Like many homeowners, hotels are starting to drown in debt.
They have been enticing travelers all year with sweet deals: credits for in-house spas and restaurants, up to 50 percent off five-star rooms, even free nights.
But all that discounting hasn’t stopped occupancy from dropping an average of 10 percent. The result? Hotel loans have begun falling into delinquency faster than any other kind of commercial real estate debt.
The rising defaults paint a grim picture for an industry with increasingly more rooms than guests, and more hotels still opening every day. It’s a problem that could get worse before it gets better, with demand expected to remain weak and ambitious new projects planned before the meltdown worsening the room glut.
The oversupply means room rates should stay low for at least another year, good news for consumers but not so great for hotel owners and the banks that lent them the cash to build or buy.
The rise in delinquencies is sharp. Five times more hotel loans are behind on payments this year than in 2008, according to mortgage data firm Trepp LLC, which tracks those traded by investors. In October, 8.7 percent were distressed, compared with 1.5 percent last year.
That’s almost double the 4.8 percent rate for commercial property and the 4.5 percent rate for stores.
“Right now is an absolutely horrible time to be in the hotel business,” said Ben Thypin, senior market analyst for market research firm Real Capital Analytics.
What happens when a hotel loan goes bad? Banks are much less willing to seize them than houses because running a hotel requires know-how. But some hotel owners are just handing back the keys where property values have plummeted.
In most cases, it is investment funds falling behind on payments, not major hotel companies. They generally don’t own much property, instead franchising brands and earning a percentage of sales.
Most of the 1,231 U.S. hotels and casinos with troubled financing are remaining open. So, in the short term at least, consumers can expect to see deals on room rates for at least another year. Executives at STR Global, the hotel research firm, expect demand to rise 1.6 percent in 2010, but average rates to drop 3.4 percent.
Not in the 20 years the firm has collected hotel data has supply and demand been so far apart – not even in the early 1990s recession or after Sept. 11, 2001.
In July, even the posh California resort where American International Group employees vacationed after the company got bailout funds – inciting a wave of populist rancor – was taken over by a lender. Franchisor Starwood Hotels & Resorts Worldwide Inc. is still operating the St. Regis Monarch Beach, but such upscale resorts are still struggling without Wall Street business.
Extended Stay Hotels LLC filed for Chapter 11 bankruptcy protection in June, with $7.6 billion in debt across 681 residence hotels that also depend on business travelers. And Red Roof Inn Inc. defaulted in June on $361.4 million in loans on 131 properties.
Most of the distressed debt is on new or newly renovated high-end resorts built from 2005 to 2007 on dreams of corporate meetings and cocktail hours. Luxury projects approved before the recession are still opening this year and in 2010 – including three Ritz-Carltons.
And even more new hotels are on the way. Because outside investors have to secure the loans and take the biggest risk, hotel chains intend to keep growing – even at the high end.
Starwood is adding 45 luxury and upscale hotels to its U.S. portfolio this year, and about 23 in 2010. InterContinental Hotels and Resorts is signing a contract every day to add to its more than 4,300 properties, the world’s largest by room count, said Jim Abrahamson, the British company’s leader in the Americas. This year, 335 of the company’s new hotels are in the U.S.
Starwood CEO Frits van Paasschen brushes off critics, saying “rumors of luxury’s demise are greatly exaggerated.”
“As you look back on the excesses of the 1980s, ‘The Bonfire of the Vanities,’ the run-up in prosperity around the Internet boom – even going to Pompeii and seeing the way people were being pampered 2,000 years ago,” he said. “I think luxury, taking care of yourself, taking care of your family and those around you is so fundamental to the human experience.”
Copyright © 2009 The Associated Press
Monday, November 30, 2009
Tuesday, November 17, 2009
Forecast hopeful with first-time homebuyers leading the way
Aided by the homebuyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery, according to the National Association of Realtors® (NAR).
“Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” says Lawrence Yun, NAR chief economist. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”
The 2009 National Association of Realtors Profile of Home Buyers and Sellers shows that first-time buyers accounted for a record 47 percent share of home sales over the past year, up from 41 percent in the 2008 survey. The share has risen steadily since a cyclical low of 36 percent in 2006.
Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0 percent over last year, and then are forecast to rise 13.6 percent to 5.69 million in 2010. “A steady draw-down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun says.
New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.
The 30-year fixed-rate mortgage will probably average 5.3 percent in the fourth quarter, rising gradually to 5.8 percent by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for homebuyers.
“We’ve seen a steady downtrend in housing inventory for well over a year, and home prices appear to be in the early stages of stabilizing,” Yun says. “With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences.”
He expects growth in the U.S. gross domestic product to be at a pace of 2.5 percent in the current quarter, with GDP up 2.8 percent in 2010.
The unemployment rate is close to peaking and is projected to ease to 9.5 percent by the end of next year.
“The size of the U.S. budget deficit is a concern going forward and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun says. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4 percent this year, then rising 1.6 percent in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4 percent this year and 1.2 percent next year.
© 2009 Florida Realtors®
“Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” says Lawrence Yun, NAR chief economist. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.”
The 2009 National Association of Realtors Profile of Home Buyers and Sellers shows that first-time buyers accounted for a record 47 percent share of home sales over the past year, up from 41 percent in the 2008 survey. The share has risen steadily since a cyclical low of 36 percent in 2006.
Existing-home sales are expected to total 5.01 million in 2009, a gain of 2.0 percent over last year, and then are forecast to rise 13.6 percent to 5.69 million in 2010. “A steady draw-down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” Yun says.
New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.
The 30-year fixed-rate mortgage will probably average 5.3 percent in the fourth quarter, rising gradually to 5.8 percent by the end of next year. NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008. Affordability will decline from record highs next year but will remain at historically attractive levels for homebuyers.
“We’ve seen a steady downtrend in housing inventory for well over a year, and home prices appear to be in the early stages of stabilizing,” Yun says. “With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences.”
He expects growth in the U.S. gross domestic product to be at a pace of 2.5 percent in the current quarter, with GDP up 2.8 percent in 2010.
The unemployment rate is close to peaking and is projected to ease to 9.5 percent by the end of next year.
“The size of the U.S. budget deficit is a concern going forward and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun says. Inflation, as measured by the Consumer Price Index, is seen contracting 0.4 percent this year, then rising 1.6 percent in 2010. Inflation-adjusted disposable personal income is estimated to grow 0.4 percent this year and 1.2 percent next year.
© 2009 Florida Realtors®
Tax-credit extension renews buyer interest in buying a home
Real estate agent Ken Brownlee’s phone stopped ringing last month once clients figured they would be unable to close before an $8,000 federal tax credit expired.
Most of his buyers were first-timers looking for a sweet deal on a short sale or foreclosed home.
“They all want to grab a deal,” said Brownlee, an agent with Keller Williams.
Those buyers now have another chance since Congress extended the program earlier this month. Real estate agents say it could mean a boon for sales.
First-time buyers can get a credit up to $8,000 and other buyers are eligible for a credit of $6,500, as long as they’ve lived in their home for at least five years. Congress also expanded it to include some buyers who already own homes.
Business picked up immediately, Brownlee said.
“As soon as it passed, I started to get a lot more phone calls and website hits on my listings,” he said. “This tax credit will likely carry us through the normally slow season.”
That’s good news for the Bay area’s fragile housing market. As the area continues to see improvement in home sales, real estate agents say the tax credit is essential in selling off inventory. Home prices have plummeted and that has enticed buyers to act, but many are still on the sidelines.
Home sales in the Tampa-St. Petersburg-Clearwater area increased 20 percent in the third quarter, which ended Sept. 30. Experts credit the increase mainly to first-time buyers trying to take advantage of the tax credit.
There were 7,795 sales in the quarter, up from 6,502 during the same period a year ago, according to the Florida Association of Realtors. At the same time, the median sales price fell 17 percent to $140,400.
One reason is that so many people feel stuck in their homes. They want to take advantage of deep discounts, but they have to sell their existing home in order to move up. With nearly half of Tampa Bay’s homeowners owing more than their home is worth, many can’t afford to move.
That’s why the tax credit will help, said Stephanie LeFew, a real estate agent with Tampa Home Buy Realty. She’s had a number of clients decide to stay in their homes because they couldn’t sell for enough to make a move worth it.
“For some people, the credit will be just enough of a boost,” she said.
Mike Larson, an analyst with Weiss Research, said home sales would likely continue to improve, even without the tax credit. Even so, he expects the credit to lure more people into the market.
“The credit is the icing on the cake, not the cake itself,” he said. “What’s really leading to improvement is that homes are affordable again. If you throw an expanded credit into a market that already has good fundamentals, the market will respond.”
To take advantage of the credit, a prospective buyer’s home has to be under contract by April 30 and the deal must close by June 30.
Copyright © 2009 Tampa Tribune, Fla
Most of his buyers were first-timers looking for a sweet deal on a short sale or foreclosed home.
“They all want to grab a deal,” said Brownlee, an agent with Keller Williams.
Those buyers now have another chance since Congress extended the program earlier this month. Real estate agents say it could mean a boon for sales.
First-time buyers can get a credit up to $8,000 and other buyers are eligible for a credit of $6,500, as long as they’ve lived in their home for at least five years. Congress also expanded it to include some buyers who already own homes.
Business picked up immediately, Brownlee said.
“As soon as it passed, I started to get a lot more phone calls and website hits on my listings,” he said. “This tax credit will likely carry us through the normally slow season.”
That’s good news for the Bay area’s fragile housing market. As the area continues to see improvement in home sales, real estate agents say the tax credit is essential in selling off inventory. Home prices have plummeted and that has enticed buyers to act, but many are still on the sidelines.
Home sales in the Tampa-St. Petersburg-Clearwater area increased 20 percent in the third quarter, which ended Sept. 30. Experts credit the increase mainly to first-time buyers trying to take advantage of the tax credit.
There were 7,795 sales in the quarter, up from 6,502 during the same period a year ago, according to the Florida Association of Realtors. At the same time, the median sales price fell 17 percent to $140,400.
One reason is that so many people feel stuck in their homes. They want to take advantage of deep discounts, but they have to sell their existing home in order to move up. With nearly half of Tampa Bay’s homeowners owing more than their home is worth, many can’t afford to move.
That’s why the tax credit will help, said Stephanie LeFew, a real estate agent with Tampa Home Buy Realty. She’s had a number of clients decide to stay in their homes because they couldn’t sell for enough to make a move worth it.
“For some people, the credit will be just enough of a boost,” she said.
Mike Larson, an analyst with Weiss Research, said home sales would likely continue to improve, even without the tax credit. Even so, he expects the credit to lure more people into the market.
“The credit is the icing on the cake, not the cake itself,” he said. “What’s really leading to improvement is that homes are affordable again. If you throw an expanded credit into a market that already has good fundamentals, the market will respond.”
To take advantage of the credit, a prospective buyer’s home has to be under contract by April 30 and the deal must close by June 30.
Copyright © 2009 Tampa Tribune, Fla
Monday, November 16, 2009
NAR Survey: First-time homebuyers set record in past year
As a percentage of all buyers, first-time homebuyers reached 47 percent during the past year, its highest market share on record, according to a study released at the 2009 Realtors® Conference & Expo.
The 2009 National Association of Realtors® Profile of Home Buyers and Sellers is the latest in a series of national NAR surveys evaluating demographics, preferences, marketing and experiences of recent homebuyers and sellers.
Paul Bishop, NAR vice president of research, said several factors have been at play.
“Tax incentives, record high affordability conditions and pent-up demand brought a record share of first-time homebuyers into the market,” Bishop says. “These buyers are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade, and stimulate related goods and services.”
The number of first-time homebuyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, and was the highest on record dating back to 1981. The previous high was 44 percent in 1991.
“It’s interesting to note the last cyclical peak of first-time homebuyers was during the last noteworthy economic downturn, with first-time buyers starting the chain reaction that led the nation out of recession,” Bishop says.
The profile shows the median age of first-time buyers was 30, and the median income was $61,600. The typical first-time buyer purchased a home costing $156,000, down from $165,000 in the 2008 study; and he or she plans to stay in that home for 10 years.
Fifty-five percent of entry-level buyers reported financing their purchase with an FHA loan, while another 8 percent used the VA loan program.
First-time buyers who made a downpayment used a variety of sources: 61 percent used savings and 22 percent received a gift from a friend or relative, typically from their parents. Six percent received a loan from a relative or friend, 6 percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-six percent chose a fixed-rate mortgage.
First-time buyers often make financial sacrifices to purchase a home: 39 percent cut spending on luxury items, 38 percent cut back on entertainment and 30 percent cut spending on clothes.
Only 12 percent said financing their first home was more difficult than expected, but 13 percent of successful buyers said they had experienced a purchase agreement that was canceled, terminated or fell through; and 8 percent had been rejected by a lender.
“This raises the question of how many potential buyers were unsuccessful because of problems with appraisals or loan qualifications,” Bishop says. “The market would be even stronger without these problems.”
“Some people were taking a housing recovery for granted, but we must acknowledge the abnormal situation from toxic loans that will keep foreclosures coming into the market over the coming year,” says NAR 2009 President Charles McMillan. “To help stem foreclosures we must first stabilize home prices, and the expansion of tax incentives should absorb enough inventory to restore balance. As the leading advocate for homeownership, NAR commends Congress for extending and expanding the tax credit because placing financially qualified buyers into affordable homes is the soundest way to heal our economy as fast as possible.”
Buyers searched a median of 12 weeks and viewed 12 homes. Among buyers who used an agent, 63 percent selected a buyer’s representative. Eighty-seven percent consider their home a good investment, and more than half see it as a better investment than stocks. Twelve percent of buyers own two homes, while another three percent own three or more homes.
The typical repeat buyer was 48 years old, earned $88,100, purchased a home costing $224,500 and plans to stay in that home for 12 years.
The median downpayment of all homebuyers was 8 percent, and the number purchasing with no money down fell from 23 percent in 2008 to 15 percent in the current survey; 8 percent of buyers paid all cash for their home.
The median age of home sellers was 46 and their income was $91,100. Typical sellers had been in their home for seven years, up from six years in the 2008 survey, moved a median distance of 19 miles, and their home was on the market for 10 weeks. Nearly half traded up in size, 30 percent bought a comparable home and 22 percent traded down.
Eighty-five percent of sellers used a real estate professional, and 64 percent of sellers chose their agent based on a referral or because they had used the same agent in the past. Eighty-one percent of sellers are likely to use the same agent again or recommend her to others.
Forty-two percent of sellers offered incentives to attract buyers, such as home warranties or assistance with closing costs. The typical home sold for 95 percent of the listing price, with a median increase over the seller’s original purchase price of $36,000. “Even with price declines in recent years, the typical home seller saw their equity increase 27 percent,” McMillan says.
Of sellers working with real estate agents, the study found that 80 percent used full-service brokerage, in which agents provide a range of services that include managing most of the process of selling a home from listing to closing. Nine percent of sellers chose limited services, which may include discount brokerage, and 11 percent used minimal service, such as simply listing a property on a multiple listing service.
All of these types of services are provided by Realtors as well as non-member agents and brokers, with comparable findings for each year since questions about brokerage services were added in 2006. Less than 1 percent of sellers chose an agent based on his or her commission.
Sellers largely want agents to price their home competitively, find a buyer, market the property and sell within a specific timeframe. Reputation was the most important factor in choosing an agent, cited by 36 percent of respondents, followed by trustworthiness at 21 percent.
Homebuyers thought the most important services agents offer are helping find the right house, and negotiating sales terms and price. The most commonly cited benefits of using an agent are helping buyers understand the process, pointing out unnoticed features or faults, negotiating better contract terms, and providing a better list of service providers. Comparable to sellers, buyers chose agents based on a referral or had used them in a previous transaction, with trustworthiness and reputation being the biggest factors in selecting an agent.
Buyers use a wide variety of resources in searching for a home: 90 percent use the Internet, 87 percent rely on real estate agents, 59 percent yard signs, 46 percent attend open houses and 40 percent look at print or newspaper ads. Although buyers also use other resources, they generally start the search process online and then contact an agent.
When asked where they first learned about the home purchased, 36 percent of buyers said a real estate agent; 36 percent the Internet; 12 percent from yard signs; 6 percent from a friend, neighbor or relative; 5 percent home builders; 2 percent a print or newspaper ad; 2 percent directly from the seller; and less than 1 percent a home book or magazine.
Eight out of 10 home buyers who used the Internet to search for a home purchased through a real estate agent, in contrast with 63 percent of non-Internet users who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction.
Local metropolitan multiple listing service (MLS) Web sites were the most popular Internet resource, used by 60 percent of buyers; followed by Realtor.com and real estate company sites, each with 46 percent; real estate agent Web sites, 45 percent; other Web sites with real estate listings, 30 percent; for-sale-by-owner sites, 17 percent; and local newspaper sites, 9 percent; other categories were smaller.
Sixty percent of buyers are married couples, 21 percent are single women, 10 percent single men, 8 percent unmarried couples and 1 percent other. Fifteen percent are non-white, 9 percent were born outside of the United States, and 4 percent primarily speak a language other than English.
Seventy-eight percent of all respondents purchased a detached single-family home, 9 percent a condo, 8 percent a townhouse or rowhouse, and 5 percent some other kind of housing. Environmentally friendly features remain a significant factor: 88 percent of buyers said that heating and cooling costs were important, 72 percent desired energy efficient appliances, and 69 percent wanted energy efficient lighting.
Commuting costs continue to factor greatly in neighborhood selection, with 36 percent of buyers saying they were very important and another 42 percent saying transportation costs were somewhat important.
Fifty-four percent of all homes purchased were in a suburb or subdivision, 18 percent were in an urban area, 17 percent in a small town, 10 percent in a rural area and 1 percent in a resort or recreation area. The median distance from the previous residence was 12 miles. The typical home size was 1,800 square feet, ranging from 1,600 for first-time buyers to 2,100 square feet for repeat buyers.
The biggest factors influencing neighborhood choice were quality of the neighborhood, cited by 64 percent of respondents; convenience to jobs, 50 percent; overall affordability of homes, 43 percent; and convenience to family and friends, 37 percent. Other factors with relatively high responses include quality of the school district, 26 percent; convenience to shopping, 26 percent; neighborhood design, 23 percent; and convenience to schools, 21 percent.
The difficulty of for-sale-by-owner transactions increased with challenging market conditions over the past year. The level of FSBOs was a record low 11 percent, down from 13 percent in 2008. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997.
Many of these properties were not placed on the open market – 42 percent were “closely held” between parties who knew each other in advance, such as family or acquaintances. Factoring out properties that were not placed on the open market, the actual number of homes sold without professional assistance was a record low 6 percent – the rest were unrepresented sellers in private transactions. The market share of open-market FSBOs is nearly half of what it was five years ago – 10 percent were sold on the open market in 2004.
The median home price for sellers who used an agent was $215,000 vs. $172,000 for a home sold directly by an owner, but there were important differences. The median income of unassisted sellers was $76,900, in contrast with $94,200 for agent-assisted sellers, and the homes were more likely to be in a rural area. Unassisted sellers also were more likely to be selling a mobile or manufactured home. These factors suggest a somewhat lower value for FSBO properties.
The most difficult tasks reported by unrepresented sellers are preparing and fixing the home for sale, getting the right price, understanding and performing paperwork, and selling within the planned length of time.
To conduct the study, NAR mailed an eight-page questionnaire in July 2009 to a national sample of 120,038 homebuyers and sellers who purchased their homes between July 2008 and June 2009, according to county records. It generated 9,138 usable responses; the adjusted response rate was 7.9 percent. All information is characteristic of the 12-month period ending in June 2009 with the exception of income data, which are for 2008. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.
The 2009 National Association of Realtors® Profile of Home Buyers and Sellers can be ordered by calling 800-874-6500, or online at www.realtor.org/newresearch. The study is free for NAR members but costs $125 for non-members.
© 2009 Florida Realtors®
The 2009 National Association of Realtors® Profile of Home Buyers and Sellers is the latest in a series of national NAR surveys evaluating demographics, preferences, marketing and experiences of recent homebuyers and sellers.
Paul Bishop, NAR vice president of research, said several factors have been at play.
“Tax incentives, record high affordability conditions and pent-up demand brought a record share of first-time homebuyers into the market,” Bishop says. “These buyers are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade, and stimulate related goods and services.”
The number of first-time homebuyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, and was the highest on record dating back to 1981. The previous high was 44 percent in 1991.
“It’s interesting to note the last cyclical peak of first-time homebuyers was during the last noteworthy economic downturn, with first-time buyers starting the chain reaction that led the nation out of recession,” Bishop says.
The profile shows the median age of first-time buyers was 30, and the median income was $61,600. The typical first-time buyer purchased a home costing $156,000, down from $165,000 in the 2008 study; and he or she plans to stay in that home for 10 years.
Fifty-five percent of entry-level buyers reported financing their purchase with an FHA loan, while another 8 percent used the VA loan program.
First-time buyers who made a downpayment used a variety of sources: 61 percent used savings and 22 percent received a gift from a friend or relative, typically from their parents. Six percent received a loan from a relative or friend, 6 percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-six percent chose a fixed-rate mortgage.
First-time buyers often make financial sacrifices to purchase a home: 39 percent cut spending on luxury items, 38 percent cut back on entertainment and 30 percent cut spending on clothes.
Only 12 percent said financing their first home was more difficult than expected, but 13 percent of successful buyers said they had experienced a purchase agreement that was canceled, terminated or fell through; and 8 percent had been rejected by a lender.
“This raises the question of how many potential buyers were unsuccessful because of problems with appraisals or loan qualifications,” Bishop says. “The market would be even stronger without these problems.”
“Some people were taking a housing recovery for granted, but we must acknowledge the abnormal situation from toxic loans that will keep foreclosures coming into the market over the coming year,” says NAR 2009 President Charles McMillan. “To help stem foreclosures we must first stabilize home prices, and the expansion of tax incentives should absorb enough inventory to restore balance. As the leading advocate for homeownership, NAR commends Congress for extending and expanding the tax credit because placing financially qualified buyers into affordable homes is the soundest way to heal our economy as fast as possible.”
Buyers searched a median of 12 weeks and viewed 12 homes. Among buyers who used an agent, 63 percent selected a buyer’s representative. Eighty-seven percent consider their home a good investment, and more than half see it as a better investment than stocks. Twelve percent of buyers own two homes, while another three percent own three or more homes.
The typical repeat buyer was 48 years old, earned $88,100, purchased a home costing $224,500 and plans to stay in that home for 12 years.
The median downpayment of all homebuyers was 8 percent, and the number purchasing with no money down fell from 23 percent in 2008 to 15 percent in the current survey; 8 percent of buyers paid all cash for their home.
The median age of home sellers was 46 and their income was $91,100. Typical sellers had been in their home for seven years, up from six years in the 2008 survey, moved a median distance of 19 miles, and their home was on the market for 10 weeks. Nearly half traded up in size, 30 percent bought a comparable home and 22 percent traded down.
Eighty-five percent of sellers used a real estate professional, and 64 percent of sellers chose their agent based on a referral or because they had used the same agent in the past. Eighty-one percent of sellers are likely to use the same agent again or recommend her to others.
Forty-two percent of sellers offered incentives to attract buyers, such as home warranties or assistance with closing costs. The typical home sold for 95 percent of the listing price, with a median increase over the seller’s original purchase price of $36,000. “Even with price declines in recent years, the typical home seller saw their equity increase 27 percent,” McMillan says.
Of sellers working with real estate agents, the study found that 80 percent used full-service brokerage, in which agents provide a range of services that include managing most of the process of selling a home from listing to closing. Nine percent of sellers chose limited services, which may include discount brokerage, and 11 percent used minimal service, such as simply listing a property on a multiple listing service.
All of these types of services are provided by Realtors as well as non-member agents and brokers, with comparable findings for each year since questions about brokerage services were added in 2006. Less than 1 percent of sellers chose an agent based on his or her commission.
Sellers largely want agents to price their home competitively, find a buyer, market the property and sell within a specific timeframe. Reputation was the most important factor in choosing an agent, cited by 36 percent of respondents, followed by trustworthiness at 21 percent.
Homebuyers thought the most important services agents offer are helping find the right house, and negotiating sales terms and price. The most commonly cited benefits of using an agent are helping buyers understand the process, pointing out unnoticed features or faults, negotiating better contract terms, and providing a better list of service providers. Comparable to sellers, buyers chose agents based on a referral or had used them in a previous transaction, with trustworthiness and reputation being the biggest factors in selecting an agent.
Buyers use a wide variety of resources in searching for a home: 90 percent use the Internet, 87 percent rely on real estate agents, 59 percent yard signs, 46 percent attend open houses and 40 percent look at print or newspaper ads. Although buyers also use other resources, they generally start the search process online and then contact an agent.
When asked where they first learned about the home purchased, 36 percent of buyers said a real estate agent; 36 percent the Internet; 12 percent from yard signs; 6 percent from a friend, neighbor or relative; 5 percent home builders; 2 percent a print or newspaper ad; 2 percent directly from the seller; and less than 1 percent a home book or magazine.
Eight out of 10 home buyers who used the Internet to search for a home purchased through a real estate agent, in contrast with 63 percent of non-Internet users who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction.
Local metropolitan multiple listing service (MLS) Web sites were the most popular Internet resource, used by 60 percent of buyers; followed by Realtor.com and real estate company sites, each with 46 percent; real estate agent Web sites, 45 percent; other Web sites with real estate listings, 30 percent; for-sale-by-owner sites, 17 percent; and local newspaper sites, 9 percent; other categories were smaller.
Sixty percent of buyers are married couples, 21 percent are single women, 10 percent single men, 8 percent unmarried couples and 1 percent other. Fifteen percent are non-white, 9 percent were born outside of the United States, and 4 percent primarily speak a language other than English.
Seventy-eight percent of all respondents purchased a detached single-family home, 9 percent a condo, 8 percent a townhouse or rowhouse, and 5 percent some other kind of housing. Environmentally friendly features remain a significant factor: 88 percent of buyers said that heating and cooling costs were important, 72 percent desired energy efficient appliances, and 69 percent wanted energy efficient lighting.
Commuting costs continue to factor greatly in neighborhood selection, with 36 percent of buyers saying they were very important and another 42 percent saying transportation costs were somewhat important.
Fifty-four percent of all homes purchased were in a suburb or subdivision, 18 percent were in an urban area, 17 percent in a small town, 10 percent in a rural area and 1 percent in a resort or recreation area. The median distance from the previous residence was 12 miles. The typical home size was 1,800 square feet, ranging from 1,600 for first-time buyers to 2,100 square feet for repeat buyers.
The biggest factors influencing neighborhood choice were quality of the neighborhood, cited by 64 percent of respondents; convenience to jobs, 50 percent; overall affordability of homes, 43 percent; and convenience to family and friends, 37 percent. Other factors with relatively high responses include quality of the school district, 26 percent; convenience to shopping, 26 percent; neighborhood design, 23 percent; and convenience to schools, 21 percent.
The difficulty of for-sale-by-owner transactions increased with challenging market conditions over the past year. The level of FSBOs was a record low 11 percent, down from 13 percent in 2008. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997.
Many of these properties were not placed on the open market – 42 percent were “closely held” between parties who knew each other in advance, such as family or acquaintances. Factoring out properties that were not placed on the open market, the actual number of homes sold without professional assistance was a record low 6 percent – the rest were unrepresented sellers in private transactions. The market share of open-market FSBOs is nearly half of what it was five years ago – 10 percent were sold on the open market in 2004.
The median home price for sellers who used an agent was $215,000 vs. $172,000 for a home sold directly by an owner, but there were important differences. The median income of unassisted sellers was $76,900, in contrast with $94,200 for agent-assisted sellers, and the homes were more likely to be in a rural area. Unassisted sellers also were more likely to be selling a mobile or manufactured home. These factors suggest a somewhat lower value for FSBO properties.
The most difficult tasks reported by unrepresented sellers are preparing and fixing the home for sale, getting the right price, understanding and performing paperwork, and selling within the planned length of time.
To conduct the study, NAR mailed an eight-page questionnaire in July 2009 to a national sample of 120,038 homebuyers and sellers who purchased their homes between July 2008 and June 2009, according to county records. It generated 9,138 usable responses; the adjusted response rate was 7.9 percent. All information is characteristic of the 12-month period ending in June 2009 with the exception of income data, which are for 2008. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.
The 2009 National Association of Realtors® Profile of Home Buyers and Sellers can be ordered by calling 800-874-6500, or online at www.realtor.org/newresearch. The study is free for NAR members but costs $125 for non-members.
© 2009 Florida Realtors®
Thursday, November 12, 2009
Low prices draw investors back to market
Real estate investors are moving back into the market, according to a new survey from Move.com.
According to the Move.com survey, 12.1 percent of home buyers today plan to buy a home as an investment property, compared to 5.6 percent in March 2009. The survey found that 15.8 percent of those interested in investment property were men and 8.1 percent were women and 52.6 percent of the investment buyers were between ages 35 to 49.
Of the 25.3 percent of buyers who are focusing on foreclosure properties, 42 percent regard the purchase they are considering an investment and don’t plan to live in the property themselves; 13.2 percent plan to rent out the property; 11.3 percent are going to fix up the property and resell it; and 17.4 percent plan to house a family member until the property can be sold profitably.
Of the 9.8 percent of buyers who say that they plan to purchase and live in a property in the next two years, 5.4 percent plan to purchase in the next 12 months; 48.3 percent are first-time buyers; 52.8 percent are women, and 44.1 percent are men.
Buyers of investment and personal property say they are motivated by these factors:
• Prices are as low as they will go, 23.6 percent
• Foreclosure prices are a bargain, 18.7 percent
• Great selection of homes for sale in their target community, 21.2 percent
• Concerned interest rates will rise, 14.2 percent
Source: Move.com (11/11/2009)
© Copyright 2009 INFORMATION, INC.
According to the Move.com survey, 12.1 percent of home buyers today plan to buy a home as an investment property, compared to 5.6 percent in March 2009. The survey found that 15.8 percent of those interested in investment property were men and 8.1 percent were women and 52.6 percent of the investment buyers were between ages 35 to 49.
Of the 25.3 percent of buyers who are focusing on foreclosure properties, 42 percent regard the purchase they are considering an investment and don’t plan to live in the property themselves; 13.2 percent plan to rent out the property; 11.3 percent are going to fix up the property and resell it; and 17.4 percent plan to house a family member until the property can be sold profitably.
Of the 9.8 percent of buyers who say that they plan to purchase and live in a property in the next two years, 5.4 percent plan to purchase in the next 12 months; 48.3 percent are first-time buyers; 52.8 percent are women, and 44.1 percent are men.
Buyers of investment and personal property say they are motivated by these factors:
• Prices are as low as they will go, 23.6 percent
• Foreclosure prices are a bargain, 18.7 percent
• Great selection of homes for sale in their target community, 21.2 percent
• Concerned interest rates will rise, 14.2 percent
Source: Move.com (11/11/2009)
© Copyright 2009 INFORMATION, INC.
Wednesday, November 11, 2009
FHA rule change could benefit condo market
The Federal Housing Administration is giving the condo market something it hasn’t had for a while – a little breathing room.
Last week, the FHA, the federal agency that insures low-downpayment home loans for private lenders, said it was relaxing its building underwriting guidelines as a way of helping the struggling sector ride out the downturn. The move could help boost sales in condos by making more FHA mortgages available to borrowers.
“The best way to bring back some level of security is to get new buyers into those vacant units. You can’t do that until new homeowners have access to financing,” said Meg Burns, director of the FHA’s single-family program development.
The new rules – which are temporary – come after more than a year of more stringent standards from lenders, who, after suffering major losses on condos, began vetting and disqualifying condominium projects for purchase loans, regardless of whether home buyers qualified.
“This might be an entree for traditional and conventional lenders to return to the marketplace. Symbolically, it’s a pretty significant move,” said Peter Zalewski, a condo market analyst and broker with Condo Vultures in Bal Harbour, Fla.
The temporary rules are effective for most of the coming year and will help the marketplace transition into a new set of tougher guidelines that bring FHA into closer alignment with the project underwriting practices of Fannie Mae.
Earlier this year, Fannie implemented a slew of new regulations governing condo projects that some claim have strangled the market by stigmatizing condo loans in tough markets such as Florida.
Similar to Fannie regulations, the FHA is also now singling out those markets for special attention by approving projects itself, rather than lenders. Burns said lenders and investors were reluctant and even “scared” to lend money, prompting the agency to step in as a way of calming nerves.
“We’re coming in and saying we’ll approve the projects and back them so you will feel confident and comfortable lending in this environment,” Burns said.
Securing the blessing of the FHA is important because it allows borrowers to get loans that require downpayments of only 3.5 percent and qualify under less burdensome terms.
Most conventional loans now require 20 percent down, keeping creditworthy borrowers on the sidelines. In some new projects, lenders have asked for downpayments of as much as 40 to 50 percent.
Among the new, temporary rules is a measure extending a deadline allowing lenders to submit mortgage loans for spot approval in buildings that have not been approved for FHA lending. The administration had said the so-called spot loans would be eliminated by the end of the year but the new deadline is February 2010.
The new guidelines also:
• Increase from 30 percent to 50 percent the number of units in a project that can be financed with FHA loans. FHA, however, will make exceptions, even allowing up to 100 percent, when buildings meet an additional set of more stringent criteria.
• Require at least 50 percent of units in a complex to be owner-occupied or sold to owners who plan to live in the units. Bank-owned units may be disqualified from the percentage calculation.
• Reduce a presale requirement in new construction to 30 percent, compared to 70 percent for loans from conventional lenders.
“This temporary guidance represents incredible leniency in terms of financing standards and loan standards,” Burns said.
It’s hard to say how many buildings may benefit from the new rules, but mortgage brokers and real estate observers applauded the reprieve.
“This should really help some of the stalled projects if they can get their buildings approved,” said Grant Stern, a mortgage consultant in Bay Harbor Islands, Fla., who specializes in Fannie Mae and FHA guidelines. “A lot of these buildings looking to sell out the rest of their inventory should be able to get FHA approval to close out the projects.”
But there will be more hurdles to overcome beginning Dec. 7. That’s when a bevy of additional regulations take effect, including a provision that withholds approval from buildings where more than 15 percent of unit owners are past due on association fees.
Copyright © 2009 The Miami Herald,
Last week, the FHA, the federal agency that insures low-downpayment home loans for private lenders, said it was relaxing its building underwriting guidelines as a way of helping the struggling sector ride out the downturn. The move could help boost sales in condos by making more FHA mortgages available to borrowers.
“The best way to bring back some level of security is to get new buyers into those vacant units. You can’t do that until new homeowners have access to financing,” said Meg Burns, director of the FHA’s single-family program development.
The new rules – which are temporary – come after more than a year of more stringent standards from lenders, who, after suffering major losses on condos, began vetting and disqualifying condominium projects for purchase loans, regardless of whether home buyers qualified.
“This might be an entree for traditional and conventional lenders to return to the marketplace. Symbolically, it’s a pretty significant move,” said Peter Zalewski, a condo market analyst and broker with Condo Vultures in Bal Harbour, Fla.
The temporary rules are effective for most of the coming year and will help the marketplace transition into a new set of tougher guidelines that bring FHA into closer alignment with the project underwriting practices of Fannie Mae.
Earlier this year, Fannie implemented a slew of new regulations governing condo projects that some claim have strangled the market by stigmatizing condo loans in tough markets such as Florida.
Similar to Fannie regulations, the FHA is also now singling out those markets for special attention by approving projects itself, rather than lenders. Burns said lenders and investors were reluctant and even “scared” to lend money, prompting the agency to step in as a way of calming nerves.
“We’re coming in and saying we’ll approve the projects and back them so you will feel confident and comfortable lending in this environment,” Burns said.
Securing the blessing of the FHA is important because it allows borrowers to get loans that require downpayments of only 3.5 percent and qualify under less burdensome terms.
Most conventional loans now require 20 percent down, keeping creditworthy borrowers on the sidelines. In some new projects, lenders have asked for downpayments of as much as 40 to 50 percent.
Among the new, temporary rules is a measure extending a deadline allowing lenders to submit mortgage loans for spot approval in buildings that have not been approved for FHA lending. The administration had said the so-called spot loans would be eliminated by the end of the year but the new deadline is February 2010.
The new guidelines also:
• Increase from 30 percent to 50 percent the number of units in a project that can be financed with FHA loans. FHA, however, will make exceptions, even allowing up to 100 percent, when buildings meet an additional set of more stringent criteria.
• Require at least 50 percent of units in a complex to be owner-occupied or sold to owners who plan to live in the units. Bank-owned units may be disqualified from the percentage calculation.
• Reduce a presale requirement in new construction to 30 percent, compared to 70 percent for loans from conventional lenders.
“This temporary guidance represents incredible leniency in terms of financing standards and loan standards,” Burns said.
It’s hard to say how many buildings may benefit from the new rules, but mortgage brokers and real estate observers applauded the reprieve.
“This should really help some of the stalled projects if they can get their buildings approved,” said Grant Stern, a mortgage consultant in Bay Harbor Islands, Fla., who specializes in Fannie Mae and FHA guidelines. “A lot of these buildings looking to sell out the rest of their inventory should be able to get FHA approval to close out the projects.”
But there will be more hurdles to overcome beginning Dec. 7. That’s when a bevy of additional regulations take effect, including a provision that withholds approval from buildings where more than 15 percent of unit owners are past due on association fees.
Copyright © 2009 The Miami Herald,
Friday, November 6, 2009
Obama signs bill: Homebuyer tax credit extended
President Obama signed H.R. 3548 this morning, enacting into law an extension, and adjustment, of the $8,000 tax credit for first-time buyers. Among other things, the extension adds money for certain move-up buyers; creates one deadline for signing a contract and a later deadline for closing; changes income requirements; and limits a purchased home’s cost to $800,000.
“Extending the homebuyer tax credit and expanding it to reach more homebuyers is the right thing to do,” says 2009 Florida Realtors® President Cynthia Shelton. “It is critical to maintaining the positive momentum we’ve been experiencing in the housing market and in the overall economy. Florida Realtors applaud congressional leaders for taking action to extend the homebuyer tax credit into 2010, which will help Florida families realize their dream of homeownership, improve our communities and strengthen our economy.”
Adds John Sebree, Florida Realtors vice president of public policy, “Florida residents enjoy two additional advantages. The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their downpayment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”
First-time homebuyers
Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”
• A purchase must be under contract by April 30, 2010.
• A purchase under contract by April 30 must close no later than June 30, 2010.
• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.
Current homeowner tax credit
An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.
• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.
• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.
Long-time Florida homeowners who enjoy discounted property taxes resulting from the state’s Save Our Homes amendment qualify for property tax portability, notes Sebree. For more information or to calculate how much tax savings can be transferred to a new home, visit floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/TopInitiatives/index.cfm
Florida Homebuyer Opportunity Program
Under FHOP, first-time Florida homebuyers can obtain interest-free bridge loans to access their federal tax credit before they complete a home purchase, enabling them to use that money upfront for downpayment and closing costs. Once buyers submit their returns to the IRS and receive their tax credit money, they repay their loans to the state.
The Florida Realtors-backed program came out of the 2009 session of the Florida Legislature. However, as part of the 2009-2010 budget year, did not become effective immediately. They tax credit extension will allow many first-time buyers to tap into the approximately $28 million in the program's remaining funds.
While funded by the state, the money is distributed through the city and county housing offices that operate the State Housing Initiatives Partnership (SHIP) program. There is no standardized program, and each local agency may operate under different rules for distribution. For more information, buyers should contact their local SHIP office.
To find a local SHIP office, go to: http://apps.floridahousing.org/StandAlone/FHFC_ECM/AppPage_SHIPLGContacts.aspx.
Additional changes
The tax credit extension includes other new rules, such as:
• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.
• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).
The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.
Florida Realtors will update tax credit information and clarify details when available on the Homebuyer Center, part of floridarealtors.org at: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm.
© 2009 Florida Realtors®
“Extending the homebuyer tax credit and expanding it to reach more homebuyers is the right thing to do,” says 2009 Florida Realtors® President Cynthia Shelton. “It is critical to maintaining the positive momentum we’ve been experiencing in the housing market and in the overall economy. Florida Realtors applaud congressional leaders for taking action to extend the homebuyer tax credit into 2010, which will help Florida families realize their dream of homeownership, improve our communities and strengthen our economy.”
Adds John Sebree, Florida Realtors vice president of public policy, “Florida residents enjoy two additional advantages. The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their downpayment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”
First-time homebuyers
Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”
• A purchase must be under contract by April 30, 2010.
• A purchase under contract by April 30 must close no later than June 30, 2010.
• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.
Current homeowner tax credit
An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.
• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.
• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.
Long-time Florida homeowners who enjoy discounted property taxes resulting from the state’s Save Our Homes amendment qualify for property tax portability, notes Sebree. For more information or to calculate how much tax savings can be transferred to a new home, visit floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/TopInitiatives/index.cfm
Florida Homebuyer Opportunity Program
Under FHOP, first-time Florida homebuyers can obtain interest-free bridge loans to access their federal tax credit before they complete a home purchase, enabling them to use that money upfront for downpayment and closing costs. Once buyers submit their returns to the IRS and receive their tax credit money, they repay their loans to the state.
The Florida Realtors-backed program came out of the 2009 session of the Florida Legislature. However, as part of the 2009-2010 budget year, did not become effective immediately. They tax credit extension will allow many first-time buyers to tap into the approximately $28 million in the program's remaining funds.
While funded by the state, the money is distributed through the city and county housing offices that operate the State Housing Initiatives Partnership (SHIP) program. There is no standardized program, and each local agency may operate under different rules for distribution. For more information, buyers should contact their local SHIP office.
To find a local SHIP office, go to: http://apps.floridahousing.org/StandAlone/FHFC_ECM/AppPage_SHIPLGContacts.aspx.
Additional changes
The tax credit extension includes other new rules, such as:
• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.
• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).
The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.
Florida Realtors will update tax credit information and clarify details when available on the Homebuyer Center, part of floridarealtors.org at: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm.
© 2009 Florida Realtors®
Thursday, November 5, 2009
Tax credit extension passes House and Senate
The $8,000, first-time homebuyer tax credit has not yet been extended beyond its Nov. 30 end date, but it’s very close to gaining a longer life.
The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.
Until the president signs the bill, however, it is not law.
In addition to extending the tax credit for first-time homebuyers under the current rules, the bill adds a smaller tax credit for move-up homebuyers who have lived in the house for five of the past seven years. The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000.
Florida downpayment assistance
After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a downpayment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers. The money is essentially a loan to first-time buyers; they receive it upfront, use it for a downpayment or other costs, and pay it back once they get their federal refund.
For more information on the Florida Homebuyer Opportunity Program, visit the Homebuyer Center on floridarealtors.org: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm
Also check floridarealtors.org for updates as they’re released; and, after the tax credit extension becomes law, details on the new program.
© 2009 Florida Realtors®
The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.
Until the president signs the bill, however, it is not law.
In addition to extending the tax credit for first-time homebuyers under the current rules, the bill adds a smaller tax credit for move-up homebuyers who have lived in the house for five of the past seven years. The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000.
Florida downpayment assistance
After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a downpayment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers. The money is essentially a loan to first-time buyers; they receive it upfront, use it for a downpayment or other costs, and pay it back once they get their federal refund.
For more information on the Florida Homebuyer Opportunity Program, visit the Homebuyer Center on floridarealtors.org: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm
Also check floridarealtors.org for updates as they’re released; and, after the tax credit extension becomes law, details on the new program.
© 2009 Florida Realtors®
Tax credit extension passes House and Senate
The $8,000, first-time homebuyer tax credit has not yet been extended beyond its Nov. 30 end date, but it’s very close to gaining a longer life.
The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.
Until the president signs the bill, however, it is not law.
In addition to extending the tax credit for first-time homebuyers under the current rules, the bill adds a smaller tax credit for move-up homebuyers who have lived in the house for five of the past seven years. The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000.
Florida downpayment assistance
After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a downpayment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers. The money is essentially a loan to first-time buyers; they receive it upfront, use it for a downpayment or other costs, and pay it back once they get their federal refund.
For more information on the Florida Homebuyer Opportunity Program, visit the Homebuyer Center on floridarealtors.org: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm
Also check floridarealtors.org for updates as they’re released; and, after the tax credit extension becomes law, details on the new program.
© 2009 Florida Realtors®
The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.
Until the president signs the bill, however, it is not law.
In addition to extending the tax credit for first-time homebuyers under the current rules, the bill adds a smaller tax credit for move-up homebuyers who have lived in the house for five of the past seven years. The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000.
Florida downpayment assistance
After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a downpayment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers. The money is essentially a loan to first-time buyers; they receive it upfront, use it for a downpayment or other costs, and pay it back once they get their federal refund.
For more information on the Florida Homebuyer Opportunity Program, visit the Homebuyer Center on floridarealtors.org: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm
Also check floridarealtors.org for updates as they’re released; and, after the tax credit extension becomes law, details on the new program.
© 2009 Florida Realtors®
Wednesday, November 4, 2009
Homeowners who walk leave houses to fate
U.S. foreclosure rates are up against more than stubborn banks, as homeowners also choose to abandon their mortgages, economists said.
Credit score company Experian and consultants Oliver Wyman reported 588,000 borrowers voluntarily gave up on their mortgage payments in 2008, twice as many as the previous year, USA Today reported Tuesday.
With home prices low, many find their homes financially underwater, meaning they owe more on their mortgages than the home is worth. Under those conditions, the futility of making payments, especially if a breadwinner has lost a job, cause many to walk away and let the bank take the home.
“It’s increasingly a more important factor driving the foreclosure crisis,” said economist Mark Zandi at Economy.com.
Home prices are down more than 50 percent from their peak in Las Vegas and Phoenix and about 25 percent below on a national scale.
CitiMortgage, part of Citigroup, said 20 percent of their defaults are the result of homeowners strategically giving up on their loans.
“It’s a very large number and it’s a very, very significant risk to the housing recovery,” said Sanjiv Das, chief executive officer of CitiMortgage.
Copyright © 2009 by United Press International
Credit score company Experian and consultants Oliver Wyman reported 588,000 borrowers voluntarily gave up on their mortgage payments in 2008, twice as many as the previous year, USA Today reported Tuesday.
With home prices low, many find their homes financially underwater, meaning they owe more on their mortgages than the home is worth. Under those conditions, the futility of making payments, especially if a breadwinner has lost a job, cause many to walk away and let the bank take the home.
“It’s increasingly a more important factor driving the foreclosure crisis,” said economist Mark Zandi at Economy.com.
Home prices are down more than 50 percent from their peak in Las Vegas and Phoenix and about 25 percent below on a national scale.
CitiMortgage, part of Citigroup, said 20 percent of their defaults are the result of homeowners strategically giving up on their loans.
“It’s a very large number and it’s a very, very significant risk to the housing recovery,” said Sanjiv Das, chief executive officer of CitiMortgage.
Copyright © 2009 by United Press International
Subscribe to:
Posts (Atom)