NAR: Second-Home Sales Fall

31 03 2009

The number of people buying vacation and investment homes fell 30 percent last year, according to the National Association of Realtors.

But, those who are buying are doing so with cash – with more than four out of 10 investment buyers and more than three in 10 vacation home buyers coming to the table with money up front.

“We expected vacation-home sales to fall given the impact of a declining economy on discretionary purchases,” said Lawrence Yun, NAR chief economist, in a news release. “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”

The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while an additional 9 percent were vacation homes, down from a 12 percent market share in 2007, according to NAR.

And as with the market for primary residences, second-home prices were also down significantly.

The median price of a vacation home was $150,000 in 2008, down 23.1 percent from $195,000 in 2007.

The typical investment property cost $108,000 last year, which is 28 percent below the 2007 median of $150,000, according to NAR.

Among other findings:

– The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence.
– Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
– Twenty-six percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb and 8 percent in an urban area or central city.
– Twenty-eight percent of investment homes were purchased in a suburb, 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town and 6 percent in a resort area.
– Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or row houses and 7 percent other.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or row houses and 6 percent other.

The survey, conducted in March, includes answers from 1,924 usable responses.





U.S. Existing Home Sales Up 5.1% in Feb.

25 03 2009

Sales of existing homes increased 6.1 percent in the South in February, according to Jacksonville Business Journal.

On a national level, existing home sales were up 5.1 percent in February, according to a report released Monday by the National Association of Realtors.

But sales in the South are still soft — more than 11 percent lower than February 2008.

More than 40 percent of sales in February across the nation were of foreclosed properties, or properties in default that were being sold for less than the mortgage balance.

Most of the sales nationally were concentrated at the bottom of the price ladder. Because more expensive homes are selling less well, the sales records continue to show dropping median prices.

The median price in the South was $146,700, down 10 percent from a year ago.





U.S. Existing Home Sales Up 5.1% in Feb.

24 03 2009

Sales of existing homes increased 6.1 percent in the South in February, according to Jacksonville Business Journal.

On a national level, existing home sales were up 5.1 percent in February, according to a report released Monday by the National Association of Realtors.

But sales in the South are still soft — more than 11 percent lower than February 2008.

More than 40 percent of sales in February across the nation were of foreclosed properties, or properties in default that were being sold for less than the mortgage balance.

Most of the sales nationally were concentrated at the bottom of the price ladder. Because more expensive homes are selling less well, the sales records continue to show dropping median prices.

The median price in the South was $146,700, down 10 percent from a year ago.





FAR: Home Sales Up, But Prices Continue to Fall

24 03 2009

While sales of existing homes in Florida rose for the sixth month in a row, prices remained significantly depressed.

Existing home sales in the Sunshine State rose 20 percent, with 9,858 homes sold statewide, up from 8,181 homes sold during the same month last year, according to the latest housing data from the Florida Association of Realtors.

The sale of existing condos was up 15 percent last month to 3,198 from 2,785 units sold in February 2008. February condo sales were up 25.1 percent over the total units sold in January.

The statewide existing condo median sales price last month was $109,300, down 37 percent from last February, when the median sales price was $173,900.

Thirteen of Florida’s metropolitan statistical areas reported increased existing-home sales in February, while 11 MSAs also showed gains in condo sales. That marks the eighth month in a row that a number of markets have reported increased sales.

However, prices remain down, the result of discounted sales and foreclosures.

The statewide median sales price for existing homes last month was $141,900 – down 29 percent from a year ago, when it was $199,300.

The median is the midpoint of sales prices: Half the homes sold for more, half for less.

In Jacksonville sales were up 6 percent and the median price fell 11 percent to $159,500. Condo sales fell 26 percent and the median price was down 17 percent to $118,600.

Source: Florida Association of Realtors





FAR: Home Sales Up, But Prices Continue to Fall

23 03 2009

While sales of existing homes in Florida rose for the sixth month in a row, prices remained significantly depressed.

Existing home sales in the Sunshine State rose 20 percent, with 9,858 homes sold statewide, up from 8,181 homes sold during the same month last year, according to the latest housing data from the Florida Association of Realtors.

The sale of existing condos was up 15 percent last month to 3,198 from 2,785 units sold in February 2008. February condo sales were up 25.1 percent over the total units sold in January.

The statewide existing condo median sales price last month was $109,300, down 37 percent from last February, when the median sales price was $173,900.

Thirteen of Florida’s metropolitan statistical areas reported increased existing-home sales in February, while 11 MSAs also showed gains in condo sales. That marks the eighth month in a row that a number of markets have reported increased sales.

However, prices remain down, the result of discounted sales and foreclosures.

The statewide median sales price for existing homes last month was $141,900 – down 29 percent from a year ago, when it was $199,300.

The median is the midpoint of sales prices: Half the homes sold for more, half for less.

In Jacksonville sales were up 6 percent and the median price fell 11 percent to $159,500. Condo sales fell 26 percent and the median price was down 17 percent to $118,600.

Source: Florida Association of Realtors





Florida Ranks No. 3 for Business

19 03 2009

Florida moved up in the ranks to become the third-best state in which to conduct business, according to Chief Executive magazine.

The magazine evaluated states on natural resources, regulation, tax policies, quality of living, education and infrastructure, among others. Florida ranked No. 10 in 2008.

Only Texas and North Carolina placed ahead on the list, which is based on surveys of more than 500 chief executives.

However, Florida didn’t rank as high in some of the categories. For example, the Sunshine State ranked No. 42 when it comes to the cost of business, No. 18 for transportation, No. 39 for education and No. 23 for quality of life.

For the fourth year in a row, California and New York were ranked the worst and second worst states to do business in, respectively. Michigan came in third from the bottom for the second year in a row. The only difference in the bottom five was a flip in the worst fourth and fifth states, as New Jersey took over Massachusetts as the fourth worst state.

Chief Executive magazine said states that perform well in the rankings tend to have lower taxes and little unionization.

Source: Chief Executive magazine





Florida Ranks No. 3 for Business

19 03 2009

Florida moved up in the ranks to become the third-best state in which to conduct business, according to Chief Executive magazine.

The magazine evaluated states on natural resources, regulation, tax policies, quality of living, education and infrastructure, among others. Florida ranked No. 10 in 2008.

Only Texas and North Carolina placed ahead on the list, which is based on surveys of more than 500 chief executives.

However, Florida didn’t rank as high in some of the categories. For example, the Sunshine State ranked No. 42 when it comes to the cost of business, No. 18 for transportation, No. 39 for education and No. 23 for quality of life.

For the fourth year in a row, California and New York were ranked the worst and second worst states to do business in, respectively. Michigan came in third from the bottom for the second year in a row. The only difference in the bottom five was a flip in the worst fourth and fifth states, as New Jersey took over Massachusetts as the fourth worst state.

Chief Executive magazine said states that perform well in the rankings tend to have lower taxes and little unionization.

Source: Chief Executive magazine





New Home Construction Jumps 22%

17 03 2009

New home building unexpectedly rebounded last month as builders nationwide increased housing starts to a 583,000 annual pace from a record low of 477,000 set in January.

The U.S. Department of Commerce reported Tuesday that starts of new homes in the South, which includes Florida, jumped 30 percent last month compared to the month before, but they were still 44 percent below home starts in the South one year ago.

Nationwide, new home construction rose 22 percent from January to February, but remained 48.5 percent below year-ago levels. The surge was led by an 83 percent jump in multifamily construction. Single-family home-building rose a modest 1.1 percent.

Only one region reported a drop in housing starts – the West, where starts declined 24.6 percent. The largest increase was in the Northeast, where starts increased 88 percent.

Permits for new home construction in the South rose 5.9 percent from January to February, but were still 46 percent lower than the prior year.

Nationwide, permits rose 3 percent from January to February, but remained 48.8 percent lower than a year ago.

The South region includes Virginia; Maryland; Washington D.C.; Alabama; Arkansas; Delaware; Florida; Georgia; Kentucky; Louisiana; Mississippi; North Carolina; Oklahoma; South Carolina; Tennessee; Texas; and West Virginia.

Source: U.S. Department of Commerce





New Home Construction Jumps 22%

17 03 2009

New home building unexpectedly rebounded last month as builders nationwide increased housing starts to a 583,000 annual pace from a record low of 477,000 set in January.

The U.S. Department of Commerce reported Tuesday that starts of new homes in the South, which includes Florida, jumped 30 percent last month compared to the month before, but they were still 44 percent below home starts in the South one year ago.

Nationwide, new home construction rose 22 percent from January to February, but remained 48.5 percent below year-ago levels. The surge was led by an 83 percent jump in multifamily construction. Single-family home-building rose a modest 1.1 percent.

Only one region reported a drop in housing starts – the West, where starts declined 24.6 percent. The largest increase was in the Northeast, where starts increased 88 percent.

Permits for new home construction in the South rose 5.9 percent from January to February, but were still 46 percent lower than the prior year.

Nationwide, permits rose 3 percent from January to February, but remained 48.8 percent lower than a year ago.

The South region includes Virginia; Maryland; Washington D.C.; Alabama; Arkansas; Delaware; Florida; Georgia; Kentucky; Louisiana; Mississippi; North Carolina; Oklahoma; South Carolina; Tennessee; Texas; and West Virginia.

Source: U.S. Department of Commerce





Florida Existing Home and Condo Sales Rose 24%

4 03 2009

Florida’s existing home sales rose in January, making it the fifth month in a row that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). Existing home sales rose 24 percent last month with a total of 8,450 homes sold statewide compared to 6,810 homes sold in January 2008, according to FAR.

“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” said 2009 FAR President Cynthia Shelton. “With a range of available housing options, historically low mortgage interest rates and affordable prices, buyers who may have been hesitant before should take a closer look at the current opportunities for homeownership. As real estate professionals who know all aspects of their local market conditions, Florida Realtors are here to help counsel consumers making sound long-term decisions for their homes and their businesses.”

Florida Realtors also reported a 13 percent gain in statewide sales of existing condominiums in January, making it the fourth recent month (following September, October and December) that statewide existing home and existing condo sales were higher compared to year-ago levels.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in January while 11 MSAs also showed gains in condo sales; it marks the seventh consecutive month that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $139,500; a year ago, it was $206,900 for a 33 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2008 was $174,700, down 14.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $281,100 in December; in Massachusetts, it was $275,000; in Maryland, it was $267,925; and in New York, it was $220,000.

NAR’s latest housing outlook shows that home prices continue to fall, but also notes a trend of increasing sales activity in the Florida, California, Arizona and Nevada markets. “It appears some buyers are taking advantage of much lower home prices,” said NAR Chief Economist Lawrence Yun. “The higher monthly sales gain and falling inventory are steps in the right direction, but buyers will continue to have an edge over sellers for the foreseeable future.”

In Florida’s year-to-year comparison for condos, 2,556 units sold statewide compared to 2,266 sold in January 2008 for a 13 percent increase. The statewide existing condo median sales price last month was $113,400; in January 2008 it was $190,200 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $181,400 in December 2008.

Interest rates for a 30-year fixed-rate mortgage averaged 5.05 percent last month, down from the average rate of 5.76 percent in January 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Daytona Beach MSA reported a total of 419 homes sold in January compared to 321 homes a year ago for a 31 percent increase. The existing home median sales price was $131,800; a year ago, it was $179,100 for a 26 percent decrease. In the year-to-year comparison for the existing condo market, a total of 77 units sold in the MSA last month, up 43 percent compared to 54 condos sold the previous January. The market’s existing condo median price was $167,800; a year ago, it was $230,000 for a 27 percent decrease.

Source: Florida Association of Realtors





Department of Defense Homeowners Assistance Program

4 03 2009

The Department of Defense (DOD) announced the Homeowners Assistance Program (HAP) to eligible service members and federal civilian, including non-appropriate fund, employees. The program is authorized by law to assist eligible homeowners who face financial loss when selling their primary residence homes in areas where real estate values have declined because of a base closure or realignment announcement.

The DOD has designated the US Army its executive agent for HAP. The US Army Corps of Engineers (USACE) administers the program for the Army, Navy, Marine Corps, Air Force, and the Coast Guard.

Working with installation commanders and housing officials, USACE district realty specialists are committed to offering all possible assistance in determining and providing HAP benefits to all eligible applicants.

HOW IT WORKS

Generally HAP provides assistance in four possible ways. If you are eligible for HAP benefits, the Government may:

1. Reimburse you for part of your loss from selling your home.

2. Assist you, if you don’t receive enough proceeds from the sale of your home to pay off your mortgage.

3. Buy your home by paying off the mortgage.

4. Help you, if you default on your mortgage.

HOW TO APPLY FOR HAP BENEFITS

The application is made on DD Form 1607, application for Homeowners Assistance Program. Part III, Section IV of the form must be completed by your personnel officer. In addition, you must submit a variety of documents to show evidence of your ownership of the property, your occupancy dates, your assignment orders, your efforts to sell the home (whether or not it was sold), and mortgage details.

A complete application pacakge can be obtained from either base/installion housing or personnel offices, or it can be downloaded from http://www.hap.usace.army.mil. Before you make an application, please contact the DOD HAP National Hotline at 1-888-DODHAP1 (888-636-4271.)

For more information, contact the DOD HAP National Hotline at 1-888-DODHAP1 (888-363-4271O, visit the website at http://hap.usace.army.mil or call the field office corresponding to your area of the country below:

HAP Field Office, Fort Worth
U.S. Army Engineer District, Fort Worth
P.O. Box 17300
Ft. Worth, TX 76102-0300
817-886-1209
888-231-7751

HAP Field Office, Sacramento
U.S. Army Engineer District, Sacramento
1325 J Street
Sacramento, CA 95814-2922
916-557-6850
800-811-5532

HAP Field Office, Savannah
U.S. Army Engineer District, Savannah
Homeowners Assistance Program
Attn: RE-RH
P.O. Box 889
Savannah, GA 31402-0889
912-652-5020
800-861-8144

National Program Manager
Headquarters, U.S. Army Corps of Engineers
Department of Defense Homeowners Assistance Program
411 G Street, NW
Washington, DC 20314-1000
202-761-1566





Fannie Mae Stops Cutting Real Estate Commissions in a Short Sale

4 03 2009

Real estate commissions are now protected in some short-sale transactions. In response to Realtor concerns, Fannie Mae announced that “preforeclosure sales may not be conditioned upon a reduction of the total (real estate) commission,” providing the total commission does not exceed 6 percent. The policy became effective March 1.

The move affects only short sales where Fannie Mae backs the mortgage, but experts hope Freddie Mac and other government-sponsored enterprises (GSEs) will soon follow suit. Currently, Fannie Mae and Freddie Mac back over half the mortgages in the U.S.

The change seeks to solve a problem encountered by many Realtors. After putting together a short-sale package and submitting it to the lender for approval, Realtors report that lenders would often counteroffer with a cut in commission. Realtors then found themselves working twice as hard on a short sale for less money.

In November during the National Association of Realtors’ (NAR) Legal Seminar, Fannie Mae officials turned to Realtors and asked what could be done to expedite the short-sale process. Among other things, attendees took Fannie Mae to task for their commission policies. The recently announced change is Fannie Mae’s response.

Fannie Mae’s announcement appeared as a short notice in a “Miscellaneous Servicing Policy Changes” announcement. It says:

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in the aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

The original document can be downloaded from Fannie Mae’s Web site at https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp?referrer=frpromo.





Florida Existing Home and Condo Sales Rose 24%

4 03 2009

Florida’s existing home sales rose in January, making it the fifth month in a row that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). Existing home sales rose 24 percent last month with a total of 8,450 homes sold statewide compared to 6,810 homes sold in January 2008, according to FAR.

“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” said 2009 FAR President Cynthia Shelton. “With a range of available housing options, historically low mortgage interest rates and affordable prices, buyers who may have been hesitant before should take a closer look at the current opportunities for homeownership. As real estate professionals who know all aspects of their local market conditions, Florida Realtors are here to help counsel consumers making sound long-term decisions for their homes and their businesses.”

Florida Realtors also reported a 13 percent gain in statewide sales of existing condominiums in January, making it the fourth recent month (following September, October and December) that statewide existing home and existing condo sales were higher compared to year-ago levels.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in January while 11 MSAs also showed gains in condo sales; it marks the seventh consecutive month that a number of markets have reported increased sales.

Florida’s median sales price for existing homes last month was $139,500; a year ago, it was $206,900 for a 33 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2008 was $174,700, down 14.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $281,100 in December; in Massachusetts, it was $275,000; in Maryland, it was $267,925; and in New York, it was $220,000.

NAR’s latest housing outlook shows that home prices continue to fall, but also notes a trend of increasing sales activity in the Florida, California, Arizona and Nevada markets. “It appears some buyers are taking advantage of much lower home prices,” said NAR Chief Economist Lawrence Yun. “The higher monthly sales gain and falling inventory are steps in the right direction, but buyers will continue to have an edge over sellers for the foreseeable future.”

In Florida’s year-to-year comparison for condos, 2,556 units sold statewide compared to 2,266 sold in January 2008 for a 13 percent increase. The statewide existing condo median sales price last month was $113,400; in January 2008 it was $190,200 for a 40 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $181,400 in December 2008.

Interest rates for a 30-year fixed-rate mortgage averaged 5.05 percent last month, down from the average rate of 5.76 percent in January 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Daytona Beach MSA reported a total of 419 homes sold in January compared to 321 homes a year ago for a 31 percent increase. The existing home median sales price was $131,800; a year ago, it was $179,100 for a 26 percent decrease. In the year-to-year comparison for the existing condo market, a total of 77 units sold in the MSA last month, up 43 percent compared to 54 condos sold the previous January. The market’s existing condo median price was $167,800; a year ago, it was $230,000 for a 27 percent decrease.

Source: Florida Association of Realtors





Department of Defense Homeowners Assistance Program

3 03 2009

The Department of Defense (DOD) announced the Homeowners Assistance Program (HAP) to eligible service members and federal civilian, including non-appropriate fund, employees. The program is authorized by law to assist eligible homeowners who face financial loss when selling their primary residence homes in areas where real estate values have declined because of a base closure or realignment announcement.

The DOD has designated the US Army its executive agent for HAP. The US Army Corps of Engineers (USACE) administers the program for the Army, Navy, Marine Corps, Air Force, and the Coast Guard.

Working with installation commanders and housing officials, USACE district realty specialists are committed to offering all possible assistance in determining and providing HAP benefits to all eligible applicants.

HOW IT WORKS

Generally HAP provides assistance in four possible ways. If you are eligible for HAP benefits, the Government may:

1. Reimburse you for part of your loss from selling your home.

2. Assist you, if you don’t receive enough proceeds from the sale of your home to pay off your mortgage.

3. Buy your home by paying off the mortgage.

4. Help you, if you default on your mortgage.

HOW TO APPLY FOR HAP BENEFITS

The application is made on DD Form 1607, application for Homeowners Assistance Program. Part III, Section IV of the form must be completed by your personnel officer. In addition, you must submit a variety of documents to show evidence of your ownership of the property, your occupancy dates, your assignment orders, your efforts to sell the home (whether or not it was sold), and mortgage details.

A complete application pacakge can be obtained from either base/installion housing or personnel offices, or it can be downloaded from http://www.hap.usace.army.mil. Before you make an application, please contact the DOD HAP National Hotline at 1-888-DODHAP1 (888-636-4271.)

For more information, contact the DOD HAP National Hotline at 1-888-DODHAP1 (888-363-4271O, visit the website at http://hap.usace.army.mil or call the field office corresponding to your area of the country below:

HAP Field Office, Fort Worth
U.S. Army Engineer District, Fort Worth
P.O. Box 17300
Ft. Worth, TX 76102-0300
817-886-1209
888-231-7751

HAP Field Office, Sacramento
U.S. Army Engineer District, Sacramento
1325 J Street
Sacramento, CA 95814-2922
916-557-6850
800-811-5532

HAP Field Office, Savannah
U.S. Army Engineer District, Savannah
Homeowners Assistance Program
Attn: RE-RH
P.O. Box 889
Savannah, GA 31402-0889
912-652-5020
800-861-8144

National Program Manager
Headquarters, U.S. Army Corps of Engineers
Department of Defense Homeowners Assistance Program
411 G Street, NW
Washington, DC 20314-1000
202-761-1566





Fannie Mae Stops Cutting Real Estate Commissions in a Short Sale

3 03 2009

Real estate commissions are now protected in some short-sale transactions. In response to Realtor concerns, Fannie Mae announced that “preforeclosure sales may not be conditioned upon a reduction of the total (real estate) commission,” providing the total commission does not exceed 6 percent. The policy became effective March 1.

The move affects only short sales where Fannie Mae backs the mortgage, but experts hope Freddie Mac and other government-sponsored enterprises (GSEs) will soon follow suit. Currently, Fannie Mae and Freddie Mac back over half the mortgages in the U.S.

The change seeks to solve a problem encountered by many Realtors. After putting together a short-sale package and submitting it to the lender for approval, Realtors report that lenders would often counteroffer with a cut in commission. Realtors then found themselves working twice as hard on a short sale for less money.

In November during the National Association of Realtors’ (NAR) Legal Seminar, Fannie Mae officials turned to Realtors and asked what could be done to expedite the short-sale process. Among other things, attendees took Fannie Mae to task for their commission policies. The recently announced change is Fannie Mae’s response.

Fannie Mae’s announcement appeared as a short notice in a “Miscellaneous Servicing Policy Changes” announcement. It says:

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in the aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

The original document can be downloaded from Fannie Mae’s Web site at https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp?referrer=frpromo.





First-Time Buyers Benefit from New Tax Credit, Low Mortgage Rates and Home Prices

1 03 2009


Maja Becirovic didn’t think she would own a home in 2009.

Becirovic, 27, and her husband had been living with her parents. But when she became pregnant with her second child, the Jacksonville couple knew they would need their own place.

She began searching for rentals, when it dawned on her — this is an ideal market for first-time buyers. The family is closing on a newly constructed home in Wynnfield Lakes in Jacksonville’s Southside.

“We wanted to save as much as we could in this economy,” she said. “But deals like this don’t come often, so we felt like we had to give it a try.”

Becirovic said she was inclined to pull the trigger because she was able to negotiate the price down 6 percent to $260,000. And Lennar, the builder, agreed to buy down the interest rate, paying the difference between the bank’s offer and what Becirovic was willing to pay. She said she got the 30-year loan at 3.9 percent, compared to the average 5.5 percent rate. She expects to move in March.

The housing market is still slow, but prices and interest rates are the lowest in decades and incentives continue to increase, making Jacksonville ideal for buyers similar to Becirovic, local agents said.

Home sales in Northeast Florida posted their second consecutive month of increase compared to a year ago, and the recent stimulus package, including an $8,000 tax credit for first-time home buyers, is likely to further the upward momentum, according to the Northeast Florida Association of Realtors.

Statewide, home prices have fallen about 20 percent in the past year. Statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared to $233,200 in the third quarter of 2007, according to the association.

The Housing Affordability Index also rose nine points from December to January.

“We are seeing more and more interested buyers,” said Melanie Green, communications director for the realtors association. “Low mortgages make it easy and improve affordability, and for first-time buyers, the stimulus is the extra bang for the buck.”

Based on January’s pending sales, it appears the continuing low mortgage rates and improved affordability are attracting more first-time buyers, Green said.

These incentives, coupled with Obama’s federal tax credit, are expected to bring an additional 300,000 home buyers into the national market, according to the National Association of Realtors.

The big thing about the tax credit is that there’s no pay back,” said Will Vasana, of Watson Realty. “It’s great news for first-time buyers and will stimulate demand.”

In 2008, 41 percent of national home sales were from first-time buyers, and Vasana excepts those figures to increase in 2009, he said.

Mortgage rates are also at the lowest levels since the 1960s, multiplying the buyer’s financial power, he said. And every half of a percent counts. For example, on a $200,000 home, half of 1 percent could save the home-owner about $815 a year, Vasana said.

Green said credit has tightened, and lenders are being more careful.

“But there’s still plenty of credit available,” Green said. “People just need to be cautious and find something that fits their needs and isn’t over their head.”

Despite the incentives, some buyers are still weary of the sluggish economy.

“A lot of people are still worried about losing jobs and scared they won’t be able to make payments,” said Kari Jelsma, owner of Future Reality Group at Cecil Field.

Despite the hesitations, Jelsma said she has still seen an increase in interested buyers during the past six months, with the majority being first-time owners.

However, not all of these incentives for first-time home buyers are expected to last.

This is good news for an oversupplied market but bad news for buyers. As prices continue to fall, sales are beginning to pick up. And due to rising demand and cost of construction, Realtors are expecting home prices to rise again.

Housing supply is also starting to decline, dropping 22.6 percent in January compared to last year. “It can cost much less to buy than rent, especially now. But as more people buy, the market will begin to shift,” Vasana said.

Source: Josh salman, Florida Times-Union








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