IS THE MARKET COOLING? 11/18/13

I don’t believe there is any reason for alarm, but yes I have noticed the cooling off here in the Brandon, FL area. It is very interesting to look back and see what has happened. The market was soft going into spring, but then investor traffic drove prices up as inventory levels were low. The investor traffic has died down, but due to low inventory levels prices have not dropped. We will have to see what happens over the next few months.Read below for various reasons for slowing market.

Buying frenzy starting to cool?
NEW YORK – Nov. 18, 2013 – Bidding wars in recent months have fueled large gains in home values in some parts of the country. But bidding wars and the buying frenzy seen just a few months ago seem to be cooling at a time when housing affordability has been reduced due to higher mortgage rates and home prices.

“The bidding wars were creating a false market,” homebuyer Mike Imgarten told Bloomberg about his two-month house hunt in Sacramento, Calif., area. “Now is a good time to jump back in and see where we’re at.”

Inventories have risen in many markets, leaving homebuyers with more options. The National Association of Realtors® reported that inventory levels of unsold homes rose in September from a year earlier – the first time since 2011.

More homeowners are seeing the return of equity (more than 2.5 million homes saw positive equity return in the second quarter alone), which has prompted more people to list their properties.

“We are shifting from a frenzy to where buyers are taking a step back and being more analytical and unwilling to just make rash decisions,” says Ellen Haberle, an economist for the real estate brokerage, Redfin.

Home sales typically slow during this time of year, but some analysts say the seasonal drop-off has been higher than expected. They blame the increase in mortgage rates for a lot of that drop-off. Since May, mortgage rates have risen a full percentage point, which has led to an increase in borrowing costs that is holding some buyers back, housing experts say.

The government shutdown also has weakened consumer confidence, says Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.

“The frenzy has died down,” says Selma Hepp, a senior economist for the California Association of Realtors. “The question in the summer of this year was, ‘is this sustainable, or is this a bubble again?’ Now the data is showing that we’re returning to more of a traditional market.”

Source: “Bid Wars Wane in U.S. Housing Markets on Supply Rise: Mortgages,” Bloomberg Businessweek (Nov. 14, 2013)

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IF YOU ARE IN THE MILITARY YOU SHOULD READ THIS

I live in a community, Fishhawk Ranch located in Lithia, Fl, with a large military presence and I know they depend on their BAH allowance to help them out. Let’s hope something is done before 2015 as these people put their lives on the line to protect us and our country.

Military families fear housing allowance is at risk
WASHINGTON – Nov. 8, 2013 – Sequestration could mean a $20 billion loss of defense funding for fiscal 2014 and possibly include a reduction in the allowance military families receive to help them pay for shelter.

Many military households apply their housing allowance to home buying or renting. The amount of an allowance varies according to geographic location, rank and other factors; and it’s adjusted annually to reflect local housing costs.

The idea of lower military allowances has already been floated. This summer, Secretary of Defense Chuck Hagel planted the idea of “changing how the basic allowance for housing is calculated, so that individuals are asked to pay a little more of their own housing costs.”

However, no major housing allowance changes are expected for fiscal year 2014, though the numbers have not yet been announced. Still, industry representatives are bracing themselves and asking enlisted families to do the same.

Elysia Stobbe of Jacksonville, Fla.-based VanDyk Mortgage, for example, says she is encouraging military customers to think about how any changes could “affect their income and ability to pay their mortgage in the future.”

Paula Cino of the National Multi Housing Council, meanwhile, is hoping that the government will keep everyone abreast of its plans so that there are no unexpected surprises. “The sooner that we really understand what the potential changes can be, the better we can respond and mitigate any damage to the program moving forward,” she said.

Source: Wall Street Journal (11/07/13) Wotapka, Dawn

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

PENDING HOME SALES DECLINE FOR 4TH MONTH IN A ROW SEPTEMBER 2013

Wow, this is not good news for a recovering Tampa housing market. The investors came in about a year or so and stabilized the Tampa market and helped us get our prices back to what they should be. But, the investors have slowed purchases in Tampa as they move on to cheaper markets, there was a 1%+ interest rate jump (which has now gone back down), 3 price increases by new construction builders in Tampa area, a government shut down, Obamacare, etc., which I think has some buyers heading back to the sidelines to wait it out and wait for some of the uncertainty to settle. I think key to the slower pending sales is price. I think home prices went up too quick which may make some people wait it out to see if prices are going to drop. No one wants to buy a home that is going to go down in value right after they bought it. That’s how we ended up with all the short sales after the housing market crash of 2007. Stay tuned to my blog to see how the Tampa real estate market is doing. Richard Kemper Re/Max Realty Unlimited 813-777-5332

Pending home sales continue slide in Sept.

WASHINGTON – Oct. 28, 2013 – Pending home sales declined for the fourth consecutive month in September. According to the National Association of Realtors® (NAR), higher mortgage interest rates and higher home prices curbed buying power.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August. Year-over-year, the index is down 1.2 percent compared to September 2012.

The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” says Lawrence Yun, NAR chief economist. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

September marks the first time in 29 months that pending home sales weren’t above year-ago levels.

“This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014,” says Yum. “Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year.”

The PHSI in the Northeast dropped 9.6 percent to 76.7 in September, and 6.4 percent below a year ago. In the Midwest, the index fell 8.3 percent to 102.3 in September, but it’s 5.7 percent higher than September 2012.

Pending home sales in the South slipped 0.4 percent to an index of 116.2 in September, but it’s 2.0 percent above a year ago. The index in the West dropped 9.0 percent in September to 97.3 and 9.8 percent lower than September 2012.

NAR projects that total existing-home sales this year will be 10 percent higher than 2012, reaching more than 5.1 million, and will likely hold even in 2014. The national median existing-home price is expected to rise 11 to 11.5 percent for all of 2013, but moderate to a 5 to 6 percent gain in 2014.

© 2013 Florida Realtors®

EXPECT DELAYS IF YOU ARE USING VA, FHA, OR USDA TO GET A LOAN!

If you are applying for a VA, FHA, or USDA loan or already in the process and just waiting for your closing date expect delays. I think we all know this, but just wanted to drive message home as I received this bit of news today which you can read. Let’s hope the government shut down does not have an adverse affect on the Tampa housing market, a market that is still soft in many ways. As always, if you need help selling or purchasing a home in the Tampa area give Richard Kemper with RE/MAX a call at 813-777-5332

 

FHA answers questions about shutdown’s impact

WASHINGTON – Oct. 7, 2013 – The Federal Housing Administration (FHA) says it has received a number of questions about the government shutdown and its impact on FHA loans. As a result, it issued a list of questions and answers:

Can I get an FHA case number?
Yes. Lenders will be able to obtain an FHA case number from the FHA Connection.

Will FHA endorse single-family loans during a shutdown?

FHA will be able to endorse single-family loans, with the exception of Home Equity Conversion Mortgages (HECM) and Title I loans, during the shutdown. A limited number of FHA staff will be available to endorse new loans. Due to limited staff, the time to endorse the cases may be extended.

Will FHA still be able to endorse my loan if I am not able to obtain tax returns verified by the IRS during the shutdown?
Some lenders obtain tax transcripts directly from the IRS when underwriting their FHA-insured loans. But these lenders may be unable to obtain returns directly from the IRS for the duration of the government shutdown.

Lenders may continue originating loans using FHA’s existing underwriting requirements, which have not changed. Lenders must obtain tax returns from certain borrowers in order to originate FHA-insured loans, and the borrower’s signed authorization (i.e., Forms IRS 4506, IRS 8821, or whatever form or electronic retrieval service is appropriate) for any loan for which the borrower’s tax returns are required.

Why didn’t the borrower’s name and Social Security Number pass validation with the Social Security Administration?
When the lender requests a FHA case number, the borrower’s name, date of birth, Social Security Number (SSN) and property address are entered into FHA Connection (FHAC). If the matching process with Social Security Administrations (SSA) fails, a “Case Warning for SSN Validation” will be placed on the case number.

The failure could occur because the data doesn’t match or because the SSA system went offline due to the government shutdown. SSA has limited tolerance for minor mistakes in names, birth dates and social security numbers.

Can the Social Security Number validation be run again?
Lenders can make necessary corrections and try a second time to validate with SSA. Any changes made to the borrower’s name, birth date and SSN at any time prior to insurance endorsement will trigger a validation request with SSA. If the revised data passes validation, the Case Warning for SSN Validation is removed.

However, if the failure was caused by the government shutdown, the Case Warning for SSN Validation will not be able to be removed until the government reopens. FHA will ensure that the validation process takes place and lenders will be advised of the results in FHAC as soon as possible after that happens.

Can I continue to process the loan without the Social Security Number validation?
Lenders may continue processing loans without receiving validation of the borrower’s name and SSN, but FHA will not endorse loans without this validation.

What happens if I cannot validate the borrower’s SSN?
The lender may submit a request for insurance endorsement if confident that the Case Warning was received in error as a result of a system shutdown. The lender must provide conclusive documentation to verify the Social Security number, such as a valid SSN card issued by the SSA; or an original document issued by a federal or state government agency that contains the name of the individual and the SSN of the individual, along with other identifying information to support the validity of the borrower’s name and SSN to the applicable Homeownership Center (HOC).

Lenders may not endorse any loans with Case Warnings for SSN Validation, and FHA will require the lender to submit the case binder for endorsement along with conclusive documentation to verify the SSN.

After viewing the documentation, FHA will endorse the mortgage for insurance if it believes the documentation provided complies with HUD’s regulations and the loan meets all other FHA requirements.

© 2013 Florida Realtors®