ChoiceOne Real Estate Blog

Just Listed! 5820 SW 117 ST Coral Gables, FL 33156
August 15th, 2009 6:49 PM
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$1,149,000.00
5820 SW 117 ST

Coral Gables, FL 33156

Beds: 4.0 Rooms: 0
Baths: 3.00 Sq. Ft.: 3255.00
Garage: 2.0 Built: 1967
 
Pine Bay Estates located in Coral Gables with Pinecrest Schools. Exceptional property located in a walled community with FHP Security. Beautifully remodeled home that features wood floors, crown moldings, high baseboards, updated maple kitchen, granite counters, stainless steel appliances, marble baths, large living & family room with formal dining room. This is a split bedroom plan and well landscaped
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ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Posted by Marcos Fullana on August 15th, 2009 6:49 PMPost a Comment (0)

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July new U.S. home sales up 9.6 percent
August 27th, 2009 11:56 AM


Sales of new U.S. homes surged 9.6 percent in July, another sign the housing market is climbing back from the historic bottom it reached early this year. The monthly increase was greater than expected and the fourth in a row and it was spurred by a decrease in the price of homes.

The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000. Sales are now up more than 30 percent from the bottom in January, but are still off from the frenzied peak four years ago.

The median sales price of $210,100, however, was down slightly from $210,400 in June and was off 11.5 percent from year-ago levels. Prices are still up from March’s low of $205,100.

Last month’s sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 390,000 units.

In an effect similar to the government’s “Cash for Clunkers” program to stimulate auto sales, homebuyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000, for first-time owners. Home sales must be completed by the end of November for buyers to qualify.

Builders and real estate agents are pressing Congress for that credit to be extended. If it isn’t, sales could reverse their upward trend. But still, the economy is healthier now, so sales are unlikely to fall back to the lows of last winter, even if the credit is discontinued, said Wells Fargo economist Adam York,

“People don’t have the sense of panic and dread,” about their futures, he said.

As sales rise, that’s likely to make builders more confident about getting going on new projects, and that’s likely to eventually lead to more jobs in the construction industry, which has been hurt badly by the recession.

“These are crucial elements of a sustainable recovery,” David Resler, chief economist at Nomura Securities, wrote in a research note.

Each new home built creates, on average, the equivalent of three jobs lasting one year and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

There were 271,000 new homes for sale at the end of July, down more than 3 percent from May. At the current sales pace, that represents 7.5 months of supply – the lowest since April 2007. The decline means builders have scaled back construction to the point where supply and demand are coming into balance.

AP LogoCopyright © 2009 The Associated Press, Alan Zibel, AP real estate writer.
Posted by Marcos Fullana on August 27th, 2009 11:56 AMPost a Comment (0)

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Bulk buyers swarm Florida’s overbuilt condominiums
August 27th, 2009 11:55 AM

Investors are swooping into distressed condominium markets from New York to Las Vegas, with Miami considered ground zero for the trend. The city has more unsold condo units than anywhere else in the country – as many as 10,000 held by developers alone. The glut of unsold inventory is attracting speculators to the area, as is Miami’s growing popularity among the global set.

Since June, five major bulk transactions have closed in South Florida; a total of 10 – encompassing more than 600 units – have closed since July 2008; and several more deals are in the pipeline. Meanwhile, additional deals for multiple units have been carried out via foreclosure auctions.

Despite the draw, bulk investing has not emerged to the extent that analysts had predicted. In fact, more and more individual buyers are driving the transactions. The reason is that while bulk sales can yield discounts of as much as 25 percent off of already-reduced prices, developers and lenders are not lowering the prices enough to bring in all-cash buyers in high numbers.

The prices are low enough, however, to catch the interest of a growing pool of regular home buyers.

Source: Market?Investor’s Business Daily (08/21/09) P. A5; Alva, Marilyn

© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
Posted by Marcos Fullana on August 27th, 2009 11:55 AMPost a Comment (0)

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Just Listed! 15225 SW 210 ST Miami, FL 33187
August 15th, 2009 6:20 PM
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$795,000.00
15225 SW 210 ST

Miami, FL 33187

Beds: 4.0 Rooms: 0
Baths: 3.00 Sq. Ft.: 0
Garage: 2.0 Built: 2005
 
Make your offer! Beautiful Esat Redland location, close enought to shopping and highways but enjoy the beautiful, peaceful country living! Mahogany and grantite kitchen, porcelain tiles. All baths are travertine marble. Palm nursery, most inventory to stay. Ag building in back gives additional 2100 sq.ft. to convert to guest house. Numerous upgrades with exceed Dade County Building Codes. Great for farm, horses whatever ag business your heart desires!
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ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Just Listed! 3090 Lime Ct Coconut Grove, FL 33133
August 15th, 2009 6:03 PM
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$449,425.00
3090 Lime Ct

Coconut Grove, FL 33133

Beds: 3.0 Rooms: 0
Baths: 2.00 Sq. Ft.: 1847.00
Garage: 1.0 Built: 2005
 
Relax & enjoy, you can do it all! Charming & immaculate 3, 2.5 townhome nestled on a quiet street a few blocks from the heart of Coconut Grove. This home offers an inviting open floor plan with marble floors, granite kitchen & bath countertops, stainless steel appliances, indoor laundry, large bedrooms with balconies, walk-in Calif. closets, accordion shutters, & oversize garage. So, come home and relax, or just go for a walk! Parks, restaurants, shops & movies, just an easy distance away, welc
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ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Just Listed! 13916 SW 278 LN Homestead, FL 33032
August 15th, 2009 5:20 PM
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$150,000.00
13916 SW 278 LN

Homestead, FL 33032

Beds: 3.0 Rooms: 0
Baths: 2.00 Sq. Ft.: 0
Garage: 2.0 Built: 2005
 
Fantastic like new condition! Recently built home is being offered on a short sale. Be the first to see the beautiful kitchen, tile floors & nice carpet upstairs. All appliances inc., clubhouse with a pool, maint. Includes cable, internet & security alarm. The home was built by D.R. Horton & located near the Homestead Air Reserve Base, Homestead Miami Speedway & near the gateway to the Fl. Keys. Located in the Naranja Charrette which is a planned community with Varying Types of housing & busines
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Marcos Fullana
ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Posted by Marcos Fullana on August 15th, 2009 5:20 PMPost a Comment (0)

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Just Listed! 19900 SW 118 PL Miami, FL 33177
August 15th, 2009 5:06 PM
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$140,000.00
19900 SW 118 PL

Miami, FL 33177

Beds: 4.0 Rooms: 0
Baths: 2.00 Sq. Ft.: 1965.00
Garage: 1.0 Built: 1965
 
Tenant Occupied month to month. Short Sale APPROVED at $160 though BPO was less and new sales warrant lower price! Want a fast closing? This is your home! House needs a little work. Great price for large home. No conversions...truly a 4/2 with a 1-car garage. Convenient to transportation, Schools and Shopping. One of the best deals in this neighborhood!
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ChoiceOne GMAC Real Estate
7863858342
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Just Listed! 2518 SE 19 PL Homestead, FL 33035
August 15th, 2009 4:04 PM
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$78,888.00
2518 SE 19 PL
#201-B
Homestead, FL 33035

Beds: 2.0 Rooms: 0
Baths: 2.00 Sq. Ft.: 1040.00
Garage: 0 Built: 1989
 
Beautiful lake front corner unit. Second floor, screened patio, wood and tile floors. New hot water heater and many upgrades. You will love the multimillion dollar club house, pool and workout room. This is one of the nicest units you will see. Easy to see & show.
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ChoiceOne GMAC Real Estate
7863858342
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Just Listed! 17304 Walker Ave Miami, FL 33157
August 15th, 2009 3:52 PM
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$39,900.00
17304 Walker Ave
#127
Miami, FL 33157

Beds: 0 Rooms: 0
Baths: 1.00 Sq. Ft.: 513.00
Garage: 0 Built: 1998
 
Seller wants action. Also willing to lease. 2 units available next to each other on an end together. Will sell or lease combined at savings to you! May also consider owner financing for the right buyer! Bring your offer!!!
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Marcos Fullana
ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Just Listed! 17241 SW 285 ST Homestead, FL 33031
August 15th, 2009 3:11 PM
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$1,900.00
17241 SW 285 ST

Homestead, FL 33031

Beds: 4.0 Rooms: 0
Baths: 2.00 Sq. Ft.: 2355.00
Garage: 2.0 Built: 2004
 
Redland home builders 1/2 acre. Split bedroom plan & wood floors in the bedrooms. Beautiful kitchen, family room, formal living and dining. Screened & roofed patio across the entire back of the house. Has a beautiful landscaped yard. Best location, near Krome Ave with easy access to Florida Turnpike. Near schools, shopping, Homestead Miami Speedway, Homestead Sports Complex and Florida Keys. Easy to see and everything to like.
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ChoiceOne GMAC Real Estate
7863858342
www.choiceonegmac.com
 
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Just Listed! 2272 NE 42 Circle Homestead, FL 33033
August 15th, 2009 2:42 PM
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$1,350.00
2272 NE 42 Circle

Homestead, FL 33033

Beds: 3.0 Rooms: 0
Baths: 3.00 Sq. Ft.: 1428.00
Garage: 0 Built: 2004
 
This 3/3 townhouse is in Marbella Cove at Waterstone. Located in a gated community & upgraded with a designed kitchen & pantry. This home is tiled downstairs with a private 1/1 (perfect for in-laws) upstairs carpeted 2/2 masters. Also features a nice sized backyard for entertaining & community offers 24 hr security. Amenities offer private clubhouse with fitness center, meeting room, lounge area, bike trail, pool & play area. Close to mall, schools, Hospital & minutes to Fl. Keys. Also available
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ChoiceOne GMAC Real Estate
7863858342
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Just Listed! 7310 SW 82 ST Miami, FL 33143
August 15th, 2009 2:14 PM
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$1,100.00
7310 SW 82 ST
#A217
Miami, FL 33143

Beds: 1.0 Rooms: 0
Baths: 1.00 Sq. Ft.: 635.00
Garage: 0 Built: 1968
 
Available for less than 1 year! Fully furnished. Perfect for visiting professor, student, executive. Walk to Dadeland Mall and Metrorail. Convenient to all shopping U of M and South Miami/Sunset. Nothing to bring but your clothes! Call for more information.
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Looking to Buy a Foreclosed or Short Sale Home at a Discount?
August 15th, 2009 1:25 PM

 

When Buying a foreclosed or short sale home for a discount Research, Patience and the Right Broker Are Keys to Success

Cutler Bay, Florida (Grassroots Newswire) August 15,2009 -- With record numbers of foreclosed and short sale homes on the market and banks eager to get them off their books, home buyers looking for a deal in Cutler Bay need to be aware of the intricacies of this type of transaction, according to Marcos Fullana of ChoiceOne GMAC Real Estate based in Cutler Bay.

"Although there are great sources for information on foreclosed homes consumers can pay for, the reality is you can get in-depth information on foreclosures for free - just by contacting a local real estate broker whose agents specialize in this type of transaction," said Fullana.

According to Fullana, foreclosures and short sales can certainly provide discounts of as much as 30 percent to 40 percent below market (more realistic is around 5 percent to 10 percent). However, the nuances inherent to the foreclosure process can prove challenging for consumers unless they are willing to put in the required research and preparation.

"Buying a foreclosure or a short sale absolutely takes some research and education combined with patience and persistence. But for those willing to try their hand at these types of transaction, the upside and return on investment can be significant," said Fullana.

Fullana offers four key tips to consider when buying a foreclosure or a short sale:

  • Be patient. Many banks are currently overwhelmed by the unprecedented volume of foreclosed or short sale properties, and it is not uncommon for some to take 60 to 90 days to decide which offer to accept.
  • Ask your broker or agent to find out how long the foreclosed home has been on the market. If it’s been 30 days or more, banks may be more flexible with the price to get the property sold; on the flip side, if the home has only been on the market a few days, banks will likely be unwilling to reduce its price immediately, or at least by very much, until they see what types of offers they might receive.
  • Pay for a professional home inspection. This is a good idea no matter what type of home you buy, but it is especially important when buying a foreclosed home. In most cases, banks sell foreclosed homes "as is," meaning the costs of any necessary repairs, large and small, are solely the buyer’s responsibility. If the home has been vacant for more than a few weeks, negotiate and make sure the utilities have been turned on for the inspection and before you close on the home.
  • Real estate owned (REO) or bank-owned properties are often the most straightforward type of foreclosure transactions since there’s little risk, no liens and likely no back taxes to pay since these properties have a clear title and are owned by the bank.

For information on foreclosures in Cutler Bay, contact ChoiceOne GMAC Real Estate, located at 18400 Franjo Rd. Cutler Bay, FL 33157 at (305) 252-1567. Additional information on homes for sale in Cutler Bay, Palmetto Bay and Pinecrest can be found at www.choiceonegmac.com.

Posted by Marcos Fullana on August 15th, 2009 1:25 PMPost a Comment (0)

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Foreclosures rise 7 percent in July from June
August 13th, 2009 4:21 PM


The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice, such as a notice of default or trustee’s sale. That’s the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

Banks repossessed more than 87,000 homes in July, up from about 79,000 homes a month earlier.

Nevada had the nation’s highest foreclosure rate for the 31st-straight month, followed by California, Arizona, Florida and Utah. Rounding out the top 10 were Idaho, Georgia, Illinois, Colorado and Oregon. Among cities, Las Vegas had the highest rate, followed by the California cities of Stockton and Modesto.

While there have been numerous recent signs that the ailing U.S. housing market is finally stabilizing after three years of plunging prices, foreclosures remain a big concern. Foreclosures are typically sold at a deep discount, hurting neighbors’ home values.

The mortgage industry has been slow to adapt to the surge in foreclosures. Many lenders have needed government prodding to get up to speed with the Obama administration’s plan to stem foreclosures.

The Treasury Department said last week that banks have extended only 400,000 offers to 2.7 million eligible borrowers who are more than two months behind on their payments. More than 235,000, or 9 percent, those borrowers have enrolled in three-month trials in which their monthly payments are reduced.

“The volume of loans that are in distress simply overwhelms” those efforts, said Rick Sharga, RealtyTrac’s senior vice president for marketing.

AP Logo Copyright © 2009 The Associated Press, Alan Zibel (AP real estate writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Posted by Marcos Fullana on August 13th, 2009 4:21 PMPost a Comment (0)

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Fed says economy leveling, new indicators released
August 13th, 2009 4:21 PM

The Federal Reserve said the U.S. economy may be “leveling out” as it held interest rates at record lows, while the weekly jobless claims to be released Thursday may give another sign of whether the recession is nearing an end.

Meanwhile, retail sales are likely to show an improvement in consumer spending, helped by the Cash for Clunkers auto sales program. Economists, however, do not believe consumer spending will look as strong excluding auto sales.

The Fed delivered a vote of confidence in the economy Wednesday, saying it would slow the pace of an emergency rescue program to buy $300 billion worth of Treasury securities and shut it down at the end of October, a month later than previously scheduled.

It also held interest rates steady, with a closely watched bank lending rate near zero, and again pledged to keep them there for “an extended period” to nurture an anticipated recovery.

Fed Chairman Ben Bernanke and his colleagues said the economy appeared to be “leveling out” – a considerable upgrade from their last meeting in June, when the Fed observed only that the economy’s contraction was slowing.

“We’re no longer at DEFCON 1,” said Richard Yamarone, economist at Argus Research, referring to the defense term used to indicate being under siege. “The Fed is pulling in some of its life preservers now that the economy is no longer sinking.”

The more optimistic tone lifted Wall Street on Wednesday. The Dow Jones industrials gained about 120 points, or 1.3 percent, to close above 9,360 – near their highest level since the market bottomed out in early March. Ahead of the opening bell Thursday morning, Dow Jones industrial average futures rose 96, or 1 percent, to 9,415.

The Treasury-buying program has bought $253 billion of the securities so far. The program is designed to force interest rates down for mortgages and other consumer debt and spur Americans to spend more money.

The program’s effectiveness has been questioned on both Wall Street and Capitol Hill, with critics saying it looks like the Fed is printing money to pay for the U.S. government’s spending binge.

As the Fed winds down the program, rates on government debt might edge higher, economists said. But the Fed appeared to feel sufficiently secure that higher rates would not jeopardize a recovery, they said.

Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi, viewed it as a “vote of confidence that credit markets and the economic outlook have improved and will show even further improvement down the road.”

The Fed left the target range for its bank lending rate at zero to 0.25 percent. And economists think it will stay there through the rest of this year. The rationale: Super-cheap lending will lead Americans to spend more, which will support the economy.

Reports last week from the major U.S. chain stores indicated that shoppers remained tightfisted in July as households struggle with continued job layoffs and the nation’s longest recession since World War II.

Retail sales are considered a strong indicator of economic recovery because consumer spending accounts for more than two-thirds of all economic activity. It is widely believed spending needs to improve to help end the ongoing recession.

A big concern now is whether worried consumers will cut back on their back-to-school purchases in coming weeks and their holiday shopping later this year.

Economists surveyed by Thomson Reuters predict that retail sales rose 0.7 percent last month after a 0.6 percent increase in June. However, the consensus view is that retail sales, excluding autos, will show a modest 0.1 percent increase, weaker than the 0.3 percent gain in June.

The Cash for Clunkers program, which gives people trading in certain types of vehicles up to $4,500 if they increase their mileage by at least 5-10 mpg, has proven popular, helping to boost unit sales of light vehicles in July to the highest level since last September.

Further job losses, sluggish income growth, hits to wealth from falling home values and still-hard-to-get credit could make Americans cautious in the months ahead, the Fed said.

While unemployment dipped to 9.4 percent in July, the Fed says it’s likely to top 10 percent this year because companies are in no rush to hire.

Wall Street economists expect the number of newly laid-off workers filing applications for unemployment benefits fell slightly last week as companies cut fewer jobs.

A Labor Department report is projected to show new unemployment insurance claims fell to a seasonally adjusted 545,000 from 550,000, according to economists surveyed by Thomson Reuters.

AP Logo Copyright © 2009 The Associated Press, Jeannine Aversa, AP economics writer.
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Fed likely to keep key interest rate at record low
August 10th, 2009 11:35 AM


With the economy strengthening but still fragile, Federal Reserve policymakers are expected to hold a key lending rate at a record low this week and will weigh whether to extend some programs that were created to ease the financial crisis.

Fed Chairman Ben Bernanke and his colleagues also are likely to signal that while the recession is winding down, the pain isn’t over.

Though the unemployment rate dipped to 9.4 percent in July – its first drop in 15 months – economists predict it will start climbing again. Many, including people in the Obama administration and at the Fed, say it could still top 10 percent this year.

For months, consumers have pulled back on spending and borrowing. To try to stimulate economic activity, Fed policymakers are all but certain to keep the target range for its bank lending rate between zero and 0.25 percent at the end of their two-day meeting Wednesday.

That means commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25 percent, the lowest rate in decades.

Fed policymakers also will probably pledge anew to keep rates there for “an extended period,” which economists interpret to mean through the rest of the year and into part of 2010.

“We’re doing everything we can to support the economy,” Bernanke said recently. “We will try to get through this process. It’s going to take some patience.”

By holding rates so low, the Fed hopes to induce consumers and businesses to boost spending, even though banks are still being stingy about extending credit.

“The Fed will be guardedly optimistic,” said Brian Bethune, economist at IHS Global Insight. “We’re seeing initial signs of the economy moving toward recovery ... (but) the underlying fundamentals are still weak.”

With numerous signs that the recession is finally ending and financial stresses easing, the Fed will consider whether some rescue programs should continue. Any such decisions, though, might not come at this week’s meeting.

One such program, aimed at driving down interest rates on mortgages and other consumer debt, involves buying U.S. Treasuries. The central bank is on track to buy $300 billion worth of Treasury bonds by the fall; it has bought $236 billion so far.

Another program, the Term Asset-Backed Securities Loan Facility, or TALF, is intended to spark lending to consumers and small businesses. It got off to a slow start in March and is slated to shut down at the end of December. Despite this program, many people are still having trouble getting loans, analysts say.

The Fed isn’t expected to launch any new revival efforts or change another existing program that aims to push down mortgage rates. In that venture, the Fed is on track to buy $1.25 trillion worth of securities issued by mortgage finance companies Fannie Mae and Freddie Mac by the end of the year. The central bank’s recent purchases have averaged $542.8 billion.

In the meantime, the economy has shown clear signs of improvement. Employers cut only 247,000 jobs in July, the fewest in a year, the government said Friday. Wages and workers’ hours also nudged up – encouraging signs that companies no longer see the need for drastic cost-cutting. Those developments could deliver a psychological boost to both companies and consumers.

The economy in the second quarter contracted at a pace of just 1 percent, suggesting that the recession, which started in December 2007, is ending.

That dip came after a dizzying free-fall in the first three months of this year. The economy had plunged at an annual rate of 6.4 percent in the first quarter, the worst showing in nearly three decades.

With the economy improving but still weak, inflation should stay low, the Fed says. Given consumers’ caution, companies won’t have much power to raise prices.

And the weak job market will limit wage growth. Companies aren’t going to feel generous about wages and benefits until they are confident a recovery will last.
AP LogoCopyright © 2009 The Associated Press, Jeannine Aversa, AP economics writer. All rights reserved.
Posted by Marcos Fullana on August 10th, 2009 11:35 AMPost a Comment (0)

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Foreclosure bargains are disappearing
August 10th, 2009 11:34 AM


 

Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

“For every listing that comes out, we have 10 buyers,” says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif. Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

“We had a lot of inventory last summer. Now we’re down to 1,500 listings – from more than 5,000,” Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.

Even in the hard-hit Detroit area, bargains are disappearing.

“For a good house that’s not too beat up in a good neighborhood, there’s no lack of buyers in this market,” says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. “There are a lot fewer of these properties than a year ago, and the super buys get multiple offers.”

Source: CNNMoney.com, Les Christie (08/06/2009)

© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688

Posted by Marcos Fullana on August 10th, 2009 11:34 AMPost a Comment (0)

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IRS cracking down on false tax credit claims
August 7th, 2009 1:32 PM


WASHINGTON – Aug. 7, 2009 – The IRS is cracking down on people who don’t qualify for the first-time homebuyer tax credit but try to claim it anyway.

The IRS says it is investigating 24 cases of people who falsely claimed the first-time homebuyer credit on their federal income tax returns. Getting caught making a false claim carries a penalty of up to three years in jail and a fine of as much as $250,000.

The First-Time Homebuyer Credit, enacted in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser must be someone who has not owned a primary residence in the previous three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse.

The home purchase must close before Dec. 1, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.

Source: The Internal Revenue Service (07/29/2009) and The Boston Globe, Chris Reidy (08/03/2009)

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Banks express hope for fed short-sale effort
August 7th, 2009 1:31 PM


The federal government is launching a program to simplify and speed up the short-sale process by providing standardized documentation, cash incentives to lenders, and a $1,500 moving allowance to borrowers. Holders of second liens will get up to $1,000 to relinquish their claims.

Banks say the short-sale process has been taking so long because both their employees and real estate practitioners are learning as they go.

David Sunlin, vice president in charge of short sales at Bank of America, says he hopes the new government plan will help. “About half of short sales never close. We see it as a big lost opportunity, and we need to improve the rate we close them,” he says.

Wells Fargo says it has cut its short sale average turnaround time from 90 days to 30 days by preparing a guide from real estate practitioners and putting in place procedures to handle short-sale requests.

The federal government first announced its short sales initiative in May at the annual Washington meetings of the National Association of Realtors®.

Source: USA Today, Stephanie Armour (08/05/2009)

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Condo conversions collapse
August 3rd, 2009 12:34 PM


Much of the attention heaped on South Florida’s struggling condominium market has been focused on the sexy, luxury towers that shot up along the coastal waterways. Before the curious eyes of the world, a historic construction boom restyled the skyline in just a few short years. But beyond the waterfront properties and the focus of the national media, in South Florida’s less come-hither heartland – communities such as Kendall, Hialeah and Lauderhill – an even larger wave of condo creation was taking place and bringing rapid change to the housing landscape.

Hundreds of rental buildings, representing tens of thousands of units, were being bought by developers, emptied of renters and turned into condominiums for quick resale, mostly to investors and speculators, as so-called condo conversions. And now that slice of the market is in real trouble.

Since 2003, when housing prices took off, more than 74,000 rental apartments were converted into condominiums in Miami-Dade and Broward counties, twice as many as the previous 50 years combined, according to state records of condo conversion applications. The number compares to roughly 53,000 new units constructed in both counties since 2003, according to research of state records by Condo Vultures, a Bal Harbour-based brokerage and real estate consultancy. As the fallout from the housing collapse continues, the conversion market – largely a collection of aging garden-style complexes and dowdy mid-rise buildings – is shaping up as one of the biggest losers of the downturn.

Most real estate analysts predict it will be the last submarket to recover since it is competing for scarce buyers with the swanky supply of new condos being marketed at cut-rate prices.

“It’s ugly out there. The conversion market is extremely dysfunctional,” said Constantine Scurtis, the Miami-based vice president of The Lynd Co., a large, national apartment management company headquartered in San Antonio. “There were a lot of inexperienced developers that converted product that never should have been converted.”

Extreme example

While almost all condos have faced plunging values, abysmal sales, high foreclosure rates and cash-strapped condo associations since the market took a dive two years ago, condo conversions have all those problems in the extreme, analysts said.

Adding to their woes are aging buildings, developer disputes, high rates of absentee landlords and foreclosures of entire projects.

Median prices for conversions are down by an estimated 60 to 75 percent since peaking. Overall, median home prices have fallen by just over 50 percent in Miami-Dade County and 60 percent in Broward, according to statistics from the Florida Association of Realtors.

Grant Stern, a mortgage consultant in Bay Harbor Islands, who joined partners in converting an apartment building during the boom, estimates that between 10,000 and 20,000 units are severely underwater and at risk of being reverted to rentals.

Vince Yambrovich, for example, paid about $174,000 for a condo at the Mirassou conversion in Northwest Miami-Dade when the market was at its peak. Now similar units are being listed for about $50,000, he said.

“People camped out to buy these places – my family didn’t do that – but several people that are still living here did and they talk with … regret about that experience to be first in line to buy one of these places. Nobody saw this coming,” Yambrovich said.

Investors have begun picking through the distressed projects, looking for high quality complexes whose developers have sold only a few units.

Scurtis says his company has access to a $500 million fund and is actively seeking to acquire bank notes and distressed South Florida conversions that can easily be turned into rentals.

The biggest challenge to so-called conversion reversions is getting lenders to stomach the huge losses, he said. “Some of them cannot take the losses because it will put them out of business,” Scurtis said. “They’ve been frozen like deer in headlights.” Stern said he was arranging financing for a developer looking to buy back 35 units from condo owners for a conversion reversion. Down the road, the idea would be to resell the entire apartment complex when the market recovers.

Renting out the remaining units in one of these “fractured” projects can pose difficulties for developers, especially when high foreclosure rates have left condo associations on the ropes.

Not only is the money coming in from the associations insufficient to keep buildings up, but the tolerance levels of owners and renters also are different. “You are dealing with a lot of homeowners, so you can’t take the place over with your maintenance crews and leasing offices,” Scurtis said.

Relatively forgotten by developers until the early 2000s, conversions were rediscovered as an inexpensive way to provide affordable housing and homeownership to low-paid workers in South Florida’s service and tourism industries.

Cashing in

When both prices and demand began to heat up in 2002, though, the virtues of conversions as quick, easy and profitable investments became clear to astute converters looking to cash in on rising property values and potential buyers’ belief that prices would continue to go up, up and up.

“To convert an apartment into a condo building required a legal declaration, a coat of paint, some new sod and blacktop for the garage, and you had a condo conversion,” said Peter Zalewski, Condo Vultures president. New construction could take two to three years or more to bring to market. Conversions, by comparison, could be turned around in nine to 12 months. The relatively simple process drew a crowd of new condo converters to the field, from doctors and plumbers, to attorneys and mortgage brokers. They pooled their money and dove in. Project financing was ample and ubiquitous.

“The root cause of the condo conversion boom was that residential apartment values were skyrocketing in comparison to the commercial income value of the apartments,” Stern said.

In much the same way that investors were making unsolicited offers to homeowners to purchase their properties, condo conversion companies were making handsome offers to buy apartment complexes from multifamily operators.

“Developers were trying to get as many deals as they could,” said Robert White, a managing director of KW Property Management & Consulting, a Coral Gables-based firm that helped arrange financing for several converters during the boom. It now handles several failed conversion projects for lenders.

Rental depletion

The result, according to analyst Jack McCabe of McCabe Research & Consulting, was “an incredible depletion in the rental apartment pool – in Florida, but especially in Miami.”

The sweep pushed rents up by 14 percent in 2006, McCabe said. “We lost over a third of the apartments to condo converters.”

At the beginning of the craze, developers were buying new apartment buildings for roughly $80,000 to $85,000 a unit, said Adam Cappel, president of Miami-based CondoReports.com, a condo consultancy. As the boom progressed, unit prices skyrocketed to $165,000.

As the best properties were snapped up, developers eventually began turning to older complexes. “Generally, converters were looking for 15 percent [or higher return] on their total development budget. So if the complex cost $40 million to buy and they needed to put in another $10 million in costs, then they would want to project a $7.5 million to $10 million profit beyond those costs,” Cappel said.

Some deals returned more. Others, obviously, ended in bankruptcy and foreclosure when the market turned, Cappel said.

Meanwhile, easy credit made homeowners and investors out of people who had little ability to afford a new condo in the soaring market. Thousands of renters, who may not even have been looking to own, were offered a chance to buy their units.

White, of KW Management, said developers offered renters first dibs on properties slated for conversion. Lenders often set up shop on the premises to peddle payment-option adjustable rate loans and mortgages requiring no proof of income or assets. Enticements included no closing costs and no money down. “Those deals [to renters] were best for developers,” White said. “Often their units wouldn’t need any upgrades. A lot of people wanted their units ‘ as is.’”

Around 25 percent of the renters would end up buying in typical projects, White said.

Easy investment

Other investors and speculators flocked to conversions not only because they were less expensive than new construction but also because developers of the ready-made product required no preconstruction deposits as builders of new condos did.

“For speculators with no financial wherewithal to enter the market, conversions were the way,” Cappel said. Teaser-rate loans allowed them to buy several units, rent them out or flip them as values rose. As conversions opened with grandiose sales events, some developers sold out their units in a matter of hours to buyers who sometimes camped out overnight so they could be among the first purchasers.

By the end of 2005, it was becoming clear to consultants like McCabe that the rate of conversion projects coupled with new condo construction was leading to a serious oversupply. “And, we knew that well over 50 percent of the sales were going to speculators,” McCabe said.

Analysts say the crash of the conversion market came in early 2006. White said instead of one or two deals a week, rather abruptly his company went to handling no deals at all. Units continued to sell for another six months but eventually that, too, slowed to a trickle.

With the pool of buyers evaporating, KW Management, whose job on some projects had been to kick out renters because prices had risen beyond their reach, began a mad scramble to bring renters back in.

Pulling back

Overall, some 16,000 conversions have been pulled back into the rental pool since the market cooled, according to McCabe. The number grows daily.

As the market turned to cinders, buyer incentives such as free granite upgrades and no maintenance fees for two years worked for only a short while. The efforts became, as White put it, “like putting a Band-Aid on a leg that had been cut off.”

When 2008 rolled around, the chips had fallen. Those developers who failed to close their units were trapped in a financial vise.

The market freeze caught many in the midst of project renovation with construction dust still in the air. “They had torn up the units to renovate them. They couldn’t sell them, but they couldn’t rent them. Then, they were in a world of trouble,” White said. Conversion foreclosures have been widespread. White’s company, for example, currently manages 20 foreclosed projects in receivership.

Timing turned out to be crucial. Analysts said most developers who delivered conversions to the market in 2006 are stuck with significant unsold inventory.

Some of those who sold at least half of their units, however, are able to stay afloat by renting out what’s left.

But other developers have simply run out of money. Flameouts range from small, individual converters to Juan Puig of Puig, Inc., one of the first major conversion companies to file for bankruptcy.

Unable to shoulder their share of maintenance fees, these developers typically have projects that are in very bad shape. “Vendors are not being paid; electricity and water are turned off. The garbage is not being picked up. It’s bad. Some are complete disasters,” White said.

While no one is tracking how many condo conversion buildings are in foreclosure or bank-owned, analysts believe it is easily in the hundreds.

Meanwhile, conversion owners like Yambrovich are stuck in quickly deteriorating properties. The Mirassou condo association is receiving demand letters from creditors because high fee delinquencies and foreclosures have made it impossible to pay all the bills.

“I see our situation as being kind of like a renter,” Yambrovich said. “We’ll never sell the place and be able to pay off the mortgage, but we need a place to live right now. So, we’re living – existing here.”

Copyright © 2009 The Miami Herald, Monica Hatcher. Distributed by McClatchy-Tribune Information Services.
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AP analysis: Foreclosures stabilize in key states
August 3rd, 2009 12:34 PM


Even as Americans suffer rising unemployment, foreclosure rates in three states hit hardest by the housing bust – California, Arizona and Florida – stabilized in June, offering hope that the worst of the real estate crisis is over, according to The Associated Press’ monthly analysis of economic stress in more than 3,100 U.S. counties.

The latest results of AP’s Economic Stress Index show foreclosure and bankruptcy rates held steady from May in some states. Yet mounting unemployment is hampering an economic recovery in some regions, especially the Southeast and industrial Midwest.

The AP calculates a score from 1 to 100 based on each county’s unemployment, foreclosure and bankruptcy rates. The higher the score, the higher the economic stress. The average county’s Stress score rose to 10.6 in June, up from 10 in May, mainly because of rising unemployment.

In June 2008, the average county’s Stress score was 6.7. The pain was lower then because the economy was still expanding. In fact, the second quarter of 2008 was the last time the economy grew.

Under a rough rule of thumb, a county is considered stressed when its score zooms past 11. In June, 41 percent of the counties scored 11 or higher, up from 36 percent in May and 34 percent in April. The latest reading was slightly worse than for February and March, when nearly 40 percent of counties met or exceeded that threshold.

The national economy, meanwhile, shrank at a pace of just 1 percent in the second quarter of the year, according to figures released Friday. It was a better-than-expected showing that provided the strongest signal yet that the recession is finally winding down.

In June, foreclosure rates held steady for Arizona, California and Florida at 4.1 percent, 3.5 percent and 3.4 percent, respectively.

“It’s obviously good news to stop the losses,” said Jim Diffley, a regional economist at consulting firm IHS Global Insight.

He cautioned, though, that even as foreclosures level out in some states, they’re doing so “at very high levels.”

Other figures from the past two weeks suggest that the housing market is recovering in many areas.

Nationally, seasonally adjusted home resales in June were up 9 percent from January. New-home sales surged 17 percent in the same period. Construction is up nearly 20 percent since the year began. And prices rose in May for the first time since June 2006.

The housing bust struck first in states such as California, Arizona and Florida, which had seen outsized price increases during the real estate boom.

Now, California’s real estate market, for one, is improving by most measures. Sales increased 20.1 percent in June, and prices rose for the third straight month, according to the California Realtors’ Association.

“It looks like we’re past the peak in foreclosures,” said Steve Goddard, president-elect of the Realtors’ association. “Most bank-owned properties are receiving multiple offers.”

Still, foreclosure rates are rising in other states, such as Nevada, Georgia and Utah. Nationwide, Diffley and many other economists say rising unemployment may push foreclosures higher into next year.

Meanwhile, the sharpest year-to-year rise in bankruptcy rates in June occurred in counties in California and Nevada that have been the epicenter of the housing bust, along with areas of Georgia and Tennessee that tend to have high bankruptcy rates.

Among states, Nevada, Michigan and California showed the most economic distress, with Stress scores of 20.41, 18.34 and 15.78, respectively.

In June, Nevada had the nation’s highest foreclosure rate (7.3 percent) and the fifth-highest unemployment rate (12 percent). Its counties have absorbed some of the sharpest growth in bankruptcy filings this year.

Michigan had the nation’s highest unemployment rate in June (15.2 percent) and the sixth-highest foreclosure rate (2 percent). California also had among the nation’s highest unemployment rates (11.6 percent) and foreclosure rates (3.5 percent).

North Dakota, South Dakota and Nebraska showed the least economic distress in June with Stress scores of 5.23, 5.43 and 6.14, respectively.

The states with the biggest year-to-year change for the worse were Nevada, Oregon and Michigan.

For a third straight month, Imperial County, Calif., topped the list of stressed counties of more than 25,000 residents, with a Stress score of 31. Imperial is among the most impoverished U.S. counties.

It was followed by Merced County, Calif. (25.73), Yuma County, Ariz. (24.56), Yuba County, Calif. (23.76) and Lauderdale County, Tenn. (23.46).

“We’ve had a couple of factory closings which have impacted a lot of our workers – mainly automotive supply parts and printing,” said Leslie Sigman, president of the Bank of Ripley, in western Tennessee’s Lauderdale County.

Riley County, Kan., home to the Army’s Fort Riley and Kansas State University, had the nation’s lowest Stress score in June (4.04) in counties with more than 25,000 residents.

It was followed by Brown County, S.D. (4.07), Brookings County, S.D. (4.12), Ward County, N.D. (4.22) and Burleigh County, N.D. (4.27), home of the state’s capital, Bismarck.

These counties are part of an economic “safe zone” stretching from the Plains to Texas that has been largely shielded from the recession because of high energy and crop prices.

Counties with the biggest year-to-year change for the worse were: Howard County, Ind., Williams County, Ohio, Union County, S.C., Chester County, S.C., and Noble County, Ind. At least a third of the jobs in those counties involve manufacturing.

AP Logo Copyright © 2009 The Associated Press, Mike Schneider and Christopher S. Rugaber. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Welcome to the bottom: Housing begins slow rebound
August 3rd, 2009 12:08 PM


WASHINGTON – Aug. 3, 2009 – It was – note the past tense – the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession’s trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath and exhale. The worst is over.

By every measure, except foreclosures, the housing market has stabilized and many areas are recovering, according to a spate of data released in the past two weeks. Nationwide, home resales in June are up 9 percent from January, on a seasonally adjusted basis. Sales of new homes have climbed 17 percent during the same period. And construction, while still anemic, has risen almost 20 percent since the beginning of the year.

Even home prices, down one third from the top, edged up in May, the first monthly increase since June 2006.

“The freefall is over,” says Dean Baker of the Center for Economic and Policy Research.

The problem is that, Baker, like many economists, expects the housing market will “be bouncing around the bottom” for the second half of the year.

There are also real threats that could poison this budding recovery. The unemployment rate, which is 9.5 percent, is expected to surpass 10 percent, leaving even more homeowners unable to pay their mortgages. Mortgage rates could rise, making homeownership less affordable. And the federal tax credit for first-time homebuyers, which has lured many into the market, is set to expire on Nov. 30.

“As long as jobs are being lost, regardless of all the federal programs out there to help the borrowers, you’re still going to have problems in the housing market,” says Steve Cumbie, executive director of the Center for Real Estate Development at the University of North Carolina’s Kenan-Flagler Business School.

True, but when you’ve got bidding wars for foreclosures in places like Las Vegas, Phoenix and Los Angeles, it’s time to call the bottom.

Northeast

Nobody knows the power of a dollar like New Yorkers.

After a home on Long Island sat on the market for four months recently, the sellers’ real estate agent told them to drop the price from the mid-$600s to $599,000. The house sold the next weekend.

In Merrick, about 30 miles east of New York City, homes are starting to sell “as long as they’re priced right,” the agent said.

In January, with the ground and financial markets still frozen, few would have believed that the worst of the housing crisis in the Northeast would turn around within six months.

But the evidence is clear: home resales in the region in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled.

Even the median sales price of $249,400 in June was up 10 percent from January and was off just 6 percent from year-ago levels, according to the National Association of Realtors.

“We certainly had our share of problems, but overall the severity of what happened here was far less” than what happened elsewhere, says Michael Lynch, an economist with IHS Global Insight.

Pittsburgh has the region’s strongest home market in terms of sales and prices because the city saw less of a housing bubble and the area has 7.7 percent unemployment rate that is below the national rate.

One of the weakest markets, by contrast, was Providence, R.I., where a jobless rate of 12 percent exacerbated the city’s foreclosure crisis. Too many residents took out risky subprime loans they couldn’t afford when the interest rates spiked within a few years. Today, more than one in 10 homeowners with a mortgage in the state is at least one month behind or in foreclosure.

The Northeast, more than any other region, felt the full force of the credit crisis that reshaped Wall Street. Manhattan’s real estate market, long immune from price declines, tanked this year as tens of thousands of people lost their jobs.

Prices of for-sale apartments plunged in the second quarter by the largest amount in decades. Prices have fallen, on average, between 13 and 19 percent, according to four reports published recently by real estate firms.

Northeast states: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont

South

The real estate market in the South remains one of extremes.

On one end, are oil-rich cities in Texas, Arkansas and Oklahoma that nearly skirted the housing recession altogether. Tipping the scale on the other side are foreclosure-ridden areas in Atlanta and swaths in Florida where prices are still falling annually by double digits.

Taken as a whole, home resales in the 17-state region rose 10 percent in the first half of this year on a seasonally adjusted basis, and are off just 4 percent from June of last year, according to the National Association of Realtors.

“Generally speaking, the rate of decrease, both in sales and prices, has started to bottom,” says the University of North Carolina’s Cumbie. “But that doesn’t mean it’s going to come roaring back.”

Mass layoffs at Bank of America and Wachovia, for example, have taken their toll in their home state of North Carolina. Home price declines in Charlotte accelerated this year, and home resales in June were off nearly 30 percent from last year.

Home and apartment construction, a key economic engine, will also vary widely across the region. Parts of the South, notably Florida and Atlanta, were vastly overbuilt during the housing boom. So construction in the region rose a meager 7 percent in the first half of the year, the lowest of the four regions, according to the Commerce Department.

There was little reason for builders to start laying new foundations. New home sales fell 2 percent from January to June, the only region in the country to post a decline.

“In the longer term, I’m confident that the real estate market is going to shift where buyers are coming out not only because of attractive interest rates and low prices, but because more people are getting jobs,” says Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Longwood, Fla. an Orlando suburb. “But, as we speak, it’s not right. It’s going to take more time.”

Southeast states: Alabama, Arkansas, Delaware, D.C., Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia

Midwest

It’s no surprise that the housing market and the auto industry are intertwined in Detroit, though, this is the first time anybody can remember that you can buy a home for less than the price of a new car.

But step out of devastated towns in Michigan, Ohio and Indiana and the housing market in the Midwest is showing some of the strongest signs of recovery in the country.

Thanks to places like the Dakotas, Iowa and Nebraska, the median sales price in the region rose almost 20 percent to an affordable $157,000 in June from January levels.

Sales of new homes jumped almost 38 percent in the first half of the year, which encouraged builders to get out their hammers. Construction, which was at a standstill in some communities, rose 86 percent on a seasonally adjusted basis, which accounts for typical variations in weather and other factors.

“New construction has been a good indicator for us in the past of what the general market is doing,” says Chris Collins, president of the Kansas City Regional Association of Realtors. “Our new market is not what we’ve been used to but it’s substantially better than other parts of the country.”

The home resale market, however, remains weaker than the nation as a whole. That again can be blamed on the economy. The jobless rate in the Midwest is 10.2 percent compared with 9.5 percent nationally. And if you don’t have a job you are not buying a house.

William Strauss, a senior economist for the Federal Reserve Bank of Chicago, cautioned that job cuts are still high in the region, and loss of income is the No. 1 reason homeowners default.

“We never got as bad as (other) states but nonetheless we still took a hit,” he says, and the market remains “soft in the Midwest.”

Midwest states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin

West

For years Las Vegas symbolized the boom, as mile after mile of desert gave way to three-bedroom homes and swimming pools. Then came the crash and it symbolized something else: a decade of speculation and excess.

Now, Las Vegas is one of the hottest housing markets in the region again. This city has always profited from others’ misfortune, and the same can be said of the current housing market.

In Clark County, Nev., home to Sin City, one in every 11 homes had received at least one foreclosure-related notice in June, according to RealtyTrac. The glut of deeply discounted foreclosures has almost doubled sales activity for most of this year.

“In January the market was busy, and since that time, it’s gone a little haywire,” says Brad Snyder, an agent with ZipRealty in Las Vegas. “There’s (sales) activity now that we haven’t seen even since ‘04.”

The situation is similar in California’s Riverside, San Joaquin and San Bernardino counties, where one out of every 14 homes was in foreclosure.

After falling 18 percent in the second half of 2008, monthly home prices were flat in the first half of this year, on a seasonally adjusted basis, according to the National Association of Realtors.

Markets like these have seen a surge this year in all-cash buyers, many of them investors, scooping up the sharply discounted properties. It’s not uncommon to see multiple offers on a single property, and that’s helped slow the rate of price declines a little. The demand also has helped whittle down the inventory of homes for sale to the lowest level since the boom.

“We have seen such a steep decline in supply right now, that when a home comes on the market it’s first day there could be seven or eight or 10 people there in a matter of hours,” Snyder says.

To lure buyers away from foreclosures, homebuilders have slashed prices or are simply tearing down vacant homes. New home sales jumped almost 59 percent in the first half of the year, while construction in these grossly overbuilt markets slid 12 percent.

In the Pacific Northwest and states such as Utah, by contrast, housing markets are on a different timer than the rest of the West. Home sales and values held up better and longer while markets in the Southwest were already in decline. These markets also haven’t seen as many foreclosures wreaking havoc with home prices.

States in the region: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming

AP Logo Copyright © 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Adrian Sainz reported from Miami, Alex Veiga reported from Los Angeles, Daniel Wagner from Washington, and David Twiddy from Kansas City. AP Data Specialist Allen Chen contributed to this report.
Posted by Marcos Fullana on August 3rd, 2009 12:08 PMPost a Comment (0)

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