Is Now the Time to Buy: Part VI (Why the end of the year is the best time to buy)

Over the last decade I've sold a fair amount of property in the last quarter of the year, particularly in December/January. So I thought I would put together a quick post highlighting the benefits of buying (either putting under contract or closing) before the end of the year.

1. Banks want to close loans by the end of the year. There is always a mad push to close loans before December 31st.

2. Banks want to sell off as much REO inventory by the end of the year and there are deals to be had. This is a very important point as Special Assets are closing their books for the year and will try and move as much inventory as possible in the month of December.

3. Sellers want to close by the end of the year and start the new year fresh.

4. Some Sellers have capital gains issues and thus want to close before the end of the year. Further, the current political establishment is hell bent on raising taxes and capital gains is one area they have been eyeing  So any seller with a capital gains issue wants to close and get paid BEFORE the rates on capital gains goes up

5. Most people are not seriously looking during the "holidays" (most of December) so its an excellent time to go after a property. Particularly in an aggressive "sellers market" like we have currently here in Miami. There are far fewer buyers vying for the same properties in December thus the multiple offer scenarios we've all become accustomed to tapers off some.

I've done many deals in December simply because my clients took advantage of the "slow period" in Real Estate.

Many buyers fall into the "its the holidays so I'll start looking again after the New Year" viewpoint. This is normal, its that time of year.

But my experience has told me that this is the BEST time to go looking for property. There's less competition  and most sellers (banks included) are more motivated to sell/do a deal.

Fla.’s housing market continues positive trends in Oct. 2012

ORLANDO, Fla – Nov. 19, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in October, according to the latest housing data released by Florida Realtors®.

“With Thanksgiving just around the corner, we have a lot to be thankful for here in Florida,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that Florida is on a positive path and has been for months. Pending sales, closed sales and prices are trending up.”

Statewide closed sales of existing single-family homes totaled 17,779 in October, up 25.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 56.7 percent over the previous October. The statewide median sales price for single-family existing homes in October was $145,000, up 9 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year. In California, the statewide median sales price for single-family existing homes in September was $345,000; in Massachusetts, it was $294,900; in Maryland, it was $244,357; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 8,252 units sold statewide last month, up 16.4 percent compared to October 2011. Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $107,000, up 20.2 percent over the previous year. NAR reported that the national median existing condo price in September 2012 was $181,000.

The inventory for single-family homes stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Once again, everything that should be going up in the market is going up, and everything that should be going down is going down,” said Florida Realtors Chief Economist Dr. John Tuccillo. “As impressive as the year-over-year gains for October are, far more impressive are year-to-date gains of 2012 over 2011. They indicate the depth and resilience of this recovery.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

© 2012 Florida Realtors®

Is Now the Time to Buy: Part V

Over this past week a slew of new indicators have come out all pointing to a vigorous rebound in South Florida housing. Over the past year I have been running this series in the hope to help my clients keep up with the voluminous data about the housing market.

It seems all the indicators continue to indicate strengthening: with prices up, foreclosures down, construction way up, and housing starts way up; further strengthen my position that if your in the market to buy (or are thinking about it) now is the time to do it.

Home vacancy rate falls to pre-housing bubble levels

Foreclosure rates and mortgage delinquency down in August

Contracts for future construction jump 66% through September

South Florida housing starts jump 41% in Q3

Home prices rise in August

If you have any questions please contact me. I'm hear to help you take advantage of the new housing "boom"

Homes are selling faster (reprinted from floridarealtors.org)

WASHINGTON – Oct. 23, 2012 – Inventories of for-sale homes aren’t the only thing dropping. The amount of time homes stay on the market is growing shorter as well – down 11 percent in the last year – according to the latest Realtor.com data.

Homes were listed on average 95 days, according to September housing data. That is down from 107 days a year earlier.

Homes sell fastest in Oakland, Calif., where the median age of the inventory averages 21 days – 57 percent below one year ago. Denver, Colo., boasts a median age inventory of only 38 days, followed by fast-selling markets of Stockton-Lodi, Calif., with 43 days, and San Francisco with 44 days.

As the median age of the inventory is falling, inventories of for-sale homes continue to hover at record lows too, dropping 18 percent last month compared to a year ago.

“There’s a recovery,” Curt Beardsley, vice president of Realtor.com, told BusinessWeek. “Our market times are low and there’s actually a compression of inventory.”

Homebuyer demand is increasing, with housing affordability still high and ultra low mortgage rates that have pushed homebuyers’ purchasing power higher. The rise in demand has caused asking prices to also rise. Last month, the median asking price was $191,500, up 0.8 percent compared to a year earlier, Realtor.com reports.

Source: “Listings of Homes for Sale Drop as U.S. Housing Recovers,” BusinessWeek (Oct. 15, 2012) and REALTOR® Magazine Daily News

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Fla.’s housing market continues upswing in Sept. 2012 (reprinted from Florida Realtors® website)

ORLANDO, Fla. – Oct. 19, 2012 – Florida’s housing market had higher pending sales, higher median prices and a reduced inventory of homes for sale in September, according to the latest housing data released by Florida Realtors®.

“Florida’s real estate market is no longer in recovery mode – stability and growth gain solid footing,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Realtors across the state are reporting consistent increases in home sales and median prices, and multiple offers from buyers isn't unusual. In fact, increasing buyer demand in many local markets is creating inventory shortages – and that’s putting pressure on prices. For sellers who may have been reluctant to enter the market, it’s now time to reconsider. Conditions are turning to a sellers’ market.”

Statewide closed sales of existing single-family homes totaled 15,643 in September, up 2 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 40.1 percent over the previous September. The statewide median sales price for single-family existing homes in September was $145,000, up 7.4 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in August 2012 was $188,700, up 10.2 percent from the previous year. In California, the statewide median sales price for single-family existing homes in August was $343,820; in Massachusetts, it was $317,750; in Maryland, it was $255,498; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 7,329 units sold statewide last month, down slightly (-2.9 percent) from those sold in September 2011. Meanwhile, pending sales for townhome-condos in September increased 30.6 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $105,736, up 18.8 percent over the previous year. NAR reported that the national median existing condo price in August 2012 was $176,700.

Last month, the inventory for single-family homes stood at a 5.2-months’ supply; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“The onward march of Florida's housing market continues,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Inventories have now tilted to the point where we truly have a sellers’ market forming. Prices are up smartly and have been for quite a while. It’s getting to the point where Florida is the place to buy, but it may soon move out of reach for many households.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.47 percent in September 2012, lower than the 4.11 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website (www.floridarealtors.org) and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the September report. Or go to Florida Realtors Media Center (http://media.floridarealtors.org/ and download the September 2012 data report PDF under Market Data. (http://media.floridarealtors.org/market-data)

© 2012 Florida Realtors®

Obama-Romney Debate ‘Ignores’ U.S. Housing And Foreclosure Problems (reprinted from foreclosure.com)

Obama-Romney Debate ‘Ignores’ U.S. Housing And Foreclosure Problems

October 17, 2012 By Foreclosure.com Leave a Comment

With all the spirited banter last night about tax cuts, 47 percenters, foreign policy, job creation and all-things political, it appears the Barack Obama and Mitt Romney “ignored” perhaps one of the biggest economic issues facing the United States during their second presidential debate at Hofstra University:

Housing!

There are countless pointed reactions and passionate thoughts about “who won” the debate. And depending on which news channel you watch or in which political direction you lean, you’re going to get a mixed bag of reactions and have formulated your own opinions. That’s cool — we’re not here to pick sides, not even close, but shed light on a glaring omission. Housing is a serious issue and it has been since the mortgage meltdown more than a half-decade ago that triggered the national foreclosure crisis.

So why aren’t the 2012 presidential candidates talking more about it?

Zachary Goldfarb of the Washington Post provides a potential explanation that splits party lines rather evenly:

“Both Republicans and Democrats agree that one way to help the economy would be to launch a massive program to allow Americans to refinance their home loans at low rates. Obama has suggested such a proposal, as has a top adviser to Romney. Yet neither Obama nor Romney has an incentive to discuss housing. Housing has been arguably one of Obama’s weakest areas as president; he has acknowledged it was the most stubborn problem he faced. And Romney’s approach has been largely to allow the free market to sort out the woes of the housing market, allowing those who got in over their heads to default. Neither is a popular talking point.”

Perhaps unpopular, but certainly worth debating when the dynamic duo hit Lynn University in Boca Raton, Fla., next week for their third and final verbal sparring session prior to the election on Nov. 6, 2012. A fine institution of higher learning nestled in the heart of South Florida, one of the hardest-hit foreclosure hot beds in the nation.

To read Obama’s policy on housing click here and to read Romney’s click here.

Photo by VOA [Public domain], via Wikimedia Commons

Is Now the Time to Buy: Part IV

I track weekly indicators in the housing market so I can best represent my clients. As a buyers agent its important for me to keep abreast of the latest trends and statistics. After-all I only make money when I sell houses. So I want to sell lots of them.

But in order to do that, I need to know what is going on in the marketplace. When and where to buy is often just as important as what to buy.

In the first three parts of this series (Is Now the Time to Buy) I covered some of the key factors for buyers like: the inventory shortages, the affect of supply and demand on rising prices, the shadow inventory, the cost of capital, the 10 year lows in median home prices, and the cost benefit analysis between renting vs. buying vis-a-vis mortgage rates.

This week two more indicators from major media outlets confirm my theory that now IS the time to buy.

CNN Money is predicting another housing boom. According to them: Signs of recovery have been evident in the recent pick ups in home prices, home sales and construction. Foreclosures are also down and the Federal Reserve has acted to push mortgage rates near record lows.

They further cite a recent Barclays Capital report "forecasting that home prices, which fell by more than a third after the housing bubble burst in 2007, could be back to peak levels as soon as 2015".

This makes sense as it coincides with the same 2015 time frame announced by the FED a few weeks ago regarding interest rates remaining at record lows, coupled with the supply and demand pressures that are currently driving up prices, as well as the "inevitable" inflation that the FEDs QE policies will trigger, driving up prices even higher.

A few days later the Washington Post ran a story about how "house flipping" is again on the rise because "a market where home prices are appreciating is much more forgiving for flippers than a market where prices are depreciating", driving a renewed interest in this industry.

Not to be confused with the illegal version which involves collusion, inflated appraisals, and fraud, "house flipping" is a genuine business engaged in by savvy entrepreneurs across the country. Buying, fixing and reselling goods for a profit is as old as apple pie.

For the last few years HUD has yearly extended its waiver against its own anti-flipping rule of 2003, to encourage private investors to help absorb and reintegrate the surplus of foreclosed and otherwise abandoned or unused homes. This waiver expires at the end of 2012 so they would have to renew it again for another year, but I'm betting they will.

Private real estate investors who buy, fix, and sell homes are the perfect mechanism to help banks liquidate their remaining inventories, and the fact that "flippers" are coming back into the market place is a very good thing vis-a-vis inventory (which affects the supply side of the pricing curve). 

However more flippers means more buyers, which means more competition, which means more demand, which means rising prices.

But as I see it we are on the bottom of this upward trend (for a loose comparison buying now would be like buying in 2001 or 2002 before the last housing boom of 2005-2006).

So from my perspective there seems to be more and more evidence pointing toward an increasingly stronger housing market, at least in the short term. 

I still have to answer emphatically YES, now is the time to buy!

As always I look forward to your thoughts and feedback.