What is the Forecast for Mortgage Rates in 2014?

Mortgage rates will likely rise above 5 percent in 2014 and average 5.3 percent by the end of 2015, according to the Mortgage Bankers Association’s forecast.

That would mark a big jump over where mortgage rates stand now. The MBA reported this week that the 30-year fixed-rate mortgage averaged 4.33 percent, the lowest average since June.

The MBA expects that the Federal Reserve will decide to taper its $85-billion per month bond-purchasing program in early 2014 and end it altogether in September 2014. The Fed’s bond buying program has been keeping mortgage rates low. The Fed has hinted in recent months that it will soon be winding down the program.

“As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances,” says Jay Brinkmann, the MBA’s chief economist.

The MBA said in its forecast that it expects home purchase applications for mortgages to rise 9 percent next year, following expected continued home sales and price increases.

However, the MBA projects that overall mortgage originations will drop 32 percent in 2014, as the number of refinancing applications post a large drop in the new year due to expected rising interest rates.

While refinancings make up the bulk of home applications today, that trend is expected to reverse next year. Purchase loans are expected to make up 60 percent of originations next year compared to about 38 percent this year.

“We are projecting home purchase originations will increase in 2014 due largely to gains in home sales and home prices,” says Brinkmann. “We expect to see a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices.”

Source: “U.S. Mortgage Applications Increase as Rates Edge Down,” Reuters (Oct. 30 2013) and “Purchase Loans Expected to Buck Rising Mortgage Rates Next Year,” Inman News (Oct. 29, 2013)

How Long Does it Take to Build a Home?

On average, it takes 7 months to build a new home from scratch, which includes obtaining the building permit, according to the 2012 Survey of Construction from the Census Bureau.

Homes that are built for sale take the shortest amount of time, averaging between 5 and 6 months.

Meanwhile, houses where the owners have the land take the longest — about 8 months if built by a contractor, but more than 11 months if they are owner-built, according to the Census.

The wait can be considerably longer, depending on the region of the country too, the data shows. For example, New England and Middle Atlantic regions have some of the longest lag times with new-home construction, averaging between 9 and 10 months. On the other hand, builders in the East South Central Division complete homes, on average, in 7 months.

Source: “How Long Does It Take to Build a House?” National Association of Home Builders’ Eye on Housing (October 2013) and REALTOR® Magazine Daily News

Americans Are On The Move Again!

After staying in place for years, bogged down by the financial effects of the recession, Americans are finally back on the move, according to the latest U.S. Census data.

In 2012, nearly 16.9 million people moved between counties, and 7 million made long-distance moves from one state to another. For long-distance moves, that figure was nearly 5 percent higher than 2010.

The recession had the effect of “freezing people in place” as they waited out a housing and economic slump, and now there’s “at least a thawing,” Kenneth Johnson, a demographer with the University of New Hampshire, told USA Today.

The median price of an existing-home rose to $212,100 this year compared to $166,200 in 2011, the National Association of REALTORS® reports. Many home owners “didn’t want to sell a house that they viewed as a low price,” says Jed Smith, an NAR economist. “Now that the prices are up, away we go.”

Where are they going? Many people are heading to the Sun Belt states: Florida, Arizona, and Nevada, Johnson says. They're moving from Northeastern and Midwestern cities, such as Baltimore, Philadelphia, St. Louis, Cincinnati, and New York. For example, the state of New York lost about 136,000 residents in 2012.

On the other hand, metro areas such as Miami-Fort Lauderdale, which lost residents during the recession, regained population in 2012 — particularly as housing and the economy recovers there. Las Vegas; Jacksonville, Fla.; and San Jose, Calif., are other metros gaining residents after a loss, USA Today reports.

Source: “Census: Americans are moving again,” USA Today (Oct. 26, 2013)

Do Higher Home Prices lead to More Sales?

If home prices edge higher, the housing market will see higher home sales, according to a new paper by two senior economists with the Federal Reserve Bank of San Francisco. The economists note that it’s not that the higher prices entice buyers as much as the higher prices entice owners to sell their homes, thereby helping to alleviate current inventory shortages.

Many sellers are still waiting out the market until home prices rise more, economists William Hedberg and John Krainer write in an article in the Federal Reserve Bank of San Francisco's Economic Letter titled “Why Are Housing Inventories Low?” In the past year, existing-home prices have edged up 11.7 percent, according to the National Association of REALTORS®.

Still, despite rising appreciation, some sellers are underwater on their mortgage or do not have enough equity yet to motivate them to sell. Research has shown that counties with a high share of underwater mortgages tend to have the smallest for-sale inventories.

The economists say that a distinct pattern exists in housing inventories, with the number of homes for sale rising in good times and falling in bad times. Some of it can be explained by credit, they say. Lenders tend to ease credit restrictions during good economic times, which helps more buyers enter the market. 

But the economists say that the level of home prices and changes in employment are by far the variables that most influences the inventory of homes for sale. “Once these are accounted for other variables, such as changes in the for-rent inventory, the underwater share, or local price-rent ratios, do little to explain the inventory of houses for sale,” Mortgage News Daily reports on the study. "Thus, current home owners may be making a rational choice to postpone selling in the hope that prices will rise further. However, this behavior tends to be short run. In the longer run, the link between the level of house prices and for-sale inventories is strong. If prices continue to rise, inventories for sale should eventually rise too."

The housing markets that have seen the strongest house price appreciation and job growth are the ones that are seeing for-sale inventories rise the most, the economists note.

Source: “More People Will Buy Homes if Prices go Up, Wait... What?” Mortgage News Daily (Oct. 21, 2013)

Investors Still Snapping up U.S Homes

RealtyTrac’s September 2013 U.S. Residential & Foreclosure Sales Report, which includes single-family homes, condominiums and townhomes, found homes sales up 2 percent from August and 14 percent compared to September 2012. It also found a preponderance of purchases by investors and all-cash sales.

The national median sales price of all residential properties — including both distressed and non-distressed — in September was $174,000, up 1 percent from a revised $172,000 median price in August and up 6 percent from a $164,500 median price year-to-year. Distressed sales combined accounted for 25 percent of all sales in September, up from 18 percent of all sales a year ago.

“The housing market continues to skew in favor of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash,” says Daren Blomquist, vice president at RealtyTrac.

However, investors appear to be pulling back from higher-priced markets and focusing their money on cities where they see more opportunity, such as Jacksonville. Places like San Francisco, Washington, D.C., New York, Seattle and Sacramento are falling out of favor, according to RealtyTrac. Investors are focusing on markets with median prices still below $200,000 – places like Jacksonville, Atlanta, Charlotte, St. Louis and Dallas.

“Distressed sales remain persistently high, particularly short sales,” Blomquist says. “Markets with the biggest increases in short sales tend to be those where either foreclosure starts or scheduled foreclosure auctions have rebounded in the last 18 months – translating into more motivated short sellers – or those with a still-high percentage of underwater homeowners with negative equity.”

Read more at Florida Realtors®

Are Banks Easing Lending Standards?

More borrowers may have an easier time qualifying for a mortgage as banks begin to accept lower credit scores and smaller down payments, according to the latest data from mortgage tracker Ellie Mae.

The average FICO score for a borrower who closed on a home loan last month was 732, a drop from 750 last year, Ellie Mae reports. Top FICO scores are 850. Nearly one-third of borrowers who closed on home loans had FICO scores under 700. That compares to 17 percent a year ago. Meanwhile, the average down payment for a home loan was 19 percent compared to 22 percent a year ago.

"We continue to see things open up ever so slightly month by month," says Ellie Mae President Jonathan Corr.

Many banks are showing these signs. In states that were hit hard by foreclosures, such as Arizona, Florida, and Nevada, JPMorgan Chase reduced down payment requirements on primary home loans from 10 percent to 5 percent. It also dropped its minimum down payment requirement on second homes from 20 percent to 10 percent. JPMorgan Chase says that the markets “have shown strong signs of improvement.”

Still, while some lenders are easing up, mortgage standards remain tight and may even get tighter next year, experts say. A new lending rule that goes into effect in January requires lenders to issue mortgages that meet federal standards or the lenders will face greater liability from borrower lawsuits if the loans default. Learn more about the Qualified Mortgage Rule.

"We're seeing tweaking of the underwriting standards, but it's not a wholesale loosening," says Guy Cecala, publisher of Inside Mortgage Finance. "The pendulum is still too far toward restrictive."

Source: “Home loans become a little easier to get,” USA Today (Oct. 23, 2013)

Housing Market to Continue Improvement into Next Year

The pace of the housing recovery showed signs of slowing heading into the fourth quarter of the year, due to the federal government shutdown, debt ceiling issues, and the slowing economy, Freddie Mac reports in its U.S. Economic and Housing Market Outlook for October.

"The housing recovery keeps chugging along despite a constant barrage of disruptions to the broader economy,” says Frank Nothaft, Freddie Mac’s chief economist. “We're likely going to see the housing recovery slow down, but not shut down, as we close out the rest of this year due to tight inventories in many markets, rising mortgage rates, and slumping consumer confidence. Fortunately, the housing recovery should continue to absorb the economic shocks in stride and improve next year."

By the end of the year, mortgage rates are expected to average around 4.3 percent and then increase in 2014, according to the Freddie report.

Limited housing inventories continue to be a challenge for the housing market. Inventories remain constrained at a 5-month supply in September. Freddie’s report says inventories of homes available remain tight due to still-present negative equity for many households, a declining supply of distressed sales, and a “severely depressed level of new construction.”

The U.S. economy is expected to add less than 1 million housing units in 2013 and around 1.15 million in 2014, which Freddie economists note is significantly below normal levels.

“Expect the ramping up of residential construction to take a while, and while economic growth will improve over the next year, the economy won’t be operating at full potential until sometime after 2015,” Freddie notes in its forecast.

Source: “Will the Economic Recovery Shut Down?” Freddie Mac (Oct. 22, 2013)

Florida Housing Market Continues Positive Gains in Sept 2013

More closed sales, higher median prices, increased pending sales and the continued stabilization of the homes-for-sale inventory resulted into a sunny outlook for Florida’s housing market in September, according to the latest housing data released by Florida Realtors®.

“Throughout the year, we’ve seen Florida’s housing market strengthen, and that positive momentum continued in September,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “Home values are rising, and many homeowners across the state see improving home equity. Those trends are helping to ease tight inventory levels in many areas as people who had been waiting on the sidelines decided to list their homes for sale.

“September marks 22 months in a row that the statewide median sales prices rose year-over-year for both single-family homes and for townhome-condo properties.”

Read more at Florida Realtors®

10 Places In The U.S. You’ll Want To Visit Right Now

Check out this from BuzzFeed; 10 Places In The U.S. You’ll Want To Visit Right Now. Guess who's Number 1! Yes, Sarasota, Florida makes it to #1 as the place to be, ahead of San Diego, CA; West Palm Beach, FL; and Austin, TX.

We are proud to call Sarasota home and it looks like the rest of the country is starting to realize why Sarasota is the best!

Housing Recovery Causes Increase in Prenups

As the housing market improves, more couples are protecting their real estate assets through prenuptial agreements, finds a new survey by the American Academy of Matrimonial Lawyer members.

Sixty-three percent of divorce attorneys say they’ve noticed an increase in prenuptial agreements during the past three years. The top three most common items covered in the prenups are “protection of separate property,” “alimony/spousal maintenance,” and “division of property.”

“As the financial and real estate markets continue to improve, there is a greater awareness of risk to possibly sharing these gains in a divorce,” says Alton Abramowitz, president of the American Academy of Matrimonial Lawyers. “The trend of divorcing spouses fighting over which one has to take possession of a devalued home and other depreciated assets appears to be coming to an end.”

The survey found an increase by 46 percent of women initiating the requests for the prenup agreements.

Source: American Academy of Matrimonial Lawyers

Mortgage Rates Climb Higher During Budget Crisis

Mortgage rates moved higher leading up to the federal budget deadline this week, Freddie Mac reports in its latest mortgage market survey.

“Recent confidence measures depict some of the effects of the government shutdown and uncertainty of the budget impasse,” says Frank Nothaft, Freddie Mac’s chief economist. “However, despite these downturns in confidence, mortgage applications rose for the second consecutive week as of October 11th, elevated by increases in applications for refinancing."

Freddie Mac reports the following national averages for the week ending Oct. 17: 

• 30-year fixed-rate mortgages: averaged 4.28 percent, with an average 0.7 point, rising from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 3.37 percent. 
• 15-year fixed-rate mortgages: averaged 3.33 percent, with an average 0.7 point, rising from last week’s 3.31 percent average. Last year at this time, 15-year rates averaged 2.66 percent. 
• 5-year hybrid adjustable-rate mortgages: averaged 3.07 percent, with an average 0.4 point, rising from last week’s 3.05 percent average. A year ago, 5-year ARMs averaged 2.75 percent. 
• 1-year ARMs: averaged 2.63 percent, with an average 0.4 point, dropping from last week’s 2.64 percent average. Last year at this time, 1-year ARMs averaged 2.60 percent. 

Source: Freddie Mac

Housing Nearing Healthy Equilibrium

The housing market is finding its center again, showing signs of greater balance, according to realtor.com’s latest National Housing Trend Report. The analysis finds year-over-year trends revealing strong gains in median list prices and declines in days on the market.

“Our September data on inventory counts, median list prices, and median time on market has shown another month of steady leveling, but the recovery certainly remains uneven in some pockets,” says Errol Samuelson, president of realtor.com. “Some of the more industrial-based markets clearly continue to struggle, yet others are showing significant price gains over this time last year. While we are pleased to see a continued trend toward a healthy market balance, imminent economic factors could pose a significant threat to these improvements.”

The report highlights some of the following progress on four main indicators for the housing market: 

• List prices: The median list price for homes in September dropped slightly but remained 6.4 percent higher than a year ago. More than 20 percent of the 146 markets that the realtor.com report covers posted year-over-year gains in listing prices of 12 percent or more.

• Home sales: Sales of single-family homes, condos, and townhomes fell 1.68 percent in September, after six consecutive months of gradual rises.

• Inventory levels: Inventories were 2.04 percent less in September than year ago levels—“signaling a greater balance between supply and demand,” realtor.com’s report notes.

• Days on market: The median age of inventory increased from 92 days to 93 days in September. However, it has fallen by 10.58 percent in the past year, which indicates that homes are selling more quickly, according to the report. 

Source: “Housing Market Pushing Further Toward Healthy Equilibrium,” realtor.com (Oct. 16, 2013)

Homeowners Willing to Spend up to 30% on Remodeling

Home owners are willing to spend 30 percent of the value of their home when they remodel, according to Planese Inc.’s Fall 2013 Remodeling Sentiment Report, which reflects survey results of home owners nationwide.

Home owners don’t plan to skimp on their remodels: They select materials that are more expensive and spend an average of $102,000 to improve their upscale remodels, the study finds.

"The wealth effect is taking hold; consumers are spending again, which bodes well for the entire home improvement industry," says Dan Fritschen, CEO and cofounder of Planese Inc., a resource for home owners tackling remodeling projects. "More people are feeling secure enough during this economic environment that they are remodeling. It's no longer the most affluent; we are at the beginning of a multi-year trend."

Seventy-four percent of home owners say they plan to hire a general contractor, up from 64 percent in 2010 and 2007, according to the survey. Forty-three percent say they plan to do none of the remodeling work themselves, compared to 36 percent in 2010.

The remodeling projects planned are getting larger too. The average number of rooms home owners say they plan to remodel is four, according to the survey. Home owners most likely are to choose the kitchen to remodel -- which also tends to be the most expensive.

Source: Planese Inc.

How Much Do You Spend After Buying a Home?

A home purchase sparks an increase in consumer spending — buying new appliances and furnishings, as well as spending on remodeling — that can last for two years, according to the National Association of Home Builders’ analysis of the Consumer Expenditure Survey.

The analysis puts a dollar sign on just how much more home buyers who purchase new and existing homes are likely to spend following a move versus those who don’t move. During the first two years after closing on a house, a buyer of a new single-family home will spend an average of $7,400 more than a similar home owner who doesn’t move. They’ll spend the majority of that amount in the first year: $4,900. Meanwhile, a buyer of an existing single-family home will spend about $4,000 more than a home owner who doesn't move — $3,600 of which will be spent during the first year.

“This confirms that home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone,” writes NAHB on its Eye on Housing blog.

A new-home buyer will spend an average of $3,000 more on furnishings than a similar household who hasn’t moved. In the second year of home ownership, new buyers will likely spend an additional $2,000 more on furnishings. They will also spend more on appliances, usually in the first year of owning, spending $1,005 more on appliances during the first year than a non-moving home owner.

For property repairs and alterations, the difference in expenditures is the smallest, with new-home buyers spending $740 more on property alterations compared to non-moving households.

Source: “The Ripple Effect on Home Buying,” Eye on Housing (Oct. 9, 2013)

New Lakewood Ranch Subdivision Gets Planning Approval

A Lakewood Ranch, Florida project called Eagle Trace Subdivision won tentative approval last week from the Manatee County Planning Commission. 

The commission agreed to a rezoning and preliminary site plan request to add 43.53 acres and 95 units for a total of 104.66 acres and 278 units.

County documents also confirmed the following headlines:

- The developer will be responsible for construction of part of the new, unnamed road, which will connect existing Pope Road to the project entrance

- The property includes 9.033 acres of wetlands, but only 1.29 acres will be affected by the development

- The site is heavily treed, with approximately 6 acres of mixed hardwoods. The developer has indicated about 85 percent of the habitat, or 5.1 acres, will be preserved through a conservation easement

The planning commission is an advisory body, so the project must still win final approval from the Manatee County Commission.
Source: Bradenton Herald

More Walkable Neighborhoods Are More Desirable

City planners across the country are looking to revitalize suburban areas by making them more walkable, CNBC reports.

Neighborhoods that boast greater walkability tend to have higher resale values in both residential and commercial properties, finds a recent study published in Real Estate Economics. In fact, a 2009 report by CEOs for Cities found that just a one-point increase in a city’s walk score could potentially increase homes’ values by $700 to $3,000.

"There's a strong preference for being in a neighborhood where people can walk to shops, restaurants, parks," says Joe Molinaro, NAR's managing director of community and public affairs.

In NAR’s 2011 Consumer Preference Survey, two-thirds of those surveyed cited walkability as an important factor in choosing where to live. What’s more, the study found that consumers were willing to sacrifice other items on their wish-lists in order to be located in a walkable neighborhood.

These high-density spaces that blend commercial workspaces, retail housing, and parks mostly have been in high demand in places like Boston, Chicago, New York, and San Francisco. But now other cities want to follow suit.

For example, officials in Woodstock, Ga., a small town about 30 miles outside of Atlanta, decided to counter its suburban sprawl by redesigning its city center to include more than 30 acres of the surrounding land, 300 housing units, 80,000 square feet of commercial space, and open parks. The move helped make the city more walkable. The change has helped to contribute to a 17 percent growth in the town’s downtown property values over the past five years.

"Walkability plays a big part in an area's economic vibrancy," says Scott Bricker, executive director of America Walks, a national nonprofit that promotes walkable communities. "The most valuable real estate around the world is in walkable places, places where people are living and working in closer proximity."

Source: NAR and “Ditch the car? Dying suburbs revived by walking,” CNBC (Oct. 9, 2013)

Builders' Retain Minerals Rights

Builders are increasingly retaining the mineral rights to homes they sell, according to a recent investigation by Reuters of county property records in 25 states. That means that while home owners own their homes from the ground up, the builders lay claim to what's beneath the home, such as oil, natural gas, water, or other natural resources.

Home owners are often unaware that builders have retained mineral rights and are displeased when they learn that they don’t own the ground under their feet, Reuters reports. “Many worry about the potential health and environmental effects of fracking,” Reuters reports.

"This is a huge case of buyer beware," says Lloyd Burton, professor of law and public policy at the University of Colorado-Denver. "People who move into suburban areas are really clueless about this, and the states don't exactly go out of their way to let people know."

In most states, sellers aren’t legally required to disclose to home buyers whether they are losing the mineral rights to a property, Reuters reports. Sometimes builders may flag it in sales contracts or deeds, but not all buyers review the paperwork closely.

Reuters’ investigation uncovered numerous builders engaged in the practice of retaining the mineral rights on homes, such as D.R. Horton, Ryland Group, Pulte Homes, and Beazer Homes.

Why do builders want to keep the mineral rights to a home? “The phenomenon is rooted in recent advances in extracting oil and gas from shale formations deep in the earth, fueling the biggest energy boom in modern U.S. history,” Reuters reports. “Horizontal drilling and the controversial practice of hydraulic fracturing, or ‘fracking,’ have opened vast swaths of the continental United States to exploration.” By keeping the mineral rights, builders stand to make a financial gain if “energy companies come calling,” Reuters reports.

Source: “U.S. builders hoard mineral rights under new homes,” Reuters (Oct. 9, 2013)

Jumbo Construction Loans on the Increase

More and more wealthy home buyers are building their dream mansions by taking out jumbo construction loans. Some are using this finance option to bankroll construction of vacation homes, while others are paying for such major renovations as adding on to existing estate homes or installing indoor swimming pools.

A construction loan is essentially short-term financing that covers building costs while the work is being done; the borrower generally pays only interest during construction on the amount that has been used at that point, then begins monthly principal and interest payments once the project has been completed.

According to TD Bank, originations for its jumbo construction loans have soared 110 percent since Jan. 1. Boston Private Bank & Trust Co., meanwhile, reports that its jumbo construction loan originations rose 35 percent in the San Francisco Bay area alone in the first eight months of the year versus the same stretch of 2012. The bank has since introduced construction lending in Southern California.

Lenders report that the increase in the lending niche is partly because of limited housing inventory in various markets. The product is not without its drawbacks, however, including additional fees; higher borrowing costs, often with an adjustable-rate structure; and larger down payments when appraisals come in lower than the cost of building a home in the borrower's market because other local homes typically are not as nice.

Source: "Construction Loans for Your Dream Home," Wall Street Journal (10/04/13)

Mortgage Demand Increases Again

Mortgage applications reversed course, edging up due to a recent spike in home owners looking to refinance and take advantage of lower rates, the Mortgage Bankers Association reported last week.

Mortgage application activity -- which includes both applications for refinancings and home purchases -- rose 1.3 percent for the week ending Oct. 4.

Broken out, refinancing applications gained 2.5 percent last week, now at its highest level since early August. Recently, the refinancing index reached its lowest level since June 2009, as rising mortgage rates dampened demand for refinancing.

Applications for home purchases -- considered a gauge for future home buying -- dropped 1 percent from the previous week, the MBA reports.

Mortgage rates fell last week amid the government shutdown. The 30-year fixed-rate mortgage dropped 7 basis points to average 4.42 percent, according to the MBA. In September, it had matched a high for the year at 4.8 percent.

Source: “U.S. mortgage applications edge up on more refinancing: MBA,” Reuters (Oct. 9, 2013)

New Fannie Mae and Freddie Mac Joint Venture to be Created

The Federal Housing Finance Agency (FHFA) announced a new joint venture between Fannie Mae and Freddie Mac last week.

FHFA says it filed a Certificate of Formation with the Secretary of State of Delaware, establishing Common Securitization Solutions LLC (CSS) as a limited liability company. The move establishes CSS as a legally recognized entity and marks an important step in creating a joint venture – an equally owned subsidiary of Fannie Mae and Freddie Mac.

“The filing of the Certificate of Formation represents a significant milestone toward accomplishing the goal of building a new secondary mortgage market infrastructure,” says FHFA Acting Director Edward J. DeMarco.

FHFA also announced that it signed a lease for commercial office space for CSS, which Fannie Mae and Freddie Mac authorized. The office space is located in Bethesda, Maryland and the lease is for a three-year term.

In addition, FHFA has retained an executive recruitment firm to identify candidates for the positions of Chief Executive Officer and Chairman of the Board of Managers of CSS. Identification and interviewing of candidates is currently underway.

In a March speech, Acting Director DeMarco announced that the formation of a new joint business entity – to be located separately from Fannie Mae and Freddie Mac and headed by a CEO and Chairman of the Board of Managers – was one of the goals FHFA expected to achieve in 2013.

© 2013 Florida Realtors®

New Homes Boost in Country Club East, Lakewood Ranch

One of the latest home building projects in Lakewood Ranch, Florida will create over 1,200 upscale homes in a community that has seen a lot of development lately. While the entire community won’t be finished for about six or seven years there are already 395 families living there and 114 homes are under construction.

Source: Bay News 9

Another Housing Bubble? Not Likely Say Experts

Several experts at a conference in Miami last week called into question economist Robert Shiller’s recent comments that the housing market was starting to look “a little bubbly.” Shiller, who co-developed the S&P/Case-Shiller Composite 10 Home Price Index, has said he’s concerned some markets across the country may be over-correcting and starting to resemble a housing bubble.

However, a group of housing experts disagreed during the ABS East 2013 conference. Price appreciation is slowing, says Mark Fleming, CoreLogic’s chief economist. Fleming says that the rapid growth in appreciation in previous months was a correction after an overshoot in prices falling during the housing crisis.

"We are certainly not in a housing bubble," added Laurie Goodman, who heads the Urban Institute.

Even if interest rates continue to move higher, the housing market would still be OK, say Goodman and Fleming. Goodman says that even with a 6 percent interest rate, affordability would remain at 2000-2003 levels.

Source: “ABS East panel says Shiller wrong on housing bubble call,” HousingWire (Oct. 7, 2013)

Foreclosure Inventory Down 33%

The nation's foreclosure inventory continues a precipitous decline, falling 33 percent year-over-year in August, according to CoreLogic’s August National Foreclosure Report. About 939,000 homes were in some stage of foreclosure, down from 1.4 million in August 2012.

“The foreclosure inventory continues to improve, as exhibited by these recent numbers,” says Mark Fleming, CoreLogic's chief economist. “A surge in completed foreclosures and a rise in the foreclosure inventory is unlikely given continued house-price improvements and shortages of supply in many markets.”

The foreclosure inventory in August represented 2.4 percent of all homes with a mortgage compared to 3.3 percent in August 2012.

Shadow inventory is another threat that is starting to recede. The residential shadow inventory in August fell to its lowest level since August 2008 to 1.9 million homes. That represents a 3.7-month supply and is down 38 percent from its 2010 peak of 3 million homes, according to CoreLogic.

"Over the past year, the value of the U.S. shadow inventory dropped by $87 billion, a sign of increased normalcy in the housing market,” says Anand Nallathambi, president and CEO of CoreLogic. “With a year-over-year decrease of 22 percent in July, the shadow inventory has now declined steadily for 10 consecutive months.”

In August, the number of completed foreclosures fell 34 percent year-over-year. Completed foreclosures, however, are still high by historical levels. Prior to the housing crisis, completed foreclosures — the total number of homes actually lost to foreclosure — averaged 21,000 per month between 2000 and 2006. In August, they were at 48,000.

Since the financial crisis began in 2008, about 4.5 million homes nationwide have been lost to foreclosure.

Source: CoreLogic

Government Shutdown Affecting Housing Optimism

Though Americans have expressed optimism about the housing recovery over the last few months, their feel-good attitudes took a turn for the worse in the run-up to the government shutdown, Fannie Mae reports in its latest National Housing Survey.

"Our September National Housing Survey results show that the improvements in consumer housing attitudes witnessed in recent months softened ahead of the government shutdown," says Doug Duncan, Fannie Mae's senior vice president and chief economist. "Americans' awareness of policy uncertainty leading up to the October 1st shutdown, and the pending debt-ceiling debate, appears to have grown as indicated by an apparent cautionary holding pattern in overall consumer housing and personal finance sentiment."

The percentage of Americans who say they believe home prices will increase over the next 12 months fell from 55 percent in August to 52 percent in September. And 63 percent say they believe mortgage rates will keep rising, and all-time high for the survey and an uptick from 60 percent in August.

Still, 72 percent say it’s a good time to buy a house, and 38 percent say it’s a good time to sell, according to the survey.

Source: “Housing Market Optimism Tempered by Shutdown,” Mortgage News Daily (Oct. 7, 2013)

Freddie Mac's Plan to Stall Impact of Shutdown

With the government shutdown now nearing its third week, Freddie Mac has issued intermediate guidelines to lending institutions for approving home loans and modifications to keep the housing market from grinding to a halt.

Federal employees and contractors are not receiving paychecks during the government shutdown, but Freddie Mac is allowing lenders to approve mortgages for those borrowers — even in the absence of steady income — assuming they meet other loan requirements and plan to return to work once the government reopens.

"Today’s bulletin is intended to give lenders the certainty to continue approving and delivering new mortgages that meet Freddie Mac guidelines to eligible borrowers, such as federal employees and contractors, during the temporary shutdown," says Dave Lowman, Freddie Mac executive vice president of single-family business. "We are also reminding servicers of our forbearance options to assist qualified home owners with Freddie Mac mortgages to minimize the shutdown’s impact on our nation’s families and communities."

Freddie Mac has mortgage relief and forbearance policies available to public- and private-sector employees who are affected by the government’s shutdown. One of the biggest hurdles for lenders is being unable to verify borrowers’ income directly from the IRS during the government freeze. But both Fannie Mae and Freddie Mac have said they would adjust policies as needed so that loans and modifications could continue to be approved.

Source: “Freddie Mac guides lenders through government freeze,” HousingWire (Oct. 7, 2013)

Healthy Halloween Treats for the Kids

Well it’s that time of the year again and everyone is getting excited for Halloween, I know my kids are! They love looking at all the decorations in our neighborhood and deciding what they are going to dress up as for 'Trick or Treat' and of course ALL the candy they get.

I mean, kids want to have some yummy, scary treats and healthy does not mean tasteless and boring. Look at some of these ideas and then get into the kitchen and create some healthy Halloween Treats.

With that in mind I thought it would be a good idea to get some healthier options to candy for the parties they might have leading up to Trick or Treat night so here are a few of my favorite ones:

Strawberry Ghosts

These are so simple to make and taste beautiful and are fun looking for the children.

Ingredients30 Fresh strawberries
8 ounces of white baking chocolate
1/8 teaspoon almond extract
1/4 cup miniature semisweet chocolate chips

DirectionsWash strawberries and gently pat with paper towels until completely dry. In a microwave-safe bowl, melt white chocolate and shortening at 50% power; stir until smooth. Stir in extract.

Dip strawberries in chocolate mixture; place on a waxed paper-lined baking sheet, allowing excess chocolate to form the ghosts' tails. Immediately press chocolate chips into coating for eyes. Freeze for 5 minutes.

In microwave, melt remaining chocolate chips; stir until smooth. Dip a toothpick into melted chocolate and draw a mouth on each ghost. Refrigerate leftovers. Yield: 2-1/2 dozen.

The children and adults will love them.

What about Cheesy Fingers?

These are so simple and easy to make. Simply cut a cheese stick in half and adhere (with cream cheese) a piece of finger nail shaped red pepper. Then with a knife create indentations to make it look like the knuckle area of the finger.

Clementine Pumpkins

Just peel little clementines or small oranges if that is all you have. Insert a one inch piece of celery into the top so that it looks like a pumpkin stalk. This looks very effective and how simple!

Banana Ghosts

These treats are so flipping adorable for a Halloween party. Just press chocolate chips into half of a peeled banana so that they resemble a ghost face. Love it.

I hope some of these ideas are useful to you. Have a spooky Halloween and stay safe.

Home Maintenance Checklist for the First Year

After buyers move in to their new home, they should be prepared for some home fixes to present themselves each season, says Rich Escallier, a handyman in Chicago. "If you can go six months without finding something that raises your blood pressure, you're lucky,” Escallier says.

CBS MoneyWatch recently released a checklist of routine maintenance and small home repairs that home buyers should expect to do their first year to help avoid more costly problems from surfacing later on:

• During move-in week: Turn on all major appliances and run them for a complete cycle. Even if the buyer already completed a home inspection, they should test again, experts say. After all, “if you have a minor leak under the dishwasher, that water leaks into the subfloor and you can't see it," says Daniel Cipriani with Kade Homes & Renovations in the Atlanta area. "But you'll start to notice the hardwood floor buckling." 

• 45 days after move-in: Change the HVAC system filter and vacuum out the air intake vents. “Capturing dirt and dust with the right filter can go a long way toward preserving the new home appeal for a few years,” CBC MoneyWatch notes. 

• Six months after move-in: Inspect the exterior of your home in both the summer and fall to ensure rainwater is draining away from the home properly. Also, clean out clogged gutters and downspouts. "Landscaping should be negatively graded away from the house," Cipriani says. "People don't think it's a big problem, but otherwise water pools against the foundation and doesn't have anywhere to go."

• Every year: Inspect the home’s roof for any missing shingles and gaps around the chimneys. Also, check the ceilings inside the home for any water spots and indications of potential leaks. 

Experts also note that every two years, home owners would be wise to hire a professional HVAC contractor to inspect their furnace, air conditioner, and hot water heater. A ruptured reservoir could potentially spill 40 gallons of water in a mere few hours so experts recommend home owners install a water alarm with sensors in the collection pan underneath the hot water heater. The sensors cost about $25 and can help save home owners from costly water damage.

Source: “Repairs Every New Homebuyer Should Make,” CBS MoneyWatch

Housing Will Strengthen in 2014 - NAHB

Despite many headwinds, the housing recovery is expected to pick up in the next year.

“The cards are in play for a decent and fairly strong recovery in 2014 and particularly in 2015,” says David Crowe, chief economist for the National Association of Home Builders. "From the standpoint of GDP growth, housing has been a plus, growing at two, three, and four times the rate of the rest of the economy in recent quarters."

Crowe made the statements during the Fall 2013 Construction Forecast webinar, hosted by NAHB last week. He noted that a double-digit increase in home prices over the past year has helped spur a housing rebound. But Crowe warned that the steep price increases won't last forever.

"We expect to see price increases moderate in the next few years as we see additional inventory on the market and investors back away as the bargains disappear," Crowe said.

The growth in household formations is a bright spot aiding the recovery, economists noted during the webinar. During the recession, household formation growth was delayed as young professionals moved back home with their parents or doubled up with roommates.

During the height of the housing boom, the U.S. was producing 1.4 million additional households each year. However, during the recession, that figure dropped to 500,000 per year. Today, the figure has risen to 700,000.

Still, plenty of challenges remain to the housing recovery, economists note.

"Credit conditions are much tighter now, builders are increasingly facing labor shortages, lot supplies are tight, building material prices are rising, and inaccurate appraisals are hurting home sales." Crowe said. "You can't charge more than you can get an appraisal for. Even though we are seeing price increases in labor, land, and materials, 36 percent of builders recently said they had lost at least one sale over appraisals coming in below the cost of production."

NAHB made some of the following projections in housing starts:
Housing starts in 2013 are projected to reach 924,000—up 18 percent from last year.
Single-family housing starts are expected to rise 17 percent this year and an additional 31 percent next year. NAHB projects that single-family production will surpass the 1 million mark in 2015.
Multifamily starts are expected to rise 20 percent in 2013 and another 10 percent in 2014. Crowe characterized that as a “normal level” of multifamily production.

Source: National Association of Home Builders

Single-family New Construction Starts to Rise 31% in 2014

The ongoing housing recovery is expected to gain momentum next year even as several challenges remain, according to economists who participated in this week's National Association of Home Builders (NAHB) Fall 2013 Construction Forecast Webinar.

“The cards are in play for a decent and fairly strong recovery in 2014 and particularly in 2015,” said NAHB Chief Economist David Crowe. “From the standpoint of GDP growth, housing has been a plus, growing at two, three and four times the rate of the rest of the economy in recent quarters.”

A double-digit increase in home prices over the past year helped spur the housing rebound, driven in part by tight inventories of new and existing homes for sale and gradual gains in employment.

“We expect to see price increases moderate in the next few years as we see additional inventory on the market and investors back away as the bargains disappear,” said Crowe.

Read more at Florida Realtors®

Most Expensive Listing in New York City at $130m

A former co-op building with designs to become a mega mansion in Manhattan has hit the market with the most expensive listing price on record for New York. (As if that place wasn't pricey enough!)

River House, a 1930s building along the East River, is asking a mind-boggling $130 million. The building’s co-op board was unable to reach an agreement over long-term lease renewals and the sale of its private club, so it decided to turn the building’s 62,000 square feet of space into the largest single-family home in New York. The five-story building has enough space for “about 10 typical Manhattan townhouses,” according to The Wall Street Journal

The building is priced at just under $2,100 per square foot, which actually makes it a deal compared to more recent penthouse transactions in the city that have fetched up to $10,000 per square foot, the Journal reports.

River House is being sold as raw space, but the listing includes renovation plans from an interior designer that re-imagines the space as a single-family residence.

If sold at or near its list price, River House would become the most expensive home ever sold in New York. To date, the city's most expensive closed sale is $88 million, which was for a 6,744-square-foot penthouse that was owned by former Citigroup Chairman Sanford I. Weill. That penthouse sold for $13,000 per square foot.

River House currently is the fourth-priciest home for sale in the country, following the $135 million Crespi-Hicks estate in Dallas, a newly reduced $140 million for the Copper Beech Farm in Greenwich, Conn., and an “off-market” $150 million listing for the Owlwood estate in Los Angeles.

Source: “$130 Million River House Residence Is Now NYC's Most Expensive Home For Sale,” Forbes (Sept. 28, 2013) and “A View and a Price, Both Astounding,” The Wall Street Journal (Sept. 25, 2013)

Where to Eat in Sarasota, Florida

There are so many fantastic places to eat here in Sarasota, Florida, we are very lucky indeed to have so many places to choose from. 

We went into Sarasota this weekend and ate at Jack Dusty's in the Ritz Carlton, it was very good and the view, ambiance and a beautiful sunset make it the perfect place for a date night or to enjoy with friends. 

From there it is only a short walk to Main Street where you have Clasico, which offers a comfortable place to eat and drink well, commune with your friends, connect with your business, and indulge yourself.

Clasico has a great vibe about it, and it reminds me of a real city bar. It is located on the corner of Main and Palm, it is unpretentious, yet interesting and delightful at the same time. They have contemporary American cuisine, full bar and dinner/late night offerings will be sure to satisfy.

Once you are on Main Street, Sarasota you have so many places to choose from: Italian, Mexican, Greek, American and a lot more! You also have live bands to choose from (some very good ones), or go for a more relaxed place to sit and people-watch along Main Street. 

We are so lucky to live in such a fantastic part of the world!

Why Are International Sales So Important to Florida?

A study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors found that international real estate deals made up 8 percent of all Fla. existing homes sales over a one-year period that ended in July 2013.

By dollar volume, international real estate transactions made up 9 percent of sales over the same period.

The numbers come from an annual study conducted by NAR, the 2013 Profile of International Home Buyers in Florida. A total of 977 Realtors responded to this year’s survey conducted July 9-Aug. 16, 2013. For the report, foreign buyers were defined as non-resident foreigners – individuals who purchase property in the U.S. but live in the U.S. only part of the year – and who typically using the property as a rental unit, vacation unit or both.

For the 12 months ended July 2013, existing home sales in Florida – single-family homes, townhomes and condos – accounted for 327,350 transactions worth $74 billion dollars. Of that total, there were 22,572 transactions worth $6.4 billion dollars to foreigners.

By dollar volume, the international market made up 9 percent of total sales in Florida for the 12 months ended July 2013 and, on a rolling basis, about 8 percent of the total number of transactions.

Prices paid by non-resident foreign buyers tend to be higher than domestic buyers, though overall, international sales have been down due to the worldwide recessions, according to NAR.

Read more at Florida Realtors®

What Do Wealthy Buyers Want?

Wealthy home buyers rank open floor plans, smart technologies, and pools as top amenities in their home purchases. Coldwell Banker Previews International and the Luxury Institute recently surveyed home buyers who make more than $250,000 a year to find out what amenities they desire most in homes.

Here are their top-ranked amenities, according to the survey:

• An open floor plan was cited by 39 percent as the No. 1 preferred amenity
• Fully automated/wired home system, which could encompass high-speed cable and integrated music systems, computerized lighting, and home monitoring systems
• Pool
• Outdoor kitchen
• Gym
• Home theater

On the other hand, wealthy home buyers ranked the following amenities as “less important”: wine cellar, guest house, safe room, separate catering kitchen, tennis court, and staff quarters (which came in last on the list). The average home purchase for this wealthy segment of buyers was estimated at $1.6 million.

Source: Coldwell Banker and “Top amenities for wealthy homeowners: Tech, open plans,” CNBC (Sept. 27, 2013)

Mortgage Rates Fall Back to July Levels

Mortgage rates continue to fall, following the Federal Reserve’s decision to delay tapering its bond purchase program. The Federal Reserve announced in September that it would delay winding down its $85 billion per month bond purchasing program, which has helped to keep mortgage rates near record lows in recent years.

The average rate on the 30-year fixed-rate mortgage, the most popular option among home buyers, fell to its lowest level last week since the week ending July 25, Freddie Mac reports in its weekly mortgage market survey.

Freddie Mac reports the following national averages for the week ending Sept. 26: 

• 30-year fixed-rate mortgages: averaged 4.32 percent, with an average 0.7 point, dropping from last week’s 4.50 percent average. Last year at this time, 30-year rates averaged 3.40 percent. 
• 15-year fixed-rate mortgages: averaged 3.37 percent, with an average 0.7 point, dropping from last week’s 3.54 percent average. Last year at this time, 15-year rates averaged 2.73 percent. 
• 5-year hybrid adjustable-rate mortgage: averaged 3.07 percent, with an average 0.5 point, dropping from last week’s 3.11 percent average. Last year at this time, 5-year ARMs averaged 2.71 percent. 
• 1-year ARMs: averaged 2.63 percent, with an average 0.4 point, dropping from last week’s 2.65 percent average. A year ago at this time, 1-year ARMs averaged 2.60 percent. 

Source: Freddie Mac

Shadow Inventory Threat to Housing Recovery Recedes

Shadow inventory—or pre-foreclosures—have dropped by more than a third since August of last year, Lenders Processing Services reports in the “first look” data from its August Mortgage Monitor. Shadow inventories have now fallen to its lowest point in four-and-a-half years, and Florida leads the way with a 24.1% reduction year-over-year, although the state still has 16% of non-current loans.

Shadow inventory was once deemed a big threat to derailing the housing recovery, but that threat has been vanishing. The shadow inventory now represents 2.66 percent of all homes with a mortgage in the country, compared to 4.04 percent a year ago. 

The current rate of mortgages that are 30 days or more delinquent but are not yet in foreclosure was at 6.20 percent in August, a decline of nearly 10 percent since August 2012, LPS reports.

Source: Lender Processing Services and “One-third of Shadow Inventory Cleared in Last Year,” Mortgage News Daily (Sept. 26, 2013)