Bradenton Florida Real Estate News

Wednesday, November 29, 2006

Manatee's home prices, sales tumble

Today's Herald newspaper ran the following front page article about our Bradenton - Sarasota real estate market.

MANATEE - The Bradenton-Sarasota market saw existing average home prices plunge almost $65,000 in October from the same month last year, according to the Florida Association of Realtors.
Bradenton-Sarasota's median existing home price fell to $277,900, down 18 percent from the $340,700 median in 2005. That median price is the lowest it has been since December 2004.

While the sales of existing homes nationwide saw their first gain in eight months, sales throughout Florida remained much lower than where they were last year.

Statewide, single-family home sales fell 22 percent, year-to-year, while home sales in Bradenton-Sarasota fell 24 percent.

Statewide, 10 other markets experienced more substantial slumps in sales than Bradenton-Sarasota, with the largest fall - 35 percent - in the Tampa-St. Petersburg-Clearwater market.
Unlike in Bradenton-Sarasota, the prices in the Tampa-St. Petersburg-Clearwater area stayed level with those of last year.

While the numbers would make it seem as though if prices are falling fast and furiously, that really isn't an accurate depiction of what is really happening, said Scott Sosso, broker/owner of Prudential Palms Realty.

In a high-inventory market, those forced to sell their house often have to price their home below market value in order to set it apart from the other product.

"Prices are still steady; no one has lost value unless they were in a position where they had to sell their house," Sosso said.

Condominiums continued a steeper descent in both sales and prices, with Manatee-Sarasota sales down 51 percent from last October and prices down an average of $78,000.

Condo sales statewide fared far worse than single-family home sales, according to the Florida Association of Realtors.

National Association of Realtors officials said the constant fluctuation of the last few months throughout the United States may be coming to an end throughout the United States.

Local agents have found more traffic through October and November than in the previous months, but Marty Garcia, team leader at Keller Williams Realty of Manatee, said it could be difficult to predict what December holds.

Historically, December is a quiet month in real estate with the distraction of the holidays and the travel that sometimes accompanies them. Many are more concerned with buying gifts for loved ones than buying houses.

"Your activity may be down in December, but the people who are looking then are usually serious buyers," said Leland Wallace of Keller Williams Realty of Manatee.

A home listed at a realistic price and easily accessible to interested buyers is a good way to sell a home, but existing homes aren't the only bargains out there as 2006 draws to a close, Sosso said.

He and his agents are keeping an eye on new developments where many builders are trying to sell inventory homes that are at or near completion.

Sosso said one of his agents recently helped a client close on a new home that came to about half of the listing price due to the number of incentives the builder was offering.

Existing home sales are expected to stay at their current level next year, National Association of Realtors chief economist David Lereah said in a press release. If that is the case, 2006 is likely to go down as the third strongest sales year on record nationally.

Sosso expects sales in 2007 will pick up and increase about 10 percent to 15 percent over the final numbers of 2006.

"We've got to get this inventory off the market, and there is still demand here," Sosso said.

Source: The Herald
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Bradenton Real Estate

Monday, November 27, 2006

30 year mortgage rates drop to 10 month low

Mortgage rates around the country fell last week, with rates on 30-year mortgages sinking to their lowest level in 10 months.

Freddie Mac, the mortgage company, reported Wednesday that 30-year, fixed-rate mortgages averaged 6.18 percent last week.

That’s down from 6.24 percent two weeks ago and was the lowest rate since the week ending Jan. 26, when 30-year mortgage rates averaged 6.12 percent.

It marked the second week in a row that mortgage rates dropped, a development that economists attributed to easing inflation pressures. Inflation is calming down amid stabilizing energy prices, slower overall economic activity and the housing slump.

“Slower growth usually means less inflation, and less inflation means lower interest rates. Hence, the drop in mortgage rates (last) week,” said Frank Nothaft, Freddie Mac’s chief economist.

After five years of booming activity, the housing market has lost its sizzle this year. Sales have fallen, builders have cut back on construction and home prices have lost considerable altitude, falling in some markets or rising more slowly in others. The housing slump was the major culprit behind the slower economic growth rate that was logged in the late summer. All categories of mortgage rates surveyed by Freddie Mac showed declines last week – offering some welcome news to those wanting to buy a home.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 5.91 percent. That’s lower than the rate of 5.94 percent two weeks ago.

For one-year adjustable rate mortgages, rates fell to 5.49 percent, compared with 5.53 percent two weeks ago.

Five-year adjustable rate mortgages dropped to 5.99 percent last week, from 6.04 percent two weeks ago. The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.5 point. One-year and five-year ARMs each carried a fee of 0.6 point.

A year ago, 30-year mortgages averaged 6.28 percent. Fifteen-year mortgages stood at 5.81 percent, one-year ARMs were at 5.14 percent and five-year ARMs averaged 5.75 percent.

Source: Planet Realtor
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Bradenton Real Estate

Wednesday, November 22, 2006

How long will this bubble continue to deflate?

I just received this sobering report...

BALTIMORE, MD - There's a growing consensus among economic and financial experts on the rate at which the real estate bubble will deflate. It will be a slow leak, they say. But the reality is far more chilling.

Last month, former Fed Chairman Alan Greenspan said, "The worst may well be over." But the "worst" is a frightening picture: Median prices for home sales have fallen sharply year-over-year, for two straight months, according to National Association of Realtors. "

In addition to being the largest price drops in at least 38 years," The Wall Street Journal reported, "the back-to-back declines are the first time median home prices have fallen since 1995." And the decline is hardly over.

According to Karim Rahemtulla, an Advisory Panelist for Investment U, based in Baltimore, Md., the situation is about to get much worse. "

Homeowners are in denial," Rahemtulla said. "Right now, sellers aren't selling ... They're still waiting for Santa to deliver their asking price, or close to it."

Those who have interest-only, or "teaser-rate," mortgages could see their monthly payments more than double. "

Interest rates will rise on about $300 billion in adjustable-rate mortgages this year alone," he said. "

That figure is projected to skyrocket to more than $1 trillion in each of the next two years."

Arizona, Nevada, Florida and California will be hit particularly hard, he said, and homeowners in these states may not see a 5% decline, as experts predict, "but could fall two or three times that number."

Homebuilders are feeling the pinch, too. One of the healthiest builders, D.R. Horton, a well-managed company with a pristine balance sheet and a portfolio that encompasses all economic strata, said its cancellation rate [homes cancelled divided by gross homes sold] for the fourth quarter of 2006 was 40%.

According to Rahemtulla, the bottom of the housing market will be here no sooner than two years.

Source: National Realty News
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Bradenton Real Estate

Thursday, November 16, 2006

Consumers believe house values will rise

Americans remain highly confident about the nation’s housing prospects – more than four out of five homeowners expect the value of their home to appreciate over the next five years and nearly seven out of 10 consider it their most valuable investment, according to results from a new nationwide survey.

“The poll clearly debunks the more sensational media reports speculating on the demise of the housing market,” says David Pressly, president of the National Association of Home Builders (NAHB). “It is interesting to note that other polls conducted by major news organizations have come up with similar results, indicating that despite the current housing market downturn, Americans resoundingly believe that buying a home is the best investment they can ever make.”

RT Strategies conducted the survey of 2,000 households Oct. 26-29.

The poll found that 81 percent of homeowners believe that the value of their homes will rise over the next five years. Only 13 percent felt their home would fall in value, while 4 percent expected no change and 3 percent were unsure.

In addition, 69 percent of respondents listed their home as their most valuable investment. By contrast, this was followed by 401(k) and other retirement accounts, with just 11 percent of those polled citing this as their top investment.

Looking ahead, NAHB said the housing market is poised for solid and sustained growth in the future.

Source: Planet Realtor
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Bradenton Real Estate

Wednesday, November 08, 2006

Buy now or wait

During the last couple of years, new listings sold in a matter of weeks in many areas. Home prices escalated at a record pace. Financing a home purchase was rarely a problem -- money was easy and interest rates were low. Few buyers wanted to miss the opportunity to make fast money in a market that seemed to defy gravity.

What a difference a year makes. Now, the appreciation rate is running at a snail's pace, and declining in some areas. According to the National Association of Realtors, the median home price nationally declined a little over 1 percent in August from a year ago. This trend is expected to continue through the end of 2006. Consequently, many buyers who were anxious to buy last year are standing on the sidelines, waiting to see what happens next.

Remarkably, there are still areas where the demand for new listings still exceeds the supply. In the desirable Claremont area of Berkeley, Calif., for example, there were recently nine offers on a listing competitively priced at $1.25 million. Another listing in neighboring Rockridge listed for $1.45 million sold with multiple offers for $1.5 million.

Regardless of whether you live in an area where there's plenty for sale or if you are still battling other buyers for too few listings, it's time to return to the basics when considering a home purchase.

HOUSE HUNTING TIP: Until recently, home buyers bought not with an eye to a quick profit but in order to gain control over the place where they lived. As a homeowner, you don't need the landlord's permission to make modifications to the property to suit your needs. You aren't at the mercy of a landlord who might raise the rent or ask you to move. Now there's no guarantee that you'll find a place to rent in a neighborhood where you'd like to put down roots. Also, rents are rising after years of lackluster performance.

Additionally, homeowners tend to take a serious interest in preserving and enhancing the quality of the neighborhoods in which they live. Renters tend to be transient.

The tax benefits of home ownership shouldn't be overlooked. While restrictions do apply, homeowners can claim a deduction for mortgage interest and property taxes from their federal income tax returns. This effectively lowers the cost of home ownership for taxpayers who itemize deductions.

There are several other good reasons why this could be a good time to buy. One is that there is, in general, less competition from other buyers than there was a year ago. It's now possible to negotiate with sellers if the list price seems out of line. Another factor in your favor is that interest rates have recently eased and are still at historically low levels.

Of course, a risk of buying now is that home prices could decline from their current level. David Lereah, NAR's chief economist, recently speculated that we will "probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory."

So, why not wait to buy until home prices start climbing again? That's certainly an option, if you can find a suitable rental. However, it's impossible to time the market. We'll know that prices have bottomed out for the cycle only after they have resumed their ascent.

Buying for the short term is risky in the current market. But, this could be a good time to buy for buyers who plan to stay put for the long term, particularly if what they're looking for is not readily available.

THE CLOSING: Some buyers look for years before they find the right place to buy.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

Source: Inman News
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Bradenton Real Estate

Friday, November 03, 2006

Now is a great time to buy or sell a home

Right now may actually be one of the best times to buy a home. Consider these facts:

Interest rates are near record lows
Today's interest rates are comparable to 40-year lows, offering homebuyers a once-in-a lifetime opportunity. According to Freddie Mac, today's mortage rate averages 6.31 percent for a 30 year loan.

The current large inventory of homes won't last
There are currently 3.75 million homes for sale. We have had a record inventory of homes on the market in recent months, offering consumers the greatest choice in decades. Here in our Bradenton - Sarasota market it appears that the inventory is stabilizing and may soon start to fall.

Prices overall have stabilized
Contract for home sales in August were up 4.3 percent and the outlook is for home prices to increase next year. Our Bradenton - Sarasota market has sustained an 18 percent decline in prices from the high's of 2005. Prices seem to be stabilizing and people are still moving into Florida and our Manatee - Sarasota market stimulating demand.

Positive Outlook
Former Federal Reserve Chair Alan Greenspan recently said that housing prospects are looking up. Most of the negatives in housing are probably behind us. The fourth quarter should be reaonsably good, certainly better than the third quarter." According to industry estimates, 2006 will be the third-best year on record for home sales.

Real estate is a great investment
Homeownership is a safe, secure way to build long-term wealth. The national median price of homes bought ten years ago has increased 88 percent. The number of US household is expected to increase 15 percent during the next decade, creating a continue high demand for housing.

Don't delay
Now is a great time to buy or sell a home!

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Bradenton Real Estate
Premier Team Inc.

Thursday, November 02, 2006

Hazard Insurance: cheaper may not be better

Most mortgage lenders require that home buyers take out a homeowner's insurance policy to protect the lender's interest in case there's a fire. It's a good idea to shop for homeowner's insurance soon after you enter into contract to buy a home.

Before you start shopping, find out if any claims were made against the property during the past five years. Your insurance agent should have access to a data bank that will give you this information. Or, ask the home sellers directly.

If the property has been subject to water damage claims within the past five years, you may have trouble finding an insurer for the property. Or, you may have to pay more for insurance than you anticipated.

The inclination is to go with the insurance company that quotes the most competitive premium price. Just make sure that you're collecting and comparing quotes for comparable coverage.

It's difficult to find Guaranteed Replacement Cost Coverage anymore. This type of insurance pays the entire cost to rebuild your home if it's destroyed by fire, even if that cost exceeds the policy limit.

The standard coverage today is Limited Replacement Cost Coverage. This type of policy will only pay up to the policy limit. So, if your house costs $750,000 to rebuild, but it's only insured for $500,000, this is all the insurance company will pay. With Limited Replacement Cost Coverage, it's important that you carry adequate coverage, even if your insurance agent thinks you need less.

A preferable type of insurance for many homeowners is Limited Replacement Cost Coverage with an Addition Percent, which pays the replacement cost up to a specified amount (often 20 percent) over the policy limit.

For example, if you insure your house for $500,000 and it costs more to rebuild, the insurance company will pay up to $625,000, which is 120 percent of the policy limit. You still need to make sure you're carrying adequate coverage, but there's a margin for error built in.

HOUSE HUNTING TIP: Be on the look out for insurance agents who under-quote the premium by estimating low on the price per square foot to rebuild in your area. Costs to rebuild vary considerable from one area to the next. If you call the 800 number for an insurance company for information, you could end up getting a quote from an agent out of state where building costs are much lower.

Your real estate agent should be able to tell you an approximate price per square foot to rebuild in your area. The lender's appraisal of the property should give you the number of square feet. Multiply the price per square foot to rebuild by the number of square feet to figure out how much coverage you need.

Unfortunately, some local insurance agents give a quote based on a low replacement cost in order to undercut their competitors. If you go with the low bidder, you may find at closing that you don't have adequate coverage according to the lender's requirements for funding the loan. This could delay the closing. Most lenders want the structure to be insured for the replacement cost value specified on the appraisal that was done for the lender.

One way to cut the premium costs is to take a larger deductible. For instance, for $500,000 of coverage there could be as much as $600 per year difference between a $1,000 and $5,000 deductible policy. Check with your lender to find out what size deductible is required. You may be able to increase the size of the deductible when you renew the policy one year after closing.

THE CLOSING: Most insurance companies offer a home alert discount if the home has a security system. And, discounts are offered if the home insurer also insures your car.

Source: Realty Times
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Bradenton Real Estate
Dan Forbes