Sales moderate in July 2011; inventory continues to drop

Members of the Sarasota Association of Realtors® reported 599 property sales in July, which was 14.3 percent higher than the July 2010 total of 525 sales.

There were 445 single family home closings and 154 condo closings in July. In 2011, four months have topped 700 in sales, with June reaching 728. In May, sales peaked at 796 sales during the height of the spring buying season, a pattern that has been evident for the past few years. Last July, sales also moderated as the slower summer season kicked in and the Federal homebuyer tax credit expired.

In July 2011, the total inventory of available properties dropped again to the lowest level in more than a decade. There were 2,829 single family homes and 1,656 condos on the market, for a total of 4,485 available properties. This is more than a 7 percent drop from the June 2011 total of 4,830, and a 25 percent drop from the July 2010 figure of 6,054. The decreased inventory could spur stronger competition for homes and condos, and subsequent price appreciation.

The median price of a single family home in July was $169,900, just slightly lower than the June figure of $175,000. The July 2010 figure stood at $155,000, so the median price was up almost 10 percent from last year at this time. The condo median price slipped to $145,000 from $185,00 in June, but was 14 percent higher than last July’s median of $127,000.

The months of inventory rose to 6.4 months for single family homes, from last month’s figure of 5.9 months. For condos, the months of inventory also rose to 10.7 months from June’s figure of 8.2 months. Both figures remain far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). This statistic represents the time it would take to sell the existing inventory at the current month’s rate of sales. The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers.

Aside from the lower inventory, another bright sign in July 2011 was the increase in pending sales from 754 in June to 799 last month. Last year, pendings were trending downward in late summer which brought a decrease in total sales in the fall.

“While we did see the market seasonally moderate in July from the hot selling pace we’ve experienced in the first half of 2011, these numbers still reflect strength in the market,” said SAR President Michael Bruno. “There hasn’t been an alarming drop in sales, and the higher number of pending sales signals a healthy fall market. The inventory of available properties remains at a low for the past decade, and this historically means we should experience upward pressure on prices. The percentage of distressed property sales has remained stable, which is another positive factor.”

The overall percentage of distressed sales (short sales and foreclosure sales) remained at 38 percent of the July 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

“The impact of recent events in the financial markets may cause some uncertainty in terms of national home sales,” explained Bruno. “But we all know that real estate is local, and Sarasota is traditionally a market that emerges from tough times with strength and leads the new wave of prosperity.”

Sarasota real estate market remains strong in June 2011

Members of the Sarasota Association of Realtors^® continued to sell properties at a brisk pace in June 2011 with 728 total transactions recorded last month. This marks the fourth month in the last 12 with sales exceeding the 700 level – all occurring in 2011. In addition, the median sales price for single family homes hit the highest level since last June, and the total inventory of available properties dropped to the lowest level in more than a decade, which could spur stronger competition for homes and condos.

 There were 510 single family home closings and 218 condo closings in June, which continues the strong sales surge in 2011. While the total was somewhat lower than May’s 796 sales, and June 2010′s total of 776 sales, the current trend has been the strongest since the real estate boom of 2003-2005. The sales even rival the mini-boom from last year’s federal homebuyer tax credit incentive. This year, there is no government program propping up the market, so the sales simply reflect a high level of buyer interest. Prices for both single family homes and condos were also above the annual median prices for the past two years, with the single family median sales rising to $175,000, the highest since June 2010 (also at $175,000). The figure was a 10 percent jump from May, when the median price was $159,000. The condo median price slipped to $185,000 from last month’s surge to $218,750. But the figure was still much higher than the median for the last 12 month period ($162,000).

The total available property inventory dropped to 4,830, another big decrease from the May figure of 5,010, and now the lowest level in the past 10 years. The inventory reached its apex in April 2007, when 17,089 properties were on the market.

The lower inventory, combined with the higher sales rate, has now dropped the months of inventory to 5.9 months for single family homes and 8.2 months for condos, both figures far below the highs of 25.3 months for single family (in early 2009) and 41.7 months for condos (in late 2008). The 6 month level is traditionally a point which represents equilibrium in the market between buyers and sellers. Once the figure trends downward below 6 months, buyers are often forced to compete for properties, which generally drives prices higher.

In fact, at the lower price ranges below $120,000, where about 40 percent of sales are occurring, the months of inventory has dipped to below 4 months. That means competition is very high for these properties, with multiple offers often reported by agents. The overall market (combined single family and condo) stands at 6.9 months of inventory.

“It is encouraging to see how the Sarasota market has continued this strong momentum in the face of continuing weakness in the national and state economies,” said SAR President Michael Bruno. “The inventory of available properties, which is lower than it has been since the 1990s, is a very important statistic. Historically, prices rise as competition for homes increases, and we’re seeing that occurring in our market. The percentage of distressed property sales is stabilizing, so prices should naturally continue to rise.”

The overall percentage of distressed sales (short sales and foreclosure sales) remained at 38 percent of the June 2011 sales. That compares to 47 percent as recently as February 2011 and a high of 51 percent in November 2010.

 ”As an association, we have kept our members educated and informed about the ongoing distressed property situation, and they have benefited greatly from this valuable resource,” explained Bruno. “Realtors who have kept current on the latest trends and changes within the market have been able to make the best of a tough situation, and the numbers reflect that. We all hope to see a significant drop in foreclosures and short sales in the coming years, and when that happens, Sarasota agents will be ready to handle the new market realities.”

Pending sales dropped to 754 from last month’s level of 841. They reached a recent peak of 1,208 in March 2011, continuing to reflect our area’s typical seasonal slowdown. Pending sales are properties going under contract during the month, and the statistic is a strong indicator for the next two or three months of sales, as pending sales reflect current buyer activity. Last June, pending sales were at 767, so the seasonal trend appears to be holding true.

Florida’s Siesta Beach ranks No. 1

May 27, 2011 @ 12:00 AM
The Associated Press

(Below is a letter submitted, without my knowing, to “Creative Loafing” for my nomination as “Sarasota Realtor of the Year 2010″.. I absolutely cherish the relationship & bond between myself and my clients.. Life is good..)

NOMINATION FOR SARASOTA REALTOR OF THE YEAR

September 2010 

Imagine a realtor who answers all calls and emails, and sticks with a needy buyer month after month regardless of how many questions or requests he gets!

For over a year we were exploring the market, investigating properties, and making offers on a multitude of houses. During this time Justin was unflappable always going the extra mile to help us to do our due diligence on every property. When a deal fell through he moved on with us leading with renewed energy and a positive, can-do, attitude.

When we finally purchased, the paperwork closed, and he had earned his commission on our new home south of downtown Sarasota, Justin continued to help us by going out of his way to make calls and contacts and visit the property to meet with contractors and utility vendors. This kind of dedication to us as customers, who lived 1,400 miles away, is beyond impressive. 

Justin is a pure example of an excellent realtor, entrepreneur, and fine young man. He is most deserving of the honor and award of Sarasota Realtor of the Year!

With pleasure,

Mr. & Mrs. Myers

Market growing for ‘quality time’ homes

ORLANDO, Fla. – Aug. 23, 2010 – Second homes, whether in the mountains or at the beach, have long had a strong family appeal. In recent years, savvy developers have been building communities aimed at families in the same way they once built for avid golfers, skiers or tennis players. Many of the homes are being bought because of family-friendly amenities and are used as a place for family gatherings, especially during holidays.

“Family-friendly definitely sells now,” says Steve Adelson, a partner in Discovery Land Co., which develops luxury second-home communities with a family focus. “In today’s market, the speculators are gone, and our buyers are real users. For people to be able to afford these kinds of homes, they usually have worked hard, spent a lot of time in the office, and on vacation they really want quality time with their families.”

Indicative of the appeal: Discovery has sold over $600 million worth of real estate this year, despite the economy.

The best family-centric communities have extensive supervised programs for kids, clubhouses and sports, activities and classes. Facilities and programs tend to be elaborate:

• At California’s Martis Camp, near Lake Tahoe, the “Family Barn” has a bowling alley, movie theater, soda fountain and stage. An outdoor sports complex offers croquet, lawn bowling, basketball courts, a soccer field, softball diamond and barbecue area. A separate “folk school” offers classes in photography and pottery.

• Colorado’s Snowmass resort has a multilevel, ski-in and ski-out “Treehouse Kids’ Adventure Center.”

• In addition to 35 miles of bike paths, a kids’ camp, three golf courses, equestrian and fly-fishing, Oregon’s Sunriver Resort has a domed astronomical observatory with a retractable roof and 13 telescopes. In summer, educational programs and viewings are conducted daily.

• Colorado’s Beaver Creek ski resort built a gondola for its kids’ ski school, has a skating rink, performing arts area and free cookies for skiers.

• At Idaho’s Gozzer Ranch, children make their own movie that’s “screened” for parents, complete with a red carpet and popcorn.

Most communities also offer simpler activities, which Adelson calls “Norman Rockwellian,” such as bingo nights and campfire steak cookouts. The best have put a summer camp twist on second-home ownership.

Copyright © 2010 USA TODAY, a division of Gannett Co. Inc., Larry Olmsted.

Foreclosure vs. short sale: pros and cons

PALM BEACH, Fla. – July 28, 2010 – With today’s reduced property values and increased unemployment, it’s tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.

Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.

But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.

“I want to be very clear on this, short sales are a better solution than a foreclosure, even when all the options in a situation where you lose your house are not great,” said Mark Greene, owner and president of Short Sale Operations LLC in North Palm Beach.

The biggest difference between Florida and many other states when it comes to losing a home is the deficiency judgment.

While some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to go after borrowers for up to 20 years. That can lead to a garnishment of wages long after the home is gone.

In a short sale, where the bank agrees to take a lesser amount for the home than what is owed on a loan, lenders sometimes are willing to write off the deficiency on the front end.

Greene said in 90 percent of the cases he handles, the bank has waived its right to seek a deficiency.

That was the case with Jupiter resident Kathryn Lorello, who in 2008 found herself in a home she couldn’t afford.

Following a divorce, and with three children, Lorello bought a $408,000 home that she lived in comfortably for a year. But then she lost her job as a manager of a real estate company.

She remembers the day the bank served the notice of foreclosure.

“I cried my eyes out,” Lorello said. “That’s when I panicked because I really didn’t want it to happen.”

Lorello got advice from Greene on doing a short sale.

Her bank, Wells Fargo, waived its right to seek a deficiency even though it ended up taking $200,000 less than what was owed on the loan.

Also, if a bank refuses to waive the deficiency in a short sale, it still would have to go back to court to seek a judgment.

In a foreclosure, at the end of the proceeding, a deficiency judgment is automatically awarded by the courts and the bank is free to seek a claim.

“In the past, people just wanted to move from the property and get on with their lives and didn’t understand what the lenders’ rights were in terms of pursuing a deficiency claim,” said Paul Baltrun, director of loss mitigation at the LaBovick & La-Bovick law firm.

“I think people are more aware now about what can happen after the fact and that their nightmare can continue.”

Another consideration is the effect of a foreclosure or short sale on credit.

According to the Fair Isaac Corp., which developed the widely used measurement of credit risk called a FICO score, the negative effect of a foreclosure is only marginally worse than a short sale.

But in Florida, a deficiency judgment from a foreclosure is likely to have a much larger impact that will prohibit your ability to buy another home for many years.

Daniel Poulos, a mortgage broker with Elite Lending in North Palm Beach who has studied the effect of foreclosures and short sales on credit, said unless a borrower pays off the deficiency, it may be 20 years before someone is eligible for another mortgage.

“That’s the kind of information that’s not getting out in Florida,” Poulos said.

There are a few situations where some experts believe it is better for someone to go to foreclosure rather than do a short sale.

To do a short sale, a borrower must give all of his or her financial information to the bank before it will decide whether to allow the short sale. The idea is that if a person can afford to pay the mortgage, the short sale may be denied.

“Now the lender knows everything about your finances and they can better decide whether they will go after you or not,” said Jon Maddux, CEO of YouWalkAway.com, a company that advises people on strategic defaults.

If a lender doesn’t know your finances, Maddux argues, it reduces the chances it will go after you following a foreclosure.

“You might fly under the radar,” he said. “With the millions of people going through this, they are probably going to go after the low-hanging fruit.”

Copyright © 2010, The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

Florida’s existing home, condo sales rise in June 2010

NAR: International interest in U.S. homeownership increases

WASHINGTON – July 8, 2010 – International homebuyers are increasingly attracted to property in the U.S., according to the National Association of Realtors®’ 2010 Profile of International Home Buying Activity. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.

“While all real estate in the U.S. is local, the same is not true for property owners,” said NAR President Vicki Cox Golder. “The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country and can rely on Realtors to help guide them through the complex process of buying property in the U.S. With expertise, knowledge and experience, Realtors have a global perspective.”

The survey covers the period between April 1, 2009, and March 31, 2010. During that time foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7 percent of the residential market.

Slightly more than a quarter of Realtors, 28 percent, reported working with at least one international client in the past year. This is a significant increase from the 2009 report, when 23 percent of Realtors worked with foreign clients. Eighteen percent of all Realtors were estimated to have completed at least one sale, compared to 12 percent last year.

“Several factors have contributed to an increase in international buyer interest in the U.S.,” said Golder. “A large majority of Realtors report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.”

International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23 percent of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Foreign buyers from Mexico have been steadily increasing. In 2010, Mexico replaced the U.K. as the second largest buying group with 10 percent of buyers. Buyers from the U.K. decreased from 10.5 percent in 2009 to nine percent in 2010. Eight percent of recent buyers came from China/Hong Kong.

Two factors important to international clients when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. Florida typically attracts European, Canadian and South American buyers while the East Coast draws Europeans. The West Coast brings Asian buyers and the Southwest attracts Mexicans.

International buyers were reported in 39 states in 2010, but a slight majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53 percent of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.

The median price paid by international buyers for a home in the U.S. was $219,400, a decrease from 2009’s median price of $247,100. However, the median price paid by foreign buyers was significantly higher than the overall median market price, which was $172,500 in 2009. On average, foreign buyers tend to purchase closer to the upper end of the market; 16 percent of the total international purchases were for homes priced at more than $500,000. According to Realtors, this was because international buyers are typically looking for a second home.

A majority of international buyers, 66 percent, purchased single-family detached homes. However, more international buyers purchased a condo than did their U.S. counterparts, at 23 percent and 7 percent, respectively. Only 44 percent of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers. Fifty-five percent of foreign buyers paid all cash. Realtors reported that a majority of international buyers use all cash because of the difficulty in establishing international credit in the U.S. Over one-third, 34 percent, of potential foreign buyers was unable to complete transactions because of financing problems in the U.S.

© 2010 Florida Realtors

AP analysis: Economic stress is easing more slowly

WASHINGTON (AP) – July 6, 2010 – Two-thirds of U.S. counties became economically healthier in May, thanks to more manufacturing jobs in the Midwest and fewer home foreclosures in the Sun Belt, according to The Associated Press’ monthly analysis of conditions around the country.

Yet the improvement appeared to slow in May compared with April, the AP’s Economic Stress Index shows. And concerns are arising that the nation’s recovery is losing momentum.

Economic stress declined month to month in 33 states in May, aided by lower unemployment. In April, by contrast, stress had eased in every state except two — and in 90 percent of the nation’s 3,141 counties.

Bankruptcy rates around the nation also inched up in May.

“As the government’s stimulus winds down and as long as the labor market remains weak, an acceleration in the economy is probably not in the cards,” said David Huether, chief economist at the National Association of Manufacturers. “If I were a betting man, I’d bet the economy won’t double dip into recession, but it will grow at a much slower pace.”

Still, conditions did improve in most of the nation in May. Just under 40 percent of counties were deemed economically stressed in May, compared with 42 percent in April. Job gains in manufacturing, farming and hotels and restaurants helped some of the counties where stress declined the most, according to the AP’s analysis.

The AP’s Economic Stress Index calculates a score for each county and state from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score indicates more economic stress. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11.

The AP’s index found the average county’s Stress score in May was 10.3, down from 10.6 in April. It was the lowest score since November’s 10.2.

For the first time since the AP began the stress index in May 2009, the four states that have shown the most stress each month — Nevada (21.75 in May), Michigan (16.22), California (16.14) and Florida (15.26) — improved from the prior month. These states benefited from declining unemployment and foreclosure rates.

Arizona rounded out the list of the five worst-performing states in May with a Stress score of 15.04. That was a slight increase from April.

The best-performing states in May were North Dakota (4.03), South Dakota (5.21), Nebraska (5.83), Vermont (6.49) and Iowa (7.5).

Despite better conditions in May, analysts say the economy’s rebound might be stalling as it enters the second half of this year, when the benefit of federal stimulus spending will start to fade.

A growing number of economists are scaling back their growth forecasts. Michael Feroli, an economist at JPMorgan Chase, for instance, thinks the economy will grow at a 3.2 percent annual pace in the July-to-September quarter, down from a previous 4 percent estimate.

The improvement in May occurred before renewed concerns about the economy emerged last month. Consumer confidence, for instance, tanked in June, and stock prices have sunk. Businesses remain wary of ramping up hiring.

Still, the economy’s bright spots — namely manufacturing — were evident in May.

Among the states, Michigan, Vermont, Idaho (11.3), Illinois (13.7) and Iowa saw the biggest month-to-month decreases in stress. Economists pointed to gains in manufacturing jobs, which helped reduce unemployment in those states. Counties in the Midwest led the nation in improvement for a second straight month.

Louisiana (8.63), Oklahoma (8.61), Pennsylvania (10.49), Mississippi (12.58) and Arizona (15.04) suffered the biggest month-to-month increases in economic stress. Higher unemployment was the main reason.

Economic stress was higher in May than a year ago in 35 states, particularly in the West. Over the past year, stress has grown the most in Idaho, Montana (7.89), Nevada, New Mexico (9.48) and Utah (10.81).

In Utah’s case, the state experienced the housing boom about a year and a half behind the Sun Belt states of Arizona, California, Florida and Nevada. That explains why the housing bust and foreclosure crisis hit Utah later than it did others, said James Wood, director of the Bureau of Economic and Business Research at the University of Utah.