Happy Holidays to all of my loyal blog readers!

It’s a Wonderful Life

This isn’t real estate related…but I thought it may come in handy to my loyal blog readers.

I ran across a blog that has a listing for ALL of the holiday TV shows…date/time/channel!

The list starts with shows as of tomorrow (11/20) and runs through Christmas day. It’s an awesome list…click on the image below and go print your list so you don’t miss seeing (or DVR’ing) any of your holiday favorites.

 

Thanks for reading…and be on the lookout for a big announcement coming in the next few weeks!

Steve Jackson

561.602.1258

The canary in the coal mine?

Back in the early days of the mid 2000’s real estate bust…Las Vegas was the first to show signs of cracking. Now, is Vegas trying to tip us off again?

Read the excerpts from todays WSJ story below and see what you think. Personally, for the past 60 days I have been telling my clients that I feel (and see) a softening in demand and growth in listing inventory. Although we still seem to be short on properly priced inventory in certain price ranges, I can feel the tide shifting.

Also, I am of the opinion that rents will be softening up soon as there are hundreds of new rental units coming close to completion. And new construction ‘for sale’ homes are coming our of the ground everywhere…just like in 2005. Close to me, Osprey Oaks had the timing about right, but I think that DR Horton is going to be late to the party with their 2 developments on Hypoluxo and the one on Haverhill north of Lantana. Then there is Capistara just around the corner on Military (Lennar I think?) and also on Lawrence just south of Hypoluxo. I think we’ll be seeing LOTS of builder incentives in 2014 in an effort to maintain the listed pricing…just like the builders tried to do in 05/06/07.

Las Vegas: The share of homes that sold in cash last month stood at 47.2%, down from 54.8% in August and one year ago, and down from a high of 59.5% in February, according to the Greater Las Vegas Association of Realtors. Many cash buyers tend to be investors.

Home sales were down 1.2% from a year earlier, even though there were more homes for buyers to choose from. The number of single-family homes listed for sale, at 14,659, stood 12.6% below last year’s levels, but the inventory of “non-contingent” listings—homes that don’t have any offers and aren’t under contract—was 60.5% above year-earlier levels. The median sales price in September fell for the first time in 19 months.

In Las Vegas, buyers earlier this year found themselves regularly losing out to investors amid tight supplies of homes for sale. Now, “the market is softening tremendously,” said Bryan Lebo, a local real-estate agent. “Buyers are becoming a lot pickier. They’re more patient.”

In some neighborhoods, he says, homes are now selling for 10% less than they were just a few months earlier, and builders are beginning to offer generous incentives, such as home upgrades to buyers and commissions to real-estate agents, in order to stay competitive.

Thanks for reading…Steve Jackson

561.602.1258

Show Me The Money!!

IMPORTANT NEWS FOR ANY HOMEOWNER WHO OWES MORE ON THEIR MORTGAGE THAN THEIR HOME IS WORTH!!

PLEASE FORWARD THIS POST TO YOUR FRIENDS AND FAMILY…

TALLAHASSEE—During a press conference on Friday, September 20, Florida Housing Finance Corporation (Florida Housing) announced that next week, Florida homeowners who have remained current on their mortgages may apply for federal assistance from the Florida Hardest-Hit Fund Principal Reduction (HHF-PR) Program. The online application, www.PrincipalReductionFLHHF.org, will open at 9:00 a.m. (Eastern) on Wednesday, September 25, and will be available in all 67 counties. ON A FIRST COME-FIRST SERVED BASIS

“This morning, Florida Housing’s Board of Directors approved $350 million in federal Hardest-Hit funds allocated to our state to be used specifically for a principal reduction program,” said Steve Auger, executive director of Florida Housing. “While our state’s housing market continues to recover, many Florida homeowners have remained current on their mortgage payments in spite of their homes being substantially underwater. For those who qualify, this new program can help to reduce their principal balance, which can result in a lower monthly payment and put more money in their pockets.”

Initially, only 25,000 completed and submitted applications will be accepted for eligibility determination, via the website only. When that number has been reached, the ability to start a new application will be disabled so that staff can begin processing the completed applications. However, if additional funding is available for the program after this initial launch, Florida Housing will notify the public prior to re-opening the application process.

The Florida HHF-PR program is designed to provide up to $50,000 to eligible homeowners who owe at least 125% more on their home than its current market value—commonly known as having a home that is “underwater.” Funds will be applied to reduce the principal balance of the first mortgage to reduce the loan-to-value (LTV) of the first mortgage to no less than 100%. The mortgage can then be recast (re-amortized) or refinanced to produce a lower monthly mortgage payment.

The minimum qualifications a homeowner must meet to be considered for participation in the Florida HHF-PR program are as follows:

· Must be a Florida resident and a legal US resident/legal alien, and occupy the property as the primary residence;

· Must be current on the monthly mortgage payment—first mortgage payment cannot have been 60 or more days late within the past 24 months;

· The first mortgage must have originated prior to January 1, 2010;

· The unpaid principal balance for the first mortgage cannot exceed $350,000;

· The loan-to-value for the first mortgage must be greater than 125%—in other words, home must be more than 125% “underwater”; and

· The total household income, including all persons age 18 years and older who live in the home, must be less than 140% of the area median income.

Principal reduction program funds will be in the form of a 0% percent, deferred-payment loan that will be subordinate to current mortgages on the home. The loan can be forgiven over a five-year period, at a rate of 20% each year. For conventional mortgages, once HHF-PR funds are applied to the principal, the mortgage will be recast (the terms of the loans will remain the same, but the loan will be re-amortized).

If the borrower has a FHA, VA or USDA-RD mortgage, the mortgage will need to be refinanced within 120 days after closing on HHF principal reduction funds in order to receive the pro rata forgiveness.

If a refinance is not completed within the specified time, the principal reduction loan will be 100% forgiven after a full five years of the borrower remaining in the home.

Homeowners in every Florida county may apply for the Florida HHF-PR program by using the official website: www.PrincipalReductionFLHHF.org. The site contains all the information users will need to begin the application process, including a program fact sheet and answers to frequently asked questions. Additionally, the Florida HHF Toll-free Information Line [1-(877)-863-5244] will be open on Saturday, September 21, and Sunday, September 22, from 9:00 a.m. – 5:00 p.m. to answer any questions callers may have about the program.

Application for the Florida HHF-PR program is FREE-OF-CHARGE, and applicants will not be asked to pay for any eligibility determination services in conjunction with applying for the program.

To My Blog Readers: If you apply for this program please follow up with me and let me know what happens/how it goes. Thanks

Steve Jackson…561.602.1258

 

Lets keep this housing party going!

There was a time when those who defaulted on their debt, especially mortgages, had to wait 3-5 years before they became eligible for any form of new credit, let alone a brand new mortgage. That, however, was in the Old Normal. In the New one things are different: so different, that for anyone who filed a bankruptcy on or before July 2012, we have good news for you - the FHA (subject to an explanation and several almost painless conditions) will be happy to provide you with a brand new mortgage.

From the recent FHA Mortgagee Letter 2013-26:

FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.

As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:

• certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
• the borrower has demonstrated full recovery from the event; and,
• the borrower has completed housing counseling.

Housing counseling is an important resource for both first-time home buyers and repeat home owners. Housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget, accessing reliable information and resources, avoiding scams, and being better prepared for future financial shocks, among other benefits to the borrower.

Well, we did say almost painless: it is only logical that after filing bankruptcy one should go to housing counseling. Surely that will 'learn' one to buy that 18 bedroom McMansion that the evil banker, gun against head, forced down one's throat.

Either way, once done with the grueling "counseling" sessions, and providing evidence one didn't blow it all in Vegas, the FHA makes one eligible for a new mortgage even with a prior recent bankruptcy, and not just any but Chapter 7 as well as 13, as follows:

D. Economic Event-Related Chapter 7 Bankruptcy

The lender must verify and document that:

• a minimum of twelve (12) months have elapsed since the date of discharge of the bankruptcy; and
• the bankruptcy was the result of the Economic Event.

E. Economic Event-Related Chapter 13 Bankruptcy

The lender must verify and document that:

• the Chapter 13 Bankruptcy was discharged prior to loan application and all required bankruptcy payments were made on-time, or a minimum of twelve (12) months of the pay-out period under the bankruptcy has elapsed and all required bankruptcy payments were made on time; and
• the bankruptcy was the result of the Economic Event.

But what if, gasp, the existing bankruptcy has not yet been discharged? Don't worry: the FHA's got you covered even then:

If the Chapter 13 Bankruptcy was not discharged prior to loan application, the lender must also verify and document that the borrower has received written permission from the Bankruptcy Court to enter into the subject mortgage transaction.

And so on. There are other conditions (the full FHA Mortgagee Letter can be found here) but if the only gate for a bankruptcy as a restraining factor is for 12 months to have gone by, one can imagine just how "strict" the other conditions have to be.

So…party on!

Thanks for reading…as always.

Steve Jackson

561.602.1258

Journeys End home values are up…how much equity do you have now?

Is the “smart money” starting to bail on real estate?

Here are 2 recent headlines relating to the hedge fund investing strategy that has gained popularity in the past few years:

 

• Is private equity and Wall Street planning their exit from the rental business- Lower yields, IPOs, and packaging deals to sell: The whispers about private equity exiting the rental market are now out in the open.  A few reports are highlighting that some private equity investors are testing the waters for an exit via IPOs.

• Housing Bubble II: Euphoria And Other Shenanigans: Private-equity funds have poured tens of billions into gobbling up vacant single-family homes in specific markets. And now some of them are planning IPOs as a way of dumping this stuff into funds that unsuspecting worker bees hold in their 401(k)s. It’s called an exit, and they have to do it before it blows up in their faces.

Personally, I just last week saw another agents deal that Blackstone (a very large hedge fund) tried to renegotiate at the last minute…then bailed out on. They had a 3 week to closing date contract on a single family home in Deerfield at $333k and on the final day of their 10 day due diligence period they asked the seller to reduce the price to $300k. Even though the seller had already contracted to purchase another home and packed most of their belongings they counter offered Blackstone at $325k..and Blackstone walked. Was this their normal M.O or are they getting a bit skittish about the rapidly rising home prices in South Florida? Time will tell I guess.

In the past few years institutional investors rushed to buy homes with the philosophy of buy cheap, renovate, and rent. But they might be in for a surprise. According to real estate research firm Trulia Inc., since 2005, there have been almost four million single-family homes added to the rental market. That supply has met the demand created during the crisis in the housing market. (Source: Trulia Inc., April 4, 2013.). Also those numbers do not include the huge rush into the building of multi-family/apartment rentals. With just a simple 15 minute drive around our area you can see hundreds and hundreds of new rental units being built…Cheap corporate money+lots of bad credit/unstable job families=A generation of renters. But the returns projected by these entities, are, in my opinion, much too high.

As a result, the rental rates that institutional investors were banking on (they were working off projections of up to 5% annual rental rate increases) are actually compressing. Recent reports have shown that rental rates are down 1.2% on average in Dade/Broward/Palm Beach counties year over year.

Interest rates have recently spiked to over 4%, which is still historically low, but every tic higher changes the yield for a leveraged investor and reduces the amount any that any buyers who needs a mortgage can qualify for.

Be careful out there.

 

Thanks for reading…Steve Jackson, 561.602.1258

For Memorial Day…The Pledge of Allegiance

Thank You to all of the veterans who have served, sacrificed and protected our freedom…

Don’t “sell your listing” when trying to sell your home

All recent indicators point to it being a strong sellers market…super low inventory, historically low interest rates, lot’s of cash on the sidelines too. It is the strongest sellers market I have seen since 2005.

But…be careful when pricing your home for sale lest you may miss this selling opportunity. It is always tempting to hire the agent that tells you the highest price. Unscrupulous agents are well aware of this typical seller tendency and often try to take advantage of it as follows:

Case in point: Earlier this year I met with a prospective seller to interview for the job of assisting them with the sale of their home. All went well EXCEPT for the portion of our meeting where we discussed the most likely selling price range. These sellers were of the opinion that their home would sell for about 20% more than my assessment. Shortly thereafter, their home showed up on the market with another well-known local franchise agent/team at the price they told me they thought it was worth. Now, not to be an “I told you so”…but after 3 price reductions and 5 months on the market, their home sold $8,000 below where I recommended it be priced initially. Buyers quickly become very astute in determining a homes value…there is sooo much information readily available that you’re not going to fool anyone into overpaying. And if you do,  then you have to convince the buyers appraiser of the higher value too!

What is your home really worth?

In a way, that's a trick question. What your home is worth to you, considering the new paint and the children's park across the street, could be very different from what the home is worth to a couple who doesn’t like your taste in color schemes and whose kids are grown. So before you put a price tag on your home, read this:

CMA (comparative/competitive market analysis) : an objective point of view

Your home's "fair market value" is the price a buyer agrees to pay and you agree to accept. All homes ultimately sell at this price.

Instead of using subjective measures, the housing market uses a "Comparative Market Analysis" or CMA. It's the most important factor in determining what your home's fair market value is. A CMA compares your home to comparable homes, or "comps," in your neighborhood that are presently on the market, currently under contract and that have sold recently. Adjustments are made to account for differences in location, size, condition, upgrades, etc...

For $300 or so you can also pay for a professional appraisal of your home to get a state certified appraisers opinion of your home's fair market value.

When Your Realtor Suggests a High Selling Price, Beware!

Meeting With Realtors

· You’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with a few local agents who’ve been mailing you cards. Each Realtor comes prepared with a "Competitive Market Analysis" and they each recommend a price.

· One of the Realtors has come up with a price that is lower than you expected and although they back up their recommendations with recent sales and current market data, you remain convinced your house is worth more.

· When you interview the next agent, they are much more in line with your own hoped-for value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

A Dangerous Sales Practice Called "Buying a Listing"

· If you’re like many people who don’t buy or sell a lot of homes, you pick Realtor number two. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that really sees the value in your home.

· The truth is that you may have just met an agent engaging in a questionable and all too common sales practice called "buying a listing."  He "bought" the listing by suggesting you might be able to get a higher sales price than the other agent recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price to where he knows it should be. (Or it could be that the agent is NOT being underhanded but that they are just new/inexperienced or plainly not very good).

Why do some agents "buy" listings this way? There are 3 reasons:

· The first one being that the agent realizes that you have to sell and they will eventually get you to reduce your asking price to where it should have been initially, even though it may be $10,000, $20,000, $50,000 or even $100,000 less then they told you they could get you on the day you signed up!

· The second one is so that they can do a neighborhood mailing and in that way get another listing “priced correctly” that they believe they have a chance of selling.

· The third reason is that they hope to get a buyer to call off of your sign or ad and that buyer will purchase some other (properly priced) house and the agent eventually gets a paycheck that way.

A seller who choose an agent based on which estimate is highest is the ultimate loser.

Selecting an agent by essentially “auctioning” your listing is a sure way to waste your time and miss out on a real buyer for your home.

Conclusion: Choose your agent based on honesty, reputation, ethics, experience, competence and marketing, and don't chase after those tossing around pie-in-the-sky numbers.

As always, thanks for reading,

Steve Jackson: 561.602.1258

Interesting Perspective

A guy whose videos I get a few times a week recently did a short video with an interesting perspective on the current market conditions.

Thanks for reading…Steve Jackson

561.602.1258

Making Moving Easier for Children

From a great parenting blog, Little Hearts/Gentle Parenting, that I read whenever I can, comes this post on kids and moving

Transitions are hard on everyone, and when the whole family is affected such as in a big move to a new home, parents often get so caught up in the logistics of the move and their own stresses that helping their children cope with the move can get lost in the chaos. Here are a few things you can do to ease the transition for your little people without adding more stress to yourself:

1. With small children, it can be tempting to build up the move beforehand to make it seem like an exciting adventure, but over excitement can be just as stressful and overwhelming to small children (and big ones!) as anxiety can be. Instead, try to keep things as low-key as possible. Wait until it’s close to time to actually start packing before discussing the move with your little one, and then use simple, age-appropriate language to tell them that you are all moving together (emphasize together so there’s no misunderstanding!) to a new house.
2. Show them pictures of the new house, the new yard, their new room, the kitchen, bathroom, living room, etc. Ask them where they’d like to put their bed and draw it on the picture with a marker. Do the same with their toy box, toothbrush, high chair, sandbox, and anything they ask about to reassure them that their things are coming along on the move and to begin to familiarize them with their new space. Give them a marker and another set of pictures of the new house to draw on so they can begin to make it their own.
3. Put boxes in their room a few days before the move and let them begin to pack their own things in their own time. You can go back and repack the boxes when they’re asleep or playing elsewhere if needed. Giving them some control over the move will help tremendously with their feelings of being taken away from their familiar home.
4. Keep a few familiar toys out for the actual move to help your little one see that their things are coming with them. If possible, let them help with loading the boxes from their room onto the truck, too. Knowing that their toys and clothes and bed are coming with them on the move is very comforting.
5. Pack a travel bag with new toys and activities and healthy, familiar snacks for moving day. The novelty of the new toys will help them to travel more happily, and the familiar snacks will keep their tummies settled and hunger at bay making for a calmer trip for all.
6. At the new house, unpack your little one’s things first if at all possible so that they can see for themselves that they made the trip and can begin settling in right away. Take the time to play with them, too. It’s amazing how a few minutes of playing together can settle a small child when they’re stressed!
7. Don’t be surprised if your little one is clingy and whiney for a few days after the move. After unpacking their things, don’t try to rush to unpack everything else all at once. Give your child all of the time and attention they need to help ease the transition for them.
8. Nighttime can be the hardest for children in a new home, so be prepared for lots of cuddling and possibly a night visitor in your bed for a while. Being there for your little one at night is as important as being there for them in the day!
9. Involve them in unpacking and putting away everything from kitchen utensils to books to linens to clothes. Children are very tactile, and actually touching all of the places and putting familiar things from their old home away in the new home can help them to begin to feel at home themselves.
10. Stick to familiar routines such as bedtime, naptime, etc. But don’t be rigid about schedules. Your little one has been through a huge change and needs extra attention and understanding from their source of comfort and security…you!
11. Introduce new things like playgroups, pediatricians, babysitters, churches, etc. slowly, spread out over as long a period of time as possible. The move itself is overwhelming enough in its newness without adding in a ton of other unfamiliar things right away.
12. Find some things near your new home that are familiar to your little one from your previous home such as a chain grocery store, toy store, restaurant, etc. Seeing and visiting familiar places is vastly reassuring for small children because they can see for themselves that you can still buy them food and other necessities even though you’ve moved.

Giving your child the reassurance that some things will remain the same even when so many things have changed helps to stabilize and assure them that their needs will still be met and life will still go on in many of the same patterns and routines they are used to. Remaining calm and available for your little one, even in the midst of your own stresses over the move, is key. But take care of yourself, too. Change is hard on everyone, so cut yourself some slack and don’t try to do everything at once. Remember, slow and steady wins the race!

 

Thanks for reading…Steve Jackson…561.602.1258

Is Now The Time To Sell Your Home?

A seller’s ability to sell their home in ANY real estate market will be determined by the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

• As of today there are 11,199 properties listed on the MLS in Palm Beach County.
• Sales reported last month in Palm Beach County were 2771
• That translates into an absorption rate based upon the above figures of a little over 4 months…

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

• Under 5 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Prices usually rise in this scenario.
• 5-7 months’ supply creates a balanced market. Historically home values appreciate at about the rate of inflation.
• Over 7 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

So…what is happening right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is well below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Here in Palm Beach County, supply is also at one of the lowest points that I have ever seen! 

Based on the guidelines above, we can see that the supply/demand ratio is showing a sellers’ market where prices normally  appreciate. This has created positive movement in housing values here as well as in most parts of the country.

Sellers have a great opportunity right now….and there is no guarantee that this confluence of events is likely to last. Historically, inventory increases dramatically as we approach summer. Selling now, while demand is high and supply is low, should garner you your best price.

If you’re in the process of interviewing agents to enable you to select the one to best represent you…make sure your agent knows the macro trend..but they also need to understand and know the figures as they apply, not only to your particular community…but the absorption rate/supply of competitive homes ‘in your price range’. You need to overlay all three of these to get an accurate depiction of the market for YOUR home.

Thanks for reading.

Steve Jackson…561.602.1258

Lantana investor special

I am sure that all of you investors know how difficult it is to find (and successfully get under contract) decent single family properties in the ‘under $150,000’ market.

I now have access to a package of 10 single family homes in east Lantana…fully leased…NO HOA…owner stated rental income of $106,200/yr..

They are not, and will not be listed on the MLS and are sold as 1 complete package.

The price is $1,050,000

Call me quickly at 561.602.1258 or email me at Investors@thejacksonteam.com (please include your proof of funds with your email).

Steve Jackson