Sarasota real estate market remains hot as temperatures cool

The Sarasota real estate market remained hot in November 2009 with overall sales nearly 86 percent higher than November 2008.  Total sales stood at 578 in November, mirroring last month’s total of 574 and much higher than the 311 sales reported in November 2008. The breakdown was 417 single family homes and 161 condos sold last month.
 
The fall has proven to be a busy one for many local Realtors®, and the trend doesn’t seem to be slowing down. Pending sales stood at 793 in November, just below last month’s total of 839, and far higher than last November, when only 504 pendings were reported. The statistic is a strong indicator for the next two or three months of sales, as pending sales are an indicator of current buyer activity. Some experts had predicted pending sales might slow because of the uncertainty over the extension of the first-time homebuyer’s tax credit. But that fear has proven unfounded in the Sarasota market.

 The tax credit was extended and expanded to include many other homebuyers on Nov. 6, so the home buying sales rush could easily continue through the season and the first quarter of 2010. The recent statistics continue to point to a local market in a prolonged recovery period.
 
The median sale prices for single family homes and condominiums have apparently stabilized after the extended drop experienced in 2008. The median sale price for single family homes actually jumped by approximately 6 percent to $162,500 from October’s level of $151,000. The median was only 4.4 percent below the November 2008 median sale price of $170,000.
 
The condominium median prices continue to see-saw, dropping to $178,750 in November after rising to $220,000 in October. In September 2009, the median was only $162,500. In November 2008, the median sale price was $195,000, which is very near the median condominium sale price for the 11 months of 2009 ($198,500).
 
Bank-owned property sales and short sales are still accounting for almost half of the single-family home sales and a third of the condo sales in November, and still represent the biggest factor in the overall lower sale prices. For normal arm’s length sales the median sale prices are almost double the figures for the distressed properties.
 
“We are experiencing a very active real estate market during the early seasonal months, when our northern visitors and winter residents return,” said Bill Geller, 2009 SAR President. “Even during these times of higher unemployment and slower national economic activity, it’s very encouraging to see that the Sarasota area remains an attractive place to purchase a home. The statistical trends indicate the market is returning to health. Higher sales and pending sales, stabilizing prices, lower inventories – all of these numbers point to a return to a vibrant real estate market.”
 
While the inventory level rose slightly in November, from 6,226 to 6,261 properties on the market, it is still at the lowest level since late summer of 2005 and the years prior to the boom period from 2003 – 2005.
 
The “months of inventory” – the number of months it would take to sell all the available properties at the current sales rate – dropped to 14.6 months for condos. That’s the lowest figure in the past three years, and far lower than the 40.5 months reported in November 2008. The months of inventory is now 9.4 months for single family homes, slightly higher than October’s 9.3 months, but far lower than last year’s figure of 27.6 months. A figure of 6 months is considered to be a market in equilibrium between buyers and sellers.

For Assistance with Purchasing or Selling a Home, Contact Justin Shirley @ 941-448-4872

Flat Fee MLS Listings show Innovation & Creativity among Real Estate Corporations: Finally, an Option for the Owner Wanting to Save Money & Sell Fast

The competition for listings between so-called “traditional” realty brokerages and commission discounters kicks up a lot of dust, but when the air clears it’s apparent that cut-rate brokerages aren’t the only force putting downward pressure on realty commissions as a percentage of the home sales price.

Fee-for-service brokerages, Internet-savvy buyers, skyrocketing home prices, a dearth of listings in some markets and some sellers’ notion that they can sell their home without paying an agent are among the other factors bearing down on conventional realty pricing structures.

Brokers and agents for decades have feared and resisted changes that would restructure commissions and traditional business models. But experts say change is unavoidable due to the new breed of real estate consumer created by the Internet.

“Real estate for almost a hundred years (considered) the end-user as being the agent and the brokerage, not the consumer. With the advent of the Internet, the entire paradigm is shifting and our end-user is definitely the consumer, not the agent,” said Julie Gardon-Good, founder and president of the National Association of Real Estate Consultants, a 1,000-member group formed in 1999 to assist realty practitioners in reframing their focus as real estate consultants.

Consumers want more control over the transaction. They value the real estate agent’s knowledge, but they resist paying for it as a percentage of the home sales price, according to Gardon-Good. She believes the fee-for-service model gives sellers what they want and compensates agents with what they’re worth.

Fee-for-service agents attach a dollar value to each service or calculate an hourly rate that’s paid regardless of whether the deal closes. The model recognizes services that have typically been given away and identifies which services are more profitable than others. Discounting typically includes providing the so-called “full service,” but charging less than the market-rate commission.

The menu aspect of fee-for-service often is confused with commission discounting. But the home’s market value determines whether the seller pays a discount or a premium price on a fee-for-service basis.

Bill Wendell, broker/owner of the Real Estate Café, which dishes a la carte buyer-side realty services, operates on the front lines of the fee-for-service model. Wendell charges $100 per hour for his services.

The average real estate transaction requires 40-60 hours per side, according Gardon-Good. That means Wendell would earn $4,000 to $6,000 per transaction or slightly more than 3 percent on a $160,000 house, but significantly less than 3 percent on a $300,000 house.

Other forces picking away at the commission structure are for-sale-by-owners who can pay a flat fee to an agent for an MLS listing with or without a buyer-agent commission split offer and the low inventory of houses for sale in some markets, which motivates agents to cut commissions in an attempt to win listings.

Skyrocketing home prices lead some sellers to question the typical 6 percent commission. A home that cost, say, $200,000 a year ago would have generated a $12,000 commission at 6 percent. If that home cost, say, $235,000 today, it would generate a $14,100 commission at 6 percent for the same services. The numbers are more striking for higher-priced homes and exceptionally hot markets. Sellers make those calculations themselves, then use the numbers to negotiate a lower rate.

Tom Cromer, broker/owner of a Miami Assist-2-Sell office, believes technology and demanding consumers pressure commissions downward, especially in the high-end housing market where a $3 million sale with a 6 percent commission would net a $180,000 commission.

“We don’t find home selling that complicated. It doesn’t take much more effort to sell a $3 million house than it takes to sell a $300,000 house,” he said.

Internet-based find-an-agent referral services like HomeGain, among others, have empowered home sellers with anonymity and turned them into fearless commission negotiators.

“People have more courage on the phone, so it would make sense that people would have more courage taking this issue on online,” said HomeGain CEO Bruce Schroder.

Self-sufficient, Web-savvy buyers and sellers know their options, spend more time virtually shopping homes and less time in the backseat of an agent’s car and expect their hard work to be rewarded with lower realty fees.

A California Association of Realtors 2002 study revealed that home buyers who used the Internet to help them with their real estate needs spent on average two weeks home shopping with their real estate agent and looked at approximately 7 homes. Traditional buyers spent approximately 6 weeks with their agents and looked at approximately 15 homes.

“The Internet has brought real estate information, be that about Realtors, house prices, commission structures, to everybody’s doorstep. So things which they might not have been sensitive about before they are more aware of today,” said real estate expert and author Stefan Swanepoel.

Editor’s note: Inman News Publisher Bradley Inman also is the founder and chairman of Homegain

 

Florida’s consumer confidence rises as economic fears ease

GAINESVILLE, Fla. – Sept. 30, 2009 – Belief that a national economic recovery is under way boosted Florida’s consumer confidence three points to 74 in September, according to a new University of Florida survey.

“I think Florida consumers are buying into the argument that the worst of the recession is over and we have avoided a complete meltdown,” says Chris McCarty, survey director of UF’s Bureau of Economic and Business Research. “Once again, they have surprised us with a higher-than-expected index.”

This month’s three-point rise follows a four-point revised increase in August. Of the five components that make up September’s index, three rose, one declined and one was unchanged. Perceptions of personal finances now compared with a year ago remained unchanged at 44, only five points above its all-time low of 39 in December. Expectations about personal finances a year from now fell three points to 81.

In contrast, perceptions of U.S. economic conditions over the next year rose three points to 75, while expectations about economic conditions over the next five years rose five points to 86. Perceptions of whether it is a good time to buy big-ticket items, such as appliances and cars, rose nine points to 84.

“It is worth noting that the two index components that gauge perceptions of personal finances both now and in the future are flat or down,” McCarty says. “All of the increase is in perceptions of future economic conditions, and in the perception that if you have the money, it’s a good time to buy.”

There are some signs that the economy is improving, he says.

Once again, the median price of a single-family home is virtually flat compared with the previous month, and up for the year, suggesting that housing prices in many areas of Florida have bottomed out, McCarty says. Although foreclosures are still high, the rate seems to be declining.

In other good news, inflation and, in particular, gas prices remain low overall compared with a year ago, McCarty says. In the past few years, gas prices have dominated the consumer confidence index. In addition, the stock market is still up for the year and at least for now appears stable.

“On the negative side, unemployment remains at 10.7 percent for Florida,” McCarty says. “This number is not expected to improve much until next year, and it could still get worse. Florida lost population this past year and could do so again as the underlying problems that prevent people from moving are still in place.”

Tourisms both domestically and internationally also are down as consumers trim discretionary spending, McCarty said. Programs such as Cash for Clunkers at least temporarily lifted retail sales, but sales tax revenues in Florida have dropped 10 percent from a year ago.

“In the near term, we expect consumer confidence to decline at least a point or two as the holiday season nears and stimulus programs like Cash for Clunkers and rebates for first-time home buyers expire,” he says. “The discussion about health care reform will be at center stage this fall, and may affect confidence if the plans involve increased payments from the middle class.”

Also of economic concern is that, at some point, extended unemployment benefits will run out, putting more pressure on the unemployed. In the long term, consumers need to be prepared for the inevitable drawing back of stimulus money from the economy, McCarty says.

The U.S. government effectively printed money to avoid a depression, and at some point most of the money will have to be withdrawn from the economy to avoid inflation and a very weak dollar, McCarty says. When that happens, interest rates will rise dramatically.

“We also have to think about how the Florida economy will adjust moving forward,” he says. “It is likely that discussions about off-shore drilling will receive much more attention as Florida looks for industries to replace those dependent on population growth.”

The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for September was conducted from 412 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.

© 2009 Florida Realtors®

ORLANDO, Fla. – Aug. 31, 2009 – International home buyers make up a significant part of the Florida real estate market, and are an important part of many Florida Realtors®’ businesses. According to a study conducted for the Florida Association of Realtors® (FAR) by the National Association of Realtors (NAR), a majority (54 percent) of Florida Realtors worked with an international client within the past 12 months.

The typical Florida Realtor participating in the survey worked with three international clients; 10 percent of respondents worked with 11 or more international clients in the past year.

Not all client interactions result in a transaction. In the past 12 months, 34 percent of Realtors who worked with international clients reported that none of their international clients purchased a home. However, this does not mean that those international clients will not ultimately buy in Florida.

Other study highlights:

• 86 percent bought an existing home, while 14 percent opted for a new home.

• 52 percent chose a single-family detached home. Of the rest, 34 percent chose a condo, 76 percent a townhome, and 7 percent “other.”

• One in four buyers (27 percent) bought a home in South Florida, while Bradenton-Sarasota-Venice and Orlando attracted 11 percent each. However, one-third (32 percent) of foreign buyers purchased a home outside Florida’s top six metropolitan areas.

• One-third of buyers (35 percent) who eventually decided to walk way did so, at least in part, because of property tax costs; while 31 percent cited immigration laws that prevent year-round residence. While Floridians balk at the cost of property insurance, however, only 20 percent of immigrants listed that as a reason to walk away.

 2009 Florida Association of Realtors

(When Small Business Loans Double over the course of the 1st Quarter 2009, that is a Very Positive Sign for Economic Recovery)

What shape is the recovery in?

NEW YORK – Aug. 14, 2009 – With the launch of an economic recovery all but certain this year – many experts say it’s already begun – the debate among pundits has turned decidedly alphabetical. In other words, what letter will the rebound resemble – U, V or W?

Typically, sharp downturns like the current one yield equally rapid, or V-shaped, upswings. But the worst recession since the Great Depression has been anything but typical, with housing and credit markets devastated. In a USA TODAY survey, 63 percent of economists said the recovery will be slow and gradual, or U-shaped.

Yet 37 percent said it will be moderate or fast. And a smattering of experts say the rebound will look like a W, with a precarious economy sliding back into recession before turning around for good. USA TODAY presents the case for each scenario:

Consumers aren’t spending
Sharp downturn followed by slow and gradual rebound

Most economists, including Federal Reserve Chairman Ben Bernanke, predict a slow and gradual upturn. To be sure, the telltale recovery signals have been flashing green lately. Factory output and new orders grew last month at the fastest pace in two years. The government’s cash-for-clunkers program has lit up a moribund vehicle market.

And with inventories of stores and manufacturers depleted, factories must soon ratchet up production just to restock.

But most experts say the recovery will be muted, largely because consumers are in no mood to open their wallets. They’ve lost $13 trillion of wealth in the recession’s housing and stock market crashes and appear determined to sock away any extra cash they have, says Mark Zandi, chief economist of Moody’s Economy.com. The savings rate jumped to 5.2 percent in the second quarter from a low of 1 percent before the crisis. Consumer spending accounts for 70 percent of the economy.

Meanwhile, the 9.4 percent jobless rate is keeping consumers “focused on necessities like food” and medicine, says Sung Won Sohn, economics professor at California State University.

Two underpinnings of a robust recovery – the housing and auto markets – are suffering from deep-seated problems that won’t soon fade. About 1.8 million in excess housing units built during the real estate bubble ensure a tepid rebound in housing starts, Zandi says. Foreclosures continue to rise. And vehicle sales have been hampered by a credit crisis that’s made it tough for consumers and businesses to get loans. It will take time for banks to feel comfortable lending again. While the cash-for-clunkers program has juiced sales lately, that will mean fewer sales next year, Zandi says.

“It’s hard to see how the economy can get going if people and businesses can’t borrow money,” Zandi says. He predicts anemic growth of 1 percent to 2.7 percent over the next year.

Hiring will ignite recovery
Dramatic tumble produces a similarly sharp upswing

Despite unusual obstacles in the housing and credit markets, some economists say traditional economic dynamics should still win the day, with the steep downturn producing a sharp rebound. Or at least a moderate one.

Businesses have cut their workforces far more than falling customer demand required in an effort “to get ahead of the curve,” says Ken Mayland, president of ClearView Economics. “They’re beyond lean, they’re understaffed,” he says. “They’ll have to start re-employing people faster than in past recessions” just to restock.

Rising employment should boost consumer spending.

Also, despite the massive drop in household wealth, the S&P 500-stock index is up 47 percent since its early March nadir. That should embolden consumers to open their pocketbooks wider than some predict, says Dean Maki, chief U.S. economist at Barclays Capital. So while Maki says the savings rate will stay high, that shouldn’t prevent consumer spending from rising at least moderately as well. Another boost to spending will come from incomes lifted by growing production and a housing construction rebound, he says.

Some optimists point to more basic economic principles. Consumers have been putting off purchases of everything from cars to appliances, leaving a storehouse of pent-up demand, says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. The population continues to grow 1.1 percent a year. And the positive economic news, along with rising stocks and gas prices that have fallen from their $4-a-gallon peak, should buttress consumer confidence, Rupkey says. The economic stimulus will likely provide an additional bounce when most of the money is spent next year, optimists say.

The economy “is kind of like a beach ball underwater,” Rupkey says. “It wants to bounce back.”

What’s more, automobile and housing sales have fallen so low that a return to even modest levels would mean a 10 percent to 20 percent increase and a V-shaped upswing, Mayland says. He projects the economy will expand at a fairly vibrant 4 percent clip in 2010, with unemployment peaking later this year.

Banks are still tightfisted. But Maki says the recovery will likely be driven by higher-income households and businesses “that don’t need credit or are still able to get it.”

More pain before the gains
Recovery cut short by recession, then a second rebound

A small group of experts believes the nation will endure an unusual W-shaped, or “double-dip,” recovery in which the economy falls back into recession before growing again.

That’s what happened in the early 1980s when the economy soared the first few months of 1981 following a recession, before the Federal Reserve raised interest rates to head off inflation. That put the brakes on the recovery, setting off another, more severe downturn.

Steve Hanke, professor of Applied Economics at Johns Hopkins University, predicts a similar pattern this time. Besides keeping a key interest rate near zero, the Fed is spending $1.75 trillion to buy government securities in a bid to keep mortgage and other loan rates low.

The massive liquidity, plus rising commodity prices, will increase inflation, says Hanke, who is also a fellow at the conservative Cato Institute. Meanwhile, Hanke believes the central bank will be loath to raise interest rates to stave off inflation in 2010, because doing so could tamp down what he says will be a weak recovery in an election year.

As a result, he says, the Fed “will wait too long” and then be forced, perhaps in 2011, to raise interest rates sharply, sending the economy back into a tailspin.

Wells Fargo economist Mark Vitner also believes a W-shaped recovery is possible, but for a different reason. The economy, he says, should grow at a fairly robust 3.4 percent in the third quarter as manufacturers boost output to replenish stocks. But he says it will likely hit a wall in the first quarter, with little customer demand to keep production up, higher state and local taxes that crimp spending and the expiration of the cash-for-clunkers program. Vitner thinks the economy will slow to a 1.8 percent crawl in the first quarter but could actually shrink before mounting a second, tepid recovery.

Copyright © 2009 USA Today. All rights reserved.

MIAMI – Aug. 4, 2009 – Jose Garcia looks over the contract for his Gables Estates home with Realtor Audrey Ross, who deals with the ultra-luxury housing market. The price of Garcia’s home: Just under $20 million.

Elite Realty. “Now, we’re getting five, six, 10 families coming through. I’m really praying and keeping my fingers crossed this is a permanent thing.”

Confidence seems to be returning, as well as a rising tide of money from outside the country, positive signs for both the high-end housing market, and the real estate market in general. Demand fed by foreign money has always been a critical piece of the real estate puzzle in South Florida.

“We’re on our way out of the worst (of the economic downturn)” said Manny Mesa, a Doral-based trial lawyer who is hunting for a bigger home for his wife and four children.

On Thursday, he toured the digs of former Miami Heat point guard Tim Hardaway. Hardaway is asking $3.9 million for the five-bedroom, five-bath home on almost two acres in the Pinecrest area. It boasts a six-foot coral rock wall for privacy and a closet the size of a very large bedroom.

“People are confident that the world is not ending,” said Adam Greenberg, a managing director for BayBridge, a Miami-based brokerage and mortgage banking firm. “They were so concerned it was ending and that our financial system could falter.”

When the global economy took a dive last year, real estate prices plummeted, including prices for South Florida’s toniest properties, priced at $1 million or more.

And then things got worse. As the calendar year turned, fear that the global financial system was heading off a cliff brought South Florida’s luxury home market – largely dependent on foreign wealth – to a standstill. In January, just nine houses priced over $1 million sold in Miami-Dade and seven in Broward.

But now brokers and some analysts are sensing a collective, if tentative, sigh of relief among the very wealthy, as evidenced by the recent uptick in luxury home sales. In June, the last full month of available data, 25 were sold in Broward and 41 in Miami-Dade.

The figures are still significantly off from the market’s peak, when about twice as many were selling on a monthly basis. And prices are still droopy.

Nonetheless, real estate brokers say it is evident that foreign buyers are returning to South Florida as news spreads globally that many of the region’s tropical, waterfront palaces are on sale. Among the bargains: Shaquille O’Neal’s 2.45 acre estate on Star Island, which sold recently for $16 million, about $2 million less than he paid for it in 2004.

Marketing a really ritzy home can involve having a robust website devoted just to that one property, color spreads in the Robb Report (billed as “The Global Luxury Source”) and advertising spots on shows like Extra and Power Lunch on CNBC. But in other ways it’s not that different from selling a two-bedroom CBS in South Miami. Delinois recommends having scented candles burning and a loaf of bread baking in the oven.

“Smell is very, very important,” said Delinois, who must know something, having sold Hulk Hogan’s home on North Bay Road in Miami Beach for a whopping $17.9 million.

Alas, despite Delinois’ recommendation, Hardaway didn’t have any candles burning or bread baking when Mesa stopped by. He didn’t get the sale either.

Mesa said he was going to keep on looking.

Brokers and analysts say the renewed activity in high-end real estate is at least partly because of a revived interest among lenders in making very large loans, called jumbo loans.

Banks’ appetite for jumbo loans – defined as more than $423,750 in South Florida – had all but evaporated as lenders hunkered down to weather the storm.

“They are marketing, inviting us to their offices to meet with them to tell us what they can do,” said Tere Bernace, a broker specializing in waterfront properties in Coral Gables and a former banker with Barclays Capital. “They say they are trying to increase their profile again in our market.”

Added Delinois: “I have never had a bank calling before to say they were lending.” BayBridge’s Greenberg said banks are interested in the rich and famous because they are looking for safety.

“They see values as very depressed and borrowers in the super luxury home market as a very unlikely default candidates,” he said.

In the past 30 days, BayBridge has closed three loans that were over $5 million.

“I’ve never had a client that has defaulted on a loan over $5 million in the nine years I’ve been doing this,” Greenberg said.

Spokesmen for Ocean Bank and BBU Bank in Coral Gables acknowledged they are actively seeking the business of luxury home buyers.

That doesn’t mean the loans are easy to get. Large loans require much heftier down payments – up to 50 percent of the purchase price – and stringent verification of income and assets.

Those who buy in the ultra-luxury category (homes priced at $5 million or more) often aren’t looking for loans.

“Most of the people who buy at this price point don’t finance, and if they do, it’s a matter of convenience,” said Audrey Ross, a senior vice president of Esslinger Wooten Maxwell.

In the past three months, Ross brokered three sales in Gables Estates – each for more than $5 million, she said. Two were all-cash transactions.

Ross, who has specialized in high-end real estate for 25 years, said typically the ultra-luxury sector takes less of a hit in real estate downturns and is usually the first to recover.

Luxury prices have held up significantly better in the current slump than the market as a whole, according to Coral Gables-based real estate analyst David Dabby.

For homes selling for more than $1 million, the price per square foot has fallen about 14 percent in Miami-Dade and 20 percent in Broward from the 2006 peak.

That compares to a 50 percent decline in the market as a whole, Dabby said.

Jill Hertzberg, a broker with Coldwell Banker, who along with her partner Jill Eber was ranked eighth nationwide in sales volume last year by The Wall Street Journal and LORE Magazine, said unheard of deals on luxury properties are driving interest.

Hertzberg cooed over a fully renovated home in Miami Beach with a stunning wide-water vista of Miami’s skyline that “ ‘screamed out to anyone wanting a downtown view and a beautiful home.”

Originally listed for $4.1 million, the property was dropped to $3.2 million and quickly drew multiple offers. It is now under contract and a closing date has been set.

“These are great properties,” Hertzberg said. “They aren’t second-rate properties. They are adjusting down to prices that are incredible, that no one has see before and people are buying them.”

 Copyright © 2009 The Miami Herald

 

Florida’s existing home, condo sales up in May 2009

ORLANDO, Fla. – June 23, 2009 – Florida’s existing home sales rose in May – the ninth month in a row that sales activity increased in the year-to-year comparison, according to the latest housin May existing-home sales continue rising trend, says NAR
g data released by the Florida Association of Realtors® (FAR). Statewide sales showed gains over the previous month’s sales level in both the existing home and existing condominium markets. Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.

Existing home sales rose 16 percent last month with a total of 13,921 homes sold statewide compared to 12,044 homes sold in May 2008, according to FAR. Statewide existing home sales in May increased 6.2 percent over April’s statewide activity. Florida Realtors also reported a 21 percent rise in statewide sales of existing condos in May; existing condo sales last month rose 3.8 percent over the total units sold in April.

“The improving sales of existing single family homes and condos is a trend we have been seeing for several months in Florida. What is new in this month’s data release is that we are seeing evidence of prices beginning to firm,” says Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “While one month of data does not a trend make, it is the first green shoot we have seen in some time as far as prices are concerned. Until prices stop declining, we cannot state with confidence that the housing market has stabilized. Sales have risen to levels we have not seen since 2006, though the economy still faces headwinds. As credit markets begin to thaw this will help speed along this process of recovery in the housing market.”

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in May and 13 MSAs also showed gains in condo sales. A majority of the state’s MSAs have reported increased sales for 11 consecutive months.

Florida’s median sales price for existing homes last month was $144,400; a year ago, it was $203,800 for a 29 percent decrease. However, the statewide existing home median price in May was higher than the statewide median price reported in each of the previous four months. According to housing industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to lower the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in April 2009 was $169,800, down 14.9 percent from a year earlier, according to NAR. In California, the statewide median resales price was $256,700 in April; in Massachusetts, it was $275,000; in Maryland, it was $255,587; and in New York, it was $185,000.

According to NAR’s latest housing industry outlook, buyers are responding to favorable market conditions. “The $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead and that should spark more sales by repeat buyers.” Many homebuyers are taking advantage of the bargain prices offered on foreclosed listings in states like Florida, California and Nevada, Yun noted, which should “set the stage for healthy market conditions going forward.”

In Florida’s year-to-year comparison for condos, 4,839 units sold statewide compared to 3,998 units in May 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $113,400; in May 2008 it was $181,700 for a 38 percent decrease. May’s statewide existing condo median price was the same as January’s statewide median, and was higher than the median reported in February, March or April. The national median existing condo price was $173,900 in April 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.86 percent last month, down significantly from the average rate of 6.04 percent in May 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s smaller markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 584 homes sold in May compared to 491 homes a year ago for a 19 percent increase. The existing home median sales price was $123,700; a year ago, it was $163,100 for a 24 percent decrease. In the year-to-year comparison for the existing condo market, 123 units sold in the MSA last month, up 6 percent compared to 116 condos sold the previous May. The market’s existing condo median price last month was $134,400; a year earlier, it was $144,300 for a 7 percent decrease.

© 2009 FLORIDA ASSOCIATION OF REALTORS

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May U.S. housing construction jumps by 17.2 percent

WASHINGTON (AP) – June 16, 2009 – Construction of new U.S. homes has jumped in May by the largest amount in three months, providing an encouraging sign that the nation’s deep housing recession was beginning to bottom out.

The Commerce Department says that construction of new homes and apartments jumped 17.2 percent last month to a seasonally adjusted annual rate of 532,000 units. That was better than the 500,000-unit pace that economists had expected and came after construction had fallen in April to a record low of 454,000 units.

In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose by 4 percent in May to an annual rate of 518,000 units.

 

Young homeowners gain despite stagnant economy

ST. LOUIS, Mo. – June 15, 2009 – If the real estate bust has a bright side, it’s this: People like Lilly Thomas, Stephanie Driskell and Dexter Wuller can finally afford homes.

Falling home prices and an $8,000 federal tax credit are putting homes in reach of young people who couldn’t afford them a few years ago. As a result, real estate agents say starter homes are the only part of the real estate market that’s showing some life.

It’s not a lot of life. House sales this year are down by a third from the boom year of 2006, and the bust spans all price classes. But the lower end of the market – houses priced under $200,000 – is suffering less, and there’s some evidence that a comeback could be beginning.

Now, real estate agents are starting to worry that rising mortgage interest rates may dampen buyers’ enthusiasm. Rates on 30-year mortgages jumped to an average of 5.59 percent last week, up from 4.84 percent a month ago. Meanwhile, many FHA lenders have raised their credit score requirements to 620 from 580, which will seal some people out of the home market.

House prices in St. Louis dropped 4 percent in the last year, and they’re down nearly 9 percent from their high of 2007, according to the Federal Housing Finance Agency’s index, which excludes the most expensive houses.

‘We got a steal’

Those falling prices prompted newlyweds Lilly and Stephen Thomas to finally make an offer on a house in O’Fallon, Mo.

“As the market fell, we were looking at a $200,000 house that we could get for $170,000,” said Lilly Thomas, 29. “My dad thinks we got a steal.”

They also got a gift from Uncle Sam. The $8,000 “first-time homebuyer” credit is available to people who buy homes before Dec. 1. Buyers qualify if they haven’t owned a house for three years.

The credit may prompt an exodus from Mom and Dad’s house. Dexter Wuller, 23, left behind Mom’s cooking when he paid $88,000 for a century-old two-bedroom house in Belleville. “Once I started looking, I started liking houses. The idea of being out on my own and owning something was pretty good,” he said.

Stephanie Driskell, 28, saved money while living at home for free. That, plus the $8,000 credit, let her to buy a $138,000 home in Affton with her boyfriend. “We’re trying to live the American dream like they want you to do,” she said.

Scott Cottrell, of the Cottrell Realty Group in Ballwin, studies real estate statistics. He sees signs of a reviving market, led entirely by low-end home sales.

In St. Louis County, the monthly count of new sales contracts has gradually caught up to last year’s levels, which he calls a hopeful sign. That improvement comes entirely from the starter home market, he says. Completed sales in the region as a whole still lag last year’s levels.

Sellers may re-emerge

Buyers are in the catbird’s seat today, but Cottrell thinks the situation may reverse this fall. He thinks buyers will slowly reduce the inventory of moderately priced homes through the summer. Then he expects to see a rush of buyers in the fall as the December tax credit deadline nears. “We could get a supply and demand imbalance that favors the seller,” he says.

Things are sadder for sellers of upper-end homes. They suffer from two extra handicaps, says Cottrell. Fewer upscale buyers can get the federal credit because they own other houses or exceed the $170,000 income limit for married couples.

But the biggest hindrance is the $281,250 limit on FHA-backed loans. The FHA has filled some of the hole left by the collapse of subprime lending. The agency permits loans with 3.5 percent down payments to people with some blemishes on their credit.

Bankers slow market

Meanwhile, indecisiveness in the banking industry sometimes stymies sales at all price ranges. Brian Hunt learned that when he bid on two vacant houses in O’Fallon, Mo., but couldn’t get a reply at the bank.

Hunt knows construction work, so he went looking for a deal on a fixer-upper. As a result, he found himself looking at properties in foreclosure or threatened by it.

On one, he offered a “short sale.” He offered a price less than the current owner owes on his mortgage. In other words, the bank that held the mortgage would have to take a loss. Such deals are becoming more common as prices fall and foreclosures loom.

“It’s very difficult to do because you can’t get the bank to call you back,” said Hunt. He waited a month without a response, then withdrew his offer. He made a short-sale offer at another house and got the same non-response.

Real estate agents say that’s a common story. Cottrell, for instance, says he has hired a full-time short-sale negotiator, and still waits 3 1/2 weeks to 5 months for an answer from overwhelmed bank real estate officials.

Hunt finally bought a $115,000 O’Fallon home from an owner who had retired to Florida.

The most active part of the market is at the very bottom. Of 5,500 homes sold in St. Louis city and county this year, 1,079 have been worth $30,000 and less, or 19 percent of sales, according to figures from the St. Louis Association of Realtors. In 2006, these low-value properties represented only 3 percent of sales.

Some of those are “bulk sales” in which banks sell several foreclosed properties to a single investor, who then resells them or repairs and rents them.

Mark Scatizzi has watched the phenomenon firsthand as a real estate agent specializing in selling foreclosed and distressed property.

“What was selling two years ago for the $50,000s and $60,000s has been pushed down into the $30,000s,” says Scatizzi, of the RealtyNet Kratky Team.

Copyright © 2009 St. Louis Post-Dispatch. Jim Gallagher. Distributed by McClatchy-Tribune Information Services.