Due to the delays in processing foreclosures that resulted from the banks' improper foreclosure practices, 84 percent of metropolitan areas with at least 200,000 residents saw their rates of foreclosure slow in the first six months of 2011 as compared to 2010. That 84 percent translates to 178 metropolitan areas that saw declines, out of the largest 211 areas. The banks have also delayed taking foreclosure action against more recently delinquent homeowners while other options, like loan modification, are considered. This way the banks do not assume the costs of maintaining the homes or evicting their residents. According to CoreLogic, 1.7 million foreclosures are currently being delayed. Delays have been the longest in states, including Florida, in which foreclosures must go through the courts.
It has also been found that job loss, rather than loans that have reset to higher payments, is the most predominant reason for homeowners falling into foreclosure.
Thursday, July 28, 2011
Wednesday, July 27, 2011
Housing Market Heating Up in Miami?
My blog doesn't normally cover Miami but some of their real estate news is worth paying attention to for those of us in Palm Beach County. According to an article in The New York Times, although one out of five homes in Miami-Dade County is in foreclosure, rich buyers, investors and foreigners are doing their part and then some to absorb the excess supply. During the first half of 2011 home sales rose 16 percent from the first half of 2010, making that the best first half of the year since 2007. Two-thirds of those sales were cash deals (and the remaining one-third was likely taking advantage of the historically low interest rates we had in the fall). From January-June 439 properties were sold for $2 million or more.
Part of this buying spree can be credited to the stoppage and subsequent slow-down of the foreclosure process. It restricted supply and buyers began purchasing the best deals. In late 2008 there were 108,000 properties for sale and now there are less than 48,000 properties on the market. The many condominium buildings that were languishing empty are now on their way to being occupied. However, foreclosure filings in Miami-Dade County in June 2011 increased 30 percent from May, making for the largest monthly total since October 2010, when the banks widely halted foreclosure proceedings as their grossly negligent and fraudulent foreclosure practices were revealed.
As foreclosure filings increase it will increase the supply of housing available for purchase. Some buyers are holding out for the shadow inventory of foreclosed homes that they hope will hit the market. But what we are seeing is that there is a segment of the global population that sees now as the opportune time to buy, even if there are some future price fluctuations. The biggest unknown factor plaguing our real estate market is what the banks and government are going to do with the foreclosed properties they own. But we are now seeing some uncertainty that those properties will in fact be the best deals available. After years of neglect and disuse, those homes are frequently going to require repairs and renovations and it is very difficult to get a loan that covers home improvements. The people who buy them are going to need cash to fix them up.
Part of this buying spree can be credited to the stoppage and subsequent slow-down of the foreclosure process. It restricted supply and buyers began purchasing the best deals. In late 2008 there were 108,000 properties for sale and now there are less than 48,000 properties on the market. The many condominium buildings that were languishing empty are now on their way to being occupied. However, foreclosure filings in Miami-Dade County in June 2011 increased 30 percent from May, making for the largest monthly total since October 2010, when the banks widely halted foreclosure proceedings as their grossly negligent and fraudulent foreclosure practices were revealed.
As foreclosure filings increase it will increase the supply of housing available for purchase. Some buyers are holding out for the shadow inventory of foreclosed homes that they hope will hit the market. But what we are seeing is that there is a segment of the global population that sees now as the opportune time to buy, even if there are some future price fluctuations. The biggest unknown factor plaguing our real estate market is what the banks and government are going to do with the foreclosed properties they own. But we are now seeing some uncertainty that those properties will in fact be the best deals available. After years of neglect and disuse, those homes are frequently going to require repairs and renovations and it is very difficult to get a loan that covers home improvements. The people who buy them are going to need cash to fix them up.
Tuesday, July 26, 2011
Want to Compare Insurance Rates?
The Florida Office of Insurance Regulation has a website, www.floir.com/choices, that lets users shop for various home insurance rates. The program is called the Consumer HomeOwners Insurance Comparison Electronic System (CHOICES) and it uses two homes (a $150,000 property built before 2001 and a $300,000 property built in 2005) as sample homes for the purposes of comparing rates. The program does not give specific quotes but it does give ranges of the cost of coverage from different insurers.
Insurers use different parameters for arriving at their rates, meaning that a carrier that is very expensive in one part of the state might be the cheapest in another. The systems shows different carriers' rates by county. The rates used are those most recent rates accepted by the Florida Insurance Commission.
Comparing rates is very important for homeowners who have recently moved from one county to another. It is also smart to do annually to see where the cost of your coverage ranks among other insurers.
Insurers use different parameters for arriving at their rates, meaning that a carrier that is very expensive in one part of the state might be the cheapest in another. The systems shows different carriers' rates by county. The rates used are those most recent rates accepted by the Florida Insurance Commission.
Comparing rates is very important for homeowners who have recently moved from one county to another. It is also smart to do annually to see where the cost of your coverage ranks among other insurers.
Government Considering Turning Foreclosures into Rentals
The Obama administration is getting creative with what to do with the glut of foreclosed upon homes that are waiting to be sold: they are considering renting them out. The homes would no longer be for sale (or not placed for sale to begin with, as we know that there are a lot of repossessed homes that are not for sale right now) and would be made available for rent. This would serve two purposes, the first being that by decreasing the supply of homes for sale, it would help stop prices from falling further. The second is that it would increase the supply of rental homes, thus helping to stop rents from increasing further due to escalating demand.
By renting out the homes the government would be able to help cover their carrying costs and it would potentially give the housing market enough time to stabilize so that the homes would eventually be sold at a higher price than they could currently command, thus further minimizing the government's losses. But before these homes can be rented out the government would have to make the homes inhabitable again. Most foreclosed properties have suffered from neglect, but many are also missing appliances or have other deferred maintenance or outright damage that make them unfit for habitation. So before they can be rented, the government must invest in them, which is not something that they have been doing. The government is used to playing landlord with public housing and VA housing, but it isn't used to renting out individual homes that are spread throughout the country. It remains to be seen how they would handle this added responsibility.
According to the Wall Street Journal, one idea the government is considering is selling thousands of foreclosed properties to investors who would rent them out. But this doesn't seem like a good idea to me because it would enrich wealthy investors by allowing them to buy masses of deeply discounted homes. The government would not see the benefit of waiting out the market for the homes values to stabilize and the public wouldn't get the opportunity to get those bargains. The only benefit would be to the rental market.
Fannie Mae and Freddie Mac currently sell round 50,000 foreclosed upon homes each month. If this were decreased to 30,000 homes (with the 20,000 homes being rented out), it could help to avoid further decreases in home prices.
Friday, July 22, 2011
Existing Condo Sales, Median Price Increase
There is finally some happy news for condo sellers out there! According to the National Association of Realtor, in June 2011 7,941 condos were sold statewide, an increase of 8% over the 7,330 that were sold in June 2010. The median price rose to $93,900 from $92,300, which was a 2% increase.
This increase is modest, but we have learned our lesson about unsustainable growth. What is important to note is that lenders are particularly restrictive with condo financing, so where credit is tightest, we have actually seen some gains. I think it is a shame that lenders are so much more stringent with condo loans than with loans on single-family homes because condos make great starter homes.
This increase is modest, but we have learned our lesson about unsustainable growth. What is important to note is that lenders are particularly restrictive with condo financing, so where credit is tightest, we have actually seen some gains. I think it is a shame that lenders are so much more stringent with condo loans than with loans on single-family homes because condos make great starter homes.
Tuesday, July 19, 2011
Beware Craigslist Rental Scams
There is a new scam involving Craigslist and rental properties. Con artists are fraudulently listing homes that are actually for rent as though they are the owners. The properties are offered at well below market rates and therefore attract a lot of potential renters. Then the con artists charge the would-be renters up-front rent and security deposit for the home without ever showing it and say that they will mail the renters the keys. They keys never shows up, the money is gone and the home is actually for rent at a much higher price and the real owner has no obligation to honor the fraudulent agreement.
To prevent this from happening it is best to work with a licensed Realtor. It is also important to take a tour of the property before any money is exchanged. And if you have doubts about whether the person who claims to own the home actually owns it, go on the county or town's property appraiser's website to confirm the owner's name.
To prevent this from happening it is best to work with a licensed Realtor. It is also important to take a tour of the property before any money is exchanged. And if you have doubts about whether the person who claims to own the home actually owns it, go on the county or town's property appraiser's website to confirm the owner's name.
Monday, July 18, 2011
Were You in Foreclosure in 2009 or 2010?
If you were in foreclosure in 2009 or 2010 and the bank improperly foreclosed upon your home, today might be your lucky day. More than 2 million homeowners were in this predicament and they can now ask for a review of their case to find out whether the bank followed the law. Homeowners who are eligible should receive a letter from their bank explaining the process- though you should call your bank if you think you might have been affected.
The mortgage servicers are going to hire independent auditors to review the cases. They will determine whether homeowners are due compensation for foreclosures that did not adhere to the law. This review will also include homeowners who were denied loan modifications when they should have been eligible.
Imagine getting a check from a bank after they improperly foreclosed upon your home. Crazier things have happened, but I just can't think of what they are.
The mortgage servicers are going to hire independent auditors to review the cases. They will determine whether homeowners are due compensation for foreclosures that did not adhere to the law. This review will also include homeowners who were denied loan modifications when they should have been eligible.
Imagine getting a check from a bank after they improperly foreclosed upon your home. Crazier things have happened, but I just can't think of what they are.
Citizens Property Insurance Corp.
Citizens Property Insurance Corp. is a taxpayer-backed insurance company that was created as an insurer of last resort for properties that could not get coverage in the private sector. There are currently 1.4 million Citizens policies and around 900,000 of them are uninsurable in the private market because they are on the coast, are older homes or are mobile homes (so I guess if you've got an older mobile home in a coastal town you've got some big insurance problems!). Currently it adds 1,000 policies every day. Citizens is the largest insurer in the state and the insurance rates are held artificially low (meaning lower than those of private companies) by state law.
It sounds great to have a state agency protecting property owners from predatory rates from private companies. But the Citizens Chairman, James Malone, says the insurer needs to decrease the number of policies it currently holds because the exposure for the state is just too great. Translation: if we get a big hurricane, Florida taxpayers are picking up the tab for insurance payouts to all Citizens policy holders who suffered property damage during that hurricane. The questions is whether the state has to resources to cover such a major loss. Mr. Malone would like to sell off a significant portion of its business to the private sector, thus reducing its exposure and returning the company to its roots as an insurer of last resort for otherwise uninsurable properties. However, there is no need right now to fear that Citizens will not be able to meet its obligations. Through the issuance of bonds it just completed a $900 million financing deal that keeps it liquid.
Currently the state is using financial incentives to get private companies to assume some of the policies from Citizens. But privitization of a large number of policies is sure to come with big increases in insurance rates for policy holders.
It sounds great to have a state agency protecting property owners from predatory rates from private companies. But the Citizens Chairman, James Malone, says the insurer needs to decrease the number of policies it currently holds because the exposure for the state is just too great. Translation: if we get a big hurricane, Florida taxpayers are picking up the tab for insurance payouts to all Citizens policy holders who suffered property damage during that hurricane. The questions is whether the state has to resources to cover such a major loss. Mr. Malone would like to sell off a significant portion of its business to the private sector, thus reducing its exposure and returning the company to its roots as an insurer of last resort for otherwise uninsurable properties. However, there is no need right now to fear that Citizens will not be able to meet its obligations. Through the issuance of bonds it just completed a $900 million financing deal that keeps it liquid.
Currently the state is using financial incentives to get private companies to assume some of the policies from Citizens. But privitization of a large number of policies is sure to come with big increases in insurance rates for policy holders.
What Single Buyers Need To Considering Before Buying
According to the National Association of Realtors, in 2010 unmarried women accounted for 20% of home purchases and unmarried men accounted for 12%. In my experience the biggest mistake single buyers make in their home selection is not considering whether that home could still accommodate them if their single status changes. A single woman who has modest needs might only buy a home that is big enough for herself, but what happens if she wants her boyfriend to move in? Suddenly that cozy home for one is a tight squeeze for two.
Buyers should never spend beyond their means when purchasing a home. But they should make sure that the home can grow with them. They need to be honest with themselves about how long they plan to live in the home and what lifestyle changes could happen during that time. Below are some good questions for single buyers to answer before buying a home:
1. How long do I plan to live in this home?
2. What lifestyles changes might happen during that time?
3. If I get into a serious relationship, would I want that person to move in?
4. Is there enough space (including closet space) for two people to comfortably live here?
5. Is there enough space for each of us to have our own space?
6. Is there parking for more than one car?
7. If we have a baby, is this a home that is appropriate for a child?
8. Do I want a pet? Is there outdoor space for a pet? Would you like taking walks in your neighborhood?
9. Does this house accommodate my hobbies?
Another hint I have for all buyers is to walk through neighborhoods to really get a feel for whether you'd like to call that neighborhood home. A new place looks a lot different from a car window than it does on foot. By walking you can get a better feel for lot sizes and how close together the homes are, whether the city is maintaining the streets and sidewalks, whether the residents are maintaining their homes and whether there are other homes that you prefer to the one you are considering. Remember that you are not just buying a home, you are buying into a neighborhood.
Buyers should never spend beyond their means when purchasing a home. But they should make sure that the home can grow with them. They need to be honest with themselves about how long they plan to live in the home and what lifestyle changes could happen during that time. Below are some good questions for single buyers to answer before buying a home:
1. How long do I plan to live in this home?
2. What lifestyles changes might happen during that time?
3. If I get into a serious relationship, would I want that person to move in?
4. Is there enough space (including closet space) for two people to comfortably live here?
5. Is there enough space for each of us to have our own space?
6. Is there parking for more than one car?
7. If we have a baby, is this a home that is appropriate for a child?
8. Do I want a pet? Is there outdoor space for a pet? Would you like taking walks in your neighborhood?
9. Does this house accommodate my hobbies?
Another hint I have for all buyers is to walk through neighborhoods to really get a feel for whether you'd like to call that neighborhood home. A new place looks a lot different from a car window than it does on foot. By walking you can get a better feel for lot sizes and how close together the homes are, whether the city is maintaining the streets and sidewalks, whether the residents are maintaining their homes and whether there are other homes that you prefer to the one you are considering. Remember that you are not just buying a home, you are buying into a neighborhood.
Tuesday, July 12, 2011
Should You Test a Home for Methamphetamines?
Below is a link to a story about a couple in Pennsylvania who bought a home that had previously been a meth lab. Unfortunately, the presence of the drug-related chemicals sickened them and they were forced to move out. And the bill to clean up the house? $61,000. There are no laws in Pennsylvania or Florida that require disclosing whether a home has been found by the government to have been a drug house.
Before you buy a house, you should consider having it tested for methamphetamines. You should also check to see if the home is registered on the U.S. Drug Enforcement Administration's National Clandestine Laboratory Registry. http://www.justice.gov/dea/seizures/index.html
http://www.cnn.com/2010/US/11/29/couple.buys.meth.house/index.html?hpt=C1
Before you buy a house, you should consider having it tested for methamphetamines. You should also check to see if the home is registered on the U.S. Drug Enforcement Administration's National Clandestine Laboratory Registry. http://www.justice.gov/dea/seizures/index.html
http://www.cnn.com/2010/US/11/29/couple.buys.meth.house/index.html?hpt=C1
Monday, July 11, 2011
What's the Bottom Line Difference Between a 20-Year and a 30-Year Mortgage?
Most mortgages are 30-year terms. But have you ever wondered what you are actually going to pay for your home over those 30 years? What about if you had a 20-year term? I think the difference will surprise you once you look at the math!
A $200,000 mortgage with a 4.75% interest rate and 30-year term would have a monthly payment of $1,043. At that rate the total interest you would pay over the 30 years would be $175,600! Zoinks! You're paying almost as much in interest as you did for the home. Suddenly 4.75% doesn't seem like such a low rate, does it?
However, if you had a $200,000 mortgage with a 4.5% interest rate on a 20-year term, your monthly payment would be $1,265. Total interest paid over the 20 years: $103,670! You would spend an extra $222 per month for the 20-year term, but you would save $71,930 in interest payments and own your home free and clear a cool ten years earlier.
A $200,000 mortgage with a 4.75% interest rate and 30-year term would have a monthly payment of $1,043. At that rate the total interest you would pay over the 30 years would be $175,600! Zoinks! You're paying almost as much in interest as you did for the home. Suddenly 4.75% doesn't seem like such a low rate, does it?
However, if you had a $200,000 mortgage with a 4.5% interest rate on a 20-year term, your monthly payment would be $1,265. Total interest paid over the 20 years: $103,670! You would spend an extra $222 per month for the 20-year term, but you would save $71,930 in interest payments and own your home free and clear a cool ten years earlier.
Considering a Short Sale?
Are you trying to sell your home as a short sale or are you considering making an offer on one? Coldwell Banker has a new short sale program that takes care of all of the details for you- calling the banks, dealing with the real estate agents. Even better, the cost of this program is included in the closing costs that are paid by the bank! All of the extra help is free for you. You could navigate the very uncertain short sale world on your own, or you could call in the professionals for free. Interested? E-mail me at regis.ahern@floridamoves.com.
The Palm Beach Real Estate Blog
Welcome to the Palm Beach Real Estate blog! I live in West Palm Beach and I am a licensed Realtor with Coldwell Banker in West Palm Beach. I started this blog as a service to those who live in Palm Beach County, those who want to live here and those who are curious about the fantastic towns and neighborhoods. Palm Beach County is a fabulous place to call home!
This blog will focus on market statistics and analysis, new listings, price changes, sold listings, local businesses and relevant neighborhood information.
As a Realtor, I am able to help you sell or buy your home. If you want to make your home available for rent, I can make that happen as well. In fact, I can place your home for sale and for rent at the same time. Although my blog focuses on Palm Beach County, I can help you sell or buy a home anywhere in Palm Beach County, Martin County, St. Lucie County or Broward County. And if you are moving farther away I can find you an experienced and trustworthy agent to help you. If you have tried to sell your house with another Realtor and it did not work, I would love the chance to present you with a new marketing plan to get your property sold. For those who are trying to sell their homes themselves, I will show you a faster, more profitable way to sell your house.
If you have any real estate questions, please e-mail me. I am happy to get you the answers. My e-mail address is: regis.ahern@floridamoves.com.
Happy Hunting!
Regis
This blog will focus on market statistics and analysis, new listings, price changes, sold listings, local businesses and relevant neighborhood information.
As a Realtor, I am able to help you sell or buy your home. If you want to make your home available for rent, I can make that happen as well. In fact, I can place your home for sale and for rent at the same time. Although my blog focuses on Palm Beach County, I can help you sell or buy a home anywhere in Palm Beach County, Martin County, St. Lucie County or Broward County. And if you are moving farther away I can find you an experienced and trustworthy agent to help you. If you have tried to sell your house with another Realtor and it did not work, I would love the chance to present you with a new marketing plan to get your property sold. For those who are trying to sell their homes themselves, I will show you a faster, more profitable way to sell your house.
If you have any real estate questions, please e-mail me. I am happy to get you the answers. My e-mail address is: regis.ahern@floridamoves.com.
Happy Hunting!
Regis
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