Property Prophet

Landmark Settlement with Mortgage Lenders Provides Relief for Some Struggling Home Owners

2012-02-10T06:22:00.000-08:00

Note to Sellers: $25B National Settlement on Rob-Signing Scandal - How It May Affect the Value of Your Home

Limbo makes for a very unpleasant place to live, and that is exactly where thousands upon thousands of homeowners have been over the past year since the scandal broke. Now that virtually every state including Florida has signed off on the $25B settlement ($8.4B earmarked for Florida), the court system is no longer encumbered by this pending litigation and the backlog of foreclosure proceedings will likely decrease as the pace of finalizing the processes get undereway again and accelerate.

The second page of the article in today's Miami Herald gives us a hint as to the potential impact this may have on the number of foreclosure properties that may come on the market:

"There are also more than 250,000 homes stuck in Florida’s lengthy foreclosure process, more than any other state in the country. The settlement may shorten the state’s foreclosure timeline — currently above two years — as banks will no longer be held up by charges of robo-signing. Still, several of the homes in foreclosure are so far behind on payments that even if banks reduce the amount owed, the homeowner will not be able to catch up."

"Several", in my opinion, may be a kind choice of words used to describe the vast number of homes whose delinquent mortgage balances are beyond the home owners' ability to bring current. If balances are not able to be satisfied either by full payment or some other installment agreement reached between the lender and the home owner, the banks will likely take posession of the homes and re-sell them as REO properties. Needless to say, the homes will likely be sold at substantial discounts which will affect the value of surrounding homes. This can affect future appraisals and will probably create a higher number of short sales. End result: the price of your home may come down.

Bottom Line: If you are currently selling your home or plan to sell in the near future, pricing your home as competitively as possible today to get it sold now will produce greater net proceeds than waiting for the unintended consequences of this court settlement.

Read more here: http://www.miamiherald.com/2012/02/09/2634050_p2/landmark-settlement-with-mortgage.html#storylink=cpy

4 Questions to Ask Before Buying a Foreclosure

2012-01-31T18:05:00.000-08:00

4 Questions to Ask Before Buying a Foreclosure

DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 31, 2012
Foreclosures can offer big bargains, but buyers need to be careful that they don’t get over their heads in purchasing a home that may need more repairs than they bargained for.

Foreclosures are usually sold as-is, and homes that are left vacant standing too long can have a lot of maintenance problems.

Real estate experts suggest buyers consider the following questions:

1. How long has the home been vacant? Be cautious of a foreclosed home that has stood vacant for more than a few weeks or had its utilities shut off a long time. Marvin Goldstein, a home inspector for many foreclosed properties, says a home can deteriorate quickly when heating, cooling, electricity, and running water have been turned off for awhile.

2. How old is the home? Goldstein says that homes that are more than 50 years old may have a failing plumbing system or inadequate electrical wiring.

3. How does the home look? Are there broken windows, gutters hanging down, or damaged siding? “Trust your instincts. If the house looks bad from the outside, it's probably worse than you think,” Goldstein told The Oklahoman.

4. Is there anything missing? Sometimes former owners remove anything of value from the home, such as built-in light fixtures, bathroom tile, water heaters, air-conditioning units, and hardwoods, says Bill Jacques, president-elect of the American Society of Home Inspectors.

Housing experts encourage buyers to get a home inspector to look at the property, even if it is sold as-is, so that home buyers know any repairs needed and cost estimates before they purchase the home.

“Buying a bank-owned home gives you the opportunity to enter the market at a very low price level,” says Dorcas Helfant, a past president of the National Association of REALTORS®. “You can find terrific values among foreclosures, especially if they're not in too bad shape. But, remember, these houses are discounted for a reason.”

Source: “Foreclosed Homes May Need Extensive Repairs,” The Oklahoman (Jan. 28, 2012)

10 Cities Where List Prices Soared Last Month

2012-01-31T17:21:00.000-08:00

10 Cities Where List Prices Soared Last Month

Energy Efficient Mortgages and Energy Improvement Mortgages

2012-01-31T15:33:00.000-08:00

WASHINGTON – Jan. 31, 2012 – If a home is energy efficient and conserves energy, the monthly utility bills won’t be as high. And if the bills aren’t as high, a buyer can afford to pay more each month on the mortgage.

That’s the theory behind Energy Efficient Mortgages (EEMs). EEMs allow borrowers to qualify for a larger loan and a better, more energy-efficient home.

EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. However, the term EEM refers to all types of energy mortgages, including Energy Improvement Mortgages (EIMs), which can be used to purchase an existing home that the buyer plans to improve with energy efficient upgrades. EIMs allow borrowers to roll the cost of the upgrades into the mortgage without increasing the downpayment.

Both EEMs and EIMs typically require that a home energy rating – an estimate of monthly energy savings – be given to the lender before the loan can be approved.

Conventional Energy Efficient Mortgages

Lenders who sell loans to Fannie Mae and Freddie Mac can offer conventional EEMs. Conventional EEMs increase the borrower’s income by a dollar amount equal to the estimated energy savings. The Fannie Mae loan also adjusts the value of the home to reflect the value of the energy efficiency measures. For more information about Fannie Mae’s EEM you can call 1-800-7FANNIE (732-6643).

FHA Energy Efficient Mortgages

The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5 percent of the value of the property, or 115 percent of the median area price of a single family dwelling, or 150 percent of the conforming Freddie Mac limit.

For more information on FHA EEM loans, visit HUD.gov. Additional information is available from HUD’s Office of Single Family Housing by calling (800) 569-4287.

VA Energy Efficient Mortgages

The Veteran’s Administration (VA) EEM is available to qualified military personnel, reservists and veterans, and caps energy improvements at $3,000 – $6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran’s Affairs or by calling (800) 827-1000.

Beautiful 4BR/3.5BA in Kendall / Tamiami Corridor

2012-01-29T10:31:00.000-08:00

Beautiful 4BR/3.5BA in Kendall / Tamiami Corridor

FHA Loans And the Power of Assumability

2012-01-12T04:30:00.000-08:00

FHA And The Power of Assumability

by Dean Hartman on January 12, 2012

One of the rarely touted advantages of people taking FHA mortgages today is the fact that they are assumable. What that means is, when the FHA homebuyer of today is looking to sell his home, a qualified purchaser can “take over” their loan.

Most people believe that interest rates will return to a “normal” range (between 6.5% and 7%) in a couple of years. When you assume a mortgage, the terms remain the same. This means that a buyer five years from now can enjoy a 4 – 4.5% mortgage by assumption rather than the 6.5% – 7% mortgage they would get without it. Since most people buy homes based on how the monthly payment fits into their personal monthly budget, this is extremely impactful.

As an example, a $300,000 loan at 4% today carries with it a $1,432.25 principal and interest payment on a 30 year fixed mortgage. If offered for sale in five years, the purchaser could assume the $271,858.56 balance with the same $1,432.25 payment and remaining term of 25 years. The total payments over the 25 years would be $429,675.

Compare that to a new $272,000 loan at 6.5% for 25 years, which would carry a monthly payment of $1,836.56 (over $400 more a month than the assumption and more than $120,000 more over the 25 year term).

At 6.5% for 25 years, to wind up with the same payment as the assumed mortgage, our borrowers would only be getting $212,000…$60,000 LESS!

The point here is that, when rates go up, homes with assumable mortgages will have more value and will sell at higher prices because they are more affordable. As an additional bonus, the closing costs on assumable mortgages are significantly less (especially here in New York where NYS Mortgage Tax is such a large component of closing costs).

The borrowers must be credit-worthy of course (have good credit, qualifying income, and necessary assets to close), but they would have to be credit-worthy to get a new mortgage too!

Besides the multiple other reasons to obtain an FHA mortgage (low down payment requirements, extended income ratios, lower credit scores, and easier sourcing of funds), there is another perk. In the future, there is a good chance that you may be able to sell your home for more money because of the FHA loan’s assumability.

In Real Estate, Keeping Current Matters!

2012-01-10T06:38:00.000-08:00

In Real Estate, Keeping Current Matters!

by The KCM Crew on January 10, 2012

There is too much misinformation being spread about today’s real estate market. Studies are being misinterpreted. Prominent names are being used to foster a point even if their quote is from years ago.

As an example, we want to look at a story published last week by The Fiscal Times titled The New American Dream: Rent, Don’t Buy. In the article, they claim:

“Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home… Those trends are just the beginning.”

We are not arguing that the homeownership rate is under downward pressure in this country. We are disputing some of the ‘evidence’ used in the article. Here are three points we want to refute:

The Homeownership Rate IS NOT in a Freefall

The article quotes a Morgan Stanley study from July 2011 which did make the argument that the homeownership rate was trending downward. Many others made the same point at that time. What the article failed to mention is that the homeownership rate unexpectedly increased in the third quarter of 2011! As DSNews reported in early November:

“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”

The jury is still out as to whether the homeownership rate will continue to fall or whether it has already bottomed out.

The Founders of Case-Shiller ARE NOT Saying Renting is Better

In the article mentioned above, they claim that the team that founded the prestigious Case-Shiller Pricing Index believes that buying makes little sense. The article explains that back in 2006 Robert Shiller presented a study based on data collected prior to 2005 showing that, over time, it made more sense to rent than buy. They use this information to conclude:

“Another skeptic is Yale economist Robert Shiller, co-creator of the Case-Shiller Home Price Index.”

They claim Shiller is a skeptic today based on what he said six years ago!

The major challenge we have with this is that Karl Case, the other founder of the Case Shiller Index, came out ten days ago saying that now is the time to buy. The New York Times in a story published on 12/30/2011 quotes Professor Case as saying:

“If you’re buying a house or apartment to live in and pay for over time, and can afford the payments, then it’s a terrific time to buy.”

Beracha and Johnson DID NOT Conclude That You Shouldn’t Buy

The Fiscal Times article went on to say:

“And in a paper this June in the journal Real Estate Economics, two researchers calculated that over the past 30 years, most often it would have been better to rent than buy.”

They were referring to the great study done by Beracha and Johnson titled Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? We are very familiar with this study as we posted on it back in May of last year. The paper does explain that over the last thirty years the financial benefits of buying vs. renting could be debated.

However, the conclusion of the paper left no room for argument. According to professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…

“[This] might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Dr. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research, is now a guest blogger on this site and in November shared with us his current presentation on this issue. To download the presentation, go to http://realestate.fiu.edu/buyer-or-renter-nation.html.

Bottom Line

We attempt to keep our readers current on this very rapidly evolving housing market with this blog, our tweets, our facebook posts and our subscription service. The letters K-C-M preface each offering. They actually stand for ‘keeping current matters’. We believe that helping our followers stay on top of the latest information available will help correct the housing market.

The Biscayne Corridor - Hemispheric Opportunity Knocks!

2012-01-06T06:09:00.000-08:00

Miami's Biscayne Corridor is about to give birth to a $10 Billion development boom. When opportunity knocks this loudly, it deserves to be shouted from the highest mountaintop (or condo tower) to as many as are willing and shrewd enough to hear. The following video is therefore offered in the three major languages of the hemisphere.

English

Español

Portugués

I've been selling and promoting the Corridor's development for the better part of a year in direct opposition to major media reports and so-called experts. I don't claim to be a fortune teller, but if it walks like a duck and talks like a duck,..........!

Comparing Real Estate to Other Investments

2012-01-04T07:06:00.000-08:00

Comparing Real Estate To Other Investments
by The KCM Crew on January 4, 2012

We recently posted Real Estate: Today’s Golden Opportunity comparing the current housing market to the market for gold about a decade ago. Some commented on the fact that you can’t compare gold to real estate as an investment as gold is a very liquid asset and it would take more time and effort to sell a house. We were not trying to make the case for real estate vs. gold as an investment in our blog. We were just showing that all investments go through cycles and that the best time to buy any investment may be when everyone is saying not to.

However, since the subject of comparing real estate to other investments has come up, let’s take a closer look. There are two major advantages to investing in a home of your own rather than another option:

You Can’t Live in Your IRA

When you buy your own home you are not taking available dollars away from another investment. You are replacing one housing expense (rent) which has no potential for a return on investment with another (mortgage payment) that does give you an opportunity for a return. We realize that there has been research showing that over the last 30 years renting has been less expensive than owning. That research also says that if you invested the entire difference between the rent payment and mortgage payment you may have done better financially. There are two challenges with this conclusion:

Today, in the vast majority of the country, renting is actually more expensive than owning a home.
History has proven that tenants DO NOT invest the difference in their rent and mortgage payments.
Today, study after study shows that owning a home is no more expensive than renting a home. However, even if this wasn’t the case, history shows that owning a home creates greater wealth.

Paying a mortgage creates what financial experts call ‘forced savings’. The Joint Center for Housing Studies at Harvard University released a study earlier this year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:

“Renters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

There Are Tremendous Tax Advantages to Investing in a Home

There is no doubt that selling an investment such as gold is easier than selling your home. However, this liquidity comes at a price. The price is called capital gains. That is the tax you pay on any financial gain you receive from the investment. This tax doesn’t apply the same way when you sell your primary residence:

Theresa Palagonia, a CPA and the Accounting Manager for the firm G.S. Garritano & Associates, was good enough to explain the Home Sale Exclusion Rules:

“You may qualify to exclude from your income all or part of any gain from the sale of your main home.

Maximum Exclusion

You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true:

You meet the ownership test.

You meet the use test.

During the 2 year period ending on the date of the sale, you did not exclude gain from the sale of another home.
If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions listed above.

You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements. (Special rules apply for joint returns.)

Ownership and Use Tests

During the 5 year period ending on the date of the sale, you must have:

Owned the home for at least 2 years, and
Lived in the home as your main home for at least 2 years
Certain exceptions exist in which you may qualify for the exclusion without satisfying the tests listed.

Bottom Line

Every investment has pros and cons. That is why there is such an assortment of great opportunities. Real Estate has been, is and always will be one of those opportunities.

All I Want for Christmas is Mortgage Principal Reduction?

2011-12-27T02:49:00.000-08:00

Realty Times - Housing Answer: Principal Reduction?

Save Money With Energy Efficient Window Coverings

2011-12-13T06:00:00.000-08:00

Save Money with Energy-Efficient Window Coverings

Energy-efficient window coverings help reduce heating and cooling costs and may qualify for the federal energy tax credit. Read

Visit houselogic.com for more articles like this.

Homes Are Selling Across The Country, and Here's Why...

2011-12-09T06:34:00.000-08:00

Homes Are Selling Across The Country, and Here's Why...

We started to see problems with transactions as early as July 2005, but prices continued to climb until about February 2006 in South Florida, which essentially represents the peak in our market. According to Case Shiller, this is where average prices are now in proportion to then. With affordability at an all time high due to home prices and low interest rates, whoever isn't convinced that now is the best time in recent history to buy a home is allowing the media to steal away your greatest opportunity for homeownership.

Common Sense Isn’t Common Practice

2011-12-08T05:28:00.000-08:00

It used to be that there was logic applied in the world of mortgage lending. An appraiser determined the value of a home by the axiom, “what a reasonable buyer would pay a reasonable seller”. An underwriter weighed the plusses and minuses of a file (after analyzing the income, the assets, the credit profile and the appraisal) and made a judgment call based on their experience.

Loans with sizable down payments used to be more flexible with how income was documented or what quality of credit was required. Even the decision of what made up “good credit” has been reduced to a FICO score. Determining the risk of a loan affected its approval or denial. Further, loans deemed riskier were given less favorable terms (higher rates and/or costs or larger down payments).

But today, everyone has tried to quantify everything and put everything into a matrix. Credit scores are numerical, and the number determines eligibility and cost. Gone is the concept of explaining why you have defects in your credit. We don’t care why, we just look at your score. Appraisers now are being scored and their data being scrutinized to a level most would find mind-boggling. Amenities that make a home worth more for a particular buyer (like a pool or upgraded basement) are virtually ignored. Underwriters have primarily become fact-checkers and quality control as a computer software program underwrites the vast majority of mortgages today.

Gone is common sense. It has been replaced by numerical formulas and a cover-my-behind, justify-everything-with-data mentality. Basically, the pendulum has swung too far. It used to be that lending was too easy (see the subprime debacle), but now we have eliminated too much of the human element. We need common sense back.

People who have saved 30% for a down payment know what they can afford monthly. Don’t they?

People who had a medical challenge two years ago that is not likely to reappear should not have a twenty year credit history destroyed. Should they?

People aren’t likely to overpay for a home with so much inventory and all the media exposure about falling prices. Are they?

Bring back some common sense when we need it most!

Real Estate As a Hedge Against Inflation (from KCMBlog.com)

2011-12-06T05:42:00.000-08:00

Real Estate as a Hedge against Inflation

We haven’t heard a lot about inflation recently. However, prices have started to creep upward over the last year. As examples, here are a few categories that increased from November 2010 to November 2011:

Food at home – up 6.2%
Housing fuels and utilities – up 3.5%
Transportation – up 9.2%

Today, we want to address the issue of inflation and the advantages of owning real estate. The National Association of Realtors (NAR) took an historic look at the impact of inflation. Here are some inflation numbers over the past 30 years:

We can see that real estate has fared very well. The most important number is the $0 increase in mortgage amount. The study assumed that the homeowner took a 30 year fixed rate mortgage thereby locking in the housing expense for the thirty years.

NAR then looked at inflation moving forward over the next thirty years. Obviously, if it remained the same as the last thirty years the percentage increase would be the same. They looked at a low inflation scenario and a high inflation scenario. The graph below shows the findings:

Bottom Line

We can lock in the housing costs of our primary residences and vacation homes at all time lows if we purchase today. Either would be a great hedge against future inflation.

Who says Homes aren't selling?

2011-11-29T06:59:00.000-08:00

Home Sales Increase Across the Country

The National Association of Realtors recently released their 2011 3rd Quarter Housing Report. In the report, they showed that combined sales of single family homes, condos and co-ops increased in EVERY state as compared to the 3rd quarter of last year. Here are the state-by-state numbers.
The next time someone says houses aren’t selling, ask them which state they live in and show them the chart.

Homeownership, As American as Baseball and Apple Pie and Baseball!

2011-11-09T04:49:00.000-08:00

Americans Still Believe in the Value of Homeownership

Last week, Fannie Mae released their National Housing Survey for the third quarter of 2011. They survey the American public on a multitude of questions concerning today’s housing market. Each quarter, we like to pull out some of the findings we deem most interesting. Here they are for the most recent report:

Most Important Reasons to Buy a Home

The study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

It means having a good place to raise children and provide them with a good education
You have a physical structure where you and your family feel safe
It allows you to have more space for your family
It gives you control of what you do with your living space (renovations and updates)

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. There is no doubt that families must justify a home purchase from a financial point of view today. However, the reasons they actually buy are the same reasons our parents and grandparents purchased their home – to create a better lifestyle for their families.

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

64% of the general population (and 69% of homeowners) believe that homeownership is a ‘safe’ investment.
55% believe that homeownership has more potential as an investment than any other traditional asset class.
68% think that now is a good time to buy a home

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

63% of renters have aspirations to someday own their own home
70% of renters think that owning is superior to renting
96% of homeowners see homeownership as a positive experience (4% see it as a negative experience) while 83% of renters see renting as a positive experience (15% see it as a negative experience)
97% of homeowners live in a single family residence while 53% of renters live in a multi-unit building

Bottom Line

Even in these difficult times, Americans still realize the value of homeownership both from a financial and social standpoint.

The Ship Appears to be Turning

2011-11-08T05:39:00.000-08:00

The Ship Appears to be Turning

Today, we are again honored to have Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research as our guest blogger. To view other research from FIU, visit http://realestate.fiu.edu/. Dr. Johnson will also be speaking at NAR’s Conference and Expo in Anaheim later this week. For more information click here. - The KCM Crew

On October 31, CNN Money reported: “Home prices headed for triple dip”. Reporting on information provided by Fiserv (a financial analytics company), a 3.6% fall in prices on a national basis is expected by next summer. This will result in the Case-Shiller Home Price Index falling to 35% below its peak in 2006 and marking a triple dip in U.S. housing markets.[1]

Say it ain’t so! Is housing set for a third dip in five years? This depend on factors being in place to lessen the impact from market anxiety brought on by worries over a pending wave of foreclosures and the U.S. debt crisis, which we will start to hear more about shortly.

So, what are these factors and what do they tell us? These factors are really fundamental drivers that encourage individuals to buy versus rent their personal residences. They are sometimes referred to as housing affordability measures. The price to income, mortgage payment to income, and a buy versus rent analysis for various markets provide strong evidence that factors are in place to encourage home ownership or favor renting depending on the resulting measurements. In ongoing research being performed by Beracha and Johnson, these measures are at record levels in favor of buying.[2] In fact, the price to income ratios in 23 of the 50 states are at 30-year record lows. The payment to income ratios are at 30-year record low in all 50 states. A buy versus rent analysis performed in 23 of the nation’s largest metropolitan areas also indicates that hurdle rates (the rates at which potential buyers are indifferent between buying and renting) in all 23 cities are below 25-year average appreciation rates. All of these results strongly favor purchasing.

What about per capita income and present day prices (relative to past prices)? Presently, U.S. per capita income is on the rise again and has regained to the level of 2007 (roughly $40,000 per person), while prices of homes on the other hand rest at 2002 levels according to the Case-Shiller Home Price Index. What about mortgages rates? Presently, 30-year fixed rates are at near record low levels.

So, let’s put this all together. Housing is presently more affordable than at any time in the last 30 years. While income is only at 2007 levels, home prices are even lower coming in at 2002 levels. All of these factors set the stage for many individuals to favor purchasing over renting. Thus, while there are grave concerns over the overall health of the economy, fundamental drivers now appear in place to staunch any further significant plunges in home prices.

The ship appears to be turning.[3]

Endnote

[1] See http://money.cnn.com/2011/10/31/real_estate/home_prices/

[2] Beracha and Johnson (2011) on going research.

[3] This conclusion obviously assumes nothing unprecedented and catastrophic occurs such as the removal of the home interest deduction to combat the national debt or the often predicted foreclosure tsunami actually finally occurs.

Homeownership: Still The American Dream!

2011-11-07T06:40:00.000-08:00

Homeownership: Reports of Its Death are Exaggerated

There have been a growing number of reports announcing the death of American homeownership over the last two years. Some have said we are evolving into a rental society and even challenge the long standing belief that homeownership should be a part of the American Dream. They look at the falling rate of homeownership as proof of their point. Others say that the younger generations no longer see the value in owning over renting.

However, this past week, two news items might refute these points. First, DSNews reported the homeownership rate actually increased in the last quarter; the first quarterly increase in two years.

“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”

Then, Fannie Mae released their 2011 3^rd Quarter National Housing Survey. We will cover this report in more detail on Wednesday. But we do want to mention a few findings the report highlighted. Both Generation Y (birth date mid-1970s to mid 1990s) and Generation X (birth date mid 1960s to mid 1970s) have stronger beliefs in the importance of homeownership than those of the general population.

Here are the numbers for the three major reasons to buy (as per the survey) with the percentage who believe in each reason:

1. It is a good place to raise children and provide them with a good education:

Generation Y: 84%
Generation X: 81%
General Population: 80%

2. You have a physical structure where you and your family feel safe:

Generation Y: 77%
Generation X: 79%
General Population: 76%

It allows you to have more space for your family:

Generation Y: 76%
Generation X: 77%
General Population: 73%

Both generations also believe in homeownership as an investment. 70% of Generation Y and 66% of Generation X see homeownership as a safe investment while 64% of the general population believes so.

Bottom Line

This country’s belief in homeownership is anything but dead. The younger generations have the same if not a higher level of belief than earlier generations. As the economy improves, more people will make the move into a home of their own.

Underwater Refinance Program Expanded

2011-10-28T03:29:00.000-07:00

by DEAN HARTMAN on OCTOBER 27, 2011

At a campaign stop in Nevada on Monday, President Obama announced an expansion of the HARP (Home Affordable Refinance Program) which would eliminate the current maximum LTV of 125%. The initiative is being looked at as a way to reward those homeowners who have been good payers of their mortgages but, because of declining home values, they could not take advantage of today’s lower interest rates.

While the actual details on the program will not be released until next month, here’s the buzz:

It will only pertain to loans currently being serviced by Fannie Mae or Freddie Mac
Because of the removal of the LTV cap, appraisals may not be required
With the only qualifying criteria announced being that the last six payments be on time, it is possible that income documentation may be streamlined and credit scores might be more forgiving
Fees allegedly will be reduced
Incentives may be offered to people who shorten their repayment time
It also sounds that the banks may be given some incentive by not holding them liable for the underwater portion of the new loan (a major incentive for sure).
The government is on the hook for these loans already. By lowering the payments (by offering lower rates), they will likely help these loans to continue to perform and make it less likely for the underwater homeowner to walk away.

The original HARP was expected to help 5 million families. After two years, it has yet to reach 900,000; therefore, estimates ranging from 800,000 to 1.6 million borrowers who may benefit need to be taken with a grain of salt.

Whether the Administration is looking for purely political rhetoric points or not, my advice to underwater homeowners is too keep an eye out for the final guidelines because you just might be able to lower your payments.

Will The 30 Year Mortgage Disappear?

2011-10-27T04:17:00.000-07:00

Will the 30 Year Mortgage Disappear?
by THE KCM CREW on OCTOBER 26, 2011

The federal government is reconsidering their involvement in the home mortgage process. They plan to still ‘guarantee’ certain mortgages. However, they appear to be redefining what they consider a ‘qualified purchaser’. They are discussing stricter lending guidelines in four different areas:

The type of mortgage
The minimum down payment
The debt ratios of the buyer
The FICO score of the purchaser
Today, we want to look at #1.

It appears that there is at least conversation about eliminating the 30 year fixed rate mortgage which has been a staple in this country’s housing industry for some time. Some in government want to duplicate the mortgage process of other countries. In Canada, for example, they don’t even have 30 year fix rate mortgages available. The vast majority of Canadian home loans have a 25 year payout but the interest rate is renegotiated every five years. If rates go down, you will wind up with a lower rate. If rates go up, you end up paying a higher rate. If you want a fixed rate mortgage for 25 years you pay a rate approximately two percentage points higher than the going rate at the time of your closing.

Would the same happen in this country? Last week, Housing Wire quoted Janis Bowdler, senior policy analyst at the National Council of La Raza:

“Without some form of Fannie Mae and Freddie Mac, replacements to support these popular loans, many first time borrowers will be shut out.

“Without that guarantee lenders would not offer 30-year fixed-rate mortgages, at least not at rates the average person could afford. Yes, some would be available but not for the average family but for those with a large amount of inherited wealth they can put to a large down payment.”

Why Is This Important?

You probably want to set your housing expense at the lowest number possible for the longest time possible. This may be the appropriate time to lock-in your long term housing expense as three things seem possible, if not likely, in the future:

Mortgage rates will increase from current historic lows
The 30 year fixed rate mortgage may disappear
Rents will return to historic norms of 3% annual increases
Bottom Line

If you want to purchase a home of your own but are waiting to see where prices will go, consider what you could be giving up while you wait.

5 Tips to Prepare Your Home to Sell

2011-10-20T20:08:00.000-07:00

With all the negative press coverage and constant onslaught of challenges facing Sellers, it's easy to lose sight of a critically important truth. Your home is in direct competition with other homes in your neighborhood. Preparing the home and making sure it looks as nice, clean and in good repair as possible will increase the chances of a buyer considering it over the others. A good frame of reference for a buyer showing is a job interview. You want to be well prepared and looking your best. Here are five tips to help give you the competitive edge.

5 Tips to Prepare Your Home for Sale

By: G. M. Filisko

Published: February 10, 2010

Working to get your home ship-shape for showings will increase its value and shorten your sales time.

1. Have a home inspection
Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates
If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs
Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter
Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning
A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.

If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.

Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

More from HouseLogic
Develop a Landscape Plan to Fit Your Budget

Spring Cleaning Guide

G.M. Filisko is an attorney and award-winning writer who has found happiness in a Chicago brownstone with the best curb appeal on the block. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Coconut Grove Real Estate Market Snapshot - October 14, 2011

2011-10-14T08:56:00.000-07:00

Notice to Buyers and Sellers

Real estate is a local business. National, regional, state, county, municipal and even district statistics are largely inconclusive when it comes to buying or selling your home. Homes are all about communities. Sales activity in one community may differ dramatically from one community to the next for any number reasons (school districts, deed restrictions, predominant style of homes, lifestyle preferences, etc.).

In addition to location, when people are looking to buy a home, they generally look within a certain property type (Single Family, Condo or Townhouse). Sales activity from one property type to another within a given community also performs differently.

Also, most buyers are limited by budget with respect to the home they may want to buy. Sales activity is predicated based on the various price segments of homes within them.

The following spreadsheet is a snapshot of the Coconut Grove market taken today. The market is fluid, so the numbers will change from day to day. However, like the balance sheet of a company, a market snapshot is a reflection of the strength of a given community's housing market.

The national media depicts the country's housing market to be in dire straits, and in countless markets across the country this is irrefutable. As you will see, however, Coconut Grove is not among them.

In fact, only condos priced over $2M (of which there are only three available at the moment) have seen no sales activity in terms of closing or pended sales in the last 30 days. Every other sub-segment has had movement. Luxury single family homes listed over $2 Million have the highest inventory number with 16 months. It is generally accepted that a healthy real estate market contains six months of available inventory or less. Every other other market segment is either on its way to falling below 6 months or already well below it.

While the media unleashes its daily dose of bad news with respect to real estate, it is critical to remember that it does represent markets at the local level, which is where it really counts.

Also, I have included the number of short sales and foreclosure across the same price segments to provide further insight as to the overall health of the market. In some markets across South Florida, distress sales make up more than 60% of the total market. In Coconut Grove, this is far from the case.

If you are a buyer or a seller, this is critical information that should play an important role in your buying or selling decisions. An experienced and qualified Realtor is your best source of information and guidance.

Homeownership Under Fire!

2011-10-13T05:34:00.000-07:00

This Time We Are Sounding the Alarms

by Steve Harney on October 12, 2011 ·

Occasionally, Steve Harney, our founder and lead content creator, asks us permission to share his personal feelings on a current real estate issue. Today is one of those times. – The KCM Crew

One of the things I often hear from people I meet is that real estate and mortgage professionals should have seen the current housing crisis coming and done something to prevent it. We should have realized that easing lending practices would lead to millions of families buying a home they could never afford. We should have warned our neighbors not to use their homes as ATMs. We should have realized that the economy could never withstand such growth and was about to crash.

Maybe these people are correct. Looking back, perhaps we could have been better stewards of the home buying process. We are committed to not making that same mistake again. Now, if we see a possible challenge in the future, we will speak up. That is what caused the writing of this blog post.

WE MUST SOUND THE ALARMS!

ALARM: Homeownership Percentage Has Dropped Dramatically!!

MSNBC.com, in an article entitled Housing Bust Worst Since Great Depression reported:

“The analysis by the Census Bureau found the homeownership rate fell to 65.1 percent last year… analysts say the U.S. may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents.”

ALARM: People Are Losing Hope in the American Dream

In the same article, Patrick Newport, economist with IHS Global Insight is quoted saying:

“The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting. While 10 years ago owning a home was the American Dream, I’m not sure a lot of people still think that way.”

ALARM: The Safety and Well Being of the Family Being Sacrificed

If we look at Fannie Mae’s quarterly National Home Survey, as far back as we can go, the top four reasons for buying a home are the same. The top four reasons people buy a home are:

It means having a good place to raise children and provide them with a good education
To have a physical structure where their family feels safe
It allows for more space for their family
It gives them control over what they do with their living space including renovations and updates.

Are children no longer important? Is safety less of a consideration today? Is the pride of homeownership soon to be forgotten? We must look at the long range consequences of being a renters’ society.

ALARM: Building Family Wealth Being Threatened

Let’s look at homeownership as an investment. The Federal Reserve does a survey every 3 years. In 1998 the average Homeowner’s net worth exceeded that of renters by 31 times. In 2001 it was 36 times and eventually in 2007 it was all the way up to 46 times that of renters. Now, homeownership isn’t about a guaranteed financial short-term return – the market goes up, down and back up again. We have to be prepared for the long-term and a key component to wealth is homeownership. Even in these toughest of times, the wealth of the homeowner is over 30 times that of renters.

At a time when we are discussing the gap in wealth between the top 1% and the other 99%, how does the less fortunate paying rent to pay off the mortgages of the more fortunate make any sense?

Bottom Line

Homeownership is important to the American family. If we lose this as a basic concept, what else do we lose? We didn’t realize the consequences when it was too easy to buy a house a few years ago and we are paying a price for that. We will pay an even larger price if we don’t realize the consequences of it being much too difficult for many to own a home today. SOUND THE ALARMS!

A Follow-up To Yesterday’s Blog

by The KCM Crew on October 13, 2011

Yesterday, Steve Harney expressed his thoughts on how homeownership is being impacted in this country. Some believed that Steve thought the American people where losing faith in the importance of owning a home. That is not the case. He just worries about how housing policies may impact our neighbors and our neighborhoods. Here is a blog we posted earlier this year on the issue. – The KCM Crew

Redistributing Wealth to the RICH?

Many people are placing the concept of homeownership under attack. There is more and more debate whether we should limit government assistance to homeowners. The administration just came out with their Reforming America’s Housing Finance Market: A Report to Congress. The report acknowledges the advantages of homeownership:

“…which has helped millions of middle class families build wealth and achieve the American Dream.”

The paper also talks about curtailing a century of government assistance for American homeownership (ex. the elimination of Fannie Mae and Freddie Mac):

“But our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters.”

At the same time it speaks of increasing its support for rental housing:

“The Administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean all Americans should become homeowners … we should ensure that there are a range of affordable options for the 100 million Americans who rent, whether they do so by choice or necessity.”

In a press release announcing the administration’s points, Housing and Urban Development Secretary Shaun Donovan is quoted:

“We must continue to take the necessary steps to ensure that Americans have access to quality housing they can afford. This involves rebalancing our housing priorities to support a range of affordable options, from promoting much-needed financing for quality, affordable rental homes to ensuring the availability of safe, and sustainable mortgage products for current and future homeowners.”

This is not just a matter of semantics. In his prepared testimony before the House Committee on Financial Services, Treasury Secretary Timothy Geithner said:

“Our goal is not for every American to become a homeowner.”

The administration is taking a strong stance against government’s role in supporting homeownership. This would be a major change in policy. Assistance for homeownership has been important to America for a century. Many young people were able to attend college because their parents were willing and able to refinance their home to pay the tuition. Many American business owners got their start-up capital by taking an equity loan on their house. Renters won’t be able to ask their landlords to help pay their child’s college tuition. Renters can’t expect landlords to finance the development of the new product they discovered.
If we start to create a land with greater numbers of renters, those able to still purchase property will get wealthier collecting the rents from those who can no longer attain the American Dream. The administration calls for more support for these developers:

“The Administration will explore ways to provide greater support for rental housing. One option would be to do so by expanding FHA’s capacity to support lending to the multifamily market.”

This will lead to the redistribution of wealth in this country with the owners of the rental units building family wealth with profits generated by this real estate.
Diana Olick in an article for CNBC Realty Check quotes Democrat Melvin Watt of North Carolina:

“…there’s not going to be any home ownership at the low income level…Rich people will have home ownership and rich people will make money on apartment rentals, but we’ll be a renter nation for low-income people.”

We have to make sure this is the America we want.

Experience, Education, or Both?

2011-10-10T05:37:00.000-07:00

Education, Experience, or Both?

by Ken H. Johnson on October 10, 2011 · 0 comments

in Uncategorized

Today, we are again honored to have Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research as our guest blogger. To view other research from FIU, visit http://realestate.fiu.edu/. - The KCM Crew

The Research

What role does education play in producing a successful real estate agent? This question has been debated for years. However, there has been very little scientific investigation to this point into the role of education and its influence on success in the industry. Anderson, Johnson and Jordan[1] are presently investigating this link, and though the results are preliminary, their findings strongly suggest that having an undergraduate college degree increases the likelihood of an agent being successful between 40% and 160%.

In its most basic form, the research’s statistical model defines success as an agent that produces more closed volume than 50% of all other brokers. The role of a college degree increases even more dramatically, when success is defined as an agent that produces more closed volume than all but 5% of all other brokers.

Implications for Practice

The result from Anderson, Johnson and Jordan clearly indicates that having an undergraduate college degree goes a long way towards creating a successful agent. The role of education, however, does not rule out or substitute for experience. From a personal perspective, experience wins out over education when the two are pitted against one another. On the other hand, combining experience with education produces the most capable agent — an agent who brings both their wealth of experience and the analytical ability to deal with new issues as they arise in the selling process.

Today, agents no longer have to choose between experience and education. There are now a number of alternatives ranging from local colleges and universities that offer real estate programs and degrees to Realtor® University, which is presently developing a real estate curriculum, among other alternatives. As a testimonial, I most strongly recommend higher education. While still in full-time practice, I obtained an M.B.A. (concentrating in Finance). After I graduated, my business volume jumped dramatically and a world of additional opportunities opened up for me.

Tips to Present a Stronger Mortgage Application

2011-10-06T04:35:00.000-07:00

Tips To Present a Stronger Mortgage Application

by Dean Hartman on October 6, 2011 ·

As underwriting guidelines for lenders become more stringent, we need to re-examine what a good mortgage application looks like. As home buyers begin their search for a home, there are a few items they should be aware of that they can do to help get their loans approved (with the best possible terms), and, at the same time, lessen some of the stress that goes along with the mortgage process.

1. Income documents

Most lenders want to see a full month of paystubs and two years’ complete Federal Tax Returns. Assembling them ahead of time and holding on to every paystub you get is a good idea even before you find a home and/or submit your mortgage application because it will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expenses are often crippling factors that, if explained and dealt with upfront, can make your loan approval smoother.

2. Asset documents

Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because large deposits can signal a new loan that wouldn’t show up on your credit report yet. What’s a “large deposit”? Typically, any deposit that would represent more than your income can support. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period). Therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place. Received a gift? You will need a Gift Affidavit, proof of the donor’s ability and transfer of the funds. Any and all questions should be discussed with your loan officer.

3. Credit Score Optimization

Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit cards. That will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, apply for a new credit card or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don’t do anything that will require having your credit run without first discussing it with a mortgage professional who knows the impact it could have.

4. Appraisal Concerns

It’s unlikely you will make an offer to purchase without checking out comparable home sales. It’s also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently on the market and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions.
Overall, it is recommended that you hold onto copies of everything financial, think before allowing your credit to be run and work with an agent and loan officer who can use their experience to put your loan application in its best possible light…as soon as you start thinking about buying a home.

Picking the Right Agent

2011-10-05T05:22:00.000-07:00

Picking the Right Agent is Crucial

by The KCM Crew on October 5, 2011

The National Association of Realtors (NAR) released their Existing Sales Report two weeks ago and in the report they discussed a troubling trend: cancelled contracts are increasing dramatically. NAR defined the issue:

“Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.”

NAR explained that 18% of all contracts were cancelled in August. This compares to 16% last month and 9% in August of 2011.

The percentage of cancelled contracts has doubled in the past year!!

It is extremely important that both buyers and sellers pick the right real estate professional to assist them with their real estate needs.

BUYERS

Make sure your agent can not only help you find the home of your dreams but also find you professional assistance with all aspects of the transaction (mortgaging, title, etc.)

SELLERS

Realize that your agent must sell the home twice:

to a qualified buyer
to the bank (through the appraiser).

The second sale may be more difficult in this market than the first.

Bottom Line

It is imperative in this housing market that both buyers and sellers use a true real estate professional to guarantee that the deal will actually reach the closing table.

The Modern Day Conundrum: Short Sale vs. Foreclosure

2011-10-04T05:14:00.000-07:00

Short Sale vs. Foreclosure: A Short Sale Always Wins

by Christopher Reale on October 4, 2011

Today’s ever changing real estate industry has brought upon some very challenging questions from our clients. We as counselors, want to put forth the best, non-emotional advice that we can, in hopes that we can help our clients and their families navigate the rough waters of the short sale process.
The most prevalent question and one that continues to permeate the industry is:
“Why should a seller go through the short sale process rather than letting their house be foreclosed upon?”
While we cannot speak to every client circumstance, we can say one thing with complete conviction. In almost all instances in which a potential seller is contemplating whether they should short sell their house or let it go through the foreclosure process, a short sale is the better option. The following are examples to consider:

Example A- Short Sale

Mr. Smith owns a home in which he has a mortgage balance of $220,000 and a current market value of $150,000. Mr. Smith has elected to short sell his property. His Realtor successfully obtains a buyer who puts forth an offer price of $120,000 (80% current market value according to Realty Trac Foreclosure Report 5/26/2011). After reviewing the buyers offer and the financial hardship information from Mr. Smith, Mr Smith’s bank agrees to accept the short payoff of $120,000 which would leave a deficiency balance of $100,000.
The transaction closes and is final. Mr. Smith then pulls his credit report 30 days after the transaction takes place. On the report he notices that the mortgage trade line states “Mortgage debt was settled for less than full” and the balance on the mortgage is $0. Mr. Smith is now on the road to financial recovery.

Example B- Foreclosure

For the ease of illustration we will use the same value and mortgage debt amounts as in Example A. However, Mr. Smith has elected to forgo the short sale process and let the bank foreclose on the property. The bank holding his mortgage facilitates the proper legal procedures to foreclose on the property, all of which are costly. Mr. Smith is notified and his property foreclosed upon of which is taken back by the bank to sell as an REO.
Six months later, the bank finally sells Mr. Smith’s home only they sell it for $90,000 (60% of current market value according to Realty Trac Foreclosure report dated 5/26/2011). Remember, as a short sale, the home would have sold for $120,000 keeping the deficiency to $100,000. In addition to the deficiency now being $130,000, the bank has elected to add on legal costs of $15,000 and asset preservation costs of another $5000 for a total deficiency liability of $150,000. Mr. Smith pulls his credit report 30 days after being notified that the bank has sold his property and of his liability.
On the report he notices that the mortgage trade line states “Foreclosure” and the balance is $150,000. Because of Mr Smith’s choice to choose foreclosure vs. short sale his road to financial recovery has taken a major detour. He not only has a foreclosure on his credit report but know has a much larger deficiency balance in which the bank, in most cases, will report on his credit report as a balance owed.

The Best Option is clear

While the financial and credit advantages are clear when choosing a short sale over a foreclosure, other advantages are sometimes overlooked. The most important of all of them is maintaining the seller’s dignity and peace of mind. We have heard too many stories of families having to leave their homes because of a Sheriffs order or some other type of legal action. The short sale process alleviates this negative social impact. The process puts the control back in the seller’s hands so that they can get back on the road to financial recovery and start providing for their families. In the battle of the two evils, a short sale always wins!!!

Previews International - #1 in Miami Luxury Homes Sold

2011-09-30T11:41:00.000-07:00

Luxury Homes are Hot Along

The American Riviera

The national media would have you think that the luxury real estate market in America has gone cold. The reality would indicate otherwise. As far as Miami is concerned, cold must stand for Cold Hard Cash!

Ironically back in 1933, when the country was in the throes of the greatest economic catastrophe in our nation’s history, a young entrepreneur by the name Henderson Talbot had an idea. He identified the need for owners of high luxury homes throughout the country to promote their exquisite properties to buyers throughout the world. Prior to this, there was no specific resource for high end residential real estate sales. He seized upon the opportunity and traveled the country, developing the first strategic marketing platform for high end homes the world had ever seen. He would take numerous photographs of the homes with his 16mm camera and together with captivating and detailed descriptions of the homes, Mr. Talbot revolutionized an industry. He called the program Previews:

Today as back then, the Coldwell Banker Previews International name continues as the preeminent leader and benchmark for high luxury homes in America, and has transcended international borders to feature the most exquisite homes all over the world. Ironically as in the dawn of its origins, the need is just as great for exceptional properties to be featured and represented in ways befitting their status and by professionals that are equally suited to the task.

In Miami, the Coldwell Banker Previews International name features prominently throughout the luxury landscape. Here are some revealing numbers for homes offered at $1,000,000 or more to support this claim:

Available Homes - $1M+ = 970

$1M+ Homes Sold or Placed under Contract-Last 30 Days = 136
Number of Months Inventory = 7.13
Closed Sales ($1M+) in Last 30 Days = 39
Closed Sales ($1M+)–Coldwell Banker Previews Intl= 10 (26%)

*as per Southeast Florida Multiple Listing Service

One in Four $1M+ Miami Homes Sold

Represented by

Coldwell Banker Previews International

Of the thousands of agents and brokerages in the Miami area, Coldwell Banker Previews International stands alone as the standard of excellence and quality performance. With these numbers, would you trust the sale of your most prized possession to anyone else? As a buyer, would you give your confidence to any other organization?

A few Coldwell Banker Previews International

Properties Sold - Last 30 Days

Coconut Grove -3810 Battersea Rd

$1,300,000

1071 San Pedro Ave

$1,375,000

Coral Gables (Cocoplum) - 184 Paloma Dr

$2,300,000

Miami Beach - 1730 W 23 St

$5,600,000

Miami Beach - 68 La Gorce Cr

$6,500,000

Quality-Experience-Resources-Brand Recognition

Industry Leadership –Global Reach

Uncompromising Professionalism

These are the hallmarks of excellence. I am proud to serve my clients among such an exceptional community of professionals. If you are considering the sale or purchase of a home, I am honored to be at your service.

Some Good News for Veterans!

2011-09-29T05:33:00.000-07:00

Some Good News for Veterans!

by Dean Hartman on September 29, 2011

Effective October 1, 2011, the costs associated with getting a VA mortgage are going DOWN!

An overview: VA mortgages are bundled, securitized and sold in the secondary market with the backing of the Federal Government. In order to insure these mortgages, the government charges a type of insurance premium, called a VA Funding Fee, which is typically added to the loan amount (thereby financed).

Remember, too, that the VA (subject to some restrictions) will insure loans up to 100% of the purchase price for the home.

What is happening next week? On loans that close effective October 1, that Funding Fee is being reduced. Because it is typical that the fee is financed into the loan, the VA is effectively lowering the monthly cost (because the loan amount is lower) AND the amount that will be paid back when the home is sold (again, because the loan amount is lower). It’s a win/win for the veteran.

If you have any questions about purchasing a home with a VA loan or if you already have one and are considering a refinance of it because of the low interest rates, reach out to your favorite mortgage professional and explore the possibilities. If you don't have one, please contact me and I will recommend a few with whom I have had success. There has never been a better time!

The Summit of High Luxury in Coconut Grove and Coral Gables

2011-09-28T19:10:00.000-07:00

Breathtaking Luxury!

Coral Gables – CocoPlum / Coconut Grove

I had the opportunity to view several luxury homes today that would take the breath away from a leviathan (mythical sea monster, for all you non-nautical types). In the interest of full disclosure, these are not my listings. These magnificent homes are being offered under the guidance and care of fellow Realtors. A few are with my beloved Coldwell Banker Previews, and others are with competing brokers, all of exceptional standing. This piece, however, is not about the brokers; it is about the properties. I will, of course, give due mention to the agents as a matter of professional courtesy and remind everyone that although we may be in competition between brokerages and agents, ultimately we cooperate and collaborate with each other upholding the highest ethical standards and best industry practices in the best interest of the clients we serve. I am grateful to all of them for the opportunity to stand in awe of what I am about to share.

The first is an amazing waterfront condo at the landmark Yacht Harbour Condominum in the very heart of the Village of Coconut Grove. Built in 1975 and tastefully draped in a nautical motif, Yacht Harbour serves as a timeless icon of the beauty, eclectic elegance and the free spirited artistry of Coconut Grove. Unit 3B is emblematic of this spirit as it seamlessly fuses a seafaring exterior design (the building is actually shaped like a ship) with a free and open interior layout that will sweep you off your feet. At 4,775 sq ft (including over 2,000 sq ft of open waterfront balcony) it is the ideal home for entertaining. With 2 spacious bedrooms and two handsomely appointed baths, this fabulous condo blends the classical soul of the Grove with the essence of trendy design concepts. Offered by Ms. Marilyn Tatman of Coldwell Banker Previews at $2,500,000.

Next we are transported from the lavish bayfront condo realm to that of the palatial waterfront estate. We travel to what is arguably the epitome of waterfront luxury on the private Tahiti Beach Island in the exclusive community of Cocoplum in Coral Gables. I visited three absolutely magnificent beyond words homes on the island. Conservatively speaking, it is 24-karat heaven. I write about these homes in no particular order, as all of them are indescribably beautiful.

As we traverse along the tree lined streets of gated Cocoplum taking in the opulent vistas of one fantastic property after another, we pass manicured lawns, a private marina and tennis club to the second guarded security gate and then onto Tahiti Beach Island. The island is home to 28 spectacular estates, each one virtually folkloric in its beauty. Land value for each lot is approximately $5M.

The first of the estates is 5 Tahiti Beach Island Dr. 11,533 sq. ft. of Mediterranean style splendor on a builder’s acre that imparts the grandeur of European classical style with views and features that are pure South Florida. Featuring 8 bedrooms, 8 full baths, 2 half baths, its own private beach and finishes that are the stuff of royalty. Built in 1997, this is a home Sir Thomas More could have used as the setting in his classic Utopia. Offered by Ms. Audrey Ross of Esslinger Wooten Maxwell Incorporated at $13,900,000. Voila!

Next we go to 24 Tahiti Beach Island Dr. This 15,563 sq. ft mansion rests on a full acre at the very end of the cul de saq on this very special street. Among its countless qualities and attributes are 7 bedrooms, 8 full baths, and 2 half baths. The residence also backs up to a small cut on the island that inspires a natural haven-like ambience. Neo-Mediterranean in motif, the home boasts soaring ceilings, exquisite marble and hardwood finishes, elevator and a private dock. Offered by Mr. Jeffrey Lehman of Coldwell Banker Previews at $13,475,000. Enjoy!

Last and as you will see, certainly not least, we come to 22 Tahiti Beach Island Dr. Built in 2005, this 13,853 sq. ft on a lot just shy of a full acre is nothing short of Mediterranean waterfront palace. 8 bedrooms, 8 full baths and 2 half baths, ceilings that could reach Olympus, and an overall design to rival the depths of one's imagination. The quality of the finishes and the sheer symmetry with which they blend with each other is absolutely magical! This home is an architectural and design symphony. Offered by Ms. Audrey Ross of Esslinger Maxwell Incorporated at $18,000,000.

I hope you enjoyed this tour de force of high luxury in Coconut Grove and Coral Gables. Once again, I give thanks to my colleagues for the opportunity to see these homes and for the privilege to write about them. I purposely kept my descriptions brief, but hope I have captured the essence of their beauty for my readers. In all honesty, each one of these homes is extraordinary beyond words. If there is interest in seeing them for yourselves, I am humbled by the privilege to be at your service.

I look forward to your feedback.

Coldwell Banker Previews: A 78 Year Culture of Class and Elegance

2011-09-28T04:31:00.000-07:00

Click on the Headline to Find Your Shangri La!

Selling? Waiting Until The Spring Makes No Sense

2011-09-27T05:33:00.000-07:00

Selling? Waiting Until the Spring Makes No Sense

by The KCM Crew on September 27, 2011

Late last year, banks were warned that they needed to guarantee that the paperwork necessary to start a foreclosure process on a family was both accurate and complete. Since then, the banks have slowed down the foreclosure process while they re-examined their procedures. They are now confident that all the required documentation is in order. We are currently waiting on a settlement between the banks and the state attorneys general which will establish what penalties will be assessed.

Once this settlement is reached, the banks will again move forward on many homes which are currently stalled at some stage in the foreclosure process.

How many homes are we talking about?

There are millions of homes in this category. Calculated Risk quantified the situation:

“There are a large number of seriously delinquent mortgage loans in limbo waiting for this settlement. According to LPS, at the end of August there were about 1.87 million loans seriously delinquent and another 2.15 million loans in the foreclosure process. This is only down slightly from a year ago when 4.4 million loans were seriously delinquent or in-foreclosure. Once the settlement is reached, the pace of foreclosures will pick up sharply.

The pace will “pick up sharply”.

Bottom Line

As more foreclosures come to the market at discounted prices, there will be greater downward pressure on all housing values. Waiting for the spring selling season to put your house on the market may not make sense this year. The increase in demand may be overshadowed by an increased supply of distressed properties.

13,780 Homes Sold Yesterday

2011-09-26T05:15:00.000-07:00

13,780 Homes Sold Yesterday

by The KCM Crew on September 26, 2011

To all those who have declared the real estate market dead, we want you to know that over 13,780 houses sold yesterday, 13,780 will sell today and 13,780 will sell tomorrow.

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 7.7% over the month before and 18.6% over the year before. According to the report, annualized sales now stand at 5.03 million.

Divide that number by 365 (days in a year) and we can see that, on average, well over 13,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may never see those numbers again (and that is probably a good thing). But to say that the current real estate market is dead or that houses are not selling is totally inaccurate. We have over 13,000 pieces of evidence to prove that.

Previews International Conference - High Powered Selling in Today's Luxury Market

2011-09-23T10:40:00.000-07:00

Yesterday, I had the opportunity to join over 200 friends and colleagues at a conference hosted by our luxury home division, Coldwell Banker Previews International. The venue was the spectacular Christine Lee’s restaurant at Gulfstream Racetrack and Casino in Hallandale. Complimented by a sensational meal and networking opportunity with the very best of the best in luxury real estate, we were privileged to have several distinguished speakers present and share valuable information and insights on the Southeast Florida luxury market segment.

Christopher Ramey
Luxury Marketing Council

Mr. Christopher Ramey of Florida’s Luxury Marketing Council was the first keynote speaker. He spoke about the driving forces of today’s high net worth buyer and seller, and the global shift of age demographics and the role it plays in market psychology and consumer behavior. Mr. Ramey addressed the importance of brand recognition in the luxury segment, and how the Previews International brand is synonymous with high luxury real estate throughout the world. Evidence of this status is demonstrated by virtue of the company we keep as invited members of the Luxury Marketing Council: Bentley, Cartier, Tiffany & Co., Mercedes Benz, Four Seasons Hotels, Brioni, Louis Vuitton, Rolls Royce, and Bergdorf Goodman just to name a few.

Jillian Tobias
Boardroom Communications Incorporated

Ms. Jillian Tobias of Boardroom Communications Incorporated (www.boardroompr.com ) , headquartered in Plantation, FL was next to speak. Her firm specializes in integrated marketing and public relations. Ms. Tobias leads the company’s forward thinking initiatives in new media (blogging, social media, interactive). Ms. Tobias gave us a peak into the world of new media and how it is continually evolving and allowing marketers to reach potential, existing and past customers around the world, and engage them to establish, maintain and retain quality relationships, loyalty and promote growth through the infinite capabilities of the internet and the expanding sphere of influence it facilitates.

Ken Kamen
Mercadien Asset Management

Mr. Ken Kamen, President of Mercadien Asset Management (http://www.mercadien.com)/ was next to grace the stage with an enlightening perspective on global markets, the economy and government. Mr. Kamen is a nationally recognized financial expert and advisor. He has consulted with the U.S. House Commerce Committee and the U.S. House Ways and Means Committee, testified before the House Subcommittee on Finance, and served as the chairman of the business advisory group to the U.S. House of Representatives’ Oversight and Investigations Sub-Committee on financial matters surrounding the Enron corporate scandals. Author of the book “Reclaiming Your Nest Egg”, Mr. Kamen demonstrated a keen awareness of the strengths and weaknesses of the American economy as well as the economies of China and Europe. Personally, my key takeaways from his presentations were (these are my words, not Mr Kamen's....in other words, I could be wrong):

1. Don’t pay too much attention to the media. Their job is to attract viewers for their advertisers, and hardship attracts more eyeballs than happiness. The media feeds on volatility, not performance. Volatility creates excitement and excitement draws viewers.

2. Don’t let the media be your financial advisor or Realtor any more than you would allow WebMD to be your doctor.

3. Financial security is a long term game, and the majority in our society has a sound bite mentality. Boring and tedious issues like insurance, asset allocation and tax planning have a more important long term impact on our future and the futures of our children than the stock of the week or the crisis du jour.

4. Government is largely controlled by very well organized special interest groups who effectively communicate their positions and objectives to congressional staffers (many of which are highly educated mature 20-somethings) who filter and feed this information to our elected officials in order to guide them and help form their opinions and positions. This, in conjunction with polling data from focus groups, drives the direction and strategy our country takes. Under this system, it is inherently implausible for government leaders to have a true and comprehensive understanding of the issues we face. While their intentions may be good, their perspectives are generally tilted to one side or another. As a result, policy decisions in most cases fall victim to unintended consequences.

5. Owning a home represents much more than a simple entry in our asset portfolio. It represents the security and stability of our lives and the comfort and well-being of our families. It represents us as an integral part of our communities. To the luxury market, it means the opportunity to create an environment for those we love that we can cherish and foster memories that will last for generations. To the high net worth buyer or seller, time is the most valuable commodity. Therefore, in the current economy where treasury notes, CD’s and money market funds result in a net loss against inflation, and uncertainty is the only constant in the stock, bond and commodities markets, the burning question is whether the wealthy should forego the pride and pleasure of a new home, give up the time and satisfaction of providing joy and happiness to their families in exchange for what the paper investment markets have to offer.

Finally, Mr. Damon Salerno (http://www.wsj.com/) of the Wall Street Journal presented a veritable library of print and digital outlets available to Previews International agents to promote and feature their properties through the world’s most widely read news publication. According to Mr. Salerno, 89% of all WSJ readers said they would do business with an agent from Coldwell Banker, far and away the industry leader among their readership.

I would like to thank Mr. Mike Murray, VP of Coldwell Banker ‘s SE Florida region, Ms. Rochelle Fraga, our Regional Marketing Director, Christine Lee’s Restaurant and all the leadership and staff who made this event possible. The ideas and insights were relevant and enlightening, the message of support and guidance from our leadership is resonant, and Coldwell Banker Previews International remains the benchmark of quality, expertise and customer care in luxury real estate!

What Happened to Modifications??

2011-09-21T05:32:00.000-07:00

What Happened to Modifications?

by The KCM Crew on September 21, 2011

Monday’s blog post generated many questions as to whether modifications would have a major impact on preventing an increase in future foreclosures. Though modifications are still being done, the onus by the government and the banks has currently shifted to two other initiatives to help the housing recovery:

Preventing future delinquencies (people falling behind on their payments)
Clearing the backlog of foreclosures already owned by the banks (REOs).

As proof of this, we just need to look at the speech by Edward J. DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), to the American Mortgage Conference.
The text of the speech was released earlier this week . Mr. DeMarco explains:

“At the end of the Bush Administration and in the early days of the Obama Administration, attention focused on loan modifications as a way of stabilizing troubled borrowers’ monthly payments and aiding them in avoiding foreclosure. These efforts resulted in the Home Affordable Modification Program, or HAMP. For much of 2009, the key priority was developing and then implementing HAMP; in late 2009 and into 2010, the challenge became making HAMP more operationally effective and converting borrowers from trial modifications to permanent modifications.”

DeMarco then talks about what initiatives the agency is now concentrating on:

“Current priorities are focused on issues at the two ends of the foreclosure process – at one end, we are enhancing efforts to keep current borrowers from going delinquent in the first place and at the other end, we are now focusing on the challenges of disposing of the real estate owned that is left after a foreclosure.”

Preventing New Delinquencies

Trying to prevent more American families from falling delinquent on their mortgage payments is a great first step to a recovery in the housing sector. DeMarco claims:

“FHFA is carefully reviewing the mechanics of the Home Affordable Refinance Program (HARP) program to identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP. If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program’s intent of assisting borrowers …we will seek to do so.”

Clearing Existing Foreclosures

We must also clear the inventories of foreclosures currently held by the banks. This is seen by FHFA as a crucial component to any plan to help the real estate market recover.

“The second area I would like to briefly discuss is the disposition of Real Estate Owned or REO. In August, FHFA, Treasury, and HUD issued a Request for Information (RFI) on ways to dispose of REO properties. While the Enterprises have considered various approaches to disposing of REO over time, the RFI represents an opportunity to consider new approaches, including possible approaches that include both the Enterprises and the Federal Housing Administration (FHA). By taking this collaborative approach, the three agencies seek ways to improve returns to taxpayers and bring greater stability to local housing markets. We have received nearly 4,000 submissions in response to the RFI. We are encouraged by the strong response and interest in this effort. Obviously it will take a little time to review so many responses but we are already hard at work doing so.

To be clear, this effort is not intended to develop a single, national program for REO disposition. Rather, we are most interested in proposals tailored to the needs and economic conditions of local communities.”

Bottom Line

To help the market, the two major initiatives FHFA is pursuing are preventing new delinquencies and selling off the backlog of foreclosures that currently exists. Modifications, at best, now appear to be on a back burner.

Home Sales: Investors

2011-09-20T05:18:00.000-07:00

Home Sales: Investors Are About to Return

by The KCM Crew on September 20, 2011

Sales in the housing industry have remained stagnant over the last several months. Though certain categories of purchasers have remained stable and even increased, the number of cash buyers and investors has dramatically decreased. Researchers from Capital Economics recently reported:

“The firm has found that since January, the number of homes purchased by cash buyers and investors has fallen by 26 percent.”

However, we believe these purchasers have not left the market entirely but instead have been waiting on the sidelines.
Both cash buyers and investors are normally looking for a deal/steal on the real estate they purchase. It is our opinion they are waiting for the release of the glut of distressed properties which has been kept off the market while paperwork issues were being cleared. Proof of this can be seen in the decreasing percentage of overall sales the distressed market has represented over the last six months (40% to 29%).
As we posted yesterday, this distressed inventory is about to come to market. These foreclosures will have very enticing prices on them. We believe sales will jump.

Bottom Line

The supply of houses will increase; so will demand for this inventory. The impact on prices will be determined by which increases more. Our bet is that supply will still be greater than demand causing further downward pressure on overall prices.

Windows of Opportunity Beginning to Close for Sellers

2011-09-19T04:18:00.000-07:00

We have suggested that sellers who need to sell within the next 18 months had a ‘window of opportunity’ to sell at higher prices. They needed to put their houses up for sale immediately before a flood of distressed properties were introduced to the market. This window is beginning to close. The paperwork challenges faced by banks that caused a delay in the foreclosure process over the last ten months are starting to clear. It seems that these houses are now coming to the market.

RealtyTrac reported in their September Foreclosure Report:

“Default notices were filed for the first time on a total of 78,880 U.S. properties in August, a nine-month high and a 33 percent increase from July — the biggest month-over-month increase since August 2007.”

James Saccacio, chief executive officer of RealtyTrac explained:
“The big increase in new foreclosure actions may be a signal that lenders are starting to push through some of the foreclosures delayed by robo-signing and other documentation problems. It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process.”

Diana Olick, of CNBC’s Realty Check quoted a spokesperson for Bank of America:

“ Strong gains like that from July to August demonstrate our progress – primarily in judicial states — clearing more volume to advance to foreclosure once we pass the numerous quality controls we have in place and exhaust all options with homeowners.”

The impact will be felt from coast to coast. New Jersey Superior Court Judge Mary Jacobson recently cleared the way for the top banks to resume foreclosures in the state. The impact this will have on the number of distressed properties can be clearly seen in these statistics reported by Housing Wire:

“In October, New Jersey had the 24th highest foreclosure rate in the country, with servicers filing roughly 5,200 foreclosures that month, according to RealtyTrac. By July, the Garden State’s foreclosure rate dropped to 42nd with just 1,112 filings last month.”

ForeclosureRadar, which handles research in California, Oregon, Washington, Arizona and Nevada, last week reported:

“Foreclosure starts rose in every state.”

Bottom Line

If you currently are selling your home, price it to compel a buyer to purchase it now. Waiting will cause you to compete with an increased number of distressed properties which sell at dramatically discounted prices.

Florida Foreclosures Fall 59%!!!

2011-09-16T11:05:00.000-07:00

The Robo-Signing debacle is the main cause for the decline, and lenders seem to be increasing the number of filings in the last few months, but are slow to release them back onto the active market.

The Real Deal | South Florida Real Estate News

A Nation's Strong Belief in Homeownership

2011-09-16T04:12:00.000-07:00

Genting unveils plan for Miami bayfront resort - Business - MiamiHerald.com

2011-09-14T18:31:00.000-07:00

How does a world class casino developer and operator commit to a multi-billion dollar private casino (being labeled as "the most iconic resort in all the Americas") in a town and state where private casinos are not currently permitted. Maybe they know something you and I don't? Hmmmmm....

What might the effect be on properties in the surrounding area?

Genting unveils plan for Miami bayfront resort - Business - MiamiHerald.com

Luxury and Vacation Homes Are Selling...

2011-09-12T05:50:00.000-07:00

Luxury and Vacation Homes Are Selling

by The KCM Crew on September 12, 2011

It has been a trying time for most segments of the real estate industry. However, two areas that are showing improvement are the luxury home and vacation home markets. It seems that people in these segments are again beginning to purchase.

Vacation Homes

Last week Market Watch published an article discussing the vacation home market. Dan White, president of Daniel A. White & Associates, a wealth-management firm in the Philadelphia area, was quoted in the article.

“A lot of people are worried about the [stock] market today because of the volatility and the fact we could be going into a double-dip recession. They’re looking for other avenues. Real estate, if we’re not at the bottom [in prices], people think we’re pretty darn close.”

The article also explained some purchasers are seeing this as an opportunity to buy a vacation/retirement home:

“Some baby boomers are seizing an opportunity to get a deal on a vacation home they can enjoy now but that’s also a home that eventually will become their primary residence when they retire.”

Luxury Homes

Along with the vacation home market, the luxury market has also made a comeback. HousingWire reported on the luxury market last month:

“In the nation’s top 20 markets, million-dollar property sales rose 18% in 2010 with a 21% increase in California, said Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing, a Dallas-based firm…

In Miami, 517 properties sold for $2 million or more during the first seven months of 2011, up nearly 16% from a year earlier.”

Bottom Line

If you are in a position to move-up to the home of your dreams or have been thinking about a vacation home for the family, now might be the time to make the move.

Florida and The International Buyer

2011-09-08T07:45:00.000-07:00

Florida and The International Buyer

The international market for U.S. residential property approaches $82 Billion on an annual basis, split equally between non-resident foreigners and recent immigrants.

There is rising affluence throughout the world, and clients come from a wide variety of countries to purchase U.S. real estate. Four states—Arizona, California, Florida, and Texas accounted for 58 percent of total U.S. residential home sales to non-resident foreigners in the 2009/2010 time frame. Florida accounted for 31 percent of total U.S. residential home sales to non-resident foreigners in the same time period. 31 percent of $82B is approximately $25.4B.

REGION OF ORIGIN OF INTERNATIONAL HOME BUYERS

Although home buyers come from all over the world to Florida, a few countries and regions accounted for the majority of sales to international clients. Canada accounted for 39 percent of buyers, up from 36 percent in 2010. The United Kingdom accounted for 7 percent of buyers, down from 15% last year. Other countries with large numbers of buyers included Brazil (8 percent, up from 3 percent), Venezuela (7 percent, up from 3 percent) and Germany (5 percent, same as last year).

The demand for U.S. homes by foreigners is different from the overall U.S. market. All real estate is local, and the important domestic market drivers-- jobs, consumer confidence, family formation, and economic growth—have had major negative impacts on existing home sales in domestic transactions. International sales of U.S. homes to foreigners, however, have different market drivers—perceptions of value relative to foreign comps, the desire to diversify assets, potential vacation use, rental opportunities, and an interest in placing assets in areas with well-defined and secure property rights.

The location choices of foreign buyers differed markedly from the patterns reported among all home buyers nationally. Compared to all home sales, as reported in NAR’s 2010 Profile of Home Buyers and Sellers, foreign buyers were much more likely to purchase in a resort area (32 percent of foreign purchases vs. one percent of all homes sold nationwide) on in a central city/urban area (36 percent of purchases vs. 18 percent). The significant share of resort buyers is not surprising given the nature of the Florida market. In addition, international buyers found Florida’s central cities to be desirable locations in a number of instances.

South Florida, and Miami in particular, enjoys the unique quality of international recognition as a top vacation / resort destination, a center of multicultural diversity, and a critical hub for global trade and finance. It is no wonder that foreign nationals are being drawn in dramatically increasing numbers to take advantage of real estate opportunities and stake a claim in the American Riviera.

In addition, businesses from all over the world recognize the benefits and strategic advantages of establishing a formal presence in Miami. The Beacon Council of Miami cites the following top 10 reasons answering the question: "Why Miami?":

Top 10 Reasons

More than 100 international consulates, trade offices, and bi-national chambers of commerce that support the worldwide flow of goods and services.
Convenient direct air service from Miami International Airport to all major destinations in Latin America and the Caribbean – more flights to the region than any other U.S. airport.
Ability to ship goods efficiently anywhere in the world through the Port of Miami, Florida’s largest container port.
A central location in the Western Hemisphere and in the Eastern time zone, facilitating communications with Europe and the western United States.
Excellent business climate with no local or state personal income tax.
Skilled multilingual, multicultural workforce drawn from more than 100 nations.
Strong, growing domestic economy serving more than 5.5 million South Floridians.
Ready access to sophisticated international banking, insurance and legal services, and other professional services.
High quality of life with a wide range of housing options, year-round outdoor recreational activities, renowned cultural institutions and four major professional sports franchises.
Financial and workforce training incentives available to qualified companies.

Foreign Buyers Swarming the US Real Estate Market

2011-09-06T13:31:00.000-07:00

YTD 2011 Foreign National Real Estate Investment in the US

Florida Leads The Way

5 Great Reasons to Sell Your House Today

2011-09-06T04:34:00.000-07:00

5 Great Reasons to Sell Your House Today

by The KCM Crew on September 6, 2011

We are often asked “Is the time to sell my home?” The answer to that question is based on what your families’ goals are. If you don’t need or want to move for a few years it might make sense to wait for the housing industry to recover and prices to appreciate. However, if you wish to move within the next six to eighteen months, it is probably better to sell sooner rather than later. Here are five reasons why:

Your House Will Get More Exposure Now Than the Winter

Housing sales usually level off in the summer and then regain momentum in September and October. The spring buyers’ market has passed. Don’t miss the early fall market. It has consistently outperformed the winter season.

Distressed Properties Will Impact Prices

Distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.

Mortgages Will Become More Difficult to Attain

Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.

It is the Perfect Time to Move-Up

With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home. If you move into a more desirable home now, you will be in position to gain larger equity as prices eventually appreciate.

You Get to Move On with Your Life

Probably the most important reason to sell is so you can get on with your life. You are considering selling for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you are thinking about moving . Are these reasons really important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.

Is a Foreclosure Home a Better Deal than a Short Sale?

2011-09-02T12:24:00.000-07:00

A recent article from the Tampa Tribune shows an alarming trend where displaced homeowners apparently have vandalized their homes as a final gesture of derision in the face of foreclosure.

While potential savings may seem somewhat higher with foreclosed homes (40% less than market value is the national average, but your local market may be higher or lower) as opposed to short sales (21% below market value on average throughout the US- again, local markets may prove otherwise), the cost of renovation and repair on a foreclosure property may prove to be a more expensive proposition. Also, lenders may opt to deny financing for homes that appraisers deem "uninhabitable". Now that many lenders are looking more favorably on short sales, buyers should carefully consider a short sale.

Below is a copy of the September 2nd article from the Tampa Tribune:

Foreclosed homeowners take out revenge on properties

TAMPA, Fla. – Sept. 2, 2011 – Some foreclosed homeowners are taking out their anger on the homes they are forced to leave behind, smashing holes in the walls, scribbling graffiti everywhere, leaving piles of trash and ripping out appliances.

More banks – facing a growing problem from trashed foreclosures – are opting to offer homes at big discounts rather than fix the repairs, which can send surrounding home values in the neighborhood spiraling down, experts say.

Real estate pro Nick Davis with RE/MAX Premier Group told the Tampa Tribune that he has seen some home values greatly diminish from foreclosed homeowners who have trashed it. For example, he recalls one home that would have fetched $250,000 back in 2006 during the housing boom that would now sell for about $75,000 because the former owners trashed it.

“It looks like someone took revenge,” Davis says about the home, which had holes in the wall, appliances ripped out, and piles of trash. “Unfortunately, we’re seeing more of this. We’ve seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.”

Some real estate professionals and lenders are even blaming the high number of real estate deals falling apart due to more homes being left in poor condition by the original owners.

Buyers “look at these homes and say, ‘If this is the damage I can see, what else did the homeowner do to this place that I can’t see?’” Davis says.

Some homeowners facing foreclosure place the blame on banks for their woes so they leave behind a mess for the bank. But trashing a home can backfire. Some banks are saying they may even start taking steps to sue homeowners for the cost of repairs, and law enforcement officials say homeowners can be charged with vandalism as well as theft if they remove items that don’t belong to them from the home.

Have Banks Finally Realized That Short Sales Are Better Than Foreclosures?

2011-08-29T08:03:00.000-07:00

Recent numbers indicate that banks have experienced an epiphany of sorts when it comes to opting to dispose of distressed homes while they are still under title to the distressed owner via short sale as opposed to waiting until foreclosure takes place, and the bank is now the righfful title-holder, the property has suffered greater abandon and potential vandalism and significantly higher value depletion.

Very revealing and informative article below:

Short Sales Beat Foreclosures, Hands Down!

Shadow Inventory - Not a Boiler Plate Call to Arms

2011-08-26T09:42:00.000-07:00

As I have been illustrating for some time now, real estate is a local market driven industry. While on a national scale, the signs are strongly indicating that a flood of new foreclosure properties are about to hit the market, Sellers should rely on local market data as their primary resource for decision making with respect to the sale of their home. I would urge Sellers to obtain current market data indicating recent sales activity in their respective communities. See what the current price range per square foot is on like homes within your community, then look at the homes that have gone "pending" (under contract) to interpret the trend as stable, appreciating or depreciating. Then take a look at the total number of homes you are competing against month over month. Are there more or less? That should give you an indication of the supply and demand component of the equation. Depending on your findings and the circumstances affecting your urgency to sell, you may need to price your home within the estimated per square foot value range or perhaps below it to attract the greatest number of potential buyers. The higher the price per square foot, the less likely you are to attract buyers. To price your home above the value range will likely guarantee that you will enjoy the comforts of your home longer than you might anticipate. Buyers are looking for extraordinary value, and an experienced and qualified Realtor will know how to effectively showcase your home

The illustration below depicts the national picture, but it may not representative of your community.

The areas consisting of Coral Gables, Coconut Grove, The Roads/Brickell Corridor and surrounding communities make up our Area 41. Here is a snapshot of the last 15 months of unit sales activity in single family homes. There has been asteady decline in the number of available homes (supply), yet pending and closed sales show about 3.47 months of inventory. If a normal market holds has about 6-7 months of inventory, then this market is on steroids!

This will change as distressed properties are fairly likely to appear. However, this market is sufficiently strong to absorb a significant number of distressed properties before it can be called a distressed community.

Will the Cork Pop On Your Community?

Delinquency Rates Dropping Dramatically - The End of The US Housing Nightmare May Be In Sight

2011-08-25T10:40:00.000-07:00

It's difficult to make a convincing argument that housing is beginning to stabilize when you still have high unemployment and almost no growth in GDP, but an interesting trend is starting to develop.

Click on the article and draw your own conclusions.

Delinquency Rates Dropping Dramatically - May Be Sign That Housing is Beginning To Stabilize

The Biscayne Corridor - All This Activity Can't Be Coincidence

2011-08-25T06:30:00.000-07:00

IF IT LOOKS LIKE A DUCK,

AND WALKS LIKE A DUCK

CHANCES ARE....

I've been saying for a while now how for a real estate market that is reportedly in the throws of a persistent vegetative state and a local government whose fiscal challenges are as daunting as Miami Dade County and the City of Miami, there's an awful lot of interesting large scale infrastructure and private sector capital investment going on simultaneously along the Biscayne Corridor.

Maybe it's my urban New Jersey roots that just set off my "Spider Sense" to these things, or maybe I owe it all to a bunch of really good arithmetic teachers, or perhaps my parents instilled me with a pretty keen knack for the abundantly obvious, but it seems fairly apparent that something is going on along the Biscayne Corridor and to all outward appearances, it looks like opportunity dressed in work clothes.

The following link is to an article that does a pretty good job of putting the pieces together. Give it a click and see if it all adds up for you.

The Biscayne Corridor - All Bets Are On!

Residences At Vizcaya in Coconut Grove - The Peak of Chic in Waterfront Luxury

2011-08-24T12:28:00.000-07:00

Click on the Headline to see the most amazing brand new waterfront high luxury community that is the very essence of the NEW Grove!

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Video:
Residences At Vizcaya - The Peak of Chic

Details:

The Brochure

Shadow Inventory: Short Term Medicine - Long Term Cure

2011-08-24T11:56:00.000-07:00

For nearly a year, the threat of "Shadow Inventory" being unleashed on to the market has loomed large in the hearts, minds and wallets of homeowners all over the country. Certainly, the short term impact of thousands, if not tens of thousands, of distressed /foreclosed properties will adversely affect property values in localities where they predominate. In some states, the courts have delayed foreclosures for years in some cases, and the sheer volume of homes that will suddenly be released onto the market will have a tsunami effect on affected communities.

South Florida, while hardly immune to judicial backlogs, have had a considerable head start compared to other regions of the US. Our real estate boom ostensibly ended in July 2005, whereas much of the country didn't experience their respective housing downturns until late 2006 and 2007.

We will most certainly feel the effect of the shadow inventory stampede in sficic areas, but I believe the effect will be considerably less devastating than other parts of the country.

In my opinion, the reasons for this is the fact that the mushroom cloud effect of the housing bust hit South Florida first, and many communities have already begun to stabilize. A second and more critical reason is that South Florida is a Mecca for foreign investment in real estate. Foreign exchange conditions with our primary international markets in Latin America have drawn thousands of buyers to our shores to take strategic advantage of the currency exchange rates. Finally, the rental market is smoking hot with increases as much as 20% over the last two years. In specific areas, the rent vs. buy analysis clearly favors the buyer.

The link below explains the situation and uses New Jersey to illustrate of the declining effect this shadow inventory will have on the real estate market. I agree that the disposition of all these distressed properties is the only way to bring the supply and demand equation back in to equilibrium. Please be reminded, however, that real estate is local in nature, and conditions in New Jersey are not the same as in South Florida or Dubuque, IA or Beaufort, SC.

I conclude that sellers should consult with a knowledgable and experienced Realtor who is keenly aware of his local market conditions, and make their decisions based on accurate local data.

http://kcmblog.com/2011/08/24/shadow-inventory-luckily-here-it-comes/

What goes into your Hurricane Emergency Kit?

2011-08-22T06:41:00.001-07:00

Make A Home Emergency Preparedness Kit
Make a home emergency preparedness kit with all the essential supplies to aid you in case a disaster strikes your area. Read

Visit houselogic.com for more articles like this.

The Appraiser's Role in Today's Real Estate Transaction

2011-08-22T06:14:00.000-07:00

Real estate professionals must work with appraisers to provide the latest trend data with respect to specific communities. Agents should provide a copy of the previous survey to the appraiser at the time of inspection if it is available. Realtors should also have a detailed market analysis of the property and the community on hand for the appraisers consideration, which need to include sold as well as active and pending properties. Active and pending listings are strong trend indicators, and may be vital to supporting the contract price being evaluated.

Visit the link below for a first hand account of some of today's appraisal challenges:

http://kcmblog.com/2011/08/22/the-appraisers-role-in-todays-real-estate-transaction/#more-8812

Have elderly relatives? Which is better- Granny Flat or in Law Quarters?

2011-08-22T03:19:00.000-07:00

Granny Flat or In-Law Suite? Which is More Prudent?
If you need to house aging parents or adult children, or if your family is multi-generational, what’s better — an in-law suite or a little granny cottage in the back yard? Read

Visit houselogic.com for more articles like this.

Under new rules, loan modification may not protect you from foreclosure...

2011-08-21T04:52:00.000-07:00

http://www.miamiherald.com/2011/08/10/2354012_under-new-rules-loan-modification.html#storylink=addthis

Still On The Fence about Buying a Home? Was it worth the wait?

2011-08-20T14:02:00.000-07:00

http://kcmblog.com/2011/08/19/homeownership-why-wait/

Estate Planning - World's Most Boring Subject....Unless?

2011-08-20T13:59:00.000-07:00

http://kcmblog.com/2011/08/18/for-the-more-affluent-home-seller/

Despite the Gloom and Doom Hooplah, Home Ownership is Still the American Dream

2011-08-16T07:07:00.000-07:00

The Evolution of Belief in the FSBO -Simple Irony or Intergalactic Epiphany? You Decide

2011-08-12T18:06:00.000-07:00

We all remember the ads for the "For Sale By Owner" website.. Why pay a Realtor a commission for doing what you can do yourself so easily?

Well, the founder of For Sale By Owner didn't exactly walk the walk, did he? In fact, he ignored his own hype and hired a Realtor!

A picture is worth a 1,000 words....

"For Sale By Owner" is a Recipe for Disappointment -Take it from the Founder of For Sale By Owner

2011-08-09T07:16:00.000-07:00

For those considering their homes without the assistance of a real estate professional, it may serve as meaningful guidance to learn that Mr. Colby Sambrotto, founder of the company "For Sale By Owner" opted to hire a Realtor who sold his New York home for $150,000 over the asking price. After six months of frustration and failure trying to sell his home on his own, Mr. Sambrotto apparently came to grips with the value of hiring a Realtor, and successs shortly followed.

The enclosed link uncovers a couple of mths regarding the For Sale By Owner business model.

Mortage Rates: Impact of the US Credit Downgrade

2011-08-08T04:42:00.000-07:00

No one really knows the answer, since this is the first time in history it has ever happened. We are ostensibly in uncharted territory. It seems the only certainty is that there will be further uncertainty. If supply and demand and fundamental economic theory were the only determinants, interest rates should increase at least somewhat. However, we live in an age where global factors play an important role in our internal economics. Moreover, the federal government and the Federal Reserve have also played active roles in determining economic outcomes through policies, measures and counter-measures.

Bottom line: It's anybody's guess.

Kucinich Q&A: 20% Downpayment Would Keep Qualified Home Buyers on Sidelines

2011-08-05T04:05:00.000-07:00

Kucinich Q&A: 20% Downpayment Would Keep Qualified Home Buyers on Sidelines
In an exclusive interview with HouseLogic, Rep. Dennis Kucinich (D-Ohio) explains why he joined a housing industry coalition in opposing a federal regulatory proposal, known as the qualified residential mortgage, that would require home buyers to make a 20% downpayment to purchase a home. Read

Visit houselogic.com for more articles like this.

Why You Need A Good Good Realtor / Negotiator

2011-07-29T07:07:00.000-07:00

When choosing a Realtor, be sure to select one with experience in the particular locale and segment of the market to which your home corresponds. If it is a short sale, the rules, regulations, legal and documentary requirements, lender policies and procedures are constantly changing. Make sure your Realtor is fully versed in these changes before making your selection. Also, make certain that your Realtor is working with an Attorney or Title Company that specializes in short sale transactions.

Finally, you as the Seller must be an active participant in the execution of your short sale if it is to be successful. It is up to you to make sure you can provide all the correct and accurate supporting documents that your lenders require. These requests may be numerous, and frequent updates and additional documentation may be required throughout the process. Your Realtor is responsible for securing the most qualified buyer that will offer top dollar for the home, and making sure that all pertinent parties are aware of what is needed to go forward. Your Realtor will also make sure your Attorney, Title Company and Lenders receive the documentation you provide, but it is up to you to provide it. Bear in mind that time is of the essence in all real estate contracts, and success relies on the Seller's ability to act and react quickly and thoroughly to the lenders instructions and requests, and for the Realtor/Negotiator to perform his/her function with diligence, responsiveness and in observance of all legal parameters to protect the integrity of the transaction and act in the best interest of his clients.

By working as a team, you can increase your chances of success exponentially. Communication and collaboration is the key.

Breaking News: The FED says Florida Real Estate is HOT!!!

2011-07-27T14:29:00.000-07:00

Nice of you to notice. Thanks Ben!

Lessons in History: Back in 1999, Gold was as Bad an Investment Stategy as Real Estate Seems to be Today

2011-07-27T04:22:00.000-07:00

I'm Glad I Didn't Buy Gold at $400 an Ounce!!

- an article from kcmblog.com

Rental Fraud - Landlords and Renters Beware

2011-07-22T14:03:00.000-07:00

It appears that fraud in the South Florida home rental industry is just one more indication of how hard times create opportunity for the unscrupulous. Internet scams on rental properties are on the rise. I know this because one of my own listings was used by a fraudster to perpetrate a scam on a free classified ad website just this past month. Sadly, two families looking for a home allegedly fell for the scam and lost money in the process. In addition, I just heard of another agent whom I know personally to be a first class professional in my area who saw one of his listings on a popular website that offers free classified ads. It said "Brokers Not Welcome". Clearly a scam.

My only advice to owners is to list your rental property with a reputable Realtor. If you are an absentee landlord (you cannot effectively manage and maintain the property yourself due to personal circumstances or logistics), please consider hiring a professional property manager.

For renters, please use internet resources that promote properties offered by members of the National Association of Realtors in your search efforts (Realtor.com, ColdwellBanker.com, FloridaMoves.com) . Free classified ad websites do little, if any, due diligence in verifying the legitimacy of their ads. Realtors are licensed agents who are accountable to government authorities and are bound by the NAR Code of Ethics. Beyond that, if something on the internet looks too good to be true, it probably is. It's ancient advice, but tried and true.

The Impact of Mandatory 20% Down Payments on Home Financing

2011-07-22T10:58:00.000-07:00

Call and write your public officials to vehemently oppose this terrible idea. The housing industry is the linchpin of our national economy. Requiring 20% minimum down payments on home purchases will devastate the country, and undermine the hopes and aspirations of millions of Americans from achieving the American Dream! If this goes through, home values will be crushed due to fewer buyers being able to buy. This is a political maneuver to appease the few at the expense of the many. Thoughtless and potentially catastrophic. A groundswell of popular opposition is the only thing that will stop this. It's up to every single American to fight this.

http://kcmblog.com/2011/07/22/20-down-payment-the-impact/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+KeepingCurrentMatters+%28The+KCM+Blog%29

Assets and Your Mortgage Application

2011-07-21T04:30:00.000-07:00

Of the four "legs" of a borrowers loan application (income, credit, collateral, and assets), assets are generally the least discussed, yet be the most critical determinant of his/her fiscal strength.

http://kcmblog.com/2011/07/21/assets-and-your-mortgage-application/#more-8585

What You Must Know About Home Appraisals

2011-07-20T03:55:00.000-07:00

What You Must Know About Home Appraisals
Understanding how appraisals work will help you achieve a quick and profitable refinance or sale. Read

Visit houselogic.com for more articles like this.

Americans Bullish on Home Ownership Despite Economy, So Why Won’t Washington Listen?

2011-07-18T17:23:00.000-07:00

Americans Bullish on Home Ownership Despite Economy, So Why Won’t Washington Listen?

If you’re worried about the future of home ownership in America, you have good reason. The nation’s economy is struggling. But it’s not just the rising unemployment rate (up to 9.2% in June 2011) that’s deferring home ownership for many. Some outlandish proposals on Capitol Hill are also weighing heavily on the hearts and minds of home owners, sellers, and potential buyers. Read

Visit houselogic.com for more articles like this.

Property Prophet

Landmark Settlement with Mortgage Lenders Provides Relief for Some Struggling Home Owners

4 Questions to Ask Before Buying a Foreclosure

10 Cities Where List Prices Soared Last Month

Energy Efficient Mortgages and Energy Improvement Mortgages

Beautiful 4BR/3.5BA in Kendall / Tamiami Corridor

FHA Loans And the Power of Assumability

In Real Estate, Keeping Current Matters!

Bottom Line

The Biscayne Corridor - Hemispheric Opportunity Knocks!

Comparing Real Estate to Other Investments

All I Want for Christmas is Mortgage Principal Reduction?

Save Money With Energy Efficient Window Coverings

Save Money with Energy-Efficient Window Coverings

Homes Are Selling Across The Country, and Here's Why...

Common Sense Isn’t Common Practice

Real Estate As a Hedge Against Inflation (from KCMBlog.com)

Real Estate as a Hedge against Inflation

Bottom Line

Who says Homes aren't selling?

Homeownership, As American as Baseball and Apple Pie and Baseball!

Americans Still Believe in the Value of Homeownership

Most Important Reasons to Buy a Home

The Home as an Investment

Rent vs. Buy

Bottom Line

The Ship Appears to be Turning

Homeownership: Still The American Dream!

Homeownership: Reports of Its Death are Exaggerated

Bottom Line

Underwater Refinance Program Expanded

Will The 30 Year Mortgage Disappear?

5 Tips to Prepare Your Home to Sell

Coconut Grove Real Estate Market Snapshot - October 14, 2011

Homeownership Under Fire!

This Time We Are Sounding the Alarms

WE MUST SOUND THE ALARMS!

ALARM: Homeownership Percentage Has Dropped Dramatically!!

ALARM: People Are Losing Hope in the American Dream

ALARM: The Safety and Well Being of the Family Being Sacrificed

ALARM: Building Family Wealth Being Threatened

Bottom Line

A Follow-up To Yesterday’s Blog

Redistributing Wealth to the RICH?

Experience, Education, or Both?

The Research

Implications for Practice

Tips to Present a Stronger Mortgage Application

Tips To Present a Stronger Mortgage Application

1. Income documents

2. Asset documents

3. Credit Score Optimization

4. Appraisal Concerns

Picking the Right Agent

Picking the Right Agent is Crucial

BUYERS

SELLERS

Bottom Line

The Modern Day Conundrum: Short Sale vs. Foreclosure

Short Sale vs. Foreclosure: A Short Sale Always Wins

Example A- Short Sale

Example B- Foreclosure

The Best Option is clear

Previews International - #1 in Miami Luxury Homes Sold

Some Good News for Veterans!

Some Good News for Veterans!

The Summit of High Luxury in Coconut Grove and Coral Gables

Coldwell Banker Previews: A 78 Year Culture of Class and Elegance

Selling? Waiting Until The Spring Makes No Sense

How many homes are we talking about?

Bottom Line

13,780 Homes Sold Yesterday

13,780 Homes Sold Yesterday

Previews International Conference - High Powered Selling in Today's Luxury Market

What Happened to Modifications??

What Happened to Modifications?

Preventing New Delinquencies

Clearing Existing Foreclosures

Bottom Line

Home Sales: Investors