Underwater owners regain equity slowly but surely

IRVINE, Calif. – Aug. 11, 2016 – ATTOM Data Solutions released its Q2 2016 U.S. Home Equity and Underwater Report, which shows 11.9 percent of all U.S. properties with a mortgage at the end of second quarter 2016 were seriously underwater – a drop from 13.3 percent in Q2 2015.

No Florida city made ATTOM’s list of the U.S. seriously underwater cities, though a few have more than 15 percent of owners with a mortgage still underwater. They include Orlando (19.1 percent underwater), Tampa-St. Petersburg (17.8 percent) and Miami (17.3 percent).

“South Florida continues to see an equity improvement greater than the national average due to our strong growth,” says Mike Pappas, CEO and president at the Keyes Company. “Our underwater homes saw a 3-times improvement over the average with the high equity owners experiencing a 1.8-times improvement. With our limited land and strong in-migration, we will continue to see improvement in equity.”

For the report, ATTOM analyzed recorded mortgage and deed of trust data from more than 1,400 U.S. counties accounting for 88 percent of the U.S. population along with automated valuation models (AVMs) for more than 56 million properties with mortgages in those counties.

“Rising home prices are lifting all home equity boats: bailing out seriously underwater homeowners and enriching homeowners who already have positive equity,” said Daren Blomquist, senior vice president at ATTOM Data Solutions (the new parent company of RealtyTrac). “Nationwide home prices reached a new all-time high in June on the heels of 52 consecutive months of annual increases. While that national trend is consistent in most markets across the country, there are still some local markets and sub-markets that have been largely left behind by the housing recovery and which still have a high percentage of underwater homeowners.”

The number of seriously underwater U.S. properties (those with a loan-to-value ratio or LTV of 125 percent or more) decreased by 37,235 compared to the first quarter and decreased by 776,958 compared to a year ago. Since the peak of 12.8 million in Q2 2012, the number of seriously underwater properties has decreased by more than 6.1 million.

About 22.1 percent of all U.S. properties with a mortgage at the end of Q2 2016 were equity rich (LTV of 50 percent or less – up from 22.0 percent in the previous quarter and 19.6 percent in Q2 2015. The number of equity rich properties increased by more than 1.4 million compared to a year ago.

Profile of seriously underwater properties

ATTOM matched home equity data against property and ownership characteristic data – including occupancy status, market value, property tax rate, ownership description and congressional district – to provide a profile of the who, what, when, where and why for seriously underwater properties:

  • Property value: 34.4 percent of properties with an estimated market value up to $100,000 are seriously underwater compared to just 4.9 percent of properties with an estimated market value above $750,000.
  • Loan vintage: 26.4 percent of properties with a loan originated between 2004 and 2008 are seriously underwater compared to 8.3 percent with a loan originated since 2009.
  • Occupancy status: 21.8 percent of non-owner occupied properties are seriously underwater compared to 9.1 percent of occupied properties.
  • Ownership type: 43.5 percent of properties owned by a Company/Corporation/Incorporated owner are seriously underwater compared to 10.1 percent of properties owned by a husband and wife.
  • Property tax rate: 21.4 percent of properties with an effective property tax rate above 2 percent of market value are seriously underwater, compared to 11.8 percent of properties with an effective property tax rate below 1 percent.
  • Political party: 13.1 percent of properties located in a congressional district with a Democrat representative are seriously underwater compared to 10.8 percent seriously underwater in a congressional district with a Republican representative.

© 2016 Florida Realtors®

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Average U.S. 30-year mortgage rate ticks up to 3.45%

Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage ticked up to 3.45 percent from 3.43 percent last week. The average rate is down sharply from 3.94 percent a year ago, and remains close to its all-time low of 3.31 percent in November 2012.

The 15-year fixed mortgage rate rose to 2.76 percent from 2.74 percent last week.

Record-low interest rates this year have helped spur home purchases and boost the housing market.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage remained at 0.5 point this week. The fee for a 15-year loan also was unchanged from last week at 0.5 point.

Rates on adjustable five-year mortgages averaged 2.74 percent, up from 2.73 percent last week. The fee held at 0.5 point.

Fla. housing’s median prices, new listings up in 2Q

ORLANDO, Fla. – Aug. 10, 2016 – Florida’s housing market reported more new listings, higher median prices and fewer days to a sales contract during the second quarter of 2016, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 76,748 in 2Q 2016, up 1.4 percent over the 2Q 2015 figure.

“In the second quarter of 2016, Florida continued to add new jobs, which attracts new residents, encourages economic growth and strengthens the housing market,” says2016 Florida Realtors President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. “Traditional housing sales increased statewide over the three-month period, while sales of distressed properties continued to decline. In another positive sign, new listings for single-family homes over the three-month-period rose 2.9 percent year-over-year, while new condo-townhouse listings rose 3.3 percent.”

The statewide median sales price for single-family existing homes in 2Q 2016 was $220,000, up 10 percent from the same time a year ago, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $163,000, up 5.2 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Looking at Florida’s condo-townhouse market, statewide closed sales totaled 31,699 during 2Q 2016, down 2.7 percent compared to 2Q 2015. The closed sales data reflected fewer short sales – and rising traditional sales – over the three-month period: Short sales for condo-townhouse properties declined 42.2 percent while short sales for single-family homes dropped 36.7 percent. Meanwhile, traditional sales for condo-townhouse units rose 6.9 percent and traditional sales for single-family homes increased 14.4 percent year-over-year. Closed sales typically occur 30 to 90 days after sales contracts are written.

“Existing home sale prices throughout most of Florida’s metro areas are continuing to exhibit robust year-over-year growth,” says Florida Realtors Chief Economist Dr. Brad O’Connor. “This growth is attributable to simple economics, which is to say that demand is strong and supply is currently limited. The inventory of homes for sale at the more affordable end of the price spectrum – which includes the vast majority of distressed properties – continues to decline significantly, and new construction has not come close to making up the difference.”

In 2Q 2016, the median time to a contract (the midpoint of the number of days it took for a property to receive a sales contract during that time) was 42 days for single-family homes and 50 days for condo-townhouse properties.

Inventory was at a 4.3-months’ supply in the second quarter for single-family homes and at a 6-months’ supply for condo-townhouse properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.59 percent for 2Q 2016, significantly lower than the 3.96 percent average recorded during the same quarter a year earlier.

Extra credit: Paying more helps mortgage approval

WASHINGTON – July 14, 2016 – Knocking off more credit card debt every month may now be a better deal for anyone looking to buy a home.

Fannie Mae, the government-sponsored enterprise that buys mortgages and sets rules on how to assess the risk of loan applicants, is rolling out revised underwriting software that rewards those who make more than the minimum required payments over time.

The use of what’s called “trended credit data,” now slated to go live this fall, is likely to help first-time homebuyers and even those with no credit scores get a mortgage.

“This change will help,” says Mindy Armstrong, product manager for Fannie Mae, and will not penalize mortgage applicants who only pay the minimum monthly amount on credit card debt.

Until now, when evaluating a potential borrower’s standard credit report, the automated process took into account only how much you owe, who you owe it to and if you make payments on time.

The revised software relies on trended credit data, pulling payment records from the last 24 months to determine not only if you pay on time but how much you pay toward your credit card balances. The data helps determine what type of risk a borrower is likely to represent for a lender.

The Fannie Mae program doesn’t prescribe a certain amount over the required minimum that must be paid or how long or consistently the bigger payments must be made. Rather, a snapshot of a mortgage applicant’s payment habits is what’s captured, explains Armstrong.

Traditional factors, such as income, assets and credit score, remain key metrics in determining who gets a loan.

© Content That Works, Marilyn Kennedy Melia; © Copyright © 2016 Tri-Town News. All rights reserved.

Mortgage rates almost unchanged near historic lows

WASHINGTON (AP) – July 14, 2016 – Long-term U.S. mortgage rates moved little this week, remaining near historically low levels in the wake of financial disarray in Europe.

Mortgage giant Freddie Mac says the average for the benchmark 30-year fixed-rate mortgage ticked up to 3.42 percent from 3.41 percent last week, staying close to its all-time low of 3.31 percent in November 2012. The average rate is down sharply from 4.09 percent a year ago.

The 15-year mortgage rate slipped to 2.72 percent from 2.74 percent last week.

After Britain’s recent vote to leave the European Union, investors fled to the safety of U.S. Treasury bonds, driving up their prices and lowering their yields. Long-term mortgage rates tend to track the yield on 10-year Treasury notes.

AP Logo Copyright © 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fla.’s foreclosure rate dropping, state now No. 4

IRVINE, Calif. – July 14, 2016 – While Florida continues to have a higher number of foreclosures, the total number continues to drop, and the state’s U.S. ranking is in decline as it moves from its often No. 1 spot down to No. 4 in RealtyTrac’s 2016 U.S. Foreclosure Market Report.

New Jersey now tops RealtyTrac’s foreclosure-rate list (0.98 percent of housing units with a foreclosure filing) followed by Maryland (0.90 percent) and Delaware (0.78 percent). In fourth place, Florida (0.70 percent) still outranks its long-time competitor for the top spot, Nevada (0.68 percent).

The top 10 list of foreclosure-rate states for the first six months of 2016 is rounded out by Illinois (0.61 percent), Ohio (0.54 percent), South Carolina (0.54 percent), Connecticut (0.48 percent) and Indiana (0.47 percent).

In a look at foreclosure rates by metro area, Florida has three cities in the top 10: Lakeland-Winter Haven was No. 4 (0.91 percent), Tampa-St. Petersburg was No. 8 (0.85 percent) and Jacksonville was No. 9 (0.80 percent). The top U.S. foreclosure cities were Trenton, New Jersey (1.31 percent) and Baltimore (0.96 percent).

“South Florida saw a 34 percent drop in foreclosure filings year-over-year,” says Mike Pappas, president and CEO at Keyes Company. “With strong employment, low interest rates and with lenders continuing to carefully scrutinize borrowers – foreclosures will soon be at the lowest levels in a decade.”

The length of time it takes from first foreclosure notice to final judgment continues to impact the Florida market. In the state with the longest foreclosure timeline, New Jersey, it takes 1,249 days. It’s followed by Hawaii (1,236 days), New York (1,058 days), Utah (1,025 days) and Florida (1,012 days).

According to RealtyTrac, investors buy 1 in 4 foreclosed homes: 27 percent of all properties sold at foreclosure auction were purchased by third-party investors. It’s the highest share for the first six months of any year since 2000 – the earliest national data is available.

National foreclosure details

The U.S. had a total of 533,813 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions – in the first six months of 2016, down 20 percent from the previous six months and down 11 percent from the first six months of 2015.

Counter to the national trend, 19 states posted year-over-year increases in foreclosure activity in the first half of 2016. Among the nation’s 20 most-populated metro areas, five posted year-over-year increases in foreclosure activity.

“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” says Daren Blomquist, senior vice president at RealtyTrac.

“While U.S. foreclosure activity is still above its pre-recession levels, many of the states hit hardest by the housing crisis have now dropped below pre-recession foreclosure activity levels,” he adds. “With some exceptions, states with foreclosure activity continuing to run above pre-recession levels tend to be those with protracted foreclosure timelines still working through legacy distress from the last housing bust.”

States where Q2 2016 foreclosure activity was still above pre-recession averages: Florida (26 percent above pre-recession levels), New Jersey (215 percent above), Illinois (36 percent above), New York (127 percent above), Indiana (2 percent above), South Carolina (376 percent above), Massachusetts (127 percent above) and Washington (29 percent above).

© 2016 Florida Realtors®

 

Can anything be done about higher insurance costs?

BOCA RATON, Fla. – June 16, 2016 – The arguments were familiar at a daylong forum in Boca Raton attended by 150 players in Florida’s homeowner insurance rate crisis.

But unlike their usual methods of venting over the past four years – legislative hearings in Tallahassee, websites, letters to the editor – the opposing sides listened to each other.

And that gave Sha’Ron James, the state’s Insurance Consumer Advocate, reason to hope a consensus might be possible that could head off the gloomy prospect of property insurance rate increases for years to come.

“People who expressed concerns about Citizens [Property Insurance Corp.] were actually talking with (Citizens President) Barry Gilway after making their comments,” James said afterward.

James organized the forum in Boca Raton to ensure participation by the tri-county area’s plaintiff’s attorneys, water restoration companies, insurance industry representatives and public adjusters.

Homeowner insurance rate hikes have been proposed by numerous companies this year, including Heritage Property & Casualty, which seeks an average 14.9 percent statewide increase. Citizens warned recently of annual 10 percent hikes for the foreseeable future if increases in non-weather-related water loss claims and related lawsuits are not brought under control.

Insurers say water restoration companies pressure homeowners to sign over the rights to collect policy benefits after emergencies such as broken pipes or water heaters, then inflate invoices and file suits if insurers deny claims or offer too little. Restoration companies often delay reporting damages so they can complete costly repairs before insurers can inspect, insurers say.

While restrictions approved for Citizens and other insurers limiting emergency repair work may help, “they aren’t the real solution to the problem,” said Sandra Starnes, director of property and casualty review for the state Office of Insurance Regulation.

Restoration companies and attorneys say insurers routinely underpay and take too long to respond to customers.

Accusations were plentiful at the forum, held in the large recruiting room of Florida Atlantic University’s football stadium. But so were suggestions for reforms that participants said shouldn’t be difficult for all sides to accept.

State Rep. Frank Artiles, R-Miami, a public adjuster, called for state regulation of water repair companies. He also proposed requiring them to provide “good faith estimates” before homeowners sign over benefits – which Gilway later said he would support.

Consultant Scott Johnson, speaking for the Florida Association of Insurance Agents, said restoration companies should be barred from offering referral fees in exchange for names of potential customers. Some companies routinely pay as much as $1,500 per referral, he said.

Some of the restoration companies agreed, while Foyt Ralston, spokesman for the Florida Association of Restoration Specialists, said his association favored state licensing and regulation to weed out the worst abusers.

Meanwhile, Paul Schwartz, owner of All Florida Restoration Specialists, said he could accept limiting assignments to just the work being proposed. Insurers say some companies go far above what homeowners expect, sometimes filing suits in homeowners’ names without their knowledge.

“I agree we shouldn’t be removing kitchens” before insurers are notified of losses, he said.

After the meeting, Gilway was seen in friendly conversation with Lee Jacobson, vice chair of the legislative committee for the Florida Justice Association, a trial lawyers group.

Both said they were encouraged by the dialogue at the workshop.

“I heard common ground discussed among multiple parties,” Gilway said.

Jacobson said he thought the discussion could result in a legislative compromise that has eluded the two sides for four years. “I hope so. I’m tired of going up to Tallahassee,” he said.

James said she plans to issue some policy recommendations by the end of summer that will require sacrifices from all sides. “I believe all stakeholders bear some responsibility,” she said.

Copyright © 2016 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.

The top 6 questions buyers ask sellers

NEW YORK – June 15, 2016 – Homebuyers want to know specifics about homes that pique their interest, so they ask questions. However, a number of those questions are the same from buyer to buyer.

Sellers who provide the answers before a question is asked not only save time, they also appear honest and helpful in a potential buyer’s eyes.

Questions almost every buyer asks

How old is the home? When was it last renovated?
How old is the roof?
What structures or fixtures are included in the list price? (For example, is the seller OK with the appliances, ceiling fans, swing set, window treatments and shed being included in the sale?)
What are the home’s annual costs for upkeep? Provide estimates for electric, water, gas, trash, pool maintenance, lawn care, homeowners’ association and any other regular fees associated with the home.
How is the home heated or cooled? How old are the units?
Are there any outstanding permits or liens on the property?
Source: “Sellers: What Every Buyer Wants to Know About Your Home,” RISMedia (June 8, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Fla.’s recent housing success? Thank baby boomers

NEW YORK – June 6, 2016 – Clear Capital’s Home Data Index (HDI) Market Report releases recent and granular data each month. The HDI Market Report provides insights into housing price trends and other leading indices for the real estate market at the national and local levels.

Florida’s markets continue to recover from the devastating lows of the housing market crash, and an increase in baby boomers provides key insight into the market’s future, according to Clear Capital.

Survey results

Regionally, the West continues to dominate quarterly growth as it hovers around a 1.1 percent quarter-over-quarter price increase, though that’s a downtick of 0.1 percent from last month. Growth rates in the South remain unchanged at 0.7 percent quarter-to-quarter growth, while Northeast and Midwest regional growth continues to lag behind the rest of the nation at 0.1 percent.
Nationally, quarterly market performance remains fixed at 0.6 percent with no change month-to-month.
The Seattle and Tampa MSAs tied for the top spot on the Highest Performing Major Metro Markets for June, each reporting a quarter-to-quarter price increase of 2.0 percent.
Tampa isn’t the only Sunshine State metro area to make the high-performers list. It also includes Orlando (1.7 percent quarterly price growth), Jacksonville (1.7 percent quarterly price growth), and Miami (1.4 percent quarterly price growth).
The most recent quarterly growth figures for the Floridian markets fit into a longer-term pattern of growth and recovery for the state, according to Clear Capital, and each major MSA has “experienced incredible gains since the market lows of 2011, recovering at least 30 percent or more of the individual market value.”

Jacksonville and Orlando home prices have increased 33 percent and 44 percent respectively; Tampa and Miami home prices have skyrocketed by almost 56 percent and 57 percent, respectively.

The baby boomer influence

Clear Capital compared Census Bureau data on baby boomer moves to the price increase from its index, calling the growth in both an “interesting phenomenon that may be contributing to the stellar price growth in the region.”

The most recent data from the U.S. Census Bureau indicates that this segment of the market – homeowners aged 55 to 74 – has increased more than 2.5X the overall population of homeowners in each of the top four Florida markets since 2011. In Miami and Jacksonville, the increase in homeowners of this generation is more than 500 percent greater than the overall increase in the total population of homeowners.

“It’s evident that the baby boomer demand for housing in the (price growth metro areas) is a significant contributing factor in the market’s overall success,” the report concludes. “In Orlando, the trend is quite similar as the ratio of baby boomer homeownership growth to overall homeownership growth is over 400 percent.”

“Florida has traditionally been regarded as prime real estate by those retirees who may be looking to migrate from colder areas of the nation such as the Northeast to a warmer and sunnier alternative for their golden years,” says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

“As the top Floridian housing markets continue to grow and return impressive price gains – Tampa is currently reporting 12.2 percent annual price growth – it’s no surprise that this generation continues to invest in real estate in the region,” he adds. “The baby boomer share of homeowners is clearly on the rise here, and as more and more of this generation nears retirement age, Florida markets may be in for a boost in performance if tradition continues and retirees demand homes in the region.”

© 2016 Florida Realtors®

One-third of Floridians not prepared for hurricanes

ORLANDO, Fla. – June 6, 2016 – The Atlantic hurricane season is underway with two named storms already in the books, but one-in-three (34 percent) Florida residents don’t make advanced preparations, according to a recent AAA Consumer Pulse survey.

Colorado State University predicts a near-average hurricane season with twelve named storms, five hurricanes and two major hurricanes this year. But if a named storm sparked evacuation warnings, nearly 18 percent of residents say they won’t leave their homes. Of those who would evacuate, 58 percent say they would only leave for a category three hurricane or greater.

“Residents should stay vigilant and be prepared for a major weather event,” said Gene Calkins, Vice-President of Insurance Agency, and AAA, the auto club group. “Part of that preparation includes having a storm kit, evacuation plan and proper insurance coverage, which includes flood insurance.”

Floods are the No. 1 disaster in the United States, and homes in low risk zones account for nearly 20 percent of yearly flood claims. Just two inches of water in a 2,000 square foot home, can cause as much as $21,000 or more in damage.

However, 71 percent of Florida residents do not have flood insurance, which is separate from homeowners insurance.

“The majority of residents in Florida do not know there is normally a 30-day waiting period for a new flood policy to take effect,” says Josh Carrasco, spokesperson, AAA – The Auto Club Group. “If you wait until a storm is named and heading in your direction, you will be too late. Now is a great time to check with your insurance agent to ensure you are covered before the busy storm season begins.”

AAA hurricane preparation tips

Secure your home
Inspect your home for minor repairs needed to roof, windows, down spouts, etc. Trim trees or bushes that could cause damage in case of high winds.
Make a plan
Develop a Family Emergency Plan that includes ways to contact each other, alternative meeting locations, and an out-of-town contact person. Identify a safe room or safest areas in your home. Research your evacuation route. Be sure and include plans for pets.
Take inventory
Update your home inventory by walking through your home with a video camera or smart phone. Keep a record of large purchases including the cost of the item, when purchased and model and serial numbers as available.
Stock emergency supplies
Plan for a week’s worth of non-perishable food and water. Be sure and have flashlights, extra batteries, battery-powered radio, medications, first aid kit, blankets, toiletries, diapers, etc. You may also want to prepare a portable kit and keep in your car should you evacuate.
Protect your property
Review your homeowners insurance with your insurance agent to determine if you have adequate protection. Discuss your deductibles. Be aware that flood insurance is not typically covered under a homeowners policy. Flooding to an automobile is available under the Physical Damage coverage.
© Copyright 2016 Okeechobee News. All rights reserved.