Choose your preferred headline of the week…is the market good/bad/better/worse?

Palm Beach County homes sales surge

From the Palm Beach Post: April's single-family home sales in Palm Beach County rose a whopping 67.9 percent from a year ago, a surge that underscores the growing belief that buying a home now is a good bet.

There were 2,186 pending home sales in April, up from 1,302 during the same month last year. Townhouses and condo pending sales are up 39.2 percent, to 2,051 in April from 1,473 a year ago.

Pricing is reflecting the renewed buyer interest in home purchasing. The median sale price of a single-family homes in Palm Beach County is $210,100, up from $199,900 the same time last year and up 6.6 percent from March. The median townhouse and condo price is $88,636, up from $85,000 a year ago.

"Prices are climbing as demand increases and inventory levels decrease," said Bonnie Lazar, 2012 President for the Realtors Association of the Palm Beaches. "Inventory is slightly below normal levels, dropping over 50 percent from the previous year."

April single-family home inventory declined 55.5 percent to 5.7 months from 12.8 months a year ago. It was the same story for townhomes and condos, which fell 53.8 percent to 5.5 months from 11.9 a year ago.

Lazar said that trend should mean continued growth in home sales and median prices.

Florida still leads nation in delinquent loans, Mortgage Brokers say

Also from the Palm Beach Post: Florida still has the dubious distinction of leading the nation in “seriously delinquent” home loans, the Mortgage Brokers Association says today.

Some 17.92 percent of Florida home loans were 90 days or more past due or in foreclosure during the first quarter. Nevada was a distant second with 12.63 percent of its loans seriously delinquent.

Florida carries burden of 30 percent of nation’s shadow inventory

Another recent Palm Beach Post article: The Sunshine State’s shadow inventory of 550,000 homes makes up a third of the nation’s unlisted distressed properties according to a report released this week by the Florida Realtors.

Florida Realtors chief economist John Tuccillo said despite the large volume, the slow leak of homes onto the market, as well as an increase in short sales, shouldn’t crash prices as many have feared.

The report, released Tuesday, defines shadow inventory as homes with mortgages 90 days or more delinquent, homes in the process of foreclosure and homes repossessed by the bank but not yet listed for sale.

Goldman Sachs predicts that homeownership rates will decline into 2014

Goldman Sachs recently released a study looking at the housing market and attempted to analyze a bottom in regards to the homeownership rate. One of their major key figures dragging the rate lower was of course, the shadow inventory and the dismal employment outlook.

 

So…there you have it…clear as pea soup.

But if you’re reading this blog and considering buying OR selling, lets talk about what your best option is given your goals and timeframe.

Thanks for reading…Steve Jackson - 561*602*1258

Does It Pay To Stay?

 

DoesItPayToStay.com

A tough question deserves an honest answer.

And one of the toughest questions homeowners are asking us every day is, “Do I short sell my home or stay and wait until I can get out even?” Either way, to make the best decision, you should have all of the information in front of you...

That's why we created a very specific online calculator to help you ‘crunch the numbers’.

Being able to see the current market value of your home and projecting when your investment will break-even is invaluable to your decision making process. With our calculator you’ll be able to do so (for free) in a matter of minutes!

Take a look at the short video below, or go right to the calculator and find out...does it pay to stay?

DoesItPayToStay.com

 

Should I Short Sale My Palm Beach County Home?|

How Do I Short Sale My Lake Worth Home?

Happy Mothers Day

 

Robert Schiller of the Case-Shiller home price index says, “the world is in a late great depression”!

Yale economist Robert Shiller recently participated in a CNBC interview and gave a chilling analysis of the world economy as well as our housing market…some excerpts below:

The global economy is mired in a "late Great Depression" despite central bank stimulus policies, says Yale economist and author Robert Shiller.
"Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller tells CNBC.

The Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have propped up their respective economies via liquidity injections known as quantitative easing, tools designed to spur recovery but dubbed by critics as printing money out of thin air. He says the world is in a “new age of austerity.”

Shiller, designer of the Standard & Poor’s/Case-Shiller house price index, adds it's "really hard to forecast" if the U.S. housing market is finally recovering but does find one bright spot.
"The general presumption is that home prices are going down and that's good – it'll make them more affordable."

"Reuters: NEW YORK – The United States housing market is likely to
remain weak and may take a generation or more to rebound, Yale
economics professor Robert Shiller told Reuters Insider on Tuesday.
 
Mr. Shiller, the co-creator of the Standard & Poor’s/Case-Shiller
home price index, said a weak labor market, high gas prices and
a general sense of unease among consumers was outweighing low
mortgage rates and would likely keep a lid on prices for the
foreseeable future.

“I worry that we might not see a really major turnaround in our
lifetimes,” Mr. Shiller said

He said suburban areas in particular might endure further price declines
as high gas prices increase demand for “walkable cities.”

Cheaper housing prices will encourage many to avoid relying on their homes as the bulk of their investment portfolio and diversify, which is a good thing, Shiller adds. "Fifty years ago, there wasn’t this talk of housing as an investment. It was a zeitgeist of the early 2000s, and it has gradually gone." The housing sector appears to be bouncing along a bottom.

It's going to be rocky for a while," says Gregory Miller, an economist at Suntrust Bank in Atlanta, according to Reuters.

Housing prices will drop by a further 20 percent as the downturn gripping the United States deepens, leading economist Gary Shilling says. Writing in the Christian Science Monitor, Shilling said more and more people are looking to rent as homeownership becomes increasingly rare. “Housing activity remains depressed, with the only life coming from the multifamily component, which is being driven by the zeal for rental apartments as homeownership falls,” he wrote.

“Homeowners are losing their abodes to foreclosures; many can’t meet stringent mortgage lending standards; some worry about homeownership responsibilities in the face of job uncertainty; and many people have no desire to buy an asset that continues to fall in price.

“I am looking for a further 20 percent slide in housing prices.”

As my dedicated blog readers know, you don’t come here for sugar-coated real estate stories. I always try to dig deeper into what is being reported…piece together related analysis…give you a clear and “no spin” picture of our real estate environment.

Feel free to call me directly at 561.602.1258

Thanks for reading…Steve Jackson

Who is buying all of these homes? And what does it mean?

I just finished going over NAR’s 2012 Investment and Vacation Home Buyers Survey,which covered existing- and new-home transactions in 2011. The report showed that investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.

A recent CNBC article (excerpted below) notes the risk of what the NAR report exposed:

While nearly half of investment buyers said they were likely to purchase another property within two years, housing and mortgage analyst Mark Hanson calls them a “thin cohort” and worries that they add ever more volatility to the current housing recovery.

“They are fickle and volatile. They will go away on the slightest of conditions changes. They also won’t chase prices higher or buy new homes from builders. Lastly, without the heavy flow of distressed supply, there is no U.S. housing market recovery. Distressed sales ARE the market,” says Hanson.

Remember…investment is all about the numbers. Change anything where the numbers aren’t as attractive — even something as minor as HOA fees — and investor demand dries up. To an investor, a house is not a home: it’s cashflow + equity. These investors analyze a house in exactly the same way they would analyze a bond or a stock.

Even if house prices remain stable, if rent rates drop, that changes the investment equation. Now the investor isn’t interested even if the price remains at $200K, because his cashflow projections are all out of whack.

Any hint of rent regulation, and an investor would have to be a fool, politically connected, or pay such a low price that he’ll still make money under rent control, to even consider buying rental properties.  

Stan Humphries, from Zillow recently said, “some markets have likely seen their bottom (think Washington DC or Phoenix, both of which we forecast to see appreciation in 2012),but nationally, the bottom in home values is some way off. Your cautions all fall in line with exactly what we at Zillow have been observing – high percentages of cash buyers, investors flocking to the market to take advantage of rising rental rates (with rents up 3% nationally during 2011). We’re forecasting the national bottom in home values for 2013, and we expect that most large markets will continue to see depreciation throughout 2012. We introduced a formal forecast in our Q1 reports. (You can see the Zillow report here: http://bit.ly/yRwRj7.

As I always tell my clients…”take every news report you read/see/hear with a grain of salt”. Most agencies who put out the stories have an agenda to promote…and most reporters no longer look into the details of any story they are given.

The recent great housing news…(i.e. sales/prices up), is being driven by a very narrowly motivated segment of buyer: “investors”. If there is any small shift in the tax laws benefiting income properties, rental rates; any reduction of cash-on-cash return or after tax return…you can bet the investors will be back on the sidelines.

Call me directly and lets talk about how all of this (and more) affect/influences your real estate selling or buying goals.

Thanks for reading…Steve Jackson

561.602.1258

Todays real estate headlines in the news…Pick your flavor

 

1) It's safe to sell your home again:

The Realtors' group's chief economist, Lawrence Yun, opted to look on the bright side of the report -- sales were up 5.2% year-over-year. "We have seen nine consecutive months of year-over-year sales increases," he said. "Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year."

2) Housing recovery still sputters:

NEW YORK (CNNMoney) -- The housing market continued to struggle in March, despite low home prices and record low interest rates, an industry report revealed Thursday.

Sales of existing homes fell 2.6% compared with a month earlier, to an annualized rate of 4.48 million homes, the National Association of Realtors said. Gus Faucher, a senior economist at PNC Financial, called the report disappointing. "We were expecting an increase," he said. "We need a turnaround to help the economy recover.

3) No Housing Recovery Until 2020 In 5 Simple Charts

Every day (for the past 3 years) we hear countless fairy tales why housing has bottomed and will improve any minute now. Just consider the latest kneeslapper from that endlessly amusing Larry Yun of the NAR, uttered just today: "pent-up demand could burst forth from the improving economy." Uh, right. Here's the truth - it won't and here is why, in 5 charts (below) directly from Bank of America, so simple even an economist will get it.

• Epic supply backlog
• A secular shift from plunging demand via habitation patterns, as more and more simply opt to live with their parents
• More and more are forced to rent
• Home prices will slide ever more as the American Dream of home ownership is forgotten, leading to even less wealth extraction via home equity loans
• Which all  means there is no hope for a long, long time…not at least until 2020

 

The so called “recovery” is about to get impaled by a tsunami of foreclosures with prices dropping a further 5-10% - recovery will take years with the added bonus that those who have been living rent free are about to direct some of that windfall of "disposable income" to actually paying for shelter…watch how that effects the overall economy!

As always…thanks for reading!

Steve Jackson

561.602.1258

Home Affordable Foreclosure Alternatives (HAFA) for Palm Beach County Residents extended through 2013

The Making Home Affordable (MHA) Program was introduced by the Obama Administration in 2009 in an attempt to stabilize the housing market and help struggling homeowners obtain relief and avoid Foreclosure. The program consisted of several smaller programs including the Home Affordable Modification Program (HAMP), the Home Affordable Refinance Program (HARP and the new HARP 2.0) and the Home Affordable Foreclosure Alternatives Program (HAFA).

HAFA is a government-sponsored initiative assisting all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure through a short sale or deed-in-lieu of foreclosure.

The program recently announced updates and changes that will take effect June 1st.

These changes will allow a greater number of distressed homeowners to seek assistance.

The major changes from March's updates to the HAFA program include:

• Extending the deadline for submitting for HAFA eligibility will be extended a full year, from December 31, 2012, to December 31, 2013.
• The removal of occupancy requirements. Previously, HAFA required homeowners to have lived in the property within the last 12 months.
• $3,000 relocation incentives will be limited to properties occupied by an owner or tenant at the time of the short sale.
• Mortgage payments will be allowed to exceed 31% of the homeowner's gross monthly income. This update will allow a homeowner to stay current on their mortgage and still qualify, minimizing the overall impact to their credit.
• Secondary lienholders may receive up to a maximum of $8,500, up from $6,000 previously.
• And one of the most dramatic changes: The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.

With these updates, a homeowner can be current on their mortgage, qualify for HAFA, continue to make their payments, and execute a short sale with minimum impact on their credit!

If you are upside down on your home…call me today. My direct line is 561.602.1258

Thanks For Reading…Steve Jackson

7 figure foreclosures…$1,000,000+ bank owned homes in Palm Beach County

When the word “foreclosure” is used, the image that is conjured up is normally one of a dilapidated home on an overgrown plot of land owned by some down-on-their-luck real estate agent, that will be lucky to sell for pennies on the dollar.

But, here in Palm Beach County, even the 1%’ers fall victim to the faltering economy occasionally. But, with almost 2200 properties on our MLS with an asking price of $1m or more…there are only 4 are bank-owned, foreclosure sales,of  $1+ million:

• In Wellington, there is a 6800 sq foot home on 6.5 acres with an asking price of only $1.1M. The last time this home sold was in December of 2004, for $2.3 million. It was once listed (in 2006) for $4.9 million!
• In Palm Beach Gardens, in Old Palm, there is a 5700 sq foot home on the golf course, built in 2004, with an asking price of $1.2 million. This home sold for just over $2 million when new in 2004.
• In Jupiter,directly on the Loxahatchee river, there is a partially completed 6700 sq foot home with an asking price of $3.5 million. Back in 2009 this home was listed on the MLS for $5.9 million.
• In San Michele, off of Donald Ross Road in Palm Beach Gardens, is a 4500 sq foot home with a detached guest house, with an asking price of $1.3 million.

There are 3 other $1+ million foreclosure sales currently under contract:

• There is one in Vero Beach…a 4200+ sq foot home built in 2007 and listed for $1.2 million
• A 3700 sq foot home in Old Palm, built in 2005 and listed just over $1 million. This home was previously mortgaged for $1.6 million.
• In Boca Raton, in Long Lake Estates is a 7200 sq foot, 6 bedroom, 4 car garage mansion, with an asking price of $2 million. The home sold for $3 million in 2005.

And the top sale of a bank foreclosure in the last 12 months was a home on West Indies Dr., on the island of Palm Beach. That one sold for $2 million…in an all cash sale!

If you’ve been hoarding your cash for an opportunity to rub elbows with the Trumps…now may be the time! I’d be happy to work with you on one of these homes.

 

And, as always, thanks for reading!

Steve Jackson…561.602.1258

Bloomberg Law with an insightful commentary on the recent $25B mortgage fraud settlement

Fourth Quarter and Year-End 2011 U.S. Foreclosure Sales Report: Shifting Toward Short Sales

RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Q4 and Year-End 2011 U.S. Foreclosure Sales Report™, which shows that sales of homes that were in some stage of foreclosure or bank owned accounted for 24 percent of all U.S. residential sales during the fourth quarter — up from 20 percent of all sales in the previous quarter, but down from 26 percent of all sales in the fourth quarter of 2010.

“We continued to see a shift toward pre-foreclosure sales, or short sales, and away from REO sales in the fourth quarter,” Moore continued. “Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO sales decreased 12 percent. Pre-foreclosure sales outnumbered REO sales in several bellwether markets, including Los Angeles, Miami and Phoenix, where REO sales had outnumbered pre-foreclosure sales a year ago. That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans.”

PLEASE READ THIS: 2012 is shaping up  to be the “perfect storm” in the realm of short sales. A) the banks FINALLY realize that it is in their best interests to approve a short sale rather than take a home back in foreclosure, B) the Mortgage Debt Forgiveness Act  is still in place, but only until the end of 2012 (and I wouldn’t bet the farm on the deadlocked politicians/bureaucrats in Washington easily coming to an extension agreement),  C) the inventory of decent single family homes here in Palm Beach County is extremely low, and D) many lenders are offering cash incentives to underwater and delinquent homeowners if they complete a short sale and meet other, minor benchmarks.

If you are upside-down..don’t wait..call me today, please. This year may be your best opportunity to sell your home in a manageable and dignified way.

My direct line is 561-602-1258.

Thanks for reading, Steve Jackson

Foreclosures in Journeys End

Below are the Journeys End homes that are reported be in foreclosure or are already bank owned, sorted by street, as of February 15th, 2012:

• Bither Way...1
• C Durham...4
• Ethan...2
• Eugene...1
• Finamore...4
• Houlton...8
• Jackie...1
• Jessy...1
• Kevin...1
• Kirsten...1
• Wilbur...5

If you would like any information on Journeys End foreclosures, or possibly you are one of the home owners in the above list and would like to expolre your foreclosure avoidance options...please call me on my direct line. 561-602-1258

Thanks for reading...Steve Jackson

Foreclosure Fraud Settlement Update…

Full and complete details are still not available as of today. We have been given only the main points of the agreement. Missing still are the most important aspects; the implementation and enforcement details. As the well known saying goes…’The devil is in the details’ (see below).

A previously ‘settled’ suit by Nevada/Arizona against Bank of America for failing to follow their responsibilities in the Countrywide settlement will be folded into the deal. In that settlement, BofA promised to deliver $8.5 billion in relief for Countrywide borrowers who fell victim to deceptive practices in the mortgage process. In reality, only $236 million was ever spent. Weak settlement terms allowed BofA to take credit merely for offering loan modifications to borrowers. And the Nevada suit alleged that BofA immediately started abusing borrowers who tried to get relief under the deal. But that suit is now gone.

State and federal regulators insist that they learned their lesson with that botched settlement and that this one has tight enforcement guidelines. (Sure!) However, the monitoring process begins with a self-assessment from the banks through quarterly reports, which will then be reviewed by a govt. determined committee. This enforcement process is likely to take months to ‘properly assess’ the settlement.

What has been made public is that 5 billion will go as a hard cash penalty to the states, which can use the monies, for what appears to be, any reason. As a matter of fact, one official close to the talks stated that he feared that much of that cash payout will go in some states toward filling their budget holes. The federal government will get a cash penalty as well (how much? for what purposes?)  Out of that $5 billion, up to 750,000 borrowers wrongfully foreclosed upon will get (up to) a $2,000 check if they sign up for it and it is determined that they qualify (who can qualify and what the process is has yet to be disclosed). For someone wrongfully foreclosed on, foreclosed on with fraudulent documents or denied due process, this is the equivalent of saying to them “sorry we broke the law and stole your home, here’s one months rent, now go away quietly.”

The bulk of the money, NOT actually a payment of any kind, around $17 billion, will go towards loan modifications, principal write-downs, short sales and other foreclosure avoidance efforts.

This figure pales in comparison to the negative equity in the country, which sits at, at least, $700 billion. Nationally, 1 in 5 mortgages is currently under water…here in Florida, almost 1 in 2 mortgages is under water. AND the banks have 3 years to implement these processes and procedures.

It will be many years into the future, after this ‘landmark settlement’ has faded from scrutiny, before it can be determined if the promises on loan modifications, etc., have been fulfilled. 

Do you think this multi-billion-dollar settlement is tough on the banks?Lets look at the stock prices of the banks involved in this settlement…did they fall through the floor as a result of the drastic penalties invoked?

• Well, just before Christmas, Bank of America stock dipped below the $5.00 mark; on Friday, it closed over $8.00…UP OVER 60% in 60 days! Nice…and one would have to have their head firmly in the sand to think that the terms of this settlement were not widely distributed to the ‘in’ crowd in the past 60 days.
• Citi..again, from a low point of about $25 the same day, just before Christmas, to a close of about $33 on Friday…a 30% return in 60 days…not as good as BofA, but still not bad for the insiders.

**and the mention of insiders brings up this point: Our elected officials do not have to comply with the rules/laws governing the trading of equities on inside information. I’d like to see how many of the ‘peoples representatives’ (privy to the details/impact of this settlement) bought bank stock in the past 60-90 days.

• JPMorgan Chase…Same date of the low…just before Christmas at just under $31, to a close on Friday of just under $38.00…only a 22% return (and that's NOT annualized) on that trade.
• Wells Fargo…SAME low date just before Christmas, of about $25.50 to a close on Friday of $30.30. Another tidy return of about 20% in 60 days.

If you laid these charts on top of one another…they are almost identical in movement! The terms were leaked, the impact evaluated, and then the party started!

I’ll post again on this when the FULL details are finally released, whenever that may be!

 

Thanks for reading and putting up with my heavy dose of cynicism…Steve Jackson

Call or email me any time with your take on the matter, 561-602-1258