Snowbirds facing new headwinds in Florida real estate markets

Canadians looking to snap up dwindling real estate deals in Florida are finding themselves facing unexpected competition — from China.

With popular property markets like Vancouver and Toronto showing significant signs of softening, Asian investors seem to be shifting their focus south of the border, according to Canadians who specialize in marketing bargain-basement Florida houses and condos to snowbirds.

“Some of our clients got beat out recently because they were waiting to book flights. Some Chinese investors bought up 35 (townhouse-condo) units without even flying in first,” says Wayne Levy of Toronto-based Florida Home Finders.

“They looked at a picture. They wrote cheques. That’s what’s happening now.”

Asian interest in Florida has “really picked up steam in the last year,” says Levy, whose company is still seeing strong demand from Canadian buyers, but finding it increasingly challenging to find properties under $150,000 as the beleaguered U.S. housing market slowly recovers and the inventory of distressed homes drops.

“They’re seeing the U.S. as a safe haven to put their money,” says Montreal-born realtor Shant Epremian, co-founder of Boca Raton-based Pink Palm Properties, who’s just returned from two weeks in Hong Kong, Beijing and Singapore.

“I am slowly starting to tap into that market because there is a tremendous amount of money there. Buyers are looking for good opportunities and see that Florida is still on sale.”

In fact, there has been a surge in Asian buyers snapping everything from multi-million-dollar New York mansions to California estates, according to data from the U.S. National Association of Realtors.

While Florida has yet to see a surge of realty companies springing up to cater to Asian buyers, as has happened with the Canadian market since the U.S. housing market meltdown, websites like Juwai.com (Mandarin for “home overseas”) are creating links between Chinese buyers, in particular, and U.S. listings.

So far, Asian buyers remain “fairly minor players” in the Florida market, “but we are noticing some activity,” says John Tuccillo, chief economist for Florida Realtors, the trade association for the state’s 115,000 real estate professionals.

The biggest competition for Canadians, Tuccillo says, are investor groups that are now making unprecedented “bulk investments” — buying dozens of condos or houses at a time in markets, like Florida, which has seen steady price growth and the inventory of homes for sale sink to five months’ worth from the glut of 20 months back in 2008.

U.S. private real estate firm Blackstone Group LP, for instance, is just one of a handful of private companies now racing against the real estate recovery. It recently spent more than $2.5 billion on 16,000 houses in nine American cities, including Miami, which it plans to use as rentals.

“They are, in essence, wiping out the bottom of the market. It’s forcing other buyers to move up the price ladder,” says Tuccillo.

That, of course, includes Canadians who remain the dominant foreign buyers of Florida real estate, although their share of the market dropped to 31 per cent last year from 39 per cent in 2011, according to figures from Florida Realtors.

That’s partly because the pool of buyers has grown in the last year, says Tuccillo.

More Americans have been able to qualify for mortgages and buyers from other parts of the world, Brazil in particular, are not only on a buying binge, they’re willing to pay significantly more — median prices of $200,000 to $300,000 — about double the median paid by Canadians, according to Florida Realtors data.

All of which makes Ottawa resident Kathryn Millar happy she and her husband decided to make the leap now: They close later this month on a three-bedroom condo in Fort Myers that, with upgrades, cost $180,000 U.S.

The couple had planned on looking at Tampa’s Equestrian Parc development as well, but it had been bought out by Asian investors before they could make it to Florida.

For the original post visit: http://www.thestar.com/business/article/1313408--snowbirds-facing-new-headwinds-in-florida-real-estate-markets

Real estate agents: Homes selling faster in US

LOS ANGELES — U.S. homes are taking less time to sell than a year ago, reflecting more homebuyer demand and fewer bank-owned homes and other properties available for sale in some markets.

The National Association of Realtors said Wednesday that the median time a previously occupied home was listed for sale shrank in July to 69 days. That’s down from 98 days in the same month last year.

One-third of the homes purchased in July were on the market for less than a month, while one in five was on the market for at least six months. A home’s median time on the market has been declining steadily since January, the trade group said.

Between 2004 and 2005, the high-flying years of the housing boom, the median selling time of previously occupied homes was four weeks, NAR said. The supply of homes on the market averaged 4.3 months over the same period. The July figures, which were derived from a monthly survey of the trade group’s real estate agents, are good news for sellers and come as the inventory of homes available for sale has been tightening.

Overall, there were 2.4 million previously owned homes for sale in July, down 24 percent in the past year. It would take about 6.4 months to exhaust that supply at the current sales pace. That’s just above the six-month inventory typical in a healthy economy and 31 percent below the 9.3-month supply in July last year.

“A notable shortening of time on market began this spring, and this has created a general balance between homebuyers and sellers in much of the country,” said Lawrence Yun, the trade group’s chief economist.

Factoring out short sales — when a bank agrees to accept less than what the seller owes on their mortgage — the median time on the market for homes was around six to seven weeks, Yun said.

By comparison, excluding short sales, the median time on the market for homes hit 10 weeks in 2009, during the depths of the economic downturn. At the time, there was a 10-month supply of homes on the market, NAR said.

The trend in homes selling faster also is further evidence that the U.S. housing market is on the mend five years after the housing bubble burst.

The average rate on a 30-year fixed mortgage has been below 4 percent all year, helping to fuel more sales of new and previously owned homes. Sales of previously occupied homes jumped 10 percent in July from a year earlier. Sales of newly built homes, meanwhile, were up 25 percent in the same period.

Home prices also have begun to rise consistently.

Source: http://www.goupstate.com/article/20120906/WIRE/120909839

Real estate agents say US homes selling faster after hitting the market than a year ago

LOS ANGELES, Calif. - U.S. homes are taking less time to sell than a year ago, reflecting more homebuyer demand and fewer bank-owned homes and other properties available for sale in some markets.

The National Association of Realtors said Wednesday that the median time a previously occupied home was listed for sale shrank in July to 69 days. That's down from 98 days in the same month last year.

One-third of the homes purchased in July were on the market for less than a month, while one in five was on the market for at least six months. A home's median time on the market has been declining steadily since January, the trade group said.

Between 2004 and 2005, the high-flying years of the housing boom, the median selling time of previously occupied homes was four weeks, NAR said. The supply of homes on the market averaged 4.3 months over the same period.

The July figures, which were derived from a monthly survey of the trade group's real estate agents, are good news for sellers and come as the inventory of homes available for sale has been tightening.

Overall, there were 2.4 million previously owned homes for sale in July, down 24 per cent in the past year. It would take about 6.4 months to exhaust that supply at the current sales pace. That's just above the six-month inventory typical in a healthy economy and 31 per cent below the 9.3-month supply in July last year.

"A notable shortening of time on market began this spring, and this has created a general balance between homebuyers and sellers in much of the country," said Lawrence Yun, the trade group's chief economist.

Factoring out short sales — when a bank agrees to accept less than what the seller owes on their mortgage — the median time on the market for homes was around six to seven weeks, Yun said.

By comparison, excluding short sales, the median time on the market for homes hit 10 weeks in 2009, during the depths of the economic downturn. At the time, there was a 10-month supply of homes on the market, NAR said.

The trend in homes selling faster also is further evidence that the U.S. housing market is on the mend five years after the housing bubble burst.

The average rate on a 30-year fixed mortgage has been below 4 per cent all year, helping to fuel more sales of new and previously owned homes. Sales of previously occupied homes jumped 10 per cent in July from a year earlier. Sales of newly built homes, meanwhile, were up 25 per cent in the same period.

Home prices also have begun to rise consistently, which could boost sales further in the months to come. The Standard & Poor's/Case Shiller index for July showed the first year-over-year increase in home prices since September 2010.

Even so, the housing market has a long way to go to reach a full recovery. Some economists forecast that sales of previously occupied homes will rise 8 per cent this year to about 4.6 million. That's still well below the 5.5 million annual sales pace that is considered healthy.

One factor constraining the pickup in sales is many homes that would otherwise be on the market are being held back.

Some of those homes are bank-owned properties.

As of July, there were 1.47 million U.S. homes in some stage of the foreclosure process or owned by banks, according to foreclosure listing service RealtyTrac Inc. Of the 620,751 in lenders' possession, only about 15 per cent are listed for sale. That's helped trigger bidding wars and led to higher prices in markets like Las Vegas, where the inventory of bank-owned homes sank to a 6.2-month supply in June.

Many homeowners who would like to sell their home are not placing them on the market because they are worried home prices might dip again. Others can't sell because they are underwater on their mortgage, meaning they owe more than their home is worth. In that scenario, the only way they can sell their home is through a short sale, in which a bank agrees to accept less than what is owed on the mortgage. In that case the seller makes nothing on the sale.

Source: http://www.canadianbusiness.com/article/97554--real-estate-agents-say-us-homes-selling-faster-after-hitting-the-market-than-a-year-ago

Why are so many real estate deals falling through?

What’s behind the unusually high rate of contract cancellations and settlement delays in the real estate market? With signs of recovery emerging in many parts of the country, shouldn’t deals be zipping along with minimal complications?

Apparently not. Nearly one-third of realty agents in a new national survey reported experiencing contract cancellations – purchases crumbling before going to closing – in February. That’s up dramatically from a similar poll 12 months earlier, when just 9 percent of agents reported cancellations. Another 18 percent reported delays in scheduled closings in the latest study, which involved approximately 3,000 agents surveyed by the National Association of Realtors.

The high reported cancellation rate (31 percent) doesn’t mean that nearly one of every three of all signed contracts is falling apart, according to the association, but rather that more than triple the number of agents and their clients are running into deal-endangering problems compared with 2011. If you are a potential buyer or seller in an otherwise improving marketplace, you need to be aware of the issues that are hampering sales, and be prepared in advance to deal with some of the most prominent.

Tops on the list:

• Appraisals below contract. You may assume that the true market value of a house is what a seller and buyer agree to in a binding contract, but it’s not. The appraiser hired by the bank may come up with a different opinion of value – significantly below what was agreed between the parties – and this is occurring with far greater frequency today than in previous years. Part of the problem is the excessive use of price-depressed foreclosure sales chosen as ”comparables” to value non-distressed houses under pending contracts. But some appraisers are inexperienced, unfamiliar with local pricing trends, and go far beyond their normal duties.

For example, Risa Bell, an agent for national broker Redfin in Boston, recently represented purchasers of a bank-owned property being sold ”as is.” An appraiser for the lender not only detailed a long list of needed repairs to the house, but said the deal could only proceed if the prospective buyers spent thousands of dollars fixing up the house before – not after – closing. Along the way, frozen pipes in the unheated house broke and a contractor hired to do repairs filed a mechanic’s lien requiring payment before the title could be transferred. All of this combined to kill the financing and torpedo the closing, but the buyers ultimately were approved by a second lender using a different appraiser, who made no such demands for repairs in advance.

• Ultra-conservative underwriting and documentation requirements. It’s no longer just towering credit score minimums, hefty down payments and mind-bending paperwork submissions that get mortgage applicants turned down. ”It’s a lot of other stuff, too,” said Melissa Zavala, broker and owner of Broadpoint Properties in Escondido, Calif. Increasingly she’s been running into regulatory hoops and restrictive underwriting rules at FHA, Fannie Mae and Freddie Mac that knock signed contracts off the tracks or at least delay them for months.

For instance, FHA’s toughened rules on condominium associations – limits on the percentage of existing residents in the entire project who are delinquent on their condo dues, plus controversial requirements for ”recertifications” of condominium developments that many condo boards find costly and burdensome in terms of legal liability – are rendering individual units in those communities difficult to get financed, no matter how well qualified the purchasers. Little-publicized recent changes in FHA rules on loan applicants who have outstanding collection accounts buried away in their credit files ”can force you to take three to four months to clean up” through mandatory repayment plans, Zavala said in an interview. By that point the contract may well have gone bust.

• Poor service by lender staff. Agents in the survey identified ”lack of customer service” and ”generally bad attitudes” as contributing factors to delays and some contract failures. But Zavala said realty agents themselves need to be on the ball when loan processing deadlines begin to slip or communication breaks down with lenders. ”Agents can be part of the problems” – and the solutions – when it comes to moving the financing along, she said.

Bottom line: If you seriously want to go to closing on a house you’re buying or selling, make sure you know all the key rules and requirements up front, then stay on top of the lending, escrow, title and real estate professionals assigned to your transaction.

And don’t give up if your deal runs into complications. There are more of them out there than usual.

Source: http://www.charlotteobserver.com/2012/03/30/3133131/why-are-so-many-real-estate-deals.html

Florida real estate market starting to turn around

Inventories are down, lending has loosened

Just as even the brightest, warmest sun must eventually set, the era of bargain real estate in Florida may be coming to an end, experts say.

Florida, which was among the first U.S. states to be hit by the real estate downturn and recession, is finally emerging from its swamp of foreclosures and depressed house prices. Realtors’ gut instincts, anecdotes and hard evidence all point to a turnaround under way in the state’s home prices — a development that could light a fire under any would-be Canadian snowbirds.

Florida cities took eight spots on the National Association of Realtors’ recent list of “Top 10 turnaround towns.” Miami — where 60% of all buyers are foreigners and the median house price is US$185,000 — was No. 1. Inventory is disappearing: In Fort Lauderdale, the number of homes listed on the market dropped 42% from 2010 to 2011. And a report commissioned by two Florida real estate firms, the Related Group and International Sales Group, predicted that by the end of this year, the developer-owned condo inventory from the last round of construction, in 2005-’06, will have completely evaporated from the Miami area.

Realtors are trying to recruit potential buyers with the message that anyone thinking of buying a home in Florida ought to look now, because the bargains won’t last forever.

“It’s actually the best time they’re going to have. We’ve been telling people for about the last year and a half to basically get down there and start looking. If they want to buy something, they should do so sooner rather than later,” says Brian Ellis, vice-president of Florida Home Finders. A brokerage based in Vaughan, Ont., it specializes in helping Canadians navigate the real estate market in Florida.

“We are expecting a substantial price bounce in Florida,” he says.

Phil Wood, president of John R. Wood Realtors of Naples, Fla., says there have even been multiple offer situations in his Southwest Florida territory, something that was “absolutely not” the case during the worst of the downturn.

Now, with a slow turnaround finally beginning in the U.S. economy, would-be secondhome buyers who had been circling Florida real estate are moving in for the kill.

“The buyers that we’re seeing, they’re for the most part second-home buyers who have been waiting. They’ve wanted to be down here for four or five years but all their plans got delayed because of the recession,” Mr. Wood says.

Other factors are bringing Americans back into the market: The banks are loosening their lending again. And as Mr. Ellis explains, Americans who walked away from their underwater homes (where they owed more than the home was worth) early in the downturn, around 2007, are now re-emerging with good enough credit to secure mortgages.

“It takes anywhere from four to five years [to come back] if you walked away from your home or were foreclosed on. As long as you’ve kept your credit good from that time on, you will be cleared to go back to the mortgage market again,” he says.

Mr. Wood says Canadians still have a competitive edge in the Sunshine State. “The loonie — I think that’s what you call your dollar — has been at or above the [American] dollar for a while now, so a lot of Canadians are looking at that and say-ing, ‘I could get real good value down in the States.’ “

And Canadians are more likely to have a healthy amount of equity available to pull out of our homes. Not surprisingly, we make up 12% to 15% of John R. Wood Realtors’ business.

Florida Home Finders specializes in catering to Canadians, who often lack knowledge of Florida markets. “We find great properties that meet the criteria most Canadians are looking for, and market them here in Canada,” Mr. Ellis says.

“We set expectations as well,” he continues, “because most Canadians have absolutely no clue about what’s really going on in the state of Florida. Setting expectations is one of the biggest things we do.”

While many (if not most) Florida homes are still deadly cheap by Canadian standards, wild tales of a feast of foreclosures are an exaggeration. You’re simply not going to pick up a dream condo on the waterfront for US$20,000, Mr. Ellis cautions.

Depending on the region, however, Canadians may be surprised at what they can get for $100,000 or $150,000.

Where to look? Whereas many part-time Florida residents enjoy the bustle of the Fort Lauderdale-Miami corridor, the relative tranquility of Southwest Florida — with communities including Fort Myers and Naples — has attracted snowbirds by the flock.

“Quite frankly, the Southwest is where the best deals are right now,” Mr. Ellis notes.

Before hunting for those deals, Canadians should be aware that securing a mortgage pre-approval in the United States can take weeks instead of the days Canadians are used to (even through a Florida-based branch of a Canadian bank). So it’s crucial to have one’s borrowing plans figured out before putting in any offers.

Canadians also have to learn about taxation and immigration issues.

House hunters with intentions of renting out their properties for extra income should also be aware that condo boards often restrict that practice — even when the home is a single-storey, villa-style condo of the kind common in Florida.

Finally, as in Canada, buyers must have a lawyer confirm that a condominium association’s finances are in good order. Since the economic downturn, “a lot of them are not in good shape,” Mr. Ellis says. The upshot can be a steep increase in condo fees down the road.

Despite potential pitfalls, Mr. Ellis urges Canadians to take serious steps toward buying a piece of the Florida sunshine, if they’ve ever considered it before. “It’s one of those woulda coulda shoulda times,” he says.

Source: http://life.nationalpost.com/2012/02/29/florida-real-estate-market-starting-to-turn-around/

Existing home sales to be revised lower

NEW YORK (CNNMoney) -- If you thought the U.S. housing market couldn't get much worse, think again.

Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.

NAR said it plans to downwardly revise sales of previously-owned homes going back to 2007 during the release of its next existing home sales report on Dec. 21.

NAR's existing home sales numbers, released monthly, are a closely followed gauge of the health of the housing market.

While NAR hasn't revealed exactly how big the revision to home sales will be, the agency's chief economist Lawrence Yun said the decrease will be "meaningful."

"For the real estate business, this means the housing market's downturn was deeper than what was initially thought," Yun said.

Yun said the database NAR uses to track existing home sales, the Multiple Listing Service (MLS), has led the real estate agency to over-count existing home sales for several reasons.

The MLS database only includes home sales listed by realtors, and excludes homes listed by owners, providing a very narrow view of the market. And because more people are using realtors to list their homes instead of selling them independently, realtor-listed sales numbers have become artificially inflated, said Yun.

In addition, some of the assumptions NAR used in calculating its data have become outdated, since they were based on 2000 Census data.

First-time homebuyers guide

The MLS has also been expanding its geographic coverage, so it may have appeared that there were more home sales simply because data from new areas were starting to show up. Also because of this geographic expansion, the system has been double-counting sales of some homes that can be considered part of multiple regions.

"Colorado Springs has their own database, but because the Denver market is nearby they may also list that home in the Denver database, so when the home gets sold, both Denver and Colorado Springs will say sales rose -- so that's genuine double-counting," said Yun.

Yun said NAR realized this upward "shift" in data during its most recent re-benchmarking process this year. With the help of the government, economists and other real estate groups, NAR has now taken these factors into account and will issue revised numbers on Dec. 21 at 10 a.m.

"There are multifaceted reasons why things were drifting upward in our database," said Yun. "We have tried to adjust for all these factors so that we have a better understanding of total home sales in America."

Yun emphasized that the revisions will have no impact on consumers because median home price data will not be revised

Source: http://money.cnn.com/2011/12/13/real_estate/home_sales_revision/index.htm