Nat’l foreclosures hit 5-year low in Sept. (reprinted in its entirety from Florida Realtors® website)

WASHINGTON – Oct. 11, 2012 – RealtyTrac issued its foreclosure report for September and the third quarter. Nationally, the news is good: Foreclosure filings – default notices, scheduled auctions and bank repossessions – decreased 7 percent from the previous month and dropped 16 percent in one year. It was the lowest U.S. total since July 2007.

Florida, however, rose to the top of the list for foreclosure starts (LIS) for the first time since 2005. According to RealtyTrac, much of the reason stems from Florida’s status as a judicial foreclosure state. The foreclosure process takes less time in states that don’t require court involvement; as a result, many non-judicial states have already cleared out much of their real estate owned (REO) housing stock.

While an increase in foreclosures appears to be a threat to Florida’s housing recovery, many Realtors say they don’t have enough foreclosures – and that an increase would be welcome.

“Right now, we’re seeing very, very few foreclosures coming onto the market,” Scott Agran, head of Lang Realty in Broward and Palm Beach counties told the Sun Sentinel. “We’re starving for inventory. We could take as much as the banks want to give us.”

National findings

• The monthly and quarterly decrease was driven mostly by big drops in non-judicial foreclosure states, such as California, Georgia, Texas, Arizona and Michigan.

• Several judicial foreclosure states – including Florida, Illinois, Ohio, New Jersey and New York – registered substantial year-over-year increases.

• U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing a bump in foreclosure starts in the second quarter.

Florida findings

• Florida foreclosure starts (LIS) in September increased 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase. The state’s foreclosure rate ranked highest nationwide for the first time since April 2005.

• In September, Florida bank repossessions (REO) increased 23 percent year over year – the ninth straight month with an annual increase.

• In the third quarter, all levels of Florida foreclosure activity increased 14 percent, but nine states saw a greater percentage increase. In New Jersey, foreclosure activity spiked 130 percent.

• In the third quarter, one of every 117 Florida homeowners with a mortgage was in some stage of the foreclosure process.

• In the third quarter, it took an average of 858 days in Florida to go through a complete foreclosure, which is a slight drop from 861 days in the previous quarter. It took longer in only two other states, New York (1,072 days) and New Jersey (931 days).

© 2012 Florida Realtors®

Is Now the Time to Buy: Part III

One of the biggest questions I field from my clients on a weekly basis is whether or not the market has "bottomed-out" and is now the time to buy.

There are many factors that go into answering such a question so I thought I would address a few of them here.

1). A few weeks ago the Federal Reserve said it would keep the federal funds rate at zero to 1/4 percent at least through mid-2015.

Notwithstanding what impact this will have on inflation after 2015, this effectively means that mortgage rates will stay at record lows over the coming years.

This is a major plus point for any buyer in today's real estate market as with the cost of money at record lows, buyers can buy "more house" than ever before.

2. Inventories are shrinking nationwide (and in my backyard) bolstering prices. Its a simple supply & demand equation. As the inventory drops (supply) and demand remains constant (or even rises) prices are going up.

The big question on this front is whether the shrinking inventory and subsequent increase in price is an artificial new bubble being created by the banks who are sitting on large #s of "shadow inventory".

There is no easy answer to this question but recently I did an analysis of the foreclosure filings in my back yard juxtaposed to the rate of distressed sales and I did find the lis pendens filings remained constant (actually slightly up) from 2011 to 2012 while the # of distressed sales has markedly decreased (over 40% in my area).

So on this point a buyer has to make a decision. Do they wait for the banks to bleed out the remaining distressed inventory, which could take years at the current rate, and possibly buy a home at a lower price per square foot, or do they buy now while prices are starting to tick up again, risking a potential future loss of equity should there be another crash.

This is a personal question each buyer, and their buying circumstances, must answer.

However there is one BIG caveat. Will the banks exhaust their shadow inventory before the FED raises interest rates in 2015 (and by all accounts eventually they must).

For when the rates rise, (and all accounts I read predict a rapid inflation in the future) then whatever gain in price drop by the "over supply" of banks dumping their remaining inventory, will be offset by the increase in the price of money.

By way of example, a mortgage of 200,000 at 3% is a P&I of $843 while that same mortgage at 6% jumps to $1199 a 27% jump in the cost of money. Homes would have to drop in value 27% just to have a net zero affect on a buyer.

Granted one can't predict what interest rates will be in 2 years, assuming inflation kicks in, but I think its highly unlikely prices will drop an additional 27% (especially after the 50+% they've already dropped since 2008).

Further, if rates go even higher (to even 8% which is not unrealistic) then all bets are off since that same 200,000 mortgage now costs in P&I $1467 or a 43% increase in the cost of money.

So as I have stated in previous posts (notwithstanding my inherent bias as a Realtor wanting to sell you a house) the facts and statistics seem to suggest NOW is still the time to buy and take advantage of historically low interest rates, even with lower inventories and rising prices.

As always I welcome your feedback. What do you think?

Is Now the Time to Buy: Part II

Statistics don't lie (unless they are of course manipulated like the unemployment numbers we are fed monthly), and according to NAR's latest numbers the median home price is at a 10 year low.

This is an overall stat and it will vary from city to city. For instance prices are actually going UP in my back yard of Coral Gables, FL.

Most of the same factors I mentioned in a previous post still apply.

However if you are employed, have your debt to income under control, and a decent 620+ credit score, most likely you CAN get a loan.

Quick Real Estate Survey

I am doing a project to enhance my services and was hoping you’d answer a few quick questions.

1. What do you consider a Realtor should provide you?

2. What do you expect from your Realtor?

3. Are you planning to buy or rent in the next 12 months?

4. Anything else I should know?

Thanks for your time.

Ronald S. Meyerson P.A.
Realtor Lic #3044035
Melo Real Estate
email: ronmeyerson@gmail.com
Blog: www.theycallitlife.blogspot.com
Website: http://meyersonron.sef.mlxchange.com/
Video Chat: http://webvideocall.oovoo.com/callme/apache2112/245

Is Now the Time to Buy

With all the back and forth in the Economy, the Stock Market, the Unemployment numbers, one may ask themselves, "is now the time to buy"? Really?

Well aside from my inherent bias as a Realtor, my answer is an emphatic YES.

Why?

I've been renting houses now for nearly two years. After dozens and dozens of rentals I have noticed a single common factor in the properties I rent. The mortgage to buy it would be LOWER than the current market rent!

This may seem astonishing and even counter-intuitive at first, but even in premium locations like Coral Gables, Coconut Grove and the like, most rental prices are higher than a standard mortgage.

Couple this with the still historical lows in mortgage rates (still hovering around 4%) and the locked in interest ceiling by the FED until 2013, and I have to say emphatically YES to my rhetorical question above.

There are some caveats however.

For one you'll need better than average credit. Right now banks aren't really looking at borrowers under a 680, although some will still do a 620 or above.

Also the document process is long, and arduous. After the mortgage mess underwriters have become EXTREMELY gun shy and check and double check everything but your blood type before issuing the coveted "clear to close".

Third, expect delays. Where it used to take 30-45 days to close a deal, now 60-90 days is the norm while underwriters "take their time" crossing and dotting everything. (Thank you Dodd-Frank).

Finally, unless you qualify for FHA making your down-payment a paltry 3.5%, expect 10-20% down. You'll need cash. Also on Nov 18th FHA loan limits were changed, but this won't affect most buyers.

But even with these "limitations" my answer is still a resounding YES.

Now IS the time to buy.

THIS IS A RANT. YBW

I've written on the subject of communication in the past and my frustrations with its absence in the Real Estate world. But after this week, I think there needs to be a new rule. If you take longer than a day to respond to a communication, you get penalized somehow.

First the mandatory rhetorical question. In today's technology driven business world, with Smartphones, Blackberry's, Laptops, etc, how difficult is it to respond to text messages, emails and phone calls in a timely manner? How long should one have to wait before they are entitled to a little upset?

I ask these questions because it is still routine in my business to have to wait days for a response to an offer, an inquiry, or a request to show a property.

And when you represent a buyer or renter, time is definitely of the essence, and sometimes a few hours makes all the difference in the world.

If you agree that Realtors should respond to their communications within an hour or two of receiving them, (death and hospitalization of course still acceptable excuses) then please pass this blog post along to everyone you know.

Maybe if enough internal group pressure exists amongst other Real Estate professionals, the lazy ones will get the message.

How the CRA Fueled the Housing Bubble

Here is a great article that further delineates in great detail the conclusions I drew in my last blog post. Enjoy!

How the CRA Fueled the Housing Bubble