Governor’s budget supports affordable housing, more economic development

Governor’s budget supports affordable housing, more economic development

With a budget surplus of approximately $420 million – the first surplus in four years – Gov. Rick Scott yesterday unveiled a state budget plan that brought cheers from housing advocates, business groups and environmentalists.

The $74.2 billion budget, called Florida Families First, includes $50 million in funding for various affordable housing program supported by Florida Realtors.

“The increasing strength of Florida’s housing market continues to help the state’s economy rebuild,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “The housing recovery is putting people back to work in much-needed jobs, stimulating local spending and revitalizing communities. For Gov. Scott to advocate setting aside $50 million to support crucial housing programs is a significant step, and one that Realtors across Florida fully support.”

Sales of existing single-family homes in Florida rose 15.6 percent in December 2012 compared to a year ago, and Realtors report a shortage of inventory in many markets, according to Florida Realtors’ latest housing data.

In announcing his budget recommendations, the governor noted that 200,000 private sector jobs were created since he took office in 2011, and that statewide unemployment dropped from 11.1 percent to 8 percent.

“The nation is taking notice of our economic turnaround,” the governor says. “The nation’s top CEOs now rank Florida as the second best state in the nation for business. We have a $24 billion trade surplus, no personal income tax, are on our way to eliminating the business tax, and our weather and beaches attract 90 million tourists a year.

“Our economy is on track,” Scott continued. “We’re now in a position to strategically invest in statewide priorities.”

Real estate-related items in the governor’s budget recommendations

• $50 million for the Sadowski Housing Trust Fund to provide down payment assistance and build or rehab housing for very low- to moderate-income families. The Sadowski Trust Funds are supported entirely by a portion of documentary stamp taxes. In addition to low-income families, teachers, firefighters and senior citizens may also access these funds to help purchase or rehab a home. In the next fiscal year, doc stamp taxes will generate $193.8 million for the fund. Since 2002, the Florida Legislature has swept all the monies generated by doc stamp taxes into general revenue.

• $19.7 million to increase the corporate income tax exemption from $50,000 to $75,000. This increase will benefit 2,000 small business owners. To provide this exemption, the Governor proposes cutting costs in state government.

• $117 million to support economic development partnerships with business and tourism groups such as Enterprise Florida, VISIT Florida and Space Florida.

• $30 million in Small Community Development Grants to improve housing for low- and moderate- income persons, thereby creating jobs that don’t currently exist.

• $18 million in Weatherization Grants to help low-income families reduce their energy bills and make homes more energy efficient.

• $60 million for Everglades restoration. In reestablishing the natural water flow to this 2.4 million-acre marsh, the governor’s staff says the funding will create a reliable water supply for millions of Floridians and provide flood control to South Florida.

• $25 million in financial assistance to local and state governments and special taxing authorities for various beach restoration projects for the state’s 220 miles of coastline.

• $75 million for the Florida Forever land-buying program. To pay for Florida Forever purchases, the first in several years, Scott has proposed earmarking $50 million from state land sales, which typically revert to the general revenue fund.

Remember that the governor’s recommendations are just that – suggestions to the Florida Legislature on how and where to allocate funds. The Legislature, which convenes March 5 for a 60-day session, will determine the state budget.

© 2013 Florida Realtors

Steve Geving
Jones and Co Realty
239-573-1400
stevegeving@hotmail.com
www.swflhomeresource.com

FHA to tighten some loan rules

FHA to tighten some loan rules

The Federal Housing Administration (FHA) announced a series of changes to be issued this week.

Commissioner Carol Galante calls the changes “essential and appropriate” as the administration tries to bolster its cash reserves in its Mutual Mortgage Insurance Fund (MMI Fund).

Changes to mortgage insurance premiums
FHA will increase the annual mortgage insurance premium (MIP) added onto most new mortgages by 10 basis points (0.10 percent). Premiums on FHA jumbo mortgages ($625,500 or larger) will go up by 5 basis points (0.05 percent). There are a few exceptions, such as some streamline refinance transactions.

In addition, most new FHA borrowers will pay the MIP for the life of their loan.

Previously, FHA automatically cancelled MIP on loans when the current principal balance reached 78 percent of the original principal balance. FHA’s Office of Risk Management and Regulatory Affairs says that cancellation has cost the MMI Fund billions of dollars in premium revenue on mortgages endorsed from 2010 through 2012.

Manual underwriting on higher-risk loans
If a buyer has a credit score below 620 and a total debt-to-income (DTI) ratio greater than 43 percent, FHA won’t allow lenders to automatically approve a loan request. Lenders must now manually underwrite these loans, document compensating factors that support their approval based on FHA guidelines.

Higher downpayment on loans above $625,500
FHA says it will raise the mandatory downpayment on jumbo loans from 3.5 to 5 percent. It will officially announce it soon in the Federal Register. FHA says the change will encourage more private lenders to participate in the housing finance market.

Home equity conversion mortgage consolidation
FHA will consolidate its Standard Fixed-Rate Home Equity Conversion Mortgage (HECM) and Saver Fixed Rate HECM pricing options. This change will be effective for FHA case numbers assigned on or after April 1, 2013.

FHA loans after a foreclosure
FHA has a minimum waiting period of three years for a borrower who went through a foreclosure. However, the administration says it’s not that simple – a buyer must also reestablish good credit and qualify under other FHA loan guidelines.

“It has come to FHA’s attention that a few lenders are inappropriately advertising and soliciting borrowers with the false pretense that they can somehow ‘automatically’ qualify for an FHA-insured mortgage three years after their foreclosure,” FHA says in a release. “This is simply not true and such misleading advertising will not be tolerated.”

FHA says non-FHA lenders have also started advertising FHA mortgages. “FHA will work with other federal agencies to address such false advertising by non-FHA-approved entities,” according to the release.

© 2013 Florida Realtors®

Steve Geving
Jones and Co Realty
www.swflhomeresource.com
stevegeving@hotmail.com

Homes for sale are in short supply

Homes for sale are in short supply

The supply of homes for sale has been shrinking for six months and shows no improvement this month – a bad sign for buyers.

Listings of existing homes for sale were down 14 percent year-over-year in the first two weeks of January, according to Realtor.com, which tracks 146 markets nationwide.

In Phoenix, where prices were up 24 percent in November from a year earlier, new listings through the first three weeks of January were the lowest in 13 years, says Mike Orr, real estate expert at the W.P. Carey School of Business at Arizona State University.

That means “prices need to go up more” to bring more sellers to market, Orr says.

Nationwide, the supply of existing homes for sale fell to 4.4 months in December, based on the current monthly sales pace, the National Association of Realtors® (NAR) says. That’s the lowest in more than seven years. A six-month supply is considered balanced between buyers and sellers.

Home prices in November were 7.4 percent higher on average than a year earlier, according to CoreLogic. Real estate experts had expected that rising prices would spur more sellers trapped by years of falling prices.

Instead, January’s listing data “is the same sad story,” says Glenn Kelman, CEO of online brokerage Redfin. If sellers don’t have to sell, “They’re holding on, thinking they’ll wait for prices to go up even more.”

Redfin’s data, covering 19 major markets, mostly in the West, show new listings down 29 percent the first two weeks of January vs. a year earlier.

Scarce sellers aren’t the only reason for shrinking supplies. There are fewer distressed properties for sale. Foreclosure sales were down 7 percent through the first nine months of last year from the same period in 2011, RealtyTrac says.

Meanwhile, demand is up. Existing home sales were up 9.2 percent last year, NAR’s preliminary data show. New home sales rose almost 20 percent in 2012, the government reported Friday, while supply fell to 4.9 months in December from 5.4 months a year before. New home construction is still weak. In each of the past three years, builders completed fewer than 500,000 single-family homes. That’s less than half the number built annually from 1993 to 2007, according to the Census Bureau.

Homebuilders would need to double production this year to alleviate the tight supply, estimates Lawrence Yun, NAR’s chief economist. That’s not likely.

Home supplies nationally will stay at about the five-month level much of the year, Yun predicts.

Some markets are far below that.

California’s supply of existing single-family homes for sale stood at 2.6 months in December, the California Association of Realtors says.

Whether the supply of homes for sale will expand to meet demand is a “big question for the market” in 2013, says Jed Kolko, economist for real estate website Trulia.

This year is also the first since the housing bust began that falling inventories are not necessarily a good thing, he says.

Listings may still swell in time for the busy spring selling season, says Stan Humphries, Zillow economist.

He says listing activity next month will be key. If it doesn’t pick up by then, the spring season is likely to bring a lot of price increases, he says.

© Copyright 2013 USA TODAY

Steve Geving
Jones and Co Realty
www.swflhomeresource.com
stevegeving@live.com

What’s behind falling housing inventories?

What’s behind falling housing inventories?

Home prices are increasing across the country as the number of homes for-sale continues to fall. But at a time when buyer demand is picking up, why is inventory still so low?

Inventories fell to 1.82 million at the end of last year, a 21.6 percent drop from one year earlier, the National Association of Realtors® reports.

The Wall Street Journal recently highlighted several reasons behind the dropping inventories, including:

• Sellers hesitant to sell: About 22 percent of homeowners with a mortgage remain underwater, owing more than their home is currently worth. These homeowners don’t tend to sell unless a life-changing event occurs because they don’t want to take a loss on the sale. CoreLogic data finds constrained inventories in areas with the highest number of underwater borrowers.

• Not enough equity to trade up: Homeowners often rely on equity from their current home to make a downpayment on the next home. With fewer homeowners seeing equity, they may not have enough money to move into a pricier home – a constraint on the would-be “trade up” buyer.

• Investors continue to snatch up properties: Investors still snap up properties, but they’ve changed their strategy, which also constrains inventories. Now they’re holding onto properties and turning them into rentals instead of rehabbing and flipping them for profit. The result: fewer homes on the market.

• Banks slowing down foreclosures: Banks have new rules to meet with the foreclosure process, and it’s causing them to move at a slower pace. Banks also are showing a preference for short sales and loan modifications, which curbs the number of foreclosed homes on the market.

• Builders doing less building: Housing starts were at record lows from 2009 through 2011, so there’s less inventory added to the market. A rebound in the new-home market has only recently started to occur.

Source: “Six Reasons Housing Inventory Keeps Declining,” The Wall Street Journal (Jan. 22, 2013)

Steve Geving
Jones and Co Realty
www.swflhomeresource.com
stevegeving@hotmail.com

U.S. home prices accelerated in November

U.S. home prices accelerated in November compared with a year ago, pushed higher by rising sales and a tighter supply of available homes.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.5 percent in November compared with the same month a year ago. That’s up from a 4.3 percent annual gain in October.

The biggest yearly gain was in Phoenix, where prices jumped nearly 23 percent. Prices in San Francisco increased 12.7 percent.

Prices also increased in half of the cities measured by the index in November from October. That’s up from seven in October. The biggest monthly gains were in San Francisco, Phoenix and Minneapolis.

Monthly prices are not seasonally adjusted and frequently decline over the winter.

Copyright © 2013 The Associated Press, Christopher S. Rugaber, AP economics writer.

Steve Geving
Jones and Co Realty
www.swflhomeresource.com
stevegeving@hotmail.com

Fla.’s housing market continues positive track in Dec. 2012

Fla.’s housing market continues positive track in Dec. 2012

Florida’s housing market had more closed sales, higher pending sales, higher median prices and a reduced inventory of homes for sale in December, according to the latest housing data released by Florida Realtors®.

“Florida is an international destination: Owning a home here appeals to people of all ages from all over the world,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “Realtors from across the state are reporting increases in home sales and median prices. As a result of rising demand from investors and other buyers, there’s a shortage of inventory in many markets, and it’s putting pressure on prices.”

Statewide closed sales of existing single-family homes totaled 18,031 in December, up 15.8 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 39.7 percent over the previous December. The statewide median sales price for single-family existing homes last month was $154,000, up 14.1 percent from the previous year.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in November 2012 was $180,600, up 10.1 percent from the previous year. In California, the statewide median sales price for single-family existing homes in November was $349,300; in Massachusetts, it was $295,000; in Maryland, it was $246,294; and in New York, it was $215,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 8,470 units sold statewide last month, up 8.6 percent compared to December 2011. Meanwhile, pending sales for townhouse-condos in December increased 31.8 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $117,500, up 26.3 percent over the previous year. NAR reported that the national median existing condo price in November 2012 was $181,000.

December marks the 12th consecutive month of higher statewide median sales prices for both single-family homes and for townhouse-condo units year-to-year, according to Florida Realtors’ data.

The inventory for single-family homes stood at a 5.5-months’ supply in December; inventory for townhouse-condos was at a 6-months’ supply, according to Florida Realtors.

“The market continues to improve, and it’s doing so in all parts of the state,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Of note is the fact that inventory levels are now clearly consistent with a sellers’ market. When the final year-end statistics are compiled, expect that sales in 2012 will be more than 10 percent higher than they were in 2011. Once again, all the positive indicators are up significantly. The Florida real estate market is rapidly improving.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.35 percent in December 2012, down from the 3.96 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the December reports. Or go to Florida Realtors Media Center and download the December 2012 data report PDFs under Market Data.

© 2013 Florida Realtors®

Steve Geving
Jones and Co Realty
239-573-1400
www.swflhomeresource.com

Fla. has money for foreclosed owners but few apply

Fla. has money for foreclosed owners but few apply

With a Jan. 18, 2013, deadline looming, Florida Attorney General Pam Bondi’s office, working with Rust Consulting, Inc., has started picking up the phone in a last-ditch effort to contact Floridians who may be eligible for cash payments under the national mortgage settlement.

People who went through the foreclosure process between Jan. 1, 2008, and Dec. 31, 2011, are eligible for money if they had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase or Wells Fargo.

“It’s difficult to reach homeowners who lost their property, because there isn’t always a clear trail once they’ve moved,” says Florida Realtors Senior Vice President of Public Policy John Sebree. “Some foreclosed owners moved to hotels; some moved out of state; some may even be homeless. Attorney General Bondi’s office has made a good faith effort to find these deserving homeowners, but not enough people know about the money.”

Bondi’s office says that claims received after Jan. 18 may be considered, but payment to those claimants isn’t guaranteed. To date, only 44 percent of eligible claimants have submitted the proper forms.

Payment checks will be mailed in mid-2013, according to Bondi. A valid claimant can expect at least $840 and probably more.

This $25 billion settlement between the nation’s five largest mortgage servicers, federal government, 49 states and the District of Columbia earmarked about $1.5 billion in payments for 2 million borrowers. In Florida, approximately $170 million will be used for the claimants. All available funds will be distributed, Bondi’s office says – none will be returned to the banks or used for any other purpose.

For more information about eligibility and filing a claim:

• Visit the master claim website: NationalMortgageSettlement.com

• Email: administrator@nationalmortgagesettlement.com

• Call toll-free: 1-866-430-8358 (hearing impaired: 1-866-494-8281). The line is staffed Monday through Friday 7 a.m. to 7 p.m. Central.

© 2013 Florida Realtors®

Steve Geving
Jones and Co Realty
239-573-1400
www.swflhomeresource.com

Fla. has nation’s top foreclosure rate in 2012

Fla. has nation’s top foreclosure rate in 2012

Florida had the nation’s highest state foreclosure rate in 2012, according to data released today by RealtyTrac. The state had one in 32 housing units with a mortgage – 3.11 percent – receiving a foreclosure filing during the year.

“2012 was the year of the judicial foreclosure, with foreclosure activity increasing from 2011 in 20 of the 26 states that primarily use the judicial process, and a judicial state – Florida – posted the nation’s highest state foreclosure rate for the first time since the housing crisis began,” says Daren Blomquist, vice president at RealtyTrac.

Other states with top foreclosure rates include Nevada (2.70 percent), Arizona (2.69 percent), Georgia (2.58 percent) and Illinois (2.58 percent).

Nationwide, however, foreclosures declined 3 percent in 2012 year-to-year, but they were down 36 percent compared to 2010. In the U.S., 1.39 percent of housing units (one in every 72) had at least one foreclosure filing during the year, down from 1.45 percent of in 2011 and 2.23 percent in 2010.

Other findings:

• Foreclosure activity in 2012 increased from 2011 in 25 states, 20 of which primarily use the longer judicial foreclosure process – including New Jersey (55 percent increase), Florida (53 percent increase), Connecticut (48 percent increase), Indiana (46 percent increase), Illinois (33 percent increase) and New York (31 percent increase).

• Foreclosure activity in 2012 decreased from 2011 in 25 states, 19 of which primarily use a more streamlined non-judicial foreclosure process.

• Foreclosure activity in December dropped 10 percent from the previous month to the lowest level since April 2007, a 68-month low, and fourth quarter foreclosure activity was at the lowest quarterly level since the third quarter of 2007 despite a 9 percent quarterly increase in bank repossessions.

• The average time to complete a foreclosure nationwide in the fourth quarter increased 8 percent from the previous quarter to a record 414 days.

• Lower foreclosure inventory gave sellers the upper hand and helped median sales prices in the first 10 months of 2012 increase from the same time period in 2011 in 25 states. Median sales prices nationwide during the first 10 months of 2012 on average were 99 percent of median list prices.

• In January 2013, 10.9 million homeowners nationwide – 26 percent of all outstanding homes with a mortgage – were seriously underwater, meaning they owed at least 25 percent more on their home than what it was worth. However, that’s down from 28 percent a year earlier in January 2012.

“Although we are comfortably past the peak of the foreclosure problem nationally, 2013 is likely to be book-ended by two discrete jumps in foreclosure activity,” Blomquist says. “We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states.”

© 2013 Florida Realtors®

Steve Geving
Jones and Co Realty
www.swflhomeresource.com
239-573-1400

U.S. rate on 30-year mortgage rises to 3.40%

U.S. rate on 30-year mortgage rises to 3.40%

Average U.S. rates on fixed mortgages rose this week but remained close to record lows. Cheap mortgages have made home buying more affordable and helped drive a housing recovery.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.40 percent from 3.34 percent last week. That’s still near the 3.31 percent rate reached in November, the lowest on records dating to 1971.

The average on the 15-year fixed mortgage increased to 2.66 percent from 2.64 percent last week. The record low is 2.63 percent.

Mortgage rates tend to track the yield on the 10-year Treasury note. The yield on the note has risen from 1.70 percent to 1.89 percent Thursday.

A deal between Congress and the White House to avoid sharp tax increases and a mildly positive employment report for December led investors last week to buy stocks and sell Treasurys. As demand for Treasurys declines, the yield increases.

Even with the increase, mortgage rates are hovering near historic lows. The 30-year fixed mortgage rate averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac.

Cheaper mortgages are a key reason the housing market began to come back last year. Many economists predict the housing recovery will strengthen in 2013.

Home prices are steadily increasing, which makes consumers feel wealthier and more likely to spend.

Another reason for the housing rebound is that there aren’t enough houses for sale. A limited supply has created demand for new construction, which has made builders more confident.

Lower mortgage rates also have persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending. Consumer spending drives nearly 70 percent of economic activity.

Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can’t qualify for stricter lending rules or they lack the money to meet larger downpayment requirements.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was unchanged at 0.7 point. The fee for 15-year loans ticked up to 0.7 from 0.6 point.

The average rate on a one-year adjustable-rate mortgage rose to 2.60 percent from 2.57 percent. The fee for one-year adjustable-rate loans edged up to 0.5 from 0.4 point.

The average rate on a five-year adjustable-rate mortgage declined to 2.67 percent from 2.71 percent last week. The fee was steady at 0.6 point.

The Associated Press, Marcy Gordon, AP business writer.

Steve Geving
Jones and Co Realty
www.swflhomeresouce.com

What the Fiscal Cliff Bill means to Real Estate

What the Fiscal Cliff Bill means to Real Estate
Tax Exclusion on sale of your home remains at $250,000/$500,000, individual/couple. In general, to qualify for the exclusion, you must meet both the ownership test and the use test. You are eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. Generally, you are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.

Capital Gains Tax
For Most of us (under $400,000 income filed individually and $450,000 filed jointly) the rate remains at 15%. It goes to 20% above that.

Debt Forgiveness Act extended thru 2013
Mortgage Insurance Premiums Can still be deducted from income for filers making under $110,000/yr. This was made retroactive to filers for 2012.

Posted In: Home Buying in Palos Verdes Estates, Home Selling in Palos Verdes Estates, Foreclosure in Palos Verdes
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