The central bank’s new stimulus policy entails reinvesting principal payments from its holdings of GSE debt and mortgage-backed securities back into new mortgage bonds issued by Fannie Mae and Freddie Mac. The Fed also intends to purchase $400 billion more of Treasury securities by the end of June 2012.

Data released by Freddie Mac Thursday puts the average 30-year fixed-rate mortgage at 4.01 percent (0.7 point)
for the week ending September 29. That’s down from 4.09 percent last week. A year ago at this time, the 30-year rate averaged 4.32 percent.

Isn’t real estate great? Low mortgage rates, abundant inventory, reasonable and better informed sellers- all of these combined together make it the best market ever. The market conditions are great not only for first time home buyers, but also for investors, retirees who are looking for a second home, or for all these people looking for that investment opportunity that is REAL- after experiencing the shocking disappointments resulting from lost 401-K’s, crashing stock markets, Ponzi schemes- the list goes on and on.

It is wise to remind ourselves that real estate was called “real” for a reason and it is time to “jump off” that fence and take advantage of this unprecedented opportunity.

“There was a place I was interested in, but I couldn’t get in touch with its owners”. So he resolved to jumping their fence.

Well, Matt, I am surprised you have not thought of having a Realtor, to get you in through the front door!

Seriously, why ANY Buyer will be looking on their own, instead of having a Realtor working for them at no cost???

Here is what every HOME-Buyer should read.

Buying a Home- 10 Steps To Follow:

Use a Buyer’s Agent
Be Wary About the Listing Agent
Get Pre-Approved for Financing: Getting a Legitimate Lender
Do Not Make Any Major Credit Purchases
Find The Right Neighborhood
Find The Right Home: Finding the Right Seller
Build a Plan of Actions and Get Ready
Do Your Homework: Hot, Normal, and Cold Markets
Importance of Inspection
Avoiding Financial Stress

If you do not have an agent, please call me at 786-412-8510, or drop a note to obtain more details on each one of the steps, or assistance regarding your search at kate@hollywood-beach-real-estate.com. I’m here to assist you every step of the way.

Cash buyers get the “real deals” in SE Florida Real Estate. Reports show that 63% of all closed transactions in the first quarter for Dade and Broward counties were all cash purchases.

The lowest price ranges for Dade and Broward, are for the most part foreclosed properties. And, not only do they go to “all-cash” buyers, but there are bidding wars.

Now, we finally have statistical data that speaks in a more convincing voice; see some of the published details below, showing clearly that Miami- Fort Lauderdale, SE Florida, is leading with 63% of all sales in the first quarter being cash purchases. What is different for this local market is that significant number of these cash buyers is made of foreign purchasers, not just investors as in the other markets.

Here are some figures from the major areas affected by foreclosures:

“WASHINGTON – June 22, 2011 – Cash buyers are snapping up homes in markets nationwide, betting that deals won’t get much better. Last month, all-cash buyers accounted for 30 percent of existing home sales, up from 25 percent in May 2010, and 12 percent two years ago”, says the National Association of Realtors.

The cash buyers are enticed by low prices and potential rental income, economists say. But while their activity has helped curb price drops, price increases have yet to follow.
—

In the Miami-Fort Lauderdale area, 63 percent of first-quarter buyers paid in cash, vs. 39 percent in 1997’s first quarter, Zillow says.

Phoenix is also seeing more cash buyers, 44 percent in the first quarter up from 25 percent in the same 1997 period, Zillow data show.

The big numbers are “positive news,” says Stan Humphries, Zillow chief economist. “These are people who’re getting back into the market because they see good value.”
—
Cash buyers are especially prevalent in markets where prices have fallen the most, often areas hard hit by foreclosures.

In Las Vegas, the foreclosure capitol of the U.S. for the past four years, cash buyers accounted for 49 percent of first-quarter sales, says data from real estate site Zillow.com.

Given low prices, they can buy homes, rent them and be immediately cash-flow positive, says Paul Dales, an economist for Capital Economics.

To read full article published by FAR (Florida Association of Realtors):

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=3&id=261436

 I have great news to share with you! Today I received this information which will positively affect you if you are considering FHA financing. Read on: New Incentive for Buyers Purchasing Fannie Mae REO Fannie Mae is offering an incentive for buyers purchasing and closing on a Fannie Mae REO between January 28 and April 30, 2010. The incentive’s goals are to encourage buyers to purchase REO properties and increase the sales volumes to help manage the higher levels of inventory anticipated this year. The incentive is a total of 3.5% of the final selling price comprised of: • Closing costs • The purchase of new Whirlpool® appliances by Fannie Mae • A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5% Since lenders may impose their own limitations on the use of the 3.5% incentive, buyers should consult their lenders for guidance. To be eligible for this incentive: • Offers must be accepted on or after January 28, 2010 • Property sales must close before May 1, 2010 • Buyers must be owner-occupants, investors are excluded Please call or email me for more information and forms. Cordially, Kate === Kate Smith, Realtor®, ABR, CRS, E-Pro, TRC, LHM 786.412.8510 kate@hollywood-beach-real-estate.com; katsmith@ziprealty.com http://www.hollywood-beach-real-estate.com; BLOG: http://4realestate.wordpress.com http://www.linkedin.com/in/miamirealtorkatesmith

First Time Home-Buyers  Should Not Wait Another Month!

Although the mortgage rates are at the lowest point in history, there are drastic changes in FHA Lending pending approval. If approved as anticipated, even fewer people would qualify for a mortgage.

The Good News: Rates on 30-year home loans fall to 4.99%

In a third straight week for declines, the 30-year mortgage rate again dropped below 5%. Read more.

The Bad News: Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
2. Update the combination of FICO scores and down payments for new borrowers.
   • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
3. Reduce allowable seller concessions from 6% to 3%

And, More Bad News: The market is rapidly adjusting, as I am certain that those of you who have been watching and waiting, have seen nice 3-4 bedroom homes in nice school districts (West Miramar, Pembroke Pines, Davie, Cooper City) for less than 300,000. Yes, it was back then- several months ago. I have been monitoring this market segment closely during the months of November, December last year and January this year, for a few desperate clients of mine, who back then decided to wait. Now, their choices are very limited… and it is a bidding war.

If you are one of those buyers, shopping at this market level and you have been pre-approved for FHA financing, the clock is ticking. And, the rewards are there today: lowest rates, tax credit and still all benefits of the FHA!

I look forward to assisting you.

Cordially,

Kate

Kate Smith, Realtor®, ABR, CRS, E-Pro, TRC, LHM

If you are of those people, who at the end of the day want to say “I’m glad I did” instead of “I wish I had”, read on. I promise you, you will find it essential or at least helpful:

1.    I hear there are so many foreclosures on the beach… Myth!

2.    I hear that there are a lot of empty units in the new buildings on the beach and we can buy them for pennies on the dollar…Myth!

3.    I hear that there are a lot of foreclosures; really expensive homes…Myth!

4.    I am going to wait; I hear the market is still going down…Myth!

5.    I am looking for 3-4 bedroom home, garage, newer, in a nice school district, my budget is $220,000- yes, was a possibility 6 months ago.

 Well, as you know me, I spent hours researching. Sending you the FACTS:

I. Homes for sale Broward: 4172 total units; total sold in 2009: 8512; REO’s Today: 299; Sold REO’s in 2009: total 3411

1.    Price range: under $200,000: 550 total homes

a)    REO-S ( i.e. Foreclosures): 96 ; Sold REO’s in 2009, total 1174= 31% of all foreclosures;

b)    Regular sales: (current): 550; sold: 2010

2.    Price range: between $201,000- $400,000- 1398 total homes;

a)    Foreclosures: 120; Sold REO’s in 2009: total 998

b)    Regular sales: (current): 1398; sold: 3588

3.    Price range: between $401,000- $700,000- 822 total homes

a)    Foreclosures: 18; Sold REO’s in 2009: total 135 (less than 4% of all cat. sales)

b)    Regular sales: (current): 822; sold: 3588

4.    Price range: between $701,000- $1,000,000- 470 total homes

a)     Foreclosures: 4; Sold REO’s in 2009: total 25 (less than 0.01% of all foreclosures)

b)  Regular sales: (current): 470; sold: 276

5.    Price range: above $1,000,000- 816 total units

a) Foreclosures: 2; Sold REO’s in 2009: total 7

b) Regular sales: (current): 816; sold: 276

I. Homes for sale Dade: 4628 total units, closed sales 2009: 6937; REO’s total 372; Sold REO’s in 2009: total 3931

1.    Price range: under $200,000: 620 total homes

a) Foreclosures: 180; Sold REO’s in 2009: total 1829

b) Regular sales: (current): 620; sold: 2317

2.    Price range: between $201,000- $400,000- 1363 total homes;

a) Foreclosures: 81 (only 6% of all homes); Sold REO’s in 2009: total 903

b) Regular sales: (current): 1363; sold: 2137, the fastest absorption rate;

3.    Price range: between - $401,000- $700,000- 808 total homes

a) Foreclosures: 11; Sold REO’s in 2009: total 142

b) Regular sales: (current): 808; sold: 754

4.    Price range: between $701,000- $1,000,000- 434 total homes;

a) Foreclosures: 3; Sold REO’s in 2009: total 10

b) Regular sales: (current): 434; sold: 250;

5.    Price range: above $1,000,000- 1239 total homes

a) Foreclosures: 5 (only 0.4% of all); Sold REO’s in 2009: total 5

b) Regular sales: (current): 1239; sold: 387

Now, that you have seen the OFFICIAL figures, you can draw the following conclusions:

1. It is evident that the lowest tiers (pricing 100-400,000) are moving towards very aggressive seller’s market, please observe the absorption rates.
2. It is evident that the luxury market is barely affected by the economic down turn; there are hardly ever any foreclosures. So, I am real curious where are all these buyers (who are convinced that there’s tons of foreclosures), getting their information?

Our reports further show, that close to 95% of the foreclosures are selling at asking or above asking price.  They go in most cases to cash buyers, since there is a real crowd bidding for them. So, when you find just that sweet deal be wise instead of being a “wise guy”!

As it has always been, housing is our bedrock investment. It will continue to generate a nest egg for us long after we’ve turned off the television and forgotten what was said in the sensation-seeking story of the moment.

I hope, you will find these points helpful. For those of you who still do not own your home or, that great investment property you have been dreaming about, please call me now. Join those people, who at the end of the day can say “I’m glad I did” instead of “I wish I had”.

Kate Smith, Realtor®, ABR, CRS, E-Pro, TRC, LHM

786.412.8510 kate@hollywood-beach-real-estate.com; katsmith@ziprealty.com

PS: Stay tuned and look for my next report on how to buy foreclosures.

I wrote on this subject some time ago. Since it is the beginning of the new year, there are notable changes, worth revisiting.

If you are of those people, who at the end of the day want to say “I’m glad I did” instead of “I wish I had”, read on. I promise you, you will find it essential or at least extremely helpful:

What prompted me to write this report, was a brief email sent by a close friend of mine who forwarded to me the following published quote:

“Some of the top U.S. lenders own as many as 700,000 foreclosed homes they have yet to offer for sale…”

To this I replied:

“Thanks for the information, however just the opening phrase should be your clue for accuracy: “some of the US Lenders…” very precise!

I choose to deal with FACTS ONLY- and these are the specific questions I would ask:

1. How many foreclosures in prime locations;

2. On water?

3. In SE Florida?

4. What is their ratio with the rest of this specific market- meaning the rest of the offerings for sale, in the same geographic area and under the same criteria?”

Well, as you know me, I spent hours researching. Sending you the FACTS:

1. Condos for sale Broward: 13087 total units; REO’s: 735; Total units sold in 2009: 12448; Sold REO’s 5447
   1. 1.    Price range: under $500,000: 7696 total units; sold 12048

a)    REO-S ( i.e. Foreclosures): 706

b)    Sold REO’s in 2009: total 5424

1. 2.    Price range: between $501,000- $999,000- 817 total units;

a)    Foreclosures: 29

b)    Sold REO’s in 2009: total 21;

3. Price range: above 1M- 371 total units

a)    REO-S ( i.e. Foreclosures): 0

b)    Sold REO’s in 2009: total 2

1. Condos for sale Dade: 16305 total units, REO’s total 242; Sold REO’s in 2009: total 1819
   1. 1.    Price range: under $500,000: 9044 total units

a)    REO-S ( i.e. Foreclosures): 228 = 2.5%;

b)    Sold REO’s in 2009: total 1750= 96% of all foreclosures

2. Price range: between $501,000- $999,000- 1957 total units;

a)    Foreclosures: 12

b)    Sold REO’s in 2009: total 59;

3. Price range: above 1M- 1384 total units

a)    REO-S ( i.e. Foreclosures): 2

b)    Sold REO’s in 2009: total 19

It is evident that the luxury market is barely affected by the economic down turn; there are hardly ever any foreclosures. So, I am real curious where are all these buyers (who are convinced that there’s tons of foreclosures on the ocean and want to buy distressed newer construction on the ocean, which is actually the pretty stable luxury inventory), getting their information?

Our reports further show, that close to 95% of the foreclosures are selling at asking or above asking price.  They go in most cases to cash buyers, since there is a real crowd bidding for them. So, when you find just that sweet deal be wise instead of being a “wise guy”!

As it has always been, housing is our bedrock investment. It will continue to generate a nest egg for us long after we’ve turned off the television and forgotten what was said in the sensation-seeking story of the moment.

I hope, you will find these points helpful. For those of you who still do not own your home or, that great investment property you have been dreaming about, please call me now. Join those people, who at the end of the day can say “I’m glad I did” instead of “I wish I had”.

Kate Smith, Realtor®, ABR, CRS, E-Pro, TRC, LHM

786.412.8510 kate@hollywood-beach-real-estate.com; katsmith@ziprealty.com

PS: Stay tuned and look for my next report on single family homes- foreclosures.

We are very pleased that President Obama signed the extended home buyer’s tax credit. The credit that he signed into law both extends the $8,000 first-time buyer tax credit and adds a new tax credit for repeat buyers of $6,500.  Plus, the credit now applies to buyers with income of up to $125,000 for single filers and $225,000 for joint filers, for homes up to $800,000.  

This credit is in effect now and buyers must be in contract by April 30 and closed by June 30, 2010.  During the discussion around this bill, Congress said that it will not extend this benefit again, so this may be the last opportunity that potential buyers will have to take advantage of this tax credit.

Take advantage of this great benefit to buy a home now.  To learn more: 

http://www.ziprealty.com/taxcredit2010

What is the reality of the market conditions, price and inventory the condo market for Miami Beach, Sunny Isles, Hollywood, Hallandale, Fort Lauderdale? 

In general, the lowest prices you can expect to see on the beach (non-beachfront, waterfront or walking distance to the beach) in SE Dade and Broward would be about $200,000 for 1-2 bedroom units. When you see listings below the typical market level, these listings are one of the following and are best avoided: 

1. Co-op;
2. Condo-Hotel;
3. Cabana;
4. Timeshare;
5. Short Sale;
6. Building with high HOA’s or in bad financial shape.
7. Building with many restrictions.

 Furthermore, if you are on the market for a min. 2-bedroom oceanfront unit, the realistic expectation would be a min. $400,000 (Miami Beach), and $350,000 (Hollywood, Hallandale). It is always important to consider solid and well maintained buildings, with reasonable HOA fees (min. expected $500 monthly, for an older building and $650 and up, for newer buildings).

 Property taxes are to be re-assessed based on the new purchase, approximately, 2% of purchase price. For more details, visit: 

http://www.miamidade.gov/pa/tax_estimator/TaxEstimator.asp

http://www.bcpa.net/homestead.asp

And, if you are still waiting for the market to continue to drop, you are in for a big surprise.  You have actually missed this moment.

Not only SE Florida real estate is not expected to drop further, but has started to adjust drastically some time ago. For SE Florida, the sales volume started to increase in the first quarter of last year, and the prices started to go up in the middle of last year.

And in my opinion, this is what the media wants: a diversion from the real estate market towards the stock market.

The truth of the matter is, that people do suffer from very short memory span and they do forget the raise and the fall of stock market and the FACT that any real estate investment will undeniably be a much safer harbor then any stock market investment. Plus, definitely with a much greater return over time!

We do see a problem here in Southeast Florida, with the higher end condo market,which seems to be bustling with inventory; however we do need to remember that land is very, very scarce here and agents, keep this in mind! There will be no such thing as prices going down, as ridiculously predicted by Fortune magazine.The prices of real estate in South Florida have never gone down; however risky speculations in real estate by un-savvy investors (brainwashed by the media) have lead to downfalls.

The trend today: if a home is priced correctly, listed with a capable agent and at a full price commission, it will sell. The sellers might have to considercreative financing for the buyers with the full price offer, to help in this market which is stressed by the higher interest rates, but make no mistake, if you are on the market for a single family home, anywhere east of I-95, prices will not go down, instead they will continue to go up, maybe at a slower rate.

Fortune Magazine showed some statistics that looked so convincing to the eye, yet one really has to read this article again and again and go back in history, and then, read the whole issue again. Here is why: according to Fortune Magazine’s here are the following definitions of the national real estate markets today:

1. Dead Zones: BOSTON, LAS VEGAS, MIAMI, NORTHERN VIRGINIA, PHOENIX, SACREMENTO, SAN DIEGO;

2. Danger zones: CHICAGO, LOS ANGELES, NASSAU/ SUFFOLK COUNTIES, NEW YORK, OAKLAND, SAN FRANSISCO, SEATLLE

3. Safe Havens: CLEVELAND, COLUMBUS, DALLAS, HOUSTON, KANSAS CITY, PITTSBURGH.(And just before this article, one reads 19 pages of advertising for the new Kansas City, totted in this article as a “safe harbor” )

One can help it, but wonder: was the perfect timing with this article in the same issue a coincidence? And last, but not least: ever wonder why the coastal regions, especially coastal regions, enjoyed such unprecedented growth during the last 10 years?

Was it the risky nature and the unpredictability of the stock market? Or, was it September 11 that contributed to the later growth? Or, maybe it was Alan Greenspan’s attempt to “spark” the economy after the market crash in late 2000 by cutting the Fed funds rate from 6.5% to 1%?

All of the above for the national growth in real estate. And one more that directly contributed to the growth in the coastal regions, and this is contributed to technology! Yes folks, since the time that technology made a joke of geography, most affluent business owners, created virtual offices and went on and settled down in “paradise”, life on the beach, with palm trees, boats, unbeatable lifestyle and all. Let’s be honest here, it is rather tempting to contemplate life on the beach in mid February, when you are trying to uncover your vehicle buried under a pile of snow.

So, in a nut shell: “technology made a joke of geography” is one of the key elements here. In conclusion, I think that NAR has to come up with a strong and powerful campaign to educate the consumer that real estate investment will always be the safe harbor, no matter what!