Monthly Archives: September 2008

Home Sales Fell More Than Expected

By THE ASSOCIATED PRESS
Published: September 24, 2008

WASHINGTON — A trade group for real estate agents says sales of existing homes fell 2.2 percent in August, but the number of unsold homes on the market also dropped sharply from the previous month’s record high.

The National Association of Realtors says sales fell to a seasonally adjusted annual rate of 4.91 million units, from an upwardly revised pace of 5.02 million in July. Sales had been expected to fall by 1.6 percent, according to economists surveyed by Thomson/IFR.

There were 4.3 million unsold homes on the market, a 7 percent drop from the record set in July. It was the steepest drop in inventory since December 2006. At the current sales pace, it would take 10.4 months to sell all the properties.

Until the inventory level is reduced to more normal levels, analysts say, the housing slump will probably persist. Inventories are being driven higher by a wave of mortgage foreclosures.

“We hope the downward trend in inventories continues,” the trade group’s chief economist, Lawrence Yun, said. “Home prices will not stabilize as long as inventories remain high.”

Median prices — the point at which half of the homes sold for less and half for more — fell 9.5 percent from a year ago to $203,100, the largest price decline on records dating to 1999. Sales were 10.7 percent below last year’s levels.

The national decline in home values coupled with shaky lending standards during the real estate boom are the driving forces behind rising mortgage defaults and foreclosures. They have spurred a credit crisis that has shaken Wall Street and caused the Bush administration to propose a $700 billion financial industry bailout.

Mr. Yun said the trade group was sending a letter to Congress in support of the rescue plan. While buyers are pouncing on lower prices — especially in places like California, Florida and Nevada — sales are sluggish in formerly stable markets like the Pacific Northwest and Charlotte, N.C., he added.

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For further information or if you wish to see your property featured here.
Please Contact:
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The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.

Housing-Price Economist Sees Market as Near Bottom

September 12, 2008
Source: Wall Street Journal (wsj.com)
By: Justin Lahart

Wellesley College economist Karl Case, the “Case” in the widely followed S&P/Case-Shiller index of U.S. housing prices, says he thinks that the housing market may be near a bottom. If he is right, financial firms may be able to breathe a sigh of relief.

At its most recent reading for June, the Case-Shiller index was 19% below its July 2006 peak, and many analysts say the decline is far from over. The inventory of unsold homes on the market is still very high, they point out, and until that excess is absorbed, it is a buyers’ market. Moreover, financial firms, hobbled by mortgage debt gone bad, are trying to rebuild cash reserves, making the firms less willing to extend loans to would-be buyers.

And the combined effects of the housing and credit crises have damaged the balance sheets and credit-worthiness of many households, leaving them a high hurdle to buying a new home. Yale University professor Robert Shiller, the co-creator of the Case/Shiller index, is among those who think it will be some time before prices stabilize.

But in a paper presented before the Brookings Institution in Washington yesterday, Mr. Case argues there is cause for optimism. He notes that of the 20 metropolitan areas covered by the Case/Shiller index, nine have shown prices slightly improving in recent months. He also says that the relationship between incomes and home prices has neared a level seen at the end of past housing slumps.

How far home prices fall matters greatly for financial institutions, Goldman Sachs economist Jan Hatzius argues in another paper presented at Brookings. If the Case/Shiller index stays at its June level, total mortgage losses will come to $473 billion, Mr. Hatzius estimates. That is more than the $400 billion in losses he projected in an earlier study conducted with economists David Greenlaw at Morgan Stanley, Anil Kashyap at the University of Chicago Graduate School of Business and Hyung Song Shin at Princeton University. Mr. Hatzius estimates that a further 10% decline in home prices would lead to losses of $636 billion and a 20% decline would lead to $868 billion in losses.

Mr. Hatzius used state-level data from the Mortgage Bankers Association from 1998 through the second quarter of this year to analyze the relationship between home-price declines and foreclosures in the current environment. That means he isn’t extrapolating from earlier periods, as he did in his previous study, when lender and borrower behavior may have been different. It also allows him to account for differences in the performance of different types of mortgages.

Under the scenario in which home prices fall another 10%, leading to $636 billion in mortgage losses, Mr. Hatzius calculates lenders will cut the credit they extend to final borrowers by nearly $2 trillion, knocking 1.8% off of gross domestic product growth. A weak dollar, low overnight rates and fiscal stimulus help mitigate the damage, he says.

The situation would be much more dire if Fannie Mae and Freddie Mac cut back on the amount of mortgages they guaranteed. One virtue of the government takeover of the two mortgage titans this week is that business doesn’t look as if it will be curtailed, Mr. Hatzius says.

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For further information or if you wish to see your property featured here.
Please Contact:
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Estate Specialists Representing Both Buyers And Sellers



The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.
The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.

Mortgage Rates May Lure Buyers

NEW YORK – Sept. 10, 2008 – A drop in mortgage rates that’s accelerated since the government said it would take over Fannie Mae and Freddie Mac has raised hopes that more buyers might be drawn into the housing market and help reverse the worst slump in decades.

Analysts caution, however, that the benefits of lower rates will be tempered by stricter mortgage-lending rules and a stubbornly weak economy. The average rate on a 30-year fixed-rate mortgage fell to 5.88 percent on Tuesday, according to Bankrate.com.

“The job market is a real problem, overwhelming even the lower rates,” says Mark Zandi, chief economist of Moody’s Economy.com. “When we combine the low rates with improvements in the job market, hopefully at the beginning of next year, then there will be some real benefit.”

As Greg McBride, senior financial analyst at Bankrate.com, notes: “It still takes good credit, proof of income and money for a down payment. With the government taking over Freddie and Fannie, due to the bad loans on their books, the last thing Uncle Sam is going to do is loosen the lending standards now that the taxpayer is on the hook.”

Some mortgage brokers and bankers have seen a modest increase in calls from potential customers in the past two days. Alan Trachtman of Trachtman & Bach, a New York brokerage, says his firm has seen more inquiries from clients. But he says he’s not confident that the lower rates will motivate home buyers the way low rates normally do, given the uncertain economy.

Still, he’s hopeful. “If rates stay down and nothing else happens to oppose it, I think you’ll see a little snowballing for the housing market – just not as big and fast as it (typically is).”

Brian Koss of Mortgage Network, mortgage bankers serving the East Coast and based in Danvers, Mass., says, “We got a huge increase of calls over the past two days.” But Koss adds, “It was pretty much a given five years ago that you’d get the loan. Now, you have all these hurdles you have to go through.”

Should you act now for fear a limited offer will run out?

No, McBride says. Buying a house is like getting married, he says; you don’t marry because there’s a sale at the bridal shop.

“If you have good credit and money for a down payment, there are some bargains,” he says. “But if you’re six months away because you need to pay down debt or build up your savings, that’s fine. Prices won’t run away from you during that time.”

Copyright © 2008 USA TODAY, a division of Gannett Co. Inc., Anna Bahney. All rights reserved.

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For further information or if you wish to see your property featured here.
Please Contact:
The Smiths – Luxury Resort Portfolio at (561) 445-2282

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Estate Specialists Representing Both Buyers And Sellers



The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.
The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.

Fourteen Percent of Florida Facing Mortgage Crisis


By Alan Zibel
The Associated Press
September 6, 2008

WASHINGTON – More than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis worsened, the Mortgage Bankers Association said Friday.

Meanwhile, Florida leads the nation with 13.68 percent of homeowners late on their house payments or facing foreclosure, according to a survey from the Washington D.C.-based trade group. Mississippi was second at 12.42 percent, and Nevada was third at 12.17 percent.

Palm Beach and Broward counties, in particular, became foreclosure hot spots after the housing boom of 2000 to 2005, when escalating home values caused many buyers to overextend themselves. Many took out short-term, adjustable-rate mortgages that now are resetting with much higher interest rates.

But the source of trouble in the mortgage market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.

“The problem that policymakers and Wall Street once assured us was ‘contained’ to subprime mortgages has proven to be anything but,” Mike Larson, a real estate analyst with Weiss Research in Jupiter, said in a research note.

The trouble is concentrated in a handful of states, the worst being Florida and California, which had some of the riskiest lending practices and rampant speculation.

“We are unlikely to see a national turnaround until we see a turnaround in the two largest states,” with the most outstanding home loans, said Jay Brinkmann, the mortgage association’s chief economist.

The latest quarterly figures broke records for late payments, homes entering the foreclosure process and for the inventory of loans in foreclosure. The trade group’s records go back to 1979.

The percentage of loans at least one month past due or in foreclosure was up from 8.1 percent in the January-March quarter, and up from 6.5 percent a year ago, using figures that were not adjusted for seasonal factors.

New foreclosures rose dramatically in eight states: Florida, Nevada, California, Arizona, Michigan, Rhode Island, Indiana and Ohio, but actually declined in Texas, Massachusetts and Maryland.

Almost 500,000 homeowners, or about 1 percent, entered the foreclosure process in the second quarter. But for the first time since the mortgage crisis started, delinquencies on subprime adjustable-rate loans declined. While more than one out of every five homeowners with a subprime ARM is still in default, that portion dipped 1 percentage point from the first quarter to 21 percent.

What’s driving the delinquency rate up now is the number of homeowners with risky, adjustable-rate prime loans made with little or no proof of the borrowers’ income or assets.

More than one out of 10 borrowers with a prime adjustable-rate loan is now delinquent or in foreclosure. That portion, 11.3 percent, was up from 9.7 percent in the first quarter and is expected to continue to rise as more homeowners see their monthly payments spike.

Many of these loans allowed the borrower to pay only the interest on the loan for a fixed period. Others gave the borrower the option to “pick-a-payment,” adding any unpaid interest to the principal balance.

Defaults on these mortgages, which earned the nickname “liar loans,” are costing Fannie Mae and Freddie Mac billions of dollars. The Treasury Department has even pledged to bail out the mortgage finance companies if necessary.

With home prices plummeting, particularly in Florida, California, Nevada and Arizona, many borrowers with these exotic loans now owe more on their home than it is worth. Worse still, these loans reset to higher monthly payments when borrowers reach maximum debt limits — typically around 10 percent to 25 percent more than the original loan balance.

Those resets can increase the borrower’s monthly payment by more than $1,000 a month on average, Fitch Ratings said in a report this week.

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NOTE:

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If you are subscribed to our corporate blog, you are NOT automatically subscribed to the Mizner Country Club – Real Estate News. They are two separate published newsletters. Please subscribe today and start receiving the latest updates in Real Estate News. Thank you again for all your support and best wishes!
Philip and Carla Smith
The Smiths – Luxury Resort Portfolio

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.

Delray Beach Officials Increasing Water, Sewage and Trash Pickup Rates

By Maria Herrera
South Florida Sun-Sentinel
Thursday, September 4, 2008

Delray Beach – It will cost more to flush a toilet in Delray Beach.

Officials gave initial approval Wednesday to increasing water, sewage and trash pickup rates.

“It’s is better to increase it a little each year than all at once,” said City Manager David Harden, who said the city has been increasing fees over the years as fuel prices and the cost of living have risen.

Water will be 5 percent more expensive with the average customer paying $5 or $6 more per month. Officials point at the higher cost of chemicals to treat water and a reduction in usage for the rate increase.

But during a City Commission workshop last month where officials considered the hike, Commissioner Fred Fetzer said he was concerned that residents would feel penalized for conserving water.

Handling sewage also got more expensive. In documents handed to commissioners, Harden said the increases are needed to pay for the cost of eliminating the discharge of treated sewage into the ocean and developing the city’s reclaimed water system.

The increases also reflect a hike by the South Central Regional Waste Water Treatment and Disposal Board.

For a customer using 10,000 gallons of water, rates will go from about $33 per month to about $35. Sewage fees will go up from $45 per month to about $51.

The city last raised fees in 2006 when it underestimated how much money it would have collected in onetime connection fees.

The fee approvals followed a tentative adoption of the city’s $147 million budget with a tax rate of $6.45 per $1,000 of assessed value. Final approval is scheduled for Sept. 16.

That means the owner of a house valued at $300,000 would see a tax bill of about $1,612. That’s about $76 less than last year.

Harden said that though the tax rate is higher than last year’s, the city is not really raising taxes because it is not taking in additional revenue.

________________________________________________________________

For further information or if you wish to see your property featured here.
Please Contact:
The Smiths – Luxury Resort Portfolio at (561) 445-2282

Luxury Resort Portfolio
A Transaction Brokerage Representing Both Buyers And Sellers

NOTE:

Remember to visit our corporate blog at http://LuxuryResortPortfolio.blogspot.com


If you are subscribed to our corporate blog, you are NOT automatically subscribed to the
Mizner Country Club – Real Estate News. They are two separate published newsletters.
Please subscribe today and start receiving the latest updates in Real Estate News.
Thank you again for all your support and best wishes!
Philip and Carla Smith
The Smiths – Luxury Resort Portfolio

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.
The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.

Delray Beach To Increase Tax Rate

Delray Beach to Increase Tax Rate, but Most Homeowners Will See Smaller Bill

By DON JORDAN
Palm Beach Post
Wednesday, September 03, 2008

DELRAY BEACH — The city commission approved a tentative $147 million budget tonight that will cut taxes for most residents, but offer less money for police enforcement, park maintenance and other city services. The tax rate would jump next year from $6.14 for every $1,000 of assessed value to $6.45, the highest amount allowed under state law without requiring a super-majority vote.

The higher rate still would mean a smaller tax bill for residents with properties with a taxable value of less than $336,000. It would also leave city coffers about $150,000 emptier than last year, according to a staff estimate.

City manager David Harden asked commissioners to approve the tentative rate after promising to recommend a lower rate before the commission votes on a final budget later this month. “We have discussed reducing the millage further and we do expect we will do that,” Harden said.

City officials have struggled for months to craft a budget that adjusts for decreased property values and Amendment 1, the voter-approved measure that restricts local governments’ tax rates. The general fund, which makes up about two-thirds of the tentative budget for next year, includes $2.5 million less than this year for law enforcement, parks and cultural programs and other city services.

Commissioner Fred Fetzer has been a vocal proponent of leaving the tax rate at the current level in the spirit of Amendment 1, which was overwhelmingly approved by Florida voters. Keeping the current year’s tax rate would cost the city an estimated $2 million in revenue next year. His sentiments were echoed today by a trio of Realtors who asked the commission to honor voters’ wishes and lower the property tax rate. “The message was clear,” local Realtor Nancy Hogan said. “The residents need tax relief and the escalation in government spending must stop.”

In addition to the property tax rate, commissioners tentatively approved raising a special tax paid on properties in the downtown development authority taxing district, from 95 cents to $1 for every $1,000 of assessed value. The commission will hold a second public hearing on the budget and tax rate on Sept. 16. The city tax figures do not include taxes levied by other governing bodies, including Palm Beach County and the school district.

Who Will Pay What???

The Delray Beach City Commission tentatively approved raising the property tax rate from $6.14 to $6.45 for every $1,000 of assessed value, which would mean a tax cut for homesteaded properties worth less than $336,000. Taxpayers will also pay an additional 46 cents per $1,000 of assessed value to pay off voter-approved debts. The commission will take a final vote on the tax rate on Sept. 16.

Under the tentative rate:
– The owner of a $250,000 homesteaded property would pay about $46 less in taxes.
– The owner of a $500,000 homesteaded property would pay about $88 more in taxes.
– The owner of a $200,000 property without a homestead would pay about $12 less in taxes.

For further information or if you wish to see your property featured here.
Please Contact:
The Smiths – Luxury Resort Portfolio at (561) 445-2282

Luxury Resort Portfolio
A Transaction Brokerage Representing Both Buyers And Sellers

NOTE:

Remember to visit our corporate blog at http://LuxuryResortPortfolio.blogspot.com


If you are subscribed to our corporate blog, you are NOT automatically subscribed to the Mizner Country Club – Real Estate News. They are two separate published newsletters. Please subscribe today and start receiving the latest updates in Real Estate News. Thank you again for all your support and best wishes!
Philip and Carla Smith
The Smiths – Luxury Resort Portfolio

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale.

All information is derived from the Palm Beach County Property Appraisers website and the MLS.