West Volusia Foreclosure Data

After a quick look at the comparison of the foreclosure, pre-foreclosure, and general sales in the West Volusia market, I decided to dig a little deeper into the specific cities to understand the statistics that the MLS is recording. For purposes of this analysis, I reviewed sales that took place during the first half of 2009 in Volusia County that were recorded through the Mid-Florida Multiple Listing Service.  For each city, I compared the percentage of sales that were bank owned (foreclosed), short sale (pre-foreclosure), and general sales. The results are fascinating. The Cities are listed in order of the total number of sales that took place during the six month period.

Foreclosure, pre-foreclosure, and others…

Introduction

Many people are interested in how the first half of the year has gone. One of the most common questions is with regards to the number of sales that are bank owned, short sale, and traditional. The data is generally available in the Multiple Listing Systems but are subject to the information entered by the real estate agents.

Daytona Beach Area Association Data

For the first half of 2009, the Daytona Beach Area Association has reported the vast majority of sales have come through the traditional sales process. The second largest group was bank owned sales (21%). “Potential Short Sale,” which are very likely short sales in almost all cases, represented less than 5% of total sales.

West Volusia Association of Realtors Data

The data from the West Volusia Association of Realtors represents a variance from the Daytona Beach Area Association. The results may be in fact but may also be developed as a result of the differences in the area. For example, the some areas of West Volusia have substantially higher foreclosure rates than any of the areas in the Greater Daytona Beach Real Estate areas. Also, the West Volusia Area Association is a part of the Mid Florida Regional Multiple Listing Service (MFRMLS). That system allows an agent to mark multiple categories, so the data is further skewed but the duplication of categories.

Analysis

The information about shows that the majority of sales are still handled through traditional methods. Bank owned properties (also called REO for Real Estate Owned) are consistently the second largest group. The fact of the matter is that banks are willing to sell properties at very reasonable prices in order to avoid paying the ongoing costs associated with maintaining the properties. In fact, in most instances, banks ask for a price that will sell a property within 30-60 days. As Realtors, we set an aggressive price in order to be competitive.

Bank Owned (REO) Properties

First, banks who own the properties that they are trying to sell truly don’t want to own them for long. The banks are not interested in paying the maintenance, taxes, insurance, and other expenses related to the property. They are also aware that property values have been declining for some time and the longer that they hold property, the lower the return. Lastly, they are never emotionally invested in the property and can set their opinions based on the actual market data

Pre-foreclosure and Short Sales

Pre-foreclosure properties are typically defined as short sales. A short sale is an instance in which a seller’s property value is not sufficient to pay off the debt associated with the property. As a result, the seller will ask the lender to forgive a portion of the debt. The data represents that pre-foreclosures are not selling in the same numbers as conventional or bank owned sales. The challenge associated with short sales is that the banks are often unaware that the property is for sale. When an offer is submitted the banks have a long process associated with bringing a sale to fruition. While our Realtors are experts on that process, it still takes time and is dependent on the lenders’ response.

General Sales

Interestingly, the majority of sales in each market are traditional sales that occur as a seller decides to sell regardless of other conditions. In most cases, the seller needs to compete with the sale price the is currently feasible for the property in question. The result is that foreclosures, short sales, and other properties are all considered competition. In the end, the properties that sell are priced appropriately in order to generate a sale.

Conclusion

In conclusion, while we can generate lists of foreclosed properties or pre-foreclosure properties at a moment’s notice, the answer is to look at properties in general that meet you particular needs. The status of foreclosure, pre-foreclosure, or any other status doesn’t guarantee that you are getting the best deal. On the contrary, limiting a search to a particular ownership type guarantees that you could miss the deal of your dreams.

Housing prices flattening

FEDERAL HOUSING FINANCE AGENCY
NEWS RELEASE

For Immediate Release Contact: Corinne Russell (202) 414-6921
June 23, 2009 Stefanie Mullin (202) 414-6376

U.S. MONTHLY HOUSE PRICE INDEX ESTIMATES 0.1
PERCENT PRICE DECLINE FROM MARCH TO APRIL

WASHINGTON, DC – U.S. home prices fell 0.1 percent on a seasonally-adjusted basis
from March to April, according to the Federal Housing Finance Agency’s monthly House
Price Index. The previously reported 1.1 percent decline in March was revised to a 1.4
percent decline. For the 12 months ending in April, U.S. prices fell 6.8 percent. The U.S.
index is 11.2 percent below its April 2007 peak.

The FHFA monthly index is calculated using purchase prices of houses backing mortgages
sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions,
seasonally-adjusted monthly price changes from March to April ranged from -0.7 percent
in the West South Central Division to +1.3 percent in the Mountain Division.
“Although monthly data are volatile, we may be starting to see signs of stabilization in
prices for houses funded by conventional conforming loans, as the HPI is only down 0.3
percent for the first four months of the year,” said FHFA Director James B. Lockhart.
Monthly index values and appreciation rate estimates are provided in the table and graphs
on the following pages. As with FHFA’s quarterly HPI, the estimates will be revised as new
data become available. Quarterly HPI reports include updated monthly data presented in
the same format as the attached table.

For detailed information concerning the monthly HPI, please see the HPI Frequently
Asked Questions (FAQ). The next release of monthly index data will be on July 22, 2009
and will include data for May. The next release of quarterly data will be on August 25,
2009 and will include results for the second quarter of 2009.

###
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan
Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S.
mortgage markets and financial institutions.

States in Each Census Division
Pacific Census Division: Hawaii, Alaska, Washington, Oregon, California
Mountain Census Division: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New
Mexico
West North Central: North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas,
Missouri
West South Central: Oklahoma, Arkansas, Texas, Louisiana
East North Central Michigan, Wisconsin, Illinois, Indiana, Ohio
East South Central: Kentucky, Tennessee, Mississippi, Alabama
New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island,
Connecticut
Middle Atlantic: New York, New Jersey, Pennsylvania
South Atlantic: Delaware, Maryland, District of Columbia, Virginia, West Virginia,
North Carolina, South Carolina, Georgia, Florida

First time homebuyer $8,000 tax credit

This video was created by the Florida Association of Realtors to explain the $8,000 tax credit that is being provided to first time homebuyers. I think everyone buying a house should see it.

http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm

May Housing Construction Starts up 17.2% – What does that mean?

Yesterday the commerce department reported that new housing construction starts were up 17.2% over the same month last year. Many have speculated that this is a sign that the housing decline is over. Believe me, no one is happier to hear the positive speculation.

The “But”

However, the reality of the situation is that the vast majority of the new housing construction is in multi-family as opposed to single family. For sellers out there hoping that this means a rapid return to prices, be cautious. The competition from foreclosures and distressed sales in general is still at very high levels. Prices can expect to continue to decline. I would expect that we may level off for the summer and then see more price declines through winter before we reach the pricing bottom.

When prices do start to return, don’t expect the rapid increases in value that we saw between 2000 and 2006. Instead, expect a regular increase more in line with the historic value changes over the long term.

The good news

The good news is that we are seeing the beginning of the end of this decline. For those  that are considering buying, get in the market. Don’t wait until prices are headed up again. For those that are selling, do it now. Price the property appropriately and get it sold rather than paying the continued cost of maintaining the property. Go ahead and sell the property for today’s price and stop paying the costs associated with mortgage, insurance, maintenance, utilities, etc. In most cases, those expenses run approximately 1.5% of the value of the home each month.

Investors Market Update

Investors Market Update

Some of my investors who are also homeowners reveal that consolidating their businesses at this time to remain competitive in this economy is necessary so they are selling a portion of their portfolio.

Being that  I work various counties some are better off than others so if you are considering opening or relocatiing your business or home, now may be the time to seriously take advantage of the opportunities that are here now.

Others are on the opposite side and are buying while prices are at unprecedented lows, interest rates are low, and inventory is high.  If you can afford to hold the properties for awhile then in the long term you will most likely see a good profit.

If you are interested in investing a certain county, I will be happy to review the data for that area if you leave a comment below.

Open Houses for June 14, 2009

11:00am to 1:00pm – 3132 Pine Tree Drive, Edgewater – Hurry to see this newly renovated 4 bedroom home! Brand new kitchen cabinets, countertops and all aplliances! Tiled for easy maintenance. Inside laundry, spacious eat-in kitchen with breakfast bar, large living room, huge back & side yars for all of the toys.
Price $109,000 – Web ID 491017
Directions

11:00am to 2:00pm – 8 Fountainebleau, Daytona Beach – Located on a Dul-de-Sac of only 8 other homes. This ?secret? neighborhood is located within walking distance of the beach. Listed as a 2 bedroom, Bonus room can be converted back to a 3rd Bedroom. Very unique home! Price $207,644 – Web ID 491088
Directions

1:00pm to 3:00pm – 1429 S. Atlatntic #133, Ormond Beach – Well maintained and updated, move-in condition, fully furnished condo in desirable Vantage Pointe Condominium, across Atlantic Ave from the beach. Great for a permanent or vacation beachside home. Price $94,500 – Web ID 491122

1:00pm to 3:30pm – 10 Brookside Ct, Ormond Beach – Well maintained brick pool home at the end of a cul de sac. Spacious rooms and open plan. Huge eat-in-kitchen with ample cabinets and center island. Formal living and dining rooms plus family room with floor to ceiling coquina stone fireplace. Price $249,900 – Web ID 480916
Directions

1:00pm to 4:00pm – 94 Buschman, Ponce Inlet – This Ponce Inlet home has wonderful curb appeal with its barrel tile roof and lush landscaping on a 1/4 acre corner lot that feels much larger. The home features a large living room with parquet floors, a 9×10 glass atrium open to the sky for growing exotic plants. Price $549,000 – Web ID 485841
Directions

Interest Rate Prediction

Don Mastro from Bank of America says that interest rates are moving up. Recently as low as 4.5%, we’re seeing them move up and approach 6%, he says. This is important information for anyone who is considering buying a home as the costs are increasing eavery day. In fact, there have been several rate increases per day recently. It’s an important time to lock in those rates…

Fed Funds Rate and Mortgage Interest Rates

Intro

The Federal Funds Rate is the interest rate that banks charge one another to lend money. The rate is set by the Chairman of the Federal Reserve and is a key way that the Fed can control the supply of money. A lower Fed Funds Rate can lead to lower interest rates charged by banks to consumers. Recently, interest rates on mortgages have been at historic lows. I thought it would be interesting to look at how the Fed Funds Rate corresponds. 

Fed Funds Rate Data

The Federal Reserve conveniently provides a system for downloading data. This chart represents data from January 1970 through This post date.

 

Fed Funds Rate 1970 to current

As you’ll notice, the Fed Funds Rate varies from time to time. However, it has never been as low as it is right now. The rates truly are at an all-time low. You may also be interested in a closer look at recent data…

 

Fed Funds Rate 2005 to current

The recent data shows that the rates are not only at historic lows over a long period of time but are actually almos zero. They prbably can’t get any lower. A rate lower than zero would actually represent losing money when lending it.

Conventional Mortage Rates

I also wanted to revew the actual rates for conventional mortgages. When a buyer is purchasing a home, the interest rate on thier mortgage effects the monthly payment. A lower interest rate can have a tremendous amountof effect on the price of the home that a buyer can buy. Alternatively, it can reduce the monthly price on an existing home in order to make it more compelling to buy vs. rent.

This graph shows the convential mortgage interest rates from 1970 to this post date:

 

Interest Rates 1970-2009

Clearly, the effect of the Federal Reserve’s monetary policy and the effect of the Fed Funds Rate is visible in this graph. Also, you’ll note that today’s rates truly are the lowest in recent history.  Lastly, to round things out, we can look at a closeup of recent interest rate history.

 

Interest Rates on Conventional Mortgages 2005-2009

Again you’ll note that while we have enjoyed lower interest rates for many years now, the rates have never been quite as good as they are right now.

 

Summary

Ultimately, there are numerous reports that discuss now being a good time to buy and that interest rates are at the lowest they have ever been. I wanted to look at the hard numbers. The numbers do, in fact, bear out the reports. With the interest rates as low as they are, far more people should be able to achieve home ownership. The $8,000 tax credit that has been offered by the government should help to stimulate that effect. 

I’ll continue to review where we are in the life cycle of the market adjustment and some of the factors that help and hinder our recovery. After reviewing this data in more detail, interest rates should certainly be credited on the HELP side of the equation.

Deals of the Week

480 Reed Canal Rd Unit 6, SD – $82,500 – This end unit is totally NEW! Kitchen includes all Corian countertops, glass top range, full appliance package-ALL NEW. Owner Financing too! Web ID 478260 
 
145 N. Halifax, DB #403 – $134,900 – Super deal on this sunny south facing unit w/great river views on the fourth floor in the Harbor View condominium. Web ID 476908 
 
20 Greenway Place, DB – $100,000 – Best price, why rent, 3 BR close to colleges & hospital. Extra deeded 50′ x125′ lot goes with house. Web ID 476234 
 
2947 S. Atlantic Ave. #1601, DBS – $179,900 – 2/2 Oceanfront, 16^th floor unit with ocean & intracoastal views, reduced to. Web ID 489490 

1726 Santee Ave., Deltona – $104,500 – 4/3/2 two story home w/great curb appeal, approved by bank for a full price offer of. Web ID V4619187

7 Fair Oaks Circle, OB, – $75,900 – Fantastic price for this Ormond Beach 2 bedroom, 2 1/2 bath townhome. Web ID 490524