Values Dip Slightly

Case-Shiller Value Index number released today show a return to value decline of just under 1-half of 1-percent in October; the first month of decline since June. Don't dispair gentle readers; this is going to happen and is necessary since, if the rate of appreciation experienced in June through September was maintined, we'd be in a boom cycle similar to the middle of the decade. 

Making Home Affordable
On December 1st the Obama Administration announced efforts to revive efforts for loan modification and other options for homeowners caught in true financial hardship. 

Price Correctly and You'll SELL

Forbes Magazine has identitified the 10 most over-priced real estate markets in the country.  The comparison was the median initial list price to the median price when the property actually sold.  The smart seller, who prices correctly, will be able to take advantage of this condition and sell far more quickly than neighbors that tenatiously hold to prices that aren't market-based.

1. Orlando

2. Miami-Fort Lauderdale-Pompano Beach

3. Jacksonville, Fla.

4. Baltimore-Towson

5. Chicago-Naperville-Joliet

6. San Antonio, Texas

7. Denver-Aurora

8. Tampa-St. Petersburg-Clearwater

9. Indianapolis-Carmel

10. Austin-Round Rock

Tax Credit Extended!

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

Extends the First-Time Home Buyer Tax 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.

Who Qualifies for the Extended Credit?

First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

The price of the home.

The buyer's income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Source: National Association of Realtors

Value Stabilization Continues

The Monthly Case Shiller Value Analysis data were released today. One of the sets provided by this analysis measures values in terms of tiered pricing; lower-priced homes, mid-priced and high-priced. I've been plotting the numbers for South Florida from the peak of the market to the present. It appears that values are leveling off as follows:

Low-Priced Tier (up to $267,899 at peak) reduced just over 60% today

Mid-Priced Tier (between $267,899 and $393,966 at peak) reduced around 50% today

High-Priced Tier (over $393,966 at peak) reduced by roughly 42% today.

While this stabilization seems logical against historical trends, the big spectre right now is a looming surge in foreclosures yet to hit the market. Some prognosticators predict a significant increase in the inventory of un-sold homes in coming months...so stay tuned.

More (less-guarded-than-ever) Good News

The Case Shiller Index findings for July were released today. You'll hear about this index in the news but it's important to remember that all real estate is LOCAL so I've been tracking the index for the Miami/Fort Lauderdale market. Last month's findings were exciting when the monthly decline reversed for the first time since early 2007. The numbers released today indicate further evidence that the market bottom or NEW NORMAL for single family homes is being determined now. Call me if you'd like an estimate of the value of your home in the NEW NORMAL.

Condo Getaway

...or if you're want to try out your French accent...pied-à-terre.

On the bright side of the recent market change; small condos-in-the-sun are once again attainable for a reasonable price. If you'd like to get started looking for a place of your own, click the link below and browse the selection of units I've identified as "Best Buys". If you see something of interest, click on the "Request More Info" button and I'll respond with more information.

Condo Getaway

'Distressed' Sales Diminishing

At the beginning of this year, single family home sales were dominated by foreclosures (REO) and short sales. As can be seen in this chart, the tide has turned and Arms-Length sales again represent the majority of units sold on a monthly basis. Perhaps another sign of an improving situation for the real estate market.

ZERO Never Looked So Good

June was the first month single family home values didn't decline since February 2007 according to Case-Shiller Index results published yesterday. In fact, the exact change in single family home value in South Florida was an increase of .54%

Of course, one month does not a market-change make but the numbers have been pointing toward this eventuality for a few months now. This should give buyers a green light to move forward and homeowners/sellers some solace that the worst of the decline is over.

There are lots of comparable sales now to help buyers and sellers determine what the 'new normal' is. Feel free to give me a call to find out what values are in your area of interest.

The 'End' in Sight?

We're starting to see some credible data to support a prediction of the market bottom. Once again I look to my revered Case-Shiller Index (remember Robert Shiller got it right in the heady years of the market boom) and have plotted the actual index against what I'm calling 'normal appreciation' (the average increase of home values for the 13 years before the boom began).

The large chart shows the 22 year history of the index measurement in South Florida; the inset focuses on the change so far in 2009. As you can see, the actual value index (the top line) is rapidly moving toward the 'normal' trend line below.

I suspect we'll see these lines cross as actual values will fall below the trend line as an over-correction is likely but I also sense values will fairly rapidly rise to return to the trend after bumping along the bottom for a few months.

OK...there you have it...I'm on the limb with a prediction (sort of). In any event, it's a great time for buyers (with better housing value and low interest rates) and sellers with long term equity can pretty closely predict the value of their property by applying the trend appreciation from their date of purchase (especially if that purchase was before 2001).

What's Normal?

OK chart-junkies...here's anther creation. I plotted the Case-Shiller value index for the 22 years the index has recorded data for South Florida. I split the chart up into:

"Normal" 1987 to 2000

"Boom" 2001 to 2006 and

"Bus..."; I mean "Change" 2007 to present.

This study would suggest that normal appreciation of single family homes is about 2.98% (the annual rate for 1987 to 2000). We experienced over 100% appreciation in just 5 years and have given back just under 65% in the last few years.

Case-Shiller Value Index

Much has been reported in the media about the positive housing trend suggested by the most recent release of Case-Shiller Index results. As with any national statistic, it is important to remember that real estate is a LOCAL enterprise and national trends will not necessarily apply to this market. Some markets in the country showed an increase in property value in May 2009 (the most-recent month reported by Case-Shiller). In the results for South Florida, values continue to decline but appear to be flattening out. Depicted here are Shiller's 'tiered price' index; you will note that moderate and lower priced single family homes seem to be making the turn while higher priced homes continue a fairly downward trajectory.

Mortgage Rates

“Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields,” said Frank Nothaft, Freddie Mac vice president and chief economist. “For instance, the Federal Reserve reported in its July 29th regional review that residential real estate markets in most of its districts remained weak, but many reported signs of improvement. In addition, it noted that entry-level homes continued to perform relatively well in part due to the first-time homebuyer tax credit.

Up a bit again...

Once again sensitive mortgage markets responded to hints of improved housing statistics with rates up just a bit over last week. Rates continue to be very favorable for qualified buyers interested in taking advantage of the great buys still out there.

'Gotta Love Fort Lauderdale

Cowabunga!
Thank you,

Jim Demarest, GRI
Keyes Company Realtors
(954) 647-4713

Sent by wireless PDA to avoid delay

Sales Analysis for June

Distressed sales (foreclosures and short sales) continue to drive unit sales in Broward County.

Monthly Value Change

According to data just released by Case-Shiller, prices on single family homes in the Miami-Fort Lauderdale market fell 2.08% in April. The attached chart plots the change in value from the peak of the market to present. Case-Shiller statistics are delayed two months to better ensure accuracy with transactions have been officially recorded in the public record.

Monthly Sales Analysis

The single family home market was once again dominated by forclosures and short sales in unit sales in May. Looking back however, the proportion of 'Distressed Sales' is shrinking compared to 'Arms Length' transactions.

Mortgage Rates at 7-Month High

“Mortgage rates followed the increase in bond yields this week as the May employment report showed that the economy lost fewer jobs than the market consensus had expected,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Revisions to the jobs report for earlier months also showed the job loss was not as large as early estimates had indicated: March and April figures were revised to add an additional 82,000 jobs to the work force. As a result, federal funds futures rose after the report, signaling that the market expects the Federal Reserve may raise its benchmark rate sooner rather than later.

Ya' Just Can't Keep a Good Real Estate Market Down

The numbers keep pointing to a much healthier market from the moribund months of the last few years. Buyers are responding to a steep decline in property inventory and finally finding value in properties as prices return to a state of true-affordability. Over half of all sales are 'distressed' (either foreclosure or short sale) but most of us are seeing that a lot of the 'great buys' are sold already. It's still unclear what the impact of the predicted second-wave of foreclosures (driven more by the down economy/unemployment) will be but all indications are that it is a great time for qualified people to purchase real estate.

Details on $8,000 Tax Credit Loan at Closing

The details for the implementation of advance loans for the "$8.000 tax credit" are slowing filtering in. There had been conflicting information related to the down payment requirement for FHA loans. FHA mortgages require a 3.5 percent down payment, and the $8,000 tax credit cannot be used to override that requirement. Once the 3.5 percent down payment requirement has been met, however, the tax credit can be applied to additional costs, including a higher down payment, paying points to lower the mortgage rate, and/or closing costs. Lenders will treat the tax credit money as a second lien on the home until it’s paid back.



The best source to determine exactly how this credit can be applied to a transaction you're considering is your mortgage lender.

Catastrophic Insurance Plan

Rep. Ron Klein has re-introduced a plan to pool catastrophic property insurance risk among 30 or so states. This could help reduce high property insurance rates in Florida and other 'high-risk' areas of the country. The proposal is similar to one he authored two years ago but failed to gain traction due, in part, to opposition from the Bush Administration.

Rep. Klein's website offers details on the proposal and a link to the actual bill.

http://klein.house.gov/?sectionid=57&sectiontree=23,57&itemid=687

Thank you,

Jim Demarest, GRI
Keyes Company Realtors
(954) 647-4713

Sent by wireless PDA to avoid delay

County Assessments Updated by June 1

The county property appraiser has committed to having assessed values posted by the first of June. To check the value of your property use the Broward County website http://www.bcpa.net/ , click on 'Property Search' and follow the look up instructions.

What More Can I Say About INTEREST RATES?

Mortage rates continue to be a great aspect in this buyers' market. For example, the purchase of a $250,000 home at the interest rates in place last July would've cost about $250.00 more than a purchase today. That's an annual savings of $3,000.00 (a nice vacation...perhaps?)

Is the END Near?

There are a lot of interesting trends developing to suggest that the real estate market might be approaching a turning point toward a healthier state. The charts in this post present the inventory of available properties in terms of months' inventory. This is derived by dividing the number of properties on the market by the number of sales for the month. A 'normal' market has an inventory of 12 months or less. It is encouraging to see steady progress toward that level.

Sales Analysis for April

Once again distressed sales (Foreclosures and Short Sales) dominated the numbers of single family homes sold in April. The number of distressed sales represented just under 61% of total sales in the month with dollar volume of 56.7%.

Better Economic News Lifts Mortgage Rates Slightly

This week provides a sign that the great mortgage rates we've been enjoying won't last forever. As we raise out of the recession, interest rates will follow. There are lots of great buys out there folks and these historically low interest rates coupled with a tax credit for those who qualify make this the year to BUY!

Average Rates Repeat Historical Low

Average interest rates again met the historically low rate of 4.78% this week. The interesting thing to note is how much rates have dropped since just October of last year (see chart). In real-money terms this means that a mortgage of $200,000 would have a payment about $220 lower today than one taken out in October.

These rates make this an even more inviting market for buyers and with the inventory of un-sold homes shrinking, NOW is the time to get serious.

Open House

1300 S Ocean 9th floor. $848,900

Listing Agent: Jocelyn Blaylock, Keyes

This Week's Best Buys

Click on the link below to see the homes priced in the 'sweet spot' in the Imperial Point area. Call me to see any of these great properties.

Imperial Point Best Buys

New Listing to Pending Sale Ratio

In my never-ending quest to find good news in the real estate market; let me share this fun statistic. The chart to the right depicts the change in a ratio that represents how many new listings are being 'canceled out' by listings coming off the market through a pending sale.

The curve of this graph was consistently in a downward direction as the market cooled as inventory of properties on the market expanded while sales volume declined. The graph (you guessed it) flattened out as we were in the doldrums in 2007 and 2008 so the apparent upward trend is a great sign moving forward.

Monthly Numbers

Gather 'round chart-lovers here are the graphical statistics for March. Sales are up and the available inventory is going down all pointing toward a more normalized real estate environment.

Interest Rates Still Low

....so why aren't you BUYING??? ;)

Distressed Sales in March

Distressed Sales (foreclosures & short sales) represented about 36% of the dollar volume of all sales in the month of March. This is the third successive month of diminished dollar value at about the same percentage of units sold throughout the period. This is yet further evidence of banks and owners lowering prices to attract buyers into the marketplace.

Slight Uptick

In what looks like a case of dyslexia, average rates rose from the historical low of 4.78% to 4.87%. These low rates have resulted in a substantial increase in new loans and refinacings for the 5 weeks ending on April 3rd. New loans increased 22% in the period and refinancings were up 129% according to the Mortgage Banker's Association.

Average Mortgage Rates Continue Falling

Average mortgage rates, as reported by Freddie Mac, continued to fall within the record setting territory reached last week. Continued reports of a weakening economy along with infusions of funds from the Federal Reserve have been keeping mortgage rates at these levels.

Mortgage Interest Rates Hit Record Low

Average mortgage interest rates reported by Freddie Mac hit the lowest rate since Freddie began measurement of rates more than 30 years ago.

“The Federal Reserve’s announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for 30-Yr FRMs peaked last year at 6.63 percent on July 24th. With this week's 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amounts to a savings of about $225 in monthly mortgage payments for a $200,000 loan.

“And potential homebuyers are taking notice of these historically low mortgage rates. Both new and existing home sales rose 5 percent in February. First-time homebuyers accounted for half of all existing home sales, according to the National Association of Realtors®. In addition, mortgage applications for home purchases consecutively rose over the first three weeks in March, based on figures published by the Mortgage Bankers Association.”

What a Trillion or so can do....

If we view the mortgage funds supply like a python...imagine it just ate a rhinoceros. The Federal Reserve "fed the python" a little over a trillion dollars this week in yet another attempt to get funds into the hands of people willing to spend them. Average mortgage interest rates fell to just under 5% just a tad above it's most recent low in January of this year. I suspect rates will fall even lower as the markets absorb the impact of the Fed's infusion. Is this a great time to be a buyer or WHAT?

Up a Little Down a Little

..with the best news being that rates remain around 5%. Contrary to what is often heard in the media, lenders ARE making loans, particularly on single family homes. The qualifications have returned to traditional ratios of income and expenses but prices on homes have come down considerably so a home is within reach for many.

Sales Units Increase as Prices Fall

February statistics show sales on a steady increase, up 19% for the first two months of this year. What's driving this, of course is a fairly steep continued drop in the average price, down 41% in January and February (as compared with 2008). The inventory of properties on the market continues to fall along with the increase sales activity and a slowing of new listings as sellers (who have the luxury) evaluate their options.

Broward County Sales Analysis

More interesting numbers on closed sales with 'distressed' properties (foreclosures/short sales) leading in UNITS SOLD but trailing in dollar volume as measured against non-distressed homes. The average number of days on market for a foreclosure property is 76; 198 for a short sale and 121 for non-distressed. Note that statistics are for single family sales as reported by the Realtor Association of Greater Fort Lauderdale.

Is Anything Selling?

Here's a case in point of what's happening in our market these days. On February 20th, I started a new section of this blog to identify what I perceive as "Best Buys" in targeted neighborhoods. The first neighborhood was my own, Imperial Point in which I identified 5 properties as Best Buys. I noticed today that THREE of the five are now UNDER CONTRACT. The lesson is that properties, priced correctly WILL SELL!

Victoria Park-Lake Ridge Best Buys

We're all hearing it's a 'Buyers' Market'; here are a few that I feel are the best buys in the Victoria Park/Lake Ridge area as of this week. Click on the link below to see what I've found. Call me if you'd like more information on any of these great homes!

Victoria Park/Lake Ridge Best Buys

Weekly Intrest Rates Up due to Bond Yields

"Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008," said Frank Nothaft, Freddie Mac vice president and chief economist. "Real Gross Domestic Product was revised from a 3.8 percent decline to a 6.2 percent drop in the fourth quarter mostly led by a 4.3 percent fall in consumer spending, which was the largest decrease since the second quarter of 1980.
"The housing market continues to slow as well. New home sales fell 10.2 percent in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7 percent, the weakest since the series began in January 2001. More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization."

Summary of 1st Time Homebuyer's Tax Credit
There is GREAT news for first-time home buyers. The Federal Stimulus Bill of 2009 provides great incentives for those interested in purchasing homes this year. While many homes are at an all-time low price, this is the time to get serious and start looking. While prices might drop slightly as the market turns, the home of your dreams may be purchased by someone slightly quicker to make a move. Don't delay any longer if you or anyone you know are seriously interested in finding your dream home.

A summary of the new law follows:
1. Up to $8,000 for new buyers: This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. This credit does not have to be repaid.
2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

So, if you are ready to take advantage of this opportunity, contact me immediately. Interest rates are phenomenal and the inventory, while shrinking, still provides a large number of homes from which to select yours.

Average Mortgage Rates Up Slightly

Freddie Mac's Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.07 percent with an average 0.7 point for the week ending February 26, 2009, up from last week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.24 percent.

"Mortgage rates were little changed this week amid mixed data reports of a slowing economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Both the core Producer Price and Consumer Price Indexes ticked up in January, higher than the market consensus, while consumer confidence in February fell to the lowest reading since records began in January 1967.
"Lower house prices and affordable mortgage rates have yet to spur housing demand. For instance, house prices declined by 8.7 percent for the 12 months ending in December 2008 and were down 10.9 percent from their highs set ion April of 2007, according to the Federal Housing Finance Agency's purchase-only monthly home price index. However, existing home sales (excluding condominiums and co-ops) fell 4.7 percent in January to 4.05 million units (annualized), the slowest pace since July 1997."

Case-Shiller Index Findings for Miami/Fort Lauderdale
The market value of single family homes in the Miami/Fort Lauderdale market declined 2.7% in December. The decline is a bit higher than November (-2.1%) but an improvement from the years’ steepest decline of -4.51% in March. Based on this index the value of single family homes decreased an average of 33.52% for 2008.

Case-Shiller Index Tiered Value for Miami/Fort Lauderdale
The index through December shows continued rapid decline in the “high tier” (lime green line). More valuable homes withstood the decline early in the changed market but forces seem to be catching up now.

The statistical references used for High/Medium/Low have changed as follows from the peak in 2006:

While difficult for many sellers, the continued downward pressure on the average price of a home will improve the affordability of our market and hopefully lead to a more vibrant real estate environment.

Upside Down?
Thanks to a recent agreement with the Keyes Company, I am now able to bring the resources of Short Sale Operations, LLC to homeowners who qualify. I'll apply all the tools of marketing and representation simultaneously with Short Sale Operations' efforts in negotiation and follow up with lenders. Call today to discuss if a short sale is possible in your situation:

A seller may qualify for a short sale if:

1. Their liabilities exceed assets
2. There is insufficient income, after reasonable living expenses, to make mortgage payments
3. The seller understands that they will not receive any money from the sale of the property
4. The seller understands there is no guarantee; however their Realtor and Short Sale Operations, LLC will work diligently to close a successful short sale transaction.

Imperial Point Area Best Buys

We're all hearing it's a 'Buyers' Market'; here are a few that I feel are the best buys in the Imperial Point area as of this week. Click on the link below to see what I've found. Call me if you'd like more information on any of these great homes!

Imperial Point Area Best Buys