At What Point would you Walk Away!
HOUSE prices in America have fallen so far that as many as one in five households have mortgage debt greater than the value of their homes. In a few states, borrowers are not liable for the shortfall between an unpaid loan and the resale value of the home it is secured upon. Even where borrowers are on the hook, lenders often find it too costly to pursue unpaid debts. So some homeowners may be tempted to default and escape the burden of negative equity.
How widespread is this practice? New research based on a survey of 1,000 homeowners suggests that one in four mortgage defaults are “strategic”—by people who could meet their payments but who choose not to. The main drivers of strategic default are the scale of negative equity, and moral and social considerations. Few would opt to renege on their mortgage if the equity gap were below 10% of their home’s value, the authors find, partly because of the costs of moving. But one in six would bail out if loans were underwater by a half. complete story
Source: The Economist.com
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The Orange County Property Appraiser's office has started mapping foreclosed properties in Orange County, Florida, on its web site."Searching for comprehensive information about foreclosed properties in your area has been almost impossible on the Web for most folks -- even for the real estate professionals," Orange County Property Appraiser Bill Donegan said Monday.The new feature was needed because of the abundance of "unreliable information" about foreclosures on the Internet, Donegan said. Popular real estate sites display properties as foreclosures, he said, when in fact the process has not been completed.Properties identified on the Orange County map as foreclosures have completed the court process and have certificates of title recorded. Once a property is resold, it is no longer displayed on the map.
Donegan's office reported 5,055 foreclosures in Orange in 2008 and 2,643 so far this year. He expects to update the map weekly.It should make it easier, he said, for people to look for potential bargains.
Source: Orlando Sentinel .com - Mary Shanklin
Stop Foreclosure Save Your Credit Orlando Short Sales
Wave of sales in the pipeline buoys Orlando housing market
Members of the Orlando Regional REALTOR® Association in May sold nearly 38 percent more homes than in May of last year, contributing to the area’s year-to-date sales increase of 44 percent.
There were 1,854 closings in May, which brings the year’s total to 7,834; a total of 5,462 homes had changed hands by this time last year. Of those May sales, 50.97 percent of the homes were either bank-owned (795) or distressed (150). The remaining (909) “normal” sales made up 49.03 percent.
Bank-owned and distressed home sales have an influence on Orlando’s reported median price. The median price of all Orlando homes sold in May is $130,000 (a 38.51 percent decrease compared to May 2008), but the median price for “normal” sales is $165,000. The median price for bank-owned sales is $82,000 and the median price for distressed sales is $140,000.
“There are two levels of pricing in the current market,” explains ORRA President Les Simmonds, L.G. Simmonds Real Estate Corp. “Traditional homes in good condition have held their value much better, so owners shouldn’t be overly concerned about median prices. Most sellers can expect a good return if they’ve been in their homes for a normal period of homeownership and haven’t excessively tapped their equity.”
In addition to an increase in completed sales in Orlando, there is more than double the number of homes currently awaiting closings (6,603) than in May of last year (3,225). Those pending sales, of which 3,455 are homes that came under contract in the month of May alone (the most in one month this year), are forward-looking indicators of an improving market. complete story
Source: Orlando Regional Realtor Association
Florida posted fewer foreclosure filings last month, but still finished second in the nation, according to RealtyTrac.
The state posted 58,931 foreclosure filings — including default notices, scheduled auctions and bank repossessions — in May, down 8.8 percent from April’s total, but still 50 percent higher than May 2008, according to RealtyTrac’s monthly Foreclosure Market Report.
Only California had a higher total, with 92,249 properties with May 2009 foreclosure filings.
The Sunshine State was No. 3 in the nation in foreclosure rates, with one in every 148 households receiving a foreclosure filing in May. Nevada led the country with one in every 64 homes receiving a filing, while California was second highest with one in every 144.
The Orlando-Kissimmee market took the No. 8 spot among the nation’s top 10 metro areas with the highest foreclosure rates. The area recorded a rate of one foreclosure filing for every 101 homes. complete story
Source: Orlando Business Journal - Anjali Fluker
Sales and prices of existing homes in the Orlando area remained flat in May from the month before, according to a monthly Realtor report released Wednesday.The steady prices are somewhat of a change from a decline of almost two years, but they come at a time when prices historically rise with the busy summer buying season.The Orlando Regional Realtors Association reported that a dramatic increase in the volume of sales and pending contracts from a year ago were strong indicators of an improving market. The association, which tracks activity of its members, broke down sales into three categories: normal sales, bank-owned sales and distressed sales.Median prices on existing homes ranged from $82,000 for houses sold by banks to $165,000 for what the association dubbed as "normal" sales, the report showed. Central Florida's overall median price was $130,000, which is the exact same number as the association reported for April. complete story
Source: OrlandoSentinel.com - Mary Shanklin
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Preparing to buy Orlando homes for sale can cause much excitement. But before you start daydreaming about all the possibilities, you need to concentrate on ways to save for a down payment.
One of the best ways to save for a house is to get out of debt first. From credit cards to personal loans, if you're still sending more of your money out of the house than you're keeping in, you need to make a point to significantly cut debt.
Although not glamorous, another job will put money in your pocket to help you buy Orlando homes for sale. Just make sure when you see the fruit of your labor, you set it aside as a down payment for your new home.
Got clothes you're not wearing? What about that CD player you never use? Holding a garage sale is an excellent way to quickly rake in cash. Some people make hundreds of dollars!
Even though putting 20% down is ideal, there are many available plans to assist you in coming up with a down payment. Depending on your situation, your down payment could be significantly less. Talk with your real estate agent or a trusted mortgage provider to get professional advice.
While this may seem like an odd way to save for a down payment, it's very practical. Have you helped save your company a lot of money? Did you work especially hard on a big project? Don't let all your talents go to waste. It can't hurt you to simply ask for a raise.
Instead of buying a new television or washer and dryer set, use your tax refund toward a down payment on your home.
With a bit of effort and focus, before you know it, you'll have your down payment and be on your way to owning your own home.
If you're thinking of buying, now's the time to start working with a professional real estate agent. we can recommend a mortgage provider who will help you get the financing that best fits your needs. I can also help you find Orlando homes for sale that fit your budget and criteria. Give us a call today at 407-876-5771.
Buying a home can be a life-changing experience. Whether it's your first piece of Orlando real estate or your third, take some time to assess all the ups and downs that are part of such an expensive purchase. Here are a few tips to help prevent negative emotions such as buyer's remorse from getting your down:
1. Do Your Research
One of the best ways to prevent home buyer's remorse is to conduct thorough research in the beginning. Know how much house you can afford. Consult a real estate professional and visit different neighborhoods. Check out school districts. Bottom line -- go over as many details as possible before putting down your hard-earned cash.
2. Be Honest With Yourself
Although you may love that charming 1920s Orlando real estate fix-upper located in a great neighborhood, do some soul searching and be honest with yourself. If you know in your heart that to make yourself happy you'd need to do a complete remodel project, maybe you should keep searching. The reality is that you could wind up taking on more than you really want to.
3. Don't Look at Other Homes
Just like fashions, home designs can change over time. There will always be something newer, bigger, more contemporary – you name it! So if you continue to look at other homes long after you've made your purchase, you may never feel satisfied with your property.
4. Stop Asking for Opinions
Everyone's situation is different, especially when it comes to homes and decorating styles. And remember, you didn't buy the home to please everyone else. You bought it to please yourself. So if you're happy with your purchase, don't concern yourself with everyone else's opinions. They will just make you doubt your choice.
Before you start feeling remorseful and questioning your home buying decision, remember to focus on your original list of wants and needs. Remind yourself that you met the majority of your criteria when purchasing your Orlando real estate. Be content. You're living in your dream home.
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A new Federal Housing Administration program will let first-time home buyers use their $8,000 tax credit for down payments or closing costs
The days of home buying with little or no money down may be back—this time thanks to Uncle Sam.
Blamed for contributing to the housing bubble, zero-down-payment loans largely vanished when the market crashed and Congress blocked seller financing for government-backed loans. Now the federal government will be forking over cash at closing.
Buyers who haven't owned a home for three years or longer are eligible for an $8,000 tax credit, thanks to a provision in this winter's stimulus package. Now, under a little-noticed program announced May 29, the Federal Housing Administration will steer the funds to cover closing costs directly—in some cases even offsetting the 3.5% minimum down payment FHA loans require. That's enough to cover most or all of the down payment and fees for homes up to the U.S. median price, now about $169,000.
Officials hope "monetizing" the tax credit will help revive the housing market, because meeting closing costs is one of the biggest hurdles for new home buyers. The National Association of Home Builders predicts it will add 40,000 to the 160,000 sales originally expected to be spurred by the tax credit. Supporters say the move avoids the worst effects of seller financing, in that the credit is essentially the buyer's money, and government assistance doesn't give sellers a perverse incentive to inflate prices in an unsustainable manner. complete story
Source: BusinessWeek.com - Theo Francis
Most people are familiar with the new stimulus plan that helps many get tax rebates for buying a home. The incentive is centered on first-time home buyers and a lot of people automatically assume they aren't eligible because they have owned a home in the past. This incentive shouldn't be dismissed so quickly. It is worth as much as $8,000 during the calendar year of 2009 and is a great reason to consider entering or re-entering the Orlando home buying market. Yes, that's right "re-entering" the market.
Three Year Rule
If you have not owned a Orlando home in the past three years, for tax purposes you are considered a first-time home buyer and are still eligible for the tax credit. This, however, includes you and your spouse if you are married so neither of you can have purchased a home in the last three years.
Principle Residence Rule
Even if you have owned a home in the last couple of years, if it has not been your primary residence, you may still be eligible for the tax break. This means that if you own property that you use as rental or other investment real estate such as flipping or reselling, you may still be able to get the tax incentive if you purchase a new home for you and your family to actually live in.
The new stimulus plan rules may be confusing but a qualified Orlando real estate professional can guide you through the possibilities.
If you are entitled to the tax rebate, 2009 should be the year you buy your new home. The tax rebate on a new home purchase is only good for the year.
If you purchased a Orlando home any time during the 2009 calendar year and didn't know you might be entitled to the rebate, now is the time to check into it.
If you have any questions regarding the new stimulus tax breaks for first-time home buyers, please give us a call at 407-876-5771. We would be happy to help.
In spite of problems in the housing market, experts agree this is a great time to buy Orlando real estate. First-time home buyers can take advantage of the many tax breaks allowed by the stimulus plan, and everyone can benefit from the fact that the stimulus package includes help for banks so that they can provide mortgages. There are other reasons the current market is good for new home buyers, too.
Mortgage Rates
Because so few mortgages were being issued, the rates are very low. This gives home buyers, especially those with good credit, a big advantage. Just a two point difference in mortgage rates can mean saving several hundred dollars a month on payments.
Low Prices
If you're considering buying Orlando real estate, act now so you can take advantage of the amazingly low prices. When you buy a home at today's exceptional prices, you're very likely to quickly add equity to your home when prices bounce back.
Less Construction
Having less construction happening may not seem like a great thing, and for many areas of the economy it is not, but a lack of new construction is a real plus for new home owners. The fact that there are fewer new homes on the market will help real estate prices bounce back over the next few years by creating more of a supply and demand situation for existing homes. Rising home values will provide that equity bump back to more modern levels.
If you're thinking about buying Orlando real estate and want more advice on the pros and cons, please give us a call today at 407-876-5771.
Just when you think you've done everything you need to do to get your home ready for the market, months pass and your home doesn't sell. Consider a few factors that can effect your goal of selling your home.
The good thing is that you can make changes that will improve the situation. Go over all the points listed and address any problems. Once that's done, you'll have a better chance of watching your home sell.
Let us give you a free analysis of your home's value in today's market. Just click the following link and fill out the short form: FREE Orlando Home Valuation
A glut of unsold homes continued to grow last month, fed by a new wave of foreclosures, even though sales of existing homes rose, a national real estate trade association said Wednesday.
The National Association of Realtors reported that the inventory of unsold houses, townhouses and condominiums rose to 3.97 million in April, the highest level since November. At the current rate of sales, it would take 10.2 months to exhaust those unsold properties.
“We’ve got all this looming inventory out there, and the likelihood that whatever gains we see in sales are going to be pretty anemic,” said Joshua Shapiro, chief United States economist at MFR. “If you look at the broad middle of the market, price adjustment has a long way to go because of this whole inventory issue.”
Housing experts said more homes would come on the market as the job market deteriorated, threatening previously secure homeowners.
An additional 313,000 homes entered foreclosure in the first two months of 2009, according to First American CoreLogic, a real estate analysis firm. More are expected as one-time delays to foreclosures end, and lenders resume proceedings against delinquent homeowners.
Although home builders are starting few new projects, the supply of houses is still overwhelming the market. The Realtors’ association said inventories grew last month even though sales of previously owned homes picked up as buyers went looking for bargains and lower-priced properties. complete story
Source: NYTimes.com - Jack Healy
I heard a startling statistic from the National Association of Realtors this morning…no not that home sales are actually increasing, but something about the high end of the market.
Chief economist Lawrence Yun said that the supply of existing homes for sale over $750,000 has reached a forty-month supply. Yep, that means it would take well over three years at the current place to sell off all of those homes.
The trouble is manifold: Jumbo loans are pricier and more difficult to get, job losses are mounting, and buyers in that price home are generally move-up buyers, so they have to sell their own homes first. I asked Mr. Yun if, given how hard it is to sell a home in that price range, he expects to see more foreclosures of high-end properties. He said absolutely.
That’s going to mean a new phase of the current housing recession. So far we’ve seen the “correction” of a boom market that was driven by faulty, exotic loan products, investors looking to make a quick buck, and average Americans using their homes as ATMs. Now the losses are being driven by traditional economic factors and by sweeping price drops across the nation.
Yesterday Fitch ratings estimated that up to 75 percent of the modifications now being done through the administration’s Making Home Affordable program will re-default in six months to a year. I’m not talking about the old mods, which were largely repayment plans that could actually raise monthly payments. I’m talking about the new mods, which lower monthly payments to 31 percent of a person’s income. I couldn’t understand Fitch’s reasoning, so I called them. complete story
Source: Realty Check - Diana Olick
The street is predicting existing home sales to increase, based largely on the sales surge of distressed properties. No question, the bottom feeders are back in the game, as are first time home buyers.
But these sales are not the type of sales necessary for meaningful recovery in housing. Don’t get me wrong, we need to unload the foreclosure inventory, but without real “organic” sales, that is move-up home buyers and sellers, there is no way to put a bottom on home prices.
I know there is a common perception that foreclosures and distressed sales are really only happening in the big boom-to-bust states, i.e. California, Florida, Nevada and Arizona. California makes up roughly 10 percent of the U.S. population and very roughly ten percent of the nation’s total housing units. complete story
Source: CNBC.com - Diana Olick
Short sales - where a lender agrees to take less than it's owed on a mortgage - are rising sharply. Here's how you can profit.
(Money Magazine) -- When Brian Gavitt, a physician, and his wife Gayleen, a stay-at-home mom, started to eye homes in Sacramento last winter, they knew they were looking in the hardest-hit areas of the housing bust. So the couple, who were relocating from Lansing, figured they could land a fantastic bargain in no time at all.
The part about the bargain turned out to be true. The Gavitts bought a five-bedroom house in the upscale Natomas Park neighborhood ("Even now, you don't see FOR SALE signs up anywhere," says Gayleen.) And it was a steal at $300,000, a full $200,000 less than they would have paid just two years ago.
The amount of time it took to land the deal was another story. It was more than six months from when the Gavitts first saw their dream home to the moment they held the keys in their hands. The reason: The home they bought was a short sale.
Not along ago, few people had even heard of a short sale, which occurs when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.
If you're in the market for a home today, you're almost guaranteed to be looking at some short sales. Nationwide, 14% of homeowners are currently underwater on their mortgages, calculates real estate website Zillow.com. And in many areas, it's far more: In the Gavitts' zip code, for example, over half of homeowners would owe more than their home is worth if they sold today, calculates Dee Schwindt, the Gavitts' realtor.
The good news is that short sellers are likely to still be living in the home and some may even be current on their payments. That means these aren't the run-down, distressed properties that you often find among foreclosures; in fact, there's a good chance that some of the most deluxe homes for sale in your market are underwater.
Before you get too excited about buying a short sale, know that they generally aren't, well, short. For the sale to go through, the seller's lender must approve the price and agree to take the shortfall as a loss. That extra step can cause the process to drag on three times as long as a normal home sale.
But as the Gavitts discovered, the hassles can be well worth it. Some buyers and realtors don't want to deal with short sales, leaving many choice homes with very few bidders. So if you're willing to brave the intricacies of the process, you'll be far more likely to land the home you always wanted. The key to snagging a good deal is knowing how to avoid the land mines. complete story
Source: CNN Money.com - Joe Light
Warren Buffett said that the real estate business his company Berkshire Hathaway owns is seeing a small improvement in housing demand. The National Association of Realtors seemed to confirm his observations when it announced that the index for pending home sales went up in March. This data helped send the stock market higher as it stays true to form by rising on the most modest news.
Except for low home prices and very low mortgage rates, all of the elements for a recover in housing are missing. Those two things should be enough, but balanced against them are shrinking access to credit, an inability of Americans to get higher wages, and crippling unemployment.
The April unemployment figures will be out later this week. Six hundred thousand people lost jobs last month, according to most estimates. Two and a half million people have lost work since the beginning of the year. A housing recovery cannot occur in the presence of the massive collapse in unemployment. The devastation of the potential home buying base is too great. Many of the people who lose jobs will also lose their houses and that increases the inventory of unsold homes.
Consumers have lost access to credit. The fact that mortgage rates have dropped does not even begin to offset that. Qualifying for a mortgage is harder than ever. Banks have reason to be cautious. One of the large credit bureaus just released a report that says 4.7% of payments for bank-issued credit cards were late sixty days or more in March, an increase of 38% over the same month last year. According to Reuters, "In March, lenders closed 20 million card accounts, sending the total down by 58 million since the peak in July 2008 to 380 million." Banks will not be lending to consumers as long as there are no solid and sustained signs of an economic recovery. They cannot afford the risk after all of the write-offs they have already taken. complete story
Source: Time.com - Douglas A. McIntyre
The downturn in home prices has left about 20% of U.S. homeowners owing more on a mortgage than their homes are worth, according to one new study, signaling additional challenges to the Obama administration's efforts to stabilize the housing market.
The increase in the number of such "underwater" borrowers comes amid signs that falling prices are making homes more affordable for first-time buyers and others who have been shut out of the housing market. But falling prices also make it more difficult for homeowners who get into financial trouble to refinance or sell their homes, and for others to take advantage of lower interest rates.
Borrowers who owe far more than their home is worth may also be less likely to participate in another part of the government's housing plan, which provides incentives for mortgage companies to modify loans to make payments more affordable. Thomas Lawler, an independent housing economist, said borrowers who owe 30% more than their homes are worth are far more likely to walk away from their property than those who owe just 5% or 10% more and expect prices to rebound. More than one in 10 borrowers with a mortgage owed 110% or more of their home's value at the end of last year, according to First American CoreLogic. complete story
Source: WSJ.com - Ruth Simon & James R. Hagerty