This week I gave a presentation to the Trustees of the Coral Springs Chamber of Commerce. They wanted to have a market update. I added in points on what it takes to be a good Buyer or Seller.
For market trends, home prices continue to depreciate but nowhere near the pace of the past two years. (I used a hand gesture of a dive that is now bouncing along the bottom, trying to stay there).
New construction starts are at their lowest levels since the 1950's. Foreclosure activity is 6 times the normal amount and we've been in this HELL since the end of 2005. 4 LONG YEARS and a little longer to go - 
But we have survived the worst!!Currently interest rates are hovering at the low 5's for a
30 year and very high 4's for 15 year mortgage.
Everyone has a different perspective on the recovery. The bottom line is that we are headed for a recovery. Some feel it will be a sideways move for the next 5 years. I'm sticking with the NAR (National Association of Realtors) economist who feels the worst is over and great improvement should be seen by the second quarter of 2010. Of course there are concerns that this will hold true. The stock market is on the increases which should lead to job increases eventually. Continued job losses could have a debilitating effect on our recovery. A national disaster could put a serious dent in our recovery efforts.
We have tracked our business for 10 years and it has no pattern. The highs and lows are affected by events. For example when the horific event of 9-11 occurred it was if someone walked in and turned off our lights and they did not come back on until December 1st. Schools starting and stopping have an effect on our business as well as most holidays. This is LIFE!
What is important to remember is that real Estate is local. (I gave them a hand-out that showed the differences in median sales prices and absorption rates.) Median sales prices changed from September 2008 to September 2009 by approximately $52,000 in Broward Count and over $77,000 in Palm Beach county for single family homes. Absorption rates (How long it takes a property to sell on average) went from 25 months to 8 months for single family in Broward County and from 34 months to 10 months for Palm Beach county. The absorption rates for Multi-family homes went from 38 months to 13 months in Broward County and from 33 months to 14 months for Palm Beach county.
Governments around the world are pushing to stimulate economies. Here we have the $8,000 First Time Home Buyer credit that has brought almost 2 million Buyers to the market place. The Federal Reserve has a plan to buy $1.45 trillion worth of mortgage-backed securities to support the housing market. This is anticipated to be phased out in early 2010 - The elimination of both of these could create another downturn, but the purpose of their timing is to buy time for the markets to recover.
Other issues with closing sales are the new HVCC rules introduced by Governor Como of NY. The HVCC is the Home Value Code of Conduct. It's a mess, but NAR is working on getting it fixed or modified so it is useful and not destructive as it has been so far. Although the intent of the bill was good so as not to overvalue properties, it has created a nightmare with Appraisal Clearing Houses sending out appraiser that have no familiarity with the areas they are appraising.
Also January 1st, 2010, The Truth in Lending laws will change again for better protection of consumers. These relate to Good Faith Estimates and again meant to protect consumers.
As of September Pending Home Sales have continued to rise for the 8th straight month. All good news because it shows buyers returning to the market. Deals are not necessarily closing because of the short sale process. A short sale for those of you that don't know is where you owe the bank $200,000 for your home and it is worth $100,000. The bank has to forgive the difference in order for you to sell it short. It might not necessarily be forgiveness. They may attach a 1099 to you for the income difference.
From an inventory perspective we still have an oversupply of homes in Broward and Palm Beach counties, although it is steadily decreasing. The lingering concern remains how much are the banks holding back on the next wave of foreclosures to be brought to the market place. These REO's (Real Estate Owned) could drive prices down again.
There are 300,000's Foreclosures per month coming into inventory in the US .
One in 156 Homes in Florida has received a foreclosure filing.
We are the 4th highest in the nation. The good news is Florida IS Not #1!! 
The national Average for foreclosure filings is ONE IN EVERY 136 HOMES.
Some banks are foreclosing and then turning the property over to Property
Management firms and renting them out until the market recovers where they
can regain some of the lost value. There are qualifications for this to take place.
WHAT I SEE DIFFERENT TODAY. The Internet has changed the home buying experience. Buyers are much more educated, but often with outdated information. This is where using a Realtor has value. Buyers will start their Internet search up to 2 years before they are actually ready to buy.
WHAT HAS STAYED THE SAME AND NEVER CHANGES? Proper Pricing. Price is King in Any Market. Your property is compared to what is on the market WHEN you go on. This is a constant variable that requires constant updates.
What does it take to be a Qualified buyer? Besides being PRE-APPROVED. Good credit scoring is still a big part of the decision on what type of loan you will get. Top 10 List (Borrowed From Dr. Chantel Saucier)
10. Thou shalt not co-sign a loan for anyone.
9. Thou shalt not change bank accounts.
8. Thou shalt not make large deposits without first checking with your loan
Officer.
7. Thou shalt not originate any inquiries into your credit.
6. Thou shalt not omit debts or liabilities from your loan application.
5. Thou shalt not buy furniture.
4. Thou shalt not spend money you have set aside for closing.
3. Thou shalt not use credit cards excessively or let your accounts fall behind.
2. Thou shalt not buy a car, truck or van (or you may be living in it)!
1. Thou shalt not change jobs, become self-employed or quit your job during
the loan process.
HOW TO BE A GOOD SELLER. Start packing early. The longer we live in a property the more we collect, be a minimalist. Your home should show like a model (Like no one lives there). Often this is unrealistic but it certainly helps move your property quicker (in addition to proper pricing).
With proper pricing the world will communicate to you in one of two ways. One with their feet they come and two with their pocketbooks they make offers. No traffic or offers means wrong price.
DO YOU NEED A LAWYER FOR A CLOSING? 
In Florida, for a closing you can use a Lawyer or a Title Co and many lawyers
own their own title Companies. We make my decision based on how the negotiations go. If the parties are jerks up front
during the negotiations, letting their EGO's get the best of them, we use a Lawyer to handle the closing, because the potential to need their intervention is greater.
WHAT MAKES A GOOD RENTAL PROPERTY? A positive cash flow, unless you need a loss in your portfolio. We have had people that do. This is subjective.
WHAT ARE THE PITFALLS OF OWNING A RENTAL PROPERTY? Homes have to be maintained even though you have someone else living there. You have to have a budget for putting money away for repairs. Other pitfalls are Bad Tenants. Money does not buy class or good housekeeping. In spite of background checks, people are still people. Visit their current home when possible. If it is a pig sty, that is how they live. Referrals are Okay, but why would I give you the name of someone that would say something bad about me. There are a lot of desperate people out there being foreclosed on who might still be a good Tenant. If I was a Landlord, I'd be visiting my property for a visual. The best place to start is a good strong lease that helps you get them out without too much inconvenience if they turn bad on you.
WHAT MAKES A GOOD AGENT? Ask your friends if they were thrilled with their real estate experience, because the majority are not. Statistics show that 64 percent of home sellers would use their Realtor again. Fortunately our repeat business is strong. We have sold 7 homes for one client alone. When interviewing agents, call them or send an email from their website, how quick do they respond to you, what is their method of follow up and how do they update you on what they are doing to sell your property?
HOW DO YOU FIND A GOOD AGENT? One way is to look for an agent that is a Certified Residential Specialist. There are only 5% of us in the nation and staying on top of our game and trends is a priority. Or look for an agent that is full of Tenacity and who listens to you!
It's A LOT of information that goes in a lot of different directions. Hopefully there is a piece here that you can take away to improve your real estate experience.
