Friday, November 12, 2010

Top Ten Reasons to Buy Florida Keys Real Estate NOW!

Top Ten Reasons to Buy Florida Keys Real Estate NOW!
When is the best time to buy real estate? When it is a buyer’s market, right? So, what are you waiting for? The Keys real estate market is a ripe opportunity for investing in real estate, buying your dream home, or buying your retirement home. Here are a few reasons why you should think about buying now!

1. Location! The Florida Keys have a wonderful, WARM desirable location. You’ve heard that old saying about how to select real estate…first and foremost is Location, Location, Location. What more could you wish for than island living and sunny days filled with great outdoor fun like excellent fishing, diving, snorkeling, kayaking, and its all right out your back door. Clear blue azure waters, warm year round climate, small local neighborhoods, low crime rates, and the laid back Keys Island life can be your reality!

2. Selection! For the first time in many years buyers have choices! The Florida Keys have an unusually large supply of inventory on the market, but it seems to have topped out. Excess inventory is what drives prices down, but just as importantly, it gives you plenty of choices. Just two years ago if you could find five homes in your price range, you were lucky, and the escalating prices shut out many eager buyers. Now you can select from several homes. Better selection equals a better purchase. Now that our inventory is beginning to shrink, it may signal that the bottom has already occurred or is very near. Buy now, before the seller’s market returns.

3. Prices are down. Our residential prices are down 40-50% percent from the high of 2005. This is unprecedented and represents a great buying opportunity. Opportunities like this don’t last long.

4. Interest rates are still near historical lows. Ask anyone in the business where interest rates are going to go over the next few years. Everyone believes that rates will go up. For every increase in interest rate, thousands of buyers are shut out of the market. Your dollars will go farther today than they will a year from now. Taking advantage of today’s rates is like buying your house at a discount. Financing guidelines are tightening on a daily basis. This is a sure sign that rate hikes are coming.

5. The baby boomers are retiring and guess where they want to go? They want to retire where it is warm! The Florida Keys offer that and much more. The laid back Keys lifestyle is a dream for most, with days filled with ocean adventures, kayaking, sailing, fishing, scuba diving, snorkeling, where you can kick back, relax, and enjoy that Florida sunshine!

6. Sellers are motivated to sell. Some homes have been on the market for over a year. They have reduced their price again, again, and again. Some are desperate and most are quite motivated. For the first time in many years, sellers are not insulted by low offers and are even offering out incentives to the buyers, such as paying for repairs or even closing costs.

7. Foreclosures and the Short Sale market is a once-in-a-lifetime opportunity. Since many speculators overextended themselves in 2005 our foreclosure and short sale rate has skyrocketed. If you are an investor, this represents a tremendous buying opportunity. Your strategy should be to buy at a discount, hold for a few years, and then sell for a big profit. Put a tenant in the property and allow them to pay down your mortgage for an even greater profit. If you are buying a home to live in, the advantage is even greater.

8. No Bidding Wars! Patience is tolerated and buyers can take their time selecting their dream home without worrying that someone will come in and snatch it right out from under their nose.

9. The Florida Keys real estate market is poised for a quick rebound. It is predicted that our market will experience what’s called a “V” recovery. It was quick to go down and it will be quick to recover. If you are the type of buyer waiting to find the bottom you have probably already missed it. Even if you believe the bottom is still to come, buying today locks in your discount during a historical opportunity, plus the added advantage of low interest rates. Waiting now may only mean paying more in the future.

10. Real financing is available. The "wink, wink" zero-down, no-doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first-time homeowner bond programs, and special loans for teachers or police officers are back in business.
The bottom line: It's a great time to buy real estate!

Friday, October 15, 2010

30 Year Mortgage Rates fall again- to 4.19%

Mortgage rates hit decades-low 4.19%
Mortgage Rate Trend Index

WASHINGTON – Oct. 15, 2010 – Rates on 30-year mortgages fell this week to 4.19 percent, the lowest level in decades. They were pushed down by lower Treasury bond yields.

Investors are buying up Treasury bonds in anticipation of a move by the Federal Reserve designed to lower mortgage rates and yields on corporate debt.

As a result, the average rate for 30-year fixed loans dropped to the lowest level on records dating back to 1971, mortgage buyer Freddie Mac said Thursday. It’s down from 4.27 percent the previous week. The last time rates were this low was in the early 1950s.

The average rate on 15-year fixed loans fell to 3.62 percent, the lowest on records dating back to 1991, Freddie Mac said.

Rates have fallen since spring as investors shifted money into the safety of Treasury bonds. That demand lowers their yields, which mortgage rates tend to track. The 30-year rate was 5.08 percent at the beginning of April. The 15-year rate was 4.39 percent.

Low rates haven’t helped the struggling housing market, which recorded its worst summer in more than a decade. But they have led to a surge in refinancing.

And rates could fall even further in the coming week.

The Federal Reserve is leaning toward buying more Treasury bonds to drive down loan rates and boost the economy, according to minutes of closed-door deliberations released Tuesday. Economists predict Fed officials will approve a bond purchase program at their Nov. 2-3 meeting.

Two Fed officials in recent remarks have suggested the new purchases shouldn’t exceed $500 billion. That would be smaller than a $1.7 trillion program launched during the recession.

The program would likely push mortgage rates down – possibly lower than 4.0 percent on the 30-year fixed loan.

Some analysts say rates are more likely to hover above 4.0 percent, without breaking that threshold.

“A lot of the impact that you would expect from this program is already priced into the market,” said Mike Larson, real estate and interest rate analyst at Weiss Research. “If there’s any risk, it’s that what the Fed announces turns out to be a disappointment in some way. You might see rates go up a little bit.”

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.47 percent, the same as the previous week. Rates on one-year adjustable-rate mortgages rose to an average of 3.43 percent from 3.4 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.8 a point for 30-year and 1-year mortgages. It averaged 0.7 of a point for 15-year and 0.6 of a point for 5-year mortgages.
Copyright © 2010 Associated Press. All rights reserved.

Thursday, October 14, 2010

Home Affordability Index- Most affordable in 40 Years!

Beacon Economics: Housing most affordable in more than 40 years
SAN FRANCISCO – Oct. 13, 2010 – Beacon Economics’ new Beacon Economics Home Affordability Index finds that in August homes were at their most affordable level since data became available (1969). Beacon Economics developed the Beacon Economics Home Affordability Index based on the percentage of income an average family would need in order to make mortgage payments on an average priced home.

The August estimate shows the cost of homeownership (mortgage interest plus principal payments after a 20 percent downpayment) falling to 16.9 percent from 17.1 percent in July. Overall, the Beacon Economics Home Affordability Index has remained below 20 percent for the past twenty-one months.

“Home affordability has reached an historic high,” says Beacon Economics Founding Principal Christopher Thornberg. “Nationwide, prices are down approximately 25 percent from their peak, and mortgage financing rates are at all-time lows.” Moreover, the high level of affordability is likely to drive demand and reduce the stock of excess inventory, ultimately resulting in the need for new housing, a rise in prices, and a pickup in new construction, according to Thornberg.

“While prices may fluctuate modestly over the next several months, we believe the worst of the housing crisis is behind us,” adds Beacon Economics Research Manager Jordan G. Levine. “We expect prices to stabilize around current levels and likely be higher in the next twelve months.”

Thornberg agrees. “Although there could be some modest volatility over the next several months, our research indicates the housing market is at or near the bottom,” he says.

The Beacon Economics Home Affordability Index is intended to help homebuyers and policymakers alike understand the current state of the market.

© 2010 Florida Realtors®

Thursday, October 7, 2010

BUY Real Estate Now?

“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”
– John Paulson 9/27/2010

WOW! That’s a powerful statement.

There is no question that John Paulson is a bull when it comes to residential real estate right now. Should we care what Mr. Paulson thinks? Should we listen to him? The answer to both questions is a resounding ‘YES’. Here are several reasons why.

Who is John Paulson?
Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?

According to Forbes John Paulson is:

a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago.

According to the Wall Street Journal Paulson is:

a hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.

What did other financial players think of his statement?
The Wall Street Journal agrees with Paulson:

Ignore the critics. The odds have to be on his side…It isn’t just that home prices have fallen a long way. It’s also that, if you can get a mortgage, you are basically taking a reverse bet on the bond market. You could be a long-term borrower at fixed rates, instead of a long-term lender. Right now you can borrow for 30 years at around 4.3%. After the mortgage tax deduction, for some people the net effective interest rate is nearer to 3%. That’s going to prove an awesome deal if we see inflation again.

And Forbes said:

As this is the best time in 50 years to buy homes, Paulson advised his listeners to take 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

Are others also saying now is the time to buy?
Just last week, we posted that there is a growing number of people saying that NOW is the time to buy, including:

§ The Wall Street Journal

§ Professor Karl Case, founder of the Case Shiller House Pricing Index

§ The wealthiest families in the country and

§ 70% of everyone else in America

Bottom Line
Thinking of buying a home? Are you taking advice from a friend or family member telling you that now is not the time? It may be time to listen to people who better understand the opportunities that exist in real estate today.

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Tuesday, October 5, 2010

Judges revisiting foreclosure cases may help owners but clog market later

Judges revisiting foreclosure cases may help owners but clog market
TAMPA, Fla. – Oct. 5, 2010 – On Florida’s west coast, where the housing bust has flooded courts with foreclosure filings, the chief judge of the 6th Judicial Circuit has little sympathy for lenders who have routinely submitted flawed and possibly fraudulent foreclosure cases.

J. Thomas McGrady, whose jurisdiction includes two hard-hit counties with more than 1 million people in the Tampa area, said Monday that foreclosures based on improper paperwork should be tossed out.

Judges “are going to have to vacate that judgment and start over again,” he said.

Across the country, judges facing pressure from homeowners and their attorneys are beginning to reexamine old cases and dismiss pending ones. The trend could lead to overturned evictions, and it could stall foreclosure cases for years and scare away buyers of millions of seized properties clogging the real estate market.

“We’ve never been inundated to this extent with this number of cases alleging fraudulent paperwork,” said Peter D. Blanc, chief judge of the 15th Judicial Circuit Court, in West Palm Beach. “We’re in new territory, and we’re struggling to determine what the proper solution is.”

Judges nationwide have broad latitude in deciding whether to accept new paperwork and whether to charge the lenders with fraud for submitting problematic documents in the first place.

Even before three of the nation’s largest lenders – Bank of America, J.P. Morgan Chase and Ally Financial – announced moratoriums on foreclosures in the 23 states that require a court order to evict a borrower from a home, some judges were beginning to push back against banks with sloppy or fraudulent filings.

The lenders have acknowledged that a handful of employees signing off on hundreds of thousands of files may not have read them, but they have insisted that the problem amounts to a technical issue that can be fixed easily by replacing old documents with new ones. They say that the facts proving that borrowers missed their payments are sound and that the procedural errors might delay foreclosures but won’t change the outcome.

As the situation in Florida shows, it’s unlikely to wind up so simple.

Armies of consumer attorneys and homeowners are seizing on the paperwork issues to try to protect individual homes from foreclosure and bring into question the legitimacy of the millions of foreclosures undertaken since the housing crisis began in 2007.

The recent moratoriums have made life easier for people such as Michael Gaier, a Philadelphia lawyer who has taken on 130 clients hoping to fight their foreclosures.

Before, he said, judges churning through foreclosure cases tended “to roll their eyes, because they’ve heard every story in the book,” he said. But now, “I don’t have to convince them on my own. I don’t have to start from scratch,” he said, because the moratoriums show that the banks “know that something is wrong.”

Gaier and other lawyers say they have been flooded with calls from new clients who had lost hope of keeping their homes but now see an opportunity to stay. In addition, homeowners who had been complaining of flawed or forged paperwork for years feel they are finally getting traction.

“My reaction is, it’s about time. In the past, people thought we were crazy; the judges laughed at us. Now everyone knows there is a serious problem,” said Denise McMillan, 51, who was evicted from her four-bedroom home in Pikesville, Md., in July and has been coordinating online with others fighting foreclosure.

The collective decisions of judges across the country could turn a foreclosure slowdown into a far larger mess if they determine that homes were wrongly seized and resold by lenders. Foreclosed homes accounted for nearly one-fourth of all residential sales in the second quarter, according to a report by RealtyTrac released last week.

That possibility already is driving away potential buyers of bank-owned properties who don’t want to get caught in legal battles between banks and borrowers. At least one company that provides title insurance, Old Republic Title, has refused to work on homes foreclosed by Ally’s GMAC mortgage unit.

Travis John, a broker in central Florida who specializes in distressed sales, said buyers in recent weeks have seen the headlines about problems in the foreclosure process and have shied away.

“If buyers continue to have this fear – if we have even 30 percent less sales – that would be traumatic,” he said. “We’re already in a traumatic market.”

Across Florida, which has the most foreclosure filings of any state, mortgage companies are already submitting formal requests to judges for the withdrawal of documents that they say were “not properly verified.”

Such actions show that the flawed paperwork is “a serious problem,” said veteran circuit court judge Lynn Tepper, who has presided over foreclosure cases in Pasco County, north of Tampa.

“They’ve conceded that the affidavit is flawed,” Tepper said. That means the judgment based on the affidavit must have been problematic as well – and that the decisions should be reversed.

Tepper sent a chill through law firms working for lenders this spring when she threw out a request for a foreclosure and ruled that U.S. Bank perpetrated fraud by submitting backdated documents that purported to show the lender owning the loan at the time of the foreclosure.

The homeowner, Ernest E. Harpster, got his home back despite the fact that he owed $190,000 on the loan. Tepper also ruled that U.S. Bank could not refile the case.

These days, Tepper is plodding slowly through the pending cases, looking closely at signatures and notarizations, making sure the names and numbers look accurate and legitimate.

“You have to be careful,” she said. “It used to be such a pro forma thing; it was a no-brainer. That’s surely not the case now.”

Copyright © 2010

Thursday, September 30, 2010

How Much Lower Can Mortgage Rates Go?

Something to keep in mind as the resurrection of the real estate market kicks into gear- and hopefully sooner rather than later. This might be the time to buy and get in when you can get interest rates at their historic lows. Timing the mortgage rates may be a tough task. Here is a little information from Elizabeth Martinez in Miami to give you some food for thought. Log on to my website to see the latest foreclosure properties in the Keys at Rhonda

How much lower can mortgage rates go?
Top News
Wednesday, 29 September 2010 17:52
By Elizabeth Martinez

Miami, FL- Just last week, reports from Freddie Mac's weekly survey showed that rates were averaging 4.37%. Rates on 30-year fixed-rate mortgages have dropped more than a percentage point since June 2009. With mortgage rates dropping like this, and the financial situation showing no improvement yet, many have started to wonder how low mortgage rates can really go.

Some analysts in the mortgage industry suggest that mortgage rates could keep going down in the direction of 0%. Rates will receive additional pressure as the Federal Reserve recently indicated that it is willing to take extraordinary steps to keep the economy growing.

"So long as the Fed allows the word 'deflation' to get bandied about, mortgage rates will ease lower," said Dan Green, a loan officer with Waterstone Mortgage in Cincinnati.
It is not unreasonable to say that mortgage rates could keep declining from their current level. Even two years ago when mortgage rates were much higher, very few would have believed that mortgage rates could get down as low as they are now. So, it is very likely due to the current situation that mortgage rates could continue moving down.

"In theory, the only stopping point is 0%—that's where all nominal interest rates have to stop," said Mike Larson, real-estate analyst for Weiss Research.

Larson said that a 0% mortgage could be compared to the 0% financing that has been in place for a long time in the auto industry. In addition, home builders also have been known to pay down mortgage rates for their clients. So, introducing lower rates than the ones we have right now wouldn’t be completely unheard of, at least for a period of time, explains Larson.

“But mortgages are different from car loans. Do I think we will see [0% mortgages] in our lifetimes? No, I don't," he said.

Furthermore, it is not very clear how a 0% mortgage could be funded. Jim Sahnger, a mortgage planner with Palm Beach Financial Network said that in essence, to fund a 0% mortgage, the investor would get a negative return—"unless there were significant fees on the front to compensate for costs to originate, deliver, default, etc."
Although unlikely, if rates do fall to or near 0%, this could bring more first-time home buyers to seek out extremely favorable financing for a house, Mr. Sahnger said. If you get more buyers in the mix, the demand for homes could kick up, thus helping home prices rise, he said.

Assuming that the 0% scenario is possible, the issue will come up with the eligibility for this type of mortgage rates. Eligibility would become an issue as the number of homeowners who are underwater on their mortgages has increased greatly. In addition, borrowers need income and a good credit score to be eligible for a mortgage. Recent studies from Zillow Mortgage Marketplace found that nearly one-third of Americans are unlikely to qualify for a mortgage due to their low credit score. Furthermore, only 47% of Americans qualify for the best rates (these are borrowers with credit scores of 720 or higher).

Because of the difficulty eligibility just mentioned, without the help of a government program, many of those homeowners are not able to refinance.

"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home-value declines, homes are more affordable than we've seen for years," said Stan Humphries, Zillow's chief economist. "But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all."

Wednesday, September 29, 2010

Home Prices Might Rise Sooner than you think!

I found this on the web and thought it was interesting enough to add to my blog about prices for home sales in the next few years....

Why Home Prices Might Rise Sooner That You Think
Published on Friday, September 17, 2010, 2:50 PM Last Update: 5 day(s) ago by James Crumbaugh III

I have been arguing that home prices will come back faster and stronger than anyone thinks. I have been making the case for this idea for some time now. I know most everyone thinks I’m out of my mind, including a close friend in the business who we had dinner with the other night.

I’ve been making this argument because I see a serious inventory situation shaping up in this country, and when there is no inventory to buy, prices skyrocket.

I’ve heard every argument - why I’m a fool, a moron, an idiot, my crystal ball has holes in it, and it’s Bush’s fault.

However, with all that said, let me give you another part of my argument of why I see the home values returning faster than anyone imagined – if we ever get Washington in order again and if we get our economy righted.

Today, I read an article that I have read dozens of variations of over the last three years. The article discussed how many homeowners are under water on their mortgages. We are talking about 4.1 million homeowners who are underwater. These are homeowners, for the most part, who aren’t in foreclosure and are making every effort to stay in their homes, with the plan of not moving, and knowing that someday they will have their mortgages paid off.

This is another reason I see the values returning. The sellers can’t sell these homes because they aren’t at this time worth what a homeowner would have to sell for to pay off their mortgage and have enough left over to buy another home. As a result this adds to the inventory shortage.

Also today, I read an article which stated that August 2010 had the highest number of home foreclosures ever in a given month. However, the banks are going to release these homes to the market slowly for the same reason I’ve been discussing. They know that an inventory shortage will cause home values to rise. The banks want to also see an inventory shortage knowing what I know. Prices will rise. This also adds to the inventory shortage.

I read another article today about a community in Southern California where the inventory is between 2 months and 3 months. And Surprise-Surprise, they saw homes values rise 11.4 % this year.

I guarantee you; I did not fall and hit my head. I’m not smoking anything funny, and I’m not blaming President Bush.

This economy will turn around. We will fix Washington, or vote all the bums out, and when we do turn this economy around, I would not be surprised if we weren’t down to a 2 or 3 month inventory in every desirable location in this country.

Only time will tell if I’m the biggest crack pot in this industry. So I ask you to watch this industry for the next two years. If we start seeing a 5% growth rate in this country, if we start getting the country’s debt under control, or at least not add any new debt, we will see the confidence factor for our country go up. When that happens, we will see people buying homes and second homes again, and when that happens we will see the inventory shortage become the next hot story, which in turn will create a demand. In our company, close to 50% of all buyer controlled sales are being bought with cash.

All of this portends a good time for our industry in the not-so-distant future.

Please don’t shoot the messenger.

James A. Crumbaugh III is CEO of Allison James Estates and Homes, a National Internet Based Real Estate Brokerage. You may reach Mr. Crumbaugh at