Naples FL Real Estate

Flippers snap up foreclosures, remodel and resell for a profit

2010-04-20T13:29:00.003-04:00

Flippers snap up foreclosures, remodel and resell for a profit

By KATY BISHOP
Posted April 17, 2010 at 7:10 p.m.

NAPLES — Stephen Campolo watched as his former neighbors tore apart their houses, carting away cabinets, tiles and toilets in U-haul trucks.

He wondered who would buy a toilet ripped out of someone else’s bathroom. Worse, he worried that no one would buy the three foreclosed houses across the street.

Weeks passed and the grass grew knee-high in front of the homes in the gated, Golden Gate Estates neighborhood of Valencia Lakes. But recently, things started looking up: An investment company bought one of the houses and contractors started arriving to throw out trash and fix up the house.

Flippers are buying beat-up, damaged properties, remodeling them and then reselling them for profits of 10 percent to 12 percent of the final sale price. It’s happening in gated and non-gated communities in Naples, Golden Gate, Golden Gate Estates and Naples Park.

They were blamed for driving prices sky-high during the bubble, but so far, residents, homebuyers and experts say these next-generation flippers are serving an important purpose. They’re paying cash for properties that nobody else wants — properties that often aren’t eligible for financing for typical buyers — and making them into homes people want to buy.

It’s changing neighborhoods across Southwest Florida, street by street.

“This is a non-financeable house, so unless an investor bought it and fixed it up, it would sit here and rot,” said Mike Conte, with MFC Investments, standing inside a foreclosure his company recently purchased.

It was Conte’s first time inside the house in Valencia Lakes, and he picked his way gingerly around the kitchen, feet crunching on shattered glass and sugar on the floor. He examined broken cabinets and eyed chewed-on chicken bones in a take-out container on the counter.

The company paid about $150,000 for the 4-bedroom, 2,724-square-foot house at an auction and will probably put about $40,000 into it, Conte said. They’ve listed it on their Web site for $215,900, noting that it will be completely remodeled.

Because the company can’t get inside foreclosed homes before purchasing them, they often don’t know quite how much damage a house has when they bid on it at auction, Conte said.

This house had more extensive damage than he expected, so their profit may be less than he had hoped. They’ll have to completely rebuild the kitchen and the bathrooms, and replace all the fixtures.

Conte’s target profit is 10 percent to 12 percent of the purchase price, so if it sells for the listed price of $215,900, that would be $21,590 to about $25,900. But with at least $190,000 invested in the property before Realtor commission and recording fees, that probably isn’t realistic.

Risk is all part of the game, Conte said.

After buying the property, Conte’s company usually turns around the house in less than 45 days. They have flipped about 100 houses in Naples since the beginning of 2009.

“We are increasing the value of the property and increasing the integrity of the neighborhood,” Conte said. “There are certain streets where we’ve renovated many properties and they look different. For example, Coconut Circle (in East Naples), where we’ve purchased a few properties and they’ve gone from boarded-up properties to fixed-up properties with people living in them.”

Foreclosures have an increasingly negative impact on the property values of the houses surrounding them, said Shelton Weeks, real estate professor with Florida Gulf Coast University’s Lutgert College of Business.

Each foreclosure within one-eighth-mile of a single-family house reduces that house’s property value by 0.9 percent to 1.136 percent, according to a study done in Chicago in the late 1990s that combined foreclosure data with property transactions.

So, say your house was worth $300,000, and your next-door neighbor forecloses. Your property values would decrease only by about $2,700 to $3,408. But if there are five foreclosures within one-eighth-mile of your house, your property values decrease by $13,500 to $17,040.

For example, on 25th Court Southwest in Golden Gate, a street that’s about a quarter-mile long, there have been a handful of foreclosures and short sales recently. Each sat vacant for a time, but many were purchased by investors.

Sylvia Martinez, 53, bought a house on the street in August 2009, and after that noticed a lot of activity in neighboring houses: Construction, and then “for sale” signs going up and new neighbors moving in.

“There’s been a lot of movement since I purchased,” she said. “In the beginning, I was very afraid to move to Golden Gate city, but I’m a single mom and I’m paying everything for myself, and the only opportunity that I had to buy was in this area. Now, I feel very different. The street that I live on is very quiet, and I like it. It’s nice to have neighbors instead of empty houses.”

Often foreclosed properties aren’t eligible for financing, especially with strict Federal Housing Authority loans, because they lack appliances, air conditioners, water pumps or have torn-up kitchens or bathrooms, said Brenda Fioretti, real estate agent and president of the Naples Area Board of Realtors.

Fioretti called the remodelers “investors” _ not flippers _ and agreed that they are serving an important market function right now.

“When you see people come into your neighborhood and fix up and buy properties and immediately try to flip them, it makes people a little apprehensive,” said Shelton Weeks, real estate professor with Florida Gulf Coast University’s Lutgert College of Business. “But when (a house) goes into foreclosure it’s as if it’s sort of fallen off the grid. The only thing that’s going to get that back into the system is a (buyer) who is going to do all the work themselves or a company that’s going to fix it up and get it back on the market.”

Olivia Hernandez, 45, needed a house that was in good condition for her family of five, and she had heard horror stories about buying foreclosures from banks. When she stepped into a move-in ready, five-bedroom house in Golden Gate Estates and saw that it had a huge family room, she knew it was perfect for her four kids.

Hernandez bought the 2,280-square-foot house for $143,000 in December 2009, three months after an investment company purchased it as a foreclosure for $121,100.

“I don’t know if it was remodeled,” she said. “All I know is that when we saw it, it was ready to move in. All the walls are white. It was just move in and paint the walls the colors that I wanted to make it my own.”

Asked whether the flippers and investors eventually might drive up property values and create another real estate bubble, Weeks, the FGCU real estate professor, said no.

“There’s so much inventory and the financing landscape is so much different than it was during the bubble,” Weeks said. “The chance of a secondary bubble resulting from this is minuscule. Swings in real estate markets tend to happen over very long periods of time.”

SOURCE: NAPLES DAILY NEWS, http://www.naplesnews.com/news/2010/apr/17/theyre-backflippers-snap-foreclosures-remodel-and-/

New Fannie Mae, Freddie Mac Structures Should Ensure Availability of Mortgage Capital and Protect Taxpayer Dollars, Says NAR

2010-03-31T11:49:00.000-04:00

New Fannie Mae, Freddie Mac Structures Should Ensure Availability of Mortgage Capital and Protect Taxpayer Dollars, Says NAR

Washington, March 23, 2010

Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac should be restructured as government-chartered, non-shareholder owned authorities, the National Association of Realtors® said in congressional testimony today.

“We want to ensure a flow of capital into the mortgage market regardless of the state of the market or economy,” Vince Malta, NAR vice president and liaison to government affairs, testified to the House Financial Services Committee. “The new Fannie and Freddie must ensure there is always mortgage capital available for creditworthy buyers and that taxpayer dollars are protected.”

In outlining NAR’s proposal, Malta cautioned Congress and the administration about moving too quickly in restructuring the GSEs. “The housing recovery is still too fragile for the government to completely step away, and any disruption in the marketplace now by doing something too radical would be harmful,” he said. “Our goal is to help Congress and our industry design a secondary mortgage model that will serve America’s best interest today, and in the future.”

Neither a fully privatized entity nor a fully nationalized structure for the secondary mortgage market giants effectively addresses the critical issues of loan availability and taxpayer protection, he said. A fully private entity would foster mortgage products more aligned with business goals rather than the nation’s housing policy for consumers. “In difficult markets, like today’s, private lenders have not been willing to make loans without government backing,” said Malta.

A fully federal structure would put taxpayers at risk. “We want to eliminate any scenario that would place taxpayers on the hook to protect these entities. And to combine the two, or merge them with Ginnie Mae, would remove competition in the secondary market, and the new entity could lose focus on it missions to serve low- and moderate-income families and maintain liquidity in the mortgage markets,” he said.

The new authorities should be subject to tighter regulations on products, profitability and minimal, retained portfolio practices in a way to ensure protection of taxpayer monies. The new entities would also concentrate on standard mortgage products that are the foundation of the housing finance market.

“While that might curtail some private participation and alternative products in this market, we believe privates will offer innovations that meet consumer needs. The new entities would focus on safe mortgage products, including 15- and 30-year fixed rate mortgages and traditional adjustable rate mortgages.”

Malta also submitted a list of further recommendations.

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.

SOURCE: www.realtor.org

April 10- 11, Statewide Open House weekend!

2010-03-25T12:48:00.001-04:00

April 10-11, 2010, is the first-ever statewide open house weekend!
Florida Realtors aren't the only ones showcasing properties during that
weekend -- state and local associations across the country have also
designated April 10 & 11 as Open House Weekend. From coast to coast,
Realtors will showcase thousands of open houses. It's a buyer's dream!

The timing couldn't be better for buyers. Interest rates are low.
There's a supply of homes at all price points. And the Florida Open
House Weekend is two weeks before the April 30 deadline for the
homebuyer tax credit. Take time now to prime move-up and first-time
buyers to go to contract that weekend

New in Naples!

2010-03-18T10:59:00.001-04:00

Sweet Tomatoes will finally open a Naples franchise on Monday in the Granada Shoppes at 10940 U.S. 41 N. on the corner of Immokalee Road. To preview its new location this Friday and Saturday, the North Naples restaurant is hosting a fundraising event for the Collier County chapter of the American Red Cross. During the two-day preview, patrons can take advantage of Sweet Tomatoes' all-you-can-eat offerings for only $5. The preview times are 11 a.m. to 2 p.m. and 5 p.m. to 8 p.m. Friday, and noon to 2 p.m. Saturday.

C.R. 901/Vanderbilt Drive Bridge Open!

2010-02-28T14:22:00.001-05:00

C.R. 901/Vanderbilt Drive Bridge Open!

The bridge opened to traffic at 10 p.m. tonight. Bicyclists and pedestrians are using a five-foot wide pathway temporarily. Crews will open the full width of the pathway (10-feet) soon – once handrail is installed on the outside bridge wall. Construction crews will complete installation of sod, pedestrian handrail and other items on the bridge in the next few weeks so please use caution when driving through the construction area.

Buyer Tax Credit Could Be Renewed Again

2009-12-30T11:27:00.002-05:00

Daily Real Estate News
December 29, 2009

Buyer Tax Credit Could Be Renewed Again

Will the housing tax credit be extended again – past the current April 30 deadline?

Sen. Johnny Isakson, a Georgia Republican and former real estate practitioner, swore in October that there would be no more extensions, but some observers predict that the answer is yes.

Jaret Seiberg, a managing director at research firm Concept Capital, predicts that Congress will choose to phase the credit out over six to 12 months. “We believe a phase-out is most likely because it would benefit housing markets but let Democrats argue they are fiscally responsible because they have designed an exit strategy that weans consumers off the subsidy,” she says.

Source: The Wall Street Journal, James R. Hagerty (12/23/2009)

Obama Signs Extended Tax Credit into Law

2009-11-09T16:08:00.001-05:00

Daily Real Estate News | November 6, 2009

Obama Signs Extended Tax Credit into Law

Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.

The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.

More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.

Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

NAR's Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.

Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.

Listen to NAR President Charles McMillan's podcast announcement.

NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.

Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)

Homebuyer Tax Credit Extended

2009-11-03T11:31:00.001-05:00

Senators agree to extend homebuyer tax credit
Set to expire at end of November, plan will remain until end of April

updated 6:56 p.m. ET, Wed., Oct . 28, 2009

WASHINGTON - Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.

Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.

Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.

Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.

Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.

Majority Democrats have refused to add the amendments.

Source: Associated Press, http://www.msnbc.msn.com/id/33522046/ns/business-real_estate/

Cubs in Naples?

2009-10-28T09:52:00.001-04:00

NAPLES — A group was formed four months ago with the purpose of making Collier County the spring training home for the Chicago Cubs, the Naples Daily News has learned.

And that group already has met with the Cubs – both at their headquarters in Wrigley Field, and earlier this month in Naples for a two-day visit by new owner Tom Ricketts and CEO Crane Kenney.

During that visit, the Cubs toured Collier County looking at potential stadium sites.

“The Chicago Cubs are exploring Naples, Florida, as a potential spring training venue and have been working with Chicago-based Esmark and Naples-based Fifth Avenue Advisors in that regard,” Kenney confirmed in a statement. “Our site visits and discussions confirm that Collier County has a number of suitable locations for a world-class spring training facility.”

Mesa, Ariz., has been the spring training home of the Cubs off and on since the 1950s, and its permanent home since 1979. Earlier this year, the Cubs brought up the possibility of leaving Mesa if its facilities weren’t updated.

Mesa Mayor Scott Smith met with the Cubs most recently in September.

“Our competition is very serious,” Smith told the Arizona Republic last month, referring to Naples. “I think it’s a serious threat. We need to match the competition.”

Smith also told the paper that the Cubs “are going to move through a very quick evaluation between us and interests in Florida to see where they want to focus their efforts. … They have told us they would like by the middle of November to have enough information that they can know whether and how to proceed with Mesa.”

Collier County has never had a spring training team, although it has been courted by several clubs, including the Cleveland Indians and Baltimore Orioles through the years. This summer, the Collier Tourist Development Council agreed to explore the possibility of luring the Cubs.

In June, Lee County commissioners agreed to spend $75 million for a new stadium for the Boston Red Sox for spring training, south of Fort Myers. Since 1992, the Minnesota Twins have trained at the Lee County Sports Complex, south of Fort Myers. The Red Sox moved from Winter Haven to Fort Myers City of Palms Park in 1993.

Fort Myers also recently courted the Orioles as a possible replacement for the Red Sox at City of Palms Park, but the Orioles chose to go to Sarasota.

The visit

Esmark Inc., co-founded by brothers Craig and Jim Bouchard, and Fifth Avenue Advisors, whose partners include Tim Cartwright, a vice president of the Economic Development Council of Collier County, and Naples City Councilman Gary Price, met for two days in Naples earlier this month.

“We were very fortunate to host Tom Ricketts (new owner of the Cubs), his sister, Laura, and Cubs CEO Crane Kenney for a casual dinner,” Craig Bouchard said. “It became clear to me that their objective is to do what is best for Cubs fans. They want to win a World Series. And they want to build the very best organization they can.”

The Cubs spent one morning touring the county in a helicopter to see what locations may be suitable. Bouchard said the Cubs are looking for 120 contiguous acres in an area that “will enhance the development plan of Collier County.”

Bouchard said: “We (the group) will only be interested in sites that are a win for the team, their fans and the future of Collier County.”

The group

Esmark currently has operations in the steel, oil, aviation, health-care and sports management fields. In 2008, Esmark sold its steel business for $1.3 billion. The Sports Management Division of Esmark is a principal sponsor of the Pittsburgh Penguins, and the Bouchards are principal owners of the Naples Tennis Club.

Craig Bouchard’s Chicago roots run deep. An admitted Cubs fan, he still has a home there after a 19-year career at the First National Bank of Chicago which saw him rise to senior vice president.

Fifth Avenue Advisors is a diversified financial firm founded by Cartwright and Craig Lyon, who started their careers in Chicago. They, too, are Cubs fans who fondly recall attending afternoon games at Wrigley Field.

This is Fifth Avenue Advisors’ first venture in the professional sports industry. However, Cartwright and Lyon point to their experience in negotiations, deal structuring, fundraising and project management.

How did Esmark and Fifth Avenue Advisors come together? By chance.

“Craig Bouchard and I did not know each other,” Price said. “We had a mutual friend that had listened to the both of us talk about the idea of bringing the Cubs to Naples. So one day he introduced us. We hit it off and took it from there.”

Cartwright said the summer months were spent unsure if the hundreds of hours that Bouchard and his firm spent on the project would result in an opportunity to attract the Cubs to Collier County.

“We took a dream and turned it into a viable opportunity, which thankfully resulted in us being able to convince the Cubs to take a look at Naples,” Cartwright said.

Funding and economic impact

The group wouldn’t get into specifics as to how the money, which could exceed $80 million, will be raised.

But Cartwright was willing to say how it was not going to be raised.

“We are pursuing every avenue, public and private, to finance this project that does not raise the property or sales taxes of the residents of Collier County.” Bouchard stated. “I committed to Crane (Kenney, Cubs CEO) that Esmark will invest and take a leadership role in the stadium project.”

Not raising sales or property taxes doesn’t rule out other forms of public financing. The Florida Legislature, tired of losing spring training teams to Arizona, recently set aside $7 million to help any Florida city keep or attract a team. Sarasota used that money to lure the Orioles from Fort Lauderdale.

The group could ask the Collier TDC for a hike in its tourist tax on hotel guests. A 1 percent hike from 4 percent to 5 percent would result in more than $3 million annually.

When asked, Bouchard, Cartwright and Price didn’t say they would make such a request of the TDC, but wouldn’t rule it out. They did however strongly express why they are pursuing the Chicago Cubs.

“This is a terrific opportunity to bring real economic impact to this county in terms of increased tourism dollars, jobs and real estate activity,” Price said.

Craig Bouchard takes it a step further.

“This effort will inject $50 million annually into the county, which would contain its spring training site, player rehabilitation, a minor league team, their minor league operations headquarters and a host of other functions year-round,” he said. “We hope to structure a deal that runs a minimum of 30 years. That’s $1.5 billion in economic impact, not counting inflation.”

Arizona’s most recent study said the Chicago Cubs’ direct economic impact to Mesa was $31.1 million annually. The impact for Arizona was figured to be $52.2 million annually.

There is a cost to maintaining stadium facilities year-round. Based on recent Lee County figures, it would cost Collier County $1.5 million to $2 million annually in maintenance expenses.

Covering these costs is often part of the negotiations a city or county has with the team. Costs can be covered through means such as parking, rent, concessions, naming rights to the stadium, and in some cases, a percentage of ticket sales.

“A facility of this type would be an incredible asset for the community, not only a destination attraction for baseball and special events, but a haven for adult and youth sports,” Lyon said.

What are the odds?

The Cubs went West in 1946. They began training in Mesa, Ariz., in the 1950s. Mesa has been the team’s full-time winter home since 1979. What are the odds that the Cubs, after all that time, would leave the Cactus League in Arizona for the Grapefruit League in Florida?

The answer depends on who you talk to.

“We are still a long shot but I agree with the mayor of Mesa that we are a serious threat,” Bouchard said. “We offer an outstanding destination for families, award-winning beaches and a belief that we can put together a proposal that is favored by the Cubs. Sometimes, long shots win.”

The Cubs’ 25-year lease with the city of Mesa expires in 2016. However, the team has an escape clause, allowing them to pay $4.2 million to the city next spring in order to leave Mesa in 2012.

* * * * *

Editor’s note: Dave Moulton is a freelance journalist who writes a Sports opinion column for the Daily News. He has written about his belief that officials in Collier County should pursue bringing the Chicago Cubs here for spring training. He also has advocated that position at a public meeting. The Daily News agreed to publish this freelance article because of its news value, but wishes to remind readers of the author’s public advocacy of this project .

Sports Editor Greg Hardwig contributed to this report

Source: Naples Daily News
http://www.naplesnews.com/news/2009/oct/25/chicago-cubs-execs-visit-collier-scout-spring-trai/

Rates on 30-year loans inch up to 5 percent

2009-10-25T10:54:00.000-04:00

WASHINGTON – Oct. 23, 2009 – Rates for 30-year home loans have inched up, hitting 5 percent for the first time in nearly a month after bond yields edged up.

The average rate on a 30-year fixed mortgage was 5 percent this week, up from 4.92 percent a week earlier, mortgage company Freddie Mac said Thursday. It was the highest average since the week of Sept. 24, when rates averaged 5.04 percent.

While above the record low of 4.78 percent hit in the spring, rates are still attractive for people looking to buy a home or refinance.

To prop up the housing market and help the economy recover from the worst recession since the 1930s, the Federal Reserve has been engaged in an extraordinary level of support, spending $1.25 trillion on mortgage-backed securities, which has driven down rates on home loans.

Last month, Fed Chairman Ben Bernanke and his colleagues agreed to slow down the pace of the program to buy mortgage securities from Fannie Mae and Freddie Mac. Instead of wrapping up the purchases by the end of this year, the Fed now plans to do so by the end of March.

Despite the government’s effort to support the housing market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

The average rate on a 15-year fixed-rate mortgage rose to 4.43 percent, from 4.37 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.4 percent, up from 4.38 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.54 percent from 4.6 percent.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 points for 30-year loans. The fee averaged 0.6 points for 15-year, five-year and one-year loans.

SOURCE: floridarealtors.org, Associated Press

30-year mortgage rates dip below 5 percent

2009-10-13T10:11:00.002-04:00

30-year mortgage rates dip below 5 percent
First time in four months, average rate on standard fixed is 4.94 percent

Rates on 30-year home loans dropped below 5 percent for the first time in four months, but still remained above this year's record low, Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage was 4.94 percent, down from 5.04 percent last week, Freddie Mac said. The last time the 30-year home loan averaged less than 5 percent was the week ending May 28, when it was 4.91 percent.

Rates hit a record low of 4.78 percent hit in the spring, and remain appealing for people interested in buying a home or refinancing.

On Thursday, the National Association of Realtors said the number of signed sales contracts rose for the seventh straight month in August, as homebuyers rushed to take advantage of a tax credit for first-time owners that expires in November.

"Low mortgage rates are helping to stabilize home sales," said Frank Nothaft, Freddie Mac's chief economist.

But borrowers may want to consider the Federal Reserve's announcement last week that it is slowing down a program intended to lower mortgage rates and boost the housing market. Analysts say mortgage rates should remain low for now but could eventually move higher, and homeowners who want to refinance mortgages shouldn't delay.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

The average rate on a 15-year fixed mortgage fell to 4.36 percent from 4.46 percent last week, according to Freddie Mac. This week's rate on 15-year mortgages was the lowest since Freddie Mac started tracking it in 1991.

Rates on five-year, adjustable-rate mortgages averaged 4.42 percent, down from 4.51 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.49 percent from 4.52 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year mortgages, and 0.6 point for 15-year and five-year loans. The fee averaged 0.5 point for one-year mortgages.

A Historic Time to Buy

2009-10-07T13:51:00.002-04:00

A Historic Time to Buy

Young people just starting to invest and buying their first homes are potentially the winners in this recession.

First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®

"This is a historic time," says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. "It's a great opportunity to make some great gains in the future."

A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains. For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5 percent.

"We need to be shouting from the rooftops that this is not the time to get out of the market if you're young," says Christine Fahlund, a senior financial planner with T. Rowe Price. "This is the time to be in the market."

Source: The Associated Press, Chip Cutter (10/05/2009)

Seventh straight month of gains

2009-10-07T13:46:00.000-04:00

Pending home sales jump 6.4 percent
Seventh straight month of gains is highest since March 2007

updated 12:39 p.m. ET, Thurs., Oct . 1, 2009

WASHINGTON - Aspiring homebuyers rushed to take advantage of a tax credit for first-time owners that expires in November, driving up the number of signed sales contracts for the seventh straight month in August.

Construction spending also rose unexpectedly in August on the biggest jump in housing activity in nearly 16 years, another sign the real estate market is recovering from its four-year slump, data Thursday showed.

Sales and homebuilding are being fueled by a tax-credit of up to $8,000, low mortgage rates and cheap foreclosures. In some of the most hard-hit areas, like Phoenix and Las Vegas, there are bidding wars for deeply discounted properties. And in all but a few cities, home prices are slowly starting to rise, reversing their three-year descent.

To make sure first-time buyers can complete their purchases by the Nov. 30 deadline, real estate agents "have been pushing buyers to sign a contract at least a couple months in advance" according to Abiel Reinhart, an economist with JPMorgan Chase.

More than a dozen bills have been introduced in Congress to extend the credit, but it's unclear if lawmakers want to continue to subsidize the market.

The National Association of Realtors said Thursday its index of sales agreements rose 6.4 percent from July to 103.8, beating forecasts. It was the highest since March 2007 and 12 percent above a year ago. Economists surveyed by Thomson Reuters expected the index would rise to 98.6.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales. However, new rules for home appraisals and rigid lending standards have scuttled many sales agreements recently. In addition, the index may also double-count some buyers who agree to purchase other homes after the first deal falls through.

These factors have made the index a less reliable gauge for completed sales. Despite a steady increase in the number of signed contracts this summer, for example, completed sales actually took an unexpected 2.7 percent dip in August.

"Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being canceled," Lawrence Yun, the Realtors' chief economist, said in a statement. "Without historic precedents, it's challenging to assess."

Pending sales were up 16 percent in the West and 8 percent in the Northeast. They were up 3 percent in the Midwest and nearly 1 percent in the South.

Home prices, meanwhile rose 1.2 percent from June to July, according to the Standard & Poor's/Case-Shiller home price index of 20 major cities. On a seasonally adjusted basis, prices rose in all but three metro areas, Las Vegas, Detroit, and Seattle.

Housing experts, however, remain divided on whether the price gains signal a definite bottom to the worst housing downturn in decades or just a brief respite from plummeting prices.

SOURCE: ASSOCIATED PRESS

http://www.msnbc.msn.com/id/33116385/ns/business-real_estate/

SALES UP 87 PERCENT

2009-09-28T14:09:00.001-04:00

SALES UP 87 PERCENT
Report Shows Inventory Declines 13 Percent

NAPLES, Fla.-September 11, 2009-Buyer conditions couldn’t be better in the Naples area as August culminated in strong sales, 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).

Overall pending sales, which are a key indicator of buyer activity, increased 87 percent with 862 contracts in August 2009 compared to 461 contracts in August 2008.

The 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 closed sales saw a 38 percent increase with 545 sales in August 2009 compared to 395 sales in August 2008.

• Single-family pending sales increased 86 percent with 483 contracts in August 2009 compared to 260 contracts in August 2008.

• Single-family pending sales for properties less than $300,000 saw a 106 percent increase with 344 contracts in August 2009 compared to 167 contracts in August 2008.

• The available inventory decreased 13 percent to 9,163 in August 2009 compared to 10,532 in August 2008.

Condo pending sales increased 89 percent with 379 contracts in August 2009 compared to 201 contracts in August 2008.

To view the entire August report, go to www.Naplesarea.com

Home Sales Maintains Uptrend

2009-08-25T14:13:00.003-04:00

Strong Gain in Existing-Home Sales Maintains Uptrend
Washington, August 21, 2009

For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.

Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said.

The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.

“Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22 percent in July from 5.42 percent in June; the rate was 6.43 percent in July 2008.

An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said.

“Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”

Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.

The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.

Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price4 was $178,800 in July, down 18.9 percent from July 2008.

Regionally, existing-home sales in the Northeast surged 13.4 percent to an annual pace of 930,000 in July, and are 3.3 percent higher than July 2008. The median price in the Northeast was $236,700, down 15.0 percent from a year ago.

Existing-home sales in the Midwest jumped 10.9 percent in July to a level of 1.22 million and are 8.0 percent above a year ago. The median price in the Midwest was $157,200, which is 5.9 percent less than July 2008.

In the South, existing-home sales rose 7.1 percent to an annual pace of 1.95 million in July and are 5.4 percent higher than July 2008. The median price in the South was $164,500, down 7.1 percent from a year ago.

Existing-home sales in the West slipped 1.7 percent to an annual rate of 1.13 million in July, but are 1.8 percent above a year ago. The median price in the West was $202,300, which is 28.0 percent below July 2008.

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.

# # #
NOTE: Any references to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.
3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for August will be released September 24. The next Pending Home Sales Index & Forecast is scheduled for September 1; release times are 10 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Homes sales up almost 70 percent from a year ago

2009-08-17T15:06:00.003-04:00

NABOR: Homes sales up almost 70 percent from a year ago
By I.M. STACKEL
Posted August 14, 2009 at 1:31 p.m. , updated August 15, 2009 at 8:15 a.m.

NAPLES — With an economy that is moving the right direction, there are going to be some celebratory brunches.

Naples Area Board of Realtors released its numbers Friday, and the statistics have many smiling: overall home sales increased by 67 percent in July, compared with the same period one year ago.

Comparing July 2009 to the previous year, there’s also been a 12 percent decrease in inventory, a positive sign that the “buy now” message is getting out, say leaders in the real estate industry.

Especially heartening: the number of people asking to look at property and pending sales. Desire for properties costing less than $300,000 increased by 165 percent compared with this period last year. In hard numbers, that was 682 pending sales last month as compared with the 257 pending sales NABOR reported in July 2008.

Condo sales increased by 61 percent with 283 in July 2009, compared to 176 in July 2008.

Florida’s existing home, condo sales up in 2Q 2009

2009-08-13T10:32:00.001-04:00

2Q existing-home sales rise in most states, says NAR

ORLANDO, Fla. – Aug. 12, 2009 – Sales of existing single-family homes in Florida rose 23 percent in second quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from the Florida Association of Realtors® (FAR). A total of 43,125 existing homes sold statewide in 2Q 2009; during the same period the year before, a total of 35,008 existing homes sold. It marks the fourth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to FAR.

Sales of existing condominiums statewide in the second quarter rose 29 percent compared to the same time the previous year. This marks the third consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

Statewide sales activity in 2Q 2009 also increased over 1Q 2009’s sales figure in both the existing home and existing condo markets, FAR records show. For 2Q 2009, statewide sales of existing homes rose 37.2 percent over the 1Q 2009 figure; existing condo sales statewide in 2Q 2009 increased 45.3 percent over the 1Q 2009 level.

“In spite of the challenges with the economy, most people – 83 percent – still believe that buying a home is a good financial decision, according to a recent survey from the National Association of Realtors® (NAR),” says 2009 FAR President Cynthia Shelton, CCIM, CRE, a broker and director of investment sales with Colliers Arnold in Orlando. (CCIM stands for Certified Commercial Investment Member and CRE is the Counselor of Real Estate designation). “Many homebuyers are realizing that this is the time to buy – with a good selection of housing inventory, affordable pricing and low mortgage rates.

“In fact, three-fourths of those responding to the 2009 National Housing Pulse Survey said they think now is a good time to purchase a home, a number that has increased steadily the past two years,” she says. “However, providing solid financing options for homebuyers is key to returning stability to the housing market, and buyers also need programs that help with downpayment and closing costs. That’s why the federal $8,000 first-time homebuyer tax credit and other programs enabling eligible buyers to access that tax credit for downpayment or closing costs are so important – programs like the Florida Homebuyer Opportunity Program.”

Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the second quarter compared to the same three-month period a year earlier, while 12 MSAs showed gains in condo sales.

The statewide existing-home median sales price was $143,600 in the second quarter; a year earlier, it was $203,200 for a decrease of 29 percent. The 2Q 2009 statewide existing-home median sales price was 1.8 percent higher than 1Q’s statewide existing-home median sales price of $141,000. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 14,742 units sold statewide for the quarter compared to 11,459 in 2Q 2008 for a 29 percent increase. The statewide existing-condo median sales price was $111,100 for the three-month period; in 2Q 2008, it was $179,800 for a decrease of 38 percent. The 2Q 2009 statewide existing-condo median sales price was almost 1 percent higher 1Q’s statewide existing-condo median sales price of $110,100.

Continuing low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 5.03 percent in 2Q 2009; one year earlier, it averaged 6.09 percent.© 2009

FLORIDA ASSOCIATION OF REALTORS

Bidding wars break out on low-priced homes

2009-07-21T15:42:00.005-04:00

Bidding wars break out on low-priced homes
FORT LAUDERDALE, Fla. – July 21, 2009 –

Bidding wars are returning to South Florida’s housing market, as investors and first-time buyers compete for homes and condominiums listed at $200,000 or less.

The race for properties is reminiscent of the boom years from 2000 to 2005, when multiple offers on all types of dwellings helped push prices to record highs.

Back then, a dearth of properties for sale had buyers rushing to scoop up anything they could find, for fear that prices would keep rising. Now, frustrated with a bloated inventory of foreclosed homes in disrepair, buyers go to great lengths when they spot a house or condo in pristine condition.“When they find a good listing, people are pouncing,” said Terry Story, a real estate agent for Coldwell Banker in Broward and Palm Beach counties.

Agents say the heated competition has been building in recent months, a result of low mortgage rates and the $8,000 tax credit for first-time buyers that expires Nov. 30.

Steady sales increases during the past year gradually have worked off the inventory of available homes. Real estate agents are convinced that the overall market has hit bottom or is close to one.

Housing market researchers have a different take.Because of mounting job losses and the lingering recession, the bidding wars are mostly confined to homes offered at deeply discounted prices. Also, housing experts say, the market needs more than investors and first-time buyers taking the plunge for a rebound to occur.Analysts don’t expect across-the-board price increases soon and predict that prices in Broward and Palm Beach counties will keep falling, albeit at a slower rate, through this year and into 2010.

The bidding wars “are a good sign, but I don’t think it’s the sign that we’re at the bottom,” said Brad Hunter, a housing analyst with Metrostudy, a market research firm with an office in West Palm Beach.Rising unemployment is sure to lead to more foreclosures and property sales later this year, which almost certainly will lower prices, Hunter and other analysts say.

Some observers suspect that lenders are holding back the supply of foreclosed homes, promoting bidding wars to increase prices now before the flood of new listings further depresses prices.Banks dispute that notion. They say they’re overwhelmed with foreclosures and try to market them for sale as quickly as possible.“The longer we hold them, the more money it costs us,” said Nancy Norris, a spokeswoman for banking giant Chase.

The bidding wars in South Florida are giving sellers more leverage after three years of buyers calling the shots.Investor Greg Bales bought a three-bedroom home in Lauderdale Lakes three months ago for $65,000 – $1,900 less than what it sold for in 1985.Bales, 41, beefed up the curb appeal with a new paint job, trees and other landscaping. Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system.He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price.

He selected a bid from a first-time buyer for $145,000, and the deal is expected to be complete next month.“We would have had a bunch more offers, but my real estate agent told the people it really wasn’t worth their time if they weren’t submitting a full-price offer,” Bales said.Eric Cormier of Philadelphia is searching for a small home for his sister-in-law in Delray Beach. He offered $120,000 cash for a house listed for $152,000, only to be out-bid by a few thousand dollars.Another home he considered received four offers in one day.

“I was surprised,” said Cormier, 47. “I thought there was a fire sale going on in Florida.”

In some cases, first-time buyers are losing homes because sellers prefer dealing with cash investors who don’t have to fiddle with financing.Meanwhile, some real estate agents are creating “drama pricing” – listing properties for far less than the market value to attract bidders and drive up the eventual selling price.

“It’s like ‘Ta-da’,” said Douglas Rill, an agent for Century 21 America’s Choice in West Palm Beach. “It creates so much of a buzz that it results in a bidding war.”

Drama pricing typically happens with short sales. Those homes aren’t as much in demand because buyers know that it can take months for the deals to close. In a short sale, a lender accepts less than what’s owed on the mortgage and forgives the remaining debt.

Tony Thomas, 44, is looking for a home in the $200,000 range in central Palm Beach County. He made three offers, only to be told each time that another buyer out-bid him.

His agent, Liz Golub, told him to “run like a bunny” to make strong offers as soon as properties come on the market. The strategy paid off recently when the owner of a home near Lantana accepted his offer. But because it’s a short sale, the bank must approve the deal, and that could take months.“It’s frustrating,” Thomas said. “I have not seen the benefits of this buyer’s market right now.”

4th Straight Monthly Gain in Pending Sales

2009-07-02T16:24:00.003-04:00

Pending Home Sales Record Fourth Straight Monthly Gain

Washington, July 01, 2009

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

The Pending Home Sales Index in the Northeast rose 3.1 percent to 80.9 in May and is 6.8 percent above a year ago. In the Midwest the index slipped 1.3 percent to 89.2 but is 11.4 percent above May 2008. The index in the South declined 1.7 percent to 92.6 in May but is 7.9 percent higher than a year ago. In the West the index rose 2.2 percent to 96.9 and is 0.7 percent above May 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index2 remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

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.A median-income family, earning $60,800, could afford a home costing $296,700 in May 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 what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said.

“We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”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.

1The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.2The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.Monthly publication of the index began in 1981 with annual data calculated back to 1970.Existing-home sales for June will be released July 23; the next Pending Home Sales Index will be on August 4.

Outlook

2009-06-23T15:04:00.005-04:00

It’s a buyer’s market!

“We expect first-time homebuyers will be the largest segment next year,” says Ed Forman, president Watson Realty Corp., Jacksonville. “That includes a high percentage of single women buying their first property.”

The same pricing dynamics benefit working-age families in their 30s and 40s who may be moving into a starter home or looking for a move-up with more space for children, according to Mike Pappas, president and CEO, The Keyes Company, Miami. “For these buyers in particular, lower pricing is making Florida homes very attractive,” he says.

In many Florida markets, affluent buyers are picking up luxury properties as primary residences or second-homes – a trend likely to continue. “The high end of the Florida market has held up quite well,” says Brad Hunter, director, South Florida region, MetroStudy in Boca Raton.

International buyers remain an important component of the state’s market, especially in coastal areas like Miami, Fort Lauderdale, Naples and Sarasota, as well as Orlando/Kissimmee. Florida Association of Realtors research studies show buyers from Canada, United Kingdom, Mexico, South America and Europe generate more than 15 percent of residential transactions.

On the other hand, the traditional flow of retiree buyers to Florida remains uncertain in the year ahead. Slower economic conditions in the Northeast and Midwest – two prime feeder markets for Florida – may make it harder for retirees with modest incomes to make the big move to Florida. Many retirees are also faced with less purchasing power due to declines in their investment portfolio and may opt to stay put.

However, the number of Baby Boomers reaching age 65 continues to increase and many of these prospective buyers will be considering Florida when the nation’s economic condition improves.

Florida still a prime location for relocation

2009-06-22T16:00:00.002-04:00

Florida still a prime location for relocation

Long one of the fastest growing states in the nation, Florida continues to benefit from a natural population growth as well as in-migration from other U.S. and international locations. Between 2007 and 2010, Florida is to add an average of 209,000 residents a year, according to Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research. “Although Florida remains a major destination for retirees, far more young and middle-aged people move into the state to find work than their older counterparts arrive to retire,” Smith said.

While Florida’s overall population growth has slowed significantly from the early 2000s, the bureau’s projections show the rate will soon increase again, reaching about 317,000 a year between 2010 and 2020. That would be similar to the peak years of the 1980s and 1990s.
“Florida remains a prime destination for workers seeking new jobs and for the growing wave of baby boomers,” said economist Hank Fishkind, president of Fishkind & Associates in Orlando. His analysis of demographic data indicates Florida enjoyed a net population growth of 350,000 each year from 2000 to 2006. That included about 203,000 people who moved to Florida from other states, about 107,000 migrants from foreign countries and about 47,000 from natural increase (total births minus total deaths). “It’s important to note that this is net growth,” added Fishkind. “The actual number of people who move to Florida each year is far greater.”

On the domestic side, the strongest traditional “sending” states are New York, New Jersey, Illinois, Ohio, Pennsylvania, Georgia, Michigan and California. Among top foreign countries are Venezuela, Puerto Rico, the United Kingdom and Canada.

“Florida has a long history of population growth regardless of the nation’s economic cycle,” said Nancy Riley, a broker with Coldwell Banker Residential Real Estate in Pinellas County and the 2007 president of the Florida Association of Realtors® (FAR).

In fact, the U.S. Census Bureau projects that in 2010 Florida will surpass New York and become the nation's third most populous state. By 2030, the Census Bureau projects the state’s population will reach 28.6 million, an increase of 12.7 million since 2000.

One reason for that growth is that the state’s highly diversified economy continues to attract jobs in tourism, technology, international trade and business services. That brings in individuals, couples and families in their 20s to 50s, primarily to Florida’s larger metropolitan areas.
In addition, Florida traditionally captures a large share of the domestic retiree market, ranging from highly affluent entrepreneurs and executives to moderate-income couples seeking a warm-weather destination with plenty of recreational opportunities.

According to the Census Bureau, there are 76 million baby boomers born between 1946 and 1964. If only 5 percent retire to Florida, that alone would add 3.8 million new residents.
International buyers provide a third stream of migration into Florida, including working-age professionals, retirees and affluent second-home buyers.

As Riley said, “The bottom line is that hundreds of people move to Florida every day. That provides a solid foundation for our state’s residential real estate market.”

Ready to make the move to Naples? Call Today! MARI VESCI REALTORS, Inc. 800-248-3724

Home Sales Rise 36 Percent...

2009-06-12T13:38:00.002-04:00

Home sales rise 36 percent over a year ago in Naplea area, NABOR reports
By: NDN Staff
Originally published 12:31 p.m., Friday, June 12, 2009

NAPLES — May home sales in the Naples area increased substantially over May 2008, according to a report released early this afternoon by the Naples Area Board of Realtors (NABOR).

Overall pending home sales in the greater Naples area, which includes the Naples beach area, North Naples, central Naples, East Naples, Immokalee and Ave Maria, saw an increase of 101 percent with 1,029 pending sales in May compared to 511 in May 2008.

The available inventory decreased 10 percent to 10,046 in May compared to 11,175 in May 2008, NABOR reported.

Other findings:

**Overall pending home sales for properties under $300,000 saw a 177 percent increase, with 5,160 pending for the 12 months ending in May compared to 1,860 for the 12 months ending in May 2008.

**The average days on the market decreased 24 percent to 155 in May compared to 203 in May 2008.

**Single-family home sales increased 53 percent with 383 in May 2009 compared to 251 in May 2008; single-family pending home sales saw a 110 percent increase with 603 in May 2009 compared to 287 in May 2008.

**Condo sales saw a 24 percent increase with 313 in May 2009 compared to 253 in May 2008.

**For the year ending in May 2009, the median price for properties over $300,000 decreased only 1 percent to $550,000 compared to $555,000. The median refers to the point where half of the sales are for more, and half for less.

RELATED LINK: www.naplesarea.com

Docks on Vanderbilt Channel

2009-06-11T11:08:00.004-04:00

State approves controversial plan to build docks on Vanderbilt Channel in North Naples
By ERIC STAATS
Tuesday, June 9, 2009

NAPLES — A developer’s controversial plan to build docks on Vanderbilt Channel in North Naples won Florida approval Tuesday.

Gov. Charlie Crist and the Cabinet voted 3-1 to approve Signature Communities’ plans to build 49 slips along a mangrove shoreline west of Vanderbilt Drive and east of Delnor-Wiggins Pass State Park. Attorney General Bill McCollum voted no.

The docks, part of the Dunes project, required approval of a lease of state submerged lands and plans to place riprap beneath the dock and dredge.

Vanderbilt Beach residents and the Conservancy of Southwest Florida have opposed the plans, saying the docks will ruin the waterway by destroying mangroves and harming manatee habitat. Backers of the project said the concerns are overblown.

The project still needs Collier County approvals and a permit from the U.S. Army Corps of Engineers but Tuesday’s approval was an important step.

“I’m disappointed,” Vanderbilt Beach Residents Association Secretary Kathy Robbins said as she traveled back to Naples from testifying at Tuesday’s hearing in Tallahassee.

Tuesday’s outcome was different than in October 2007, when a deadlocked Cabinet offered opponents a glimmer of hope with a tie 2-2 vote on the submerged land lease.

Back then, McCollum and Chief Financial Officer Alex Sink voted no. Sink cited inadequate submerged land lease fees.With today’s proposal, Signature Communities agreed that instead of paying a one-time $31,000 lease fee, the project would also pay any fee increases the Cabinet or the state Legislature approve within two years of the lease going into effect, according to the lease.

Also changed since the October 2007 vote, the developer has agreed to deed 54 acres of submerged land and deed another 66 acres above the mean high water line to the state of Florida.McCollum cast the sole dissenting vote Tuesday, saying the new wrinkles in the project aren’t enough.“I don’t see the change,” McCollum said.

Besides Robbins, two other members of the Vanderbilt Beach Residents Association made the trip to Tallahassee for Tuesday’s hearing.The Conservancy sent a letter June 1 to the Cabinet, saying the Dune projects is incompatible with the designation of Wiggins Pass as an Outstanding Florida Waterway and that it failed to meet the “public interest test” required for approving submerged land leases.

“This is certainly no casual, slight or NIMBY type of opposition,” attorney Bill Hyde, an attorney for opponents, told the Cabinet.

Backers of the project also were at the hearing, including a fishing guide who said the project would not harm the ecosystem he relies on for a living.The guide, South Bay Marina owner Justin Finch, said having additional boat docks at the Dunes will alleviate overcrowding at county boat ramps.

Dunes resident Pam Mac’Kie told the Cabinet that the Dunes only wants what others in the neighborhood already have.“We’d like please to have access to the waterway too,” said Mac’Kie, a former Collier County commissioner.

Dunes attorney Steve Lewis told the Cabinet that the project is “not unreasonable” and meets state standards.

“I would suggest we’re not even remotely overreaching,” Lewis said. “We’ve done everything anyone asked us to do and more.”

Economy on pace for ‘09 turnaround

2009-06-08T13:41:00.002-04:00

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.”

Bernanke said consumer spending, which dropped sharply in the second half of 2008, has been “roughly flat” so far in 2009, and “consumer sentiment has improved.” He also said the Obama Administration’s economic stimulus could boost spending. However, the Fed chairman said a weak job market, the loss of housing wealth, and tight credit conditions could hamper consumer spending, which would be a key component of any recovery.

“Making Progress”

The Fed chairman said businesses “remain very cautious and continue to reduce their workforces and capital investments. On a more positive note, firms are making progress in shedding the unwanted inventories that they accumulated following last fall’s sharp downturn in sales.”

Bernanke said the Fed continues to believe economic activity will turn up later this year, based on improvements in consumer spending and housing demand supported by fiscal and monetary stimulus and stabilization in foreign economic activity. Inflation is likely to remain low over the next year, Bernanke said.

However, he warned that the forecast is dependent on continuing improvement in credit markets, and he said that “even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while, with unemployment continuing to rise even after the economy turns around.

Concerns about the job market were heightened by Wednesday’s release of the ADP National Employment Report. The private sector report, which has become more closely watched in recent months, said employment decreased by 532,000 in May, vs. a revised decline of 545,000 jobs in April.

While the ADP report showed a slight improvement, it was “another in a list of ‘less bad’ economic reports,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management. “We do believe that the market expectations are shifting from simple survival to sustainability, so less bad is not good enough.”

Copyright © 2009 The McGraw-Hill Cos., Business Week Online, Phil Mintz. All rights reserved. The Associated Press contributed to this report.

The upside of Florida real estate

2009-06-04T15:25:00.003-04:00

The upside of Florida real estate: 15 market positives

Let’s take a look at some of the opportunities for today and the future of Florida’s real estate market....

1. Great prices. Statewide, the existing-home median sales price was $161,200 in the fourth quarter of 2008; a year earlier, it was $216,600 for a decrease of 26 percent.

2. The time is right. Home sales volumes are rising again – a clear signal that today’s “buyers market” may be changing soon. In fourth quarter 2008, statewide sales of existing single-family homes were up 13 percent compared to the same period last year, according to FAR statistics.

3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is still plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don’t wait too long.

4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer’s financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.

5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The U.S. Housing and Economic Recovery Act of 2009 includes an $8,000 tax credit for first-time buyers. President Obama’s 2009 economic stimulus package also identifies and offers incentives to help home buyers with mortgages. Talk to a local mortgage lender about state and federal incentive programs. How to get the $8,000 credit.

6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010 economists forecast that Florida will be the third-most-populated state in the country. Florida’s population is expected to swell about 75 percent by 2030. Florida has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.

7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida’s population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research. That’s a lot of new buyers coming into the market.

8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State’s mild climate and outdoor amenities continue to make Florida a top retirement destination.

9. Business-friendly state. Florida has always been a business-friendly state – no state income taxes, plus incentives from local municipalities encourage businesses to set up shop here. Even with the current economic downturn nationwide, Florida leaders continue to keep business needs in the forefront of planning for the state's future. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its “Best Performing Cities Index 2008,” which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida’s business climate ranked fourth among executives and sixth overall on “Site Selection” magazine’s 2008 Top State Business Climate rankings.

10. Positive investment outlook. Every quarter, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the third quarter 2008 survey, the investment outlook for various types of Florida properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”

11. Homeownership has value. Realtors believe – and research supports that belief – that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group.

12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.

13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They’re also shown to have a higher lifetime annual income.

14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.

15. An unsurpassed lifestyle. Finally, let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put Florida in the top three of Harris Poll’s “Most Desirable Places to Live” survey.

Call today to find your piece of paradise, MARI VESCI REALTORS, Inc. 239-566-8989 or email vesci@vesci.com