June 30, 2009
Mortgage interest rates are still on the rise! The rates for a 30-year fixed mortgage leapt to 5.42% from 5.38% last week, according to Freddie Mac. The rate increase is due in part to the climb in treasury yields on long-term government debt, as the two are closely related. Although the yields are falling back down from and 8-month high of 4.01%, the mortgage rates have not returned to the percentage that they once were.
With all the signs of a recovering market, the higher mortgage rates could be a threat to the market, as potential homebuyers may decide to hold off on home buying. The consumer confidence index now stands at 49.3, which is quite a significant difference from the May index of 54.8. May’s figures showed the highest level since September of 2008, when the level was 61.4.
According to Lynn Franco, director of the Conference Board Consumer Research Center, the decline in consumer confidence “continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak.”
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June 29, 2009
The Federal Deposit Insurance Corp (FDIC) issued twenty cease-and-desist orders across the country last month. Three of these banks, First Commercial Bank of Tampa, The Royal Palm Bank of Florida in Naples and Premier American Bank in Miami, are located here in Florida!
First Commercial Bank of Tampa Bay has received notice that if they are not able to increase deposits and rid themselves of all dependency on “volatile funding sources”, the FDIC could force a sale.
First Commercial Bank of Tampa is celebrating its 20th anniversary this year, but is struggling with a large amount of delinquent real estate loans, inadequate capital and inadequate board supervision, among other charges, according to the FDIC.
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June 26, 2009
Wednesday, June 24, 2009, Florida Gov. Charlie Crist rejected a bill that would allow insurers to charge whatever fee they wanted for property insurance! The reason? He declared that the bill lacked enough consumer protection.
This rejection will ensure that State Farm Florida will indeed leave the Florida property insurance market. Don’t get excited just yet…State Farm may not drop any policies for a year and half, according to the Office of Insurance Regulation. The term “drop” would mean “renew”. According to State Farm, they intend to drop their 900,000 property insurance clients over a two year period and that they will give their policyholders a 180 day notice before their coverage ends.
The process will take some time if indeed State Farm does follow through with their threats, however, according to Mike Bennett, R-Bradenton, “I think State Farm was running a bluff when it did what it did; I think the insurance commissioner was running a bluff when he did what he did,” Bennett said. “I think they both lost. But I also think the Florida market is too large for them to walk away. … These are smart people; I don’t think they will leave the state of Florida entirely.”
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June 25, 2009
The Obama Administration authorized the U.S. Small Business Administration to alter its 504 loan program to allow small businesses to refinance any existing loans that were used to purchase real estate or equipment. These changes were made in effort to lower interest rates on the loans thus lowering payments to lenders.
The money that can be saved by making smaller payments to lenders must be used for expanding the business, however most small businesses aren’t interested in “expanding” at the moment; they appear to be more interested in just keeping their doors open! On the flip side of the coin, many others view these changes to the 504 loan program as an opportunity to buy real estate as opposed to renting.
Finding a lender that is participating in Small Business Association loan programs, may be tough as most of the banks dropped out of the SBA loan program last year. However, due to some modifications to the program, lenders are beginning to return.
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June 24, 2009
Although, home sales fell nationally last month in an annual comparison, the State of Florida is showing a gain! Existing home sales jumped 16% over last months sales and existing condos rose 21%, according to the Florida Association of Realtors (FAR).
These statistics mark the ninth month in row that existing home sales have shown a rise in activity. The difference in May’s home sales is that we are starting to see the prices stabilize. The median sales price, the midpoint, for existing home sales in Florida was at $144,400 in May, this shows a drop from last year’s $203,800!
Potential homebuyers are definitely beginning to respond to the favorable market conditions, between the $8,000 first-time homebuyer tax credit and the bargain prices, the market has become enticing.
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June 22, 2009
Tomorrow, Hernando County Commissioners will consider a land lease for NAC (Neubert Aero Corp.) Dynamics, a manufacturer of airport safety products that plans to take up roots at the Hernando County Airport Industrial Park.
The manufacturing company has contracted with Proud Pelican Construction to construct its 10,000 sq ft manufacturing and business facility and Hernando County is prepared to offer building permit and impact fee incentives.
NAC Dynamics plans to use a 1,500 ft. performance test track for calibration and friction testing to explore the friction factor on hazardous runways. The new company could very well provide some much needed jobs in the Hernando County area.
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June 18, 2009
The Obama Administration is dishing out another $3.1 billion towards modifications to the foreclosure program, in an effort to fight the record number of foreclosures. The modifications to the program include adding Residential Credit Solutions of Fort Worth Texas to the mortgage servicing companies that are participating in the program, as well as providing an increase in funds to Countrywide Home Loans Servicing LP.
There have been many questions as to whether or not the original foreclosure program announced in March has made any difference to the suffering real estate industry. The figures last week showed that over 32,000 borrowers have enrolled in the 3-month trial modifications under the plan, according to the Treasury Department
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June 17, 2009
Last Thursday, during the International Real Estate Conference, Lawerence Yun, chief economist for the National Association of Realtors (NAR), stated in regards to the real estate market, “We’re certainly near the bottom if not at the bottom.”
This is no way means that the real estate market is going to make a quick come back, there are many variables that point to a slow recovery. The high-end real estate market is slow, inventories are high, foreclosure filings are still on the rise and mortgage rates are climbing; all of these factors could point to a slow rebound.
According to the RealtyTrac U.S. Foreclosure Market Report for April, foreclosures increased less than one percent on a monthly comparison and 32 percent on a yearly comparison, marking April as the highest monthly foreclosure rate since 2005. In Hernando County Florida, foreclosures fell 14.5 percent in a yearly comparison with April of last year, which is a good sign for the local community.
The Real Estate inventory is much higher than it should be, although homes under $200,000 seem to moving rather quickly, the high-end market has become” stagnant”.
When taking these threats to the real estate market into consideration, a slow recovery seems inevitable; however, the market will recover none-the-less.
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June 16, 2009
For the first time in 3 months new construction rose 17.2 percent in May, 2009, as well as the applications for building permits. These are two very good signs that our ‘under-the-weather’ housing market may be on the road to recovery. The figures are still 45.2 percent lower than they were this time last year; however any sign of a rebound is a good sign.
It’s been a difficult time for new construction trying to compete with the plummeting home prices that are believed by many economists to continue falling until spring of next year; however this unexpected rise is an encouraging sign that the housing slump may be beginning to bottom out.
Even with all of the encouraging news, many people are still hesitant to purchase a home, as the rising unemployment and falling home prices are a bit unsettling, however, the Obama Administration is scheduled to release a plan to put an end to the lending abuses that started the downfall of the financial system tomorrow, perhaps that will help to ease many potential homebuyers minds.
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June 15, 2009
With the recent plummet in home prices and the $8,000 tax credit, the youth is finding the means to purchase their starter home. Although home sales are showing very little signs of life, homes that are priced $200,000 and under are showing small signs of a comeback!
As the market starts to perk up, mortgage interest rates are beginning to rise and credit score requirements have risen to 620 from 580 by most FHA lenders. These new blockades that are being placed in the road to mortgage recovery, has real estate professionals concerned that the home sales will slow down once again.
In the meantime, the youth is digging deep and taking advantage of the many perks that are being offered by the real estate industry. There is definitely some evidence of a comeback and getting in on the deals could require some quick action. Buying your new home now as opposed to later, could mean the difference between saving thousands as opposed to hundreds.
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