According to a recent Business Week article, distressed properties (meaning properties that sell as a foreclosure or a short sale) sold at an average 26% discount in the second quarter 2010. Bank-owned properties sold at an average 35% discount and accounted for 15% of total sales. Nationally almost 25% of transactions- or 248,534 homes- involved properties that were in trouble with their mortgage, representing a 5% increase over the first quarter. However, that number was down 20% from the seconde quarter 2009.
The discount rate is arrived at by comparing the average sales price of distressed properties to non-distressed properties. The average sales price of a distressed property was $174,198. The average price for a bank-owned property was $154,147, versus $204,932 for homes in default or scheduled for auction.
The pressure from distressed properties upon the market is not expected to abate in the near future. In August there were 95,000 home repossessions, reaching a new record for the third time in five months. Sales of distressed properties will likely account for 25%-33% of all transactions through 2011. But the most sobering statistic might be that before the housing crisis distressed properties represented a scant 1%-3% of total sales.
Thursday, September 30, 2010
Tuesday, September 28, 2010
Home Prices Increase
Nationally home prices have increased for five consecutive months, from March-July. Prices increased 0.6% from June to July and prices rose 3.2% from July 2009 to July 2010.
For those of you interested in buying, now is the time! Interest rates are at historic lows and prices are beginning to rise. Furthermore, Fannie Mae is currently offering 3.5% towards buyer's closing costs! Smart buyers are taking advantage of this confluence of opportunities.
For those of you interested in buying, now is the time! Interest rates are at historic lows and prices are beginning to rise. Furthermore, Fannie Mae is currently offering 3.5% towards buyer's closing costs! Smart buyers are taking advantage of this confluence of opportunities.
Thursday, September 23, 2010
Aren't You Glad You Live in Orlando?
Coldwell Banker's newest report lists the ten cities below as the ten most expensive cities in the U.S. in which to buy a home. The numbers below represent the average list price for four-bedroom, two-bathroom properties. Now aren't you glad that you live in Orlando?
1. Newport Beach, Calif., $1.83 million
2. Palo Alto, Calif., $1.48 million
3. Rye, N.Y., $1.33 million
4. San Francisco, $1.33 million
5. La Jolla, Calif., $1.21 million
6. Greenwich, Conn., $1.20 million
7. Wellesley, Mass., $1.08 million
8. Pasadena, Calif., $1.04 million
9. Honolulu, $1.03 million
10. Santa Barbara, Calif., $1.02 million
1. Newport Beach, Calif., $1.83 million
2. Palo Alto, Calif., $1.48 million
3. Rye, N.Y., $1.33 million
4. San Francisco, $1.33 million
5. La Jolla, Calif., $1.21 million
6. Greenwich, Conn., $1.20 million
7. Wellesley, Mass., $1.08 million
8. Pasadena, Calif., $1.04 million
9. Honolulu, $1.03 million
10. Santa Barbara, Calif., $1.02 million
Wednesday, September 22, 2010
Where is the Huge Wave of Foreclosed Properties?
We've all heard threats (or promises, depending on your viewpoint) of a massive inventory of foreclosed properties that was supposed to hit the market. But it hasn't shown up, leading many to wonder: Where is our foreclosure tsunami?
Ladies and gentleman, the good (bad?) news is that it is probably not going to come. And there are a couple of reasons why note. First, many homeowners have taken advantage of loan modification programs, thus saving their homes from foreclosure. Secondly, banks, with the help of programs like Coldwell Banker's short sale program, are getting a little bit better about making short sales happen. Finally, many investors are taking advantage of the market and are buying up distressed properties in bulk.
So if you've been waiting for the right time to take advantage of the glut of foreclosures, that time has come.
Ladies and gentleman, the good (bad?) news is that it is probably not going to come. And there are a couple of reasons why note. First, many homeowners have taken advantage of loan modification programs, thus saving their homes from foreclosure. Secondly, banks, with the help of programs like Coldwell Banker's short sale program, are getting a little bit better about making short sales happen. Finally, many investors are taking advantage of the market and are buying up distressed properties in bulk.
So if you've been waiting for the right time to take advantage of the glut of foreclosures, that time has come.
Foreclosures in Florida
Despite foreclosure rates dropping for five consecutive months, 56,877 homes- that's one in every 155 homes- in Florida received foreclosures warnings in August. That is over twice the national average. Florida has the second highest foreclosure rate nationally, ranking ahead of only Nevada.
This is great news for buyers. The availability of attractive properties that are selling at a discount is greater than in 48 other states! If you are thinking about buying, now is a great time to buy a home. In fact, many homeowners can now afford their dream home that just a few years ago was totally out of their price range.
This is great news for buyers. The availability of attractive properties that are selling at a discount is greater than in 48 other states! If you are thinking about buying, now is a great time to buy a home. In fact, many homeowners can now afford their dream home that just a few years ago was totally out of their price range.
Percentage of Homeowners Underwater
Nationally 23% of homeowners are underwater. For those homeowners who can no longer afford their mortgage, a short sale is often the best solution because it may have less of a negative impact upon their credit scores. Among the obvious benefits of having a higher credit score is that the homeowners would be able to qualify for another mortgage (hopefully one they can afford!) sooner.
Short sales are often a better deal for the banks as well because a bank becomes fully responsible for maintaining and selling a foreclosed property- and banks are not in the real estate business. As banks work to clear the backlog of foreclosed properties from their books, the properties sit unoccupied and slowly decay.
Unfortunately, despite the obvious benefits of short sales for both consumers and the banks, it is very difficult to get a short sale closed. The ease of the transaction depends most heavily on the lender's motivation and competence. For the buyers and the sellers of a short sale, getting the deal done can be such an impossibility that the buyers often walk away after months of trying and the sellers' homes ends up in foreclosure. And the kicker is that the property sells for far less in foreclosure than it would have as a short sale. In these instances the sellers, buyers and the banks have all lost out, not to mention the neighbors who now have an abandoned property in their neighborhood and will have their home values negatively impacted by the depressed sales prices.
Fortunately for buyers and sellers of short sales, Coldwell Banker has a fantastic short sale program. For $600, paid by the bank, not the buyer or seller, Coldwell Banker's team of short sale experts will expedite the process for you, often saving the property from falling into foreclosure. Within Coldwell Banker, 80% of short sale deals that used the program closed. Only 58% of short sale deals that did not use the program closed.
The moral of the story is that short sales are extremely tricky and sellers need an expert to handle the process for them. If you need to sell your home, let me guide you through the process.
Short sales are often a better deal for the banks as well because a bank becomes fully responsible for maintaining and selling a foreclosed property- and banks are not in the real estate business. As banks work to clear the backlog of foreclosed properties from their books, the properties sit unoccupied and slowly decay.
Unfortunately, despite the obvious benefits of short sales for both consumers and the banks, it is very difficult to get a short sale closed. The ease of the transaction depends most heavily on the lender's motivation and competence. For the buyers and the sellers of a short sale, getting the deal done can be such an impossibility that the buyers often walk away after months of trying and the sellers' homes ends up in foreclosure. And the kicker is that the property sells for far less in foreclosure than it would have as a short sale. In these instances the sellers, buyers and the banks have all lost out, not to mention the neighbors who now have an abandoned property in their neighborhood and will have their home values negatively impacted by the depressed sales prices.
Fortunately for buyers and sellers of short sales, Coldwell Banker has a fantastic short sale program. For $600, paid by the bank, not the buyer or seller, Coldwell Banker's team of short sale experts will expedite the process for you, often saving the property from falling into foreclosure. Within Coldwell Banker, 80% of short sale deals that used the program closed. Only 58% of short sale deals that did not use the program closed.
The moral of the story is that short sales are extremely tricky and sellers need an expert to handle the process for them. If you need to sell your home, let me guide you through the process.
Wednesday, September 15, 2010
Mortgage Rates Rise
Mortgage rates have risen to 4.35% due to improving confidence among investors. If you are looking to buy you should take advantage of the mortgage rates while they are still low. Combined with the low housing prices, you'll get an incredible deal.
Home Sales Are Up!
As of September 2010, Orlando-area home sales are up 36.12% over September 2009! That is great news!
Wednesday, September 8, 2010
Tenant in a Foreclosed Property?
Here is a great article for anyone living in a rental property that is being foreclosed upon.
Tenants of foreclosed homes often unsure of options
WALNUT CREEK, Calif. – Aug. 24, 2010 – Erin Kennedy-Florez was 10 months into a one-year lease on a home in Richmond, Calif., when she found a notice on her door saying the home was being foreclosed.
She said she called her landlord, who told her that he was trying to refinance the house and to keep paying him rent.
“I was paying the rent, but he was not paying the mortgage,” Kennedy-Florez said.
Soon after, the house went into foreclosure, and Kennedy-Florez immediately heard from a law firm representing Freddie Mac, the federal real estate lending agency that held the note on the home.
“I had to decide whether I still wanted to be living there while they were showing it (to potential buyers),” she said.
Kennedy-Florez’s situation reflects a problem that tenants rights’ groups say has been flying under the radar since the home foreclosure crisis began in 2008. They say thousands of renters have lost security deposits, paid rent to former landlords who no longer owned the house, and agreed to move on short notice because they didn’t know their rights.
Kennedy-Florez accepted a cash settlement to move three weeks after the foreclosure in November 2009. She received the check the day she moved out but struggled to come up with the security deposit for a new rental in El Cerrito, Calif.
The landlord still owed her a $3,200 security deposit and has been paying it back in $100 and $200 installments, she said.
“I jumped at the first place I could find,” she said. “I’m hoping this place isn’t shaky, too.”
Kennedy-Florez’s former landlord said the home had been foreclosed but that he had paid back the security deposit in full. He did not want to be named because of privacy concerns.
Some of foreclosure situations probably have been resolved to the satisfaction of landlords and renters alike, said Gabe Treves, program coordinator with rights group Tenants Together, which is based in San Francisco.
But Treves said his agency has helped 3,000 renters squeezed between landlords who are behind on their mortgage payments and lenders trying to recover their investments.
“The vast majority of the tenants we talk to are having their rights violated,” Treves said. “Banks are being very aggressive in trying to get the tenants out, because they are stuck on the idea that if tenants vacate the home that they can sell it.”
Wells Fargo Bank is committed to following all rules that protect tenants who are living in foreclosures, spokesman Jason Menke said. At the same time, Wells Fargo is in the business of lending money for home purchases, not in managing rentals, he said.
“Generally, it’s our object to get a new owner into the house as quickly as possible,” Menke said. “It’s in our best interest and that of the community to return properties to the market.”
California Attorney General Jerry Brown launched an investigation into the issue last month, partly in response to the Tenants Together report. Brown sent a letter in June to California banks, lenders, investors and law firms asking them to explain their procedures for dealing with tenants in foreclosed properties in an effort to find out whether laws are being broken.
Tenants are protected by a 2009 federal law that allows them to stay in their units for 90 days after a foreclosure notice is posted, but they have other rights as well:
• Renters can insist on staying in their units until the end of their leases, except when the new owner of a single-family home wants to move in.
• They can require banks and their agents to put all communication in writing.
• They are not required to take cash incentives to move out before the law requires.
• Harassment, such as changing locks without a court order, entering the home without permission or shutting off utilities, is illegal.
Wells Fargo sends tenants a letter outlining their legal options if it forecloses on the house where they live, Menke said. The bank often offers cash incentives for tenants to move out before the three-month period has passed. The bank also honors lease agreements as long as the tenant has a copy of the lease. But if the bank sells the house, tenants have 90 days from the sale to move, said Wells Fargo spokeswoman Mary Berg.
“If the new owner wants to move in, then the tenant is no longer protected unless the new buyer decides to keep the renters there,” Berg said.
Copyright © 2010 Los Angeles Times
Tenants of foreclosed homes often unsure of options
WALNUT CREEK, Calif. – Aug. 24, 2010 – Erin Kennedy-Florez was 10 months into a one-year lease on a home in Richmond, Calif., when she found a notice on her door saying the home was being foreclosed.
She said she called her landlord, who told her that he was trying to refinance the house and to keep paying him rent.
“I was paying the rent, but he was not paying the mortgage,” Kennedy-Florez said.
Soon after, the house went into foreclosure, and Kennedy-Florez immediately heard from a law firm representing Freddie Mac, the federal real estate lending agency that held the note on the home.
“I had to decide whether I still wanted to be living there while they were showing it (to potential buyers),” she said.
Kennedy-Florez’s situation reflects a problem that tenants rights’ groups say has been flying under the radar since the home foreclosure crisis began in 2008. They say thousands of renters have lost security deposits, paid rent to former landlords who no longer owned the house, and agreed to move on short notice because they didn’t know their rights.
Kennedy-Florez accepted a cash settlement to move three weeks after the foreclosure in November 2009. She received the check the day she moved out but struggled to come up with the security deposit for a new rental in El Cerrito, Calif.
The landlord still owed her a $3,200 security deposit and has been paying it back in $100 and $200 installments, she said.
“I jumped at the first place I could find,” she said. “I’m hoping this place isn’t shaky, too.”
Kennedy-Florez’s former landlord said the home had been foreclosed but that he had paid back the security deposit in full. He did not want to be named because of privacy concerns.
Some of foreclosure situations probably have been resolved to the satisfaction of landlords and renters alike, said Gabe Treves, program coordinator with rights group Tenants Together, which is based in San Francisco.
But Treves said his agency has helped 3,000 renters squeezed between landlords who are behind on their mortgage payments and lenders trying to recover their investments.
“The vast majority of the tenants we talk to are having their rights violated,” Treves said. “Banks are being very aggressive in trying to get the tenants out, because they are stuck on the idea that if tenants vacate the home that they can sell it.”
Wells Fargo Bank is committed to following all rules that protect tenants who are living in foreclosures, spokesman Jason Menke said. At the same time, Wells Fargo is in the business of lending money for home purchases, not in managing rentals, he said.
“Generally, it’s our object to get a new owner into the house as quickly as possible,” Menke said. “It’s in our best interest and that of the community to return properties to the market.”
California Attorney General Jerry Brown launched an investigation into the issue last month, partly in response to the Tenants Together report. Brown sent a letter in June to California banks, lenders, investors and law firms asking them to explain their procedures for dealing with tenants in foreclosed properties in an effort to find out whether laws are being broken.
Tenants are protected by a 2009 federal law that allows them to stay in their units for 90 days after a foreclosure notice is posted, but they have other rights as well:
• Renters can insist on staying in their units until the end of their leases, except when the new owner of a single-family home wants to move in.
• They can require banks and their agents to put all communication in writing.
• They are not required to take cash incentives to move out before the law requires.
• Harassment, such as changing locks without a court order, entering the home without permission or shutting off utilities, is illegal.
Wells Fargo sends tenants a letter outlining their legal options if it forecloses on the house where they live, Menke said. The bank often offers cash incentives for tenants to move out before the three-month period has passed. The bank also honors lease agreements as long as the tenant has a copy of the lease. But if the bank sells the house, tenants have 90 days from the sale to move, said Wells Fargo spokeswoman Mary Berg.
“If the new owner wants to move in, then the tenant is no longer protected unless the new buyer decides to keep the renters there,” Berg said.
Copyright © 2010 Los Angeles Times
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