February 26, 2013
WASHINGTON (AP) – Feb. 26, 2013 – U.S. new-home sales jumped in January from the previous month to the highest level since July 2008, a sign that the housing recovery is accelerating.
The Commerce Department said Tuesday that new-home sales rose nearly 16 percent in January to a seasonally adjusted annual rate of 437,000. The percentage increase was the largest in nearly 20 years. And December’s sales were revised higher to 378,000 from 369,000.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy houses. Sales of previously occupied homes rose to the highest level in five years last year.
At the same time, the number of previously occupied homes for sale is at a 13-year low. That shortage creates more demand for new homes. Builders began construction on the most houses and apartments in four years last year.
The supply of new homes for sale was unchanged last month at 150,000. That’s barely above August’s total of 143,000 – the smallest supply of new homes on records dating back to 1963.
At the current sales pace, it would take just 4.1 months to exhaust the number of new homes for sale, the lowest in eight years. Low inventories should encourage more construction.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders.
The increase in home building has helped boost construction hiring. The industry has gained 98,000 jobs since September, the best stretch since the spring of 2006.
Still, the increases in new-home sales are coming from depressed levels. Sales plummeted to a record low in 2011. And sales are still well below the 700,000 annual level that economists consider healthy.
The biggest gain in new-home sales was in the West, where they soared 45.3 percent. The supply of previously occupied homes in that region has fallen sharply. Sales jumped 27.6 percent in the Northeast, 11.1 percent in the Midwest but only 3.2 percent in the South.
A separate report Tuesday showed that home prices accelerated in December. The Standard & Poor’s/Case-Shiller 20-city home price index rose 6.8 percent in December compared with the same month a year earlier. That’s up from November’s 5.5 percent gain over the previous November.
Rising home prices can fuel the housing recovery by encouraging people to buy before prices increase further. They can also bring more sellers off the sidelines.
Higher home values also make homeowners feel wealthier, building confidence and encouraging more spending. And banks are more likely to provide mortgage loans if they are confident that home prices are rising.
AP Logo Copyright © 2013 The Associated Press, Christopher S. Rugaber, AP economics writer.
February 26, 2013
Mayfair Woods in Palm Harbor, FL
137 Mayfair Circle W.
Palm Harbor, FL 34683
MLS #: U7557878
4 bedrooms, 3 baths, 2-car garage, 2,620 square feet, List Price $279,900
Better be quick to this stunning home in the heart of palm harbor. This home has an amazing layout, wide open. living, dining, and family rooms. updated kitchen, gorgeous floors throughout. kitchen overlooks family room with a beautiful fireplace. The pool area is incredible and perfect for entertaining. Pool overlooks a huge back yard. split bedroom plan. there is absolutely nothing to do in this home but move in. No flood insurance is required. Newer roof and air conditioner. Indoor utility room. This home will not last. Perfect home for the expanding family. Close to beaches, shopping, pinellas trail.
February 21, 2013
NEW YORK – Feb. 21, 2013 – Short sales are increasing this year, and these transactions can take up to three times longer than a traditional transaction. A lot 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 exam 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 avoid 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 culprit of delays. All homeowner financial information needs to be kept current and forwarded to the servicer every 30 days, says Dunsten.
Source: “Avoiding the Dirty Dozen Barriers to Short Sale Success,” RISMedia (Feb. 20, 2013)
© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688
February 19, 2013
EW YORK – Feb. 19, 2013 – Hedge funds and investment firms are buying up Florida foreclosures, beating out homebuyers and local flippers, while steering the state into what some fear is another real estate bubble.
The companies, including New York-based Blackstone Group and Lake Success Rentals, a partner of Toronto-based Tricon Capital Group, purchased an estimated 5,300 Florida homes last year that were in some stage of foreclosure, according to a report from RealtyTrac.
In Palm Beach County, RealtyTrac measured 425 purchases by firms buying multiple properties out of foreclosure and usually with the intent to rent them out until increasing property values can offer a substantial return on investment.
RealtyTrac Vice President Daren Blomquist said the buying trend accelerated around the second quarter of 2012 after billionaire business magnate Warren Buffett said he would buy up “a couple hundred thousand” single-family homes if he had a way to manage them.
But Blomquist warned that prices jacked up by the increased competition could lead to an artificial inflation.
“There is some potential for locally based housing price bubbles because of this almost frenzy on the part of these big-money folks to purchase as many properties as they can,” he said. “They’re paying cash, so it shouldn’t result in a lot of foreclosures, but it may be that down the road, they decide the gamble isn’t paying off and flood the market with properties.”
Florida’s biggest buyer last year was Malibu, Calif.-based American Homes for Rent, with more than 260 purchases, according to RealtyTrac. The Blackstone Group-related company THR Florida, LLC, had more than 160 purchases.
But both of those companies focused their efforts mostly in areas outside of South Florida.
Heavy hitters locally include Lake Success Rentals, based in Fort Lauderdale, and Southeast Florida Rental Housing (Sfrh SF Rental), which shares the same Fort Lauderdale address as Lake Success.
In July, Tricon Capital Group announced its partnership with Lake Success in an aggressive push to buy more distressed real estate. Tricon, which says it has $1.2 billion of assets under management, provides financing to local companies to buy the homes.
“I expect Miami to be one of the fastest-growing cities in the next decade, and the opportunity to purchase homes for rental housing in the surrounding areas at a fraction of peak prices and replacement cost was very attractive to me,” said Lake Success co-founder Barry Bergman in a news release announcing the partnership.
Last month, Tricon announced the purchase of 550 homes in Charlotte, N.C., for $26 million.
Blomquist said RealtyTrac’s study compared active foreclosures against sales deed data and may not include all bulk buyers in an area.
Don Cameron, a real estate investor who owns a South Florida franchise of We Buy Ugly Houses, said he bought more than 100 homes last year, many of which were at foreclosure auction, but he is not included in RealtyTrac’s report.
Also not included is a Greenwich, Conn.-based company called SRP SUB, LLC, which has bought about 40 Palm Beach County homes at foreclosure auction since November.
Cameron said he noticed an increase in competition from the big-time investment firms and hedge funds about eight months ago. His company buys homes, renovates them and then sells them. He said he’s lost out on homes because the larger firms pay asking price, or higher.
“They just have loads of money and are paying maximum dollars for the properties then renting them out,” Cameron said. “Some people are really inflating the market right now.”
Copyright © 2013 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services.
February 18, 2013
ORLANDO, Fla. – Feb. 18, 2013 – Given the improvement in local and state residential real estate demonstrated by last week’s 2012 Florida Realtors statistics, there’s a lot of positive buzz, and possibly a bit of wishful thinking taking place among would-be sellers, Realtors, mortgage brokers, appraisers, developers and contractors.
But a reality check still shows a murky future: Up to a tenth of Florida homes, and almost a fifth of Manatee-Sarasota area homes are in some state of distress, raising concerns that a tsunami of bank sales could increase inventory, depress prices and lengthen closing times for residential sales in 2013 or even longer.
That view is “overly pessimistic,” said Florida Realtors chief economist John Tuccillo. But, he concedes, Florida has “a third of the nation’s ‘shadow inventory,’ a term used to define homes more than 90 days delinquent, or already in foreclosure, and that is very, very high.”
After the misery and displacement of the Great Recession, everyone, including President Obama, wants to believe that a broad-based real estate recovery is well and truly under way. In his State of the Union message, Obama announced that “the housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in six years, home purchases are up nearly 50 percent and construction is expanding again.” So far, so good.
But then, Obama put his finger right onto the tricky bit when he said, “Even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it.”
Banks and mortgage lenders – many of whom received federal assistance to the tune of $700 billion in the controversial 2008 Troubled Asset Relief Program (TARP), which was designed to address the subprime mortgage crisis – are simply not lending to would-be buyers.
And maddeningly, sellers, frequently the very same banks themselves, clearly prefer cash buyers to avoid burdensome, messy and uncertain mortgage applications, and all-but-frozen secondary mortgage markets.
In fact, the big banks and other financial institutions that, in the heyday of mortgage madness, shoveled money out the door to “anyone with a heartbeat who could also fog a mirror,” are today part of the obstacle to a sustained real estate recovery, says Jack McCabe, CEO of McCabe Research & Consulting, a Florida-based real estate and economic analyst.
He pointed to the February 2012 joint state-federal settlement with the country’s five largest mortgage servicers Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, in which roughly $25 billion in relief was earmarked for distressed borrowers and various local and federal jurisdictions.
“Since the lawsuit has been settled, those banks are no longer holding back on foreclosures, which is one reason why real estate inventory levels were limited, and why prices rose in 2012,” said McCabe.
“Of the 475,000 completed Florida foreclosures since 2006, banks, realty funds and other financial players still hold an estimated 200,000 housing units,” said McCabe. That is roughly equivalent to the total number of 2012 statewide single-family home sales as reported on Monday by the Florida Realtors.
“There are currently 377,000-plus open foreclosures in Florida state courts, and 80 percent of them will become distressed transactions in the coming two to three years,” McCabe estimated. “The remainder will likely get loan modifications and possibly some relief from the lenders.”
But that is the tip of the iceberg, says McCabe.
“Another 550,000 additional Florida homeowners are 90 days-plus delinquent and thus subject to future foreclosure filing,” he said. “Taken together, there are 1.1 million distressed residential properties in the state.”
Given that the U.S. Census shows Florida has 9 million housing units in total, that means about 11 percent of the state’s housing stock is experiencing some level of distress.
The 11 percent distressed figure sounds “entirely plausible” to Anne Ray, Florida Housing Data Clearing House manager at the Shimberg Center for Housing Studies at the University of Florida, the official repository for state housing data. Ray estimated more than 320,000 open foreclosures statewide, close to McCabe’s figure.
Ray also pointed out that the Manatee-Sarasota MSA, one of the state’s best performers in sales increases, “had a foreclosure rate of 13.77 percent as of September 2012, and a ‘pending’ rate of an additional 3.36 percent.” Taken together, it means more than 17 percent of the area’s homes are in some state of distress.
But Florida Realtors argue that those statewide figures might be double-counted.
According to Sept. 30, 2012, estimates from CoreLogic, a leading provider of real estate and financial data, 562,664 homes have mortgages delinquent by 90 days or more, 389,149 are in foreclosure and 36,284 are REO (Real Estate Owned) loans, property in the possession of a lender as a result of foreclosure, says Florida Realtors research economist Brad O’Connor.
“Loans that are counted in foreclosure and REO estimates can also be counted in the 90-day plus delinquency estimate, so it would be erroneous to add them together to obtain a count of distressed loans,” O’Connor said. “Unfortunately, the statistics we receive from CoreLogic do not provide us with any counts of how many loans are both 90-plus delinquent and in foreclosure/REO status.”
One reason many banks are not lending is that with undigested and often unsavory inventory in their bellies, many may be at or near the regulatory threshold for the portion of their portfolios dedicated to residential lending, said McCabe.
Charles “Charlie” Brown III, chairman and CEO of Insignia Bank, a Sarasota-based community bank which includes Manatee in its core market, says “there’s a big difference between what the large institutions may be contemplating, and what’s going on at locally owned and operated community banks, where I’m seeing a flood of portfolio lending nationwide.”
“Insignia is making portfolio loans, typically five- to 15-year fixed mortgages, has excess capacity and could double its current mortgage portfolio on top of its total of $113 million, 200-plus loan portfolio,” Brown said.
A portfolio mortgage is one that the bank itself holds to maturity, as opposed to secondary mortgages that are usually sold to government-sponsored enterprises, including mortgage giants Fannie Mae, Freddie Mac and others. That secondary market is where the squeeze, and most of the money and problems are, says Brown. He’s in a position to know, since he recently completed his second two-year term as one of 14 members of the Federal Deposit Insurance Corp.’s Community Bank Advisory Board in Washington, D.C.
Brown said that getting loan approvals in the secondary market where the GSE’s set the base standards is an ever-shifting and increasingly difficult process.
“They are continually tightening, tweaking and revising performance standards,” Brown said. “It’s very difficult to get a ‘conforming’ GSE mortgage and many banks have thrown up their hands altogether. I’m sensing both tension in the GSEs, as well as political pressure.”
But real estate attorney Anne Weintraub of Sarasota’s Band Weintraub says the larger banks are tired of being sued and are starting to cooperate with homeowners.
“They are tired of spending monies on attorneys to fight borrowers and realize owning a home is not ideal,” she said. “Most homes are abandoned, left in a state of disarray and the volume of abandoned homes is so enormous some banks don’t even realize they own the homes.”
In either scenario, banks can be both lenders and sellers, and typically hire the appraiser.
“Until the banks get the foreclosures off their books, they are sellers who want to get the best possible prices,” McCabe said. “Due to the legal wrangling, foreclosure sales in 2012 were basically ‘on the shelf’ while banks saw prices increasing, so now, after the settlement in a ‘perceived recovering market,’ I’d expect foreclosure filings and bank sales to accelerate this year and next.”
Bank-retained private appraisers also can be part of the problem, he contends, if their low valuation compared to the contract sales price inhibits lending.
Uncertainty surrounds issues
Additional flies in the recovery ointment are state and federal issues that may have adverse impacts on sustainable realty recovery.
In Tallahassee last week, a bill designed to speed up the foreclosure process passed the Florida House Civil Justice Subcommittee on a 10-3 vote. Foreclosure monitoring service RealtyTrac reported that “House Bill 87 allows third-party lienholders to start foreclosure proceeding and rushes final judgment of foreclosure if a homeowner doesn’t file a defense. The bill aims to streamline and expedite the foreclosure process.” RealtyTrac termed the bill a controversial piece of legislation in Florida – the state that leads the nation in foreclosure filings.
Immediately, more than a half-dozen law firms and attorneys aligned to defeat the bill, including St. Petersburg’s Matt Weidner, Mark Stopa and Charles Gallagher, a member of Florida Consumer Justice Advocates, a self-funded consumer lobbying group.
“Our fear is the current due-process rights of homeowners are being further diluted by the provisions of HB 87 and if passed, this bill would further handicap homeowners from defending their foreclosure and provide banks with little judicial resistance from the speedy foreclosure of their homes,” said Gallagher.
Tuccillo, the Florida Realtors’ chief economist, says the bill has “its pros and cons, and while I’m not a raving fan of HB 87, I would like to see it passed.” He called the slow judicial process a primary contributing factor to the huge build-up of the state’s shadow inventory.
“It’s been a long, long time” that banks have held onto the troubled mortgages, and “it’s time to get all this garbage out of the way,” he said.
In Washington, the Consumer Financial Protection Bureau – the agency that holds primary responsibility for regulating consumer protection with regards to financial products and services in the United States – is viewed by some as part of the problem.
The CFPB, in its attempt to protect consumers, is creating a “bigger mess” as compliance and risk escalate with every new rule they put out, Charlie Brown says. CFPB sends out revised guidelines “almost every 30 days that are scaring off mortgage lenders due to litigation and compliance risk.” The situation with the secondary market and the CFPB is “extremely difficult, and very much worries me,” said Brown.
It could get uglier.
“About 40 percent of Floridian mortgage holders who are current on payments are nonetheless underwater,” meaning that their current mortgage balance is greater that the market value of their property, says McCabe. That portends an expanding horizon of potentially distressed properties coming onto the market.
Veteran Florida real estate analyst Lewis Goodkin agrees.
“There used to be a stigma attached to foreclosures, but no more,” Goodkin said. “I know people making good money, professionals, whose homes are underwater and they have decided to simply stop making payments and put the money into the bank instead.
“In one case, fully 21 months after not getting payments, the bank finally foreclosed. When banks unload property, they are so leery of mortgage availability that they only take cash offers, which means they sold at prices 20 percent lower than they normally could have,” he said.
Those buyers are either large specialized Wall Street funds that have been snapping up distressed property, or foreign buyers.
“Over half of the (2012) transactions in the Miami market were cash-only deals, which means that a normal person with a steady job is unable to compete, or even to buy at all,” Goodkin said.
So what do the numbers mean?
“Bottom line is that, if you only pay attention to Realtor data, everything looks great,” summarized McCabe. “However, if you remove the blinders and consider underlying financial market activity and data, there’s still trouble in paradise and it’ll take another two to three years to achieve a normal healthy real estate market.”
Goodkin echoes that time frame.
“It’s not a very dynamic situation and we’re not out of the woods yet, and probably won’t see a normally functioning market until mid-2014, unless we have a depression, God forbid,” he said.
Realtors and hopeful sellers and buyers who cheered 2012’s rose-tinted Florida housing report as an indicator of better things to come in the short term are “smoking Hopium,” said McCabe, adding tongue-in-cheek that he “trademarked the term” for the duration of the Great Recession.
© 2013 The Bradenton Herald (Bradenton, Fla.), Stephen Frater, The Bradenton Herald. Distributed by MCT Information Services
February 15, 2013
Flor-A-Mar – New Port Richey
5501 Bowline Bend
New Port Richey, FL 34652
MLS #: U7570102
WATERFRONT! 2 bedrooms, 2 baths, 1-car garage, 1,390 square feet, List Price $265,000
If you’re a boating or fishing enthusiast you’re going to love this upgraded and move-in ready BLOCK construction WATERFRONT Gulf Harbors beauty. This is the perfect waterfront home for those that demand direct access to the open waters of the Gulf-of-Mexico. Whether as a primary residence, investment property or simply a vacation home, this 2 bedroom, 2 bath Keywest-style home has it all. Situated on a saltwater canal you’ll enjoy 70 feet of seawall and waterfront, a huge patio along the seawall, a custom double catwalk deck for multiple boats or watercraft, and a 10,000 lb boat lift. Explore the mangroves and islands by Kayak just minutes from your backyard. The yard is professionally landscaped and fenced. Many recent upgrades including a new TILE roof in 2006, newer air conditioning, windows, exterior/interior paint and appliances. Check out the kitchen and bathroom photos! You’ll see quality Corian counters and light and bright spaciousness. Home is offered unfurnished but the seller is willing to negotiate the furnishings on the side.