Cape Coral Florida's Real Estate Guide

Could we see another buyer tax credit?

WASHINGTON - Aug. 31, 2010 - Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN's "State of the Union" that the administration would "do everything we can" to stabilize the U.S. housing market.

"The July numbers were worse than we expected, worse than the general market expected, and we are concerned," Donovan said. "That's why we are taking additional steps to move forward."

Whether HUD will resurrect the first-time homebuyer tax credit is up in the air. "All I can tell you is that we are watching very carefully," Donovan said on the show. "We're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers."

Gov. Charlie Crist appeared on the same show and supported a new version of the homebuyer tax credit, saying it would "help enormously," noting that Florida has the nation's third highest foreclosure rate.

Donovan also said the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.

© Copyright 2010 INFORMATION, INC.

Florida's existing condo sales rise in July

ORLANDO, Fla., Aug. 24, 2010 - Sales of existing condominiums in Florida rose 11 percent in July, with a total of 5,557 condos sold statewide compared to 4,991 units sold in July 2009, according to the latest housing data released by Florida Realtors®.

Eleven of Florida's metropolitan statistical areas (MSAs) reported higher existing condo sales in July, according to Florida Realtors. The statewide existing condo median sales price last month was $87,200; in July 2009 it was $108,500 for a 20 percent decrease. The national median existing condo price was $181,300 in June, according to the National Association of Realtors® (NAR).

Meanwhile, in the year-to-year comparison for existing home sales, a total of 13,589 single-family existing homes sold statewide last month compared to 15,762 homes sold in July 2009 for a decrease of 14 percent. Florida's median existing-home sales price in July was $138,000; a year earlier, it was $147,600 for a decrease of 7 percent. The median is the midpoint; half the homes sold for more, half for less.

"The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market," said Dr. Sean Snaith, director for the University of Central Florida's Institute for Economic Competitiveness. "As we move past this second dip, which is evident in the July data, the continued recovery of the state's housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.

"A healthy housing market depends upon a healthy Florida economy, and in particular, an improving labor market," Snaith added. "Job growth and a declining unemployment rate will help sales continue to grow while at the same time reducing the number of foreclosures in Florida."

2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville, noted that the Gulf oil spill, along with uncertainty over its impact, has affected the state's housing market.

"Along with many local businesses in the Florida Panhandle and in other Gulf Coast states, real estate has experienced significant economic harm following the Deepwater Horizon drilling rig explosion and oil spill," Davis said. "The announcement that a special allocation from the BP Oil Spill Fund is now available to help the claims of real estate professionals' - Realtors and licensees - over loss of income or sales due to the Gulf oil spill is a positive action that will help bolster the state's fragile economy recovery."

The national median sales price for existing single-family homes in June 2010 was $184,200, up 1.3 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $331,150 in June; in California, it was $311,950; in Maryland, it was $265,268; and in New York, it was $220,750.

More jobs continue to be key to the housing sector's recovery, according to NAR's latest industry outlook. "There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve," said NAR Chief Economist Lawrence Yun.

The interest rate for a 30-year fixed-rate mortgage averaged 4.56 percent in July, down from the 5.22 percent averaged in July 2009, according to Freddie Mac. Florida Realtors' sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

© 2010 Florida Realtors®

Most experts (61%) polled by Bankrate.com continue to predict little change in rates even as rates continue to fall. Still, 11% foresee further drops while 28% expect a rate increase.

WASHINGTON - Aug. 6, 2010 - Mortgage rates dropped to the lowest level in decades for the sixth time in seven weeks, offering the most attractive opportunity for those who qualify to refinance or purchase a home.

Government-controlled mortgage buyer Freddie Mac said Thursday that the average rate for 30-year fixed loans this week was 4.49 percent, down from 4.54 percent last week. That's the lowest since Freddie Mac began tracking rates in 1971.

The average rate on the 15-year fixed loan dropped to 3.95 percent, down from 4 percent last week and the lowest on record.

Rates have fallen since spring as investors seek the safety of U.S. Treasury bonds. That has lowered the yield on Treasurys. Mortgage rates tend to track those yields.

The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years.

Low rates have sparked some activity in the weak housing market, but not a massive boom in refinancing.

Applications to refinance loans increased 1.3 percent and those to purchase homes increased 1.5 percent, according to the Mortgage Bankers Association.

Nevertheless, high unemployment, slow job growth and tight credit have made it difficult for many to purchase homes. The housing industry received a boost this spring when the government offered homebuying tax credits, but housing activity has plummeted since they expired in April.

The number of buyers who signed contracts to purchase homes plunged in June to the lowest level on records dating back to 2001, according to the National Association of Realtors.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.63 percent, down from 3.76 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.55 percent from 3.64 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 a point for all loans.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.

OAKLAND, Calif. - July 29, 2010 - Emily Rennie's three-bedroom house in Oakland was a beauty in a sweet location. Walking distance to the lakeshore. Close to shops. A refurbished patio in the back. Inside, a modern kitchen with granite countertops.

Listed at $539,000 when she put it on the market, the Excelsior Avenue house was missing one crucial thing: The right price. After a few weeks with no offers, she cut the price to $499,000 in May. Then she cut it to $475,000 in June. She is still hoping for an offer.

Rennie is discovering the cold reality of post-housing-bust prices: No matter what she thinks her house is worth, what matters is what buyers are willing to pay. That can be a lot less in areas where the supply of houses for sale is swollen by foreclosures and short sales, often priced 20% to 30% below the ones being sold by financially healthy owners. Nationally, such properties account for a third of all sales three years after a historic chill blew over an overheated housing market.

Foreclosures "do make it harder to sell," acknowledges Rennie, who works in marketing communications. "People can get a really good deal."

Real estate professionals say Rennie is in good company. Nationally, 30% of the houses for sale were reduced in price in June, according to Zillow.com, an online real estate site. Plenty of sellers have trouble pricing their home against the foreclosed houses that lenders are trying to unload.

"It's one of the hardest things for sellers to do. They have an emotional attachment to their house," says Amy Bohutinsky, a spokeswoman for Zillow.com. "For sellers to understand how they should price, they should deeply understand their market and competition -- what's on the market now, not just what's sold."

Those who do that successfully don't have a problem.

"People who price their homes to the market are selling them in a reasonable amount of time, but people who cling to 2004 or 2005 prices aren't," says Richard Smith, president and CEO of Realogy, the parent company of Century 21, ERA, Coldwell Banker and Sotheby's International Realty. "If you take into account (bank-owned property) pressures, you'll sell pretty quickly."

Competition for bargains

Oakland and nearby San Francisco are two markets where foreclosures have a strong influence.

Nearly three of every 1,000 homeowners in Oakland lost their homes to foreclosure in May, according to Zillow. Foreclosure resales made up 36% of all sales in May, although that's down from a peak of 66% in March 2009.

Sellers have had to adjust. In June, 20% of the properties for sale in Oakland made price cuts, according to Zillow.com, compared with 15% in May. Drawn by falling prices, young professionals from San Francisco are coming across the bay to snap up homes in Oakland, and most of the stiffest competition for properties is in the top tier, around $808,000.

At that price, sellers in May paid 0.1% less than the asking price, according to Zillow. In all price ranges, they paid 0.3% less than asking price. Based on the median list price, that's $1,080 less than the last listing price.

But some agents are seeing bidding wars.

"We're seeing multiple offers; we're seeing above asking price," says David Kerr, a ZipRealty agent who represents buyers and sellers in Oakland. "People are buying foreclosures, fixing them up and selling them and getting offers."

Those who do take foreclosures into account and price their homes right cannot only find a buyer, but sometimes one who will pay well above what they're asking.

One such buyer was Rosa Verdin, 40, who bought a restored Victorian in north Oakland from a developer in May. The asking price was $450,000, which was well-priced, she says. She and her partner, Kelly Helms, 32, a nurse, offered $50,000 more, outbidding at least two other parties.

"We had been looking for six to eight months," says Verdin, 40, who works in graphic arts. "The location was centrally located to our work, the house was move-in ready and within our price points. Timing just seemed right, and the decision was relatively easy."

Not all offers go so smoothly. Even when owners find willing buyers, getting their price isn't a sure thing. Lenders generally require appraisals before giving a mortgage, and appraisers often take into account what foreclosed properties in the area sell for when determining how much a home is worth. If a home is being sold at too high a price, the sale can fall apart.

"Every day, sales fall apart," says Leslie Sellers, with the Appraisal Institute. "Smart sellers get appraisals done before they sell the home."

Neighborhoods buck trend

Other neighborhoods also show just how well good prices pull in successful offers.

In the heart of San Francisco, Noe Valley is home to dot-com millionaires and working professionals. The streets are lined with Edwardian and grand Victorian row houses built in the late 19th century, and the neighborhood, flanked by hills, features an eclectic array of coffee shops, sushi restaurants and lively bookshops.

The real estate market in San Francisco is struggling to regain its footing, with home prices down 0.7% from the third quarter of 2009 to the first quarter of this year. But in Noe Valley, most homes are going just above listing price. In May, homes sold for an average of 0.02% more than the last listing price, according to Zillow.com. Based on median list price, that translates into $218 more.

"It's crazy," says Brendon DeSimone, a Realtor with Paragon Real Estate in San Francisco, who represents buyers and sellers in Noe Valley. "I had one house with five offers, and it went from $1.4 million to $1.7 million. The valley has just popped. It's not uncommon for one open house to have 200 people come through."

Nationally, the average property takes eight to nine weeks to sell, down from 10 to 11 weeks a year ago, according to the National Association of Realtors. In Noe Valley in May, there were 25 listings that sold after averaging five weeks on the market.

As the overall housing market has tumbled, Noe Valley has take a hit, with home values down 17% from their peak in June 2008, according to Zillow.com. In the neighborhood, about 5% of home sales in March were foreclosure resales.

But Noe Valley remains a hot neighborhood for several reasons. Other neighborhoods such as Pacific Heights and the Marina District have already been in such demand that prices are often out of reach for younger families, DeSimone says. Noe Valley remains more affordable but still has the kind of row houses desired by families.

It's also closer to Silicon Valley than other neighborhoods in northern San Francisco, which shaves off about 20 to 30 minutes of commuting time (Google and Apple both have bus stops in Noe Valley). And many buyers want historic Victorians, so demand for homes in the neighborhood is strong.

That's why, when homes are priced well, they can set off a bidding frenzy -- even in an anemic real estate market.

Copyright © 2010 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.

PALM BEACH, Fla. - July 28, 2010 - With today's reduced property values and increased unemployment, it's tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.

Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.

But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.

"I want to be very clear on this, short sales are a better solution than a foreclosure, even when all the options in a situation where you lose your house are not great," said Mark Greene, owner and president of Short Sale Operations LLC in North Palm Beach.

The biggest difference between Florida and many other states when it comes to losing a home is the deficiency judgment.

While some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to go after borrowers for up to 20 years. That can lead to a garnishment of wages long after the home is gone.

In a short sale, where the bank agrees to take a lesser amount for the home than what is owed on a loan, lenders sometimes are willing to write off the deficiency on the front end.

Greene said in 90 percent of the cases he handles, the bank has waived its right to seek a deficiency.

That was the case with Jupiter resident Kathryn Lorello, who in 2008 found herself in a home she couldn't afford.

Following a divorce, and with three children, Lorello bought a $408,000 home that she lived in comfortably for a year. But then she lost her job as a manager of a real estate company.

She remembers the day the bank served the notice of foreclosure.

"I cried my eyes out," Lorello said. "That's when I panicked because I really didn't want it to happen."

Lorello got advice from Greene on doing a short sale.

Her bank, Wells Fargo, waived its right to seek a deficiency even though it ended up taking $200,000 less than what was owed on the loan.

Also, if a bank refuses to waive the deficiency in a short sale, it still would have to go back to court to seek a judgment.

In a foreclosure, at the end of the proceeding, a deficiency judgment is automatically awarded by the courts and the bank is free to seek a claim.

"In the past, people just wanted to move from the property and get on with their lives and didn't understand what the lenders' rights were in terms of pursuing a deficiency claim," said Paul Baltrun, director of loss mitigation at the LaBovick & La-Bovick law firm.

"I think people are more aware now about what can happen after the fact and that their nightmare can continue."

Another consideration is the effect of a foreclosure or short sale on credit.

According to the Fair Isaac Corp., which developed the widely used measurement of credit risk called a FICO score, the negative effect of a foreclosure is only marginally worse than a short sale.

But in Florida, a deficiency judgment from a foreclosure is likely to have a much larger impact that will prohibit your ability to buy another home for many years.

Daniel Poulos, a mortgage broker with Elite Lending in North Palm Beach who has studied the effect of foreclosures and short sales on credit, said unless a borrower pays off the deficiency, it may be 20 years before someone is eligible for another mortgage.

"That's the kind of information that's not getting out in Florida," Poulos said.

There are a few situations where some experts believe it is better for someone to go to foreclosure rather than do a short sale.

To do a short sale, a borrower must give all of his or her financial information to the bank before it will decide whether to allow the short sale. The idea is that if a person can afford to pay the mortgage, the short sale may be denied.

"Now the lender knows everything about your finances and they can better decide whether they will go after you or not," said Jon Maddux, CEO of YouWalkAway.com, a company that advises people on strategic defaults.

If a lender doesn't know your finances, Maddux argues, it reduces the chances it will go after you following a foreclosure.

"You might fly under the radar," he said. "With the millions of people going through this, they are probably going to go after the low-hanging fruit."

Copyright © 2010, The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Info