April existing home sales rise by 2.9 percent
Buyers are taking advantage of a steep drop in prices

updated 10:37 a.m. ET, Wed., May 27, 2009 WASHINGTON -

Sales of previously occupied homes rose modestly from March to April as buyers who were brave enough to dive into the market took advantage of prices that were 15.4 percent below year-ago levels.

The National Association of Realtors said Wednesday that home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March.
The results slightly beat economists' forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters.

The median sales price plunged to $170,200, down from $201,300 in the same month last year. That was the second-largest price drop on record after January, when prices fell 17.5 percent.
The number of unsold homes on the market at the end of April rose almost 9 percent from a month earlier to nearly 4 million. That's a 10-month supply at the current sales pace.

"We still need a continuing and consistent rise in home sales to get the inventory down," said Lawrence Yun, the group's chief economist. Only then, economists say, will prices stabilize and eventually recover. Another big problem, Yun noted, is the lack of activity at the higher-end of the housing market, among properties priced at $750,000 or higher.

Interest rates are much higher for loans above $730,000 that cannot be purchased by Fannie Mae or Freddie Mac. And that's sapping demand for expensive properties.

"It's just stalled. completely stalled," Yun said. The Realtors group is pushing for the Federal Reserve to start buying up those loans, even if they are not backed by Fannie and Freddie. It also wants the higher loan limits to apply to the whole country, not just expensive areas like California and New York.
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There are plenty of great buys still out there! Call today for a free list of properties of foreclosures in the Naples area 239-566-8989

Labels: naples fl foreclosures, naples fl real estate, Real Estate Prices, real estate sales trends

INVENTORY DECLINES 16 PERCENT FOR PROPERTIES OVER $300,000

Report Shows Overall Pending Sales Increase 87 Percent

NAPLES, Fla.-May 15, 2009- Inventory continues to diminish in Collier County as buyers take advantage of favorable sales prices, according to a report released by the Naples Area Board of REALTORS® (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island).

The overall available inventory for properties over $300,000 declined 16 percent to 5905 in April 2009 compared to 7088 in April 2008. The average days on the market decreased 15 percent to 165 in April 2009 compared to 195 in April 2008.

The April report provides annual comparisons of single-family home and condo sales (via the SunshineMLS), price ranges, geographic segmentation and includes an overall market summary. The statistics are presented in chart format, along with the following analysis:

Overall home sales in the greater Naples Area, which includes Naples Beach, North Naples, Central Naples, South Naples, East Naples, Immokalee, and Ave Maria, increased 20 percent, with 582 in April 2009 compared to 486 in April 2008.

Overall pending home sales for properties under $300,000 saw a 199 percent increase, with 792 pending in the April 2009 compared to 265 in April 2008.

Single-family home sales increased 46 percent with 304 in April 2009 compared to 208 in April 2008; single-family pending home sales in the less than $300,000 category saw a 298 percent increase with 446 in April 2009 compared to 112 in April 2008.

Condo sales saw a zero percent increase with 278 in April 2009 compared to 278 in April 2008; however, pending condo sales increased 66 percent with 468 in April 2009 compared to 282 in April 2008.

Overall pending home sales increased 87 percent to 1088 in April 2009 compared to 583 in April 2008.

To view the entire April report, go to www.Naplesarea.com or click to view the statistics: http://www.naplesarea.com/realestate_news/Statistics_2009_April_Naples_Market_Statistics_Price_Area.pdf

Call MARI VESCI REALTORS, Inc. for all of your real estate needs, 239-566-8989

Labels: naples fl real estate, Naples Real Estate Statistics, Southwest Florida Real Estate Sales

NAPLES — The hotly debated issue of mandatory inspections for foreclosed and vacant homes couldn’t be resolved Tuesday, and will be brought back to Collier County commissioners again. This much commissioners had decided as of Tuesday, however: The inspections will be mandatory but will be performed by private contractors, not county government workers. And the local law to be brought back to commissioners will legally define “foreclosed” and “vacant.”

After a long debate Tuesday, Collier commissioners unanimously decided to continue the discussion June 23 before making a final decision. That’s when county employees will come back to commissioners with an ordinance that requires mandatory inspections of foreclosed and vacant homes. The proposal was prompted by a large percentage of abandoned or foreclosed homes -- condominiums, single-family houses, townhouses and duplexes -- that were found to have plumbing problems, electrical violations and mold. Inspections would reassure future home buyers that the buildings comply with county codes.

“I’m here just to throw this out to you all,” said Joe Schmitt, administrator of the county’s Community Development and Environmental Services department. About 20 speakers turned out at Tuesday’s commission meeting to comment on the staff’s proposal. Tom Lykos, president of The Lykos Group and president of the Collier Building Industry Association, said voluntary inspections won’t work. Furthermore, he said, home inspection isn’t an industry that is licensed by the state. Lykos recommended inspections by county government inspectors instead of private ones. John Barlow also advocated mandatory inspections. Barlow is with an organization called Housing Opportunities Made For Everyone (H.O.M.E.)

Many of the homes on the market are unhealthy and unsafe to live in, Barlow said, showing pictures to support his argument. Problems include decrepit wiring, overloaded breaker boxes and roofs that are crumbling. Barlow recommended inspecting only foreclosed homes. H.O.M.E. board member Gina Downs stressed the number of electrical fires caused by improper installation, improper use and overloaded circuits, all egregious health and safety issues. Furthermore, Downs said, the problem is growing.

“More than 11 percent of our homes will be foreclosed by next year,” Downs said. She expressed concern about flippers who have no interest in the greater Naples area. Flippers refers to those who buy property for investment purposes, fix them up and then resell them. “Collier County has a nightmare of a problem, and it is a growing problem,” Downs said. North Naples Fire Chief Orly Stoltz supports the measure because safety is of concern for firefighters during a structural fire. It would be better if electrical problems were identified, Stoltz said. Among the various speakers, from real estate agents to builders to electrical contractors, many focused on home safety.

But some stressed a private market solution, not government involvement. They said they’ve all seen unpermitted additions to structures and unlicensed electrical improvements. Contractor Bob Hahn talked about illegal connections of water heaters, which he called a bomb waiting to go off. “It’s not that we’re looking for work. We’re not even charging full rates to homes,” he said.

“Everyone’s working hard to clean these (properties) up, not at a big profit.” Bill Poteet, vice president of the Naples Area Board of Realtors, credited Collier Code Enforcement Director Diane Flagg with bringing the issue to the organization’s attention. Poteet said his organization believes in inspections. NABOR members looked at the proposed ordinance, and concluded this problem can be solved by private market solutions, Poteet said. The NABOR board is committed to resolving this issue, Poteet said, adding, “We will get the message out to the Realtors.” Jeff Jones, chairman of NABOR’s task force on the issue, said the majority of homes his organization’s members are involved with are inspected. The proposed inspections shouldn’t only apply to foreclosed homes, he said.

Jones reiterated a point Poteet had made earlier: that code compliance issues appear in all structures, not just foreclosed homes. County Attorney Jeff Klatzkow has expressed concern that only one segment of an industry is being targeted, namely foreclosure or vacant homes. “We ask that you give the voluntary process a chance,” Jones said. Give the industry a crack at solving the problem before it becomes a government program, Jones said. Wes Kunkle, president of Kunkle Realty, has more than 25 years of investment experience. He specializes in vacant land brokerage and investment properties.

“The private inspections work. Don’t overload government. There are 4,400 Realtors aware of this,” Kunkle said. Debates over using private inspectors rather than county government inspectors may be moot next year. According to Schmitt, the state will require property inspectors to be licensed in 2010. Some commissioners are concerned about the government fee that Collier County would charge for inspections, an issue in these bad economic times. The original proposed fee was $50 to $100, but anecdotal information has led them to believe that the fees could be as expensive as $400. Lykos said the meeting was intriguing.

“It was interesting to watch the commissioners weigh the public’s best interest with allowing private enterprise to work,” Lykos said. “I’m sure the county staff can create an ordinance that will allow for quick absorption of the foreclosed home inventory and still provide for thorough inspections to protect future homeowners.”

What do you think about the prospect of required inspections?

Labels: naples fl foreclosures, naples fl real estate

Economic Guru Foresees Slow Recovery

The economy will bottom out in the fourth quarter of 2009 and then begin a slow climb, predicts Mark Zandi, senior economist at Moody’s Economy.com

“The economy won’t come roaring back,” Zandi says. “The sectors that generally lead us out of a recession—housing and vehicles—are flat on their backs and won’t revive rapidly. The economy will kick into high gear in 2011 and 2012.”

The housing market is one of the major factors preventing a faster recovery, he says. “I am expecting the end of the [housing] price decline to occur later this year or early in 2010," he explains. " But that is an assumption.

We need to see the loan modification program work. If it doesn’t work, foreclosures will go up and that will put pressure on consumers because of loss of wealth.”

Do you feel that housing prices in our area have reached thier bottom?

Labels: Naples Real Estate Market

Interest in purchasing foreclosed homes rises

SAN FRANCISCO – May 21, 2009 –

Consumers appear to be more willing to buy foreclosures, with 55 percent of U.S. adults indicating that they are at least somewhat likely to consider a foreclosed home in the future, compared to the 47 percent of U.S. adults who indicated the same in November 2008, according to a new study. Harris Interactive conducted the survey for Trulia.com and RealtyTrac.

In the current market, adults in the U.S. believe foreclosed properties offer an even greater bargain opportunity than before, the study found. Forty percent expect to pay at least 50 percent less for a foreclosed home, compared to only 31 percent of U.S. adults surveyed in November 2008.

The May 2009 survey also found that 74 percent of U.S. adults familiar with President Barack Obama’s mortgage relief program are at least somewhat confident it will give homeowners the incentive to renegotiate with mortgage lenders in order to prevent their homes from going into foreclosure.

While overall consumer interest in buying foreclosed homes has increased, the current wave of the study also found higher levels of negative sentiment about forecloses. In November 2008, 80 percent of U.S. adults felt that there were negative aspects to purchasing a foreclosed home. In the current survey, the number of U.S. adults concerned with negative aspects rose to 85 percent.

Among the 85 percent, 71 percent cite hidden costs as their top concern, 46 percent believe the process is risky and 31 percent are concerned that the home will lose value. Not surprisingly, consumers expect hefty discounts on foreclosed homes, with 83 percent believing they should pay at least 25 percent less for a foreclosed property, perhaps to compensate for perceived risks.

“As interest in purchasing foreclosed homes increases, competition is heating up with traditional sellers competing with bank-owned prices,” said Pete Flint, co-founder and CEO of Trulia. “Across the U.S., 24 percent of existing homes for sale on the market have seen at least one price reduction in order to stay competitive, creating a tremendous opportunity for consumers to buy homes at significantly lower prices. Competition amongst sellers, along with the newly created economic incentives, has created the most significant discounts that we’ve seen in decades, presenting opportunities for first-time homebuyers and families looking to trade up to a bigger home.”

“Although consumers are aware that there may be some challenges involved in purchasing a foreclosed home, they are very interested in the bargain opportunities available in the foreclosure market,” said Rick Sharga, senior vice president of RealtyTrac. “People want the best deals they can find and they are willing to go outside their comfort zones if it means they can buy more home for less money. Consumers who educate themselves on the opportunities available will likely be rewarded.”

Most likely to buy foreclosures:

• Two-thirds of U.S. adults between the ages 18-44 (66 percent) would consider purchasing a foreclosed home, compared to a little more than one-third of those ages 55 and older (38 percent). Respondents aged 45-54 fell in between, with 53 percent indicating that they would be at least somewhat likely to consider a foreclosed property.

• Current renters (68 percent) are more likely to consider purchasing a foreclosed home than current homeowners (49 percent).

• U.S. adults with children under 18 living in their household also show an increased likelihood to consider foreclosure properties, with 66 percent indicating they would be at least somewhat likely to purchase one, compared to 49 percent of those without children under 18 in the household.Confidence in mortgage relief plan

• 74 percent of U.S. adults familiar with President Obama’s mortgage relief program are at least somewhat confident it will give homeowners the incentive to renegotiate with mortgage lenders in order to prevent their homes from going into foreclosure.

• U.S. adults aged 18-34 familiar with the program have the highest confidence level in the mortgage relief program.

• 84 percent are least somewhat confident in the plan, compared to 71 percent of those aged 35-44, 69 percent of those aged 45-54, and 71 percent of those aged 55-plus.

• Interestingly, women familiar with the program are more likely to be at least somewhat confident in its ability to give homeowners the incentive to renegotiate with their mortgage lender in order to prevent their home from going into foreclosure than men familiar with the program (79 percent vs. 69 percent, respectively).

The May 2009 survey was conducted online within the United States by Harris Interactive via its QuickQuery online omnibus service on behalf of Trulia between May 1-5, 2009 among 2,397 U.S. adults aged 18 years and older

If you are interested in receiving a list of foreclosures or discussing properties for sale in the Naples area please call MARI VESCI REALTORS, Inc. at 800-248-3724

Labels: florida foreclosures, naples fl foreclosures, naples fl real estate, Southwest Florida Real Estate Sales

HUD plans to tweak $8,000 tax credit rules so first-time homebuyers can get instant down-payment assistance.

By Les Christie CNNMoney.com staff writer
Last Updated: May 19, 2009: 12:45 PM ETNEW YORK (CNNMoney.com)

Home prices are cheap. Affordability is at a record high. And the market is littered with distressed properties looking for a buyer. But there is one big obstacle for many first-time house hunters looking to take advantage of the market: cash for down payments.

The typical first-time buyer has only saved enough to cover 4% of the purchase price, according to the National Association of Realtors.As part of the stimulus package, Congress created a refundable first-time homebuyers tax credit in hopes of helping on-the-fence buyers to take the home-purchase plunge. But buyers couldn't collect the $8,000 credit until tax time, rather than at closing time - when it's needed.

Now the U.S. Department of Housing and Urban Development is planning to change that.

The agency is working on a plan that will allow Federal Housing Authority-approved lenders to provide buyers with the tax credit cash up front."We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment," said Shaun Donovan, HUD secretary, in a speech last Tuesday before the National Association of Realtors.

Donovan did not reveal many details, but the plan could be modeled after programs in Colorado, Missouri, New Jersey, Pennsylvania, Tennessee and Washington. To quickly infuse cash into their housing markets, these states created "bridge loans" that allow buyers to borrow against the $8,000 credit and then repay it with their tax refunds.The first state to launch such a plan was Missouri, which rolled out its Missouri Housing Development Commission Tax Credit Advance Loan program on January 14 - a month before Congress approved the stimulus package.

Since then, Missouri has approved applications by more than 300 borrowers and closed on 128 of them. Lamar Cherry and his wife, Chrishanna, used the program to augment their down payment when they bought their home in Kansas City.The couple purchased a four-bedroom, three-bath split-level home for $150,000, putting about 6% down. Much of that $9,000 came from the loan program, which they tapped so they wouldn't have to drain their reserves."We had money saved up that we were going to use for the down payment," said Cherry. "Now we can use some of that to buy some things we need for the house."

At closing, the Cherrys, like all buyers in the program, signed for their first mortgage, plus a second mortgage issued by the state. The second note is good for 6% of the price of the home, up to $6,750; there is a $350 set-up fee, but no interest is charged if the debt is repaid by June 2010.

In Missouri, borrowers can only access $6,750 of the $8,000 credit for down payments. "We wanted them to have a cushion below that $8,000 in case other tax liabilities show up," said Greg Spurgeon, the single-family homeownership administrator for the Missouri Housing Development Commission. If borrowers don't pay off the note, it becomes a 10-year fixed-rate mortgage with an interest rate one-half percentage point above that of their first mortgages. For example, borrowers paying 6% on their first mortgages would be charged 6.5% on the second.

So far, Spurgeon said, a significant proportion of participating homebuyers have repaid their loans. He expects most of the others to do the same before the deadline.Cherry has claimed the federal tax credit on his 2008 taxes, but he hasn't gotten his refund yet. He definitely intends to repay the loan before the 2010 deadline because, he said, not doing so would add about $75 a month to his house payments.

How do you feel about the current credits and options available to first time homebuyers?

Labels: first time homebuyer credit, Florida Real Estate, naples fl real estate, Naples Real Estate Market

Made-over condos sell in North Naples
By Christina Cepero
News Press

Along Vanderbilt Beach, condominiums have been selling after a proactive
effort by Bonita Springs-based K2 Design Group to spruce up buildings
and residences up and down Gulfshore Drive.

“So many made good use of a market in pause, and we’re now seeing buyers
walking into condominiums that knock their socks off and they’re buying
them,” explained Mari Vesci, owner of Mari Vesci Realtors, Inc. “For
homeowners as well as sellers, the trend is definitely makeovers.”

Vanderbilt Beach, a 1.3 mile stretch of land between a Ritz-Carlton
Hotel and Delnor-Wiggins State Park, has prime beachfront real estate,
much of it in high-rise towers. Upscale dining in the immediate vicinity
include Baleen at La Playa Beach & Golf Resort and the Turtle Club. The
intimate neighborhood even holds vestiges of Old Florida with Buzz’s
Lighthouse Restaurant and Lighthouse Inn on Vanderbilt Lagoon.

The demographic most attracted to Vanderbilt Beach comprises of empty
nesters in the 50-year age range, Vesci said. Whereas the traditional
buyer has been a second-home buyer, high technology and the virtual
office have paved the way for longer stays.

A perfect example of the what is happening in many of Southwest
Florida’s more mature high-rise condominium communities is found at
Vanderbilt Gulfside Condominium, where exterior common areas as well as
residences are sporting sophisticated new looks.

Flexible living space and innovative storage solutions are high on the
priority list for those wanting to turn dated vacation condos into
year-round residences. In one condominium, the successful transformation
of a two-bedroom layout resulted in two additional remodel contracts for
K2 Design Group, a single-source architectural, interior design and
construction management firm.

“The owners wanted better use of their home,” said Jenny Carter,
president and principal designer of K2 Design Group.

As in the case of many homes, one of the bedrooms was rarely used.
Opening that one room changes the dynamic of the entire home with
increased functionality and stylish looks. To accomplish that, K2 Design
Group expanded the air conditioning onto the lanai at one end of a great
room and created an attractive work space, a beautiful setting to catch
up on e-mail. In the same area, sliding acoustical panel doors allow the
space to convert — with finger-tip ease — to a guest suite for the
occasional visitor.

In the kitchen, which was opened to living areas, glass-walled cabinetry
showcases the homeowner’s handcrafted blown glass collection while
concealing electrical and plumbing.

“This is a dramatic change,” Carter said. “By eliminating the wall that
had previously housed the electrical panel, we gained a view. Glass in
the curio cabinets also allows the Gulf view to be seen from the entry.”
Throughout the home, ceilings were opened and ductwork was moved. The
foyer was opened. In addition to a much-improved interior, the facelift
opened the residence and changed the focus from walls to beautiful views.
Several touches incorporate existing features. A wave ceiling treatment
adds interest and creates the illusion of depth without having to raise
the ceiling. Paneling kitchen appliances with wood skins matching
cabinetry lends an integrated look. Recovered living room furniture
blends with the renewed interior.

“High-rise makeovers take a bit of ingenuity, and K2 Design Group has
completed many,” Carter said. “We won new contracts when residents in
the same building saw everything that we did and appreciated that we
could completely open a two-bedroom unit. Clever adjustments enable
condominium residents to enjoy their homes so much more.”

When they were built in the 1980s, these beachfront residences were not
about high ceilings. The entire ceiling was lowered to the depth of the
duct work.

“We have the technology and skills today to open high-rise spaces and
the impression is dramatic,” Carter said. “Homebuyers do not always have
the vision to imagine what’s possible. For sellers, these makeovers
create interest.”

Celebrating a 15-year anniversary, K2 Design Group has completed upscale
residential and commercial projects in Southwest Florida — from Marco
Island to North Fort Myers — and throughout the United States.
Internationally, the company has completed work in the Bahamas, Canada,
England, Germany, Ireland and Panama.

Sitting on 8.8 acres, the 80s-era high-rise property — 72 residences in
each of two towers — is in the midst of an exterior facelift. Parking
structures, entry gate and porte-cochère have been replaced. Lush
landscaping has been enhanced and is receiving increased attention with
a new irrigation system. Attractive pavers replaced asphalt along the
winding driveway and Italian stone was installed around the pool and
walkway. In addition to fresh paint, exterior balconies, railings and
screens are being upgraded.

Along Vanderbilt Beach, many bought their homes more than 20 years ago
for well under $200,000. In addition, many were bought as vacation
homes. While the real estate appreciated considerably, the common
thinking was that there was no need to spend money to fix what was not
broken, especially when cosmetic improvements would be costly.
Perspectives change in a buyers’ market, Vesci said.

“Potential buyers have certain expectations about the amenities,” she
said. “First impressions count. No matter how nice a condominium is, a
buyer considering the purchase of a condominium might not even come to
look if they hear that the building’s common areas are not scheduled for
some kind of improvement.”

At Vanderbilt Gulfside Condominiums, sellers, homeowners and real estate
agents alike are pleased with a fresh exterior and stylish interiors,
said Pat Gibbs, manager.

“Our residents are thrilled that the exterior is brand new and in
keeping with the upscale nature of the neighborhood,” she said. “And
Realtors love it when they can show a property like this following a
makeover. It generates excitement.”

For more information, visit k2design.net.

http://www.news-press.com/apps/pbcs.dll/article?AID=/20090506/NEWS0102/90506062&template=printart

For all of your real estate needs, call Mari Vesci at 239-269-8889 or email mari@vesci.com

Labels: naples fl real estate, Naples Real Estate, Naples Real Estate Market, real estate sales trends, Southwest Florida Real Estate Sales

Recession may be over early, some forecasters say
WASHINGTON – May 11, 2009

The jobless rate is expected to tick up and continue climbing for months, a crisis in commercial real estate looms and the latest survey of bank lending suggests that it’s still pretty hard to get a new mortgage.

So it may sound surprising that some forecasters see an imminent end to the recession.

“The rate of decline in the second and third quarter, if indeed we have a decline, is going to be much more slight than what we’ve seen in the last couple of quarters,” said Peter Kretzmer, an economist with Bank of America in New York. He thinks the economy is beginning to turn.

In a May 1 commentary, forecaster RDQ Economics was more direct. The weekly forecast headline asked, “Is the Recession Drawing to a Close?”The answer, according to RDQ’s chief economist, John Ryding, is yes.

He thinks the liquidation of inventories by business was as large as any seen in past recessions. This emptying of warehouses and showrooms points to future spending by businesses to restock shelves for an expected rise in consumption.“Inventories sliced 2.8 percentage points off growth in the first quarter, but if inventory liquidation has peaked, then this drag on growth will disappear in the second quarter,” Ryding wrote.RDQ is advancing its earlier forecast that the recession will end late this year.

One reason is that the Institute for Supply Management’s manufacturing index has risen four consecutive months and is nearing levels that point to an economic expansion. Similar manufacturing indexes in China show the same kind of signals. That suggests that the world’s two engines for economic growth are picking up steam.As the global economy returns to growth, that’s good news for U.S. exports, which kept the U.S. economy out of recession for much of 2007 and prevented the current downturn from being even worse last year.“

A few indicators suggest ... that the decline in foreign economic activity may also be moderating. And, as has been the case in the United States, investor sentiment and the functioning of financial markets abroad have improved somewhat,” Federal Reserve Chairman Ben Bernanke said Tuesday.Testifying before the Joint Economic Committee of Congress, Bernanke said the global downturn was moderating and that he expects a return to growth late this year.Some private forecasters think the recession’s end may come even sooner.“The data suggest that the recession may end sooner than our forecast of a fourth-quarter bottom in economic activity,” wrote Ryding, who cautioned it will hardly be the start of a new boom. “Even if the recession finishes earlier than we were expecting, we still expect a very anemic recovery over the next year and the unemployment rate is likely to continue well into 2010.”

That’s a view shared by Mark Vitner, a senior economist for Wachovia in Charlotte, N.C. He forecasts unemployment to reach as high as 11 percent, but he thinks the recession will draw to a close sometime after September.

“I feel certain that the recession is not yet over, but I think we are moving toward some resolution on it,” he said. “Maybe the recession ends late third quarter, or early fourth quarter. But it is still going to be in the latter part of 2009. We’re not going to wake up tomorrow and find everything is fine again.”

Forecaster Ed Yardeni of Yardeni Research is even more bullish. He now thinks the current contraction will shrink at only a 1.2 percent annual rate in the current quarter, and will rebound to a 5.3 percent annual growth rate in the July-September quarter, followed by a 3.3 percent growth rate in the final quarter of 2009.The exact beginning and end of a recession is never known at the time. It falls to the independent National Bureau of Economic Research to make an after-the-fact determination based on a wide range of data.There is now a growing number of signs, however, that the economy may be headed for an upturn.

Those signs include:

• The Conference Board’s consumer confidence survey, after posting a slight gain in March, surged in April.

This suggests that consumers, who drive more than two-thirds of U.S. economic activity, are getting ready to shop.

• Total U.S. construction spending ticked up 0.3 percent in March, the Commerce Department reported Monday. That was the first gain in six months, fueled by public works projects that offset declines in private spending.

• The National Association of Realtors index of pending home sales rose 3.2 percent in March, the second consecutive month it has risen. This measure reflects sales of existing homes that actually occurred six or eight weeks earlier. As such, it suggests a fragile rebound in home sales.

• The Institute of Supply Management’s nonmanufacturing composite index, a private measure of the services sector, showed a smaller-than-expected contraction in April, a sign that the downturn is slowing and could reverse.

• Wal-Mart Stores Vice Chairman Eduardo Castro-Wright told a late-April conference held by the British bank Barclays that American consumers were beginning to spend again on discretionary items, such as sporting goods and bedding.

• The cost in U.S. dollars for a three-month loan overseas – called the London interbank offered rate, or Libor – has come down, which reduces borrowing costs. It has fallen from a high 4.82 percent in September to 0.99 percent on Tuesday, the lowest it’s ever been.

• The Fed’s Senior Loan Officer Opinion Survey on lending practices in April showed that banks are loosening their grip on credit for commercial and industrial loans and commercial real estate. Banks actually tightened their lending for home mortgages in the period, but they saw demand for mortgages and home equity loans increase.If the recession is indeed drawing to a close, most Americans won’t notice. The unemployment rate is expected to rise beyond its current level; most projections put it at least up to 8.9 percent and then well beyond in the months ahead. In addition, millions of Americans remain underemployed, working two or more jobs to make ends meet.Problems in credit markets remain a significant risk. A huge number of commercial mortgages will come due for renewal later this year and during the next two years, and they may be unable to qualify for refinancing. That could layer a commercial mortgage crisis on top of the existing residential mortgage crisis, which brought a collapse in home prices to many parts of the nation.

On Monday, credit rating agency Moody’s Investors Service reviewed the entire range of complex bundles of commercial mortgages that it rates. Moody’s downgraded virtually all of these securities, which had a combined value of almost $53 billion, reflecting concerns that a large number of commercial mortgages will either default or not qualify for refinancing.It all suggests that even when the recession is over, good times won’t return right away.

“We’re no longer looking into the abyss,” Vitner said. “We can deal with this, we can deal with the cards we have now.”

Pending Home Sales Rise, Housing Affordability Near Record
Washington, May 04, 2009

Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors®.The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and is 1.1 percent higher than March 2008 when it was 83.7.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

NAR’s Housing Affordability Index2 remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”

A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

http://www.realtor.org/press_room/news_releases/2009/05/march_phsi

Labels: first time homebuyer credit, Florida Real Estate, Southwest Florida Real Estate Sales