Florida Realtors: May Ends with Year-on-Year Increase of Existing Condo and Home Sales

Sales of existing condos and homes in Florida posted a year-over-year increase of 17 and 3 percent, respectively, in May, according to the latest data from the Florida Realtors.

During May, a number of 17,228 existing homes were sold, up three percent from 16,790 in May last year.

This is the sixth month in a row with year-over-year growth in sales of both existing condos and existing homes. Furthermore, Florida Realtors data shows that sales of existing homes increased in 12 of the state’s metropolitan statistical areas, while sales of existing condos increased in 14 metropolitan statistical areas.

The president of Florida Realtors, Patricia Fitzgerald, said that many buyers realized that the current times could be the best in a long time to buy homes and condos, as mortgage rates are low and the inventory of properties at affordable prices is high.

The median price in Florida for existing homes was 135,000 dollars, down 5 percent from May 2010, when it was 142,900 dollars. May also brought a 2.9 percent increase of the median price for Florida homes.

The median price for condos was 98,200 dollars, up two percent from 96,400 dollars in May last year. Compared to April this year, the median price was 6.9 percent higher but still way below the national average of 167,300 dollars.

Real estate analysts pointed out that the increase must take into account the high number of distressed and foreclosed properties, which still has negative effects on the statewide median price. Another factor with negative influence on the real estate market is the tight credit conditions, which continue to suppress the recovery of the market.

Experts forecast that the condo and homes market will increase at an uneven pace for the remainder of the year, and tight credit is making market recovery more difficult than it should be, as banks continue to hold on to high reserves of cash.


Mortgage Rates Continue to Fall Nine Weeks in A Row

Mortgage Rates Continue to Fall Nine Weeks in A Row

In a climate of less than optimistic economic news, mortgage rates continue to decline. The weekly nationwide survey conducted by Bankrate shows that the mortgage rate for fixed rate 30-year mortgage loans is now at 4.65 percent.

The average rate for fixed 15-year mortgage loans posted a new record low, dropping to 3.79 percent. A slight increase, to 5.19 percent, was noted in the jumbo loans extending for 30 years at a fixed rate.

According to Bankrate, the key factor for the decrease of mortgage rates was the recent employment report, which had disappointing findings. Furthermore, the recent economic results are lower than expected, bringing down the ten-year yields of Treasury notes at less than three percent. All these factors combined are responsible for the decrease of mortgage rate nine weeks in a row, reaching new  record lows.

Mortgage rates have not been above 6 percent since November 2008. At the time, fixed 30-year mortgage contracts had a rate of 6.33 percent, meaning that the monthly payments for a 200,000 dollars loan extended over 30 years generated 1,241.86 dollars monthly payments per contract. At the current level of 4.65 percent, the monthly payment has dropped by 210 dollars, to 1,031.27 dollars. This is to the advantage of people who are currently seeking to refinance their loans.

The survey is based on data from the top 10 US banks. About 62 percent of mortgage experts predicted that mortgage rates will remain mostly unchanged over the coming week. The remaining experts are equally split between a rebound or continued decline.

Numbers of Foreclosures Drop in New Jersey, Grow in New York

Despite government attempts to help people keep their homes, homeowners across the country face foreclosures, as underlying unemployment impacts their financial situation.

In New York the number of foreclosures increased by 3.05 percent, from 361 in April to 372 in May, while New Jersey saw a huge drop in bank foreclosures, of 23.72 percent, from 468 in April to 357 in May, reports Bankownedproperties.org.

In the state of New York, there have been less bank foreclosures in Buffalo and Bronx, which reported a drop in foreclosures of 11.7 percent each, and Brooklyn, with a decrease of 5.26 percent. On the other hand, Rochester posted a 52.9 percent rise in foreclosures, followed by Staten Island, with an increase of 18.1 percent.

In New Jersey, there was an increase in the number of bank foreclosures in Elizabeth (7.14 percent). Other cities reported drops in foreclosures, such as 31.8 percent in Trenton, 28.5 percent in East Orange, 24.1 percent in Perth Amboy, and 23 percent in Newark.

Despite the fact that the government created programs aimed to help homeowners keep their house, many people simply did not apply to those programs, mostly out of fear that they might not qualify. Most homeowners are actually suspicious about the possibility of meeting the requirements of government assistance programs.
In many of the large cities, the rental market is booming. Homeowners who lost their house to foreclosures, rent new homes, and this trend could keep the rental market alive for years to come.

As the foreclosure paperwork is finalized, many cities might post an increase in the number of foreclosures over the coming months.

Standard & Poor’s: US Home Prices Down by 4.2 Percent in Q1 2011

S&P Home Price Index Q1 2011Data from the first three months of the year, released by Standard & Poor’s, reveal that the US Home Price Index declined by 4.2 percent in the first quarter. This decrease follows another one of 3.6 percent in the last quarter of 2010.

Compared to the first quarter of 2010, the US Home Price Index fell by 5.1 percent, putting current home prices at the same level they had back in 2002.

The index’s 20-City composite fell below its previously historic low of 139.26 recorded in April 2009. The annual rate of decline was 3.6 percent. The sharpest annual decline was recorded in Minneapolis, of 10 percent. The only metropolitan area that recorded price increases was Washington DC. Home prices in Washington DC posted a monthly increase of by 1.1 percent and an annual increase of 4.3 percent. Seattle also recorded a light increase of 0.1 percent, but the region is still 7.5 percent lower than in March last year. The 10-City composite also recorded a decline of 2.9 percent on an annual basis.

Thirteen of the 20 metropolitan areas in the 20-City composite have gone deeper into negative rates. The annual rates of Seattle, Phoenix and Chicago remained steady.

S&P Inces representative, David Blitzer, said that an increasing number of real estate markets have been posting new record lows since December 2010. He added that Washington DC was, at the moment, the only metropolitan area that shows optimistic prospects.

The Mortgage Fraud Index for the First Quarter Up 44 Percent

The first quarter of the year witnessed an increase of 44 percent in the volume of money in mortgage fraud activity, reveals the Mortgage Fraud Index.

The index also revealed that, in average, mortgage fraud cases are prosecuted four years after the fact. At the end of the fourth quarter last year, the mortgage fraud index was 814, with 867 million dollars of mortgage fraud activity and 126 cases.

Despite index increase of 44 percent, to a dollar volume of 1.25 billion dollars and 150 cases, the situation for the first quarter of 2011 is somewhat improved over the levels in the same period last year, when the index was situated at 1144, corresponding to 172 cases of fraud with a dollar volume of 1.92 billion in real estate loans.

The report was announced at the Global Technology Summit. The Mortgage Fraud Index is based on the tracking of mortgage fraud cases on FraudBlogger.

According to the publisher of the Index, MortgageDaily, represented by founder Sam Garcia, the recent increase seems to be generated by repurchases. He explained that small companies are put in the situation where they have to buy back real estate loans from lenders or housing agencies. In the process, they make their own investigation into the case and discover fraudulent activities.

The highest index was registered in the state of Florida, at 130, followed by California with 103. Indices lower than 100 are in New York (60), Ohio (53), and Pennsylvania (50).

The highest dollar amounts in mortgage fraud cases were in California – 273 million dollars, Florida – 156 million, Illinois – 132 million, Virginia – 125 million and Texas – 64 million dollars.

Historically, the highest index was in 2009, at a peak of 1676, four years after the peak of sub prime mortgages in 2005, added Sam Garcia.

US Home Prices Drop For the Seventh Consecutive month

home for salePrices of homes continue to decline and, in February, they have fallen by 6.7 percent year-on-year, making February the seventh consecutive month with a drop in residential property price. In January, the year-on-year decrease was of 5.5 percent, according to the Home Price Index published by financial, consumer and property information Core Logic.

The decreases include the distressed homes. The non-distressed homes had much lower price drops, of only 0.1 percent. Furthermore, despite the decrease in prices, the non-distressed segment of the market is showing signs of stability, said the Core Logic chief economist, Mark Fleming.

He added that price decreases are increasingly isolated, and in most cases they are limited to real estate owned sales, as real estate companies are trying to clear their stock of foreclosures.

Among a general trend of price decrease, some areas witnessed appreciation. The highest increases in all homes, including distressed sales, were of 5.4 percent (West Virginia), 4.7 percent (New York), 4.1 percent (North Dakota), 3.6 percent (Maine), and 1.2 percent (Alaska). Excluding distressed sales, the highest price increases were noted in West Virginia, New York, South Carolina, Hawaii and the District of Columbia, by 4.5 to 8.2 percent.

The highest depreciations, distressed transactions included, were of 14.6 percent in Idaho, 12 percent in Arizona, 11.2 percent in Florida, 11.1 percent in Michigan and Illinois. Without distressed sales accounted for, the price drops were less severe, from 5.4 to 9.3 percent, in Idaho, Montana, Maine, Arizona, and Rhode Island.

From 2006, when the housing market was at its peak, to present, the depreciation was 34.5 percent. Without the distressed sales, the drop was 21.7 percent.

Mortgages Remain Difficult to Pay Off for More Than a Fifth of Americans

mortgage loanWhile news gets increasingly optimistic about the economic prospects of the US, some 22 percent of Americans encounter difficulties in keeping up with mortgage payments. This category also includes a small percentage of seven percent, who think that they have serious problems meeting payments on their mortgages, reveals a nationwide poll by Harris Interactive.

Moreover, 21 percent of people who have mortgages think that their properties have seen their values decrease and that there is little chance that their current value would match the value of the mortgage.

Despite the somewhat pessimistic tone, the numbers this year are better than last year. Harris Interactive reports a seven percent decrease in the number of those who have difficulties making mortgage payments, while those who had extreme difficulties are less by four percent this year than in 2010. In 2010, the number of Americans feeling underwater was higher by three percent than this year.

A decrease was also noted in the number of people who have mortgages, from 69 to 66 percent.

Another finding of the survey is that 62 percent of adults, with or without a mortgage, fear that their income this year will not meet the needs of their families. The groups with low income (under 35,000 dollars per year) are very pessimistic, with 75 percent saying that they are concerned about their financial prospects this year, and 36 percent – very concerned.

The poll was conducted with the online participation of almost 3,200 adults in the week of 7-14 March.

Recovery Trend Spotted by PwC in Commercial Real Estate

real estateThe fundamentals of the real estate industry’s commercial segment are improving steadily, supporting investor consensus that the industry will get out of the tight spot, reveals the latest Price Waterhouse Coopers (PwC) Real Estate Investor Survey.

The recovery of the commercial real estate sector sparks in the context of improved overall economic conditions – lower number of jobless claims, increasing consumer optimism, business confidence, and employment numbers.

PwC leader of real estate advisory practice in US, Mitch Roschelle, said that the investors interviewed by PwC feel that the industry of commercial real estate is getting out of depression, towards recovery, but the process is slow, since the economic fundamentals in US have been growing, at best, in an uneven and slow pace. He added that investors become increasingly eager to close deals as their confidence in the recovery of the market increases.

The barometer shows that the US office stocks will enter recovery by the end of this year, mainly due to a decrease in vacancies and lack of new supply. By the end of 2012, 86.2 percent of the US office property segment will be in recovery. However, some regional market could still struggle even then, as the barometer foresees grim times for Tampa, Los Angeles, Las Vegas and Chicago.

In the retail sector, recession will persist through 2012 for 76.6 percent of the market, due to fears of inflation and volatile consumer spending. Recovery is expected by the end of 2013 for 77.1 percent of the retail property sector. Some areas are expected to have higher than average performances, starting to recover next year. These are Fairfield County, Nashville and Long Island.

The industrial property segment is expected to spike this year based on increasing demand fueled by economic improvements. According to the PwC barometer, 71.8 percent of the sector will start recovering this year, while, in 2012, the positive trend is expected to continue, engulfing some 86.2 percent of the industrial real estate segment. Some of the geographical losers might be Minneapolis, Cleveland, Akron and Tampa. Nonetheless, this sector will have positive evolutions, with 20.9 and 40.6 percent of the sector entering an expansion phase in 2013 and 2014, respectively.

The real estate sector with the best performance so far appears to be the multifamily one. PwC forecasts that 30.2 percent of this segment will enter the expansion phase in 2014, with the exception of Syracuse, which is expected to be in recession until 2014, and New Orleans, entering recovery in 2014 only.

The 2011 Real Estate Investor Survey follows anticipated changes that occur from 2011 to 2014 on four real estate market segments – multifamily, industrial, retail and office. The PwC real estate barometer looks at historical information and forecast data, and it measures how the stock modifications in each segment in the contraction, growth, depression and revival phases of the property market’s cycle.


Sales of Existing Condos and Homes in Florida Post Year-on-year Increase

Sales of existing condos and homes in the state of Florida increased by 36 percent and 14 percent, respectively, compared to figures from the same month last year, reveal data published by the Florida Realtors.

Last month posted statewide sales for 12,151 homes, compared to January 2010 when there were 10,702 sales.

According to Patricia Fitzgerald, president of Florida Realtors, those looking to buy a home in the state of Florida should make up their minds fast, as the timing is ideal because of historically low mortgage rates, before they increase. Mortgage rates are starting to show slight increases as the economy recovers, but the market is still in favor of home buyers.

The average price of Florida homes decreased in January 2011 by 7 percent, to 122,000 dollars, compared to January 2010, when homes were selling for more than 130,000 dollars.

Across the United States, the national average sale price was close to 170,000 dollars in December 2010, only 0.2 percent lower than in the same month of 2010. The nationwide resale price was above 300,000 dollars, according to data from the National Association of Realtors.

The first month of the year registered 6,681 sales of condos in Florida at an average price of less than 80,000 dollars. In January 2010, less than 5,000 condos were sold at an average statewide price of 97,000 dollars. These numbers translate into a 36 percent increase of sales in the context of an 18 percent decrease in prices. Data from the National Association of Realtors shows that the national average price for condos in December 2010 was around 165,000 dollars.