Sarasota real estate market returns to pre-tax credit numbers As expected, property sales in the Sarasota real estate market in July 2010 slowed to pre-tax credit numbers following the expiration of the federal $8,000 homebuyer incentive.   Property sales in July 2010 stood at 525 total sales, declining 47.8 percent from the June 2010 figure of 776 sales. The sales figure was much closer to the 506 sales in January 2010 and the 528 sales in February 2010, when the homebuyer credit wasn't a factor in the market.   In July, 374 single family homes were sold, compared to 576 single family homes sold in June 2010.  The median price also trended lower at $155,000, compared to June's figure of $175,000.  The figure was more in line with the 12-month rolling median sale price of $162,000.   Condo sales in July stood at 151, a drop from last month's figure of 200.  The median price of condos also fell in July to $127,000, which again primarily reflected distressed property sales. Non-distressed condo sales saw a median price of $227,500, while for distressed properties, the median sale price was $73,000 for bank-owned condos and $121,700 for condos involved in short sales.   For the last 12 months combined, the median sale price for single family homes was $162,000. For condos, the median price over the last 12 months was $175,000.   Pending sales also dropped to 653 - slower than the period during which homebuyers were eligible for tax credits.  The March and April pending sales figures both topped 1,000 and reflected a last minute rush to beat the federal homebuyer tax credit deadline.   "We are seeing what was predicted - a slower period following the expiration of the tax credits and the rush of buyers to the closing table," said 2010 SAR President Erick Shumway. "There logically had to come a time when sales would taper off from the highs we hadn't experienced in almost five years. We are not immune to the economic forces which continue to limit our nation's recovery - high unemployment, lower consumer demand, and other factors. But we remain confident that better days are ahead."   The level of sales of distressed properties (foreclosures and short sales) rose in July 2010 to 48.7 percent of the overall market, from 44.6 percent in June 2010. The distressed market also topped 48 percent in late 2009.   The property inventory level remained fairly consistent, rising slightly above the 6,000 level in July 2010 at 6,045, still one of the lowest monthly levels since late summer of 2005.   The months of inventory for single family homes in July 2010 rose to 10.4 months from 6.6 months in June. This figure represents the number of months it would take to sell all available homes at the current pace. For condos, the figure rose to 14.4 months from 10.6 months, still lower than last July's figure of 16.9 months. Once the market reaches the 6 month level it is considered to be in equilibrium between a buyers and sellers market. Click HERE for the complete PDF version of the press release, along with two pages of statistical charts.

 

 

 

 Mortgage rates hit low of 4.49%  Mortgage Rate Trend Index 

WASHINGTON – Aug. 6, 2010 – Mortgage rates dropped to the lowest level in decades for the sixth time in seven weeks, offering the most attractive opportunity for those who qualify to refinance or purchase a home.

Government-controlled mortgage buyer Freddie Mac said Thursday that the average rate for 30-year fixed loans this week was 4.49 percent, down from 4.54 percent last week. That’s the lowest since Freddie Mac began tracking rates in 1971.

The average rate on the 15-year fixed loan dropped to 3.95 percent, down from 4 percent last week and the lowest on record.

Rates have fallen since spring as investors seek the safety of U.S. Treasury bonds. That has lowered the yield on Treasurys. Mortgage rates tend to track those yields.

The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years.

Low rates have sparked some activity in the weak housing market, but not a massive boom in refinancing.

Applications to refinance loans increased 1.3 percent and those to purchase homes increased 1.5 percent, according to the Mortgage Bankers Association.

Nevertheless, high unemployment, slow job growth and tight credit have made it difficult for many to purchase homes. The housing industry received a boost this spring when the government offered homebuying tax credits, but housing activity has plummeted since they expired in April.

The number of buyers who signed contracts to purchase homes plunged in June to the lowest level on records dating back to 2001, according to the National Association of Realtors.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.63 percent, down from 3.76 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.55 percent from 3.64 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for all loans.

AP - Associated Press

Low U.S. home prices, high loonie make it a good time to be a Canadian snowbird

TORONTO – Aug. 6, 2010 – Mary and Ron Ethier long believed a getaway home in the Florida sun would remain a retirement dream, but when a recent real estate turnaround opened the border to a growing flock of snowbirds, the couple suddenly saw an opportunity too tempting to pass up.

“We just felt with the prices that were happening down there, that it was out of our reach     financially,” said Mary Ethier from her home in Pembroke, Ont. “But when their real estate market basically took a big hit and the Canadian dollar came up, we thought if we’re ever going to do it, now’s the time to get off our butts and go and do it.”

The couple, too busy with their lawn-care franchise to enjoy Ontario summers, toured homes in the Fort Myers, Fla., area in the fall of 2007 and made a lowball offer, expecting to negotiate, but instead found their deal accepted.

By January, they owned a condo in a gated community, a property foreclosed upon when the U.S. housing bubble burst and home prices began to plummet and many American homeowners realized they could no longer pay their mortgages.

The loonie has since risen to hover around parity while U.S. home prices have stagnated, creating new financial incentives for Canadians to act fast and scoop up American real estate deals.

“It’s a once in a lifetime opportunity for Canadians,” says Mark Dziedzic, a Canadian Realtor with Cross Border Realty and a snowbird himself.

The Sun Belt states of Texas, Arizona, California and Florida are favorites, while there are also deals to be had in Nevada and Georgia. The average price of a home in Phoenix, Ariz., is US$144,600, compared to $432,253 in Toronto.

“People are buying $40,000 to $50,000 condos in Phoenix right now. Condos (in Toronto) are selling for $400,000 to $500,000,” Dziedzic said. Taxes, condo fees and closing costs are also generally less expensive in the U.S., he added.

Prices in most U.S. regions have steadied after falling for three years, but a high number of foreclosures persist, lowering prices, especially in Florida and Nevada, said Bank of Montreal mortgage specialist Laura Parsons.

“This is the time to buy if you’re going to,” she said.

“I think you’ve got to look at this as a long-term investment because you’re getting such a deal. You’re going to have to hang on to it for a while,” and ride out any further downturns before the market picks up again, she said.

There is a fine balance between rushing to buy and waiting for lower prices. Economists predict the U.S. housing market will remain soft, but it’s futile to make decisions based on where a currency or a housing market is going.

“I don’t think you need to rush down and get a place, but the good stuff in the lower price range ... those are moving. The good ones come up and they’re sold,” Dziedzic said.

Buying real estate in the U.S. is becoming easier for Canadians as more snowbirds snap up getaway homes. But experts caution that the buying process, which takes about three to four months, is a different beast.

© The Canadian Press 2010