South Florida house prices: 'Price Reduced' becoming the new normal

As South Florida house prices are reduced, thousands of dollars in phantom equity disappear.

By Mary Shanklin, Orlando Sentinel 6:37 p.m. EDT, October 4, 2010

The "Price Reduced" sign in front of a house is showing up more and more on properties listed for sale in South Florida .

The percentage of homes with price reductions in Palm Beach County has risen to 26 percent of the market compared with 22 percent at the beginning of the year, according to the real estate research firm Trulia Inc. In Broward County, the percentage inched up to 18 percent from 16 percent.

Of the homes listed for sale in select ZIP codes in early September, the proportion with the wet blanket of a price cut ranged from 6 percent in Boynton Beach to 30 percent in Boca Raton andHighland Beach. And the average size of those discounts ranged from 7 percent in Boynton to 14 percent in Boca/Highland Beach.

In Broward, 14 percent of the listings in Coral Springs/Parkland had price reductions, while a quarter of the listings in Fort Lauderdale had price cuts. The average size of the reductions in those areas was 11 percent.

With the posting of every new "Price Reduced" sign on a street, thousands of dollars in phantom equity disappear.

"What we look at is the potential wealth lost, and the amount of equity they [homeowners] thought they had and didn't," said Ken Shuman, a spokesman for Trulia. "But if you live on a street with five houses for sale, and three are bank owned, you're going to have to adjust your price."

Discounts have become commonplace in South Florida . The median sales price in Broward fell last month to $206,700, about what it was in early 2004. In Palm Beach County, the median dropped to $227,800, a price last seen in 2003.

Michael Citron, a real estate agent for RE/MAX ParkCreek in Coconut Creek, said the first 30 to 45 days are the most important for a new listing.

If it's priced too high, it won't get any offers, forcing the buyer to cut the price. A house with multiple price reductions tells buyers that something's wrong, Citron said.

He said many sellers often have unrealistic expectations about their asking prices. "I always tell my sellers to price the home at or ahead of the market so they don't have to chase the market," Citron said.

If you have to unload the property as a "short sale" — that is, for less money than is owed on the mortgage — some agents suggest dropping your price 5 percent to 10 percent every seven to 10 days. Those attempting to sell a moderately priced home under ordinary circumstances should look at the competition in the neighborhood and adjust accordingly.

Reprinted courtesy of The Sun-Sentinel: http://www.sun-sentinel.com/business/os-house-price-breaks-zip-20100927,0,381799.story

Florida’s Existing Home, Condo Sales Rise in October 2008

Florida’s existing home, condo sales rise in October 2008

ORLANDO, Fla. – Nov. 24, 2008 – For the second month in a row, Florida’s existing home sales rose in October, with Florida Realtors® reporting a 15 percent increase in activity in the year-to-year comparison; last month’s sales of existing condos statewide increased 5 percent in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR).

A total of 10,443 existing homes sold statewide last month, up 15 percent over the 9,118 homes sold in October 2007, according to FAR. Florida Realtors also reported higher statewide existing home and existing condo sales in September compared to the year-ago levels.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in October; seven MSAs also showed gains in condo sales, marking the fourth consecutive month that a number of markets have noted higher sales activity.

Florida’s median sales price for existing homes last month was $169,700; a year ago, it was $222,200 for a 24 percent decrease. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in September 2008 was $190,600, down 8.6 percent from a year earlier, according to the National Association of Realtors (NAR). In California, the statewide median resales price was $316,480 in September; in Massachusetts, it was $295,000; in Maryland, it was $271,520; and in New York, it was $215,000.

Market conditions continue to range widely, according to the latest housing outlook from NAR. “A pattern of sharply higher sales in areas with large price declines is well established,” said NAR Chief Economist Lawrence Yun. “Affordability conditions have consistently been a major factor in driving sales. Historically during recessions, buyers have responded to incentives and it’s important for government to keep that in the forefront of housing stimulus decisions.”

In Florida’s year-to-year comparison for condos, 2,956 units sold statewide compared to 2,805 sold in October 2007 for a 5 percent increase. The statewide existing condo median sales price last month was $147,600; in October 2007 it was $192,300 for a 23 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $199,400 in September 2008.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.20 percent, down from the average rate of 6.38 percent in October 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s large to medium-size markets, the Miami MSA reported a total of 453 homes sold in October compared to 367 homes a year ago for a 23 percent increase. The existing home median sales price was $246,800; a year ago, it was $354,800 for a 30 percent decrease. In the year-to-year comparison for the existing condo market, a total of 439 units sold in the MSA last month, up 1 percent compared to 436 condos sold the previous October. The market’s existing condo median price was $197,400; a year ago, it was $268,300 for a 26 percent decrease.

Courtesy: FLORIDA ASSOCIATION OF REALTORS © 2008 http://www.floridarealtors.org/NewsAndEvents/n1-112408.cfm

What the Government Takeover of Fannie Mae & Freddie Mac Means to the Housing Industry

What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry
Reprinted from the National Association of Realtors

In short-term, home sales should improve as mortgage rates fall

Washington, D.C. (September 8, 2008)-The federal government's takeover of secondary mortgage giants Fannie Mae and Freddie Mac should cause a drop in mortgage rates in the short term that benefits home buyers, but the long-term outlook is too early to call. NAR fully supports the action of the U.S. Treasury and the Federal Housing Finance Agency.

The federal government had no choice. The capital situation of the two companies was not enough to handle the fallout from rising mortgage defaults in the near future. In addition, investors who purchase Fannie Mae and Freddie Mac debt have lost confidence in the two.

In a statement, NAR commended the Treasury's action, announced yesterday, to bring stability and continued liquidity to the mortgage market.

"The plan will help restore confidence in the secondary mortgage market," said NAR President Richard F. Gaylord.

"We appreciate the steps taken to calm the market, make mortgages more widely available and protect taxpayers. We look forward to working with the administration and Congress to ensure the continued vibrancy of the secondary mortgage market.

Summary of what the Treasury actually did and what it means

• In the takeover, Treasury placed the GSEs into a conservatorship-similar to a Chapter 11 bankruptcy- which fully protects taxpayers from conflicts of interest between taxpayers and shareholders or current management.


• The federal government is authorized to take up to an 80 percent stake in the companies, will review their financial condition quarterly, and inject money into the operations as needed. That means the market for GSE securities will be treated more like Treasury obligations, which should push mortgage interest rates down. That in turn, is expected to speed up home sales and help stabilize home prices.


• The GSEs will be allowed to increase their mortgage funding over the next year and a half to help stabilize markets. Starting in 2010, the plan calls for them to reduce their portfolios.


• The heads of Fannie Mae and Freddie Mac have been relieved of their duties. Treasury selected Herbert Allison, former Merrill Lynch vice chairman, to lead Fannie Mae, and David Moffett, former U.S. Bancorp CFO, to guide Freddie Mac.

Talking Points

• NAR, as the leading advocate for homeownership and housing issues, has closely monitored the market turmoil affecting the stock and debts of the two government-sponsored enterprises (GSEs) - Fannie Mae and Freddie Mac. Their mission is crucial to the economy to make fair and affordable mortgages available to home owners and home buyers. That mission must not be interrupted.
  
• Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners. That must not be interrupted. Treasury Secretary Henry M. Paulson Jr. and James B.Lockhart III, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, have issued strong statements assuring the public that credit will continue to flow over the next 12 to 18 months.


• Short term, the takeover will result in government money driving down interest rates, which is expected to spur an increase in home sales.


• Long term, the action will lead to a major reorganization of the two GSEs as privately owned models. The brunt of that work will fall to the new administration and new Congress. NAR will help shape that process and the association is already working on a plan to do that.


• The action taking by Treasury and the FHFA, which regulates GSEs, makes clear the government will not let the deteriorating conditions of the GSEs disrupt the flow of capital to the housing sector, or harm the national and international financial system.


• The GSEs guarantee more than 40 percent of the nation's mortgages and own or guarantee more than $5 trillion in mortgages. Since the credit crunch began in August 2007, the private sector mortgage securitization market has virtually disappeared and the market share of the GSEs has jumped to about 70 percent.


• NAR will continue to follow events closely and develop recommendations on the future of the GSEs' mission to ensure there will be a robust secondary mortgage market in all markets.

Why a weaker dollar isn't necessarily bad news

By Dr. Irwin Kellner, MarketWatch

(MarketWatch) -- Talk about your party poopers -- just as we are preparing to celebrate the 231st anniversary of our declaration of independence from England, the dollar has sunk to a 26-year low against the British pound.

Not since 1981 has sterling been worth as much as $2.02 in the foreign exchange markets.

At first blush, this appears to put a damper on our July 4th celebrations. After all, a strong dollar is like motherhood and apple pie, right?

Sometimes it is and sometimes it isn't.

A strong dollar makes foreign goods cheaper, which helps to keep inflation and interest rates down. It also gives tourists from this country more buying power when they travel overseas.

However, like many things in economics and finance, a strong dollar has its downside.

Cheaper foreign imports usually lead to a bigger trade deficit, thus subtracting from economic growth. This also reduces jobs, many of which are relatively high paying, while cutting into profits that U.S. firms make from their operations abroad.

But we're talking about a lower dollar, today, and, as you might have guessed, a weaker dollar produces results that are quite the opposite of those conferred by a strong currency.

For example, a lower-valued dollar will slow the inflow of goods made overseas, since they will be more expensive. At the same time, this will boost sales of products made here in the U.S.A., since they will be cheaper to foreigners.

A lower dollar will give earnings a lift -- not just for exporters, but for any U.S. company with operations based overseas. This is because stronger currencies overseas translate into more dollars stateside.

As fewer foreign goods come in while more local products flow out, our trade gap will shrink, leading to more economic growth -- not to mention more jobs. A smaller trade gap also means we can become less dependent on others to satisfy our financial needs.

This boost to profits will come just in time, since many firms are having trouble matching gains in earnings recorded last year and the year before. This could be why the stock market has been celebrating for much of this year, bringing the Dow Jones Industrial Average a mere chip shot away from last month's all-time high.

The stronger pound should encourage some Brits to hop across the pond and visit their former colonies, since everything here is so much cheaper for holders of sterling. By the same token, fewer U.S. citizens are likely to take flight when the cost of traveling abroad is so dear.

And while they're here, these visitors from abroad will not only buy loads of goodies to take back with them -- some might even buy something that has to remain here.

I'm talking about real estate, my friends, whose value in hot locales like Manhattan is soaring at a time when prices elsewhere are tanking.

If this is not reason to celebrate -- I don't know what is.

Dr. Irwin Kellner is chief economist for MarketWatch. He also is the Weller professor of economics at Hofstra University and chief economist for North Fork Bank. Copyright ©2007 MarketWatch, Inc. User agreement applies.

Commentary Added by Branon Edwards:
South Florida has a traditionally strong foreign influence. Europeans have been flocking to Miami and Fort Lauderdale for years now to purchase real estate. This has been especially true since the British Pound and the Euro have remained strong. South Americans have done the same as their currencies have increased as well. The international nature of our economy has protected South Florida from a number of economic issues over the years.

In short, South Florida continues to be exceptionally attractive for international investors. While our real estate market has certainly slowed from the hay-days of 2004-2005, there are still a substantial number of properties changing hands here every day in the land of Sunshine. Couple the international investors with the baby boomers who are trying to escape the winter cold, and Florida is still one of the more attractive places to buy real estate in the United States.

With the present Buyers' Market we are experiencing, savvy buyers are finding exceptional bargains. Real estate hasn't stopped, it has simply changed.

401 Blu - Rented & Ready

Miami Beach Condo in Trendy NoBe!
Priced to Sell at $274,999
Great Tenant in Place @ $1,300 through June 2008
Keep Tenant or Can be Delivered Vacant - Buyer's Choice

More Photos and Info:
http://www.InvestFloridaRealty.com/listings/401-blu.htm

401 69th Street, Unit 311
Miami Beach, Fl 33141

Lovely light and airy third floor condo in 401 Blu, a newly remodeled condo in trendy North Beach. Great city views from private balcony and the master bedroom. This upgraded home features LOTS of closet space, fresh paint, berber carpet, new tile, new granite bathroom counter with undermount sink and solid maple cabinetry, new kitchen w/stainless steel appliances, knockdown textured walls, plus custom baseboards and crown molding. The building offers a large gym with cardio theatre, rooftop pool, secure lobby, and more.

Please Contact Us for Details or to Tour this Property

Highlights:
Rented @ $1300/month through June 2008
Lease Contains 60-Day Tenant Kick-Out Clause
Great Tenant
Move In or Keep Tenant - Buyer's Choice!
Newly Renovated Building
1-bedroom
1-bath
Great City Views from Master Bedroom and Private Covered Balcony
Floor-to-ceiling Sliding DoorsLeading to Balcony
Large Gym/Fitness Center
Roof Top Pool and Observation Deck
Fresh Paint Inside the Unit
Custom Base Boards and Crown Molding
New Kitchen with Stainless Steel Appliances
New Bathroom
Black Granite Counter Top
Solid Maple Cabinetry
Berber Carpet in Living Areas
Ceramic Tile in Bathroom and Kitchen
Attended Lobby with Security
Multiple Elevators
Laundry on Each Floor

Please contact me at 786-417-4910 to arrange a showing of this beautiful condominium home.

As always, thank you for the opportunity to earn your business.

All the best,

--Branon A. Edwards
Licensed Real Estate Broker and Mortgage Broker
786-417-4910 Direct Phone
786-524-5747 Direct Fax
Branon@InvestFloridaRealty.com
http://www.InvestFloridaRealty.com

Real Estate Office:
Aqualand Realty, Inc
8359 Stringfellow Road
Saint James City, FL 33956 USA

Mortgage Office:
Mainland Mortgage Corp
2807 E Commercial Blvd
Fort Lauderdale, FL 33308

Apply for a Mortgage Online:
http://www.MainlandMortgage.com/apply-fora-loan.shtml

Gulf Access Under $600k!

Original Price: $650,000
Reduced to: $620,000
Reduced AGAIN to: $599,900 PLUS Seller Pays Closing Costs
Special Financing Also Available

2540 SW 36th Lane
Cape Coral, FL 33914

3-Bedroom / 2-Bath / 2-Car Garage / Pool / Jacuzzi
Boat Dock with 7,000-Pound Boat Lift
Gulf Access!
1784 Sq Ft Under Air / Approx 3700 sq ft Total Area
Custom Waterfront Home with Reinforced Metal Roof, Boat Dock, Lift, and Gulf Access

Absolutely Perfect - Ready to Move In!

For More Photos and Info, Please Click Here:
http://www.InvestFloridaRealty.com/listings/gulf-access.htm

As always, thank you for the opportunity to earn your business.

All the best,

--Branon A. Edwards, Real Estate Broker
Aqualand Realty, Inc
786-417-4910
Branon@InvestFloridaRealty.com

What's Selling in a Slow Market

According to Hovnanian Enterprises, Toll Brothers, John Laing Homes, Kimball Hill Homes, David Weekley Homes, Drees Homes, and Orleans Homebuilders, their top-selling models are priced between $500,000 to $2 million and boast numerous specialty rooms.

Among the most popular features are angled entries that visually enlarge interior space, game rooms, sunrooms, bigger pantries, walk-in closets and smaller living rooms. To preserve resale value, many buyers want dining rooms, even though they will take most of their meals in spacious “morning rooms” near the kitchen.

Builders are offering these rooms without expanding the home’s square footage. Unlike sellers of existing residences, builders say they can attract buyers with tens of thousands of dollars in free upgrades that enhance the home without boosting the price due to their ability to purchase materials in bulk.

Source: Wall Street Journal (06/15/07) P. W8; Fletcher, June© Copyright 2007 INFORMATION, INC. Bethesda, MD

Bankruptcy Sale - Bring Offers

BANKRUPTCY FORCES SALE!
623 SW 39th Terrace
Cape Coral, FL 33914

Court Priced to Sell at Just $329,000 - Court Wants Any Reasonable Offer!!

Click Here for Photos and Info:
http://www.InvestFloridaRealty.com/listings/623-sw-39-terr.htm

3-Bedroom / 2-Bath / 2-Car Garage
Pool with Screened Lanai
Waterfront with Boat Dock

Bankruptcy Forces Sale of this beautiful Cape Coral waterfront home with 3-bedrooms, 2-baths, 2-car garage, and pool with screened lanai and entertaining area. The spacious eat-in kitchen also features new granite counter tops and newer appliances. The separate laundry area also includes washer, dryer, and basin tub. All appliances are included in the sale.

Conveniently located across from a private school and within walking distance to Wal-Mart Neighborhood Grocery Store. The property is located just North of Mohawk Parkway and just East of Skyline Boulevard on SW 39th Terrace in Cape Coral.

All three bedrooms, the living room, and the kitchen have direct water views. French doors open from the master bedroom to the lanai and sliding doors open from both the living area and the kitchen to the lanai. The home offers tile floors throughout and also includes ceiling fans. Please note that all contracts must be approved by the court-appointed trustee, but they are begging for offers. Easy to show - call us today to visit your new home!

Sold As-Is with Right to Inspect. House is ready to move-in - just a few minor touches to make it your own.

Highlights:
Bankruptcy Forces Sale
Contracts Must Be Approved by Court Trustee
Great Price!
3 Bedrooms
2 Full Bathrooms
2 Car Garage with Automatic Garage Door Opener
Large Swimming Pool
Screened Lanai Pool Enclosure
Large Covered Entertaining Area at Pool Deck
Waterfront Home on Canal
Boat Dock
Ceramic Tile Throughout (no carpet)
All 3 Bedrooms, Living Room, and Kitchen Have Water View!
Separate Dining Area
Kitchen
Newer Appliances
Refrigerator
Range/Oven
Microwave
Dishwasher
Granite Counter Tops
Island / Breakfast Bar
Separate Laundry Room
Washer
Dryer
Basin Tub

Click here for photos and info:
http://www.InvestFloridaRealty.com/listings/623-sw-39-terr.htm

As always, thank you for the opportunity to earn your business.

All the best,

--Branon A. Edwards
Licensed Real Estate Broker and Mortgage Broker
786-417-4910 Direct Phone
786-524-5747 Direct Fax
Branon@InvestFloridaRealty.com
http://www.InvestFloridaRealty.com

Real Estate Office:
Aqualand Realty, Inc
8359 Stringfellow Road
Saint James City, FL 33956 USA

Mortgage Office:
Mainland Mortgage Corp
2807 E Commercial Blvd
Fort Lauderdale, FL 33308

Apply for a Mortgage Online:
http://www.MainlandMortgage.com/apply-fora-loan.shtml

InvestFloridaRealty - Opening Blog

**Dear Readers:

We hope this entry finds you, your family, and your real estate investments well. We have run the MiamiRealty group on Yahoo Groups since 2004 and now find ourselves venturing into the wide world of blogging in a continuing effort to serve our customers.

The goal of our blog will be to keep you updated on everything related to Florida Real Estate - changes in the market, new and hot properties for sale, special investment opportunities, property taxes, plus general advice and commentary on the state of the market here in the land of Sunshine.

Our company, Aqualand Realty, Inc, has experienced agents on BOTH Florida Coasts. We focus on residential and commercial real estate primarily in South Florida including houses, condominiums, rentals and property management, office and apartment buildings, warehouse and industrial properties, vacant land, business opportunities, and general 1031 Tax-Deferred Exchanges.

East Coast of Florida: (Miami-Dade, Broward, and Palm Beach Counties)
Including Hollywood, Fort Lauderdale, Dania, Hallandale, Aventura, Sunny Isles Beach, Pembroke Pines, Miramar, Coconut Creek, Plantation, West Palm Beach, Boca Raton, etc...

West Coast of Florida: (Lee, Charlotte, Collier, and Hendry Counties)
Including: Pine Island, Saint James City, Pineland, Bokeelia, Matlecha, Cape Coral, Fort Myers, Sanibel, Captiva, Punta Gorda, Alva, Lehigh Acres, Labelle, Bonita Springs, Naples, etc...

Whether you're a novice or seasoned investor, a renter or a homeowner, we'll have something for you and your specific interests. Of course, if you've got ideas, questions, suggestions, or need help buying or selling real estate in Florida, please feel free to give us a shout at any time.

You can also visit us at one of our websites:

Our Personal Website: http://www.InvestFloridaRealty.com
Our Company Website: http://www.AqualandRealty.com
Property Listings: http://www.AqualandFlorida.com

Thank you for the opportunity to earn your business. And of course, we consider referrals to be the most sincere compliments we can receive from our current and past customers. Thank you for your trust.

All the best,

--Branon A. Edwards, Licensed Florida Real Estate and Mortgage Broker
--Jelena Panfilova, Licensed Florida Real Estate Broker-Associate

786-417-4910 Branon Direct
Branon@InvestFloridaRealty.com

786-417-4911 Jelena Direct
Jelena@InvestFloridaRealty.com

Aqualand Realty, Inc
If it's Florida... It's Aqualand!