New Orleans has a new waterfront master planned community and it is called Algiers Crossing. This is the only waterfront new construction available in New Orleans! While other areas of the country may have cooled off for investors, New Orleans is now the place to be. Algiers Crossing is located on the Mississippi River and offers unparalleled views of the downtown New Orleans skyline that no other project can match. Two powerful forces have joined to bring you Algiers Crossing, J.S. Karlton and International Sales Group.
As everyone knows New Orleans has suffered in the wake of hurricane Katrina, but now the future is looking brighter than ever with the creation of the GO ZONE act. The Go Zone provides investors with large tax breaks due to the 50% deprecation that can be taken in the first year of ownership. The US Government is also pouring 100 billion into the New Orleans area to spur growth, and you can imagine what that is doing for the area. If you are considering investing in the New Orleans area and if you have a vision for what the future may hold, please call us today to find out how to maximize your money.
- Price Range - $350,000 to $500,000s
- Size of units - 1/1, 1/1.5, 2/2, 2/2.5
- Majority of the units will have a view of the Mississippi River
- 5% deposit with letter of intent and 5% at contract
- Third 5% 6 months after contract and 5% at completion of exterior
- Project delivery 2009 and 2010
Please call today for a brochure and more detailed information.
Paul Hansen 786-586-4778
The decades-long explosion in residential square footage may be coming to an end, says Gopal Ahluwalia, the National Association of Home Builders vice president for research.
Although the size of the average home has been on the rise to 2,495 last year from 1,500 square feet in 1973 consumers are beginning to choose higher quality living spaces over additional square footage, according to Ahluwalia, who spoke at the recent International Builders Show in Orlando, Fla.
Architects, designers, manufacturers, and marketing experts who were asked by NAHB about their expectations for future homes agreed that home size would slip into the 2,300- to 2,500-square-foot range by 2015.
NAHB says that two-story homes will continue to dominate as increasing construction costs drive choices. As housing prices go up, so too does the share of two-story homes, says Ahluwalia, noting that two-story construction is less expensive than one story on a square-foot basis. U.S. Census Bureau data shows that 55 percent of the homes built in 2005 had two or more stories.
Demise of the Living Room?
On the chopping block are formal living rooms. Last year, 40 percent of newly constructed homes did not have a living room, and 55 percent of the architects, designers, and builders surveyed expect living rooms to vanish from the average home in the next 10 years. Thirty-one percent say it will evolve into a parlor/retreat/library or a music room.
Most likely to capture more square footage in both average and upscale homes is the family room. In upscale homes, 68 percent of those surveyed also expect kitchens to become even larger.
Master bedroom or master suite options are increasing as well, with 63 percent of upscale homes and 13 percent mid-level homes expected to have two master suites by the next decade. Such a configuration not only accommodates guests, but also offers the option of having a master bedroom on the first floor as well as the second floor to give owners more choice and also accommodate aging owners or relatives. The Renewed American Home, one of several show homes at IBS, featured a second-floor master suite and an additional first-floor suite that was a tad smaller.
High Ceilings Dominate
Smaller homes will not translate into less volume though, and the high ceilings that have characterized new homes in recent years are here to stay. Average homes in the future are expected to have 9- to 10-foot ceilings on the first floor. In luxury homes, 10- to 12-foot ceilings on the first floor will be standard.
Unusual weather patterns and problems in the sub prime lending marketplace are creating challenges in assessing housing market conditions, but a recovery is likely this year, according to the latest forecast by the NAR.
David Lereah, NARs chief economist, says there is some ambiguity about the current housing market.
Our goal each month is to fine-tune the forecast based on the latest housing data and a variety of economic indicators, but extraordinary weather variations are skewing home sales and clouding the picture, he says. Underlying trends point to a housing recovery in 2007, but it will take a couple months for us to get a better handle on it. Existing-home sales are expected to slowly improve from what appears to be the cyclical low last fall, but we think there will be some additional pain in the new home market, which hopefully will start to rise later in the year.
2007 Housing Projections
Here are some of NARs predictions for the coming months in housing:
- Existing-home sales are projected at 6.42 million this year and 6.66 million in 2008, compared to 6.48 million last year. The national median existing-home price is projected to rise 1.2 percent to $224,500 this year, following a 1 percent gain in 2006. Although existing-home sales will be marginally reduced due to sub prime lending restrictions, they should be gradually rising this year and next,” Lereah says. However, total sales this year will be fairly close to 2006 because last year started high and ended low.
Consumers are beginning to respond to more favorable housing market conditions, with existing home sales expected to steadily increase into 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS.
After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008, says David Lereah, NARs chief economist.
Existing home sales, which reached the third highest total on record of 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million in 2008.
New construction, on the other hand, will take longer to recover. Following a fourth-best 1.06 million in 2006, new home sales projected to decline to 961,000 this year and then rise to 971,000 in 2008. We look for that sector to turn around later in the year, Lereah adds.
Among the other key highlights of NARs new forecast:
-Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. When new home demand begins to catch up with supply, builders will slowly increase construction probably in the second half of this year, Lereah says.
-The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions, Lereah says. When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.
-The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
-The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.
Pending home sales are higher, affirming the stabilization that is occurring in home sales, according to the NATIONAL ASSOCIATION OF REALTORS.
The Pending Home Sales Index, based on contracts signed in December, rose 4.9 percent to an index of 112.4 from an upwardly revised level of 107.2 in November, but is 4.4 percent lower than December 2005.
The monthly gain was the biggest increase since March 2004 when the index rose 6.9 percent. A steady narrowing from year-ago readings has been observed since last July when the level of unsold housing inventory peaked at an all-time high.
David Lereah, NARs chief economist, says a moderate rise in existing-home contracts is a welcome relief.
Some of the monthly gain may be weather related, but it appears buyers are becoming more comfortable, sensing the timing is good and that their local market has bottomed out, he says. I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity. 2007 promises to be the fourth-best year on record.
The upturn was broad based, with all regions showing an increase.
-The PHSI in the Northeast jumped 8.1 percent in December to 89.9 but was 4.8 percent below a year ago.
-In the West, the index rose 5.3 percent to 112.2 but was 4.9 percent below December 2005.
-The index in the South increased 4.3 percent to 129.8 but was 4.2 percent lower than a year earlier.
In the Midwest, the index was up 3.2 percent in December to 103.2 but was 4.3 percent below December 2005.
The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
The most expensive home in the United States is owned by none other than Donald Trump. His home is Palm Beach, Fla is now on the market for $125 million.
In 2004, Donald J. Trump bought former health care executive Abe Gosman's palace, Maison de L'Amitie, at bankruptcy auction for $41.25 million. With the refurbished version, complete with a ballroom, conservatory, 100-foot-long swimming pool and 475 feet of oceanfront. Trump aims to set a U.S. sales record. It is currently on the market and ready for sale. If you would like more information on this estate, please contact Paul Hansen 786-586-4778.
Residents of a coastal trailer park in Palm Beach County, Fla., called Briny Breezes have approved the sale of their community to a developer for more than $510 million.
The proceeds will be distributed based on the size and location of their lots, making most of the property owners millionaires.
Nearly all of the 488 share-owning trailer owners voted; 80 percent approved the sale, while 17 percent rejected it.
The vote clears the way for Boca Raton-based Ocean Land Investments to buy the 43-acre property. State and local officials still must approve new zoning to accommodate the 900 condo units, luxury hotel, and marina proposed by the developer.
Owner Kevin Dwyer says he understands why some people did not want to sell - they will have to give up oceanfront living. But he voted yes because the return was irresistible - about $800,000 for the singlewide trailer and lot he bought nine years ago for $37,500.
I do not have much money. It is a no-brainer for me, Dwyer says.
A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.
Here are three major things to think about when considering a home in need of lots of improvements:
-Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as - not a lot more - than other homes in the neighborhood?
-How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, and then take off another 10 to 15 percent for unexpected problems. If you cannot get the property for that, then it is probably a bad deal.
-Prepare for the mess. Get ready for renovations to take longer than expected. Know that your life will be disrupted if you cannot afford to live somewhere else while the work is being completed.
The most expensive house sold in 2006 was an English-style, 10,000-square-foot Alpine, N.J., mansion with guest cottages, pool, and tennis courts, according to the Institute for Luxury Home Marketing.
The price tag for the 63-acre estate five miles from Manhattan: $58 million. Advanced Photonix CEO Richard Kurtz bought this years top seller from Henry Clay Frick II.
In 2005, the priciest house was an ocean-front estate that sold for $70 million to Ron Perelman of Palm Beach, Fla.
The Institute for Luxury Home Marketing estimates from not-yet-complete data that 2006 sales of homes priced at $5 million and above were up about 11 percent over 2005. And at least 10 buyers throughout the country were willing to shell out $28 million or more for high-end residences last year.
A stabilization trend in the housing market is likely to continue, according to the latest reading on pending home sales published by the National Association of Realtors® (NAR).
The Pending Home Sales Index, based on contracts signed in November, eased by 0.5 percent to 107.0 from an upwardly revised reading of 107.5 in October, and is 11.4 percent lower than November 2005. The decline from year-ago levels has been steadily narrowing since July, which was 16.0 percent lower than the same month in 2005.
David Lereah, NARs chief economist, says the narrowing from year-ago levels is a significant factor. Because there is a stronger parallel between changes in the index from a year ago and the actual pace of home sales in coming months, the index is pointing toward fairly stable home sales in the near future, he says. That is another indicator that home sales likely bottomed-out in September.
The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
Although some monthly declines are possible, when we look at the forecast for existing-home sales in 2007 on a quarterly basis, we see gradual improvement over the course of the year, Lereah said. That will support future price appreciation as inventories are drawn down.
Only 28 percent of home buyers say what they read and hear from the media has any impact at all on their decisions to buy or not to buy a new home, according to a survey commissioned by the National Association of Home Builders.
"While the majority of the households we polled indicated that they found the media a reliable source of information on the housing market, what they read in the newspaper, saw on television or heard on the radio was no substitute for actually going out and shopping the market," says Thomas Riehle, a partner in RT Strategies, which conducted the research for NAHB.
Factors that did have an impact on the home-buying decision were:
* Price of home: 80 percent
* Potential for the new home to appreciate in value: 71 percent
* Likelihood of selling their former home at a fair price: 70 percent
* Mortgage interest rates: 69 percent
* Life changes like a new job or family member: 60 percent
For the last few months an identity theft ring has been targeting property owners, mortgage lenders and the title insurance industry -- an international scheme in that many of the suspects appear to be of Eastern European origin and much of the stolen money is being wired to accounts in Greece, the Slovak Republic, Russia, Latvia and elsewhere.
The scheme involves absentee-owned property and includes both vacant land and improved residential and commercial properties. In most of the cases reported, the true owners reside outside Florida. Additionally, in some of the cases, the properties are listed for sale through the local Multiple Listing Service (MLS).
"This involves millions and millions of dollars, and it's all over the state -- not just South Florida," says Doug Pollock,
President and Founder of Information Data Services, Inc.IDS, www.idsnetwork.com which serves the legal, corporate, title insurance and mortgage lending industry.
Borrowers continue to choose risky nontraditional mortgages, even after state and federal regulators have issued widespread warnings about the unstable and rapidly rising payments associated with this kind of financing.
About 26 percent of mortgage loan originations by dollar volume in the first six months of 2006 were interest-only loans, according to the Mortgage Bankers Association.
Another 13 percent were "option" adjustable-rate loans, which allow customers to pick their payment amount, including a low-cost choice that covers neither the full interest nor the principal.
The loans have been marketed aggressively by lenders to consumers who find them an attractive way to cope with rapidly rising home prices. Payments on the loans can double or even triple as rates adjust and reflect unpaid principal. Most home owners are making only the minimum payments, according to banking data.
Consumer demand is behind the growth in these loans, Doug Duncan, chief economist for the Mortgage Bankers Association, said in a statement. "As expected, consumers respond to changing opportunities in the marketplace, but it looks like these products serve an important need."
Let's face it, the reason most people use the "For Sale By Owner" or FSBO method is to save on the real estate commission. What those people don't understand is that the process of marketing and selling a home or condo is just that, a process. From start to finish the sale of your home can take up to six months. In the U.S.A. the National Association of Realtors (NAR) states that FSBO's sell for as much as 20% less than homes sold by Realtors. That is a far cry from the six percent real estate commission.
For a real estate agent there is one primary goal, selling your home or condo. The agent won't let his or her emotions get in the way like the owner of a home will. The truth is that most buyers feel very uncomfortable when the owner is home during a showing. Buyers tend to feel like they can't ask the questions they would like and can't voice their true opinions, so you can imagine what they feel like when they walk into a FSBO. When an owner shows their own home, they tend to make the entire experience too personal and geared toward their experiences there, and that turns off potential buyers which makes it harder to sell the FSBO.
FSBO's don't realize when they try to sell their own property that they will be subject to complete strangers walking through their home at all hours of the day. After a few weeks of FSBO's juggling their daily schedule to accommodate different buyers, FSBO's will generally get frustrated or completely stressed and call their local realtor to list their home for sale. Realtors will make sure that buyers coming through are pre qualified and looking for a property that is similar to your home.
If a FSBO does get lucky enough to finally get to contract, then comes the hard part, negotiating. Negotiating price and terms of the contract can be tricky and FSBO's tend to attract buyers looking to make low ball offers, or even worse commit fraud. They think if there is not an agent there looking out for the seller's best interest, that they can take advantage of them. Realtors are trained to spot fraud and help to keep potential buyers from bringing low ball offers.
Many times you will see FSBO's agree to accept an offer from a buyer being represented by a real estate agent, and since most serious buyers have an agent this happens all too often. This scenario can be catastrophic for the FSBO in the negotiating process. An experienced agent knows contracts and contingencies inside and out and will structure deals in the favor of their buyer. Without an agent on their side the FSBO will generally accepts price and terms far below what an experienced seller's agent would be able to get for them.
These are just a few reasons to use a Realtor when you are ready to sell your home or condo. The sale of a home is usually the largest and most stressful transaction that people make in their life, so why not make it a pleasant experience and enlist the services of a Realtor.
10. You open yourself to unneeded stress and aggravation.
9. FSBO's can be a security risk for the seller.
8. Unqualified strangers walking through your home.
7 Takes hours out of your day and some appointments never even show up.
6. You could end up negotiating with an experienced buyer's agent.
5. You may be unaware you are participating in fraud.
4. Advertising can be expensive and unreliable.
3. Most of the calls you will get will be from Realtors anyway.
2. You will probably overprice you home.
And the number one reason not to go FSBO.....who wants to ruin their weekend having an open house?
We are always interested on why people are looking for homes in South Florida. We look forward to your participation in our survey. Please give the South Florida real estate poll a second to load.
The percentage of first-time home buyers under age 25 has been increasing in response to low interest rates
As they begin to enter the housing market, many consumers in their 20s are more likely to buy a home at a younger age than their older brothers and sisters as well as their baby boomer parents, and are not necessarily waiting for marriage or even a long-term relationship before becoming homeowners.
The next generation of homeowners is beginning to exert its influence on the housing market, said Thomas M. Stevens, National Association of Realtors president from Vienna, Virginia, and senior vice president of NRT Inc. Many younger buyers have seen the wealth-building effects of homeownership in their parents and understand the value of housing as a good long-term investment.
The motivations, interests, and home buying approach of some younger buyers are chronicled in Tomorrow Buyers: Who They Are and What They Want in the September 2006 issue of Realtor Magazine. The report integrates NAR research with the experiences and attitudes of real-life buyers who represent different demographic populations, putting a human face on statistical trends.
The percentage of first-time homebuyers under age 25 has been increasing in response to historically low interest rates and continued confidence in the long-term housing market, from 11% in 2001 to 14% in 2005, according to the 2005 NAR Profile of Home Buyers and Sellers. Owning a home is no more burdensome than renting, and in the long term, it's the better investment, said Kristen Carreira, a 26-year-old homeowner in Pittsburgh.
Carreira is also part of a trend in single female home buyers. While married couples are still the norm, they represent a smaller share of the home buying public than they did just 10 years ago, from 70% of home buyers in 1995 to 61%, says NAR. During that same time, the proportion of single women buying homes has increased, from 14% in 1995 to 21%.
Younger buyers are also likely to use technology and the Internet in their home buying search. In 2005, according to NAR research, the median age of buyers who used the Internet to search for homes was 11 years younger than those who did not, at 38 and 49, respectively.
Realtors have adapted to meet the needs of this growing population of young home buyers, said Stevens. More than one-third of NAR's 1.3 million Realtor members have had special training and lots of experience in buyer representation and technology. That expertise is reflected in special designations and certifications, such as the Accredited Buyer Representative (ABR) designation and e-PRO certification. A commitment to understanding the demands of this changing marketplace is just one more way Realtors add value to the real estate transaction.
Today we just launced out new blog design for www.hansenhomesaventura.com. We would love to hear your feedback on the new look and navigation of the blog. If you have any suggestions on how we can make our blog better please leave us a comment. We also launched out new MLS listing system on the main site miami real estate . We will be adding unique features on a monthly basis. If there are any features that you would like to see please drop us a line or leave us a comment.
New mortgage applications are up. Pending home sales are up. The economy is expanding. Unemployment is at 4.6 percent. And mortgage rates are still historically low.
What kind of housing bust is this anyway?
All the dismal reports about the real estate market overlook the realities in the market place, some housing experts say.
The housing correction -- expressed through new home starts -- "may be closer to [its] trough than to [its] peak," says Federal Reserve vice chairman Donald L. Kohn.
Today's "unusually low" long-term mortgage-rate environment "stands in sharp contrast to some past downturns in the housing market that followed actions by the Federal Reserve to tighten credit conditions significantly," Kohn adds.
James Glassman of JP Morgan Chase is equally optimistic. He says 30-year fixed-rate mortgages at 5.75 percent are a distinct possibility if long-term rates in the global bond market keep easing. The current cyclical downturn in housing "is not your classic interest-rate story" he says.
Perhaps the most blunt appraisal comes from Mike Moran, chief economist of Wall Street’s Daiwa Securities America. Moran says the financial press is taking a normal and long-predicted cyclical rebalancing and "portraying it as a catastrophe."
The average household spends nearly $9,000 on products and services
linked directly to a home, or about $170 billion a year, according to a new survey by Move Inc. About half of the moving-related expenses pay for household goods and services, including home decorating, improvements and repair. People who are moving spend 60 percent more on such purchases than non-movers, the study found. The rest of the money is spent when switchingto new merchants for services like banking, cable or satellite TV, telephone service and Internet access. Movers also switch to new grocery stores, insurance companies, auto mechanics and pharmacies. The 2006 Mover Study analyzed consumers' timeline for buying
move-related products and services as well. It found that many buying decisions were clustered around the two weeks immediately before and after a move.
Since most people rarely deal in real estate transactions, terminology of the industry can be confusing and foreign. A website called www.realestatewords.com has listed just about every real estate term you can imagine with a definition. This website can be very helpful if you are dealing in any type of real estate transaction, or if you are a new agent in the business. If you are experiencing any difficulty in a real estate transaction, please feel free to give me a call for some friendly advice. I am always happy to help.
Rates on 30-year mortgages fell for a fourth consecutive week as a slowing economy eased concerns about inflation. Mortgage giant Freddie Mac said Thursday that 30-year, fixed-rate mortgages fell to 6.52 percent this week from 6.55 percent last week.
That was the lowest level for 30-year mortgages since they averaged 6.49 percent the week of April 13. Mortgages had been rising since April, hitting a more than four-year high of 6.80 percent the week of July 20 before easing down. Analysts attributed the rollback in rates to further evidence that the economy is slowing, which should ease inflation pressures. "Long term rates continue to relax as economic reports support a picture of a weakening housing sector and a slower growing economy," said Frank Nothaft, chief economist at Freddie Mac. Nothaft said this week's news that new home construction fell by 2.5 percent in July added to the belief that a slowing housing market will contribute to lower overall growth. This, in turn, will reduce inflation pressures and allow the Federal Reserve to call a halt to further rate hikes. The central bank last week left rates unchanged, breaking a two-year period of rate increases, although policymakers left the door open to further rate hikes if inflation becomes a problem. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.20 percent this week, unchanged from last week. For one-year adjustable-rate mortgages, rates dipped to 5.65 percent from 5.69 percent last week. Rates on five-year adjustable-rate mortgages fell to 6.18 percent this week from 6.21 percent last week. The mortgage rates do not include add-on fees known as points; a point is 1 percent of the total loan amount. Thirty-year mortgages and 15-year mortgages both carried a nationwide average fee of 0.3 point. One-year ARMS carried a nationwide average fee of 0.5 point, while five-year ARMs carried an average fee of 0.4 point. A year ago, 30-year mortgages averaged 5.80 percent, 15-year mortgages stood at 5.40 percent, one-year ARMs were at 4.58 percent and five-year ARMs averaged 5.34 percent.
Floridians can now apply for a free home inspection and professional recommendations on how to improve their homes' ability to withstand a hurricane.
Homeowners who undergo the My Safe Florida Home inspection may also qualify for matching grants of up to $5,000 to fortify their homes.
My Safe Florida Home is a $250 million mitigation program to help Floridians strengthen their homes against hurricanes and to reduce property losses in Florida.
The goal is "to strengthen as many homes as possible against hurricane damage," said Jeff Takacs, spokesman with Department of Financial Services, which administers the My Safe Florida Home program.
Tom Gallagher, Florida's chief financial officer and a gubernatorial candidate, said that as many as 50,000 Florida households will be served over the next year through this program. The program will help reinforce older homes -- those built prior to 2002 -- which represent 85 percent of all Florida homes, said Bob Lotane, spokesman with the Office of Insurance Regulation.
Those strengthened homes would be less susceptible to damage from hurricanes, making them more attractive to insurers, and resulting in lower premiums, Lotane said.
"If we can get these improvements on the home, the rates are automatically going to drop," he said.
But for the program to work, the premium savings would need to be high enough to justify the homeowner's cost of re-enforcing the home, said Jeff Grady, president of the Florida Association of Insurance Agents.
To be eligible to apply for a free home inspection, Floridians must live in a single-family, site-built home with an insured value of $500,000 or less and have a valid homestead exemption. Once an inspection has been done, the homeowner will receive a report within 10 days that would outline up to seven areas that could be improved to better protect the home against hurricanes. The homeowner would be provided an estimate of how much each of those improvements would cost, the expected savings if the improvements were made, and a rating of the home's current ability to withstand hurricanes.
Mortgage rates around the country dipped for a third week in a row, pushing 30-year mortgages to their lowest level in the last few months. Freddie Mac said Thursday that 30-year, fixed-rate mortgages fell to 6.55 percent this week, down from 6.63 percent last week. That was the lowest level for 30-year mortgages since they averaged 6.53 percent the week of April 20. Since that time, mortgages have been rising, hitting a more than four-year high of 6.80 percent the week of July 20.
Most analysts say that this latest decline is due to evidence that the economy continues to slow gradually. Job growth continues to look weak, and is another sign that the economy is probably slowing down.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.20 percent this week, down from 6.27 percent last week. For one-year adjustable-rate mortgages, rates held steady at 5.69 percent, the same as last week, after having been at 5.78 percent the week of July 27. Rates on five-year adjustable-rate mortgages fell to 6.21 percent this week, from 6.27 percent last week. If rates continue their decline or hold steady, this should help with sales in the real estate market.
The housing market is in a process of stabilizing with little change in overall sales volume expected over the balance of the year, according to the National Association of Realtors (NAR).
David Lereah, NAR�s chief economist, says the indicators already are leveling-off. �We�ve seen a minor easing in closed transactions of existing-home sales, and a slight increase in the leading indicator of pending sales based on contracts,� he says. �New-home sales and housing starts have been fluctuating, so the overall market is stabilizing.�
�On one hand is the rise in mortgage interest rates that has slowed sales in many higher-cost markets, and on the other is 3.8 million new jobs over the last two years,� Lereah adds. �This means many potential homebuyers could enter the market in the foreseeable future, especially in moderately priced areas where affordability conditions remain favorable. In fact, this is already occurring.�
Although sales will be fairly steady over the balance of the year, declines since last fall mean annual totals will be lower. Existing-home sales are forecast to fall 6.5 percent to 6.61 million this year, the third highest on record after 2005 and 2004. New-home sales are projected to drop 12.8 percent in 2006 to 1.12 million, also the third best on record. Housing starts should be down 9.1 percent to 1.88 million this year.
The 30-year fixed-rate mortgage is running nearly a percentage point higher than a year ago but is likely to rise very slowly in the months ahead, reaching 6.9 percent in the fourth quarter.
NAR President Thomas M. Stevens says current market conditions are favorable for buyers. �The rise in housing supply is the biggest change in the market over the last year,� says Stevens. �Clearly, this has taken pressure off of home prices and has significantly widened choices for buyers. At the same time, sellers are getting excellent returns -- but in this competitive environment they need real estate professionals more than any time since the 1990s to market their homes and maximize value.�
The national median existing-home price for all housing types is forecast to grow 4.3 percent this year to $229,000, while the median new-home price is expected to rise only 0.5 percent to $242,100 as builders offer incentives to clear unsold inventory.
The unemployment rate should average 4.7 percent for the balance of the year. Inflation, as measured by the Consumer Price Index, is likely to be 3.5 percent for 2006, while growth in the U.S. gross domestic product is projected at 3.5 percent. Inflation-adjusted disposable personal income is expected to grow 3.0 percent this year.
Population is the driving force in any real estate market. Each day 1,000 new permanent residents move to Florida. Most of the incoming population will move to South Florida. Florida is adding more residents than any other state.
Population Growth - Florida population will double by 2040. This is the equivalent of moving everyone now living in Pennsylvania and Maryland into Florida. These residents will need housing and would be willing to pay a lofty premium to be in the coastal region. In addition to this significant increase in housing Southeast Florida also benefits from a huge second home market discussed below.
Second Homes � South Florida is a prominent second home market, attracting international and U.S. buyers.
Baby boomers are in their peak earning years and many have purchased second homes, which often become retirement homes. The baby boomer impact will continue for another 10 to 15 years.
U.S. Migration to Florida - Home prices are getting big support due to many wealthy Northeasterners moving into Florida. They are selling their pricey homes in Boston and New York and elsewhere . . . and have the financial equity and capability to pick up - relatively speaking - affordable homes in Florida. Florida has the highest net in-migration in the country. According to the U.S. Census, 541,000 people moved to Florida from other states between 2000 and 2003. Certainly, Southeast Florida is a huge contributor to the figure. Again, these figures do not include either second home buyers or our large international buyer market� major additions.
Second Home, Vacation, and Investment Property Buyers
A recent study released by the National Association of Realtors� (NAR) shows sales of second homes surged in 2004, certainly continued in 2005. Investment property and second homes now make up more than one third of all residential transactions. South Florida�s unique market and location coupled with the continuous real estate growth make it a prime area for unprecedented buying opportunities � now and in the future.
