Consumer Confidence Index climbs in Jan. Florida Real Estate

South Florida Real Estate - Dean Isenberg - Realtor - 305-929-DEAN

Americans’ confidence in the economy improved modestly in January for the third straight month, as they begin to feel slightly better about business conditions and the job picture, according to a survey released Tuesday.

The Conference Board’s Consumer Confidence Index increased to 55.9 – the highest in more than a year but still relatively gloomy. That compares with 53.6 in December.

January’s index was better than the expected 53.5 forecast by economists.

Economists watch confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity. It takes a reading of 90 to indicate an economy on solid footing and 100 or more to indicate growth.

The new figures still don’t point to an end to the nation’s economic woes any time soon.

“Consumers’ short-term outlook, while moderately more positive, does not suggest any significant pickup in activity in the coming months,” Lynn Franco, director of The Conference Board’s Consumer Research Center, said in a statement.

Tuesday’s figures are based on a survey of 5,000 households by the private research group.

Capital Economics analyst Paul Dales said Americans’ sentiments are well below the Index’s historic average of 95.

“In other words, despite the fact the economy probably grew at an annualized rate in excess of 5 percent in the fourth quarter, the labor market appears to be on the cusp of generating net employment gains, interest rates are at record lows and the rally in equities remains largely intact, confidence remains incredibly depressed,” Dales wrote in a research note. “This all suggests the legacy of the recession will live long in the mindset of consumers.”

While consumers were less dire about their income prospects, “(the number of) pessimists continues to outnumber the optimists,” Franco said.

Job security is a vital part of how Americans view the economy. Those who feel better about their jobs feel more comfortable spending money, which in turn fuels the nation’s economy. That means without a meaningful and steady increase in Americans’ faith that their paychecks will keep coming, and in turn a pickup in spending, there’s unlikely to be any strong revival in the economy.

“Without a sustained acceleration in consumption growth, the overall economic recovery is doomed to disappoint,” Dales wrote.

The unemployment rate held steady in December at 10 percent, down slightly from a 26-year high of 10.2 percent in October. Some analysts worry it will start climbing again in coming months, and could even rise as high as 10.5 percent next summer.

The Consumer Confidence index hit a historic low of 25.3 in February after registering 37.4 last January and enjoyed a three-month climb from March through May, fueled by signs that the economy might be stabilizing.

Since June, it has bounced along anemically between 47 and 55 as rising unemployment has taken a toll.

Also Tuesday, a report showed that The Standard & Poor’s/Case-Shiller home price index rose for in November – its sixth straight month of increases. And 14 of 20 metro areas posted improvements from the month before.

That index is now up 3.4 percent from its bottom in May, but still 30 percent below its peak in May 2006.

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Foreclosures hitting more people with good credit. Miami Real Estate 800-819-5466

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The foreclosure crisis likely will persist well into next year as high unemployment pushes more people out of homes, pulls down housing prices and raises concerns about the broader economic recovery.

The latest evidence was a report Thursday that a rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure. That’s a shift from last year, when riskier subprime loans drove the housing crisis.

The report from the Mortgage Bankers Association also found that 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September. It was a record-high figure for the ninth straight quarter.

The data suggest the housing market and the broader recovery will remain under pressure from the surge in home-loan defaults, especially as unemployment keeps rising. Lost jobs are the main reason homeowners are falling behind on their mortgages.

After three years of plunging prices, the housing market started to rebound this summer. That lifted hopes for the overall economy. But analysts say there are too many foreclosed homes that have yet to be dumped on the market and expect further price declines.

Among states, the worst damage is still concentrated in the states hardest hit from the start: Florida, Nevada, California and Arizona. Together, they accounted for 43 percent of new foreclosures.

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One in four mortgages in Florida were either past due or in foreclosure, the most in the U.S. Nevada was close behind at 23 percent.

“There’s no indication in this data that foreclosures are going to abate anytime soon,” said Mark Zandi, chief economist at Moody’s Economy.com, who projects that nationwide home prices will fall up to 10 percent before bottoming next fall.

Driven by rising unemployment, prime fixed-rate loans to borrowers with good credit accounted for nearly 33 percent of new foreclosures last quarter. That compares with 21 percent a year ago.

Many laid-off homeowners might be able to survive on their savings for a while, but “the longer the economic situation stays in place, the less likely they are to hold on,” said Jay Brinkmann, chief economist at the Mortgage Bankers Association.

In markets where foreclosures already are high and still rising, prices likely will remain soft. That will cause developers to keep their bulldozers idle and prevent the industry from making a big contribution to the economy’s recovery.

“Builders only start homes when they can make money,” said John Burns, an Irvine, Calif.-based real estate consultant. “In a lot of areas, until prices go back up, construction doesn’t make any sense.”

The crisis has struck people like Betty Wilson of San Diego. She was laid off a year ago from her job at an insurance company.

Since then, Wilson has managed to pay her $1,090 mortgage bill from collecting unemployment benefits, renting out a room and dipping into savings. But money is running low. She fears she won’t make her payment for December.

Wilson, 56, said she has tried to get her mortgage company, GMAC Mortgage, to lower her 6.25 percent interest rate or give her a temporary break from payments. Many mortgage companies will let a borrower skip up to six months of payments, though they require that the money be paid back eventually.

After The Associated Press inquired about her case, a GMAC spokeswoman said Thursday that the company would offer Wilson reduced payments for four months, “while we continue to review her financials for a permanent solution.”

After a typical recession, foreclosures peak about six months after the unemployment rate does. But the process could take longer this time, in part because loan-modification programs and new state laws have prolonged the process. Unemployment, now at 10.2 percent, isn’t expected to peak until next spring or summer.

Another unknown is the effectiveness of the Obama administration plan to attack the foreclosure crisis. As of last month, about 20 percent of eligible borrowers, or more than 650,000 people, had signed up. But most of those enrolled have been chosen for trials lasting up to five months.

About 4 million homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if some of them manage to stay in their homes, the market is likely to absorb a wave of new foreclosures. Those properties are concentrated in states like Florida and other already beleaguered areas.

Subprime loans with adjustable rates have fallen to 16 percent of new foreclosures, from 35 percent a year earlier. Loans backed by the Federal Housing Administration also show rising signs of trouble. More than 18 percent of FHA borrowers are at least one payment behind or in foreclosure.

The Mortgage Bankers Association’s quarterly survey of 44.6 million loans is considered the most authoritative report on mortgage delinquencies. A separate report, issued monthly by foreclosure listing service RealtyTrac Inc., is based on courthouse filings.

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June new home sales rise 11 percent Miami Real Estate 800-819-5466

Miami Florida Real Estate

WASHINGTON (AP) – New U.S. home sales rose by the largest amount in more than eight years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.

The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.

It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.

The report is another encouraging sign that the beleaguered housing sector is finally coming back to life. Last Thursday, the National Association of Realtors reported that home resales posted a monthly increase of 3.6 percent in June.

There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007.

Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.

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Copyright © 2009 The Associated Press, Alan Zibel, AP real estate writer.

South Florida home sales spike in February. Miami Real Estate

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Prices are down as bargain-hunters, cash buyers snap up deals.

South Florida's existing home sales skyrocketed in February as irresistible prices and low mortgage rates continued to win out over the deepening economic gloom.

Broward County sales rose 39 percent last month, to 500 from 360 a year ago, the Florida Association of Realtors said Monday. The median price fell 30 percent, to $214,400 from $307,700, meaning houses now cost what they did in 2003.

The region's housing slump lingers in its fourth year, and mounting foreclosures and short sales are expected to depress prices through 2009 and most likely into 2010. While today's sellers grimace at the plummeting prices, more affordable homes ultimately will help the market rebound sometime next year, analysts say.

Despite rising unemployment and tight credit, year-over-year home sales in Broward have increased for eight consecutive months as investors and first-time buyers scoop up distressed properties. But weak job security has many potential buyers still sitting on the sidelines hoping prices keep falling and the overall economy improves.

The average 30-year fixed mortgage rate nationwide was 5.13 percent last month, down from 5.92 percent a year ago, according to mortgage giant Freddie Mac. Last week, average mortgage rates dropped below 5 percent and are expected to stay there.

"There's still a pool of people who have the financial wherewithal to buy a home, and now they're saying this is the right time," said Brad Hunter, a housing analyst based in West Palm Beach.

Broward's existing condominium sales also were brisk in February, rising 27 percent from a year ago. The median condo price was down 39 percent to $85,800.

The increased sales activity for homes and condos is making a dent in South Florida's bloated inventory of properties for sale.

Broward County has 31,921 available homes, townhouses and condos, down 14 percent from the end of November, according to a report Monday from Condo Vultures, a Bal Harbour-based real estate consulting firm.

"All-cash buyers are spooked by the stock market, and a lot of people are looking for peace of mind, and that's in bricks and mortar," said Peter Zalewski, principal at Condo Vultures.

Terry Story, a real estate agent for Coldwell Banker in South Florida, said she's running out of homes to sell. On a recent weekend, she had 27 showings, nearly triple her normal amount.

"If you're a serious seller, and you price it right, the home will sell," Story said.

But many sellers who bought recently say they can't price their properties to make a profit or break even because they paid peak prices themselves during the housing boom of 2000 to 2005.

While there are plenty of homes to choose from, some people don't want to buy now because of the declining job market and the belief that prices will fall even more in the months ahead, said Liliane Weinstein of Lang Realty in Broward and Palm Beach counties.

"Buyers are still very hesitant," she said.

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Cathy Kusuma and her husband are like many potential buyers: eager to find a home but not able to take the plunge until they sell their existing property.

The Kusumas have a sales contract on their Margate townhouse and expect to close in May. Last week, they put in an offer on a four-bedroom Parkland house, but it's a short sale and they don't know whether the bank will accept their bid.

"Circumstances have to line up just right," said Kusuma, 31.

Homeowners who have to sell before they can buy again often are left in limbo for months or even years.

A few weeks ago, Scott Kerr, 55, made an offer on a Deerfield Beach townhouse, but it was contingent on being able to sell his Delray Beach house.

He eventually had to pull out of the deal because he couldn't find a buyer. "I'm stuck," Kerr said.

In Palm Beach County, existing home sales rose 33 percent in February, while the median dropped 34 percent, to $228,100. Across Florida, sales rose 20 percent, and the median price fell 29 percent to $141,900. National new home sales figures will be released on Wednesday. Builders are reeling, with more than 100 nationwide, including the legendary Levitt and Sons of Fort Lauderdale, having folded in recent years.

Hollywood-based TOUSA Inc., which filed for bankruptcy protection early last year, said Monday it's suspending efforts to generate new sales and will focus on completing homes under construction, selling its remaining inventory of speculative homes and liquidating its land assets over time.

"The existing homes are being priced so aggressively that it's undercutting the builders quite a bit," said Mike Larson of Weiss Research in Jupiter.

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Short sales: A win-win or a minefield ? Call The Miami Short Sale Exprets 800-819-5466

Miami Real Estate Information

MIAMI, FLORIDA – Short sales are a financial tactic that appears only in real estate downturns. Such sales are supposed to be a win-win that gets the seller out of a tight spot, a buyer a good deal and the bank off the hook.

But what sounds like a logical alternative to the usual outcome of defaults - foreclosure - can be a minefield. Critics charge banks with being shortsighted and a menace to neighborhood home values. Banks say they have obligations to their investors. Some say inexperienced real estate agents forward irrational offers and incomplete paperwork, then expect fast miracles from their inundated staff members.

The result inside this real estate downturn has often been frustration for sellers, buyers and banks. Banks have been resistant, operating in a new financial landscape that requires permission from global investors and other parties. Many real estate agents simply avoid short sales, steering buyers to bank repos. And sellers have become frustrated by complications and 60- to 90-day timetables.

"We did everything we could do, to do the right thing, and we're not getting anywhere," said Chris Britton of Orangevale, Calif. He said he's waited five months for his lender to respond to an offer.

The lender, Bank of America, insists that he pay thousands of dollars in late fees, he said, for accepting a short sale.

Britton's real estate agent, Kathy Gheen of Fair Oaks, Calif., said it's unreasonable. Meanwhile, Britton's buyer waits. All agree the house is headed to foreclosure if nothing changes.

Agents who try short sales often accuse banks of being shortsighted, even harming the market.

Miami Real Estate Information

"If we could get to a point where a quarter of sales ... were short sales, we would see price stabilization more quickly. The neighborhoods would be maintained and the properties would not be invitations to crime," said Scott Thompson, partner in Mortgage Resolution Services in Carmichael, Calif.

Thompson, one of the Sacramento region's most successful short sale specialists, said banks too often ignore short sale offers, then lose $40,000 foreclosing and more selling the home in a declining market.

Bankers agree about foreclosure losses and say it may partly explain rising short sale numbers reported to the state.

But in places like California, where 78 percent of defaults end in foreclosure, according to DataQuick Information Systems, they say short sales are troublesome.

Miami Real Estate Information

"All the lien holders have to release it. It may be palatable to us. It may not be palatable to another lender. That's one of the realities of short sales. It's a practical legal reality that has to be met," said David Bradley, spokesman for Bank of America and its recent Countrywide acquisition.

Banks prefer loan modifications over short sales, said Robert Satnick, president of the California Mortgage Bankers Association. Freezing or lowering interest rates helps people who want to stay with the house. Short sales aim at owners who just want out. He also cited problems with incomplete short sale applications.

"The banks are inundated," he said. "If you give them an incomplete application, it's going to the bottom of the pile."

Pepperdine University finance professor Len Rushfield, a former bank president, said short sales may be rising but are still too much work for most banks.

"It's easier to foreclose. There's a direct process there," he said. "It may be financially a better result if you get it done through a short sale, but getting it done is the blockage."

What's the No. 1 secret to getting a short sale done successfully?

"The first thing is to contact your servicer and let them know you intend to sell," said David Knight, vice president for Wells Fargo & Co.'s default and retention division.

"In this challenging environment, if you let us know early, we can get things ready, go through the financials and get ahead of the offer. Then we can make a decision quickly."

Miami Real Estate Information

He said too often, people submit the entire packet with their first offer. Sometimes it's incomplete.

"If you have done your paperwork, you are significantly better off to benefit from the deal that comes in," he said.

For more information regarding the above web Blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit them on-line at A-Realtor.Com

Click Here To E-Mail The “I-Team”

Click Here To Request More Information About The Above Web Blog

South Florida Real Estate Information

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Short sales: A win-win or a minefield ? Call The Miami Short Sale Exprets 800-819-5466

Miami Real Estate Information

MIAMI, FLORIDA – Short sales are a financial tactic that appears only in real estate downturns. Such sales are supposed to be a win-win that gets the seller out of a tight spot, a buyer a good deal and the bank off the hook.

But what sounds like a logical alternative to the usual outcome of defaults - foreclosure - can be a minefield. Critics charge banks with being shortsighted and a menace to neighborhood home values. Banks say they have obligations to their investors. Some say inexperienced real estate agents forward irrational offers and incomplete paperwork, then expect fast miracles from their inundated staff members.

The result inside this real estate downturn has often been frustration for sellers, buyers and banks. Banks have been resistant, operating in a new financial landscape that requires permission from global investors and other parties. Many real estate agents simply avoid short sales, steering buyers to bank repos. And sellers have become frustrated by complications and 60- to 90-day timetables.

"We did everything we could do, to do the right thing, and we're not getting anywhere," said Chris Britton of Orangevale, Calif. He said he's waited five months for his lender to respond to an offer.

The lender, Bank of America, insists that he pay thousands of dollars in late fees, he said, for accepting a short sale.

Britton's real estate agent, Kathy Gheen of Fair Oaks, Calif., said it's unreasonable. Meanwhile, Britton's buyer waits. All agree the house is headed to foreclosure if nothing changes.

Agents who try short sales often accuse banks of being shortsighted, even harming the market.

Miami Real Estate Information

"If we could get to a point where a quarter of sales ... were short sales, we would see price stabilization more quickly. The neighborhoods would be maintained and the properties would not be invitations to crime," said Scott Thompson, partner in Mortgage Resolution Services in Carmichael, Calif.

Thompson, one of the Sacramento region's most successful short sale specialists, said banks too often ignore short sale offers, then lose $40,000 foreclosing and more selling the home in a declining market.

Bankers agree about foreclosure losses and say it may partly explain rising short sale numbers reported to the state.

But in places like California, where 78 percent of defaults end in foreclosure, according to DataQuick Information Systems, they say short sales are troublesome.

Miami Real Estate Information

"All the lien holders have to release it. It may be palatable to us. It may not be palatable to another lender. That's one of the realities of short sales. It's a practical legal reality that has to be met," said David Bradley, spokesman for Bank of America and its recent Countrywide acquisition.

Banks prefer loan modifications over short sales, said Robert Satnick, president of the California Mortgage Bankers Association. Freezing or lowering interest rates helps people who want to stay with the house. Short sales aim at owners who just want out. He also cited problems with incomplete short sale applications.

"The banks are inundated," he said. "If you give them an incomplete application, it's going to the bottom of the pile."

Pepperdine University finance professor Len Rushfield, a former bank president, said short sales may be rising but are still too much work for most banks.

"It's easier to foreclose. There's a direct process there," he said. "It may be financially a better result if you get it done through a short sale, but getting it done is the blockage."

What's the No. 1 secret to getting a short sale done successfully?

"The first thing is to contact your servicer and let them know you intend to sell," said David Knight, vice president for Wells Fargo & Co.'s default and retention division.

"In this challenging environment, if you let us know early, we can get things ready, go through the financials and get ahead of the offer. Then we can make a decision quickly."

Miami Real Estate Information

He said too often, people submit the entire packet with their first offer. Sometimes it's incomplete.

"If you have done your paperwork, you are significantly better off to benefit from the deal that comes in," he said.

For more information regarding the above web Blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit them on-line at A-Realtor.Com

Click Here To E-Mail The “I-Team”

Click Here To Request More Information About The Above Web Blog

South Florida Real Estate Information

Miami Real Estate Information

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Thank You !