Florida Realtors Sees Positive Trends in Today’s Housing Market

WASHINGTON – Dec. 2, 2016 – What fall slowdown? In many markets across the country, the housing market is showing anything but the typical seasonal slowdown. In fact, a report released by the National Association of Realtors® (NAR) finds just the opposite.

Existing-home sales eclipsed June’s cyclical sales and, in October, zoomed to the highest annualized pace in nearly a decade, according to NAR. All major regions saw an increase in sales last month as well.

It’s a good time to be in the real estate business. And NAR says that Realtors have a lot to be thankful for this holiday season:

The Economy is Improving

In 2017, the economy is expected to continue growing, at least at a moderate pace, next year, and growth will lead to even lower unemployment, which can help boost consumer confidence. What’s more, a growth in jobs often translates into more households looking for homes.

Powerful Buying Forces Emerge

Two major demographic shifts at play in the current housing market could profoundly drive sales in the coming years: millennials and retiring baby boomers.

We are now in the midst of two massive demographic waves that will power above-average demand for homes for at least the next 10 years,” says Jonathan Smoke, realtor.com’s chief economist. The median age of a first-time buyer this year was 32, according to NAR’s 2016 Home Buyer and Seller Report. Next year, 4.4 million people in the U.S. will turn age 32.

Further, the nation’s second-largest generation, the boomers, is now moving into retirement. Americans age 65 to 74 are in a key age range where housing decisions are being made, which typically involve a home sale and a purchase. Over the next five years, the number of people in the U.S. over the age of 65 is expected to increase 18 percent as the population overall grows only 4 percent.

Foreclosures are Plummeting

The foreclosure inventory fell 31 percent in September and completed foreclosures dropped 7 percent year over year, according to data from CoreLogic. What’s more, the number of seriously delinquent mortgages (ones 90 days or more past due, including loans in foreclosure or REO) dropped by 25 percent in September year-to-year to the lowest level since August 2007.

Completed foreclosures have fallen by a total of more than 100,000 homes during the 12 months prior to September 2016, says Anand Nallathambi, president and CEO of CoreLogic. “The decline in foreclosures is one of the drivers in the drop in vacancies, which is positive for homeowners and communities. Heading into 2017 we see that prices, performance and production – the three most important drivers of the real estate market – are all improving.”

More New Homes are in the Pipeline

Housing starts rose 25.5 percent in October, reaching a seasonally adjusted annual rate of 1.3 million, the Commerce Department reported. It’s the highest pace since August 2007. Single-family housing starts reached a nine-year high in October, reaching a rate of 869,000.

These robust figures correlate with strong builder optimism in the housing market,” says Ed Brady, chairman of the National Association of Home Builders. ” A firming job market, a growing economy and rising household formations will keep the housing recovery on track into next year.”

Drones are Flying

Long-awaited guidelines were released in June that allow more real estate professionals to incorporate drones into their marketing, and they’re capturing aerial pictures and videos of properties to lure buyers.

The Federal Aviation Administration released its final rule on commercial drone use in June, though guidelines must be followed: Operators are required to obtain a Part 107 certificate, which replaced the previous Section 333 waiver. Operators also no longer are required to hold a pilot’s license. Still, operators must take a test before flying, and they must retake that test every 24 months in order to operate drones. Also, there are restrictions on the number of activities you can do with a drone (such as FAA prohibitions against flying a drone over a person or flying at night).

“Businesses are more and more finding opportunities to utilize drones as a way of cutting costs and better serving customers,” says Tom Salomone, NAR’s immediate past president. “That’s true in real estate and other industries as well. As application of this technology picks up, the regulatory landscape will likely continue to evolve.”

Source: Florida Realtors

 

Homeowners Regain Equity in 2nd Quarter 2016

CoreLogic released a new analysis showing 548,000 U.S. homeowners regained equity in Q2 2016 compared to the previous quarter, increasing the percentage of homes with positive equity to 92.9 percent of all mortgaged properties, or approximately 47.2 million homes.

Nationwide, home equity grew year-over-year by $646 billion, representing an increase of 9.9 percent in Q2 2016 compared with Q2 2015.

2016 Year-Over-Year change in negative equity, by state.

2016 Year-Over-Year change in negative equity, by state.

In Q2 2016, the total number of mortgaged residential properties with negative equity stood at 3.6 million, or 7.1 percent of all homes with a mortgage. This is a decrease of 13.2 percent quarter over quarter from 4.2 million homes, or 8.2 percent, in Q1 2016 and a decrease of 19 percent year over year from 4.5 million homes, or 8.9 percent, compared with Q2 2015.

Negative equity, often referred to as “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or a combination of both.

For homes in negative equity status, the national aggregate value of negative equity was $284 billion at the end of Q2 2016, decreasing approximately $20.4 billion, or 6.7 percent, from $305 billion in Q1 2016. On a year-over-year basis, the value of negative equity declined overall from $314 billion in Q2 2015, representing a decrease of 9.5 percent in 12 months.

Average amount of negative equity

Average amount of negative equity for 10 largest Core Business Statistical Area (CBSA)

Of the more than 50 million homes with a mortgage, approximately 8.6 million, or 17 percent, have less than 20 percent equity (referred to as under-equitied) and approximately 965,000, or 1.9 percent, have less than 5 percent equity (referred to as near-negative equity).

Borrowers who are under-equitied may have a difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of shifting into negative equity if home prices fall.

“Home-value gains have played a large part in restoring home equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index,” said Anand Nallathambi, president and CEO of CoreLogic. “Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

Highlights as of Q2 2016:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 15.3 percent, followed by Florida (14 percent), Maryland (11.8 percent), Illinois (11.7 percent) and Arizona (11.6 percent). These top five states combined accounted for 33.7 percent of negative equity in the U.S., but only 18.6 percent of outstanding mortgages.
  • Texas had the highest percentage of homes with positive equity at 98.3 percent, followed by Alaska (98 percent), Colorado (97.8 percent), Hawaii (97.7 percent) and Utah (97.6 percent).
  • Of the 10 largest metropolitan areas by population, Miami-Miami Beach-Kendall, FL had the highest percentage of mortgaged properties in negative equity at 18.4 percent, followed by Las Vegas-Henderson-Paradise, NV (17.6 percent), Chicago-Naperville-Arlington Heights, IL (13.4 percent), Washington-Arlington-Alexandria, DC-VA-MD-WV (9.9 percent) and New York-Jersey City-White Plains, NY-NJ (5.9 percent).
  • Of the same 10 largest metropolitan areas, San Francisco-Redwood City-South San Francisco, CA had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent, followed by Denver-Aurora-Lakewood, CO (98.5 percent), Houston-The Woodlands-Sugar Land, TX (98.4 percent), Los Angeles-Long Beach-Glendale, CA (96.7 percent) and Boston, MA (95 percent).
  • Of the total $284 billion in negative equity, first liens without home equity loans accounted for $159 billion aggregate negative equity, while first liens with home equity loans accounted for $125 billion.
  • Among underwater borrowers, approximately 2.2 million hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $252,000, and the average underwater amount is $73,000.
  • Approximately 1.4 million of all underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $314,000, and the average underwater amount is $88,000.
  • The bulk of positive equity for mortgaged residential properties is concentrated at the high end of the housing market. For example, 96 percent of homes valued at $200,000 or more have equity compared with 89 percent of homes valued at less than $200,000.
  • Q1 2016 data was revised. Revisions with public records data are standard and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Source: CoreLogic

Florida Housing: New Listings, Median Prices Rise in March ’16

ORLANDO, Fla. – April 20, 2016 – Florida’s housing market reported higher median prices, more new listings and fewer all-cash closed sales in March, according to the latest housing data released by Florida Realtors®. Statewide closed sales eased last month amid tighter inventory: Single-family home sales totaled 23,758, remaining relatively the same (down 0.6 percent) from March 2015.

“Many Florida homeowners have been able to rebuild home equity due to strong price growth, but that can also pose a challenge for first-time buyers and move-up buyers,” says 2016 Florida Realtors President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. “However, new listings rose in March, which is good news for potential buyers. New listings for existing single-family homes rose 5.6 percent compared to a year ago while new listings for townhouse-condo properties are up 2.6 percent.”

Meanwhile, sellers received more of their original asking price at the closing table. Sellers of existing single-family homes in March received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).

The statewide median sales price for single-family existing homes last month was $209,500, up 10.3 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $155,000, up 3.3 percent over the year-ago figure.

March marked 52 months in a row that statewide median sales prices for both single-family homes and for townhouse-condo properties rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

FloridaRealtor March 2016 Market Data1

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2016 was $212,300, up 4.3 percent from the previous year the national median existing condo price was $198,900. In California, the statewide median sales price for single-family existing homes in February was $446,460; in Massachusetts, it was $309,000; in Maryland, it was $235,206; and in New York, it was $235,000.

Looking at Florida’s townhouse-condo market, statewide closed sales totaled 10,076 last month, down 7.1 percent compared to March 2015. However, the closed sales data reflected fewer short sales and cash-only sales in March: Short sales for townhouse-condo properties declined 39.3 percent while short sales for single-family homes dropped 33.2 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.

FloridaRealtor March 2016 Market Data2

“Overall, statewide inventory levels essentially held steady in March; however, beneath the surface, we can see that active listings in the most affordable price tiers are continuing to decline,” says Florida Realtors Chief Economist Brad O’Connor. “These declines are being offset by the growth in the upper price tiers, particularly in the luxury market. The active inventory of homes listed for over $1 million, for instance, was up 18.3 percent year-over-year among single family homes and 38.6 percent among condos and townhouses.”

Inventory was at a 4.5-months’ supply in March for single-family homes and at a 6.3-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.69 percent in March 2016, down from the 3.77 percent average recorded during the same month a year earlier.

Download directly the March 2016 Market Data for analysis.

 

SOURCE:  Florida Realtors

 

4 Big Short Sale Hang-ups

As the market rebounds, short sale activity is increasing lately, but these transactions can take up to three times longer than a traditional transaction. A lot of things can go wrong in that timeframe.

These are the most common delays, according to a recent article by George “Gee” Dunsten, a real estate broker and president of Gee Dunsten Seminars.

Title issues

Be sure to do a title examination at the beginning in order to identify all individuals on the deed and mortgages – and determine all lien holders.

Lack of communication with the lender

Lost documents and misunderstandings commonly cause delays. Make it a habit to follow up with the mortgage servicer twice a week to prevent entirely avoidable problems.

Delaying the start

Some short sales don’t begin until a contract to purchase has been initiated, but this can add up to two extra months to the process. The lender won’t even look at a buyer contract until a seller candidate for a short sale is approved and the market value has been determined, Dunsten says.

Incomplete packages

Make sure you carefully submit all documents completely and accurately. Submitting incomplete packages is another common cause of delays. All homeowner financial information needs to be kept current and forwarded to the servicer every 30 days if possible, says Dunsten.

Can a mortgage insurer sue after short sale?

Question

I completed a short sale on my home, and the agreement didn’t address whether I still was on the hook for the forgiven debt. I was just served with a lawsuit from a mortgage insurance company that wants me to pay the deficiency”.

What’s going on?

Answer

Here’s an answer from Florida attorney Gary M. Singer, who is a board-certified expert in real estate law in Florida:

I’m seeing more of these lawsuits. A common misconception about private mortgage insurance is that it protects the borrower. In reality, while the borrower pays for this insurance, it actually is designed to protect your lender if you default on the mortgage. Not all loans have PMI. But if yours does, and you complete a short sale or lose the home in foreclosure, your lender can make an insurance claim with the PMI company. The company then can stand in your lender’s shoes to try and collect the money back from you, a legal concept known as “subrogation.”

The theory is that because your actions resulted in the insurer having to pay the claim, the company can seek repayment from you. You can respond to this lawsuit by making the company prove it has the right to collect the deficiency, just as you would make the lender prove it has the right to foreclose.

You may be able to settle with the insurer for less than the full amount you owe. Of course, if the deficiency had been previously waived by your lender in the short sale or foreclosure, you don’t have to worry about any of this.

That’s why it’s so important to make sure the lender forgives the debt.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

 

 

Buying a Foreclosure? What you need to know…

Get prequalified for a loan and set aside funds, and you’ll be ready to purchase a foreclosed home.

When lenders take over a home through foreclosure, they want to sell it as quickly as possible. Since lenders aren’t in the real estate business, they usually turn to real estate brokers for help marketing their properties. Buying a foreclosed home through the multiple listing service can be a bargain, but it can also be a problem-filled process.

Foreclosures offer great opportunities to purchase a home at a low price.

The South Florida area was hit particularly hard with foreclosures. It has a large inventory of bank-owned properties for sale, which represents never before seen opportunities to purchase real estate at low prices.

Should you want to go ahead with buying a foreclosure, here’s a few things to keep in mind.

1. Choose a foreclosure sale expert. Lenders rarely sell their own foreclosures directly to consumers. They list them with real estate brokers. You can work with a realtor who sells foreclosed homes for lenders, or have a realtor find foreclosure properties for you.

2. Be ready for complications. In some states, the former owner of a foreclosed home can challenge the foreclosure in court, even after you’ve closed the sale. Ask your realtor to recommend a real estate attorney who has negotiated with lenders selling foreclosed homes and has defended legal challenges to foreclosures.

Have your attorney explain your state’s foreclosure process and your risks in purchasing a foreclosed home. Set aside as much as $5,000 or more to cover potential legal fees.

3. Work with your realtor to set a price. Ask your real estate agent to show you closed sales of comparable homes, which you can use to set your price. Start with an amount well under market value because the lender may be in a hurry to get rid of the home.

4. Get your financing in order. Many mortgage market players, such as Fannie Mae, require buyers to submit financing preapproval letters with a purchase offer. They’ll also reject all contingencies. Since most foreclosed homes are vacant, closings can be quick. Make sure you have the cash you’ll need to close your purchase.

5. Expect an as-is sale. Most homeowners stopped maintaining their home long before they could no longer make mortgage payments. Be sure to have enough money left over after the sale to make at least minor, and sometimes substantive, repairs.

Although lenders may do minor cosmetic repairs to make foreclosed homes more marketable, they won’t give you credits for repair costs (or make additional repairs) because they’ve already factored the property’s condition into their asking price.

Lenders will also require that you purchase the home “as is,” which means in its current condition. Protect yourself by ordering a home inspection to uncover the true condition of the property, getting a pest inspection, and purchasing a home warranty.

Be sure you also do all the environmental testing that’s common to your region to find hazards such as radon, mold, lead-based paint, or underground storage tanks.

Final Thoughts

Buying foreclosures is not the for the faint of heart. But they do offer great opportunities to buy properties at low prices, if you can handle the additional complexity involving such transactions. Your realtor will be critical in helping you navigate the purchase process successfully.

 

 

Welcome to my Real Estate Blog

Welcome to my Blog!

Here you will find interesting articles, thoughts, opinions and news about what is going on in South Florida real estate. If you need another reason to visit frequently, remember this: you will find plenty of tips for homeowners, sellers, and investors and information about South Florida luxury properties which will help you enhance the value of your property.

So, please come back soon. And don’t forget. If you are thinking about buying, investing or selling a property, I am your South Florida Realtor. Call me at my direct number below…

Thanks for visiting!

Elizabeth A Ford

One | Sotheby’s International Realty
401 East Las Olas Blvd Suite #100
Fort Lauderdale, FL 33301
(954) 465-8591 Direct Cell
(954) 522-2831 Office
(954) 522-2832 Fax
eford@onesothebysrealty.com