The NAR Existing Home Sales Report is out:)

Some Highlights:
•Existing Home Sales are up 9.6% over last year.
•Homes Sold on Average in just 34 days!
•Inventory now stands at a 5.0-month supply.
•Distressed Sales made up only 8% of all sales.

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BUYING a Home this Winter 2014. This will help explain the current Market

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Update on Pending Home sales

Power South Realty your Real Estate experty

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September 2012 month’s inventory

Here is a perfect example of supply and demand:) Lower inventory + lots of buyers and local/national investors = higher Real Estate Values

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U.S. sues Wells Fargo over FHA-insured loan defaults

The U.S. government has sued Wells Fargo in a New York court, accusing America’s largest mortgage lender of misrepresenting the quality of thousands of loans in order to be eligible for federal loan insurance.

The lawsuit, filed Tuesday in federal court in Manhattan, seeks to recover “hundreds of millions of dollars” that the Federal Housing Administration (FHA) paid out after borrowers defaulted on Wells Fargo mortgage loans.

The bank had applied for FHA insurance for the loans, meaning that if the loans went bad, the bank could ask the government to pay for costs associated with the defaulted mortgages. The lawsuit charges that Wells Fargo falsely certified that some loans were eligible for government insurance when they actually weren’t.

Specifically, the lawsuit alleges that between May 2001 and October 2005, Wells Fargo & Co. certified that over 100,000 mortgage loans were eligible for the insurance. But “a very substantial percentage of those loans – nearly half in certain months” were not eligible, according to the lawsuit.

Wells Fargo denied the allegations and promised a vigorous defense in a statement Tuesday. Many of the issues raised by the lawsuit, it said, have already been addressed with the Department of Housing and Urban Development (HUD). The bank also pointed out that it has already disclosed the issues in its latest quarterly report.

“Wells Fargo is proud of its long involvement in the FHA program, which has helped so many people obtain affordable mortgages and become homeowners,” the bank said in a statement.

U.S. Attorney Preet Bharara, who announced the lawsuit along with HUD officials, sought to portray the bank as driven by quantity instead of quality. Bharara said that Wells Fargo rewarded employees based on the number of loans they approved, a practice he called “an accelerant to a fire already burning.”

This marks the fifth lawsuit that the government has brought against major lenders over mortgage practices.

Wells Fargo, based in San Francisco, is the country’s fourth-biggest bank by assets and its biggest mortgage lender. Shares fell 70 cents, or 2 percent, to finish at $35.10.
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Home prices build to new peaks in dozens of U.S. markets

As U.S. home prices begin to edge up after largely falling for years, prices in a smattering of cities are already at all-time highs, new data show.

More than 100 metropolitan areas hit their peak home prices in July and a few did in June, according to data through July from mortgage tracker Lender Processing Services. Those areas include Pittsburgh and Anchorage. Another 50 areas are within 2 percent of their previous peaks, LPS’ home price index shows, including: Austin; Denver and Boulder, Colo.; Indianapolis; and Portland, Maine.

Many cities whose prices are at or near peaks never experienced the large swings in prices, up and down, that marked the national market’s boom and bust in the past decade, says Mark Zandi, Moody’s Analytics chief economist. Those cities haven’t had as far to come back to hit highs.

Some of the markets have also risen in tandem with growing local economies, especially those built on strong energy and agricultural business.

All told, the 150 areas account for about 7 percent of the nation’s residential housing stock.

Their price trends are a stark contrast with prices in most of the country.

Nationally, July home prices were up 1.2 percent from a year ago. But they were still 30 percent below their 2006 peaks, according to the closely watched Standard & Poor’s Case-Shiller index of 20 leading cities.

But a look at a wider group of cities illuminates what Realtors have long maintained. National housing prices don’t always reflect what’s going on at a local level, where job growth, housing supply and other regional factors play big roles.

Most of the cities that are hitting highs now are smaller than the nation’s leading cities. Almost half are in Texas, Oklahoma, Colorado and North Dakota, the data show.

In Texas and Oklahoma, home prices didn’t rise as fast or as much as the U.S. average leading up to the bursting of the housing bubble, Moody’s Analytics’ research reports show.

“We’re been pretty steady in good and bad times,” says Ron Croushore, owner of Prudential Preferred Realty in Pittsburgh. Average prices there have been rising since 2010 after dipping only slightly, Croushore says.

Some of the cities have also been standout job creators. Pittsburgh and Denver, for instance, posted faster job growth than the average for 49 similar size cities from the first quarter of 2010 to the same quarter this year, the U.S. Chamber of Commerce says. While LPS shows Denver 2 percent off its previous home price peak, Case-Shiller’s latest data show prices 5 percent off their 2006 peak.

Las Vegas prices are still 56 percent off the 2006 peak, LPS says. Other cities with July home prices more than 45 percent off former peaks include Cape Coral, Fla., and Riverside, Stockton and Bakersfield, Calif., LPS’ data show.

© Copyright 2012 USA TODAY

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Real estate investors plan to buy more

Despite rising prices and shrinking foreclosure inventories, 65 percent of active real estate investors plan to buy as many homes over the next 12 months as they bought in the previous 12 months, according to a survey conducted by ORC International for and Memphis Invest.

Founded in 1938, ORC International has conducted the CNN|ORC International poll since 2007.

Future activity

The survey found that 39 percent of active investors intend to increase their purchases over the next twelve months, while 26 percent plan to buy as many in the upcoming year to come as they did in the past year. Added together, the two groups equal about 4.5 million investors. Only 30 percent of survey respondents planned to buy fewer properties.

Last year, investors purchased 1.23 million homes, a 64.5 percent increase over 749,000 in 2010, according to the National Association of Realtors®.

Who are the investors?

Some 3 percent of American adults – 7 million people – consider themselves to be real estate investors. An additional 9 percent of all Americans own investment property today but have no current plans to buy more. Thus, one out of eight – 28.1 million Americans – either consider themselves to be residential real estate investors or own residential investment properties today, according the survey.

“Hundreds of thousands of foreclosures and short sales are coming to market and rents are continuing to improve in most markets, creating a positive environment for the nation’s 28.1 million residential real estate investors,” says Joshua Dorkin, founder and CEO of “We’re talking about a group of Americans that is about the same in number as the number of Americans who own Roth IRAs (28.5 million) or the total number of money market fund shareholders (29 million). They have significant buying power.”

Housing repair

At a median expenditure of $7,500 per property, investors are spending a total of $9.2 billion per year to repair the damage caused by foreclosures and rehabilitate the nation’s housing stock – about four times more than the federal Neighborhood Stabilization Program.

“This survey puts some hard numbers behind the contribution that investors are making towards … driving the economy,” says Chris Clothier, a partner with Memphis Invest. “Those investors are driving their local economies by spending billions in repair costs with local electricians, plumbers, flooring companies and laborers.”

Promoting real estate investment

The survey found that lower interest rates and removing financing access limits would provide incentives to investors. Survey respondents said lower interest rates would make active investors more willing to invest in additional properties (70 percent). A distant second was additional tax incentives for capital spent to purchase, rehab or renovate investment properties (54 percent).

Third place went to elimination of limits imposed by lenders on the amount they will lend an investor (46 percent) and fourth to easing of rules on section 1031 Exchanges (44 percent).

Only 30 percent said that the easing of securities laws limiting the pooling of capital by investors for purchases would encourage them to buy more.

© 2012 Florida Realtors®

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New guidelines to help condos get FHA loans

Many first-time homebuyers consider condos a good home when starting out, but loans issued by the Federal Housing Administration (FHA) that come with relatively low downpayments have not been offered in many condo buildings.

FHA approval for a condo is more complicated the FHA approval for a single-family home. To minimize its risk, FHA looks at more than the unit requesting a loan – it also considers traits of the association itself. Associations can help individual condo sellers get an FHA loan by becoming certified, but fairly stringent rules kept many from applying.

That may change and, according to the Community Associations Institute (CAI) Chief Executive Officer Thomas Skiba, it’s “excellent news for sellers, buyers, condominium communities and the housing market across the country.”

In creating its certification system, FHA listed traits considered desirable. Certification was denied, for example, if an association had too many rental condominiums or too much commercial space.

According to real estate writer Kenneth Harney, the previous certification process also presented considerable risk to associations. During the application process, Harney says, they were asked to “accept broad legal liability on matters they couldn’t totally be certain about, such as disputes among tenants in the building, litigation filed with courts” and more.

CAI says the FHA made “temporary adjustments.” While it applauded FHA’s guidelines, it says it will continuing pushing for “long-term certainty of process, flexibility and support for the future of condominium housing, and to resolve critical policy areas not addressed by today’s announcement.”

Major changes

• FHA looks at the percent of current condo owners who are delinquent on mortgage payments. The cutoff is 15 percent, but the individual standard was 30 days late; it’s now 60 days late.

• New rules require at least 50 percent of units to be inhabited by owner-occupants or under contract, while the other 50 percent may be owned by investors. A single investor can own up to 50 percent of the units; previously, single investors could not own more than 10 percent.

• The amount of commercial space is limited now, as it was before, to 25 percent. However, a new rule gives associations a little wiggle room. In certain circumstances, they can request a variance up to 35 percent for commercial space, providing the development remains “primarily residential.”

FHA’s new guidelines are outlined in Mortgagee Letter 2012-18 issued by the Department of Housing and Urban Development.

© 2012 Florida Realtors®

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Starting Jan. 1, short sales may carry hidden cost

According to the U.S. Internal Revenue Service (IRS), a homeowner who owes money to a mortgage lender is given something akin to a gift when the lender cancels out some mortgage debt through a short sale. As a result, the IRS sees that forgiven money as income and could tax it accordingly.

A 2007 law designed to help homeowners specifically forbids the IRS from taxing forgiven money on a principal residence, however, since people who can’t afford to keep their home generally can’t afford higher taxes less than a year later. But that law expires on Dec. 31, 2012.

Any short sale that occurs on or after Jan. 1, 2013 – barring further action by Congress – would face a federal income tax on the forgiven portion of their mortgage.

While Congress could agree to extend the tax forgiveness and most experts see bipartisan support to do so, a presidential election and looming end-of-the-year fiscal crisis will capture most lawmakers’ attention. An extension, even if it occurs, is not considered a sure thing by the Dec. 31 deadline.

That leaves at-risk homeowners with a dilemma. They can hope Congress extends the tax forgiveness or they can list their home as a short sale soon.

Since many short sale transactions take longer than non-short sales, a home needs to be listed – and ideally pre-approved by the lender as a short sale – while it still has enough to time to attract a buyer and close. With only three-and-a-half months remaining in 2012, the window for a new listing has started to close.

If the end of the year looms and the short-sale tax forgiveness deadline has not been extended, Realtors and others involved in home sales could find their holidays curtailed by end-of-the-year closings as sellers rush to beat the clock.

“I’m not making any plans for Dec. 31,” Sunrise real estate lawyer Gary Singer told the Fort Lauderdale Sun Sentinel. “I expect to be in the office very late.”

For more information on the Mortgage Forgiveness Debt Relief Act, visit the IRS’s website.

© 2012 Florida Realtors®

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Amendment 4 would help first-time buyers

What is Amendment 4?

Yeson4logo_smAmendment 4 is a constitutional amendment on Florida’s ballot this year. This proposal will lower property taxes for new homebuyers and spur much-needed economic growth in the housing market by offering a healthy new exemption for first-time homebuyers.

Amendment 4 will also protect working families, small businesses and homeowners from unfair and unexpected tax increases by helping to stop “recapture,” a tax gimmick that increases property taxes even when property values decline.

Finally, Amendment 4 will lower assessment increases on non-homestead properties from a burdensome 10 percent to a more reasonable 5 percent.

Bottom Line

  • Amendment 4 creates an additional homestead exemption for first-time homebuyers for 5 years.
  • Amendment 4 protects Floridians from increased property taxes when their property values have declined.
  • Amendment 4 lowers the maximum yearly assessment increase on non-homestead properties from 10 percent to 5 percent.

Potential Questions

Q: Does this new homestead exemption replace the exemption in current law?
A: No. The new homestead exemption in Amendment 4 is applied in addition to your current homestead exemption.

Q: Won’t creating an additional homestead exemption affect the funding of police officers and firefighters?
A: Amendment 4 is not retroactive and does nothing to affect the current budgets of local governments.

Q: Does Amendment 4 change or reduce “Save Our Homes”, which caps assessment increases at 3% per year for homestead property, at all?
A: No.

Q: If local governments are not able to raise the assessed value of a property that has gone down in market value, won’t they just raise millage rates?
A: It is the local government’s decision whether to raise taxes on Florida homeowners or not. Amendment 4 simply gives the Legislature the authority to protect homeowners from burdensome, unfair tax increases if the value of their home goes down.

Q: Exactly how much is this new homestead exemption?
A: The additional homestead exemption that Amendment 4 creates is equal to half of the home’s value, up to the median home value in the county.

Learn more:

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Multiple offers possible in tight housing market, experts say

Bidding wars are back as the housing market continues its recovery.

After years of lackluster sales and sagging prices, demand is growing while the number of homes for sale shrinks.

Those market conditions drive multiple offers in many areas, but real estate agents and other housing followers say sellers still can take practical steps to boost the level of interest among buyers.

• Price it as low as possible. Many sellers and their agents obviously underprice homes to attract bidding wars. Douglas, a broker at in West Palm Beach, Fla., refers to the tactic as “drama pricing.”

Douglas said he was instructed by the lender to list a West Palm Beach home with a leaky roof and other problems for $37,600, even though comparable sales supported a listing close to $50,000.

“Do you know what that does to my cell phone?” Rill said. “It blows it up.”

The bank’s strategy worked. More than 70 potential buyers toured the home, which eventually sold for $51,000.

At the very least, sellers should list their homes at the low end of market value, which will draw in buyers who sense they’re getting good value, agents say.

• Pay for an inspection, lien search. Buyers typically cover those, but motivated sellers can go on the offensive to prove the home is in good condition and free of title problems that would delay closing.

“You may be able to attract multiple offers just because the buyers will know what they’re getting,” said Marta , a broker in Broward County, Fla.

• Offer owner-financing. This only works for sellers who own the property outright. But it’s an option to consider, especially for condominiums in which government financing is limited, Marta said.

• De-clutter. Getting rid of all those books, magazines and board games you haven’t touched in years will help make the home seem bigger and more appealing.

“Buyers are visual,” said Judy, an agent in Lighthouse Point, Fla. “Clean and crisp sells.”

Sandra, a professional home stager in Weston, Fla., said properties should be “Q-tip clean” and free of smoking or pet odors. “If you can smell it, you can’t sell it,” she said.

A paint job freshens up a room, and it doesn’t cost a lot. Even replacing a light bulb to improve a room’s brightness can make a difference to a skeptical buyer, agents say.

“When a buyer goes in and flips on the light switch and it doesn’t work, they think there’s an electrical problem,” Sandra said.

• Spruce up the landscaping. Planting fresh flowers, laying mulch and keeping the hedges trimmed will make a solid first impression on a buyer.

“When buyers walk up to a house that’s (in poor shape) – even if it’s just the landscaping – there’s going to be a sense that the seller doesn’t care about it,” said Ron , an agent in Broward. “And the buyers will think that they can really lower their offer or they just won’t be interested at all.”

© 2012 Sun Sentinel (Fort Lauderdale, Fla.), Paul Owers. Distributed by McClatchy-Tribune News Service.

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Fla. housing market continues positive track

Existing-home sales improve in July, prices continue to rise

Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in July, according to the latest housing data released by Florida Realtors®.

“Florida’s real estate recovery is on solid ground,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Since May 2011, pending sales have increased every month for both existing single-family homes and for townhome-condo properties. In July, pending sales were up more than 42 percent for existing single-family homes and 26 percent for townhouse-condo units, compared to a year ago. Home prices are on the rise in many markets, while the inventory of homes for sale is down. Florida’s housing market is growing stronger and stronger.”

Pending sales refer to contracts that are signed but not yet completed or closed; closed sales typically occur 30 to 90 days after sales contracts are written.

Statewide closed sales of existing single-family homes totaled 17,420 in July, up 9.8 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The statewide median sales price for single-family existing homes last month was $148,000, up 7.8 percent from July 2011.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in June 2012 was $190,100, up 8 percent from the previous year. In California, the statewide median sales price for single-family existing homes in June was $320,540; in Massachusetts, it was $325,000; in Maryland, it was $268,910; and in New York, it was $220,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts 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.

Looking at Florida’s year-to-year comparison for sales of townhomes/condos, a total of 7,779 units sold statewide last month, up 2.8 percent from those sold in July 2011. The statewide median for townhome-condo properties was $102,000, up 10.9 percent over the previous year. NAR reported the national median existing condo price in June 2012 was $183,200.

Last month, the inventory for single-family homes stood at a 5.3-months’ supply; inventory for townhome-condo properties was at a 5.4-months’ supply, according to Florida Realtors. Industry analysts note that 5.5-months’ supply symbolizes a market balanced between buyers and sellers.

“We really need to recognize that over the past year, we have seen a market reversal, from a clear buyers’ market to a neutral market to one that is verging on a sellers’ market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “This is a precursor to price growth. Our MLS (Multiple Listing Service) numbers confirm this in that both median and average prices have been trending up. Florida Realtors’ soon-to-be-launched price index, based on all sales, is showing the same sort of behavior in that price drops ended in 2009 and are now showing signs of moving up.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.55 percent in July 2012 – significantly lower than the 4.55 percent average during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website at, and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the July report. Or go to Florida Realtors Media Center at and download the July 2012 data report PDF under Market Data at:

© 2012 Florida Realtors®

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Home prices rose 0.8% in May

The federal agency that tracks same-home sales over time under Fannie Mae and Freddie Mac says prices rose 0.8 percent in May compared to April. And prices were up 3.7% year-to-year, since May 2011.

The Federal Housing Finance Agency’s (FHFA) monthly House Price Index previously reported a 0.8 percent increase in April, though it revised the index downward slightly to a 0.7 percent increase. The index is 17.0 percent below its April 2007 peak and roughly the same as its May 2004 level.

Since the FHFA’s index looks at repeat sales of the same homes over time, it’s considered a fairly conservative yet accurate reflection of U.S. home price changes. The index includes only single-family home transactions with conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. It doesn’t include FHA, VA or other federal government mortgages, nor does it include homes with jumbo loans.

© 2012 Florida Realtors®

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The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines. Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.

The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a housing data-analysis firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won’t happen again this year, he says.

Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.

“Even with the overall economy slowing,” Wells Fargo Securities economists said, cautiously, in a note to clients, “the budding recovery in the housing market appears to be gradually gaining momentum.”

Economists aren’t always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don’t. (The full results of the Journal’s July survey will be released at 2pm ET)

Housing is still far from healthy despite the Federal Reserve’s efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac’s latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans’ equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.

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Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. “A little tail wind is a lot better than a headwind,” says economist Chip Case, the “Case” in Case-Shiller.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. “Manufacturing had led growth and construction had lagged,” JPMorgan Chase economists said last week.”Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life.”

Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.

But the housing bust is over.

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Latest housing scam: ‘Securitization audits’

 A new foreclosure rescue scam promises to help distressed homeowners reveal the actual owner of a promissory note through a “securitization audit.” But the scammers are charging fees for information that’s free.

“These questionable outfits are targeting desperate families, giving them the impression they can make their mortgages disappear if they just pay for a securitization audit,” said Mortgage Fraud Examiners founder Storm Bradford.

Owners are told that a securitization audit finds the true owner of their mortgage, and that can be used to convince the court that the mortgage servicer doesn’t have a legal right to foreclose.

“But here’s the thing: Anyone can find out who owns his or her note with just a little digging,” says Bradford. “There’s absolutely no need to pay a company for a securitization audit, but the peddlers of this scheme count on the fact that the average homeowner doesn’t know that.”

In addition to the financial hit, securitization audits usually deal homeowners another blow: They’re not typically admissible in a court of law.

Attorney Gregory Bryl, who practices in Florida and Virginia, says that most securitization audits are merely the opinions of the people writing them, and those people have no way of knowing exactly what happened with a mortgage after it originally closed.

Attorney Thomas K. Plofchan, Jr., who practices in Sterling, Va., contends that the only proven method for securing evidence critical to a homeowner’s claim against the lender is a thorough examination of the mortgage contract.

“Every homeowner facing foreclosure has fantasized about getting his home free and clear because his lender screwed up,” said Bradford. “It’s only natural, but the fact is the only homeowners getting a home free and clear, and/or been granted other compensation have succeeded after a thorough analysis of their mortgage transactions … A securitization audit can’t provide that level of scrutiny.”

© 2012 Florida Realtors®

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South Florida foreclosures up 38 percent this year

There were 4,183 foreclosures filed in South Florida in June this year, according to Condo Vultures, a 34.5 percent increase from the same month a year ago. Slightly more than one third of the foreclosures, or 1,696 of them, came in Broward County, which continued to lead South Florida counties in foreclosure filings last month. Miami-Dade County came in second with 1,472 foreclosures, compared to 1,118 in June of 2011. Palm Beach County ranked third with 1,015, nearly twice as many as the 655 foreclosures it saw in the same month the previous year. 

Overall, 22,439 foreclosures were filed in South Florida through the end of June, a 37.8 percent increase from the same period a year ago. Broward accounts for 53 percent of all those foreclosure, while Palm Beach and Miami-Dade counties split the remaining foreclosures at 25.7 and 27.4 percent.

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Rental rates forecast to rise in 2012

Rental rates forecast to rise in 2012

SARASOTA, Fla. – June 1, 2012 – Throughout Florida, such factors as an improving job market, a lack of new apartments construction, and declining vacancy rates has Marcus & Millichap forecasting apartment rent hikes in most of the state’s major markets this year.

Bryn Merrey, vice president and regional manager in the firm’s Tampa office, remarks, “We’ve started hearing very frequently that people were able to raise their rents for the first time in a long time.”

However, there may be a bit of a lag in some areas, because such smaller markets as Bradenton and Sarasota have traditionally been slower to attract investment and have had somewhat higher vacancy rates than such cities as Miami.

Apartment rents have remained in check in and around Sarasota largely because of the number of foreclosed and bank-owned houses that are vying with the local stock of rental apartments.

Jayci Grana, rental division director at Michael Saunders & Co., notes that monthly rents began recovering this year and will likely go up between 3 percent and 5 percent in 2012 following a large decline that began in 2007. She adds that new apartment communities are finally being considered in many of Florida’s major markets and are poised to become a popular investment.

Sarasota Herald-Tribune (FL) (05/28/12) Sword, Doug

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Pending home sales retrenched in April

NAR: Pending sales index at 95.5, down 5.5% from March but up 14.4% from year ago. Housing recovery still on track
WASHINGTON – May 30, 2012 – Following three consecutive monthly gains, pending home sales retrenched in April, but are notably higher than a year ago, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. The data reflects contracts but not closings.

NAR Chief Economist Lawrence Yun said a one-month setback in light of many months of gains does not change the fundamentally improving housing market conditions. “Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” he said.

Yun notes home sales are staying well above the levels seen from 2008 through 2011. “Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007,” he said. “All of the major housing market indicators are expected to trend gradually up, but a new federal budget must be passed before the end of the year for the economy to continue to move forward.”

The PHSI in the Northeast rose 0.9 percent to 78.9 in April and is 19.9 percent higher than April 2011. In the Midwest the index slipped 0.3 percent to 93.0 but is 23.0 percent above a year ago. Pending home sales in the South fell 6.8 percent to an index of 105.7 in April but are 13.3 percent higher than April 2011. In the West the index dropped 12.0 percent in April to 94.9 but is 5.1 percent above a year ago.

The housing forecast has been upgraded, with existing-home sales expected to reach 4.66 million this year, compared with 4.26 million in 2011. The outlook for 2013 is now 4.92 million, but could vary significantly depending on two scenarios.

If lending returns to normal, the 2013 outlook for existing-home sales would measurably improve to 5.3 million. However, a fiscal cliff scenario of higher taxes and sharp spending cuts beginning in early 2013, which is an unlikely event but still worth noting, would lower the sales projection to 4.5 million.

Because of measurably lower inventory supplies, the forecast for home prices has been upwardly revised with the median existing-home price projected to rise 2 to 3 percent this year and 4 to 5 percent in 2013, with wide local market variations. Miami and Phoenix will easily achieve double-digit price growth by year-end.

Yun said the price gains will measurably reduce the number of underwater homeowners.

“For example, a 5 percent national price gain means the number of underwater homeowners would fall to about 9 million from current estimates of around 11 million. A 10 percent gain, say over the next two years, would reduce the underwater status to about 7 million households out of 75 million owner-occupied homes,” he said.

About 25 million homes are owned free and clear without a mortgage.

Though the proportion of distressed properties is still high, the numbers have been falling over the past two years. “The diminishing share of distressed properties is another reason for higher home prices in upcoming months,” Yun added.

© 2012 Florida Realtors®

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May 2012 Real Estate update

May 2012 KCM
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Miami condo prices jump 38 percent in first quarter, inventory falls 33 percent

The median sales price of a Miami-Dade County condominium rose by 38 percent in the first quarter, compared to the same period in 2011, according to a report from the Miami Association of Realtors. The median single-family home sales price rose to $174,799, a 14 percent increase compared to the first three months of 2011. “In the first quarter, we have seen further decline of housing inventory in Miami-Dade County, coupled with consistent and significant price appreciation,” said Martha, 2012 Chairman of the Board of the Miami Association of Realtors. “Record home sales, which were greatly boosted by foreign buyers and investors in Miami-Dade County, have further strengthened the local real estate market and economy.” The price increases came despite short sales and REOs continuing to account for a significant proportion of closed home sales. Inventory in Miami fell by 33 percent in the same period. — Alexander Britell

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Is housing as cheap as it’ll ever get?

Homebuyers who want a bargain may want to act now because the housing market is in the midst of a turnaround, economists say.

Home prices have fallen and mortgage rates are hovering near record lows, pushing home affordability for the average family to record highs. Meanwhile, rents have been on the rise, making owning a home cheaper than renting in most areas of the country, according to recent surveys.

But the housing deals aren’t expected to stick around much longer.

An improving job market, a decrease in the number of homeowners falling behind on their mortgage, and an anticipated improvement in access to mortgages is expected to help home prices start bouncing back by next year, economists say.

Investors eyeing profits in rentals also have been snapping up bank-owned properties, which Clear Capital’s Alex Villacorte attributes as helping to lead to an increase in prices on foreclosed properties. This “could have a significant impact on the market overall in terms of providing a rising floor to home values,” Villacorte told CNNMoney.

Some areas are already seeing prices rise. In Phoenix, housing prices have already increased 8.4 percent during the three months ending April 30, and Miami saw prices bump up 4.6 percent quarter over quarter, according to Clear Capital data.

“Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000,” Tanya Marchiol, founder of Team Investments in Phoenix, told CNNMoney.

Loan rates, demand predictions

Buyers may want to act more quickly because mortgage rates are expected to tick up slightly by the end of the year. The increase is being sparked by greater demand, says Doug Lebda, CEO of LendingTree. He predicts 30-year fixed-rate mortgages will inch up to 4.5 percent by the end of the year, which is still low, however, by historical standards.

The Mortgage Bankers Association is also predicting a big leap in mortgage loans next year. For this year, MBA estimates that buyers will take out loans totaling about $415 billion, but by 2013 that number is expected to nearly double to $706 billion.

Source: “Buying a Home Won’t get Much Cheaper,” CNNMoney (May 3, 2012) and “Time To Trade The Lease For A Mortgage?” NPR (May 1, 2012)

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Real Estate’s Bidding Wars Are Back

Real Estate’s Bidding Wars Are Back

Pending-home sales in March hit their highest level since April 2010, spurring the return of real-estate bidding wars.

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Economist: Florida existing home prices could rise 10 percent in 2012

Existing home prices in Florida could increase by as much as 10 percent by the end of this year, according to Lawrence Yun, the chief economist for the National Association of Realtors, the Palm Beach Post reported. “Compared to other parts of the country, the Florida market, particularly the South Florida market, is [recovering] very rapidly from oversupply to a shortage of inventory,” Yun said at a conference in Palm Beach. “That clearly implies we will begin to see some modest turnaround

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Florida housing market on positive track in Feb.

Pending sales and median prices rose, while the inventory of homes for sale dropped in Florida’s housing market in February, according to the latest housing data released by Florida Realtors®.

“Growing optimism about the economy, gains in the state’s jobs market and continued low mortgage rates are generating interest in Florida real estate,” says 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Increased statewide pending sales for both single family existing homes, up 36.1 percent, and for townhouse-condo properties, up 19.8 percent, show that buyers are encouraged by these positive signs.”

Pending sales refer to contracts that are signed but not yet completed or closed; closed sales typically occur 30 to 90 days after sales contracts are written.

The statewide median sales price for single-family existing homes in February was $134,000, up 7.2 percent from the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The statewide median for townhome-condo properties was $95,000, up 15.9 percent over Feb. 2011.

The national median sales price for existing single-family homes in January 2012 was $154,400, which is 2.6 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in January was $268,280; in Massachusetts, it was $265,000; and in Maryland, it was $219,500.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts 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.

Statewide sales of existing single-family homes totaled 14,270 in February 2012, down 4.8 percent compared to the year-ago figure. Looking at Florida’s year-to-year comparison for sales of townhomes/condos, a total of 7,545 units sold statewide last month, down 16 percent from those sold in February 2011. NAR reported the national median existing condo price in January 2012 was $156,600.

In February, the months supply of inventory stood at 6.2 for single-family homes and at 6.3 for the condos/townhomes, according to Florida Realtors.

“The overall picture that these statistics show is of a stabilizing housing market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “While closed sales are down, so are listings and so is inventory. These are signs of a market that’s moving from being a buyer’s market to a balanced market.

“For the past year, median sales prices have been slowly rising; and over a longer period of time, prices have really flattened out – again, signs of an improving housing market.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.89 percent in February 2012, down from the 4.95 percent average during the same month a year earlier, according to Freddie Mac.

© 2012 Florida Realtors®
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Miami, Fort Lauderdale office markets in recovery, according to survey

The market for office space in Miami and Fort Lauderdale is leading the rest of Florida and a bright spot in the Southeast, according to a survey conducted by PricwaterhouseCoopers, the South Florida Busines Journal reported. While vacancy rates remain high, at 19.2 percent in Miami-Dade County, 17.2 percent in Fort Lauderdale and 21.3 percent in Palm Beach, investor confidence is high. As for other sectors of the South Florida commercial market, Miami and Fort Lauderdale showed a recovering retail market, and Miami was showing strength in the multifamily sector

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Renters are losing their leverage

During the boom years of home buying, property manager Charlie Biter used to offer new apartment tenants one or two months’ free rent as a lease enticement. Now, as rental demand continues to surge, no such offers are necessary.

“Back then, everybody was being creative to bring renters in,” said Biter, who oversees 2,000 apartment units in the Nashville area for Continental Property Management. “But now I’m not aware of any units offering concessions.”

Across the country, as more people compete for apartments in the wake of the housing collapse, the market has swung in favor of landlords. For tenants, that means saying goodbye to move-in incentives and watching rents edge higher.

About a quarter of all apartments nationwide offered some type of concession in last year’s fourth quarter. By comparison, 53 percent of apartments offered concessions in the first quarter of 2010, according to data tracker MPF Research’s latest report.

“The industry moves in cycles, and right now not a lot of apartments are available,” said Jay Parsons, an analyst at MPF Research. Until apartment construction catches up to demand, landlords will maintain their control of the market, he said.

The vacancy rate in Pittsburgh, at 2.2 percent, is among the lowest in the country, according to MPF’s fourth-quarter data from 2011. University of Pittsburgh master’s student Harrison Murphy knows the difficulty first-hand. Four years ago, he found an apartment within an hour of searching, he said. Now, not only are rentals harder to come by, but many landlords require stricter background checks.

“I have been unable to find a single place that doesn’t require a recommendation from your previous landlord, with some even asking for recommendations from teachers,” Murphy, 24, said.

In New York, too, as rental demand swells in some of the most desirable neighborhoods, rates are reaching new highs. In 2011, average rents across all apartment categories rose 8.4 percent compared with the year-ago levels, according to the Citi Habitats annual report.

In Chelsea and the East Village, average monthly rent in January for a one-bedroom apartment hit $3,218 and $2,616 respectively. Both neighborhoods have vacancy rates below 1.5 percent. Furthermore, landlord concessions in New York plunged 68 percent from 2010, according to the report.

“With high demand in the marketplace, landlords were not likely to negotiate with potential renters, and needed to do little to attract clientele to their available apartments,” said Citi Habitats President Gary Malin.

In Portland, Ore., one of the country’s tightest markets, the year-end vacancy rate was 3.1 percent, according to the Barry Apartment Report, a local data tracker.

“Nobody’s giving concessions. That’s history,” said Joe Weston of Weston Investment, which owns 3,000 apartments in the Portland area.

In April, his firm plans to raise rental rates about 5 percent. “People living in suburbia are moving to the city center,” he said. “And some of those people were foreclosed on and are now renting.”

Feeling squeezed

Increasingly, real estate observers say, more people are finding themselves in situations like Chicago resident David Sundquist, who says his rent, which continues to inch up, squeezes his budget. He said most affordable apartments he finds on Craigslist ads are in unsafe neighborhoods. In addition, “It seems like the only way to get a place is to have a roommate,” said the 31-year-old commodities trader.

In the heyday of the housing market, when the country saw droves of empty apartment units, some landlords attempted to woo tenants in striking ways.

For instance, Woody McLaughlin of Nashville’s apartment association remembers one landlord offering a trip to the Bahamas to new lease-signing tenants. But now, deals offering even one free month’s rent are scarce, he said.

Todd Jackovich, a developer with Atlanta-based Stonehenge DCM, said he and other property managers use a computer program that shows how much rents can be increased based on rates at nearby apartment buildings. “Landlords are trying to set a new floor (price) on some of their products,” he said.

Construction up

While the country’s single-family home construction is still recovering from the depths of the downturn, this year is expected to be an important milestone in the tide of new multifamily home construction occurring in many cities. MPF Research estimates 125,000 apartment units will be completed by year’s end, an 89 percent gain from 2011.

“That sounds like a huge increase,” MPF’s Parsons said. “But it’s really still on the low side by historic standards. (It) puts in perspective just how very, very low 2011 was.”

Waiting lists are getting longer at apartment buildings around the country, which is fueling a spike in apartment development, real estate professionals said.

Skeptical observers, such as Weston, the Portland apartment manager, worry some markets may be over-betting on construction, creating the conditions for a speculative bubble several years from now.

“The income the developers want for some of their units is too high,” Weston said. “By 2015 we’ll have a lot of apartment products, but will there be enough people?”

© Copyright 2012 USA TODAY,

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Fla. housing market upbeat in Jan. 2012 Sales prices rose 5.3% for single family, 18.8% for condos, and inventory declined. NAR reports 4.3% sales increase

Feb. 22, 2012 – Florida’s housing market reported gains in median sales prices and a reduced inventory of homes for sale in January, according to the latest housing data released by Florida Realtors®.

“We’re seeing positive signs of a strengthening recovery in Florida’s housing market,” says 2012 Florida Realtors President Summer. “In both the statewide single-family and condo-townhome markets, pending sales are higher and the statewide median sales price rose – up 5.3 percent to $129,000 for single-family homes and up 18.8 percent to $95,000 for condo-townhomes. Improving the availability of affordable financing to qualified buyers and investors would continue to stabilize Florida’s housing market and economy.”

The median is the midpoint; half the homes sold for more, half for less. 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, according to housing industry analysts.

The national median sales price for existing single-family homes in December 2011 was $165,100, which is 2.5 percent below the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in December was $285,920; in Maryland, it was $222,934.

Florida statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.

Looking at Florida’s year-to-year comparison for sales of condos/townhomes, a total of 5,963 units sold statewide last month, down 22.6 percent from those sold in January 2011. According to NAR, the national median existing condo price in December 2011 was $160,000.

“Even though closed sales are down from a year ago, there are two really bright spots in Florida’s housing market,” said Florida Realtors Chief Economist Dr. John Tuccillo. “One is a significant increase in pending sales. In fact, pending sales have been up every month since May. The barrier that stands between pending sales and closings is the difficulty consumers are experiencing in obtaining financing.

“The second positive is inventories, which are now at a point close to a balanced market,” Tuccillo said. The months supply of inventory stands at 6.4 for both the single-family homes market and the condos/townhomes market.

The interest rate for a 30-year fixed-rate mortgage averaged 3.92 percent in January 2012, down from the 4.76 percent average during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors Media Center at and look under Latest Releases, or download the report under Market Data at:

The January 2012 Florida Realtors home sales release marks a new statewide housing market reporting partnership between Florida Realtors Industry Data and Analysis department and a new vendor partner, 10K Research and Marketing. Housing sales data from the state’s 63 local Realtor organizations is collected and organized with the goal of providing unique, localized market reports to the local Realtor boards and associations within Florida Realtors, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets.

At the same time, Florida Realtors is providing comprehensive statewide housing market statistics – but this new data series only includes statewide numbers. Beginning with this January 2012 housing data report, Florida Realtors is no longer reporting any market data for Realtor members’ sales in the state’s metropolitan statistical areas, as had previously been reported in partnership with the University of Florida’s Bergstrom Center for Real Estate Studies.

© 2012 Florida Realtors®

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Foreclosure activity edges higher in Jan.

RealtyTrac: Foreclosures rose 8% nationally last month from Dec., but down 15% from year earlier; Fla. still in top 10
Banks took back more U.S. homes in January than in the previous month, the latest sign that foreclosures are accelerating after slowing sharply last year as lenders sorted out foreclosure-abuse claims.

Foreclosures rose 8 percent nationally last month from December, but were down 15 percent from a year earlier, foreclosure listing firm RealtyTrac Inc. said Thursday.

Despite the annual decrease at the national level, some states posted sharp increases compared to January 2011. In New Hampshire, foreclosures jumped 62 percent. In Massachusetts, 75 percent.

That trend is expected to strengthen this year in light of last week’s $25 billion settlement between the nation’s biggest mortgage lenders and 49 state attorneys general over the industry’s handling of foreclosures.

Many banks and mortgage servicers processed foreclosures without verifying documents. Some employees signed papers they hadn’t read or used fake signatures to speed foreclosures — a practice dubbed “robo-signing.”

Major banks temporarily put foreclosures on hold after the problems surfaced in the fall of 2010. Some had to refile previously filed foreclosure cases and revisit pending cases to prevent errors. Those delays and uncertainty over state and federal probes into the industry’s foreclosure practices led to a sharp slowdown in foreclosure activity last year.

The settlement between the banks and state attorneys general helps clarify the rules banks must follow to foreclose on borrowers, said Daren Blomquist, a vice president at RealtyTrac. That will pave the way for more foreclosures, he said.

“The settlement will accelerate the foreclosures that are happening this year and it will accelerate the process of lenders catching up on the backlog of foreclosures that has been building up over the last year and a half,” Blomquist said.

Credit rating agency Fitch Ratings also anticipates foreclosures will climb nationally this year, but not right away, noting it will take some time for lenders and mortgage servicers to make sure they are in compliance with the rules set forth in the settlement.

“You probably are going to see the pace pick up as the year goes on,” said Grant Bailey, a managing director at Fitch.

RealtyTrac projects foreclosures will rise 25 percent this year to 1 million homes. Last year, lenders took back 804,000 homes.

Even so, the rise in foreclosures isn’t expected to be uniform nationwide. That’s because the settlement isn’t likely to ease the backlog of foreclosure cases in states where courts play a role in the process.

In addition, some states have taken steps to slow lenders down.

Throughout the housing downturn Nevada has had the nation’s highest foreclosure rate. There, a law that went into effect in October requires that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.

That has contributed to fewer homes entering the foreclosure process, but also a smaller pool of foreclosed homes available for sale in places like Las Vegas.

There are as many as 3,000 fewer homes listed for sale in the greater Las Vegas market than just a year ago, said Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev.

That’s made multiple offers on foreclosures and other properties priced up to $250,000 commonplace, she said.

“There are tons of homes sitting out here vacant that people haven’t paid on for two years, or whatever the case, that should be in the foreclosure pipeline and are not yet,” Herwick said.

Foreclosure activity in Nevada fell 8 percent last month from December, but was down 52 percent from January last year, RealtyTrac said.

High unemployment, a sluggish housing market and falling home values remain major factors in homeowners falling behind on their mortgage payments. Many borrowers also have simply stopped paying their mortgage because they owe more on the mortgage than the home is worth.

All told, 210,941 U.S. homes received a default notice, were scheduled for auction or were repossessed by a lender in January, RealtyTrac said.

That’s up 3 percent from December, but a drop of 19 percent from January last year. The foreclosure rate translates to one in every 624 U.S. households.

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Late payments on mortgages rise again in 4Q

Late payments on mortgages ticked up in the last three months of 2011, the second straight quarter-to-quarter increase after nearly two years of steady decline.

Credit reporting agency TransUnion said 6.01 percent of mortgage holders were behind on their payments by 60 days or more in the October-to-December period. That compared with 5.88 percent for the third quarter of 2011.

To be sure, the rate is down significantly from the fourth quarter of 2010, when 6.41 percent of mortgage holders were behind by two or more months. But the uptick is still unwelcome news.

“We were hoping for better, because delinquencies remain very high,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit. Prior to the housing bust, the mortgage delinquency rate typically hovered around 2 percent.

What’s more, while the national rate fell from the prior year, 18 states showed delinquency increases from the 2010 period. Leading the increases was a big jump in New Jersey, where the rate went to 8.32 percent from 7.43 percent.

While the national rate is still far above normal, however, Martin said the increase in the fourth quarter may in part reflect a return to seasonal patterns that disappeared during the economic downturn. Historically, delinquencies rose in the fourth quarter as some homeowners directed their funds elsewhere.

“We were certainly off pattern for the last couple of years,” Martin said.

He added that while the increase was not good news, the year-over-year decline is encouraging, and points to a continued, if slow, recovery in the housing market.

Of note were sharp declines in delinquencies in Arizona, where the rate plunged to 7.5 percent from 9.7 percent a year ago, and California, to 7.14 percent from 9.14 percent in the 2010 fourth quarter.

These two states are among the four hardest hit by the housing and foreclosure crisis.

Nevada, where the housing market has also been hit hard, saw delinquencies decline sharply as well, to 12.08 percent from 14.76. Florida, which remains the state with the highest delinquency rate, saw a far smaller decline, to 14.27 percent from 14.5 percent.

Martin said the statistics were not unexpected, in part because of the apparent return to seasonal swings in delinquency. He also noted that housing prices continued to decline during the quarter, a key factor for homeowners who are struggling to keep up with their payments.

Indeed, prices dropped in November from October in 19 of the 20 cities tracked by the Standard & Poor’s/ Case-Shiller home-price index. Only Phoenix showed an increase for the month. And with a large number of vacant homes sitting idle on the market, prices are not expected to rise for several years.

TransUnion expects the rate of late mortgage payments to tick up again in the current quarter, and then resume their decline.

The news last week of a deal with the nation’s five largest mortgage lenders will likely result in many suspended foreclosures being cleared off the books. And roughly 1 million homeowners are expected to see the size of their mortgage reduced through that deal with 49 state attorneys general, which should help reduce delinquency as well.

But until home prices stabilize and unemployment rebounds, Martin said many homeowners will continue to struggle with their payments. “Delinquencies won’t get better until that other stuff works its way through the pipeline,” and the economy also improves, he said.
Copyright © 2012 The Associated Press

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Fla. existing home, condo sales up in 4Q

Existing home sales rose 7%, condo sales 4%. Home prices down 1%, condos 4%. NAR: sales up 5.9%, prices down 4.2%.
Florida’s existing home and existing condo sales continued their positive trend in fourth quarter 2011, posting gains compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®.

Existing home sales rose 7 percent in 4Q 2011 with a total of 42,038 homes changing hands statewide; during the same period the year before, a total of 39,355 homes sold, according to Florida Realtors. Statewide sales of existing condos in the fourth quarter rose 4 percent compared to the year-ago sales figure.

Florida’s existing-home median sales price was $132,000 for the three-month period, down only 1 percent from the $133,400 reported in 4Q 2010. 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 existing condo sales, 18,558 units sold statewide in the fourth quarter compared to 17,922 units in 4Q 2010 for a 4 percent gain. The statewide existing-condo median sales price was $88,800 in the fourth quarter; a year earlier, it was $84,400 for a 5 percent increase.

“The quarterly numbers continue to show the steady improvement of the housing market in Florida,” says Florida Realtors Chief Economist Dr. John Tuccillo. “The upward movement in sales has been pretty much across the state. Prices have stabilized, and in general, the state’s economy is improving. With that improvement, we expect continued growth in housing activity.”

Mortgage rates continued to hover around historical lows in the fourth quarter. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.01 percent in 4Q 2011; one year earlier, it averaged 4.41 percent.

The 4Q 2011 sales data release is the last release handled under Florida Realtors’ partnership with the University of Florida’s Bergstrom Center for Real Estate Studies. Beginning with the January 2012 existing sales statistics, Florida Realtors will launch a new statewide housing market reporting partnership with 10K Research and Marketing, a division of the Minneapolis Area Association of Realtors and its Industry Data and Analysis department.

10K will collect and organize housing sales data from the state’s 63 local Realtor organizations. The goal is to provide unique, localized market reports to the local Realtor boards and associations, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets.

At the same time, Florida Realtors will provide more comprehensive statewide housing market statistics – but the data series will only include statewide numbers. Beginning with the January 2012 report, Florida Realtors will no longer report any market data for Realtor members’ sales in the state’s metropolitan statistical areas, as had previously been reported.

© 2012 Florida Realtors®

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Nearly 100 house markets improving

The list of housing markets showing measurable improvement expanded by 29 metros in February for a total of 98 entries on the National Association of Home Builders/First American Improving Markets Index (IMI).

With the latest addition of Miami, the list now includes seven Florida cities: Cape Coral, Deltona, Jacksonville, Miami, North Port, Punta Gorda and Tampa. Thirty-six states have at least one metro area that’s improving.

The index lists metropolitan areas that have shown improvement in housing permits, employment and house prices for at least six consecutive months. The February index adds some metropolitan areas that have been particularly weak. The IMI measures improvement from an economic trough, and NAHB says new notable entrants with six months of an upswing include Miami along with Boston; Detroit; Kansas City, Mo.; Portland, Ore.; Memphis, Tenn.; and Salt Lake City.

“The number of improving housing markets has risen for six consecutive months,” says NAHB Chairman Bob Nielsen. “Despite the many challenges that continue to drag on a housing recovery – including the tight lending environment for builders and buyers – improving conditions are slowly but surely spreading from one housing market to the next.”

“While many of the markets on the February IMI are far from fully recovered, the index points out where employment, home prices and housing production are no longer retreating and have held above their lowest recession troughs for six months or more,” said NAHB Chief Economist David Crowe. “This is a sign that a large cross section of the country is starting to turn the corner as local economic conditions stabilize.”

The IMI measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas (MSA). The three indicators are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. An MSA must have improvement in all three areas for at least six months following their respective troughs to be included on the improving markets list.

Seven markets dropped from the NAHB/First American Improving Markets Index in February as they experienced softening house prices: San Jose, Calif.; Washington, D.C.; Kankakee, Ill.; New Orleans; Worcester, Mass.; Jackson, Miss.; and Sherman, Tex.
A complete list of all 98 metropolitan areas currently on the IMI, and a separate breakout of metros newly added to the list in February, is available at:

© 2012 Florida Realtors®

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Rate on 30-year FRM falls to record 3.87%

Rate on 30-year FRM falls to record 3.87%

The average rate on the 30-year fixed mortgage fell this week to a record low, the ninth time that has happened in the last year. Even with the cheapest rates in history, the housing market remains depressed.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.87 percent this week. That’s below the previous record of 3.88 hit two weeks ago.

The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates date back to the 1950s.

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Core Logic releases 2011 home price stats

Core Logic released its December Home Price Index (HPI) report. Including distressed sales, home prices in the U.S. decreased 4.7 percent in 2011 compared with December 2010. Florida, however, fared a bit better than the national average with a price decline of only 3.3 percent. According to Core Logic, 2011 was the fifth consecutive year for a decrease in the HPI.

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Fla. consumer confidence surges upward in January

Consumer confidence among Floridians surged in January, up seven points to 77 from a revised December reading of 70, marking a steady rise in optimism, according to the University of Florida’s monthly survey.

Four of the five categories measured by the survey found increased optimism. One category that asks survey takers if they’re better off financially than they were a year ago rose four points to 60, its highest level since March 2008 when the U.S. economy began to falter. Expectations that their personal finances will improve by this time next year rose eight points to 86.

In addition, confidence in the nation’s economy over the next year went up dramatically by 14 points to 74. Trust in the U.S. economy over the next five years was upbeat, too, moving 10 points to 83. These figures parallel results of a University of Michigan study that show consumer confidence across the nation shot up from 69.9 in December to 75 in January.

Only one category dropped – whether or not it’s a good time to buy big-ticket items such as an automobile or a refrigerator, which fell four points to 81.

“Consumer confidence in Florida is now back to the level it was in January 2011,” says Chris, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “We are beginning the year with the same pattern as last year where there were relatively steady increases in confidence from the end of the summer with a surge to 77 in January 2011. This was followed by seven months of decline with the low of 61 in August 2011 when Congress debated the debt ceiling.”

The UF survey shows these increases ranged across income and age groups, except for lower income respondents whose perceptions of current personal finances declined slightly. Results also indicate little difference in confidence among political parties, which indicate that the rising consumer confidence is most likely linked to perceptions of the economy rather than concern about the upcoming November elections, Chris says.

Employment gains, especially in trade, transportation and utilities, may help explain the boost in confidence. However, Chris says, the drop in unemployment may also reflect a decline in the labor force, along with adjustments the Bureau of Labor Statistics used to remove seasonal fluctuations in its unemployment calculations.

Encouraging news about housing prices and stock market investments, which are the major asset sources for most households, also may be helping to buoy Floridians’ spirits. For instance, the median price of a single-family home increased in December to $134,300, a $4,000 gain from the previous month. In addition, the stock market is near a post-recession high.

“Concrete plans to modify Social Security and Medicare have been shelved, at least temporarily, which is a relief to many seniors,” Chris adds.

Finally, although gas prices have increased nearly 20 cents a gallon over the past month, inflation overall remains low. In addition, interest rates are at near record lows and the Federal Reserve has announced plans to keep them low for the next two years.

“While many aspects of the economy are better this year, it remains to be seen whether this level of confidence will be sustained,” Chris says. “The biggest threat to the U.S. economy, and therefore Florida, is the recession in Europe, which would affect Floridians primarily as decreased demand for Florida tourism, decreased demand for houses from foreign investors, and the stock market portfolios of workers and retirees whose investments would include companies with exposure to much of Europe. However, barring a very negative outcome to the turmoil over European debt, this pattern of confidence, if sustained, bodes well for Florida.”

The index used by UF researchers is bench marked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150. The UF survey was conducted between Jan. 2 and Jan. 25, and reflects the responses of 420 individuals statewide.

© 2012 Florida Realtors®

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Interest rates will stay low, low, low

WASHINGTON – Jan. 26, 2011 – Consumers and businesses can brace for another two years of exceptionally low interest rates after the Federal Reserve said Wednesday it is likely to keep its rates below 1 percent until late 2014 because of the economy’s continued weakness.

The decision means the era of historically low rates on loans – and savings – that the Fed kicked off at the peak of the financial crisis in late 2008 will run longer unless the economy improves faster than Fed policymakers predict.

The Fed said unemployment would stay near its 8.5 percent level through the end of this year and could still be in the range of 6.7 percent to 7.6 percent at the end of 2014. Housing remains depressed while growth in business investment has slowed, it said.

Meanwhile, inflation is staying below 2 percent.

Fed Chairman Ben Bernanke left open the possibility that the Fed could do more to fight joblessness, even at the short-term risk of inflation above the bank’s 2 percent annual target.

“There has been some encouraging news recently,” Bernanke said at a press conference. “There are positive signs, no doubt. At the same time, there are mixed signals,” as indicators such as retail sales growth have been disappointing, he said. Policymakers are also worried about Europe’s financial crisis, he said.

The Fed’s moves, and especially its decision to discuss its thinking about rate policy much more publicly than it has in the past, are laden with consequences for savers, borrowers and consumers, said PNC Financial chief economist Stuart Hoffman.

“It means that if you own certificates of deposit and you’ve bemoaned low rates, bad news – you’re going to get that this year, next year and the year after,” Hoffman said. “If you’re a borrower, very low mortgage rates are going to be here for a while. Some people may delay making decisions, but other people will plan for the future” and prepare either to buy or renovate homes, he said.

Bernanke acknowledged that savers are hurt by the low rates. “We realize that low interest rates impose a cost,” he said. “The savers in the economy are dependent on a good economy to get a good return.”

Wall Street reacted favorably to the news, pushing stocks higher and interest rates lower. The Dow Jones industrial average climbed 83 points to 12,759.

The yield on 10-year U.S. Treasuries, which closed at 2.06 percent Tuesday, dropped as low as 1.91 percent before settling at 1.99 percent.

Most Fed governors think the economy will grow by 2.2 percent to 2.7 percent this year, with unemployment at 8.2 percent to 8.5 percent and core inflation at 1.5 percent to 1.8 percent, the Fed said.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Tim Mullaney

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Are cash buyers driving down home prices?

Are cash buyers driving down home prices?
Cash buyers are sending home values down much lower than they otherwise would be, suggests a new survey by Campbell Inside Mortgage Finance, which polled more than 2,500 real estate agents nationwide.

In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.

“Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.

Cash buyers can be attractive to home sellers, banks and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.

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Jan. 20, 2012 Florida’s home, condo sales end 2011 higher

Fla.’s home, condo sales end 2011 higher
Home sales rose 8%, condos 15%. Fla. home, condo median price in Dec. up 1%, 4% respectively. National sales up 5%.
Jan. 20, 2012 – At the close of 2011, Florida’s existing home and condominium markets reported higher sales compared to the previous year, according to the latest housing data released by Florida Realtors®. It was the third consecutive year for statewide home and condo sales activity to end the year on a positive upswing – higher year-over-year sales also were reported at the close of 2010 and 2009, records show.

Looking back on 2011, Florida’s existing home sales rose 8 percent for the year, with a total of 185,921 homes sold compared to 172,462 homes sold in 2010. The statewide existing home median price for 2011 was $131,700; it was $135,900 in 2010 for a 3 percent decrease. In Florida’s condo market, a total of 87,581 units sold statewide in 2011, a gain of 15 percent compared to 76,209 units sold in 2010. The statewide existing condo median price in 2011 was $88,300; it was $90,000 in 2010 for a 2 percent decrease.

Sixteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales at the close of 2011 compared to 2010; the same number of MSAs also reported higher existing condos sales.

“Florida’s economy is continuing to strengthen, which is good news,” “Many people are hoping to take advantage of the current record low mortgage rates and affordable conditions to find their Florida dream home – but overly restrictive lending requirements continue to create barriers to homeownership for qualified homebuyers. To re-energize the housing market and the economic recovery, we need improved access to affordable financing options for qualified buyers and investors.”

In December, a total of 15,290 existing single-family homes sold statewide, a decrease of 2 percent from the 15,546 homes sold in December 2010. The statewide existing home median sales price last month was $134,300, up 1 percent from the $133,000 reported in December 2010, according to Florida Realtors’ data. The national median existing single-family home price was $165,100 in December, according to the National Association of Realtors® (NAR). The median is the midpoint; half the homes sold for more, half for less.

In the year-to-year comparison for statewide existing condo sales, a total of 6,836 units changed hands last month, compared to 6,985 condos sold in December 2010 for a decrease of 2 percent. The statewide existing condo median sales price in December was $91,900, up 4 percent from the $88,400 reported a year earlier. The national median existing condo price was $160,000 in December, according to NAR.

“Although sales were down slightly in December, they’re up strongly for the year, which reinforces the reality that Florida is in a slow real estate recovery,” “Our expectation is that recovery will continue through 2012. The major obstacle in the market is the inadequate accessibility to financing. Prices are moderating, but we don’t expect too much movement owing to the continuing significance of distressed properties.”

In December, the interest rate for a 30-year fixed-rate mortgage averaged 3.96 percent, down from the 4.71 percent average during the same month a year earlier, according to Freddie Mac. The annual average rate for a 30-year mortgage in 2011 was 4.45 percent. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

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