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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.

While 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 beth@bethfrederick.com .

Tags: First time homebuyers, Foreclosures, home sales, pinellas county, Pinellas County real estate, real estate, short sales

First-time homebuyer programs in other countries

Scottish row houses

If you are a first-time homebuyer, you know how hard it can be to get that initial investment together, even in times like these, when home prices are dropping and interest rates are low.

 Yes, there are first-time-homebuyer programs of various types available through different agencies. But have you ever wondered what other countries do to help people who are buying their first homes?

 If you lived in Scotland, you could get some special assistance through a government program that is just now being expanded for people trying to buy their own homes.

 Here’s how it works:

First-time home buyers find the homes they want, but then only pay between 60 and 80 percent of the purchase price. The government picks up the rest, and holds on to its portion as an equity stake.

When the house gets sold sometime in the future, some of the sale proceeds go to the government to pay off that equity stake. If the homebuyers decide they want to pay off the government before they sell, they are free to do so. The whole arrangement is interest-free.

The Scottish government has been experimenting with the plan, called LIFT, and has made it available in limited areas, funding it with 24 million pounds. It has been so successful that the government is now expanding it to all of Scotland, and upping the fund to 60 million pounds.

Government officials hope the shared-equity idea will help not only first-time homebuyers, but home sellers as well. It is primarily aimed at low-to-moderate-income buyers.

To learn more click on http://www.cml.org.uk/cml/policy/issues/758

Tags: First time homebuyers, real estate

What’s driving the market in North Pinellas County?

The real estate market is still slow here, just as it is everywhere, and there’s plenty of uncertainty about buying and selling to go around.  Still, things have been quite a lot better since around the first of the year, and I’ve been pretty busy with a steady stream of buyers.

What’s the common denominator? It’s probably that many of them are first-time home buyers.

This is not a very good time for the move-up buyer, who wants to trade up to a larger or nicer home.  Those people already own a home, and the chances are good they may owe more than the house is worth, or have a large enough mortgage that there just isn’t much equity left to finance a move to a nicer, more expensive home.

But for first-time homeowners, this is a great time.  Home prices are lower than they have been in a decade, interest rates are low, inventories and selection are great, and sellers are willing to negotiate in earnest. And don’t forget that big $8,000 tax credit that’s available to first time homebuyers (or to people who haven’t bought a home in the past three years or longer.)

I’ve sold a number of houses so far this year to first-time home buyers, and some of the deals have been REALLY favorable.

Do you have a good first-time home buyer story that you’d like to share? Use the “comment” area at the top of this post  – I’d like to hear from you.

Tags: First time homebuyers, North Pinellas County, real estate