30-year mortgage rate drops to record 3.56%

WASHINGTON – July 13, 2012 – Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.56 percent. That’s down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week’s previous record of 2.89 percent.

The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects and spending at a faster pace.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger downpayments required by banks.

And the sluggish job market could deter some from making a purchase this year.

U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2 percent, the government reported last week.

Slower job creation has caused consumers to pull back on spending.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans also was 0.7 point, unchanged from the previous week.

The average rate on one-year adjustable rate mortgages rose to 2.69 percent from 2.68 percent last week. The fee for one-year adjustable rate loans slipped to 0.4 point, down from 0.5 point.

The average rate on five-year adjustable rate mortgages dropped to 2.74 percent from 2.79 percent last week. The fee was unchanged at 0.6 point.

Advertisements
Posted in Market Watch, Mortgage, Mortgage Rate, property value, Real Estate | Tagged , , , | Leave a comment

Miami-Dade property values rise for first time in four years

In May, Property Appraiser Pedro J. Garcia said property values rose for the first time in four years. On Friday, he said they rose even more than he expected.

BY CHARLES RABIN
CRABIN@MIAMIHERALD.COM

A month ago, county leaders rolled out estimated numbers showing Miami-Dade’s property tax base had increased for the first time in four years, a clear signal the battered real estate market is beginning to turn the corner.

Friday, the picture of higher property values and new construction got even rosier.

In a small conference room just outside County Hall’s commission chambers, Property Appraiser Pedro J. Garcia explained how county real-estate values rose almost 2 percent, to $190.7 billion, from a year ago, the first year-over-year increase since the real estate market slide began in 2007 – and a slight increase over his earlier estimate in late May.

“What we are seeing is a recovery period for Miami-Dade County,” Garcia said.

At the end of May, Garcia estimated the total property value of Miami-Dade’s 897,650 properties at $189.7 billion, about one-half of one percent — or $970 million — lower than the actual number turned out to be. Though it’s considered statistically insignificant, every little bit helps in a community so dependent on construction that has seen its overall property values plummet $55 billion since 2008.

Most real-estate veterans seem in tune with Garcia, believing the South Florida marketplace has finally bottomed out.

“I’ve been saying that for a year and a half,” said Michael Y. Cannon, executive director of Integra Realty Resources. “We’re in the expansion period again. The cycle’s restarting.”

The overall tax roll has a major impact on the September property-tax rates to be set by county commissioners. Simply put, the higher the tax rolls, the more money available for the county to tax. Homeowners who have seen their property-tax bills dwindle the past few years may be in for a slight sticker shock this year, unless commissioners decide to lower the current property-tax rate. A homeowner whose property value increased will pay more in taxes if the current property-tax rate remains the same.

That’s because 18 of the county’s 35 municipalities have higher tax-roll values this year than a year ago. A final property tax bill also depends on several other taxing districts, such as the Miami-Dade School Board, and on tax rates set by individual cities.

Like other governments, Miami-Dade’s final tax roll numbers, which were submitted to the Florida Department of Revenue, typically differ from early estimates as sales of homes in neighborhoods continue to rise or drop depending on demand. In Miami-Dade, Garcia’s office also reevaluated some properties still under construction.

That was particularly significant in Bal Harbour, where the tax roll leaped by $172 million — or more than 5 percent — in the past month, mainly through the re-evaluation of some condominiums and the recently opened St. Regis Hotel, where the Bal Harbour Sheraton had been.

“We’re still reviewing some neighborhoods, and we’re evaluating new construction amounts,” said Marcus Saiz, the county’s deputy property appraiser.

Bal Harbour Village Manager Alfred Treppeda said the higher tax roll will allow him to propose lowering the property-tax rate for the village’s 3,000 or so residents.

“What we are seeing is a recovery period in Miami-Dade County,” said Garcia, the property appraiser.

Municipalities with the highest tax roll increases over last year tend to be coastal cities with growth, including Bal Harbour, which jumped by 35.4 percent; Indian Creek, which is up 11.8 percent, and Sunny Isles Beach, which increased by 7 percent.

Cities still reeling from the real-estate collapse tended to be inland areas that jumped on the construction bandwagon of the last decade but failed to draw residents. Florida City’s tax roll is down 6.3 percent from a year ago; El Portal’s dipped by 4.1 percent, and Homestead’s fell 3.8 percent.

Overall, single-family homes in Miami-Dade were valued at $58.6 billion. Condos account for $51 billion, and commercial property for $49.6 billion. The remainder of the $190 billion comprises multi-family properties, vacant land, and “others” — which includes some small businesses and large properties like Florida Power & Light and AT&T.

Broward County posted similar increases.

Property Appraiser Lori Parrish said Broward’s tax roll jumped by 1.5 percent over last year, with 24 of the county’s 32 municipalities seeing gains. The leader was Cooper City, which, pushed by Monterra Development’s 1,600 new homes, saw its tax roll jump 8.5 percent. Other winners include Sea Ranch Lakes at 4.5 percent; Lighthouse Point, which increased by 4.2 percent, and Wilton Manors, where the tax roll rose by 3.6 percent.

On the downside, West Park’s tax roll plunged 8.4 percent, Lazy Lake’s was down 7.2 percent, and Lauderdale Lakes saw its property values drop by 2.9 percent.

Overall, Broward’s tax roll jumped to $127.1 billion, an increase of $1.8 billion from the previous year.

Parrish attributed property-value increases in part to aggressive code enforcement that in some cases prevented abandoned homes “from falling into unsightly, unsafe and blighted states of repair.”

Posted in Homebuyers, Market Watch, property value | Tagged , | Leave a comment

Miami-Dade property values rise for first time in four years

In May, Property Appraiser Pedro J. Garcia said property values rose for the first time in four years. On Friday, he said they rose even more than he expected.

By Charles Rabin

crabin@MiamiHerald.com

A month ago, county leaders rolled out estimated numbers showing Miami-Dade’s property tax base had increased for the first time in four years, a clear signal the battered real estate market is beginning to turn the corner.
Friday, the picture of higher property values and new construction got even rosier.
In a small conference room just outside County Hall’s commission chambers, Property Appraiser Pedro J. Garcia explained how county real-estate values rose almost 2 percent, to $190.7 billion, from a year ago, the first year-over-year increase since the real estate market slide began in 2007 – and a slight increase over his earlier estimate in late May.
“What we are seeing is a recovery period for Miami-Dade County,” Garcia said.
At the end of May, Garcia estimated the total property value of Miami-Dade’s 897,650 properties at $189.7 billion, about one-half of one percent — or $970 million — lower than the actual number turned out to be. Though it’s considered statistically insignificant, every little bit helps in a community so dependent on construction that has seen its overall property values plummet $55 billion since 2008.
Most real-estate veterans seem in tune with Garcia, believing the South Florida marketplace has finally bottomed out.
“I’ve been saying that for a year and a half,” said Michael Y. Cannon, executive director of Integra Realty Resources. “We’re in the expansion period again. The cycle’s restarting.”
The overall tax roll has a major impact on the September property-tax rates to be set by county commissioners. Simply put, the higher the tax rolls, the more money available for the county to tax. Homeowners who have seen their property-tax bills dwindle the past few years may be in for a slight sticker shock this year, unless commissioners decide to lower the current property-tax rate. A homeowner whose property value increased will pay more in taxes if the current property-tax rate remains the same.
That’s because 18 of the county’s 35 municipalities have higher tax-roll values this year than a year ago. A final property tax bill also depends on several other taxing districts, such as the Miami-Dade School Board, and on tax rates set by individual cities.
Like other governments, Miami-Dade’s final tax roll numbers, which were submitted to the Florida Department of Revenue, typically differ from early estimates as sales of homes in neighborhoods continue to rise or drop depending on demand. In Miami-Dade, Garcia’s office also reevaluated some properties still under construction.
That was particularly significant in Bal Harbour, where the tax roll leaped by $172 million — or more than 5 percent — in the past month, mainly through the re-evaluation of some condominiums and the recently opened St. Regis Hotel, where the Bal Harbour Sheraton had been.
“We’re still reviewing some neighborhoods, and we’re evaluating new construction amounts,” said Marcus Saiz, the county’s deputy property appraiser.
Bal Harbour Village Manager Alfred Treppeda said the higher tax roll will allow him to propose lowering the property-tax rate for the village’s 3,000 or so residents.
“What we are seeing is a recovery period in Miami-Dade County,” said Garcia, the property appraiser.
Municipalities with the highest tax roll increases over last year tend to be coastal cities with growth, including Bal Harbour, which jumped by 35.4 percent; Indian Creek, which is up 11.8 percent, and Sunny Isles Beach, which increased by 7 percent.
Cities still reeling from the real-estate collapse tended to be inland areas that jumped on the construction bandwagon of the last decade but failed to draw residents. Florida City’s tax roll is down 6.3 percent from a year ago; El Portal’s dipped by 4.1 percent, and Homestead’s fell 3.8 percent.
Overall, single-family homes in Miami-Dade were valued at $58.6 billion. Condos account for $51 billion, and commercial property for $49.6 billion. The remainder of the $190 billion comprises multi-family properties, vacant land, and “others” — which includes some small businesses and large properties like Florida Power & Light and AT&T.
Broward County posted similar increases.
Property Appraiser Lori Parrish said Broward’s tax roll jumped by 1.5 percent over last year, with 24 of the county’s 32 municipalities seeing gains. The leader was Cooper City, which, pushed by Monterra Development’s 1,600 new homes, saw its tax roll jump 8.5 percent. Other winners include Sea Ranch Lakes at 4.5 percent; Lighthouse Point, which increased by 4.2 percent, and Wilton Manors, where the tax roll rose by 3.6 percent.
On the downside, West Park’s tax roll plunged 8.4 percent, Lazy Lake’s was down 7.2 percent, and Lauderdale Lakes saw its property values drop by 2.9 percent.
Overall, Broward’s tax roll jumped to $127.1 billion, an increase of $1.8 billion from the previous year.
Parrish attributed property-value increases in part to aggressive code enforcement that in some cases prevented abandoned homes “from falling into unsightly, unsafe and blighted states of repair.”

Sonia Quesada

Premier Realty Team, LLC
3475 Sheridan Street, Suite 210
Hollywood, Florida 33021
Cell 786.486.8174
Soniaqrealty@yahoo.com

Posted in Market Watch, property value, Real Estate, Taxes | Tagged , , | Leave a comment

Prevent short sale delays, double-check paperwork

WASHINGTON – July 5, 2012 – Under new rules that took effect June 15, underwater home sellers with Freddie Mac- or Fannie Mae-backed mortgages loans can expect a short sale decision from their lender within 60 business days. The new guidelines should speed the short sale process, which once averaged eight months, according to RealtyTrac. The wait was so long that many potential buyers walked away from the deal.

Despite the faster deadlines now in place, however, the process can still be delayed if all the necessary paperwork isn’t submitted to the lender, and that includes something as simple as a photocopy of the borrower’s driver’s license. In many cases, it’s not enough to simply submit the missing piece of paperwork if one is missing. Many times, the entire submission must be redone, banks say.

“The way short sales are packaged and presented by real estate agents is more than half the battle,” Ed Delgado, who trains agents how to package short sales, told the Chicago Tribune. “The more agents understand about how the process works, the fewer the delays and the faster the closings.”

One critical document in the short sale package: The hardship letter. In this letter, homeowners explain to the bank why they need to short sell the property.

“You don’t need a novel … Be precise; be clear,” says Karen Mayfield, national sales manager at Bank of the West in San Francisco. “Offer a bullet-point list in your own hand of the events that led to your hardship. If the lender can’t understand how you got into trouble, he may close your file and move on to the next one. Or he may suspect you are trying to pull a fast one.”

Lenders also usually require tax returns for the last two years, bank statements for two to six months, pay stubs for the last 60 days, proof of residency (such as a paid utility bill), a listing agreement, and a third-party authorization allowing the bank to work with the real estate agent.

Sales trainer Gee Dunsten says he advises agents to bind all of these required documents together with a cover letter and table of contents that clearly lists everything included to let lenders know right away everything is there. Dunsten also says he writes a personal letter to the lender that explains the details of the transaction.

“When it comes to short sales, the devil truly is in the details,” Dunsten says.

Source: “It Pays to be Proactive in a Short Sale,” Chicago Tribune (June 22, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Posted in Real Estate, Shortsales | Tagged | Leave a comment

How to snag mortgage rates in 3% range

NEW YORK – July 3, 2012 – Mortgage rates are at record lows, with 30-year fixed-rate mortgages – the most popular choice among homebuyers – averaging in the 3 percent range for the last several weeks.

So how can homebuyers snag such low financing for their home purchase?

Banks have tightened their lending standards in recent years, which put record-low rates out of reach for many homebuyers. To get a loan, borrowers find that lenders scrutinize their credit scores, income, employment history, liquid assets, downpayment, property value, type of property (single home vs. multifamily, for example), and how much money they’ll have left after closing, The New York Times reports.

Mortgage brokers say the greatest challenge in processing a loan nowadays is “documenting your income and every bit of information on your application, down to the last $200 your mother sent you for your birthday.”

“What’s tougher today is the level of scrutiny and documentation and analysis and re-verification around assets, income, employment and appraisals,” says Bob Walters, Quick Loans chief economist. “Lenders are terrified, literally terrified, of repurchases. What that means is if a lender makes a mistake, or there’s a difference in opinion, and they close the loan and it goes into default, Fannie Mae or Freddie Mac could require them to repurchase the loan.”

To secure the lowest mortgage rate, you need the following:

• Credit score of 740 or better
• Downpayment of 25 percent or more
• Single-family home

However, homebuyers with a lower credit score may still be able to get a low rate.

“Say you have a 700 score but you are only financing 50 percent of the home’s value,” says Mark Maimon with Universal Mortgage in Brooklyn, N.Y.” You might get the same rate as someone who has an 800 score doing 75 percent financing.”

Source: “A Mortgage Rate Beginning With a 3,” The New York Times (June 29, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Sonia Quesada

Premier Realty Team, LLC
3475 Sheridan Street, Suite 210
Hollywood, Florida 33021
Cell 786.486.8174
Soniaqrealty@yahoo.com

Posted in Market Watch, Mortgage, Real Estate | Tagged , | Leave a comment

First-time homebuyers struggling amid recovering market

MIAMI – July 3, 2012 – South Florida’s housing renaissance is becoming a curse for first-time homebuyers.

Despite affordable prices and historically low mortgage rates, these buyers are being shut out of the market by strict lending standards and a dearth of homes for sale. When they do find a place, it’s also targeted by investors whose cash offers make sellers swoon.

Ally Apostolis and her boyfriend, Steve Momot, have been looking for a home since March. They found the perfect place, a three-bedroom in Fort Lauderdale for $149,000. They bid just above the list price but still lost the home to a cash buyer.

Late one night, Apostolis found another home she liked, but it already was off the market by the next morning. She and Momot recently made yet another offer that the seller accepted, but it’s a short sale, which requires lender approval, so the deal could still take weeks or months.

“We’ve had a rough time,” said Apostolis, 26, an executive assistant for an oil hedging firm. “If this doesn’t work out, it’s going to be a stressful road ahead of us.”

First-time buyers are considered the backbone of the nation’s housing market. When young, single professionals or newly married couples buy and furnish homes, the ripple effect stimulates the economy. Traditionally, these buyers use the profits from the sales of first homes to buy bigger properties, creating a confidence that typically sustains the market for years to come.

“You constantly need a fresh crop of first-time buyers coming in to an area to a have a healthy housing market,” said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach.

“Without the starter home market, you don’t have a recovery,” said Lewis Goodkin, a housing consultant based in Miami.

First-time buyers accounted for roughly a third of all home sales nationwide in May, according to the National Association of Realtors. Ideally, the percentage should be 40 percent or more, said Walter Molony, a spokesman for the Realtor trade group.

State and local Realtor boards say they don’t yet track numbers of first-time buyers. But more than six out of 10 sales in May across Palm Beach and Broward counties were cash deals, well above the national average, according to the Miami Association of Realtors.

Almost all first-time buyers need financing, which has been difficult to get following the housing boom. Many first-time buyers prefer Federal Housing Administration loans because they require only 3.5 percent downpayments.

But sellers worry that FHA deals will fall apart, real estate agents say. The government insists that FHA-eligible homes be in good condition, requiring sellers to make repairs, such as replacing rotted wood and installing a working pool pump.

Because sellers, including banks, don’t want the hassle and expense, they prefer to deal with cash buyers – many of them investors from Canada, Brazil and other countries who see American real estate as a sound investment. They buy the homes as-is and the deals tend to close quickly.

“It’s not just the highest offer, it’s the highest and best, and many times that’s a cash transaction,” said Marta DuPree, an agent for Keyes Co. in Broward and Palm Beach counties.

Today’s first-time buyers also face a shortage of available homes. Recent price increases have persuaded some homeowners to hold off selling until values rise even more. Other owners can’t sell because they owe more than their homes are worth.

To compete in a tight market, first-time buyers should be preapproved by a lender for a specific mortgage amount so they can act quickly the moment a home is listed for sale, real estate agents say.

Also, buyers may want to consider conventional mortgages instead of FHA loans. Conventional mortgages require a little more down – 5 percent – but they’re seen as more attractive than FHA, said Stephen B. McWilliam, president of the Greater Fort Lauderdale Realtors.

“The sellers know there’s less red tape with conventional,” McWilliam said.

Judy Trudel, an agent in Lighthouse Point, said she tells first-time buyers the process may be more difficult than they expect.

“I say, ‘Don’t get your hopes up,’” Trudel said. “But it generally doesn’t sink in until they’ve lost a couple of houses.”

Christian Montalto of Hollywood knows the feeling.

The high school English teacher has been looking for a two-bedroom home in Broward since last fall. He says he has made at least 10 offers, to no avail.

Either investors out-maneuver him or he kills the deals himself because sellers aren’t willing to make the necessary repairs. Montalto, 30, never thought it would be this “cutthroat,” but he perseveres.

“The Red Sox won the World Series,” he said, “so anything’s possible.”

Copyright © 2012 the Sun Sentinel (Fort Lauderdale, Fla.) Distributed by MCT Information Services

Sonia Quesada

Premier Realty Team, LLC
3475 Sheridan Street, Suite 210
Hollywood, Florida 33021
Cell 786.486.8174
Soniaqrealty@yahoo.com

Posted in Homebuyers, Market Watch, Real Estate | Tagged , , | Leave a comment

Many proposed rentals could become condo conversions

If history is any indicator, South Florida’s next generation of residential condo conversion units are currently being proposed, financed, and built in Miami-Dade, Broward, and Palm Beach counties under the auspices of rising rental rates.

In a trend reminiscent of South Florida’s last condo boom and ultimate bust, rising lease prices are prompting developers to build – increasingly with bank financing — a new wave of apartment projects to capitalize on the spike in rents.

If the South Florida condo market returns to any form of normalcy, where most residents users can actually purchase units, many of today’s newly proposed rental projects would be expected to be converted into condominiums and sold off for a premium.

During the last South Florida real estate boom, several proposed and existing rental towers were converted under such a scenario into condominiums, including the Skyline and the Vue in greater downtown Miami, the Tides and the Wave in Hollywood Beach, and the Las Olas By The River and the Village East in downtown Fort Lauderdale.

For the last six months, developers from various real estate specialties — ranging from office towers to industrial warehouses — have been rushing forward with plans to construct at least 3,000 new rental units scattered in locations from Kendall to Coconut Creek with everything in between, including Miami’s Upper East Side, downtown Fort Lauderdale, and Hollywood’s Young Circle neighborhoods.

The proposed residential rental units are slated to be developed in a variety of projects, ranging from a pair of 20-story high-rise towers with 400 units on 79th Street at Biscayne Bay in Miami to nearly 400 units in a series of low-rise buildings on a 24-acre site in Coconut Creek.

Construction of these projects — often on former condo development sites — is in the early stages of development but expected to begin by the end of 2012 with the first units scheduled to be ready for tenants by late 2013.

The new residential rental units are targeted toward users who cannot — or choose not to — purchase in South Florida for a variety of reasons, including an inability to pay all cash for a property, credit problems, difficulty securing mortgages, or the fear that the market has not yet bottomed.

Regardless of the reason for not purchasing, South Florida’s rental population is faced with lease prices that are rising at rates two and three times that of annual inflation.

For example, the median price per square foot monthly for a rental property in the first quarter of 2012 was $2.01 in the greater downtown Miami market, $1.21 in the downtown Hollywood and the beach area, and $1.26 in the downtown Fort Lauderdale and the beach neighborhood, according to an analysis of the Southeast Florida MLXchange.

Compare this to the first quarter of 2009 when the U.S. economy was on the brink of financial disaster, the median rental price per square foot per month at that time was less than $1.60 in greater downtown Miami, $1.00 in downtown Hollywood and the beach, and $1.05 in downtown Fort Lauderdale and the beach, according to the data.

As the rents have increased, the operating expense for landlords has remained somewhat consistent or even decreased in condo projects as governing associations have used the foreclosure process to recoup unpaid fees, thereby, reducing or even eliminating special assessments. Adjustments in property taxes are somewhat mixed depending upon the specific market.

For developers of the new rental projects, the financial returns have the potential to be even greater as apartment residents usually expect less in terms of amenities, finishes and service compared to condo owners. This translates into lower costs on the construction and the operations.

Contributing to the potential upside for developers of today’s rental projects, the cost of the developable land – often times with the necessary planning approvals already in place from previous developers who failed to build – is significantly less than the price levels achieved at the height of the South Florida real estate boom.

The unknown is whether today’s renters will ultimately become tomorrow’s owners given the financial and personal hardships that many experienced during the last real estate implosion.

                                                                                                        BY PETER ZALEWSKI

Peter Zalewski is a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures. Zalewski, who has had a Florida real estate license since 1995, works as a consultant for private equity groups and institutional investors from around the world.

Posted in Condominium, Real Estate, Rental | Leave a comment