When Bad News is Good News
Up until three or so years ago, a statistic of just under 10% decline in single family home value would've caused pandemonium and panic. Today's year-end number from the Case Shiller Value Index of 9.91% decline for 2009 has only to be compared to 2008's 28.79% drop to find the silver lining. December's monthly depreciation was just a bit less than three-tenths of one percent, again a far cry from monthly depreciation of as much as 4.5% in 2008.


So another year, one of RECOVERY this time, is behind us. It's going to be a bumpy ride in 2010 but sales volume remains high, the inventory of unsold homes has gone way down and if we start to see some recovery in the economy; we'll be on our way again.

At Risk of Foreclosure?-Take ACTION!


If the financial burden of owing your home is becoming overwhelming, the WORST thing to do is nothing.  The US Department of Housing and Urban Development suggests these steps to avoid foreclosure:
Whether you're in foreclosure now or worried about it in the future, the Department has information that can help. Click here for the list (with links to contact information).

Get Help Now!

Talk to a foreclosure avoidance counselor
Contact the Talk to your lender
Contact the Find state and local foreclosure resources
Contact the Contact HOPE NOW

Keep Your Home
Are you at risk of foreclosure?
Contact the Tips for avoiding foreclosure
Contact the Foreclosure scams

Refinance Options

Making Home Affordable Program
Contact the Learn about HOPE for Homeowners
Contact the Who to call when a lender won't work with you

If You Can't Keep Your Home

Redemption period - your last chance to save your home
Local renting resources
Contact the Rental assistance
Contact the Relocation resources
Contact the U.S. Postal Service Movers Guide

Foreclosure Surge?

I've been tracking 'distressed' single family home sales verses arms-length (normal??) for about a year now. As you can see in this chart, REO (foreclosures) dominated sales in Broward County in percentage of units sold early last year (the blue line is above the green line). The trend changed in April '09 as arms-length sales represented the majority compared to foreclosures and short sales. January provided an interesting turn with foreclosures again edging above. One month doesn't tell the complete story but this is a statistic to keep an eye on.

This FREE audit can save you money and help the environment.


The American Homeowners Foundation (AHF) has developed a free Home Energy Audit to help homeowners reduce energy consumption and costs. The audit takes about ten minutes and identifies opportunities for homeowners to improve the energy efficiency of their home in the most cost effective manner.

It is easy to perform the self-directed audit, requiring only a flashlight, a ruler, screwdrivers, and a printed copy of the three page audit questionnaire to keep track of your score. “It takes about ten minutes to walk through a typical home and fill out the questionnaire,” according AHF President Bruce Hahn. “It will help you identify many inexpensive do-it-yourself opportunities like caulking, where a few dollars in materials can save hundreds of dollars this year and into the foreseeable future,” he added.

A typical U.S. home has over 1/2 mile of gaps and cracks. Through those cracks around windows, doors, and electrical outlets flow your hard-earned dollars. More energy is wasted in many other areas of the home as well. The resulting costs will continue to mount as energy prices increase. Energy waste in American homes is also a significant contributor to global warming.

The federal government, and many states, offer incentives to encourage homeowners to make their homes more efficient. On December 8, 2009, President Obama proposed a new “Cash for Caulkers” program that would reimburse homeowners for up to $12,000 in spending on home energy efficiency improvements. The President’s proposal is in addition to the 2009 American Recovery and Reinvestment Act, which provides more than $25 billion for energy efficiency, as well as the Emergency Economic Stabilization Act of 2008 and the Energy Independence and Security Act of 2007. The 2007 and 2008 laws provide incentives for highly efficient new homes, home improvements, heating and cooling equipment, and appliances. In 2010, you can get a 30% income tax credit, capped at $1,500, for expenses on installing energy efficient windows, doors, roofs, and heating and cooling equipment in your home, or adding to your current insulation. More details on incentives are available on both the Internal Revenue Service and Department of Energy websites.

There are many other things homeowners can do to reduce home energy costs. Many of them are lifestyle related. While inside your home wear warmer layered clothing in the winter, and light and loose fitting garments in the summer. You'll use less energy for heating and cooling. Try to spend more of your time in warmer parts of your home in the winter, and in the coolest part of your home in the summer and you’ll also use less energy for heating and cooling. The top floor of the south side of a home is usually the warmest and the lowest level of the north side is usually coolest.

There are other ways for homeowners to save energy as well. Today you can buy most products on the Internet for less than their price at a mall. You’ll also save time, money spent on gasoline, and wear and tear on your vehicle.

In addition, the postal carrier, UPS and FedEx trucks are coming down your street anyway, so there’s no added environmental impact in getting the product to your home. The gas you’re not using will help to reduce global warming (and the reduction in gasoline consumption will help keep gas prices lower).

Today many jobs can be performed effectively in a home office. More employers are supporting telecommuting now that technology is friendlier to working at home. Think about asking your employer if you can telecommute. A car parked in the driveway is even more energy efficient than a hybrid vehicle, and you’ll be helping to reduce rush hour traffic jams and pressure on your state’s transportation infrastructure.

For a free copy of AHF’s ten minute energy audit, simply send an email to AHF@AmericanHomeowners.org with the words “Free Ten Minute Home Energy Audit” in the subject line. The Foundation will email it back to you in Microsoft word format.

Home Values Flat In November

The Case Shiller Value Index figures for November 2009 were released today.  Values in the South Florida market for single family homes remained flat resulting in an annualized change of -9.65% for 2009.  While this may not sound like great news; it represents a pretty dramatic turn-around from 2008 when values declined 29.44%.  The correction continues but the days of free-fall are (hopefully) over.

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

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