Florida's Housing Market Gains Momentum in July

Florida’s housing market gained momentum in July, with more closed sales, more pending sales, higher median prices and a shrinking inventory of homes for sale, according to the latest housing data released by Florida Realtors®.

“We’re seeing double-digit gains in statewide closed sales, new listings, pending sales and higher median prices,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “And these increases are happening in both the single-family and the townhome-condo markets. July marks the 19th consecutive month that we’ve seen the statewide single-family home median sales price increase year-over-year. Florida’s housing market is growing and that’s good news for our economy.”

Statewide closed sales of existing single-family homes totaled 21,238 in July, up 20.9 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Read more at Florida Realtors

Declining Shadow Inventories Help Housing Recovery

Shadow inventories posted the largest quarter-over-quarter decline since the housing crisis began, and dropped 23 percent year-over-year, according to Compass Point Research & Trading.

Shadow inventories — homes at risk of default that have yet to hit the market — once posed a big threat to the housing recovery. At its peak in March 2010, shadow inventory was at about 5.5 million loans, according to data compiled by the Mortgage Bankers Association and Bloomberg. For the second quarter of 2013, shadow inventory has fallen to 2.99 million.

In comparison, shadow inventory loans totaled about 800,000 in March 2000—considered a more normal average.

There has been a large decline in 90-day-plus past due loans, which has helped lead to the drop in shadow inventories. Also helping to lower shadow inventories is the rise in home prices, lower unemployment rates, the higher number of loan modifications, and tightening of underwriting standards that has led to an improvement in mortgage credit quality, economists note.

“The shadow inventory is quickly being worked off and is no longer a significant weight on the housing market in most parts of the country. The key exceptions would be pockets in Florida, parts of the Midwest, and the middle Atlantic,” says Mark Zandi, Moody’s Analytics chief economist.

The decline is expected to continue as more home owners stay current on their loans.

Source: “Shadow Inventory Decline Begins to Accelerate,” HousingWire (Aug. 23, 2013)

Don't Buy A House Without Checking These 5 Things

Home buyers need to be extra vigilant about inspections in the early stages of a purchase because if problems are discovered too late in the process, it can "dash home owners' dreams and budgets," writes Yahoo! Finance in a recent article.

One home buyer in Long Island, N.Y., explains in the story that she didn't discover the fixer-upper she bought needed $225,000 in repairs until after she purchased it.

Jonathan and Drew Scott, who educate viewers about transforming fixer-uppers on HGTV's "Property Brothers," offers up a checklist of five things buyers should look for to ensure they don’t buy a lemon. 

• Mold: Buyers should note any musty smells in the home and be on the lookout for any mold. Mold can be caused by improper air circulation as well as water leaks. 
• Pests: Termite damage can be widespread and costly to repair. 
• Outdated fixtures and wiring: Electrical problems in a home can cause fire hazards. Buyers should take note of any indication of faulty wiring, such as cable coming out of drywall. 
• Poor DIY jobs: Buyers should make sure that the previous home owner's do-it-yourself projects were done correctly and are up to code. For example, poorly done flooring and painted-over wallpaper can be time-consuming and costly to fix. 
• Drainage problems: Sloping sod can cause flooding problems in a backyard, and a slow-draining sink could be an indication of a bigger problem. Buyers should test sinks and flush toilets to test for any potential problems. 

Source: “Property Brothers: Don’t Buy a House Without Checking These 5 Things,” Yahoo! Finance (Aug. 19, 2013)

House Prices Up 7.7% for Year Through June

U.S. house prices rose 7.7 percent in the year through June, extending a recovery that’s spurring more homeowners to list their properties for sale.

Prices climbed 0.7 percent on a seasonally adjusted basis from May, the Federal Housing Finance Agency (FHFA) said today in a report from Washington. The average economist estimate was for a 0.6 percent gain, according to data compiled by Bloomberg.

Price increases are drawing more sellers to a market where a tight supply of homes has pushed up values, said Paul Diggle, property economist at Capital Economics Ltd. in London. The inventory of unsold homes was a seasonally adjusted 5 months in June, up from 4.7 months in January, according to data from the National Association of Realtors.

“The current big gains in prices are temporary and they reflect the bounce from the bottom,” Diggle said in a telephone interview before the FHFA report. “They shouldn’t be expected to continue at that pace that much longer.”

Diggle’s firm projects that price gains will slow to 4 percent for 2014, down from 8 percent this year.

Higher mortgage rates may be encouraging buyers to complete deals before borrowing costs rise further. Sales of previously owned U.S. homes climbed 6.5 percent last month to the fastest pace since November 2009, the National Association of Realtors reported yesterday. The median price jumped to $213,500, up 13.7 percent from July 2012.

The FHFA’s report showed prices increased 17 percent from a year earlier in the Pacific area, which includes California and Washington. In the Mountain region, including Nevada and Arizona, the gain was 11 percent. The Middle Atlantic area – New York, New Jersey and Pennsylvania – had the smallest increase, at 2.5 percent.

The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide a specific price for homes.

Copyright © 2013 Bloomberg

Existing Home Sales Increase in July

Existing-home sales rose strongly in July, with the median price maintaining double-digit year-over-year increases, according to the National Association of Realtors® (NAR).

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 6.5 percent to a seasonally adjusted annual rate of 5.39 million in July from a downwardly revised 5.06 million in June, and are 17.2 percent above the 4.60 million-unit pace in July 2012. Sales have remained above year-ago levels for 25 months.

Read more at Florida Realtors 2013

All-Cash Sales Dominate Market

More than half of all homes sold last year and in 2013, so far, have been purchased mortgage-free, according to economists at Goldman Sachs Group. Prior to the housing crash, about 20 percent of all homes sold were purchased without financing. All-cash sales have more than doubled over the last seven years.

“The surprisingly large cash-share of purchases helps to explain why home sales have jumped over the past two years despite more muted increases in broad measures of new mortgage activity, such as the MBA’s mortgage application index,” The Wall Street Journal reports.

The large share of cash buys are most likely from investors, foreign buyers, and wealthy home owners, the report notes.

The Goldman report estimated that around 44 cents of every one dollar of homes sold presently are being financed with a mortgage. Prior to the housing crisis, that stood at 67 cents of every dollar.

The Goldman Sachs analysts used data from the National Association of REALTORS®, Census Bureau, Mortgage Bankers Association, and Lender Processing Services to arrive at their calculations.

Source: “Half of All Homes Are Being Purchased With Cash,” Wall Street Journal (Aug. 15, 2013)

Average Rate on 30-year U.S. Mortgage Stays at 4.4%

Average rates on U.S. long-term fixed mortgages remained steady for a second straight week, giving prospective homebuyers more time to lock in historically low levels.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan remained unchanged at 4.4 percent this week. That is a full percentage point higher than in early May, when rates neared record lows. Still, rates remain low by historical standards.

The average on the 15-year fixed loan edged up to 3.44 percent from 3.43 percent.

Mortgage rates spiked in June after Chairman Ben Bernanke indicated that the Federal Reserve could slow its bond purchases this year. The purchases have helped keep long-term interest rates low, encouraging more home buying. Despite the recent rate increases, mortgages remain a bargain for borrowers who qualify.

Low rates have boosted home sales and prices, contributing to a housing recovery that has helped drive economic growth this year.

Greater demand, along with a tight supply of homes for sale, has pushed up prices. It also has led to more home construction, which has created jobs.

Confidence among U.S. builders is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year. The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday reflected the brighter sales outlook.

The index jumped to 59 this month from 56 in July. It was the fourth consecutive monthly gain. A reading above 50 indicates more builders view sales conditions as good rather than poor.

Mortgage rates tend to follow the yield on the 10-year Treasury note, which has risen on speculation that the Fed could slow its bond-buying stimulus. The rate on the 10-year note rose to 2.79 percent Thursday morning, its highest level since July 2011.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan slipped to 0.6 point from 0.7 point.

The average rate on a one-year adjustable-rate mortgage rose to 2.67 percent from 2.62 percent. The fee edged up to 0.4 point from 0.3 point.

The average rate on a five-year adjustable mortgage increased to 3.23 percent from 3.19 percent. The fee held at 0.5.

Copyright © 2013 The Associated Press

Builders Broke Ground on More Homes in July

U.S. developers broke ground on new homes at a faster pace in July, partly reversing a sharp drop the previous month. The figures suggest that housing construction is maintaining its recovery.

The Commerce Department said Friday that builders began work last month on houses and apartments at a seasonally adjusted annual rate of 896,000. That was up 6 percent from June, though below a recent peak of just over 1 million in March. Construction began on 26 percent more apartments, a volatile category, but 2.2 percent fewer single-family houses.

Applications for permits for future home construction also rose, though mostly because of apartments. Permits rose 2.7 percent to 943,000, boosted by a 13.5 percent jump in apartment permits. Permits for single-family homes dipped 2 percent.

In June, builders had sought the most building permits for single-family homes in five years. Americans are buying more new homes, and builders are increasingly optimistic that demand will keep rising. Both trends should spur more construction. New-home sales jumped in June to their highest level in five years.

And a measure of homebuilder confidence rose for a fourth consecutive month in August to nearly an eight-year high. The National Association of Home Builders/Wells Fargo builder sentiment index, released Thursday, rose to 59 from 56 in July. That is the highest level since November 2005. A reading above 50 indicates that more builders view sales conditions as good rather than poor.

Home prices and construction began to recover early last year, and the recovery has picked up in recent months. It has offset some of the drag this year from higher taxes and federal spending cuts.

Slow but steady hiring and historically low mortgage rates have encouraged more people to buy homes. Increased demand, along with a tight supply of homes for sale, has pushed home prices higher. It’s also made builders more optimistic about the market for newly built homes, leading to more construction and jobs.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.

Despite the lift from housing, the economy has been sluggish this year. It expanded at just a 1.7 percent annual rate in the April-June quarter after a 1.1 percent annual rate in the first three months of the year.

Copyright 2013 The Associated Press

Homes For Sale in Lakewood Ranch, Florida

Lakewood Ranch is an 8,500-acre master-planned community located east of I-75 on the border of Manatee and Sarasota counties. This award-winning community is composed of seven villages, each offering a range of residential options amid lake and nature preserve views.

Notable golf courses include the private Lakewood Ranch Golf and Country Club, featuring 36 holes of championship golf designed by the Palmer Course Design Company and 18 holes of championship golf designed by Rick Robbins, as well as the public Legacy Golf Course, an 18-hole Arnold Palmer signature links course.

Club members enjoy a 44,000-square-foot Italian Villa Clubhouse and an Athletic Center with 18 lighted clay tennis courts, a fitness center with steam rooms and saunas, Junior Olympic pool and resort pool for younger children.

Several commercial parks, a medical center, colleges, a polo club and cricket club are also found here, as well as upscale shopping, dining and cultural venues.

Main Street at Lakewood Ranch is located across from the Lakewood Ranch Medical Center. This outdoor venue offers stylish boutiques and international restaurants, the Lakewood Ranch Cinemas and the Fish Hole, a miniature golf course. Main Street combines elements of the ideal downtown with easy to access stores that make year-round shopping a pleasure. Famous names and specialty shops line the streets.

The open-air environment provides a unique plaza for strolling and shopping. Main Street has its own theater of six screens and shows new release movies, as well as independent films from the Sarasota Film Society. Other events at Main Street include the following: Music on Main, Evening Under the Stars, Suncoast Wine Festival, and Art at the Ranch. During the Christmas season, Main Street attracts locals by creating a huge tree in the middle of its circle drive, decorations, and fake snows that fall from the store’s rooftops; Christmas music is piped in through speakers on the street.

Lakewood Ranch has dedicated half of its land for parks, trails, and recreational fun. The trails alone stretch over 150 miles of the land.

Other recreational activities include polo and cricket. Lakewood Ranch has nine fields and a regulation size arena that can be played on throughout the winter season. The polo fields are located on 35 private ranches with over 600 horses stabled around the Club during the season.

Here, homage is paid to the breathtaking environment that surrounds Lakewood Ranch, which is why the community is proud to have been designated as the largest green-certified community in the US. The commitment to remaining green in all aspects of residential and commercial development remains unwavering.

Builders' Confidence On The Rise

Builder confidence in newly built, single-family homes is on the rise again.

The National Association of Home Builders/Wells Fargo Housing Market Index posted its fourth consecutive monthly gain in August, bringing it to its highest level in nearly eight years. The index gauges builders’ perceptions of single-family home sales, sales expectations, and buyer traffic for the next six months.

The index now stands at 59 — and any number above 50 indicates that more builders view market conditions as “good” rather than “poor.”

"Builders are seeing more motivated buyers walk through their doors than they have in quite some time," said NAHB Chairman Rick Judson. "What's more, firming home prices and thinning inventories of homes for sale are contributing to an increased sense of urgency among those who are in the market."

Buyers are showing increasing demand for the limited supply of new and existing homes in markets across the country, says David Crowe, NAHB’s chief economist.

"However, this positive momentum is being slowed by the ongoing headwinds of tight credit and low supplies of finished lots and labor,” Crowe notes.

Source: National Association of Home Builders

Good News in the Housing Sector Bodes Well for Future Economic Growth

Four years into the recovery, and lackluster economic growth persists. Housing continues to be one bright spot, providing a positive boost to the GDP in the second half of 2013, according to Freddie Mac’s August 2013 U.S. Economic and Housing Market Outlook report.

"The economic recovery has completed its fourth year, but it has not been without growing pains,” says Frank Nothaft, Freddie Mac’s chief economist. “The U.S. has experienced the weakest economic recovery coming out of a recession in the Post-War era. Despite the eye-popping monthly house price appreciation taking place in some parts of the country, the recovery that has lingered for years is just now starting for many Americans. Fortunately, we should see this positive housing trend continue to improve in the second half of the year. A housing recovery is a broad-based recovery, benefiting all Americans, and therefore the overall economy."

Economists point out in the report that the positives in the housing market can help lift the economy in three main ways:

• Increasing construction - Rising demand for housing will help increase new single-family and multifamily construction, and in turn boost home sales. Economists project that starts will hover just below 1 million over the second half of the year, which will mark the best six-month building pace since the first half of 2008.
• Wealth effect - "Through the housing wealth effect, rising home prices should help to spur consumption spending," economists note. Home equity lending is already showing signs of rising. In the second quarter, $9.5 billion in home-equity was cashed-out as part of a refinance. 
• Rising home prices - The uptick in home prices will aid the economic recovery by helping to spur small business formation — “as a business owner’s home often serves as collateral for a start-up,” economists note in the report. 

Source: Freddie Mac

Homes For Sale in Sarasota, Florida

Rolling white-sand beaches and sparkling azure waters combine with a sophistication and charm to make Sarasota the gem of Florida's Gulf Coast. The center of the Theater and Arts District offers a world of experiences, including Main Street - the setting for numerous arts festivals, restaurants, and the ever-popular Saturday morning Farmers Market.

Downtown Sarasota is a cultural and entertainment hub, small enough to walk to most destinations but tight enough to fill your days and nights with entertainment, good eats and decadent drinks.

Within just three square blocks of downtown, almost within sight of Sarasota Bay, is the heart of Sarasota's rich arts scene. The historic Sarasota Opera House is an art deco masterpiece of the 1930s, home to a nationally recognized opera company that pulls talent from across the world. The intimate, 1,000 seat theater inside also hosts the performances of the renowned Sarasota Ballet.

In addition, more than 10 theaters and 30 art galleries are located in Sarasota. Main Street in downtown Sarasota boasts dozens of shops, restaurants and nightclubs. There are many special events throughout the year in Downtown Sarasota including live music, art festivals, motorcycle shows and parades.

There are 35 miles of beaches and the beautiful sunsets of the Gulf of Mexico. The nearby beaches of Siesta Key are known for the whitest sand in the world, and nearby Lido Key offers beautiful beaches and great dining and shopping on St. Armand’s Circle.
Downtown Sarasota can be anything you want it to be. It's the tree-shaded esplanade of Main Street, filled with shops, restaurants, cafes, and gourmet food stores. It's the boutiques, salons and art galleries of Palm Avenue. It's the antique stores and darkened art cinemas at Burns Court, or the quaint and friendly artists' colony at Towles Court. It's a morning's jog along the bayfront, lunch beneath the banyans at Marie Selby Botanical Gardens and afternoon high tea sipped in grand style at the Ritz-Carlton. It's a daylong fishing charter that glides from its bayside slip; or a sunny morning stroll amid fresh produce and other open-air delights at each Saturday's Farmers' Market.

Residential opportunities are equally eclectic, possessing the same unique blend of possibilities. From the bungalow-rich side streets of vintage neighborhoods, to opulent new bayfront condominiums, downtown Sarasota offers a walk-able lifestyle that oozes with casual tropical charm, the distinct aura of history and the excitement of all things new.

Homes For Sale in Siesta Key, Florida

Located on the shores of the beautiful Gulf of Mexico, across the bay from the mainland Sarasota, you might be tempted to think that Siesta Key is just a beach town with miles of "the world's finest, whitest sand", but that's just a really good start...

Siesta Key is the perfect place to spend a holiday, a season or a lifetime and, whether you are visiting for a week, planning to relocate, or a long-time resident of this beautiful barrier island, we are the perfect place to find everything you need to know about this little piece of paradise.

There's more to Siesta Key than just beaches and water. This island is a destination for all who stay or live in the Sarasota area thanks to the wide variety of entertainment and dining options that stretch its length. On the north end, a short walk from one of Siesta's large expanses of public beach, lies Siesta Key Village. In the village's quaint few blocks you'll find dozens of shops that cater to the island lifestyle, offering necessities like groceries and hardware alongside souvenirs and bathing suits. Siesta Key Village restaurants -- most with large, open-air dining -- range from pancake and egg joints to award-winning fine dining spots.

No matter how fancy, though, dress codes are always casual: sandals are not only allowed, they're expected!

Down at the south end of Siesta Key you'll find more restaurants, shops and public beaches, as well as marina and boat rental facilities. Within minutes, you can putter in a pontoon boat or slice through waves in a high-powered jet ski. Try parasailing for more high-flying adventure, where you'll experience a unique view of Siesta Key while suspended from a parachute over 100 feet in the air. Or exercise more than just your sense of wonder by renting a bike or a kayak to explore the island on your own.

A short drive from downtown Sarasota, Siesta Key sits adjacent to the glittering Gulf of Mexico and its Siesta Public Beach has been named one of the nation’s best. This quaint yet quirky eight-mile-long island offers one-of-a-kind shopping, resorts, dining and nightlife. Known for its brilliant quartz sand, turquoise waters and many beachside amenities, Siesta Key is a must-visit island paradise. Siesta Key offers something for everyone. It's a romantic getaway for lovers, a family vacation destination and a playground for active sports enthusiasts. And don’t forget: Wherever you stay, the beach and bay are always nearby.

Florida Rebounding with Foreigners' Housing Cash

Record foreign investment in Florida housing over the last three years is boosting property-tax revenue in the localities hardest hit by the recession.

In the 10 Florida counties that have had the largest influx of international cash since 2010, property-tax assessments have risen by an average of 4.1 percent this year, according to state records. That’s nearly twice as fast as the rest of the state.

“It’s all been attributable to the foreign buyer,” Norman Edelcup, mayor of Sunny Isles Beach, a city of 21,000 north of Miami where values jumped 10.2 percent this year, boosting tax revenue.

The purchases are helping localities in south and central Florida recover from the 18-month recession, which ended in June 2009 and left the state with the second-highest foreclosure rate, behind Nevada, depressing prices and tax revenue.

Even with the buying, prices in most parts of the state haven’t returned to pre-recession levels. In the metropolitan areas of Miami and Tampa, prices are about 40 percent below the 2006 peak, according to an S&P/Case-Shiller housing report released July 30.

Foreign investment in Florida residential property has been rising since the end of the recession, according to a March report by the Washington-based National Association of Realtors.

Read more at Florida Realtors

Are Banks Looking to Ease Lending Standards?

With fewer home owners refinancing their mortgages because of rising interest rates, banks may soon relax their lending standards to ramp up business, according to the Mortgage Bankers Association. 

Credit availability has risen 3 percent since May — when mortgage rates began to rise — according to an MBA survey. Refinances have fallen 59 percent from a year ago, but applications for home purchases have risen 5 percent.

In recent years, tight underwriting standards have been blamed on shutting out many people from the housing market. Many potential borrowers have been unable to meet requirements for higher credit scores and larger down payments in order to qualify for a loan.

"As volumes slow, it makes sense that originators might ease some of their overlays as they now have the additional bandwidth to focus on slightly lower-quality loans or those loans that require more intense underwriting prior to approval, such as loans for self-employed individuals or investors that own multiple homes," Craig Strent, CEO of Maryland-based Apex Home Loans, told CNBC. "Competition for loans, particularly for home purchases, will continue to rise as refinances wane and originators look for continued loan volume to support the infrastructure they put in place during the recent refinance wave."

Source: “Higher Mortgage Rates May Mean Easier Credit,” CNBC (Aug. 5, 2013)

Short Sales Less Appealing to Buyers

Once seen as big bargains, the appeal of short sales has dwindled recently, so much so that some real estate professionals are advertising listings as "not a short sale" to attract more buyers.

The term 'short sale' appears to have a stigma now, getting bank approval for a short sale can be difficult, and the process of buying a short sale can take four to six months in Florida.

A recent study found that short sales in Boca Raton tended to stay on the market much longer than other homes. And when homes were advertised as "not a short sale," they tended to sell for 2 percent to 5 percent more than comparable non-distressed homes that were not advertised the same way, according to the study. Homes advertised as "not a short sale" also sold faster, according to the study.

In housing markets where short sales are less prevalent, agents say they aren’t noticing the stigma. Buyers aren't as aware of the lengthy process so they don’t dread it as much. Therefore, singling out a property as “not a short sale” would be pointless.

Source: “Is There a Stigma with Home ‘Short Sales?’” CBSNews.com (Aug. 14, 2013)

Homes For Sale in Longboat Key, Florida

Longboat Key is a town in Manatee and Sarasota counties along the central west coast of the U.S. state of Florida, located on and coterminous with the barrier island of the same name. Longboat Key is south of Anna Maria Island, between Sarasota Bay and the Gulf of Mexico. It is almost equally divided between Manatee and Sarasota counties. The town of Longboat Key was incorporated in 1955 and is part of the Bradenton–Sarasota–Venice Metropolitan Statistical Area.

Known for tasteful luxury and manicured surroundings, Longboat Key is rich in gorgeous beaches, wildlife and upscale amenities. High-end boutiques and five-star restaurants make it an ideal destination for vacationers who like their beaches on the swankier side. Ignored by spring breakers and devoid of the garish attractions that characterize many Florida beach towns, Longboat Key is one of quietest barrier islands on the Gulf Coast—and all the more beloved for it.

Its history includes tales of explorers and Native Americans, pirates and pioneers. There are grand mansions and even grander yachts, plus some of the world’s most beautiful sunsets lining the tranquil Gulf of Mexico.

Scores of retirees, young families and romantic couples relocate or visit each year to take advantage of the superb angling, shelling, biking, shopping, dining and the luxury homes that dot its 12-mile stretch of shoreline. Just minutes away from the cultural attractions of Sarasota and world-famous St. Armand’s Circle, Longboat Key is the ideal base from which to explore the area.

Although Longboat Key is a locale that prizes its tranquil nights and lazy beach days, it also offers plenty of opportunities. Let us take the guess work out of our island by providing our local services.

ARMs Are Back as Rates Climb Higher

ARMs aren’t quite back with a vengeance; they’re more creeping in from the shadows.

Vilified for causing defaults once “teaser” rates spiked higher after 2006, ARMs fell into disuse while fixed mortgage rates plunged.

But since May the share of ARMs among all mortgages has climbed by half, thanks to a little-watched gap in how rates are rising.

As the Federal Reserve mulls slowing its monthly bond purchases, rates for 10-year U.S. Treasuries have climbed more than a percentage point between early May and July. Fixed-rate mortgages, which follow 10-year Treasuries, rose to 4.51 percent last month from 3.34 percent in January.

But ARMs follow short-term rates such as one-year Treasuries. Because the Fed will keep short-term rates very low until unemployment is 6.5 percent or lower, one-year Treasuries traded at a 0.1 percent yield recently, down 0.04 percent in the last month.

The upshot: Fixed mortgage rates have risen twice as fast as five-year ARMs since speculation about the Fed’s exit began, according to Freddie Mac data. So last week, 6 percent of mortgage applications were for ARMs, up from 4 percent in early May, according to the Mortgage Bankers Association of America.

The availability of ARMs keeps homes affordable, argues Barb Jandric, president of Edina Realty, outside Minneapolis. It’s one reason Edina didn’t see buyer interest fall as rates began rising, she said.

The more expensive the house, the likelier it will have an ARM: 14 percent of the dollar value of new mortgage requests last week were for ARMs, said Matt Robinson, spokesman for the Mortgage Bankers Association of America.

“It can mean a difference of 1.75 (percentage points) in the interest rate,” said Brian Koss, executive vice president of Mortgage Network. He estimates that 5 percent to 10 percent of his most recent customers have switched to ARMs.

ARMs aren’t for everyone. Their interest rates can rise after one, five, seven or 10 years, and the first jump can be a budget-busting 2 to 5 percentage points. They’re best suited for buyers who will move on or refinance before the rate changes, Koss said.

Even so, some lenders still advise against ARMs, arguing that fixed rates are still near multi-decade lows.

“You can’t lose sight of how amazing rates are,” said Matt Weaver, senior lender at WCS Lending in Boca Raton, Fla.

He said borrowers who keep their homes longer than expected may regret it. Depending on the product, the first jump can be either 2 or 5 percentage points. “It doesn’t warrant the risk.”

Copyright © USA TODAY 2013.

Turnkey Purchase of Tampa Bay Mansion Includes Mercedes, Bentley and the Towels!

While it's generally unusual for the bulk of a home's furnishings to convey as a condition of sale, ultra-luxury property agents say this kind of demand is popular among affluent overseas buyers who desire a fast and convenient transition to their U.S. digs.

One recent example involves the sale of the Tampa Bay, FL, mansion of K-9 Detectives founder Christine Barsema. The spread -- which boasts seven full bathrooms, a gym, a dog run, marble floors, and more -- originally listed for $14.9 million in 2010 but was lowered by $2 million this spring. A buyer has since emerged and is slated to close on the property in September.

The deal includes not only the 15,000-square-foot estate but also Barsema's Mercedes convertible and Bentley, $2 million worth of handcrafted furniture, towels, dishes, rugs, and just about everything else inside the home.

Source: Tampa Bay Times (08/05/13)

Exterior Areas Not to be Neglected for Home Showings

A home’s outdoor space will set the first impression to prospective home buyers. A recent Realty Times article by Lillian Montalto offers some of the following tips on ramping up the curb appeal of these outdoor spaces: 

• Garage spaces: “Invest in trays, bins, shelving, and anything else that will organize the space,” Montalto writes. “Stow similar objects together. Hang items on wall hooks when possible. And above all, make certain there isn’t an overload of equipment to begin with, even if you need to store larger items at a storage unit or friend’s house.” 

• Patios and decks: Declutter, restain (if needed), and pressure-wash the bricks, pavers, and outdoor furniture, Montalto writes. 

• Yard: Fix any sidewalks, driveway, or walkway cracks. Ensure sellers mow the lawn and make sure nothing is overgrown or blocking any views of the home from the street. Spruce up the yard with colorful flowers and planters. 

• Exteriors: Fix any peeling paint and trim, and make sure windows are sparkling clean. Also, take careful note that any exterior hardware and the house numbers are in good shape. 

Source: “Key Rules to Showing Your Home: Preparing the Exterior,” Realty Times (Aug. 9, 2013)

Inventory Levels Rise as More Homes Get Listed For Sale

Inventory levels are on the rise nationwide, which could soon mean the severe inventory shortages plaguing many markets the last few months may soon be nearing an end, according to the latest report from realtor.com®. As home prices rise, more sellers may be testing the market, helping to increase the options for home buyers.

Realtor.com® reported that 1.96 million homes were listed for sale in June -- the highest number since last September.

The markets that posted the largest rises in the number of homes for sale compared to one year earlier were:

• Atlanta: inventories rose 17.9% year-over-year
• Sacramento, Calif.: +16.7%
• Los Angeles: +6.8%
• Orlando: +2.8%

All four markets have also posted strong gains in home prices the past year, realtor.com® reports.

“At the current pace of sales, the supply of homes for sale is still very low, suggesting price gains are likely to continue,” The Wall Street Journal reports. “But the months supply is up slightly in a growing number of markets. This could actually boost sales — a major complaint of home shoppers and their real estate agents is that there’s a shortage of attractive homes being offered for sale.”

Meanwhile, inventories of homes for-sale has fallen year-over-year levels in 26 of the markets realtor.com® monitors. Inventory levels fell the most in Detroit (by –30.2%); Boston (–28.9%), Denver (–25.1%), and San Francisco (–19.4%).

Source: “Housing Inventory Rose in July,” The Wall Street Journal (Aug. 13, 2013)

Regulator Explains Why Florida Insurance Rates Aren’t Dropping

Florida’s insurance commissioner says there are reasons why homeowner rates in the state are not coming down despite reports that insurers are starting to save money on one of their biggest expenses.

And he said that in some instances rates may still go up since some companies have spread increases out over several years.

Chief Financial Officer Jeff Atwater last week asked Kevin McCarty to explain to him why costs have not been dropping this year. Florida hasn’t been hit by a hurricane since 2005 and industry reports point out that the cost of reinsurance has dropped by 15 percent to 20 percent this year.

Insurers purchase reinsurance to provide financial backing in case of major claims.

McCarty wrote Atwater last Friday and told him that in some cases insurers are purchasing additional reinsurance instead of passing on the savings to homeowners. He said there is no “firm rule” on how much must be purchased and that rating agencies are requiring some insurers to buy more coverage.

“While the average reinsurance cost might have decreased this year, not every insurance company will experience a drop in its reinsurance costs,” McCarty wrote.

He also added that there hasn’t been enough time for insurers to reflect the savings in their rates. McCarty says most reinsurance contracts start on June 1.

McCarty did add that some insurers have indicated they plan to reduce rates in some parts of the state. Insurers are required to update their rates once a year. But he also noted that some companies have chosen “to transition large rate increases” over a number of years meaning that a price hike “may be still be warranted.”

McCarty also warned that that reinsurance reductions do not “translate into a one-to-one reduction” in rates. He said that one company recently proposed dropping its rates by 8 percent despite having its reinsurance costs go down by nearly 20 percent.

A spokesman for Atwater, who played a key role in in guiding insurance bills when he was in the Legislature, said he “recognizes the complexities” contained in rate filings. But Chris Cate said Atwater “intends to validate one way or another where the savings from lower reinsurance rates are being applied.”

The cost of insurance has been hotly debated on the campaign trail and in the Legislature for years.

Annual reports prepared by Florida’s Office of Insurance Regulation show that the department has been approving more than 100 rate hikes a year since 2009, including requests to raise rates by double-digits.

Industry officials argue that insurers in the past did not charge adequate rates to deal with the real risk of covering homes in hurricane-prone Florida. The fragile nature of the market has been exposed by storms such as Hurricane Andrew in 1992, a Category 5 storm that destroyed much of the South Florida city of Homestead, and the series of storms that battered the state in 2004 and 2005.

 Copyright 2013 The Associated Press

Slowdown in Home Prices is No Reason to Panic

Although home prices have risen nearly 12 percent from a year ago, a slowdown is expected soon. But many analysts say it’s no cause for concern.

“Prices are still going to rise — just not as at brisk a pace as we’ve seen over the past year,” The Wall Street Journal reports. “This should calm down those pundits who have fretted over a new crop of housing bubbles.”

According to a report by Goldman Sachs economists, home prices will likely moderate because they have returned to “fair value” and are no longer being viewed as “undervalued,” as they were for the past two years. Also, a rise in mortgage rates may cause some buyers to re-evaluate their options. 

For the first time this year, buyer traffic dropped below agents’ expectations, and “the next few months will be crucial to determining whether this is just a pause or something more,” the Goldman Sachs report notes.

The report also notes that investors will likely slow their purchases as the number of foreclosures start to dry up. What’s more, the inventory of homes for sale is starting to loosen as more sellers look to put their homes on the market. Those sellers, in turn, will then be looking to purchase another home, so prices will still likely continue to rise until new-home construction catches up.

“With the improving underlying housing demand driven by household formation and economic recovery, we think housing activity will remain on an upward trajectory, despite occasional ups and downs along the way,” says the Goldman report.

Source: “Why Home-Price Growth Will Slow,” The Wall Street Journal (Aug. 12, 2013)

Repeat Buyers Are Driving Housing Recovery

The increasing numbers of repeat home buyers are helping to drive the housing recovery, making up for the dwindling numbers of first-time buyers.

Repeat home buyers accounted for 54 percent of existing-home sales in June, up from 49 percent just one year prior, according to the National Association of REALTORS®. Meanwhile, first-time buyers — who usually account for 40 percent of the market share — shrank to 29 percent in June. A lack of lower-priced homes and strict lending requirements are edging more first-time buyers out of the market.

“What we’re seeing are these buyers who’ve waited around and who have finally realized this is a good time to move,” says David Crowe, chief economist for the National Association of Home Builders. “They will feed the demand until our economy gets a little more solid.”

Rising home prices are increasing household wealth and pushing more home owners to sell, either to trade up for bigger properties or to use the greater equity in their homes to put down a larger down payment for a comparable home, Bloomberg reports.

“The economy looks to be on a sounder footing, home prices are rising, and expectations are that they’ll continue to increase,” Michelle Meyer, a senior economist at Bank of America in New York, told Bloomberg. “Not only would they be able to sell their current property, but also in terms of purchasing their larger home, they’ll feel that their homes will appreciate with time.”

Source: “Home Sales Buoyed by Repeat Buyers,” Bloomberg (Aug. 11, 2013)

Foreclosure Fears Not Threatening Housing Recovery

Fears over a large overhang of potential foreclosures that could threaten the housing recovery have failed to materialize – and aren’t likely to do so – according to the Mortgage Bankers Association.

More housing data is supporting that statement: The number of homeowners behind on their mortgage payments or facing foreclosure dropped to a five-year low in the second quarter, according to a report released Thursday by the Mortgage Bankers Association.

At the end of June, nearly 6 percent of home mortgages were 90 days or longer past due or in the foreclosure process. That’s down from a 9.7 percent high set in late 2009, and down from 7.3 percent last year at this time.

“At a national level, all of the indicators are good. The numbers are down where they should be down,” says Jay Brinkmann, the chief economist for the Mortgage Bankers Association.

While the drop is welcome news to the housing industry, the share of homeowners delinquent on their mortgages still remains well above historical levels. Prior to the housing boom, seriously delinquent rates averaged about 2.5 percent.

Some states – particularly those that don’t require foreclosures to go through the courts for approval – are seeing some of the biggest improvements and have returned to near pre-crisis levels. California had a foreclosure rate of 1.6 percent and Arizona’s was 1.5 percent in the second quarter. These mark a drastic improvement for these states, which once were in the top five as worst foreclosure rates in the nation during the housing downturn and now are No. 37 and 38, respectively, MBA reports.

On the other hand, judicial foreclosure states – such as Florida, New York, and New Jersey – continue to battle higher shares of foreclosures.

“If you look at where the problems are centering now, the northeast is more of a center of attention,” Brinkmann says.

Source: “Mortgage Delinquencies Hit Five-Year Low,” The Wall Street Journal (Aug. 8, 2013)

Will Privatizing Mortgage Finance Cost Borrowers?

If Congress shuts down Fannie Mae and Freddie Mac, will borrowers likely end up paying slightly higher mortgage rates? Proposed House and Senate bills would wind down the two firms over five years and scale back the government intervention in guaranteeing mortgage securities.

The House GOP bill would virtually privatize the mortgage market, while the Senate's bipartisan plan would limit Washington's role in insuring mortgage securities and retain the federal government as an insurer of last resort. Both plans are meant to shift more mortgage financing risk from the government to the private sector in order to prevent future taxpayer-funded bailouts.

Mark Zandi, chief economist at Moody's Analytics, suggests that, as a result, typical borrowers could pay about $75 per month in extra interest payments—or about half a percentage point more—under the Senate proposal, and about $135 more under the House plan. That could be the average on a conforming loan of about $200,000 with a 20 percent down payment.

Source: "Closing Fannie, Freddie Could Up Mortgage Rates," Associated Press (Aug. 8, 2013)

Long Bar Pointe Project Gets Split Decision

A meeting about the proposed Long Bar Pointe development in Manatee County turned into a 12-hour marathon and was not wrapped up until early Wednesday morning.

More than 1,000 people showed up with Manatee County commissioners about the project. The meeting ended just after 2 a.m. with a split decision.

Developers want to build a high-end resort, housing and marina on more than 460 acres in Bradenton. They said the project would provide jobs and improve the area.

Those against the project say it would have a negative impact on the coastal waterways, including the destruction of mangroves and sea grass.

The developers already own the property and have approval to build homes there, but they do not have approval for the mixed-use part of their plan, which calls for a hotel, restaurants and marina.

Commissioners unanimously voted against a text amendment that would have opened up the now protected coastal areas to more development. But the commission did narrowly agree to a map amendment.

That will open Long Bar Pointe up to not just residential but mixed-used development as well, including shops, hotels and restaurants.

In order to get that deal, the developer had to drop plans for a marina. Now, the next step is for the developer to re-submit plans for the 460 acres.

No timeline has been set for the new plans.

Florida Housing Market Continues to go from Strength to Strength

Florida’s housing market gained strength in second quarter 2013 with more closed sales, higher median prices, more pending sales and a shrinking supply of homes for sale compared to the same quarter in 2012, according to the latest housing data released by Florida Realtors®.

Second quarter existing home sales are up 14.7% year-to-year, with price up 14.1%. Sales of condos are up 7.9% year-to-year, with price up 16.7%. The National Association of Realtors® report sales up 12.3% year-to-year, and single-family homes prices up by 12.2%.

Source: Florida Realtors

Sarasota Luxury Home Sales Outperforming National and Broader Market

Forty Sarasota County homes and condominiums sold for $1 million or more in July, generating a total of $70.2 million and averaging $1.75 million each. That's three more than June and the same pace as March, the more traditional high season for home sales in Southwest Florida.

Compared to July 2012, when 26 homes and condos and two waterfront lots changed hands for $48.2 million, we are currently experiencing a 54% increase in units sold and 46% increase in total volume sold for the same period last year.

All of the sales but one were on the region's barrier islands.

The numbers outperform the national average, where homes priced at more than $1 million jumped an average 37 percent in 2013, triple the pace of the broader market.

Source: Sarasota Herald-Tribune

Americans Confident of Further Home Price Increases

Americans are increasingly optimistic about the housing market, despite the threat of a continued rise in mortgage rates, a new survey shows. Fifty-three percent of Americans expect home prices to increase by an average of 3.9 percent over the next 12 months, according to Fannie Mae’s July National Housing Survey of 1,000 home owners. Only 6 percent expect prices to fall, a new low in the survey's three-year history.

Seventy-four percent of those surveyed say now is a good time to purchase a house, and 40 percent say now is a good time to sell. But consumers are bracing themselves for higher mortgage rates: 62 percent of survey respondents say they expect rates to rise over the next year, while only 5 percent expect them to fall.

"Consumers have taken the interest-rate rise in stride,” says Doug Duncan, Fannie Mae’s chief economist. “Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month. These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated."

Source: “Fannie Mae says Consumers Taking New Interest Rates in Stride,” Mortgage News Daily (Aug. 7, 2013)

New Mobile App Released for My Home On The Gulf

I have some exciting news to share with you as I have just launched my very own mobile real estate app that you can download and use on your iOS or Android mobile device. Click HERE for instructions on how to set up your own personalized app that you can start using immediately. You can now search for properties while on the go, and at the touch of button I will receive your requests for further information or showing requests in real time! 

This will help you stay ahead of the competition when buying real estate in Sarasota, Lakewood Ranch or Bradenton.

Financial Considerations for Homebuyers Over 40

Most people wade into homeownership for the first time in their 20s and early 30s, when they still have the bulk of their working years ahead of them and time to build equity – key to moving up to a bigger home.

But what if you’ve reached midlife and still envision buying a home one day? Tackling that first home purchase after 40 can be easier in some ways than when you’re just staring out in your career, but it also brings its own set of financial factors.

A National Association of Realtors survey of people who bought a home between July 2011 and June 2012 showed that nearly 80 percent of first-time homebuyers were 32 years old or younger.

In the next age bracket, those age 33-47, 36 percent were first-time buyers; between the ages of 48 to 57, only 19 percent were first-time buyers. The rates of first-time homeownership generally declined as buyers got older, according to the survey, which featured 8,500 respondents.

Even so, the last decade’s economic downturn and housing crash has forced many to put off that first home purchase.

Check out the following link from Florida Realtors for some things to consider if you’re over 40 and eyeing homeownership.

Mortgage Applications Rise Despite Higher Rates

Mortgage applications for home purchases climbed last week, even as rates continued to rise, the Mortgage Bankers Association reports in its weekly mortgage market survey.

Loan applications for home purchases, viewed as a key indicator of future home sales, grew 0.7 percent for the week ending Aug. 2. Mortgage applications for home purchases had fallen four of the past five weeks, according to the MBA.

Overall, the MBA’s index, which includes both refinancing and home purchase demand, increased 0.2 percent for the week. Applications for refinancing, the largest share of that index, fell 0.1 percent last week. The higher costs of refinancing have prompted fewer home owners to refinance in recent weeks.

Fixed 30-year mortgage rates increased last week to a 4.61 percent average, up 3 basis points over the previous week, the MBA reports. Since early May, rates have increased more than 1 percentage point. However, rates still remain low by historical standards.

Source: “U.S. mortgage applications rise, but so do rates: MBA,” Reuters (Aug. 7, 2013)