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Old 12-31-2006, 09:27 AM
 
Location: St Pete -- formally LI, NY
628 posts, read 1,675,091 times
Reputation: 231

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So over the last couple of months several things have been happing that could be indicators of what’s to come in real estate.

The Fed has held steady on any further rate increases and there is speculation among economists that the Fed will lower rates next year.

Sales of existing homes rose for the second consecutive month in November, The inventory of homes for sale was down 1 percent at the end of November to 3.82 million units.


Purchase applications as reported by the Mortgage Banker Association have been increasing as have refinance applications. A clear indication that purchase activity is returning and that many existing mortgage holders are seeking better terms while rates are favorable. This also could mean that many of those who have risky financing are moving to more conventional financing.

Dec 13, 2006 ‘borrowers who took on exotic mortgages in order to stretch to afford pricey homes has economists and housing analysts worried. But with mortgage rates having fallen near their lowest levels of the year, many of those borrowers are jumping into the safety of a fixed-rate loan, says Richard Powers, general manager of Ditech.com, the online mortgage lender, a unit of GMAC Residential Capital LLC.”

Private Mortgage Insurance (PMI) is now tax deductable so many who would opt for greater than 80% financing do not have to worry about their 2nd mortgage rate escalating in the future. A major benefit here is that more people will save money with a single fixed payment that will amortize and build equity as well as enjoy the tax advantage. Any benefit in savings is an added increase to affordability!

Major Real Estate Acquisitions! There have been several real estate mega deals in the last few months with big name and big money companies buying real estate and/or real estate related companies. What do they know that we don’t???


While the average person seemingly sits on the sidelines the big players are quite busy - here are a few:

December 18, 2006
Realogy, the giant real estate franchisor that owns Coldwell Banker, Century 21 and Sotheby’s International Realty agreed yesterday to be sold to Apollo Group, the private equity firm, for about $9 billion

November 20, 2006
The Blackstone Group, a private investment firm, said yesterday that it had agreed to acquire Equity Office Properties Trust, the nation’s largest office-building owner and manager, for about $36 billion.

The purchase of Stuyvesant Town and Peter Cooper Village in Manhattan for $5.4 billion is the largest real estate deal ever.

 
Old 12-31-2006, 09:30 AM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Quote:
Originally Posted by Shores9 View Post
So are you saying that corporate relocations are the cause of foreclosures??? And the stat you have for this is simply explained as “A LOT”

As far as the diverse nature of Florida’s employment have you looked beyond the Big Mac or chicken nuggets you order for lunch??

Here is a US Department of Labor – Bureau of Labor Statistics State of Florida at a glance reference for your review. http://www.bls.gov/eag/eag.fl.htm

You will find almost every sector of Florida’s labor markets have had increases and the 2 that had a decrease have been nominal. Further, there has been a significant decline in mass layoffs as well as unemployment claims

And lastly could you explain why you say “expect a lot of corporate relocations out of Florida?
Despite the fact that real estate prices dropped in 2006, mortgage foreclosures were up nearly 300 percent in November in Collier (Naples) compared with the same month last year, court records show.” This is just one area I can list each county. as far as corporate relocations just sit back and watch. expenditures are up too high for most to stay here. There is no need to be here and most of my friends are moving there business to corporate friendly states. Its all about expenditures and profit. If you came from Wall st. you know the game.
 
Old 12-31-2006, 09:35 AM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Quote:
Originally Posted by Shores9 View Post
So over the last couple of months several things have been happing that could be indicators of what’s to come in real estate.

The Fed has held steady on any further rate increases and there is speculation among economists that the Fed will lower rates next year.

Sales of existing homes rose for the second consecutive month in November, The inventory of homes for sale was down 1 percent at the end of November to 3.82 million units.


Purchase applications as reported by the Mortgage Banker Association have been increasing as have refinance applications. A clear indication that purchase activity is returning and that many existing mortgage holders are seeking better terms while rates are favorable. This also could mean that many of those who have risky financing are moving to more conventional financing.

Dec 13, 2006 ‘borrowers who took on exotic mortgages in order to stretch to afford pricey homes has economists and housing analysts worried. But with mortgage rates having fallen near their lowest levels of the year, many of those borrowers are jumping into the safety of a fixed-rate loan, says Richard Powers, general manager of Ditech.com, the online mortgage lender, a unit of GMAC Residential Capital LLC.”

Private Mortgage Insurance (PMI) is now tax deductable so many who would opt for greater than 80% financing do not have to worry about their 2nd mortgage rate escalating in the future. A major benefit here is that more people will save money with a single fixed payment that will amortize and build equity as well as enjoy the tax advantage. Any benefit in savings is an added increase to affordability!

Major Real Estate Acquisitions! There have been several real estate mega deals in the last few months with big name and big money companies buying real estate and/or real estate related companies. What do they know that we don’t???


While the average person seemingly sits on the sidelines the big players are quite busy - here are a few:

December 18, 2006
Realogy, the giant real estate franchisor that owns Coldwell Banker, Century 21 and Sotheby’s International Realty agreed yesterday to be sold to Apollo Group, the private equity firm, for about $9 billion

November 20, 2006
The Blackstone Group, a private investment firm, said yesterday that it had agreed to acquire Equity Office Properties Trust, the nation’s largest office-building owner and manager, for about $36 billion.

The purchase of Stuyvesant Town and Peter Cooper Village in Manhattan for $5.4 billion is the largest real estate deal ever.
That will work if we just keep selling realestate to each other. Its all associated with building and real estate. Case and point Houston Tx. You never put all the eggs in one basket.
 
Old 12-31-2006, 09:42 AM
 
Location: St Pete -- formally LI, NY
628 posts, read 1,675,091 times
Reputation: 231
Quote:
Originally Posted by firemed View Post
Despite the fact that real estate prices dropped in 2006, mortgage foreclosures were up nearly 300 percent in November in Collier (Naples) compared with the same month last year, court records show.” This is just one area I can list each county. as far as corporate relocations just sit back and watch. expenditures are up too high for most to stay here. There is no need to be here and most of my friends are moving there business to corporate friendly states. Its all about expenditures and profit. If you came from Wall st. you know the game.
I could take a stab here and say without even looking up the stat that Detroit is the foreclosure capitol of the country but in relation to the hundreds of other cities and municipalities across the nation it is not significant enough to impact anything other than Detroit. The same can be said about Naples.

Insofar as just sitting back and watching I wouldn’t hold my breath if I were you as the statistics clearly prove you wrong and you could suffer from oxygen deprivation and permanent mental damage.

Coming from Wall Street I tend to watch the numbers
 
Old 12-31-2006, 09:49 AM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Quote:
Originally Posted by Shores9 View Post
I could take a stab here and say without even looking up the stat that Detroit is the foreclosure capitol of the country but in relation to the hundreds of other cities and municipalities across the nation it is not significant enough to impact anything other than Detroit. The same can be said about Naples.

Insofar as just sitting back and watching I wouldn’t hold my breath if I were you as the statistics clearly prove you wrong and you could suffer from oxygen deprivation and permanent mental damage.

Coming from Wall Street I tend to watch the numbers
I would like to stay and have fun with this but I got to fly home.
 
Old 12-31-2006, 11:23 AM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Quote:
Originally Posted by Shores9 View Post
I could take a stab here and say without even looking up the stat that Detroit is the foreclosure capitol of the country but in relation to the hundreds of other cities and municipalities across the nation it is not significant enough to impact anything other than Detroit. The same can be said about Naples.

Insofar as just sitting back and watching I wouldn’t hold my breath if I were you as the statistics clearly prove you wrong and you could suffer from oxygen deprivation and permanent mental damage.

Coming from Wall Street I tend to watch the numbers
“New data in a research report from securities firm UBS show a high percentage of borrowers with delinquent, defaulted and foreclosed loans have second mortgages, which they’ve usually taken out at the same time as their first loans to buy a house. The UBS data suggest these borrowers are so stretched financially by the added debt that they can’t make payments on their first loans on time.”

“Second mortgages underwritten by the same bank that originated the first loan are termed ’silent seconds’ because the loan-to-value ratio lenders report includes only the first mortgage. They can enable a home buyer to borrow more, often to buy a property he or she couldn’t otherwise afford.”

“These second mortgages, sometimes called piggyback loans, started to take off along with other ‘nontraditional’ mortgages, such as interest-only mortgages and payment-option ARMs, as housing prices appreciated in recent years and meeting traditional mortgage requirements became more difficult.”

“Today, adjustable-rate, interest-only loans constitute the highest percentage of silent seconds. In the ‘Alt-A’ mortgage market, where borrowers have good credit but don’t necessarily fit traditional lending standards, 58 percent of the $24.6 billion in adjustable-rate, interest-only mortgages originated in 2006 have second mortgages.” The LA Times. “Ownit Mortgage Solutions Inc. of Agoura Hills, which shut down abruptly early this month, has filed for bankruptcy protection, saying it owes more than $165 million to Merrill Lynch & Co. and other financial firms that bought Ownit loans now in default.”

“The filing is a sign of the stresses felt by so-called sub-prime lenders such as Ownit, which make higher-cost loans to borrowers with poor credit or limited incomes. In its filing, Ownit listed its assets as between $1 million and $10 million and said it owed $170 million to its 20 biggest creditors. By far the biggest portion of the debt resulted from soured mortgages.”

“Ownit sold its loans on the condition that it would have repurchased them if the borrowers missed payments in the early months.”

“Merrill Lynch demanded that Ownit repurchase mortgages totaling $93 million. Several other Wall Street firms are seeking smaller amounts, and Calabasas-based Countrywide Financial Corp. has $11 million in loans it wants Ownit to buy back.”

“Merrill Lynch was Ownit’s chief backer on Wall Street, having bought a 20% stake in the company for $100 million in September 2005. Merrill also had provided a large credit line to Ownit and purchased two-thirds of its loans to convert into mortgage-backed securities.” Major Real Estate Acquisitions are a way of making things look good, Come on, your from Wall St. its part of the game.

Last edited by firemed; 12-31-2006 at 11:40 AM..
 
Old 01-01-2007, 10:15 AM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Default Naples News.

“Since the end of 2005, property values have fallen an average of 20 percent in Southwest Florida, said Ellis. Transactions were off 40 to 50 percent for single-family homes throughout 2006 in the Naples area, compared to a year earlier, he said.”

“Realtors don’t expect to ever again see the kind of run-up in prices that sellers experienced in 2005. Median home prices appreciated 40 to 50 percent. ‘That was stupid and everyone is paying for it now,’ said Brodersen.”

“With the cool-down in the market, some Realtors have left their jobs for other careers or have moved to other states seeking better opportunities. Ellis said 2,500 members of the Realtor Association of Greater Fort Myers and the Beach did not pay their annual dues on time. The deadline was Dec. 15, and it has been extended to January to help those who might be hurting for money, Ellis said.”

“If those Realtors don’t renew, the association will lose almost 40 percent of the primary board members, he said. The association’s membership grew from 2,735 in July 2003 to 5,884 in July 2006.”

“The market may not have hit bottom just yet. But the bottom might be around the corner. ‘Buyers know they have more leverage than they did at any time throughout last year,’ said Ellis.”
 
Old 01-01-2007, 10:21 AM
 
Location: So. Dak.
13,495 posts, read 34,025,136 times
Reputation: 15058
Since it seems evident that prices are dropping in Fla., I've been wondering about something and maybe someone could explain it to me. Wouldn't the realtors actual benefit from prices falling? I realize it would lessen the commission for selling a cheaper home, but wouldn't they be able to sell more homes when the prices are something that more of us could afford?
 
Old 01-01-2007, 11:47 AM
 
Location: St Pete -- formally LI, NY
628 posts, read 1,675,091 times
Reputation: 231
Quote:
Originally Posted by Jammie View Post
Since it seems evident that prices are dropping in Fla., I've been wondering about something and maybe someone could explain it to me. Wouldn't the realtors actual benefit from prices falling? I realize it would lessen the commission for selling a cheaper home, but wouldn't they be able to sell more homes when the prices are something that more of us could afford?
You have an interesting question. And the answer is most definitely yes! Affordability has become a major issue not just in Florida but across the nation. If houses were more affordable there would be more sales and of course more business for those who are realtors. And yes prices have fallen and I believe this is healthy because the average home was out of reach for the average buyer!!!

The national association of realtors publishes an affordability index that I think is an important stat to watch as it is a measure of the direction and pace at which home prices will move. The index measures the median price vs the median income and then calculates the housing costs based on certain parameters such as a 25% qualifying ratio, 20% percent down payment, and using a 30 yr fixed or an arm at an average rate for that period. The formula that they use can be questioned as it may not fully represent the average buyer’s method of financing nor regional issues related to homeownership (such as insurance here in Fla) but it does give a good indication on the overall direction of the market as it pertains to affordability.

Using this index a number of 100 means the average person (or household) can afford the average home. The higher the number the means the average person can afford more than the average home and conversely the lower the number means he or she can afford less. A negative number means the average person can not afford the average home.
Here is a link to http://www.realtor.org/Research.nsf/files/REL0610A.pdf/$FILE/REL0610A.pdf

In addition to home prices affecting affordability there are numerous other issues that I think we as citizens should be more proactive on such as government spending, taxation, and insurances.

I would like to add that I think that more real estate professionals should be concerned with all the issues affecting affordability as it really should be a priority to promote increased homeownership just as much if not more that promoting increased commissions.
 
Old 01-01-2007, 12:58 PM
 
2,141 posts, read 6,342,031 times
Reputation: 588
Quote:
Originally Posted by Shores9 View Post
You have an interesting question. And the answer is most definitely yes! Affordability has become a major issue not just in Florida but across the nation. If houses were more affordable there would be more sales and of course more business for those who are realtors. And yes prices have fallen and I believe this is healthy because the average home was out of reach for the average buyer!!!

The national association of realtors publishes an affordability index that I think is an important stat to watch as it is a measure of the direction and pace at which home prices will move. The index measures the median price vs the median income and then calculates the housing costs based on certain parameters such as a 25% qualifying ratio, 20% percent down payment, and using a 30 yr fixed or an arm at an average rate for that period. The formula that they use can be questioned as it may not fully represent the average buyer’s method of financing nor regional issues related to homeownership (such as insurance here in Fla) but it does give a good indication on the overall direction of the market as it pertains to affordability.

Using this index a number of 100 means the average person (or household) can afford the average home. The higher the number the means the average person can afford more than the average home and conversely the lower the number means he or she can afford less. A negative number means the average person can not afford the average home.
Here is a link to http://www.realtor.org/Research.nsf/files/REL0610A.pdf/$FILE/REL0610A.pdf

In addition to home prices affecting affordability there are numerous other issues that I think we as citizens should be more proactive on such as government spending, taxation, and insurances.

I would like to add that I think that more real estate professionals should be concerned with all the issues affecting affordability as it really should be a priority to promote increased homeownership just as much if not more that promoting increased commissions.
Well the good news is sellers are starting to listen to the Realtors and adjusting their prices to where they should be instead of where they want them to be.
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