Sales usually slow in the fall, but the housing market posted a strong September. The National Association of Realtors says existing home sales in September were up 4.7 percent from August and 8.8 percent higher than September 2014. Existing home sales have posted year-over-year gains for 12 consecutive months. “September home sales bounced back solidly after slowing in August and are now at their second highest pace since February 207,” said NAR chief economist Lawrence Yun. “While current…
Sometimes it’s just easiest to remember that (with one or two exceptions) there are no loans on condos right now.
For those interested in the detail, HUD just changed its condominium rules again for those seeking FHA approval, but I’m not sure it really changes anything for the average buyer.
HUD has relaxed itsÂ controversial requirement that at least fifty percent of the units in a condoÂ project be sold before FHA could insure loans. Under the amended rule, FHA financing could be available in projects where at least 30 percent of the existing units have been sold.
That changeÂ could beÂ big forÂ some developersÂ because many new-construction projects have had trouble pre-selling units and so most of them have not been able to meet the 50 percent requirement and in a classicÂ Catch-22, FHA rules help prevent them from ever hitting that mark.
HUD has also relaxed its policy that no more than 30 percent of the units in a condo project could be financed with FHA-insured mortgages. The new maximum will be 50 percent.
Under certain circumstances, however, HUD said it would be willing to consider situations where the percentage of FHA financing on individual units is even higher, provided the project has been completed for at least a year, and the condo association’s operating budget provides significant reserves for capital improvements and deferred maintenance. Read More
Yep. It is if you’re an investor looking for a condo deal under $50K.
Increasing numbers of observers have said of late that we’ve already hit bottom, and I’m inclined to agree, with one caveat. Bottom will arrive at slightly different times for different states, and different cities within states and, different communities within cities. There is no uniform nationalÂ bottom. When I hear the refrain, “I don’t think we’ve hit bottom yet” I just roll my eyes. And then, there is your personal bottom.
With this in mind, if you’re looking to purchase a condo in Florida, in Orlando, then depending on the community you’re looking at, there’s a better than even chance that you’ve been looking at bottom for at least the last several weeks. In fact, in many cases, the buyer’s market is over. Most of you will be surprised at what follows but in the under $50K range, we are now in a seller’s market. As such, many of you have already missed the boat we’ve been talking about since Christmas.
The generally accepted definition of a buyer’s market is more than six orÂ seven months of supply. A ‘balanced’ market has from five to seven months of inventory, and a seller’s market has less than five to sixÂ months of inventory. Now take a look at the chart below.
With only 4 months of supply in the under $50K range and low interest rates, we have now moved from a buyer’s market, through a balanced market to a seller’s market. I see evidence of this every day with multiple offers on bank owned (foreclosure) properties in this price range. And yet I still have folk trying to low ball what’s already the perfect deal.Â In this sector of the market,Â you’re usually wasting everyone’s timeÂ by making an offer – unless, of course,Â it’s more than asking price.
Fore more info see our dedicated Orlando Foreclosure page.
Hooray!Â Our money woes are a thing of the past!Â President Obama had a rousing show of support at the recent G-20 economic summit, where the leaders of the 20 most economically influential countries in the world convene to fix our shattered economy, so that’s why it takes a whole day.
Give them a week and I’m sure we’ll have global warming, poverty, and epidemic diseases all elimiÂnated.Â
No, I am a fan of tradition and all, but this summit amounted to little more than international lip-service and lots of sign-wielding protesters.Â High level schmoozing does not a solution make.Â Many countries have volunteered to “do what they can” to help drag everyone out of this global recession, but I doubt that means more than giving doe-eyed stares as America yet again works out a way to reÂsolve a fundamentally broken international economy.
Stack on top of that the latest unemployment statistics, which show our fine nation at an 8.5% rate of unemployment.Â To provide some contrast, two years ago we were at 4.4%.Â Yessir.Â About doubled.Â However, some economists and market analysts seem to think that between the series of stimuli that the government has injected into our money markets and the â€˜tighten our belts’ nature of American business and consumers, that we may be approaching a bottom for job losses.Â It’s the “every piece of bad news is getting us closer to some good news” mentality.Â The glass is half full type of thing. Read More
There are a lot of volatile cross-currents washing through the financial markets right now.Â If we were not sure about things a month ago, we’re hopelessly confused now.Â The big stimulus package, a new pile of national debt, a record drop in home prices over the 4th quarter of 2008, CitiGroup, AIG, and the auto makers all needing more money…it’s enough to make you want to hide under the covers with the lights off.
However, tumultuous times present unique (though fleeting) opportunities.Â And there are two major points I’d like to bring to your attention:
1)Â We have a â€˜new and improved’ 1st time homebuyer tax credit!Â $8,000 dollars straight in your pocket just for buying a place!Â And you don’t have to pay it back!Â I know!Â It’s toÂtally mind-blowingly awesome!!!Â As with all good things, this tax credit comes with some strings attached (buy a home costing over $80,000, earn less than $150,000 anÂnually as a couple, haven’t owned a home in the past 3 years) but nothing constricting.Â The big difference between this credit and the $7,500 tax credit we had before is you don’t have to repay this one if you live in the home for 3 years.Â That’s like your boss giving you a $1.28 per hour raise for 3 years just for being a homeowner.Â Except your boss is America.
2)Â Bank stress testing is a’coming.Â As a nation, this is not one of our brightest ideas.Â The concept is that we’re going to send an army of regulators marching to all the banks in our country to comb their books and see if those banks could survive a “worst-case scenario” economy.Â If it is determined that the bank is in trouble, confidence in that bank will collapse (along with their stock price) and government intervention will be necessary.Â Basically, if regulaÂtors say a bank will fail, it will become a self-fulfilling prophecy as everyone jumps ship.Â My problem: it’s setting up some otherwise solvent institutions for failure by virtue of mob mentality.Â But such is the skittish nature of investors these days.
The moral of the story is that we are going through a very murky period.Â A single day can make a world of difference on everything, including asset values and mortgage rates.Â If you are thinking about buying a home, set up a time to talk with me so I can help you time these big market upheavals and find surprisingly good deals amongst them.Â Uncle Sam is trying to encourage homeownership in every way that he can.Â Now might be the time to start examining the options.
Effective March 1, Fannie Mae (FNMA) the folk the make conventional loans “conventional” are planning to further tighten the condo guidelines on which mortgages they will buy on the secondary market. It could be argued that it makes no difference since they are already impossible in most cases, leaving only FHA backed loansÂ as an option.
Additionally, in theÂ case of bank owned condosÂ cash is usually the only option anyway -Â so again, perhaps it makes no difference.
In today’s Orlando Business JournalÂ (OBJ), a Fannie Mae spokeswoman is quoted: “The pre-sale requirement is intended to ensure a project is well-managed and able to sustain itself financially at times when there are a large number of condo fee delinquencies.”
Anjali Fluker at the OBJ repports that under the new rules, pre-sale requirements will go from 50 to 70 percent. And no more than 15 percent of the community’s units can be more than 30 days late.
Fifteen percent!? Name one condo association in Orlando that has aÂ delinquency rate of less thanÂ 15 percent… (“Johnny, put your hand down. We’re talking HOA delinquency, not juvenile delinquency.”)Click newspaper image for full article.
Long time talk show host and co- author of The Fair Tax Book Neil Boortz said this morning that anyone looking to invest needed to forget about the stock market and look at real estate.Â When consulting a want-to-be investor Boortz said.
Â “I am contracted into a large real estate deal this year.Â If I had any more money to invest I would be looking at big Real Estate Deals.Â We are going to see a lot of inflation thanks to the Democrats.Â Inflation is good for real estate prices.”
Though certainly the blame doesn’t fall entirely on the Democrats, it is un arguable that the trillions of dollars in debts and deficits, banker bail outs, stimulus plans, the Fed buying back their own T-Bills because no other country will touch them etc. etc. will result in inflation.Â In this environment it is always better to keep investment money out of dollars and into something real, like real estate.
This coupled with the simply incredible buying opportunities that are out there today and the interest rates at unbelievably low levels, if you don’t get in the market in the next 6 months, don’t be surprised if you miss the boat.
In a moment of profound unpreparedness, our brand-spanking new Treasury Secretary Tim Geithner spoke on Tuesday about the ‘details’ of the upcoming stimulus package.Â After no â€˜details’ whatsoever were declared, the stock market expressed their discontent by trashing the Dow Jones Industrial AverÂage by 300+ points.Â Ouch-town, population you, Tim.Â Maybe it’s best to have the information before you tell the press that you want to release the information.
As I write this, the House of Representatives is hard at work debating the particulars of the upcoming stimulus bill.Â Senate is set to get their think tank a-rolling later this evening.Â The latest page count for the bill is 1071.Â To give you a base of comparison, reading this bill would be comparaÂble to reading Pride and Prejudice, The Grapes of Wrath, and washing them both down with MachiaÂvelli’s The Prince all in one day.Â Only more boring.
Where are the Cliff’s Notes when you need them?
If my high school English class was any indicator, I’m guessing that many of our fine representatives won’t read the bill word for word.Â At least some politicians are being honest about it.Â U.S. Rep. Emanuel Cleaver, a Missouri Democrat, was quoted as saying, “Regardless of party, we will all cast our votes with one hand and cross our fingers with the other.”
So, you’re basically telling me that we’re spending close to a trillion dollars on… something that the people who made it really don’t understand?Â Isn’t this how I, Robot started?Â It didn’t work out so well for Will Smith in that one.
Simultaneously, Barack and his Obama-nauts are trying to hammer out a mortgage subsidy program.Â To spare you the convoluted web of details, essentially what they are trying to do is come up with a standardized qualification and re-appraisal process that all banks can use to establish eligibility for loan modification.Â The talk of the program alone brought the stock market roaring back over 200 points towards the tail-end of yesterday.Â I’m a big fan of anything that government is willing to do to keep people in their homes and stop home price depreciation.Â Rock on, Barack.
Another immediately problematic trend is America’s newfound desire to save money.Â Between dwinÂdling retirement accounts and severe job insecurity, consumers have retrenched and started to put their cash in their mattresses.Â It has gotten to the point where some in the administration wish to change the phrase â€˜A penny saved is a penny earned’ to â€˜A penny saved is a penny you’re not spending to generÂate commerce and jobs for your fellow Americans, you unpatriotic jerk’.Â Yikes.
Last August we reported on the $7500 tax credit available to first time home buyers.
Now, the $790 billion stimulus package hammered out by House and Senate conferees late last night will increase the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years.
The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds.
The credit remains open only to first-time buyers (those who haven’t owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program.
If you’re a first time buyer, this is great news and just one more reason to buy. You may never have it this good again.
UPDATE: This government offer expires December 1st 2009! For more info call 407-290-3408.
See also our latest post at the Orlando Real Estate Pros Blog.