After a concerning decline in the pending home sales over the last few months, the National Association of Realtors (NAR) Pending Home Sales Index (PHSI) showed an incline of 5.2%!

Pending home sales reflect contracts that were signed during the 30 day period.  As the closing process can take a few months, the Pending Home Sales Index provides a look into the upcoming future of the real estate market. 

According to Lawrence Yun, Chief Economist for NAR, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy, the loan underwriting standards are tighter, but homebuyers can improve their chances of getting a loan by staying well within their budget.”

Across the nation the PHSI rose in the Northeast, Midwest, South and the West. 

A recent quote on CNN Sunday by Shaun Donovan, HUD Secretary, has caused plenty of turmoil in the real estate industry.  After stating that a restoration of the homebuyer tax credit is "not off the table" and that it is "too soon to say" if the tax credit would be revived, Donovan's remarks sparked controversy among real estate professionals.

HUD spokesperson tried to back pedal yesterday by claiming that "There are no discussions underway to revive the credit." However, just the talk of a revision could cause the home sales to stall even further.  The existing home sales in July showed a drastic decline, and if the figures for August are anything like July's a push for Government interference could certainly rise.  The Pending Home Sales Index will be released by the National Association of Realtors (NAR) on Thursday, September 2, 2010.

 

A mortgage foreclosure is a legal proceeding in which a lender terminates a homeowner’s right to the property in question. When a borrower defaults on a mortgage that is held by the lender, the lender has the right to repossess the property. Once the property has been repossessed by the lender, the bank can then sell the property and keep all of the proceeds to pay off the remaining amount left on the mortgage as well as any legal costs that incurred during the foreclosure process.

If the property does not sell after the foreclosure process, the borrower will remain liable for the amount due on the mortgage. The lender is required to sell the property at a price that is near the fair market value (FMV), however more often than not the lender sells the home at a discounted price in order to recover the amount lost on the mortgage. A foreclosure usually results in a loss for both the lender and the borrower, which is the reason that many homeowners will look at a short sale option before the mortgage ends up in foreclosure.

The first change to the flood plain designations in Collier County, Florida have been released, showing that nearly 1/3 of Golden Gate Estates is currently in a flood zone. This has left residents curious as to how their homes have fallen in a flood zone if their homes are well above sea level.

The new flood plain maps that were released by the Federal Emergency Management Agency (FEMA) have placed nearly 10,500 homeowners in need of flood insurance if they are unable to receive a certificate of elevation from a surveyor.  

For the next 90 days FEMA will begin to publish formal notices in the Naples Daily News that will begin the appeal process.  According to Bill Lorenz, County Land Development Services Director,  “This is the time that the public can file any scientific-based appeal of why they think the mapping is not correct.”  If you wish to search for which zone your home is located in, feel free to visit the Collier County website.

Maps are expected to be finalized by the beginning of 2011 and FEMA will issue a final determination letter, the flood insurance rules will not kick in until roughly six months after the distribution of the letter.





 

Puerto Rico is a fantastic option for people looking to buy investment property. It is already a US territory, which makes the process of buying property a little easier. Nonetheless, Puerto Rico is a separate nation and has laws governing the buying and selling of real estate that you need to understand for an effective buy.

The office that governs property taxes in Puerto Rico is called CRIM (Centro de Recaudacion de Ingresos Municipales). This is a centralized board that has offices in each region. When you buy a property here, you have to contact the local CRIM office for information on how to properly pay real estate taxes.

Currently the tax rate in Puerto Rico is a flat levy of 1.03 percent. Additionally you wll pay 1 percent more for the value of all personal property within the home, and three percent for the land value. CRIM is well within its rights to reassess values at any time and will sometimes backdate adjusted taxes. Needless to say, this makes things a little confusing, which is why depending on the local CRIM department is nothing less than essential if you want to own property here.

On the upside, Puerto Rico is only 1,000 miles away from Florida, making it easily accessible by plane. The island’s Latin flavor, warm beaches, championship golf courses, coral reefs and surfing – well, there’s really something for everyone. If you buy a home here specifically for renting to vacationers you should have no trouble keeping it booked. Just remember to leave a week for yourself in the winter!

Mortgage giant, Freddie Mac announced this week that mortgage rates have hit an all time low for the 9th time in 10 weeks. Mortgage rates on 30 year fixed rate mortgages have continued to decline since the spring of this year. Although the rates have continued to fall, home sales don't seem to be moving as the unemployment rate and high credit standards seem to be blocking forward motion in sales.

Although the expiration of the FED program that pumped $1.25 trillion into mortgage backed securities spiked concern with economists that mortgage rates would rise significantly, the European Debt crisis caused investors to shift funds into safer US Treasury bonds.  As the mortgage rates are so closely tied in with long term treasury bonds, they can change drastically even on a given day.

Freddie Mac collects rates from lenders across the nation weekly Monday through Wednesday. The rates this week came in at 4.36%, reflecting the lowest rates since Freddie Mac began tracking rates in 1971.   

 

Due to the expiration of the Homebuyer Tax Credit sales of existing homes were expected to fall and fall they did.  During the month of July home sales dropped 27.2% in a monthly comparison, according to the National Association of Realtors (NAR).

Sales are currently at the lowest level in over a decade, and are expected to continue at this pace for months to come.  According to Lawrence Yun, Chief Economist at NAR, "Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place it in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”

Home prices on the other hand are starting to rise.  The national median existing home price was up in an annual comparison by .7% in July, while distressed home sales remained firm from June accounting for 32% of the home sales during the month of July.  

Yun went on to say, “Thanks to the homebuyer tax credit, home values have been stable for the past 18 months despite heavy job losses, over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

This leaves the opportunities for potential homebuyers unlimited!  Mortgage rates are at record lows, home prices are remaining stable and there is no limit to the homes on the market at the moment.  If there was ever a time to purchase home, it's now, these circumstances won't last forever.





 

Mortgage rates on a 30 year fixed rate mortgage broke another record last week, falling to 4.42%, according to mortgage giant Freddie Mac.  These rates reflect the lowest rate seen since Freddie Mac began tracking rates in 1971.

Freddie Mac collects mortgage rates from lenders across the country weekly, Monday through Wednesday.  As rates are so closely tied in with long term treasury bonds, the rates are capable of fluctuate significantly, even on a given day.

Rates on a 15-year fixed rate mortgage dropped to 3.90%, continuing to decline since spring of this year.  Rates began falling when the European Debt Crisis reared its ugly head and investors began moving their funds into safer treasury bonds.
 

The controversy continues over Amendment 3, a proposed amendment to the Florida Constitution that would allow homebuyers that have not owned a home in 8 years a claim to a property tax break.  In addition to the tax break, the amendment would lower the annual tax appraisal cap for rental property and commercial property to 5%.

The controversy is not over what the amendment will do for homeowners, but  the wording of the amendment in the ballot box!  Recently, a judge removed the amendment from the ballot altogether.  The effective date of the property tax is not mentioned in the amendment, causing the judge concern on whether voters would be able to understand the explanation of the amendment.

The Florida Supreme court has yet to decide whether or not the amendment should be back on the ballot.  According to Trey Price, Florida Realtors public policy representative,  "If Amendment 3 does, in fact, not appear on the November ballot, Florida Realtors' State and Local Taxation Subcommittee is ready to discuss the next steps and plan for a better amendment for 2012. Economists are telling us that commercial property assessments are unlikely to exceed 5 percent in the coming two years, so that is somewhat good news."
 

Thanks to funds received from the Government formed Neighborhood Stabilization Program, 22 homes have been purchased in Broward and Palm Beach Counties in Florida by the Habitat for Humanity as well as other non-profit contractors in an effort to rehabilitate and re-sell these foreclosures.

According to a survey conducted by Bankrate, Inc., a online financial rate website, the closing costs across the nation are on the rise. National average shows that closing costs are nearly $1,000 more this year that they were in 2009.

If you're a veteran who served at least 90 days of active duty during a declared war, or over 181 days of peace time service, you are eligible for a VA loan to help purchase a home. Note that only active veterans or those honorably discharged qualify.

First things first, go online to the Department of Veteran Affairs: Regional Loan Centers and find the nearest loan center in your area. Give them a call. This center can then provide you with a list of VA approved lenders to contact. Also ask if they have any recommendations. Not all approved VA lenders are created equal.

You can also visit the VA Mortgage Center: VA Loan Eligibility Requirements online to review any requirements about which you may be uncertain. Call several of the approved lenders and get a feel for their level of experience. If you can get a face-to-face meeting, all the better. Choose the one that you feel most comfortable with, and that illustrates the greatest amount of hands-on experience with VA loan processing.

While you can only have one active loan at a time, currently you can obtain up to $417,000 toward a house (as of 2010). Thanks to all who serve and happy house hunting.

Mortgage rates hit another record low this week coming in at 4.44% on a 30-year fixed rate mortgage, according to mortgage giant, Freddie Mac. Mortgage rates are closely tied in with long-term treasury bonds and as investors continue to shift their money from stocks to treasury bonds, the yields continue to drop.

Fishing in the Federal Waters off the Florida Panhandle has been reopened, according to Federal officials, as no oil has been spotted in the last 30 days in the 5,144 sq mile area of the Gulf of Mexico!

According to Florida Realtors, sales of existing single-family homes jumped 21% in the state of Florida during the second quarter of this year in a yearly comparison to 2009.  Seventeen metropolitan statistical areas (MSA) across the state have reported increased sales of existing homes in a quarterly comparison.

The $1.2 billion loss shown on the Financial statement of mortgage giant, Fannie Mae during the 2nd quarter is the smallest loss shown since the September of 2008! The quarter before showed a $11.8 billion loss! Although the financial condition of the government run company is improving, $1.5 billion in government assistance was still requested by the company. To date Fannie Mae has borrowed $85 billion from the Treasury Department at a hefty interest rate.

A small decline in the percentage of US Homeowners that are struggling with and "underwater mortgage", a term used when what is owed on the home exceeds the value of the home, was evident in the second quarter, according to Zillow.com, a national real estate website.

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Things are looking up for the real estate market in South Florida, according to the Miami Realtors.  In a yearly comparison, pending home sales in July of this year were up 40.5% at 10,113.  The pending home sales is a tally of the number of housing contracts that have been signed, yet not closed.

Nationally, the pending home sales index hit a record low of 75.7 during the month of June, according to the National Association of Realtors (NAR).  The low index is claimed to be a result of the expiration of the Homebuyers Tax Credit, a program that offered a tax credit of $8,000 to new homebuyers and $6,500 to qualified second homebuyers. 

According to Jack Levine, Chairman of the Board of the Miami Realtors, “We are encouraged by the statistics for pending home sales in the South Florida real estate market even after the expiration of the homebuyer tax credit, while the number of pending sales has dropped slightly month-over-month, they are still significantly higher than they were a year ago.”

Some people focus on using real estate as a means of earning an income by buying distressed properties at a good price and then fixing them up for resale. As one might gather, this isn’t as simple as it sounds. Many such properties require more than a coat of paint and TLC. That means you have to look really closely at calculations before you purchase anything.

The general rule of thumb in flipping is that you want properties that list at 20 percent below the area’s market value for that housing type and location. The best time for seeking such homes is during a buyer’s market when real estate is “soft” and sellers more anxious to move their properties.

Even at a good price if the property isn’t in relatively good condition, say “no.” Until you get experienced with flipping and know the problems for which to look that could break the bank, avoid buying such properties unless you have someone you can trust to review the property. What are the biggest expenses? Water damage, hidden structural issues like wood ant nests, bad roofing, and old electric or plumbing lines.

If you need three months or less to flip a property – that’s ideal. Take your purchase price, add in repairs and then give the house a reasonable mark up based on the current market. If you want the house to sell quickly, you know you’ve done a GREAT flipping job if you can price it below market costs and still make money. By the way, don’t forget to add in the monthly mortgage cost on the house, insurance, closing and the cost of advertising the house when it goes back on the market.

Amendment 4, an amendment that would, if passed, require all comp-plan changes be approved by voters through a local referendum, will appear on the official ballot on November 2, 2010.  The official ballot summary is as follows: "Establishes that before a local government may adopt a new comprehensive land use plan, or amend a comprehensive land use plan, the proposed plan or amendment shall be subject to vote of the electors of the local government by referendum, following preparation by the local planning agency, consideration by the governing body and notice.

Convention dates run from August 25th-August 29th with presenters such as Jim Accursio, CRS, GRI and president of The Auction Company & Associates, Chuck Bonamer, CRB, GRI and president of Trans-Equity Inc. Realtors and Amy Chorew, Director of Education and Training at the Social Media Marketing Institute.

The Trade Expo runs from August 26th through August 27th with an Ice Cream Social on Thursday, August 27th from 4:15-5:15 p.m. 

For more information and location please visit the Florida Realtors website.

The foreclosure rate is rising as many of the nation's homeowner's fall behind in their monthly mortgage payments.  According to RealtyTrac, Inc., more foreclosure warnings have been received during the first 6 months of this year than were distributed during the first half of 2009. The high unemployment rate appears to be the culprit, as unemployment continues to climb, so does the number of foreclosures.

Falling to 66.9% in the second quarter of this year, according to the Census Bureau, the average number of homeowners in the country has fallen to the lowest level seen in over a decade.

In 2009 Amendment 3, an amendment that stated that homebuyers that haven't owned a home in 8 years would be allowed a 25% homestead exemption on new property if purchased after January 1, 2010, came into effect.  The problem with this amendment was that there was no effective date that was recognized on either the ballot title or the summary.

New benefits under the Homebuyer Tax Credit for military members serving outside of the U.S. have been extended by one year.  First time homebuyers that are members of the military have until April 30, 2011 to enter into a purchase contract. If a contract is signed by the April 30th deadline, homebuyers will then have until June 30, 2011 to close on the purchase.

Along the coasts of Boston, Seattle, New York and Los Angeles tiny waves of recovery amidst the commercial real estate market are popping up.  Although the signs are subtle the latest Moody's REAL Commercial Property Index showed a gain of 1.7% during a monthly comparison in April. 

You’ve purchased income property and are getting ready to rent it out. Creating a solidly worded lease now becomes a priority. A lease details owner and renter obligations, specifically with regard to fees, upkeep, and property damage. There are several key elements you must include in the lease documentation.

1. The property address
2. The tenant’s name and license number or some other means of traceable identification
3. Monthly rental cost and due dates (with or without utilities) along with any required security deposits and late or bounced check fees
4. How rent will be paid (picked up, mailed, mailing address)
5. Rental stipulations including whether pets are permitted, how many people can live in the house and penalties for breaking stipulations.
6. Trouble reporting: how the tenant should report issues with the property along with several alternative contact numbers / addresses.
7. Subletting: can the renter sublet, and if so under what conditions?
8. Termination clause: how can the tenant or owner terminate the lease?
 

If you don’t feel comfortable in creating your own leases there are several places online that have free legal documents that you can download and personalize. Or, if you have an attorney that person can create a standardize lease for you to use on any income property.

Many parts of the United States are currently experiencing temperature extremes. This heat wave poses a potential hazard to homes and land. Making your property fire safe is one way to protect not only yourself but your neighbors. Step one, that many people do NOT take, is inspecting your smoke detectors regularly and making sure they’re placed according to building codes. Have one in main hallways, bedrooms, and near your fire place or stove. Change the batteries at least every six months.

Step two is obtaining a fire extinguisher – one for the kitchen minimally, and potentially one for the garage. Train your family in the correct use of the extinguishers. Note that many local fire departments offer classes in fire safety for free.

If practicable, a home sprinkler system is also a good idea as it protects your property even when you’re not home. Most such system are very reliable.

Outside the home various parts of the house remain vulnerable to fire coming from outside. Old roofs, for example, might catch fire from flying sparks. Likewise with any dry ground brush near the home or in your gutters. Keep dead plant matter cleaned away from the house (back at least 30 feet) and gutters clear. Watch tree growth to make certain it doesn’t encroach on a chimney.  As money allows, begin a step-by-step refurbishing of household materials to ones that offer fire-resistance.

Finally make an emergency plan. No matter how careful the homeowner is, many things can ignite a fire. Have several escape routs out of the house and neighborhood planned and discuss them with all members of the family. Have drills at least twice a year in which you remind people to stay low. Smoke inhalation causes more deaths than fire.

According to mortgage giant, Freddie Mac, mortgage rates on a 30 year fixed mortgage fell again this week to a record low of 4.57%.  This marks the lowest rate ever recorded by Freddie Mac, who began keeping track of mortgage rates in 1971.