South Florida Real Estate Blog - Updates & Realty News

Most everyone involved in a foreclosure says they never wanted to go through the process in the first place: Not the homeowners at risk of losing their houses, not the banks that loaned them the money, not the judges who must rule on the cases.

Still, court clerks say more than 135,000 foreclosures could be filed in Miami-Dade, Broward and Monroe counties this year -- compared to a tri-county total of about 17,500 in 2006.

The avalanche of filings has overwhelmed the civil courts and prolonged the pain of foreclosure for all: Homeowners are living in limbo; banks are losing money; and the ripple effects are felt from condo associations that can't collect dues to municipal governments that must spend scarce resources to shutter or maintain abandoned houses.

``Everybody's getting burned in this thing,'' says Judge Jennifer D. Bailey, who oversees civil courts for the 11th Judicial Circuit, which covers Miami-Dade County. ``The bank's not going to come out of this in one piece. The people who owned the property, whether they're homeowners or investors, are not going to come out in one piece.''

Even the courts are struggling to hold together, as foreclosures crowd the calendars of judges who also must tend to traffic, probate and other non-criminal cases. complete story

Source: MiamiHerald.com - Daniel Chang

A new forecast predicts Miami-area home values will plummet another 30 percent by June 2010, the worst price decline among 381 metropolitan areas ranked

While recent evidence shows South Florida's home values have begun to flatten out, a new forecast says prices of single-family homes will take another serious tumble in the year to come.

And, among 381 metropolitan areas ranked nationwide, Miami will be the biggest loser, according to Fiserv, a financial information and analysis firm.

The firm predicts Miami home values will plunge another 29.9 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Orlando fared second-worse, with values shrinking 27 percent. Prices are forecast to fall another 26 percent in Fort Lauderdale.

Nationwide, Fiserv predicts home values will slide another 11.3 percent

In Miami, that means the median home price would fall to $150,500 by next June and $153,100 in the Fort Lauderdale metro area. The price deductions are calculated from the median price at the end of the second quarter.

The forecast contradicts recent evidence from the highly regarded S&P/Case-Shiller index as well as median price data from the Florida Association of Realtors. Both measures have shown single-family home values mellowing in South Florida. Fiserv bases its forecast on Case-Shiller data, but also other economic variables, including interest rates, demographic trends and labor market conditions.

Jack McCabe, a Deerfield Beach-based real estate analyst, said the Fiserv forecast was unrealistic. He predicts prices will fall another 10 percent to 15 percent regionwide before bottoming out. After that, they will remain flat for two more years, as the effect of a massive number of foreclosures lingers.

McCabe said Case-Shiller data generally lagged other real-time housing indicators available to analysts. He agreed, however, that South Florida's housing woes were not over.

``Distressed properties are going to fuel the inventory pipeline through 2010,'' McCabe said.

``Because they are distressed, they are going to have the lowest asking prices and they are going to dictate market conditions.'' 

Source: MiamiHerald.com - MONICA HATCHER

Stop Foreclosure  Save Your Credit Florida Short Sales

For months now, it appeared that Southwest Florida real estate prices had bottomed out.

But two analyses commissioned by the Herald-Tribune suggest that a second wave of home foreclosures looms and will likely cause a new flood of homes for sale — and even lower prices, possibly lasting through 2011.

Zillow.com analyzed monthly median home values in Southwest Florida since the start of the decade.

The online home valuation service found that the rate of decline in markets from Bradenton to Punta Gorda has slowed to the point where it is statistically flat, meaning it rose or fell by about 1 percent or less from July to August.

That would seem to imply the bottom many real estate experts have noted, but Zillow’s chief economist thinks that the results only point to a respite before the new wave of foreclosures pushes prices down again. complete story

Source: Herald Tribune - Tom Bayles

Stop Foreclosure  Save Your Credit Florida Short Sales

While obstacles to short sales remain, real estate practitioners say the process is becoming more efficient. Rather than waiting six months or more to push through a deal, agents say banks are more willing to negotiate prices up front.

"My gut feeling is that short sales seem to be the preferred avenue for distressed property now," says Cindi Hagley of San Ramon, Calif.-based Windermere Welcome Home. "It's cheaper for [banks] to do a short sale than go all the way to foreclosure."

The short-sale process has become more manageable now that banks are willing to pre-approve prices, reach out to underwater borrowers who have listed their homes for sale, implement Web-based systems that manage the short sale process, and add staff dedicated to short sales.

Additionally, the U.S. Treasury is set to implement a streamlined short sales framework and offer incentive payments of $1,500 to home owners and $1,000 to both loan servicers and second-lien holders.

Borrowers also prefer short sales because Fannie Mae requires them to wait only two years to own another home or even less than that if they were not delinquent. By contrast, those who lost their homes to foreclosure have to wait five years.

Source: Realtor.org

Stop Foreclosure  Save Your Credit Florida Short Sales

If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years -- though it underestimated the scope.

Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years.

If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.

In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.

Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%. compete story

Source: CNNMoney.com - Les Christie

Stop Foreclosure  Save Your Credit Florida Short Sales

So far this year, Florida is second only to California in the number of bankruptcy filings, thanks to sinking home prices and lost jobs.

While Wall Street has been obsessing over the market's return to 10,000, Main Street has been focused on a darker threshold: one million.

U.S. bankruptcy filings this year passed that mark in September, putting the nation on track to see the highest failure rates since laws for bankruptcy were made more strict in 2005 and filings plummeted.

From January through September, Florida saw 70,799 bankruptcies, making it second only to California in terms of volume, and 16th nationwide on a per-capita basis, according to AACER, a bankruptcy-data and management firm. That's a 48 percent increase from the same time frame in 2008.

Fueling the filings are sinking home prices and lost jobs that have left millions deeply in debt and turning to bankruptcy as a way to shake off lenders.

Those on the financial edge were the first to tumble, but now the troubles are creeping up the socio-economic ladder, local lawyers said.

Miami consumer attorney Samira Ghazal said she is seeing more middle and upper-class clients in financial straits. Recently, she counseled a doctor who lost his job and then ``lost his shirt'' in the real estate market.

``Before, this was a blue-collar issue,'' she said. ``Now it's a white-collar issue too.''

Marisela Gonzalez, 49, of Miami-Dade resorted to bankruptcy in June of last year in hopes of holding on to her house, which had gone into foreclosure. The gambit failed: Gonzalez lost her home and is now adjusting to a world where credit -- even for the little things -- is denied.

Recently, she had to cancel dance lessons for her daughter because she couldn't pay for them in cash.

``I don't even think about things like buying a new car,'' said Gonzalez, who has been a teacher for special-needs children for almost 10 years. ``I would just like my kids to be involved in extracurricular activities.''

The vast majority of bankruptcies in the state are personal, not commercial. According to AACER, there were 68,186 noncommercial bankruptcies during the first nine months of the year versus 2,613 commercial.

Most of those are Chapter 7 bankruptcies, meaning outright liquidation to pay off creditors, rather than Chapter 11, which involves restructuring debt payments.

While those figures are dramatic, they are only a rough sketch of the true problem. complete story

Source: MiamiHerald.com - Jim Wyss

Stop Foreclosure  Save Your Credit Florida Short Sales

Recent data suggests the dismal housing market is making a turnaround.

•U.S. home prices are up nearly 4% from their low point in April.
•The Standard & Poor’s/Case-Shiller Index has risen for three consecutive months.
•New home sales are up 58% on an annualized basis since January.

 
Even Robert Shiller admits, "the suddenness of this shift surprised me."

Whitney Tilson, founder of T2 Partners agrees. "The rebound has been stronger than we've anticipated," he says. Still, the author of More Mortgage Meltdown remains "confident this is the mother of all head fakes."

Tilson points to the following reasons for the sudden upturn in housing.

•Low Interest rates
•First Time Home Buyer Tax Credit
•Falling Prices
•Seasonality

But Tilson says there's still supply and demand issues that will hamper the recovery. The National Association of Realtors reports housing inventories -- the overhang of unsold homes -- are at an 8.5 month supply, well below its recent peak. But "the total inventory is triple what's actually being reported," Tilson says, estimating there's twice as many homes in foreclosure or near foreclosure that aren't for sale yet.


Tilson doesn't forecast "another calamity to come," but thinks housing is won't bottom until those homes are off the market, forecasting at least another 10% decline in prices and no true bottom for another year, at the earliest.

Source: Yahoo.com Finance - Peter Gorenstein

Stop Foreclosure  Save Your Credit Florida Short Sales

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When Will This Horror Show Come to an End? -- the title of a recent report by Wachovia Corp. economists -- aptly summarizes what's on many South Floridians' minds these days.

The deep downturn in the housing market, rampant home foreclosures, rising unemployment, collapsing banks -- and especially the credit crunch -- have most people feeling a bit off-balance.

''The situation is unprecedented,'' said David Denslow, an economist at the University of Florida. ``Our ordinary models don't explain what's going on. All those ordinary models aren't working, and now everybody is groping. No one knows what's really salient.''

But this much seems clear: 2009 will be a difficult year.

Here's a sector-by-sector look at how major drivers of the South Florida economy are expected to fare this year:

HOUSING

Falling home prices expected

In many ways, the region's economic woes started a few years ago with the housing boom.

From 2002 to 2006, fueled by low interest rates and easy credit, the median home price in Miami-Dade doubled, from $185,000 to $375,000. Thousands of people found work building huge condo towers and subdivisions, and their prosperity spread throughout the economy.

Then, last year, the dream became a nightmare. Home prices had risen far beyond most people's ability to buy, forcing down demand. Speculators were buying up condos at prices so high that no landlord could make money renting them.

Last year homes prices were back down to 2003 levels, foreclosures began to skyrocket and credit markets slowed and then seized up almost entirely.

Now, most experts think South Florida home and condominium prices will continue to fall in 2009, but probably not as fast as in 2008. complete story

Source: Miami Herald - Scott Andron

Stop Foreclosure  Save Your Credit Florida Short Sales

Some potential homeowners just don’t want a pre-lived in South Florida home. They’d rather have their house built to their own specifications. They want a home that fits their needs exactly. If this is you, I understand and would like to help by giving you a glimpse into the future of home design.

The Future of Design

Thinking of the future might bring ideas of fantastic scientific miracles like smart houses that vacuum themselves. While building your Southeast Florida home and having it wired as a smart home may be a good idea, think, also, about sustainable design. Here are just a few reasons why sustainable design is a great idea:

1. Government mandates and incentives – Under the current administration, sustainable design is a big thing. In fact, many cities are passing mandates and offering incentives that encourage green building. In places such as Austin, Houston, Seattle and Portland, sustainable design is no longer a trend; it’s standard practice. Before having your home built, check into the homeowners’ incentives for green building.
   
2. Cost of sustainable design – While sustainable design may be a little more costly than standard home building, don’t just assume that it is. Check with green building contractors as well as standard contractors and compare pricing. Also, keep in mind that the cost of the design is well repaid down the line. As well, remember that it may be easier and cheaper to build a sustainable home, rather than remodel one to be green later.
   
3. Resale value – Although you may not ever want to move from your home once it’s built, you never know what will happen in the future. A sustainable design can up the resale value of the home by as much as 15%.

Between the government incentives, the cost savings and the resale value, your South Florida home and sustainable design may end up being the best investment you ever made!

If you’re looking for a green home or a contractor to build one, we can help. Call us for more information.

Last week offered a rude awakening for anyone who assumed the housing bust was over. As existing home sales slumped and home-building stocks sank, Laurie Goodman of Amherst Securities Group came out with a scary pre-Halloween report about the extent of the “shadow” housing inventory—the overhang of likely-to-be-foreclosed homes that have yet to hit the market.

Various pundits have estimated the size of this shadow inventory in the millions. Ms. Goodman put a more specific estimate on it: 7 million homes. That’s well above the 5.1 million annual U.S. sales rate for previously occupied homes, as reported for August.

“We are concerned that, in light of this overhang, the housing market stabilization is temporary, based on seasonal factors, and prices can deteriorate further,” the report concludes.

Of course, there are always some homes destined for foreclosure. But usually the number isn’t enormous. In early 2005, near the peak of the housing bubble, the total was about 1.27 million, Ms. Goodman says.

So how does she get to 7 million now? Ms. Goodman uses data from the Mortgage Bankers Association to estimate there are 55.9 million American homes with mortgage debt. She notes that at the end of the second quarter, an MBA survey found that more than 13% of single-family home mortgages were at least 30 days delinquent or in foreclosure.

Then Ms. Goodman looked at “cure” rates, the percentage of delinquent loans that return to current status. Those cure rates lately have been puny. The report assumes that about 99% of loans that are 90 days or more overdue will result in homes lost to foreclosure. The assumption for those 60 days or more delinquent is that 96% are toast, and for 30 days or more, 72%.  All in all, she estimates that 12.4% of the mortgages outstanding as of June 30—representing about 7 million homes—are going to end up changing hands on the courthouse steps.  complete story

Source: WSJ.com - James R. Hagerty

Stop Foreclosure  Save Your Credit Florida Short Sales

Banks appear to be resorting more often to a maneuver that helps them avoid acquiring property through foreclosure.

Before banks can acquire homes in foreclosure cases, there is a public auction, often at a county courthouse. These auctions are typically called trustee sales or sheriff sales. Normally, the lender or loan servicer (an entity that collects payments and handles administrative chores including foreclosure) makes a bid well above what investors are willing to pay for the home, and in those cases the bank ends up owning the property. It becomes part of the vast REO (real-estate owned) inventory that banks must sell off.

But sometimes the lender or loan servicer makes a bid low enough to tempt others to step in with a higher offer and win the auction. That has been happening more often lately in some parts of the country.  complete story

Source: WSJ.com - James R. Hagerty

Stop Foreclosure  Save Your Credit Florida Short Sales

Delays in dealing with home foreclosures are stretching out the pain for the U.S.  housing market, as we reported in Wednesday’s Journal. That has stirred lots of debate over whether it is better for the nation to face the pain of millions of foreclosures immediately –  to get it over with fast — or to draw the process out over several years in hopes that the economy and housing demand will recover.

It looks like we’re taking the latter course, for better or worse.

The foreclosure process takes about twice as long as it used to for a variety of reasons, including efforts to modify loans to keep borrowers in homes, staffing shortages at loan servicers, bankruptcy filings and a “strategic rationale” by lenders hoping that home prices will recover, says Ivy Zelman, chief executive of Zelman & Associates, a research firm based in Cleveland.  In states where foreclosure is a judicial process, it now takes about 19 to 29 months, she says, and in other states it takes 11 to 17 months.

While efforts to modify loans will help some borrowers, she says, they mostly will amount to “kicking the can down the road.”  complete story

Source: WSJ.com - James R. Hagerty

Stop Foreclosure  Save Your Credit Florida Short Sales

If you have a home for sale in Southeast Florida and it’s been sitting on the market for quite awhile, you’re probably trying to come up with ways to get it sold. One of the ways that people are talking about (at least on the Internet) is through a house raffle. Will a house raffle really solve all your problems? Can it really help you get that home for sale in SE Florida off your hands?

Well, yes, and no…

The Legal Aspects

Before raffling your house, whether here or anywhere else in the U.S., it’s important to know that most raffles are illegal. The only way they’re legal, in fact, is if a non-profit organization owns the house before the raffle starts. There have been so many scams in the past that it’s doubtful any U.S. state will allow you to raffle your own house. In fact, the organization must already be a 501(c) 3 and well known.

Mounds of paperwork must be filled out and filed, and a permit will be required. You’ll also want to make sure that the raffle complies with the state’s charitable gaming laws. Once the paperwork is finished, rules will need to be written to govern the raffle. Since every detail matters, this should probably be done by an attorney. You’ll need to set up a website for national coverage; be able to accept PayPal, credit cards or other forms of payment; and figure out how you’re going to keep track of your accounting records.

If a charity does raffle off your house, you can’t personally benefit. In other words, although you get a big tax deduction, you don’t get cash. For those who are trying to make up some of the money spent on the home, raffles aren’t going to give them what they’re looking for.

The Alternatives

If a charity raffle is not for you, you can try adding minor home improvements and looking at other homes for sale in South florida to see how your house stacks up to the competition.

You can also work with a real estate agent who will professionally price and market your home.

If raffles aren’t for you and you’re interested in working with a professional real estate agent, we can help. Call us for more information.

When people think of environmental concerns, very seldom do they think of their home environment. Mold spores, carcinogens, allergens and more can fill up your Southeast Florida real estate and create a bad environment. Here are a few ways to make sure your indoor air quality is as good as it can be:

• Check for mold. Mold has a distinctive odor; somehow, it manages to smell both wet and dry, as well as musty. It can grow around windows, in the bathroom and in your air ducts. For windows, bathrooms and small areas within your home, you can clean the mold yourself wearing protective gear and using the right mold cleanup methods.
  
• Check the ductwork. Mold, dust, insect parts and other small to microscopic pollutants settle in ductwork and then, when the air is turned on, flow out into the various units. I recommend leaving this job to professionals with the proper equipment. Research green janitorial services in your area that specialize in environmentally safe cleaning practices and provide good indoor air quality through the practices.
  
• Check your carpet. Carpets can be a big cause of bad indoor air quality. Some carpets contain a high level of VOCs (volatile organic compounds), which are emitted into the air as gases. Exposure to VOCs can cause nose and throat irritation, headaches, nausea, fatigue, dizziness and skin rashes. If you're having any of these issues, your may want to replace your carpet with an eco-friendly carpet.

If you’re looking for eco-friendly South Forida real estate, we can help. Call us at 407-876-5771 for more information