VA Clinic construction continues

 

 

Del Prado Blvd widening Cape Coral

Del Prado Blvd widening Cape Coral update

 

Florida's existing home, condo sales rise in April

Florida’s existing home, condo sales rise in April

ORLANDO, Fla. – May 24, 2010 – Sales of existing homes in Florida rose 27 percent in April, which means that sales activity has increased in the year-to-year comparison for 20 months, according to the latest housing data released by Florida Realtors®. Another positive sign: Last month's statewide existing-home median price of $140,100 was 1 percent higher than the statewide median price in April 2009.

Existing home sales rose 27 percent last month with a total of 16,781 homes sold statewide compared to 13,244 homes sold in April 2009, according to Florida Realtors. Statewide existing home sales last month increased nearly 3 percent over statewide sales activity in March. Meanwhile, April's statewide existing-home median price was 2.3 percent higher than March's statewide existing-home median price of $137,000. It marks the second month in a row that the statewide existing-home median price has increased over the previous month's median.

"Buyers responding to the federal homebuyer tax credit before it expired helped to boost home sales across Florida," said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. "And buying conditions remain favorable, with a variety of housing options available in local markets at attractive and affordable prices. Plus, current mortgage interest rates are at historically low levels, which gives buyers more 'bang' for their buck."

Florida Realtors also reported a 55 percent increase in statewide sales of existing condos in April compared to the previous year's sales figure; statewide existing condo sales last month rose 2 percent over the total units sold in March. Though April's statewide existing-condo median price of $103,600 was down 3 percent compared to the year-ago figure, it was 6.9 percent higher than March's statewide existing-condo median price.

 

Seventeen of Florida's metropolitan statistical areas (MSAs) reported increased existing home sales in April while all but one MSA had higher condo sales. A majority of the state's MSAs have reported increased sales for 22 consecutive months.

Florida's median sales price for existing homes last month was $140,100; a year ago, it was $138,100 for a 1 percent gain. The median is the midpoint; half the homes sold for more, half for less.

Thenational median sales price for existing single-family homes in March 2010 was $170,700, up 0.6 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $301,790in March; in Massachusetts, it was $280,000; in Maryland, it was $235,785; and in New York, it was $209,900.

According to NAR's latest outlook, two trends are influencing a broader stabilization of home prices in housing markets across the nation: months of increased sales activity and lower levels of inventory. "Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," said NAR Chief Economist Lawrence Yun. "With home values stabilizing, a revival in homebuying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears."

In Florida's year-to-year comparison for condos, 7,291 units sold statewide last month compared to 4,703 units in April 2009 for an increase of 55 percent. The statewide existing condo median sales price last month was $103,600; in April 2009 it was $107,200 for a 3 percent decrease. The national median existing condo price was $170,600 in March, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.10 percent in April, up from the average rate of 4.81 percent during the same month a year earlier, according to Freddie Mac. Florida Realtors' sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state's smaller markets, the Panama City MSA reported a total of 128 homes sold in April compared to 108 homes a year earlier for a 19 percent increase. The market's existing home median sales price last month was $160,000; a year earlier it was $156,800 for an increase of 2 percent. A total of 65 condos sold in the MSA in April compared to 53 units sold the same month a year earlier for an increase of 23 percent. The existing condo median price last month was $187,100; a year earlier, it was $172,900 for an 8 percent gain.

© 2010 Florida Realtors®

 

Village Square to Begin Construction

Village Square to Begin Construction 

 

Plans are underway to begin construction of the first building in Village Square.  Village Square has been designed as a true urban mixed use development, where residents and workers can walk to shopping and restaurants within the project.  Five buildings oriented to an internal public square (shown here), as well as surrounding public streets, will provide 152 residential units, 251,546 square feet of office, retail, theatre and restaurants and a structured parking garage to provide 938 public and project parking spaces. Approximately, 4,000 square feet will be made available to the City for a police substation and other community use.  

 

The proposed mixed use development project will encompass an entire city block within the Community Redevelopment Area and will help to transform the CRA by helping to stimulate other new development and economic growth. The 3.94 acre site comprises a full block bounded by Cape Coral Parkway to the south, SE 47th Terrace to the north, SE 8th Court to the west and SE 9th  Place to the east.  The project is planned in phases--the first building will house Fifth Third Bank.  

 

Pending home sales on an upswing

Pending home sales on an upswing

WASHINGTON – May 4, 2010 – Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring homebuying season, according to the National Association of Realtors^® (NAR).

NAR's Pending Home Sales Index (PHSI) a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0; this follows an 8.3 percent increase in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, says favorable affordability conditions have been working with the tax credit. "Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales," he says. "Later, in the second half of the year and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and a return of buyer demand as they see home values stabilizing."

The PHSI in the Northeast declined 3.3 percent to 75.1 in March but remains 27.2 percent higher than March 2009. In the Midwest the index increased 1.2 percent to 98.9 and is 18.5 percent above a year ago.

Pending home sales in the South jumped 12.7 percent to an index of 121.2, which is 28.3 percent higher than March 2009. In the West the index rose 1.9 percent to 99.9 and is 8.8 percent above a year ago.

"Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages," Yun says. "As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up."

The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

© 2010 Florida Realtors® 

 

Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types

UF: Florida real estate market has hit bottom

GAINESVILLE, Fla. – April 29, 2010 – Florida real estate markets show the first tentative signs of recovering from the most painful recession in the state's history, according to the latest University of Florida (UF) report.

"Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types," says Timothy Becker, director of UF's Bergstrom Center for Real Estate Studies.

But while most of the survey respondents report the market probably won't get any worse, few say it has actually begun to improve yet, Becker says. "One of our respondents summed it up by stating that 'if anything, we will get less bad.'"

On the positive side, private capital – both foreign and domestic – is continuing to enter the state in search of quality investment deals. As banks start to deal with their problem assets, more deals will come to market.

Another good sign: Life insurance companies have started to re-invest in commercial properties after backing off for the last year and a half, Becker says. Because these companies use premiums from life insurance policies to make investments, they are not deterred by the lack of available bank financing.

"(Life insurance companies) see the fundamentals of the economy stabilizing and they see the opportunity to get quality assets at a good price," Becker says. "So if they think things aren't going to get worse and they may actually get better, it follows that they're going to want to start investing again."

On the negative side, unemployment continues to be one of the state's biggest problems, edging up to 12.3 percent in March, its highest level since the state began keeping count in the 1970s. Florida has lost more than 880,000 jobs since 2007.

Although there is a potential for job growth later in the year, even under the most optimistic assumptions it will take three to four years to return to 2006 levels, Becker says.

Also of concern is the continued reluctance of commercial banks to lend money because of pressure from regulators to manage risks along with depressed values that make it difficult to refinance mortgages.

The retail and office markets are the worst off, Becker says. "Until there is an increase in job growth, there is no need for more office space, and people aren't spending as much money as they used to."

Apartments continue to be the best market in the state due to high demand from people moving out of foreclosed homes. "More people are going to be living in temporary spaces than trying to buy homes just because it's gotten a lot more difficult to buy homes from a financing perspective," Becker says.

Statewide, Florida's new housing market will continue to be slow, a result of more foreclosed homes becoming available. "That competition makes it very difficult for new homes to get built and purchased because buyers can often get an equal or nicer home for a much cheaper price on the foreclosure market," Becker says.

One of the strongest areas of the state is South Florida, especially Miami-Dade and Broward counties, with their diverse economies, steady migration and influx of foreign capital. "The glut of condos in South Florida is actually starting to change hands – they're beginning to rent them – and I think there is more life in downtown Miami than there has been in a long time," Becker says.

Orlando, Tampa and Jacksonville also are picking up. "Florida's big cities – those four areas – are less bad off than the rest of the state, and they're going to recover quicker than other places," Becker says.

Jacksonville, in particular, is in a good position because its housing market never got as hot as other markets; and, as a result, it doesn't have as many foreclosures. "I think Jacksonville is primed to really take off, and with the expansion of the port is going to have a lot of jobs coming into the marketplace," Becker says.

A positive note overall is that survey respondents' confidence in their own business has risen for the fifth consecutive quarter. In previous breakdowns by profession, developers and lenders had extremely low expectations for their own businesses, and that has grown substantially in the last few surveys.

"It's always a good sign for us that the lenders think their business is going to get better," Becker says. "Maybe it means there is some light at the end of the tunnel, even though we're still not at a great spot."

© 2010 Florida Realtors®

 

Don't let dogmatic thinking or just plain bad reporting blind you from opportunity. That destroyed the real estate bulls back in 2005, and it could cost real estate bears big bucks today

Many people thought I was nuts when I called the housing market top in 2005. They simply didn’t believe my prediction that the market would crash, rather than gently level off.

A key reason: The mainstream press and traditional Wall Street analysts were leading them astray. Those guys couldn’t stop pointing out how everything was GREAT. They forecast sunshine and roses, with home prices supposedly growing to the sky forever and ever.

Now many people don’t want to believe the message I began communicating a year ago. I pointed out in May 2009 that I saw early indicators of a shift in housing market conditions. Heck, I went even further. I suggested that investors cover any “short”
positions in housing-related stocks … and even begin looking for pockets of investment value.

How’d that call work out?

Between May 1, 2009 and a few days ago, the benchmark Philadelphia Housing Index (HGX) increased more than 32 percent in value. Then this week it made a massive upside breakout. Multiple stocks in the sector have doubled, tripled, or more. And the price of lumber — a key input in home construction — has soared from around $160 per 1,000 board feet to $322. That 101 percent gain makes wood one of the best performing commodities on the planet!

 

Bottom line: You can’t believe everything you read or hear in the mainstream press or on TV. You have to consider the variant view — that the time for doom and gloom is past, and the time for unearthing pockets of investment value is at hand!

 

Critical Answers to
Key Housing Questions

Before I get into some of the places I’m looking for value investments, let me address the questions I keep getting over and over, especially in the wake of last week’s column. I hope my answers will help you avoid the unhelpful skepticism that is blinding so many others to real money-making opportunities.

Q. Don’t you know that millions of foreclosures are hitting the market? How the heck can you have a recovery when that’s the case?

A. Do I know that? Of course I do! I’d be a pretty lousy analyst if I didn’t. But you know what? Many of those properties are being ABSORBED. They’re being priced aggressively, and they’re being snapped up quickly. Some are ending up in the hands of investors. But many are going to traditional buyers who can actually afford to buy homes again thanks to the collapse in prices.

Here’s something else that isn’t being talked about much:

While late-stage delinquencies (90+ days) and loans in some stage of foreclosure have piled up like crazy, there is some evidence of stabilization in early-stage delinquencies. That’s not just in mortgages, by the way, but also things like credit cards.

So yes, we’re dealing with a mountain of distressed inventory. But it’s not getting bigger, and leading indicators suggest we’ll see improvement before long.

Q. Banks aren’t making loans any more. Nobody can get a mortgage!

A. This is another media canard. Yes, standards are much tighter than they were a few years ago. That’s a good thing. But the tightening trend has long since stopped getting worse. If anything, conditions are starting to gradually ease again.

Case in point: The Fed’s Senior Loan Officer Survey on Bank Lending Practices. This quarterly survey chronicles how willing banks are to make various types of loans, including home mortgages.

In the worst depths of the housing crisis (Q3 2008), a net 74 percent of the institutions surveyed were tightening standards on traditional home mortgages. It truly was almost impossible to get a mortgage.

 

But that number has shrunk steadily since then — to just 13.2 percent in the first quarter of this year, according to Fed data. That’s the best reading going all the way back to the end of 2006! I’m also seeing a bit of easing in jumbo loan qualifying standards. Even the mortgage securitization market is starting to stir again after lying dormant for many, many months.

Q. What about “shadow inventory?”
Aren’t banks sitting on a mountain of unsold homes? When they dump that junk on the market, it’ll crater everything!

A. Yes, shadow inventory is out there. Banks, Fannie Mae and Freddie Mac, and other parties do have a lot of property that they own outright. Other homes are still nominally owned by borrowers. But those borrowers are way behind on payments. By all rights, these properties should be quickly seized, then sold to new buyers. And if that happened, then prices would crater.

But that just ain’t going to happen! The government has made it entirely clear that they will NOT force those parties to liquidate.

Banking regulators are going to let some of the inventory fester while they look the other way. Policymakers are also going to continually add more goodies to keep lenders from foreclosing … and add more sweeteners to lower borrower payments via the loan modification process.

Heck, some homes are being foreclosed, then rented back to troubled borrowers!

So yes, there could be a few million “shadow” homes to deal with. But they’ll be dealt with over time — parceled out into the market rather than dumped all at once. This will keep the recovery from being a vigorous one, but will also avoid a fresh sizable NEW crash in home prices.

Q. You’re on record predicting a surge in interest rates. Won’t that pummel housing?

A. Later on, higher rates will cause problems for housing. But not right now. Mitigating factors should offset the impact of higher rates during the first phase of the rate climb.

Remember, rates are rising in conjunction with an improvement in the global and domestic economies. Job losses are easing and consumer confidence is improving somewhat. Those forces will likely compensate for higher financing costs — until rates rise fast enough and far enough to overpower them.

Think I’m nuts?

Then consider this: Thirty-year fixed mortgage rates surged 33 percent from 6.49 percent in October 1998 to 8.64 percent in May 2000. During that same time, home sales plunged, right? Wrong! Existing single-family home sales held steady at around 4.57 million units. New home sales dipped a barely noticeable 4 percent.

Bottom line: When rates rise far enough and fast enough to win the battle with improving economic conditions, THEN you want to worry. But not until then. Until then, focus on what I keep harping on — the FIRST-ROUND impact of rising rates, such as plunging bond prices and how to profit from them.

Oh and in case you’re wondering, within a day of the first contract on my house falling through, I had multiple new showings. A replacements contract was signed less than a week later.

Nothing’s certain in this market, of course. This sale could fall through too. But you can clearly see that when the price is right, buyers are ready to act. That’s a big difference from 2008 and early 2009.

My final piece of advice: Don’t let dogmatic thinking or just plain bad reporting blind you from opportunity. That destroyed the real estate bulls back in 2005, and it could cost real estate bears big bucks today.