All Real Estate Is Local

Remember – All Real Estate Is Local

Getting your real estate news through national news sources is dangerous to your financial health. I read a lot about real estate and too often I see so many examples of news reported that just doesn’t fit with our local situation.

I read today that mortgage applications are way down over the past four weeks. My initial reaction was a little panic about my business, but then I remembered that what’s happening nationally is out of sync with what’s happening in the Daytona Beach area.

My business is good. We had 17 phone and email inquiries over a 2-1/2 day period this week. These are people are buyers. We have a load of closings on the books over the next two to three months and we are writing a lot of contracts.

The Daytona Beach real estate market is out of sync with the national market. The things that make Daytona Beach, Ormond Beach and Port Orange attractive have not changed. The beach, ocean and weather that made the area to begin with are still here.

I urge you to take your real estate news in local doses. A good place to start is our just published Daytona Beach Area Home and Condo Sales Up in May 2010. We’ve also just updated our foreclosure pages to reflect current listings, you can see that at Daytona Beach Foreclosures Pages Updated.

As always, you can call me to discuss any home or condo, or just talk about the local market.

January 2009 Daytona Beach Real Estate Sales Up 29%

January Daytona Beach Real Estate Sales Up Over 2008

Last year, sales at any point in the year where never ahead of 2008 Daytona Beach homes sales. This year we start off January 29% ahead.  Last year in January, we had a horrendous sales month when only 164 homes and condos were sold through the Daytona Beach MLS. That was a huge drop from the previous December when 230 properties were sold.

This year the numbers look a little better. The preliminary numbers for January 2009 show 212 properties sold which is 48 more than last January.  We are down a little from last month’s sales when 223 homes were sold, but that’s less than 5%, compared to almost 30% last year.

We are by no means in a roaring market, but we’ll take any sign of strength. The trend of higher sales at the lower prices continue with 67.5% of sales below $200,000 and 88.2% of all sales below $300,000. Sales above $300,000 remain slow with 25 properties sold in that price range.

The Daytona Beach MLS includes Ormond Beach condos and homes, Port Orange Condos and homes, Daytona Beach real estate and homes in Ormond by the Sea, Ponce Inlet, Holly Hill and South Daytona.

Daytona Beach Home Buyers – Big Mortgage News of 4.5% Rates

Leaking News of 4.5% Mortgage Rates

Big news is rumored to be coming out of Washington that could spur home sales in Daytona Beach and around the country.

Treasury Department officials are in conversation to offer 4.5% mortgages through Fannie Mae and Freddie Mac. The leak is causing quite a stir as people currently in the process of financing a home are scrambling to stop the process while they see if the rumor is true.

The New York Times reported the story on Wednesday and I’ve checked it out as best as I can, but there seems to be some possibility that this will happen. Of course you will still need to qualify and it appears that this program will be for new purchases and not available for refinancing.

National rates are about 5.5% today, so a drop of 1% results in a drop in the monthly payment of about $130 on a $200,000 mortgage.

We will keep you updated as more information becomes available.

LA Times Kills Sunday Real Estate Section After 107 Years

Signs of the Times – LA Times Kills Sunday Real Estate Section

When people wake up tomorrow morning and open their LA Times, there will be no Real Estate section for the first time in 107 years. (See article)

Citing staff reductions and cost cutting the Times kill the section after last week’s edition. Some of the regular features will be shown in other sections on other days, but an icon is gone.

It was only a few years ago that my husband and I would sit on Sunday morning and read the paper. Today, we hardly open it. Newspapers and print magazines are suffering losses in readers and subscriptions. The internet is a part of the daily life of many people, especially young people. Indeed, many of us spend hours everyday on line. Survey of home buyers show that over 74% start their home search on the internet. That’s why we publish this blog and why full, no registration Daytona Beach real estate search is available at www.lynnbyrne.com.

We are comitted to providing buyers and sellers with the best online services available. We will soon be publishing full video of all our listings. The planning will be complete tomorrow and shooting will begin next week. We will announce our video listing presentations very soon.

First Look – July 08 Daytona Beach Real Estate Sales Jump 15%

Preliminary Report Daytona Beach Homes Sales Are Up 15%

Sales jump and median prices are up

Not all sales have been recorded yet, but Sales of homes and condos in Daytona Beach, Ormond Beach, Port Orange and the area reached the highest monthly total for this year.

Residential home and condo sales stand at 297 properties as of this writing. More will be added today, so we may actually top 300. That’s up 15% from June’s 259 units and tops May 286 properties sold. To add even more good news, the median price is up to $185,000 from $175,000 for the past two months.

These are not the final numbers, we will report those early next week, but this is really good news! The Daytona Beach real estate market is gaining strength. So, check back here later, or if you want regular updates subscribe to our RSS feed.

How Does New Housing Bill Affect Daytona Beach Real Estate Market?

Senate Passes Housing Bill – Does it Help the Daytona Beach Real Estate Market?

The Senate passing the housing bill can only do good things for the Daytona Beach Housing and Condo market. The benefit are two fold:

  • Fewer homes will come on to the market
  • Positive news

The housing bill today that will go into affect on October 1st. First let’s look at what the bill does:

Who Is Eligible?

  • Must live in the home
  • Good for loans issued from January 2005 through June 2007.
  • Must be spending at 31% or more of gross monthly income on mortgage payments
  • Up to date on their mortgage or in default
  • Borrowers must prove they can’t pay their existing mortgage
  • Borrowers must attest they are not defaulting to obtain lower payments

Any second mortgage, home equity line of credit or any other debt other than the primary mortgage must be eliminated before a homeowner might get an FHA backed loan.

The Catches

  • Borrowers cannot get another home equity loans for 5 years (with some exceptions)
  • Borrowers will pay a 3.0% origination fee that can be put into the monthly payments
  • Borrowers pay insurace of 1.5% of the mortgage principle – that’s $250/month on a $200,000 loan
  • Borrowers pay a 3.0% exit fee to the FHA when they sell or refinance the home
  • Borrowers are in partnership with the US Government. 100% of the profit of the sale goes to the FHA if you sell within a year, 90% after one year, down to 50% after fives years. Then it stops. The borrower will pay at least 50% of profit to the FHA when sold.

This is a voluntary program for lenders. That means that not all will participate and they will be selective. You will probably need to contact them to discuss possibilities and options.

For more information go to How Housing Rescue Bill Can Help You at money.cnn.com.

Benefit to Daytona Beach Market

Now back to the benefits for our Market. We have no idea how many people will be able to save their homes. I hope it’s significant and home owners in our area can benefit. Any homes that are saved are good for those people and our market. Fewer homes on the market reduces the excess we currently suffer (over 6,000 homes and condos).

Second, I feel for those who are genuinely suffering from the economic issues and housing crisis. To those who have lost their homes, this is too little to late. To those who are still in a position to save their homes, this is good news. For the rest of us, it is an island of good news in a sea of bad news. I can only help perceptions and contribute to the healing of the housing market.

So, overall, we don’t know the impact and won’t know for some time, but, it is a positive action by congress. President Bush has removed his veto threat and the bill should be signed into law this coming week.

IndyMac Failure and Daytona Beach Real Estate

How Does IndyMac Failure Affect Daytona Beach Real Estate

The failure of IndyMac will have little affect on Daytona Beach Home and Condo owners. On Friday, July 11, 2008, IndyMac bank out of California was “taken over” by the Federal Government. This is the second largest bank failure in US history.

The bank informed Federal banking regulators that because of a recent run on the bank, in the form of deposit withdrawals, IndyMac no longer met capital requirements for banks. In other words, they don’t have enough cash or near cash .

What happens to depositors?

If depositors were under the $100,000 limit for FDIC insurance, they will get their money immediately. If they had over $100,000 at IndyMac, they are likely to lose 50% of the amount over $100,000. For IRA’s the amount insured is $250,000. The estimate is that all together, these people will lose 1/2 of one billion dollars, or $500,000,000.

The loss for taxpayers is estimated between $4 to 8 Billion. That’s a lot of money and I’ll bet that IndyMac is not the last to fail.

IndyMac was an active mortgage lender in the Daytona Beach area during the boom. Their business model was based on lending money to just about anyone, then betting that prices would keep rising to protect them. We all know that it didn’t quite work out that way.

If you hold a mortgage from IndyMac, keep making the payments. The mortgage will eventually be sold off, probably in the Fall of this year.

IndyMac recently cut about one-half of their staff, so I’ll bet that it’s a real mess there. I’m going to bet that with the Federal Government involved, the cost of this loss will be above the $4-8 billion estimate. When the FDIC gets into the books, it’s probably going to be worse than they thought.

The biggest lesson from the IndyMac failure, is to make sure that you do not have more money at any single bank above the FDIC insured levels. If you have more than $100,000 at any bank, it makes sense to spread it among enough banks to make sure all your money is insured.

How would you feel today, if you had $1,000,000 deposited at IndyMac. In the blink of an eye, you lost $450,000 (1/2 of the uninsured $900,000). Yes, you might get a bit back from the bank’s sale, but it will probably be pennies on the dollar.

The affect on Daytona Beach real estate is probably minimal, but it’s another lender out of the market and this whole mess can do nothing but make getting credit tougher.

Yes, we will get through all the effects of under-regulated banks. I hope we are all smarter for the next time.

Mortgage Rate Increases Headline Daytona Beach Real Estate News

Daytona Beach Real Estate News – Mortgage Rates Up 1/2%

Mortgages rates are up 1/2% over the past two weeks. This is not good news for people in the market for Daytona Beach Homes or condos. The 30 year fixed conventional mortgage rate was at 5.8% two weeks ago. The rate today is 6.3%.

What does an increase of 1/2% mean when making your home buying decision. If $200,000 is financed, here’s how it breaks down:

$200,000 financed at 5.8% = $1,183.71 monthly payment
$200,000 financed at 6.4% = $1,241.86 monthly payment

The difference in payment is $58.15/month.

Looked at another way:

$200,000 financed at 5.8% = $1,183.71monthly payment
$191,000 financed at 6.3% = $1,185.98 monthly payment

Basically, if you are financing 80%, you get $11,250 less home for the same payment. ($250,000 vs. $238,750 at 80% financing)

Will prices adjust further downward because of increased interest rates? We can’t be certain, but at some point, inflation will cause prices to rise. We’ve recently been hearing about housing housing affordability putting the breaks on falling home prices. We believe that’s possible and for the first two weeks of June, the median Daytona Beach condos and homes sale price is up $15,000 over May and the average sale price is up about $14,000. This number could change, but median prices had been dropping for a while now. We’ll see what happens going forward.

For a more information and analysis, see our weekly Daytona Beach Real Estate Market Report.

Mortgage Rate Increase Alert for Home Buyers

Mortgage Rate Alert for Home Buyers

Mortgage rates moved up about 3.5% over the last week from 5.8% to 5.99%. If you are in the market for a new home or condo, or considering a purchase in the near future, you should be paying attention to the rates.

We track interest rates and other key information about Daytona Beach homes and condos weekly on my website. You can see the latest version at Daytona Beach Real Estate Market Report.

There is no reason to panic. The cost of a 0.2% increase is less than $8 per month per $100,000 borrowed. However, we believe that significant inflationary pressures are in place in the US economy. The economy is still the strongest in the world, but with high government borrowing and a weakening dollar, we may see more inflation in the next two years than we’ve seen in the last decade. We wrote a post a while back, Daytona Beach Home Buyers – Remember 1980s Interest Rates, outlining some of our concerns.

Please understand that this is a short-term trend. We are calling attention because it’s quite a jump for a one week period. If you finance $200,000 and you keep the home for five years, your will pay $131.50 more per month if the rate goes for 6% to 7%. That’s $7,890 more that you would pay. We point this out because you may lost money waiting for price to drop if mortgage rates are increasing.

That’s the challenge. If you are expecting prices to drop further, watch interest rates and calculate the affect. Go here to access our Mortgage Calculator.

Home buyers are still in the driver’s seat in this market, but to get the best long-term appreciation, you will need to buy low and hold to the next boom, and yes there will be a next boom if your market is like Daytona Beach. Look at the total cost of owning that new property for 5-7 years. Mortgage rates are much more important when considering in this way.

New Role of Real Estate Agents

The New Role of Real Estate Agents and Home Owners

Home owners will use online services to set their price and online home marketing sites to market it. Real estate professionals will get paid if they bring a buyer, but their services will not be required for listing the home.

That’s what an article at CNN titled, “a new reality for real estate agents,” is suggesting for the future. There is really nothing new in the article, but what is being said is important. The basis of the story is that services such as zillow.com and others that estimate home values, and sites such as forsalebyowner.com allow home owners to determine the value and market their homes themselves.

Real estate information wants to be free,” says Stephen Gandel the author of the article. He states that what has happened with stock brokerages and the impact to their fees will happen to the traditional fee structure in real estate. The “traditional” 6 percent brokerage listing fees may be gone before long. Agents will be relegated to bringing buyers to the sellers.

Can It Work? Can You Sell Your Own Home?

So, can it work? Can you set your own price and sell your own home? Sure, it can work and has worked well for a good number of people. People who are comfortable selling, answering calls, returning calls, negotiating, showing their homes and hearing about all the flaws of their homes. I am all for informed clients. Informed clients are much easier to work with. I would love to meet with a client and pull out a magic machine where we put in the home’s address and out pops the exact value of the home. No arguments, just the exact value. Set the price and buyers know that’s what it’s worth. No negotiation, no haggling. Whoa, Not yet.

First, the services such as zillow.com are not accurate enough yet to give a good estimate. They are relying on historical data. As long as the market is not changing, these estimates will be good. But if the markets not changing, everybody in the neighborhood pretty much knows what homes are worth. When the services can adjust rapidly to changing markets, and give accurate estimates in near real-time, there will be tremendous value.

Second, there a truism that all real estate is local. National services may struggle with local markets, especially markets that change rapidly. They must be able to factor in local economic, cultural and political conditions. That’s a pretty tough job. How would a national service deal with the political battle like we had recently in Ormond Beach, Florida to restrict new Ormond Beach Condos to no more than 75 feet or 7 stories (it passed). That political change altered the value of property. Business development increases demand for homes, will smaller markets be worth the cost for national services to sift through and quantify all that data?

Third, stocks are traded regularly by a lot of people. People can become very good at knowing how to evaluate and buy and sell stocks. They learn through mistakes and repetition. How many times will you sell your home and can you really afford to make any mistakes with your biggest asset?

The Real Estate Information Explosion is Good

The more information you have, the better you’re prepared to deal with real estate agents and buying or selling a home. Sales happen when buyers and sellers are in agreement on price and other terms. If more reliable information is available, homes can be priced right and buyers will be more likely to agree on value. The information will get better, especially in big markets where the market size will permit the needed level of investment to get it right. I’m not sure smaller markets, like the Daytona Beach Homes market will be economically viable for the needed level of investment. Orlando, Jacksonville, Tampa, Miami and such with their millions in population are much more likely to see increasing home valuation services and alternative marketing outlets.

Your Choice – Become Your Own Real Estate Agent

Some people are interested in selling their own home. If this is you, go for it. Check out the options, and give it a try. Check out what’s available online and find people who have sold their own homes and talk to them. Decide if you are going to pay real estate agents a commission if they bring you a buyer, and if so, how much. Of course, the more you offer in commission, the more motivated agents is to show your home before others.

My only advice is to protect yourself. Take some of the money you save in commissions and hire a good real estate attorney to draw up the contracts and represent you at the closing. You’ll feel a lot more comfortable.