When will the Tampa Real Estate market stabilize?
I get this question so often. I can’t blame sellers for wanting to staunch the blood loss nor buyers looking to hit that bottom just right. I’ll cut right to the chase…it’s simple supply and demand, just like I learned in high school economics (Thanks, Mr. Cole!)
Our supply, or should I say oversupply, of homes for sale contrasts very tepid demand for these homes. Thus, more people are fighting over less buyers. Ok, but when will we stabilize? When will our “demand” return to more robust levels?
Everyone pontificates on that fact, including myself. I clearly remember the “Sharp V” bounce back being touted by the Realtors Association about 2 years ago. I was naïve and bought into it…now I’m a bit more jaded and see the glass as half-empty.
It seems as if it’s so easy to pull something out of harmony and into chaos than it is to restore it to that harmonic point. The Gulf oil leak, Middle East, and our current real estate market are great examples…we screw it up and struggle to bring it back to “normal”. (I bet I am the first person to correlate the Middle East crisis with our real estate market ;-)
Here are a few things that I believe are bringing our market to our knees (my opinion only!):
1) It becomes as cheap to own as it is to rent. Time Magazine is now touting the end of homeownership as a valuable commodity. Rents are so cheap now, why not lease a home. Until rents get back in line with owning, we will not see stabilization.
2) UNEMPLOYMENT. This is the big white elephant in the room no one is mentioning. Tampa just clocked in at 12.6% unemployment…many claim this number to be higher due to the people who have run out of unemployment and have given up. So let’s say 15%. The 12.6% number is a point above the Florida state average. How could we expect home prices to stabilize when over 1/10 of our population does not generate income?? How many people out of work have used up their savings trying to stay in their home and now must abandon it or short sell it? Until unemployment gets below 8-9%, we’ll continue to falter.
3) CONSUMER CONFIDENCE. This is the latest report on Florida’s consumer confidence measure http://www.bebr.ufl.edu/files/cci_08_2010.pdf : “Consumer confidence is entrenched at a relatively low level,” said Chris McCarty the Survey Director. “With the exception of a jump in April due almost entirely to the housing and appliance rebate programs, consumer confidence has been stuck in the upper 60s to low 70s for the past year. While the mix among the five components has changed, overall consumers’ attitudes reflect other economic indicators that don’t show a clear path out of recovery or back to another recession. We are in economic doldrums.” If we are not confident in our perceptions of our personal finances and the state of the economy, we will take less risk and choose to hold off on major financial transactions.
4) MORTGAGE INFLEXIBILITY. Those banks loved that bailout money but they sure didn’t turn around and lend it out, did they? They made it even harder for people to get a share of it in the form of a mortgage or equity line. Until we see a substantial loosening of mortgage standards – NOT like back in the heyday of mortgage fraud – we will be unable to get buyers of slightly higher risk in homes. By risk, I mean higher debt ratios and/or lower credit scores.
5) UNSTABLE SALARIES. If you are in the corporate world, you may have already experienced this. A client just related a story about a new corporation winning a government contract by being lowest bidder. The new company told the old contract employees to take a substantial 25% - 50% paycut if they wanted to stay on. Hmmm, that won’t help buoy our aging market when salaries are being reduced, people are being threatened with termination, and companies are taking back what they had given employees years ago. Multiple rounds of layoffs are commonplace at big firms as they trim their budgets…not only do the laid-off workers get hurt, but what do you think Mary in Accounting is thinking as her friends get escorted off the property? Yeah, let’s hold off on that new home.
6) FORECLOSURES & SHORT SALES. Yeah, this is obvious. Do you know foreclosures in Tampa are normally priced 20%-30% below market, sell in 5-10 days, and quite often go ABOVE list price due to the multiple bids received? That is not helpful for an area that has a higher-than-average foreclosure rate, such as new home communities, condo conversions, and other typically investment-driven complexes.
Heck, there’s probably more but I’m tired y’all. Tomorrow is another day in paradise!
Monday, September 20, 2010
Sunday, September 12, 2010
TRICKS OF THE TRADE!
The following info is pertinent to Florida only. For purposes of illustration, I am using Pinellas County.
"HOW DO I FIND HOA INFORMATION, AND WHO IS THE PROPERTY MANAGEMENT COMPANY?"
Here are a few tricks to help with this mystery-
1) ASK THE SELLER....Although they might not know offhand, there’s a chance they have received correspondence from them OR know a Board member. Some communities have a web presence that only residents know about.
2) Go to www.sunbiz.org:
• In the Left column select “LOOK UP A BUSINESS NAME”
• Choose the first link “INQUIRE BY NAME”
• Type in the name of your Subdivision in question, it doesn't have to be complete (ex. Try WESTLAKE VILLAGE)
• Scan the search results for something that looks like a community association (WESTLAKE VILLAGE CIVIC ASSOCIATION, INC.)
• Now click on the link, this will tell you who is the President, VP, Sec, etc. of the association.
• 411 the President, and ask them if they are self managed and who the best point of contact is. VOILA!
3) Finding a MANAGEMENT COMPANY is a little more tricky. Often, simply GOOGLING "HOA (enter name) MANAGEMENT COMPANY" will get you the info you need.
4) Another trick is to go to the Clerk's website (www.pinellasclerk.org):
• On left side halfway down select “Recording and Official Records”
• Choose ”Search Official Records”
• Type in the name of the HOA to search
• Select a LIEN that was recently filed.
Usually, an attorney does this for them, but read the Lien itself - it will show the name of the MANAGEMENT COMPANY in the body of the Lien.
The following info is pertinent to Florida only. For purposes of illustration, I am using Pinellas County.
"HOW DO I FIND HOA INFORMATION, AND WHO IS THE PROPERTY MANAGEMENT COMPANY?"
Here are a few tricks to help with this mystery-
1) ASK THE SELLER....Although they might not know offhand, there’s a chance they have received correspondence from them OR know a Board member. Some communities have a web presence that only residents know about.
2) Go to www.sunbiz.org:
• In the Left column select “LOOK UP A BUSINESS NAME”
• Choose the first link “INQUIRE BY NAME”
• Type in the name of your Subdivision in question, it doesn't have to be complete (ex. Try WESTLAKE VILLAGE)
• Scan the search results for something that looks like a community association (WESTLAKE VILLAGE CIVIC ASSOCIATION, INC.)
• Now click on the link, this will tell you who is the President, VP, Sec, etc. of the association.
• 411 the President, and ask them if they are self managed and who the best point of contact is. VOILA!
3) Finding a MANAGEMENT COMPANY is a little more tricky. Often, simply GOOGLING "HOA (enter name) MANAGEMENT COMPANY" will get you the info you need.
4) Another trick is to go to the Clerk's website (www.pinellasclerk.org):
• On left side halfway down select “Recording and Official Records”
• Choose ”Search Official Records”
• Type in the name of the HOA to search
• Select a LIEN that was recently filed.
Usually, an attorney does this for them, but read the Lien itself - it will show the name of the MANAGEMENT COMPANY in the body of the Lien.
Sunday, August 22, 2010
With mortgage rates at 4.42%, which is the LOWEST EVER since rates have been tracked, have you thought about re-financing. It's a tough decision that would normally be an easy one.
There are a few Pro's to re-financing:
1) Lower payment due to lower interest rate
2) Locking in an ULTRA-low interest rate good for 15, 20, or 30 yrs.
3) Converting monthly payment savings into HARD, IN-THE-BANK savings OR
4) Paying off bills with the monthly payment savings
5) Avoiding a balloon payment if you have a balloon mortgage
Some Con's you should consider:
1) Payments are pushed out 15, 20, or 30 years, setting back full satisfaction of the mortgage
2) Your principal portion of monthly payment shrinks
3) You may have to pay PMI (Mortgage Insurance) if you dont have at least 80%-85% loan-to-value ratio (LTV)
4) If you have a pre-payment penalty built into your current loan (tsk, tsk...yuou should have read the fine print)
5) If re-fi'ing with an ARM, you are losing longterm stability of your interest rate.
6) If you are paying points at the time of re-finance, compare actual upfront cost to annual savings...you may find it will take 5-10 years to break even on your savings.
Please do your due diligence if considering a re-fi! It's good for most but not for ALL!
There are a few Pro's to re-financing:
1) Lower payment due to lower interest rate
2) Locking in an ULTRA-low interest rate good for 15, 20, or 30 yrs.
3) Converting monthly payment savings into HARD, IN-THE-BANK savings OR
4) Paying off bills with the monthly payment savings
5) Avoiding a balloon payment if you have a balloon mortgage
Some Con's you should consider:
1) Payments are pushed out 15, 20, or 30 years, setting back full satisfaction of the mortgage
2) Your principal portion of monthly payment shrinks
3) You may have to pay PMI (Mortgage Insurance) if you dont have at least 80%-85% loan-to-value ratio (LTV)
4) If you have a pre-payment penalty built into your current loan (tsk, tsk...yuou should have read the fine print)
5) If re-fi'ing with an ARM, you are losing longterm stability of your interest rate.
6) If you are paying points at the time of re-finance, compare actual upfront cost to annual savings...you may find it will take 5-10 years to break even on your savings.
Please do your due diligence if considering a re-fi! It's good for most but not for ALL!
Sunday, August 15, 2010
July stats are in and our market continues to sputter as it tries to get it's legs. My personal opinion is we are in a POST-Homebuyer Tax credit depression coupled with the severe mortgage and appraisal issues we are constantly dealing with.
The number of Homes Sold in July plunged 32% compared to June. On the other hand, the amount of new homes for sale only increased 2.4% (a stable supply will stabilize home prices) and Pending Sales showed a 14% increase over June's numbers. That should translate into a good August!
The number of Homes Sold in July plunged 32% compared to June. On the other hand, the amount of new homes for sale only increased 2.4% (a stable supply will stabilize home prices) and Pending Sales showed a 14% increase over June's numbers. That should translate into a good August!
Sunday, August 08, 2010
Short Sales – just GOOGLE it!
For most realtors, short sales are a substantial part of our business. After 4 years in a decreasing marketplace, more people find themselves upside down on their mortgage EVERY day. While they certainly have their downsides, helping sellers in a financial quagmire unload a very negative asset is rewarding.
While I have a SFR designation (Short Sale & Foreclosure Resource) and have attended numerous training events offered by our local realtor Board and other entities, there is NO substitute for getting your hands dirty and working the phones for a short sale. I learn new things just about every short sale I close.
I took a listing recently that has THREE mortgages. It’s a first for me. Obviously, 1 mortgage is normally fairly straightforward and 2 mortgages requires some more advance planning and technique. But 3 mortgages??? Now I’m in the majors, baby!
After the fear subsided, I realized I had no choice but to dive right in. The very first thing I did was send in the authorization letters. My second action was to hop online and Google “short sale 3rd mortgage” and also the bank holding the note.
Now, we all know 2nd & 3rd lienholders THEORETICALLY have no “leverage” but they actually wield quite a lot of power, which catch many by surprise. They have the power to withhold approval, meaning you have a dead deal. They have the power to release the lien, allowing the sale, but NOT release the seller from the obligations of the note. They have the power to require a large payoff at closing, which is basically a ransom demand.
If one has never dealt with a particular bank in a particular lien position, then Google is a great place to start. The amount of info-sharing via customers and realtors is great. For instance, I learned that this particular 3rd mortgage has a separate number for submitting authorization letters (which I knew beforehand) and it behooves realtors to follow up for a contact in their Executive Client Relations division, where they will be assigned a neogitator. Unfortunately, I also learned that under no circumstances will they release the deficient amount owed on the equity line – at least that is what people claim. A follow-up call to the lender confirmed that.
Information is power these days. I have already alerted the sellers in order to set their expectations. I know the bank’s negotiation position beforehand. I also know how they have responded to other borrowers.
So if you’re wondering how your bank responds to short sales, just Google it. You’ll be glad you did.
For most realtors, short sales are a substantial part of our business. After 4 years in a decreasing marketplace, more people find themselves upside down on their mortgage EVERY day. While they certainly have their downsides, helping sellers in a financial quagmire unload a very negative asset is rewarding.
While I have a SFR designation (Short Sale & Foreclosure Resource) and have attended numerous training events offered by our local realtor Board and other entities, there is NO substitute for getting your hands dirty and working the phones for a short sale. I learn new things just about every short sale I close.
I took a listing recently that has THREE mortgages. It’s a first for me. Obviously, 1 mortgage is normally fairly straightforward and 2 mortgages requires some more advance planning and technique. But 3 mortgages??? Now I’m in the majors, baby!
After the fear subsided, I realized I had no choice but to dive right in. The very first thing I did was send in the authorization letters. My second action was to hop online and Google “short sale 3rd mortgage” and also the bank holding the note.
Now, we all know 2nd & 3rd lienholders THEORETICALLY have no “leverage” but they actually wield quite a lot of power, which catch many by surprise. They have the power to withhold approval, meaning you have a dead deal. They have the power to release the lien, allowing the sale, but NOT release the seller from the obligations of the note. They have the power to require a large payoff at closing, which is basically a ransom demand.
If one has never dealt with a particular bank in a particular lien position, then Google is a great place to start. The amount of info-sharing via customers and realtors is great. For instance, I learned that this particular 3rd mortgage has a separate number for submitting authorization letters (which I knew beforehand) and it behooves realtors to follow up for a contact in their Executive Client Relations division, where they will be assigned a neogitator. Unfortunately, I also learned that under no circumstances will they release the deficient amount owed on the equity line – at least that is what people claim. A follow-up call to the lender confirmed that.
Information is power these days. I have already alerted the sellers in order to set their expectations. I know the bank’s negotiation position beforehand. I also know how they have responded to other borrowers.
So if you’re wondering how your bank responds to short sales, just Google it. You’ll be glad you did.
Sunday, August 01, 2010
Mortgage tips for Buyers.
Preventing the last minute collapse of your mortgage file doesn't take much...just knowing how the game is played. A new rule (Fannie) called Loan Quality Initiative went into effect on July 1, 2010 that requires lenders, Before Closing, to check credit to make sure borrowers have not incurred any new debts. If borrowers incur More debt, and it affects the underwriting ratios by more than 2%, the loan will have to be re-underwritten prior to closing. Here's some Old School Advice that's still relevant!
Don’t – allow multiple credit checks
Don’t - apply for new credit within 45 days of signing a contract
Don’t – “Shop” for new credit before closing (Furniture, cars, etc)
Don’t – Go on a spending spree (using your credit limits) to buy things for your new home.
Do – File tax returns and/or extensions
Do – Explain or document all inquiries on your credit report
Do – Disclose all Debt – even if it did not show up on your credit report
Do – Work with a knowledgeable lender who can help you navigate the ever-changing mortgage industry.
Preventing the last minute collapse of your mortgage file doesn't take much...just knowing how the game is played. A new rule (Fannie) called Loan Quality Initiative went into effect on July 1, 2010 that requires lenders, Before Closing, to check credit to make sure borrowers have not incurred any new debts. If borrowers incur More debt, and it affects the underwriting ratios by more than 2%, the loan will have to be re-underwritten prior to closing. Here's some Old School Advice that's still relevant!
Don’t – allow multiple credit checks
Don’t - apply for new credit within 45 days of signing a contract
Don’t – “Shop” for new credit before closing (Furniture, cars, etc)
Don’t – Go on a spending spree (using your credit limits) to buy things for your new home.
Do – File tax returns and/or extensions
Do – Explain or document all inquiries on your credit report
Do – Disclose all Debt – even if it did not show up on your credit report
Do – Work with a knowledgeable lender who can help you navigate the ever-changing mortgage industry.
Sunday, July 25, 2010
Hi. We need to talk.
Please, have a seat. No, you should really sit down.
It's been a rough couple of years, with the market zigging and zagging...ok, mostly "zagging".
I can see the serious money you put in your home...the granite counters, crown moulding, remodeled pool, outdoor kitchen...you've done a wonderful job!
You're probably asking yourself, "Is he going to give me bad news?"
Unfortunately, I am. I don't want to, but it's my job.
Your home's value has fallen - hard. But your not alone...according to the county, my own home's value has fallen 23% from 2009 - 2010. A little excessive, but I won't argue...I want my taxes lowered.
Just so we're clear, Pinellas County has released it's 2010 real estate values in advance of mailing all countywide homeowners their real estate TRIM (TRuth In Millage) notice. The numbers are "preliminary" but I doubt they'll change much.
Also, we're NOT talking true value numbers...we don't use the tax records for that. We would use comparable properties sold w/i the last 3-6 months.
However, for tax purposes, the County is saying our homes' values took a nosedive. Your first thought is probably "Whew" followed closely by "What does that mean for me?"
Well, you MAY be paying lower taxes, as long as the taxing authority doesn't raise your millage rate. GOTCHA!
If you're selling, you BETTER believe buyers are looking at this info. I try to counsel my clients that it should not be relied upon solely for valuation purposes.
If you're curious, go to WWW.PCPAO.ORG and click on "Search our Database" on the lefthand side. Select you method of entry (I used address) and get out the tissues...
Just keep in mind that historically Real Estate has DOUBLED every 7-10 years so we're in a trough now. Our population is increasing (read: demand) and with so few new homes being built, our supply is stable. There will be a stabilization and turnaround, but no one can say when.
Hey, it looks grim but it will get better. As we all know, nothing stays the same forwever...
Please, have a seat. No, you should really sit down.
It's been a rough couple of years, with the market zigging and zagging...ok, mostly "zagging".
I can see the serious money you put in your home...the granite counters, crown moulding, remodeled pool, outdoor kitchen...you've done a wonderful job!
You're probably asking yourself, "Is he going to give me bad news?"
Unfortunately, I am. I don't want to, but it's my job.
Your home's value has fallen - hard. But your not alone...according to the county, my own home's value has fallen 23% from 2009 - 2010. A little excessive, but I won't argue...I want my taxes lowered.
Just so we're clear, Pinellas County has released it's 2010 real estate values in advance of mailing all countywide homeowners their real estate TRIM (TRuth In Millage) notice. The numbers are "preliminary" but I doubt they'll change much.
Also, we're NOT talking true value numbers...we don't use the tax records for that. We would use comparable properties sold w/i the last 3-6 months.
However, for tax purposes, the County is saying our homes' values took a nosedive. Your first thought is probably "Whew" followed closely by "What does that mean for me?"
Well, you MAY be paying lower taxes, as long as the taxing authority doesn't raise your millage rate. GOTCHA!
If you're selling, you BETTER believe buyers are looking at this info. I try to counsel my clients that it should not be relied upon solely for valuation purposes.
If you're curious, go to WWW.PCPAO.ORG and click on "Search our Database" on the lefthand side. Select you method of entry (I used address) and get out the tissues...
Just keep in mind that historically Real Estate has DOUBLED every 7-10 years so we're in a trough now. Our population is increasing (read: demand) and with so few new homes being built, our supply is stable. There will be a stabilization and turnaround, but no one can say when.
Hey, it looks grim but it will get better. As we all know, nothing stays the same forwever...
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