A Biltmore on the lake with a pool that has been on the market since June 4th of this year has just reduced their price by $200 to $368,700. The original list price on this home was $414,900. On a per-sq-ft basis, the original asking price was $168/sq ft and the current price is $149/sq ft.
During the 2005/06 heyday, homes routinely were selling for $200/sq ft and up!
Just for comparison purposes...there have been 11 sales reported in 2009 in Journeys End/Grande Estates. The Average sales-price-per-sq-ft of living area has been $102.33/sq ft...with the high being $118/sq ft and the low being $91/sq ft.
10/16/09
Under contract...NOT A SHORT SALE OR FORECLOSURE!
A Biltmore with a pool in Grande Estates has gone under contract in 17 days. The asking price at the time of contract was $325,000.
This quick contract at $131/sq ft (as opposed to the average $100+/sq ft for distressed sales) confirms our current hypothesis that non-distressed sales are commanding a nice premium at the present time....that finding, combined with the fact that the inventory for non-distressed homes is very low makes it a very good time to place a home on the market that is not marketed as "distressed".
This quick contract at $131/sq ft (as opposed to the average $100+/sq ft for distressed sales) confirms our current hypothesis that non-distressed sales are commanding a nice premium at the present time....that finding, combined with the fact that the inventory for non-distressed homes is very low makes it a very good time to place a home on the market that is not marketed as "distressed".
10/12/09
10/8/09
Bank foreclosure hits the market!
The home is on the lake, with a pool. The owner who lost the home to the bank paid $497,000 for it back in May '04 but subsequently refinanced it in 2006 for $700,000.
The home was on the market in 2005 for $799,000 then for as much as $899,000 for 4 months back in 2006, then back to $799,000 into early '07. In mid 2007 it was marketed for $768,000 then late in '07 at $529,000 as a short sale.
At less than $100/sq ft for a lakefront/pool home in Journeys End, I predict that this will be gone immediately at more than the banks asking price...which is a sales tactic used successfully by quite a few lenders recently; price agressively, get multiple bidders/offers...elicit "highest and best" at some point and therefore create the"sense of urgency" lacking in most traditional market offerings.
10/7/09
Kensington short sale, Grande Estates
A Kensington short sale, pool/lake has just reduced their price from $400,000 to $390,000. This home has been on the market a total of 541 days. It was under contract 3 times while listed at $400,000 and fell through each time for 1 reason or another. It was originally placed on the market back in Apriol of '08 at $549,000.
Is the rug going to be pulled out?
Since the initial decline of the housing market and the associated collapse of the banking and mortgage industry, FHA loans have taken over a majority of the lending being done here.
I have often thought that these FHA loans were going to be our next "wave of defaulting loans" for the following reasons: Most FHA loans made here are with only a 3.5% down payment and allow the seller to contribute up to 6% towards the buyers closing costs. And generally, a lot of the buyers go "FHA" for 2 main reasons...they don't have much cash AND they have lower credit scores than required by conventional lenders.
In essence, all of these newly issued FHA loans are the same "no money down" loans that are currently contributing to the explosion in defaults. It has been shown that homeowners are more likely to default when there is no equity in the home....this seem obvious.
Well, in a declining market, like we are in, it won't take long for all of the FHA loans made in the previous 12 months to be "upside-down". Combine "upside-down", with lower credit scores and what do you get? The recipe for more defaults!
I believe that the above reasoning has prompted the following:
The FHA Taxpayer Protection Act of 2009 — HR 3706 , introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5% and would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage. (seller-paid closing costs)
The bill’s author, Rep. Scott Garrett (R-NJ), said the current policy of allowing closing costs to be rolled into the mortgage effectively reduces FHA down payments to as low as 2.5% (and sometimes greater than 100% financing) because borrowers don’t have to have as much (any) cash on hand at closing.
“As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage.”
The bill also calls for an examination of the housing market’s dependence on the fund (FHA) since the mortgage crisis began.
The inspector general for HUD, Kenneth Donohue, also appeared before the House subcommittee calling for more resources. To illustrate the explosion of FHA’s presence in the market since the development of the near-third statistic often exchanged by industry players and media outlets, Donohue said data show the FHA’s endorsements (or guarantees of mortgages) rose from 24% of the single-family market in the first quarter of 2008, to 63% of the market in Q109, including home sales and refinance.
So, if the above bill does pass and the FHA lending criteria "tighten", then I believe that here, locally, the housing market will suffer. When you make it more difficult to obtain the loan that the majority of our buyers are utilizing...there is only 1 conclusion. Then, combine this change with the expiration of the 1st time homebuyer tax credit AND a potential rise in mortgage interest rates! Not good for us homeowners here in South Florida.
Shoot me an email and let me know which way you see the market heading.
I have often thought that these FHA loans were going to be our next "wave of defaulting loans" for the following reasons: Most FHA loans made here are with only a 3.5% down payment and allow the seller to contribute up to 6% towards the buyers closing costs. And generally, a lot of the buyers go "FHA" for 2 main reasons...they don't have much cash AND they have lower credit scores than required by conventional lenders.
In essence, all of these newly issued FHA loans are the same "no money down" loans that are currently contributing to the explosion in defaults. It has been shown that homeowners are more likely to default when there is no equity in the home....this seem obvious.
Well, in a declining market, like we are in, it won't take long for all of the FHA loans made in the previous 12 months to be "upside-down". Combine "upside-down", with lower credit scores and what do you get? The recipe for more defaults!
I believe that the above reasoning has prompted the following:
The FHA Taxpayer Protection Act of 2009 — HR 3706 , introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5% and would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage. (seller-paid closing costs)
The bill’s author, Rep. Scott Garrett (R-NJ), said the current policy of allowing closing costs to be rolled into the mortgage effectively reduces FHA down payments to as low as 2.5% (and sometimes greater than 100% financing) because borrowers don’t have to have as much (any) cash on hand at closing.
“As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage.”
The bill also calls for an examination of the housing market’s dependence on the fund (FHA) since the mortgage crisis began.
The inspector general for HUD, Kenneth Donohue, also appeared before the House subcommittee calling for more resources. To illustrate the explosion of FHA’s presence in the market since the development of the near-third statistic often exchanged by industry players and media outlets, Donohue said data show the FHA’s endorsements (or guarantees of mortgages) rose from 24% of the single-family market in the first quarter of 2008, to 63% of the market in Q109, including home sales and refinance.
So, if the above bill does pass and the FHA lending criteria "tighten", then I believe that here, locally, the housing market will suffer. When you make it more difficult to obtain the loan that the majority of our buyers are utilizing...there is only 1 conclusion. Then, combine this change with the expiration of the 1st time homebuyer tax credit AND a potential rise in mortgage interest rates! Not good for us homeowners here in South Florida.
Shoot me an email and let me know which way you see the market heading.
10/6/09
Laredo price reduction
This home has been on and off the market since February 2007, when it was on the market for $399,900.
10/5/09
Updated price...Biltmore
Tips on how to save 40% on your homeowners insurance bill and how to keep you family safe from carbon monoxide and bees!
Please take a few minutes to watch this video interview...there are some money-saving and very important safety issues we discuss.
Thanks
10/1/09
Under contract in 3 days
The Pueblo short sale on C Durham, that was listed 3 days ago @ $225,000 just went under contract.
It is still a sellers market for well-priced property.
It is still a sellers market for well-priced property.
9/30/09
New listing...
Subscribe to:
Posts (Atom)
Posts
