The action is now moving from the low $100,000 price range to include up to the $400,000 range. This reflects the buyer's confidence in the upper middle values in today's market.
A slight increase in sales in the higher end market also reflects an increased confidence by buyers.
Fewer listings are coming on the market each month, giving a glimmer of hope for a change in this buyer's market . . . possibly sooner than the now-predicted three- to five-year period.
Interest rates continue to flutter but still hover below the 5 percent level, further enticing buyers to commit to purchase.
Prices continue to dip slightly but not nearly at the rate of depreciation in the past few months and the past year. Some neighborhoods show fewer to no available homes, but contracts reflecting any market appreciation are constantly stymied by low appraisals and are unable to close. As many buyers are now paying cash as are those who choose conventional financing. Federal Housing Administration and VA financing still are popular methods of purchase for moderately priced homes.
The luxury market is now being assisted by some lenders offering more competitive rates on jumbo loans, but lenders still are conservative in appraisals and loan-to-value ratios of 30 percent to 70 percent in this category.
Brevard County continues to find recognition for all it has to offer in housing, in climate, in beaches and lifestyle.
Having recently traveled to Alaska and finding cold temperatures in addition to rain, my heart still finds comfort in everything our area has to offer. Our own Northern Lights are the spectacular sunsets on the Indian River or the night launches that shake the earth with their power. No, we do not have the magnificent glaciers with aqua crystallized accents and the moose and bears that traverse the vast wilderness, but I will opt for the dolphins as they capture the bait fish.
I will enjoy the blue herons and our favorite river bunnies. And I will close my eyes at night as the stars and the moon shine through my window. There is nothing not to love in Brevard County. Spoken by a true native Floridian.
Sunday, May 31, 2009
Sunday, May 24, 2009
Things looking up for Brevard...
As the much-needed rains continue to fall on Brevard County, the grasses get greener and the birds and wildlife are happier. As the buyers continue to bring the deluge of contracts on properties, the bankers, the sellers, and the Realtors begin to smile. Life in Brevard keeps getting better.
The interest rates flutter but we are promised continuous optimism in the financing arena. The stock market echoes our prediction of economic strengthening and the nation comes a little closer to ending our crisis. With still an abundance of inventory in our area, there is a long way to go before properties appreciate.
The market in 2004, 2005 and part of 2006 jumped so very high, that in order to bottom out, it had a long hard fall. It is estimated that values today in our area, are in the range of 2002 prices.
In a few states and cities that showed a minimal depreciation factor over the past several years, it should be noted that those areas did not show a significant amount of appreciation in 2004 to 2006. Those areas are in the minority as most states and cities across the United States jumped high and now have fallen back.
Continuous efforts to increase the market value are stifled by the conservative nature of the lending institutions who are wrapped in tighter regulations. Loan processing is tougher and longer than in the past year. Lenders require more information and documentation from buyers prior to a loan commitment.
Insurance rates have, for the most part, shown a slight decrease, and more significant decreases are seen if a wind mitigation inspection shows construction that withstands hurricanes.
Incentives for storm protective features, energy/green features, grant rewards to buyers and sellers who purchase quality upgrades.
Buyers show continuous confidence that the real estate market is at or very near the bottom. Fewer "for sale" signs dot our neighborhoods, and some are not sure if the signs floated away in the rains or properties have sold. I will vouch for the sold. The activity in sales contracts each month since February have continued to increase.
Brevard County is a very special place to call home. The concern for the homeless, the hungry and the poor, by all of our residents, reflects the sensitivity and the caring nature of the people who live here. Even the Loggerhead turtles search every shore in the world and choose here to lay their eggs and give us the pleasures of witnessing their hatching.
The interest rates flutter but we are promised continuous optimism in the financing arena. The stock market echoes our prediction of economic strengthening and the nation comes a little closer to ending our crisis. With still an abundance of inventory in our area, there is a long way to go before properties appreciate.
The market in 2004, 2005 and part of 2006 jumped so very high, that in order to bottom out, it had a long hard fall. It is estimated that values today in our area, are in the range of 2002 prices.
In a few states and cities that showed a minimal depreciation factor over the past several years, it should be noted that those areas did not show a significant amount of appreciation in 2004 to 2006. Those areas are in the minority as most states and cities across the United States jumped high and now have fallen back.
Continuous efforts to increase the market value are stifled by the conservative nature of the lending institutions who are wrapped in tighter regulations. Loan processing is tougher and longer than in the past year. Lenders require more information and documentation from buyers prior to a loan commitment.
Insurance rates have, for the most part, shown a slight decrease, and more significant decreases are seen if a wind mitigation inspection shows construction that withstands hurricanes.
Incentives for storm protective features, energy/green features, grant rewards to buyers and sellers who purchase quality upgrades.
Buyers show continuous confidence that the real estate market is at or very near the bottom. Fewer "for sale" signs dot our neighborhoods, and some are not sure if the signs floated away in the rains or properties have sold. I will vouch for the sold. The activity in sales contracts each month since February have continued to increase.
Brevard County is a very special place to call home. The concern for the homeless, the hungry and the poor, by all of our residents, reflects the sensitivity and the caring nature of the people who live here. Even the Loggerhead turtles search every shore in the world and choose here to lay their eggs and give us the pleasures of witnessing their hatching.
Sunday, May 17, 2009
Appraisal can set a home's sale price.
In this market, buyers cannot possibly overpay for a property if they are financing or the contract for sale and purchase is contingent upon the property appraising at contract price.
The beauty of purchasing in this "buyer perfect" market includes:
- Interest rates under 5 percent.
- An abundance of properties to choose from.
- An $8,000 tax credit for first-time homebuyers.
Now buyers have the best protection possible: lenders in our area and in most of the United States are mandated to proceed with caution in the appraisal process. The appraisal is scrutinized in "underwriting," and appraisers are following procedures to select sales from the past six months that are comparable to the property being financed. Appraisals, therefore, are low, and lenders will not lend if the appraisal or value of the property is indicated to be less than the purchase price.
In addition to using sales within the past six months, appraisers must use a "depreciated market adjustment" for the months past the time of the sale. This adds to the lowering of the appraised value. What does this mean to the seller? The motivated seller must price his/her property at the appraised value.
Fair or not fair? In my opinion, this keeps the market from increasing in value. The fact is, there is nothing we can do about this until the abundance of properties are absorbed and the balance of supply and demand comes to the real estate market.
The possible solution or correction to this appraisal issue is obvious: Sell low and buy low. Use the market to your benefit. We cannot change the past, and now we have to live with the conservative lender practices. It seems to be a lateral move if you lose on the sale and gain on the purchase.
As our crystal clear skies come with the occasional threat of thunderstorms, so too this wonderful, very active market, has some black clouds. But the sun continues to shine on Brevard County.
Sunday, May 10, 2009
Contract protects both sides...
Sellers and buyers have rights under the terms of a home contract. The contract typically used for purchasing a property in Brevard County and most of Florida is called the "FAR/BAR Contract." It was developed and implemented with the Florida Association of Realtors and the Florida Bar Association. It appears to be a balanced contract for both buyers and sellers.
Certain addenda are usually attached to this contract giving the buyers the right to inspections and limiting the repairs of the sellers to a dollar figure that is agreeable to both parties.
In the addendum for inspections, the buyers typically have the right to cancel the contract and get a refund of all money deposited if the inspections are unsatisfactory in the opinion of the buyers. This condition for inspections and the right to cancel is for a limited time period, usually about 10 days from the date of signing the contract. Hiring a good inspector is essential in today's market. The inspector should notify the buyer if more inspections are necessary. For example, if there is an indication of past leaks and past moisture damage, a mold mildew inspection may be recommended.
Sellers should complete a "real property seller's disclosure" for the buyer's information. This disclosure will inform the buyers of past repairs and conditions of the property. Sellers must disclose items, not readily visible to the buyers, that would materially affect the value of the property. This is an obligation of the seller required by the contact and enforceable by the law.
Sellers can truly assist a buyer by providing additional information on what subcontractors were used for repairing air conditioners, electrical problems, pool problems and other maintenance or improvements on the property.
The buyers should be aware that an appraiser does not inspect a home for wiring, plumbing, heating, cooling, roof or appliances. The appraiser inspects the home for the size, condition, quality, age and location to determine the comparable sales and render the opinion of value for the bank in order for the buyers to secure the loan.
The surveyor has the duty of verifying the property lines and flagging any violation as to set backs and encroachments.
A title search is performed prior to closing to prove there are no claims or liens on the property that will not be corrected by paying off the mortgage, the taxes and any other existing liens.
The buying and selling process complex and these inspections and services provide assurance that the process is protective of both buyers and sellers.
The market continues to be extremely active as interest rates, although varied this week, continue to be low and the selection of available properties is outstanding. Smart buyers are taking advantage of this wonderful time in the real estate market in Brevard County.
Certain addenda are usually attached to this contract giving the buyers the right to inspections and limiting the repairs of the sellers to a dollar figure that is agreeable to both parties.
In the addendum for inspections, the buyers typically have the right to cancel the contract and get a refund of all money deposited if the inspections are unsatisfactory in the opinion of the buyers. This condition for inspections and the right to cancel is for a limited time period, usually about 10 days from the date of signing the contract. Hiring a good inspector is essential in today's market. The inspector should notify the buyer if more inspections are necessary. For example, if there is an indication of past leaks and past moisture damage, a mold mildew inspection may be recommended.
Sellers should complete a "real property seller's disclosure" for the buyer's information. This disclosure will inform the buyers of past repairs and conditions of the property. Sellers must disclose items, not readily visible to the buyers, that would materially affect the value of the property. This is an obligation of the seller required by the contact and enforceable by the law.
Sellers can truly assist a buyer by providing additional information on what subcontractors were used for repairing air conditioners, electrical problems, pool problems and other maintenance or improvements on the property.
The buyers should be aware that an appraiser does not inspect a home for wiring, plumbing, heating, cooling, roof or appliances. The appraiser inspects the home for the size, condition, quality, age and location to determine the comparable sales and render the opinion of value for the bank in order for the buyers to secure the loan.
The surveyor has the duty of verifying the property lines and flagging any violation as to set backs and encroachments.
A title search is performed prior to closing to prove there are no claims or liens on the property that will not be corrected by paying off the mortgage, the taxes and any other existing liens.
The buying and selling process complex and these inspections and services provide assurance that the process is protective of both buyers and sellers.
The market continues to be extremely active as interest rates, although varied this week, continue to be low and the selection of available properties is outstanding. Smart buyers are taking advantage of this wonderful time in the real estate market in Brevard County.
Sunday, May 3, 2009
Appraisals can make, break sale!
Clear blue skies, spectacular sunsets, beaches, rivers brimming with life, art shows, music in the parks and soon, the Loggerhead turtles will seek the dunes to lay their eggs.
How wonderful life is in Brevard.
The real estate action is fantastic too, with far more activity than in the past year. Offers, counter-offers, short sales and foreclosures keep everything moving. However, there can be some trouble in paradise for those experiencing low appraisals. With lender restrictions, appraisers appear to be guided to lower their value indications and cast a conservative view on the market. What is an appraisal? An appraisal is an opinion of value rendered by one designated and licensed to perform this evaluation. The appraiser is typically hired by the lender when a buyer applies for a loan on a property.
The appraiser inspects the property, then studies the market for sales that are current and comparable to the property. In analyzing the information, the appraiser adjusts the recent sales that are comparable by dollar values placed on differences in age, condition, location, amenities, quality of construction and time of sale.
A market depreciation is used if the sale was not quite as recent as other sales. A depreciation factor is used to indicate that the market value has gone down since the sale of the comparable property. An appraisal is subjective and given as an opinion of value. The value indicates a range because the value is not a fact but an opinion. The opinion of value is determined to be what a typical buyer will pay for in today's market.
This appraisal is an integral part of the loan process. The appraisal can kill the purchase if the value does not meet the contract price of the property and financing is necessary. Most recently, there have been appraisals that come in lower than the contract price. How can the market recover if the past sales indicate a depressed market?
The only way to increase the market value of a neighborhood and the homes within is to have some cash sales or sales where the down payment is so significant that the appraisal does not negate the financing. The lender is not causing this problem as the lender is bound by problems and current restrictions on mortgage practices.
The appraiser is not the problem because he or she is at risk if the work is not performed in a conservative manner. If we can inch upward in our value indications and not put the lender or the buyer at risk, the slightly higher sales that have been killed by appraisals will allow for a slight change, which is a welcome relief in our real estate market.
Let's keep the action moving and enjoy the treasures of this beautiful place we call home.
How wonderful life is in Brevard.
The real estate action is fantastic too, with far more activity than in the past year. Offers, counter-offers, short sales and foreclosures keep everything moving. However, there can be some trouble in paradise for those experiencing low appraisals. With lender restrictions, appraisers appear to be guided to lower their value indications and cast a conservative view on the market. What is an appraisal? An appraisal is an opinion of value rendered by one designated and licensed to perform this evaluation. The appraiser is typically hired by the lender when a buyer applies for a loan on a property.
The appraiser inspects the property, then studies the market for sales that are current and comparable to the property. In analyzing the information, the appraiser adjusts the recent sales that are comparable by dollar values placed on differences in age, condition, location, amenities, quality of construction and time of sale.
A market depreciation is used if the sale was not quite as recent as other sales. A depreciation factor is used to indicate that the market value has gone down since the sale of the comparable property. An appraisal is subjective and given as an opinion of value. The value indicates a range because the value is not a fact but an opinion. The opinion of value is determined to be what a typical buyer will pay for in today's market.
This appraisal is an integral part of the loan process. The appraisal can kill the purchase if the value does not meet the contract price of the property and financing is necessary. Most recently, there have been appraisals that come in lower than the contract price. How can the market recover if the past sales indicate a depressed market?
The only way to increase the market value of a neighborhood and the homes within is to have some cash sales or sales where the down payment is so significant that the appraisal does not negate the financing. The lender is not causing this problem as the lender is bound by problems and current restrictions on mortgage practices.
The appraiser is not the problem because he or she is at risk if the work is not performed in a conservative manner. If we can inch upward in our value indications and not put the lender or the buyer at risk, the slightly higher sales that have been killed by appraisals will allow for a slight change, which is a welcome relief in our real estate market.
Let's keep the action moving and enjoy the treasures of this beautiful place we call home.
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