S&P/Case-Shiller Report Tampa Area Home Prices Drop

Bay area home prices improved in January but still saw some of the steepest declines in the nation, according to the S&P/Case-Shiller Metro Area Home Price Index. Home prices in the Tampa-St. Petersburg-Clearwater metropolitan area fell 7.4 percent compared with the same month in 2009. The only area to fare worse was Las Vegas, where prices fell 17.4 percent. The Bay area's decline tied Detroit's number. Even so, the Bay area saw improvement. Prices fell 0.5 percent from December to January - slightly better than the 0.6 percent drop from November to December. The monthly declines have shown signs of stabilization since summer and have increased slightly during several months. The year-to-year declines are better, too. December's year-to-year drop was 11 percent, compared with January's 7.4 percent.

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Flood insurance program hiatus disrupts home closings

Homeowners who need flood insurance to close on the purchase of a home in a flood zone are in limbo again. Congress could not come to terms for extending the National Flood Insurance Program before it went on recess, forcing the NFIP to stop issuing and renewing policies effective March 28. Coverage of existing policies is not affected. It's the third time in recent months that program funding has temporarily expired amid political wrangling. The latest round of short-term funding is connected to legislation that also extends a number of programs for the unemployed. The hiatus is expected to be short-lived, with Congress taking up the legislation when it returns to session April 12. Once Congress authorizes the program again, it's expected to make it retroactive. Standard homeowners insurance policies do not cover flooding. The flood insurance program, created in 1968, offers coverage from floods associated with hurricanes, overflow of rivers or lakes, rain storms, mudslides and winter melt. Florida is the seventh-largest state in terms of flood insurance claims.

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US home prices post smallest annual decline in 3 yrs

Home prices showed the smallest annual decline in almost three years in January, indicating there are surprising areas of strength in the housing market. The Standard & Poor's/Case-Shiller 20-city home price index fell just 0.7 percent from last year on a seasonally adjusted basis. The index reading of 146.32 was almost in line with analysts expectations, according to a survey by Thomson Reuters. "There was some positive momentum in home prices in January," wrote Ian Pollick, a portfolio strategist with TD Securities. Better still, prices rose 0.3 percent from December to January, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose.

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Associations using reverse foreclosure to get fees from banks

Some homeowners associations fed up with unpaid assessments on foreclosure homes are using a new legal tool to force lenders to pay. With so many abandoned distressed properties, it is becoming increasingly difficult for associations to pay bills for services such as water, cable and maintenance. When there are shortfalls, associations typically have little choice but to raise fees for all unit owners who do pay their bills. Legally, the owner of the property must pay the fees. But when banks take months or years to foreclose, properties are left in limbo. Some lenders hold off on foreclosure because so many properties are worth less than the mortgage amount. This leaves no one paying association fees.

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Option ARMs a housing hazard

Home values are slowly rising, and interest rates are still at low tide. But some analysts see a hidden reef that could sink the housing market: option-ARM loans. Option ARMs are adjustable-rate mortgages that give borrowers the option to make minimum payments that don't even cover the interest owed, much less the principal. That unpaid interest gets tacked onto the principal, increasing the size of the loan. But there's a catch: The optional minimum-payment period usually lasts five or 10 years. Because most of the option-ARM loans were funded from 2005 to 2007, the easy-term periods have started to expire. In a wave cresting through the coming two years, most of the estimated 900,000 borrowers who have option ARMs will lose their ability to make these teaser payments, according to First American CoreLogic, a Santa Ana, Calif., real estate research firm.

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Mortgage Rates Inch up Following Bond Yields

The 30-year fixed-rate mortgage (FRM) averaged 4.99 percent with an average 0.6 point for the week ending March 25, 2010, up slightly from last week when it averaged 4.96 percent. Last year at this time, the 30-year FRM averaged 4.85 percent.

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Florida agents pessimistic home prices will rise soon

It's the question everyone wants to know: will home prices stabilize or drop? About half of Florida's real estate agents think prices are staying where they are over the next six months, according to a survey released today by Calif.-based HomeGain, an online real estate company. The state's agents are slightly more pessimistic than agents in other states, said Louis Cammarosano, general manager of HomeGain. Fifty-percent of Florida agents said home prices will stay the same, and 33 percent thought prices would decrease. In Tampa Bay, area home prices have plummeted more than 40 percent since the housing boom peaked in 2006. That includes homes in the Tampa-St. Petersburg-Clearwater area. In the past year, home prices generally have increased month-to-month and have hovered in the high $130s for the past several months. The average median price for the year was $137,500, according Florida Realtors. The median price of single-family existing homes in the Bay area fell to $125,600 in January, the most recent month for which data has been released. That's an 11 percent drop from December but a 3 percent increase from a year ago when the median price was $122,400.

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Florida will be last out of recession

The path to economic recovery may come in the shape of a gravy boat with a sharp decline, a long flat bottom and a tapered spout, according to economist Sean Snaith. Like most economists, Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida College of Business Administration, said he believes the nation exited the recession in the third quarter of 2009, but for most people, it doesn’t feel like it. Snaith expects commercial real estate foreclosures to continue to impact the market, although because the commercial market is expecting them, and preparing for them, he doesn’t expect them to be as severe as some have feared. While job growth is expected to improve in the coming months, Snaith also expects unemployment to continue to plague the market until 2013-2014. In the long term, he also expects the state’s population to grow at a slower rate than it has in the past. “In Florida, we went into the recession before everybody else and we’ll come back after everybody else.”

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February Tampa Area Home Sales Up 10%, Prices Down 3%

The Tampa-St. Petersburg-Clearwater MSA reported a total of 2,050 homes sold in February compared to 1,856 homes a year ago for a 10 percent increase. The existing home median sales price was $128,100; a year ago, it was $131,400 for a 3 percent decrease. In the year-to-year comparison for the existing condo market, a total of 710 units sold in the MSA last month, up 74% from a year ago when 408 condos sold. The market’s existing condo median price was $89,200; a year ago, it was $99,000 for a 10 percent decrease.

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Florida Realtors are gloomy about prices

It's the big question: Will home prices stabilize or drop? About half of Florida's real estate agents think prices are staying where they are over the next six months, according to a survey released Monday by California-based HomeGain, an online real estate company. The state's agents are slightly more pessimistic than agents in other states, said Louis Cammarosano, general manager of HomeGain. "It was a little surprising given that Florida has been suffering for quite some time already," Cammarosano said. "A lot of the pain in Florida has already worked its way through." Fifty percent of Florida agents said prices will stay the same, and 33 percent thought prices would decrease. In the Tampa Bay area, home prices have plummeted more than 40 percent since 2006. That includes homes in the Tampa-St. Petersburg-Clearwater areas.

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Foreclosure Inventory Is Increasing

The inventory of foreclosed homes that banks are sitting on is rising, threatening to push home prices down further in some parts of the country. Analysts at Barclays Capital estimated that banks and mortgage investors held about 645,800 foreclosed homes in January, up 4.6 percent from December. That is down significantly from the peak of 845,000 in November 2008. States with the largest number of foreclosures are Florida, Arizona, Nevada, California, and Michigan.

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Buyer beware in Tampa's low-priced housing market

Home prices are lower than they have been in years, and there are plenty of properties to choose from. No doubt, it's a buyer's market. But it's also a market to beware. As buyers rush to find homes before the federal tax credit expires next month, experts say they should be cautious. About 60 percent of the homes on the market in Tampa Bay are distressed sales. In some cases, these properties can allow buyers to stretch their budgets even more, but there are potential pitfalls.

1. Make sure the home doesn't have contaminated drywall.
2. If you buy a distressed property beware that it comes "as is."
3. Check records to make sure there are no liens or past due bills on the property.
4. Don't buy a home for the short term.

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Fixed-Rates Flat This Week

The 30-year fixed-rate mortgage (FRM) averaged 4.96 percent with an average 0.7 point for the week ending March 18, 2010, up slightly from last week when it averaged 4.95 percent. Last year at this time, the 30-year FRM averaged 4.98 percent.

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Fed To Stop Buying MBS

The Federal Reserve renewed its commitment to keep key interest rates near zero for an “extended period,” but also confirmed that it will stop buying mortgage-backed securities at the end of March. The Fed, whose regular meeting began Tuesday, said that “housing starts have been flat at depressed levels” and “employers remain reluctant to add to payrolls” as a reason for extending the cap on interest rates. “The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability,” the Federal Open Market Committee statement said.

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Housing Experts Say Real Estate is Recovering

Some of the nation’s top economists believe the housing market has turned and better days are on the way for the housing industry. Increases in jobs, credit, and affordable homes will overcome impediments such as rising interest rates, and the expiration of the Federal stimulus program to push the housing market toward recovery, says Dean Maki, chief U.S. economist for Barclays Capital. “I would bet even odds that we’re at a bottom and that we’re going to see improvement in the coming months,” says Karl Case, co-creator of the S&P/Case-Shiller Home Price Index and a professor of economics at Wellesley College. “The underlying trend is turning positive,” says Bruce Kasman, chief economist at JPMorgan Chase & Co.

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Florida among states rushing plans for $1.5B in housing funds

The five states hardest hit by the foreclosure crisis have been given only weeks to plan how to spend $1.5 billion in federal funding announced by the Obama administration last month. Guidelines issued under the U.S. Treasury Department's Fund for Hardest Hit Housing Markets on March 5 gave housing finance agencies in California, Arizona, Florida, Nevada and Michigan just six weeks to come up with plans on how to spend their share of the money. The rush could be problematic for the states, especially because Treasury is seeking "innovative" measures to help families facing foreclosure. But some experts have been urging the administration to try the approach, believing it will be helpful and that it can be done quickly.

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Future Foreclosures Could Hamper Housing

In spite of signs of a recovery, many home buyers are continuing to fall behind on their mortgages. Some economists see this as an indication that a second major wave of foreclosures is likely, even though the housing market appears to be stabilizing. This next upsurge in foreclosures could cause more disruption and push prices down farther. Housing experts say that the recent favorable housing data doesn’t reflect the number of properties that banks have left in limbo — repossessed, but not yet on the market. "Lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is there," says Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development.

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Florida seeking drywall relief

Florida is asking the federal government for disaster relief for consumers overwhelmed by tainted drywall in their homes. It's a highly unusual tack, and is the first step in seeking funds from the Federal Emergency Management Agency. FEMA typically helps in cases of natural disasters, such as hurricanes, not product defects. Kurt Pickering, spokesman for FEMA's regional office in Atlanta, said the agency is reviewing Florida's request. Area counties could benefit most if the request is approved.
Florida homeowners with toxic drywall, imported mainly from China, deserve money and answers about health concerns, according to a letter Florida's interim emergency management director sent to federal officials Wednesday.

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Mortgage Rates Drop Slightly in Freddie Mac Weekly Survey

The 30-year fixed-rate mortgage (FRM) averaged 4.95 percent with an average 0.7 point for the week ending March 11, 2010, down from last week when it averaged 4.97 percent. Last year at this time, the 30-year FRM averaged 5.03 percent.

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US foreclosure rates up by smallest amount in 4 years

The foreclosure crisis isn't over, but the pace of growth may finally be slowing down. RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years. Among states, Nevada posted the nation's highest foreclosure rate, though foreclosures there were down 7 percent from January and down more than 30 percent from a year earlier. It was followed by Arizona, Florida, California and Michigan. Rounding out the top 10 were Utah, Idaho, Illinois, Georgia and Maryland. The metro area with the highest foreclosure rate in February was Las Vegas. Though one in every 90 homes there received a foreclosure filing, foreclosures were down 9 percent from a month earlier. Foreclosures in the No. 2. metropolitan area, the Cape Coral-Fort Myers area in Florida, were up 31 percent from a month earlier.

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Foreclosures back on the rise in Tampa Bay

Foreclosure rates were up nationally in February, and the story isn’t much different in the Tampa Bay region. Only Manatee and Pasco counties had annual foreclosure rate decreases in February. Those were the only highlights in Florida where foreclosures were up more than 16 percent, according to a new report from RealtyTrac. However, February marked the 50th straight month of national increases in foreclosure rates, despite the 6 percent growth nationally being the smallest annual increase seen since January 2006.

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Tampa's Unemployment Hits 13.1%

Florida's unemployment rate reached 11.9 percent in January, tying a state record set nearly 35 years ago. The jobless rate released Wednesday morning, which was up from a revised 11.7 percent in December, was fueled by a loss of 6,100 jobs during the month and 303,200 jobs over the past year. The numbers for the Tampa Bay area were even more harsh, with unemployment hitting 13.1 percent, up from 12.4 percent a month earlier.

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Fewer Sellers Are Cutting Prices

The prices on 19 percent of homes for sale as of March 1st have been reduced at least once, the lowest percentage in the last year, according to Trulia.com. In October and November, when the market was feeling the effect of the tax credit, 26 percent of sellers cut their asking prices. “Better pricing is leading to less time on the market, less price reduction, and in a lot of markets we're starting to see bidding wars on lower end properties," said Ken Shuman, spokesperson for Trulia.

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To walk or not to walk: underwater homeowners face dilemma

Michael Keigans is “underwater” on his mortgage, owing $80,000 more than his Deerfield Beach house is worth. Keigans figures it could take a decade or two to recover the lost equity, so he’s tempted to walk away, even though he has the money to pay. “Why keep putting money into a house that’s going down in value?” he asks. It’s a question being debated in many households nationwide as the housing crunch continues. Some borrowers feel they have a moral obligation to pay the mortgage, but a growing number of homeowners and consumer advocates say walking away could be a smart business decision. The scale of the problem is daunting: More than half of all residential mortgage holders in Broward County are underwater, California research firm First American CoreLogic said last week. In Palm Beach County, nearly half of mortgage holders fall in that category. And there are several reason for the crisis: Homeowners who now are underwater have seen their property values plummet after they paid peak home prices from 2004 to 2006. Many of these borrowers bought with adjustable-rate mortgages, putting little or no money down. Some are underwater because they refinanced their homes at the market’s peak. So should they walk? Hundreds of thousands of people are doing just that.

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Tax credit has Realtors' phones ringing as deadline looms

Real estate agents say their phones are ringing a lot more in recent weeks as folks scurry to sell and or buy homes before next month's tax credit deadline. To qualify for the credit, buyers must have fully executed sales contracts in place by April 30 and the deal must close by June 30. First-time home buyers are eligible for up to $8,000. Buyers who have owned a home for five consecutive years within the past eight years can get a credit of up to $6,500. Tampa Bay area sales prices have plummeted more than 40 percent since the peak of the housing boom. Home sales in Tampa-St. Petersburg-Clearwater rose 28 percent in the fourth quarter of 2009, and the median sales price hit $138,800. That's down 42 percent since prices peaked at $239,600 in June 2006.

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Mortgage Rates to Stay Low, Goldman Predicts

Investment bank Goldman Sachs recently predicted that mortgage rates won’t rise much when the Federal Reserve ends its purchases of mortgage-backed securities at the end of March. Part of the reason is that demand for mortgages is low, says Goldman analyst Sven Jari Stehn. What would drive up mortgage rates, he says, is a decision by the Fed to sell the mortgage backs it holds, but that isn’t likely to happen anytime soon, he believes.

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The Future of Home-Price Appreciation

After its historic decline brought the global economy to its knees, the U.S. housing market is gearing up for a long-awaited recovery. Real estate experts expect home prices to hit bottom in late 2010 or early 2011 before--finally!--heading north again. But what shape will the rebound take? Are we in for another boom? Or will we have to settle for sluggish growth? Here's the outlook for home price appreciation through 2020.

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Foreclosed Borrowers May Get Loans Again

Will people who currently face foreclosure or short sales or who walk away from their underwater properties ever be able to get financing to buy another home down the road? Banks haven’t been very forthcoming on this issue. However, knowledgeable observers of the situation say that while it may take some time, the situation will right itself for most people. Because bankrupt borrowers have eliminated their debts, they should "constitute attractive fodder for mortgage lenders," says University of Michigan law professor John Pottow, whose specialty is bankruptcy. As home prices and the mortgage market stabilize, lenders will be motivated to lend to people who previously had financial troubles if they look like they can pay the next time around, says Alan Riegler, a consultant with CCG Catalyst, which advises banks.

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Low Rates Help Make Home Buying More Affordable

The 30-year fixed-rate mortgage (FRM) averaged 4.97 percent with an average 0.7 point for the week ending March 4, 2010, down from last week when it averaged 5.05 percent. Last year at this time, the 30-year FRM averaged 5.15 percent.

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Buyers Who Wait May Lose a Lot

Potential home buyers who delay have a lot to lose. First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit. Other factors that should spur buyers: Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent. Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

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After one-year blip, Florida's population to grow again

Florida's population should rebound this year from its first loss in more than half a century, according to new estimates from the University of Florida. The state is expected to add about 23,000 residents between April 1, 2009, and April 1, 2010, following a loss of almost 57,000 residents the previous year, UF's Bureau of Economic and Business Research reported Tuesday. Last year's population drop startled a state used to steady, and sometimes explosive, growth since World War II. Researchers say that appears to have been just a one-year blip. "Based on changes in electric customer data, we believe Florida's population has increased slightly over the past year," said bureau director Stan Smith who led the research. "This may be an indication the state's economy is no longer declining at the rate it had been before."

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Move-Up Tax Credit Having Little Impact

The $6,500 move-up tax credit isn’t significant enough to have much of an impact on the housing crisis, housing experts say. The percentage of current home owners who are considering buying was unchanged from January, a traditional slow month, to February, when business is usually better, according to a poll of 1,500 real estate agents by Campbell Communications and Inside Mortgage Finance. "You've got a really big problem that requires big guns, and the tax credit is just not big enough," says Roberton Williams, senior fellow at the Tax Policy Center in Washington. The credit "is hardly registering on the economic Richter scale," says Patrick Newport, an economist with IHS Global Insight.

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