Existing-Home Sales Stumble in July

August 25, 2016
Call today to get more information on the market in Celebration. 321-939-1300. Kathy can do a free market analysis of your home if you are thinking of selling.
Slowed by frustratingly low inventory levels in many parts of the country, existing-home sales lost momentum in July and decreased year-over-year for the first time since November 2015, according to the National Association of REALTORS®. Only the West region saw a monthly increase in closings in July.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June. For only the second time in the last 21 months, sales are now below (1.6 percent) a year ago (5.48 million).
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” he says. “Realtors® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
 
Home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring,
 
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped from 3.57 percent in June to 3.44 percent in July. Mortgage rates have now fallen five straight months and in July were the lowest since January 2013 (3.41 percent). The average commitment rate for all of 2015 was 3.85 percent.

Good news! FAMRC to be housed in Osceola County!

August 24, 2016

Osceola County’s efforts to become the world leader in research and manufacturing centered around smart sensors and nanotechnology just received a $2.2 million grant from the U.S. Department of Commerce’s Economic Development Administration.

Osceola County is partnering with the University of Central Florida, the Florida High Tech Corridor Council and others to establish the Florida Advanced Manufacturing Research Center (FAMRC), a state-of-the-art research and incubation facility that will focus on developing the next generation of universal smart sensors.


Baby boomers chart new direction in housing

August 23, 2016

NEW YORK – Aug. 22, 2016 – Economists are having a tough time figuring out what housing market moves baby boomers will make next. Americans over the age of 55 are veering from previous generations, opting not to retire but instead launching second or even third careers. They are shunning the traditional patterns of retirement, and that could have a big impact on their housing choices, according to a Freddie Mac Insight report.

Baby boomers are a critical piece to the housing market puzzle. Americans over the age of 55 make up a quarter of the population and control about two-thirds of the single-family home equity in the nation. Sixty-five-year olds who, on average purchased a home 35 years ago now tend to have a home value that is likely 3.7 times the purchase price.

Nearly a quarter of baby boomers recently surveyed by Freddie Mac say they need major renovations in their current home in order to stay there as they age – and many say they face financial constraints to take on those remodels. And some of the baby boomers may be underestimating the financial costs of outfitting their home with age-in-place features, says Sean Becketti, Freddie Mac’s chief economist.

As a result, about 18 million homeowners over the age of 55 may be shopping for another house in the next few years, according to the Insights Report.

Unlike earlier generations, however, baby boomers’ main reasons to move aren’t due to downsizing. Instead, the survey showed the key influences making these generations move are: Affordability of the community, the need for retirement amenities and a home with less maintenance.

Bottom line, the authors note: The 55-plus population is likely to be an active part of the housing economy for years to come still.

Source: “Boomers Ignoring Conventional Housing Wisdom,” Mortgage News Daily (July 19, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD


2016 International Profile

August 23, 2016

International Homebuyers


What do you do if floodwater rises unexpectedly?

August 19, 2016

BATON ROUGE, La. – Aug. 17, 2016 – Due to recent flooding in Louisiana, FEMA’s National Flood Insurance Program (NFIP) is offering the following tips on what to do after a flood to ensure that local residents are aware of hazards as they re-enter flooded areas and guidance on filing flood insurance claims for those who have coverage through the NFIP.

“We encourage area residents who are not insured for flooding to protect themselves from the financial costs of future floods by obtaining flood insurance through the NFIP (National Flood Insurance Program),” FEMA adds. “You can learn about the NFIP and FloodSmart, the marketing and education campaign of the NFIP, by visitingFloodSmart.gov.

During a flood

  • Move to high ground. When it floods, go to higher ground. Avoid areas subject to flooding. Be aware of streams, drainage channels and areas known to flood so you’re not cut off from your evacuation routes.
  • Watch out for water. Don’t walk across flowing streams or drive on flooded roads. Moving water just six inches deep can knock you off your feet and cause an injury. Even two feet of water is enough to sweep a car off the road.
  • Listen for updates. Listen to the radio or TV for information. Be sure to follow the instructions of local authorities.
  • Turn off power. Turn off all utilities at the main power switch and close the main gas valve if advised to do so. Don’t touch any electrical devices if you’re wet or in standing water.

After a flood

  • Check for damage. Check for structural damage before re-entering your home. If you suspect damage to water, gas, electric or sewer lines, contact authorities.
  • Remove wet items. Immediately remove wet carpeting, furniture and bedding. Any item holding moisture can develop mold within 24 to 48 hours. Clean and disinfect everything touched by floodwaters. Get cleanup tips at the Center for Disease and Control’s website.
  • Plan before you repair. The rebuilding decisions you make now to lower your risk and insurance costs can result in big benefits over the long term. Contact your local building inspection or planning office or your county clerk’s office to get more information.
  • File your flood insurance claim. To file your claim, you’ll need your insurance company’s name, your policy number and a phone number where you can be reached. Take photos of any water in the house and anything damaged in your home. Make a detailed list of all damaged or lost items.
  • Ask about disaster assistance. Federal disaster assistance might be available if the president has declared a federal disaster. When available, this assistance typically comes in the form of a loan and must be paid back with interest.

Rebuilding

  • Understand your flood insurance claim and policy. If you have questions, call 800-621-3362 and use Option 2.
  • Get a repair permit from your local building official. A substantial damage determination is required for building repairs in the Special Flood Hazard Area. A building that is damaged to 50 percent of its market value or greater is considered a substantially damaged building, which requires that all repairs meet local flood damage prevention ordinances. That determination is a factor in future premium rating for a flood insurance policy and is needed for Increased Cost of Compliance claims.
  • Learn more about ICC (Increased Cost of Compliance Coverage). You may be able to obtain up to an additional $30,000 toward elevating, relocating, or demolishing your home to comply with the local floodplain management requirements. Ask your adjustor about opening an ICC claim.
  • Ask about mitigation grants. Grants for elevating homes may become available because of the flood event. Ask officials about applying to the State of Louisiana on your behalf for Hazard Mitigation Grant Program funding.

For more information

  • Contact your local building inspections or planning office or county clerk’s office to get more information on local building requirements before repairing your structure. If you can’t find a local contact, call your state NFIP coordinator.
  • For more information about flood insurance, visit FloodSmart.gov. To financially protect your property with a flood insurance policy, call your insurance agent or call 800-427-2419 to find an agent near you.

© 2016 Florida Realtors®


Most in U.S. say it’s a good time to buy

July 14, 2016

WASHINGTON – July 13, 2016 – Despite lackluster economic growth and stark home-price appreciation in several parts of the country in recent months, roughly three-quarters of surveyed households still believe it’s a good time to buy a home – but there’s a considerable morale gap between homeowners and renters, according to the latest installment of the National Association of Realtors® (NAR) Housing Opportunities and Market Experience (HOME) survey.

The survey also found that roughly half of young adults with student debt are uncomfortable about taking on a mortgage.

In NAR’s second quarter HOME consumer survey, respondents were asked about their confidence in the U.S. economy and various questions about their housing expectations, including whether student debt is tempering their ability and appetite to take on mortgage debt.

NAR’s survey found that the share of homeowners and renters who believe it’s a good time to buy a home has held steady so far this year, with 80 percent of homeowners (82 percent in March) and 62 percent of renters (unchanged from last quarter) saying it’s a good time to buy. However, the share of renters who think so is down from 68 percent in December 2015, and those under 35 were the least confident.

Lawrence Yun, NAR chief economist, says the survey brings to focus the ongoing disparity in buyer confidence between current homeowners and renters.

“Existing-home prices surpassed their all-time peak this spring and have climbed on average over 5 percent nationally through the first five months of the year, and even faster in areas with severe supply shortages,” he says. “Most homeowners appear to realize that if they’re ready to sell, they’ll likely find a buyer rather quickly and be able to use the sizeable equity they’ve accumulated in recent years towards their next home purchase. Meanwhile, renters interested in buying continue to face minimal choices, strong competition and home prices growing faster than their incomes.

This HOME survey also found that student debt is causing many potential homebuyers to be uneasy about taking on additional debt: Roughly two-thirds of non-homeowners and half of respondents under 35 with student debt said they aren’t comfortable also having a mortgage. Furthermore, of those with student debt, non-homeowners and younger adults were less likely to believe they’d be able to qualify for a mortgage if they applied.

“It’s becoming very evident from this survey and our research released last month that the financial and emotional impact of repaying student debt is contributing to a delay in purchasing a home for many would-be buyers,” adds Yun. “At a time of quickly rising rents, mortgage rates at all-time lows and increasing housing wealth, a lot of young adults in their prime buying years are struggling to enter the market and are ultimately missing out on the stability and wealth accumulation that owning a home can provide.”

Attitudes about U.S. economy, personal finances outlook mostly unchanged

About half of all households surveyed believe the economy is improving (49 percent), which is mostly unchanged since the inaugural HOME survey in December 2015. Renters, respondents living in urban areas, and those in the West were the most optimistic.

When asked if they thought their personal financial situation would be better in six months, the latest survey reflected a little less optimism. The survey’s monthly Personal Financial Outlook Index of all households decreased slightly (to 57.7 in June) month-to-month (58.1 in March), but it’s unchanged from June 2015.On the other hand, nearly two-thirds of those living in rural areas don’t believe the economy is improving.

More believe it’s a good time to sell

With strong price growth prevalent in most of the country and homes selling at a quickened pace, more current homeowners (61 percent) believe it’s a good time to sell compared to the first quarter of this year (56 percent). Respondents in the West were again the most likely to think now is a good time to sell, but they’re also least likely to think it’s a good time to buy.

“More homeowners acknowledging this pent-up demand may perhaps mean we begin to see more supply come online in the near future,” adds Yun.

When asked about their outlook for home prices in their community in the next six months, almost all believe that prices will stay the same or rise (93 percent), which is consistent with last quarter (91 percent). Respondents from the West, those living in urban areas and renters are most likely to believe prices will go up in their communities.

© 2016 Florida Realtors®


Brexit spurs international interest in U.S. Commercial Real Estate

July 13, 2016

NEW YORK – July 12, 2016 – As the fallout from Brexit continues to stir market volatility, many international investors seek the security and economic stability of the U.S. commercial real estate market. Coupled with low interest rates for loans, brokers who belong to the CCIM (Certified Commercial Investment Member) Institute are seeing an increase in global activity in commercial real estate investments from primary gateway cities to tertiary markets.

The CCIM Institute is one of the largest international networks of commercial real estate professionals.

“The trend of Foreign Direct Investment (FDI) net inflows of capital toward the U.S. commercial real estate market will remain strong and the Brexit initial ripple effect for demand in the U.S. will initially increase as investors seek security,” says Kamil Homsi, CCIM, president of Global Realty Capital LLC in New York City. “Additionally, I see the demand increasing constantly to acquire senior and student housing, self-storage portfolios, and medical facilities across all regions.”

Interest rates in the U.S. are likely to remain low, and U.S. benchmark yields hit record lows last week. According to the U.S. Department of the Treasury, the 30-year Treasury yield plunged to a record low of 2.098 percent before recovering to 2.12 percent. And the 10-year Treasury closed below 1.4 percent for the first time, falling to 1.367 percent.

The continuing European market uncertainty, declining British pound and strengthening of U.S. dollar make it less likely that the Federal Reserve will move rates up or take other tightening measures this year. That has far reaching implications for U.S. commercial real estate markets.

“Commercial office space is often the preferred investment for overseas investors,” says Ernest Brown IV, CCIM, broker at Rohde Ottmers Siegel Realty in San Antonio, Texas. “But we also are seeing an increase in demand for well-located newer industrial assets for warehousing, distribution and service.”

The historic stability and low volatility, even within the presence of low cap rate markets, will continue to drive foreign investment into the U.S. commercial real estate market. This will drive up prices and lower cap rates for commercial buildings in several cities according to Reis Analytics. Primary gateway cities including New York City, Los Angeles, San Francisco and Boston will see the most impact, but secondary and tertiary markets also stand to see increased activity because investors have yet to drive up prices.

“Shortly after Brexit, I received several calls from international investors seeking more information about Texas commercial real estate,” says Jim Young, CCIM, broker at Longbow Real Estate Group in Austin, Texas. “In addition, several U.K. investors tell me that they see U.S. commercial real estate as a safe haven. Given low interest rates on commercial real estate loans and commercial rental rates in Central Texas that continue to rise, there will be even more of an uptick in European and global investor activity.”

While some U.S. assets may be sold to shore up assets held in Great Britain and elsewhere by foreign investors, the long-term goal is the safety of the investment. Historically, foreign investors rarely take their capital out of the U.S. commercial real estate market unless there is a major drop in valuation within European gateway cities. This is unlikely due to limited available inventory, time needed and European Union exit tax complexities.

Brexit further complicates the matter with increased uncertainty.

“Investments in the U.S. will only get stronger as a result of these factors,” says Eric Rutherford, CCIM, broker at Wright Kingdom in Boulder, Colo. “Individuals in the European market may take a risk and reinvest, but I just received word from a group of investors pouring $10 million into the U.S.”

The U.S. has always been a safe haven for global investors. With the continued repercussions of Brexit yet to be fully realized, many foreign investors actively seek to reposition their assets to a stable economy. The increased activity in U.S. commercial real estate properties by global investors looks to continue.

© 2016 Florida Realtors®

 


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