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ARM or FRM? 34% of homeowners don’t know!
NORTH PALM BEACH, Fla. – March 26, 2007 – More than three in 10 homeowners (34 percent) do not know what type of mortgage they own, according to a new poll released by Bankrate.com. Furthermore, 28 percent of those surveyed worry about how they will afford their payments. The national poll reveals the confusion and anxiety that homeowners are experiencing today.
Another notable finding is that 34 percent of homeowners with adjustable rate mortgages (ARM) do not know what they will do when their loan readjusts. Bankrate calls that a “staggering statistic” since the adjustment could tack several hundred dollars onto their monthly mortgage payment.
“Clearly, many homeowners are uninformed about their mortgages,” says Greg McBride, senior financial analyst at Bankrate.com. “With interest rates stabilizing, it’s a very good time to assess whether they should refinance or not. Now may be the time to lock into a mortgage with a fixed rate which remains near historic lows.”
Other key findings of the poll that studied homeowners include:
• 36 percent of homeowners surveyed with an Adjustable Rate Mortgage (ARM) plan to refinance to a fixed-rate loan when their ARM changes
• 28 percent worry either “regularly” or “sometimes” about how they will afford their payments next year
• 57 percent of homeowners have a fixed-rate mortgage
Key findings of the poll that studied homeowners include:
• 40 percent of renters consider affordability the biggest obstacle in buying a house
• Just under 12 percent are concerned their credit rating is not high enough to purchase a home
• 38 percent would avoid an ARM when they’re ready to purchase a home
To view the complete results, go to http://www.bankrate.com/mortgagepoll.
The study was conducted by the polling firm GfK Roper via telephone among a nationally representative sample of 1,004 adults, aged 18 or older. The sample was collected March 16-18, 2007, using a Random Digit Dialing Methodology. The data is weighted by age, sex, education, rate and geographic region. The study has a 95 percent confidence level and a plus or minus 3 percent margin of error.
- Posted By The Valore Group, Inc
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Report: Worst of national housing slowdown is over
ORLANDO, Fla. - June 1, 2007 - The worst of the housing slowdown is over, but the nation's economy still faces challenges including rising unemployment and uncertainty over gas prices, University of Central Florida economics professor Sean Snaith said today.
Snaith, director of UCF's Institute of Economic Competitiveness, said in his second quarter U.S. forecast that housing starts will decline in the third quarter and then begin a "slow upward climb through 2009."
Mortgage rates will "creep to 6.9 percent in 2009" and excess supply of homes in many markets will continue to put downward pressure on prices through 2007 and into early 2008.
The nation's unemployment rate will end a three-year decline, the forecast predicts, and begin to rise slightly this year but will remain below 5 percent before falling back to 4.7 percent in 2009. U.S. payroll job growth also will slow to 1 percent in 2008 before recovering to 1.5 percent in 2009.
Inflation also should remain relatively tame, and even dip in 2008 and 2009, though energy prices "threaten to reignite inflation."
Copyright © 2007 The Orlando Sentinel, Fla., Jerry W. Jackson. Distributed by McClatchy-Tribune Information Services.
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The commercial real estate markets are continuing to grow with record investment, with appetite for office properties at historically high levels and fundamentals improving in almost all markets, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of REALTORS®.
In many markets, pent-up demand for new space is adding new supply, but there is a lag effect when it comes to filling older space vacated by tenants on the move. This phenomenon is particularly noticeable in the office and industrial sectors in several markets. In the multi-family sector, one very noticeable trend seen this year has been the reverse condo conversion. In 2003 with tight housing markets, several multi-family rental buildings/complexes were purchased and converted into condominiums. In 2005 this trend accounted for 30% of all multi-family acquisitions. This year we have seen several reverse condo conversions, where newly built condo buildings are now be marketed as "rentals."
The NAR forecast for five major commercial sectors includes analysis of quarterly data for various tracked metro areas. The sectors include the office, industrial, retail and multifamily markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.
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Investment in the Office sector at a record pace, with fundamentals improving...
With a sales transaction volume of over $157 billion in the first four months of 2007, the year is staring out with a bang. Over 60% of this transaction volume is from trades within the office sector. In April alone over $14 billion worth of former the Equity Office Properties portfolio was spun off by the Blackstone Group.
The $157 billion transaction volume is significant, when compared to previous years. In all of 2006, $306.8 billion worth of real estate traded hands and $267.6 in 2005 and the $150 billion that traded hands in 2004. An every increasing sales volume goes hand-in-hand with rising per square foot prices and falling cap rates when examined over the last few years.
NAR FORECAST: The flow of capital (both equity and debt) will continue to be strong throughout 2007. Large portfolio transactions and REIT privatizations could make 2007 a major investment transaction year. Concerns by regulators about risky levels of lending concentrations in commercial real estate by some banks, could have some impact on capital flow, but should not deter large institutional inventors, investment banks and foreign investors from seeking price appreciation and income-streams from commercial real estate investments.
Posted By -The Valore Group, Inc
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ANDY REID
Sun-Sentinel
Wednesday, August 1, 2007
Taxpayer-owned land once intended to house a high-tech science "village" featuring The Scripps Research Institute could instead become a mix of homes, agriculture, dirt mining and waterways, according to a proposal for Mecca Farms released Friday.
Palm Beach County Administrator Bob Weisman on Friday called for jump-starting stalled discussions on uses for the 1,919 acres of former orange groves north of Northlake Boulevard, which cost taxpayers $60 million to buy and another $60 million to get ready for Scripps.
Environmental concerns last year moved Scripps' planned research labs and headquarters to Jupiter. Since then commissioners have had on-again, off-again discussions about what to do with the property.
Weisman's proposal calls for:
· Offering up to 750 acres of Mecca Farms for sale to developers by early next year. He suggested allowing as many as 1,500 homes but said proposed changes to development guidelines for western areas could push that to 2,400 homes.
· Selling 100 acres to the Solid Waste Authority of Palm Beach County. Storing hurricane debris, recycling yard waste and excavating dirt to cover mounds of trash at the county landfill are among proposed uses for the property.
· Set aside land for the "flow way," a man-made filter marsh, envisioned in the Scripps plan. The flow way would help clean and deliver water that could replenish the Loxahatchee River. County officials on Friday met with representatives from the South Florida Water Management District to discuss the flow way and other water cleaning features that could be included on Mecca Farms.
· Keep at least 750 acres to use for agriculture, environmental improvements, water treatment or other needs.
The idea was to offer commissioners "max flexibility" but also to start taking action on what to do with Mecca Farms, Weisman said.
"I'm just laying out a plan to start talking," he said. "It depends where the board wants to go."
Commissioner Burt Aaronson welcomed Weisman's proposal. Aaronson has called for allowing about 2,400 homes and commercial development on Mecca Farms in order to boost its sales value.
In addition to the money spent to acquire Mecca Farms and plan for Scripps' construction, paying the debt service on the deal costs the county between $5 million and $8 million a year.
"We should get the taxpayers' money back." Aaronson said.
Commissioner Jeff Koons said he was "intrigued" by Weisman's proposal to reserve land for agriculture.
Koons said he supports carving out a portion of Mecca Farms for the Solid Waste Authority. Pits left from digging out dirt for the landfill could become water storage areas that help with Everglades restoration efforts, he said.
"We have been kind of ducking on it," Koons said about deciding Mecca Farms' future. "I think we need to take a look at it."
No price has been set for the 100 acres Weisman proposed selling to the Solid Waste Authority, but the agency would be ready to "move quickly," the authority's chief administrative officer, Marc Bruner, said. Opponents to developing Mecca Farms have argued that allowing thousands of homes there would cost too much for the roads and community services required when suburbia spreads to rural land.
They have called for returning Mecca Farms to its natural state and leaving it as open space. The county could sell its development rights to builders elsewhere who are willing to pay for the chance to build more homes than otherwise allowed.
"Why are they so gung-ho to develop it right now?" asked Joanne Davis, spokeswoman for the growth watchdog group 1,000 Friends of Florida, which opposed building Scripps on Mecca Farms.
"They have got all these grandiose ideas. ... They have jumped way ahead of themselves."
· Posted By The Valore Group, Inc
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WASHINGTON – Aug. 2, 2007 – A forward-looking indicator based on pending home sales shows the market is likely to stabilize in the months ahead, according to the National Association of Realtors® (NAR).
NAR’s Pending Home Sales Index, based on contracts signed in June, was 5.0 percent higher than the downwardly revised May index of 97.5, but is 8.6 percent below June 2006 when it stood at 112.0. The 5.0 percent monthly gain is the largest in more than three years, since a 6.1 percent increase in March 2004.
Lawrence Yun, NAR senior economist, says it is encouraging that the increase occurred in all four major regions. “However, it is too early to say if home sales have already passed bottom,” he says. “Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.”
The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The PHSI in the West increased 8.6 percent in June to 103.6 but was 5.5 percent below a year ago. In the Northeast, the index rose 3.1 percent from May to 96.0 but is 2.4 percent lower than June 2006. The index in the South increased 4.7 percent in June to 111.6 but was 12.7 percent below a year ago. In the Midwest, the index rose 3.5 percent in June to 92.5 but was 8.2 percent lower than June 2006.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Annual changes in the index are more closely related to actual market performance than are month-to-month comparisons. As the relatively new index matures and seasonal adjustment factors are refined, the month-to-month comparisons will become more meaningful.
· Posted By The Valore Group, Inc
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TALLAHASSEE, Fla. – Aug. 2, 2007 – Declaring that the “property insurance wars have commenced,” state Rep. Dan Gelber on Wednesday called on Gov. Charlie Crist to add property insurance to the agenda of the upcoming special legislative session.
Gelber noted that Crist and lawmakers both have expressed frustration with the actions of insurers, some of whom have filed this summer for significant rate increases in the wake of legislation that was designed to lower rates. The Miami Beach Democrat is asking Crist to create a Rate Reduction Authority that would give the governor, Cabinet or State Board of Administration broad enough powers to deal with changing market conditions.
“If the state is going to be involved in the marketplace, it must give its agents [the Rate Reduction Authority] the ability and authority to address each crisis without having to wait for the Legislature to convene,” Gelber wrote the governor. After lawmakers act, he said, “those with other agendas are nimble enough to find a loophole or avenue that that allows them to escape the spirit and reach of our efforts.”
In a special session in January, lawmakers expanded the state’s hurricane catastrophe fund and allowed it to provide reinsurance, a backstop for the industry, at below-market rates. Avoiding the expensive reinsurance market should have reduced insurers’ costs, the state says, and those savings were to be passed along to customers.
But some insurance companies filed for new rates showing smaller savings than the 24 percent expected by state regulators. Others filed for increases – including USAA, the fourth-largest home insurer in Florida, which recently filed for a statewide average increase of nearly 54 percent.
Legislative leaders have already called a special session to convene Sept. 18. Its sole purpose is to trim the state budget in the wake of an economic slump that has trimmed nearly $1.5 billion from tax revenues.
Crist was traveling on Wednesday. “The governor appreciates his [Gelber’s] efforts. We will carefully study his recommendations,” Crist spokeswoman Erin Isaac said. “All elected officials can agree the insurance companies are charging too much money for insurance and the people of Florida
need relief.”
Jill Chamberlin, spokeswoman for House Speaker Marco Rubio, R-Miami, noted that the speaker and Senate President Ken Pruitt, R-Port St. Lucie, stated in their order for the session that it should be limited to budget cuts. “That hasn’t changed,” Chamberlin said.
Some lawmakers and special interests are pushing legislative leaders to add the state’s no-fault insurance law and an expansion of the KidCare child health insurance program to the September special session agenda. The no-fault law, with its requirement that all drivers carry personal injury protection, is scheduled to sunset on Oct. 1.
Copyright © 2007 Tampa Tribune, Fla., Jerome Stockfisch. Distributed by McClatchy-Tribune Information Services.
· Posted By The Valore Group, Inc
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WASHINGTON – July 31, 2007 – International buyers – foreign citizens who legally enter the U.S. to purchase a home – make up a growing share of business for real estate practitioners, according to new research by the National Association of Realtors® (NAR).
NAR’s 2007 Profile of International Home Buying Activity shows that a quarter of Realtors report more international business in 2006 than five years ago. Nearly one in five respondents sold a home to an international client in the past year, and one-third say they believe foreign retirees are an increasingly important market in the United States.
“Just as many U.S. residents are looking overseas for retirement and second homes, people in other countries are considering a home in this country,” says NAR President Pat V. Combs. As international boundaries of homeownership dissolve, you must stand ready to serve an increasingly diverse and multicultural marketplace, she adds.
The research explored the characteristics of second-home purchases in the United States made by international clients. Here are six of the top findings:
Stronger preference for condos and apartments. In 2006, most international homebuyers purchased single-family homes or townhomes, and like most domestic homebuyers, they financed their purchase. However, they showed stronger preferences for condos/apartments when compared to U.S. homebuyers; 22 percent of international buyers purchased condos/apartments, versus 12 percent of U.S. buyers.
More pay in cash. Twenty-eight percent of foreign buyers bought their houses with cash, compared to 8 percent of U.S. buyers.
Purchase pricier homes. The median sales price of homes purchased by international buyers was $299,500, which is significantly higher than the U.S. median of $221,900 during the same period.
Homes used for vacation, investment. Forty-seven percent of all international buyers purchased homes exclusively for vacation, while 22 percent were motivated primarily by investment. Nearly a third of foreign buyers cited both vacation and investment as reasons for their purchase. International homeowners spent an average of 4.2 months of the year in their U.S. property in 2006.
Buyers from Mexico most prevalent. A third of all international buyers are from Europe, but buyers from Asia and North America (outside the United States) each represent about one-fourth of the total market. Sixteen percent of all international buyers are from Latin America. By individual country, most buyers come from Mexico (13 percent), the United Kingdom (12 percent) and Canada (11 percent).
Florida leads the pack. Foreign buyers purchase homes across the United States, but 52 percent of sales in 2006 were concentrated in three states: Florida (26 percent), California (16 percent), and Texas (10 percent). The South attracted nearly half – 49 percent – of international buyers last year, while 31 percent purchased homes in the West.
© 2007 FLORIDA ASSOCIATION OF REALTORS
· Posted By The Valore Group, Inc
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WASHINGTON – July 31, 2007 – Have U.S. consumers turned a corner? Consumer confidence for July surged 7.3 points over June numbers to reach its highest level in six years.
The Conference Board Consumer Confidence Index, which had dipped in June, now stands at 112.6 (1985=100), up from 105.3 in June. The Present Situation Index, a component that gauges attitudes about conditions today, increased to 139.2 from 129.9 in June. The Expectations Index, which gauges attitudes about the future, rose to 94.8 from 88.8.
“The rebound in consumer confidence has catapulted the index to its highest reading in nearly six years (August 2001, 114.0),” says Lynn Franco, director of The Conference Board Consumer Research Center. “An improvement in business conditions and the job market has lifted consumers’ spirits in July. The Present Situation Index is also at a near six-year high (August 2001
144.5). Looking ahead, consumers are more upbeat about short-term economic prospects, mainly the result of a decline in the number of pessimists, not an increase in the number of optimists. This rebound in confidence suggests economic activity may gather a little momentum in the coming months.”
Consumers were considerably more positive about current-day conditions in July than they were in June. Those claiming conditions are “good” increased to 28.1 percent from 27.3 percent. Those saying conditions are “bad” decreased to 14.4 percent from 16.1 percent. Consumers were also more upbeat about the job market. Those saying jobs are “hard to get” declined to 18.4 percent from 20.5 percent. Those claiming jobs are “plentiful” improved to 30.5 percent from 27.6 percent in June.
Consumers were also less pessimistic about the short-term outlook. Those expecting business conditions to worsen in the next six months declined to 8.0 percent from 10.8 percent. However, those expecting business conditions to improve dipped to 15.4 percent from 16.2 percent.
The outlook for the labor market was mixed. The percent of consumers expecting more jobs in the months ahead was virtually unchanged at 14.1 percent, while those anticipating fewer jobs decreased to 15.1 percent from 17.0 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 18.8 percent from 19.4 percent in June.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS.
© 2007 FLORIDA ASSOCIATION OF REALTORS®
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