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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.
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International buyers confident of Fla. recovery

MIAMI – June 15, 2009 – Gerson Lehman Group reports that international realty buyers believe the Florida housing market is poised for recovery, and they are paying close attention to distressed properties in the state. The report says these international buyers view homes in the United States as “desirable, profitable and secure” investments.

“Those who delay buying their dream home in Florida may soon find that they have to pay considerably more for the same property in just a few months,” advises the report’s author, Howard Liggett, president of Distressed Real Estate Consulting Services.

Liggett cites data from the National Association of Realtors® and the Florida Association of Realtors® indicating that 25 percent of international buyers are Canadian, 21 percent are British, and 21 percent are western European.

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Bernanke: Economy on pace for ‘09 turnaround

WASHINGTON – June 5, 2009 – The pace of economic contraction is slowing, indicating the economy could bottom out and then turn up later this year, Federal Reserve Chairman Ben S. Bernanke told the House Budget Committee on June 3. He cited recent reports, including a flattening out of the decline in consumer spending and signs of a bottom in the housing market.

Bernanke said the economy “has contracted sharply since last fall, with real gross domestic product [GDP] having dropped at an average annual rate of about 6 percent during the fourth quarter of 2008 and the first quarter of this year,” Bernanke told the committee. He said 6 million jobs have been lost since the downturn began, and recent labor market information “suggests that sizable jobs losses and further increases in unemployment are likely over the next few months.”

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January 2009 pending sales jump almost 18 percent

In the face of national economic doom and gloom, pending sales in the Sarasota real estate market rose to 683 in January 2009 as reported by members of the Sarasota Association of Realtors®, topping the 500 level for the 13th month in a row. Pending sales last month were much higher than the 516 reported in January 2008, which indicates that local real estate has bucked the national downward to some extent.
 
Pending sales reflect contracts executed by buyers and sellers. The recent numbers demonstrate a steady, strong pattern, indicating buyers have become more active in the Sarasota market as the traditional season heats up.

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(When you Flat List with Shirley International Realty, anywhere in the State of Florida, we will also market your home across the top 20 Real Estate Web Search Portals on the Internet.. Our MLS Listing Service is Second to None, & Staged to Sell Your Home While Saving You Money..)

‘Freaky’ side of real estate economics
Flat-fee brokers may put pressure on traditional commissions
Friday, June 23, 2006

By Glenn Roberts Jr.
Inman News

SAN FRANCISCO — Traditional pricing for real estate services is bound to crumble, and flat-fee brokers will likely deliver the deathblow — at least according to Steven D. Levitt, co-author of “Freakonomics,” a book that takes an unconventional approach to economics.

Levitt, who spoke to attendees Thursday at the PCBC builders’ conference and trade show at San Francisco’s Moscone Center, also said that the real estate brokerage industry is in some ways its own worst enemy, as low barriers to entry lead to proportional surges in agent population during housing market booms.

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(Shirley International Realty offers the most detailed & highest quality MLS Listings in the State of Florida. Ask how we can put you on MLS, without having to pay high listing commissions. Saving money, while selling your home is our goal in selling real estate..)

Commissions pressured beyond discounting
Savvy buyers, sellers tap new business models for more savings
By Susan Romero
Inman News Features
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.

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(Mortgage Rates just plunged to 4.5% (Compare that to the Historic Real Estate Mortgage Graph Above), which will be enticing for many “Sidelining” consumers to jump into the Real Estate Market. This still won’t be enough to stabalize our Markets depreciating condition. This rate only applies to “Purchasing New Homes” & not refinancing. Only a week after the Federal Reserve unveiled a $600 billion plan to reduce mortgage rates, the Treasury Department is considering adding to the effort to lower rates even more.)

 Mortgage rates drop to lowest level since January

WASHINGTON – Dec. 5, 2008 – Rates on 30-year mortgages plunged this week to the lowest level since January after the government launched a sweeping new effort to aid the U.S. housing market.

Mortgage finance giant Freddie Mac reported Thursday that average rates on 30-year fixed-rate mortgages dropped to 5.53 percent in the largest one-week drop in 27 years. That was down from 5.97 percent last week, and the lowest since the week of Jan. 24, when it was at 5.48 percent.

Further drops could be on the way if the government launches an industry-backed plan to lower the rate on a 30-year mortgage to 4.5 percent by spending hundreds of billions to buy mortgage-backed securities issued by Fannie Mae and Freddie Mac.

That would follow an effort announced last week by the Federal Reserve, which is planning to purchase up to $600 billion of mortgage-backed securities and other debt issued by Fannie and Freddie and the Federal Home Loan Banks. Those institutions don’t make loans directly to consumers, but provide money to the mortgage market by packaging loans into investments.

The Fed’s move caused rates to immediately drop by about a half-point, and many in the real estate industry hope rates will keep dropping as the government increases efforts to battle the credit crisis.

Rates “are now almost a full percentage point lower since the last week in October,” Freddie Mac Chief Economist Frank Nothaft said in a statement.

Bringing mortgage rates down is positive, but it “doesn’t help people that currently have unaffordable mortgages because it doesn’t help them refinance,” Sheila Bair, chairman of the Federal Deposit Insurance Corp., said Thursday. “Low interest rates help some consumers, but the ones that really need help and can’t refinance are not helped.”

Meanwhile, Federal Reserve Chairman Ben Bernanke said the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market. Currently, he said, “the mortgage market is dysfunctional.”

Mortgage rates are sinking as Treasury yields, some of the most sensitive barometers of investor sentiment, have dropped to record lows this week as a torrent of bad economic news continues. But as investors send yields down, they’re also influencing the economy – driving interest rates so low that savers get punished and borrowers get a break.

Treasury buying has picked up and sent yields down because the economy is in a recession that investors believe will be long and deep.

Consumers already are taking advantage of the situation. New mortgage applications more than doubled last week, according to the Mortgage Bankers Association’s weekly survey released Wednesday. Refinance volume more than tripled, and made up nearly 70 percent of all applications.

Rates on other types of mortgages also fell, according to Freddie Mac’s survey. For 15-year, fixed-rate mortgages, rates averaged 5.33 percent, down from 5.74 percent last week.

Rates on five-year, adjustable-rate mortgages dipped to 5.77 percent, compared with 5.86 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 5.02 percent, from 5.18 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 5.96 percent, 15-year mortgage rates averaged 5.65 percent, five-year adjustable-rate mortgages were at 5.75 percent, and one-year adjustable-rate mortgages stood at 5.46 percent.

The rate on Fannie Mae 30-year mortgage-backed securities fell to about 4.25 percent Thursday, said Kevin Giddis, managing director of fixed income at Morgan Keegan. That is down from about 5.5 percent in mid-November.

Fears of a protracted recession are slamming Treasury yield, which is good for borrowers with mortgage rates tied to Treasurys, but bad for people invested in money market funds that have been buying up Treasurys for safety.

Treasury prices fell again on Thursday, sending rates to new record lows, as the Dow Jones industrial average fell more than 200 points. The 10-year Treasury note yielded 2.56 percent, down from 2.67 percent late Wednesday, while the 30-year Treasury bond yielded 3.07 percent, down from 3.17 percent.

Copyright © 2008 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved

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(I’m representing more Real Estate Investors than ever due to the depreciating prices in our market.. Sarasota, & much of Florida, traditionally has made for rough rental investments due to expensive prices & contrasting low rent rates.. With correcting values, investors are re-entering the market & buying homes that earn them 10% a year on their capital investment.. Purchasing a home below market value, & finding a tenant to pay market value for rent is a common package in our current market & something Shirley International Realty Inc. offers to anyone looking to make money off of Real Estate. Read on about the experiences from other Real Estate Professionals & Investors uncovering opportunities Post-”The Bust”..

Bright side of housing bust

OCALA, Fla. – Nov. 26, 2008 – Ron Boatright had more business than he could handle during the housing boom.

His Ocala drywall business employed as many as 60 people in the home construction heyday. Back then, it looked like there would be good times for a long time.

“It was wide open. I was in The Villages for 12 years working and the most we did was 16 (homes) a week. That’s a lot,” Boatright said.

Fast forward three years and Boatright’s thriving drywall business is anything but. That’s because with almost no new homes being built, there’s little need for drywallers and Boatright’s telephone, which once rang off the hook, went silent.

“Now we’re lucky if we do one home a week,” Boatright said. “And I think it’s going to get worse.”

But the 50-year-old Boatright also saw a new housing niche and a way he and his family could cash in on it. He saw hundreds of homes for sale with sticker prices significantly less than what their owners had paid for them just a few years ago.

So Boatright took his savings and looked for homes costing about $50,000 or less. He found one this year, bought it for $50,000 and put his family and in-laws to work restoring it. Three years ago the home cost $110,000.

Boatright put in about $8,000 worth of repairs, tacked on another $2,000 for a Realtor to list the house for $70,000 and sell it. Within two weeks he had a potential buyer. The only problem was the buyers didn’t qualify for a bank loan.

So Boatright decided to hold the mortgage for five years. By doing that, he made some extra money and ensured the sale went through. At 8 percent interest, Boatright is planning to make an extra $10,000 in interest in addition to proceeds from the sale of the house.

Now Boatright said he’s accepting buyers that many banks would probably reject, and he accepts a smaller down payment than most financial institutions. He is in the process of buying his fourth investment house this year.

“If I can find somebody with halfway decent credit and a steady job, I can get them in the (house),” Boatright said.

Even though he’s charging higher interest, Boatright said he’s offering homes that buyers can afford, something most banks didn’t do before with sub-prime mortgages.

Dawn Rickabough, a broker and mortgage consultant in California, said that in today’s tough housing market, offering homes at lower cost and owner financing gives sellers an edge.

“Depending on the area, it can be critical and the difference between making a sale and not,” said Rickabough, who lectures on holding mortgages.

Although there are no statistics readily available about how many homes are sold through owner financing, Rickabough said an informal study she commissioned showed that in 2006, about one in every 400 properties sold had some form of owner financing.

That jumped to one in every 50 this year, and Rickabough predicts the number will only grow during the next few years.

Rickabough said that while the market has been a tough road for sellers these past couple of years, there is a niche and people like Boatright are filling it.

“I think he’s got a good system going there,” she said. “(He’s) getting a decent return on his money and doing better than the stock market. I think it’s a fabulous strategy.”

But buying a home cheap, fixing it and selling it by holding the mortgage isn’t for everybody.

Rickabough said sellers need to understand the risks and whether they can afford to keep the property if the buyers stop making payments.

Sellers need a reliable source of equity to buy properties, and set the buyers’ payments according to the risk. Sellers should also make sure they have all the financial documents in order, such as proof of buyers’ income, tax returns and credit history, in case the seller wants to sell the mortgage one day to another investor.

Michael Malkasian, president of the Web site FSBO.com (For Sale by Owner) said that during the past couple of years he is seeing about double the number of people buying inexpensive homes, repairing them and then selling them through owner financing or renting them in hopes the market will improve later.

“In a market like today, sellers are forced to come up with more creative ways to get their properties sold and owner financing is one of the oldest ways,” he said.

The market in Ocala is tough, but one in which Boatright can flourish, with more than 6,000 properties listed for sale.

And with sales stagnant, Boatright is working in an environment in which investors can buy homes at a fraction of what they sold for just a few years ago.

Single-family home sales in the third quarter of this year were down 10 percent in the Ocala area compared to the same period in 2007, according to a study released Tuesday by the Florida Association of Realtors. The median sales price dropped 16 percent. During the same period from 2006 to 2007, Ocala single-home sales dropped 53 percent and sales prices dropped 6 percent.

Sales in Gainesville weren’t much better. The number of home sales in the Gainesville area dropped 33 percent during the third quarter of 2008, compared to the same period in 2007. Median sales prices dropped 11 percent. During the same period last year, home sales dropped 10 percent from 2006 and 2007 and prices fell 4 percent.

Bert Meadows, president elect of the Marion County Association of Realtors, said there is money to be made in the housing market if investors buy cheap, make modest repairs and offer owner financing. Boatright said he plans to continue buying and selling homes because he doesn’t see the demand for drywall work picking up soon.

Flipping houses and offering mortgages has kept some of his family members and in-laws off the unemployment line.

“And I just see it getting worse,” he said. “So I’m going to keep doing what I’m doing.”

Copyright © 2008 Ocala Star-Banner, Fla., Fred Hiers. All rights reserved. Distributed by McClatchy-Tribune Information Services.

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Foreclosure reprieve gives hope to families

TAMPA, Fla. – Dec. 1, 2008 – Tiffany Edwards thought she was running out of time to persuade her lender to work out a new loan so her growing family could stay in their Tampa home.

She had been out of work for more than a year, and her husband’s income wasn’t enough to cover all the family’s bills. She found a job a few weeks ago, but her lender was already set to foreclose on the house – likely before Christmas.

With a 3-year old daughter and a baby on the way, Edwards panicked. Then came last week’s announcement that Fannie Mae and Freddie Mac – the nation’s two largest providers of mortgages – will postpone foreclosures until early January. In the meantime, they will try to work out loan modifications so more homeowners can keep their homes.

“What a stress relief,” Edwards said. “Now I have hope we’re going to be able to work something out.”

The Edwardses are one of about 16,000 families nationwide who are eligible for the help. The foreclosure suspension is exactly the kind of action some economists and industry leaders say is needed as the foreclosure crisis weighs down the entire economy. Florida Gov. Charlie Crist is contemplating a way to get lenders to agree to a moratorium on foreclosures until after the holidays.

There were cheers when Fannie and Freddie agreed to hold off on some foreclosures. But now that the dust is settling, many wonder how significant the action will really be.

That’s because after Jan. 9, the people helped by the reprieve could still lose their homes. Even if all those people work out new loans, they still represent a small percentage of the more than 2 million homes that are expected to be lost in foreclosure before late 2009.

“This is great, it really is,” said Debbi Colon, a Catholic Charities foreclosure counselor who has worked with the Edwards family. “But it’s just a first step.”

After the announcement last week, her phone rang all day and night from clients wondering if they qualified for the reprieve, Colon said. Most don’t, she said, because their loans are held by private companies.

That’s the downside of the plan, Colon said. Only homeowners with loans owned by Fannie Mae and Freddie Mac are eligible. Together, the two companies own only about 20 percent of the nation’s delinquent loans.

Of the loans that Fannie and Freddie own, not all of them are eligible for the reprieve. Homeowners must be still living in the home and must be at least three months behind on their payments.

For those who are lucky enough to get a second chance at a loan modification, Fannie and Freddie’s new program could be a big help. It calls for mortgage payments – including taxes and insurance – to total no more than 38 percent of homeowners’ pretax monthly income.

Officials for the Center for Responsible Lending said they are encouraged by Fannie and Freddie’s holiday reprieve, but know it’s not a solution.

“This is a solid step in the right direction,” said Ginna Green, spokeswoman for the center. “But we must also aim for solutions – like streamlined modifications – that keep families in their homes for the long term as well as the short term.”

Even so, Edwards and her family say they are thankful for the extra time in their home. No matter how long that ends up being.

Copyright © 2008 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services.

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(Trying to Avoid Foreclosure? Shirley International Realty Inc. Is Serving Sarasota, Florida with Short Sale Services that Negotiate with Your Bank on the Sale of Your Home.. Give us a Call @ 941-448-4872 for Short Sale Advice)

ORLANDO, Fla. – Nov. 11, 2008 – When families lose their homes to foreclosure, communities, the housing market and the economy all suffer. Short sales are one way that some troubled homeowners can avoid foreclosure, a topic discussed by Realtors at the Short Sales Solutions session, part of the National Association of Realtors® (NAR) 2008 Conference & Expo in Orlando.

“Homeowners who are struggling to make their mortgage payments must have more options available to them to avoid foreclosure,” said NAR President Richard Gaylord. “Short sales can benefit not only the homeowner in question, but also buyers, lenders and the surrounding community. With their established lender relationships and insights into complicated real estate transactions, Realtors can add real value for both sellers and buyers interested in short sales.”

A short sale is a transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan. The lender often receives a higher amount of the remaining loan balance than it would from the sale of the property after a foreclosure. This helps support home values in the surrounding community. Short sales also help homeowners maintain some level of credit.

According to Freddie Mac, 50 percent of homeowners entering the foreclosure process did not have any contact with the lender first. One of the most valuable services Realtors can provide to clients who may be facing a foreclosure is guiding them through the lender’s short sale process and facilitating communication, according to session panelists Michael and Stacey Spikes of America’s Home Rescue.

“The process for short selling an FHA loan is different than the process for shorting a Veterans Administration or conventional loan,” said Stacey Spikes. “Knowing the type of loan the seller has, and understanding the proper steps for short selling that loan and the order of those steps, is critical.”

Homeowners who are having difficulty making their mortgage payments and who may be considering a short sale must generally meet three qualifying criteria: they must be behind on their payments, be able to prove a legitimate hardship, and have little or no equity in their home.

While a typical real estate transaction involves two real estate professionals, a seller, a buyer, and the buyer’s lender, a short sale can include all of these parties in addition to the seller’s loan servicer, housing counselor, junior lien holders, mortgage investors and mortgage insurers. In addition to the number of parties involved, Realtors say that other challenges can make short sales difficult. These include burdensome paperwork, appraisals that do not consider the sellers’ duress or the number of foreclosures in a community, over-burdened loss mitigation departments, and complications created by second mortgages.

NAR has created a working group to examine the problems and difficulties surrounding short sales and to educate its members on how to best work with their clients through this process. NAR is also reaching out to its partners in the housing and mortgage industry to encourage adoption of principles and practices to streamline the short sale process.

“Short sales give many families in financial difficulties the possibility of salvaging their credit and avoiding the embarrassment of a foreclosure,” said Gaylord. “Realtors across the country stand ready to help.”

© 2008 FLORIDA ASSOCIATION OF REALTORS®

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