Landscaping can be pricey, but it can make a big difference in creating curb appeal that attract buyers to the door.
"The condition of your lawn has a big effect on the look and value of your home, whether you have a complicated landscaping plan with water features and/or an expanse of grass and flowers," Angie Hicks, founder of service-ratings site Angie's List, told the Chicago Tribune.
If working with a landscaping pro to boost your seller’s curb appeal, here are some tips to getting more for your money.
▪ Schedule consultations. Contact several landscaping pros to arrange appointments for them to visit the property and recommend what needs to be done and your options. (For people to contact, check sites such as Yelp.com or Kudzu.com.) Use them as consultants about what the property needs. Also for smaller tasks, such as mowing, raking or weeding, you might try to find a teenager who might offer a good deal, suggests Robert Krughoff, president of Consumers' Checkbook.
▪ Get several price bids. Request estimates on what you want done from at least three companies because you may find big price differences among each. Krughoff cites an example of how a tree-removal job could cost from $1,935 to $6,300 depending on the company. As for lawn care, Consumers' Checkbook found companies quoting ranges from $229 to $805.
And just because a company is pricier don’t assume you’ll get better results. Krughoff says the Consumers’ Checkbook has found no correlation between price and quality in lawn care and tree services.
▪ Watch for add-ons. Krughoff says don’t be quick to say “yes” whenever a landscaper or lawn service recommends various fertilizers, sprayings, and treatment. Make sure there’s a compelling case on why it’s necessary, Krughoff says.
▪ Don’t pay until the job is done. If possible, pay nothing until the job is completed so that you have more leverage in ensuring the job is done to your satisfaction. Some companies may require a deposit. If so, pay with a credit card, experts suggest. By using a credit card, you’ll be able to dispute the charge with the credit card company if the service was incomplete or not done adequately.
Source: “Trimming Landscaping Costs,” Chicago Tribune (April 24, 2011)
Friday, April 29, 2011
Homebuyers: Do your homework on home warranties
Home sellers hoping to close a deal sometimes agree to purchase home warranties to give their buyers peace of mind.
Prospective homeowners, however, should do their homework to make sure the policies, which typically cover the major mechanicals and appliances in a home for one year after the sale, will actually help, say consumer protection experts.
The warranties range in price from $350 to $800. If purchased from reputable companies, they can help homeowners deal with broken appliances, malfunctioning air conditioning and other problems, the experts say. The policies usually call for homeowners to contact the service company when something breaks. The company then sends out a repair person who provides an evaluation for a set fee, usually about $65. Once a professional has determined what the problem is, the warranty company pays for the broken item to be repaired or replaced.
Often, homeowners dislike transferring that decision-making power to a third party, said Angie Hicks, founder of Angie’s List, the national consumer rating service based in Indianapolis. Users of home warranty or home service companies have been the least satisfied group of reviewers on the site for the past six years, she said.
Homeowners often expect the companies to replace the item and are disappointed to learn it’s going to be repaired, added Bob Miller, president-elect of the Ohio Association of Realtors in Columbus, Ohio.
“They’re going to try and fix things before they give new ones,” he said.
It wouldn’t be economically viable to replace furnaces, washers and garbage disposals that can be repaired, said Art Chartrand, spokesman for the National Home Service Contract Association, headquartered in Olathe, Kan.
“If servicing it will take care of it, we’ll service it,” he said. “We certainly don’t want our product oversold.”
Homeowners may end up surprised by the details of their policies because the contracts are often bought as closing gifts, so the person using the service is not the one who bought it, Hicks said. That means the user did not have a chance to research the company and carefully evaluate the policy before it was purchased, she said.
When William Merritt bought his first house last summer in Leander, Texas, the seller purchased a warranty for him. He’s been satisfied with the service so far, but wishes he had had the opportunity to vet the company himself.
“When I go to renew, I’ll look at all the options,” said Merritt, whose warranty recently covered an $800 repair to his pool pump. “I’ll definitely do my research.”
Sheila Adkins, a spokeswoman for the council of Better Business Bureaus, in Arlington, Va., recommends researching home warranty or home service contract providers before making an offer on a house. When it’s time to buy, ask for the company by name in the offer, she said.
It’s a reasonable request, Miller added. Many home sellers are expecting to buy the agreements and should be willing to go with the company of the buyer’s choosing, he said.
“Depending on who you go with, you can get some really good stuff out of these,” Miller said.
Angie’s List members also have had issues with some contractors that warranty companies send on service calls, Hicks said. She suggests asking the company that holds the policy for a list of the plumbers, electricians and repair people it uses, and checking them out before a problem occurs. When something goes wrong, request the contractor with the best track record, she said.
Other tips for selecting a home service provider:
• Find out exactly what the contract covers and how much the service fee is. Pools, spa tubs and other specialty items might not be included.
• Check to see if the company has policies on pre-existing conditions, and whether those repairs would be covered.
• Find out how the company handles complaints about the contractors who handle repairs.
• Ask if the company will let you buy a new appliance or item at a reduced rate if you would rather not have it repaired.
Source: The Associated Press, Melissa Kossler Dutton.
Prospective homeowners, however, should do their homework to make sure the policies, which typically cover the major mechanicals and appliances in a home for one year after the sale, will actually help, say consumer protection experts.
The warranties range in price from $350 to $800. If purchased from reputable companies, they can help homeowners deal with broken appliances, malfunctioning air conditioning and other problems, the experts say. The policies usually call for homeowners to contact the service company when something breaks. The company then sends out a repair person who provides an evaluation for a set fee, usually about $65. Once a professional has determined what the problem is, the warranty company pays for the broken item to be repaired or replaced.
Often, homeowners dislike transferring that decision-making power to a third party, said Angie Hicks, founder of Angie’s List, the national consumer rating service based in Indianapolis. Users of home warranty or home service companies have been the least satisfied group of reviewers on the site for the past six years, she said.
Homeowners often expect the companies to replace the item and are disappointed to learn it’s going to be repaired, added Bob Miller, president-elect of the Ohio Association of Realtors in Columbus, Ohio.
“They’re going to try and fix things before they give new ones,” he said.
It wouldn’t be economically viable to replace furnaces, washers and garbage disposals that can be repaired, said Art Chartrand, spokesman for the National Home Service Contract Association, headquartered in Olathe, Kan.
“If servicing it will take care of it, we’ll service it,” he said. “We certainly don’t want our product oversold.”
Homeowners may end up surprised by the details of their policies because the contracts are often bought as closing gifts, so the person using the service is not the one who bought it, Hicks said. That means the user did not have a chance to research the company and carefully evaluate the policy before it was purchased, she said.
When William Merritt bought his first house last summer in Leander, Texas, the seller purchased a warranty for him. He’s been satisfied with the service so far, but wishes he had had the opportunity to vet the company himself.
“When I go to renew, I’ll look at all the options,” said Merritt, whose warranty recently covered an $800 repair to his pool pump. “I’ll definitely do my research.”
Sheila Adkins, a spokeswoman for the council of Better Business Bureaus, in Arlington, Va., recommends researching home warranty or home service contract providers before making an offer on a house. When it’s time to buy, ask for the company by name in the offer, she said.
It’s a reasonable request, Miller added. Many home sellers are expecting to buy the agreements and should be willing to go with the company of the buyer’s choosing, he said.
“Depending on who you go with, you can get some really good stuff out of these,” Miller said.
Angie’s List members also have had issues with some contractors that warranty companies send on service calls, Hicks said. She suggests asking the company that holds the policy for a list of the plumbers, electricians and repair people it uses, and checking them out before a problem occurs. When something goes wrong, request the contractor with the best track record, she said.
Other tips for selecting a home service provider:
• Find out exactly what the contract covers and how much the service fee is. Pools, spa tubs and other specialty items might not be included.
• Check to see if the company has policies on pre-existing conditions, and whether those repairs would be covered.
• Find out how the company handles complaints about the contractors who handle repairs.
• Ask if the company will let you buy a new appliance or item at a reduced rate if you would rather not have it repaired.
Source: The Associated Press, Melissa Kossler Dutton.
Rate on 30-year fixed mortgage fall to 4.78%
Fixed mortgage rates dipped this week, with the rate on the 30-year loan staying under 5 percent and the 15-year loan falling below 4 percent.
Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.78 percent from 4.80 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage slipped to 3.97 percent from 4.02 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell earlier this week on weak business manufacturing activity in Philadelphia, Dallas and Richmond, said Frank Nothaft, Freddie’s chief economist.
Despite the low rates, housing remains in the doldrums. High unemployment and tight lending standards are preventing people from buying homes. A record number of foreclosures are forcing down home prices, leaving would-be buyers worried that prices haven’t bottomed out yet.
Four homebuilders reported softer sales in the most recent quarter. PulteGroup Inc.’s loss widened in the first three months of the year on a 17-percent drop in home sales. Its net new orders for homes edged up less than a percent. The Ryland Group Inc., M/I Homes Inc. and Meritage Homes Corp. all reported double-digit declines in new home orders, a sign of future demand.
More Americans did sign contracts to buy homes last month, the National Association of Realtors reported Thursday. But the increase wasn’t enough to bring home sales to a level economists consider healthy.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage fell to 3.51 percent from 3.61 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan fell to 3.15 percent from 3.16 percent. That marked the lowest level for the rate on the 1-year ARM in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Source: The Associated Press, Janna Herron, AP real estate writer. All rights reserved.
Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.78 percent from 4.80 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage slipped to 3.97 percent from 4.02 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell earlier this week on weak business manufacturing activity in Philadelphia, Dallas and Richmond, said Frank Nothaft, Freddie’s chief economist.
Despite the low rates, housing remains in the doldrums. High unemployment and tight lending standards are preventing people from buying homes. A record number of foreclosures are forcing down home prices, leaving would-be buyers worried that prices haven’t bottomed out yet.
Four homebuilders reported softer sales in the most recent quarter. PulteGroup Inc.’s loss widened in the first three months of the year on a 17-percent drop in home sales. Its net new orders for homes edged up less than a percent. The Ryland Group Inc., M/I Homes Inc. and Meritage Homes Corp. all reported double-digit declines in new home orders, a sign of future demand.
More Americans did sign contracts to buy homes last month, the National Association of Realtors reported Thursday. But the increase wasn’t enough to bring home sales to a level economists consider healthy.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage fell to 3.51 percent from 3.61 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan fell to 3.15 percent from 3.16 percent. That marked the lowest level for the rate on the 1-year ARM in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Source: The Associated Press, Janna Herron, AP real estate writer. All rights reserved.
Thursday, April 28, 2011
What to Consider Before Building a Pool
Installing an in-ground pool is an expensive proposition with ongoing maintenance costs, so before you take the plunge, make sure you review the numbers.
The decision to build an in-ground pool isn't one to take lightly. Apart from the substantial installation costs, which typically run into the tens of thousands of dollars, you have to factor in ongoing maintenance expenses as well as insurance and tax implications. And you can't be assured of recouping your investment when you sell; while a pool may be attractive to some buyers, others might be put off by the upkeep or safety concerns.
If you're looking for bang for your buck at resale, an upscale kitchen or extra bathroom offers greater impact. But if you want the ultimate backyard entertainment amenity and social gathering spot, nothing fills the bill like a swimming pool. Thinking about taking the plunge? Here's a look at how the numbers add up.
Ballpark your installation costs
The average cost in the U.S. to install, equip, and fill a 600-square-foot concrete pool starts at $30,000. Add in aesthetic details like waterfalls, lighting, landscaping, and perhaps a spa (http://www.houselogic.com/articles/what_to_consider_before_building_spa/), and you're easily looking at totals approaching six figures.
Concrete is the most expensive pool material, but it's also the most durable and offers the most options for customization. Fiberglass shells and those with vinyl liners fall on the lower end of the budget scale, but the liners typically need replacing every 10 or so years. Changing the liner requires draining the pool and replacing the edging (called coping), so over time costs add up. Most home buyers will insist that you replace a vinyl liner, even if it's only a few years old.
Decide on a filtration and heating system
The filtration pump is the biggest energy hog in a pool system, so you want to get the most efficient pump possible. The good news here is that new, variable-speed pumps use up to 80% less energy than old single-speed pumps, cutting operating expenses dramatically. At about $1,500, these cost more up front, but some local utilities offer rebates through participating pool dealers. You can further cut energy costs by setting the pump to run at non-peak times, when rates for electricity are lower.
If you're planning to heat your pool, gas heaters are the least expensive to purchase and install, but they typically have the highest operation and maintenance costs. Many pool owners opt instead for electric heat pumps, which extract heat from the surrounding air and transfer it to the water. Heat pumps take longer than gas to warm the pool, but they're more energy-efficient, costing $200 to $400 less to operate per swimming season. Regardless of heating system, covering the pool with a solar blanket to trap heat and reduce evaporation will further lower operating costs.
Account for ongoing maintenance expenses
All pools require that the water be balanced for proper pH, alkalinity, and calcium levels. They also need sanitizing to control bacteria and germs, which is where chlorine has traditionally entered the picture. These days you have a variety of options, including systems that use bromine, salt, ozone, ionizers, or other chemical compounds that can be less irritating to skin. Chlorine remains the most popular because the upfront costs are reasonable, and you don't have to be as rigid about checking the levels on a set schedule. But as far as your wallet is concerned, they all even out in the end.
In a seasonal swimming climate, budget about $600 annually for maintenance if you shoulder the chemical balancing and cleaning yourself; in a year-round climate, it's more like $15 to $25 per week. To save yourself the task of once-a-week vacuuming, you can buy a robotic cleaning system for between $500 and $800 that will do the job for you. In locations where the pool must be opened and closed for the season, add another $500 each time for a pro to handle this task.
Factor in insurance and tax implications
A basic homeowners insurance policy (http://www.houselogic.com/articles/homeowners-insurance-time-for-annual-check-up/) typically covers a pool structure without requiring a separate rider, but you should increase your liability from the standard amount. It costs about $30 a year to bump coverage from $100,000 to $500,000. Many underwriters require you to fence in the pool so that children can't wander in unsupervised.
In some areas, adding a pool may increase your annual property taxes, but it won't necessarily add to your home's selling price. For that reason, try to keep your total building cost between 10% and 15% of what you paid for your house, lest you invest too much in an amenity that won't pay you back.
Julie Sturgeon has written about residential pools for nearly a decade. Her family was clueless when they bought a home with an in-ground pool, but they have avoided making a major mistake with it yet.
Source: HouseLogic
Fed signals $600B bond program to end in June
The economy and job creation have strengthened enough for the Federal Reserve to end its $600 billion Treasury bond-buying program in June as planned, the Fed signaled Wednesday.
Ending a two-day meeting, the Fed made no changes to the program. The decision was unanimous. The bond purchases were intended to lower loan rates, encouraging spending and boost stock prices. But critics worried that the purchases would feed inflation.
The Fed downplayed inflation risks. It acknowledged a spike in oil prices, but concluded that the pickup in inflation will be temporary.
As it winds down its economic support programs, the Fed is shifting its focus on when and how it should start boosting interest rates to prevent inflation from getting out of control. Economists think the Fed will start raising rates later this year or early next year. Higher rates would reduce borrowing and spending and make companies less inclined to boost prices.
The Fed offered a mostly upbeat assessment on the economy. It said that the economic recovery is proceeding at a “moderate pace” and hiring is improving gradually. Consumers and businesses also are spending enough to support the recovery, the Fed said.
But the Fed’s statement also pointed to weak spots in the economy. It noted that the housing market remains “depressed.”
To nurture the recovery, the Fed also kept a pledge to hold its key interest rate at a record low near zero for an “extended period.” The Fed has kept rates at ultra-low levels since December 2008.
Even though the bond-buying program is scheduled to end in June, the Fed said it’s continuing a separate support program: It’s reinvesting about $17 billion a month in proceeds from its portfolio of mortgage securities to buy Treasury debt. That should help keep rates low on mortgages and other consumer loans.
Since the Fed’s bond-purchase program was announced in early November, the economy has gained strength. The unemployment rate has dropped to 8.8 percent, a full percentage point. Companies have added more than 200,000 jobs for two straight months – the first time that’s happened in five years. And the S&P 500 index has surged 28 percent over the past eight months. Rates on 30-year mortgages have dropped and now stand at 4.80 percent.
Later Wednesday, Chairman Ben Bernanke is poised to make history by holding the first of three regularly scheduled news conferences this year. No chairman has done so in the 98-year history of the Fed, which has long been a secretive institution.
The news conferences are part of a long-standing effort by Bernanke to make the Fed, an independent government agency, more transparent. They also allow him to steer a debate about hiring, growth and inflation and to cast himself as open and accessible. He can have his voice heard above a vocal minority of Fed officials who are concerned about rising inflation.
Those officials, including the Fed regional chiefs in Philadelphia and Minneapolis, say the Fed may need to raise interest rates by the end of this year to fight inflation. The central bank has kept its benchmark interest rate near zero since December 2008.
Richard Fisher, president of the Federal Reserve Bank of Dallas, has argued that the Fed should consider halting the bond-buying program now, not in June.
The majority – including Bernanke, vice chairwoman Janet Yellen and William Dudley, president of the Federal Reserve Bank of New York – say interest rates should stay low longer, and the bond-buying program should run its course.
Bernanke has predicted that the jump in oil and food prices will cause only a brief increase in consumer inflation. Excluding those prices, which tend to fluctuate, inflation is still low, he has argued.
So far this year, Bernanke has managed to forge consensus for his policies. All the Fed’s decisions this year have been unanimous. But the deepening divides could make Bernanke’s job harder.
Source: The Associated Press, Jeannine Aversa, AP economics writer.
Ending a two-day meeting, the Fed made no changes to the program. The decision was unanimous. The bond purchases were intended to lower loan rates, encouraging spending and boost stock prices. But critics worried that the purchases would feed inflation.
The Fed downplayed inflation risks. It acknowledged a spike in oil prices, but concluded that the pickup in inflation will be temporary.
As it winds down its economic support programs, the Fed is shifting its focus on when and how it should start boosting interest rates to prevent inflation from getting out of control. Economists think the Fed will start raising rates later this year or early next year. Higher rates would reduce borrowing and spending and make companies less inclined to boost prices.
The Fed offered a mostly upbeat assessment on the economy. It said that the economic recovery is proceeding at a “moderate pace” and hiring is improving gradually. Consumers and businesses also are spending enough to support the recovery, the Fed said.
But the Fed’s statement also pointed to weak spots in the economy. It noted that the housing market remains “depressed.”
To nurture the recovery, the Fed also kept a pledge to hold its key interest rate at a record low near zero for an “extended period.” The Fed has kept rates at ultra-low levels since December 2008.
Even though the bond-buying program is scheduled to end in June, the Fed said it’s continuing a separate support program: It’s reinvesting about $17 billion a month in proceeds from its portfolio of mortgage securities to buy Treasury debt. That should help keep rates low on mortgages and other consumer loans.
Since the Fed’s bond-purchase program was announced in early November, the economy has gained strength. The unemployment rate has dropped to 8.8 percent, a full percentage point. Companies have added more than 200,000 jobs for two straight months – the first time that’s happened in five years. And the S&P 500 index has surged 28 percent over the past eight months. Rates on 30-year mortgages have dropped and now stand at 4.80 percent.
Later Wednesday, Chairman Ben Bernanke is poised to make history by holding the first of three regularly scheduled news conferences this year. No chairman has done so in the 98-year history of the Fed, which has long been a secretive institution.
The news conferences are part of a long-standing effort by Bernanke to make the Fed, an independent government agency, more transparent. They also allow him to steer a debate about hiring, growth and inflation and to cast himself as open and accessible. He can have his voice heard above a vocal minority of Fed officials who are concerned about rising inflation.
Those officials, including the Fed regional chiefs in Philadelphia and Minneapolis, say the Fed may need to raise interest rates by the end of this year to fight inflation. The central bank has kept its benchmark interest rate near zero since December 2008.
Richard Fisher, president of the Federal Reserve Bank of Dallas, has argued that the Fed should consider halting the bond-buying program now, not in June.
The majority – including Bernanke, vice chairwoman Janet Yellen and William Dudley, president of the Federal Reserve Bank of New York – say interest rates should stay low longer, and the bond-buying program should run its course.
Bernanke has predicted that the jump in oil and food prices will cause only a brief increase in consumer inflation. Excluding those prices, which tend to fluctuate, inflation is still low, he has argued.
So far this year, Bernanke has managed to forge consensus for his policies. All the Fed’s decisions this year have been unanimous. But the deepening divides could make Bernanke’s job harder.
Source: The Associated Press, Jeannine Aversa, AP economics writer.
Pending home sales rise again in March
March saw another increase in pending home sales, with contract activity rising unevenly in six of the past nine months, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.1 percent to 94.1 in March from a downwardly revised 89.5 in February. The index is 11.4 percent below 106.2 in March 2010; however, activity was at elevated levels in March and April of 2010 to meet the contract deadline for the homebuyer tax credit.
The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
“Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” says Lawrence Yun, NAR chief economist. “The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.”
The PHSI in the Northeast fell 3.2 percent to 63.4 in March and is 18.4 percent below March 2010. In the Midwest, the index rose 3.0 percent in March to 83.5 but is 16.6 percent below a year ago. Pending home sales in the South jumped 10.3 percent to an index of 110.2 but are 10.5 percent below March 2010. In the West, the index increased 3.1 percent to 103.7 but is 4.1 percent below a year ago.
“Based on the current uptrend with very favorable affordability conditions, rising apartment rents and ongoing job creation, existing-home sales should rise around 5 to 10 percent this year with sales growth of lower-priced homes likely to outperform high-end homes. That means the price trend will reflect more homes sold in the lower price ranges,” Yun said.
“The good news is that recent homebuyers are staying well within budget, leading to exceptionally low loan default rates among homebuyers over the past two years,” Yun added.
Source: Florida Realtors®
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.1 percent to 94.1 in March from a downwardly revised 89.5 in February. The index is 11.4 percent below 106.2 in March 2010; however, activity was at elevated levels in March and April of 2010 to meet the contract deadline for the homebuyer tax credit.
The data reflects contracts but not closings, which normally occur with a lag time of one or two months.
“Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” says Lawrence Yun, NAR chief economist. “The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.”
The PHSI in the Northeast fell 3.2 percent to 63.4 in March and is 18.4 percent below March 2010. In the Midwest, the index rose 3.0 percent in March to 83.5 but is 16.6 percent below a year ago. Pending home sales in the South jumped 10.3 percent to an index of 110.2 but are 10.5 percent below March 2010. In the West, the index increased 3.1 percent to 103.7 but is 4.1 percent below a year ago.
“Based on the current uptrend with very favorable affordability conditions, rising apartment rents and ongoing job creation, existing-home sales should rise around 5 to 10 percent this year with sales growth of lower-priced homes likely to outperform high-end homes. That means the price trend will reflect more homes sold in the lower price ranges,” Yun said.
“The good news is that recent homebuyers are staying well within budget, leading to exceptionally low loan default rates among homebuyers over the past two years,” Yun added.
Source: Florida Realtors®
Wednesday, April 27, 2011
Buyer Rush to Beat 'Jumbo' Mortgage Deadline
More buyers in high-cost areas may be motivated to purchase a home before an Oct. 1 deadline when the government plans to scale back the size of “jumbo” mortgages it guarantees in costly real estate markets.
On Oct. 1, the maximum loan amount that Fannie Mae and Freddie Mac is set to decrease from $729,750 to $625,500. This might make mortgages more expensive or more difficult to get for buyers in high-cost areas, MSNBC.com reports.
For example, after Oct. 1, a borrower who seeks a government-backed mortgage for a $1-million property may have to come up with a $370,000 down payment instead of $270,000, Rob Chrisman, a mortgage banking consultant from San Rafael, Calif., told MSNBC.
Up until 2008, any loan more than $418,000 was considered a jumbo loan, but that later swelled to $625,500 and then was temporarily set at $729,750 (which expires at the end of September).
Once the current jumbo loan limit expires, lenders who want to make loans over $625,500 either will have to hold onto the mortgage themselves or find a private investor to purchase it.
Guy Cecala of Inside Mortgage Finance is confident that private lenders will step in to make up any of the downfall from the GSEs change. He’s already pointing to the signs: In the last quarter of 2010, private lenders originated more loans over $417,000--which is considered the traditional jumbo market--than did government agencies.
Source: “Rules for ‘Jumbo’ Mortgages to Change This Year,” MSNBC.com (April 25, 2011)
On Oct. 1, the maximum loan amount that Fannie Mae and Freddie Mac is set to decrease from $729,750 to $625,500. This might make mortgages more expensive or more difficult to get for buyers in high-cost areas, MSNBC.com reports.
For example, after Oct. 1, a borrower who seeks a government-backed mortgage for a $1-million property may have to come up with a $370,000 down payment instead of $270,000, Rob Chrisman, a mortgage banking consultant from San Rafael, Calif., told MSNBC.
Up until 2008, any loan more than $418,000 was considered a jumbo loan, but that later swelled to $625,500 and then was temporarily set at $729,750 (which expires at the end of September).
Once the current jumbo loan limit expires, lenders who want to make loans over $625,500 either will have to hold onto the mortgage themselves or find a private investor to purchase it.
Guy Cecala of Inside Mortgage Finance is confident that private lenders will step in to make up any of the downfall from the GSEs change. He’s already pointing to the signs: In the last quarter of 2010, private lenders originated more loans over $417,000--which is considered the traditional jumbo market--than did government agencies.
Source: “Rules for ‘Jumbo’ Mortgages to Change This Year,” MSNBC.com (April 25, 2011)
Scott wants state-backed insurer smaller, solvent
Gov. Rick Scott says there is no plan to eliminate the state-backed Citizens Property Insurance Corp.
Scott said Tuesday the only plan he has ever had for Citizens is one he put out during his successful gubernatorial campaign last year. Scott said then he would work with the Legislature to eliminate the government-run program’s reliance on assessments and ensure that it operates on actuarially sound rates.
Scott reiterated that that has always been the plan and he’s sticking to it.
Citizens is Florida’s largest property insurer with some 1.3 million policies in force. If the company would be unable to pay claims following a major hurricane or series of storms, Florida residents who have insurance on their homes, business or cars would be assessed to make up the difference.
Source: The Associated Press.
Scott said Tuesday the only plan he has ever had for Citizens is one he put out during his successful gubernatorial campaign last year. Scott said then he would work with the Legislature to eliminate the government-run program’s reliance on assessments and ensure that it operates on actuarially sound rates.
Scott reiterated that that has always been the plan and he’s sticking to it.
Citizens is Florida’s largest property insurer with some 1.3 million policies in force. If the company would be unable to pay claims following a major hurricane or series of storms, Florida residents who have insurance on their homes, business or cars would be assessed to make up the difference.
Source: The Associated Press.
Tuesday, April 26, 2011
6 Reasons to Reduce a Home's Price
The longer an overpriced home sits on the market, the more likely buyers will begin thinking something’s wrong with it. Help your clients avoid a long wait for the right offer by branding, printing, and hand-delivering a free article detailing 6 reasons to reduce your home’s price from the REALTOR® Content Resource.
That’s just one of five free articles to help sellers get their home sold that you can hand deliver (or post to your blog, Web site, e-newsletter, Facebook, or Twitter). You can also search the REALTOR® Content Resource by keyword or topic for other topics ranging from home improvement and maintenance to taxes and finance.
While you’re at the REALTOR® Content Resource, remember that there are only a few days left to log in to enter the REALTOR® Build-Your-Business Sweepstakes, featuring drawings for the final free iPad and the last $150 Visa gift card. All winners will be selected by April 29.
The REALTOR® Content Resource is brought to you by the National Association of REALTORS®. With it, you can download free home ownership content from HouseLogic to your marketing materials.
That’s just one of five free articles to help sellers get their home sold that you can hand deliver (or post to your blog, Web site, e-newsletter, Facebook, or Twitter). You can also search the REALTOR® Content Resource by keyword or topic for other topics ranging from home improvement and maintenance to taxes and finance.
While you’re at the REALTOR® Content Resource, remember that there are only a few days left to log in to enter the REALTOR® Build-Your-Business Sweepstakes, featuring drawings for the final free iPad and the last $150 Visa gift card. All winners will be selected by April 29.
The REALTOR® Content Resource is brought to you by the National Association of REALTORS®. With it, you can download free home ownership content from HouseLogic to your marketing materials.
The Conference Board Consumer Confidence Index Increases Slightly
The Conference Board Consumer Confidence Index, which had decreased in March, improved in April. The Index now stands at 65.4 (1985=100), up from 63.8 in March. The Present Situation Index increased to 39.6 from 37.5. The Expectations Index rose to 82.6 from 81.3.
“Consumer confidence, which had declined sharply in March, posted a modest gain in April. Consumers’ short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Inflation expectations, which had spiked, retreated somewhat in April. Although confidence remains weak, consumers’ assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues.”
Consumers’ appraisal of present-day conditions, although mixed, improved in April. Those stating conditions are “good” decreased slightly to 14.8 percent from 15.0 percent. Those stating business conditions are “bad” also declined slightly to 36.4 percent from 36.6 percent. Consumers’ assessment of the labor market was more favorable than last month. Those saying jobs are “hard to get” declined to 41.8 percent from 44.4 percent, while those stating jobs are “plentiful” increased to 5.2 percent from 4.6 percent.
Consumers’ short-term outlook, which had soured in March, improved moderately in April. While those expecting business conditions to improve over the next six months declined to 18.8 percent from 20.8 percent, those anticipating business conditions to worsen decreased to 14.2 percent from 15.5 percent. Consumers were mixed about the labor market outlook for the next six months. Those expecting more jobs in the months ahead declined to 17.5 percent from 19.6 percent, while those anticipating fewer jobs declined to 19.0 percent from 20.5 percent. The proportion of consumers expecting an increase in their incomes improved to 16.7 percent from 15.2 percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for April’s preliminary results was April 14, 2011.
Source: Florida Realtors
“Consumer confidence, which had declined sharply in March, posted a modest gain in April. Consumers’ short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Inflation expectations, which had spiked, retreated somewhat in April. Although confidence remains weak, consumers’ assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues.”
Consumers’ appraisal of present-day conditions, although mixed, improved in April. Those stating conditions are “good” decreased slightly to 14.8 percent from 15.0 percent. Those stating business conditions are “bad” also declined slightly to 36.4 percent from 36.6 percent. Consumers’ assessment of the labor market was more favorable than last month. Those saying jobs are “hard to get” declined to 41.8 percent from 44.4 percent, while those stating jobs are “plentiful” increased to 5.2 percent from 4.6 percent.
Consumers’ short-term outlook, which had soured in March, improved moderately in April. While those expecting business conditions to improve over the next six months declined to 18.8 percent from 20.8 percent, those anticipating business conditions to worsen decreased to 14.2 percent from 15.5 percent. Consumers were mixed about the labor market outlook for the next six months. Those expecting more jobs in the months ahead declined to 17.5 percent from 19.6 percent, while those anticipating fewer jobs declined to 19.0 percent from 20.5 percent. The proportion of consumers expecting an increase in their incomes improved to 16.7 percent from 15.2 percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for April’s preliminary results was April 14, 2011.
Source: Florida Realtors
Thousands apply for mortgage assistance program
In its first week of enrollment, over 9,000 people applied to Florida’s “Hardest Hit” financial assistance program. The Florida Housing Corp. is in charge of the federally funded program that could provide nearly 40,000 unemployed and underemployed homeowners with up to six months of assistance to make their mortgage payments.
Florida was given $1 billion from the federal government to implement this program. Under its original form, it would have provided as much as $35,000 in assistance over an 18-month period.
But the program has been tweaked to provide smaller awards for shorter periods of time to more people. The counties with the largest applicants are Broward and Miami-Dade.
Source: News Service of Florida
Florida was given $1 billion from the federal government to implement this program. Under its original form, it would have provided as much as $35,000 in assistance over an 18-month period.
But the program has been tweaked to provide smaller awards for shorter periods of time to more people. The counties with the largest applicants are Broward and Miami-Dade.
Source: News Service of Florida
Citizens policy holders watch premiums keep rising
Seeking warm weather, Debbie and Mark Roman decided recently to move from Pennsylvania to South Florida, and locked into a Coral Springs ranch house for $299,999. The price was right, the pool a plus, and the four bedrooms offer plenty of space to work from home.
But as they prepared to close on the deal and began getting estimates for homeowners insurance, they were taken aback.
“When I got the first quote, I thought, ‘You’ve got to be kidding,’ ‘‘ said Debbie Roman, 43. “I never thought it would be so much.’’
Their house in York, Pa., which was larger and worth more money, cost $700 a year to insure. Now, they are going to have to spend $4,000 to $5,000.
“I can see someone getting to this point and not being able to afford the house,’’ Roman said. “If you live down here, you expect it and you know it, but for us it was quite a shock.’’
Even for those who have long lived in South Florida, the envelope harkening your insurance renewal this year may come as an unwelcome surprise, especially if your home is covered by Citizens Property Insurance Corp.
Last September, the Florida Office of Insurance Regulation approved a 10.3 percent statewide premium increase for Citizens, the state’s largest insurer, with 1.3 million policies.
The premium increase went into effect beginning in January and February, on policy renewal dates this year. It was the second increase in two years for Citizens customers, following a three-year rate freeze that ended in 2009.
Homeowners in Miami-Dade, Broward, Palm Beach and Monroe counties, who account for 45 percent of Citizens’ policies, will see increases ranging up to 11.2 percent, according to Citizens’ charts, which break down the state into geographic territories.
Citizens is limited to requesting rate hikes of 10 percent each year, based on a rate cap. The current increase in premiums statewide included additional funds to infuse cash into the Florida Hurricane Catastrophe Fund, which provides back up for private insurers as well as Citizens.
Even as homeowners are just seeing these latest premium increases, new legislation winding its way through the Florida legislature could raise that rate cap even higher if approval comes during the final weeks of the session.
A bill in the House, which would raise the annual cap to 15 percent per policy holder, could go to a floor vote as early as this week.
A bill in the Senate, which would raise the cap to 25 percent per policy holder, but no more than 20 percent per territory, is still in committee.
“Our rate need overall is more than we have been allowed to implement under law, so we continue to need more,’’ said Christine Ashburn, spokeswoman for Citizens. Because of the rate freezes in 2007, 2008 and 2009, rates have not been adequate since 2006, she said.
In fact, Citizens’ territory charts for South Florida point to “indicated rate changes,’’ or what Citizens would like to have, exceeding 100 percent increases in parts of Miami-Dade and Broward – and 184 percent in Monroe.
The rate need is driven by the concentration of exposure and the risk of loss, using storm track scenarios, Ashburn said.
“Think about the amount of risk we have in South Florida,’’ she said. “It’s significant.’’
No doubt for South Florida homeowners, the insurance premium outlook is far from bright.
“The worst is yet to come,’’ said Lee Gorodetsky, owner of L&S Insurance, an agency based in Fort Lauderdale. He expects to see rates jump 30 percent to 50 percent over the next two years.
Other insurance professionals are also concerned.
“It’s frustrating as an agent, because if 80 percent of the population has Citizens, and they complain about their rate, there’s not much you can do,’’ said Alex Virelles, owner of Diplomat Insurance, an agency based in Coral Gables.
Indeed, in certain parts of South Florida, particularly east of I-95, where private insurers generally are not writing wind policies, the options are limited.
Yet even Dolores Smerkers, who owns a three-bedroom villa in Davie, may end up with Citizens.
“I’ve been with State Farm for 33 years and they are not renewing me,’’ said Smerkers, 59, a chief financial officer for a non-profit corporation. “And I’m having difficulty shopping.’’
She paid $2,700 last year with State Farm, and may now have to pay $3,600 elsewhere when her policy renews in July.
Homeowners may also see Citizens premiums rise as the value of rebuilding their home is adjusted upward, based on an inflation factor, Ashburn said.
“Even though the real estate market has obviously been in a significant downturn, the cost to replace a home has gone up,’’ she said, citing building materials such as steel.
As partial relief, some homeowners can opt to pay their premium in installments.
Citizens allows homeowners to pay their insurance semi-annually or quarterly. Virelles’ agency will finance the premium over 10 months, at up to 14 percent interest.
Agents say they can also offer reduced coverage, if homeowners desire, such as substituting depreciated cost for replacement cost of furniture.
Deductibles can also be raised from 2 percent to 5 percent, for example, if the mortgage company allows it. But then the homeowner carries a much higher share of the risk in the event of a claim.
Still, for homeowners like the Romans from Pennsylvania, the South Florida insurance landscape poses a harsh reality.
“It’s all confusing and new to us,’’ Roman said. “Back home you could shop around. Here you have no competition.’’
Source: The Miami Herald. Distributed by McClatchy-Tribune Information Services.
But as they prepared to close on the deal and began getting estimates for homeowners insurance, they were taken aback.
“When I got the first quote, I thought, ‘You’ve got to be kidding,’ ‘‘ said Debbie Roman, 43. “I never thought it would be so much.’’
Their house in York, Pa., which was larger and worth more money, cost $700 a year to insure. Now, they are going to have to spend $4,000 to $5,000.
“I can see someone getting to this point and not being able to afford the house,’’ Roman said. “If you live down here, you expect it and you know it, but for us it was quite a shock.’’
Even for those who have long lived in South Florida, the envelope harkening your insurance renewal this year may come as an unwelcome surprise, especially if your home is covered by Citizens Property Insurance Corp.
Last September, the Florida Office of Insurance Regulation approved a 10.3 percent statewide premium increase for Citizens, the state’s largest insurer, with 1.3 million policies.
The premium increase went into effect beginning in January and February, on policy renewal dates this year. It was the second increase in two years for Citizens customers, following a three-year rate freeze that ended in 2009.
Homeowners in Miami-Dade, Broward, Palm Beach and Monroe counties, who account for 45 percent of Citizens’ policies, will see increases ranging up to 11.2 percent, according to Citizens’ charts, which break down the state into geographic territories.
Citizens is limited to requesting rate hikes of 10 percent each year, based on a rate cap. The current increase in premiums statewide included additional funds to infuse cash into the Florida Hurricane Catastrophe Fund, which provides back up for private insurers as well as Citizens.
Even as homeowners are just seeing these latest premium increases, new legislation winding its way through the Florida legislature could raise that rate cap even higher if approval comes during the final weeks of the session.
A bill in the House, which would raise the annual cap to 15 percent per policy holder, could go to a floor vote as early as this week.
A bill in the Senate, which would raise the cap to 25 percent per policy holder, but no more than 20 percent per territory, is still in committee.
“Our rate need overall is more than we have been allowed to implement under law, so we continue to need more,’’ said Christine Ashburn, spokeswoman for Citizens. Because of the rate freezes in 2007, 2008 and 2009, rates have not been adequate since 2006, she said.
In fact, Citizens’ territory charts for South Florida point to “indicated rate changes,’’ or what Citizens would like to have, exceeding 100 percent increases in parts of Miami-Dade and Broward – and 184 percent in Monroe.
The rate need is driven by the concentration of exposure and the risk of loss, using storm track scenarios, Ashburn said.
“Think about the amount of risk we have in South Florida,’’ she said. “It’s significant.’’
No doubt for South Florida homeowners, the insurance premium outlook is far from bright.
“The worst is yet to come,’’ said Lee Gorodetsky, owner of L&S Insurance, an agency based in Fort Lauderdale. He expects to see rates jump 30 percent to 50 percent over the next two years.
Other insurance professionals are also concerned.
“It’s frustrating as an agent, because if 80 percent of the population has Citizens, and they complain about their rate, there’s not much you can do,’’ said Alex Virelles, owner of Diplomat Insurance, an agency based in Coral Gables.
Indeed, in certain parts of South Florida, particularly east of I-95, where private insurers generally are not writing wind policies, the options are limited.
Yet even Dolores Smerkers, who owns a three-bedroom villa in Davie, may end up with Citizens.
“I’ve been with State Farm for 33 years and they are not renewing me,’’ said Smerkers, 59, a chief financial officer for a non-profit corporation. “And I’m having difficulty shopping.’’
She paid $2,700 last year with State Farm, and may now have to pay $3,600 elsewhere when her policy renews in July.
Homeowners may also see Citizens premiums rise as the value of rebuilding their home is adjusted upward, based on an inflation factor, Ashburn said.
“Even though the real estate market has obviously been in a significant downturn, the cost to replace a home has gone up,’’ she said, citing building materials such as steel.
As partial relief, some homeowners can opt to pay their premium in installments.
Citizens allows homeowners to pay their insurance semi-annually or quarterly. Virelles’ agency will finance the premium over 10 months, at up to 14 percent interest.
Agents say they can also offer reduced coverage, if homeowners desire, such as substituting depreciated cost for replacement cost of furniture.
Deductibles can also be raised from 2 percent to 5 percent, for example, if the mortgage company allows it. But then the homeowner carries a much higher share of the risk in the event of a claim.
Still, for homeowners like the Romans from Pennsylvania, the South Florida insurance landscape poses a harsh reality.
“It’s all confusing and new to us,’’ Roman said. “Back home you could shop around. Here you have no competition.’’
Source: The Miami Herald. Distributed by McClatchy-Tribune Information Services.
Monday, April 25, 2011
Analysts Say Housing Is on the Way Up
Analysts at both Standard & Poor's and Barclays Capital agree that the uptick in home resales last month is a favorable sign of things to come. Because pending home sales — an indicator of future activity — were up in February, S&P believes transaction volume will rise for April.
Barclays, meanwhile, says March's 3.7 percent gain in existing-home sales merely reinforces its position that the housing market actually hit bottom in late 2010.
Source: “Monday Morning Cup of Coffee,” Housing Wire, Jon Prior (04/25/11)
Barclays, meanwhile, says March's 3.7 percent gain in existing-home sales merely reinforces its position that the housing market actually hit bottom in late 2010.
Source: “Monday Morning Cup of Coffee,” Housing Wire, Jon Prior (04/25/11)
Homeowners can get low-rate loans for energy upgrades
Many U.S. homeowners are now eligible for up to $25,000 in federally insured loans to make energy-efficient upgrades such as adding insulation, sealing ducts or replacing windows.
Consumers with good credit scores, manageable debt and some equity in their homes can get PowerSaver loans at or below market rates to finance efficiency measures that also include new HVAC systems, water heaters, solar panels and geothermal heating/cooling.
“We’re making it easier for American homeowners to save money by saving energy,” said Energy Secretary Steven Chu, noting they spend an average of $2,000 each year on utility bills.
Eighteen regional and national lenders, including Quicken, have signed on to the two-year pilot program, said Secretary of Housing and Urban Development Shaun Donovan, who joined Energy Secretary Chu on Thursday in making the announcement.
Donovan said he expects the loans will serve about 30,000 homeowners and will not only save them money on energy bills but also reduce pollution and create at least 3,000 construction jobs.
The loans are part of the Obama administration’s broader efforts to improve home energy efficiency.
In November, Vice President Biden announced a pilot program to test a new Home Energy Score, which ranks a home’s energy efficiency on a scale of 1 to 10.
Similar to the miles-per-gallon label for cars, the score will tell consumers how their homes compare with others and how much money they could save with efficiency upgrades based on an energy audit.
“The government should not be in the business of selecting which home improvement projects homeowners can finance,” says David Kreutzer, an energy expert at the Heritage Foundation, a Washington, D.C.-based research group often critical of President Obama’s environmental policies.
Kreutzer says only homeowners who could qualify for normal home-equity loans will likely meet the lending criteria, which include a credit score of at least 660.
“This looks like a program to subsidize home improvements for those who don’t need subsidies,” he says.
Steven Nadel, executive director of the private American Council for an Energy-Efficient Economy, disagrees.
“It’s a useful step,” he says of the loans, adding that the energy-retrofit market has been growing on its own but slowly. “This will help.”
Donovan said the Home Energy Score could help prove the payback for various upgrades, and the PowerSaver loans could expand demand for them that will prompt greater private investment.
The Federal Housing Administration will cover up to 90 percent of the loans’ amount in the case of default, leaving the remaining risk to the lenders.
Source: USA TODAY, a division of Gannett Co. Inc.
Consumers with good credit scores, manageable debt and some equity in their homes can get PowerSaver loans at or below market rates to finance efficiency measures that also include new HVAC systems, water heaters, solar panels and geothermal heating/cooling.
“We’re making it easier for American homeowners to save money by saving energy,” said Energy Secretary Steven Chu, noting they spend an average of $2,000 each year on utility bills.
Eighteen regional and national lenders, including Quicken, have signed on to the two-year pilot program, said Secretary of Housing and Urban Development Shaun Donovan, who joined Energy Secretary Chu on Thursday in making the announcement.
Donovan said he expects the loans will serve about 30,000 homeowners and will not only save them money on energy bills but also reduce pollution and create at least 3,000 construction jobs.
The loans are part of the Obama administration’s broader efforts to improve home energy efficiency.
In November, Vice President Biden announced a pilot program to test a new Home Energy Score, which ranks a home’s energy efficiency on a scale of 1 to 10.
Similar to the miles-per-gallon label for cars, the score will tell consumers how their homes compare with others and how much money they could save with efficiency upgrades based on an energy audit.
“The government should not be in the business of selecting which home improvement projects homeowners can finance,” says David Kreutzer, an energy expert at the Heritage Foundation, a Washington, D.C.-based research group often critical of President Obama’s environmental policies.
Kreutzer says only homeowners who could qualify for normal home-equity loans will likely meet the lending criteria, which include a credit score of at least 660.
“This looks like a program to subsidize home improvements for those who don’t need subsidies,” he says.
Steven Nadel, executive director of the private American Council for an Energy-Efficient Economy, disagrees.
“It’s a useful step,” he says of the loans, adding that the energy-retrofit market has been growing on its own but slowly. “This will help.”
Donovan said the Home Energy Score could help prove the payback for various upgrades, and the PowerSaver loans could expand demand for them that will prompt greater private investment.
The Federal Housing Administration will cover up to 90 percent of the loans’ amount in the case of default, leaving the remaining risk to the lenders.
Source: USA TODAY, a division of Gannett Co. Inc.
Rate on 30-year mortgage falls to 4.80%
The rate on the 30-year mortgage fell last week, staying below 5 percent. But low rates have done little to lift the struggling housing market.
Freddie Mac says the average rate on the 30-year loan declined to 4.80 percent from 4.91 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage fell to 4.02 percent from 4.13 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell earlier this week.
Sales of previously occupied homes rose slightly last month to a seasonally adjusted pace of 5.1 million homes a year, the National Association of Realtors said; but the March gains were driven by a rise in foreclosure sales to investors. Even with the increase, home sales remained below the 6-million-homes-a-year pace considered healthy by most economists.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage fell to 3.61 percent from 3.78 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan fell to 3.16 percent from 3.25 percent. That marked the lowest level for the rate on the 1-year ARM in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Source: Copyright 2011 The Associated Press. All rights reserved.
Freddie Mac says the average rate on the 30-year loan declined to 4.80 percent from 4.91 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage fell to 4.02 percent from 4.13 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on the 10-year Treasury note, which fell earlier this week.
Sales of previously occupied homes rose slightly last month to a seasonally adjusted pace of 5.1 million homes a year, the National Association of Realtors said; but the March gains were driven by a rise in foreclosure sales to investors. Even with the increase, home sales remained below the 6-million-homes-a-year pace considered healthy by most economists.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage fell to 3.61 percent from 3.78 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on a one-year adjustable-rate loan fell to 3.16 percent from 3.25 percent. That marked the lowest level for the rate on the 1-year ARM in the last year.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac’s survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
Source: Copyright 2011 The Associated Press. All rights reserved.
US home sales rose in March after weak winter
More Americans bought new homes in March, helping give the battered industry a small lift after the worst winter for sales in almost a half-century.
The Commerce Department says new-home sales rose 11 percent last month to a seasonally adjusted rate of 300,000 homes. That follows three straight monthly declines. But it remains far below the 700,000-a-year pace that economists view as healthy.
Last year was the fifth consecutive year of declines for new-home sales. Economists say it could take years before sales return to a healthy pace.
Poor sales of new homes mean fewer jobs in the construction industry. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders.
Source: The Associated Press.
The Commerce Department says new-home sales rose 11 percent last month to a seasonally adjusted rate of 300,000 homes. That follows three straight monthly declines. But it remains far below the 700,000-a-year pace that economists view as healthy.
Last year was the fifth consecutive year of declines for new-home sales. Economists say it could take years before sales return to a healthy pace.
Poor sales of new homes mean fewer jobs in the construction industry. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders.
Source: The Associated Press.
Friday, April 22, 2011
6 Ways to Save Money in Your Home, Car
You can help save the planet while also saving cash, according to the Alliance to Save Energy.
The average U.S. household spends about $3,425 to power a car and $2,175 on home energy costs--in other words, about $5,600 on energy costs per year. That number is likely even greater with rising fuel and utility costs.
In honor of Earth Day, the Alliance to Save Energy is offering up some pointers on how to trim those yearly expenses with some easy ways to go “green.” Here are a few of its tips.
In your car:
In your home:
Source: “Already-Soaring Gas Prices Make Energy Efficiency an Apt Way to Honor Earth Day While Saving Money, Says Alliance,” Alliance to Save Energy (April 19, 2011)
The average U.S. household spends about $3,425 to power a car and $2,175 on home energy costs--in other words, about $5,600 on energy costs per year. That number is likely even greater with rising fuel and utility costs.
In honor of Earth Day, the Alliance to Save Energy is offering up some pointers on how to trim those yearly expenses with some easy ways to go “green.” Here are a few of its tips.
In your car:
- Use cruise control. Cruise control on the highway can help you maintain a constant speed, which can help save gas.
- Use the overdrive gear. By using the overdrive gear, your car’s engine speed goes down, which not only saves gas but also reduces engine wear and tear.
- Slow down. Driving anything above 60 miles per hour is decreases your gas mileage rapidly. The Alliance equates it to every 5 mph over 60 mph that you drive is basically like paying 24 cents per gallon for gas.
In your home:
- Swap out the light bulbs. Replace old incandescent bulbs with energy efficient options such as compact fluorescent lights, which can shave up to $50 off your electricity costs over the lifetime of each bulb, even factoring in the higher purchase price of the bulb.
- Plant a tree. Properly positioned trees outside your home actually have been found to reduce a home’s energy use, even up to 50 percent during the summer months and 15 percent in the winter.
- Get a tax break. Uncle Sam is offering 2011 tax breaks of up to $500 for energy efficiency home improvements, such as with Energy Star windows, insulation, or energy efficient heating and cooling equipment. Learn more.
Source: “Already-Soaring Gas Prices Make Energy Efficiency an Apt Way to Honor Earth Day While Saving Money, Says Alliance,” Alliance to Save Energy (April 19, 2011)
Thursday, April 21, 2011
Mortgage Rates Drop This Week
After four straight weeks of rising, mortgage rates dropped this week, according to Freddie Mac’s weekly market survey.
Here are how rates fared for the week:
"Low inflation is keeping mortgage rates at bay,” says Frank Nothaft, chief economist at Freddie Mac.
Source: “30-Year Fixed-Rate Mortgage Drops to 4.80 Percent,” Freddie Mac (April 21, 2011)
Here are how rates fared for the week:
- 30-year fixed-rate mortgages: averaged 4.80 percent, down from last week’s 4.91 percent average. Last year at this time, the 30-year fixed-rate mortgage averaged 5.07 percent.
- 15-year fixed-rate mortgage: averaged 4.02 percent, down from last week’s 4.13 percent. A year ago at this time, the 15-year mortgage averaged 4.39 percent.
- 5-year adjustable-rate mortgage: averaged 3.61 percent this week, down from last week when it averaged 3.78 percent. Last year at this time, the 5-year ARM stood at 4.03 percent.
"Low inflation is keeping mortgage rates at bay,” says Frank Nothaft, chief economist at Freddie Mac.
Source: “30-Year Fixed-Rate Mortgage Drops to 4.80 Percent,” Freddie Mac (April 21, 2011)
Fannie Mae: Economy hits an air pocket
Global events during March – ongoing political turmoil in the Middle East and North Africa, the surge in oil prices and supply disruptions from the tragedy in Japan – dampened U.S. economic growth in the first half of 2011, according to the April 2011 Economic Outlook released today by Fannie Mae’s Economics & Mortgage Market Analysis Group.
However, Fannie Mae expects the slowdown to be temporary, with a modest acceleration in economic growth projected for the second half of the year. The group forecasts economic growth to average 3.1 percent for 2011, a downgrade from 3.5 percent projected in the prior forecast.
Home sales were weak in the first part of 2011, with distressed sales (foreclosure and short sales) continuing to account for more than a third of total existing home sales. In turn, a rising share of distressed sales and the winding down of various programs to support the housing market have caused home price measures to decline.
“Home price expectations have deteriorated during the past several months, which could cause some potential homebuyers to remain on the sidelines – and further sharp cutbacks in housing demand would pose a risk to the fragile housing recovery,” says Fannie Mae Chief Economist Doug Duncan. “We expect a little more decline in house prices at the national level than we had thought previously, but expect prices to begin stabilizing later this year.”
On the upside, recent employment reports have been very strong, with more than 230,000 private sector payroll jobs added in each of the last two months. “We anticipate there will be continued reasonably good news in employment through the rest of the year,” said Duncan. “If that continues, we expect housing to move in a similar positive direction – hopefully by the second half of 2011.”
Source: Florida Realtors®
However, Fannie Mae expects the slowdown to be temporary, with a modest acceleration in economic growth projected for the second half of the year. The group forecasts economic growth to average 3.1 percent for 2011, a downgrade from 3.5 percent projected in the prior forecast.
Home sales were weak in the first part of 2011, with distressed sales (foreclosure and short sales) continuing to account for more than a third of total existing home sales. In turn, a rising share of distressed sales and the winding down of various programs to support the housing market have caused home price measures to decline.
“Home price expectations have deteriorated during the past several months, which could cause some potential homebuyers to remain on the sidelines – and further sharp cutbacks in housing demand would pose a risk to the fragile housing recovery,” says Fannie Mae Chief Economist Doug Duncan. “We expect a little more decline in house prices at the national level than we had thought previously, but expect prices to begin stabilizing later this year.”
On the upside, recent employment reports have been very strong, with more than 230,000 private sector payroll jobs added in each of the last two months. “We anticipate there will be continued reasonably good news in employment through the rest of the year,” said Duncan. “If that continues, we expect housing to move in a similar positive direction – hopefully by the second half of 2011.”
Source: Florida Realtors®
U.S. monthly house price index declined 1.6% Jan. to Feb.
U.S. house prices declined 1.6 percent on a seasonally adjusted basis from January to February, according to the Federal Housing Finance Agency’s monthly House Price Index. A previously reported 0.3 percent decrease in January was revised to a 1.0 percent decrease.
For the 12 months ending in February, U.S. prices fell 5.7 percent. The U.S. index is 18.6 percent below its April 2007 peak and roughly the same as the February 2004 index level.
Fannie Mae or Freddie Mac calculates the FHFA monthly index using purchase prices of mortgages that have been sold or guaranteed. For the nine Census Divisions, seasonally adjusted monthly price changes from January to February ranged from -3.7 percent in the Mountain Division to -0.6 percent in the East South Central Division.
Visit the Federal Housing Finance Agency’s website for complete historical data
Source: Florida Realtors®
For the 12 months ending in February, U.S. prices fell 5.7 percent. The U.S. index is 18.6 percent below its April 2007 peak and roughly the same as the February 2004 index level.
Fannie Mae or Freddie Mac calculates the FHFA monthly index using purchase prices of mortgages that have been sold or guaranteed. For the nine Census Divisions, seasonally adjusted monthly price changes from January to February ranged from -3.7 percent in the Mountain Division to -0.6 percent in the East South Central Division.
Visit the Federal Housing Finance Agency’s website for complete historical data
Source: Florida Realtors®
Mortgage Applications Bounce Back, Up 5.3%
The number of mortgage applications are back on the rise again after a monthlong decline in filings, according to the Mortgage Bankers Association.
Mortgage applications increased 5.3 percent the past week, with most of the increase attributed to a surge in applications for government loans. Government loan applications increased 17.6 percent.
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums.”
The seasonally adjusted purchase index rose by 10 percent, while applications for refinancing increased 2.7 percent from the previous week, MBA reports.
"Refinance activity increased somewhat, as rates dropped to their lowest level in a month towards the end of the week," Fratantoni said.
Source: “Mortgage Applications Rose 5.3% After Month-Long Decline,” HousingWire (April 20, 2011)
Mortgage applications increased 5.3 percent the past week, with most of the increase attributed to a surge in applications for government loans. Government loan applications increased 17.6 percent.
“Purchase application volume jumped last week largely due to another sharp increase in applications for government loans,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “Borrowers were likely motivated to apply for loans before the scheduled increase in FHA insurance premiums.”
The seasonally adjusted purchase index rose by 10 percent, while applications for refinancing increased 2.7 percent from the previous week, MBA reports.
"Refinance activity increased somewhat, as rates dropped to their lowest level in a month towards the end of the week," Fratantoni said.
Source: “Mortgage Applications Rose 5.3% After Month-Long Decline,” HousingWire (April 20, 2011)
NAR: March Existing-Home Sales Rise 3.7%
Sales of existing-home sales rose in March, continuing an uneven recovery that began after sales bottomed last July, according to the NATIONAL ASSOCIATION OF REALTORS®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit.
Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”
NAR’s housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median-priced existing home is only 13 percent of gross household income, the lowest since records began in 1970.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.84 percent in March, down from 4.95 percent in February; the rate was 4.97 percent in March 2010.
Data from Freddie Mac and Fannie Mae show requirements to obtain conventional mortgages have been tightened, with the average credit score rising to about 760 in the current market from nearly 720 in 2007; for FHA loans the average credit score is around 700, up from just over 630 in 2007.
“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” Yun explained.
“Given that FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low-downpayment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget. Raising the downpayment requirement would unnecessarily deny credit to many worthy middle-class families and veterans,” Yun said.
A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent of homes in February; they were 44 percent in March 2010.
Record Share of All-Cash Sales
All-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010. Investors accounted for 22 percent of sales activity in March, up from 19 percent in February; they were 19 percent in March 2010. The balance of sales were to repeat buyers.
The national median existing-home price for all housing types was $159,600 in March, down 5.9 percent from March 2010. Distressed homes – typically sold at discounts in the vicinity of 20 percent – accounted for a 40 percent market share in March, up from 39 percent in February and 35 percent in March 2010.
NAR President Ron Phipps said some renters are looking to home ownership as a hedge against inflation. “The typical buyer today plans to stay in a home for 10 years, while rents are projected to rise at faster rates over the next few years,” he said. “As buyers gain more financial security, the advantages of home ownership become more obvious. Rents will continue to trend up, especially in comparison with a fixed-rate loan which provides financial stability and gradual accumulation of equity over time.”
Total housing inventory at the end of March rose 1.5 percent to 3.55 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, compared with a 8.5-month supply in February.
Single-family home sales rose 4.0 percent to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5 percent below the 4.76 million level in March 2010. The median existing single-family home price was $160,500 in March, down 5.3 percent from a year ago.
Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 650,000 in March from 640,000 in February, but are 4.1 percent below the 678,000-unit pace one year ago. The median existing condo price was $153,100 in March, which is 10.1 percent below March 2010.
Regions: Northeast
Regionally, existing-home sales in the Northeast rose 3.9 percent to an annual level of 800,000 in March but are 12.1 percent below March 2010. The median price in the Northeast was $232,900, down 3.0 percent from a year ago.
Midwest
Existing-home sales in the Midwest increased 1.0 percent in March to a pace of 1.06 million but are 13.1 percent lower than a year ago. The median price in the Midwest was $126,100, which is 7.1 percent below March 2010.
South
In the South, existing-home sales rose 8.2 percent to an annual level of 1.99 million in March but are 1.0 percent below March 2010. The median price in the South was $138,200, down 6.6 percent from a year ago.
West
Existing-home sales in the West slipped 0.8 percent to an annual pace of 1.25 million in March and are 3.1 percent below a year ago. The median price in the West was $192,100, which is 11.2 percent lower than March 2010.
Source: NAR
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit.
Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue. “Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path,” he said. “With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.”
NAR’s housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median-priced existing home is only 13 percent of gross household income, the lowest since records began in 1970.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.84 percent in March, down from 4.95 percent in February; the rate was 4.97 percent in March 2010.
Data from Freddie Mac and Fannie Mae show requirements to obtain conventional mortgages have been tightened, with the average credit score rising to about 760 in the current market from nearly 720 in 2007; for FHA loans the average credit score is around 700, up from just over 630 in 2007.
“Although home sales are coming back without a federal stimulus, sales would be notably stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago – before the loose lending practices that created the unprecedented boom and bust cycle,” Yun explained.
“Given that FHA and VA government-backed loan programs turned a modest profit over to the U.S. Treasury last year, and have never required a taxpayer bailout, we believe low-downpayment loans should continue to be available for those consumers who have demonstrated financial responsibility and are willing to stay well within their budget. Raising the downpayment requirement would unnecessarily deny credit to many worthy middle-class families and veterans,” Yun said.
A parallel NAR practitioner survey shows first-time buyers purchased 33 percent of homes in March, compared with 34 percent of homes in February; they were 44 percent in March 2010.
Record Share of All-Cash Sales
All-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010. Investors accounted for 22 percent of sales activity in March, up from 19 percent in February; they were 19 percent in March 2010. The balance of sales were to repeat buyers.
The national median existing-home price for all housing types was $159,600 in March, down 5.9 percent from March 2010. Distressed homes – typically sold at discounts in the vicinity of 20 percent – accounted for a 40 percent market share in March, up from 39 percent in February and 35 percent in March 2010.
NAR President Ron Phipps said some renters are looking to home ownership as a hedge against inflation. “The typical buyer today plans to stay in a home for 10 years, while rents are projected to rise at faster rates over the next few years,” he said. “As buyers gain more financial security, the advantages of home ownership become more obvious. Rents will continue to trend up, especially in comparison with a fixed-rate loan which provides financial stability and gradual accumulation of equity over time.”
Total housing inventory at the end of March rose 1.5 percent to 3.55 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, compared with a 8.5-month supply in February.
Single-family home sales rose 4.0 percent to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5 percent below the 4.76 million level in March 2010. The median existing single-family home price was $160,500 in March, down 5.3 percent from a year ago.
Existing condominium and co-op sales increased 1.6 percent to a seasonally adjusted annual rate of 650,000 in March from 640,000 in February, but are 4.1 percent below the 678,000-unit pace one year ago. The median existing condo price was $153,100 in March, which is 10.1 percent below March 2010.
Regions: Northeast
Regionally, existing-home sales in the Northeast rose 3.9 percent to an annual level of 800,000 in March but are 12.1 percent below March 2010. The median price in the Northeast was $232,900, down 3.0 percent from a year ago.
Midwest
Existing-home sales in the Midwest increased 1.0 percent in March to a pace of 1.06 million but are 13.1 percent lower than a year ago. The median price in the Midwest was $126,100, which is 7.1 percent below March 2010.
South
In the South, existing-home sales rose 8.2 percent to an annual level of 1.99 million in March but are 1.0 percent below March 2010. The median price in the South was $138,200, down 6.6 percent from a year ago.
West
Existing-home sales in the West slipped 0.8 percent to an annual pace of 1.25 million in March and are 3.1 percent below a year ago. The median price in the West was $192,100, which is 11.2 percent lower than March 2010.
Source: NAR
Cities build toward airport ‘aerotropolises’ for growth
For decades, Ford produced its popular Taurus sedans at a plant next to the busiest airport in the world, Atlanta’s Hartsfield. But the 130-acre lot has sat vacant since 2008 when the plant was shut.
A local commercial real estate developer bought the land and now envisions something completely different: a mixed-use project, with office parks for firms that need quick access to Hartsfield, plus hotels and shops.
“We saw the development opportunity because it was a large contiguous tract next to the busiest airport in the world,” says Scott Condra of Jacoby Development, the project developer.
Development projects next door to airports are back in vogue throughout the U.S., as financially struggling cities look to attract export-oriented and high-tech businesses amid an uncertain economic recovery.
Atlanta is just one of several cities latching onto the trend of trying to build all the aspects of a city around an airport -- an “aerotropolis” as it’s called by planners. The push is for aviation authorities to partner with private companies to cohesively and systematically develop bountiful land near airports to attract office space, warehouses, logistics centers, retail stores, recreational facilities and apartments.
By attracting businesses that need frequent and easy access to airports -- delivery-fulfillment centers, exporters, Web commerce companies, biomedical manufacturers and other time-sensitive enterprises -- other clusters of businesses that cater to existing companies will be formed, aerotropolis advocates say. Projects such as entertainment and residential complexes will soon follow, forming a city whose core and economic engine is the airport.
Denver, Indianapolis, Milwaukee, Detroit and the Winston-Salem/Greensboro region in North Carolina have plans to pursue aerotropolises. Even cities that have had expansive development near the airport, such as Dallas/Fort Worth and Memphis, want to push the concept further.
“You’re seeing a lot of airports jumping on the bandwagon,” says Mark Perryman, president of Landrum & Brown, an airport planning firm that’s working with Indianapolis for an aerotropolis project there. “Some airports are competing for the same type of industries.”
Metro rails create right atmosphere
Fostering airport development to expand the local economy isn’t a new concept. Airports such as those in Denver, Memphis and Dallas/Fort Worth have studied, proposed or implemented it to varying degrees of success in the last decade. And warehouses, budget motels and other businesses looking for inexpensive land have always been drawn to airports.
But the concept is re-emerging as more cities -- including Denver, Dallas, Washington, D.C., Miami and Los Angeles -- extend local metro rail to airports and debate how to spur rider traffic and create lively destinations near airports.
Aviation officials also see aerotropolises as a way to boost non-aviation revenue. Real estate projects promise a steady stream of rent and parking fees that can offset declining income from tight-fisted airline tenants.
What also separates the latest round of proposals is the economic urgency palpable in cities that have miles of vacant land and a sense that not using it reflects an inability to compete in a globally connected economy. U.S. city officials hear stories from Asia and the Middle East, where airports such as Seoul-Incheon, Shanghai, Hong Kong and Dubai have been aggressive in converting the aerotropolis idea into reality, often unimpeded by the bureaucratic and financial hurdles that many U.S. airports face.
Despite an economic downturn in South Korea and sluggish demand from prospective tenants, Seoul-Incheon is building a multi-use complex adjacent to the airport that will house a mall, marina, an amusement park, a convention center and a fashion complex for designer studios. A medical center to capitalize on the rise in Asian medical tourism is also planned.
“We need to treat airports and airlines as key infrastructure to compete in a global economy,” says John Kasarda, a University of North Carolina professor who is largely credited with coining the term “aerotropolis” and is pushing for the idea once again with a new book released in March, Aerotropolis: The Way We’ll Live Next. “It might take 50 years. But we must do that, or we’re going to fall behind in competition to India, China and Brazil.”
Among the airport-city projects in development in the USA:
Detroit. In desperate need of economic reinvigoration, Wayne and Washtenaw counties along with seven other cities and towns in Michigan have agreed to target 60,000 acres near Detroit Metro for development. An office park headed by GE is already there, and about 40 companies have relocated there, but the area “still needs more tenants,” says Robert Ficano, Wayne County executive.
“We have flight patterns that are tied into international traffic. You can reach 60% of the U.S. overnight.” Tax incentives and abatements will be considered for companies that agree to move in and use “multimodal” -- or rail, air, waterways and highways -- to develop and transport goods.
Winston-Salem/Greensboro, N.C. The 12 counties that surround Winston-Salem and Greensboro are looking to an aerotropolis model to make up for the 90,000 jobs lost in the last 10 years from textile, furniture-making and tobacco industries, says David Hauser of the Piedmont Triad Partnership, a public-private partnership that’s spearheading the effort. Energized by FedEx’s opening of a new Mid-Atlantic hub at Piedmont Triad International Airport, local officials vow to proceed with the plans despite sluggish economic conditions that have forced FedEx to scale back its operation.
“We’re going to build an aerotropolis whether we like it or not,” Hauser says. To try to accelerate it, the partnering counties are trying to standardize zoning processes to expedite paperwork for companies interested in the region. “You tell a company that it takes nine months to get zoning, it’s going to move to Mississippi,” Hauser says.
Denver. When Denver International opened in 1995, its planners envisioned business and neighborhood clusters eventually filling the 53 square miles surrounding the airport. The vision has fallen short. Single-family homes were quickly built near the airport to meet feverish demand a decade ago, but waves of foreclosures have hit the area. The fast-casual restaurants, low-rise office buildings and limited-service hotels that dot the main roadway into the airport don’t evoke the aerotropolis that local officials touted in 2003.
Denver is giving it another try, hoping to pack in more options at a metro rail station that will open on airport property in 2016. “I wouldn’t say we’ve had a true aerotropolis-type of development,” says John Ackerman, the airports’ chief commercial officer. “But we’re very interested in it now.”
The density-focused plan calls for a walkable environment at the station, with retail shops and restaurants. A second rail station, to be built further out from the terminal, will have office space and apartments within a quarter mile, and possibly entertainment complexes and a golf course.
Joshua Schank, CEO of Eno Transportation Foundation, says airport-city developments with a focus on walkability and public transportation have a better chance of succeeding. “It’s hard to have an aerotropolis that’s auto-centric,” Schank says. “What makes cities interesting and dynamic is that they’re not just about cars.”
Dallas/Fort Worth. Airport officials see a new aerotropolis around three new rail stations that will connect the airport to Dallas and Fort Worth when they open in the next three years. Owning a land mass larger than Manhattan, the airport has zoned about 6,000 acres for industrial parks, retail and restaurants, hotels and an entertainment venue that will be developed gradually in the next 20 years, says John Terrell, the airport’s vice president of commercial development.
About 1,000 acres already have been developed, consisting of a hotel, golf course, cargo and commerce park. Aviall, an aircraft parts distributor, has moved in, as have the Dallas Cowboys’ merchandising headquarters and aircraft engine maker Pratt & Whitney.
With American and Southwest airlines headquartered in the region, aviation has always been a key economic driver in Dallas and Fort Worth, and the region has had some previous success in aerotropolis development. Nearby suburbs, such as Southlake and Grapevine, have flourished as large employers located their headquarters near the airport. Las Colinas, a planned, upscale area nearby, has owed much of its development to the airport, Terrell says.
Indianapolis. In February, Indianapolis aviation officials approved a long-term development plan for 59 million square feet of leasable land at Indianapolis International. The usual aviation-intense businesses -- logistics and cargo firms -- will be targeted as tenants, but the plan also calls for a solar-energy farm in one corner. The aviation authority could possibly generate up to $63 million a year in rental income by 2040, estimates Landrum and Brown.
Memphis. Not content to sit on its reputation as an advanced U.S. aerotropolis, the cargo-heavy airport is “tweaking and refining” its development model, says Arnold Perl, board chairman of the Memphis-Shelby County Airport Authority. While the city has the world’s No.2 air cargo traffic (FedEx is headquartered there) and one of the busiest trucking and rail corridors in the U.S., Memphis wants to improve roads between the various transportation modes and is spending a $1.5 million federal grant to figure out how to better merge leisure centers and housing into its aerotropolis model, Perl says.
Not all airports are candidates
Simply devising lease plans to fill empty buildings with corporate tenants doesn’t an aerotropolis make, some planners and economists say.
As economies wane and businesses move out, urban planning theories that promise reinvigoration are apt to resurface, says David Prosperi, an urban planning professor at Florida Atlantic University. But with only so many logistics and delivery companies to go around, many aerotropolis proposals are bound to fall short, he says.
Some cities lack other characteristics that are needed for a sustained economic revival, such as good universities, a good quality of life and an educated workforce. “It has become very much a fad,” he says. “Virtually every city wants to do an aerotropolis. The problem is, everyone is doing that.”
More focused development of concentrated businesses that exploit the region’s competitive strengths is more likely to succeed, he says. “I’d think more about jobs. To think that you’re going to have a cute seaside village at the airport is nonsense.”
There are other possible obstacles in the way of the concept, too, including the simple idea of location.
“People don’t want to live next to an airport, because it’s not a pleasant place. It looks industrial. It looks sprawled out. And they don’t want to work in a place like that,” Eno’s Schank says. “(Developers) think humans are automatons and will just go where it’s most convenient.
“But will people pay a premium to live next door to an airport? I doubt it.”
Source: USA TODAY, a division of Gannett Co. Inc., Roger Yu.
A local commercial real estate developer bought the land and now envisions something completely different: a mixed-use project, with office parks for firms that need quick access to Hartsfield, plus hotels and shops.
“We saw the development opportunity because it was a large contiguous tract next to the busiest airport in the world,” says Scott Condra of Jacoby Development, the project developer.
Development projects next door to airports are back in vogue throughout the U.S., as financially struggling cities look to attract export-oriented and high-tech businesses amid an uncertain economic recovery.
Atlanta is just one of several cities latching onto the trend of trying to build all the aspects of a city around an airport -- an “aerotropolis” as it’s called by planners. The push is for aviation authorities to partner with private companies to cohesively and systematically develop bountiful land near airports to attract office space, warehouses, logistics centers, retail stores, recreational facilities and apartments.
By attracting businesses that need frequent and easy access to airports -- delivery-fulfillment centers, exporters, Web commerce companies, biomedical manufacturers and other time-sensitive enterprises -- other clusters of businesses that cater to existing companies will be formed, aerotropolis advocates say. Projects such as entertainment and residential complexes will soon follow, forming a city whose core and economic engine is the airport.
Denver, Indianapolis, Milwaukee, Detroit and the Winston-Salem/Greensboro region in North Carolina have plans to pursue aerotropolises. Even cities that have had expansive development near the airport, such as Dallas/Fort Worth and Memphis, want to push the concept further.
“You’re seeing a lot of airports jumping on the bandwagon,” says Mark Perryman, president of Landrum & Brown, an airport planning firm that’s working with Indianapolis for an aerotropolis project there. “Some airports are competing for the same type of industries.”
Metro rails create right atmosphere
Fostering airport development to expand the local economy isn’t a new concept. Airports such as those in Denver, Memphis and Dallas/Fort Worth have studied, proposed or implemented it to varying degrees of success in the last decade. And warehouses, budget motels and other businesses looking for inexpensive land have always been drawn to airports.
But the concept is re-emerging as more cities -- including Denver, Dallas, Washington, D.C., Miami and Los Angeles -- extend local metro rail to airports and debate how to spur rider traffic and create lively destinations near airports.
Aviation officials also see aerotropolises as a way to boost non-aviation revenue. Real estate projects promise a steady stream of rent and parking fees that can offset declining income from tight-fisted airline tenants.
What also separates the latest round of proposals is the economic urgency palpable in cities that have miles of vacant land and a sense that not using it reflects an inability to compete in a globally connected economy. U.S. city officials hear stories from Asia and the Middle East, where airports such as Seoul-Incheon, Shanghai, Hong Kong and Dubai have been aggressive in converting the aerotropolis idea into reality, often unimpeded by the bureaucratic and financial hurdles that many U.S. airports face.
Despite an economic downturn in South Korea and sluggish demand from prospective tenants, Seoul-Incheon is building a multi-use complex adjacent to the airport that will house a mall, marina, an amusement park, a convention center and a fashion complex for designer studios. A medical center to capitalize on the rise in Asian medical tourism is also planned.
“We need to treat airports and airlines as key infrastructure to compete in a global economy,” says John Kasarda, a University of North Carolina professor who is largely credited with coining the term “aerotropolis” and is pushing for the idea once again with a new book released in March, Aerotropolis: The Way We’ll Live Next. “It might take 50 years. But we must do that, or we’re going to fall behind in competition to India, China and Brazil.”
Among the airport-city projects in development in the USA:
Detroit. In desperate need of economic reinvigoration, Wayne and Washtenaw counties along with seven other cities and towns in Michigan have agreed to target 60,000 acres near Detroit Metro for development. An office park headed by GE is already there, and about 40 companies have relocated there, but the area “still needs more tenants,” says Robert Ficano, Wayne County executive.
“We have flight patterns that are tied into international traffic. You can reach 60% of the U.S. overnight.” Tax incentives and abatements will be considered for companies that agree to move in and use “multimodal” -- or rail, air, waterways and highways -- to develop and transport goods.
Winston-Salem/Greensboro, N.C. The 12 counties that surround Winston-Salem and Greensboro are looking to an aerotropolis model to make up for the 90,000 jobs lost in the last 10 years from textile, furniture-making and tobacco industries, says David Hauser of the Piedmont Triad Partnership, a public-private partnership that’s spearheading the effort. Energized by FedEx’s opening of a new Mid-Atlantic hub at Piedmont Triad International Airport, local officials vow to proceed with the plans despite sluggish economic conditions that have forced FedEx to scale back its operation.
“We’re going to build an aerotropolis whether we like it or not,” Hauser says. To try to accelerate it, the partnering counties are trying to standardize zoning processes to expedite paperwork for companies interested in the region. “You tell a company that it takes nine months to get zoning, it’s going to move to Mississippi,” Hauser says.
Denver. When Denver International opened in 1995, its planners envisioned business and neighborhood clusters eventually filling the 53 square miles surrounding the airport. The vision has fallen short. Single-family homes were quickly built near the airport to meet feverish demand a decade ago, but waves of foreclosures have hit the area. The fast-casual restaurants, low-rise office buildings and limited-service hotels that dot the main roadway into the airport don’t evoke the aerotropolis that local officials touted in 2003.
Denver is giving it another try, hoping to pack in more options at a metro rail station that will open on airport property in 2016. “I wouldn’t say we’ve had a true aerotropolis-type of development,” says John Ackerman, the airports’ chief commercial officer. “But we’re very interested in it now.”
The density-focused plan calls for a walkable environment at the station, with retail shops and restaurants. A second rail station, to be built further out from the terminal, will have office space and apartments within a quarter mile, and possibly entertainment complexes and a golf course.
Joshua Schank, CEO of Eno Transportation Foundation, says airport-city developments with a focus on walkability and public transportation have a better chance of succeeding. “It’s hard to have an aerotropolis that’s auto-centric,” Schank says. “What makes cities interesting and dynamic is that they’re not just about cars.”
Dallas/Fort Worth. Airport officials see a new aerotropolis around three new rail stations that will connect the airport to Dallas and Fort Worth when they open in the next three years. Owning a land mass larger than Manhattan, the airport has zoned about 6,000 acres for industrial parks, retail and restaurants, hotels and an entertainment venue that will be developed gradually in the next 20 years, says John Terrell, the airport’s vice president of commercial development.
About 1,000 acres already have been developed, consisting of a hotel, golf course, cargo and commerce park. Aviall, an aircraft parts distributor, has moved in, as have the Dallas Cowboys’ merchandising headquarters and aircraft engine maker Pratt & Whitney.
With American and Southwest airlines headquartered in the region, aviation has always been a key economic driver in Dallas and Fort Worth, and the region has had some previous success in aerotropolis development. Nearby suburbs, such as Southlake and Grapevine, have flourished as large employers located their headquarters near the airport. Las Colinas, a planned, upscale area nearby, has owed much of its development to the airport, Terrell says.
Indianapolis. In February, Indianapolis aviation officials approved a long-term development plan for 59 million square feet of leasable land at Indianapolis International. The usual aviation-intense businesses -- logistics and cargo firms -- will be targeted as tenants, but the plan also calls for a solar-energy farm in one corner. The aviation authority could possibly generate up to $63 million a year in rental income by 2040, estimates Landrum and Brown.
Memphis. Not content to sit on its reputation as an advanced U.S. aerotropolis, the cargo-heavy airport is “tweaking and refining” its development model, says Arnold Perl, board chairman of the Memphis-Shelby County Airport Authority. While the city has the world’s No.2 air cargo traffic (FedEx is headquartered there) and one of the busiest trucking and rail corridors in the U.S., Memphis wants to improve roads between the various transportation modes and is spending a $1.5 million federal grant to figure out how to better merge leisure centers and housing into its aerotropolis model, Perl says.
Not all airports are candidates
Simply devising lease plans to fill empty buildings with corporate tenants doesn’t an aerotropolis make, some planners and economists say.
As economies wane and businesses move out, urban planning theories that promise reinvigoration are apt to resurface, says David Prosperi, an urban planning professor at Florida Atlantic University. But with only so many logistics and delivery companies to go around, many aerotropolis proposals are bound to fall short, he says.
Some cities lack other characteristics that are needed for a sustained economic revival, such as good universities, a good quality of life and an educated workforce. “It has become very much a fad,” he says. “Virtually every city wants to do an aerotropolis. The problem is, everyone is doing that.”
More focused development of concentrated businesses that exploit the region’s competitive strengths is more likely to succeed, he says. “I’d think more about jobs. To think that you’re going to have a cute seaside village at the airport is nonsense.”
There are other possible obstacles in the way of the concept, too, including the simple idea of location.
“People don’t want to live next to an airport, because it’s not a pleasant place. It looks industrial. It looks sprawled out. And they don’t want to work in a place like that,” Eno’s Schank says. “(Developers) think humans are automatons and will just go where it’s most convenient.
“But will people pay a premium to live next door to an airport? I doubt it.”
Source: USA TODAY, a division of Gannett Co. Inc., Roger Yu.
Fla.’s existing home, condo sales up
Florida’s existing home and existing condo sales rose in March, according to the latest housing data released by Florida Realtors®. Existing home sales increased 12 percent last month with a total of 18,522 homes sold statewide compared to 16,540 homes sold in March 2010, according to Florida Realtors. Statewide sales of existing condos last month rose 24 percent compared to the year-ago sales figure.
Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home and existing condo sales in March; 17 MSAs also had higher condo sales. It’s the fourth consecutive month that Florida Realtors has reported higher year-over-year existing home and existing condo sales statewide.
“A variety of housing opportunities is available at attractive prices across the state, while mortgage interest rates remain historically low,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Favorable conditions like these spark the interest of buyers – who should consult a local Realtor to find out more about their local markets.”
Florida’s median sales price for existing homes last month was $126,300; a year ago, it was $136,000 for a 7 percent decrease. Analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in February 2011 was $157,000, down 4.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $271,320 in February; in Massachusetts, it was $270,000; in New York, it was $245,000; and in Maryland, it was $208,258.
According to NAR’s latest industry outlook, a strengthening economy will continue to bolster the housing market’s slow recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by unnecessarily tight credit,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 9,703 units sold statewide last month compared to 7,830 units in March 2010 for an increase of 24 percent. The statewide existing condo median sales price last month was $84,300; in March 2010 it was $94,800 for an 11 percent decrease. The national median existing condo sales price was $150,400 in February 2011, according to NAR.
The interest rate for a 30-year fixed-rate mortgage averaged 4.84 percent in March, down slightly from the 4.97 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home and existing condo sales in March; 17 MSAs also had higher condo sales. It’s the fourth consecutive month that Florida Realtors has reported higher year-over-year existing home and existing condo sales statewide.
“A variety of housing opportunities is available at attractive prices across the state, while mortgage interest rates remain historically low,” said 2011 Florida Realtors® President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Favorable conditions like these spark the interest of buyers – who should consult a local Realtor to find out more about their local markets.”
Florida’s median sales price for existing homes last month was $126,300; a year ago, it was $136,000 for a 7 percent decrease. Analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in February 2011 was $157,000, down 4.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $271,320 in February; in Massachusetts, it was $270,000; in New York, it was $245,000; and in Maryland, it was $208,258.
According to NAR’s latest industry outlook, a strengthening economy will continue to bolster the housing market’s slow recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by unnecessarily tight credit,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 9,703 units sold statewide last month compared to 7,830 units in March 2010 for an increase of 24 percent. The statewide existing condo median sales price last month was $84,300; in March 2010 it was $94,800 for an 11 percent decrease. The national median existing condo sales price was $150,400 in February 2011, according to NAR.
The interest rate for a 30-year fixed-rate mortgage averaged 4.84 percent in March, down slightly from the 4.97 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Tuesday, April 19, 2011
Commercial Real Estate Investment Drops Globally
A new report by Jones Lang LaSalle's (JLL's) Capital Markets Research division shows that global direct commercial real estate investment volumes totaled just under $90 billion in this year's first three months, a 20 percent decrease from the fourth quarter of 2010.
Compared to the start of last year, all major global markets have seen an increase in volumes, especially in Germany, Poland, Russia, and the United Kingdom. However, JLL researchers also note that investors are still being careful with risk and are consequently holding out to see if fundamentals will improve.
Steve Collins, managing director at JLL, notes, "You've still got coffers full of money all over the globe, itching to get into the real estate markets. They can't let the money sit there and just earn less than 1 percent. You've got groups such as the Chinese government that are saying they want to invest their cash into hard assets."
Mirroring trends seen in the United States, the global market continues to be very fractured, with pockets of quality available here and there. Collins uses the comparison of London, which had low capitalization rates that rose up when the market tanked, and now the city's West End is leading the local charge.
Source: "Global Investment Drops from Fourth Quarter" GlobeSt.com (04/15/11)
Compared to the start of last year, all major global markets have seen an increase in volumes, especially in Germany, Poland, Russia, and the United Kingdom. However, JLL researchers also note that investors are still being careful with risk and are consequently holding out to see if fundamentals will improve.
Steve Collins, managing director at JLL, notes, "You've still got coffers full of money all over the globe, itching to get into the real estate markets. They can't let the money sit there and just earn less than 1 percent. You've got groups such as the Chinese government that are saying they want to invest their cash into hard assets."
Mirroring trends seen in the United States, the global market continues to be very fractured, with pockets of quality available here and there. Collins uses the comparison of London, which had low capitalization rates that rose up when the market tanked, and now the city's West End is leading the local charge.
Source: "Global Investment Drops from Fourth Quarter" GlobeSt.com (04/15/11)
Foreclosure relief program launches in Florida
A $1 billion program expected to help 40,000 Floridians stave off foreclosure opened statewide Monday, setting off a first-come, first-served rush for government-aided mortgage payments.
The Florida Hardest Hit Fund program, administered by the Florida Housing Finance Corp., is designed to aid unemployed homeowners by paying their mortgages for up to six months, or helping them get caught up on as much as $6,000 in past due payments.
“For the homeowners who qualify, this temporary relief from their mortgage payments will provide some ‘breathing room’ so they can focus on becoming re-employed at a level that will allow them to resume making payments on their own,” Steve Auger, executive director of Florida Housing, said in a statement.
Housing agencies and homeowner help centers reported lots of interest and few hiccups with the online-only application process.
“Needless to say, people were waiting by their computers this morning and have been busy all day,” said Reg Froese, director of homeownership preservation for Neighborhood Housing Services of South Florida.
By midday Monday, about 50 program applicants were referred to NHSSF by Florida Housing, which hands over completed applications to several housing agencies across the state. NHSSF also had about 70 applicants waiting to get help with the program before it launched statewide, Froese said.
Florida Housing spent five months monitoring and tweaking the program during a pilot run in Lee County.
After the pilot, the program parameters and requirements changed. The amount of aid available to homeowners was reduced and participants are now required to contribute at least $70 each month towards their mortgage.
A spokeswoman for Florida Housing said it was too early to gauge the level of interest on the first day of the program’s launch, but data on the number of applications received would be available Friday.
In order to qualify, a homeowner must be unemployed or underemployed, and must be no more than six months behind on mortgage payments. The program is only for primary, or “owner-occupied,” residences.
In South Florida, where unemployment remains in the double-digits, and hundreds of thousands of mortgages are delinquent, interest in the program is likely to be high until the $1 billion in funding runs out.
Ray Payano, a Cutler Bay homeowner who lost his job last year and fell behind on mortgage payments before starting his own business, said he was preparing to apply for the program on Monday.
“I haven’t had a chance to do it yet, but I plan to fill out the application,” he said.
For more information, or to apply, visit javascript:HandleLink('cpe_0_0','CPNEWWIN:NewWindow%5Etop=10,left=10,width=500,height=400,toolbar=1,location=1,directories=0,status=1,menubar=1,scrollbars=1,resizable=1@www.flhardesthithelp.org');. (Peggy: Link this one.)
Source: The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services
The Florida Hardest Hit Fund program, administered by the Florida Housing Finance Corp., is designed to aid unemployed homeowners by paying their mortgages for up to six months, or helping them get caught up on as much as $6,000 in past due payments.
“For the homeowners who qualify, this temporary relief from their mortgage payments will provide some ‘breathing room’ so they can focus on becoming re-employed at a level that will allow them to resume making payments on their own,” Steve Auger, executive director of Florida Housing, said in a statement.
Housing agencies and homeowner help centers reported lots of interest and few hiccups with the online-only application process.
“Needless to say, people were waiting by their computers this morning and have been busy all day,” said Reg Froese, director of homeownership preservation for Neighborhood Housing Services of South Florida.
By midday Monday, about 50 program applicants were referred to NHSSF by Florida Housing, which hands over completed applications to several housing agencies across the state. NHSSF also had about 70 applicants waiting to get help with the program before it launched statewide, Froese said.
Florida Housing spent five months monitoring and tweaking the program during a pilot run in Lee County.
After the pilot, the program parameters and requirements changed. The amount of aid available to homeowners was reduced and participants are now required to contribute at least $70 each month towards their mortgage.
A spokeswoman for Florida Housing said it was too early to gauge the level of interest on the first day of the program’s launch, but data on the number of applications received would be available Friday.
In order to qualify, a homeowner must be unemployed or underemployed, and must be no more than six months behind on mortgage payments. The program is only for primary, or “owner-occupied,” residences.
In South Florida, where unemployment remains in the double-digits, and hundreds of thousands of mortgages are delinquent, interest in the program is likely to be high until the $1 billion in funding runs out.
Ray Payano, a Cutler Bay homeowner who lost his job last year and fell behind on mortgage payments before starting his own business, said he was preparing to apply for the program on Monday.
“I haven’t had a chance to do it yet, but I plan to fill out the application,” he said.
For more information, or to apply, visit javascript:HandleLink('cpe_0_0','CPNEWWIN:NewWindow%5Etop=10,left=10,width=500,height=400,toolbar=1,location=1,directories=0,status=1,menubar=1,scrollbars=1,resizable=1@www.flhardesthithelp.org');. (Peggy: Link this one.)
Source: The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services
Monday, April 18, 2011
Is the Value of 'Green' Lost in Appraisals?
According to recent surveys, buyers want more environmentally sensitive home features, and they are willing to pay for them. But builders say not enough appraisers are recognizing green’s worth and factoring it into their property valuations.
"Appraisers just don't get it," says William T. Nolan, a Florida consultant to home builders. "We can't get them to appreciate the value of net costs. And if we can't get the values recognized, (manufacturers) can't justify moving these products forward."
The Appraisal Institute is taking steps to change that, according to spokesman Ken Chitester, by producing several webinars and publishing a booklet to help educate more appraisers on green valuations.
But until the industry gets caught up, some say it’s up to the real estate agent or builder to make sure the appraiser used is trained in green building.
Dave Porter of Porterworks, a sustainability consulting firm in Stanwood, Wash., tells agents and home owners that it’s not “pressuring anybody” to make sure an appraiser knows the value of green attributes and has the competency to factor it into his or her property evaluations.
What You Can Do
Joseph Magdziarz, president of the Appraisal Institute, agrees and even encourages home owners to accompany the appraiser during his inspection to point out energy-saving features throughout the home so they aren’t missed.
Southwest Florida appraiser Sandra Adomatis, an expert in green valuations, encourages home owners and professionals to provider appraisers with the following information:
▪ Provide a rating from a recognized agency that shows how the “green” home compares to a similar model that has fewer energy efficiency construction standards.
▪ Offer a breakdown of the additional construction costs of green and energy-efficient items.
▪ Create a chart that compares “green” features with those in code-built houses.
Source: “Value of Green Often Lost on Appraisers,” Chicago Tribune (April 15, 2011)
"Appraisers just don't get it," says William T. Nolan, a Florida consultant to home builders. "We can't get them to appreciate the value of net costs. And if we can't get the values recognized, (manufacturers) can't justify moving these products forward."
The Appraisal Institute is taking steps to change that, according to spokesman Ken Chitester, by producing several webinars and publishing a booklet to help educate more appraisers on green valuations.
But until the industry gets caught up, some say it’s up to the real estate agent or builder to make sure the appraiser used is trained in green building.
Dave Porter of Porterworks, a sustainability consulting firm in Stanwood, Wash., tells agents and home owners that it’s not “pressuring anybody” to make sure an appraiser knows the value of green attributes and has the competency to factor it into his or her property evaluations.
What You Can Do
Joseph Magdziarz, president of the Appraisal Institute, agrees and even encourages home owners to accompany the appraiser during his inspection to point out energy-saving features throughout the home so they aren’t missed.
Southwest Florida appraiser Sandra Adomatis, an expert in green valuations, encourages home owners and professionals to provider appraisers with the following information:
▪ Provide a rating from a recognized agency that shows how the “green” home compares to a similar model that has fewer energy efficiency construction standards.
▪ Offer a breakdown of the additional construction costs of green and energy-efficient items.
▪ Create a chart that compares “green” features with those in code-built houses.
Source: “Value of Green Often Lost on Appraisers,” Chicago Tribune (April 15, 2011)
Commercial real estate heats up
The once-dismal commercial real estate market is turning around far more quickly than analysts expected, with troubled loans falling, occupancy rising and office building sales surging in the largest markets.
That’s welcome news for an economic recovery that still faces headwinds such as rising oil prices. The improving market has eased fears that banks might be crippled by heavy losses from their bad construction loans in the mid-2000s and would have to rein in lending just as credit is easing.
Lenders were still saddled with $181 billion in distressed loans in February, according to Real Capital Analytics (RCA). But that’s down from $188 billion in September. Mortgage defaults for office, retail and industrial building loans dipped for the first time since 2005 in the fourth quarter, to 4.28 percent from 4.36 percent. They should fall further this year, says RCA economist Sam Chandan. “Worst-case scenarios have been avoided,” he says.
The recovery, he says, has finally stabilized building occupancy, letting landlords pay down loans. Vacancy rates in the first quarter dipped slightly for retail and industrial properties, to 7.2 percent and 10 percent, respectively, and were unchanged at 13.4 percent for offices, according to CoStar Group. Occupancy has edged up steadily since early last year.
Investors, meanwhile, are clamoring to buy well-leased office buildings in markets such as New York City and Washington, D.C. A big reason: virtually no new development the past few years.
In New York, “We’re seeing prices (for prized buildings) return to 2007 levels” after falling 40 percent in the downturn, says Richard Baxter, vice chairman of real estate giant Jones Lang LaSalle.
New York’s biggest office landlord, SL Green Realty, has been scooping up buildings. Co-Chief Investment Officer Isaac Zion says credit is available, occupancy and lease rates are up and returns far exceed meager bond yields. “We really saw the writing on the wall and we pounced,” Zion says.
Commercial mortgage-backed securities, a big funding source for some buyers, are up this year.
More foreclosures are still likely to batter prices in many areas. But the investment furor could spread to cities such as Dallas, Denver and Houston, says CoStar real estate strategist Chris Macke.
Rising prices could at least temper foreclosures on the $1.4 trillion in commercial mortgages that Deutsche Bank says are maturing by 2013. Even owners still making payments might not be able to refinance properties whose values fell sharply.
Source: USA TODAY, a division of Gannett Co. Inc., Paul Davidson, USA TODAY
That’s welcome news for an economic recovery that still faces headwinds such as rising oil prices. The improving market has eased fears that banks might be crippled by heavy losses from their bad construction loans in the mid-2000s and would have to rein in lending just as credit is easing.
Lenders were still saddled with $181 billion in distressed loans in February, according to Real Capital Analytics (RCA). But that’s down from $188 billion in September. Mortgage defaults for office, retail and industrial building loans dipped for the first time since 2005 in the fourth quarter, to 4.28 percent from 4.36 percent. They should fall further this year, says RCA economist Sam Chandan. “Worst-case scenarios have been avoided,” he says.
The recovery, he says, has finally stabilized building occupancy, letting landlords pay down loans. Vacancy rates in the first quarter dipped slightly for retail and industrial properties, to 7.2 percent and 10 percent, respectively, and were unchanged at 13.4 percent for offices, according to CoStar Group. Occupancy has edged up steadily since early last year.
Investors, meanwhile, are clamoring to buy well-leased office buildings in markets such as New York City and Washington, D.C. A big reason: virtually no new development the past few years.
In New York, “We’re seeing prices (for prized buildings) return to 2007 levels” after falling 40 percent in the downturn, says Richard Baxter, vice chairman of real estate giant Jones Lang LaSalle.
New York’s biggest office landlord, SL Green Realty, has been scooping up buildings. Co-Chief Investment Officer Isaac Zion says credit is available, occupancy and lease rates are up and returns far exceed meager bond yields. “We really saw the writing on the wall and we pounced,” Zion says.
Commercial mortgage-backed securities, a big funding source for some buyers, are up this year.
More foreclosures are still likely to batter prices in many areas. But the investment furor could spread to cities such as Dallas, Denver and Houston, says CoStar real estate strategist Chris Macke.
Rising prices could at least temper foreclosures on the $1.4 trillion in commercial mortgages that Deutsche Bank says are maturing by 2013. Even owners still making payments might not be able to refinance properties whose values fell sharply.
Source: USA TODAY, a division of Gannett Co. Inc., Paul Davidson, USA TODAY
Positive News about the South Florida Real Estate Market. March, 2011
Miami-Dade Pending Home Sales Continue to Rise
Miami, FL - Total cumulative pending home sales - including single-family homes and condominiums - in Miami-Dade County increased 18 percent in March compared to a year earlier, from 9,751 to 11,544, and 3.24 percent, up from 11,182, compared to the previous month according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS)
Miami, FL - Total cumulative pending home sales - including single-family homes and condominiums - in Miami-Dade County increased 18 percent in March compared to a year earlier, from 9,751 to 11,544, and 3.24 percent, up from 11,182, compared to the previous month according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS)Broward County Pending Home Sales Rise Again in MarchMiami, FL - Total cumulative pending home sales - including single-family homes and condominiums - in Broward County increased 6.02 percent in March compared to a year earlier, from 8,173 to 8,665, and were up 3.27 percent month-
over-month from 8,391, according to the 23,000-MIAMI Association of REALTORS and the local MLS systems.Miami Home Sales Continue to Rise
Miami, FL - Sales of existing condominiums in the Miami Metropolitan Statistical Area (MSA) increased 58 percent, from 545 to 859, compared to February 2010, according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS). Sales of existing single-family homes rose 21 percent in February, from 445 to 540. Cash transactions represented 67 percent of closed sales.
Miami, FL - Sales of existing condominiums in the Miami Metropolitan Statistical Area (MSA) increased 58 percent, from 545 to 859, compared to February 2010, according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS). Sales of existing single-family homes rose 21 percent in February, from 445 to 540. Cash transactions represented 67 percent of closed sales.Home Sales and Prices Rise in BrowardMiami, FL - In Broward County, condominium sales increased 19 percent from 1,138 in February 2010 to 1,357 last month, according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing
Friday, April 15, 2011
IRS Loses $513M to Tax Credit Cheaters
An investigator with the Internal Revenue Service says the government likely paid $513 million in home buyer tax credits to people who did not quality for it, according to a new report released today by the inspector general.
About $326 million went to more than 47,000 taxpayers who did not really qualify as first-time home buyers, according to the report. The remaining money went to prison inmates and taxpayers younger than 18 who did not even purchase a home.
The home buyer tax credit offered up to $8,000 to first-time home buyers and $6,500 to existing home owners who purchased a home in 2009 and 2010.
In February, the Justice Department announced it was cracking down on nationwide false claims for tax credits, after suing several tax preparers across the country who were trying to claim the home buyer tax credit even though they were ineligible.
Among the cases, a McAllen, Texas, man was accused of claiming at least $985,000 in tax credits in 2009, and in a Philadelphia federal court case, federal officials were accusing a tax preparer of claiming at least $1.2 million in tax credits in 2009 for his customers.
Source: “Investigator: IRS Pays $513M in Homebuyer Tax Credits to People who Probably Don't Qualify,” Associated Press (April 15, 2011) and “Lawsuits Mount on Home Buyer Tax Credit Fraud,” REALTOR® Magazine online (Feb. 10, 2011)
About $326 million went to more than 47,000 taxpayers who did not really qualify as first-time home buyers, according to the report. The remaining money went to prison inmates and taxpayers younger than 18 who did not even purchase a home.
The home buyer tax credit offered up to $8,000 to first-time home buyers and $6,500 to existing home owners who purchased a home in 2009 and 2010.
In February, the Justice Department announced it was cracking down on nationwide false claims for tax credits, after suing several tax preparers across the country who were trying to claim the home buyer tax credit even though they were ineligible.
Among the cases, a McAllen, Texas, man was accused of claiming at least $985,000 in tax credits in 2009, and in a Philadelphia federal court case, federal officials were accusing a tax preparer of claiming at least $1.2 million in tax credits in 2009 for his customers.
Source: “Investigator: IRS Pays $513M in Homebuyer Tax Credits to People who Probably Don't Qualify,” Associated Press (April 15, 2011) and “Lawsuits Mount on Home Buyer Tax Credit Fraud,” REALTOR® Magazine online (Feb. 10, 2011)
Thursday, April 14, 2011
Mortgage Applications Drop 6.7% This Week
Mortgage applications for refinancings and purchases continued to fall, despite low interest rates, according to the Mortgage Bankers Association’s weekly report for the week ending April 8.
Overall mortgage applications dropped 6.7 percent compared to one week earlier.
The Purchase index for mortgage applications decreased 4.7 percent compared to the previous week, and is 11.4 percent lower than the same week one year ago.
Applications for refinancings also fell, dropping 7.7 percent to its lowest level since Feb. 11.
While interest rates have increased for four straight weeks, the 30-year fixed-rate--a popular choice among purchase borrowers--continues to be under 5 percent.
Source: “Mortgage Applications Decrease in Latest MBA Weekly Survey,” Mortgage Bankers Association (April 13, 2011)
Overall mortgage applications dropped 6.7 percent compared to one week earlier.
The Purchase index for mortgage applications decreased 4.7 percent compared to the previous week, and is 11.4 percent lower than the same week one year ago.
Applications for refinancings also fell, dropping 7.7 percent to its lowest level since Feb. 11.
While interest rates have increased for four straight weeks, the 30-year fixed-rate--a popular choice among purchase borrowers--continues to be under 5 percent.
Source: “Mortgage Applications Decrease in Latest MBA Weekly Survey,” Mortgage Bankers Association (April 13, 2011)
Rising rents could spark more buyers
Apartment bargains once dominated the housing market, but those bargains have slowly faded away. As vacancies decrease and rents rise, renters are finding fewer deals.
Analysts expect vacancies to decrease even more and rents to continue to rise through 2013 as the economy continues to improve.
In 2011, rental activity recorded its best start for the year since 1999, according to Reis Inc. Vacancy rates have fallen to mid-2008 levels and rents have increased for the past five quarters, now averaging $991 per month nationwide.
Renters are finding the fewest deals near the coasts, such as in New York, Washington, D.C., Boston, Los Angeles, San Francisco, Seattle and San Jose, Calif., that have low vacancy rates. Also, a boost in these cities’ economies is sending rents higher. New York City alone has seen double rent increases compared to the national average and has the lowest vacancy rate in the nation.
The best rental deals can be found in Las Vegas, Tucson, Ariz., Phoenix, and several cities in Florida – all areas where unemployment and foreclosures remain high. According to Reis, Las Vegas was the only city to see rents fall last year. In Florida, Orlando and Jacksonville made CNN’s list of top six cities where it makes more sense to buy than to rent.
However, analysts say that bargains across the country are getting fewer, and renters should expect to see an increase in rents over the next three years.
Source: INFORMATION, INC. Bethesda, MD
Analysts expect vacancies to decrease even more and rents to continue to rise through 2013 as the economy continues to improve.
In 2011, rental activity recorded its best start for the year since 1999, according to Reis Inc. Vacancy rates have fallen to mid-2008 levels and rents have increased for the past five quarters, now averaging $991 per month nationwide.
Renters are finding the fewest deals near the coasts, such as in New York, Washington, D.C., Boston, Los Angeles, San Francisco, Seattle and San Jose, Calif., that have low vacancy rates. Also, a boost in these cities’ economies is sending rents higher. New York City alone has seen double rent increases compared to the national average and has the lowest vacancy rate in the nation.
The best rental deals can be found in Las Vegas, Tucson, Ariz., Phoenix, and several cities in Florida – all areas where unemployment and foreclosures remain high. According to Reis, Las Vegas was the only city to see rents fall last year. In Florida, Orlando and Jacksonville made CNN’s list of top six cities where it makes more sense to buy than to rent.
However, analysts say that bargains across the country are getting fewer, and renters should expect to see an increase in rents over the next three years.
Source: INFORMATION, INC. Bethesda, MD
Fannie Mae: 3.5% buyer closing assistance
Buyers purchasing a Fannie Mae-owned home may receive up to 3.5 percent of the final sales price for closing cost assistance if they close before June 30, 2011. Offers previously submitted (before April 11) do not qualify, and the offer is not extended to investors – buyers must use the home as their primary residence.
All Fannie Mae-owned HomePath properties are listed on HomePath.com and most include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.
Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to homebuyers.
“Attracting qualified buyers to the market and reducing the inventory of vacant homes remains essential to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president of credit portfolio management for Fannie Mae.
© 2011 Florida Realtors®
All Fannie Mae-owned HomePath properties are listed on HomePath.com and most include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3 percent down.
Fannie Mae has a federal charter and operates in America’s secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to homebuyers.
“Attracting qualified buyers to the market and reducing the inventory of vacant homes remains essential to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, executive vice president of credit portfolio management for Fannie Mae.
© 2011 Florida Realtors®
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