Home loan rates increased by .125% last week, in reaction to good economic news. As interest rates increase your purchasing power decreases, so why wait for interest rates to go up further? They are still at historically low rates.
Tag: buying real estate
48.5% of the increase in sales reported by NAR were under $250,000. In the South, 51.6% of the sales were under $250,000. The increase in sales was largely due to the expiration of the first-time homebuyers credit, which President Obama ended up extending and expanding. Most experts expect the next couple of months sales to slide back a bit.
48.5% of the increase in sales reported by NAR were under $250,000. In the South, 51.6% of the sales were under $250,000. The increase in sales was largely due to the expiration of the first-time homebuyers credit, which President Obama ended up extending and expanding. Most experts expect the next couple of months sales to slide back a bit.
Third quarter commercial sales decreased 70% across the board from last year’s third quarter sales. The price per square foot fell
- 12% for office
- 14% for multi-family
- 23% for industrial and
- 9% for retail.
Although the number of homes in foreclosure decreased in October from the same time last year, the overall number of foreclosures are still high and some experts think it will rise. According to RealtyTrac, there were 7, 741 foreclosures in Miami Dade as of October. Most of the first round of foreclosures were sub-prime and adjustable-rate mortgages that became unaffordable once interest rates reset. The potential for another round of foreclosures is due to the large amount of negative equity many people currently have in their homes and the high unemployment rate, 11.3%, in Miami-Dade County.
This new round of foreclosures will keep real estate prices low, and may push them lower, unless the current sales trend continues and a balance is reached where inventories are stable at a 6 – 9 month supply. The recently extended and expanded First Time Homebuyers Tax Credit, continued low interest rates and real estate prices that have retrenched, should help keep sales moving and inventories decreasing. The graph below is for single-family homes and condo sales for Miami-Dade County. Some areas within the county are already at a 6-9 month supply level.
According to the National Association of Realtors third quarter report, sales are up throughout most of the country. The biggest increase in sales was in Florida at 36.8%. This is no surprise considering that we are also the state with the highest number (9 out of the top 15) of metro area price decreases in the double digits. Miami-Fort Lauderdale-Miami Beach metro area had a price decrease of 24.6 percent. What this means to you depends on whether you are a:
- Seller – Pricing is everything in this market. Although sales are up, the high unemployment rate and continued high inventories mean that prices will not be going up any time soon.
- Buyer – If you are waiting for the bottom of the market, you probably missed it, but high inventory levels, low interest rates and the extension and expansion of the First Time Homebuyers Tax Credit, still equal a great time to buy.
- Investor – There are and will continue to be good buys but the high unemployment rate and inventory levels will continue to put downward pressure on rental and vacancy rates across the commercial/investment sector.-
More detailed information regarding specific real estate markets in Miami-Dade County can be found in Miami Real Estate – Single Family Homes Market Summary
On January 1, 2010, new rules adopted by the Department of Housing and Urban Development go into effect. These rules
are going to give borrowers a much more realistic estimate of what their closing costs are going to be so there are fewer surprises at the closing table.
- Good-faith estimates will now be on a uniform form, so borrowers can more easily compare settlement fees and loan charges among lenders.
- The form will break-down fees into three categories: those that can’t increase from original estimates, those that can increase by as much as 10% and those that the lender has no control over. Fees that can increase up to 10% are limited to a total 10% in that category so, if at closing, two items increase by 10%, the most the borrower will pay is the 10%.
Although the new rules do not guarantee a borrower’s actual closing costs will be exactly what the good-faith estimate states, it will be a lot better and closer to reality than many of these estimates currently are. The fact that these new uniform good-faith estimates are also going to be included in a new HUD-1 will allow borrowers to compare what they were told with the actual charges. The new HUD-1 will also break out the title insurance premiums so that the borrower can see what percentage is going to the insurance and what portion is a fee to the title agent.
What should you do if you are shopping for a mortgage now and plan on purchasing a home before the new rules come out? Use HUD’s shopping for a mortgage brochure to get you started.
What does the bill that President Obama signed into law on Friday mean to you if you are a first time homebuyer? It means that you did not miss out on the First Time Homebuyers Tax Credit and may be able to qualify for it now, even if you didn’t before. Why? Because the new First Time Homebuyers Tax Credit:
- expanded the credit to higher income individuals and married couples,
- expanded the credit to existing sellers who are looking to move up or downsize their primary residence as long as they owned and occupied the residence for five consecutive years out of the previous eight,
- extended the deadline until April 30, 2010 to be under contract as long as closing takes place by June 30, 2010
With so many foreclosures on the market today, many buyers think they can get a good deal in a foreclosure. Sometimes foreclosures are not the best deal. This apartment was stripped bare, including the entire kitchen, all bathroom fixtures, the doors, baseboards, even the air conditioner was ripped out! There was no way to do an inspection.
To minimize his risk, the buyer had several contractors come through to determine the cost of replacing everything and took those costs into account in his offer to the bank. His offer was accepted and he got a very good deal compared to the price of other recent sales in the building.
The National Association of Realtors reported a 21.2 percent increase in pending home sales for the month of September. This is the 8th consecutive monthly gain so, what does that mean in terms of the real estate market? The answer, as always, is it depends on the location. The NAR number is a national number so it takes in the number of pending sales across the country. There are some areas of the country, such as the Northeast, that had a decrease in pending sales from August to September.
On a national basis, the increase in pending home sales bodes well for the housing market since most pending sales result in closed sales within 1 – 4 months. If you are currently trying to buy or sell real estate, you need to look at what all the numbers are doing in the location where you are buying or selling. In addition to looking at pending and closed sales; look at the inventory; price per square foot of listings, pending and recently closed sales; and the number of short sales and foreclosures in each category. All of these numbers will give you a good picture of what is going on in your market and will guide you in your offers if you are a buyer and your pricing if you are a seller.