Real Estate News for North Pinellas County

Archive for the 'home values' Category

Pinellas County real estate: Demand UP, supply DOWN

If you are thinking about BUYING a home in Pinellas County, or if you are thinking about SELLING your home, here are a couple of very important things you need to know:

  • Sales are UP. A lot.
  • Listing inventory is DOWN.

Closed sales in April 2015 were 2,103, up almost 20 percent over April in 2014 (1756). At the same time, listing inventory for the same month was 7,566 units — DOWN 1.5 percent.

What does that mean? Well, it means a couple of things.  First, more buyers are chasing fewer available homes. And when demand exceeds supply like that, it pushes prices UP. And that’s exactly what’s happening in Pinellas County right now.

I have buyers right now who are frustrated because the houses they want to buy are simply not on the market.

So I have a couple of things to tell you: If you are a buyer, prices are going to be higher than they are right now. And if you are a seller, or a potential seller, this is a great time to get your home on the market. There’s a buyer out there right now who is ready to make you an offer.

 

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Mold. What should you do about it?

     I see it all the time – mold on bathroom ceilings, mold in shower enclosures, mold in kitchens and laundry rooms. It’s more than just an aesthetic problem; mold can cause serious health problems, especially for people with allergies or asthma.

But it’s not necessarily a reason to walk away from buying a home.

First, let’s look at what mold is and how it gets into houses:

Mold is a kind of fungus. Its purpose in nature is to help with the decomposition of dead organic material such as trees and plants.  Dig through a pile of dead leaves and you will usually find plenty of mold.

IMG_9706Mold travels through the air in the form of microscopic spores that you can’t see without a microscope. There’s plenty of those little spores around and you probably breathe them in every day.

But that black, dark blue or green mold that you may see on an interior wall results when mold spores find a wet or damp surface. Dampness on organic material is what mold spores love to find.

Mold is bad for humans because it can cause allergenic reactions – sneezing, rashes or even asthmatic attacks. Reactions to mold can run the gamut from a minor annoyance to a life-threatening asthma attack.

It’s possible to remove mold, but if you don’t deal with the moisture that attracted it, there’s a very good chance that the mold will reappear. So if you buy a home that has visible mold, you have to be concerned about removing the mold AND dealing with the source of the moisture that attracted those mold spores in the first place.

There are different kinds of mold, and there are tests available that can tell you what kind of mold you are dealing with. But mold testing can be costly, and mold in a home should be removed and dealt with no matter what kind of mold it is.

So, let’s say you find mold in your home and decide to deal with it. If the mold is on wood, tile or painted drywall, you should be able to use a good detergent and scrub it off with a sponge. You can use bleach or a commercial mold killer if you want, but remember what we said about those mold spores being everywhere; even if you kill all the visible mold, it may well come back if new mold spores come into contact with a damp surface.

If you are dealing with unpainted drywall, you should cut the drywall out and replace it, because drywall is porous and the mold will have penetrated it.

Also, remember that if mold is on one side of a wall, it’s likely to be on the inside surface as well. You could successfully get all the mold of a drywall surface, only to find that a similar mold outbreak is taking place on the inside drywall surface as well. So think seriously about replacing the moldy drywall.

A couple of cautions:

1. Wear gloves

2. If you suffer from allergies or asthma, get a friend (or hire someone) to do the work.

The U.S. Environmental Protection Agency has a page on its website devoted to mold and how to get rid of it. Take a look.

And don’t forget – getting rid of the mold will be a useless exercise if you don’t deal with the dampness that attracted it. So deal with that dampness, whether it’s a leaky pipe, bad condensation or water seeping into the home from outside.

Also, some insurance companies may be leery about providing insurance on a home that has an active or recent mold problem, so check that out ahead of time. If you are planning on financing the home through FHA, be aware that FHA may refuse to guarantee a mortgage on a home that has, or has had, mold problems.

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Pending home sales are UP in Pinellas County and elsewhere

  Here’s some good real estate news: the National Association of Realtors says that pending home sales rose 10.4 percent during the month of October. Pending sales are contracts on home purchases that have not yet closed.

 Pending sales now are running 9.4 percent above last year’s levels.

Here in the South, those numbers are strong as well, if a bit behind the national average. Pending sales in the South for October were up 8.6 percent.

NAR doesn’t break down those figures beyond regions, but it’s safe to say that real estate trends in Pinellas County roughly track the NAR’s regional analysis. Some if you are thinking about a real estate purchase in Pinellas County, this information should be a real plus as you consider your options.

realtor logoLawrence Yun, chief economist for the National Association of Realtors, said the increase may be due to the continuing affordability homes, and pent-up demand.

 “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years,” he said. “We hope this is indicates more buyers are taking advantage of the excellent affordability conditions.”

 While the numbers are encouraging, there is a caution that must be remembered; not all contracts lead to closed transactions. In fact, these tough economic times have resulted in an increase in the number of contracts that never reach closing. Sometimes appraisals come in lower than agreed-upon sales prices and that can end deals; Also, buyers sometimes underestimate the new, more stringent credit score requirements.

 “Although contract signings are up, not all contracts lead to closings,” Yun said. “Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as canceling an old credit line while taking on a new one. Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close to the margins of qualifying, or they might get a loan but with less favorable terms.”

 If you are wondering where you might stand in trying to buy a home in Pinellas County, you should give me a call. I have many years of experience in the mortgage field, both in Pinellas County and elsewhere, and I can offer you valuable advice about how to go forward in today’s real estate market.

Five things that can be done right now to stimulate Pinellas County real estate sales (and real estate sales everywhere)

 

We’re around five years into the recession, and the real estate market has been suffering all of that time. There were a lot of reasons for the downturn, just as there are lots of reasons for the slow recovery.

balancing houseWhile I don’t have a magic bullet to right the ship and make everything okay real estate-wise, I think there are some things that could be done right now to stimulate sales and make things better, here in Pinellas County and really everywhere. Nothing is going to make up for nine percent unemployment or for the under-employment of millions more people, but I think we could do a lot for the national and the Pinellas County real estate markets to make home ownership more possible for thousands of would-be home owners by taking a few simple steps.

Here they are:

  1. MAKE CREDIT STANDARDS MORE REASONABLE: Much of the problem in the first place resulted from very easy-going credit standards when it came to home mortgages – things such as incomes that didn’t have to be verified or 100 percent (and even 110-percent) financing. Lenders have reacted to those transgressions by tightening credit requirements to a ridiculous level. So let’s find a happy medium that works for buyers while protecting the interests of lenders.
  2. BRING BACK THE 90 PERCENT MORTGAGE:  Where we once saw no-money-down mortgages, we now see lenders who want 20 or 25 percent down. There are many very qualified buyers with good incomes who should be able to buy homes with 10 percent down. Let’s make that possible for the right buyers.
  3. STREAMLINE THE UNDERWRITING PROCESS:  Underwriting has become extremely tight and difficult, and it is not unusual for lenders to come back repeatedly for additional documentation. That takes extra time, and deals can fall apart during those long waits. Good, effective underwriting shouldn’t have to take weeks or months.
  4. GENERATE MORE JOBS: Probably the biggest impediment to a housing market recovery is a lack of good-paying jobs. If people can’t earn adequate incomes, they can’t afford to buy new homes. This is something the government can help with by instituting encouraging policies; the private sector can contribute to it by investing in themselves in ways that encourage job creation.
  5. CLEAR OUT THE FORECLOSURE INVENTORY: Banks have been slow to clear out the inventory of foreclosed homes. Short sales can take forever, and lenders seem to be in no hurry to get their foreclosed-upon properties off their books. Some observers even say that banks have withheld significant numbers of foreclosed properties in order to keep home values from falling even further.  If banks want to get back to the business of lending money for home purchases, they have to do their part, take the hit, and get that inventory back into the hands of private owners.

Got any ideas of your own? Send them along and I’ll post them on the blog.

In many ways, this is a great time to buy Pinellas County real estate, especially in certain market segments. Give me a call and we’ll discuss: 727-643-7100, or e-mail me at [email protected] .

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Tampa Bay, nation show some rallying in real estate prices

Every few months, people who are interested in the real estate market turn their attention to the S&P/Case-Shiller Home Price Indices, the most reliable measurement of home prices in the nation. 

standard & poor 2That quarterly report came out today, and it contains some encouraging news – home prices were up in the second quarter of 2011. According to the Case-Shiller report, the U.S. National Home Price Index went up 3.6 per cent in the second quarter. In the previous quarter, the one ended at the end of March, the Home Price Index was down 4.1 percent. 

Any bad news in this report? Well, while the second quarter was up from the first quarter, it was down 5.9 percent when compared to the second quarter of 2010, one year ago. 

Nationally, home prices are about where they were in early 2003. 

Case-Shiller comes up with its national figures by keeping track of home prices in 20 metropolitan areas. One of those areas is Tampa Bay. Pinellas County real estate is not considered on its own, but the Tampa Bay real estate numbers should be very close to our own here in Pinellas County. 

Tampa Bay has taken a worse-than-average hit when it comes to home values for the quarter. Values are down seven per cent in this most recent quarter when compared to a year ago. That’s more than a percentage point more than the national average. 

Not as bad as such places as Minneapolis or Portland, Ore. or Phoenix, but worse than such cities as New York, Boston or Washington DC. 

“This month’s report showed mixed signals for recovery in home prices,” said David M. Blitzer, chairman of the Index Committee at S&P Indices. “No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates.” 

Blitzer said the numbers show that regional markets have to be considered as separate entities – the national housing market is not rising or falling as one. So don’t simply go by whatever national real estate figures you see in the newspaper — remember that values of Pinellas County real estate may be quite different.

You can see the Case-Shiller news release here.

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July home index leaves little to smile about

 

Every month, real estate people, financing professionals, homebuilders and many others wait with great anticipation for release of the monthly Case-Schiller home price index from Standard & Poor. 

 The index keeps track, on a month-by-month basis, of home prices across the country.

standard & PoorThe most recent index report was released this week. And while everyone was hoping for a healthy uptick in home sales, what they got instead was more of the same.

Home prices in May (measured in 20 major cities) were down 4.5 percent from the same month a year ago. When compared to the previous month of this year, April, home prices were virtually unchanged.

 So what we have is a market that continues to sort of limp along at the same slow pace. No big drops to indicate additional troubles in the area of home prices; but no indications of additional market recovery, either.

Taken market-by-market, prices were up a bit in nine cities, and down a bit in 11 others. Unfortunately for those of us in this part of the country, homes prices were down 1.5 percent in Tampa Bay.

Why aren’t we seeing more recovery after such a long period of market weakness? Here’s a few possible reasons:

  • The battle in Washington over raising the debt ceiling, and the inability of lawmakers to come up with some sort of strategy or plan – any plan – doesn’t do anything to inspire confidence.
  • Because so many problems result from lax lending standards, the current lending standards are much tighter than before, and that keeps some buyers (even qualified buyers) out of the market.
  • High unemployment rates (9.2 percent nationally) means thousands of people don’t have the incomes necessary for home purchases.
  • The bad economy prevents the formation of new households. People forming new households are people in need of new housing.

 I posted a story a few days ago about the increase in cancelled real estate sales contracts. There are a number of reasons for cancelled contracts (tighter credit standards, tougher appraisals, general nervousness in the market), but whatever the reason, fewer executed contracts obviously means fewer sales.

Were you hoping for a little more optimism in this month’s Case-Schiller home price index? Okay, here are a couple of bright spots: 

  • The inventory of homes for sale was 164,000 units, a little more than a six-month supply. That’s the lowest that home inventories have been in a long time. Once we fight through all this stagnant inventory of homes for sale, we’ll see a re-ignition of the new-home construction business, and that will mean new jobs and some good stimulation for the economy.
  • The median home sales price for the month of June was up 7.2% for new single-family homes. That could be an indication that homes in the higher price ranges are starting to sell.

If you are a glass-half-full kind of person, the new monthly index figures are a little encouraging. If you are more of a glass-half-empty sort, then the index just means more of the same.

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Real estate and Palm Harbor: Is this the best market for buyers ever?

If I were to ask you to describe your income, would you use words like “reliable,” “dependable,” or “steady?”  Do you think there’s a very good chance that your job (or your business) will be around in a year, or two, or five?

If you took out some sort of loan tomorrow, would you worry about your ability to pay it back because of future income issues? Or would you be confident that your job would remain in place over the long term?

opportunitySome people have jobs that pay really well, but which probably won’t be around for long periods.  I’ll give you an example: I have a relative who is working right now as an electrical contractor in Iraq. He’s making REALLY good money, but he doesn’t expect (or want) the job to last forever. After a year or so, he’s going to want to shake the sand out of his jeans, come back to the States, and resume a more normal life.

My relative’s big but short-term income puts him in a great position to pay off debt and accumulate cash. However, it does NOT make him a great candidate for a 30-year mortgage or a five-year car loan.

But YOU, on the other hand, might be sitting on a bigger asset than you realize, if you have a steady and dependable job or other source of income.

Why? Because this may be the best time in the past, oh, 75 years or so, to buy a house.

Which brings me to my second question:

Do you know what the S&P/Case-Shiller Home Price Indices is? Okay, I’ll tell you – it is a monthly report that measures the residential housing market. It tracks home values in 20 metro markets in the U.S.

And the Case-Shiller report for October, released just this week, shows a couple of things: 1. Home values in October were flat, and 2. in spite of that, home values during 2009 have generally been in slow but steady recovery mode.

Case-Shiller reports that home values have fallen a full 30% since their peak in 2005. That drop has been stunning – nothing like it has been seen since the Depression, and perhaps even earlier than that. For people who need or want a new home, it is an opportunity of stunning proportions.

And there is even more good news; interest rates have dropped, too, If you wanted a 30-year fixed rate mortgage three years ago, it would have likely cost you around 6.4 percent. Apply for that same mortgage today, and you’ll pay more like 5 percent.

What that means is that median home prices are now about where they were in the mid-1990s, a time when just about every agrees was a really great time to buy. What makes the current conditions even more attractive than then, however, is the difference in mortgage rates – something like 5 percent now, more like 9 percent back then.   

The Wall Street JOURNAL recently did some numbers-crunching, and came up with this conclusion: Buy an average home now, finance it with a 5 percent 30-year mortgage, and the cost comes out to be around 19 times today’s average weekly earnings. Conditions haven’t been that favorable for homebuyers since the 1970s, according to the JOURNAL.

Still not good enough for you? Okay, fine – then throw in the $8,000 first time home buyer tax credit, which is scheduled to run through the spring season.

Which brings us back to my original question: How would you characterize your income? Would you describe it as “reliable,” “dependable,” or “steady?”

If it is, and you can feel pretty good about relying on your income over the long term, this is probably the best time to buy a home that has come along during your entire lifetime, and probably your parents’ lifetime, and maybe even your grandparents’ lifetime as well.

The real question is the reliability of your income. These are uncertain economic times, and no one needs additional uncertainty in times like these. Unstable or unreliable income down the road could result in a foreclosure, no matter how attractive the selling price of the home is now.

But if income unreliability is not a major concern, unprecedented real estate opportunities await you.

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New homeowner tax credit may mean tax windfall for builders

Last week, the Congress extended the first time homeowner tax credit. But what wasn’t so obvious about that legislation is that it provides some really big tax breaks for home building companies.

Big builders like Lennar and Pulte could end up with hundreds of millions of dollars in refunds from the U.S. Treasury on taxes they paid as far back as five years, according to the Wall Street Journal. Those refunds are designed to help the companies cope with the big losses they have experienced in the past two years or so.

homebuilder pictureThe tax break will apply to large companies of all kinds. But it may be of particular benefit to the country’s biggest home builders, because they have experienced some really hefty losses as the economy has tanked over the past couple of years.

Some critics say they home builders don’t really need that much help because they have been selling off assets, such as land and unsold inventory, and bargain prices and then hoarding the proceeds. One source estimates that the 10 largest home building companies are sitting on average of $1.2 billion in cash each, quite a lot more than the $616 million cash average they had just a couple of years ago.

Pulte Homes says it may receive more than $450 million in tax refunds; Lennar Homes may get refunds of as much as $300 million.

One benefit to the tax refund news: stock prices for Lennar and other builders went up last week as the legislation was announced.

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Home refinance program expanded

     We’ve written here in the past about tax credits and about government programs aimed at saving homes from foreclosure and making home payments more affordable. Now, it looks as though the Obama Administration wants to expand those programs to make them apply to more borrowers than before.
 

making-home-affordable-logo

    Until now, those government programs have been available to people whose mortgage amounts are up to 105 percent of a home’s value. This week, the administration announced that it wants to raise that limit to 125 percent of value.
Here are some of the conditions that apply:

  • The mortgages in question must be owned or backed by Fannie Mae or Freddie Mac.
  • The applicants for new financing must be current on their mortgage payments.

     It is estimated that 30 percent of all mortgages are for amounts that exceed their homes’ values.
     The expansion of this federal home refinance program is an acknowledgement that the original program fell far short of expectations. When it was announced in March, the Obama Administration said it hoped that it would help 4-5 million homeowners who were upside-down on their mortgages. But in the middle of June, the administration admitted that only about 20,000 homeowners had applied to refinance their mortgages under the plan.
One problem has been rising interest rates. Current rates are around 5.5 percent, up from 4.84 percent in April. That rate increase has put a damper on refinances. The government hopes that the new expansion will encourage more homeowners to refinance their homes, and those refinances will make the homeowners less likely to default on their mortgages.
     Got a home in Palm Harbor, Dunedin, Clearwater, or anywhere else in Pinellas County with a mortgage bigger than the home’s value? This expanded program may be for you.

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Federal government offers mortgage help

 

making-home-affordable-pic-21-300x651

Okay, so you’ve been living in your home in Pinellas County and faithfully making your mortgage payments, but your home’s value has been steadily slipping and now you owe more than the place is worth. You keep reading about new government programs that are supposed to help, but you need to find out more.

Fear not – there’s a place you can go to find the help you need.

That place is www.MakingHomeAffordable.gov. It’s a website designed to describe the benefits of a federal program called, well, Making Home Affordable. It offers homeowners a number of opportunities to either refinance their mortgages, or modify the mortgages they already have.

The Making Home Affordable program is financed with $75 billion for loan servicers and borrowers. Its designers say that it should be able to offer mortgage help to four million homeowners who need to modify their loans to make them more affordable, or who need to negotiate short sales of their properties with their mortgage providers.

Officials say that the money will allow Fannie Mae and Freddie Mac to refinance up to five million loans they own (or guarantee). Fannie Mae and Freddie Mac have set up web sites and toll-free hotlines for borrowers who need to determine if their mortgages fall under Fannie or Freddie. Fannie Mae’s is www.fanniemae.com/homeaffordable (phone number (800) 732-6643); Freddie Mac’s is www.freddiemac.com/avoidforeclosure (phone number (800) 373-3343).

Some borrowers might prefer to get information first from their own mortgage servicer. To do that, go to www.HopeNow.com and fill out an application. That web site is operated by an alliance of mortgage servicers and nonprofit counselors. You can talk to them on the phone at (888) 995-4673.

No matter where you live in North Pinellas County – Tarpon Springs, Palm Harbor, Dunedin, Clearwater, Safety Harbor, or anywhere else, for that matter – the information offered applies to you.

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