Tag: real estate

When Foreclosures Can Be A Good Thing

Let me be clear. A foreclosure is never a good thing for a homeowner. It signifies not only a loss off financial security but also perhaps a loss of cherished memories — not to mention good credit.

But in the big picture, having a lot of foreclosures completed means the real estate market is getting healthier.

So the fact that the Tampa Bay area is tops in the country in completing foreclosures may be a good thing for the recovery of the housing market in the local area.

Yes, Tampa Bay led all major U.S. metro ares in completed foreclosures last year as lenders took back almost 18,400 homes and condos. That’s up 5.3% from 2013. Most of the rest of the nation saw a decline in completed foreclosures according to CoreLogic.com, a leading real estate tracking website.

Most realtors say that the sooner the foreclosure properties are cleared out, the sooner the market can get back to normal and begin to grow.

Local Market Is Active

With strong real estate demand in the area, foreclosure properties are still in demand. Realtors say that most properties have multiple offers and that average days on the market are less than 30 days. This covers the entire range of the market from low-priced homes to those selling for up to $1 million.

  • In Hillsborough, 3,259 single family homes that had been foreclosed sold last year. That’s up 32% from the previous years. Median price rose 9%.
  • In Pinellas sales shot up 34% from 2,891 to 3,875. Median price was up 8% to $81K.

Lenders Spending To Improve Property

In a new development, it seems the market is so strong that banks are investing in rehabbing the properties to make them more competitive and get the selling price up. This can only help all homes in the area. With an improved neighborhood all values will go up and the distressed homes will sell more quickly.

Also homes in good condition can more easily get loans. This leads to more sales and more homeowners — always a good thing for a market.

Even homes in the very low end of the scale are getting some attention. If the home is not valuable enough to renovate then some lenders will “white box” the home by removing all cabinets and sprayin the entire interior with white paint to remove dirt and smells.

Legal System Is Helping

Judges seem anxious to move things along too. Pinellas County judges in particular seem ready to clear the books and move the foreclosure process along. This can only help in the long run to stabilize the market.

Yet it’s clear to real estate experts, that until the backlog of foreclosures and distressed homes is finally cleaned up, the market will continue to lag and housing prices and sales will be sluggish and slow to grow at a pace that is deemed healthy.

Of course, if you are a homeowner facing a foreclosure this is not good news for you. You are still experiencing the pain and the frustration every day. If Brown & Associates can help let us know by contacting us here.

Tampa Bay Home Sales Up Big-Time

In what has to be considered a very good sign, Tampa area home sales were up 18.4% in November. Median prices rose 6.7% too.

Now you know things have been getting better slowly over the last few years, but this may mean something more significant. Perhaps the real estate market is really getting back to normal… whatever that is.

But all the factors are in line.

Not only were sales and prices up but some other significant statistics were looking good.

  • Median home prices were up to $175K in Pinellas which puts it equal to Hillsborough which has traditionally had higher prices.
  • Bank-owned homes were selling well which is goo for clearing up the foreclosure and short-sale backlogs. Bank sales were up 53% and median prices were up to $106K from $83K. Hillsborough foreclose sales were up even more to $125K from $93K.
  • Of the 20 major Florida metropolitan areas, Tampa Bay was 5th highest in single-family home sales.
  • Condo sales in Pinellas were up 15.4%
  • Cash sales rose 13.4% in Pinellas indicating investors are still active in the market.

Compared to the nation as a whole, Florida looked mighty good with national sales rising only 2.1% in November nationally compared to Florida’s overall increase of 3.5%.

“The real estate market in Florida has settled into a nice sustainable groove,” said Florida Realtors Chief Economist John Tuccillo. “We are seeing gradual changes, mostly in the right direction, on all of our metrics.”

What Does It All Mean?

If you are an underwater homeowner, this can only be good news. Your “dry-out” is continuing and you just might get your head above water at some point.

For those who are behind on payments and might be facing foreclosure, it means banks might be a little more willing to negotiate with you.

And the option of a short sale is beginning to look less attractive, unless you are in a situation where you can get the bank to work with you. They clearly have less reason to sell low with a market where prices are on the way up.

It certainly means you want to have a good real estate attorney working for you. You need to have someone who understands the current market and can give you some clear options. Please contact Brown & Associates. We want to help you get the answers you need. Contact us here or call 813-289-8485.

Mortgage Help Slow To Come In Florida

Florida’s Hardest Hit Fund program was created to help underwater homeowners reduce their mortgage amounts and get their payments to a place they can afford. It was created back in 2010 by the Federal Government to reduce the foreclosure rate in the hardest hit states like Florida. It provides as much as a $50,000 reduction in the loan amount for qualifying homeowners.

But administration of the program has been so slow some homeowners have been waiting years to find out if they qualify and get some relief.

The Federal Program earmarked $7.6 billion for all the hardest hit states. Florida’s share was $1.1 billion of which Florida has only spent out about 44%. Other states like Oregon and Rhode Island have spent over 85% of their money.

Why the foot-dragging here in Florida?

Some say it’s partly Governor Scott’s hesitancy to use Federal money of any kind. Florida also started out slowly by creating only a small pilot program in Lee County to test the waters. Meanwhile many homeowners went into foreclosure and lost their homes because they couldn’t get relief in time. For many it was just too little too late.

“If Florida is lagging behind, it an embarrassment and shows lack of concern for the folks who’ve been hit the hardest,” said Ryan Brown, a spokesperson for Sen. Bill Nelson.

At Nelson’s request, the Treasury Department has been looking into questions raised by a Tampa Bay Time’s story that said law-abiding homeowners were slow to get money, but often the program was helping felons and tax cheats to get money.

In response, the Florida Housing Finance Corporation, the agency administering the program, said they are on track to use up all the money by 2017. Again this may be “too little too late” for many struggling homeowners.

Tampa Bay Times article mentioned many homeowners who had frustrating stories of the slow process they have been faced with when trying to qualify for funding. Many have waited months just to hear from administrators after filing online. One homeowner waited so long he got behind on his payments and then no longer qualified for the program. One stipulation of the program is that the homeowner is current with mortgage payments.

Other stipulations of the program include…

  • The home must be the primary residence of the borrower
  • The unpaid balance must be less than $350,000
  • Household income cannot be more than 140% of the average median income for the area ($80,360 in Tampa Bay)
  • The homeowner must owe more than 125% of the current value
  • The homeowner must be up-to-date on payments

You can learn more about the state’s program here.

The Hardest Hit Fund could clearly be a home-saver for many homeowners. But a slow applications process and our own state government’s foot-dragging on implementing the state’s program, have left many homeowners struggling to make mortgage payments, or worse, facing foreclosure.

If you need help with this process, please contact Brown & Associates. We are anxious to help you solve your mortgage problem. Contact us here or call us directly at 813-289-8455.

Home Ownership Not For The Weak of Heart… or Pocketbook

Home ownership is at the lowest point since 1995.

Of course part of the reason is the economy is still not great. But home prices went down big-time after the real estate crisis, so you’d think that would have helped those first-timers and the lower income bracket. Plus interest rates are at some of the lowest levels in decades. So you think it would be a great time for new homeowners to get into the market.

But that’s not what is happening.

Of course, part of the reason is getting a loan is harder than ever. Lenders are being very stingy with money and a first-time buyer needs at least a 10% down payment and sometimes much more. Plus they need very good credit with a score over 750.

That leaves a lot of people out.

Affordability Factor

The fact is, depending on where you live, having a good job doesn’t mean you can afford a home. Prices are still very high in the major metro areas where many millennials want to live like New York, San Francisco, Boston, and Seattle.

Sure there are plenty of good-paying middle class jobs in those areas. But even if you make over $100K in those cities, it’s not enough to buy a decent family home. In fact, 40% of households in those cities make more than $100,000 per year, but the share of residents who own homes has been steadily declining. And that’s a big reason why that home ownership level of 64.4% is so low.

During the real estate boom years a few years ago, you could buy a home with little or no money down. At worst you had to come up with 5% down payment. Many times you didn’t need any money down.

But these days, after the real estate bust, lenders aren’t taking any chances. Of course, who can blame them. Many got burned. But some might say are taking things a little too safe.

For example…

Fannie Mae and Freddie Mac just came out with a policy that says you only need 3% down to get a Fannie or Freddie insured loan. But lenders like Bank of America say they will not be going along with that guideline. And some say that in the big and most popular areas, 3% is not enough to make much of a dent in those markets. For the typical home in those big cities, where average home prices are up around $800K, 3% is still $24,000 dollars. It’s not common for young millennials to have that kind of money sitting around. Even with help from family, there’s few young professionals that can come up with that. And some young families haven’t had time to build a good credit score.

The Tampa Area

And you’d think the Tampa Bay area would be a good place for millennials to look for a home. Median home prices around here are under $200K. But there are far fewer good-paying jobs and that keeps young professionals away. Often even the good paying jobs are well under $50K and a starting teacher in Florida barely makes over $40K. So in Tampa Bay, and Florida in general, homes are still difficult to afford for a young professional. That’s why those big paychecks in the big cities are so attractive.

Generally, a lender looks for incomes that are at least one-third of the home price, or homes selling for 3-times the annual income, or a 3 to 1 ratio. Yet in some big cities with high home prices, the ratio jumps to 5-to-1 or even 7-to-1 in San Francisco for example.

Trulia.com says that a $90K salary would be enough to buy only 28% of the homes in San Francisco. In New York it would only buy about 2% of available homes — a small studio without much room for a family. And that’s income is considered middle class by most standards.

So it’s not hard to see why the real estate market, particularly in some big cities, is very slow and just doesn’t make sense for the typical first time buyer.

Makes you wonder if it ever will again.