Should I buy now?

Buyers are looking at houses, and they see that they have been on the market for up to a year. They ask, "if I buy now in a slow market and I want to sell in a few years quickly, am I stuck?"

Short answer: Not likely.

Long answer: There is no doubt that home prices are soft, and there are lower interest rates. Yet people in Orlando need to remember that we are coming off a period of very quick appreciation. In 2005 and the beginning of 2006, due to limited supply, home prices skyrocketed. Prices in Orlando had been low, compared to other areas of the country. Investors flocked to invest and make some great money.

Some of the people who put their properties on the market at the beginning of 2006 did not sell them as expected, and the market took a dramatic slow down from August to December of last year. Some property prices have been overinflated, trying to capitalize on what happened in 2005.

As for a home appreciating, the projected existing home prices are expected to increase in the coming years. The stronger gains will most likely happen in 2008. It won't take off like 2005, but appreciation is likely.

Why is the market sluggish now? Because there are a lot of properties on the market. The real estate market is cyclical, and it does not respond quickly to shifts. Because of the time it takes to build a house and/or a person to decide to sell and list their house, the housing market does not bounce back in a matter of days---it can take months.

With the strong economic factors expected in Orlando due to employment, new business, and the average number of people moving here daily, there is no reason to expect a recession, leading to depreciated property rates next year.

I don't have a crystal ball......

...so I read a lot about the real estate market from experts in the field. The chief economist for the National Association of Realtors, David Lereah, states that existing-home sales are projected at 6.42 million this year, and 6.66 million in 2008, compared with 6.48 million last year. Although some home sales will be reduced by the sub-prime loan restrictions, they should be gradually rising this year and next.

I know I am sounding like a broken record, but this is a good time to buy!

Are you ready to buy?

With all the discussions about sub-prime loans and home prices, many of the people I talk with are concerned they can't afford a home. You do need savings to be a good homeowner, for maintenance and emergencies.

But how much is too much to spend on a house?

The rule of thumb is 33%. Your monthly housing costs, including principal, interest, taxes and insurance should not be more than 33% of your gross income. With all your other loans and credit cards, your total debts should not be more than 38% of your gross income.

If you have any additional questions about affording a home, give me a call.

Osceola County---great and growing

Forbes has recently reported that Osceola County, Florida is one of the fastest growing counties in the US. It is in the top 25, according to the Census Bureau's analysis between April 1, 2000 and July 1, 2006. This is one of several counties in Florida that is viewed as an alternative to the priciest areas in South Florida.

Florida ranks #1 in Foreclosures

CNN Money reported today that Florida had the most homes in the foreclosure process nationwide in February, according to RealtyTrac, which reported a two-fold year-over-year gain in delinquencies – more than 19,144 statewide.

Foreclosure filings are also recording double-digit increases in California, Nevada and Arizona, mainly because large numbers of speculative investors cannot sell properties purchased during the recent housing boom.

Is now a good time to buy?

Yesterday I was out walking with a friend, who is currently renting an apartment. She is in a new job as a teacher, and doesn't know how long she will stay in her current position. She has all the necessary resources to purchase, but her question was: "Is now a good time to buy a house?"

I get this question frequently, given the current real estate market. So much has been changing over the years. Property values have significantly increased in Orlando. The news is reporting on the sub-prime loan problem every day. There are mixed messages in the media.

My response: Yes, it is a good time to buy. Why? The interest rates are good. There are properties to purchase in every price range. The key? Buying property is a great investment. You have tax advantages not available to renters. When you leave an apartment, you don't see any appreciation in your asset! Consider the advantages......

Some home selling tips

Yes, it's a buyer's market.

Sellers, want to know how to make your house more of a "hit" on the market? In a survey conducted by HouseHunt, Inc., the North Carolina Realtor's Association reported that:

3 out of 4 buyers found "closing costs paid" as an incentive to purchase

A distant second was "free upgrades"

Third: "free property inspection"

Fourth: "free appliances" or "flooring credits"

Artists unite!

Floridarealtors.org had an interesting article on it's website the other day. In determining where to invest in real estate in the next 5 or 10 years, look at where the artists are living now.

It seems that artists are the advance of what's cool, and due to their lower incomes, they have to seek out less expensive neighborhoods. One of the most significant reasons? An economist noted, "businesses don't often understand the extent to which art affects them. [Artists] are just as important as science and technology companies."

Designing women

Women make 83% of consumer spending decisions in the US. What does that mean in home design?

Architect Ann Olson and Designer Paul Foresman offered these suggestions:

• pay attention to de-stressing areas, like the master bath
• rear foyers are important--include lots of storage
• people now gather in the kitchen---size matters
• busy women demand closet organization systems
• natural light makes her happy
• women crave kitchen storage
• outdoor maintenance is a burden, so use things like maintenance-free decking
• always include a home office
• consider the needs of blended families who don't want to share bathrooms
• women like change, so incorporate flexibility in the designs

Save money with CFL bulbs

With all the talk of global warming (did you see the Oscars?) many are touting ways to slow the process. One suggestion is using compact fluorescent light bulb (CFL). It's benefits? One bulb should last 5 years, and could lower your electric bill 50 cents to 75 cents each month. If every American home replaced just one light bulb with the CFL, the US could save enough energy to light more than 2.5 million homes for a year and prevent greenhouse emissions of nearly 80,000 cars.

Study says home prices are stabilizing

The U.F. Bergstrom Center for Real Estate Studies reported on March 9th that single family home prices have leveled out. They conducted a survey of 318 industry experts, including market analysts, attorneys, financial advisors and industry executives. Wayne Archer, Director of the center is quoted as saying: "If you're thinking of buying a house, there's probably not much to be gained by holding out at this point. It doesn't look like prices are going to fall anymore."

Seems that buyers are agreeing with him. In February 2007, there were 2,387 new contracts in Orange and Seminole County. The lowest dip in the last year was December 2006, with 2,012 contracts.

The average mortgage rate for February 2006 was 5.92% for our area, compared to 6.07% for the same time last year.

Let the RE/MAX brand work for you

Before I became a real estate agent, I used to wonder why RE/MAX touted it's brand strength.

In questions about real estate companies, 91% of respondents say RE/MAX, making us #1 in brand awareness.

For the month of January, RE/MAX 200 Realty was the number one RE/MAX company in Florida, based on closed transactions.

That doesn't mean a hill of beans unless it has meaning for you, the client. Having worked for RE/MAX now and seen the inside of the company, here's what I've learned:

1. Top brand awareness draws top, professional people. Therefore, you're working with excellent agents who are well-trained and experienced.

2. As a seller, the RE/MAX name will transfer its goodwill to your property. As potential clients see the sign in your yard or view your property on the web, it will provide more confidence during the home selling process.

3. The name draws millions to the website, which has led to 1,991,228 unique site visits. Impressive potential viewings for any property.

4. In drawing the best agents to RE/MAX, the office is incredibly productive. Higher productivity means that greater resources are provided to support the agent's needs. Working with our office means you have the benefit of those additional resources.

Brits: new company for your Florida property?

Jack Snyder with the Orlando Sentinel wrote yesterday about a new business debuting here---a London based firm, Global Property Audit Agency. For $600 a year, British owners of property in the Orlando area will receive home inspections and property reports so they will be aware of how their vacation /investment properties are maintained.

Interesting.....I'd love to hear how it goes!

Home improvements provide big impact

Sid Davis, writer of Home Makeovers That Sell (AMACON, 2007) warns sellers that if they don't make updates on their houses they may pay dearly. The Miami Herald shared some of his suggestions to get the most out of the sale:

• start with the kitchen; it's the most important room in the house for buyers
• update the bath; replacing the mirror and vanity will net the biggest payoff
• clean the laundry room, and add storage shelves
• scrub, scrub, scrub! A clean house wows buyers

Many of the buyers I have worked with confirm these suggestions. More people enjoy entertaining from their kitchen these days, and expect it to be large. Also, sellers will immediately leave a dirty house. I know it can be a chore to keep the house clean at all times, but buyers set appointments. Most people decide to buy a house in the first minutes of being in the house. Bottom line: If it does not show well, it will not sell well.

Rising home values expected in Lakeland

Business 2.0 magazine ranked the top cities in the US for rising home values. On the list, Lakeland ranked 4th, with a 59% projected gain in home prices over the next 5 years. Between Orlando and Tampa, the home prices are much less than either city.

Two other Florida cities that could result in good investment returns include Panama City (#1) with an airport opening up next year and Vero Beach (#2) with moderate property taxes and beautiful weather.

Weekly mortgage interest rates 3.6.07

Depending on one's credit history and amount of the loan, thirty-year fixed rates are in the range of 6% to 6.5% this week.

Florida's existing home sales in January 2007

The Florida Association of Realtors (FAR) research for January 2007 shows that existing home sales in Florida remained slow in January. The median sales price for single family homes in January 2007 was $239,300. Last January it was $243,200 for a 2% decrease.

Sales of existing condominiums also decreased. 3,007 condos sold statewide, compared to 4,279 in January 2006. Although the prices of condos only decreased 1%, the amount sold decreased by 30%.

Real estate analysts said that as inventories become more balanced over the next several months, we are expected to see some modest price gains.

fun local event: Florida Strawberry Festival

My friend Mickey reminded me about the Florida Strawberry Festival yesterday---
Held in Plant City through March 11th, you can try: strawberry shortcake, strawberry sundaes, strawberry milkshakes, strawberry cobbler, strawberry.....ok, you get the idea! They also have country music performances and the coronation of the Florida Strawberry Festival Queen.

Check it out at: flstrawberryfestival.com

Don't get caught in the foreclosure wave

When the real estate market was booming these last several years, lenders often ignored borrowers' credit problems because the property values were rising. Now, with the downturn, lenders are looking at borrowers who are paying late.

According to the Christian Science Monitor, that means 2.2 million people are facing foreclosure and could lose their homes.

The majority of these loans are called subprime---meaning that the loans are for people who do not qualify for prime market rates because of blemished or limited credit. Wikipedia.com says that about 25% of the population falls into this category---they have a credit rating below 700.

In 1995, only 5% of mortgages were subprime. Today, Wall Street estimates it is about 18 to 24%.

I'm all for home ownership for everyone, but one needs wise when purchasing a home. With subprime loans come higher interest rates and a greater risk of losing your house. There may be a short-term gain of a new home, but it could cause greater credit problems down the line if you are unable to make the payment. Also, if you are able to improve your credit prior to your purchase, you could qualify for a better interest rate.

In response to this major problem, Freddie Mac said on February 28th it will stop buying subprime adjustable-rate mortgages and will require more borrowers to prove they earn the income they disclose on their loan applications. Unfortunately, this may be too late for many.

National home prices take a dramatic drop

The Dow Jones Business News reported that US home prices fell .7% in the fourth quarter, according to the new Case-Shiller price index.

Why is this statistic important? It is the fastest rate that national home prices have fell since 1992. Prices in the metro areas are down 2%, and overall home prices rose only .4% last year.

None of the price gains were in Orlando; The biggest gains were in Seattle, Portland, and Charlotte.