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

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

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.

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

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

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

Florida Realtors and Gov. Crist agree: ‘Now’s the time to buy’ a home in Florida

Realtors reported an upswing in existing home sales in the past three to six months, to which the governor responded, “Now is the time to buy, while the deals still exist.”

TALLAHASSEE, Fla. – April 15, 2009 – Ten Realtors from across Florida met with Gov. Charlie Crist this morning to discuss increased home sales and other positive trends in their markets, as well as offer insight into some current issues facing the real estate industry. It’s part of this year’s Great American Realtor Days, April 14-15, when about 1,000 Realtors from throughout the state join forces at the state capital to meet with their legislators and discuss concerns affecting all Florida residents.

Representing markets from Miami to Jacksonville and all points in between, Realtors reported an upswing in existing home sales in the past three to six months, when comparing year-to-year activity and also month-to-month sales figures. John Sebree, vice president of public policy for the Florida Association of Realtors® (FAR), kicked off the Real Estate Roundtable meeting with Gov. Crist by noting that February’s statewide existing home sales rose 20 percent over the same period last year, according to FAR data. He also reported that February’s home sales were about 17 percent higher than January’s statewide sales activity.

Realtors also told the governor about other positive indicators such as: mortgage interest rates under 5 percent; reduced housing inventory levels as buyers take advantage of current, more affordable housing opportunities; and encouraging market reaction to the federal economic stimulus package, especially the new $8,000 first-time homebuyer tax credit.

Upon hearing these reports from around the state, Gov. Crist said, “It doesn’t get much better than this. [Housing] supply and demand is going to come into balance here. Two to three years from now, people will be saying, ‘Back in April 2009 I could have gotten that home for so many dollars’ – so you don’t want to wait.

“Prices have gotten as low as they can. Now is the time to buy, while the deals still exist,” the governor said.

Discussing some of the challenges in today’s market, many Realtors pointed to difficulties with so-called “short sales,” where the bank or lender agrees to accept less money on a home sale than the seller owes on the mortgage. They said that short sales are problematic not only because of how long it actually takes to finalize the sale, but also because of the inconsistencies in information and documents required by lenders. Streamlining the short-sale process and providing consistency in required documentation among the lenders would boost the recovery of Florida’s real estate market.

Solutions to ease lenders’ restrictions on the state’s condo market are also needed, said Edgewater Realtor Robert Clinton. “Not only is the prospective condo buyer having to be approved for a mortgage, but the condo owners association itself has to be approved and qualified, which is causing problems,” he said.

Largo Realtor Alan Riley told Gov. Crist that 50 percent of buyers involved in recent home sales in the Tampa Bay area paid cash for their purchases, a strong indicator that investors have returned to the housing market. “Savvy investors have returned to our market as well,” added Eric Sain, a West Palm Beach Realtor. “But we’re also seeing a lot of young families buying a home to settle down and establish roots in the community. That’s a sign that people aren’t leaving the area, aren’t leaving Florida.” Gov. Crist agreed, saying, “Of course they are [establishing roots] – it’s Florida. Why would they go anywhere else?” Not only is it a great time to buy a home in Florida, it’s also a great time for businesses to move to the Sunshine State, noted Suzanne Sherer, a Fort Myers Realtor. Commercial and business properties are readily available in a range of price options, she said, providing prime opportunities for entrepreneurs. She asked the governor and state leaders to take steps to encourage the relocation of businesses and industries to Florida.

At noon today on the steps of the old Capitol, Gov. Crist addressed the crowd of nearly 1,000 Realtors participating in Great American Realtor Days, applauding their perseverance and dedication to their profession despite challenges posed by the economy and the marketplace. Amid reports of increased home sales and other positive signs, the governor said that the “changing landscape” for Florida’s real estate markets is “nothing short of remarkable.” Other participants in Gov. Crist’s Real Estate Roundtable included: Jacksonville Realtor Millie Kanyar; Fort Lauderdale Realtor Jesse Acevedo; Miami Realtor Carlos Cruz; Port St. Lucie Realtor Scott Wingfield; Panama City Realtor Katie Patronis; and Orlando Realtor Les Simmonds.

© 2009 FLORIDA ASSOCIATION OF REALTORS

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Labels: Florida Real Estate, Naples Real Estate Market, Real Estate Prices