Pending Home Sales on a Record Roll

According to a National Association of Realtors (NAR) press release, contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001.

The “Pending Home Sales Index”, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7. Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.
Read the release >
View the Daily Forecast Update >
View the video >
View Pending Home Sales Index >

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Housing Market Continues To Improve

Pending home sales jumped again - up by 3.2 percent for July, according to the National Association of Realtors. That’s the sixth straight month of improvement. The pending sales index is now at its highest level since June of 2007, a full 12 percent above a year ago.

Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates. Plus, the eight thousand dollar federal tax credit for first time buyers.

Meanwhile, there is more evidence that prices are turning around in growing numbers of markets around the U.S. Freddie Mac’s most recent home price index, released last week, showed national prices up by an average 2.7 percent. Orlando real estate is seeing markedly increased sales activity over a year ago, although mostly in the condo market.

There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers Association. Fifteen year rates averaged 4.6 for the week.

Looking at the larger economic picture, the Mortgage Bankers Association’s top forecaster, Orawin Velz, continues to predict that the recession will be over shortly - or already is over. She cited rising consumer expenditures - up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.

Who knew?

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Realtor Killed in Foreclosed Home: An Inside Perspective

“So anyway, this is the kitchen - beautiful isn’t it - and in the living room you will notice the, um, the dead body on the floor?”

Many of you telephone us, having seen something you like the look of online, and ask us to just meet you there at the property for a viewing. We’ve never met you, you’ve never been to our office - you’re not even a client.

Some buyers are surprised when we want to “pre-qualify” them before meeting them at an empty house or putting them our cars; that is, make sure they are ready, willing and able to purchase a home before they we show them homes.

This period is also an opportunity for the buyer to decide if they would like the Realtor in question to represent their home buying interests, while the Realtor also has an opportunity to decide whether or not the buyer is likely to be um, an axe weilding psychopath? You see, meeting random strangers who want to go see houses isn’t really part of a Realtor’s job description, although many agents are willing to take the risk in the hope of finding a client. But in reality, a buyer should become a client first, get pre-qualified for a loan second, and look for houses last of all. But I digress.

Back to the story: the dead man on the living room floor is 45 year old Ricardo Contreras, a California agent that had gone missing the week before. In this case, the victim was actually male - which only goes to prove that equal opportunity is alive and well in the murder business. 

And which is why an agent might respectfully ask to meet with you at the office before showing you homes. They’re not being awkward, they just don’t know you from Adam. Chances are that you’re not a homicidal maniac but you might not have a penny to your name, which is far, far worse. Personally, I don’t mind being found dead on my own living room tile, but on a dirty carpet in a foreclosed home? Mamamia… the indignity of it all!

Original news post

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Orlando Home Sales Increase Again

Orlando home sales in the market grew more than 43 percent in June 2009, according to the Orlando Realtor Association.

Association members sold 2,131 homes last month in the Orlando metropolitan area, and the sales growth has finally helped bring down area inventory supply to single digits.

Nearly 46 percent of the homes were either bank-owned or distressed property sales. Homes in the Orlando area spent an average of 104 days on the market before being sold in June, and the average home sold for 93.8 percent of its listing price - which may surprise many.

About 184 single-family homes sold in the $200,000-$250,000 range, while 10 homes sold for $1 million or more.

Along with stronger sales, 7,230 homes were awaiting closings, more than double the 3,329 that were pending at this time last year.

Duplex, townhome and villa resales also jumped nearly 32.8 percent, from 131 in June 2008 to 174 last month.

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Orlando Home Sales Up 38%

Orlando home sales were up 38 %  over the same period last year. Orlando housing inventory of homes for sale dropped below 20,000 listings for the first time in since December 2006. However, of the 1,854 closings in May, 51 % of the homes were either bank-owned or distressed. Foreclosed and distressed home sales are playing a massive role in establishing Orlando’s median home price. The median home price for all Orlando homes sold in May was $130,000. This represents a 38.51 % decrease compared to last May, but the median price for “normal” home sales is $165,000. The median home price for bank-owned home sales is $82,000 and the median home price for distressed home sales is $140,000.

There are currently 19,123 homes listings available for purchase through the Orlando MLS. For assistance in finding some of these once in a life time foreclosure bargains, contact us here at the Orlando Real Estate Pros or call 407-290-3408.

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Orlando’s Home Starts Increase

Residential construction activity remains low nationally, but the Orlando market is among the highest in housing starts, according to a May 2009 report by Metrostudy.

The Orlando market indicates about 12,000 buidling starts for the 12 months ending March 2009, making it  #4 nationwide. Houston led that list with 22,000 home starts during that same period, while the Dallas area posted 17,638 starts. Phoenix was #3 with 12,302 starts.

The Orlando area also was fifth in move-ins, or absorptions, with 18,423 posted for the same 12-month period. Houston also topped that list with 28,326, followed by Dallas/Fort Worth with 23,957, Phoenix with 21,838 and Atlanta with 20,007.

For more info on the Orlando market, contact the Orlando Real Estate Pros.

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Tax credit becomes real cash!

The FHA will now allow lenders and government agencies to “monetize” the $8,000 federal homebuyer tax credit, providing purchasers with downpayment cash upfront, available at closing, rather than waiting for the IRS to mail them a tax credit check.

Under the bridge loan concept, an FHA-approved private lender, a state or local housing agency, or an FHA-approved nonprofit organization could advance as much as $8,000 for downpayment and closing costs — in anticipation of receipt of the $8,000 credit months or weeks down the road.

It has been estimated that half of all would-be first-time buyers lack the downpayment resources needed to complete a purchase, and therefore are unable to make use of the credit.

For more information on the program contact the Orlando Real Estate Pros or call 407-290-3408.

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Orlando real estate - May update

The 1,741 completed Orlando closings in April are a 41.43 percent increase compared to April 2008 (1,231) and a 0.74 percent decrease compared to last month (1,754). Year to date, there have been 42.58 percent more sales than by this time last year (5,867 to 4,115).

The median price of all Orlando homes sold in April ($132,900) decreased by 37.01 percent compared to April 2008 while the area’s average interest rate increased to 4.86 percent, up from last month’s record low of 4.67 percent.

The area’s affordability index continues to nudge the 200 percent mark. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $52,307 can qualify to purchase one of 11,233 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $257,840 or less.

The first-time homebuyer affordability in Orlando is currently 137.96 percent. First-time buyers who earn the reported median income of $35,569 can qualify to purchase one of 7,027 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $155,850 or less. [Read more]

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How They Sell Real Estate In The UK

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Positive Signs for Florida Real Estate

The National Association of Home Builders (NAHB) is reporting that builder confidence is up 5 points this month. After months of negative numbers, their Housing Market Index indicates that this is the biggest one month gain in 6 years.

“If you’re a potential buyer who’s been sitting on the fence waiting for a sign that now is the time to act, this is it,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “Some of the most favorable buying conditions in a lifetime are now in place, and they are drawing more consumers back to the market.”  

“This is a very encouraging sign that we are at or near the bottom of the current housing depression,” said NAHB Chief Economist David Crowe.

In other good news from Tallahassee, Florida is experiencing an unprecedented number of requests to build new homes and develop commercial property. Despite a rapidly deteriorating housing market and plunging real estate values, requests are coming from developers with an eye on a future real estate bubble. “Instinctively, most people would think there would be a slowdown,” said Mike McDaniel, a planner at the state’s Department of Community Affairs. “And it may be true at the other end, where the developers apply for the permit. But there’s been no letup here. It’s a gold rush.”

It is the Department of Community affairs that approves and denies requests to change land usage. Since 2007, it has received a massive 410,126 acres of proposed new projects, with a potential for over 630,000 new homes and 480 million square feet of nonresidential space.

“This really catches me by surprise,” said David Denslow, a University of Florida economics professor. “I’ll have to revise my thinking.”

Of course, not all plans submitted get approved, and not all plans approved will be built, but this trend seems to add to the indicators that things are gradually improving for Florida real estate.

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First Time Home Buyer Credit - $8000 - FREE

Expires December 2009. From now and through November 30 2009, anyone who qualifies as a “first time homebuyer” (has not owned a home in the last three years) who buys AND CLOSES on a principal residence will receive a substantial tax credit of $8,000.  

Firstly, let’s be clear about the difference between a TAX CREDIT and a TAX DEDUCTION.  A TAX CREDIT is a dollar for dollar reduction in a person’s tax obligation which will result in a refund in that amount for most buyers - or, as you are seeing in ads from some lenders this can also be turned into down payment money up front.  A TAX DEDUCTION, on the other hand, is simply a reduction in a person’s taxable income and results in a savings of a percentage of that amount based on the tax payers tax bracket (i.e., for someone in the 28% tax bracket, the saving would be $2,240).  In contrast to the TAX CREDIT that was in place
 last year, this $8,000 NEVER has to be paid back to the Federal Government.

So, let’s assume the Orlando Real Estate Pros sell you a $200,000 home and you obtains a 90% loan or a loan for $180,000 at 4.875%.  The monthly P&I payments would be $952.57.  Now assume that values drop another 10% this year and you wait for the bottom (which buyers ALWAYS MISS) and a year from now you can purchase the home for $180,000 with 90% financing with a $162,000 loan, but due to the market rebounding the rates go up to 5.5% (very conservative) which brings the payments down to $919.82 P&I for a savings of $32.75 per month.  Under this scenario, it would take you 20 years to recapture the $8,000 tax credit without taking into consideration inflation and the real cost of money.  If we calculate this scenario at a more realistic interest rate of 6% a year from now, the payments are $971.27, which is $18.70 per month HIGHER than what the home could be purchased for now AND you now miss the opportunity to get the TAX CREDIT.

There are only 7 months left for buyers to avail themselves of this opportunity. Contact us for more info.

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Orlando’s real estate market… bottom?

Are we at… B… B… B… Bottom?

Yep, the much anticipated “B” word - no one wants to risk saying it. I mean, what if you’re wrong? There was Jim Cramer (Mad Money) with Bear Stearns, and George Bush with Mission Accomplished. Why take the chance of making a public gaffe?

Well, I’m not about to stick my neck (all the way) out - but the fact is, there is light at the end of the tunnel. Sales and pending sales of homes have turned in hard-hit markets. House prices are finally affordable. Consumer confidence polls show noteworthy improvements in the public’s outlook. And mortgage rates are at 4.7%.

Each state and community will rebound according to its own economic underpinnings but the signs are that even the Orlando condo market is on the way to recovery.

In last week’s developments:

Mortgage applications for purchases of resale and new homes were up again - 8 % for applications using conventional loans, and a remarkable 17 % gain in applications to buy houses using low-down payment FHA mortgages.

A group of new consumer-sentiment polls came out showing that Americans are feeling better about their economic prospects for the first time in months. The Times even put the results at the top its front page with the headline: “Poll finds Brightening Outlook on U.S. Economy.”

Members of the National Association of Home Builders reported that shoppers’ visits to look at new houses for sale are “on the rise and consumer interest is increasing.” The Association also announced that more than half of all U.S. households - 55 million of them - can now afford to buy the median priced $200,000 new home. That’s up 45 % in the past 2 years.

Even Business Week, particularly harsh on U.S. housing in recent years, ran a cover story about the turnaround getting underway, focusing on hard-hit areas like Florida, and Las Vegas, where sales have been rising fast. In Orlando unsold inventory is taking a plunge.

In view of still-rising unemployment and depressed levels of available credit we’re not out of the woods yet. But if you’re a buyer and you’re still on the sidelines, then there’s an Orlando real estate genie who’d like a word in your ear!

Contact the Orlando Real Estate Pros on 407-290-3408 to get the latest Orlando data on buying or selling a home.

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Cheer Up - You Could Be An Orlando Real Estate Broker!

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Orlando Real Estate Update: Feb 2009

The Orlando housing market continued to show signs of strength in February. Orlando Realtors filed 58.36% more contracts in the month of February than in February 2008. Overall, pending sales - considered to be a reliable indicator of future sales - continued its upward trend in February to 4,348. There are twice as many more homes under contract in February 2009 than compared to February 2008.

The median price of Orlando homes sold in February ($145,500) decreased by 34.75% compared to February 2008 while the area’s average interest rate dropped yet again to 5.25%, its lowest point since May of 2005 which is great news.

The decrease in median price drove the area’s affordability index to yet another record high of 169.17%. The first-time homebuyer affordability has increased to 120.30%. (An affordability index of 99% means that buyers earning the state-reported median income are 1% short of the income necessary to purchase a median-priced home. This means that buyers who earn the reported median income of $52,193 can qualify to purchase one of 11,976 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $246,140 or less.

The majority of single-family homes that changed hands in February 2009 were sold in the $200,000 - $250,000 price range, while local new-home builders reported 122 new-home sales for the month of February, with a median price of $234,950.

There are currently 22,168 homes available for purchase through the MLS. Inventory decreased by 445 homes from January 2009. Compared to last year, the February 2009 inventory level is 14.68% lower than it was in February 2008 (25,984). The inventory level reflects an 18.19-month supply at the current pace of sales, which is down from the 21.54-month supply recorded in January 2009 and down from the 27.32-month supply recorded in February 2008. There are 16,057 single-family homes currently listed in the MLS, a number that is 3,474 (17.79%) less than this time last year.

Average days on the market? 102.

See this link for January’s Orlando Real Estate analysis.

See the Condo Metropolis blog for Orlando’s condo information.

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Orlando Asbestos Prevention & Healthy Alternatives for Homeowners

The journey to purchasing a home is one of many joyous experiences for you and your family. Quite frankly, it is the investment of a life time. It is also one that will bring additional responsibilities into your life. The real-estate world is a fast paced industry where decisions need to be made in a quick and orderly fashion.

Many homes will require further repairs or renovations, especially if located in an area that is susceptible to natural disasters. Many structures continue to harvest older methods of construction and can pose many problems for home owners. Asbestos has appeared as insulation, piping, roof shingles and flooring.

Potential buyers of Orlando real estate or those remodeling older homes should be aware that homes built before 1980 may still contain asbestos. It should be stated that asbestos exposure is easily preventable by taking simple precautions. There are now a number of alternative forms of insulation which replace the need for asbestos entirely.

If any asbestos materials are suspected, professionals advise to leave it un-disturbed. Asbestos in good condition may not pose any health risks. Once asbestos becomes damaged or friable, its fibers could become airborne. Rare form of asbestos lung cancer known as mesothelioma is caused only through exposure. Accounting for three percent of cancer diagnoses in the United States, there is no mesothelioma cure.  Although advances have been made with mesothelioma treatments, many variables affect how patients respond to them. These include age of diagnosis, latency period and cigarette smoking.

It is recommended for home owners or remodelers to hire professional inspectors who can determine the legitimacy of danger if any asbestos materials are present. If removal is deemed necessary, it must be performed by a licensed abatement contractor who is licensed in dealing with hazardous materials. The Florida Department of Air Resource Management administers an asbestos removal program in order to prevent the release of airborne asbestos fibers in places of work, public facilities and homes. [Read more]

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