4.3 Million Foreclosure Victims Offered Independent Case Reviews With Focus On Proper Processes

While I’m not so sure I agree with the word “victims” in this article title I still think it holds some merit and deserves to be shared. So many people have either already been kicked out of their homes or are in the process of being given the boot. I agree that improper processes need to be identified and addressed.

Here is the article from yesterday’s NotaryBulletin presented by the National Notary Association.

In what is being considered the first meaningful response to the foreclosure crisis, the federal government has ordered 14 mortgage lenders involved in the “robo-signing” scandal to send letters to 4.3 million consumers who may have been victimized by foreclosure errors and misconduct, paving the way for a massive number of individual case reviews and potential compensation.

Read more

U.S. ‘Underwater’ Homeowners Increase to 28.6%, Zillow Reports

Nov. 8 (Bloomberg) — The number of U.S. homeowners who owe more than their properties are worth climbed in the third quarter as lenders repossessed fewer houses, Zillow Inc. said.

The share of borrowers with negative equity rose to 28.6 percent, up from 26.8 percent in the second quarter and 23.2 percent a year earlier, the real estate data provider said today. Last quarter’s portion was the biggest since Seattle- based Zillow began tracking the measure in the first quarter of 2009, when 22.3 percent of households were underwater.

Read more

Obama challenged by RE/MAX broker

How long can you breathe underwater?

Inman News

Top 10 states with highest share of negative equity mortgages

1. Nevada (68 percent of 592,000 mortgages)
2. Arizona (50 percent of 1.3 million mortgages)
3. Florida (46 percent of 4.5 million mortgages)
4. Michigan (38 percent of 1.4 million mortgages)
5. California (33 percent of 6.9 million mortgages)
6. Georgia (28 percent of 1.6 million mortgages)
7. Idaho (24 percent of 243,000 mortgages)
8. Virginia (23 percent of 1.2 million mortgages)
9. Maryland (22 percent of 1.4 million mortgages)
10. Utah (20 percent of 470,000 mortgages)

Expect prices in Tampa Bay to drop even more

We hear so many different opinions on the subject of home values and the overall real estate industry that it is very difficult to know who or what to trust. I’m here to tell you that nobody really knows and anyone who claims to be an expert on the subject is trying to sell you something.

As someone who lives and breaths real estate I can say with complete confidence that I don’t know what the future holds. All I know for certain is that there are too many homes on the market for the quantity of buyers, and as a result prices are down and will remain down. If you’re looking to sell now or in the immediate future you need to face the music. You’re not going to get what you probably feel you deserve for your home should you decide to sell in 2010.

According to Inman News

National home prices were up slightly in February from a year ago — the first annual increase in more than three years — but are expected to give up those gains and more later this year, according to a report from First American CoreLogic.

First American CoreLogic’s LoanPerformance Home Price Index showed prices up 0.3 percent in February from a year ago, compared to a 0.5 percent year-over-year price decline in January.

The index currently shows a 30.6 percent decline in national home prices from an April, 2006 peak, or 21.7 percent if distressed properties are excluded.

Only 1 in 8 short sales ever close

Fannie Mae recently released statistics showing the difficult nature of a Short Sale transaction and how that relates to Foreclosure statistics.

In 2008, Fannie Mae found that for every one short sale that closed, eight homes went into foreclosure. This speaks to the difficult nature of the Short Sale process and the backward nature of how lenders handle them.

President Obama Signs Homebuyer Tax Credit Extension

This last Friday, President Barack Obama signed the new tax credit legislation which provides:

• Extends the First-Time Home Buyer Credit of up to $8,000 to first-time home buyers until April 30, 2010.

• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Tampa Bay market is starting to heat up!

The statistics show that the real estate market in the Tampa Bay area is really starting to pick up. If you’re thinking of buying a new house or condo you might want to start getting serious now. Have prices hit rock bottom yet? There is no way to tell, but most people in the business don’t see them going much lower. If you can buy real estate priced relatively cheaper than comparable properties you should be in good shape over the course of the upcoming months or even year.

Gus Bilirakis responds to my letter supporting extending the $8,000 tax credit

Dear Chris:

Thank you for contacting me to express your support for extending and expanding the federal tax credit for first-time home buyers. I appreciate hearing from you.

I support lowering taxes on home purchases. As you may know, H.R. 1, the American Recovery and Reinvestment Act, was signed into law in February of this year. This legislation provided an $8,000 refundable credit for all first-time homes brought between January 1 and November 30, 2009. Several bills have been introduced in the House and the Senate that would extend the tax credit from anywhere from six months to one year, expand eligibility of the credit to multi-family properties used as the borrower’s primary residence, and eliminate income caps of $75,000 and $150,000.

I am reviewing these bills to determine how best to make home ownership more affordable and stabilize prices in the housing market. Your comments have provided a valuable perspective as I evaluate these bills. You may be certain that I will remember your support for expanding and extending the tax credit for first-time home buyers should I have the opportunity to consider relevant legislation in the future. I will also share your comments with my House colleagues, who will benefit from your views.

As a resident of Florida’s Ninth District, your comments and opinions are an important source of information to help me carry out my duties as your federal representative. In hat regard, please do not hesitate to contact me in the future on any issue important to you. Also, if you would like to be informed more frequently about my work in Congress and in Florida’s Ninth Congressional District, please visit my website at http://www.bilirakis.house.gov to sign up for regular email or to send me a message.

Again, thank you for sharing your thoughts with me.

Sincerely yours,

Gus M. Bilirakis
Member of Congress

I’m aware that this letter was probably sent out to 23,000 other people that sent similar letters expressing support for expanding and extending the tax credit.

Housing indicators are pointing in a positive direction

A recent Washington Post article pointed out that many of the housing indicators are pointing in the same positive direction. Several analysts attribute the improvements to the soon to expire $8,000 tax credit for first-time homebuyers, historically low interest rates, and rock bottom prices in many areas.

3 States Account For Half Of The Country’s Foreclosures

Since 2007, foreclosures have dominated national real estate news. You can’t turn on the news or open a paper without seeing at least one foreclosure-related story.

But for all of the discussion, even two-and-a-half years after the peak of the housing market, home foreclosures continue to be geographically concentrated.

In looking at the latest stats from foreclosure marketplace RealtyTrac, more than half of the country’s foreclosure actions from March 2009 occurred in just 3 states — California, Florida and Nevada.

Homes Still Cost Too Much

By John F. Wasik,
Author of Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream

You would think with home prices still dropping like hailstones in most areas, that homes would be bargains.

The present buyer’s market obscures a key fact about the housing crisis though: millions sought the refuge of cheap credit, subprime and adjustable loans during the boom because they were the easiest routes to homeownership in a time when house prices far outpaced income growth.

The sad fact is that the Great American Dream is still out of reach for far too many and it was the declining affordability of decent houses that was one of the triggers of the housing bust.

It’s not that home prices haven’t plummeted as banks unload foreclosed homes at fire-sale prices. The national median home price fell to $169,000 in the first quarter, according to the National Association of Realtors. Bank-owned properties are selling at 20-percent to 50-percent discounts.

“Contrary to popular belief,” says Jeffrey Lubell, executive director of the Center for Housing Policy, “the recent decline in home prices has not resolved the nation’s housing affordability problem.” Read more

Government plans stimulate hope for Florida’s real estate markets

GAINESVILLE, Fla. – May 13, 2009 – The first signs of confidence in Florida real estate are starting to appear, along with hopes that government stimulus plans will unfreeze markets and reinvigorate business, the latest University of Florida (UF) survey finds.

“Positive responses to several questions lead us to believe there is light at the end of the tunnel,” says Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies, which conducts the quarterly survey.

Perhaps most significant is that respondents’ perception of their own business outlook has improved after three years of steady decline.

“If real estate investors think there are opportunities out there for their firms to make money, that means there are deals that will be getting done. And when deals start getting done, various participants in the transactions make money, and it’s almost like a snowball effect,” Becker says. Read more

Pending home sales up 3.2%, housing affordability near record

WASHINGTON – May 4, 2009 – Pending home sales rose in March with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index, 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 it’s 1.1 percent higher than March 2008’s 83.7.

“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,” says Lawrence Yun, NAR chief economist. “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 Index 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 Housing Boom and Bust by Thomas Sowell

Publisher: Basic Books

Release Date: April 29, 2009

Product Description
This is a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The “creative” financing of home mortgages and the even more “creative” marketing of financial securities based on American mortgages to countries around the world, are part of the story of how a financial house of cards was built up—and then suddenly collapsed.

The politics behind all this is another story full of strange twists. No punches are pulled when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened when the financial house of cards in the financial markets collapsed.

What to do, now that we are in the midst of an economic disaster, is yet another story—one whose ending we do not yet know, but one whose outlines and implications are explored to reveal some surprising and sobering lessons.

About the Author
Thomas Sowell has taught economics at Cornell, UCLA, Amherst and other academic institutions, and his Basic Economics has been translated into six languages. He is currently a scholar in residence at the Hoover Institution, Stanford University. He has published in both academic journals in such popular media as the Wall Street Journal, Forbes magazine and Fortune, and writes a syndicated column that appears in newspapers across the country.

Visit Thomas Sowell’s web site

Visit the Wikipedia page for Thomas Sowell

Florida’s existing home, condo sales rise in February 2009

Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.

– FLORIDA ASSOCIATION OF REALTORS®

Evidence that the “experts” can be even more clueless than you and I

For those of you not up on your history the Great Depression was a worldwide economic downturn that started in the United States in 1929. It lasted for 10+ years and is used even today as the perfect example of how bad economic conditions can get.  The effects of the Great Depression were devastating and should never be forgotten.

Note the dates on the below quotes and then decide how much weight you think we should place on what today’s financial experts are saying about the current state of our economy…

“We will not have any more crashes in our time.”
- John Maynard Keynes in 1927

“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment…and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”
- Calvin Coolidge December 4, 1928

“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

“There will be no repetition of the break of yesterday… I have no fear of another comparable decline.”
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

“Buying of sound, seasoned issues now will not be regretted”
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

“Some pretty intelligent people are now buying stocks… Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
- R. W. McNeal, financial analyst in October 1929

“The decline is in paper values, not in tangible goods and services…America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.”
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

“Hysteria has now disappeared from Wall Street.”
- The Times of London, November 2, 1929

“The Wall Street crash doesn’t mean that there will be any general or serious business depression… For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game… Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.”
- Business Week, November 2, 1929

“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation…”
- Harvard Economic Society (HES), November 2, 1929

“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929

“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

“Financial storm definitely passed.”
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

“I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

“I am convinced that through these measures we have reestablished confidence.”
- Herbert Hoover, December 1929

“[1930 will be] a splendid employment year.”
- U.S. Dept. of Labor, New Year’s Forecast, December 1929

“For the immediate future, at least, the outlook (stocks) is bright.”
- Irving Fisher, Ph.D. in Economics, in early 1930

“…there are indications that the severest phase of the recession is over…”
- Harvard Economic Society (HES) Jan 18, 1930

“There is nothing in the situation to be disturbed about.”
- Secretary of the Treasury Andrew Mellon, Feb 1930

“The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930

“… the outlook continues favorable…”
- HES Mar 29, 1930

“… the outlook is favorable…”
- HES Apr 19, 1930

“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
- Herbert Hoover, President of the United States, May 1, 1930

“…by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent…”
- HES May 17, 1930

“Gentleman, you have come sixty days too late. The depression is over.”
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

“… irregular and conflicting movements of business should soon give way to a sustained recovery…”
- HES June 28, 1930

“… the present depression has about spent its force…”
- HES, Aug 30, 1930

“We are now near the end of the declining phase of the depression.”
- HES Nov 15, 1930

“Stabilization at [present] levels is clearly possible.”
- HES Oct 31, 1931

“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”
- President F.D. Roosevelt, 1933

Financial experts say recession ends by year’s end

According to a Yahoo Finance article published a few days ago…

A group of financial wizards looked into their crystal ball Tuesday and saw some good news. The recession will ease by the end of this year and companies will begin adding workers, signaling the end of the worst economic downturn since the Great Depression.

Do these “financial experts” live on the same planet as you and I?

The good news is there’s an end in sight. The economy will pull out of the recession at the end of this year, marking a duration of 24 months, about twice as long as the average post-World War II recession, Faucher said.

In my not-so-humble opinion Faucher’s prediction is bovine scatological, but you decide for yourself. The way I see it we’re going to be even deeper in doo doo by year’s end. And the so-called “Economic Stimulus Plan” that Obama is cramming down our throats is going to cause long-lasting problems from which we may never recover.

Oh, I’m a doomsayer you say? You’re darn tootin’ I am. (I’ve always wanted to say that) I’m a realist and spending more money when you’re deep in debt is a recipe for financial disaster. We should be tightening our belt, reducing taxes and allowing the market some freedom to catch it’s breath and start to recover, but instead we’re compounding the problem by doing the exact opposite. Quite frankly…I’m scared.

Obama says NO to banks practicing real estate

On March 11 of 2009, President Barack Obama signed into law the FY2009 Omnibus Appropriations Act permanently prohibiting banks from entering the real estate brokerage and management businesses. This is a tremendous victory for The National Association of Realtors (NAR), who fought hard since 2001 to keep banks out of the real estate business.

What harm would come of banks being involved in real estate brokerage and management?

Had banks been allowed to practice real estate, an area in which they lack expertise, consumers would have been financially harmed. Any time competition is limited, such as through the merger or fusion of the banking and real estate industries, consumers are given less options and subsequently less power and control over their own finances. NAR deserves credit for keeping pressure on the government and educating the relevant decision makers.

Congress could change the law, but the odds are slim this will ever happen. Good work, NAR.

Neighborhood Stabilization Program (NSP)

Obama’s new housing stimulus bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties.

The Keys to Housing Recovery

To move the country out of this economic crisis, Congress and the next administration must place significant emphasis on restoring confidence in the housing market. That’s what National Association of Realtors® President Charles McMillan told the House Financial Services Committee in testimony today.

“The housing sector is at the core of the current economic crisis,” McMillan said. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”

McMillan congratulated Chairman Barney Frank, D-Mass., on H.R. 384, the TARP Reform and Accountability Act, which was introduced last week. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current homeowners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available.

The principle focus of NAR’s plan is to ensure that the Troubled Asset Relief Program does what it was originally intended to do – end the credit crisis and jumpstart mortgage lending. “It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” said McMillan. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry.”

“We are pleased that Congress is moving forward on these important issues. Together these actions will build a solid foundation for a housing recovery,” said McMillan.

NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.

“Low interest rates are only effective if people can get a loan. We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system,” said McMillan.

NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that are preventing consumers from getting or modifying home loans. “These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.

NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.

Read President McMillan’s testimony (PDF)

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.

Accurate pricing is the key to selling in 2009

Accurate pricing is the key to selling a home during this tumultuous market. Sellers are focused on selling for prices realized during the very peak of the housing boom and buyers are searching for bargains. Someone has to give. Both can’t achieve their objectives. A seller cannot sell their home for top dollar to a buyer who is after a bargain.

So who wins in this housing crisis?

Clearly, the winner is going to be the side with the cards stacked in their favor and it should be abundantly clear that the buyer calls the shots in this market. There are literally dozens of sellers for every buyer and educated buyers know this. Sellers that cannot grasp the reality of this are doomed to disappointment and eventual failure, which in many cases means foreclosure and financial ruin.

What does it take to sell in this market?

Sellers need to be priced competitively. If most comparable homes are priced lower than your price you’ve got a recipe for failure on your hands. And even if you’re priced similarly to most other homes you are probably never going to sell. Only those homes that are priced in the lower 25% of comparable listings are getting the showings and getting sold.

There are simply too many options for buyers. Why would they want to look at your home priced at $335,000 when there are similar homes priced at $250,000 – $265,000? If there are 12 – 20 listings for every buyer what do you think these buyers will do? They’re going to take advantage of their buying power and purchase the best deals. Those sellers clinging to 2005 prices will never even get a showing.

Sometimes the easiest way to understand how the market works is to close your eyes and pretend you are the other person. If you’re a seller pretend you’re the buyer. If you’re the buyer pretend you’re selling your home.

So if you want to understand why you’re not getting any showings try to put yourself in the buyers shoes. Now mentally change the industry. Pretend you are a buyer looking to purchase a Toyota Corolla. You head to the dealership and check out what the market has to offer. The lot is filled with Toyota Corolla’s. In fact you don’t recall there ever being so many cars on the market from which buyers may choose.

If you were a buyer walking around that Toyota dealership lot and you saw hundreds of similar Corolla’s priced around $17,000, but a few over to the side priced at $25,000 what would you do? Assume the cars priced at $25,000 are just a little nicer than the $17,000, such as they have sunroofs or CD players. Would you even attempt to negotiate the price of the $25,000 car down or would you instead negotiate the $17,000 car down and then later add your own CD player and sunroof?

Many sellers today wonder why they aren’t getting any showings. I hear, “But why don’t buyers at least make me an offer.” The answer is simple. Buyers think you’re completely irrational. Why would they waste their time with a seller that has such a high starting point when they can negotiate the lowest priced homes down even lower?

Inventory makes now the time to buy

Conditions are ideal for buyers to find their dream home. Inventory is plentiful. In Florida’s three largest markets alone, more than 125,000 homes were for sale at year’s end in 2007. Even with these high inventory levels, economists predict that number will go down in 2008 – which, of course, is another great reason to buy now.

Fed cuts rates to lowest since 1958

In an effort to simulate the economy the Fed has slashed interest rates by 1/2 a point to the lowest rate since 1958.  According to the Fed, “intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and business to obtain credit.” Many economists already believe we’re in a recession, but they applaud the Fed’s efforts to mitigate the extent and depth of the recession.

Greenspan admits to not being superhero!

It looks like Alan Greenspan is finally coming out of the closet and admitting he is not the superhero we all thought he was for so many years. As of today he is confessing that he placed far too much faith in the self-correcting power of free markets and had failed to anticipate the destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

Many people now believe that had Greenspan not held interest rates down for so long we wouldn’t be in the mess we’re in today. Low interest rates caused a feeding frenzy in the banking industry where people not otherwise qualified to buy a home were now finding it utterly irresistible. While I’m not sure any one individual can be held 100% accountable I do find it fascinating how we all love to point our fingers at one another. What ever happened to personal accountability?

Short Sales: Bad for Business?

In the October 2008 edition of “Florida Realtor” a Realtor wrote a letter to the editor complaining that short sales are basically bad for business. Home sellers that are not in a short sale or foreclosure situation cannot compete with the extremely low prices offered by short sales and bank owned properties.

While this is true I have the reverse opinion. Short sales and foreclosures are helping thin out a saturated market. Granted, it is going to take quite a while to sell all of these short sale and REO (bank owned) homes, but they DO need to be sold if we’re ever going to get out of this economic crisis. The lower the list price the quicker the sale. The quicker the sale the faster we can clear the market of these under priced homes and start seeing traditional sellers have a chance of selling. Because right now…you and I don’t stand a chance of selling our homes. We have to wait it out and let the short sales clear the market. And it’s going to be a long and painful process so don’t hold your breath. As the current short sales sell new ones will enter the market.

An elementary understanding of economics tells us that price (or the equilibrium point of supply and demand) cannot increase (thus making traditional equity-holding sellers happy) without a decrease in supply. So short sales selling are facilitating a decrease in supply. Short sales are a good thing. We should all celebrate every time a short sale closes in our neighborhoods, because this short sale is moving us one step closer to a normalized market. There IS a light at the end of the tunnel. Hopefully, that light isn’t a train.

Is this market starting to awaken?

The real estate market appears to be picking up the past few months in the Tampa Bay area. While I would never call the market healthy or active there does seem to be a little more life to the monster. Most of my personal listings are currently under contract or teetering on the edge of a sale. Buyers are out and about and my phone is ringing.

Florida’s existing home sales remain level in July 2008

ORLANDO, Fla. – Aug. 25, 2008 – Single-family existing home sales rose in Florida for the first time in more than two years: While only six more homes sold in July 2008 than in July 2007, it could indicate stabilization in Florida’s housing sector, according to the latest housing statistics released by the Florida Association of Realtors® (FAR).