Real Estate Blog

Low-ball offers don’t work anymore

When the number of home sellers grossly outpaces the number of buyers, no offer can be ignored, even if it’s 25 percent or more off the asking price. But in today’s rebounding market, those low-ball offers don’t often work. Many times, the potential buyer finds that they don’t get a counter-offer. And, in many cases, another more realistic buyer gets the home.

A low-ball offer – generally 25 or more off the asking price – allows buyers to see if they can land a great deal, even if they’re willing to pay more. In a survey last year conducted by the National Association of Realtors® (NAR), one in 10 respondents cited low-ball offers as a concern. According to real estate columnist Kenneth Harney, a NAR survey conducted in March and not yet released found that almost no one complained about low offers.

When the number of listings outpaced the number of buyers, many potential homeowners submitted a shockingly low offer on the theory that they had nothing to lose. If the seller balked, most would still counter with something below their asking price. Today, however, offers close to the asking price – or even beating it – will probably come in fairly quickly from someone else if a home is priced correctly in the first place.

Even buyers who still want to low-ball an offer on a home many times switch tactics after they lose a property or two to a more aggressive buyer.

Florida Realtor Marnie Matarese works with J Wood Realty in Sarasota. She told Harney that fewer buyers want to low-ball an offer in her area, but they still come in – mainly from out-of-state or out-of-the-country people who have read about the state’s foreclosures and short sales. That news, however, is old – it has not kept up with reality in many areas.

Matarese says some people still insist on making a low-ball offer, but that she doesn’t mind. “You can’t blame a buyer for trying to get a good deal,” she says.

In some cases, a seller isn’t offended by a low-ball offer, but their counter-offer shaves only a little bit off their original asking price. An Olympia, Wash., real estate agent had a $150,000 offer for a $250,000 listing, according to Harney. But after the dust settled and the seller shook off his irritation, he and the buyer agreed to $230,000.

Harney closed his column with this advice: “Rolling low-balls at sellers may have been an effective approach between 2008 and early 2011. But in 2012’s environment – at least in rebounding markets – it could be counterproductive if you truly want to buy.”

Source: Ken Harney. Distributed by Washington Post Writers Group.

© 2012 Florida Realtors®


Posted by Fred Hintenberger on April 24th, 2012 9:51 PMPost a Comment (0)

March 6th, 2012 10:42 PM
Gone, but not forgotten, old debts can come back to haunt you.

But while you can ignore old flames, you can’t dismiss past debts, even if your lender forgave them. Debts that were canceled or forgiven are considered taxable income – something many taxpayers don’t realize until they receive a 1099-C tax from their lenders.

During the Great Recession, lenders wrote off billions of dollars of credit card debts deemed uncollectible. Now, the tax bills on that debt are coming due. The IRS estimates that creditors will send taxpayers 6.4 million 1099-C tax forms this year, up from 3.9 million in 2010.

The appearance of an unexpected tax bill “creates a financial nightmare for people who have already been through financial hell,” says Gerri Detweiler, personal finance expert for Credit.com.

Fortunately, if unemployment or other financial calamities forced you to default on your debts, there’s a good chance you won’t have to pay the tax bill. You qualify for an exemption from taxes on forgiven debt if:

You filed for bankruptcy.
Debts discharged in bankruptcy aren’t taxable, says Jennifer MacMillan, an enrolled agent in Santa Barbara, Calif.

If you receive a 1099-C for a debt that was discharged in bankruptcy, fill out IRS Form 982 and file it with your tax return, Detweiler says. Check box 1a, “Discharge of indebtedness in a title 11 case.” (Don’t be confused by the term “title 11” – that’s a reference to the section of the U.S. Code covering bankruptcy, not the type of bankruptcy you filed.) On Line 2, list the amount of debt that was discharged.

You were insolvent. If your debts exceeded your assets when the debt was forgiven, some or all of the debt reported on 1099-C is exempt from taxes. This exclusion is also reported on IRS Form 982. You can use a worksheet in IRS Publication 4681.

Your list of debts should include everything you owed when the debt was forgiven, including debts that aren’t dischargeable in bankruptcy, such as student loans. For assets, estimate the fair market value of everything you owned when the debt was written off.

Even if you’re accustomed to doing your own taxes, it may be worthwhile to consult with a professional tax preparer, Detweiler says.

Erroneous tax forms

Complicating matters, a significant number of 1099-Cs issued to taxpayers contain errors, says IRS Taxpayer Advocate Nina Olson. To comply with Treasury regulations, some lenders issue 1099-Cs for debts they haven’t tried to collect in 36 months, even if they haven’t forgiven them, she says. In other cases, taxpayers have received duplicate 1099-Cs for the same debt, she says.

In her 2010 report to Congress, Olson listed inaccurate reporting of canceled debt as one of the most serious problems facing taxpayers. The problem hasn’t gone away, Olson says, and taxpayers continue to face numerous obstacles when they try to challenge an erroneous 1099-C.

Shelley Cartier, 48, of Austin, recently received a 1099-C for a $6,400 credit card debt that was discharged when she filed for bankruptcy in the early 1990s. The debt was so old that the tax form was addressed to Cartier’s former married name and sent to her mother’s house.

When Cartier contacted the financial institution, she was told it was up to her to prove the debt was discharged. That’s a problem, because Cartier discarded her bankruptcy documents after holding on to them for the period required by law.

With help from her bankruptcy lawyer, Cartier was able to track down a service that she hopes will retrieve the court documents for her bankruptcy filing for $35.

“I don’t know how much time I’ve spent trying to clear this up,” she says.

Fixing the problem

The worst thing you can do when you receive a 1099-C is ignore it. When your lender sends you the form, it also sends a copy to the IRS, which will match the document with information on your tax return.

Contact the lender if you believe the information on the tax form is incorrect, MacMillan says. If your lender won’t revise the form, report the amount on the 1099-C on your tax return and make an adjustment to correct the error. Most tax software programs provide a way to explain the discrepancy.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., twitter.com/sandyblock


Posted by Fred Hintenberger on March 6th, 2012 10:42 PMPost a Comment (3)

TALLAHASSEE, Fla. – Jan. 23, 2012 – An issue discussed at the recent Florida Realtors Mid-Winter Meetings appears resolved, at least for now. Citizen’s Property Insurance Corp. – the state-owned insurer of last resort – relied on a single vendor, 360Value, to estimate a building’s replacement costs that, in turn, impact the amount of property insurance an owner had to buy.

A number of Realtors and homeowners, however, felt that 360Value overestimated replacement costs, forcing owners to overpay for insurance. Consequently – and in response to criticism from Florida Realtors, homeowners, the media and others – Citizens says it will now consider other sources when calculating replacement cost, including other software firms, appraisers, contractors and more.

“Florida Realtors has followed Citizens’ actions closely, and we discussed replacement costs at the recent Mid-Winter Business Meetings,” says Florida Realtors Senior Vice President of Public Policy John Sebree. “This issue is important to Realtors, homeowners and buyers, and we’re pleased with Citizens’ decision to expand replacement cost appraisals.”

As a state-owned insurer, Citizens cannot raise rates beyond 10 percent per year; but critics of the replacement cost appraisals claimed Citizens found a way to raise rates by skirting the yearly cap – simply force policyholders to buy more coverage than needed.

In response, Citizens said that wasn’t true, and that replacement cost differs from market value. Buying a foreclosed home, for example, many times costs less than the money it would take to build that same home.

The problem started in late 2010 when Citizens started to use 360Value exclusively. Homeowners could not get alternative appraisals if they disagreed with the values released by the vendor. Effective now, however, Citizens will still use data from 360Value, but it will also accept the following to calculate replacement costs:

• Estimates from other vendors, such as MSB and e2Value

• An appraisal from someone licensed to estimate insurance reconstruction costs, which can be different than market value

• A general contractor, architect or engineer estimate, providing it includes a contract price for reconstruction and an itemized list of features in the home

• A property inspection report, providing it’s been conducted within the previous 12 months

Citizens officials have not said how they will deal with past problems, however. Some owners balked when their insurance premiums went up based on new and higher replacement cost estimates, but they continued to pay the higher premiums anyway. Under the updated rules, it’s not clear if Citizens will make a new estimate retroactive, and, if so, whether a property owner can expect reimbursement for premiums already paid.


Posted by Fred Hintenberger on January 23rd, 2012 10:37 PMPost a Comment (1)

October 20th, 2011 6:24 PM
Best day to list real estate for sale: Friday

After analyzing 1.2 million listings in 16 markets across the country for 21 months, Redfin found that sellers have a better chance of moving their homes off the market if they list them on a Friday.

The brokerage says the study indicates that Friday listings are 12 percent more likely to change hands within 90 days. Additionally, 94.4 percent of properties listed on a Thursday or Friday sold close to the list price; in contrast, only 93.3 percent of those listed on a Sunday or Monday sold close to the list price.

Friday listings were 18.8 percent more likely than Sunday or Monday listings to be toured, with Redfin noting that “homes listed on Fridays are the freshest in buyers’ minds when they’re making their weekend plans.” Buyers also prefer to visit the newest listings first to beat the competition.

The study’s conclusion: “More tours leads to more offers, and more offers leads to a better price and a better chance of selling.”

Source: Inman News (10/18/11)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


Posted by Fred Hintenberger on October 20th, 2011 6:24 PMPost a Comment (2)

September 15th, 2011 9:01 AM
Fed agencies to push foreclosure assistance

WASHINGTON – Sept. 14, 2011 – The Ad Council – in partnership with the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD) – will launch a new phase of their Foreclosure Prevention Assistance Public Service Advertising (PSA) Campaign.

The campaign, if successful, will increase awareness of the Making Home Affordable Program’s (HAMP) free resources for homeowners struggling with mortgage payments.

One in 11 homeowners nationwide has missed two or more mortgage payments, yet many enter foreclosure without reaching out for assistance. The new PSAs tell homeowners that help exists – and the sooner they act, the more options they have.

The foreclosure campaign encourages homeowners to call (888) 995-HOPE (4673) to speak with a HUD-approved housing expert and discuss the solutions available. The program website, MakingHomeAffordable.gov, serves as an online resource for struggling homeowners to learn about options other than foreclosure.

Created for free by Schafer Condon Carter, a Chicago-based advertising agency, the new television, radio, print, out of home, and online PSAs have been made in English and Spanish. The PSAs aim to inspire homeowners who are unsure of where to turn to reach out for help as soon as possible.

“The Making Home Affordable Program has already assisted over a million homeowners,” says HUD Secretary Shaun Donovan. “Struggling homeowners do not need to work through their concerns alone.”

The latest commercial and other media resources are available online.

© 2011 Florida Realtors®


Posted by Fred Hintenberger on September 15th, 2011 9:01 AMPost a Comment (0)

September 13th, 2011 10:26 PM
Low appraisal killing a deal? Here’s what to do

WASHINGTON – Sept. 13, 2011 – The National Association of Realtors® (NAR) reports that 16 percent of real estate professionals surveyed in June reported a cancelation in a sale, mostly due to a large number of low appraisals.

Many real estate professionals are watching deals unravel, with some appraisals coming in 10 to 20 percent – or even more – below the accepted offer.

“Over the past decade, finding ‘comps’ that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust,” according to a recent article by RISMedia. “Discounts paid for foreclosures and short sales have created a dual price structure between ‘normal’ and distress sales.”

Obviously one of the easiest solutions when a low appraisal comes in: Ask the seller to agree to a lower price. But when that doesn’t work, consider the following tips:

Research

If clients feel the appraisal was completed incorrectly, they have the right to a copy of the appraisal from their lender, including who performed it and what comparables were used. For example, a client can find out where the appraiser is based (maybe it was an out-of-town appraiser who was unfamiliar with the area). If an out-of-town appraiser unfamiliar with the local market does the appraisal, clients can demand a new one.

Also, a client should evaluate the comparables used in the appraisal. If a client feels that the earlier home sales do not fairly compare to the home they wish to buy, they can ask their real estate agent to pull together a fairer list of recent comparable sales – or possibly even pending sales – to justify the agreed-to-sales price. That information should then be submitted to the loan’s underwriter when asking for a review of the appraisal.

Request a new appraisal

If clients feel the appraisal wasn’t done fairly or accurately, they can ask their lender for a new appraisal. A lender has the ability to override an appraisal estimate, though that’s unlikely. The lender could, however, order a new appraisal, which is more likely.

Get an independent appraisal

Clients could opt to get their own appraisal. (If the loan is an FHA loan, they should ask the lender for a list of approved appraisers.) The bank will generally review the appraisal and ask the previous appraiser if they agree or disagree with the new one. Banks may request yet another appraisal, or they could reject a private appraisal altogether. However, the first appraiser could agree with facts in the independent appraisal and return with a better price.

Source: “5 Ways to Fight a Low Appraisal,” RISMedia (Sept. 7, 2011)


Posted by Fred Hintenberger on September 13th, 2011 10:26 PMPost a Comment (1)

September 4th, 2011 8:44 PM
Foreclosed homeowners take out revenge on properties

TAMPA, Fla. – Sept. 2, 2011 – Some foreclosed homeowners are taking out their anger on the homes they are forced to leave behind, smashing holes in the walls, scribbling graffiti everywhere, leaving piles of trash and ripping out appliances.

More banks – facing a growing problem from trashed foreclosures – are opting to offer homes at big discounts rather than fix the repairs, which can send surrounding home values in the neighborhood spiraling down, experts say.

Real estate pro Nick Davis with RE/MAX Premier Group told the Tampa Tribune that he has seen some home values greatly diminish from foreclosed homeowners who have trashed it. For example, he recalls one home that would have fetched $250,000 back in 2006 during the housing boom that would now sell for about $75,000 because the former owners trashed it.

“It looks like someone took revenge,” Davis says about the home, which had holes in the wall, appliances ripped out, and piles of trash. “Unfortunately, we’re seeing more of this. We’ve seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.”

Some real estate professionals and lenders are even blaming the high number of real estate deals falling apart due to more homes being left in poor condition by the original owners.

Buyers “look at these homes and say, ‘If this is the damage I can see, what else did the homeowner do to this place that I can’t see?’” Davis says.

Some homeowners facing foreclosure place the blame on banks for their woes so they leave behind a mess for the bank. But trashing a home can backfire. Some banks are saying they may even start taking steps to sue homeowners for the cost of repairs, and law enforcement officials say homeowners can be charged with vandalism as well as theft if they remove items that don’t belong to them from the home.

“Anything that came with the house needs to stay with the house,” says Larry McKinnon, spokesman for the Hillsborough County Sheriff’s Office in Florida. “You may think you’re getting back at the bank. But the bank may have the last laugh.”

Source: “Trashing Foreclosure Homes May be on the Rise,” Tampa Tribune (Aug. 30, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


Posted by Fred Hintenberger on September 4th, 2011 8:44 PMPost a Comment (0)

August 24th, 2011 10:50 PM

WASHINGTON – Aug. 24, 2011 – In recent news, Fannie Mae has publicly assured homeowners going through foreclosure that they will be protected from losing their homes while applying for a federally funded loan modification. Homeowners can apply for a modification at any point before or during the foreclosure process.

The basic steps of foreclosure


If a modification is approved, homeowners can keep their homes if they make their adjusted payments. Absent that, here are the stages of a typical foreclosure:

1) In default: A loan is in default when a mortgage payment is 30 days late.

2) Warning: When a loan is 60 days past due, the bank, credit union or mortgage company warns that foreclosure is the next step.

3) Proceedings begin: After 90 days, the lender refers the loan to its foreclosure department, and hires a local lawyer to begin foreclosure proceedings.

4) Sale advertised: The lender's lawyer advertises the property for sale for four consecutive weeks in a local newspaper. The sheriff's sale date is listed in the advertisement.

5) Sale held: The sale is held on the published date. A sheriff's employee conducts a courthouse auction and the highest bidder wins, usually the bank that owned or serviced the mortgage.

6) Sheriff's deed: The winning bidder gets a sheriff's deed that lists the last date the homeowner can redeem, or take back, the property, usually six months from the date of the sheriff's sale. During this redemption period, the homeowner can live in the property or try to sell it.

7) Redemption period: To redeem a property, the homeowner must pay off the mortgage and all interest and late fees, court and attorney fees, title and appraisal fees, taxes and insurance. Otherwise, they will be evicted from the home.

Copyright © 2011, Detroit Free Press. Distributed by McClatchy-Tribune Information Services


Posted by Fred Hintenberger on August 24th, 2011 10:50 PMPost a Comment (4)

Homeowners across Florida who are up for an insurance policy renewal with the state's insurer of last resort are receiving letters about their roofs.

Anyone with a home 25 years old or older must get an inspection and prove to Citizens Property Insurance Corp. that their roof is expected to last at least three more years.

Robert Brown says he thought he had a few more years to save money to put new roofs on his rental homes. But Citizens told him the roofs must be replaced now, or it won't renew his policies.

"They're forcing people to put on a new roof, even if you have a few years of life left on the roof," Brown said. "This could force a lot of people into foreclosure, if they can't afford the roof and then lose their insurance."

Replacing a roof on a typical home can cost several thousands of dollars.

The relatively new requirement for the roof inspection comes on the heels of another controversial Citizens policy. The company recently said it's raising its rates for sinkhole coverage by 400 to 2,000 percent in some Bay area locations.

When it comes to the roof policy, some customers can't afford a new roof now and say they're letting their insurance lapse, local insurance agents said.

"This couldn't come at a worse time," said Laura Hart, of Florian Insurance Inc. in Hudson. "This is the worst economy most of these people have seen in their lives."

Hart said some customers are angry that their insurance company is taking away their chance to save longer for a new roof.

If an inspector says the roof is damaged, has visible signs of leaking, or if the inspector thinks the roof might not last three years, Citizens wants it repaired or replaced.

Christine Ashburn, spokeswoman for Citizens, said the company wants to make sure it's not covering homes that are vulnerable to hurricanes because of a weak roof.

Ashburn said the three-year lifespan rule is reasonable, and too many homeowners wait too long to replace their roofs.

"Insurance is not a maintenance program and it's important for Citizens to make sure we're not covering homes with roofs in disrepair," Ashburn said. "If we have a deficit after a hurricane, everyone in Florida could be assessed to make up for it."

Ashburn said the company instituted the new roof requirements for some policy holders a year ago, but more homeowners are learning about now, as their policies come up for renewal.

"Tampa may have clusters of older homes, and that may be why more homeowners are complaining about the roof policy now," Ashburn said.

Citizens is Florida's insurer of last resort, meaning many of its policyholders couldn't get coverage through private insurers. So customers can't shop around.

Kirsten Tams-Schleitwiler, of AAA Insurance Agency, in Sun City Center, said she has also had customers say they'll just go without insurance.

That's dangerous for anyone, she said, and not really an option for those with a mortgage. Without insurance, a bank will assign insurance to the property, which is typically triple the cost of a regular policy, she said.

Nathan Dutcher, of Point Residential in Tampa, inspects roofs and said his business is up, mostly because of worried Citizens customers.

Most shingle roofs are advertised to last 25 years, but few do, he said, because of the Florida heat.

"Homeowners are frustrated," Dutcher said. "People don't have too much money for that now, they don't really think about, "hey, I'm going to need a new roof this year or next year.'"

Some homeowners, though, know they'll need a new roof soon, but aren't ready to replace it yet.

That's what happened to Ted Williams in Tampa. He planned to buy a new roof next spring, after he received his tax return.

"My wife got a letter that explained that in order to renew our insurance, the roof had to be replaced," Williams said. "With citizens being the lone insurance choice, it's not fair, but what can I say."

Williams said his roof was about three years old when he moved in 14 years ago. He knew the roof wasn't in good shape, but was still surprised he couldn't wait until spring to replace it.

The roof cost him $6,000.

"We have four kids and are trying to buy school clothes and things," Williams said. "But you can't go without insurance on your home, not when a hurricane could come."


Posted by Fred Hintenberger on August 22nd, 2011 11:59 PMPost a Comment (0)

August 15th, 2011 9:41 PM
Weak appraisals hamper home sales, experts say

Weak appraisals are “driving down the real estate market” and “borders on buffoonery,” says William Maxwell, an expert in finance and professor at Southern Methodist University’s business school, who has seen his own Dallas property fluctuate in appraised value by $60,000 in just a year.

While the sluggish economy has pushed home values down the last few years, some real estate professionals and economists say that low-ball appraisals are pushing values down even more and undermining a housing recovery, The Wall Street Journal reports.

The National Association of Realtors® says that 16 percent of real estate pros surveyed in June reported a cancelation in a sale, mostly due to a large number of low appraisals.

Erin Wanner, a sales executive with Stirling Sotheby’s International Realty in Orlando, Fla., says that one of her deals fell through when an appraisal came in 40 percent lower than expected for a 7,000-square-foot custom-built lakefront home; the home was under contract for $650,000, but the appraisal came in at $380,000.

Some real estate professionals are accusing lenders of pressuring appraisers to come in with lower estimates and for basing their valuations largely on nearby distressed sales that often sell at discounted prices. That has prompted at least four states – Illinois, Nevada, Missouri, and Maryland – to consider legislation that would prevent appraisers from using distressed sales when conducting their valuations.

But the Mortgage Bankers Association says more conservative appraisals are needed. The trade association says it’s a way to protect the banks from future problems with investors who buy mortgages.

Source: “Judgment Call: Appraisals Weigh Down Housing Sales,” The Wall Street Journal (Aug. 12, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD

I personally think that the banks are trying to do everything in their power to deny all home loans.


Posted by Fred Hintenberger on August 15th, 2011 9:41 PMPost a Comment (0)

Breakout: Mortgage Rate Trend Index

This week, 62% of the industry experts polled by Bankrate.com believe mortgage rates will rise over the next week or so – the rest are split evenly with 19% thinking rates will fall and 19% predicting rates will remain relatively unchanged.

WASHINGTON (AP) – July 1, 2011 – Fixed mortgage rates were mostly unchanged this week, hovering near their annual lows.

The average rate on the 30-year loan rose slightly to 4.51 percent, Freddie Mac said Thursday. It hit its lowest level of the year three weeks ago, at 4.49 percent.

The average rate on the 15-year fixed mortgage, a popular refinancing option, stayed at 3.69 percent. It reached its low point of the year two weeks ago, at 3.67 percent.

Rates typically track the yield on the 10-year Treasury note, which has been rising in the past week.

That could change this week when the Federal Reserve’s $600 billion bond buying program ends.

The Fed has purchased around $75 billion worth of bonds each month since November. That drove the yield on the 10-year Treasury note lower than 3 percent this spring. As a result, rates on mortgages and other loans also fell.

Still, low mortgage rates and plummeting home prices have done little to boost the troubled housing market. Tougher lending standards and bigger downpayment requirements have prevented many people from taking advantage of the ultra-low rates. Many people who can qualify are holding off, worried that prices have yet to bottom out.

Fewer people purchased previously occupied homes in May. Sales fell to their lowest level of the year. Since the housing market went bust in 2006, sales have fallen in four of the past five years and hit a 13-year low last year.

New-home sales fell last month to a seasonally adjusted annual rate of 319,000 homes. That’s fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market.

Federal Reserve Chairman Ben Bernanke said last week that the housing market is dragging down the broader economy. For the market to recover, he said foreclosures must be cleared from the pipeline of homes for sale.

Most economists say home prices will keep falling through the rest of the year. Many forecasts don’t anticipate a rebound in prices until at least 2013.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage fell from 3.25 percent to 3.22 percent, the lowest rate on records dating back to 2005. The average rate on a one-year adjustable-rate loan fell to 2.97 percent, slightly above the record low of 2.95 percent.

The rates do not include the extra fees known as points. One point is equal to 1 percent of the total loan amount.

The average fees for the 30-year and 15-year fixed loans were 0.7, according to Freddie Mac’s survey. The average fees for the five-year and one-year ARM were 0.6.
AP Logo Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved.


Posted by Fred Hintenberger on July 1st, 2011 2:14 PMPost a Comment (1)

June 30th, 2011 9:09 PM
 Pending home sales rose strongly in May with all regions experiencing gains from a year ago, pointing to higher housing activity in the second half of the year, according to the National Association of REALTORS®.

The Pending Home Sales Index rose 8.2 percent to 88.8 in May from an upwardly revised 82.1 in April and is 13.4 percent higher than the 78.3 reading in May 2010. The data reflects contracts but not closings, which normally occur with a lag time of one or two months.

This is the first time since April 2010 that contract activity was above year-ago levels, and the monthly gain was the strongest increase since last November when the index rose 10.6 percent.

Lawrence Yun, NAR chief economist, said the improvement bodes well for home prices. “Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” he said.

“Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago, including areas such as Hartford, Conn., Indianapolis, Minneapolis, Houston, and Seattle,” Yun added.

Pending home sales have trended up unevenly since bottoming last June, rising in seven of the past 11 months. “Home sales still could be 15 to 20 percent higher,” Yun said. “If banks would simply return to normal, sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”

“In addition, a nonsensical situation has developed recently in some states with HUD unable to complete foreclosure deals because of insufficient funds to pay attorney fees at closing, even with buyers offering the full listing price,” Yun added.

Regional Performance

? The PHSI in the Northeast rose 7.3 percent to 69.2 in May and is 4.4 percent above a year ago.
? In the Midwest, the index jumped 10.5 percent to 82.8 and is 17.2 percent higher than May 2010.
? Pending home sales in the South increased 4.1 percent to an index of 95.0 in May and are 14.6 percent higher than a year ago.
? In the West, the index surged 12.9 percent to 100.6 and is 13.5 percent above May 2010.

Yun cautioned that healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. “The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country,” he said.

Source: NAR


Posted by Fred Hintenberger on June 30th, 2011 9:09 PMPost a Comment (0)

June 1st, 2011 9:30 AM

 In the aftermath of the nation’s housing-market collapse and recession, more than 500 midsize and large cities have seen a rise in the share of homes that are rented rather than owned, according to a USA TODAY analysis of Census data.

Almost 4 million homes have been lost to foreclosures the past five years, turning many former owner-occupied homes into rentals.

The shift to rental housing is potentially long lasting and portends changes for neighborhood stability and how people build wealth, economists say.

“The changes are big but glacial,” says Mark Zandi, economist at Moody’s Analytics.

The swing from owner- to tenant-occupied homes in the past decade has been dramatic in some places:

Of the 100 largest cities, some of those with the largest shifts were Irvine, Calif., which went from about 40 percent of occupied homes rented in 2000 to 49.8 percent in 2010; Philadelphia increased from 40.7 percent to 45.9 percent; and Birmingham, Ala., rose from 46.3 percent to 50.7 percent.

Twenty-five cities including Baltimore, Minneapolis, Sacramento and Salt Lake City swung from having more than half of homeowners in 2000 to majorities of renters in 2010. In Reading, Pa., 57.6 percent of occupied homes were rentals in 2010, up from 49 percent in 2000.

Florida, California and Arizona had the most cities where the share of renter-occupied housing grew by at least 5 percentage points. All three states have been hit hard by foreclosures.

Nationwide, 34.9 percent of occupied homes were rented in 2010, up from 33.8 percent in 2000.

The Census data that USA TODAY analyzed for cities covered only housing within the cities’ boundaries, not their much larger metropolitan areas.

Vacant properties, excluding seasonal or vacation homes, accounted for 7.9 percent of U.S. housing units in 2010.

It’s not clear how many of those have since become rentals or owner-occupied homes.

The renter household market had remained fairly stable from 1990 to 2006, says Daniel McCue, senior research analyst at Harvard University’s Joint Center for Housing Studies.

Since 2006, when housing prices peaked, the number of renter households in the U.S. has grown an average of 692,000 a year, while owner households have fallen an average of 201,000 a year, Census surveys show.

Several factors will boost the growth of rental homes for years to come, Zandi says, including continued foreclosures, continued drops in home prices that frighten buyers and potential cuts to government subsidies supporting homeownership.

On the other hand, 74 percent of renters think owning is superior to renting, said a recent survey by mortgage giant Fannie Mae.


There will be a steady and gradual increase in rent rates as rental supplies diminish.


“There’s still a pull toward homeownership although it’s been diminished,” McCue says.
Contributing: Paul Overberg

© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Julie Schmit and Barbara Hansen.


Posted by Fred Hintenberger on June 1st, 2011 9:30 AMPost a Comment (0)

 Real estate investors, by three to one, will be more active in their local markets compared to typical homebuyers in the next 24 months; and 69 percent of investors say it’ll be easier to find properties in the near future, according to a survey of real estate investors released by Move, Inc., the management company overseeing Realtor.com.

The Move Investor survey suggests that local markets will be heating up with renewed investor interest and activity. Compared to a year ago, 62 percent of investors are paying more attention to home values in their local markets – only 43.5 percent say it will be harder to find bargains and 41.5 percent expect it to be easier to sell their properties in the next six months.

Meanwhile, 22 percent of investors are bullish and expect prices to rise in the next six to 12 months, and 53.5 percent expect prices to remain relatively the same. Twenty-three percent expect prices to fall in the next six to 12 months.

The Move Investor survey also found that investors are prepared to compete vigorously with traditional first-time homebuyers for hot deals. Two-thirds of investors (65.5 percent) said they expect that first-time buyers’ problems getting a mortgage will make it easier for investors to compete for properties. One in five investors (18.5 percent) say they’ll be cash-only buyers, a strategy that’s out of reach for most first-time buyers. Eight out of 10 (80.5 percent) expect cash discounts from sellers.

Today’s investors – not stereotypical, deal-driven flippers

Contrary to the tactics used by “flippers,” 50 percent of today’s real estate investors plan to hold their properties for five-plus years. Only 11 percent expect to sell within 12 months of purchase. Two-thirds (67.5 percent) say they’re investing for the long term.

Fifty-nine percent (59 percent) told Move they’re new to real estate investing, with 33.5 percent considering their first investment purchase and 8.5 percent in the process of buying and selling their first investment property. Another 17 percent said they just completed their first transaction and plan to make more. Only 36.5 percent have experience in more than one property transaction.

When it comes to repairs and maintenance, 56.5 percent of investors say the repair and maintenance of investment property has not been difficult. Moving forward, 42 percent plan to invest their own time and energy to improve, repair and maintain their properties. The rest said they’d hire a contractor for repairs (29.5 percent) or purchase move-in-ready properties (28 percent). The majority (65.7 percent), don’t expect repair costs to exceed 20 percent of the property’s purchase price.

“This data suggests today’s climate is hot for investing and is attracting a lot of new people that don’t fit the stereotypical deal-driven flippers that buy and sell properties quickly,” said Move, Inc. Chief Executive Officer Steve Berkowitz.

Investors combine cash and credit to snap up properties

While cash is king in many circles, 75.5 percent plan to combine cash and credit to purchase properties as they build their real estate portfolio. In fact, 59.5 percent plan to put less than half down on their next property purchase and they’ll finance the rest. Those planning to use more than 50 percent cash and finance the remainder account for 16 percent of today’s investors. Investors told Move the second most difficult challenge has been finding financing (57 percent).

“The fact that most real estate investors plan on combing cash and credit for their purchases goes against the conventional wisdom that investor transactions today are mostly cash-only sales,” says Berkowitz. “We were surprised to learn that 75 percent of investors are financing portions of their purchases. This suggests they’re seeing tremendous or once in a lifetime opportunities and may be tapping into credit or taking out second trusts on existing properties. The data also shows they’re expecting high returns to match the level of investment they’re making in an arena that is new to many investors.”

High risk leads to high ROI expectations

Based on the investments they’re making in today’s environment, real estate investors clearly expect high yield returns. Nearly half (48 percent) expect a profit of 20 percent or more from their property investments, a 4 percent annual rate of return over five years. Another 40 percent expect a profit of 10 percent, and only 6.5 percent expect a 5 percent or less return on investment. Half (50 percent) of today’s real estate investors plan to hold their properties for five-plus years.

Property investments gateway to homeownership for many

While the survey shows investors will outnumber traditional homebuyers three to one, nearly half (49 percent) plan to live in their investment property until it’s sold or turned into a rental property. Slightly more than half (56.5 percent) will put their investments to work as rental properties, and 28 percent plan to purchase vacation property that they’ll eventually sell. The Move Investor survey also found 30 percent of real estate investors are interested in buying retirement property as an investment.

“The survey suggests some first-time buyers may be looking at investing as a strategy to becoming homeowners,” Berkowitz said. “While today’s market is tough for some, it’s also motivating millions to take an unconventional approach and creatively search for new ways of entering the housing market.”

© 2011 Florida Realtors®


Posted by Fred Hintenberger on June 1st, 2011 9:22 AMPost a Comment (0)

May 18th, 2011 11:35 PM
April statistics from our Multiple Listing Service are out.  There has been a lot of activity in the market, people are buying!  Yes - people are buying!  Investors are out from their hiding place and catching properties as soon as they appear on the market.  Some highlights of what we are seeing and present market conditions are:

  • All indications are showing that we have more or less hit the bottom - investors are feeling it and are out buying homes!
  • For the past three months, more than 60% of all closed transactions have been cash transactions,
  • When properties are priced correctly, the average number of days a property will stay 'active' is less than 45 days,
  • Interest rates continue to hover around 5% - still the lowest in many, many years,
  • Home prices have stabilized.  We may see some minor dips and increase in prices, but for the most part we seem to have stabilized
  • Home affordability is at record levels - somewhere around 14%, compared to around 37% in 1980
  • The average age of a home buyer today is between 30-45, making up over 50% of all buyers - these are the echo buyers, children of the baby boomers and 80 million strong,
  • 82% of people purchasing today are buying single-family homes, 9% buying condos, 7% buying townhouses, and 1% buying duplexes,
  • Buyers today are very well educated.  They look at many properties, determine value by comparison shopping, they watch TV and most all work with a real estate agent.
  • Moving over to the seller's side - sellers need to put their trust in two time-tested principles of real estate: condition and price.  These are the only two factors sellers have control over, and they are the two that buyers care about the most.
  • 94% of homes in better condition were offered a higher percent of the list price than 88% of homes in poor condition were offered a lower percent of the list price,
  • Staging a home or having a professional stager come and evaluate a home is critical.  Interestingly enough staging a home in California is common and here in Florida its viewed as an expense.  Yet - staging a home will typically bring 1.7% more on the sale of the home.


Posted by Fred Hintenberger on May 18th, 2011 11:35 PMPost a Comment (0)

April 14, 2011 – Buyers purchasing a Fannie Mae-owned home may receive up to 3.5 percent of the final sales price for closing cost assistance if they close before June 30, 2011. Offers previously submitted (before April 11) do not qualify, and the offer is not extended to investors – buyers must use the home as their primary residence.
 
All Fannie Mae-owned HomePath properties are listed on HomePath.com and most include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.

Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to homebuyers.

“Attracting qualified buyers to the market and reducing the inventory of vacant homes remains essential to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president of credit portfolio management for Fannie Mae.

© 2011 Florida Realtors®


Posted by Fred Hintenberger on April 14th, 2011 5:03 PMPost a Comment (0)

April 2nd, 2011 9:35 AM
WASHINGTON – April 1, 2011 – Mike Castleman, founder and CEO of Metrostudy, which tracks real-time data of the country’s inventory of new homes, says a housing shortage is looming that will soon create a huge surge in demand for new homes. As such, now is the time to buy, he says.

In the 41 cities Metrostudy covers, 78,000 houses are either vacant and for sale, or under construction – that is less than a quarter of the new homes that fell in that category during the housing boom in 2006 and way below the level of a decade ago.

“If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”

The historic drop in new construction mixed with the decline in housing prices is laying the foundation for a dramatic recovery in residential real estate, Castleman told CNN. Castleman expects homeowners soon will start returning, which will drive up prices in many markets later this year.

While demand remains low for new construction, he expects that to change. He foresees the recovery following a similar path as previous ones: A severe housing shortage will drive a big increase in demand.

“We’ll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved,” he predicts. “Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house.” But they’ll want the house so bad that they’ll “bid the prices up.”

Source: “Real estate: It’s time to buy again,” CNN

Posted by Fred Hintenberger on April 2nd, 2011 9:35 AMPost a Comment (0)

February 22nd, 2011 3:13 PM
FHA releases info about premium increase

WASHINGTON – Feb. 22, 2011 – Effective April 18, the average FHA-backed mortgage will cost new borrowers about $30 more per month. In a letter sent yesterday, Assistant Secretary for Housing/Federal Housing Commission David H. Stevens explained the change, which will increase the mortgage insurance premium (MIP) on all 30-year and 15-year loans by a quarter of a percentage point (.25).

The increase impacts FHA loans with a case number assigned on or after April 18, 2011.

According to Stevens, FHA must increase its Mutual Mortgage Insurance (MMI) fund reserves – a two percent capital reserve ratio – to comply with current law.

“The MMI fund has been below the two percent threshold in our last two annual actuarial reports to Congress,” Sevens says; and that at the current rate, MMI will not meet its mandated level until at least 2015. “Raising the annual premium will enable FHA to increase revenues … Based on current volume projections, the annual MIP increase would generate an additional $2.5 - $3 billion annually.”

Stevens defended the increase’s unveiling during a down real estate market by calling the quarter-point increase “a responsible step towards meeting the two percent threshold, while allowing FHA to remain the most cost-effective mortgage-insurance option for borrowers with lower incomes and lower downpayments.

“I understand the concerns of those in the industry about this increase,” he says. “While I do not expect all to agree, we have made these moves to protect FHA so that it can continue its vital mission.”

While the monthly payments on the average FHA loan will go up about $30, it shouldn’t impact closing costs. The upfront MIP remains unchanged at one percent.

To read the Department of Housing and Urban Development’s Mortgagee Letter explaining the change (PDF format), visit HUD’s website.

© 2011 Florida Realtors®


Posted by Fred Hintenberger on February 22nd, 2011 3:13 PMPost a Comment (0)

February 9th, 2011 10:11 PM
Feb. 9, 2011 – Renting offers zero tax breaks, while buying a home has several tax benefits that make ownership more affordable.

The following list outlines a few tax benefits of homeownership, according to Stephen Fishman, an author and lawyer who specializes in small business, tax and intellectual property law.

? Home mortgage interest deduction: Homeowners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.

? Property tax deduction: Homeowners can deduct from their federal income taxes state and local property taxes paid on the home.

? Deductible homebuying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan and prorated property taxes paid at settlement.

? $250,000/$500,000 home-sale exclusion: Homeowners who have lived in their home for two of the prior five years prior to sale do not have to pay income tax on the majority of their profit – $250,000 for single homeowners and $500,000 for married homeowners who file jointly.

? 14 days of free rental income: Homeowners can rent the home up to 14 days during the year and pay no tax at all on the rental income.

Source: “The Tax benefits of homeownership,” Inman News (Feb. 4, 2011)

Posted by Fred Hintenberger on February 9th, 2011 10:11 PMPost a Comment (0)

February 2nd, 2011 10:59 PM
Header
Header_2
Listings Photo
$598,700.00
7028

South Pasadena, FL 33707



Beds: 3 Rooms: 0
Full Baths: 2 Sq. Ft.: 1932
Garage: 0 Built: 0
 

This is a new listing that
I thought you might be
interested in or would like to share with a friend because it's an absolute bargain. Located on the Island of Pasadena Isles with some of the best views in Florida and it comes with a deep water dock! Visit this listing online to see more photos of the property,Google Earth satellite images, and much more.
 

If you have any questions
about this property or
require more information,
please feel free to call.

Fred Hintenberger
Charles Rutenberg Realty
7274815517
www.myehomes.com



 
  Visit this listing here

Posted by Fred Hintenberger on February 2nd, 2011 10:59 PMPost a Comment (4)

February 1st, 2011 9:21 PM
Borrowers with Fannie Mae-backed loans will face higher borrowing costs and interest rates, even if they have a perfect credit score, starting on April 1.

The agency is imposing a “loan-level price adjustment” on several mortgages, in which borrowers will be charged more in cost or higher interest rate based on the downpayment amount – or the amount of equity in their home if they’re refinancing – as well as their credit score, explains mortgage expert Bill Gassett in the Massachusetts Real Estate News.

Prior to the adjustment, a buyer with a 700 credit score and a $160,000 mortgage who was purchasing a $200,000 home may pay an additional $800 in these fees. That cost would now be doubled: The loan’s risk-based pricing would equal $1,600, said Cameron Findlay, chief economist for LendingTree.

Borrowers who don’t have large downpayments or who have low credit scores will see higher rates. But even borrowers with good credit scores will have to pay more too.

For example, Gassett explains that a buyer with a credit score over 740 who has a 25 percent or lower downpayment will now pay about 0.125 percent more in rate.

For any buyer or refinancers of a condo (excluding detached condos) who have less than a 25 percent downpayment will face an increase in rate of nearly 0.5 percent.

“It certainly says that even with a great credit score, they still see some risk in you,” Findlay told The Wall Street Journal.

Some lenders have already started incorporating the higher fees.

Not all loans will be subjected to the fees, experts note. For example, not all lenders sell all mortgages to the secondary market and loans insured by the Federal Housing Administration also will be immune.

Source: “Fannie Mae Mortgage Interest Rates & Costs Rising,” Massachusetts Real Estate News (Jan. 30, 2011) and “Mortgage Fees on the Rise Again,” The Wall Street Journal (Jan. 25, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


Posted by Fred Hintenberger on February 1st, 2011 9:21 PMPost a Comment (0)

January 24th, 2011 8:50 PM

Jan. 24, 2011 – BizCosts.com did an analysis on pro-business cities and counties –based on the cost of doing business – and created the nation’s top 20. In the analysis, Orlando came out on top, and five Florida city areas made the list. No other state had more than one area in the top 20.

Florida city areas by rank and yearly cost to operate
1. Orlando
3. Jacksonville
7. Tampa Bay
16. Palm Beach County
20. Broward County

“Florida is one of the most pro-business states in the nation, and it has been for some time,” said John Boyd Jr. with BizCosts.com.

To create the top 20, BizCosts looked at typical business costs, such as the operation of a corporate headquarters building, labor, taxes and travel. To make the comparison between cities fair, it assumed a 75,000-square foot headquarters and staff of 300. Based on that model company, the yearly cost in Orlando is about $19.9 million per year; Jacksonville is about $20.1 million; and Broward County is about $21.6 million.

In New York City, the most expensive city for business operating expenses, the cost per year is about $28.5 million.

Source: The Orlando Sentinel, Jan. 19, 2011, Jim Stratton

© 2011 Florida Realtors®


Posted by Fred Hintenberger on January 24th, 2011 8:50 PMPost a Comment (0)

January 12th, 2011 7:37 PM
Banks can go after other assets in Florida of Owners that default on their home mortgage.

TALLAHASSEE, Fla. – Jan. 10, 2011 – Worried that your bank might go after your other assets if you’re late on the mortgage or lose your home to foreclosure?

It can happen in Florida, especially if a bank sells your foreclosed house and doesn’t recoup the full loan amount and if you’re a big-dollar borrower.

With nearly half of all mortgages under water in South Florida, plenty of residents may wonder if their home lender can garnishee their wages or suddenly lock down their deposit accounts.

Rules on tapping assets vary by state and depend on the terms of specific loans and accounts.

Problems on typical home loans usually don’t crop up before foreclosure. They tend to come after the bank sells the home and ends up short.

In Florida, banks can go to court for a “deficiency judgment” to collect the rest of the money owed on a mortgage after foreclosure, said Anthony di Marco, vice president of the Florida Bankers Association.

Banks can pursue other assets with that judgment. They can file a lien on your boat or car. But “they can’t jump priority on a loan,” so the lender for that boat or car has first dibs to collect, di Marco said.

Florida banks usually don’t target other assets after foreclosure if they don’t see much to tap. “Collecting on judgments is time-consuming and costly,” said real estate attorney Shari Olefson, a partner at Fowler White Boggs in Fort Lauderdale and author of “Foreclosure Nation: Mortgaging the American Dream.”

But banks pay more attention to borrowers with multimillion-dollar homes or businesses that default on big commercial properties. The lender can check if the customer has other accounts with the same bank. Depending on the terms of those savings or checking accounts, they may move to freeze, sweep, garnishee or otherwise tap those accounts to collect money owed, Olefson said.

There’s another risk for smaller borrowers later. Banks may sell their deficiency judgments to a collection agency. The judgments are valid for up to 20 years. That leaves an agency focused on collections ample time to come after you for the balance still due, she said.

“That’s why it’s so important for people to deal with these mortgage problems upfront,” Olefson said. “So if you have the chance to do a short-sale through the bank, or if you have the chance to negotiate with the bank and clear up the loan – rather than have this financial time-bomb ticking over your head for years – you’ll be so much better off working with the bank.”

And be sure to get any settlement reached with the bank in writing, mortgage specialists add.

No matter what, some types of assets are off the table when banks look to collect money due on homes.

Some federal payments cannot be garnisheed at any time to cover a mortgage. Those include Social Security checks, veterans benefits and some railroad retirement payments, among others, according to the American Bankers Association in Washington, D.C.

Some states don’t let banks go after an individual’s assets after a home is seized and sold, said Mark Tenhundfeld, the association’s senior vice president of regulatory policy.

Even with a deficiency judgment, Florida law specifies 11 items that cannot be garnisheed to pay court orders in most cases, including unemployment benefits, disability checks and payments from Supplemental Security Income, a federal anti-poverty program.

Consumers in Florida have complained about what they see as improper garnishments by banks.

The Florida Office of Financial Regulation said concerns often center on Supplemental Security Income payments garnisheed to pay the mortgage loan.

But a consumer can reverse the practice by showing that the law exempts that income from garnishment or by going to court to resolve the issue, said Flora Beal, a spokeswoman for the regulators office.

Banks have sometimes garnisheed funds that are electronically deposited into a customer’s account, not knowing that the money came from exempt sources, according to the Florida Bankers Association.

The borrower’s recourse: Inform your bank that the money is exempt and seek to get it back, said the association’s di Marco.

That’s not always easy, according to South Florida building contractor James Clare III.

Clare said he fell off a roof during a job, was disabled and lost income. He ran late on mortgage payments and other bills. One day, he found that his bank would not allow him access to a disability award electronically deposited into his account at the same bank.

Clare engaged a lawyer, but he said it took weeks for the bank to give him access to the funds and then, only after he agreed to bring some payments up to date.

“I had no choice. It would have cost me more to go to court. My attorney said by the time I’d pay all the fees and all the bills over a year or two, the money’s gone,” said Clare. “It was the most frustrating time.”

Copyright © 2011, Sun Sentinel, Fort Lauderdale, Fla., Doreen Hemlock. Distributed by McClatchy-Tribune Information Services.


Posted by Fred Hintenberger on January 12th, 2011 7:37 PMPost a Comment (0)

December 30th, 2010 6:57 PM
Pending Home Sales Continue Recovery
Pending home sales rose again in November, with the broad trend over the past five months indicating a gradual recovery into 2011, according to the NATIONAL ASSOCIATION OF REALTORS ® .

The Pending Home Sales Index, a forward-looking indicator, rose 3.5 percent to 92.2 based on contracts signed in November from a downwardly revised 89.1 in October. The index is 5.0 percent below a reading of 97.0 in November 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said historically high housing affordability is boosting sales activity. “In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market,” he said. “But further gains are needed to reach normal levels of sales activity.”

The PHSI in the Northeast increased 1.8 percent to 72.6 in November but is 6.2 percent below November 2009. In the Midwest the index declined 4.2 percent in November to 78.3 and is 7.7 percent below a year ago. Pending home sales in the South slipped 1.8 percent to an index of 91.4 and are 7.2 percent below November 2009. In the West the index jumped 18.2 percent to 123.3 and is 0.4 percent above a year ago.

“If we add 2 million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume,” Yun said. “Credit remains tight, but if lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy.”
The 30-year fixed-rate mortgage is forecast to rise gradually to 5.3 percent around the end of 2011; at the same time, unemployment should drop to 9.2 percent.

For perspective, Yun said that the U.S. has added 27 million people over the past 10 years. “However, the number of jobs is roughly the same as it was in 2000 when existing-home sales totaled 5.2 million, which appears to be a sustainable figure given the current level of employment,” he explained. “All the indicator trends are pointing to a gradual housing recovery,” Yun said. “Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers.”

Existing-home sales are projected to rise about 8 percent to 5.2 million in 2011 from 4.8 million in 2010, with an additional gain of 4 percent in 2012. The median existing-home price could rise 0.6 percent to $173,700 in 2011 from $172,700 in 2010, which was essentially unchanged from 2009.

“As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2 to 3 percent in 2012,” Yun said.
New-home sales are estimated to rise 24 percent to 392,000 in 2011, but would remain well below historic averages, while housing starts are forecast to rise 21 percent to 716,000.

Yun sees Gross Domestic Product growing 2.5 percent in 2011, and the Consumer Price Index rising 2.3 percent.

Yun discusses the latest PHSI reading in a 5-minute video.

Source: NAR


Posted by Fred Hintenberger on December 30th, 2010 6:57 PMPost a Comment (0)

Forecast: Fewer foreclosures on horizon

WASHINGTON – Dec. 10, 2010 – U.S. credit bureau TransUnion predicted Thursday the number of delinquent mortgage accounts would drop by nearly 20 percent next year.

The number of delinquent accounts – those with payments 60 days past due – is predicted to fall to 4.98 percent by the end of 2011 from 6.89 percent at the end of 2009.

“This is a welcome contrast to the year-over-year increases of 54 percent between 2006 and 2007, 53 percent between 2007 and 2008 and 50 percent between 2008 and 2009,” TransUnion said in a press release.

Steve Chaouki, group vice president in TransUnion’s financial services business unit, said the decrease in delinquencies could be attributed to “a slowly improving unemployment picture and continued stabilization in housing markets.”

“While there is continued price pressure in many markets, we expect a rise in property values along with some stabilization of values in those states and markets hardest hit by the recession,” he said.

TransUnion said Nevada would see a 24.77 percent drop in its delinquency rate next year while Arizona’s rate would drop 24.27 percent. In Florida, the rate would drop 23.9 percent.

“Interestingly, the states projected to experience the greatest decrease in mortgage delinquencies – Nevada, Arizona and Florida – are the same areas expected to have the highest 60-day mortgage delinquency rates at the end of next year,” TransUnion said.

The states most in need of improvement, in other words, are expected to experience the highest rates of improvement.

Copyright © United Press International 2010


Posted by Fred Hintenberger on December 11th, 2010 8:47 PMPost a Comment (0)

December 2nd, 2010 5:54 PM
Strong rebound in pending home sales tops the streets expectations. 

WASHINGTON – Dec. 2, 2010 – Pending home sales jumped 10.4 percent in October, showing another positive uptrend since bottoming in June, according to the National Association of Realtors®.

The Pending Home Sales Index (PHSI), a forward-looking indicator, rose to 89.3 based on contracts signed in October from 80.9 in September. The index remains 20.5 percent below a surge to a cyclical peak of 112.4 in October 2009, which was the highest level since May 2006 when it hit 112.6.

The latest surge also reflects market strength, since buyers had an additional push to close quickly in October 2009 to qualify for one version of the first-time homebuyer tax credit that expired in November. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

The data also surprised economists who had expected a decline in pending home sales given current troubles within the housing market. However, Lawrence Yun, NAR chief economist, says excellent housing affordability conditions drew in more homebuyers.

“It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels,” Yun says. “The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011. More importantly, a return to more normal loan underwriting standards and removal of unnecessary underwriting fees for very low risk borrowers is needed and could quickly help in the housing and economic recovery.”

Recent loan performance data from Fannie Mae and Freddie Mac clearly demonstrates very low default rates on recently originated mortgages – much lower that the vintages of 2002 and 2003 before the housing boom.

The PHSI in the Northeast jumped 19.6 percent to 71.3 in October but is 27.3 percent below the tax credit peak in October 2009. In the Midwest, the index surged 27.3 percent in October to 81.7 but is 24.8 percent below a year ago.

Pending home sales in the South rose 7.1 percent to an index of 93.8 but are 18.4 percent below October 2009. In the West, the index slipped 0.4 percent to 104.3 and is 15.6 percent below a year ago.

Near term, Yun expects home sales to continue climbing from their cyclical low this past summer.

“Even so, we now have some consumer concerns regarding the mortgage interest deduction, an important component in housing affordability,” Yun says.

© 2010 Florida Realtors®


Posted by Fred Hintenberger on December 2nd, 2010 5:54 PMPost a Comment (0)

WASHINGTON – Nov. 18, 2010 – Annual single-family housing production in 2008 and 2009 fell about one million units short of the housing that would be needed in a normally functioning economy, suggesting that builders will have a lot of catching up to do as the economy improves and household formations return to trend levels, according to a special study by economists at the National Association of Home Builders (NAHB).

The report, “Extent of Underbuilding in the Single-Family Housing Market,” found an excessive amount of single-family building from 2003 through 2005. But overbuilding largely ended by 2006, and the subsequent downturn was severe enough to more than offset the annual surpluses. This year is likely to add to the growing deficit of single-family homes by another one million units, according to the report.

“The single-family housing market in the U.S. currently finds itself in a significantly underbuilt state,” says NAHB Chairman Bob Jones. “Pent-up demand for housing will at some point need to be worked off, pushing single-family production in a positive direction. In the meantime, the deficit continues to grow as builders remain cut off from the credit they need to begin developing and building new housing.”

The analysis compares levels of single-family permits in recent years with the long-term trend that would be seen if housing, labor and credit markets were functioning normally and generating a normal rate of household formations.

Permits were used instead of housing starts because they are based on a much larger sample and provide more geographic detail, which enabled the study to be extended to the state level. (A building or zoning permit represents housing units that are authorized to be built. According to the Census Bureau, all but a small percentage of permits become starts. A start is when ground is first broken for the foundation of the building.)

Single-family permits plunged to a trough of 441,000 in 2009, their lowest level since World War II. The previous post-war low occurred in 1981, when 550,000 single-family permits were recorded. Adding to the magnitude of the recent downturn, multifamily starts and permits last year fell below 150,000 units, an historic low, compared to about 400,000 units annually during the early 1980s.

“In 1980, there were roughly 226 million people and 88 million housing units in the country,” the report says. “By 2009, these numbers had increased to 307 million people and 130 million housing units, so in that year the U.S. added a record low number of new housing units to a population and housing base that was larger than it had ever been before.”

From 1988 through 2003, the U.S. population was growing at a fairly steady average annual rate of 1.15 percent and varied only between 0.90 percent and 1.35 percent. During the recession, household formations slowed markedly below this pace, delaying two million household formations. The deficit in new single-family homes can continue as long as household formations remain depressed.

Over the 1988-2003 period – which goes right up to the housing boom years of 2004 and 2005 and can be considered a fairly normal one for housing – the number of single-family permits issued was increasing at an average of about 36,000 per year, consistent with a growing population that needs housing and an expanding inventory of older homes that need to be replaced.

Projecting that trend past 2003, single-family permits should have hit 1.4 million by 2005, 1.5 million by 2008 and around 1.56 million in 2009, the report finds. Instead, permits were well over 1.4 million in 2003 and pushed past 1.6 million in both 2004 and 2005, “a period of serious overbuilding.”

Subsequently, however, permits dropped to under 1.4 million by 2006 – already slightly below trend – and continued to fall through last year.

Single-family surpluses occurred from 2002 to 2006 and they were well over 200,000 annually in 2004 and 2005. Deficits, which began to materialize after 2005, reached about a half a million units in 2007 and one million every year since then as single-family permits dropped below 500,000 – more than a million units per year below trend.

Accumulating annual surpluses peaked at 493,000 single-family units in 2005, and that was worked off entirely by the end of 2007. Depressed levels of single-family housing production resulted in a cumulative deficit of 2.17 million units by 2009 and will likely grow to 3.28 million by the end of this year.

The study also found that there are now single-family housing deficits in most of the states. This includes the states that had the hottest markets during the boom: Arizona, with a deficit of 144,500; California, 49,500; Florida, 112,600; and Nevada, 75,600.

To read the entire report, go to www.nahb.org/underbuildingsfh.

© 2010 Florida Realtors®


Posted by Fred Hintenberger on November 18th, 2010 8:43 PMPost a Comment (0)

Nov. 9, 2010 – The United States’ investment sales market has the potential for increased fluidity in the year ahead, based on findings from Colliers International’s Q3 2010 Global Investor Sentiment Survey.

More than six out of 10 U.S. real estate investors responding to the survey indicated that they are considering selling property over the next year, up considerably from the 23 percent reported in the Q1 response. Meanwhile, 85 percent of U.S. investors expressed a desire to buy assets domestically during that time, with a focus on primary markets nationwide. The combined forces may position a significantly increased number of U.S. assets to trade over the next 12 months.

In particular, U.S. investors noted markets in California, Texas, New York/New Jersey and Florida, as well as Washington, D.C., Boston, Atlanta, Chicago, Denver and Seattle as key targets.

Further, 60 percent of U.S. real estate investor respondents expect to expand their portfolios in the coming year. An additional three out of 10 expect to maintain the size of their portfolios, with some of those expressing an interest in rebalancing their portfolios among different asset classes.

The survey, which includes investors from around the globe, also determined that the majority of U.S. respondents still believe that the “Property Clock” is at six o’clock, or at the bottom of the cycle. That is in sharp contrast to the average globally, which puts the time at eight o’clock, or at the beginning of an up cycle, but is similar to the U.S. sentiment in the first quarter of 2010.  

The Property Clock equates market cycles to specific times of the day, with 12 o’clock representing the top of the market and six o’clock representing the bottom. Each six-hour period in between designates rising (after six o’clock to 12 o’clock) or declining (after 12 o’clock to six o’clock) cycles.

“With the Property Clock at six, it is no wonder why so many investors are seeking to expand their portfolios in the coming year,” said Dylan Taylor, Chief Executive Officer of Colliers International in the U.S. “Investors recognize that prices are at the bottom and see tremendous value in commercial real estate. This kind of positive sentiment expressed by U.S. investors is often a precursor to a more active investment sales market. There is plenty of pent-up demand and the survey suggests investors are ready to get off the sidelines and back into the game.”

The survey also reflected overall positive momentum globally. Survey participants believe that most commercial real estate markets have passed the bottom and are on the rise. Improving markets are characterized by rising demand, falling availability and vacancy and rising headline rents.

Some additional key global findings of Colliers International’s Q3 2010 Global Investor Sentiment Survey include:

• The largest group of respondents put the Global Property Clock for their regions at eight o’clock; the second and third largest groups were at six and seven o’clock, respectively.

• Most Q1 respondents placed their markets at between five and six o’clock.

• Ninety percent of respondents said they planned to expand their current level of real estate holdings within a year or maintain them at current levels.

• New York, Chicago, San Francisco, Washington, London, Sydney, Singapore and Hong Kong were listed as key cross-border investment destinations. Emerging markets mentioned include Poland, Ukraine and Brazil.

• Nearly 80 percent think debt will be easier to access in the next 12 months. Respondents who said they believe the cost of debt would rise in the next 12 months fell slightly from the first quarter of 2010, with 44 percent predicting an increase vs. 52 percent six months ago.

Some additional key regional findings include:

• In Western Europe, 60 percent of respondents intend to make cross-border investments, a notable increase from the figure of 30 percent for Q1 2010.

• 73 percent of Asian investors expect to expand their property portfolio in the next 12 months, up from 65 percent in Q1 2010.

• Looking ahead to the next 12 months, fewer Pacific investors (46 percent) expect to expand their property portfolio compared to the 68 percent who expected to expand in Q1 2010.

• Across Central and Eastern Europe, the range of locations being targeted by investors was quite diverse, although Warsaw remains the most popular destination, notably for office product. Other popular targets quoted were Kiev, Prague, Moscow and Bucharest.

The Q3 2010 Global Investor Sentiment Survey was conducted from Aug. 15 to Sept. 7, 2010. More than 200 major institutional and private investors with holdings of US $710 billion and representing a broad cross-section of property investors across the globe participated.

© 2010 Florida Realtors®


Posted by Fred Hintenberger on November 9th, 2010 8:48 PMPost a Comment (0)

Judges revisiting foreclosure cases may help owners but clog market

TAMPA, Fla. – Oct. 5, 2010 – On Florida’s west coast, where the housing bust has flooded courts with foreclosure filings, the chief judge of the 6th Judicial Circuit has little sympathy for lenders who have routinely submitted flawed and possibly fraudulent foreclosure cases.

J. Thomas McGrady, whose jurisdiction includes two hard-hit counties with more than 1 million people in the Tampa area, said Monday that foreclosures based on improper paperwork should be tossed out.

Judges “are going to have to vacate that judgment and start over again,” he said.

Across the country, judges facing pressure from homeowners and their attorneys are beginning to reexamine old cases and dismiss pending ones. The trend could lead to overturned evictions, and it could stall foreclosure cases for years and scare away buyers of millions of seized properties clogging the real estate market.

“We’ve never been inundated to this extent with this number of cases alleging fraudulent paperwork,” said Peter D. Blanc, chief judge of the 15th Judicial Circuit Court, in West Palm Beach. “We’re in new territory, and we’re struggling to determine what the proper solution is.”

Judges nationwide have broad latitude in deciding whether to accept new paperwork and whether to charge the lenders with fraud for submitting problematic documents in the first place.

Even before three of the nation’s largest lenders – Bank of America, J.P. Morgan Chase and Ally Financial – announced moratoriums on foreclosures in the 23 states that require a court order to evict a borrower from a home, some judges were beginning to push back against banks with sloppy or fraudulent filings.

The lenders have acknowledged that a handful of employees signing off on hundreds of thousands of files may not have read them, but they have insisted that the problem amounts to a technical issue that can be fixed easily by replacing old documents with new ones. They say that the facts proving that borrowers missed their payments are sound and that the procedural errors might delay foreclosures but won’t change the outcome.

As the situation in Florida shows, it’s unlikely to wind up so simple.

Armies of consumer attorneys and homeowners are seizing on the paperwork issues to try to protect individual homes from foreclosure and bring into question the legitimacy of the millions of foreclosures undertaken since the housing crisis began in 2007.

The recent moratoriums have made life easier for people such as Michael Gaier, a Philadelphia lawyer who has taken on 130 clients hoping to fight their foreclosures.

Before, he said, judges churning through foreclosure cases tended “to roll their eyes, because they’ve heard every story in the book,” he said. But now, “I don’t have to convince them on my own. I don’t have to start from scratch,” he said, because the moratoriums show that the banks “know that something is wrong.”

Gaier and other lawyers say they have been flooded with calls from new clients who had lost hope of keeping their homes but now see an opportunity to stay. In addition, homeowners who had been complaining of flawed or forged paperwork for years feel they are finally getting traction.

“My reaction is, it’s about time. In the past, people thought we were crazy; the judges laughed at us. Now everyone knows there is a serious problem,” said Denise McMillan, 51, who was evicted from her four-bedroom home in Pikesville, Md., in July and has been coordinating online with others fighting foreclosure.

The collective decisions of judges across the country could turn a foreclosure slowdown into a far larger mess if they determine that homes were wrongly seized and resold by lenders. Foreclosed homes accounted for nearly one-fourth of all residential sales in the second quarter, according to a report by RealtyTrac released last week.

That possibility already is driving away potential buyers of bank-owned properties who don’t want to get caught in legal battles between banks and borrowers. At least one company that provides title insurance, Old Republic Title, has refused to work on homes foreclosed by Ally’s GMAC mortgage unit.

Travis John, a broker in central Florida who specializes in distressed sales, said buyers in recent weeks have seen the headlines about problems in the foreclosure process and have shied away.

“If buyers continue to have this fear – if we have even 30 percent less sales – that would be traumatic,” he said. “We’re already in a traumatic market.”

Across Florida, which has the most foreclosure filings of any state, mortgage companies are already submitting formal requests to judges for the withdrawal of documents that they say were “not properly verified.”

Such actions show that the flawed paperwork is “a serious problem,” said veteran circuit court judge Lynn Tepper, who has presided over foreclosure cases in Pasco County, north of Tampa.

“They’ve conceded that the affidavit is flawed,” Tepper said. That means the judgment based on the affidavit must have been problematic as well – and that the decisions should be reversed.

Tepper sent a chill through law firms working for lenders this spring when she threw out a request for a foreclosure and ruled that U.S. Bank perpetrated fraud by submitting backdated documents that purported to show the lender owning the loan at the time of the foreclosure.

The homeowner, Ernest E. Harpster, got his home back despite the fact that he owed $190,000 on the loan. Tepper also ruled that U.S. Bank could not refile the case.

These days, Tepper is plodding slowly through the pending cases, looking closely at signatures and notarizations, making sure the names and numbers look accurate and legitimate.

“You have to be careful,” she said. “It used to be such a pro forma thing; it was a no-brainer. That’s surely not the case now.”

Copyright © 2010 washingtonpost.com


Posted by Fred Hintenberger on October 5th, 2010 6:48 PMPost a Comment (0)

NEW YORK – Sept. 28, 2010 – Have you been working to boost your credit score before trying to get a mortgage? It may not yield the payback you expect.

The mortgage loan interest rates offered to borrowers with stellar FICO scores aren’t much lower than the rates offered to those with a middle-of-the-road 720 score these days.

That means that efforts to drive up a credit score to lofty heights aren’t likely to produce substantial savings over the life of the loan.

The real savings comes from getting your score to that magic line of 720.

An analysis of interest rate quotes made through real estate website Zillow.com during the first half of September found that prospective borrowers with FICO scores of 620 or below aren’t likely to get any mortgage offers. “These lenders are really not looking at people under 620 at all,” said Stan Humphries, chief economist for Zillow.

That means well over a quarter of U.S. adults have little or no access to mortgage loans right now, based on the most recent distribution of scores provided by FICO. That’s because credit remains tight and banks, which have written off billions in bad loans in the past three years, are trying to keep their risks low, so they’re bypassing the diciest borrowers. “As the housing market continues to improve over the next five years, then this situation will also change,” Humphries predicted.

For potential borrowers with scores between 620 and 720 - roughly another quarter of U.S. adults - the lowest annual interest rate offered by lenders through Zillow.com shows the impact a few credit score points can have.

• For scores between 620 and 639, the best average annual percentage rate offered was 4.9 percent.
• For scores between 640 and 659, the rate was 4.73 percent.
• For scores between 660 and 679, the rate was 4.6 percent.
• For scores between 680 and 699, the rate was 4.56 percent.
• For scores between 700 and 719, the rate was 4.44 percent.
• For scores of 720 and above, the rate was 4.3 percent.

That means that for each 20-point score increase, the average rate dropped 0.12 percent. On a $300,000 home with a 20-percent down payment, a 0.12 percent decline equals about $6,400 saved over the course of a 30-year mortgage, according to Zillow. The company looked at 25,000 loan requests and the quotes they garnered from its pool of 1,000 lenders to come up with its data.

“If you’re between 620 and 720, you should be killing yourself to get every point you can,” Humphries said.

But if you’re already at 720, the benefits start to dwindle as you improve your score further. There are still incremental rate reductions for borrowers in the higher range, but they won’t see the same level of drop-off that improvements lower on the scale can produce.

Part of the reason for so little change for the top borrowers is that interest rates are so low overall. “There’s not that much room right now between the rates,” noted Diane Winland, a financial planner with Financial Finesse, based in Manhattan Beach, Calif.

Another potential factor is that consumers with “perfect” credit scores tend to be less profitable for banks than consumers with a few dings on their histories, who pay higher rates and often penalties like late fees.

Consumers with great scores by and large avoid credit, explained John Ulzheimer, president of consumer education for the website Credit.com. “They have credit, they have had credit for a very long time, but they’re definitely a small-time user of credit. Which means that they’re not very profitable.”

The current situation means that potential mortgage applicants need to carefully evaluate their current standing and their goals before taking any steps.

Someone with a low credit score should work to improve his or her credit report before applying. “There’s lots of things people can do in a short period of time to go up 10 points,” said Todd Marks, vice president of education at the Consumer Credit Counseling Service of Greater Dallas.

But someone who already has a relatively high score may not benefit enough from an improved score to make delaying a home purchase worthwhile. “I always tell people, don’t get greedy,” Ulzheimer said. A rate in the low 4-percent range is still very good by historic standards, he noted. “In the grand scheme of things, it does not pay to wait.”

Copyright © 2010 The Associated Press, Eileen AJ Connelly, AP personal finance writer.


Posted by Fred Hintenberger on September 29th, 2010 6:07 PMPost a Comment (0)

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