Sales of new homes dropped sharply last month to the slowest pace on record, falling 12.4% over June numbers WASHINGTON (AP) – Sales of new homes dropped sharply last month to the slowest pace on record, the latest sign that the economic recovery is fading.

The Commerce Department says new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963.

Economists surveyed by Thomson Reuters had expected a pace of 330,000.

June’s sales figures were revised downward to an annual pace of 315,000. May’s figures were revised upward and are now the second-slowest pace on record.

The median sales price in July was $204,000. That was down 4.8 percent from a year earlier and down 6 percent from June

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WASHINGTON – June 30, 2010 – According to a new report from RealtyTrac, foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010. Additionally, the average sales price of properties sold while in some stage of foreclosure was nearly 27 percent below the average sales price of properties not in the foreclosure process.

A total of 232,959 U.S. properties in some stage of foreclosure – default, scheduled for auction or bank-owned (REO) – sold to third parties in first quarter 2010, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.

“First-time homebuyers and investors continue to buy foreclosure properties in large numbers and at substantial discounts,” says James J. Saccacio, chief executive officer of RealtyTrac. “As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration.”

The average sales prices on properties in some stage of foreclosure decreased 23 percent from 2006 to 2009, while the average discounts on foreclosure purchases steadily increased from 21 percent in 2006 to 27 percent in the first quarter of 2010. Discounts on REOs are larger than discounts on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common.

Also from the RealtyTrac report:

• Foreclosure sales increased 2,500 percent from 2005 to 2009.

• More than 1.2 million U.S. properties in some stage of foreclosure sold to third parties in 2009, an increase of 25 percent from 2008 and an increase of nearly 327 percent from 2007.

• Total foreclosure sales in 2009 were up more than 1,100 percent from 2006.

• Foreclosure sales accounted for 29 percent of all sales in 2009, up from 23 percent in 2008 and up from 6 percent in 2007.

• The average sales price of properties that sold while in some stage of foreclosure in 2009 was 25 percent below the average sales price of properties not in the foreclosure process. That was up from an average discount of 22 percent in 2008 but down from an average discount of 26 percent in 2007.

• The average foreclosure discount in 2005 was 35 percent, driven by a nearly 50 percent discount on REOs; however, the discount on pre-foreclosures trended up slightly over the same five-year period, from nearly 12 percent in 2005 to 15 percent in 2008 and 2009.

• Nevada, California, Arizona posted the highest percentage of foreclosure sales in the first quarter. Foreclosure sales accounted for 64 percent of all sales in Nevada in the first quarter, the highest percentage of any state. California posted the second highest percentage, with foreclosure sales accounting for 51 percent of all sales there in the first quarter – up slightly from 50 percent in the previous quarter but down from 70 percent of all sales in the first quarter of 2009. Foreclosure sales as a percentage of all sales were also down in Arizona from the first quarter of 2009, but the state still posted the third highest percentage in the first quarter, with foreclosure sales accounting for 50 percent of all sales.

• Other states where foreclosure sales accounted for at least one-third of all sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho and Oregon.

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Statewide sales up 15% compared to June '09; condo sales up 33%. Fla.'s June home median price higher than May's
Sales of existing homes in Florida rose 15 percent in June, marking 22 consecutive months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

A total of 18,038 single-family existing homes sold statewide last month compared to 15,732 homes sold in June 2009, according to Florida Realtors. June’s statewide existing home sales increased 7.7 percent over statewide sales activity in May. Meanwhile, last month’s statewide existing-home median price of $143,400 was 2.1 percent higher than May’s statewide existing-home median price of $140,400. It marks the fourth month in a row that the statewide existing-home median price has increased over the previous month’s median.

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in June, while 16 MSAs posted increased existing condo sales. A majority of the state’s MSAs have reported increased sales for 24 consecutive months.

Florida’s median sales price for existing homes last month was $143,400; a year ago, it was $147,700 for a decrease of 3 percent. 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 May 2010 was $179,400, up 2.7 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $324,430 in May; in Massachusetts, it was $299,000; in Maryland, it was $249,177; and in New York, it was $194,900.

More jobs are key to the continued recovery of the housing market, according to NAR’s latest industry outlook. “If jobs come back as expected, the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions,” said NAR Chief Economist Lawrence Yun. “We’ll also keep a close eye on market conditions on the Gulf Coast.”

In Florida’s year-to-year comparison for condos, 6,916 units sold statewide last month compared to 5,215 units in June 2009 for an increase of 33 percent. The statewide existing condo median sales price last month was $95,000; in June 2009 it was $112,800 for a 16 percent decrease. The national median existing condo price was $181,300 in May, according to NAR.

The interest rate for a 30-year fixed-rate mortgage averaged 4.74 percent in June, down from the 5.42 percent averaged during June 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Tampa-St. Petersburg-Clearwater MSA reported a total of 3,226 homes sold in June compared to 2,848 homes a year earlier for a 13 percent increase. The market’s existing home median sales price was $138,400; a year earlier it was $139,400 for a decrease of 1 percent. A total of 912 condos sold in the MSA in June compared to 671 units sold in June 2009 for an increase of 36 percent. The existing condo median price was $99,100; a year earlier, it was $113,300 for a decrease of 13 percent.

© 2010 Florida Realtors®

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Power South Realty specializes in Palm-Aire Cypress Estates.  Cypress Estates in Palm Aire is one of the most unique and desirable neighborhoods in Pompano Beach, built between 1972 and 1982 .

These beautiful luxury homes vary in size and style. Large Walk-In Closets and Very large driveways are also included in this community. Most properties have private pools and fenced in backyards making it peaceful for owner to enjoy South Florida great weather. We welcome you to come join our community at Cypress Estates. Call us any time 954-640-7777

Tags: Palm-Aire Pompano | Palm Aire Pompano Beach | Palm Aire Country Club | Palm-Aire Real Estate | Palm Aire Realty

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The Index dropped 30% to 77.6 in May - 15% from one year earlier - following expiration of the tax credit

Following a surge driven by the homebuyer tax credit, pending home sales fell, according to the National Association of Realtors® (NAR). To qualify for the credit, homebuyers needed a signed contract by April 30, 2010.

The Pending Home Sales Index (PHSI), a forward-looking indicator, dropped 30.0 percent to 77.6 based on contracts signed in May from a reading of 110.9 in April, and is 15.9 percent below May 2009 when it was 92.3. The falloff comes on the heels of three strong monthly gains as homebuyers rushed to take advantage of the tax credit.

The data reflects contracts and not closings, which normally occur with a lag time of one or two months. However, many closings have been delayed recently from a rush of buyers into the system and slow processing of short sales, in addition to the heavy volume and a more thorough loan underwriting process.

“Consumers are rational and they rushed to meet the (April 30) tax credit eligibility deadline in April,” says NAR chief economist Lawrence Yun. “The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June. Surprisingly, though, some local markets such as Portland, Maine, and Jacksonville, Fla., actually experienced an increase in contract signings from a year ago without the tax credit.

“Existing-home sales that close in June will remain elevated, but we’ll then see a notable decline for July and August.”

A lapse in the National Flood Insurance Program also contributed to the decline in new contracts. Many lenders were hesitant to approve mortgages on homes that require flood insurance without congressional action, and numerous sales have been on hold.

Yun noted that the tax credit broadly stabilized home prices. “Without the tax credit, there will be more aggressive price negotiations between buyers and sellers,” he says. “The key test on whether the housing market can stand on its own without stimulus medicine will depend critically on private sector job creation in the second half of the year. We’ll also keep a close eye on market conditions on the Gulf Coast.”

Through May of this year, 495,000 net private sector jobs have been created; NAR’s forecast for employment growth is about 1 million additional net new jobs over the balance of the year and another 2 million in 2011.

“If jobs come back as expected, the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions,” Yun said.

“In most areas of the country there will be no sharp snap back in home prices in the upcoming years, although some local markets have experienced double-digit gains this year,” Yun said. NAR forecasts the national median home price to rise only 4 percent cumulatively over the next two years.

“One factor that could lead to price acceleration in upcoming years for some markets is if the very low levels of new home construction were to persist for another year or two,” he added.

The PHSI in the Northeast fell 31.6 percent to 67.0 in May and is 14.8 percent lower than May 2009. In the Midwest the index dropped 32.1 percent to 70.8 and is 20.2 percent below a year ago. Pending home sales in the South fell 33.3 percent to an index of 82.5, and are 14.4 percent lower than May 2009. In the West the index declined 20.9 percent to 85.3 and is 15.1 percent below a year ago.

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Fla. state courts recorded about 25% fewer foreclosures than they did last year and almost 10% less than in 1Q 2008
The number of foreclosure filings for the first quarter of the year is down significantly compared to the past two years.

According to the Office of State Courts Administrator, the number of foreclosure filings for January through April stand at 105,149. During that same period in 2009, there had been 143,936 filings and in 2008 there were 111,337.

"Is it where it could be?" asked Miami-Dade Judge Jennifer Bailey, who chaired a Florida Supreme Court task force on the foreclosure crisis. "No. Is it getting better? Yeah."

The crush of foreclosure cases has been an ongoing problem for the state court system as the state budget tightened and they had fewer people to handle the massive amount of paperwork associated with foreclosures.

The result was a painful process for homeowners and lenders.

The number of cases created a huge backlog in courtrooms, with cases that once took three months getting dragged out to six months. In 2007, the court recorded 182,044 foreclosure filings. In 2008, that number jumped to 368,742 and increased again in 2009 to 399,120 filings.

Bailey said the numbers in Miami-Dade follow the statewide trend, though there is still an immense caseload compared to several years ago when the housing market was booming.

At the order of the Florida Supreme Court, local court systems have created foreclosure mediation programs over the past several months to ease the process by bringing all the parties together before it heads to court.

Sometimes it works and the parties settle. Other times it doesn't.

"I believe we're seeing a whole lot more 'work-outs' than we were before," Bailey said.

It's still too early to tell though if the mediation programs will have the desired impact overall, Bailey said. Some judicial circuits created their programs recently, and even in Miami-Dade, which established a program before the Supreme Court ordered it, there are still a few hiccups.

Getting borrowers to the table has also been difficult sometimes because phone landlines have been disconnected and other contact information has not been provided. But for the cases where all sides can get to the table, it has been working out, Bailey added.

"For those institutions that have realized what an opportunity this is to keep their costs down, those cases are settling," she said.

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Reasons not to walk away: Fla. lenders who lost money have 5 years to file a lawsuit and the IRS could tax forgiven losses

FORT LAUDERDALE, Fla. – June, 2010 – Before Thomas unloaded his Pompano Beach, Fla., home last fall for a fraction of what he paid, he cut a deal that will keep him from worrying about a huge debt hanging over his head.

Thomas insisted that his lender, American Home Mortgage Servicing, agree not to come after him for the estimated $174,000 he still owed on his two mortgages. "I feel incredible relief," the 32-year-old restaurant manager said last week.

Others may not be as fortunate.

Lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don't result in enough money to pay the mortgages in full, real estate and legal analysts say.

"It will be a dramatic problem because the borrowers will not know it's coming," said Frank Alexander, a law professor at Emory University in Atlanta.

Laws vary from state to state. In Florida, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers' assets.

Before the housing meltdown, few lenders filed these lawsuits. Foreclosures and short sales – selling for less than the mortgage amount – were relatively rare at the time, and many of the homeowners didn't have sufficient assets to make it worth the banks' time and expense.

But following the heady days of the housing boom that spawned millionaire investors seemingly overnight, it's not uncommon for borrowers to default on mortgages while still holding lucrative investments.

As the next wave of the housing crisis plays out, those most in danger of getting slapped with lawsuits include angry homeowners who ransack properties they're losing in foreclosure and borrowers who walk away from "underwater" mortgages. In both cases, analysts say, banks will want to discourage other people from such behavior.

More than four in 10 homeowners said they would consider abandoning properties that are underwater, or worth less than the mortgages, according to a national online survey released last week by real estate firms Trulia and RealtyTrac.

Mortgage companies typically won't sue homeowners who negotiate in good faith or those who default on their loans because of job losses or other unforeseen circumstances, said Anthony.

Still, borrowers shouldn't rely on a lender's verbal commitment, Manno said. "Get something in writing."

Critics insist that spite will play a role in some of these lawsuits. Lenders deny it.

"We certainly would not do that," said Russell Greene, president of Grand Bank & Trust of Florida in West Palm Beach. "It's a business decision – not an emotional decision. It's very time-consuming to take someone to court."

Even if lenders don't pursue the judgments, they could sell mortgage debt to collection agencies at deep discounts. And it will be those debt collectors that will hound borrowers, said Shari Olefson, a Fort Lauderdale real estate lawyer.

"They paid money to be able to hassle you," she said.

Thomas, the former Pompano Beach homeowner, said he didn't have money for a downpayment but was approved for 100 percent financing on two loans in spring 2006. He bought a three-bedroom home for $245,000.

Thomas said he soon became responsible for the entire mortgage after his roommate lost his job. That became even more difficult after Thomas took a pay cut.

So he attempted a short sale, eventually finding plenty of prospective buyers interested in a property that had plummeted nearly 70 percent in value. He and American Home Mortgage accepted one offer for $80,000. After closing costs, the lender netted about $71,000, said his Fort Lauderdale lawyer, Joe.

But before the sale closed, Joe had American Home Mortgage waive its right to collect on the remaining mortgage debt.

Christine Sullivan, a spokeswoman for the lender, wrote in an e-mail that she can't discuss Thomas' case because of privacy issues. But when homeowners seeking short sales demonstrate legitimate hardship, "we provide a full release of liability, and we do not pursue deficiency judgments."

Some banks say they won't file a lawsuit, though they aren't willing to put that in writing, Joe said.

"I have no choice but to accept that," he said. "Even when you play by the rules, banks don't always do what we'd like."

Under new government guidelines for short sales that took effect this spring, lenders aren't supposed to hold homeowners responsible for any remaining mortgage debt. But not all short sales fall under the guidelines, while some lenders choose not to implement them, Joe said.

A forgiven mortgage balance through 2012 is not considered taxable income on a primary residence as long as the debt was used to buy or improve the house. But borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount.

Homeowners who hand their properties back to the bank through so-called deeds in lieu of foreclosure also should make sure they won't be on the hook for any mortgage debt.

With friends facing deficiency judgments, Thomas said he's grateful he sought legal advice on how to avoid a lawsuit. He now rents a home west of Boca Raton, but he just found out the owner is in foreclosure.

"I've escaped my own problem, only to inherit someone else's," Thomas said. "But this is nothing. It's just a matter of picking up the pieces and moving on to the next rental."

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Stocks are extending their gains on a government report that sales of new homes jumped in April.

Latest gain well ahead of economic estimates. New home sales rose 14.8% following 29.8% increase in

Stocks have been rising Wednesday after an upbeat durable goods report gave investors a reason to keep buying after a late rally a day earlier.

The Commerce Department says sales of new single-family homes rose 14.8 percent to a seasonally adjusted annual rate of 504,000 units after buyers raced to secure an expiring tax credit. That follows a 29.8 percent rise in March that was the biggest increase in 47 years. The latest gain is well ahead of estimates.

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Owners of homes purchased after Nov. 6 cannot file for the $8K tax credit yet because the IRS has not updated the form

WASHINGTON – Dec. 7, 2009 – With President Obama’s signature on Nov. 6, 2009, the first-time homebuyer tax credit was extended, and some move-up buyers became eligible for up to $6,500 starting on Dec. 1, 2009.

However, the new law changed the way a home sale must be documented to the Internal Revenue Service (IRS), including additional back-up information to minimize the chance of fraud. And that documentation change became effective immediately when the bill was signed.

But that new form is not yet available.

The homebuyer tax credit is claimed using IRS Form 5405, and that won’t change under the new program; however, Form 5405 must be revised to adhere to rules in the law signed Nov. 6.

Currently, the IRS has only the old version of Form 5405 on its website – the one that applies to sales that took place Nov 6, 2009, or earlier. The revised Form 5405 applicable to sales on Nov. 7, 2009, and later, will not be on the IRS website, according to IRS officials, until late December.

Buyers who close after Nov. 6 and use the old claim form may have trouble collecting their tax credit quickly.

For more information on the tax credit and Form 5405, visit the IRS website.

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Perhaps best to claim credit on 2009 return; if homebuyers amend an ‘08 return, they could wait up to four months.  WASHINGTON – Dec. 14, 2009 – First-time homebuyers who bought as long ago as last winter are still waiting for their $8,000 tax refund.

As of mid-September, more than 1.4 million taxpayers had requested the credit by amending their federal tax returns. The IRS announced in October that it expects 5.1 million claims by year-end. That count doesn’t reflect the extension and expansion of the credit in November.

IRS spokeswoman Carrie Resch says the agency is experiencing a higher-than normal number of amended returns and because amended returns are reviewed by hand, the process is delayed.

U.S. Sen. Amy Klobuchar (D-Minn.) has been fielding constituent calls for weeks from irate homebuyers. She sent a letter to the IRS that said in part: “The full and immediate economic impact of the tax credit is lost when it takes up to four months for people to get the money due to them … such lengthy delays are unacceptable and erode the public’s trust in the competence of the government.”

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for month, up for year The index fell 16% to 96 from an upwardly revised 114.3 in Oct., but it’s 15.5% higher than it was in Nov. 2008

WASHINGTON – Jan. 5, 2010 – Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time homebuyer tax credit, but remains comfortably above a year ago, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16.0 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as homebuyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more homebuyers take advantage of affordable housing conditions before the tax credit expires.”

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

The PHSI in the Northeast dropped 25.7 percent to 74.4 in November but is 14.7 percent above a year ago. In the Midwest the index fell 25.7 percent to 82.0 but is 9.2 percent higher than November 2008. Pending home sales in the South fell 15.0 percent to an index of 97.8, but are 14.7 percent higher than a year ago. In the West the index declined 2.7 percent to 124.6 but is 21.4 percent above November 2008.

Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job growth impact in the second half will support homebuying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

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Existing sales rose 33% over Dec. ‘08, marking 16 months of increases; condo sales up 91% year-to-year ORLANDO, Fla. – Jan. 25, 2010 – Florida’s existing home sales rose in December, marking 16 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

Existing home sales rose 33 percent last month with a total of 14,630 homes sold statewide compared to 11,013 homes sold in December 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.3 percent over statewide sales activity in November.

Florida Realtors also reported a 91 percent increase in statewide sales of existing condos in December compared to the previous year’s sales figure; statewide existing condo sales last month rose 22 percent over the total units sold in November.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in December. A majority of the state’s MSAs have reported increased sales for 18 consecutive months.

Florida’s median sales price for existing homes last month was $140,400; a year ago, it was $155,300 for a 10 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. 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 November 2009 was $171,900, down 4.4 percent from a year earlier, according to NAR. In California, the statewide median resales price was $304,520 in November; in Massachusetts, it was $285,000; in Maryland, it was $245,569; and in New York, it was $210,000.

According to NAR’s latest outlook, home sales are seeing a boost from the federal homebuyer tax credit. “There are many more potential buyers who can enter the market in the months ahead,” said NAR Chief Economist Lawrence Yun. “Activity should ramp up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires, and balance should be restored to the housing sector with inventories continuing to decline.”

In Florida’s year-to-year comparison for condos, 5,968 units sold statewide last month compared to 3,132 units in December 2008 for an increase of 91 percent. The statewide existing condo median sales price last month was $107,000; in December 2008 it was $130,300 for an 18 percent decrease. The national median existing condo price was $178,000 in November 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.93 percent last month, significantly lower than the average rate of 5.29 percent in December 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the West Palm Beach-Boca Raton MSA reported a total of 849 homes sold in December compared to 638 homes a year earlier for a 33 percent increase. The market’s existing home median sales price last month was $247,900; a year ago it was $246,000 for an increase of 1 percent. A total of 763 condos sold in the MSA in December, up 45 percent over the 527 units sold in December 2008. The existing condo median price last month was $111,400; a year earlier, it was $112,900 for a decrease of 1 percent.

Related: Dec. existing-home sales down, prices rise; 2009 sales up, says NAR

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Increasingly aggressive mortgage lenders are seeking to collect deficiencies from former homeowners who walked away from their properties or sold them in short sales.

Many states, including Florida, give mortgage holders as long as five years to seek a deficiency judgment. If granted, the bank gets up to 20 years to collect and the option to renew for another 20 years if the debt isn’t paid.

About one-third of U.S. states, including California and Arizona, prohibit collection efforts after foreclosure, but homeowners usually waive that protection in a refinance.

Most states allow collection on unpaid home-equity loans.

Banks are most likely to try to collect from people who walk away from a property on which they are still making payments.

“The bank is going to pull your credit report, and if you’re current on your other bills, they are going to come after you and potentially ruin you,” said Larry Tolchinsky, a Florida real estate attorney.

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Fla.'s existing home, condo sales up in 4Q 09 Existing sales rose 44% over 4Q 08, marking the 6th consecutive quarter of increases; condo sales up 93%

ORLANDO, Fla., Feb. 11, 2010 – Sales of existing single-family homes in Florida rose 44 percent in fourth quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 43,926 existing homes sold statewide in 4Q 2009; during the same period the year before, a total of 30,610 existing homes sold. It marks the sixth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

Statewide sales of existing condominiums in the fourth quarter rose 93 percent compared to the same time the previous year. This marks the fifth consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

To gain insight into current trends in Florida’s real estate industry, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a quarterly survey of industry executives, market research economists, real estate scholars and other experts. The survey noted uncertainty over the tight credit market, foreclosures and the jobs outlook.

On the positive side, private investors – both foreign and domestic – are starting to “kick the tires” in many markets, said Timothy Becker, the center’s director. In addition, investor expectation for returns is starting to fall to more realistic levels, helping to close the spread between bidding and asking prices, he said.

“These developments bode well for the transaction market when quality properties start coming to the marketplace,” Becker added.

Eighteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the fourth quarter compared to the same three-month-period a year earlier, while all of the MSAs showed gains in condo sales.

The statewide existing-home median sales price was $140,000 in the fourth quarter; a year earlier, it was $160,600 for a decrease of 13 percent. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 16,255 units sold statewide for the quarter compared to 8,410 in 4Q 2008 for a 93 percent increase. The statewide existing-condo median sales price was $105,500 for the three-month period; in 4Q 2008, it was $136,600 for a decrease of 23 percent.

Low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.92 percent in 4Q 2009; one year earlier, it averaged 5.86 percent.

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In Port St. Lucie, 68% sold at a loss; statewide, 47% did so; in Miami-Dade, Broward and Palm Beach, 48%

 WEST PALM BEACH, Fla. – Feb. 15, 2010 – Nearly half of South Florida homes sold in December did so at a loss, a 4 percent increase from the previous year and a “disturbing” sign for anyone with a home on the market.

The data, released by analysts at Zillow.com, evaluated sales by region, county and ZIP code – a measure that showed 53 percent of West Palm Beach homes sold at a loss in December, while 68 percent of Port St. Lucie homes were purchased at prices lower than the previous sale.

Statewide, 47 percent of homes sold at a loss in December, nearly equal to the 48 percent in Miami-Dade, Broward and Palm Beach counties combined.

“This shows how deeply home values have fallen in South Florida since the peak of the market,” said Amy Bohutinsky, vice president of communications for Zillow. “It is certainly a disturbing number as far as what is happening to home sellers.”

Ken Johnson, a Florida International University professor and real estate economist, said the statistics don’t surprise him. They reflect how inflated prices had become during the boom, he said.

Also, high foreclosure rates naturally lead to lower sale prices as banks try to unload inventory. More than 500,000 Florida homes received some type of foreclosure notice last year.

“This is the market clearing,” Johnson said about the Zillow study. “It’s bad medicine and we either swallow it a little at a time or a lot at a time. This is a lot.”

Nationally, 28 percent of homes sold for a loss in December.

Zillow’s study also measured negative equity in home loans by region. At the end of December, about 41 percent of South Florida borrowers owed more on their mortgages than what their home was worth. That’s a small improvement over the 46 percent seen in the fall. About 55 percent of Treasure Coast loans were underwater, also lower than the 62 percent from the third quarter of the year.

Bohutinsky attributes the improvement to home values flattening out toward the end of the year.

The Zillow Home Value Index showed South Florida values had decreased less than 1 percent in December from the previous month to $164,400.

But Zillow Chief Economist Stan Humphries called the stabilization a brief respite “from a larger market correction that has not yet run its course.”

“While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of the year,” Humphries said. 

2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

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A first-time homebuyer might offer more money for a bargain home than an investor, but cash trumps credit in this market.

The residential property market – characterized by favorable prices and tax breaks – is heavily weighted in favor of buyers. Yet average house-hunters, especially those dabbling a toe in the ownership market for the first time, find themselves blocked out by investors flush with cash.

Both first-time buyers and investors who see a good opportunity are making a run at the deeply discounted foreclosures that have flooded the market. However, in a race that pits financing against cash, it is the investors who are emerging as winners.

“Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge,” says National Association of Realtors researcher Jed Smith. “The investor may actually pay less, but it’s cash, right now.”

Sellers give priority to cash transactions because the closing process is expedited and the deal becomes less likely to collapse. A lender, for example, might refuse to approve a deal after an appraisal comes in too low.

The cash trend is evident nationwide, with the share of resale homes bought entirely with cash climbing to 22 percent in December from 16 percent a year earlier.

Cash is even more important in places like California, Florida, Arizona and Nevada, where residential values have plunged and foreclosures account for a big chunk of the market. For instance, all-cash homebuyers accounted for 54 percent of sales in Miami in December, 46 percent of sales in Las Vegas and 25 percent of sales in Southern California.

Source: Foster’s Daily Democrat (NH) (02/12/10) Veiga, Alex

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DEERFIELD BEACH, Fla. – March 9, 2010 – Michael is “underwater” on his mortgage, owing $80,000 more than his Deerfield Beach house is worth.

Michael figures it could take a decade or two to recover the lost equity, so he’s tempted to walk away, even though he has the money to pay. “Why keep putting money into a house that’s going down in value?” he asks.

It’s a question being debated in many households nationwide as the housing crunch continues. Some borrowers feel they have a moral obligation to pay the mortgage, but a growing number of homeowners and consumer advocates say walking away could be a smart business decision.

The scale of the problem is daunting: More than half of all residential mortgage holders in Broward County are underwater, California research firm First American CoreLogic said last week. In Palm Beach County, nearly half of mortgage holders fall in that category.

And there are several reason for the crisis: Homeowners who now are underwater have seen their property values plummet after they paid peak home prices from 2004 to 2006. Many of these borrowers bought with adjustable-rate mortgages, putting little or no money down. Some are underwater because they refinanced their homes at the market’s peak.

So should they walk? Hundreds of thousands of people are doing just that.

Michael, 36, is considering it, too. First, he wants to try to unload the house in a short sale, in which a buyer would agree to pay current market value – probably no more than $200,000 – and his lender would forgive the remaining debt. If that doesn’t work, he sees little choice but to walk away.

But borrowers have to weigh several practical considerations of so-called strategic default. They risk being sued by the lender for the unpaid mortgage balance for up to 20 years. Their credit will take a huge hit, making it difficult to get a credit card or a car loan. And the poor credit rating could affect future employment and mean higher auto insurance rates.

Some homeowners, unable to strike deals with their lenders, are willing to face those consequences for the opportunity to shed burdensome mortgages.

“There is no easy way out,” said Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter.

In a recent study, global information services company Experian and consulting firm Oliver Wyman estimated that 588,000 borrowers nationwide chose to walk away from their mortgages in 2008, up 128 percent from 2007. The taboo of abandoning homes appears to be dissolving amid the mortgage meltdown, the report said.

Those who walk away and let their homes fall into foreclosure can expect to see their credit scores drop by 200 to 300 points, said Shari Olefson, a Fort Lauderdale real estate lawyer. Foreclosures stay on borrowers’ records for 10 years, and they won’t be able to get other mortgages for at least two or three years, she said.

“We should be encouraging people to meet their obligations,” said Olefson, author of Foreclosure Nation, a book about the housing downturn. “It’s the right thing to do. We should be setting a good example for our kids.”

Florida law allows lenders to seek personal judgments if homeowners default on the mortgage. The increase in homeowners walking away likely will result in more lawsuits from lenders seeking to recoup losses, credit counselors say.

There may be tax issues, too. If lenders forgive the mortgage debt, borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount. Forgiven mortgage debt through 2012 is not taxable income on a primary residence as long as the debt was used to buy or improve the house.

“We don’t think [walking away] is a good option for homeowners,” said Nancy Norris, a spokeswoman for banking giant Chase, which lends in all 50 states. “A mortgage is a contract. We expect you to pay the money back that you borrowed.”

But sometimes that doesn’t make financial sense, said Brent White, a University of Arizona law professor who wrote a research paper in December on underwater borrowers.

White contends that most underwater homeowners stay put to avoid the stigma of foreclosure and because of the “exaggerated anxiety over foreclosure’s perceived consequences.” Borrowers who have good credit before they walk away can rebuild their credit rating within two years of the foreclosure, White wrote.

He said homeowners should make decisions in their own best interests, without worrying about “unnecessary shame and guilt and fear.”

Lenders and other businesses break contracts without considering morals or ethics, White said.

He points out that securities giant Morgan Stanley announced plans in December to hand back to its lender five San Francisco office buildings to get out of the loan obligation.

“We have a double standard,” White said. “It’s indefensible.”

But legal, Cecala said. Businesses often buy assets by setting up corporate entities that protect them from liability. Generally, most underwriters for residential mortgages require borrowers to be on the hook personally.

Edward Sunshine, a theology professor at Barry University, says borrowers and businesses should honor their contracts if they have the financial means to do so. Deciding to walk away from a mortgage in anticipation of financial problems that have not yet happened is rationalization, he said.

“Our whole economic system is based on trust,” he said. “It is important for people to fulfill their obligations and do what they said they’d do.”

Michael, the Deerfield Beach homeowner, bought the property for $327,000 in 2005. He didn’t make the February mortgage payment of about $2,100. And if he walks, he thinks he’ll be able to rebuild his credit faster than the house would regain the value of his mortgage.

He said he doesn’t feel the least bit guilty. He blames the banking industry for creating the mortgage mess by lowering lending standards to make homeownership attainable for many Americans who couldn’t comfortably afford it. The increased demand helped push prices to record highs.

“The financial minds that made these decisions had to know that someone making $40,000 a year couldn’t repay a $400,000 loan,” Michael said.

Boca Raton resident Hilton  said reaching out to lenders often is a waste of time.

Hilton, a Fort Lauderdale lawyer, has tried unsuccessfully to make deals with his lenders on 10 underwater investment properties he owns across Florida. But he said they wouldn’t work with him, either refusing to take back the properties or rejecting offers for short sales.

Unwilling to deplete his savings to cover the mortgages, Wiener has stopped making the payments. He said his first responsibility is to his family – not the banks.

“You have to make choices in life,” he said.

 Sun Sentinel, Fort Lauderdale, Fla. Paul Owers. Distributed by McClatchy-Tribune Information Services.

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WASHINGTON (AP) – March 24, 2010 – Sales of new U.S. homes fell unexpectedly to the lowest level on record in February as stormy winter weather kept buyers on the sidelines. The weak results make clear the difficulties facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales fell 2.2 percent last month to a seasonally adjusted annual sales pace of 308,000.

It was the fourth consecutive month of declines and the worst showing on records dating to 1963. January’s results, meanwhile, were revised upward slightly to a pace of 315,000.

Economists surveyed by Thomson Reuters had expected February sales would rise to an annual rate of 320,000.

Sales plummeted dramatically in parts of the country that were hit with bad weather. In the Northeast, they fell 20 percent from a month earlier. Midwestern sales fell 18 percent. Sales fell nearly 5 percent in the South but rose 21 percent in the West.

The new home sales report reflects signed contracts to purchase homes rather than completed sales and thus gives economists a feel for how many buyers were out shopping for new homes in a given month.

The number of new homes up for sale in February increased slightly to 236,000. At the current sales pace, it would take more than 9 months to exhaust that supply.

There was some positive news for builders as the median sales price climbed on both a monthly and yearly basis. It rose to $220,500, up more than 5 percent from a year earlier and up about 6 percent from January.

Home sales have been sluggish during the winter even though the deadline for a tax credit for first-time home buyers was extended. It had been set to expire on Nov. 30. The earlier deadline caused sales to surge last fall.

Congress extended the deadline until April 30 and expanded it to cover existing homeowners who move. But economists and real estate agents say the extension has not had much of an impact on sales. That also was reflected Tuesday when the National Association of Realtors said sales of previously occupied homes dropped 0.6 percent in February to a seasonally adjusted annual rate of 5.02 million.

Some homebuilders say their outlook is getting better, but the recovery is not a strong one.

“A number of housing markets may be stabilizing or starting to rebound, though we do not yet see, in many respects, a sustained nationwide recovery,” Jeffrey Mezger, president and chief executive officer of KB Home, a major builder, said Tuesday as his company reported a $55 million quarterly loss.

 The Associated Press, Alan Zibel, AP real estate writer.

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Statewide sales up 24% compared to March '09; condo sales up 63%. Statewide median prices rise compared to Feb

ORLANDO, Fla. – April 22, 2010 – Florida’s existing home sales rose in March, which means that sales activity has increased in the year-to-year comparison for 19 months, according to the latest housing data released by Florida Realtors®.

Existing home sales increased 24 percent last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009, according to Florida Realtors. Statewide existing home sales last month increased 37 percent over statewide sales activity in February. Also noteworthy: While March’s statewide existing-home median price of $137,000 was down from the same time a year ago, it was 4.3 percent higher than February’s statewide existing-home median price.

Florida Realtors also reported a 63 percent increase in statewide sales of existing condos in March compared to the previous year’s sales figure; statewide existing condo sales last month rose 40.6 percent over the total units sold in February. Though March’s statewide existing-condo median price of $96,900 was down compared to the year-ago figure, it was 5.1 percent higher than February’s statewide existing-condo median price.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in March while all MSAs had higher condo sales. A majority of the state’s MSAs have reported increased sales for 21 consecutive months.

Florida’s median sales price for existing homes last month was $137,000; a year ago, it was $141,300 for a 3 percent decrease. Industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

Thenational median sales price for existing single-family homes in February 2010 was $164,300, down 2.1 percent from a year earlier, according to NAR. In California, the statewide median resales price was $279,840 in February; in Massachusetts, it was $271,950; in Maryland, it was $237,446; and in New York, it was $225,000.

NAR’s latest outlook anticipates a rise in home sales in late spring, which should help to absorb inventory. Increased pending sales is a positive sign for home prices, which are continuing to stabilize, according to NAR Chief Economist Lawrence Yun.

In Florida’s year-to-year comparison for condos, 7,148 units sold statewide last month compared to 4,387 units in March 2009 for an increase of 63 percent. The statewide existing condo median sales price last month was $96,900; in March 2009 it was $108,500 for an 11 percent decrease. The national median existing condo price was $170,200 in February, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.97 percent last month, down from the average rate of 5 percent in March 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Sarasota-Bradenton MSA reported a total of 1,055 homes sold in March compared to 765 homes a year earlier for a 38 percent increase. The market’s existing home median sales price last month was $163,800; a year earlier it was $150,000 for an increase of 9 percent. A total of 382 condos sold in the MSA in March compared to 226 units sold the same month a year earlier for an increase of 69 percent. The existing condo median price last month was $146,400; a year earlier, it was $129,000 for a gain of 13 percent.

Related: NAR: Existing-home sales rise on buyer tax credit, favorable market conditions

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"Results of our 1st quarter survey indicate that the real estate market ... is stabilizing," says UF real estate center director.

GAINESVILLE, Fla. – April 29, 2010 – Florida real estate markets show the first tentative signs of recovering from the most painful recession in the state's history, according to the latest University of Florida (UF) report.
"Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types," says Timothy Becker, director of UF's Bergstrom Center for Real Estate Studies.
But while most of the survey respondents report the market probably won't get any worse, few say it has actually begun to improve yet, Becker says. "One of our respondents summed it up by stating that 'if anything, we will get less bad.'"
On the positive side, private capital – both foreign and domestic – is continuing to enter the state in search of quality investment deals. As banks start to deal with their problem assets, more deals will come to market.
Another good sign: Life insurance companies have started to re-invest in commercial properties after backing off for the last year and a half, Becker says. Because these companies use premiums from life insurance policies to make investments, they are not deterred by the lack of available bank financing.
"(Life insurance companies) see the fundamentals of the economy stabilizing and they see the opportunity to get quality assets at a good price," Becker says. "So if they think things aren't going to get worse and they may actually get better, it follows that they're going to want to start investing again."
On the negative side, unemployment continues to be one of the state's biggest problems, edging up to 12.3 percent in March, its highest level since the state began keeping count in the 1970s. Florida has lost more than 880,000 jobs since 2007.
Although there is a potential for job growth later in the year, even under the most optimistic assumptions it will take three to four years to return to 2006 levels, Becker says.
Also of concern is the continued reluctance of commercial banks to lend money because of pressure from regulators to manage risks along with depressed values that make it difficult to refinance mortgages.
The retail and office markets are the worst off, Becker says. "Until there is an increase in job growth, there is no need for more office space, and people aren't spending as much money as they used to."
Apartments continue to be the best market in the state due to high demand from people moving out of foreclosed homes. "More people are going to be living in temporary spaces than trying to buy homes just because it's gotten a lot more difficult to buy homes from a financing perspective," Becker says.
Statewide, Florida's new housing market will continue to be slow, a result of more foreclosed homes becoming available. "That competition makes it very difficult for new homes to get built and purchased because buyers can often get an equal or nicer home for a much cheaper price on the foreclosure market," Becker says.
One of the strongest areas of the state is South Florida, especially Miami-Dade and Broward counties, with their diverse economies, steady migration and influx of foreign capital. "The glut of condos in South Florida is actually starting to change hands – they're beginning to rent them – and I think there is more life in downtown Miami than there has been in a long time," Becker says.
Orlando, Tampa and Jacksonville also are picking up. "Florida's big cities – those four areas – are less bad off than the rest of the state, and they're going to recover quicker than other places," Becker says.
Jacksonville, in particular, is in a good position because its housing market never got as hot as other markets; and, as a result, it doesn't have as many foreclosures. "I think Jacksonville is primed to really take off, and with the expansion of the port is going to have a lot of jobs coming into the marketplace," Becker says.
A positive note overall is that survey respondents' confidence in their own business has risen for the fifth consecutive quarter. In previous breakdowns by profession, developers and lenders had extremely low expectations for their own businesses, and that has grown substantially in the last few surveys.
"It's always a good sign for us that the lenders think their business is going to get better," Becker says. "Maybe it means there is some light at the end of the tunnel, even though we're still not at a great spot."

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