Housing may loosen up

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Housing may loosen up

NEW YORK – Dec. 21, 2012 – Shrinking inventories of homes for sale, which have helped drive prices higher this year, may reverse course next year, economists say.

Rising prices are likely to persuade more people to sell and builders to add more homes, which would expand supplies.

In recent years, with prices nationally down more than 30 percent from their 2006 peaks, the only people selling were people who had to sell, says economist Paul Diggle at Capital Economics. But prices have been rising, up 6.3 percent in October compared with a year earlier, CoreLogic says. More increases are likely next year.

Supplies of homes for sale are “close to a low point now,” Diggle says and will “probably turn around over the next year.”

That will help keep a check on prices. Still, Capital Economics predicts prices will rise 5 percent next year. Economists surveyed by market watcher Zillow foresee a 3.1 percent jump.

The housing market continued to show signs of strengthening in November, with existing home sales climbing to its highest level in three years, the National Association of Realtors reported Thursday.

Total sales of existing homes rose 5.9 percent in November to a seasonally adjusted annual rate of 5.04 million, up 14.5 percent from a year ago, NAR said.

Yet, the most important number in the monthly report dealt with the supply of homes for sale, says economist Patrick Newport of IHS Global Insight. Supplies have fallen to the lowest in more than seven years, based on the current pace of sales. NAR reported the supply fell to 4.8 months in November, down 38 percent from January 2011. Realtors consider a six-month supply to be a balanced market between buyers and sellers.

More people will likely step up to sell next year, assuming prices continue to rise, Newport says. “A lot of people have just been waiting.”

Phoenix, which leads the nation with a 25 percent rise in October prices year-over-year, saw its supply of active listings hit a low in June, then expand until December. That’s a normal seasonal pattern for Phoenix, but more ordinary sellers are also likely tapping into rising prices, says Mike Orr, real estate expert at Arizona State University.

A recent survey also points to more sellers. Fannie Mae’s November National Housing Survey showed the share of consumers who say now is a good time to sell a home jumped 5 percentage points in November to 23 percent. That’s the highest level since the survey began in June 2010.

Real estate website Trulia, with Harris Interactive, also recently surveyed homeowners and found that 22 percent of current homeowners said they’re at least somewhat likely to sell their homes next year.

Those most likely to sell are people who bought after 2009 and have seen prices rise, the survey showed. They will likely include “flippers” who buy distressed homes, fix them, then resell, says Trulia economist Jed Kolko.

Supplies of homes for sale have been tightening, given stronger sales and a reluctance among people to sell while prices were weak. Also, fewer distressed properties have been coming to market as the foreclosure crisis slowly abates.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Julie Schmit

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The long-awaited opening of the Veterans Affairs clinic in Cape Coral

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The long-awaited opening of the Veterans Affairs clinic in Cape Coral today means easier access to health care for many area veterans, but also — city officials hope — a dose of good medicine for the city’s economy. Dana Brunett, the city’s director of economic development, said more than 500,000 people could visit the clinic each year. “You got people traveling pretty fair distances,” he said. “They’re gonna have to get something to eat, buy gas, stuff like that. We want to make sure that happens in our community.” The city has pushed hard for development on more than 400 acres of untapped land within a mile of the site, what it calls the Veterans Investment Zone. On its wish list is everything from medical offices and pharmacies to movie theaters and bars. Nothing much is stirring yet, Brunett said, but that should change. “People like to see it happen,” he said. “They don’t want to be pioneers, but I think once you see the bodies showing up at that place and the amount of traffic they’re going to have, I think it’s really going to pick up.” Cape Coral real estate agent Hal Leopard said it’s pretty clear what’ll happen first. “Primarily, you’re gonna see hotels first, then there’ll be food vendors, restaurants, and then you’re gonna have the last (wave): retail,” Leopard said. And since many of the veterans will be disabled, that means they’ll be traveling with families, he said. “It’s gonna be a serious impact in that area,” he said. “Because once you close the Fort Myers location of the existing clinic, the only other two places vets can go is Tampa or Miami.” With more than 200,000 veterans in Southwest Florida and others coming from six counties, Cape Coral Councilman Kevin McGrail said the next step is securing a straight shot from Interstate 75, a federal project that will likely cost tens of millions.

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Homebuyers reveal preferences

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Old vs. new? Homebuyers reveal preferences

NEW YORK – Dec. 6, 2012 – What do home shopper prefer about new homes versus older homes? A study commissioned by BHI Inc. examined consumer preferences in new homes versus existing homes among 984 prospective buyers who plan to purchase a home within the next 12 months.

The survey found that consumers generally prefer existing homes over new homes, but many will still consider a new home offered by a builder. Seventy-five percent of the buyers say they’re considering an existing home compared to 20 percent who want a new home. Five percent say they have no preference whether the home is old or new, according to the survey.

For home shoppers who prefer existing homes, their preferences tend to be driven by the mature landscaping, larger lot sizes and sense of community that they say existing homes tend to offer. Some said established neighborhoods tend to have a “warmer inviting feel,” “better construction,” and “better privacy – homes are not on top of each other and cookie cutter.”

Homebuyers who prefer new homes tend to cite energy efficiency, the ability to customize the home to their needs, and lower maintenance costs as top drivers. Also, they say that new homes tend to offer more living space, but that may come at the expense of smaller yard and lot sizes.

Source: “Don’t Let Buyers Shop New Homes Without You,” Inman News (Nov. 14, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Oct. 2012 pending home sales highest in over five years

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Oct. pending home sales highest in over five years

WASHINGTON – Nov. 29, 2012 – Pending home sales rose strongly in October with mixed regional results, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI) based on contract signings increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September. The PHSI is 13.2 percent above October 2011 when it was 92.6. The data reflect contracts but not closings.

“We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about homebuying now that home prices have clearly turned positive,” says Lawrence Yun, NAR chief economist.

Outside of a few spikes during the tax credit period, pending home sales are at the highest level since March 2007 when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 consecutive months.

Yun says there are clear regional patterns: “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West.”

“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” says Yun.

The PHSI in the Northeast slipped 0.1 percent to 79.2 in October, but it’s 13.3 percent above a year ago. In the Midwest, the index jumped 15.6 percent to 104.4 in October, and it’s 20.0 percent above October 2011.

Pending home sales in the South rose 5.5 percent to an index of 117.3 in October, and it’s 17.4 percent higher than a year ago. In the West, the index declined 1.1 percent in October to 105.7, but it’s 0.9 percent above October 2011.

© 2012 Florida Realtors®

 

 

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Investors see shrinking 2-year window to buy up REOs

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Investors see shrinking 2-year window to buy up REOs

NEW YORK – Nov. 16, 2012 – The big discounts in the housing market are fading, and investors are taking notice that time is ticking. Blackstone Group LP, one of the world’s largest private-equity firms, says that investors likely have less than two years to buy up foreclosed U.S. homes as prices rise and supplies shrink.

“Prices are starting to move faster,” Jonathan Gray, global head of real estate for Blackstone, told Bloomberg. “That’s one of the risks that emerge as more people like us get into the space and as individual homeowner confidence grows. Frankly, buying a home today is pretty compelling.”

Blackstone has spent about $1.5 billion on 10,000 foreclosed homes this year alone. It is the biggest buyer of single-family homes in the nation. According to Blackstone, the investment firm purchases $100 million in these kinds of properties per week. The strategy is to purchase foreclosed single-family homes at steep discounts and turn them into rentals.

“The recovery in house prices could surprise people,” Gray told Bloomberg. “They have just gotten beaten down so much and we’re not building enough to keep up with the population growth. Affordability is there. I think as homeowners get a little bit of confidence, we will steadily have more people lean toward buying homes, faster home-price appreciation, which will be good for this investment strategy and good for the economy at large.”

Source: “Blackstone Sees 2-Year Window to Buy Distressed Homes: Mortgages,” Bloomberg (Nov. 14, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

 

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Fla.'s housing market continues positive trends in Oct. 2012

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Fla.’s housing market continues positive trends in Oct. 2012

ORLANDO, Fla. – Nov. 19, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in October, according to the latest housing data released by Florida Realtors®.

“With Thanksgiving just around the corner, we have a lot to be thankful for here in Florida,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that Florida is on a positive path and has been for months. Pending sales, closed sales and prices are trending up.”

Statewide closed sales of existing single-family homes totaled 17,779 in October, up 25.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 56.7 percent over the previous October. The statewide median sales price for single-family existing homes in October was $145,000, up 9 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year. In California, the statewide median sales price for single-family existing homes in September was $345,000; in Massachusetts, it was $294,900; in Maryland, it was $244,357; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 8,252 units sold statewide last month, up 16.4 percent compared to October 2011. Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $107,000, up 20.2 percent over the previous year. NAR reported that the national median existing condo price in September 2012 was $181,000.

The inventory for single-family homes stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Once again, everything that should be going up in the market is going up, and everything that should be going down is going down,” said Florida Realtors Chief Economist Dr. John Tuccillo. “As impressive as the year-over-year gains for October are, far more impressive are year-to-date gains of 2012 over 2011. They indicate the depth and resilience of this recovery.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

© 2012 Florida Realtors®

 

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Housing market uptrend expected through 2014

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·         Housing market uptrend expected through 2014

·         ORLANDO, Fla. – Nov. 12, 2012 – The housing market recovery should continue through the coming years, assuming there are no further limitations on the availability of mortgage credit or a “fiscal cliff,” according to forecast presentations at a residential forum at the 2012 Realtors® Conference and Expo. Lawrence Yun, chief economist of the National Association of Realtors (NAR), said the housing market clearly turned around in 2012.

“Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases,” Yun said. “Disruption from Sandy likely will be temporary, notably in New Jersey and New York, but the market is likely to pick up speed within a few months with the need to build new homes in damaged areas.”

Yun sees no threatening signs for inflation in 2013, but projects it to be in the range of 4 to 6 percent by 2015. “The huge federal budget deficit is likely to push up borrowing costs and raise inflation well above 2 percent,” he said. Rising rents, quantitative easing (the printing of money), federal spending outpacing revenue, and a national debt equal to roughly 10 percent of Gross Domestic Product are all raising inflationary pressures.

Mortgage interest rates are forecast to gradually rise and to average 4.0 percent next year, and 4.6 percent in 2014 from the inflationary pressure.

With rising demand and an ongoing decline in housing inventory, Yun expects meaningfully higher home prices. The national median existing-home price should rise 6.0 percent to $176,100 for all of 2012, and increase another 5.1 percent next year to $185,200; comparable gains are seen in 2014.

“Real estate will be a hedge against inflation, with values rising 15 percent cumulatively over the next three years, also meaning there will be fewer upside-down homeowners,” Yun said. “Today is a perfect opportunity for moderate-income renters to become successful homeowners, but stringent mortgage credit conditions are holding them back.”

Existing-home sales this year are forecast to rise 9.0 percent to 4.64 million, followed by an 8.7 percent increase to 5.05 million in 2013; a total of about 5.3 million are seen in 2014.

New-home sales are expected to increase to 368,000 this year from a record low 301,000 in 2011, and grow strongly to 575,000 in 2013. Housing starts are forecast to rise to 776,000 in 2012 from 612,000 last year, and reach 1.13 million next year.

“The growth in new construction sounds very impressive, and it does mark a genuine recovery, but it must be kept in mind that the anticipated volume remains below long-term underlying demand,” Yun said. “Unless building activity returns to normal levels in the next couple years, housing shortages could cause home prices to accelerate, and the movement of home prices will be closely tied to the level of housing starts.”

“Home sales and construction activity depend on steady job growth, which we are seeing, but thus far we’ve only regained half of the jobs lost during the recession,” Yun said.

Yun projects growth in Gross Domestic Product to be 2.1 percent this year and 2.5 percent in 2013. The unemployment rate is showing slow but steady progress and is expected to decline to about 7.6 percent around the end of 2013.

“Of course these projections assume Congress will largely avoid the ‘fiscal cliff’ scenario,” Yun said. “While we’re hopeful that something can be accomplished, the alternative would be a likely recession, so automatic spending cuts and tax increases need to be addressed quickly.”

Regardless, Yun said that four years from now there would be an even greater disparity in wealth distribution.

“People who purchased homes at low prices in the past couple years, including many investors, can expect healthy growth in home equity over the next four years, while renters who were unable to get into the market will be in a weaker position because they are unable to accumulate wealth,” he said. “Not only will renters miss out on the price gains, but they’ll also face rents rising at faster rates.”

Also speaking was Mark Vitner, managing director and senior economist at Wells Fargo, who said the fiscal cliff is the biggest situation that needs to be addressed. “Beyond concerns about the fiscal cliff, the economic improvement seems to be broadening,” he said. “Housing will strengthen in 2013 even if the economy weakens, because there is a demand for more construction, and the demand for apartments is rising at a faster rate than the need for more single-family homes. Unfortunately, apartment construction is focused on about 15 submarkets, so additions to supply will be uneven.

Even with declining market shares of foreclosures and short sales, Vitner said they would continue. “Distressed homes right now are like an after-Christmas sale – most of the best stuff has been picked over, but make no mistake, they’ll be with us for a while.”

Yun projects the market share of distressed sales will decline from about 25 percent in 2012 to 8 percent in 2014.

© 2012 Florida Realtors®

 

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Cape Coral VA facility unveils 'healing environment,' added capabilities

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·         Cape Coral VA facility unveils 'healing environment,' added capabilities

·         12:10 AM, Sep. 28,

·         Written by

·         Frank Gluck

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·         Scott Rogowski shows off an operating room at the VA outpatient clinic in north Cape Coral that opens in December. / Andrew West/news-press.com

·         The facility

·         • Location: 2489 Diplomat Parkway E., Cape Coral. 
• Open date: Dec. 17 
• Size: 220,000 square feet 
• Some of what it offers: Eight operating rooms, four soundproof audiology booths for hearing evaluation, a 3,200-square-foot laboratory, a 4,500-square-foot pharmacy and nine dental offices.

·         The first thing apparent when you step inside the soon-to-open VA outpatient clinic in Cape Coral is the light.

·         Broad windows and expansive views of the surrounding landscape define the new 220,000-square-foot building on Diplomat Parkway. The concept is part practical — it helps reduce the electric bill for artificial lighting — and part therapeutic.

·         The front lobby design includes a four-story “glass curtain” wall to flood the building with sunlight and convey a wide open sense of space.

·         “It’s very much a healing environment,” said Suzanne Klinker, director of the Bay Pines VA Healthcare System, which oversees the new clinic. “Light makes everyone feel good.”

·         Klinker, assorted VA officials and members of the media got an early look inside the new $60 million building Thursday, almost three months before its scheduled Dec. 17 opening date.

·         Today, construction is largely done and workers are installing medical equipment and furniture.

·         The new clinic is triple the size of the VA clinic in Fort Myers and has room for expansion on the 30-acre site, officials say.

·         It is designed to serve the estimated 250,000 veterans living in Southwest Florida, snowbird veterans and the more than 31,000 patients the Fort Myers clinic saw last year.

·         Like the existing 14-year-old clinic on Winkler Extension in Fort Myers, this facility is an outpatient clinic only and is not designed for overnight stays.

·         But it allows for expanded services including primary care, orthopedics, imaging and health testing, mental health, dental services and women’s care.

·         The new building includes eight operating rooms, four soundproof audiology booths for hearing evaluation, a 3,200-square-foot laboratory, a 4,500-square-foot pharmacy and nine dental offices, according to Manhattan Construction, which supervised the project.

·         Unlike the existing clinic, the new facility also will have an on-site coffee and food “bistro” for staff and visitors.

·         The VA is recruiting another 70 hospital staffers, including doctors and nurses, who will bring the total employee number to 400.

·         Some preference will be given to veterans, said VA spokesman Jason Dangel.

·         “We really enjoy employing veterans — veterans serving veterans in our facility,” he said.

 

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Housing may help give the economy a lift

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·         Housing may help give the economy a lift

·         NEW YORK – Nov. 9, 2012 – Lately, the housing market may be the one thing going right for the economy, Reuters reports. Several signs have pointed to a housing market in full recovery mode.

“Higher sales, prices and building, albeit modest so far, are a welcome boost as other drivers of the economy falter,” Reuters reports.

Unlike the “boom” years, housing has accounted for a small fraction of the gross domestic product in recent years. In 2005, it accounted for 6 percent, compared to 2.5 percent in the third quarter of this year.

The housing sector “would have to be on steroids to significantly boost GDP growth,” Paul Dales, an economist with Capital Economics, wrote in a recent research note.

Still, several economists are hopeful that residential investment could add two- to three-tenths of a percentage point to the GDP next year.

An increase in housing-related jobs also may help give the economy a lift. Housing-related jobs increased an average of 11,000 per month this year, a significant shift from 2011 when housing-related jobs declined, on average, by 1,000 per month.

But even the 11,000 per month could pale by 2013 if they hit an average of 30,000 per month, as predicted by Jim O’Sullivan, chief of U.S. economist at High Frequency Economics. That could make housing a significant contributor to chipping away at the unemployment rate. Analysts estimate that the economy needs 150,000 jobs created each month to keep the unemployment rate steady.

Housing may also help lift consumer spending, another important factor that needs to increase to give the economy a jolt. Real estate wealth can help, economists say. As more homeowners refinance into record low mortgage rates, these households will have more to spend.

Source: “Housing Market Rebound Fails to Recharge Economy,” Reuters (Nov. 5, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda

 

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Short sale worth the extra hit?

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·         Real Estate Q&A: Short sale may be worth the extra tax hit

·         FORT LAUDERDALE, Fla. – Nov. 8, 2012 – Question: I have decided to sell my home through a short sale. I have heard that the deadline for the tax waiver is the end of the year. After that, you have to pay taxes on any debt that the lender forgives. I don’t want to owe money to the government. Now I’m unsure whether to go through with the short sale. – Sarah

Answer: The Mortgage Forgiveness Debt Relief Act of 2007 does expire at the end of this year, and industry groups and observers are concerned about the effect on homeowners and the real estate market in general. Most pundits, including me, think the law will be extended at some point. Still, this isn’t something you can count on.

As it is now, the amount the lender forgives on most primary residences is not taxable. No extension would make short sales less attractive next year and beyond because sellers would have to pay taxes due to the forgiven debt. This could result in tax hits of a few thousand dollars or considerably more.

Despite the potential tax liability, a short sale still may be the best choice – particularly if you owe much more than the house is worth, you’re getting divorced or you have to move quickly for a new job. Consult an accountant and see about your specific situation. Despite its reputation, the Internal Revenue Service often is willing to work with taxpayers.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

Copyright © 2012 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by McClatchy-Tribune News Service.

 

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Home prices rise all over the US

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WASHINGTON – Nov. 7, 2012 – Growth in metropolitan area median home prices increased in the third quarter, and more areas are showing gains, according to the latest quarterly report by the National Association of Realtors® (NAR).

The median existing single-family home price rose in 120 out of 149 metropolitan statistical areas (MSAs) based on closings in the third quarter compared with same quarter in 2011, while 29 areas had price declines. In the second quarter 110 areas showed increases from a year earlier, while in the third quarter of 2011 only 39 metros were up.

NAR Chief Economist Lawrence Yun said the growth in home prices gets down to supply and demand. “Housing inventories have been gradually trending down from a record set in the summer of 2007,” he said. “Earlier this year, a broad equilibrium began to develop in most areas between home buyers and sellers, which led to a sustained upturn in home prices. We expect fairly normal appreciation patterns in 2013, but there is a risk of price acceleration if builders are unable to increase supply to meet the needs of our growing population and household formation.”

The national median existing single-family home price was $186,100 in the third quarter, up 7.6 percent from $173,000 in the third quarter of 2011, which is the strongest year-over-year price increase since the first quarter of 2006 when the median price rose 9.4 percent. In the second quarter the price increased 7.2 percent from a year earlier.

The median price is where half of the homes sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions.

Some of the price gain resulted from a smaller share of distressed home sales in the market, but the higher prices significantly reflect a market recovery. Distressed homes - foreclosures and short sales that generally sell at deep discounts - accounted for 23 percent of second quarter sales, down from 30 percent a year ago.

A separate breakout of income requirements to buy a home on a metro area basis shows buyers in the vast majority of areas had ample income in the third quarter, assuming they could meet stringent mortgage credit standards.

Total existing-home sales, including single-family and condo, rose 3.2 percent to a seasonally adjusted annual rate of 4.68 million in the third quarter from 4.54 million in the second quarter, and were 10.3 percent higher than the 4.25 million pace during the third quarter of 2011.

At the end of the third quarter 2.32 million existing homes were available for sale, which is 20.0 percent below the close of the third quarter of 2011 when 2.90 million homes were on the market.

According to Freddie Mac, the national commitment rate on a 30-year conventional fixed-rate mortgage averaged a record low 3.54 percent in the third quarter, down from 3.80 percent in the second quarter and 4.31 percent in the third quarter of 2011.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said affordability conditions are a big factor in rising sales. “Historically low mortgage interest rates are encouraging many buyers who were on the sidelines,” he said. “Sales this year are notably higher than the levels seen in 2008 through 2011, so we’re clearly in a recovery phase with rising sales, declining inventory and rising prices. Of course the recovery would be stronger and more stable if we could return to safe but sensible mortgage underwriting standards.”

A breakout of incomes required to purchase a median-priced existing single-family home by metro area shows the typical buyer had more income than necessary in the third quarter. Income amounts are determined using several downpayment percentages, assuming a mortgage interest rate of 4 percent and 25 percent of gross income devoted to mortgage principal and interest.

The national median family income was $61,700 in the third quarter. However, to purchase a home at the national median price, a buyer making a 5 percent downpayment would only need an income of $40,900. With a 10 percent downpayment the required income is $38,700, while with 20 percent down the necessary income is $34,400.

In the condo sector, metro area condominium and cooperative prices - covering changes in 54 metro areas - showed the national median existing-condo price was $180,800 in the third quarter, up 7.7 percent from the third quarter of 2011. Thirty-three metros showed increases in their median condo price from a year ago and 21 areas had declines.

First-time buyers purchased 32 percent of all homes in the third quarter, down from 34 percent in the second quarter; they were 32 percent in the third quarter of 2011.

The share of all-cash home purchases was 27 percent in the third quarter, down from 29 percent in the second quarter and 29 percent in the third quarter of 2011. Investors, who make up the bulk of cash purchasers and compete with first-time buyers, accounted for 17 percent of all transactions in the third quarter, down from 19 percent in the second quarter and 20 percent a year ago.

“The modest decline in first-time buyers and investors shows the impact of limited inventory in the lower price ranges from a shrinking share of distressed homes, which are popular with both of these groups,” Yun explained.

Regionally, existing-home sales in the Northeast increased 1.7 percent in the third quarter and are 9.8 percent above the third quarter of 2011. The median existing single-family home price in the Northeast slipped 0.3 percent to $246,900 in the third quarter from a year ago.

In the Midwest, existing-home sales rose 5.2 percent in the third quarter and are 17.8 percent higher than a year ago. The median existing single-family home price in the Midwest increased 4.2 percent to $151,100 in the third quarter from the same quarter in 2011.

Existing-home sales in the South increased 5.4 percent in the third quarter and are 11.7 percent above the third quarter of 2011. The regional median existing single-family home price rose 5.7 percent to $165,400 in the third quarter from a year earlier.

In the West, existing-home sales slipped 1.2 percent in the third quarter due to limited supplies, but are 2.1 percent higher than a year ago. With the tight inventory, the median existing single-family home price in the West surged 20.2 percent to $247,400 in the third quarter from the third quarter of 2011.

© 2012 Florida Realtors

 

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Fla. consumer confidence hits five-year high

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·         Fla. consumer confidence hits five-year high

·         GAINESVILLE, Fla. – Sept. 26, 2012 – Florida’s September consumer confidence reached a post-recession high of 79 – up three points from a revised August reading of 76 – according to a monthly University of Florida (UF) survey.

“The last time Florida consumer confidence hit 79 was in October 2007,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “At that time, confidence was on its way down as the housing crisis was getting under way. This month’s index comes at a time when the economy is still in recovery.”

The September survey showed increases in all five components that researchers use to assess the collective economic opinion of Floridians.

In September, the component measuring whether respondents’ think they’re better off economically today compared to a year ago rose one point to 62. In addition, the component that measures economic expectations one year from now rose one point to 86, while the component measuring expectations that personal finances will improve a year from now rose one point to 86.

Floridians had a rosier outlook for the state as well. That component rose three points to 78. The component that measured their outlook for the nation went up two points to 84.

Finally, the component that measures whether Floridians think it’s a good time to buy big-ticket items, such as automobiles and refrigerators, rose two points to 82.

Despite the uptick, McCarty says several economic conditions serve as a drag on Florida’s recovery: job losses in construction and government helped keep the state’s unemployment rate in August unchanged from the previous month at 8.8 percent. And “although inflation is currently under control, consumers should expect increases in prices next year, as the effects of the drought hitting much of the U.S. make their way into food prices.”

However, there is good economic news for Florida.

The median price for a single-family home in August was up 5.8 percent over the previous year’s average at $147,000, although it was down slightly from July’s figure.

“The stock market is getting closer to the all-time record and this, along with increases in housing prices, are certainly a boost to consumers’ sense of wealth,” McCarty says, adding that October should prove to be an “interesting month.”

Political ideology, which already plays a significant role in consumer confidence, could also become even more crucial as the presidential campaign heats up. “Obama supporters have much higher confidence than Romney supporters,” McCarty. “Whether Floridians react negatively or positively remains to be seen, but it will largely determine consumer confidence as we get close to the holiday shopping season.”

Conducted Sept. 12-20, the UF study reflects the responses of 419 individuals who represent a demographic cross-section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.

© 2012 Florida Realtors®

 

Cape Coral Florida

Provided by CapeCoralRealEstate

 

Time to buy your first home is NOW

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·         Florida Housing Finance, the administrator of the Florida Bond program has just delivered some great news for area First Time Homebuyers.  The interest rate on the program has been lowered to a fixed rate of 3.5%!  Lender fees are still very limited on the program and no doc stamps or intangible taxes are collected on the note and mortgage which saves the borrower a significant amount at closing.

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·         A second program change that has been communicated is that the borrower’s minimum cash investment under the program of $1,000 can now be gifted!

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·         Most borrowers under the program will qualify for a $7,500 zero interest, zero payment second mortgage that can be used towards the down payment and closing costs of the loan.  Certain borrowers may qualify for additional assistance of up to $10,000 under the Lee County HOME program, up to $20,000 under the Collier County SHIP program or up to $5,000 under the Federal Home Loan Bank first time homebuyer program.  And if further assistance is needed, the seller can pay up to 6% of the purchase price towards closing costs!

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·         Keep in mind that to qualify for this program, the borrower and/or their spouse cannot have owned a primary residence over the last three years.  Also, maximum household income cannot exceed $79,800 for a family of three or more or $68,400 for a one or two person family in Lee County or $101,920 for a family of three or more or $87,360 for a one or two person family in Collier County.  The minimum credit score on the program is 640 and non-traditional credit can be developed for a borrower if no credit scores exist. 

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Contact us for more information

Cape Coral Florida

Provided by CapeCoralRealEstate

 

Time to buy a house is NOW

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·         If you can pull it off, buy a house

·         NEW YORK – Aug. 13, 2012 – Investment opinions are like, um, noses: Everyone has one. Buy stocks, sell bonds? Go long steel and short copper? Buy sheep, sell deer?

It’s pretty easy to see both sides of an investment argument. But it’s hard to argue against buying a house now, assuming you can get a loan.

The housing cycle is a long one, in part because buying a house moves at a glacial pace, at least compared with the time it takes to buy a stock or bond. If you’re not pre-approved for a mortgage, you have to submit to a credit check, which, these days, is only slightly less intrusive than a CIA background check. You have to get the home inspected. You have to figure out the various fees your bank charges, including the one marked “Just because we can.”

How long is a housing cycle? Pretty long. A relatively modest housing bubble, by today’s standards, occurred in Boston in the late 1980s. Average home prices, adjusted for inflation, hit $310,000 in October 1987. Home prices didn’t hit that level again until May of 2000. Someone who bought at the high had a long wait to get even – particularly in light of the broker’s commission.

Home prices bottomed, however, in March 1993 – roughly six years after the top. History doesn’t repeat itself precisely, but it’s interesting to note that the top of the last housing bubble was six years ago, in 2006.

Why be bullish on housing?

Prices. You can always buy low and watch prices go lower. But by many measures, home prices are still cheap. The median single-family home price – half higher, half lower – hit its nadir in January, dropping to $154,600, the lowest since October 2001, according to the National Association of Realtors. That’s down from a high of $230,900 in July 2006.

Existing-home prices rose in June to a median $190,100, up 8 percent from June 2011. Those are still 2003 levels.

Supply. The good news is that the enormous supply on the market is shrinking. It takes a wearisome amount of time for supply to shrink, in part because there are people who have wanted to sell their homes for many years, but haven’t been able to get the price they want. As prices rise, more homes come on the market.

Nevertheless, Ned Davis Research, a respected institutional research firm, estimates that excess supply of houses on the market should be eliminated by the end of 2013. When excess supply dries up, people start building more new houses, which has the virtuous effect of reducing the unemployment rate and increasing the economy generally.

Mortgage rates. The average 30-year fixed-rate mortgage rate is 3.59 percent, according to mortgage giant Freddie Mac. That’s above the all-time low of 3.49 percent the week of July 26, but close enough. It’s conceivable that at some point in the next 30 years, your interest rate would be less than the rate of inflation.

Assuming you financed 80 percent of the median single-family home, or $152,080, your mortgage payment would be about $691, excluding taxes and other irritations. About $5,589 of your first year’s payments would be tax-deductible mortgage interest.

Thanks mainly to low home prices and interest rates, the NAR’s housing affordability index rose to its highest level on record. (The higher the index, the more affordable the average home. The index also takes into account average family income, which has been falling since 2008.)

What could go wrong? All sorts of things. You may not be able get a loan. Bankers are insisting on checking things that seemed far too troublesome during the housing bubble, like whether you have a decent credit rating, a down payment, or a job.

The other problem is that houses are leveraged investments – that is, you borrow money to buy them. Let’s consider the example above, where someone buys a $190,100 house and finances $152,080.

Your investment is $38,020. Let’s say that the worst happens: Home prices fall, and you have to sell the house for $175,000.

Unfortunately, the bank won’t split the loss with you. You’ll get back $22,920 from the sale, and wave goodbye to $15,100 of your downpayment. That’s a 40 percent loss, even though your house has fallen 8 percent in value.

There are other risks with homeownership, ranging from termites to ghosts in the hall closet. But if you’re planning to live in your home for a long time, you have the money, and you can get financing, it’s a fine time to buy.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc.

 

Cape Coral Florida

Provided by CapeCoralRealEstate