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.