In Step with Florida Real Estate Trends
By JoAnn Rooney
There is a Chinese proverb that says, “May you live in interesting times.”
Well these are very interesting times in real estate. Cash is king in Florida and sales of homes in Tampa Bay prove it. We have seen a surge in sales the first quarter of 2011 and the more it snowed up North the busier we got. We are seeing pricing that the Tampa Bay area has not seen for 10 years and interest rates are still holding steady. It’s looking like the homes that are priced right will be selling this next quarter. The sooner we get though the glut of homes the sooner we will see a return of equity in our homes.
We are seeing buyers that are using funds from retirement accounts and the stock market because they are banking on getting a better return on a home by renting it out for the next five to ten years. As these sales rise median prices are falling. This is a great opportunity for the second home buyer, the investor and the first time homebuyer. In some areas we are seeing multiple bids on homes. I have a client who drove through her Mother’s neighborhood and for years there was a home that she could only dream of owning… today she’s living there because that home sold for thirty percent less than what the previous owner paid for it; her patience paid off.
A lot of the homes that are short sales (you owe more than the house is worth and your lender agrees to take less than what you owe on the property to release you from the lien) have been renovated back in 2005 and 2006 when money was flowing. I had a young buyer today that commented on how updated the homes were that she was looking at.
Unfortunately all those homes that were foreclosed on and these same short sales leave behind displaced homeowners. If you had your property foreclosed on you may have to wait seven years before you can apply for a mortgage and three years with a short sale. Where are these homeowners going to live in the meantime? They are going to be renters and the rental market is heating up. These are tough times we are living through and the housing crisis has affected someone that we all know; a sister, brother, cousin, neighbor, parents and friends. Jobs have been lost across all sectors and bad things have happened to good people.
What happens three years from now and seven years when these same renters want to buy again? We don’t have much new building going on in Tampa Bay so the demand for homes will be high and this will bring back equity in our homes since no one wants to be paying the mortgage for the landlord. This is exactly what investors and foreign buyers are banking on. They will either fix them up to produce cash flow for the next five to ten years or sell them to other buyers for a quick profit.
In January and February of 2011 Tampa Bay recorded 2,619 foreclosure sales compared to 2,532 conventional sales. One year ago in 2010 for the same months, foreclosure sales numbered 1,154 compared with 3,089 conventional sales. Our best months; spring and summer, for buying homes are here, and the best advice I can give a client is to get approved for a loan before you contact a real estate agent, have a larger down payment and make sure you know what your credit profile is so you can compete with the cash buyers.
Lending is tougher then ever and you need a trusted advisor to help you navigate through the maze of paperwork and tougher underwriting standards that lenders are imposing on buyers these days. I just closed a self-employed buyer because the bank he went to turned him down because they couldn’t properly read a business tax return! Good grief that’s mortgage 101! There are plenty of extremely knowledgeable loan officers out there; make sure you are working with one. I am licensed, tested, my credit report is pulled and I have passed an FBI screening; ask your lender if they can say the same.
If you need a referral to a real estate agent call me and I can recommend someone who can help you negotiate the purchase of a home. A real estate agent works harder than ever and can work with a buyer for up to six months on a short sale and if the home does not close they spent six months working for free. Why should they drive you around when gas is $4.00 a gallon if you are not approved for a loan?
Experts believe we have seen the worst of the housing slump and the increase in sales is welcome news for all of us. So when that short sale or foreclosed home in your neighborhood sells–go introduce yourself to your new neighbors and thank them for helping us all get closer to our homes increasing in value.
Need us? Call us! At Your Mortgage Source, Inc., your priorities are our priorities! Call us today at 717-787-2299. We’re here to help.
