Bush signs into law major help for the Real estate Market

Just passed and signed today, Major reforms that will help all levels of homeowners, and buyers.

attached is the link to the site that gives an outline of the changes that passed today.

These changes, plus the decreasing level of inventory in our local market should help create an enviroment that will lead to price stability and increased sales..



http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

• GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  
• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
  
• FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
  
• Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
  
• VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
  
• Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
  
• GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
  
• Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
  
• National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
  
• CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
  
• LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
  
• Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

short sales in manatee county, getting easier?

My experience doing short sales is either paying off, or the process is getting easier! My latest transaction was assigned a negotiator, appraised, and ready for submission within 5 days of submitting the offer! That's fast. Too date the quickest too close was a short sale with Suntrust, that closed in less than 30 days.
Hopefully, the inventory will continue to drop, as it has been doing. In some key neighborhoods, the inventory is down half from a year ago. Less inventory will lead to price stability, which will level out the market.

encouraging news on inventory

Well finally some positive press! The news are always a little behind the curve because they rely on the stats that we create. unfortunatly there is no instant reporting.
In a nut shell here is where we are in Manatee County.

The Good News!

1. Inventory is down, countywide, about 10% from January. In some neighborhoods, for example, Condos in Waterlefe, inventory was this time last year at 35 units, now we are at 17 units!
2. Sales are up a bit with pending deals per month at 300-400 units.
3. Months of Supply. We are down from 24 months of inventory to now 18 months. ( 6 months is considered a "normal" market, whatever normal means!)

The BAD News!

1. Foreclosures are continuing to rise in our area, although we are not the worst market for foreclosures, we have a few thousand homes that are, or will become foreclosed in the near future. These homes will depress the market prices for entry level, and workforce housing. Most of the homes that were bought as "flips" or "investments" really fall into a class that appeals to full time buyers, as opposed to the second home and vacation home buyers. Most of the homes that have been selling so far this year really are to this category of buyer. If a home does not appeal to a Vacationer, then I predict prices will continue to fall as the job market, and economy suffers. Rich people will always be drawn to Florida. We have the beaches, golf, boating, and Disney!
2. With the poor economy, inflation, and the price of gas homes that are on the outskirts of town will suffer more than homes that are closer to amenities. The homes that are located in remote neighborhoods in east, and north county are becoming less desirable because buyers are considering the 20 mile trip to the grocery store as a factor in home buying.

In conclusion, I see that we will have a slight rebound as we bounce on the bottom of the market for luxury/vacation homes. And, homes that are in remote, work-force areas will continue to decline with the increase of distress and foreclosure homes coming on the market.

This is the best time to be a buyer because homes that have great potential are available in numbers we have never seen before. Selection is great, and yes if you buy today there may be a home that comes on for less next month, but chances are it will be a home in poor condition, or have a flaw that keeps a well qualified buyer away.

My philosophy is that Every home is right for every buyer.... At the RIGHT price! Of course, there are going to be bargain hunter stealing homes, but when you look at appreciation potential the homes available today offer some of the best Value and future price appreciation potential.

Remember that when the papers tell you that the market has switched, then we are already in a appreciating market, It is always best to buy while we are depreciating and forget about perfecting the timing. That perfect house will already have been sold!

Two different Markets, at the same time and place?

As I suspected the sales in bradenton where up overall compared to last year, Not as good as the cape coral, fl market that had a 41% increase! But, I was busy, too busy to tend to my blog.
It seems like the market just slowed down much faster than usual. Summer time typically has the buyers that are looking for upgrade, or relocation during the summer recess from school. These buyers are few and far between.
Most of the buyers that I have been dealing with are buying Cash, or if they finance they are overly qualified buyers. It seems that the perception is this is a time to pick up that bargain in Florida.
As I see it there is the Second home/Investor buyer, and the Workforce buyer. It is amazing how we can have two different scenarios playing at the same time! The people with plenty of cash are scooping up bargains, while the "workforce" deals with foreclosures, and short sales.
Actually there has been signs that the luxury second home market is having a rebound in bradenton. There was a record sale in Waterlefe last month. 1.3 million for a 3200 sqft home, while two slightly smaller less lavish homes sold for less than half that price.

Market showing signs of recovery

Sales for January are up over 30 units from last january.
this is for the entire region for Coldwel Banker