Last week in the (real estate) news

Retail sales fell 0.6% for the week ending November 20, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.8%.

Gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2.5% in the third quarter of 2010. This follows a 1.7% pace of growth in the second quarter of 2010.

Existing home sales fell 2.2% in October to a seasonally adjusted annual rate of 4.43 million units from 4.53 million units in September. The inventory of unsold homes on the market declined 3.4% to 3.86 million, a 10.5-month supply at the current sales pace, down from a revised 10.6-month supply in September.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending November 19 rose 2.1%. Refinancing applications decreased 1%. Purchase volume rose 14.4%.

Orders for durable goods — items expected to last three or more years — fell 3.3% in October after increasing an upwardly revised 5% in September. Excluding volatile transportation-related goods, orders posted a monthly decrease of 2.7%.

New home sales fell 8.1% in October to a seasonally adjusted annual rate of 283,000 units from a rate of 307,000 units in September. Economists had expected a pace of 314,000 units.

Initial claims for unemployment benefits fell by 34,000 to 407,000 for the week ending November 20. That’s the lowest level since July 2008. Continuing claims for the week ending November 13 fell by 142,000 to 4.18 million.

All that said, we are in full swing of buying season in Florida, and we have experienced greater buyer activity this year, over 2009.

Althea Garner
Preferred Realty Executives (Florida and California)
Your House Of Homes Online
DRE 01516817
772-626-1768

Search over 50,000 listings at my web site:
http://www.isellpslhomes.com

Women’s Council of REALTORS(R):
President-Elect – 2011 (Saint Lucie County)
VP Membership – 2010 (South Orange County)
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Vice Chair – 2009

REALTORS(R) Association of Saint Lucie
Vice Chair, Global Business – 2011

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2 CommentsLeave a comment

  1. Y’all are living with a tough housing market, Althea. I mean, in Broward County and Palm Beach County sales were down from both September and last year, and home prices across the state were down 12% from September.

    So, you’re amazing, but the housing market in Florida is on the ropes. 🙂

    • You’re right, Mitch, not so much because of the economy, but because of the attitude of most people and the press.

      What I mean is that yes, the housing market tanked here, just like it did everywhere else, but because Florida had the highest construction of new homes at the time, it was felt more than in other States. When things got tough, the builders went under which created HUGE unemployment – greater than in other States. Add to that: Because there was so much construction in process in Florida so soon after Katrina, and because New Orleans (which had to be rebuilt) got all the US-made dry wall, Florida was forced to use imported dry wall – ie Chinese dry wall and now all those homes are uninhabitable.

      It was a comedy of errors, but once the construction industry went down, it created so much spin-off unemployment, that this has made it hard for Florida to recover. Hard, but not impossible.

      We see improvement, though. Properties are moving and prices have stopped going down but we will always have those properties that were over-priced and which must be reduced – that happens in good times, too.

      The biggest problem is not the unemployment or the economy but the press that continually spreads doom and gloom. The press also reports only half truths, which delivers a very different picture. For example: “Half of Florida homes are upside-down”. Well, yes they are, but not all of those homes are for sale! Owners whose property has lost value are fine IF they are still paying their mortgages, because the amount that they borrowed for the property has remained unchanged. There value will return, although it won’t be for a long time.

      With a daily dose of doom and gloom from the press, people panic and unfortunately many of them have seen an easy way out of the result of good living by walking away from their loans. Strategic foreclosure has become epidemic! Even people who COULD afford to pay their mortgages but who had racked up huge credit card debt (on good living), baled out because it was a quick way to erase their debt. And why not? Three years later, they’re allowed to buy again, but this time without the burden of paying the high interest on credit cards and besides, ‘they would have had to have paid rent anyway’, (is the way that they are conditioned to think).

      This attitude has been far more damaging to our Florida economy (and in fact throughout the country) than a failed economy and has simply exacerbated the problem.

      Bruce and I still own properties, the loans for which are not upside down and on which we continue to pay even though they have lost value. These properties are still our assets because we did not borrow against them (second loans and HELOCS). Notice: the LOANS are not upside down because the original amount borrowed is unchanged and we are not behind in payment. These properties continue to be rented and therefore remain good investments. Properties that became ‘upside-down’ were those bought on an inflated market, or those that were borrowed against, but as long as the loan payments are being made, they still have some value.

      The percentage of people who truly could not afford to pay their loans is not as high as we are lead to believe. The people who fell on true harship, are either homeless now or they have moved in with family. Others are strategic defaulters, many of whom are paying rent similar to what their mortgage payments were. Those borrowers who are paying less rent now than their mortgage, a] couldn’t afford to buy their property and should not have been gven a loan OR, they fell victim to Option ARM loans that rose substantially upon maturity. Our primary residence at the time, would have gone from $2,500/month to $10,000/month, but we kept our eye on the ball and sold the property before the ARM payment changed. Even in a declining market, we were able to make $374,000 PROFIT by not burying our heads in the sand and following a carefully formulated plan.

      When times get tough, our plans muct be adjusted accordingly. There is nothing wrong with moving in with family, if possible. Why not rent out one’s home and split living costs with a family member? Why do some people think that when the whole world is feeling the bite of recession, that they should continue to live the high life?

      Adjustments have become necessary.

      One thing that has changed in Florida is the rental market. With so many displaced families, rental properties don’t last on the market and they are fetching a good price, too. My son bought a foreclosure last year (for which he paid higher than list price, BTW) – his payment is $400/month but he rented it within four days after closing, for $950/month, which is low for the house being rented (he could easily have asked $1,200/month).

      It’s not all doom and gloom, here. There are silver linings but people will continue to accept their daily dose of press medication!


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