Congress recessed and the flood insurance program expired last night. Lost in a debate over unemployment, COBRA payments and other issues, the National Flood Insurance Program was not extended and expired last night.
This could mean delayed closings if you are purchasing a property where the lender requires flood insurance, since the NFIP is the only one who offers it.
A vote in the Senate is scheduled for April 12.
According to an article in today’s South Florida Business Journal, a report by IHS Global Insight suggests that in grossly overvalued markets, prices dropped an average of 37% from 2005 until the fourth quarter of 2009. In Miami, prices have fallen 35.8% in that time frame. The report suggests that for the country as a whole, the real estate market is now slightly undervalued.
If you are planning on using the Home Buyers Tax Credit to purchase your home, time is running out.
The main reason the current mortgage market is like the diamond trade is because the Fed’s current policy has been to create the market for mortgage backed securities. The Fed agreed to spend $ 1.25 trillion through the first quarter of 2010 to purchase mortgage bonds, thereby keeping interest rates low and stimulating the housing market.
The video below, How Interest Rates Move, does a great job of explaining interest rates in general and how the Fed’s policy has affected the housing market the up until now.
[youtube]http://www.youtube.com/watch?v=F8mXNBDFCck[/youtube]
This house is great for entertaining; it is like having your own country club in your back yard! A North/South tennis court, pool, and large covered patio with electric awning and pass-through to kitchen make this deep acre lot the place to be.
A large kitchen with granite counter tops, spacious living and dining room, and 5 bedrooms provide a wonderful space for relaxing after a day of fun in the sun.
Sellers and buyers of real estate often fixate on what the price of a property is and in doing so, lose sight of the more important factor, cost. Price is what you get for the property if you are a seller and what you pay for it if you are a buyer. However, what affects both seller and buyer on a monthly basis is the cost. In addition to principal, interest, taxes and insurance costs, there are maintenance costs and maybe association fees.
If you are a seller, consider how much it is costing you to carry that property each month you don’t sell it. Based on the inventory of similar properties in your area vs the number of sales, you can calculate how much it is going to cost you to continue carrying that property for the average number of months it is taking to sell properties in your area. I suggest you cut your sales price and take the loss upfront vs slowly cash out each month.
If you are a buyer, realize that there has never been a better time to buy than right now. You have a large number of options, the interest rates are the lowest they have been in decades and there is the government tax credit that expires at the end of April 2010. If you are waiting for prices to go down lower, consider the cost of owning if the prices go down but the interest rates go up. If prices come down 10% more, but interest rates inch up only 1% your monthly payments are going to be roughly the same.
The days of the McMansions have been put on hold for now. What is selling in Miami are the smaller homes on smaller lots in neighborhoods that are close to shopping and transportation. Most of the homes fitting this description are under $500,000 and many are under $300,000 and are therefore perfect for first-time homebuyers.
If you have a home that fits this description, now is a good time to sell since inventories in these price ranges are low and buyers are often bidding above asking. Many of these buyers want to be under contract prior to the end of April in order to qualify for the First Time Homebuyers Tax Credit.
Although nationally existing home sales fell in December, sales of single family homes in Miami were up 37% over November. With the median price of both single family and condos down significantly and the expiration of the first First Time Homebuyers Tax Credit coming up in April, sales are expected to continue rising in the first quarter.
Great price for this 3 bedroom 2 bath home on double lot near Coral Gables, Miami International Airport, Downtown Miami. Wood floors add warmth to this 1948 charmer.