Florida Real Estate Blog

Florida Now Has A State Site Where You Can Compare Insurance Rates

In an effort to help Floridians find affordable insurance coverage for their home, the state has set up a site where you can search and compare rates in all of our counties.  You will see what the rates should be for a typical Florida home. Considering that companies are still asking for rate increases, perhaps this new site will be a useful tool for many people living here. You can access this site by clicking here:  http://www.shopandcomparerates.com/  I have begun to lose faith that the state will ever get a handle on the insurance situation here, but it does not hurt to see what is available out there and compare it to what you are paying.

Of course the site comes with a disclaimer "The typical rates quoted here are not guaranteed rates, but are only intended to demonstrate that rates vary significantly from company to company".

5 Florida Insurance Companies AGAIN Ask for Double-Digit Rate Increases

I just have received word that 5 insurance companies in this state are requesting double-digit rate increases for a variety of reasons. Auto Owners, Cincinnati Insurance, Florida Farm, Hartford, and Metropolitan Property and Casualty are the companies involved so far. Can others be far behind? The state has to approve any increases. Wasn't insurance reform supposed to stop or slow this. So far I have seen no impact on my customers. Let's hope that the property tax reform that was recently approved does not go down the same path.

I will let you know if I hear any more news on this issue.

Florida Governor Signs Legislation That Will Require the Licensing of Home Inspectors

Finally after years of trying, there is finally a law (SB 2234) that will require that home inspectors be licensed by the State of Florida. Most of the certified home inspectors that I know have long asked for such a requirement, but it never seemed to get anywhere. This year the Florida Association of REALTORs® also called for the law's passage. As things are now, anyone can be a home inspector. All they need to do is get a business license and off they go. No state license, no certification, no testing, nada. I could do it. And trust me, you would not want that!

The bad news is that the legislation will not take effect until July of 2010. The delay is to give the government time to come up with an implementation plan. Inspectors will be required to complete 120 hours of training, and pay a licensing fee. This will also give consumers another avenue to take if they believe that a home inspector has somehow wronged them.

The passage of the bill can only help consumers who often rely on the work of inspectors to inform them of the conditions of the properties that they are buying. That investment is a big one. There is no reason why the persons who work as inspectors should not have to meet specific professional requirements, just as real estate agents and many other professionals who work in Florida do.

For A Second Week Freddie Mac Reports Interest Rates Have Dropped A Little

Today  Freddie Mac reported that nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.67% (6.63% in the southeast), down from 6.69% a week ago. The average interest rate for 15 year fixed-rate mortgages was 6.34%, down from 6.37% last week.

After a month and a half of increases the rates dipped again due to the continued housing recession. Sales of existing homes in May 2007 were the slowest they have been since June 2003 and the number of months that homes stayed on the market averaged 8.9, the highest since June 1992! It was reported that prices fell 2.1% in twenty metropolitan market areas for the calendar year ending in April 2007.

Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com  and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be should you decide to finance a home purchase.

Consumer Confidence in Florida Rises Slightly According to the University of Florida

GAINESVILLE, Fla. — Consumer confidence in Florida rose one point to 83 in June, one month after dropping to its lowest level in 19 months, a new University of Florida study finds.

The small increase was due to increased optimism over future economic conditions in the United States. Expectations about U.S. economic conditions over the next year rose two points to 76, while expectations of U.S. economic conditions over the next five years rose six points to 84.

Perceptions of personal finances now compared with a year ago remained the same at 79, while expectations about finances one year from now fell two points to 89. Perceptions of whether it is a good time to buy big-ticket items fell five points to 86. All five of the index components are lower than at this time a year ago, and the overall index is down five points from a year ago, the study shows.

“Although confidence increased slightly in June, it was well within the margin of error for the survey,” said Chris McCarty, director of the Survey Research Center at UF’s Bureau of Economic and Business Research. “Consumer confidence doesn’t differ much from the previous month’s reading. Interestingly, confidence among low-income households, those making less than $30,000 a year, has held exactly at 70 every month since March. The movement in confidence is entirely due to changes in the attitudes of middle- and higher-income households.”

Gas prices in Florida, a key driver of consumer confidence for the past two years, have decreased more than 14 cents per gallon through the month of June, primarily because of unexpected increases in imports and more inventory. Prices are still 13 cents higher than the same time a year ago and are expected to increase again in July as holiday travel picks up, McCarty said.

Although most lower-income families have adjusted to higher gas prices, there may be some additional negative impact on middle- and upper-income households if prices rise too much, McCarty said.

Retail sales nationally posted an unexpected increase in May, largely because of gasoline sales. However, other segments that had been experiencing difficulty, such as building supplies, posted gains.

McCarty said he expects the problems in the housing industry to continue dampening consumer confidence. The National Association of Realtors reported Monday that nationwide sales of existing single-family homes in May dropped to their lowest level in four years, and the median price dropped for a 10th consecutive month.

“Moving forward, we still expect consumer confidence in Florida to decline as the effects of the housing downturn intensify,” McCarty said. “The most recent housing data show that nationally, and particularly here in Florida, the prices of existing homes have not fallen to a level to attract enough buyers to work through the massive inventory.

“As prices fall, this will affect consumers who count on rising home values to support spending though home equity lines of credit and refinancing. This is still the big question moving forward into the summer – will the effects of housing spill over into other parts of the economy, or will it be contained to the housing sector? Our opinion is that the effects, at least here in Florida, will be far-reaching.”

The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for June was conducted from 400 responses. The error rate is plus or minus 5 percent.

Consumer confidence is designed to help predict buying patterns by measuring the mood of consumers toward purchasing. Although other economic indicators also predict buying patterns, consumer confidence tends to be available sooner. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for the year. The value of the index is in comparing changes over time rather than looking at an isolated month.

Credits

Writer
Ron Wayne, rwayne@ufl.edu, 352-392-0186Source
Chris McCarty, ufchris@ufl.edu, 352-392-2908, ext. 101

SOURCE: Press Release from The University of Florida

May Existing- Home Sales Show Market is Under Performing - National Association of REALTORS®

WASHINGTON, June 25, 2007 -

Existing-home sales were essentially unchanged in May, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – eased by 0.3 percent to a seasonally adjusted annual rate1 of 5.99 million units in May from an upwardly revised pace of 6.01 million in April, and are 10.3 percent below the 6.68 million-unit level in May 2006.

Lawrence Yun, NAR senior economist, said the market softness is understandable. “I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers,” he said. “Household formation has slowed dramatically since late 2006, implying that many people are doubling-up – they’re adding roommates or moving in with parents.

“The market is underperforming when you consider positive fundamentals such as the strength in job creation, economic growth, favorable mortgage interest rates and flat home prices. It appears some buyers are simply waiting for more signs of stability before they get serious about getting into the market.”

The national median existing-home price2 for all housing types was $223,700 in May, which is 2.1 percent below May 2006 when the median was $228,500. The median is a typical market price where half of the homes sold for more and half sold for less, but there is a temporary downward distortion in the current national comparison because sales have shifted away from many high-cost markets in the past year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.26 percent in May, up from 6.18 percent in April; the rate was 6.60 percent in May 2006.

NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said higher inventories are helping to offset an affordability impact from higher mortgage interest rates. “Although mortgage interest rates are trending up, they are historically favorable,” she said. “The good news is buyers have more negotiating power with a fairly large supply of homes available in much of the country. Buyers who’ve been on the sidelines may want to take a closer look at current conditions in their area – if they wait for sales to rise, their choices and negotiating position won’t be as good as they are now.”

Total housing inventory rose 5.0 percent at the end of May to 4.43 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.4-month supply in April.

Single-family home sales slipped 0.8 percent to a seasonally adjusted annual rate of 5.20 million in May from an upwardly revised 5.24 million in April, and are 10.8 percent lower than a 5.83 million-unit pace a year ago. The median existing single-family home price was $223,000 in May, which is 2.4 percent lower than May 2006.

Existing condominium and co-op sales rose 2.6 percent to a seasonally adjusted annual rate of 790,000 units in May from 770,000 in April, but are 6.7 percent below the 847,000-unit level in May 2006. The median existing condo price3 was $228,200 in May, down 0.4 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 5.8 percent to a level of 1.10 million in May, but are 3.5 percent lower than May 2006. The median existing-home price in the Northeast was $282,700, which is 0.5 percent higher than a year ago.

Existing-home sales in the Midwest rose 0.7 percent in May to a level of 1.41 million, but are 6.6 percent below a year ago. The median price in the Midwest was $168,800, which is 1.7 percent below May 2006.

Existing-home sales in the West slipped 0.8 percent in May to an annual pace of 1.18 million, and are 16.3 percent below May 2006. The median price in the West was $341,900, which is 0.5 percent lower than a year ago.

Existing-home sales in the South fell 3.4 percent to an annual sales rate of 2.30 million in May, and are 11.9 percent below a year ago. The median price in the South was $184,000, down 3.8 percent from May 2006.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #

(1)The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

(2)The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data.

Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

(3)Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for June will be released July 25. The next Pending Home Sales Index will be on July 3 and the forecast will be revised July 11.

SOURCE: National Association of REALTORS Press Release

Feel free to contact me if you have any questions concerning the real estate market in Zephyrhills, Pasco County and the surrounding areas.. John Elwell - REALTOR at CENTURY 21 Bill Nye Realty, Inc. Tel: 813-783-4444  E-Mail: jelwell1@tampabay.rr.com You can also visit my webpage at: jelwell.century21bnr.com

Florida's Existing Home Sales, Median Price Down in May 2007

ORLANDO, Fla., June 25, 2007 – Statewide sales of existing single-family homes in Florida totaled 12,607 in May and were more in line with activity in May 2002 – prior to the housing boom years – than the May 2006 figures of 19,072 homes sold for a 34 percent decrease in the year-to-year comparison, according to the Florida Association of Realtors® (FAR).

Florida’s median sales price for existing single-family homes last month was $237,000; a year ago, it was $250,100 for a 5 percent decrease. The median is the midpoint; half the homes sold for more, half for less. In May 2002, the statewide median sales price for single-family homes was $137,100, for an increase of 72.9 percent over the five-year-period, according to FAR records.

In April 2007, the national median sales price for existing single-family homes was $220,500, down 0.9 percent from the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $597,640 in April; in Massachusetts, it was $345,000; in Maryland, it was $311,075; and in New York, it was $252,500.

Home sales are projected to move in a relatively narrow range with a gradual upturn becoming more pronounced by the end of 2007, according to NAR’s latest market outlook. “Overall housing levels are historically strong, but sales remain sluggish compared to the recent boom,” says NAR Senior Economist Lawrence Yun. “It’s important to keep in mind that all real estate is local, and many markets are expected to have higher sales and strengthening prices during the second half of this year.”

Sales of existing condominiums in Florida also decreased last month, with a total of 4,090 condos sold statewide compared to 5,671 in May 2006 for a 28 percent decline, according to FAR. The statewide median sales price for condos last month was $202,500, down 4 percent from May 2006’s condo median price of $210,800. NAR reported the national median existing condo price was $223,700 in April 2007.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.26 percent, according to Freddie Mac, lower than the average rate of 6.60 percent in May 2006. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the West Palm Beach-Boca Raton Metropolitan Statistical Area (MSA) reported 741 existing homes sold last month compared to 982 homes sold a year ago for a 25 percent decrease. The market's median sales price for homes was $387,800; it was $391,000 in May 2006 for a 1 percent decrease. A total of 613 existing condos changed hands in the MSA last month, up 11 percent from the 552 condos sold the previous year. The existing condo median sales price in May was $217,400; a year ago, it was $218,900 for a 1 percent decrease.

The Palm Beach area draws strong interest from retirees, baby boomers and second-home buyers, says Norma Mirsky, president of the Palm Beach Board of Realtors and broker-owner of Mirsky Realty Group LLC. “The wave of speculative investors seeking a quick profit appears to be gone, and now we have a more normal market with buyers interested in investing in a personal dream and finding a home,” she says. “The Scripps Research Institute is building very quickly and that will bring in 3,000 or more high-tech jobs, which is great for our employment outlook.”

Among the state’s smaller markets, the Fort Walton Beach MSA reported a total of 242 homes sold in May compared to 309 homes a year ago for a 22 percent decrease. The existing home median sales price was $219,700; a year ago, it was $231,700 for a 5 percent decline. A total of 85 existing condos sold in the MSA last month compared to 81 condos the previous May for a 5 percent increase. The market’s existing condo median price was $345,800; a year ago, it was $422,000 for a decrease of 18 percent.

Harry Millsaps, president of the Emerald Coast Association of Realtors and a Realtor with Prudential Coastal Properties Inc., says that the area’s economy remains strong and home sales are returning to a more normal pace. “A lot of high-tech jobs are coming into the Fort Walton Beach area in connection with Eglin Air Force base, which is almost doubling in size due to the military base reorganization and closures,” he says. “Plus, our beautiful sugar-white beaches and friendly, relaxed way of living continue to draw homebuyers to our community.”

Two charts showing statistics for Florida and its 20 MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices; the other compares the volume of existing, condominium sales and median sales price in May 2007 to May 2006 based on Realtor transactions.

Single-Family Download May_2007_home_chart.pdf

Condominium Download May_07_condo_chart.pdf

The Florida Association of Realtors (FAR), the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 150,000 members in 68 boards/associations.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

SOURCE: Press Release from the Florida Association of REALTORs®

Feel free to contact me if you have any questions concerning the real estate market in Zephyrhills, Pasco County and the surrounding areas.. John Elwell - REALTOR at CENTURY 21 Bill Nye Realty, Inc. Tel: 813-783-4444  E-Mail: jelwell1@tampabay.rr.com You can also visit my webpage at: jelwell.century21bnr.com

Congressmen Introduce Bill To Require Future Mobile Homes To Be Equipped With Weather Radios

June 21, 2007: Ellsworth Introduces CJ’s Home Protection Act

WASHINGTON - Rep. Brad Ellsworth was joined by Reps. Spencer Bachus (R-AL), Kay Granger (R-TX), and Dennis Moore (D-KS) in introducing legislation requiring manufactured and mobile homes to be equipped with weather radios to warn residents of severe weather. Ellsworth, Bachus, and Moore joined tornado survivor and advocate Kathryn Martin in unveiling CJ's Home Protection Act during a Capitol Hill press conference.

"As Vanderburgh County Sheriff, I saw firsthand the destruction these storms bring to the families and communities they touch," said Ellsworth. "This bill is about public safety. The CJ's Home Protection Act is designed to ensure inhabitants of mobile and manufactured homes have warning when violent weather is about to strike so they can take action to protect themselves," said Rep. Ellsworth.

CJ's Home Protection Act would change the Federal manufactured home construction and safety standards to require every manufactured home delivered for sale to be supplied with a weather radio. Weather radios provide immediate broadcasts of severe weather warnings and civil emergency messages, including tornado and flood warnings, AMBER alerts for child abductions, and chemical spill notifications. Prices vary from $20-$80.

"Severe weather doesn't distinguish between Republicans and Democrats. It doesn't care whether you live in Indiana or Kansas or Texas or Alabama," said Ellsworth. "We are coming together because we believe that if this prevents just one mother from losing her son, a $30 weather radio is not too much to ask."

The bill is named after CJ Martin, a two-year-old boy, whose life was taken by an F3 tornado in southwest Indiana in 2005. His mother, Kathryn, turned her grief into a state-wide advocacy campaign that resulted in an Indiana law requiring NOAA Weather Radios be installed in all new mobile and manufactured housing, which then prompted the federal initiative.

SOURCE: Press Release from the office of Rep. Brad Ellsworth - Indiana

Note from John Elwell: Since many of our residents and my customers here in Florida reside in mobile homes, this legislation seems like a low cost way of giving owners some added protection. Considering how cheap these radios are in relationship to the price of the home, I am surprised that that the mobile home manufacturers have not done this already on their own initiative. Since this only will apply to future homes, it is a good idea for owners of older mobiles to think about getting their own weather radios. Not a bad investment!

Americans Express Confidence in the Value of Their Homes

Americans Express Confidence in the Value of Their Homes, Despite Softening Housing Market Majority Believe They Could Sell Their House for More Than They Could a Year Ago, According to a New Survey by The Boston Consulting Group

(Chicago, June 21, 2007)- Americans are confident their homes are retaining, even gaining, value, according to a nationwide telephone survey conducted this month by The Boston Consulting Group (BCG).

In fact, Americans are nearly as optimistic now about the rising value of their homes as they were a year ago, according to the research.

"Americans believe their homes are still their best investment. They're positive about their homes' value and believe in a bounce-back in residential real estate overall. Talk of declining average values of homes is not forcing a cutback in spending. It's just not translated into the American psyche," says BCG Senior Partner and consumer spending expert Michael J. Silverstein.

According to the survey:

*
55% of Americans say their home would sell for more money now than it would have a year ago. (Last summer, 59% of American homeowners felt that way.)
*
Nearly three-quarters (74%) of homeowners say they're confident they could sell their home within the next six months at a price they think it's worth.
*
85% of Americans believe their house will be worth more five years from now than it is today.
*
The majority - 63% - of Americans think real estate is a good or excellent investment.

Further, Americans say the residential real estate market is having very little impact on how they spend.

*
76% of Americans say the current real estate market has no impact on how they're spending now. (However, 16% say they're cutting back because of a perception of lower residential real estate values.)
*
Most homeowners - 69% - say they're likely to make renovations or improvements to their home over the next 12 months.
*
27% of Americans say they're likely to purchase a better home over the next five years.

"Consumers don't view blips in overall housing prices as a catastrophe. They take a very long-term perspective and don't move very often. Tales of the end of housing as the primary asset for American households are way over-told," says Mr. Silverstein, author of two recent books on the consumer economy and spending patterns, Treasure Hunt: Inside the Mind of the New Consumer (Portfolio, May 2006) and Trading Up: Why Consumers Want New Luxury Goods - and How Companies Create Them (Portfolio, 2004).

Despite optimistic views of their own homes' value, many Americans are, in fact, concerned about the real estate market's impact on the economy. Nearly half - 49% - say they believe the decline in housing prices is hurting the national economy "moderately." And 15% say they believe it's hurting the economy "severely." Only 12% say it's not hurting the economy.

Most Americans (52%) believe the residential real estate slump will last two years or less. Only 22% believe it will last for five or more years.

For more information, please contact: Eric Gregoire, +1 617 854 4570.

Survey Methodology

The public opinion data reported in this study are the result of a random and representative telephone survey conducted May 31-June 3, 2007, with 1,007 adult Americans, 18 years of age and older, living in the continental United States. The survey was designed in collaboration with Michaels Opinion Research, Inc.

Interviewing was conducted from a central telephone facility utilizing a random-digit-dial (RDD) sampling methodology to ensure that both listed and unlisted telephone numbers were included. All sample numbers selected were subject to up to four attempts to complete an interview.

Survey results have been weighted by four variables (age, sex, region and race) for reliable and accurate representation of the total U.S. population.

The margin of error for results based on the national sample of 1,007 is ±3 percentage points and is greater for smaller sub-groups of respondents.

About The Boston Consulting Group
Since its founding in 1963, The Boston Consulting Group has focused on helping clients achieve competitive advantage. Our firm believes that best practices or benchmarks are rarely enough to create lasting value and that positive change requires new insight into economics and markets and the organizational capabilities to chart and deliver on winning strategies. We consider every assignment to be a unique set of opportunities and constraints for which no standard solution will be adequate. BCG has 64 offices in 38 countries and serves companies in all industries and markets.

SOURCE: Boston Consulting Group - Press Release

NOTE FROM JOHN ELWELL - Some of the beliefs of the participants fly in the face of the reality that exists in the streets. Except for some very special markets, homes are not selling for more than they did a year ago. In fact, many are selling for less than they would have in late 2005. However, this is something we have to deal with as real estate agents every day. The sellers accept that their neighbors' homes are worth less, but they feel that their own home is "special", and therefore the rules of supply and demand do not apply to them. That is a hard hurdle to overcome. Only after several months of having their homes on the market with no activity at all, will many admit they were wrong and finally drop their price to current market levels.

Those participants who believe that in 5 years their homes will be worth more are very likely on target. As with the stock market, over the short term there can be highs and lows, but over the long term real estate has historically always risen eventually.

Freddie Mac Finally Reports That Average Mortgage Interest Rates Have Dropped Slightly

Today  Freddie Mac reported that nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.69% (6.65% in the southeast), down from 6.74% a week ago. The average interest rate for 15 year fixed-rate mortgages was 6.37%, down from 6.43% over last week.

Market worries that the housing market will be a drag on the economy for a longer period helped to ease the recent upward movement of interest rates over the past several weeks. Homebuilder optimism dropped to a 16 year low and new housing starts fell for the first time in 4 months.

Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com  and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be should you decide to finance a home purchase.

FLORIDA: NEW LEGISLATION SIGNED INTO LAW THAT WILL ENHANCE CONSUMER PROTECTION FOR CONSUMERS SEEKING A MORTGAGE

TALLAHASSEE – Governor Charlie Crist signed into law today legislation that will enhance consumer protection for consumers seeking a mortgage.  The legislation, an “Act Relating to Mortgages,” was sponsored by Senator Mike Fasano and Representative Garrett Richter at the request of the Office of Financial Regulation.  This law will help protect consumers by requiring additional disclosures, such as the risk associated with adjustable rate mortgages.  The law also provides additional enforcement and investigative tools for prosecuting perpetrators of mortgage fraud and makes it a third degree felony for violators.

The enactment of this legislation coincides with actions that are being taken by the Financial Services Commission and the Office of Financial Regulation to address lending and foreclosure issues.  The Financial Services Commission is encouraging financial institutions and other lenders to work with borrowers who are delinquent or subject to foreclosure on their homes.  The Commission is reaching out to all lenders to help make Florida an affordable and better place to live.

The Commission is concerned that the American dream of home ownership is becoming less affordable to many Floridians.  Financial institutions and lenders are being urged to make every effort prudently possible to assist Floridians in realizing their hopes and dreams of being a home owner. Alternative solutions that promote safe and sound lending practices are generally in the long-term best interest of the financial institution and the borrower.

The Office of Financial Regulation has put together a list of proposals that will hopefully allow some guidance to borrowers and lenders.   One example would be modifying loan terms, or moving the borrower from a higher adjustable rate to a lower fixed rate loan.  The Office has also created a new link available at www.flofr.com titled, “Tips on Foreclosures and Delinquencies,” that provides additional information to help borrowers and lenders alike in coping with mortgage foreclosures and delinquencies.  Borrowers who are unable to make their mortgage payment should contact their lender or servicer immediately to see what alternatives are available to them. 

The Financial Services Commission is comprised of the Governor, Charlie Crist, Attorney General, Bill McCollum, the Chief Financial Officer, Alex Sink, and the Commissioner of Agriculture, Charles Bronson.  The Office of Financial Regulation reports to the Financial Services Commission.

SOURCE: FINANCIAL SERVICES COMMISSION Press Release 6/19/07

Notes from John Elwell - It is my understanding that this new legislation will require the following:

1. That borrowers be informed whenever a loan's terms change, no later than 3 business days before the closing on the sale/purchase.
2. If a lender is going to pay a fee to a mortgage broker they must inform the buyer in writing how much that payment will be.
3. Now "Good Faith Estimates" of closing costs must be signed and dated by the borrowers when they receive them. Furthermore, they must show all fees that will be charged. In the past I have had buyers arrive at the closing table having never even seen a good faith estimate.
4. Lenders and mortgage brokers are required to give borrowers precise disclosures concerning their loans.
5. Now the Florida Office of Financial Regulation will be able to take action against lenders and mortgage brokers that violate either the Real Estate Settlement Procedures Act (RESPA) or the federal Truth In Lending Act.

Considering some of the fraudlent activity that has gone on in the past, this law can only benefit home buyers in Florida. At one time we were a hotbed of lending fraud. This may help curtail such behavior in the future. Let's hope so.

University of Florida Press Release: Florida’s Housing Market Suffers Setback, New Survey Results Show

Florida’s housing market suffers setback, new survey results show

Filed under Research on Monday, June 18, 2007.

GAINESVILLE, Fla. — Florida’s housing market, thought to be stabilizing earlier this year, deteriorated in the latest quarterly survey conducted by the University of Florida, a situation likely brought on by uneasiness about lending practices, insurance rates and the state’s property tax structure.

“Like the graying skies over the state tainted by drought-driven brush fires, the mood for Florida real estate has grown more somber since January,” said Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “Perhaps the implications of the subprime ‘meltdown’ are creating a disquieting haze; perhaps anxiety over property taxes and high insurance rates are shrouding Florida’s otherwise sunny outlook. In any case, there are few signs of improvement.”

Whereas the advice from the January survey to Florida’s hopeful home buyers was to act immediately in buying single-family residential housing, Archer now said he could be positive only about the prospects for buying newly built homes. The outlook for existing single-family housing is more pessimistic, and things look even worse for condos, according to the latest survey conducted in April of 306 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, appraisers and other experts in the field.

But Archer also cautioned that unforeseen circumstances sometimes cause the market to improve. “Those of us who have watched markets for a long time realize the picture can change rather dramatically in a short period of time if something allows people to sell their house more quickly, such as a change in the property tax situation or a sudden improvement in the economy,” he said.

In any case, prospective buyers are on solid ground when it comes to new construction, Archer said. “If someone is considering buying a brand new home, I don’t see the risk of the value going down, particularly if they plan to keep it for at least several years and live in it themselves,” he said. The same cannot be said for existing single-family homes, where there is a large inventory of supply compared with the rate of sale, Archer said. In addition, this type of housing may be overpriced for current market conditions, he said.

“There is strong opinion among many thoughtful people that with existing homes many sellers are still expecting the kind of premium that they saw happen between 2003 and 2005 and they haven’t come to terms with the fact that price increases have cooled off,” he said. “So you may find people asking for more than their houses are worth.”

Prices are shakiest for condominiums, which are in the worst shape, Archer said.

“Condominiums have always been the most volatile component of the housing market,” he said. “They’re the play things of the amateur investors and they seem to invite misjudgments and high-risk behavior.”

Would-be condo buyers are best advised to look for property with a “monopoly location,” in that there is something unique about its physical characteristics, Archer said. Most condominiums along the coast, for example, are likely to be good prospects because coastal property is disappearing, he said.

If condominiums are well-designed and well-placed and purchased as an owner-occupied investment rather than a speculative one, their value will probably hold, he said.

The study found some regional variations. In Gainesville and Tallahassee, the housing market is pretty stable, even for condominiums, while the picture is more precarious for southwest Florida and the Miami, Fort Lauderdale and Palm Beach areas, he said.

Ironically, though, international capital could revive some of these markets as the southeast coast is popular with South American and European investors, Archer said.

In terms of the overall housing picture, economists have remained divided about whether so-called subprime loans have had ill effects beyond borderline homebuyers, Archer said. Such loans allow homeowners with less-than-sterling credit to get mortgages at higher interest rates, and they have resulted in large numbers of foreclosures, he said.

Although these irregular practices have led to more conservative lending policies, most home buyers who want standard home loans will still be able to get them, he said.

-30-

Credits

Writer

Cathy Keen

Source

Wayne Archer, archerw@ufl.edu, 352-273-0314, 273-0311

SOURCE: © University of Florida, Gainesville, FL 32611; (352) 392-3261.

NOTE FROM JOHN ELWELL: Homeowners should pay special attention to the comments in this release in Paragraph 4 regarding new home sales and the sales of older homes. We are finding locally that developers and home builders are deeply discounting their prices. Some are at nearly $100 per square foot. Something we have not seen for several years. Homeowners need to take this into consideration when pricing their homes. Buyers will NOT pay more for a resale home when they can get a new home for less money. Let me say that again. BUYERS WILL NOT BUY AN OLDER HOME THAT COSTS MORE WHEN THEY CAN GET A SIMILAR HOME THAT IS BRAND NEW FOR LESS MONEY! This may be hard for sellers to accept, but this is the reality of today's market. To disregard this concept will result in frustration for all concerned.

Home Sellers Must Be Careful When Letting Strangers Into Their Homes

Do you remember the days when we could leave our homes, sometimes for days at a time, without locking the doors? Seems like a long time ago. Today, we lock the door if we are just going to the mailbox. Homeowners need to be aware of some things they should do under certain circumstances.

If you are selling your home by yourself, it will be up to you to let potential buyers into your home for tours. This may also be the case if you have listed your home with one of the reduced service real estate companies that requires you to conduct the showings of your home. Often these companies receive phone inquiries at their call centers, then they call to let you know that a "Mr. Smith" will be coming to see your home, and request that you give him a tour. No one has met this "Mr. Smith" in person. He could certainly be a legitimate buyer who is sincerely interested in purchasing your home. Or, he could want to enter your residence for "other" reasons. Here are some tips that may prevent you or your loved ones from getting into an uncomfortable situation.

1. If possible, do not be at home alone when the buyer comes. Have at least one other adult with you. Perhaps a neighbor could come over to stand-by during the showing.

2. Avoid allowing tours to take place after dark.

3. Before you open the door, confirm the person's name and the company that sent him or her to your home.

4. If you have a friend that lives nearby and a wireless or cell phone, call your friend. Then keep the line open and the phone in your hand while the buyer(s) is in your home. That way they can hear the conversation and also your request for assistance, if it is need.

5. While your friend is on the phone, and before the buyers get to the door, it would not be a bad idea to tell your friend the color, make, and license number of the car the people arrived in.

6. If your home has an alarm system with a portable "panic button", carry it with you while the visitors are in your home.

7. If more than one person comes to tour your home, try to keep them together as best you can. The last thing you want is to be in the kitchen with the wife while her husband is in the bedroom going through your valuables. If you followed the first rule and have someone with you, it will be easier to keep track of wanderers.

8. In the same vein, no matter how your home is being shown, it is best to lock away, or at least hide, any truly valuable items. You may even with to let a trusted friend or family member keep them for you during the weeks when the home will be shown.

9. Let the buyers enter the rooms before you do and station yourself at the door so that you can easily get out of the room if you should need to. You do not want to be blocked from the only exit. So make sure you are the one closest to the door.

10. If at any point you feel that something is "just not right", tell the visitors that you are not feeling well, and ask the buyers to return on another day.

11. After the "buyers" have gone, check to make sure that all windows and doors are still locked, and that none of them have been unlocked to permit an unauthorized entrance later on.

You should always be prudent when allowing strangers into your home, no matter how nice they seem.

One of the many advantages of using a full-service REALTOR®, like myself, is that when a tour is given, there will always be a licensed agent with the prospective buyer(s). I would never ask a seller to conduct a showing. Either another licensed agent or I will handle that task as a part of our service to you. You do not even have to be at the home while the tour is going on.

Safety has become a very important issue in the world we live in. Take all the steps you can to make sure that your home selling experience has a happy ending!

Feel free to contact me if you have any questions concerning this topic. My phone number is 813-783-4444 and my e-mail address is:  jelwell1@tampabay.rr.com  Also feel free to add any of your own tips or ideas concerning safety during home showings by clicking on the comment button below. Best of luck!

COMMISSIONER MCCARTY (Florida) ORDERS INSURER TO REFUND $43.2 MILLION TO CUSTOMERS

TALLAHASSEE (06/15/2007) - Florida Insurance Commissioner Kevin McCarty issued a Consent Order requiring United Property & Casualty Insurance Company to refund millions of dollars in unapproved homeowners' insurance rate increases.

Last October, United began charging its customers higher insurance rates before the Florida Office of Insurance Regulation officially approved the rate increase. This was allowed under Florida law at that time and was referred to as a "use and file" rate increase.

However, the law also stated that if, after the Office reviewed the increase and determined that it was too high, the Office had the authority to require the company to return to policyholders the difference between the original rate charged and the rate ultimately approved by the Office. In this case, the difference between the amount charged and the amount approved is $43,249,714.

"Recent legislation in Florida prohibits property insurers from using use and file rates in the future, but United engaged in this action last year before it was banned," McCarty said. "We will continue to aggressively pursue all refunds and credits that are due to Florida consumers."

The Consent Order requires United to begin refunding immediately.

SOURCE: Press Release from the Office of Insurance Regulation

Florida Legislators Arrive at Property Tax Reform Agreement

Yesterday the special session of the Florida legislature ended with a program to reform property taxes in the works. Despite warnings from schools, local governments, firefighters, and police departments that services to the public would suffer, Republican lawmakers allowed few alterations to their proposals. The only one that seemed to have gotten by is to give property owners the option of retaining their "save our homes" savings if they choose to do so. Only as owners sell or die will these homes be phased out, lengthening the process. By allowing this, the projected tax cut will drop from $31.6 billion dollars to $24 billion.

Legislation that was passed will force local governments to freeze taxes for 2008 at this year's levels. From that point on they must decrease the taxes from 3% to 9%, depending on how rapidly the property owners' taxes had risen in the past. Future increases will be limited by an index based on the inflation rate. It is believed that this move alone will trim taxes throughout the state to the tune of about $15 billion.

The legislature also will place before the voters a constitutional amendment that would create a "super exemption". Instead of the current Homestead Exemption which removes the first $25,000 of assessed value for primary, or homesteaded properties, this super exemption will allow homesteaded property owners to take off 75% of the assessed value and be taxed on the remainder for homes valued up to $200,000, and 15% for the next $300,000 of value. That is how I understand it anyway. If this is approved by the public, the state predicted that it will cut taxes $16 billion. However, as I mentioned above, if homeowners can opt to keep their "save our homes" status, this amount would be reduced. Voters will have a chance to weigh in on this amendment on January 29, 2008.

No one likes taxes, that is for sure. But they are a necessary evil. With such huge tax reductions predicted, it still remains to be seen how the Republican controlled legislature will keep our schools, police, firefighters, park system, local governments, etc. running. Let's hope that this is not one of those occassions when everyone cheers when a new program is enacted and then within a short time they are all looking for the "tar and feathers" and "finger pointing" becomes the state sport.

Global Insight Reports: Home Prices Fall Back to Historic Norms

Home Prices Fall Back to Historic Norms, as Prices Drop and Housing Markets Cool
Some Markets Remain Stubbornly Overvalued

Waltham, MA 14 June 2007 — Global Insight, the world's leading company for economic and financial analysis and forecasting, today released the first-quarter 2007 update of its study, House Prices in America. The updated U.S. housing valuation analysis shows a widely dispersed drop in single-family home prices, resulting in a continued decline in the incidence of overvaluation in the nation's housing market.

The overall number of single-family housing units deemed to be overvalued fell from 17% in the fourth-quarter 2006 to 14% (revised). Meanwhile, in terms of single-family asset value, the percent deemed to be overvalued fell to 25% from 33% (revised) in the prior quarter.

Nationally, single-family home prices increased in the first quarter at an annualized rate of 2.2%. On a year-over-year comparison, however, prices are up only 3.0%, further normalizing the market with the weakest gain in a decade. Nearly 50% or 157 of the 317 metro areas in the study experienced price declines in the first quarter, accounting for 38% of all single-family units and half of all single-family real estate assets in the nation.

The most highly concentrated declines, while widely dispersed, occurred in areas that had experienced the most dramatic run-up in overvaluation, including California, Florida, New York, and New England. The industrial Midwest was hit hard by the cutbacks in automobile manufacturing. The most dramatic declines among the nation's large metro areas were seen in California's Central Valley. Sacramento CA, where prices fell by 8.2% in the past year and 10.0% since 2005, experienced the greatest decline among the nation's large metro areas.

Prices were most resilient in the Pacific and Mountain Northwest, most of Texas, and the Carolinas.

Markets identified in the study as overvalued decreased to 54 metro areas in the first quarter, down from 62 metro area markets (revised) in fourth-quarter 2006. The nation's most overvalued markets are now Bend, OR and Prescott, AZ, highlighting the precarious nature of the price resiliency in the interior West. Meanwhile, the most undervalued markets continued to be in Texas, specifically Dallas (24.9%) and Houston (22.1%).

James Diffley, managing director of Global Insight's Regional Services Group, said, "The price declines we are seeing today in California, Florida, and New England were predicted two years ago when we identified them as the most extremely overvalued markets in the nation. Widespread weakness across the country is a reflection of the dramatic swing in sentiment and bargaining power between buyers and sellers." "Going forward," Diffley continued, "the accelerating declines in California, where home prices crested earliest warn of further declines elsewhere. The huge glut of new and existing homes for sale on the market, and the tightening of credit standards in light of the sub-prime mortgage troubles, will continue to exert downward pressure on prices for some time."

The House Prices in America study, a joint effort by Global Insight and National City Corporation, examines the top 317 U.S. real estate markets, representing 92% of the single-family housing market, to determine what home prices should be, accounting for differences in population density, relative income levels, interest rates, and historically observed market premiums or discounts. Markets with valuation premiums above 34% were deemed at risk for price corrections based on the typical degree of overvaluation that preceded the 63 known local market price declines observed since 1985.

House Prices in America combines a statistical model originally developed at National City Corporation (www.nationalcity.com/housevaluation) with data largely developed at Global Insight. More information on Global Insight's housing valuation analysis is available atL http://www.globalinsight.com/housingvaluation.

SOURCE: Global Insight

Another Nasty Jump In Mortgage Interest Rates Reported by Freddie Mac

Today  Freddie Mac reported that nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.74% (6.71% in the southeast), up from 6.53% a week ago. The average interest rate for 15 year fixed-rate mortgages was 6.43%, up from 6.22% over last week! The 30 year rate has not been higher since July 20, 2006!

The sharp rise in mortgage rates was the biggest that the housing market has seen in over 3 years, according to a Freddie Mac spokesperson. These interest rate increases mirror the similar increases in the rising yields on Treasury securities as worries about inflationary pressures and continued spending by consumers and businesses have made an interest rate cut less likely.

Higher interest rates may affect the housing market's gradual recovery. Demand appears to be more stable, but inventories of new housing units is still high and this is exerting downward pressure on construction starts and housing prices.

Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com  and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be should you decide to finance a home purchase.

Governor Crist Extends Insurance Premium Rate Freeze

I am hearing that Governor Crist has extended the freeze that he signed several months ago that prevents Citizens Property Insurance (the so-called, insurer of last resort in Florida) from raising the rates it charges their customers for homeowner coverage. Instead of doing this by executive order, he accomplished it by signing a bill into law. The freeze on Citizen's rates will remain in effect until the end of 2008. This bill also forbids large national companies from forming companies just within the state of Florida, and then claiming they are losing money since they are not spreading the risk over ALL of their customers in all 50 states, or wherever it does business outside of Florida. In the past when a hurricane hit Florida, they reported horrible losses and asked for huge rate increases, even though everywhere else in the country they were raking in the dough. No more of that. The bill will also require that before national companies ask for a rate increase, they must factor in all the money they are making nationwide.

Special Session of Florida Legislature Begins Today To Tackle Property Tax Reform

Who knows what Tallahassee is going to come up with. A $31.6 billion tax cut is being mentioned. There are so many proposals being tossed about I am not sure anyone understands it all, even the authors of the bills. I am very sure that they do not know all of the repercussions down the road. The true fact is you have to pay for what you want. If it currently costs us X dollars to keep the state running and we suddenly decide to reduce tax income by Y dollars, we either will have reduced services or we will have to find another way to make Y dollars to replace those that were lost. That is how it works in my home and that is how it works in the state.

One of the two biggest components are a new type of "super homestead exemption" that would run from $50,000 to nearly $200,000. (I would love this since my tax bill would disappear. However, I do not think it fair that I am a citizen using the roads, parks, etc. and do not pay a cent). The second part of the plan is to force local governments to rollback tax bases with a cap on how much future taxes can go up.

To change the current homestead law, there would need to be a vote by the public on this modification to the state's constitution. And it would take 3/4 of the legislature to vote for it to be placed on the ballot before the voters would even have the chance to weigh in.

Now, getting back to cuts. Where will that $31.6 billion come from. First Republicans are planning on taking $7.1 billion of it from school budgets over the next 7 years. This even as our state is bursting at the seams with new schools going up every day?? They said they could make up these cuts next year when the new budget is done. But where are they going to pull that money from then? All they are saying is "trust us".

In addition, firefighters, police and local governments are expressing concerns that they will be forced to make drastic budget cuts that will have negative consequences on the citizens in their areas.

Then we get to the sticky situation were some property owners are actually better off under the current taxing statutes and will pay a lot more if the new proposals are passed. Their savings from "save our homes" is greater than any new homestead exemption will be. Will they vote for the constitutional amendment that will create the "super homestead exemption"

Guys, this looks like a real mish-mash to me. My bet is that when it is all done, and we are a couple of years down the road, another special session will need to be called to clean all of this up. Anyone want to bet?

I will let you know what the final outcome of the special session is.

Commission, Commission! Who Gets the Real Estate Commission??

Some colleagues and I were talking the other day, and several of us said that we were still amazed by the number of customers who think that the commission they see on their closing statements goes to the agents alone. I sure wish it did! I would not be driving a Honda, living in a 700 square foot house, and sweating the health insurance premiums every month.

In most cases, the commission is split many ways. There are often many brokers and agents involved in any sale. The listing broker, the listing agent, the selling broker, the selling agent, along with any referring agents if they are a part of the transaction, get a piece of the pie. Depending on the size of the total commission, this frequently leaves very little for each participant. Each company sets its own commissions that it charges customers and then determines what part of the commission that it will offer to cooperating brokers and agents to encourage them to help sell your property. I have created this flow chart to help you see how the money flows. If you click on the image it should enlarge to fill your screen. If you cannot see or scroll to see the entire chart, try "right clicking" on the image and have it open up in a new window where you can scroll. If you are still having problems, see the link below to download a PDF version. As I mentioned earlier, there are variations of the ways that commissions are split. Commissions charges also vary since companies are forbidden by law from agreeing to charge the same amounts. However, this is how splits often work, and I think it is not uncommon around Florida and the US for the commission money to flow in this manner.

My main point in this post is that no one person gets all the commission money, no matter what the plan is. In one way or another, the money gets shared with others in some way. So if you believe that your real estate agent is making a fortune handling your sale, this is very probably not the case. A good full-service agent works hard for every dollar he or she makes.

I hope that this will help clarify for my readers how commissions are commonly split. Do not hesitate to contact me if you have any questions concerning this topic. You can e-mail me at: jelwell1@tampabay.rr.com If you were unable to enlarge the image at the top, you can download a PDF file of the same flow chart by clicking here: Download CommissionSplitFlowChart4

Mortgage Rates Hit 10 Month High According to Freddie Mac

Yesterday  Freddie Mac reported that nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 6.53% (6.52% in the southeast), up from 6.42% a week ago. The average interest rate for 15 year fixed-rate mortgages was 6.22%, up from 6.12% over last week. A year ago the 30 year average was 6.62% and the 15 year was 6.23.

Wage growth and a tight labor force helped to drive interest rates higher this week. May's unemployment rates were at the second lowest level since May 2001 and hourly earnings rose. Labor costs increased 1.8 during the first 3 months of 2007, triple the estimated increase, and this in turn has raised concerns regarding inflation.

Do keep in mind that we live in a very large and complex country. What happens in California is not necessarily what is happening in Florida. And what happens in Florida may be a far cry from what occurs in Michigan. Real estate is still very much a local issue.

If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com  and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac.

If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be should you decide to finance a home purchase.

National Association of REALTORS (NAR) Revises Its Housing Forecast

Sales Projected to Fluctuate Narrowly With a Gradual Upturn

WASHINGTON, June 06, 2007 -

Home sales are projected to move in a relatively narrow range with a gradual upturn becoming more pronounced by the end of the year, according to the latest forecast (PDF 136k) by the National Association of Realtors®.

Lawrence Yun, NAR senior economist, said the market is relatively soft. “Overall housing levels are historically strong, but sales remain sluggish compared to the recent boom,” he said. “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year. It’s important to keep in mind that all real estate is local, and many markets are expected to have higher sales and strengthening prices during the second half of this year.”

Existing-home sales are projected to total 6.18 million in 2007 and 6.41 million next year, in contrast with 6.48 million in 2006. New-home sales are forecast at 860,000 this year and 901,000 in 2008, down from 1.05 million last year. Housing starts are likely to total 1.43 million units in 2007 and 1.49 million next year, below the 1.80 million recorded in 2006.

The national median existing-home price should ease by 1.3 percent to $219,100 in 2007 before rising 1.7 percent next year. The median new-home price will probably fall 2.3 percent to $240,800 this year, and then grow by 2.6 percent in 2008.

“We continue to experience a temporary distortion in comparing median existing-home prices,” Yun said. “Because the sales volume has shifted from many high-cost areas to moderately priced markets, we’re not getting a true apples-to-apples comparison. When you look at other measures, such as this week’s price index from Freddie Mac which is based on repeat sales, overall home prices are rising slowly.”

“Buyers today need to have a traditional view that housing as a long-term investment is an added benefit to their shelter expense. If so, that investment generally will build a nice nest egg over time, especially if they use a traditional mortgage instrument that reduces debt,” Yun said.

The 30-year fixed-rate mortgage is likely to increase to 6.6 percent in the third quarter and then hover at that level through 2008.

“Because of reductions in home sales and new home construction, the economy will expand at a subpar pace in 2007,” Yun said. “As housing market conditions improve going into 2008, the economy will reach back to its growth potential next year.” Growth in the U.S. gross domestic product is estimated at 2.0 percent this year, lower than the 3.3 percent growth in 2006. Yun forecasts GDP to grow 3.0 percent in 2008.

The unemployment rate is projected to average 4.6 percent in 2007, unchanged from last year. Inflation, as measured by the Consumer Price Index, is expected to decline to 2.5 percent this year, down from 3.2 percent in 2006. Inflation-adjusted disposable personal income is likely rise 2.8 percent this year, compared with a 2.6 percent increase in 2006.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #

Existing-home sales for May will be released June 25; the Pending Home Sales Index is scheduled for July 3 and the next forecast will be July 11.

SOURCE: National Association of REALTORS

Smell Your House or Sell Your House

Most real estate professionals will agree that their buyers will usually make a decision about liking or not liking a home within 10 seconds of entering the house. There can be many things that will make them rapidly form an opinion about a property. Today I will discuss SMELLS. Often we become accustomed to the smell of our own homes and do not notice anything wrong. However, when others enter the house, they may readily note its ambient scent, whether good or bad. When marketing your home, how it smells can make all the difference in the world. A home that smells fresh and clean will create positive feelings, while a musty home that reeks of animals, cooking residue, or smoke will have potential buyers running for the door. Some people are allergic to certain irritants, and for them even entering the home could make them sick. Here are some things you can do to minimize the effects of bad smells in your home and make it more attractive to buyers:

• Have carpets, curtains, and upholstery cleaned, preferrably with a steam cleaner that will not just mask smells, but will remove the causes of the smells.
• Frequent spraying with an upholstery freshener like Febreeze cannot hurt.
• If your home is vacant and you are going to turn your refrigerator off for any reason, please prop the doors open. You cannot imagine the smells that can build up within a warm refrigerator. My customers tell me that it may help to place crumpled newspapers inside it. These apparently help absorb bad smells. In the end, it may be best to leave the refrigerator running, but at a higher setting. In this way smells will not develop and buyers will be able to see that the unit is working well.
• If you smoke, for the duration of the marketing period try to smoke outside, on a porch, in a Florida room, a garage, or at least open the doors and windows so the smoke will not linger in the air and in the furnishings. I know firsthand that this can be a hassle for you, but you have no idea how negatively buyers view a home that smells of tobacco smoke. They hate it.
• Consider painting some or all of your walls. The faint smell of new latex paint (not oil based paints that can drive buyers out of your home) gives the house a "new home" smell. You probably know people who love the smell of a new car. It works the same way for a home. If you cannot paint, at least consider washing the walls down with a mild detergent that can eliminate odors. If you have "extreme colors" on your walls, painting them a more neutral shade will help with visual appeal, as well as eliminate bad odors.
• If you have a cat, empty the litterbox VERY frequently. Smells from it can make or break a deal. If you have a male cat that has "marked his territory", clean these areas vigorously to remove the smell. Sometimes it is even necessary to seal the area if the urine has penetrated into the wood or concrete of the structure. If you do not do this, expect thousands of dollars to come off the price of your home and plan on it spending a much longer time on the market.
• If your home is a vacation residence and will be vacant when it is shown, please do not put moth balls around the home. Their strong smell is unpleasant and could trigger allergic reactions. It is better to spray the perimeter of your home with insecticide or put out pest baits.
• If the home is not currently lived in, leave the air-conditioning on at a high setting like 85 degrees so that it comes on a couple of times a day. In this way the humidity will be kept low and the air will seem fresher.
• Change the filters in your AC system frequently. This will help eliminate stale smells and will also stop the formation of black streaks and cobwebs near your AC vents.
• While it is not a bad idea to leave a few air fresheners in your home, check out their potency. I was in one home that had one of those plug-in devices. The home smelled like someone had tossed gallons of cheap perfume everywhere. It was so bad my eyes watered! Not a very welcoming thing. In fact that home ended up selling for $52,000 instead of the $69,900 asking price. Still think things like bad smells do not matter? They do!
• If you have mold growing in the bathroom, get rid of it with a little water and bleach or with a commercial product. There has been so much said about mold in homes lately, that you do not want people starting down the wrong road and begin worrying about mold in other areas where it does not exist.
• If you will be around the home when potential buyers will be touring it, you can try boiling cinnamon on the stove or cut an apple in two pieces, sprinkle it with cinnamon & nutmeg and bake it in your oven. Your house will have the homey smell of apple pie which can create a familiar atmosphere for buyers. Scented candles can also help create pleasant smelling surroundings, without overpowering your visitors' nasal passages.
• If the weather is pleasant, consider opening the windows and doors prior to a visit to let the stale air out and the fresh outside air fill the home.

Hope these suggestions help you. They can make your home sell more quickly and literally put hundreds of dollars in your pockets. Feel free to call me at 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com if you have any questions concerning this topic or other ways to make your home more appealing to buyers. You can also visit my webpage at: http://www.jelwell.century21bnr.com

New Companies to Accept New Homeowners Insurance Policies in Florida

The state is reporting that five new companies will begin writing policies in Florida. For months we have seen an exodus of insurers, and perhaps it is a positive sign that some are now entering our market.

Clearwater's Modern USA Insurance Company will begin writing coverage in October for homes that have average values of $210,000.

Olympus Insurance Company out of Orlando will begin offering coverage sometime around October 2007.

American Keystone Insurance Company of Ponte Verda Beach will offer policies on homes valued from $250,000 to $3,000,000.

Plantation's Privilege Underwriters Reciprocal Exchange, Inc. will handle homes valued at more than $1,000,000.

The last company, Homeowners Choice Property & Casualty Insurance Company will take over 10,000 policies now serviced by Citizens (the state run company). Near the end of this year they will accept new customers and hope to sell up to 25,000 new policies on homes valued between $150,000 and $750,000.

A sixth company, Sawgrass Mutual Insurance Company out of Hollywood, Florida has also applied to be able to sell homeowner policies in the state.

These additional companies will at least offer us more options. It is unclear whether in the end they will offer us cheaper prices. Time will tell. But the fact that companies are coming to Florida is a positive sign. Now we just have to hope we have a calm hurricane season so that they are not driven back out of the state.

June 2007 Zephyrhills Real Estate Newsletter Available

I have just finished creating my newsletter for this month. I think you will find useful information there for buyers and sellers of properties. You can download copies in Adobe Acrobat PDF format at the following links:

Sellers Version:

Download june_2007_sellers.PDF

Buyers Version:

Download june_2007_buyers.PDF

If you like, send me your e-mail address and I will be happy to e-mail you each new edition of my newsletter when it is published at the start of each month. My e-mail address is: jelwell1@tampabay.rr.com 

Another Seller Shoots Himself in the Foot by Overpricing His Home in Zephyrhills, Florida

I want to relate to you an incident that happened yesterday that is a perfect example of how many home sellers are creating problems for themselves and their agents.

I got a call from a local man who had received one of my postcards in the mail. He and his wife will be moving in a few months and they wanted to see what their home here in Zephyrhills would sell for. I pulled up county records of recent sales and prepared a Comparative Market Analysis (CMA) using the multiple listing service. Comparable homes in that specific subdivision had sold for from between $135,000 to $182,000 over the past months. Average sold price is $155,000. Keep in mind that those homes that sold at the higher end of the range were updated and a couple of them had inground swimming pools.

I toured the home, and it was not without its problems. The home had only two bedrooms and two baths, which can be a handicap in a market where most buyers want a minimum of 3 bedrooms. The master bedroom was painted a very dark rose color and the carpeting in the home, though new, was a bright blue sculptured type more often seen in homes in the 1970's. The kitchen had the original wooden cabinets which had been painted several years ago and were now showing a lot of wear. The applicances were older and their age was apparent. The home was filled with too much furniture, none of which seemed to complement anything else. No updating of the home was evident. This home was not a disaster, but it would not show well at all.

On the plus side, the roof, air-condi