Fla.’s Housing Market Continues Positive Track in Dec. 2012

Florida’s housing market had more closed sales, higher pending sales, higher median prices and a reduced inventory of homes for sale in December, according to the latest housing data released by Florida Realtors®.

“Florida is an international destination: Owning a home here appeals to people of all ages from all over the world,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “Realtors from across the state are reporting increases in home sales and median prices. As a result of rising demand from investors and other buyers, there’s a shortage of inventory in many markets, and it’s putting pressure on prices.”

Statewide closed sales of existing single-family homes totaled 18,031 in December, up 15.8 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 39.7 percent over the previous December. The statewide median sales price for single-family existing homes last month was $154,000, up 14.1 percent from the previous year.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in November 2012 was $180,600, up 10.1 percent from the previous year. In California, the statewide median sales price for single-family existing homes in November was $349,300; in Massachusetts, it was $295,000; in Maryland, it was $246,294; and in New York, it was $215,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 8,470 units sold statewide last month, up 8.6 percent compared to December 2011. Meanwhile, pending sales for townhouse-condos in December increased 31.8 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $117,500, up 26.3 percent over the previous year. NAR reported that the national median existing condo price in November 2012 was $181,000.

December marks the 12th consecutive month of higher statewide median sales prices for both single-family homes and for townhouse-condo units year-to-year, according to Florida Realtors’ data.

The inventory for single-family homes stood at a 5.5-months’ supply in December; inventory for townhouse-condos was at a 6-months’ supply, according to Florida Realtors.

“The market continues to improve, and it’s doing so in all parts of the state,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Of note is the fact that inventory levels are now clearly consistent with a sellers’ market. When the final year-end statistics are compiled, expect that sales in 2012 will be more than 10 percent higher than they were in 2011. Once again, all the positive indicators are up significantly. The Florida real estate market is rapidly improving.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.35 percent in December 2012, down from the 3.96 percent averaged during the same month a year earlier, according to Freddie Mac.





© 2013 Florida Realtors®

Tim Shelton, Realtor Advertisement

Freddie Mac: Short sale process cut in half or more

Jan. 24, 2013 – Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.

“We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent,” as a result of the changes, writes Tracy Mooney, Freddie Mac’s executive vice president in her recent blog post. “We worked with our regulator, the Federal Housing Finance Agency, to remove obstacles and streamline the process, so we can help more borrowers and reduce costs for the company and taxpayers. The end result is a shorter short sale process that’s long in benefits for borrowers.”

Among the Nov. 1, 2012, changes:

• Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days.

• Mortgage servicers must acknowledge receipt of a short sale application within three days of submission. Servicers must provide weekly status updates if they need more time to review the application past the initial 30-day period.

• Mortgage servicers have the authority to approve short sales when qualifying financial hardships for homeowners who are past due or current on their mortgage payments.

• Mortgage servicers may also approve short sales without a separate review by the mortgage insurance company.

Following a short sale, homeowners may be able to qualify for up to $3,000 in relocation assistance.

 







Source: “The Shorter Short Sale: Long on Borrower Benefits,” Freddie Mac Executive Perspectives Blog (Jan. 22, 2013)

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

More Young Americans Forming Households

 Household formation, which stagnated when recession kept many young Americans from leaving their parents’ home or forced others to return to them, is finally on the rise.

The number of households increased 1.1 million in 2011 and nearly 1.2 million last year, underpinned by gradual labor market gains and steady economic improvement.

RBS analyst Guy Berger remarks, “The rise in household formation bodes well for the housing recovery. Instead of having too many houses, we are turning to a situation where there aren’t enough.”

The gains are felt the most in the rental market, where rising demand has triggered a spike in new apartment construction. Increased building activity, in turn, has also stimulated such related areas as furniture sales. By comparison, the U.S. homeownership rate has not risen much from a 15-year low reached in the first quarter of last year.

“We are going to see more recovery in the rental market in the very short run,” says Gary Painter, a public policy professor at the University of Southern California. “As the market improves, people will start to face higher rents and over time, that will spill over into the owner-occupied market.”

A monthly National Association of Home Builders survey shows that growing demand and tightening supply have pushed homebuilder sentiment to a near seven-year high. NAHB Chairman Barry Rutenberg, a homebuilder from Gainesville, Fla., says that more residential developers appear undaunted by the possibility that banks could dump an increasing number of foreclosed homes onto the market as conditions improve. He estimates that approximately 916,000 new residential projects would break ground in 2013 versus around 780,000 last year.















Source: “Analysis: More Americans Leave Parental Nest in Boost for Housing” Reuters (01/18/13)
© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

Can I Buy Your House? Pretty Please?

In the District of Columbia, Seattle, San Diego, Chicago and other markets, sales are heating up and listings are getting multiple bids. Consequently, buyers are, once again, writing letters to tell a seller what they love about their home.

Pitch letters – which typically include personal photos and heartfelt language – attempt to forge an emotional connection between the buyer and seller, with an eye toward giving the buyer a competitive edge.

The strategy worked for one couple that put in an offer on a three-bedroom townhouse in Mountain View, Calif., even though their offer was less than ones submitted by 11 other buyers. The buyer told the seller why the home was perfect for them and their soon-to-be-born first child. It struck a chord with the seller, who also has a toddler and liked the idea of the home going to someone in a similar situation.

“The market has gotten so crazy that money alone doesn’t talk,” says Redfin CEO Glenn Kelman.
















Source: Wall Street Journal (01/10/13) P. M1; Lublin, Joann S.

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

Sneak Peek at my 2013 Calendar

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Leasing Program Helps Move-up Buyers Who are Underwater

JACKSONVILLE – Jan. 8, 2013 – Dawn and Victor Pellot were stuck in their 1,300-square-foot home off Wilson Boulevard on Jacksonville’s Westside, owing more on the mortgage than the home was worth, and they wanted more room.

Two months ago, they got it. The Pellots and their two children, ages 3 and 18 months, moved into a newly-built, 3,500-square-foot home in Orange Park through a program that allowed them to lease their old place and move into the new one.

“It was extremely important,” Dawn Pellot said. “That made all the difference” in deciding to look for a new home to build as early as April, she said.

A Detroit-based company, Marketplace Homes, has partnered with homebuilders in several markets in the United States to offer the program, one of few such in the nation and the only one available on the First Coast.

It works on the premise of leasing the existing home under a six-year deal while the existing homeowner gets a new mortgage to build a new house. Although the previous homeowner is still financially responsible for the mortgage on the existing home, Marketplace essentially manages the property for six years and assumes 100 percent of the risk if it can’t be rented. Generally, Marketplace representatives will try to incorporate a lease-to-own agreement for the new tenant.

On the First Coast, Marketplace has hooked up with homebuilders D.R. Horton and Drees Homes. The two local companies did not respond to requests for interviews.

Marketplace’s vice president of marketing, Chintan Pathak, said the approach is new and started on the First Coast in March. It targets homeowners who want to take part in the buyer’s market but can’t sell.

Essentially, Pathak said, the six-year lease will stabilize the existing home’s value by turning it into a rental property, which decreases foreclosures or short sales by property owners who struggle with negative equity in a house or condominium. Company officials say there are “fewer than five” foreclosures of properties they’ve turned into leases.

“It allows (property owners) to take advantage of the market today and allows you to sell when the market recovers,” Pathak said.

At the end of the six years, Marketplace will continue to manage the property or the homeowner can decide to list it for sale. The homeowner would still be responsible for the mortgage, as they are even under the six-year lease deal. The guarantee on the rent lapses, but the homeowner has the option to continue the lease and property-management agreements.

Marketplace gets no commission on the existing home. It assists in trying to find a lease-to-own tenant, but the homeowner can market the sale of the house on their own, given considerations for the lease stipulations.

The company evaluates each home and mortgage to determine the custom lease rate. If a renter pays more than the monthly mortgage costs, Marketplace gets the difference. If the lease doesn’t cover costs, the property owner has to pay the difference.

Marketplace also gets a “standard” commission from the builder of the new home.

Although Victor Pellot and his wife found a renter on their own, the guaranteed lease removed a worry.

“If you don’t have a renter, then you don’t have two mortgages to pay,” Victor Pellot said. “The only pitfall is you have to pay the first two months of rent for marketing and all that.”

The program is so new that many homebuilders and real estate workers on the First Coast are unaware of it.

Daniel Davis, executive director of the 1,000-member Northeast Florida Builders Association, was one.

“It is a new concept. But you’re seeing more confidence and you’re going to see creative ways to get people into new homes,” said Davis.

Part of the housing collapse that started in 2008 was attributed to a glut of new construction. But Davis said that’s now behind the First Coast market and programs like Marketplace’s can only help to literally rebuild the industry.

“I think it’s very attractive and I think it’s good for the community and good for creating jobs in North Florida,” said Davis, who is also a Republican member of the Florida House of Representatives. “We need to figure out ways to help out people who are underwater in their existing homes and this is one of the ways that can do it.”

The Northeast Florida Association of Realtors was more cautious. Communication Director Melanie Green hadn’t heard of the program, either, and advised anyone considering it to seek real estate legal advice.

“The only thing I would offer to any potential homeowner is get legal counsel,” she said. “Certainly, there’s some sort of contractual agreement they’ll be entering into.”

The Times-Union contacted a real estate attorney who declined to comment on the program, and several messages left with other lawyers requesting an interview were not returned.

Marketplace says it understands the caution and welcomes the scrutiny.

“We’re the only ones doing this on this large of a scale,” said spokeswoman Elyse Sarnecky. “For the caution, I welcome any Realtor to call us. If they advise legal counsel, our leases are one-page documents and they’re written in plain language.”

The program has not been without its problems.

Sarnecky acknowledged its early stages brought issues with bogus lessees. But that’s been aggressively addressed.

“Our property management department underwent a huge overhaul over a year ago,” Sarnecky said. “Since then, we’ve gotten a lot of this under control and we’ve been able to place high-quality tenants.”

© 2013 The Florida Times-Union (Jacksonville, Fla.), Drew Dixon. Distributed by MCT Information Services