Florida Real Estate Market Has Hit Bottom - Univ of Florida

UF: Florida real estate market has hit bottom

GAINESVILLE, Fla. – April 29, 2010 – Florida real estate markets show the first tentative signs of recovering from the most painful recession in the state's history, according to the latest University of Florida (UF) report.

"Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types," says Timothy Becker, director of UF's Bergstrom Center for Real Estate Studies.

But while most of the survey respondents report the market probably won't get any worse, few say it has actually begun to improve yet, Becker says. "One of our respondents summed it up by stating that 'if anything, we will get less bad.'"

On the positive side, private capital – both foreign and domestic – is continuing to enter the state in search of quality investment deals. As banks start to deal with their problem assets, more deals will come to market.

Another good sign: Life insurance companies have started to re-invest in commercial properties after backing off for the last year and a half, Becker says. Because these companies use premiums from life insurance policies to make investments, they are not deterred by the lack of available bank financing.

"(Life insurance companies) see the fundamentals of the economy stabilizing and they see the opportunity to get quality assets at a good price," Becker says. "So if they think things aren't going to get worse and they may actually get better, it follows that they're going to want to start investing again."

On the negative side, unemployment continues to be one of the state's biggest problems, edging up to 12.3 percent in March, its highest level since the state began keeping count in the 1970s. Florida has lost more than 880,000 jobs since 2007.

Although there is a potential for job growth later in the year, even under the most optimistic assumptions it will take three to four years to return to 2006 levels, Becker says.

Also of concern is the continued reluctance of commercial banks to lend money because of pressure from regulators to manage risks along with depressed values that make it difficult to refinance mortgages.

The retail and office markets are the worst off, Becker says. "Until there is an increase in job growth, there is no need for more office space, and people aren't spending as much money as they used to."

Apartments continue to be the best market in the state due to high demand from people moving out of foreclosed homes. "More people are going to be living in temporary spaces than trying to buy homes just because it's gotten a lot more difficult to buy homes from a financing perspective," Becker says.

Statewide, Florida's new housing market will continue to be slow, a result of more foreclosed homes becoming available. "That competition makes it very difficult for new homes to get built and purchased because buyers can often get an equal or nicer home for a much cheaper price on the foreclosure market," Becker says.

One of the strongest areas of the state is South Florida, especially Miami-Dade and Broward counties, with their diverse economies, steady migration and influx of foreign capital. "The glut of condos in South Florida is actually starting to change hands – they're beginning to rent them – and I think there is more life in downtown Miami than there has been in a long time," Becker says.

Orlando, Tampa and Jacksonville also are picking up. "Florida's big cities – those four areas – are less bad off than the rest of the state, and they're going to recover quicker than other places," Becker says.

Jacksonville, in particular, is in a good position because its housing market never got as hot as other markets; and, as a result, it doesn't have as many foreclosures. "I think Jacksonville is primed to really take off, and with the expansion of the port is going to have a lot of jobs coming into the marketplace," Becker says.

A positive note overall is that survey respondents' confidence in their own business has risen for the fifth consecutive quarter. In previous breakdowns by profession, developers and lenders had extremely low expectations for their own businesses, and that has grown substantially in the last few surveys.

"It's always a good sign for us that the lenders think their business is going to get better," Becker says. "Maybe it means there is some light at the end of the tunnel, even though we're still not at a great spot."

© 2010 Florida Realtors® Courtesy: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=238713

Fannie Mae Sweetens Offer to Avoid Foreclosure

Fannie sweetens offer to avoid foreclosure
WASHINGTON – April 26, 2010 – Struggling borrowers who give up their homes through a "deed in lieu of foreclosure" or a short sale will be able to obtain a new Fannie Mae loan in two years. Currently, these owners must wait at least four years.

The new policy, which takes effect in July, is designed to make foreclosure alternatives more attractive. The policy applies only to Fannie Mae's willingness to approve a mortgage, however. Homeowners' credit scores will still take a hit following a short sale or deed in lieu of foreclosure.

To qualify for a mortgage after the two year wait, Fannie Mae says borrowers must make a 20 percent downpayment; but those who lost a job or have other extenuating circumstances will be able to make a 10 percent downpayment.

Freddie Mac – which, with Fannie Mae, insures over half the mortgages in the U.S. – currently makes homeowners wait four years after a short sale or deed in lieu of foreclosure before it will back a new mortgage. Owners who go through a foreclosure wait five years. For both Fannie Mae and Freddie Mac, the waits can be shorter in some cases if borrowers show extenuating circumstances.

Source: Wall Street Journal (04/26/10) P. A2; Timiraos, Nick © Copyright 2010 INFORMATION, INC. Bethesda, MD

State gives out more appliance rebates than expected

Federal energy efficiency program brings $62 million in sales for Florida merchants

By Diane C. Lade, Sun Sentinel, April 19, 2010

State officials and retailers on Monday declared Florida's cash for clunker appliances program a success, with Floridians reserving about 72,700 rebates — almost 4,700 more than originally anticipated — before the $17.5 million in state funding ran out Saturday night.

Brenda Buchan, the chief analyst for the Governor's Energy Office who's managing the federally-financed program, said the state was able to hand out more 20 percent rebates on energy-efficient appliances because the average cost was less than expected. "There were some really good deals out there," she said.

The money also lasted almost a day longer than projected.

South Florida merchants were delighted with the response, with state officials saying the program generated at least $62 million in sales and $4 million in sales tax. Bobby Johnson, senior vice president for South Florida-based BrandsMart USA, said customers continued to buy appliances on Sunday even though the rebate funds were gone.

Now consumers' anxiety is shifting from snagging a priority number online, which helped guarantee them a rebate, to getting their appliances delivered in time to qualify. Rebate applications must be mailed by May 10, and customers need the serial numbers off their new products before they can complete them.

"I'm hoping the government gets enough complaints that they extend it," said Virgina Stewart, of Dania Beach. She bought a $1,700 refrigerator Friday at Sears store in Fort Lauderdale and wrangled a priority number, only to discover she might not be able to get her appliance until May 11.

Sears spokesman Larry Costello said he hadn't heard of similar complaints. "We've been preparing for almost a year … It's to our benefit to make sure customers get their products in time," he said.

When sending an application, include the original sales receipt and proof of recycling your old model from your installer for an additional $75, and make sure your priority number is on the application. Make photocopies of everything for your records.

Applications will continue to be accepted without a priority number but placed on a waiting list. For information, go to: http://www.rebates.com/florida.

Diane Lade can be reached at dlade@SunSentinel.com.

Copyright © 2010, South Florida Sun-Sentinel

Florida's Appliance Rebate Program Starts Today

Florida’s appliance rebate Web site down, but should be up by 11 a.m.

Posted: April 16, 2010 - 1:34am

WILL DICKEY/The Times-Union

-Customer Dustin Goldbrown (left) looks at washers and dryers with the help of sales associate Will Phillips at hhgregg at The Avenues early Friday morning, April 16.

By David Bauerlein

The Web site for Florida's long-awaited appliance rebate program was down this morning, but state officials said it should be up and running by 11 a.m. when consumer can start reserving their rebate funds.

The state's Web site is www.rebates.com/florida.

An alternative site consumers can check out is www.myfloridaclimate.com. The myfloridaclimate.com site contains information about the program and how it works. However, consumers cannot place reservations for rebates at that site. State officials strongly urge the reservations because it is a first-come, first-serve program until the money runs out.

The 20 percent rebate for appliances kicked off today amid the kind of retail buzz that usually accompanies high-tech gadgets rather than clothes washers.

Sears and Best Buy opened stores at 6 a.m. for early-bird shoppers. Lowe’s and Home Depot also promoted the rebates to their shoppers.

The $17.5 million rebate program, funded by federal stimulus money, will provide the rebates to Florida residents purchasing select Energy Star-rated appliances. Those are refrigerators, freezers, clothes washers, dishwashers, tankless gas water heaters, and room air conditioners.

Shoppers have been asking about the program for the past month, said Tom Crosby IV, owner of Crosby & Son Appliances on the Westside.

“We’re a third-generation business but I’ve never seen anything like this,” he said Thursday.

His store opened an hour early at 7 a.m.

State officials expect the rebates will be enough for 68,000 appliances and all the rebate funding could be sucked up by purchases made the first day. Appliances must be purchased at Florida stores. Online purchases won’t qualify.

After buying the appliance, the next step will be to go to the state’s Web site, www.rebates.com/florida, and reserve rebate money for your purchase. The Web site will start taking reservations at 11 a.m. The site will keep a running tally of how much rebate money is left.

Consumers will then mail in rebate forms that can be downloaded from the state’s site. The state doesn’t have a phone number for the program.

david.bauerlein@jacksonville.com Courtesy of http://jacksonville.com

Foreclosure Filings Jump in South Florida

Foreclosure filings jump in South Florida
Mounting job losses, “underwater” mortgages lead to more foreclosure filings in South Florida

By Paul Owers, Sun Sentinel, April 15, 2010

Foreclosure filings rose last month by 38 percent in Broward County as homeowners struggled with unemployment and "underwater" mortgages, RealtyTrac Inc. said Thursday.

Broward had 6,341 homeowners in some stage of foreclosure in March, up from 4,599 a year ago, according to the Irvine, Calif.-based company that tracks mortgage defaults nationwide. Broward had the eighth-highest foreclosure rate among Florida's 67 counties, with one in every 127 housing units receiving a filing.

Palm Beach County filings in March totaled 3,983, more than double the 1,509 in March 2009. The county had the state's 17th-highest foreclosure rate.

The problem isn't likely to improve soon, as job losses mount and home price declines add to the number of homeowners who owe more than their properties are worth.

"We're going to continue to have a dark cloud hanging over our real estate market for some time," said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach.

Initial foreclosure filings in both counties were down substantially compared with February, perhaps an early indication that a government-sponsored foreclosure-alternative program started recently is working, RealtyTrac said.

The plan is designed to remove barriers to so-called short sales and promote deeds in lieu of foreclosures, in which homeowners hand back their properties to the banks. The plan took effect April 5, but some lenders were using it earlier this year.

The program is sure to be popular with people who want to get out from under onerous mortgages. But it will drag down home prices, creating more underwater borrowers who may fall into foreclosure, Fort Lauderdale real estate lawyer Shari Olefson said.

"I don't know that this is the answer," she said.

RealtyTrac spokesman Daren Blomquist said it's important to speed up short sales because that will clear the inventory of available homes and ultimately help the housing market recover.

Meanwhile, South Florida remains one of the busiest areas in the nation for loan modifications. A Treasury report on the Making Home Affordable program showed that the Miami-Fort Lauderdale-Pompano Beach metropolitan area accounted for 4.7 percent of loan modification activity under the program.

But those efforts aren't likely to ease the foreclosure crisis, according to the Congressional Oversight Panel, a watchdog agency monitoring the federal government's bailout program.

RealtyTrac compiles default notices, scheduled foreclosure auctions and bank repossessions. Not all homeowners who get notices lose their properties.

Florida had the nation's fourth-highest foreclosure rate in March, with one in every 149 housing units receiving a filing, RealtyTrac said.

In December, the Florida Supreme Court ordered the creation of a statewide mediation program for homeowners and lenders before a property can be sold through foreclosure.

Broward's 17th Judicial Circuit Court has appointed the American Arbitration Association to administer its mediation program starting July 1. Program details for the 15th Judicial Circuit Court in Palm Beach County are not yet clear.

A bill in Florida's Legislature that would allow banks to foreclose without going before a judge appears to have died.

While the state's clogged foreclosure system needs an overhaul, the proposed bill was too radical, said Rod Petrey, president of the Collins Center for Public Policy. The nonprofit group provides mediation services for four state circuit courts.

"With someone's home, where their family is, we ought to move very slowly in taking that away," Petrey said.

Staff writer Harriet Johnson Brackey contributed to this report. Paul Owers can be reached at Powers@SunSentinel.com. Copyright © 2010, South Florida Sun-Sentinel. Provided courtesy of Florida Sun-Sentinel: http://www.sun-sentinel.com

Our Economy 80 Years After The 1929 Stock Market Crash

80 Years After Black Tuesday
Posted: October 30, 2009 8:29AM by Katie Adams

Eighty years ago, the stock market experienced the most significant day of its infamous 1929 crash. Dubbed "Black Tuesday," 16 million shares were traded on the New York Stock Exchange. The ticker tape was running more than three hours behind. When the market bell rang at 7:45pm, the losses were tallied and the one-day slide totaled nearly a $14 billion loss in value. The Dow Jones Industrial Average lost just over 30 points in one day, which represented a nearly 12% loss. America has endured approximately 13 recessions including our present economic slump since that dark day, but what else has occurred during those eight decades? (Learn about the series of events that triggered the Great Depression, in The Crash Of 1929 - Could It Happen Again?)

Automobiles and Domestic Production
U.S. automobile production reached a peak of 4 million in 1929 and quickly dropped off, not to see that same point again until well after World War II. Today, the beleaguered auto industry is expected to produce just 8.7 million cars, off from a previous high of 17.4 million in 2000. However, the increase in the price of a barrel of crude oil has exponentially outpaced auto production – from 65 cents eight decades ago to approximately $78 today.

In 1929, the gross domestic product stood at $103.1 billion. Today, our country's GDP is approximately $14.3 trillion, an increase of 13,492% (not adjusted for inflation) in 80 years, or approximately 1,687% per decade since 1929.

Education
In 1929, fewer than one in five Americans (19% of the U.S. population) had completed high school, and only 3.9% of Americans completed four or more years of college. In 2009 more than 85% of Americans are projected to complete high school and nearly 29% will earn at least a Bachelor's degree.

Employment and Wages
The U.S. unemployment rate stood at just over 3% in 1929. There were just over 88 million Americans and a labor force of just 49.4 million, of which only 1.5 million were unemployed. Today, the U.S. Bureau of Labor Statistics reports a labor force of 153 million and a national unemployment rate of approximately 9.8%.

In 1929, there were 553,000 paid civilian employees of the federal government. Today more than 1.8 million civilian employees work for the federal government (not including the post office), making it the nation's largest employer.

Before the 1929 stock market crash, there was no national minimum wage standard. That was established in 1938 through the Fair Labor Standards Act. At its inception, the minimum wage was 25 cents per hour; it is $7.25 today. In 1929, the average annual salary was $1,236, and according to the U.S. Census Bureau, in 2009 the U.S. real median household income is $50,303.

Home Ownership
Home ownership steadily grew from 49% in 1929 to just over 67% today. The home ownership rate hit its high (of a little more than 69%) in 2005. In response to massive losses during the Great Depression, the government created a secondary mortgage market in 1938. The first government-sponsored enterprise (GSE) – Fannie Mae – was given $1 billion in purchasing power from its federal creator to buy loans from banks and increase liquidity. Before Fannie Mae (and its twin, Freddie Mac) were seized by the federal government in September, 2008, they held or guaranteed more than $5 trillion in debt.

Inventions
It would be nearly impossible to list all of the inventions that have been introduced since October, 1929, but some of the most significant ones for American consumers, investors and corporations include:

the integrated circuit, microchip, computer, modem, microprocessors, the internet
ballpoint pens, scotch tape, fax machines, photocopiers
helicopters, jet engines
radar, transistors, optic fiber, lasers
color television, mobile phones, microwave ovens
atomic and hydrogen bombs
bar codes, credit cards, ATMs
penicillin, MRIs, the artificial heart, oral contraceptives
Life Expectancy
The average American born in 1929 could expect to live just 59.1 years, whereas a baby born in 2009 can look forward to living, on average, 80 years.

New York Stock Exchange (NYSE)
The New York Stock Exchange (NYSE) has rapidly evolved since Black Tuesday. The NYSE volume reached the 10 million daily share volume mark in 1929, and its highest single volume day since then was 7.3 billion on October 10, 2008. Notable NYSE changes since 1929 include:

1943 - Women traders allowed onto the floor
1953 - Automated quotes introduced
1966 - Real-time ticker arrived
1977 - Foreign brokers admitted
1978 - Intermarket trading system (ITS) established
1997 - Wireless data system used
2000 - First NYSE global index launched
2001 - Trading switched from fractions to decimals
2007 - NYSE Euronext, the first global marketplace, established

Population Growth
The world's population has burgeoned from to 1.8 billion to 6.8 billion, and the U.S. population has jumped from 121 million to more than 307 million. There have been seven national census undertakings in the U.S. since 1929. The 23rd is slated for 2010. (See how people's movements, ages, deaths and buying patterns affect portfolios worldwide, in Demographic Trends And The Implications For Investment.)

U.S. National Debt
The national debt currently stands at more than $11.9 trillion, representing a 74,275% increase (not adjusted for inflation) from its level of $16.9 billion in 1929.

War
The U.S. has fought in six major wars since 1929: World War II, The Korean War, Vietnam, Desert Storm, Enduring Freedom and Iraqi Freedom. (Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common! Find out more in War's Influence On Wall Street.)

Conclusion
While this is by no means an exhaustive list, it begins to give you an idea of the scope of change we've experienced as a nation since that ominous day on Wall Street 80 years ago today. Without doubt, the next 80 years will usher in another unforetold number of changes.
http://financialedge.investopedia.com/financial-edge/1009/Eighty-Years-After-Black-Tuesday.aspx?partner=basics10

What Happens When You Stop Paying Your Mortgage?

What happens if you don’t pay the mortgage?

FORT LAUDERDALE, Fla. – Oct. 29, 2009 – We all talk about what if's. One big “what if” that many homeowners have today has to do with mortgages.

About one-third of South Florida mortgages are underwater, meaning the homeowners owe more than the home is worth at today’s depressed prices, according to First American CoreLogic. Some homeowners are certainly wondering why they’re sending in the payment on, say, a $300,000 mortgage, when the house today would sell for only $210,000.

Your options: Keep paying or try to change your loan’s terms.

But some people wonder, what if I just stop paying the mortgage? It may be a tempting idea, but it quickly leads to trouble.

Here’s what could happen if you don’t pay the mortgage.

Report to the credit bureau

If your payment does not arrive, your lender or servicer will report this late payment to the credit bureau by the first day of the next month. This can happen in as little as two weeks from due date and put a negative mark on your credit report. Your credit score drops.

The late payment report whacks your credit rating. Your credit score starts to drop, by up to 200 points, if this is your only late or missed payment.

Cards are closed, rates rise

In the next 30 days, you can expect your other creditors to take note of the late payment and to take action. They can raise your interest rates, shut off your credit card entirely, or lower your credit limit. You also could face other changes in your financial life, because auto insurance, student loans and other forms of credit are pegged to your credit score.

Tightening of credit lowers your score

Credit scores feed on themselves. If your credit card limits are lowered and you are carrying a balance, you are then using more of your available credit, something known as your utilization rate. When that goes up, it lowers your score some more.

The negative mark stays on your credit report for seven years. But the impact on your credit score lessens over time. The biggest impact is for the first two years.

Lender response

The phone will start ringing. Your lender will try to contact you, try to persuade you to go into a loan modification of some kind.

But after 90 days, you cannot just start making payments again. The lender may actually send your payment back, if you send it this late and have not been in contact.

What happens next

After four months of not paying your mortgage, you will likely be served with a foreclosure notice.

If you don’t respond within 20 days, then the lender, in the following 60 days, will ask a court to issue a judgment against you.

A county sale will be arranged 50 to 120 days after the judgment. Next, 120 days after the sale, the sheriff will be at the door. Ten days after that, you’ll be thrown out of your home.

(Tip: This schedule is a general one. Courts are facing a backlog of foreclosure cases and could take longer to go through these steps. If you hire a lawyer and fight the foreclosure, you may be able to delay the sale for many months or avoid it altogether.)

Sources used for this column included: John Ulzheimer, president of consumer education for Credit.com; Barry Paperno, consumer operations manager at FICO; Attorney Roy Oppenheim of Weston, whose practice centers on foreclosure defense; and Jessica Cecere, president of the Consumer Credit Counseling Service of Palm Beach.
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=225965
© 2009 Sun Sentinel Distributed by McClatchy-Tribune News Service, Harriet Johnson Brackey.