Florida Existing Home, Condo Sales Rise in January 2010

28 02 2010

Florida’s existing home sales rose in January, marking 17 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

Existing home sales increased 24 percent last month with a total of 10,465 homes sold statewide compared to 8,444 homes sold in January 2009, according to Florida Realtors. January’s statewide sales of existing condos rose 81 percent compared to the previous year’s sales figure.

Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in January; all MSAs had higher condo sales. A majority of the state’s MSAs have reported increased sales for 19 consecutive months.

“Now is the time for anyone thinking of buying a home in Florida to make that decision,” said 2010 Florida Realtors President Wendell Davis, a broker and regional vice president with Watson Realty Corp. in Jacksonville. “Markets across the state are seeing increased sales, yet conditions remain very favorable with still-low mortgage rates, a range of housing inventory and attractive prices. As an added incentive, buyers need to accelerate their plans because a purchase contract must be in place by the end of April to take advantage of the extended and expanded federal tax credit. To find out more, consult a Realtor about options, qualification criteria and opportunities in your local housing market.”

Florida’s median sales price for existing homes last month was $130,900; a year ago, it was $139,400 for a 6 percent decrease. Analysts with the National Association of Realtors (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2009 was $177,500, up 1.4 percent from a year earlier, according to NAR. In California, the statewide median resales price was $306,820 in December; in Massachusetts, it was $305,000; in Maryland, it was $244,820; and in New York, it was $222,000.

According to NAR’s latest outlook, homebuyers are taking advantage of the federal tax credit. “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices,” said NAR Chief Economist Lawrence Yun.

In Florida’s year-to-year comparison for condos, 4,631 units sold statewide last month compared to 2,554 units in January 2009 for an increase of 81 percent. The statewide existing condo median sales price last month was $97,300; in January 2009 it was $113,300 for a 14 percent decrease. The national median existing condo price was $183,700 in December 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.03 percent last month, slightly lower than the average rate of 5.05 percent in January 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s smaller markets, the Fort Walton Beach MSA reported a total of 143 homes sold in January compared to 118 homes a year earlier for a 21 percent increase. The market’s existing home median sales price last month was $201,400; a year ago it was $188,300 for an increase of 7 percent. A total of 70 condos sold in the MSA in January compared to 25 units sold the same month a year earlier for an increase of 180 percent. The existing condo median price last month was $270,800; a year earlier, it was $268,800 for a gain of 1 percent.

Source: Florida Realtors





First-Time Homebuyer Credit for Service Members of the Military and Certain Other Federal Employees

25 02 2010

Did you know that qualified service members who are ordered on a period of official extended duty, the tax credit dates are extended for one more year? For these homebuyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.

Special Rules for Members of the Military, the Foreign Service and the Intelligence Community

Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers.
Exemption From Tax Credit Recapture Rules

* Typically, homes that are sold or that cease to be used as a principal residence within three years of the initial purchase are subject to recapture of the tax credit.
* However, qualified service members who sell or move from a tax credit home within three years of the initial purchase due to official extended duty are exempt from the recapture rule.

Extension of Tax Credit Deadlines

* The home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.
* However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.

Definitions

* “Qualified service member” means a member of the uniformed services of the US Military, a member of the Foreign Service of the US or an employee of the intelligence community.
* “Official extended duty” means any period of extended duty outside of the United Stated for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

Source: IRS http://www.irs.gov/newsroom/article/0,,id=215594,00.html





Home Purchase Loan Demand at Lowest Since 1997

24 02 2010

U.S. mortgage applications fell for a third straight week, with demand for home purchase loans sinking to the lowest level in 13 years as inclement weather weighed, data from an industry group showed on Wednesday.

A continued drop in demand for purchase loans, a tentative early indicator of home sales, would not bode well for the hard-hit U.S. housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention.

The Mortgage Bankers Association reported an 8.5 percent decline in its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended February 19.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 1.6 percent.

The MBA’s seasonally adjusted purchase index fell 7.3 percent, the lowest level since May 1997.

“As many East Coast markets were digging out from the blizzard last week, purchase applications fell, another indication that housing demand remains relatively weak,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement.

“With home prices continuing to drift amid an abundant inventory of homes on the market, potential homebuyers do not see any urgency to lock in purchases,” he said.

The MBA’s seasonally adjusted index of refinancing applications decreased 8.9 percent.

The refinance share of mortgage activity decreased to 68.1 percent of total applications from 69.3 percent the previous week. The shares of adjustable-rate mortgages, or ARM, increased to 4.7 percent from 4.4 percent the previous week.

A rise in rates may have played a role. Interest rates on mortgages typically play less of a role in home purchase loan demand than in refinancing activity.

The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.03 percent, up 0.09 percentage point from the previous week.

That is above the all-time low of 4.61 percent set in the week ended March 27, 2009, but below the year-ago level of 5.07 percent. The survey has been conducted weekly since 1990.

“Demand is waning due to rising mortgage rates and the fear that rates will move higher after March 31,” said Alan Rosenbaum, president of Guardhill Financial, a New York-based mortgage banker and brokerage company.

Mortgage rates are expected to rise when the Federal Reserve stops buying mortgage-related securities at the end of March.

The MBA said fixed 15-year mortgage rates averaged 4.35 percent, up from 4.33 percent the previous week. Rates on one-year ARMs increased to 6.80 percent from 6.67 percent.

The lowest mortgage rates in decades and high affordability helped the hard-hit U.S. housing market find some footing in 2009 after a three-year slump.

More key insight into the state of the housing market will emerge on Wednesday when the U.S. Commerce Department releases January new U.S. single-family home sales data.

Source: Reuters and Fidelity Investment





Fed Raises Interest Rate Charged to Banks In First Move Since 2008

20 02 2010

The Federal Reserve, taking its first step to return lending to normal after more than two years of extraordinary actions to prop up the economy, on Thursday raised its discount rate — the interest rate it charges on emergency loans to banks — by one-quarter percentage point.

The increase, to 0.75 percent from 0.50 percent, takes effect on Friday.

Officials said the move was not meant to be a broad tightening of credit. Rather, they said, it was intended to discourage emergency borrowing when other financing is available to banks.
The discount rate had been at 0.50 percent since December 2008.

Source: New York Times





Housing Construction up 2.8% in January

18 02 2010

Housing construction posted a better-than-expected increase in January, which pushed activity to the highest level in six months. The solid gain raised hopes that the construction industry is beginning to mount a sustained rebound from its worst slump in decades.

The Commerce Department said Wednesday that construction of new homes and apartments rose 2.8 percent last month to a seasonally adjusted annual rate of 591,000 units. That was better than the 580,000 annual pace that economists were forecasting.

Applications for building permits, considered a good barometer of future activity, fell 4.9 percent to a rate of 621,000, but that was after two months of large increases.

In another sign of strength, Wednesday’s report revised activity upwards in December to show builders were starting construction at an annual pace of 575,000 units during that month, much stronger than the 557,000 originally reported. Even with the upward revision, activity fell a slight 0.7 percent in December, a dip that was blamed on severe weather in many parts of the country that depressed construction activity.

Economists are hoping that housing is beginning to recover and a rebound in this area will help support the economy as it struggles to mount a sustained recovery from the deepest recession since the 1930s.

The strength last month was led by a 10 percent jump in activity in the Northeast and an 8.9 percent increase in the West. Construction was up a smaller 1 percent in the South and 3.2 percent in the Midwest.

The strength in January pushed construction activity up by 21.1 percent from the pace in January 2009. Last month’s building rate was the fastest pace since July.

Construction of single-family homes rose by 1.5 percent to a seasonally adjusted annual rate of 484,000 units while construction of multi-family units increased 9.2 percent to an annual rate of 107,000 units.

The National Association of Home Builders said Tuesday that its housing market index rose by two points to 17 in February after having fallen for two consecutive months.

That increase in sentiment was likely influenced by a number of favorable developments including a report earlier this month that the nation’s unemployment rate fell in January to 9.7 percent – still high, but lower than the 10 percent of the previous month.

In other favorable developments, mortgage rates are hovering around 5 percent, pushed down by a Federal Reserve program to buy mortgage-backed securities. And builders say they are also seeing a boost in the demand for homes coming from a government stimulus program. That program provides tax credits of up to $8,000 for first-time homebuyers and up to $6,500 for current homeowners who decide to move.

Bob Jones, chairman of the home builders, said builders were “slightly more optimistic that the housing recovery is finally beginning to take root.”

Source: The Associated Press





Median Home Prices Show Signs of Stability

18 02 2010

Home prices rose in more than 40 percent of U.S. cities in the fourth quarter of last year, as massive federal spending helped the housing market show signs of stability.

The National Association of Realtors said that the median sales price for previously occupied homes rose in 67 out of 151 metropolitan areas in the October-December quarter versus a year ago. That’s a sharp improvement from the third quarter, when prices rose in only 20 percent of cities.

The national median price was $172,900, or 4.1 percent below the fourth quarter last year. That was the smallest year-over-year price decline in more than two years.

Home sales surged in the quarter, outpacing the third quarter and the previous year’s figures. A federal tax credit of up to $8,000 for first-time homebuyers that was originally due to expire Nov. 30 but was extended through April provided much of the fuel. Sales for the quarter hit a seasonally adjusted annual rate of 6 million, up 27 percent from a year earlier.

The big question hanging over the housing market this year is whether the tentative recovery will stumble after the government pulls back support. The Federal Reserve’s $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March. A month later, the newly extended tax credit for first-time homebuyers runs out.

Economists are also concerned about a huge backlog of homeowners facing foreclosure. If those homes go up for sale at deeply discounted prices, median prices could turn downward again. Indeed, prices in some severely depressed areas are still falling.

The largest price decline by percentage in the fourth quarter was in Ocala, Fla., where the median sale price plunged 23.4 percent to $93,000. Foreclosure-plagued Las Vegas saw its median price tumble 23.3 percent to $139,400 versus a year ago.

The largest price gain was in Saginaw, Mich., where prices rose more than 50 percent to a median of $67,400. Cleveland followed with an increase of 25 percent to $110,000.

Source: Associated Press





Countrywide Settlement Pays $16.9 Million to Florida Homeowners

18 02 2010

More than 2,700 people will receive checks from a 2008 settlement Florida negotiated with Countrywide Financial Corporation. As part of the settlement, Countrywide is offering foreclosure relief payments to eligible borrowers who returned valid and timely claim forms and releases under a program administered by the Countrywide settlement administrator.

More than $16.9 million will be distributed this week, and each check will be written for just over $6,000.

In July 2008, Attorney General Bill McCollum filed a lawsuit against Countrywide, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade practices. The lawsuit claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading. That lawsuit was resolved in October 2008, and the settlement agreement included a foreclosure relief payment program for Florida homeowners with qualifying Countrywide mortgages.

Eligible homeowners should consider the following:

• Important information: The checks must be cashed on or before May 13, 2010.

• A payment under this settlement may be taxable, and recipients should consult a tax advisor if they have any questions concerning possible tax liabilities.

• Recipients with any questions should contact the settlement administrator, Rust Consulting, toll free at (866) 411‐6987, or http://www.countrywidesettlementinfo.com.

The settlement also includes $4 million to fund a foreclosure defense assistance program. The money will be provided to organizations over the course of two years, and the first funds were distributed in late 2009. The organizations that receive the grants agree to provide free legal assistance to eligible homeowners who face foreclosure but cannot afford an attorney to review their case.

“These resources, both the checks to homeowners and the grants to fund pro bono foreclosure defense assistance, are substantial assets to Floridians,” says Heather Rodriguez of Holland & Knight law firm and president of the Legal Aid Society of the Orange County Bar Association, one of the organizations that received grant funding and has an attorney dedicated to foreclosure defense assistance. “Orange and Osceola counties are both high in foreclosures, and homeowners are struggling.”

Countrywide Chief Executive Angelo Mozilo was also named in the Countrywide lawsuit and the civil case against him is still pending in Broward County Circuit Court. McCollum has also called on Bank of America, the company that acquired Countrywide after the lawsuit was filed, to be more responsive to consumers trying to modify loans and save their home from foreclosure.

Source: Florida Realtors





NAR: 4Q Existing-Home Sales Surge in Most States

12 02 2010

Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter, with many more metro areas seeing prices rise from a year earlier, according to the latest survey by the National Association of Realtors (NAR).

Sales increased from the third quarter in 48 states and the District of Columbia; 32 states saw double-digit gains. Year-over-year sales were higher in 49 states and D.C.; all but three states had double-digit annual increases.

Total state existing-home sales, including single-family and condo, jumped 13.9 percent to a seasonally adjusted annual rate of 6.03 million in the fourth quarter from 5.29 million in the third quarter, and are 27.2 percent above the 4.74 million-unit level in the fourth quarter of 2008. Distressed property accounted for 32 percent of fourth quarter transactions, down from 37 percent a year earlier.

Lawrence Yun, NAR chief economist, says the first-time homebuyer tax credit was the dominant factor. “The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates,” he says. “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to a record low 4.92 percent in the fourth quarter from 5.16 percent in the third quarter; it was 5.86 percent in the fourth quarter of 2008.

In the fourth quarter, 67 out of 151 metropolitan statistical areas reported higher median existing single-family home prices in comparison with the fourth quarter of 2008, including 16 with double-digit increases; one was unchanged and 84 metros had price declines. In the third quarter only 30 MSAs showed annual price increases and 123 areas were down.

The national median existing single-family price was $172,900, which is 4.1 percent below the fourth quarter of 2008; the median is where half sold for more and half sold for less. “This is the smallest price decline in over two years, with the most recent monthly data showing a broad stabilization in home prices,” Yun says.

“Because buyers are taking on long-term fixed rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price recovery process appears durable,” Yun says.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., says near-term market conditions remain favorable. “Mortgage interest rates are expected to trend up later this year, but right now we have very good conditions with steadying home prices and favorable inventory in most areas, especially in the higher price ranges,” she says. The biggest issue is for repeat buyers who will have to accelerate their buying plans if they want the expanded tax credit. Since you must have a contract in place by the end of April, the best advice is to consult a Realtor now about qualification criteria and options in your area.”

Repeat buyers do not have to sell their existing home, but all buyers must occupy the property they purchase as a primary residence to qualify for the tax credit. Buyers who have a contract in place by April 30, 2010, have until June 30, 2010, to finalize the transaction to get a credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $177,300 in the fourth quarter, down 4.8 percent from the fourth quarter of 2008. Eleven metros showed increases in the median condo price from a year earlier and 43 areas had declines; in the third quarter only four metros experienced annual price gains.

Regionally, existing-home sales in the Northeast rose 11.1 percent in the fourth quarter to a pace of 1.03 million and are 33.6 percent higher than a year ago. The median existing single-family home price in the Northeast declined 5.6 percent to $234,900 in the fourth quarter from the same quarter in 2008, but with widely varying conditions.

“In the Northeast, markets with lower median prices that have avoided wide swings, such as Buffalo, are generally showing consistent price gains,” Yun says. “Even so, some of the higher cost areas are showing signs of stabilization, such as Nassau-Suffolk, N.Y., and Boston.”

In the Midwest, existing-home sales jumped 14.5 percent in the fourth quarter to a pace of 1.38 million and are 29.9 percent above a year ago. The median existing single-family home price in the Midwest rose 1.1 percent to $141,100 in the fourth quarter from the same period in 2008, with the region accounting for the majority of metro areas experiencing double-digit gains.

Yun says markets with high unemployment rates in Ohio and Michigan experienced large price swings. “Big price gains in many Midwestern areas are due to a more normal range of home sales in contrast with predominately foreclosed sales a year ago,” he says.

In the South, existing-home sales rose 13.8 percent in the fourth quarter to an annual rate of 2.23 million and are 28.2 percent higher than the fourth quarter of 2008. The median existing single-family home price in the South was $153,000 in the fourth quarter, down 2.4 percent from a year earlier.

“Affordable markets in the South that have relatively better local economies are seeing healthy price gains, such as Houston, Oklahoma City and Shreveport, La.,” Yun says.

Existing-home sales in the West jumped 16.2 percent in the fourth quarter to an annual rate of 1.38 million and are 18.2 percent above a year ago. The median existing single-family home price in the West was $227,200 in the fourth quarter, which is 8.9 percent below the fourth quarter of 2008, but with many areas showing notable gains.

“Markets in the West such as San Francisco, San Jose and Denver are showing double-digit price increases, and other markets like San Diego and Anaheim have begun to firm up,” Yun says.

Source: Florida Realtors





Florida’s Existing Home, Condo Sales Rise in 4Q 2009

12 02 2010

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

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

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

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

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

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

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

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

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

Florida Sales Report – 4th Quarter 2009
Single-Family, Existing Homes

Realtor Sales Median Sales Price
————- ——————
Statewide &
———–
Metropolitan
Statistical 4th 4th
Areas (MSAs) Qrtr. Qrtr. % 4th Qrtr. 4th Qrtr. %
———— —— —— — ——— ——— —
2009 2008 Chge 2009 2008 Chge
—- —- —- —- —- —-
STATEWIDE* (1) 43,926 30,610 44 $140,000 $160,600 -13
————– —— —— — ——– ——– —
Daytona Beach 2,309 1,413 63 $126,400 $148,100 -15
————- —– —– — ——– ——– —
Fort
Lauderdale 2,314 1,764 31 $203,800 $234,100 -13
———- —– —– — ——– ——– —
Fort Myers-
Cape Coral 4,430 2,440 82 $93,800 $117,500 -20
———– —– —– — ——- ——– —
Fort Pierce-
Port St.
Lucie 1,689 1,122 51 $110,800 $132,400 -16
———— —– —– — ——– ——– —
Fort Walton
Beach 680 467 46 $184,900 $184,100 –
———– — — — ——– ——– —
Gainesville 507 341 49 $162,000 $170,000 -5
———– — — — ——– ——– —
Jacksonville
(2) 3,376 2,339 44 $147,300 $164,700 -11
———— —– —– — ——– ——– —
Lakeland-
Winter Haven 996 1,125 -11 $106,200 $132,500 -20
———— — —– — ——– ——– —
Melbourne-
Titusville-
Palm Bay 1,361 1,189 14 $109,400 $135,000 -19
———– —– —– — ——– ——– —
Miami 1,649 1,250 32 $188,700 $227,600 -17
—– —– —– — ——– ——– —
Ocala 920 550 67 $91,500 $121,900 -25
—– — — — ——- ——– —
Orlando 6,889 4,247 62 $139,000 $171,700 -19
——- —– —– — ——– ——– —
Panama City 311 249 25 $165,500 $185,000 -11
———– — — — ——– ——– —
Pensacola 899 733 23 $142,500 $151,700 -6
——— — — — ——– ——– —
Punta Gorda 791 601 32 $107,300 $108,200 -1
———– — — — ——– ——– —
Sarasota-
Bradenton 2,468 1,634 51 $160,600 $167,000 -4
——— —– —– — ——– ——– —
Tallahassee 493 344 43 $173,400 $171,500 1
———– — — — ——– ——– —
Tampa-St.
Petersburg-
Clearwater 7,163 5,579 28 $138,800 $149,400 -7
———– —– —– — ——– ——– —
West Palm
Beach-Boca
Raton 2,423 1,706 42 $239,500 $252,200 -5
———- —– —– — ——– ——– —

(1) * Statewide figure includes data from the Naples Area Board of
Realtors; it also includes data from the Marco Island Association of
Realtors.
(2) Data from the Amelia Island-Nassau County Association of
Realtors for November and December is not available.

Editor’s note: Sales numbers represent totals of Realtors’ closed
transactions from local Realtor boards/associations within the
MSAs.

This information is based on a survey of MLS sales levels from
Florida’s Realtor boards/associations. MSAs are defined by the 2000
Census. Source: Florida Realtors(R) and the University of Florida
Bergstrom Center for Real Estate Studies.

Florida Sales Report – 4th Quarter 2009
Existing Condominiums

Realtor Sales Median Sales Price
————- ——————
Statewide &
———–
Metropolitan
Statistical 4th 4th
Areas (MSAs) Qrtr. Qrtr. % 4th Qrtr. 4th Qrtr. %
———— —— —— — ——— ——— —
2009 2008 Chge 2009 2008 Chge
—- —- —- —- —- —-
STATEWIDE* (1) 16,255 8,410 93 $105,500 $136,600 -23
————– —– — ——– —— —
Daytona Beach 431 178 142 $158,700 $177,300 -10
————- — — — ——– ——– —
Fort
Lauderdale 2,771 1,588 74 $83,700 $107,200 -22
———- —– —– — ——- ——– —
Fort Myers-
Cape Coral 1,139 476 139 $118,000 $157,400 -25
———– —– — — ——– ——– —
Fort Pierce-
Port St.
Lucie 349 192 82 $95,000 $120,000 -21
———— — — — ——- ——– —
Fort Walton
Beach 260 120 117 $248,000 $270,600 -8
———– — — — ——– ——– —
Gainesville 59 46 28 $113,000 $134,500 -16
———– — — — ——– ——– —
Jacksonville
(2) 413 183 126 $87,500 $130,800 -33
———— — — — ——- ——– —
Lakeland-
Winter Haven 69 22 214 $71,500 $60,000 19
———— — — — ——- ——- —
Melbourne-
Titusville-
Palm Bay 306 220 39 $101,400 $118,300 -14
———– — — — ——– ——– —
Miami 2,022 1,203 68 $145,400 $183,700 -21
—– —– —– — ——– ——– —
Ocala 14 5 180 $38,800 $85,000 -54
—– — — — ——- —— —
Orlando 1,765 446 296 $54,000 $85,800 -37
——- —– — — ——- —— —
Panama City 153 95 61 $195,900 $227,100 -14
———– — — – ——– ——– —
Pensacola 112 77 45 $269,200 $203,600 32
——— — — — ——– ——– —
Punta Gorda 117 64 83 $82,100 $109,100 -25
———– — — — ——- ——– —
Sarasota-
Bradenton 798 344 132 $148,600 $190,000 -22
——— — — — ——– ——– —
Tallahassee 88 6 1367 $71,100 $153,300 -54
———– — — —- ——- ——– —
Tampa-St.
Petersburg-
Clearwater 2,283 1,195 91 $104,400 $124,900 -16
———– —– —– — ——– ——– —
West Palm
Beach-Boca
Raton 2,219 1,366 62 $108,100 $123,000 -12
———- —– —– — ——– ——– —

(1) *Statewide figure includes data from the Naples Area Board of
Realtors; it also includes data from the Marco Island Association of
Realtors.
(2) Data from the Amelia Island-Nassau County Association of
Realtors for November and December is not available.

Editor’s note: Sales numbers represent totals of Realtors’ closed
transactions from local Realtor boards/associations within the
MSAs.

This information is based on a survey of MLS sales levels from
Florida’s Realtor boards/associations. MSAs are defined by the 2000
Census. Source: Florida Realtors(R) and the University of Florida
Bergstrom Center for Real Estate Studies.

Source: Florida Realtors





New FHA Rules Affect Condo Purchase After 2/1/10

7 02 2010

The new FHA guidelines announced by The Department of Housing and Urban Development (HUD) last November is causing more headaches for lenders and buyers/sellers alike.

With the new condominium approval process, there will be fewer condo properties that are eligible for FHA financing which prevents first-time buyers from purchasing any condos that are for sale on the market. There will be less than 10-20% of FHA approved condos available in any given market in the U.S. so you can see why this presents major problems in the condo world. What will happen to the rest of condo projects that are not FHA approved? The answer is the pool of buyer will be limited to cash buyers or conventional buyers with 20% to 30% down payment only.

Beginning 2/1/10, new FHA rules are in effect:

– FHA spot approval is gone. FHA condo loans that required an FHA spot approval are no longer available. This mean no more spot appraisals after 2/1/10 so it will be harder to get an approval on a condo project unless it has been approved by HUD or one of HUD’s approved lenders. Effective for all case numbers issued on or after 2/1/10, all previous FHA condo approvals will be eliminated and condominium projects must be re-certified by HUD. (Previously, FHA spot approval allows an FHA-approved direct lender to approve a specific condo unit even if HUD hasn’t FHA-approved the building. Spot eligible condo buildings must be 4 units or larger, 90% sold, 51% owner-occupied, and no single entity can own more than 10% of the project. Unit owners must be in control of the HOA for 1 year, and the HOA must have roughly 50-60% of annual budget in reserves.)

– Going forward there will be two approval methods for FHA Case numbers ordered after February 1, 2010:  HUD Review and Approval Process (H-RAP), DE Lender-Approval and Review Process (DEL-RAP).

– All FHA case numbers issued AFTER 4/5/10 will require the up-front PMI of 2.25% (this is increased from 1.75% today.)

– Early summer – Seller contributions on ALL FHA loans will be reduced to 3% (this is reduced from an allowed 6% today.)

– FHA has waived the flipping rule for all purchase made after 2/1/10. Private sellers and investors can now sell their properties to FHA buyers without having to wait 90 days (seasoning.)

After 2/1/10, Spot Approvals are eliminated and HUD must directly approve entire condo buildings, a 1-3 month process. If a buyer who is looking for an FHA condo loan on a non-FHA approved project, now it will be very difficult to do so.

Currently, there are 67 condo projects in Jacksonville Florida market that are on FHA approved list. Most condos in Jacksonville no longer qualify for the FHA loan. Most lenders will not lend on condos unless you have 20%-30% to put down. This will definitely slow sales and end up decreasing values in certain segments of the condo market throughout the country.

Right now if you are looking to buy a condo, you have two choices:

1. Choose the projects that are listed on the FHA approved list.
2. If the projects are not currently on the FHA approved list, seek condo approval directly with HUD (which administers the FHA mortgage program)

My recommendation is to buy NOW and buy new construction as most builders will pay up to 6% in sellers contribution (this will be limited to 3% soon.) If you need to buy a resale, you need to find out first if the condo you are interested in is on the approved list at https://entp.hud.gov/idapp/html/condlook.cfm.

There are different ways to search but I suggest you start searching by zip code or the legal name of the condo community. A good portion of the approved condos are listed by mistakes, so if you don’t get a hit on the first try, don’t get discouraged. If the condo project you are interested in is already on the approved list, you can move forward. But the lender still has to certify things about the current condition of the condo project. Whether this is a long time approved project or one approved last week, the lender still has to verify the following:

– Is the condo project involved in any litigation?
– Are there any pending special assessments?
– Does any single entity own more than 10% of the total units?
– Are more than 15% of the owners delinquent with their association dues?
– Are at least 51% of the sold units owner-occupied?
– Does the project meet the requirements for FHA concentration (no more than 50%, unless certain conditions are met)?

The lender goes through these questions using a condo questionnaire sent to the condo association or the management company. Please keep in mind that there are new projects that are being added on to the FHA approved list . Every time HUD (or a direct endorsement lender, eventually) approves a unit, all the other units in that project (up to the maximum concentration) will also be placed on the FHA approved condo list. And HUD is bending some rules to make more projects eligible. When HUD released the new guidelines last October, all projects that were not on the approved list last year would not be included on the approved list until they are “re-certified.” HUD is now giving these properties a one year grace period, so they will be on the list as eligible up until 12/7/10. The re-approval process for these projects will be much simpler than the process for new projects (brand new constructions.)

DILEMMA:

With increasing tougher lending guidelines through conventional financing, FHA spot approval has been an answer for most lenders to obtain condo financing for their buyers. In the past, FHA was deemed unnecessary as the approval process was time consuming and paperwork intensive for developers to go through. When the real estate market was red hot, home prices skyrocketed and lending requirements were easy for most buyers to qualify (remember the time when people with no income, no asset, no money down, and no job could buy a home?) Developers didn’t have to get FHA approved for their condo projects. It’s not surprising we have a small numbers of condo projects that are on the FHA approved list. Nowadays, developers have to petition for a condo project approval when they are building a community (brand new or condo conversion) if they want FHA financing available to buyers. The FHA spot approval was a way to approve one condominium unit, not the entire building. It was part of the purchase process; while the lenders went through the work of approving the borrowers, they would approve the condo unit at the same time. It was a great program and it helped many buyers obtained FHA financing with limited cash and down payment. However, there were some issues:

– The FHA spot approval did not apply to smaller buildings so condos less than 4 units could not qualify for the program.

– The FHA spot approval did not accept condos with “First Right of Refusal” language written in condo docs. The reason being it can be used to discriminate some buyers.

From HUD’s point of view, the spot approval presents problems because HUD did not have control and loans were closed and funded on properties that did not meet the guidelines. So the new condo approval process was introduced to address these problems. The new condo approval process allows properties that have the “First Right of Refusal” language, and it can be used with projects as small as 2 units.

Under the new guidelines, lenders can approve a new condo in two ways:

1. Go directly to HUD (HRAP) and file all the paper work directly with HUD. Most developers have done this in the past.

2. FHA Direct Endorsement lenders (DELRAP) would have the authority to approve the projects on their own. This works similarly like spot approval. When the borrower buys a new condo, the lender will scrutinize the building as part of the approval process and will approve the project at the same time. Once a direct endorsement lender approves a project it will be added to the FHA approved list and then any other lenders who make FHA mortgages will be able to provide FHA financing for the entire project. However, there is a flaw in this process and I am sure they didn’t think of the consequences:

Under the new FHA condo approval process, HUD needs more documentation and more express warranties from the direct endorsement lender approving the project. The deadline for this was extended twice while HUD tried to iron out the kinks and get the lenders on board, and they allowed the spot loan to continue as a way to keep financing open. But now the spot loan is gone and the new improved process is not ready to take place.

Condo buyers can still buy anything that is currently on the FHA approved condo list, but what are the options if they want to buy in a building that has not been approved? And how about developers or sellers who own the condos? What options do they have for getting their project approved?

Being able to finance with FHA is a a real competitive advantage in this market. Any properties with FHA financing are selling quicker and this appears to make them more valuable. There are also a lot of newer properties that do not meet conventional guidelines because they have not sold and closed enough units but would be eligible for FHA financing.

The FHA saga continues…








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