Real Estate Sales to Rebound in Six Months

22 10 2006

Existing home sales across South Florida could rebound in the next three to six months, but demand for new homes probably won’t pick up until 2008, a real estate analyst said Wednesday, adding that “the Realtors will get happy before the builders.” Meanwhile, NAR’s real estate outlook calls for national sales activity to pick up early next year.

“The Realtors will get happy before the builders,” Brad Hunter told more than 400 people attending an Urban Land Institute conference at the Palm Beach County Convention Center in West Palm Beach.

If hurricane season ends Nov. 30 without another storm hitting the region, hesitant buyers will start making offers on the glut of unsold homes, said Hunter, who runs the South Florida division of MetroStudy, a West Palm Beach consulting firm. It will take about 18 months after that for new home sales to increase, he said.

Other real estate observers are more skeptical of short-term improvement in a local housing market that slowed dramatically in 2006 after the five-year boom when the price of a typical home more than doubled to well above $300,000.

Aside from the threat of hurricanes, buyers are afraid to commit for fear that falling prices will tumble more, Hunter said. But Moody’s issued a report last week that suggested the worst of the housing squeeze has occurred in South Florida.

The West Chester, Pa., research firm said Palm Beach County’s median price for existing homes fell from late 2005 through the third quarter of 2006 but won’t go any lower. Broward County’s median will continue to decline through the third quarter of 2007, according to the report.

Palm Beach County’s median price declined $25,400 to $386,000 in August, marking the first year-over-year drop in seven years, according to the Florida Association of Realtors. The August median for Broward County fell $24,200 to $362,800. It was the second month in a row that Broward’s median declined on an annual basis.

Mortgage rates are holding steady, and former Federal Reserve Chairman Alan Greenspan said this week that he expects the slumping market to stabilize.

“The key thing that has to happen,” Hunter said, “is that the (buyers’) psychology has to change, and it’s going to.”

Still, rising insurance premiums and property-tax bills are major deterrents to buying homes. Consumers are looking to lawmakers to offer relief on those fronts.

“A lot of people are sitting and waiting,” said Debbie Anderson, an agent for Prudential Florida WCI Realty in northwest Broward County. “I don’t blame them.”

Ashley Ostroff is asking $498,900 for her three-bedroom Palm Beach Gardens home even though her agent said she could get more. Ostroff, a marketing director, has yet to field an offer.

“Even people who are ready to buy now are waiting because of what they’re hearing in the media,” she said. “It doesn’t matter what the market is doing. Buy at the price that’s right for you.”

Minto Communities, a Coconut Creek-based home builder, said it’s starting to find more interest in new homes.

About 3,000 people turned out last weekend for a townhouse and condominium development in Sunrise, while 1,500 showed up in August for a single-family home project in St. Lucie County, Minto President Harry Posin said.

“The consumer is responding,” he said. “We just have to work through this.”

Source: South Florida Sun-Sentinel

Florida’s Real Estate Forecast: Still Sunny

22 10 2006

Florida real estate may be in a slump, but its future is golden. That’s the
good news former Wall Street economist Richard Hokenson delivered
last week to Tampa Bay’s Chartered Financial Analysts. “Ride the
wave,” he told them, but he wasn’t talking about surfing. Hokenson,
who runs a demographics consulting firm in New Jersey, said the wave
of baby boomers rolling into retirement provides an investment
opportunity. “There’s a baby boom tsunami and a fixed supply of coastal
land,” he said at the meeting at the University Club. Whether boomers
can afford a Florida retirement may depend on whether they can shed
their NIKEs, the acronym Hokenson bandied for “No Income Kids with
Education.” Hokenson says population trends explain 70 percent of
what happens in the economy.

Source: St. Petersburg Times

Homebuyers More Cautious with Their Money

22 10 2006

Compared with a year ago, more adults are buying homes at prices they can afford rather than trying to stretch themselves financially.

Among those who have purchased a home in the past three years, 78 percent say they bought within their price range, up from 67 percent last year, according to a survey conducted by Harris Interactive for Wall Street Journal Online.

Single adults are more likely than married people to stretch their finances; 30 percent of single adults, compared with 15 percent of married couples, say they purchased a home above their price range.

Thirty-eight percent of borrowers said they used “creative” or “pay option” mortgages, up from 33 percent a year earlier.

Fourteen percent used interest-only mortgages, which let them avoid paying principal in early years of the loan. That’s down from 17 percent a year earlier.

Another 12 percent combined traditional mortgages with home equity loans or other lines of credit. Nine percent used mortgages that let them choose what to pay each month, and 3 percent took out mortgages that let them skip some payments.

Source: Planet Realtor

U.S. Population Hit 300 Million Milestone

22 10 2006

According to the U.S. Census Bureau, the U.S. population hit 300 million this month and all those people must live somewhere.

The Census Bureau expects a surge in the country’s population to 400 million during the next 35 years, with immigrants accounting for most of those newcomers. With about
86 people per square mile nationwide now, the U.S. would seem to have plenty of room for more, but where will these new Americans live?

As it grows, the population is increasingly concentrated in just a dozen states, and the heartland in states like North Dakota, Ohio, Michigan, Kansas and Nebraska are either losing population or just staying even.

The Center for Environment and Population, a nonpartisan research group, calculates that more than half the population lives within 50 miles of the coasts, and half of these new residents will join them. But other areas with reasonable housing costs will become a draw, and there’s some sign that’s already happening. The foreign-born population of Tennessee is up 140 percent in the past five years, while Idaho and Utah grew by 10 percent — twice the rate of the U.S. generally.

Source: The Wall Street Journal

Housing Starts Rise in September

22 10 2006

Construction of new homes and apartments, which had been falling in the face of a weakening housing market, posted an unexpected increase in September.

The Commerce Department reported that construction rose by 5.9 percent last month to a seasonally adjusted annual rate of 1.772 million units. It was the first increase after three consecutive monthly declines.

Analysts, however, still expect housing to move lower as builders continue to work through record levels of unsold homes. Building permits, a good sign of future activity, fell in September for an eighth consecutive month.

Source: The Associated Press

One-Stop Shop is Tops

22 10 2006

Homebuyers pay no more in settlement costs when they deal with affiliated real estate companies than they do if they conduct business with independent, unaffiliated companies, according to new research. The study, conducted by CapAnalysis Group for the Real Estate Services Providers Council, whose members include title companies, negates the theory that affiliated businesses provide inadequate service or overcharge customers, says Brian Levy, council chairman. “In fact, vertically integrated businesses are probably held even more accountable for exceptional service and competitive costs, because if something goes wrong anywhere in the transaction, the finger can only point back in one direction,” Levy says. The council commissioned the survey in response to government scrutiny of settlement services that are directly or indirectly owned by the company or individuals referring the business.

Source: REALTOR® Magazine Online

Immigration Policies are Deterring Foreign Buyers

22 10 2006

Real estate professionals in Florida are speaking out against federal security and immigration policies that make it difficult for foreigners to purchase homes in the United States.

Agents in the state also say that some longtime foreign property owners have found it difficult to renew their visas in recent years and that some foreigners and/or their relatives have not been allowed to return to the States after leaving to visit their home countries.

“It seems like we’re putting the thumbscrews down on the very type of people we want here,” notes Tony Macaluso, vice chairman of the Florida Association of Realtors’ (FAR) international operations committee.

Foreigners who want to stay in the United States for more than 90 days are required to obtain visas, and even then the Department of Homeland Security can turn them away. They also must undergo more comprehensive background checks as well as routine fingerprinting.

FAR is urging the government to offer a retirement visa to foreigners who meet specified financial guidelines, as visa issues are prompting international property buyers to settle instead in Panama, Costa Rica, Mexico and other countries with fewer barriers to entry.

Source: Planet Realtor

Top Seven Mistakes that Home Buyers Make

22 10 2006

Over the past few weeks, we have examined steps that buyers should take to make buying a home a smooth and easy process. This week, we’ll cover what I believe are the top seven mistakes that buyers make, so you can avoid them:

1. Looking at homes for sale before getting pre-qualified for a loan.

Unless you have the cash to buy without a loan, it makes sense to talk with a lender about what types of loans you might qualify for and how much down payment you will need. Many buyers fall in love with homes they cannot possibly afford.

2. Getting talked into the wrong kind of loan.

We are very likely entering a period of rising interest rates. So it doesn’t make sense to apply for an adjustable rate loan unless you want to pay more interest later.

Instead, focus on fixed rate loans. If you are certain you will need to sell in less than seven years, you might consider a loan that is fixed for only five years, but avoid interest-only loans.

When the time comes, don’t shop for a loan based on the rate alone. Compare each lender’s good-faith estimate of overall costs.

3. Looking at a house in the wrong location.

Because location is so important in the future value of a house, be very sure where you want to live. If that means renting for six months or a year to be sure, so be it.

Remember that metro Atlanta has some of the worst traffic in the nation. There is a reason that people are willing to pay more for a house in a convenient location. Know where you want to live and find a way to own there.

4. Buying the first house you see.

This often happens when a friend calls and says, “There is this perfect house in my neighborhood, but you have to act quickly.”

Your response should be that there is no such thing as the last deal in real estate. Take your time and see a variety of houses in your price range. Compare features and amenities.

5. Waiting for the best deal in the world.

Many buyers, especially first-timers, hope to score a home run during their first at-bat. They want to get a house in great shape for about half of what it’s worth. Unfortunately, most true bargains are snapped up before they hit the market.

Focus on trying to find a fair price, and let time and inflation work for you.

6. Not having a professional home inspection.

It is very important to bring in a disinterested third party to examine the home. Only an experienced inspector can give an unbiased view and help you know what you are getting.

That advice is good for resales as well as new construction. Because builders often rely on subcontractors, they welcome a professional inspector who conducts a “phased” inspection.

That means the inspector visits the site several times during the building phase, then returns for a final walk-through. Many county inspectors are overloaded and may just do a “drive-by” of your home. You deserve better.

7. Lacking professional representation.

In my opinion, it is a mistake to undertake the home-buying process without the services of an experienced real estate professional and the legal advice of an attorney.

In almost every case, your real estate agent will be compensated by sharing in the commission paid by the seller. And the quality of your buying experience jumps dramatically as soon as a real estate professional enters the picture.

There are simply too many opportunities to make a wrong turn, and your agent has “been there and done that” when it comes to the twists and turns of the process many times before and has a better idea of how to make the right turn.

Likewise, you are about to enter into the most important and expensive contractual agreement of your lifetime, signing a five-page document in small print that you simply do not understand.

How could you think of doing this without consulting your legal adviser? Instead, have your attorney review everything you intend to sign, and I mean everything.

And do it before you sign it.

Source: The Journal-Constitution

In Cooling Market, Sellers Turn To Patron Saint

22 10 2006

As the real-estate market softens, some people are turning to faith – and a shovel – to sell their stagnant properties.

According to tradition, burying a statue of St. Joseph in the lawn – and praying to the patron saint of house sellers – will help a real-estate deal.

And with sales of existing single-family homes falling significantly in Central Florida and much of the country, it’s a tradition that appeals to sellers such as Tricia Caldiero.

Caldiero’s three-bedroom Deltona home, priced at $219,000, has been on the market for more than nine months.

“Nothing is happening. And I am desperate,” Caldiero said. “I thought it would sell, piece of cake.”

Caldiero, who recently adopted a baby and moved back to New York, is juggling two mortgages.

So she begged her real-estate agent to submerge the tiny St. Joseph statue in the lawn. Another is buried at Caldiero’s New York home.

“Whichever (house) sells first, I’m just going to live in the other one,” she said. “It’s in God’s hands now.”

While home sales are slow, the sale of St. Joseph statues is anything but sluggish.

“It’s gone absolutely bananas,” said Ann DeMartino, owner of TWOS Sales, Inc., a St. Joseph statue wholesale company in Illinois. “It’s hard to keep up with the amount of orders.”

In a regular year, she usually sells 80,000 to 90,000 statue kits.

But this year, she already has sold more than 100,000.

“People just turn to faith and prayer,” she said. “It shouldn’t be your last resort, but a lot of times, that’s what it is.”

The key to the tradition, according to one Roman Catholic group, is devotion. Without prayer and faith, the burial is just plain superstition.

“The distinction is what the disposition of the individual is,” said Mike Sullivan, vice president of Catholics United for the Faith.

The church itself has neither condoned nor condemned the practice, Sullivan said.

“It’s never been encouraged or discouraged,” he said. “But the practice of asking intercession from the saints is certainly encouraged.”

Web sites that sell the statues said the tradition dates back hundreds of years, to European nuns looking for land for their convents. They buried medals of St. Joseph and asked for his blessing.

Phil Cates, owner of the Web site, sells thousands of statues each month. Florida is his biggest market. Originally a skeptic, Cates latched onto the idea for its marketing value. But the thousands of testimonials he has heard have convinced him.

“When I started this thing back in 1990, I thought this thing was kind of a fluke, a novelty,” he said. “With this much evidence in front of me, I’d be a fool not to be a believer.”

Another St. Joseph entrepreneur, Ron Weissman, started an Internet business in June. The Delray Beach, Fla., man said he has been “flabbergasted” by the sales at

“We expected hundreds, and we’re selling thousands,” Weissman said. “It’s just amazing to me, and I guess you have to attribute it to the downturn.”

The Internet isn’t the only place to find the statues. The Abbey Catholic Book and Gift Store in Orlando has stocked the statues since before the new owners took over in 1989. It sells an average of one or two a day.

“They’ve always sold really well,” owner Sandy Wilkinson said. “We have a lot of people who come back and tell us, yes, it did work.”

According to Realtor Don Kiolbasa, the statues should be buried upside down, facing the road, in the front of the house. Once the house sells, the statue should be dug up.

“I can’t tell you how many St. Josephs I’ve put in the ground,” said Kiolbasa, of Watson Realty in Oviedo, Fla. “In this market, I’ve been putting them in all the listings.”

His partner, Erika Szabo, has taken to the trend as well.

“I actually started doing it six months ago, when the market changed,” she said. “The overabundance of inventory has made it (selling houses) more challenging.”

Szabo said the tradition boosts the morale of sellers.

“I think it makes it a little more enjoyable for the customers, and families and the children,” she said. But it’s just a small part of the equation. “You have to put in 120 percent still.”

Though the tradition may be familiar to some, homeowner Bob Konen hadn’t heard of it. A lifelong Catholic, he was wary of putting a sacred figure headfirst in the dirt.

“I had to look it up myself to believe it,” said Konen, whose home in Celebration, Fla., is listed for $979,000.

He hopes the statue will add a bit of faith – and some fun – to the home sale.

“We’re just going to hope St. Joseph might bring us a blessing,” Konen said.

Source: The Orlando Sentinel

Younger Home Buyers More Prevalent

22 10 2006

As they begin to enter the housing market, many consumers in their 20s are more likely to buy a home at a younger age than their older brothers and sisters as well as their baby boomer parents, and are not necessarily waiting for marriage or even a long-term relationship before becoming homeowners, according to a new NAR study.

“The next generation of homeowners is beginning to exert its influence on the housing market,” said Thomas M. Stevens, National Association of Realtors president from Vienna, Va., and senior vice president of NRT Inc. “Many younger buyers have seen the wealth-building effects of homeownership in their parents and understand the value of housing as a good long-term investment.”

The motivations, interests, and home buying approach of some younger buyers are chronicled in “Tomorrow’s Buyers: Who They Are and What They Want” in the September 2006 issue of REALTOR Magazine. The report integrates NAR research with the experiences and attitudes of real-life buyers who represent different demographic populations, putting a human face on statistical trends.

The percentage of first-time homebuyers under age 25 has been increasing in response to historically low interest rates and continued confidence in the long-term housing market, from 11 percent in 2001 to 14 percent in 2005, according to the 2005 NAR Profile of Home Buyers and Sellers. “Owning a home is no more burdensome than renting, and in the long term, it’s the better investment,” said Kristen Carreira, a 26-year-old homeowner in Pittsburgh.

Carreira is also part of a trend in single female home buyers. While married couples are still the norm, they represent a smaller share of the home buying public than they did just 10 years ago, from 70 percent of home buyers in 1995 to 61 percent today, says NAR. During that same time, the proportion of single women buying homes has increased, from 14 percent in 1995 to 21 percent today.

Younger buyers are also likely to use technology and the Internet in their home buying search. In 2005, according to NAR research, the median age of buyers who used the Internet to search for homes was 11 years younger than those who did not, at 38 and 49, respectively.

“Realtors have adapted to meet the needs of this growing population of young home buyers,” said Stevens. “More than one-third of NAR’s 1.3 million Realtor members have had special training and lots of experience in buyer representation and technology. That expertise is reflected in special designations and certifications, such as the Accredited Buyer Representative (ABR) designation and e-PRO certification. A commitment to understanding the demands of this changing marketplace is just one more way Realtors add value to the real estate transaction.”

Source: National Association of Realtors

National Foreclosures Increase 24 Percent

22 10 2006

According to a national foreclosure tracking service, foreclosures increased 24 percent from one month earlier and 53 percent from a year earlier. Colorado, Nevada, and Florida posted the highest state wide rates.

The five states with the most new foreclosure filings — Florida, Texas, California, Ohio and Illinois — accounted for 50 percent of the nation’s foreclosure activity in August. Other states reporting foreclosure rates among the nation’s 10 highest were Georgia, Texas, Michigan, Ohio, Illinois, Indiana and Utah.

Highest metro foreclosure rates in Colorado, Florida and Louisiana

Greely, Colo., posted the highest foreclosure rate among the nation’s 252 largest metropolitan areas, with one new foreclosure filing for every 136 households — more than seven times the national average. The Greely metro area comprises one county, Weld, which reported 488 properties entering some stage of foreclosure, a 39 percent increase from the previous month.

With one new foreclosure for every 166 households, Baton Rouge, La., documented the nation’s second highest metro foreclosure rate. Of the four parishes that are in the metro area, East Baton Rouge Parish reported the majority of foreclosure activity, with 1,507 properties entering some stage of foreclosure during the month. That represented an increase of more than 2,500 percent from the previous month, when only 56 new foreclosure filings were reported.

A foreclosure moratorium imposed by the Department of Housing and Urban Development for homeowners affected by the hurricanes of last year ended Aug. 31, contributing to the sharp rise in foreclosure activity in Baton Rouge and Louisiana as a whole.

Fort Lauderdale, Fla., documented the nation’s third highest metro foreclosure rate — one new foreclosure filing for every 174 households. Broward County reported 4,263 properties entering some stage of foreclosure, an increase of more than 160 percent from the previous month.

Foreclosure rates in Miami and Denver also registered among the top five metro foreclosure rates. Miami reported 4,362 properties entering some stage of foreclosure — one new foreclosure filing for every 195 households — and Denver reported 4,506 properties entering some stage of foreclosure — one new foreclosure filing for every 196 households.

Source: National Realty News

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