Housing prices will hit bottom in the fourth quarter of 2009, predicts Moody’s Economy.com in a new report. “Despite the darkening national economic outlook and the weak conditions in the housing market, some positive signs give hope that a bottom in the housing market is coming into view,” the report says. On average, home prices will decline 36 percent from the peak in the first quarter of 2006, the report says. By the end of the housing downturn, nearly 62 percent of the nation’s 381 metropolitan areas will have experienced double-digit-percent declines in house prices, peak-to-trough, says the report. The declines will exceed 20 percent in about 100 metro areas, according to the report, and the recovery will be “lackluster.” “A number of uncertainties in both the housing and economic outlooks remain, and the risks tilt to the downside,” says Moody’s Economy.com Chief Economist, Mark Zandi.

Labels: Business, Condos, Deals, Finance, Florida, Florida Panhandle, Foreclosure, Panama City, Real Estate, Short Sale, Vacation

Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, released a list of the top 10 steps homeowners can take to negotiate an affordable loan modification. The following steps apply to homeowners working directly with a lender, as well as to those teaming up with an attorney or alternative third-party representative.

1. Come clean. It can be tempting to bend the truth when you are trying to convince a lender to approve a loan modification. Only by laying all your cards on the table and disclosing the truth can you begin to develop and implement solutions that will put you back on the path to long-term financial health.

2. Understand your lender’s point of view. As far as your lender is concerned, it all boils down to money. You are most likely to be approved if you can show modifying your loan will cost the lender less than a foreclosure.

3. Keep a cool head. Expressing anger toward your lender puts you in an extremely disadvantageous position. For example, your lender may decide that you are unreasonable and that foreclosing would be less costly overall.

4. Give them what they need. In order to expedite the situation, find out exactly which forms you need to fill out and which documents your lender needs to process your application. Make sure you provide everything to your lender or representative in the manner specified.

5. Ask for what you want. Before meeting with your lender, make sure you spend some time figuring out what you want and need. For example, how much can you realistically afford to pay each month?

6. Let them do their job. Loan modifications typically take between 30-90 days from start to finish. During this time, avoid the temptation to micromanage the process. To alleviate unnecessary anxiety, ask your lender for an anticipated timeline.

7. Get your financial house in order. Put a tracking system in place today and start developing a budget to ensure you are not spending more money than you are earning.

8. Keep everyone posted of any changes. If anything changes related to your financial situation, be sure to keep your loan modification representative or lender in the loop.

9. Make sure the lender’s offer is truly affordable. If the loan modification is unaffordable or makes your budget so tight that you are only one car repair or medical bill away from defaulting again, head back to the negotiating table to try to work out a better deal.

10. Hold up your end of the bargain. The key to success is discipline and commitment. All the effort you spend setting up a plan is of no use if you don’t follow the plan you created or agreed to.

Labels: Business, Credit Partners, Deals, Finance, Florida, Florida Panhandle, Foreclosure, Investment, Panama City, Real Estate, Short Sale, Vacation

Al Muller had numbers on parade Wednesday when he spoke to the Navarre Area Board of Realtors about where the local real estate market has been and where it is. But what his audience of nearly 90 really wanted to know was: How soon will things get better?

Muller’s answer: That pretty much depends on the intersection of projected & actual trend lines when it comes to sales. That would align the ability to buy based on actual income and when prices become affordable again. “When will the two lines meet?” Muller asked rhetorically. “Optimistically, by the end of 2009 ... pessimistically, by the end of 2010 ... realistically the middle of next year.”

Muller is with Metro Market Trends, which provides reporting and analysis information on real estate sales, tracking and market share for Florida and South Alabama. His PowerPoint presentation showed resales of single-family homes down 19 percent in Navarre and on Navarre Beach since 1991. Condo resales are down 58 percent for the same span. “Booms are followed by busts,” Muller said, “but bubbles are followed by carnage. ... This is the first time in our history that a real estate decline has pushed the economy into recession, instead of the other way around.” Declining home prices and an increasing foreclosure rate were factors he listed on both the positive and negative sides of the ledger. “That’s our medicine,” Muller said, “and there is no other answer but time.”

Unless, of course, President Barack Obama’s administration and key federal agencies intervene.

“We forget that the federal government now owns Freddie Mac and Fannie Mae,” Muller said, “and if they want to decide Monday that rates are 4 percent on a 30-year fixed loan, they can do it. ... This would mean something to people who could refinance or people who are sitting on the fence about buying.”

James Baker from Fort Walton Beach-based mortgage banker Baker and Lindsey Inc. saw elements of hope in the presentation. “It’s felt negative for a long time, but the data he has supports our feeling that there’s good mixed in with the bad,” Baker said. “What struck me most was hearing that it’s much worse in other areas. That means we can feel better about this market coming out of it sooner.”

And what about those 4 percent loans? “Definitely not a pipe dream,” Baker said. “It would be one of the most effective things the government can do. It would help people buy homes, and if they refinanced with that rate, the value and the payments would be more in line. That would make people feel better about their homes, and that would directly affect foreclosures.”

Labels: Business, Credit Partners, Deals, Finance, Florida, Florida Panhandle, Foreclosure, Investment, Panama City, Real Estate, Short Sale, Vacation

A new tax credit of up to $8,000 for first-time homebuyers that’s being included in the economic stimulus package was far less than the homebuilding industry wanted, and analysts expect it will provide only a modest boost to the battered U.S. housing market.

The tax credit is part of the economic stimulus package expected to be signed by President Barack Obama on Monday. It was scaled back from a Senate proposal of $15,000 and limited to first-time buyers who act between the start of this year and the end of November. The credit for 10 percent of the value of a home, up to $8,000 was estimated to cost the government $6.6 billion. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Struggling homebuilders, already looking ahead to the traditional spring selling season, had been counting on Congress to help spur pent-up sales after completing the worst year for new home sales since 1982. Executives for one major builder noted earlier this week that they had seen an uptick in traffic over the weekend as many prospective buyers learned of the Senate’s original incentive provision. But with that proposal gone, Wall Street analysts said the homebuyer provision will have a negligible effect on homebuilders’ fortunes. “Congress, unambiguously, left the builders out in the cold,” said Deutsche Bank analyst Nishu Sood. “It’s a pretty big disappointment that they scaled it back.”

Real estate agents were more optimistic. The National Association of Realtors projected the change will stimulate an additional 200,000 home sales. The big unknown, however, was the state of the economy. With employers laying off thousands of workers, many potential homebuyers are nervous about making such a big financial commitment.

Mortgage rates remain low, falling this week to a national average of 5.16 percent for a 30-year fixed-rate mortgage, according to mortgage finance company Freddie Mac. But credit remains tight and borrowers need a downpayment of at least 3.5 percent to qualify for a loan backed by Federal Housing Administration, a popular option for many first-time buyers.

Many potential buyers haven’t saved up enough money for a downpayment. “If you don’t have a way to get that, the tax credit doesn’t do them much good,” said James McCanless, an analyst who covers builders for FTN Midwest Securities.

But if the government can prod lenders to loosen credit standards and buy enough mortgage-backed securities to keep mortgage rates low, the tax credit could make a difference, said Mark Zandi, chief economist at Moody’s Economy.com. “I don’t think it’s enough to jolt the housing market back to life, but it’s a plus,” he said. Last year, Congress enacted a $7,500 tax credit for first-time buyers, but that had to be paid back over 15 years and the impact on home sales was negligible.

First-time buyers, in last year’s law, were defined as those who haven’t owned their own homes for three years. “The bulk of the market right now is first-time buyers,” he said. First-time homebuyers bought 2.2 million new and existing homes last year, according to the National Association of Realtors, making up about 41 percent of total U.S. home sales, up from 39 percent in 2007 and 36 percent in 2006.

Concerns about the bill’s overall costs, plus criticism that a much larger credit would not benefit borrowers on the verge or foreclosure, and mainly help people with healthy enough incomes to buy a house helped sink plans for a much larger credit. The homebuilding industry mounted an unsuccessful push for a credit for up to $20,000 for all buyers, flying builders in from around the country last month for a massive lobbying push that wound up falling short. “What the builders wanted was massive relief – not targeted toward where the real problem was – paid for by everybody,” said Thomas Lawler, a Northern Virginia housing economist. “That seemed to be pretty egregious.”

Sales fell in the fourth quarter of last year around the country, except for six states where buyers have been able to snap up foreclosed homes at a bargain: Nevada, California, Arizona, Florida, Minnesota and Virginia, the National Association of Realtors said Thursday. Nationwide, the median sales price was $180,100, down 12 percent from a year ago.

Labels: Business, Credit Partners, Deals, Finance, Florida, Florida Panhandle, Foreclosure, Investment, Panama City, Real Estate, Short Sale, Vacation