Pending sales hit 11-month high in February 2012Pending sales hit 11-month high in February 2012 Pending sales in the Sarasota real estate market hit an 11-month high in February 2012, demonstrating once more the health of the local industry as the buying season heats up. Median sale prices were also up substantially for single family homes and condos in February 2012 compared to this time last year – another positive sign for a successful home buying season. “I have heard nothing but positive reports from our members about the seasonal surge in our real estate market,” said SAR President Laura Benson. “Sales are up, prices are stable and much higher than last year at this time, and we are seeing multiple offers on many transactions. Pending sales are off the charts – we hit an 11-month high of 1,130 in February. This is all very encouraging news.” The January 2012 holiday sales lull didn’t last long. The 177 condo sales in February represented the highest level in the last eight months. If pending sales, which represent properties going under contract, produce the expected level of closed sales, we could see a major selling month in March 2012. That could repeat what we saw in March 2011, when sales hit the highest total since 2005. Overall, February 2012 saw a 15 percent increase in property sales over January 2012, and a 17 percent increase in pending sales from the previous month, both reaffirming numerous verbal reports of a very busy spring selling season in Sarasota. Closed sales stood at 414 for single family homes and 177 for condos, lower than in February 2011, but higher than last month. In February 2011, 471 single family homes and 201 condos were sold. The single family home median price climbed to $167,500 in February 2012 from last month’s figure of $162,000. For condos, the figure fell to $150,000 from the January level of $180,000. Last February, both single family homes and condos were selling at the median price of $137,500, so both of the current numbers reflect a stronger market than a year ago. Single family home prices were a whopping 21.8 percent higher than in February 2011. Condo prices were 9 percent higher than last February. The inventory for February stood at 4,588, down almost 5 percent from January’s 4,711, and 20 percent lower than last February’s total of 5,864. With fewer available properties, the law of supply and demand indicates asking prices could be climbing higher in the coming months. The inventory hit a 10-year low of 4,408 in August 2011, and has remained at or close to this low level since then. As the inventory has slid, the months of inventory has also dropped. The figure now stands at 7.2 months for single family homes, compared to 8.3 last month and 8.0 months in February 2011. The figure was 9.1 months for condos, compared to 11.3 months in January and 10.4 months last February. A figure of 6 months is considered equilibrium between a buyer’s and a seller’s market. Distressed property sales continued to represent a higher percentage than normal in the local market in February 2012, with 37.4 percent of all sales from bank-owned foreclosures and short sales. But the figure was a drop from the 40 percent total in January 2012, and far below the record high of over 50 percent in the second quarter of 2010. Currently, only 740 properties for sale in the MLS are distressed listings (short sales and foreclosures), or roughly 15 percent of the market. Last month at this time, the number was 812 out of 4,711 homes and condos on the market, or about 17 percent. If this percentage continues to trend lower, we could begin to see median sales price increases going forward. “The lower number of distressed property sales, and the decreased number of foreclosures and short sales available will likely mean greater competition and higher asking prices,” noted Benson. “We are all hoping for a return to historic levels of distressed properties, which would be less than 5 percent of the market. But until that day, our members will continue to educate themselves on the existing market and help customers make sensible decisions.”

The RE/MAX Hot Air Balloon recently made an appearance at the Florida Winefest and Auction Balloon Glow Dinner to support Disadvantaged Children.

Home prices fell nearly 6% during the six months ended Dec. 31, sending values to their lowest levels in the post-bubble period, S&P/Case-Shiller reported on Tuesday. On Wednesday, the National Association of Realtors reported that sales of existing homes rose for the third straight month.

"At least it's not a double whammy where both sales and prices are dropping," said Stuart Hoffman, chief economist for PNC Financial Services Group. "Deals are getting done."

That's because 26% of all homes sold last year were foreclosures and short sales, according to a RealtyTrac report released on Thursday. That's down slightly from 2009, but a jump compared to 2008.

Homes already foreclosed on and repossessed by banks, called REOs (real estate owned), sold for an average of 36% less than normal sales, RealtyTrac reported. Meanwhile, the discount for homes sold while they were still in the foreclosure process (short sales) was 15%.

Nevada had the highest percentage of distressed sales of any state at 57%. That was, however, less than 2009, when 67% of sales there were foreclosures. In Arizona, 49% of sales were distressed properties; in California, 44%; and in Florida, 36%.

These homes have attracted bargain hunters, including individuals or groups looking to buy and hold properties, according to Hoffman. They hope to buy at such a good price that they can rent out the properties and make a profit.

"These folks are cash investors who are going in and offering very low bids," he said.

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NAR reported that all-cash sales went up to 32% of the total, up from 26% a year earlier. It estimated the percentage of investor purchases hit 23%, up from 17% a year ago.

"Unprecedented levels of all-cash purchases -- primarily of distressed homes sold at deep discounts -- undoubtedly pulls the median price downward," said NAR president, Ron Phipps.

These investment opportunities are not going away. Nearly 30% of mortgage borrowers are underwater on their loans, owing more than their homes are worth, according to Stan Humphries, chief economist for Zillow, the real estate web site.

These owners are very vulnerable to foreclosure so the number of distressed properties that will go on sale only the next year or two will probably remained high. 

 

   If you're like most homeowners, there is never a shortage of options when it comes to projects around the house. But studies have shown that some of the highest return on household improvements can come from those on the outside, not the inside.

A primary reason is that outside investments can produce curb appeal, which is especially important if you are planning to sell your home. Those same improvements can enhance the enjoyment factor if you and your family plan to stay in your home. 

For example, one national industry resource—the National Association of Realtors, reported recently their experience shows a new wood deck produces the second highest return on home improvement investment of any common addition, remodel or replacement project.

However projects don’t have to be big to add value or enjoyment, according to Jimmy Rane, president of Great Southern Wood Preserving, a leading producer of pressure-treated lumber products and maker of YellaWood brand products.

The following popular outside improvement projects will increase the curb appeal or value of a home: 

Adirondack chairs—Uniquely-American classic outdoor furniture is made entirely of wood and has a straight back and seat, which are set at a slant to sit comfortably on a hillside or mountain incline, but still be comfortable at any angle.

Gazebo—A gazebo can be freestanding or attached to a garden wall, roofed and open on all sizes to provide shade or shelter.

Planters and window boxes—Planters have become popular because they are both functional and ornamental. Additionally, some can be moved frequently to account for seasonal weather or just to create a change in scenery.

Picnic table—Picnic tables go well on a patio or a deck, but equally as well on the grass or under a tree in the yard. A traditional picnic table is all in one piece so that it wears well without a lot of maintenance.

Trellis—A trellis can function as a unique sun screen or it can be the framework for an outdoor hanging garden. Building it with pressure treated lumber can add life by minimizing rotting and other threats.

Trash can corral or compost bin—While many outdoor projects tend to be cosmetic in nature, here are two ideas that are both practical and pretty. With a trash can corral, you can hide unsightly trash cans and with a compost bin, you can reduce your own carbon footprint in a way that doesn’t take away from the visual appeal of the place.

 National average for a 30-year fixed loan slips slightly to 4.78 percent

Turmoil in the stock market and the European debt crisis are making life easier for American homebuyers and families looking to refinance: Mortgage rates are inching closer to a record low.

The window of opportunity may close soon. Home loan rates will rise if investors grow more confident and shift money out of the safety of government bonds, which influence mortgage rates.

For now, though, rates are tantalizingly low. The average 30-year fixed-rate loan sank to 4.78 percent this week, the lowest this year and barely above the record of 4.71 percent set in December. And 15-year loans are at their lowest rates in two decades.

"Strike now," suggested Greg McBride, senior financial analyst at Bankrate.com.

Some homeowners are doing just that. Applications to refinance surged this week to the highest level in seven months, the Mortgage Bankers Association said.

Anxiety over the European crisis has caused global investors to snap up Treasury bonds, which they view as much safer than other investments. Treasury yields have fallen as a result, taking mortgage rates down, too.

When the crisis eases, and especially if the American economy recovery stays on track, expect investors to move out of bonds and back into stocks. That would make mortgages more expensive.

"If the economy finally really shows sustained improvement, rates are definitely going to go up," said Fred Chamberlin, a consultant with Alpine Mortgage Planning in Eugene, Ore.

He suggests that homeowners looking to refinance move fast and not hold out for even lower rates. "If you want the bottom, the only way you're going to know it is when you've missed it," Chamberlin said.

As cheap as mortgages are these days, the number of loans being taken out to buy homes remains at its lowest point in more than 13 years. One reason is that a special tax credit for homebuyers expired last month. Many people had rushed to sign contracts by then.

Another obstacle: trouble qualifying for a mortgage. Borrowers need solid credit and a down payment of at least 3.5 percent. Banks tightened lending standards after millions of borrowers fell into default and foreclosure during the housing bust.

"They're really looking with a magnifying glass," said Steve Mevorah, a loan officer with Icon Mortgage Inc. in Las Vegas. "They're trying to make sure that they are flawless loans."

Analysts had expected mortgage rates to rise when the government ended a program designed to bolster the housing market. Instead, they fell because of fears that Greece would default on its debt.

Also keeping rates low is the government's decision last year to provide unlimited support through 2012 for Freddie Mac and Fannie Mae, which buy mortgages and package them into securities and help keep rates low.

 

Investors "are very comfortable with the guarantee that is in place," notes Credit Suisse mortgage strategist Mahesh Swaminathan. "That, for all practical purposes, is very strong government support."

Since the financial crisis ended, mortgages of all types have become more affordable — from the 30-year fixed to adjustable varieties.

The premium that borrowers pay to take out "jumbo" loans for more expensive homes has dropped by a full percentage point since late 2008, to just 0.8 percent, for instance.

Mortgage interest rates slipped for the second week in a row last week, with some rates reaching 2007 lows. According to Freddie Mac's Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 6.18 for the week with an average of 0.4 point. The previous week it averaged 6.22 with 0.4 point. The rate is identical to the year's low that occurred the week January 4. The 15-year FRM established a new low for the year at 5.92 percent, down five basis points from the previous week and two basis points lower than the first week of the year. Points were unchanged at 0.5. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) also established a new 2007 low at 5.93 percent with 0.6 point. Last week it averaged 5.95 percent with 0.5 point which was the previous low for the year. The one-year Treasury-indexed ARM was unchanged from the previous week at 5.49 percent. Average fees and points did decrease to 0.6 from 0.7.

 

Foreclosures in Charlotte and Sarasota counties continued their downward trend in April, with both reporting their lowest monthly totals in more than two years.

Charlotte had 220 initial foreclosure filings last month, a 24-percent drop from March and 47-percent slide from April 2009, according to figures released Monday by the Charlotte County Clerk of Courts.

In Sarasota, the county reported 442 initial foreclosures filings in April, a modest 3-percent decline from March and 49-percent plunge from the same time a year ago, according to the clerk of courts.

For both counties, it was the lowest post since September 2007.

ìThis is excellent news, and it really looks like weíve begun to turn the corner,î said Bob Gray, president of the Punta Gorda, Port Charlotte, North Port Association of Realtors. ìWe were the first in, and it looks like we will be one of the first out.î

Gray said declining foreclosures are restoring prices on traditional homes to more stable levels.

Fewer foreclosures entering the market also will help deflate the areaís existing home inventory, giving new construction a needed push. At the current pace, the areaís down to about seven monthsí worth of inventory, he said.

ìThere are a lot of crazy wild cards, but I have a positive outlook,î Gray said. ìWeíve got great weather, itís a great place to live, taxes are low and prices are still affordable. How could you go wrong?î

Foreclosures in Charlotte have now remained below the 300 mark every month this year.

Similarly, April was Sarasotaís second consecutive month with foreclosure totals under 500 ó a first since fall 2007, the data shows.

ìWeíre seei ng foreclosures trend downward, which has been positive over the last few months,î said Jim Masch, chief deputy with the Charlotte County Clerk of Courts. ìI think weíre probably over the curve and headed downward. Right now, itís looking good.î

Masch fears the area could see another surge of foreclosures later this year driven by double-digit unemployment rates.

Many seasonal residents have also returned north, which could spur further job losses in the hospitality sector.

RealtyTrac, an independent online database that tracks foreclosure activity, is scheduled to release its findings later this month.

ìThe more foreclosures we get off the market, the better off weíll be,î Charlotte County Commissioner Dick Loftus said. ìWe need to get people in those homes and get building again.î