SRQ Realtor

Florida’s mild climate and world-class beaches continue to draw Northern retirees seeking temporary refuge from harsh winter weather, but tourism experts say many of these snowbirds are shortening their stays. Rental rates have risen to keep up with spiraling property insurance rates from recent hurricanes, pricing some retirees out of the market. “Prices in rentals have gone up because of insurance. We’re 98 percent booked for February and March, but booked about 75 percent for January, which is very unusual,” said Lisa Durgin, a Cocoa Beach-based Realtor who rents to snowbirds.
Durgin said this January is among the slowest she has seen.

Blanka Kovarik, a retiree from Toronto, said many of her friends are planning shorter stays in Florida this winter. Along with the increased rental costs, gas prices and rising medical expenses are also a factor, she said. In Brevard County, for example, a study by Schulman, Ronca, Bucuvalas, Inc., found that the number of snowbirds fell nearly 9 percent to 27,600 in 2005 from 30,300 in 2003. Abraham Pizam, dean of the Rosen School of Hospitality Management at the University of Central Florida, said that snowbirds have been stricken with “Florida fatigue.”

“Snowbirds are not returning to Florida as they used to,” Pizam said. “We’re not getting as many repeat visitors. Other destinations are competing with us as well. Also, remember that snowbirds have a lot of expenses, with insurance and medical costs, and they have less money for trips. So, rather than cutting out the vacation completely, they’re staying for a shorter time.” Businesses are feeling the crunch, said Rob Varley, executive director of the Space Coast Office of Tourism. “The season is shorter, and the part-time residents are not coming as soon, either,” Varley said.
 
Copyright © 2007 South Florida Sun-Sentinel. Distributed by McClatchy-Tribune Business News.

Selling one house and buying another is like putting yourself between a rock and a hard place. If you set both closings within the same basic time frame you run the risk of ending up with two mortgages or much worse. If you schedule them with sufficient time between to solve any closing problems you face the prospect of renting and moving twice.

This is not a rare occurrence – the National Association of Realtors, or NAR, estimates 6.24 million homes were bought or sold during 2006, and unless you were a first-time buyer or kept your old house as an investment property, most of those transactions involved buying one house and selling another. But there are steps you can take to protect your best interests. Read the rest of this entry »

It’s getting more difficult to build projects involving mixed-income housing. CED Construction, a workforce housing developer, says rising land prices and the need for new schools and road upgrades make it difficult for it to profitably build mixed-income housing. Officials say the company’s $36 million Marbella project in Orange County, where 40 percent of units will be reserved for households earning no more than 60 percent of the local median income, may be the last affordable-housing development there for some time. “We have two issues that compete within our community: the need
for affordable housing, and school and transportation concurrency rules,” explains CED Construction Vice President Scott Culp. “It is very difficult to get a site for these projects that meets all of the regulations.” Orange County housing and community development manager Mitch Glasser says recommendations from a task force of developers and county officials on ways to continue producing affordable housing are expected by May.

Source: Orlando Sentinel (FL) (01/16/07) Rivera-Lyles, Jeannette
© Copyright 2007 INFORMATION, INC. Bethesda, MD

Seller financing has become more of a topic in potential real estate transactions recently. Property owners appear more willing to negotiate terms that help close a deal with a buyer who may not be able to meet the requirements of a regular mortgage lender, says Walter Molony, a spokesman for NAR. High lending rates in the teens made seller financing — in which the seller finances part or all of a home sale — popular in the late 1970s and early 1980s. But high residential prices threaten to keep many prospective buyers out of today’s market. Some real estate and lending officials express concern about the home financing strategy if the seller is not financially stable. A homeowner who has other assets stands a better chance of not being “wiped out if the buyer is delinquent,” says Raymond Bershtein, a partner with the New Haven, Conn., law firm of Bershtein, Volpe & McKeon.

Source: New London Day (Conn.), Bob Tedeschi (01/12/07)
© Copyright 2007 INFORMATION, INC. Bethesda, MD

Present Market Conditions                                            
Early reports for the end of 2006 look to be mostly favorable.Unprecedented figures for the stock market as well as record earnings reports helped to offset a downturn in the national housing market. Financial markets will experience another short week, being closed for New Year’s Day as well as the national day of mourning for former President Gerald Ford.                                               
                                                                      
Expectations                                                         
Most economists are waiting for this week’s reporting of several key economic indicators. Both the December employment figures and the Institute of Supply Management’s report on manufacturing activity are expected to show economic growth is slowing, but not stopped completely. Ken Mayland of ClearView Economics agrees that the economy is entering “something of a slowdown period, specifically when it comes to production. “The place where the economic slowdown is really evident has been in the manufacturing sector,” said Mayland.
                                                                      
Guidance                                                             
Mortgage rates crept up slightly last week but remain well within reach of the lowest of the year. These tremendously low mortgage rates coupled with an abundance of available homes make this a terrific time to purchase a home or refinance a mortgage. As always, staying informed of movement in financial markets and having the assistance of a professional mortgage consultant will enable you to take full advantage of the mortgage market.
Copyright © 2006 XINNIX, Inc. All Rights Reserved

It’s difficult for housing experts to determine whether the market has finally bottomed out, especially since home sales typically slow during the winter months. Moreover, Census data shows that 4.6 percent of the nation’s for-sale and rental homes, or 5.7 million units, sat vacant in the third quarter — up from an average 3.5 percent during the last decade. More than 1 million of these units need occupants if the ratio is to return to normalcy, yet a Blue Chip Economic Indicators survey of economists found that most anticipate 1.6 million housing starts in 2007.

The housing slump has not yet had an impact on the national economy, and homebuilders do not expect to know whether the downturn has ended until the spring homebuying season commences.

Source: Wall Street Journal (01/08/07) P. C1; Lahart, Justin

After three solid months of gains, consumer confidence in Florida fell in December by four points to 89, University of Florida (UF) economists report. “The release this month shows a Florida consumer who is still reasonably optimistic about the economy at present but is expecting a decline in their finances and the overall economy over the next year,” says Chris McCarty, director of the survey research center at UF’s Bureau of Economic and Business Research.

The drop in confidence was broad-based, with declines in four of the five components. Expectations about U.S. economic conditions over the next five years fell nine points to 84. Expectations about personal finances a year from now fell seven points to 94. Expectations about national economic conditions over the next year fell six points to 82. Perceptions of personal finances now compared with a year ago fell Read the rest of this entry »

In most parts of the country, the New Year will dawn on a housing market that’s shockingly different from just a year ago. Overzealous speculation, too-lenient lending and aggressive overbuilding have combined to create the type of home-inventory levels and price stagnations that haven’t been felt in the U.S. since the early to mid-1990’s.

In short, the housing market, after a historic run-up in prices, is correcting. While that’s of little concession to current and would-be sellers, it’s not the end of the world either, especially if you don’t need to sell immediately. Economics elsewhere are encouraging. Recession doesn’t appear imminent. Wall Street appears healthy. Unemployment is low, and the general economy is good.

The market, as it always does, will reach equilibrium again, though probably not before mid-2008 or so, most economists estimate. So reset that panic button and sit back to raise a glass to 2007 as a transition year that will bring us one step closer to healthier home sales. In the meantime, take note of how home-buying and home-selling strategies change in a down market.

Here are seven selling tips and seven buying tips for ‘07 that could help save you a little grief in the short term and a lot of money in the long term.

7 selling tips for the down cycle:

• 1. Price to sell. If you really must sell now, don’t mess around. List your house based on what the market dictates today, not the prices that friends, relatives and co-workers got last winter or last spring.
• 2. Consider all credible offers. Holding fast for a better offer might put you in a situation where you’re merely playing catch-up with a moving market. Don’t assume there’ll always be another offer coming down the pike. You may need to come off your price 5 percent in some areas and 10 percent or more in others.
• 3. Offer to proffer. Buyers are requesting all kinds of enticements to spice the pot. Club memberships, prepaid lawn maintenance, moving-expense reimbursements, all appliances included and liberal repair credits are just a few possible throw-ins. Don’t be shocked if you hear, “Throw in that plasma TV and we’ve got a deal.” Consider in advance how far you’ll be willing to go, but draw the line, however, at “first-born child.”
• 4. Catch the wave at the source. Prepare your home for sale at the very earliest point this “spring” (actually early March or even late February), the time when seasonal buying interest is just starting to build.
• 5. Preserve your equity. Until the market stabilizes, refrain from borrowing from home equity (or raiding your 401(k), for that matter) to pay your bills, or for vacations and other purchases.
• 6. Gain in a sell-buy scenario. If you’ll be buying another home at the same time you’re selling your current one, the price reduction on the new one can compensate for the “loss” you’re taking on the old one. If you plan a “move up” to a better neighborhood and are paying 10 percent below list after selling your old home for 10 percent below list, your net dollar savings will actually be more.
• 7. Stay if possible. If you’re happy in your home and are meeting your expenses but want to sell due to continuing “housing bubble” fears, sit a spell. A home is a shelter first, and investment second. Except for a handful of markets that are still hyper-inflated, odds are that it will pay to ride out the storm. Generally, the early stages of a downturn are the scariest because that’s when amateur investors are dumping “spec” properties cheaply. 

7 buying tips for the down cycle:

• 1. Negotiate with builders. Don’t be afraid to ask builders for concessions such as steep price discounts, closing-cost waivers, luxury upgrades, free landscaping, free trips and free club memberships. Many builder-incentive packages are worth 10 grand and up! In some markets such as Boston, new condos are selling for 20 percent less than they were in mid-to-late 2005.
• 2. Negotiate with home sellers. Unlike the go-go market of recent years, offers of 5 percent to 10 percent or more under asking price will not be inappropriate. (See “selling tips” for some of the throw-ins that buyers are being offered.)
• 3. Educated timing. Read up on local – not national – market trends, religiously read for-sale ads, and get a sense of what’s moving and where, then be prepared to jump on bargains, especially as the last of the speculators are being flushed out of the market and for-sale inventories are at their zenith.
• 4. Avoid hot spots. Stay away from buying homes in neighborhoods that appreciated significantly above average home prices in recent years – especially if you’re moving for the short term. Once prices in these hot spots are corrected, these often see slower upward movement or remain flat after the overall market heads north again.
• 5. Modesty is the best policy. Consider more modest homes in well-maintained, established neighborhoods. By contrast, pricing and re-pricing on expensive homes, new homes and new condos make those products riskier during down cycles.
• 6. Flexibility. For maximum flexibility in pouncing on the right deal, get preapproved for your home loan.
• 7. Follow fundamentals. Just because a lender will advance you money to live or build beyond your means doesn’t mean you’re standing on sound fiscal footing. At year-end 2006, $330 billion of adjustable-rate mortgages, or ARMs, were creeping upward. Avoid risky interest-only loans and ARMs, opting for fixed-rate mortgages instead. And learn from the recent past: Don’t assume housing will appreciate enough in the near term to cover your home’s rising interest payments.

© 2007 Bankrate.com

The bull market in commercial real estate made 2006 a record year, and many believe 2007 will be just as good.
“There’s just a lot of cash in the system chasing assets that throw off a yield,” says Michael H. Winer, who manages the Third Avenue Real Estate Value Fund. “As long as the liquidity is there, the prices will hold up.”
Prices for a square foot of office space were up 17.2 percent in 2006 to $218, from $186 in 2005, according to Real Capital Analytics, a New York research firm. Warehouse and industrial space jumped 8 percent to $68 a square foot in 2006 from $63 in 2005. Retail space, such as malls and strip centers, was up 10 percent.
The increases in rents – up 2 percent in the third quarter alone – and the low vacancy rate, 13.5 percent, further supports the idea that 2007 will be rosy.

Source: The Wall Street Journal, Ryan Chittum and Alex Frangos (01/02/07) © Copyright 2007 INFORMATION, INC. Bethesda, MD http://www.floridarealtors.org/NewsAndEvents/n3-010307.cfm

Seeking happiness? An Australian researcher finds that making payments on a mortgage is a good way to feel better. Professor Bob Cummins of Deakin University told the Sydney Morning Herald that his studies of well-being have found that homeowners are more content than renters at all levels of income. Renters tend to be more footloose, Cummins said. Couples also find that holding a mortgage together increases their feeling of commitment. Oddly, events like the Sept. 11, 2001, terrorist attacks in the United States or the Bali nightclub bombing that killed scores of Australian tourists can also increase a feeling of well-being. “All of this created an amazing sense of external threat that Australia had not really had since World War II,” Cummins said. “This kind of threat caused people to bond much better.” But there’s nothing like a mortgage, especially for couples. “They have a clear investment in their combined future. People who rent have not made that kind of mutual commitment,” Cummins said.
Copyright © 2006 by United Press International
 

Charlotte County home sellers may have finally learned that the boom market is over — at least for now.

Supply and demand seem to be finding a new equilibrium in the Punta Gorda metropolitan statistical area, which also includes all of unincorporated Charlotte County, according to October existing-home sales figures released Tuesday by the Florida Association of Realtors.

Across nearly all Florida markets this year, housing inventory has piled up as potential sellers listed their houses at the high prices prevailing in 2005. But with more choices available, potential buyers have been able to shop for bargains, while leaving overpriced houses to sit on the market month after month. Read the rest of this entry »

Cities are struggling to adequately meet the housing needs of lower-income working families, those with disabilities, people in transition, and immigrant families. At the same time, three-fourths of local housing officials report that the spiraling cost of housing is significantly limiting the opportunities for homeownership for lower-income people and younger families. These findings are part of the State of America’s Cities Survey on Municipal Housing, released today by the National League of Cities (NLC) at its Congress of Cities conference, in Reno, NV.

The NLC survey found that securing safe and affordable housing is becoming more difficult for many cities, with one-third reporting that the availability of affordable housing has worsened in the past year.  Among the most significant challenges facing cities are the increasing number of foreclosures, need for home repairs among elderly and low-income families, deteriorating housing stock, absentee landlords and vacant and abandoned properties. In addition, one-third of local housing officials have seen predatory lending on the increase, with more than half indicating it is a problem in their city.

“Ensuring an adequate housing stock is just one of the major obstacles faced by cities in this decade but all the obstacles are linked together,” said Cynthia McCollum, second vice president of NLC and a council member from Madison, Ala, a suburb of Huntsville. “We are facing increasing numbers of older residents, more fiscal challenges, problems with crumbling infrastructure and a changing economic climate. We must work together to keep our cities strong, because without strong cities – large and small – our quality of life will diminish.”

Funding for city housing programs comes from a critical mix of government and non-governmental sources: 84 percent of cities receive some federal assistance, 72 percent state assistance, and 52 percent fund housing programs directly from city resources. About three out of four housing officials, however, reported that the federal and state governments are not doing enough. Read the rest of this entry »

Brevard County’s housing market continued to be in the doldrums in November, according to the latest statistics from the Home Builders & Contractors Association of Brevard.

The number of housing construction permits issued countywide in November was 235, down from 613 permits in November 2005 and down from a short-lived increase of 512 permits in October of this year.

Of the 235 permits issued last month, 201 were for single-family homes — the lowest number for single-family construction for any month this year. The 201 single-family permits in November were down significantly from earlier this year, when more than 400 single-family home permits were being issued each month.

“It’s been pretty serious. It’s going to get a little bit more serious before it gets better,” said Franck Kaiser, the association’s chief executive officer. Read the rest of this entry »

Happy Holidays to all of our Loyal Readers!

Buyers and sellers are waiting for the other to blink: The housing slowdown isn’t giving buyers the big bargains that they might have hoped; and where there are discounts, buyers aren’t leaping to grab them, says Karl E. Case, an economics professor at Wellesley College, who specializes in real estate. Case says the most recent survey he and a colleague conducted among homebuyers revealed growing pessimism about buying in a down market. “They’re scared they’re going to buy something very expensive that’s going to fall in value,” he says. Sellers, meanwhile, are being “stubborn. They seem to be holding out so far.” The result: “People are staring each other down.” Case described home prices as having “downward stickiness,” meaning they don’t fall nearly as much as they rise during the strong periods. In previous down periods, Case points out, the economy has been in a general slump. This time, in most parts of the country, the economy is growing and adding jobs. Case concludes the housing market is in “that flat period, of four to six quarters, where prices don’t plummet. They hold on.”

Source: The Boston Globe, Andrew Caffrey
© Copyright 2006 INFORMATION, INC. Bethesda, MD