Sarasota Housing Market is Cooling Off Slightly.. (sales, mortgage)

[FLSnowbirds]

http://www.sarasotarealtors.com/file...2101722806.pdf

[MrRee]

I woudn't want to live there !!!!

[Sunshine Rules]

Sales numbers typically dip August to September. August is one of our slower months for home buyers as many families are busy getting ready for the new school year vs home hunting.

If you look at the stats for home sales September 2012 vs 2011, you'll note that sales are actually up in Sarasota county (and by the way, also in Manatee county).

The issue I see going forward into the winter selling season is lack of inventory, especially in certain price ranges and popular neighborhoods.

Local builders have also picked up on these trends and are both increasing their inventory of new construction homes for the winter season and buying up additional land for future construction projects.

[photoman_6]

gotta love statistics- seems you can spin them any way you want.

[bbronston]

Spin...definitely true but I think it would be a mistake for anyone to convince themselves that our market is cooling down. New construction is not only active but they've been steadily increasing their prices. Inventory is way down which, in a normal world, would both mean lower sales figures but higher prices. Of course, we don't live in a normal world anymore so it's tough to predict what will happen. If my experience is any indication, there are an increasing number of northerners wanting to move here, particularly this winter, so that could eat up the inventory even further. I never predict prices but I will say that it is likely that rates will go up , loan money will go down, and inventory will get even tighter. These are interesting times.

[loves2read]

I don't think rates will go up--
no one wants that for lots of different reasons...
and until wages really start to increase, there is no reason for rates to go up

[bbronston]

I would have absolutely agreed with you until about a week ago when we had a lender talk to our office and explain that Dodd-Frank is adding a new wrinkle that goes into effect either in november or December (can't recall). It places greater demand on the lender that has the effect of making them have more money on hand for each loan which makes the loans less profitable. So, he believes that loan funds will be reduced and rates will go up. I'm the last person you'll find who will say something is inevitable but at least one expert I know is predicting higher rates.

[loves2read]

I am glad we have house we are selling in TX under contract then and that my son bought this summer
If mortgage rates go up though you know there will be all kinds of pressure NOT to raise rates on CDs

[bbronston]

I have to...ahem...amend my earlier comment regarding the effect of Dodd-Frank at the end of this year. We had another meeting today and got a bit further into the subject. Apparently, I misunderstood about the rates going up. I'll explain for those who are interested: There is a requirement for the lenders, referred to as Basel III, that will cause them to have more "skin in the game" for every loan they make. It essentially requires them to set aside cash for every loan they write and service, even if they sell the loan to Fannie, as I understand it. Since they have to have this money set aside, obviously they can't lend it so there is less money available to lend. That will make it harder to get a loan and the requirements for a loan are probably going to get tougher. The other problem is the lack of liquidity in the sense that only the government is buying these mortgages. That's where the rate part might come in. Eventually, they will have to bring investors in to buy these things and they'll have to raise the rates to make them attractive. That was where I got that impression. So, again, who knows what will happen? But this is what we are being forewarned about.

[Rushmore]

Originally Posted by bbronston

I have to...ahem...amend my earlier comment regarding the effect of Dodd-Frank at the end of this year. We had another meeting today and got a bit further into the subject. Apparently, I misunderstood about the rates going up. I'll explain for those who are interested: There is a requirement for the lenders, referred to as Basel III, that will cause them to have more "skin in the game" for every loan they make. It essentially requires them to set aside cash for every loan they write and service, even if they sell the loan to Fannie, as I understand it. Since they have to have this money set aside, obviously they can't lend it so there is less money available to lend. That will make it harder to get a loan and the requirements for a loan are probably going to get tougher. The other problem is the lack of liquidity in the sense that only the government is buying these mortgages. That's where the rate part might come in. Eventually, they will have to bring investors in to buy these things and they'll have to raise the rates to make them attractive. That was where I got that impression. So, again, who knows what will happen? But this is what we are being forewarned about.

It obviously should always have been this way. As it was, they were essentially margin trading, with nothing to relatively safeguard the loans they were making.

Yes, it will not help in the short term, but we need to implement some essential lending basics if we're ever going to be able to know this will not happen to us again.