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Florida is #3 for Homebuyer Tax Credits

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According to a report released by the Government Accountability Office, the state of Florida accounted for 64,879 claims under the three federal first-time home buyer credits offered since 2008.

FLA residents claimed $455,565,365 through the credits offered under the Housing, Recovery and Assistance acts.

Only California, with 116,896 claims, and Texas, with 98,971 claims, had more.

Nationwide, first-time home buyers submitted 3.32 million claims totaling $23.5 billion over two years, about $1.5 billion more than original estimates from the congressional Joint Committee on Taxation.

The Housing Act provided taxpayers a refundable credit equal to 10 percent of the home’s purchase price, up to a maximum of $7,500. The Recovery Act provided a refundable 10 percent tax credit, but increased the maximum to $8,000. And, the Assistance Act extended the Recovery Act credit through April 30, and it allowed certain long-term homeowners in the market to claim a $6,500 tax credit.

The federal assistance is widely credited with fueling the national housing market in 2009 and the first half of this year, just as the new car tax credit may have staved off disaster for the auto industry.

The National Association of Realtors recently blamed the expiration of the tax credits for the huge decline in the sale of existing homes in July.

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July Sales Down 12.4% From Last Month

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Sales of new homes unexpectedly sank 12.4% in July from the prior month, showing continued weakness in the housing market absent government stimulus.

Yesterday, the Commerce Department said that sales of new, single-family houses in July were sold at a seasonally adjusted annual rate of 276,000 units. That is 32.4% below the July 2009 estimate.

The government report claims that sales of previously owned homes dove in July, falling 27.2% over the prior month and igniting fresh concerns over the economic recovery.

The new-home sales numbers — registered when a consumer signs a purchase contract on a home, as opposed to existing sales numbers that are measured when a deal closes escrow — give the most current snapshot of buyer interest in the market absent the popular $8,000 federal tax credit for shoppers.

Economists surveyed by Bloomberg News had expected some modest improvement after new-home sales plunged in May and then bounced back in June.

Dan Greenhaus, chief economic strategist for New York brokerage Miller Tabak + Co., wrote in a research note:

“The fallout from the first-time home-buyers credit continues, but in a perverse way, this is a good thing. Investors are getting their first ‘organic’ look at the housing market in nearly one year.”

The median sales price of new houses sold in July 2010 was $204,000 while the seasonally adjusted estimate of new-home inventory at the end of July was 210,000, representing a supply of 9.1 months worth of supply at the current pace.

17,000 Homeowners Sought NACA Loan Modifications

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Yesterday, Bruce Marks, the Chief Executive Officer of Neighborhood Assistance Corp. announced that more than 17,000 people had been through the doors at its marathon mortgage modification event in West Palm Beach.

That was a smaller number than he originally expected, however Mr. Marks said he expected more than 20,000 borrowers. He stated: “We’ve been here for five days straight, 24-hours a day and people are still coming in.”

NACA isn’t entirely going away after the doors close at 8 p.m. Marks promised that the organization, which acts as a not-for-profit mortgage broker, will open a South Florida office shortly. There are already 38 other offices and two call centers.

NACA says it has modified thousands of mortgages for South Floridians, at three events here since last year.

Borrowers facing foreclosure or seeking loan modifications can still get counseling and information on mortgage modifications at Naca.com.

They can also turn to the Homeowners Hope hotline, 1-888-995-HOPE, to find counseling and assistance.

In South Florida, the Urban League of Palm Beach County also is a Department of Housing and Urban Development-certified foreclosure mitigation counseling agency. The service is free.

Counselors are available Monday through Friday 9 am to 5 pm at 561.833.1461 ext 3000.

Forms and paperwork needed for the service are available at www.ULPBC.org.

The Broward County Housing Authority also offers foreclosure counseling at 954-739-1114, or www.bchafl.org.

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New HUD Program Gives Government & Nonprofits a Chance to Beat Investors to the Punch on Foreclosures

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Today, the U.S. Department of Housing and Urban Development (HUD)  announced an agreement with top mortgage lenders to offer local governments and nonprofits the chance to buy foreclosed homes before they are made available to private investors.

HUD Secretary, Shaun Donovan states:

“This groundbreaking agreement will help rebuild neighborhoods that have been struggling with blight and declining home values due to foreclosures. Local communities will now get an exclusive option to buy foreclosed properties in targeted neighborhoods so they can turn the homes into affordable housing or, in some cases, tear them down. This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods.”

Lenders participating in the National First Look Program include  Ocwen Financial Corp., Bank of America, Chase, Citi, Deutsche Bank, GMAC, Nationstar Mortgage, Saxon Mortgage Services, U.S. Bank, Wells Fargo, Fannie Mae, Freddie Mac, and the Federal Housing Administration.

According to HUD, the above lenders represent about 75% of bank-owned properties.

The agency said state and local governments and nonprofit organizations often have to compete with investors for foreclosed homes. That hinders efforts to stabilize neighborhoods hit hard by foreclosure. Under this program, these governments and nonprofits will be notified when a property becomes available and will have one to two days to express interest in buying the home.

Todays’s announcement comes on the same day as the Federal Reserve begins a national summit to address the impact of foreclosures on neighborhoods.

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Case-Shiller Index: Home Prices Rise in June

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According to Standard & Poor’s/Case-Shiller Home Price index released today, Prices in Palm Beach, Broward and Miami-Dade counties rose 0.4 in June from May. On an annual basis, prices increased 1.1%.

Nationally, home prices are 3.6% higher than they were a year ago.

David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement these prices were boosted by the $8,000 and $6,500 homebuyer tax credits, which have since expired. He states: “While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead.”

Mortgage Bankers Association said one in 10 mortgages nationwide are either delinquent or in foreclosure.

The S&P index measures prices of the same house over time. Analysts say that’s a more accurate reading of the market than releasing median prices for homes sold in a month, as the Florida Realtors does.

South Florida: Great Investment Opportunities, Properties For 50K and Under

Real Estate = Big MoneyImage by thinkpanama via FlickrAccording to CondoVultures.com, roughly 6,000 condos, townhouses and single-family homes priced at $50,000 or less are for sale across South Florida.

Some examples are:

  • A Coral Springs condominium on Riverside Drive is listed for sale at $50,000.
  • On Haverhill Road in West Palm Beach, a house is going for $40,000.
  • And on Southwest 36th Street in Hollywood, you can buy a two-bedroom house for $34,900, or roughly the cost of a 2011 Ford Expedition.

Broward County led the tri-county region with 2,400 of these properties. Palm Beach County has 2,100 homes, while Miami-Dade County has 1,500. In 2005, at the peak of the housing boom, a total of 18 sales closed at $50,000 or less in Broward and Palm Beach counties.

Many of the properties on the market today are owned by lenders and “underwater” owners trying to complete short sales, in which they sell for less than the mortgage amount. The collapse in home prices during the past five years has left plenty of bargains for the taking, but many of the properties are shoe-box tiny, need new roofs or have some other major flaw that doesn’t make financial sense for buyers on a budget.

Typically, investors will buy the homes, renovate them and then resell the properties for a profit within a few weeks or months. Rick Henderson, who recently bought a West Palm Beach home for $42,000, said he and other investors negotiate good deals with contractors and spend $10,000 to $20,000 fixing the homes. He states: “It would cost twice as much for a regular homeowner. There truly is no way that a regular homeowner could get the kinds of prices on material and labor unless they’re in the trades.”

While most of these homes have structural problems or other issues, they’re not necessarily in poor, unsafe areas, real estate agents say. The single-family homes are mostly in older, working-class neighborhoods in the central parts of Broward and Palm Beach counties. The condos are more spread out, located in buildings hit hard by foreclosures or facing steep assessments for repairs. Some of the condos could not be sold by developers after they converted the units from rentals during the boom.

According to the Florida Realtors, the median price for an existing home in Broward County in July was $207,500, and in Palm Beach County the median was $226,000. In both counties, the medians are nearly half of what they were in 2005. July’s median condo prices in Broward and Palm Beach counties were below $100,000, having plummeted by at least 60% since the peak. The median means half the properties sold for more, half for less.

During the early part of the past decade, speculators helped fuel the run-up in home prices by purchasing homes and quickly “flipping” them for large profits. When prices plunged, investors left the market. Now they’re back, this time capitalizing on the low prices and helping to clear the supply of foreclosed homes. David Dabby, a housing analyst in Coral Gables states: “It’s ironic. Now these investors are serving a very useful purpose.” If first-time buyers are interested in bidding for homes priced at $50,000 or less, they’re likely to face steep competition from investors

Judy Trudel of Balistreri Realty in Lighthouse Point states that most buyers need mortgages, but banks typically won’t lend money for a house that has structural problems or is missing major appliances. Investors paying cash don’t have that worry. She says: “Investors are sitting out there and swooping in. Cash is king.”

David Dweck, a real estate agent and founder of the Boca Real Estate Investment Club, said investors must do the proper research to ensure the deals make financial sense. He states: “It’s very hard to go wrong when you’re buying this cheap.” As long as they do that, most of his members find the industry lucrative.

Trebatch, 31, a former banker, expects to buy and sell three or four homes this year. She concludes: “It’s a great time to be buying. Banks are trying to get rid of their inventory. Buy low and sell low. Don’t be greedy.”

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This Month in Real Estate (US) : August 2010

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Why Aren’t People Buying Houses?

Even with mortgage rates are less than 5%, home prices in Broward and Palm Beach counties are about half of what they were at the peak of the housing boom in 2005.

It’s seams like a great time to buy – why are people so hesitant?

The government tax credits are gone, and potential buyers either don’t have jobs or are afraid of losing them. Some people don’t want to take on a mortgage because they think prices are destined to keep falling.

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South Florida Home Sales Decline as Federal Tax Rebates Disappear

South Florida home sales slowed in July directly following the expiration of two federal tax credits for buyers.

According to Florida Realtors yesterday, Broward County had 720 sales of existing homes last month, down 21% from a year ago,  while Palm Beach County sales fell 7% to 802.

The National Association of Realtors said also claimed that statewide, sales dropped 14% from a year ago. Nationally, single-family sales, which account for the bulk of the transactions, are at the lowest level since May 1995.

Buyers who signed contracts by April 30 and close by the end of September qualify for the $6,500 to $8,000 tax rebates. Analysts expected demand for homes to wane once the program ended.

Lawrence Yun, chief economist for the national Realtors’ group, said in a statement he expects a soft sales pace to continue through September. He states: “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.”

The median price in Broward County in July was $207,500, down 5% from a year ago. Palm Beach County’s median was $226,000, off 8% from July 2009. While, Broward’s existing condominium sales fell 12% last month, and the median price of $74,000 was down 8% from a year ago.

Palm Beach County condo sales rose 16%, but the median dropped 15% to $93,400.

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July Home Sales Plummet: 2nd Recession Ahead?

New home sales nationwide plunged in July to their lowest level since the government started keeping track in 1963.

This follows Tuesday’s dismal report for existing homes and raises fears that the economy is poised for another recession – a so-called double dip.

New home sales dropped 12% from June and 32% from July 2009 to an annual pace of 276,000, the Commerce Department said Wednesday.

Analysts expected the April 30 expiration of two federal tax credits to curtail demand for homes later in 2010. But buyers clearly are spooked by unemployment concerns, even thought mortgage rates are at historical lows and homes are affordably priced.
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