Florida Real Estate Blog

Florida Home Sales Again Go Up for 5th Month, Contrary to National Trend

ORLANDO, Fla., Feb. 25, 2009 – Florida’s existing home sales rose in January, making it the fifth month in a row that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR).  Existing home sales rose 24 percent last month with a total of 8,450 homes sold statewide compared to 6,810 homes sold in January 2008, according to FAR.

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

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

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

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

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

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

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

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

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

Source: Florida Association of REALTORS

January Existing-Home Sales Fall, Inventory Down says NAR

  WASHINGTON, February 25, 2009 - Existing-home sales declined in January with some buyers waiting to see how details of the economic stimulus package would affect them, according to the National Association of Realtors^®. At the same time, inventories fell to a two-year low.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 5.3 percent to a seasonally adjusted annual rate¹ of 4.49 million units in January from a level of 4.74 million units in December, and are 8.6 percent lower the 4.91 million-unit pace in January 2008.

Lawrence Yun, NAR chief economist, said there was understandable hesitation by some home buyers. “Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” he said. “The housing market will soon get a lift from very favorable buying conditions – not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates.”

NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. Inventory is expected to fall below an 8-month supply by the year end, which would be consistent with home price stabilization.

Total housing inventory at the end of January fell 2.7 percent to 3.60 million existing homes available for sale, which represents a 9.6-month supply² at the current sales pace. Because sales were down, the January supply is up from a 9.4-month supply in December.

“The drop in total inventory is an encouraging sign because the number of homes on the market has declined steadily since peaking in July 2008, and inventory is at the lowest level in two years,” Yun said. In January 2007 there were 3.54 million homes for sale.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said foreclosure relief needs to be fair. “Though President Obama's foreclosure relief plan is a step in the right direction with a net positive benefit for the housing market, serious issues of moral hazard and fairness need to be better addressed,” he said.

“The plan should be wider in scope with equal opportunity for all rather than targeting specific groups. Responsible homeowners who have been making payments consistently on time but do not have traditional refinance options should also qualify for potential loan modifications,” McMillan said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low at 5.05 percent in January from 5.29 percent in December; the rate was 5.76 percent in January 2008.

A high prevalence of distressed home sales, and of those in lower price ranges, has skewed the median price to be markedly lower than under normal market conditions. The national median existing-home price³ for all housing types was $170,300 in January, down 14.8 percent from a year earlier when the median was $199,800; the median is where half of the homes sold for more and half sold for less.

McMillan said we are living in a bifurcated market divided between distressed sales and traditional homes. “It appears that in many instances a buyer can get a really good deal on a distressed sale, although that home may require some significant effort to bring it up to standard.” A preliminary analysis by NAR suggests that non-distressed properties are holding their value much better.

“Distressed sales activity appears to be leveling off, although there are wide differences locally. For example, close to 80 percent of all sales are either foreclosed properties or short sales in Santa Ana, Calif., but less than 20 percent in the Chicago region,” Yun said. About a quarter of all inventory is listed as being distressed, but NAR estimates that distressed sales – foreclosed or those requiring a lender-mediated short sale – comprised about 45 percent of all sales in January. “Home buyers are evidently competing for homes with deep discounts,” he said.

Yun said it will take a while for the stimulus to show in housing data. From the time a buyer starts looking for a home until it is reported as a closed sale can take as long as five months: a median of 10 weeks to search and make an offer, about 6 weeks to close the transaction and up to 4 weeks to collect and report the data. “This means improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates,” he said.

Significant local market variations continue. “A majority of markets experienced sales declines of more than 20 percent from a year ago, but some markets appeared to have reached the tipping point of accelerating home buying,” Yun said. “For example, home sales in Las Vegas have more than doubled with some reports of multiple bids.”

Single-family home sales fell 4.7 percent to a seasonally adjusted annual rate of 4.05 million in January from a pace of 4.25 million in December, and are 7.1 percent less than a 4.36 million-unit level in January 2008. The median existing single-family home price was $169,900 in January, which is 13.8 percent below a year ago.

Existing condominium and co-op sales dropped 10.2 percent to a seasonally adjusted annual rate of 440,000 units in January from 490,000 units in December, and are 20.3 percent lower than the 552,000-unit level a year ago. The median existing condo price⁴ was $174,400 in January, down 20.6 percent from January 2008.

Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, and are 23.8 percent lower than January 2008. The median price in the Northeast was $228,200, down 14.7 percent from a year ago.

Existing-home sales in the Midwest fell 5.7 percent in January to a level of 1.00 million and are 16.7 percent below a year ago. The median price in the Midwest was $138,100, which is 6.8 percent lower than January 2008.

In the South, existing-home sales declined 5.7 percent to an annual pace of 1.64 million in January, and are 15.9 percent below January 2008. The median price in the South was $152,100, down 7.4 percent from a year earlier.

Existing-home sales in the West were unchanged at an annual rate of 1.20 million in January and are 29.0 percent stronger than a year ago. The median price in the West was $220,000, which is 25.5 percent below January 2008.

Source: National Association of REALTORS Press Release

Homebuyer Education Workshops Offered in Pasco County, Florida in 2009

 Let's face it, buying a home can be a daunting experience. And even if you have purchased one in the past, things have changed a lot lately. New ways of financing, new regulations, new contract forms, etc. I was at a meeting today at the county offices and I got some information that I thought you might find helpful.

In Pasco County, Florida workshops are being held throughout the year for people who are considering buying a home. These are held at various times at many locations around the county, so you should be able to find a time and place that is convenient for you. Also keep in mind that several buyers assistance programs require that buyers attend these types of workshops so that they can be informed consumers and know what they are doing when they buy a home.

Some of the topics covered are:

• Determining the price of the home you can afford
• Down payment and closing cost assistance
• Pre-Qualification VS Pre-Approval
• Shopping for a Mortgage
• Closing on a Home Loan
• Qualifying for a Home Mortgage Loan
• Free Financial Counseling
• And Other Related Topics

You can download informational sheets and a schedule of workshops by clicking on the following link: Download Homebuyer Workshop Schedule 2009

To reserve your place at one of these workshops call: 877-854-1446  At our meeting today they did not mention any cost at all, but you can clarify that when you call. To the best of my understanding, these workshops are free. But do confirm that.

PS: On June 2, 2009 the county published a new list of more workshops they have scheduled to meet demand. So you may wish to check out the post I wrote here on my blog on June 2nd. You will find the expanded schedule there.

As always, you can also contact me at: 813-783-4444 or by e-mail at: jelwell1@tampabay.rr.com

Smaller Insurance Companies Accept Customers in Florida, as Another Company Flees

A few weeks back I wrote that State Farm said it could not make money on property insurance in Florida and therefore would not be renewing its current policies here. It is my understanding that they will continue to write other types of coverage, auto, health, etc. (Just my opinion, but that looks like "Cherry picking" to me, dumb farm boy that I am). Now another company is singing the same sad tune. This time it is Encompass Insurance. They plan to start non-renewals of their 15,000 policies soon and terminate all underwriting of property policies in 2011. Like State Farm, they will keep writing insurance for your cars, etc. Isn't that nice.

The good news is that many smaller companies are stepping up to bat to offer coverage for residents here. Citizens Property Insurance, the state-run company, is still always an option. However, it is great to also have the ability to choose another firm.

Northern Capital Insurance has just said it can take as many as 50,000 of State Farm's policies. They are also approved to take on some of the Citizens' policies so that homeowners may be able to get a break on premium rates.

Other companies that hope to fill the gaps left by State Farm, Encompass and their ilk are: Capitol Preferred, Edison, Olympus, American Traditions, Florida Peninsula, Security First, Modern USA and others.

Even if your non-renewal from State Farm, Encompass, or some other company could be many months down the road, it may not hurt to start looking to see what your coverage options are. It has never been a bad idea to shop around, and that has never been more important than now.

So be informed consumers and be proactive. Do not wait until you are in a corner with little time to get information and make a decision. In Zephyrhills we have many independent insurance agents who would be more than happy to assist you in any way that they can.

If you would like to contact me concerning this topic, you can call me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com  You can also visit my website at: www.jelwell.century21bnr.com

Florida Considering Mandatory Septic Tank Inspections When Homes Sell

It is being reported that the Florida Department of Health is considering making it a requirement that septic system inspections be made when homes that are not connected to public or private sewers are sold. Supposedly this is to limit the amount of nitrogen getting into the soil. Of course this is a worry to homeowners and their REALTORS since it could greatly add to the costs of selling a home here.

In 2007 the Florida legislature approved a study to look into reducing the nitrogen levels introduced into the environment by septic systems. According to the department's proposed plan, passive systems that we are all familiar with and that have been used for many, many decades in this country would be replaced by newer systems that are run by electricity. These newer systems could reportedly cost between $3,000 and $10,000 (my bet is they will cost more before all is said and done).

If put into place, these new rules would affect all new construction (that at least makes some sense) and any system being replaced or repaired. My question about repairs is, how major must the repairs be before an update to the new more expensive system is triggered. Repairing a cover to the tank? Replacing the leach bed?

If the rules will require an inspection when a home is sold, it is unclear who will pay for any required repairs or upgrades. This will make it just one more thing the seller, buyers, and their agents will have to hash out. It could also make homes that are not connected to sewer systems less attractive to buyers and thus lower the properties' values. In my humble opinion, that is an unfair slap at rural homeowners. One would think that there should be some way to "grandfather" in existing systems that are functioning sufficiently and not causing a health hazard.

If you wish, you can send your comments to:

Bureau of Onsite Sewage Programs

4052 Bald Cypress Way, Bin A08

Tallahassee, FL  32399-1713

Or even easier, e-mail them at: EnvironmentalHealthOnsiteSewageProg@doh.state.fl.us

You can also visit the Department of Health's website at: http://www.doh.state.fl.us/

If you like, you can contact me at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com  I also invite you to visit my website at: www.jelwell.century21bnr.com

Pending Home Sales Show Healthy Gain Says NAR

WASHINGTON, February 03, 2009

Pending home sales increased as more buyers took advantage of improved affordability conditions, according to the National Association of Realtors^®. Big gains in the South and Midwest offset modest declines in other regions.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in December, rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9.

Lawrence Yun, NAR chief economist, said the index shows a modest rebound. “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” he said. “The biggest gains were in areas with the biggest improvements in affordability.”

NAR’s Housing Affordability index rose 10.9 percent in December to 158.8, the highest on record.² The HAI shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

“Significant uncertainty still clouds the housing market despite improved affordability conditions. For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers,” Yun added.

The PHSI in the Northeast slipped 1.7 percent to 62.1 in December and is 14.5 percent below a year ago. In the Midwest the index jumped 12.8 percent to 83.7 but remains 1.2 percent below December 2007. The index in the South surged 13.0 percent to 96.8 in December and is 1.6 percent above a year ago. In the West, the index fell 3.7 percent to 97.5 but remains 17.5 percent higher than December 2007.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the rise in contract signings is encouraging. “However, housing activity remains weak compared with potential demand, and the market is fragile given the economic backdrop,” he said.

“We can’t take our eye off the need to stimulate housing, which can set the foundation for an economic recovery,” McMillan said. “Last week’s actions in the House to eliminate the repayment feature on the first-time home buyer tax credit, and to raise mortgage loan limits, are helpful. However, we need to take additional steps to meaningfully draw down inventory and stabilize home prices.”

McMillan said some enhancements that could bring more buyers into the market include expanding the $7,500 tax credit to all home buyers and extending it until the end of 2009, and making loan limit increases permanent. “We also need to direct funds in the Troubled Asset Relief Program to add liquidity to the mortgage market, buy down mortgage interest rates and increase other forms of credit,” he said.

Yun said the outlook for housing and the economy is murky. “Although Congress and the Obama administration are taking steps to help the economy, the stimulus package must deal with the root cause of the economic downturn, and apply the right fix to turn it around. If housing is ignored, a significant downward overshooting of home prices would continue to drag the economy down independent of the scale of the stimulus,” Yun said.

Source: Press Release from National Association of REALTORS (NAR)