Wednesday, November 18, 2009
Shadow Inventory
Had a great class today hosted by Ken Sorgenfrey from HBM. HBM and ROHRS together is a great system to manage and incubate your buyers. It may take 6-12 months for some buyers to get themselves completely ready, and HBM helps to keep you in front of them until they are. Anyway, just a sidenote. While we were talking, he mentioned the following: "The banks stopped releasing the foreclosed properties at the request of the government for 3 months, to reduce the impact on the price levels. That expired in September, and well, the government asked for - and was granted - another 3 months. This will expire the end of the year, but in the meantime, the banks have built up an enormous number of properties in inventory. They will have to release them soon, and we will once again see a huge number of REO's on the market"
Tuesday, June 23, 2009
Housing market bumping along at the bottom, better in some areas
For those of us who are dealing mainly in the REO arena and first time home buyers or investors, getting an offer accepted on a bank owned property has become increasingly difficult. It has been my experience that even cash offers are now more than full-price, and the only way for finance deals to be accepted is to offer 15-20% above asking price. If the house has any kind of code violation, cash is the best way. I have also noticed that inventories have dropped significantly.
REO realtors have also adopted a strategy whereby they list the property at such a low price, that it creates and environment where multiple buyers get into a "bidding frenzy". The result is that the REO agent receives multiple offers, and most of them are higher than asking.
This does not mean that your deals will not get accepted. It just may take a little longer, a few more showings, and a couple more offers. It also helps to talk to the REO realtors to get some idea (yeah - I know they are busy and hard to reach) of where the offers stand. Obviously they cannot tell you exactly, but they can at least guide you.
Now for some good news. According to foreclosures.com in Florida, like California, home sales are up, and so are foreclosures and defaults. For the eighth month in a row, existing home sales rose--18%--in April, with existing condo sales up to--21%, according to Florida Association of Realtors’ numbers. The state, along with California, Arizona, and Nevada, powers the nation’s foreclosure abyss--10.6% of the mortgages in Florida are “somewhere in the process of foreclosure,” according to the Mortgage Bankers’ newest Delinquency Survey.
This means we can expect a lot of new inventory soon, so hopefully the buyer's frenzy and bidding wars will ease a bit. So keep your buyers list handy.
REO realtors have also adopted a strategy whereby they list the property at such a low price, that it creates and environment where multiple buyers get into a "bidding frenzy". The result is that the REO agent receives multiple offers, and most of them are higher than asking.
This does not mean that your deals will not get accepted. It just may take a little longer, a few more showings, and a couple more offers. It also helps to talk to the REO realtors to get some idea (yeah - I know they are busy and hard to reach) of where the offers stand. Obviously they cannot tell you exactly, but they can at least guide you.
Now for some good news. According to foreclosures.com in Florida, like California, home sales are up, and so are foreclosures and defaults. For the eighth month in a row, existing home sales rose--18%--in April, with existing condo sales up to--21%, according to Florida Association of Realtors’ numbers. The state, along with California, Arizona, and Nevada, powers the nation’s foreclosure abyss--10.6% of the mortgages in Florida are “somewhere in the process of foreclosure,” according to the Mortgage Bankers’ newest Delinquency Survey.
This means we can expect a lot of new inventory soon, so hopefully the buyer's frenzy and bidding wars will ease a bit. So keep your buyers list handy.
Friday, February 27, 2009
Obama budget opposition - NAR
You may have seen news reports about President Obama’s budget proposal that was released today at 11:30 AM Eastern Time. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. NAR is 100% opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.
As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will lead to a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved.
As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal.
This communication is the first part of our response, we will continue to update you as the situation and events warrant.Sincerely,Charles McMillan, CIPS, GRI2009 NAR President
As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will lead to a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved.
As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal.
This communication is the first part of our response, we will continue to update you as the situation and events warrant.Sincerely,Charles McMillan, CIPS, GRI2009 NAR President
Thursday, February 26, 2009
Positive News - Home Sale Numbers are up
Florida’s Existing Home, Condo Sales Rise in January 2009ORLANDO, Fla., Feb. 25, 2009 – Florida’s existing home sales rose in January, making it the fifth month in a row 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). Existing home sales rose 24 percent last month with a total of 8,450 homes sold statewide compared to 6,810 homes sold in January 2008, according to FAR.
“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” said 2009 FAR President Cynthia Shelton. “With a range of available housing options, historically low mortgage interest rates and affordable prices, buyers who may have been hesitant before should take a closer look at the current opportunities for homeownership. As real estate professionals who know all aspects of their local market conditions, Florida Realtors are here to help counsel consumers making sound long-term decisions for their homes and their businesses.”
Florida Realtors also reported a 13 percent gain in statewide sales of existing condominiums in January, making it the fourth recent month (following September, October and December) that statewide existing home and existing condo sales were higher compared to year-ago levels.
Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in January while 11 MSAs also showed gains in condo sales; it marks the seventh consecutive month that a number of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $139,500; a year ago, it was $206,900 for a 33 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in December 2008 was $174,700, down 14.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $281,100 in December; in Massachusetts, it was $275,000; in Maryland, it was $267,925; and in New York, it was $220,000.
NAR’s latest housing outlook shows that home prices continue to fall, but also notes a trend of increasing sales activity in the Florida, California, Arizona and Nevada markets. “It appears some buyers are taking advantage of much lower home prices,” said NAR Chief Economist Lawrence Yun. “The higher monthly sales gain and falling inventory are steps in the right direction, but buyers will continue to have an edge over sellers for the foreseeable future.”
In Florida’s year-to-year comparison for condos, 2,556 units sold statewide compared to 2,266 sold in January 2008 for a 13 percent increase. The statewide existing condo median sales price last month was $113,400; in January 2008 it was $190,200 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $181,400 in December 2008.
Interest rates for a 30-year fixed-rate mortgage averaged 5.05 percent last month, down from the average rate of 5.76 percent in January 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the Daytona Beach MSA reported a total of 419 homes sold in January compared to 321 homes a year ago for a 31 percent increase. The existing home median sales price was $131,800; a year ago, it was $179,100 for a 26 percent decrease. In the year-to-year comparison for the existing condo market, a total of 77 units sold in the MSA last month, up 43 percent compared to 54 condos sold the previous January. The market’s existing condo median price was $167,800; a year ago, it was $230,000 for a 27 percent decrease.
Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in January 2009 to January 2008 based on Realtor transactions; the other compares the volume of existing, condominium sales and median sales prices in January 2009 to January 2008 based on Realtor transactions.
Single Family Condominiums
“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” said 2009 FAR President Cynthia Shelton. “With a range of available housing options, historically low mortgage interest rates and affordable prices, buyers who may have been hesitant before should take a closer look at the current opportunities for homeownership. As real estate professionals who know all aspects of their local market conditions, Florida Realtors are here to help counsel consumers making sound long-term decisions for their homes and their businesses.”
Florida Realtors also reported a 13 percent gain in statewide sales of existing condominiums in January, making it the fourth recent month (following September, October and December) that statewide existing home and existing condo sales were higher compared to year-ago levels.
Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in January while 11 MSAs also showed gains in condo sales; it marks the seventh consecutive month that a number of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $139,500; a year ago, it was $206,900 for a 33 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in December 2008 was $174,700, down 14.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $281,100 in December; in Massachusetts, it was $275,000; in Maryland, it was $267,925; and in New York, it was $220,000.
NAR’s latest housing outlook shows that home prices continue to fall, but also notes a trend of increasing sales activity in the Florida, California, Arizona and Nevada markets. “It appears some buyers are taking advantage of much lower home prices,” said NAR Chief Economist Lawrence Yun. “The higher monthly sales gain and falling inventory are steps in the right direction, but buyers will continue to have an edge over sellers for the foreseeable future.”
In Florida’s year-to-year comparison for condos, 2,556 units sold statewide compared to 2,266 sold in January 2008 for a 13 percent increase. The statewide existing condo median sales price last month was $113,400; in January 2008 it was $190,200 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $181,400 in December 2008.
Interest rates for a 30-year fixed-rate mortgage averaged 5.05 percent last month, down from the average rate of 5.76 percent in January 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the Daytona Beach MSA reported a total of 419 homes sold in January compared to 321 homes a year ago for a 31 percent increase. The existing home median sales price was $131,800; a year ago, it was $179,100 for a 26 percent decrease. In the year-to-year comparison for the existing condo market, a total of 77 units sold in the MSA last month, up 43 percent compared to 54 condos sold the previous January. The market’s existing condo median price was $167,800; a year ago, it was $230,000 for a 27 percent decrease.
Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in January 2009 to January 2008 based on Realtor transactions; the other compares the volume of existing, condominium sales and median sales prices in January 2009 to January 2008 based on Realtor transactions.
Single Family Condominiums
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