Category Archives: Florida News

Federal Flood Insurance Changes: New proposal may affect Florida homes

Federal Flood Insurance Changes



Federal Flood Insurance Changes


The 2017 hurricane season has put a lot of strain onto the National Flood Insurance Program which is currently $25 million dollars in debt. President Trump’s administration is calling for an overhaul of the program to help alleviate the pressure of growing flood related spending. If put into action, these changes could stifle the housing market yet jump-start the private insurance market.


The proposal will end insurance for newly built homes in flood prone areas after 2020. It would also allow FEMA to end insurance for home that are continuously affected by flooding. The idea is praised by some for helping to curtail people from building in areas where they are at high risk, but The National Association of Home Builders claims that the proposal will curb economic growth: “It would simply prevent home builders from being able to provide safe and affordable housing to consumers. By creating uncertainty in the housing market, this proposal would also harm local communities and impair economic growth.” The press release from the NAHB went on to say that newer homes are at less risk because they are build more soundly and with more precautions than older homes, which means insurance claims would be less. 


While this proposal won’t hinder homes from being built or rebuilt and privately insured, lenders may not accept private flood insurance, which will narrow down the buying pool for new homes drastically. Though there is a regulatory proposal to require lenders to accept private insurance, the measure has not been finalized. The NFIP was temporarily extended in September and Congress has until December 8th to reinstate it.



Post Irma Mortgage Relief

Post Irma Mortgage Relief

Post Irma Mortgage Relief



Post Irma Mortgage Relief


Last weekend hurricane Irma swept through Florida causing major damage to homes from Miami to Jacksonville. Tampa Bay, though spared the heaviest of the wind and rain, is still recovering from the storm and damage is being assessed. There is hope for those who are wondering how they’ll pay for damage repairs. You may qualify for mortgage relief up to 90 days through your lender. Here’s how to find out.


Check to see if your mortgage is eligible. Not sure if you are eligible for forbearance? Fannie Mae and Freddie Mac have made it easy for you to check. If you’re still not sure…


Call your lender.  Don’t wait. If you haven’t contacted your mortgage servicer yet, do it now.  A lot of lenders are offering up to 90 days forbearance on mortgages. The only way to know for sure is to call and ask as it is not an immediate action the lenders will take.


Ask questions. Some are adding to the end of your loan while some require the amount owed to be paid after the 90 day period. Ask about your forbearance options and ask clarifying questions before you make a decision. Some lenders may be able to extend the time frame past 90 days as well.


Note that this doesn’t just apply to mortgages. Banks like Wells Fargo are offering assistance on credit card, personal loans and lines of credit by waiving late fees as well as waiving fees at non-Wells Fargo ATMs.


Post Irma Insurance Claims: What You Need to Know

Post Irma Insurance Claims

Post Irma Insurance Claims



Post Irma Insurance Claims


Hurricane Irma spared Tampa Bay the massive damage we all feared, but there is still significant damage to homes throughout the area. If you have questions regarding filing insurance claims for damage to your property, we have links and resources you need.


Read your insurance policy thoroughly. Some home owners may have multiple insurers they work with to insure their home against different threats. Be sure to read your policies carefully and call them with any questions you may have regarding the coverage. If you have questions about the process, you can call the Florida Division of Consumer Affairs insurance helpline here.


Call your insurer(s). Even if you have minor damage, call and file a claim. Don’t assume you don’t have coverage for particular damages.


Take photos. Of everything. All the damage and surrounding areas as well. It is important to make sure it is properly documented for your claim. You also want to make sure to take note of who your spoke with when filing your claims, the date, time and answers the the questions asked.


Save receipts. Again, of everything. From alternative living (hotels, etc.) to repairs, your policy could cover more than you think and you could be reimbursed.


For the under-insured: You’re not out of luck. Click here to go to website where you can apply for federal assistance.



More information on assistance programs and other helpful links:


FEMA – Hurricane Irma Assistance and information

City of Tampa on Facebook for the latest updates

City of St Pete for the latest updates

St Pete’s Operation Blue Roof

St Pete Opens Disaster Relief Centers

How Will the New Flood Insurance Bill Impact You?

Flood Insurance is at Risk


How Will the New Flood Insurance Bill Impact You?


The National Flood Insurance Program, which was created in the late 1960’s to help facilitate more private insurance options, is going to expire on September 30th, 2017. Congress has recently introduced the “21st Century Flood Reform Act” that will allow flood insurance policies to go uninterrupted through the middle of Florida’s 2017 hurricane season.


The catch? The bill has to be passed and signed by the president before September 30th.


What This Means For The Homeowner


According to Florida Realtors, Florida represents 40% of NFIP nationally. If you are a homeowner in a flood zone in the Tampa Bay area this could be troublesome as congress has merely only introduced the bill needed to keep flood insurance afloat and hurricane season will not end until November.


Further, if you are looking to buy or sell your home, closing will be tough. Florida realtors states “Mortgage lenders require proof of property insurance before they will lend money at closing, and they require proof of flood insurance if a property is located within a FEMA-designated flood zone. If home buyers can’t secure proof of flood coverage, their closing could be cancelled or delayed.”


What You Can Do


Call or email your congress representative and ask them to push a long the bill, or pass an extension so flood insurance is not disrupted. You can easily find contact information for your representative here.




Bring The Noise: The St Pete Pier Is Coming

Construction begins on the new St Pete Pier.

Construction begins on the new St Pete Pier.


The New St Pete Pier


The ceremonial ground breaking on the St Pete Pier has come and gone and now comes the tough, not-so-pretty part: noise pollution. Remember when the One building started? It was (and is) an ear full of ground pounding, crane engine running, and metal clanking throughout the east side of downtown. We can expect more of the same starting next week as construction starts on the new St Pete Pier.


What does this mean for you?


ABC Action News reported that over 400 piles are going to be drilled by the crew through January to support the weight starting in September. But test piling will start on July 17th, which will be bringing the noise to Beach Drive and Old Northeast. According to, construction should end in late 2018 and the official ribbon cutting in “early 2019”. That’s a lot of noise.


The pier looks to be an amazing build, though. There will be multiple gardens, play areas, music venues and room for shops restaurants. It sure looks pretty, at and a cool $14 million estimated cost it ought to be. Will the end result be worth it? Sure looks that way from the renderings. It will be interesting to see how the noise affects businesses nearby that have outdoor space. In the mean time, there are events like Pier Beer Summer Series. This even will connect the booming brewery scene and education on the pier and it’s progress.


For more information on the project and to keep updated with time lines and events, check out and sign up for their newsletter.

Tampa Leads Nation in Institutional Investment

Good news for the Tampa region: We’re a leading market for institutional investors.
Among institutional investors – defined as buyers who purchase 10 or more properties during a calendar year – Tampa’s housing market ranks as the top selling in the nation. According to a recent report in The Tampa Tribune, institutional investors account for 4.7 percent of all purchases in the Tampa region, the highest rate in the country among markets with a population of at least 1 million.
Tampa SkylineWhile it may not be surprising that there are an abundance of rental properties that are not going to waste in the sunshine state, most of these properties are actually rented to year-round tenants, largely young families who are just starting out or saving for their own home ownership. The influx of institutional buyers to the area – attracted by the many sales of low-priced, bank-owned properties – have stabilized the housing market that has struggled during a few difficult years between 2007 and 2014.
Now, more and more people are choosing to rent properties instead of buying. Renters use their time to build up their credit while saving up for a down payment on a home of their own. This makes it a great time for investors to buy some of the great properties in the area, with ample opportunities for these buyers to turn around and lease homes to renters or enter rent-to-own agreements with families interested in eventually buying out the property.
If you are a real estate investor who is considering purchasing a home to rent or turn into a timeshare, check out the market in Tampa. Conditions won’t favor the buyer like this forever, so take advantage of low market prices and diverse properties in great locations throughout the region while you can. With plenty of homes available at reasonable prices and a hot rental market, now’s the time to buy. Let The Price Group help you with your property search. To get started, contact us today!

Government, Bank’s Mistake your Gain (Still)

florida foreclosureAs the summer months wind down and the chillier winds roll in through the fall months and into early winter, many Americans look out their windows at their cold and dismal hometowns. Their neighborhoods, strewn with fallen leaves or dirty snow, strongly fortify dreams of a second—or a first—homes in paradise. But with Florida real estate inventory, and subsequently prices, as conducive as ever to a buyer’s market the dream is as achievable as ever.

We all know the story of the early-2000’s housing bubble. Inflated by banks selling to the subprime mortgage market, a brand new segment in 2002, the bubble got bigger and bigger until it finally popped in 2007. But five years was long enough to do plenty of damage to markets across the country, particularly in Sun Belt areas. And right under the bubble was southwest and the west coast of Florida.

A tool to increase buyer confidence, writing bad mortgages actually didn’t start with the banks. Rather it started with the administration taking initiative to combat the fallout from the 2001 terrorist attacks. And many consumers took the bait in the name of achieving the American dream. The issue with this is many didn’t have the income to support mortgage payments, nor did they have to prove it. This was thanks to a brand new tool called the ‘No Doc’ loan, short for ‘no documented proof required.’

Needless to say, many of these mortgages were foreclosed on, left as bank-owned properties. As a matter of fact, in 2006 right before the bubble burst, 21% of subprime mortgages went into default. This compares to the prime loan statistic of less than 1%. Of these, most were in Florida– where statewide there were nearly 325,000 subprime mortgages issued.

Fast forward to 2015, and Florida still has the highest rate of late mortgages. Statewide, over 18% mortgage holders are late or about to face foreclosure. And when banks foreclose, they are not looking forward to sitting on excessive supply; they want to turn and burn to the highest bidder. And with an inventory glut the highest bidder typically isn’t bidding too high lately.

Firestone Grand Prix this weekend in St Pete

It has been a decade since the Grand Prix first took over downtown, bringing thousands of fans to St Pete.

A series of races along a picturesque 14 turn, 1.8 mile temporary track, featuring the IndyCar, Firestone Indy Lights, Pro Mazda Championship, USF2000 National Championship, Pirelli World Challenge Championships, Expanded Bright House Speed Zone, Yacht Club, Indy Fan Village, autograph sessions, Ferris Wheel, Stadium Supertrucks, go cart racing, celebrity sightings and more!

New this year, the HERO ZONE, a free, interactive military obstacle course, lets kids of all ages test their skills on some of the same obstacles faced by our troops in basic training. The HERO ZONE is deployed by Wish for Our Heroes and is located inside Gate 1, next to the Bright House Speed Zone. Inside the Speed Zone, get physical with rock climbing, power jumping, mechanical bull rides, a pit stop challenge, or gyroscope.

From 7 a.m. to 7 p.m. there is a FREE shuttle service from Tropicana Field to the race course. Parking at Tropicana Field will be $10. The shuttle will pick passengers up on 10th St. S. and drop off passengers near the Hilton on Fourth Ave. S. between Second and Third Streets. There will be a two-block walk to the race entry gate 5. The shuttle will operate all three race days from 7 a.m. to 7 p.m.

March 28th-30th

FL home sale prices up 11.4% year-to-year in Dec.

Florida’s housing market reported higher median prices, more new listings, fewer days on the market and the continued stabilization of inventory in December, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 19,497 last month, up 8.6 percent over the December 2012 figure.

“Florida’s housing market continues to demonstrate its recovery,” says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and the Villages. “December marked over two years – 25 months – of consecutive gains in statewide median sales prices, year-over-year, for both single-family homes and for townhouse-condo properties. The rising prices, along with the renewed strength of the state’s housing market, are encouraging more homeowners to list their properties for sale. Statewide, new listings for single-family homes increased 23.8 percent in December, while new townhome-condo listings rose 8.1 percent. The rising prices mean increased equity, which is another reason people are listing properties.

“Properties also are taking less time to sell, another trend that is sparking sellers’ interest,” Meadows added. “In December, the median days on market (the midpoint of the number of days it took for a property to sell that month) was 50 days for single-family homes and 51 days for townhouses and condos. That means 50 percent of homes on the market in Florida sell in less than two months.”

The statewide median sales price for single-family existing homes last month was $172,630, up 11.4 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in December was $137,500, up 17 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in November 2013 was $196,200, up 9.4 percent from the previous year; the national median existing condo price was $197,400. In California, the statewide median sales price for single-family existing homes in November was $422,210; in Massachusetts, it was $316,500; in Maryland, it was $257,677; and in New York, it was $229,000.

Looking at Florida’s townhome-condo market, statewide closed sales totaled 8,364 last month, down slightly (2.5 percent) compared to December 2012. However, the closed sales data reflected fewer short sales and cash-only sales in December: Traditional sales in Florida rose 23.3 percent for single-family homes and 6 percent for condo-townhome properties. Closed sales typically occur 30 to 90 days after sales contracts are written.

“Florida’s market exhibited all the signs of the annual holiday lull,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Because of things like the reduced number of workdays and the presence of other important things to do, the statistics at this time of year don’t necessarily give a good read on where the market really is. Three continuing trends to note, however, are rising inventories, declining cash sales and the lessening presence of distressed property sales.

“The first two are indicative of reduced investor activity and thus a return to a more normal market. The last is a product of rising values that have increased market sales relative to short sales and foreclosures.”

Inventory was at a 5.5-months’ supply in December for single-family homes and at a 5.8-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.46 percent in December 2013, up from the 3.35 percent average recorded during the same month a year earlier.

© 2014 Florida Realtors®

This weekend in St Petersburg, 29th annual Martin Luther King Jr Day Parade

On November 3rd 1983, President Ronald Reagan signed the Federal King Holiday Bill, making the third Monday of every January, the Federal King Holiday.

On January 20, 1986 he first, oldest, and largest MLK National Parade, Battle of Bands and Drum Line Extravaganza was held For the first time in American History, White marching bands and African American Marching Bands marched together in Salute and Tribute to the first Martin Luther King, Jr. National Parade in St Petersburg Florida.

Monday, January 20th, 2014 11am-3pm

National Martin Luther King, Jr. Drum Major for Justice Parade begins at Third Ave. South and Martin Luther King St., goes north to Central Ave, east to Bayshore Drive and finally north to Fifth Ave. North, finishing at Vinoy Park.




Fla. will gain about 175,000 new jobs in 2014

an independent, non-partisan research and public policy organization, projected expected employment growth for each U.S. state, and overall, Florida ranked fifth in expected job growth in 2014.

Since jobs and home sales go hand in hand, the growth could benefit Florida’s real estate buyers and sellers.

To compare states with different populations, the study compared the anticipated percentage of job growth. In Florida, Pew estimates that the state will see 176,423 new jobs for a 2.34 percent increase.

The top state for jobs? North Dakota with an expected growth rate of 3.56 percent, though that translates into only 15,902 jobs due to the state’s smaller population. At the bottom of the list, Washington, D.C., is expected to grow jobs by only 0.75 percent in 2014.

View an an interactive U.S. map with state-by-state forecasts is posted online click the link  below:

The 36th Annual St. Petersburg Power & Sailboat show this weekend

The 36th Annual St. Petersburg Power & Sailboat Show, the largest boat show on the Gulf Coast, is set to sail into the Progress Energy Center for the Arts Mahaffey Theater Yacht Basin and Albert Whitted Park in St. Petersburg from Thursday, Dec. 5 through Sunday, Dec. 8

The show will feature an impressive selection of power boats and sailboats in water and on land, including a 40,000-square-foot clearspan tent housing all types of marine gear. Show-goers will find hundreds of power boats and sailboats including family cruisers, runabouts, fishing boats, magnificent sailing yachts, personal watercraft and much more.  – See more here


6th Annual Chillounge Night Saturday 23rd November

Straub Park will transform again into a magnificent outdoor lounge, tomorrow evening, with 6 trucks of beautiful lounge furniture. The 6th Annual Chillounge night  is the most highly anticipated event in November.

Sipping cocktails under the stars makes an ideal venue for socializing with friends or an intimate, romantic evening. Enjoy live music from local bands, fashion shows and fireworks on the spectacular lounge seating areas throughout the park.

Tickets include complementary food and drinks from Parkshore Grill and 400 Beach.

Fla. backs Miss. lawsuit to block flood insurance hikes

Gov. Rick Scott, Attorney General Pam Bondi and Chief Financial Officer Jeff Atwater announced that Florida would file an amicus brief, or “friend of the court” brief, in the Mississippi Department of Insurance’s lawsuit aimed at delaying flood rate increases outlined in the Biggert-Waters Flood Insurance Reform Act.

The lawsuit asks a federal judge to find that the Federal Emergency Management Agency (FEMA) failed to deliver a homeowner affordability study of higher flood insurance rates by April 2013 as required under Biggert-Waters – and it asks a judge to block the current rate increases until that study has been completed.

Bondi says Florida decided to support the Mississippi lawsuit rather than file its own lawsuit on the off chance that the federal government will quickly address the situation, which could impact about 270,000 Florida property owners. However, the state may take other actions in the future.

“We haven’t ruled anything out at this point, but right now we’re joining Mississippi, and hopefully they’ll be successful,” Bondi says. “And again, Congress needs to take action and the White House needs to take responsibility for this and to protect Floridians.”

The 2012 act requires FEMA and other agencies to make a number of changes to the way the National Flood Insurance Program is run, including raising rates to reflect true flood risk and to make the program more financially stable.

But Realtors and bankers have expressed concerns about the effects a phase-out of federal subsidies could have on the housing market – notably older properties – and the state’s economy.

The Mississippi lawsuit names the U.S. Department of Homeland Security and FEMA, one of its agencies.

However, FEMA Director Craig Fugate told a U.S. Senate Banking subcommittee on Sept. 18 that the study would take about two years to complete, and he said his agency is powerless to stop the flood rate increases.

“I need help,” Fugate told the subcommittee. “I have not found a way to delay (the rate increases) … without some additional legislative support.” Fugate, a former Florida emergency-management director, told the subcommittee members there is “no provision for affordability in (the Biggert-Waters) law.”

In June, the U.S. House voted to delay parts of the act, including putting a one-year hold on the rate changes FEMA is rolling out. The House also approved a delay in the removal of a longstanding grandfather clause that has allowed subsidies to be carried over when properties are sold.

However, a bipartisan Senate proposal to delay the rates for one year remains on hold.

Because of federal inaction, the Florida Senate Banking and Insurance Committee floated the idea that Florida could withdraw from the federal program, either by altering regulations to attract more private insurers to provide the coverage or through establishing a state-backed agency similar to the Florida Hurricane Catastrophe Fund.

Source: News Service of Florida

Flood Insurance FAQ’s

Many older homes in flood zones have long benefited from a subsidy that kept flood insurance rates very low. Starting next month, those homeowners will typically see annual rates jump more than 25 percent, including a fee for a new reserve fund.

Can you do anything to fight higher rates? Yes!

– Obtain an elevation certificate to show how high your home is compared with flood levels. There is an initial cost, but it may help reduce your rate.
Murphy’s Land Surveying specialize in surveys and elevation certificates,

Review your flood zone maps to see your property’s current flood risk and how close it is to a potential change in risk status if a new map is adopted.

And don’t let your policy lapse, this could be a trigger for a big rate increase.

Call Rachel Keeser at Commonwealth Insurance of Seminole on 727-392-1090 or email
and she will be happy to give you a competitive flood quote after you have an elevation certificate.

Other Links:
Interactive Map for NFIP Subsidized Policies by State and County
FEMA: Homeowner’s Guide to Elevation Certificates
FEMA: Flood Insurance Rate Maps
FEMA: Flood Insurance Rate Maps

Bidding wars are back!

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.
From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.
Peter Earl McCollough for The Wall Street Journal
Debbie and Bill Wetherell received multiple offers for their home.
“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.
An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.
“We very much believe we’ve hit bottom,” said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.
View Interactive

The Wall Street Journal’s quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months’ supply. In March, there was a 6.3-months’ supply.
Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.
Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York’s Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.
Increased competition is frustrating buyers and their agents. “We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive,” said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.
Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for “Buddy,” a white toy poodle.
Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.
In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation’s biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.
Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.
Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren’t concerned. “There’s an enormous appetite for foreclosures. Release the inventory. It will sell,” said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.

The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963.
Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.
Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is “entirely affordability driven, which tells me there will be strong resistance to price increases” by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.
Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.
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Rates are “so low that we can afford a house that was out of our price range before,” said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country’s hottest real-estate markets.
Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her “aha moment” earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn’t even viewed the property.
“There are only so many buyers who are going to be in such a hurry, so we’re hoping it’ll top off soon,” she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven’t found out if they made the top bid.
On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. “I was floored. It was so fast, it was surreal,” says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.
Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell’s husband has commuted to Reno, Nev., for five years and they have decided to relocate.
Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the “trade-up” market has been stalled. These homeowners can’t sell their current homes, let alone come up with the down payment for their next home.
Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won’t appraise at the price that buyers have agreed to pay sellers.
Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.
“We just knew this house would go quickly,” says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house.

FHA loan limits are changing this year 2011

Congress has extended FHA loan limits in 2009, 2010 and 2011 on an annual basis, but on October 1, 2011, the loan limits for the FHA will decline due to changes set in law. FHA loan limits are set slightly differently than those for Fannie Mae and Freddie Mac. By law, the lowest limit for any county for one-unit homes is $271,050. The ceiling for FHA currently cannot exceed $729,750, but that ceiling is set to decline on October 1, 2011 to $625,500.
For counties that lie between these limits, the mortgage loan limit is equal to the area median house price multiplied by 125% (currently) or 115% (as of October 1, 2011).
According to the limits published by the Federal Housing Administration, 620 of 3143 counties in the United States, or 20% of the total, will see a decrease in the applicable FHA loan limit. Many, but not all, of the affected areas are concentrated along the coasts and other high cost areas such as California. It is also worth noting that every county that will realize a decrease in its applicable GSE loan limits is also among the 620 counties that will face a decline in the FHA loan limit.
We use the American Community Survey (ACS) to demonstrate that these counties include significant concentrations of population and housing, more than the share of the counties affected (one in five) would suggest. In fact, the affected counties contain 44.3 million owner-occupied housing units of the 75.3 million nationwide or 59% of all owner-occupied housing in the U.S.
For counties facing a decline, the average decline in the FHA loan limit is $58,060 or 14% from current levels. For Pinellas and Hillsboro counties there is a $21,450 decline, $157,300 for Manatee and Sarasota counties.
To estimate the range of homes that will be affected by the change, we assume an average 3.5% down payment (the minimum required under present law by the FHA). Using home value data from the American Community Survey (ACS), we interpolate prices by county. With this approach, we estimate the following impacts concerning affected homes:
• Under present law, 8.32 million owner-occupied homes are priced above the existing FHA loan limits
• Under the changes set to take place on October 1, 2011, an additional 3.87 million owner-occupied homes will be put above the limit, bringing the total number of homes that are not eligible for FHA-insured mortgages to 12.2 million.

U.S. housing prices overall are expected to hit bottom by spring 2011

U.S. housing prices overall are expected to hit bottom by spring 2011 and begin a gradual rise in 2012, Frank Nothaft, chief economist and vice president of housing lender Freddie Mac said on Wednesday.

“I do think we’ll see these housing prices bottom out, maybe by the spring,” Nothaft said.

Nothaft presented Freddie Mac’s January 2011 Economic Outlook to reporters at the annual International Builders’ Show in Orlando.

Nothaft predicted that potential home buyers who have been sitting on the sidelines will start to get back into the market. He said this prediction is bolstered by historically low mortgage interest rates and other positive economic indicators, a small drop in the rate of unemployment, increases in purchases of durable goods and a slight slowing of serious delinquencies feeding the glut of foreclosed housing stock.

“This is the time to come in the market if you’ve got the financial resources and wherewithal,” Nothaft said.

However, the housing market will continue to recover unevenly around the country with regions of Florida, Nevada and California continuing to slog through the effects of the economic bust, he said.

Homebuilders and suppliers at the home builder event, where attendance is off nearly 50 percent since the show was staged in Orlando in 2005 through 2008, viewed the forecast through the lenses of their home communities’ experience of the recession.

“I’ve been in a crash for four years,” millwork supplier Jeff Thompson of Vero Beach, Florida, told Reuters. “But I’m almost seeing a glimmer of light in getting new projects.”

“We’ve pretty much already bottomed out,” said Jeffrey Capogrossi, a custom homebuilder from Columbia, South Carolina, said. “Now, how long we’re going to stay flat is hard to tell.”

Custom home builder Robert Leslie said his company in Fargo, North Dakota, never stopped growing through the national housing bust.

“Our markets, if anything, just leveled off for awhile. So now, they’re starting to move up,” he said.

Freddie Mac and the National Association of Home Builders are projecting a 20 to 21 percent increase in new housing starts – from 475,000 in 2010 to 575,000 in 2011, according to Nothaft and David Crowe, the NAHB’s chief economist.

“Twenty percent may sound like a really big increase, but keep in mind it comes off a very low base,” Nothaft said.

Justifying the projection for new housing starts, Crowe said the national inventory of new homes is at a 40-year low. In addition, Crowe estimated that 2 million people who normally would have moved into their own homes stayed put through the recession, many of them young adults who remained in their parents’ homes or continued to share living quarters with roommates.

“We have an enormous pent-up demand for households,” Crowe said.

Thompson believes Florida, one of the hardest hit states, is well positioned for a resurgence as a result of the precipitous fall in housing prices and appraisals. “You put all that together and Florida has become affordable again like back in the 1960s, 70s and 80s,” Thompson said. “I think there are a lot of opportunities that are coming our way. We are on the cusp.”

(Editing by Greg McCune)


The Saturday TAMPA TRIBUNE came out with a strong, well-written objection to Amendment 4.

Suggest you forward this to every Florida voter you know — and SOON!

And come to FGCAR HQ to pick up some yard signs, bumper stickers, and postcard-sized flyers to distribute.

A power you should not want

The Tampa Tribune

Published: October 2, 2010

Approval of Amendment 4 would give voters new power to reject local land-use plans at the ballot box. The motive of supporters of this ill-conceived change to the constitution is to make growth decisions more democratic.

Having to vote on every land-use change would slow down economic growth without guaranteeing neighborhoods any real protection from the encroachments they fear most.

The amendment is supported by a group called Hometown Democracy, whose name is itself a false promise. Your home community would have only a minority voice in countywide and citywide land-use decisions.

Under the existing system, community groups have a big impact when they show up in force at public hearings to lobby for their interests. If Amendment 4 is passed, concerned citizens would be faced with organizing a countywide campaign to sway a majority of voters.

If the issue were, for example, where to put a tent city for the homeless, most people wouldn’t care as long as it wasn’t near them. Some of the hottest growth disputes involve rezonings and compatibility issues that wouldn’t be affected by passing Amendment 4, but many more complicated decisions would go on the ballot.

The biggest flaw in requiring everyone to vote on a bewildering list of land-use issues is the difficulty of educating the public. The loudest voices you would hear explaining things would not always be trustworthy.

The assumption that we the people are always smarter than our elected representatives isn’t true on issues requiring lots of homework, such as the proper level of service for rural areas, the right size for setbacks, where to put a new school, and the proper density for a transit-oriented development.

It is hard to imagine how a 20-page, highly technical land-use issue could be reduced to 75 words or less on the ballot. It is even harder to imagine a majority of voters wading in deep enough to understand it and get it right.

We don’t think passage of Amendment 4 would solve any of the legitimate complaints of its supporters.

The Legislature each session comes up with bills designed to weaken growth rules. Passing Amendment 4 would only inspire lawmakers to find more loopholes.

Some local elected officials are influenced by contributions from wealthy land owners and developers. In some jurisdictions growth plans are changed so frequently they lose their backbone. But voters should remember that Amendment 4 only gives veto power, not the power to make growth rules stronger.

Taxpayers in many areas have seen the costs of rampant growth shifted to them and away from those profiting from it. They have seen their roads become congested and their water supplies run low. But Amendment 4 promises no quick fix.

Developers might move their projects to remote areas where no one objects, and thus cause more sprawl and higher public costs.

Those in the stop-growth camp should understand that Amendment 4, while opposed strongly by business groups and city and county organizations, would not be a reliable roadblock to growth. Florida has some 300,000 empty houses and apartments, and many more projects have already won approval.

Amendment 4 seems more likely to discourage desirable new development than to stop the kinds of projects neighborhoods find objectionable. Companies are unlikely to pursue job-creating projects if they are faced with such a costly political hurdle.

In Hillsborough and its three cities, about 30 or 40 land-use changes are proposed each year. The process is time-consuming and deliberate. To add a public vote to each change would slow things down to the point that many developers would just give up and move to another state.

In any case, the unpredictability and expense of running everything past voters would be a significant barrier to progress.

It’s human nature to accept an offer of more power. But once every land-use change appears on the ballot, voters eventually will realize their mistake and repeal it. The best solution is to vote no on Amendment 4 before it brings the state costs and confusion we cannot afford.

Proposal: Property tax breaks for Gulf owners

TALLAHASSEE, Fla. – June 9, 2010 –Gulf coast property owners impacted by the Deepwater Horizon oil spill could get a property tax break. Gov. Charlie Crist wants that issue to be discussed as part of a special session of the Florida Legislature that he hopes to call as early as next month.

Chief Financial Officer Alex Sink pushed Crist to embrace the tax reduction plan Tuesday as the governor and Cabinet heard presentations about the effects of the massive spill from BP, and state environmental, wildlife and revenue officials.

The economic impact of the spill – which a University of Central Florida economist estimates as potentially $2.2 billion to as much as $10 billion – is proving difficult to gauge.

“This is going to be an incredibly complex legal tangle to untangle, and to ensure that everybody is compensated fairly,” said Sink, who said she’s been advising businesses, individuals and city and county governments to carefully document losses stemming from the encroaching oil.

The tax-break proposal emerged in a joint letter to Crist from property appraisers in the Panhandle’s Santa Rosa and Escambia counties. They said that property owners are likely to endure a loss in value this year because of the spill but will face tax payments this fall based on assessments in place at the start of 2010.

“We are concerned for the taxpayers of our respective counties who are already struggling with the economic downturn and the resulting declining property values,” Gregory Brown, of Santa Rosa, and Chris Jones, of Escambia, told Crist. “When property values decline along the coast due to BP’s negligence, the affected citizens should be allowed some adjustment to their tax burden.”

Tinkering with property taxes is not new. Property tax relief has followed five disasters already, according to Lisa Echeverri, executive director of the state’s Revenue Department. The most recent property-tax break was issued to Central Florida counties battered by tornadoes in 2007.

But those relief efforts may have proved easier to implement. The 2007 legislation offered as much as $1,500 in property-tax reimbursements to residents whose houses were destroyed or heavily damaged in the tornadoes. By contrast, losses stemming from a lack of tourists coming to commercial properties or the diminished value of residential or vacant land may prove tougher to calculate, officials acknowledge.

Similarly, the loss of tax revenue to state and local government caused by the spill could require lawmakers to approve a scheme for distributing dollars coming from BP. The company Tuesday promised Florida another $25 million – on top of an earlier $25 million issued the state.

Crist has sought as much as $200 million from the company to offset damage, for advertising and continued coastal monitoring.

“We’re trying to figure out how the models may need to be adjusted,” Echeverri said of state revenue forecasts that could be shaken by the disaster. Economists were anticipating a $6 billion budget shortfall next year before the Gulf spill changed some variables.

Crist has been pushing lawmakers for a special session in order to create a proposed constitutional amendment to put on the November ballot that would ban oil drilling in Florida waters. So far, the call for a special session has been rejected by House leaders, including incoming House Speaker Dean Cannon (R-Winter Park).

Cannon sponsored legislation in 2009 that would have allowed drilling as close as three miles offshore and this spring conducted public hearings that minimized the risks of oil and gas exploration.

Crist also wants the special session to include a discussion on ways Florida can draw at least 20 percent of its energy needs from wind, solar and other renewable energy sources within 10 years.

But pulling temporary property tax relief into the session may finally give him an issue an otherwise reluctant, Republican-led Legislature can embrace this election year.

Florida’s existing home, condo sales rise in April

May 24, 2010 – Sales of existing homes in Florida rose 27 percent in April, which means that sales activity has increased in the year-to-year comparison for 20 months, according to the latest housing data released by Florida Realtors®. Another positive sign: Last month’s statewide existing-home median price of $140,100 was 1 percent higher than the statewide median price in April 2009.

Existing home sales rose 27 percent last month with a total of 16,781 homes sold statewide compared to 13,244 homes sold in April 2009, according to Florida Realtors. Statewide existing home sales last month increased nearly 3 percent over statewide sales activity in March. Meanwhile, April’s statewide existing-home median price was 2.3 percent higher than March’s statewide existing-home median price of $137,000. It marks the second month in a row that the statewide existing-home median price has increased over the previous month’s median.

“Buyers responding to the federal homebuyer tax credit before it expired helped to boost home sales across Florida,” said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. “And buying conditions remain favorable, with a variety of housing options available in local markets at attractive and affordable prices. Plus, current mortgage interest rates are at historically low levels, which gives buyers more ‘bang’ for their buck.”

Florida Realtors also reported a 55 percent increase in statewide sales of existing condos in April compared to the previous year’s sales figure; statewide existing condo sales last month rose 2 percent over the total units sold in March. Though April’s statewide existing-condo median price of $103,600 was down 3 percent compared to the year-ago figure, it was 6.9 percent higher than March’s statewide existing-condo median price.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in April while all but one MSA had higher condo sales. A majority of the state’s MSAs have reported increased sales for 22 consecutive months.

Florida’s median sales price for existing homes last month was $140,100; a year ago, it was $138,100 for a 1 percent gain. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in March 2010 was $170,700, up 0.6 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $301,790in March; in Massachusetts, it was $280,000; in Maryland, it was $235,785; and in New York, it was $209,900.

According to NAR’s latest outlook, two trends are influencing a broader stabilization of home prices in housing markets across the nation: months of increased sales activity and lower levels of inventory. “Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably,” said NAR Chief Economist Lawrence Yun. “With home values stabilizing, a revival in homebuying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears.”

In Florida’s year-to-year comparison for condos, 7,291 units sold statewide last month compared to 4,703 units in April 2009 for an increase of 55 percent. The statewide existing condo median sales price last month was $103,600; in April 2009 it was $107,200 for a 3 percent decrease. The national median existing condo price was $170,600 in March, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.10 percent in April, up from the average rate of 4.81 percent during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s smaller markets, the Panama City MSA reported a total of 128 homes sold in April compared to 108 homes a year earlier for a 19 percent increase. The market’s existing home median sales price last month was $160,000; a year earlier it was $156,800 for an increase of 2 percent. A total of 65 condos sold in the MSA in April compared to 53 units sold the same month a year earlier for an increase of 23 percent. The existing condo median price last month was $187,100; a year earlier, it was $172,900 for an 8 percent gain.

© 2010 Florida Realtors®

Home Affordable Modification Program – Is Help On Its Way?

If you are like many American’s who purchase or refinanced their home during the heat of the real estate boom this could be the program that was designed to help YOU! Over the past 2 years I’ve been working to help many clients who have found themselves upside down and need financial help to correct their housing situation. It’s been a long and hard road for many of these good people whose lives have changed in one way or another.

Finally it looks like our government has taken a step in the right direction to streamline the process of helping these good hardworking people.

There are two program: The first is called HAMP, and this is how it works:
The Home Affordable Modification Program is designed to help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use.

Borrower eligibility is based on meeting specific criteria including:
1) borrower is delinquent on their mortgage or faces imminent risk of default
2) property is occupied as borrower’s primary residence
3) mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

After determining a borrower’s eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower’s total pretax monthly income:

•First, reduce the interest rate to as low as 2%,
•Next, if necessary, extend the loan term to 40 years,
•Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
Note: Servicers may elect to forgive principal under HAMP on a stand alone basis or before any modification step in order to achieve the target monthly mortgage payment.
The Home Affordable Modification Program includes incentives for borrowers, servicers and investors.

If you can’t complete the HAMP program for one or a number of reasons than you maybe (should be able to) go in to the second program call HAFA.

Here is the info on HAFA: How HAFA Can Help

The Home Affordable Foreclosure Alternatives (HAFA) Program was designed to complement the Home Affordable Modification Program (HAMP) by helping current homeowners with mortgage debt who are eligible for HAMP but still cannot keep their home.

When a borrower applies for help from HAMP, not everyone succeeds with the program. Sometimes their lender is unable to approve a loan modification. Other times the borrower declines the terms of the loan modification. Some borrowers are approved and accept the terms of the modification, but fail to complete the program for various reasons. Before HAFA, these borrowers were usually headed for foreclosure.

HAFA gives those borrowers a viable alternative to foreclosure. If they have or want to find a buyer for their home, they may request approval for a short sale with pre-approval short sale terms and minimum acceptable net proceeds. If not, they may request approval for a deed-in-lieu . When a borrower applies for help with one of the HAFA solutions, the program already has their financial and hardship information from their HAMP application.

HAFA also imposes limits on the lender to help the borrower. Under the terms of this program, a lender must release the borrower from all future liability for the first mortgage debt. The lender may not ask the borrower for cash or a promissory note, and the lender may not ask a court for a deficiency judgment. The program also prohibits the lender from asking the listing real estate agent to discount their commission at the closing of a short sale.

All documents have been standardized and procedures, time frames, and deadlines have been streamlined under HAFA to make the process easier for both borrowers and lenders.

HAFA also provides financial incentives for both borrowers and lenders to participate in the program. Borrowers are entitled to receive $1,500 in relocation assistance , to be paid at closing. Lenders or loan servicers may receive up to $1,000 to help with administrative costs. There are also financial incentives for the lender or investor on the first mortgage to allow some of the proceeds from the sale of the property to be paid to subordinate lienholders.

Finally, participation in the HAFA program puts the foreclosure process on hold for the borrower. The lender may initiate the foreclosure process, but if the borrower is in the middle of the application process, or if any approved short sale or deed-in-lieu agreement has not been completed or reached its deadline, the lender may not complete the foreclosure process.


There are a lot of people who need this information so please forward to a friend or RT on twitter

Florida expected to start adding residents

Florida expected to start adding residents again after population decline.

March 3, 2010 – It’s a small bounce, but Florida’s population should rebound this year from its first loss in more than half a century in a hopeful sign for the struggling state economy, new estimates from the University of Florida (UF) show.

The Sunshine State is expected to add about 23,000 residents between April 1, 2009, and April 1, 2010, following a loss of almost 57,000 residents the previous year, according to population projections released yesterday by UF’s Bureau of Economic and Business Research.

“Based on changes in electric customer data, we believe Florida’s population has increased slightly over the past year,” says bureau Director Stan Smith who led the research. “This may be an indication the state’s economy is no longer declining at the rate it had been before.”

Although the state’s unemployment rate remains very high, there are signs that the housing market is starting to pick up in a number of places. “It appears the state’s population loss was a one-year occurrence,” he says. “Even so, Florida’s growth will be very slow during the early years of the new decade.”

Not until 2014 or 2015 will the state return to annual population gains that are close to 300,000, the average annual increase over the past 30 to 40 years, Smith said. Population grew by more than 400,000 residents a year during the housing boom between 2003 and 2006.

The economy has such a big impact on Florida’s population growth because it drives migration, Smith says. People in their 20s, 30s and 40s who move to the state for jobs are the largest group of newcomers, followed by retirees and foreign immigrants.

“Even retirees are affected by economic conditions because of the housing market,” he says. “If it’s difficult for them to sell their homes, they may have to delay a retirement move to Florida even if that is what they had been planning to do.”

Due to the bursting of the housing bubble and the severe national recession, Florida lost more than 800,000 jobs between the fall of 2007 and the fall of 2009, and the state unemployment rate rose from about 4 to 11 percent. The declining economy led to a huge slowdown in population growth between 2007 and 2008 and a population loss between 2008 and 2009. The loss was the first since military personnel left the state at the end of World War II.

The bureau estimates the total number of state residents will grow from 18,750,000 to 18,773,000 between April 2009 and April 2010. According to long-term projections, state population is expected to reach approximately 21,247,000 in 2020, 22,574,000 in 2025, 23,821,000 in 2030, and 24,971,000 in 2035.

The biggest numerical increases forecast between 2010 and 2035 are in large counties. Orange County is projected to add the most new residents, 512,200; followed by Hillsborough, 471,800; and Miami-Dade, 457,200.

“Population growth has a lot of momentum in the sense that places that have been growing rapidly in one time period tend to grow rapidly in the following time period as well,” Smith says. “Large markets attract businesses and have more opportunities to draw job seekers. Also, migrants are often attracted by social and family connections with people who moved to an area previously.”

In terms of percentage increases, the biggest leaders over the next quarter century are projected to be Sumter and Flagler counties, growing by 111 percent and 109 percent, respectively.

“The main driving force to Sumter County’s growth is The Villages, a huge retirement community that has been adding a large numbers of residents,” Smith says. “Flagler County also has added a lot of retirees but has a rapidly growing working-age population as well.”

Monroe is the only county projected to lose population over the next 25 years, declining by about 4 percent. The county has little vacant land that can be developed and the area has a high cost of living. Some counties are expected to grow quite slowly, such as Pinellas, with an expected quarter century population increase of less than 2 percent. As the state’s most densely populated county, it has little available space.

First-Time Home Buyer Tax Credit Fraud

The General Accountability Office has reportedly frozen more than 110,000 first-time home buyer tax credit refunds pending civil or criminal examinations due to allegations of fraud. The main concerns are whether or not a home purchase actually took place and if the home buyer claiming the credit is technically a first-time home buyer as defined by the IRS.

In another article about the possible first-time home buyer tax credit fraud, reporter Dawn Kopecki reports that children as young as four years old have improperly received the first-time home buyer tax credit. And, according to the Treasury’s J. Russel George, who testified before Congress recently: “They [IRS] also found that 580 taxpayers under 18 years old and therefore ineligible to buy a home claimed almost $4 million in tax credits.”

The first-time home buyer tax credit ends Nov. 30, 2009. If you do not have a property under contract by the end of October 2009 it will almost be impossible to complete the sale unless you are paying cash!

Fed survey shows U.S. recession may be over

WASHINGTON (AP) – Sept. 10, 2009 – The recession is ending and the U.S. economy is finally growing again.

That’s the message implicit in the Federal Reserve’s latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions.

Economists warn the expansion is fragile and will have staying power only if consumers start spending more money. Rising unemployment that keeps Americans cautious could make for a plodding recovery in the months ahead.

The Labor Department will report on Thursday the number of new jobless claims filed last week, which could indicate whether the incipient recovery is slowing the pace of layoffs.

Wall Street economists expect that first-time claims for unemployment insurance benefits fell to a seasonally adjusted 560,000 from 570,000 the previous week, according to a survey by Thomson Reuters.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers.

While the figures are volatile, first-time claims have trended downward in recent months. Initial claims topped 600,000 for most of this year, until falling below that level in early July.

The total number of people receiving benefits, meanwhile, is expected to drop by about 30,000 to 6.2 million. The figures on so-called continuing claims lag initial claims by a week.

All but one of the Fed’s 12 regions, meanwhile, indicated economic activity either was “stable,” showed “signs of stabilization” or had “firmed,” according to the Fed’s survey. The one exception was the St. Louis region, which reported the economic decline is “moderating.”

Businesses in most Fed regions said they were “cautiously positive” about the economic road ahead. The survey, known as the Beige Book, does not include precise figures.

Analysts predict the economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 percent to 4 percent. That’s mostly because businesses, which had slashed investments during the recession, are spending more.

Auto sales have been lifted by the government’s recently ended Cash for Clunkers program. Manufacturing and the battered housing market, which led the country into recession when it collapsed, have also shown signs of improvement.

The problem for the economy is that the expected growth this quarter comes mainly from the auto companies and other manufacturers, which are refilling their depleted stockpiles.

Those inventories had dwindled as factories and retailers sought to bring what they had more in line with reduced sales. Any robust growth in the economy might be short-lived if shoppers don’t step up their spending.

In the Fed survey, most regions of the country reported that the clunkers program had boosted sales. Other merchants struggled. And consumer spending remained soft in most places.

Still, the assessments of businesses on the front lines of the economy were brighter than those they provided for the last edition of the Fed survey in late July.

At that time, most regions of the country reflected only that the recession was easing its grip. “That’s a pretty significant change in tone from the previous Fed report,” said Brian Bethune, economist at IHS Global Insight.

The survey’s findings will figure into discussions when Fed Chairman Ben Bernanke and his colleagues meet Sept. 22-23. The Fed is expected to keep interest rates at record lows, probably for some time, to help nurture the recovery.

“There are presently some signs that the economy is stabilizing and even reviving in certain areas, despite mixed signals,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech in Texas.

The market for homes is still weak — though it flashed some signs of improvement. In most places, buyer demand was stronger for cheaper homes, and in and around Philadelphia, sales were up for more expensive homes, too.

Fed regions credited a tax incentive for first-time homebuyers with increasing sales. Home prices kept falling in most parts of the country, though in the Dallas and New York regions, the survey found prices “firming.”

In a sign that lenders’ efforts to help troubled mortgage holders may be helping, the number of U.S. households threatened with losing their homes held steady last month, RealtyTrac Inc. reported Thursday.

The number of foreclosure-related filings — including default notices, scheduled auctions and bank repossessions — remains 18 percent higher than a year ago.

There was plenty of bad news in the survey. In the commercial real estate market, demand stayed weak, and construction fell in all parts of the country. And the job market was still sickly all over the nation.

The nation’s unemployment rate, which stood at 9.7 percent in August, could top 10 percent this year. Fisher, of the Dallas Fed, called for “uncomfortably high unemployment” as businesses keep cutting costs.

New Home construction up for fifth month in a row!

WASHINGTON – Aug. 19, 2009 – At least the market for new homes isn’t getting worse anymore, and that’s the first step to getting better.

In fact, the overall economy is actually getting a small boost as more buyers walk into model houses ready to sign contracts and builders hire workers to pour foundations and pave roads.

Construction of single-family homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since last October, the government said Tuesday. Building permits climbed nearly 6 percent.

Each new home built creates about three jobs on average and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

With new construction up 37 percent from its low point this winter, the industry is expected to help the overall economy this quarter for the first time in three and a half years.

“Housing is no longer a drag,” said Mark Vitner, a senior economist with Wells Fargo. “That’s a good thing.”

Of course, the housing industry is coming back from the worst recession since the Great Depression, and construction is still more than 70 percent from its 2006 peak. So the impact from hiring and spending on materials like wood and concrete is modest.

In addition, hammers are silent at construction sites for apartment buildings. For developers, it makes little sense to build when there are so many vacant homes and condominiums for rent. Apartment construction fell 13 percent from June to July.

That pulled the combined construction rate for homes and apartments down 1 percent to a seasonally adjusted annual rate of 581,000 units, from 587,000 in June. Economists polled by Thomson Reuters expected 600,000.

There are still several threats to the recovery of the U.S. housing market.

The unemployment rate, now 9.4 percent, could surpass 10 percent, leaving more homeowners unable to pay their mortgages. Interest rates are still near historic lows but could rise, making homes less affordable. Foreclosures are still at record highs.

And July was the last month that most builders could start new homes and have first-time buyers qualify for a new tax credit. Buyers can save 10 percent on the price of a home, up to $8,000 in taxes, if they complete the purchase by the end of November.

Builders and real estate agents are pressing in Congress for that credit to be extended. If it isn’t, sales could easily slump again.

“I’m not seeing a tremendous amount of good news on the job or economic front, so I do think it’s important that the credit get extended,” said Richard Dugas Jr., CEO of Pulte Homes Inc.

On Tuesday, Pulte completed its acquisition of Centex Corp. for $1.53 billion in stock, becoming the largest homebuilder in the country.

One of the reasons for the purchase was Centex’s focus on more affordable homes. Since the housing bubble burst, many builders have shifted to smaller houses that can be sold at lower prices to woo first-time homebuyers. The median sale price for a new home was $206,200 in June, almost $30,000 cheaper than a year earlier.

More homebuyers also means more business to retailers like Home Depot Inc., which on Tuesday posted its first annual increase in quarterly sales transactions in five years. Better still, the retailer saw improvements in Florida and California, two of its most important – and troubled – markets.

Sales of new homes have posted monthly increases since April. The Commerce Department reports on July new home sales numbers Aug. 26. Sales are expected to rise roughly 2 percent, according to economists surveyed by Thomson Reuters.

Economists pronounce the recession over

NEW YORK – Aug. 13, 2009 – The majority of economists surveyed by the Wall Street Journal say the recession is over and Federal Reserve Chair Ben Bernanke deserves another term.

Of the 47 economists the newspaper surveyed, 27 said the recession has ended and 11 predict another trough this month or next. The rest refused to commit. But they were nearly unanimous in saying that Bernanke should be rehired.

“He deserves a lot of credit for stabilizing the financial markets,” says Joseph Carson of AllianceBernstein. “Confidence in recovery would be damaged if he was not reappointed.”

Poll respondents believe Bernanke has more than a 70 percent chance of being asked by President Barack Obama to remain at the helm of the central bank.

Gross domestic product is expected to grow 2.4 percent in the third quarter at a seasonally adjusted annual rate. Economists were also heartened by a better-than-expected jobless report in July.

Foreclosure bargains are disappearing

ATLANTA – Aug. 10, 2009 – Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of

“For every listing that comes out, we have 10 buyers,” says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif. Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

“We had a lot of inventory last summer. Now we’re down to 1,500 listings – from more than 5,000,” Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.

Even in the hard-hit Detroit area, bargains are disappearing.

“For a good house that’s not too beat up in a good neighborhood, there’s no lack of buyers in this market,” says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. “There are a lot fewer of these properties than a year ago, and the super buys get multiple offers.”

Source:, Les Christie (08/06/2009)

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