Allison Stewart BROKER/ASSOC/REALTOR ®St. Cloud Florida

In times of economic uncertainty listlessness not only affects professionals in Real Estate it affects sellers, and builders as well. They seem spiritless, having little inclination to fully understand how Prime Rates, Mortgage Rates and Consumer confidence affect demand, and impact a price driven Market.

Sellers have been cadging professionals to facilitate transactions. The Red "Cadge" of Courage aka begging for offers on behalf of the customers we serve may have finally paid off.

A reported improvement in certain markets suggests home sales are on the rise. Fueled by Bank Owned properties facing "fire sale" pricing in combination of repackaging loans to new buyers, (to help reduce the liability columns on the bank books) historic low prices are attracting investor and new buyers to a once forbidding market.

Nearly three years after the bubble burst-hope is renewed for new buyers. As prices return to preinflated ranges, affordable housing has risen from ashes much like a Phoenix. Mortgages are at near historic low levels, and the rate for new mortgage applications to QUALIFIED buyers is also on the rise. The readjustment in Property Value Assessments, will also encourage bargain buyers to continue their pilgrimage back to the housing market.

As a result, Sales are perking up. Not only in Florida, but in several regions across the country. In the past two weeks we had a surge of buyer interest-triggered in part by professional investors who often are again of Market Trends-indicating the time to buy has arrived. Don't be surprised if suddenly the media changes its tune as the numbers begin to reflect a rise in existing home sales. While it may be some time before we see a surge as we did in 2005. due to the increased availability of homes for sale (new construction) , the inventory of exisiting homes (foreclosures) and time required to achieve a sale should decline proportionately as these homes rotate off the inventory.

New pricing, creates renewed interest. Much like the "After Holiday Supersales"...Real Estate is now attracting bargain hunters in larger numbers. There are some very good values in renovated retired rentals, builder inventory homes, and of course the glut of foreclosed homes over the past two years.

There is little consensus among experts these days on when the Real Estate Market will bottom out. Some predict the market won't hit bottom until 2010-while others argue that the last quarter of 2008 will see improvement in market conditions overall. Is the glass half empty or half full?

Amidst the conflict in expert opinions and market data interpretations of sales achieved and inventory status of existing homes, there is a crystal clear view beneath it all.

While the statistics suggest that the median price of existing homes has fallen yet again, it is in the wake of hyper inflated value.

In 2003 the median price for a home in Florida was $151,000. Today the median price is 198,000. An INCREASE of 30.9%

HOMES HAVE ALWAYS BEEN LONG TERM INVESTMENTS

A home purchased in 2003 despite the radical Market swings has still achieved a net gain of 6.19%. Historically over a 33 year period of tracking home price fluctuations, this seems to suggest that the market is stabilizing.

In addition Mortgage rates are approaching a 40 year low.

According to FAR. "Florida's median sales price for existing homes last month was $198,900; a year ago, it was $239,000 for a 17 percent decrease. But, looking back to April 2003, the statewide median sales price for single-family homes has increased about 30.9 percent over the five-year-period, according to FAR records - at that time, the statewide existing-home median price was $151,900. The median is the midpoint; half the homes sold for more, half for less."

Foreclosures have spiked in Osceola County, Florida 76% over the same period last year. From 135 in April of 2007 to 563 in 2008. As Lawrence Yen, Chief economist of the National Association of Realtors said, "there is plentiful supply".

What fueled the housing boom was a shortage of existing homes.

THE SHOE IS ON THE OTHER FOOT

Now that Bank Owned Real Estate inventories are pregnant with multitudes of properties, the concern most lending institutions have, is focused on slowing down the growth rate of the foreclosed properties.

The reclaimed properties represent more mouths to feed, added expenses in legal costs, carrying costs, and community fees. They answer to many unhappy investors with insatiable appetites for gains, not losses want to liabilities converted back to assets.

Banks are now slowing the caravan to the Courthouse down.

For consumers this means that the roll back pricing to the pre-boom era is in fact good news. Yes, the decline is favorable.

It ripens the market for achieving the pick of the crop in existing homes. The decline is being measured from the hyper inflated values achieved in 2004-2005 when prices fueled by the home shortage spiked off the chart.

What made Florida appealing to home buyers was the value they could achieve when compared to similar properties in other regions. In other words, Florida was affordable. During the surge to buy in 2005, many buyers found themselves shut out of the market as priced rose daily-much like gas prices these days.

It is a matter

of Perspective

For some the shoe may still not fit,

for others, it may feel just right.

It is called the Domino Effect when ones falls they all fall. This applies to sales as well. For months buyers have been teetering. Wondering when the bottom will come. The phones have been ringing off the hook. It only takes one offer to start the block's gentle sway back and forth. Finally that is startings to happen.

By working contacts and keeping in touch it is possible to shift buyer opinion as to when the timing is right.

These are exciting times. After months of bad news buyer and investors know the timing is favorable to get great properties at prices they want to pay.

Making this work for you is one way to get the Dominos in perfect alignment for them to fall into contract once the first offer comes in. There is safety as well as power in numbers.

After a boost to the Stock Market this week, and subsequent drop has triggered the number of showing calls which was remarkably improved. Buyers are out there. They are cuatiously exploring options and testing the waters.

For too long many professionals in Real Estate have been skeptical of buyers. There was a wave of Hopefuls following the housing boom- however nearly three have passed since the Market Adjustment first kicked in. In Osceola County, Florida we have seen a large number of seller witrhdrawing homes for sale willing to wait it out until the Market Improves. stimates vary on how long a full return to previous will take.

The wave of foreclosures and banked owned properties have reset Market Value to new lows. Banks willing to take drastic reductions and Builders Liquidating Inventory homes have helped to generate competition among buyers seeking new or newer properties at reduced prices. In attempts to improve cash flow, many lenders and Builders are considering offers once considered to be unacceptable.

FHA has loosened lending requirements, assisting many first time would be home owners in transistion from renting to buying.

CASH IS STILL KING

Even in the Great Depression there were a select few who knew how to make money by buying when everyone else was selling.

The same still holds true- by buying when prices are low and holding until they go up, these select few are hedging inflation by being proactive now.

By the time the masses return to market, they will making handsome returns on their investments.

This is true in any recession. There are always top tier buyers who often are not local, who have the funds to purchase when local people cannot. We see this most often in Florida. Our economic base is tourist driven. When times are tough here, they are very inviting for foreign guests and well paid northern counterparts.

Bad nightly news is good news for those people who have been watching closely what happens here.

The Canadian Market by contrast in booming. Our neighbors to the North are experiencing what happened here in 2005 is now happening there particularly with condo sales.

So despite bleak economic forecasts the benefit to anyone jumping in the game now is that you will in the long run find you made a good deal.

It may not be only the what we know...but our ability to share what we know with people who are serious about moving forward towards the closing table.

As some of you may be aware the market has hit bottom. First to jump on the encouraging market news was the WALL STREET JOURNAL, expect the others to follow shortly. What needs to be said is the "sluggish market" is now almost three years old. The market stalled in July 2005. Price declines have reverted to 2003 levels.

What differs in this market reversal when compared to previous recession declines is the affordable rate of mortgages. When compared to 16.8% in 1981 for example, today's mortgages are affordable for average people.

As a result of huge market inventory (11 month supply Nationwide) early indicators the housing slump is coming to completion in the very near future. Experts predict will see a rise in prices closer to the end of 2008 and 2009 as the existing foreclosures rotate off the current market inventory.

On a local level- pending sales and completed sales in Osceola County Florida are already on the upswing. While inventory levels remain high, sales are being achieved.

Speculators who waited it out and were looking to capitalize on the influx of foreclosure homes currently available, have made some excellent purchases.

Real Estate is a long term investment. Those people who are purchasing now are discovering the numerous choices they have available in low end price ranges. Unlike the previous market. These properties will achieve gain as the market continues to rise.

The newest tool is the Bill passed by the House increasing FHA limits and making it possible for current homeowners to revise high mortgages to more affordable levels; thereby keeping them off the market and aiding in the inventory surplus.

As the good deal come off the market, banks liquidate excessive inventory, new buyers will have opportunities to acquire freshly remodeled affordable housing at unprecedented levels. This moiety of delicious mortgage interest rates and reduced priced housing is a feast sure to satiate hungry buyers.

The local news, will now bgin to slowly report gains inthe Real Estate Market as the bottom has arrived.

How can bad news be good? The media is all about sensationism. Sensationalizing bad news primarily appealing to morbid "better him than me" thinking. Bad news somehow makes us feel better about ourselves.

Fortunes are made based on two primary elements. Opportunity and Timing. Experts agree the market has bottomed out in many areas. This is not good news..it is GREAT news. The elements are in place. Unlike the masses successful investors know bad news is great news.

Recently a "fire sale" price reduction sparked excitement which remarkably caused a spiked in showings at Villa Sol in Kissimmee Florida. Capitalizing on unprecedented price reductions, sensationalism created the motives investors seek to expand their wealth.

An unprecedented price reduction in this resort community created a flurry of showings, where competing buyers had an opportunity to see other investors looking to capitalize on reductions of inventory Town Homes offering a savings of as much as 32% off previous asking prices. Buyers have been shielded from one another for the most part. Leading them to believe they are alone.

Inventory Homes offer the best opportunity for the quickest recapture. WHY? No need for repairs. Unlike their counterparts, Foreclosures, and short sales. These inventory homes have never been lived in.

They are still Brand New, immaculate and can close without long delays from loss mitigators or foreclosure departments.

MOST BUYERS ARE UNAWARE THEY ARE NOT ALONE

For competing Buyers to have the Opportunity to see that they have tangible competition is stimulating. It creates a sense of urgency. With only a few units remaining, quickly moving buyers got the best deals.

Consult a Realtor® they know what is hot and where it is.

Wealth is built on timing and opportunity. Those willing to run against the current of popular belief, will no doubt sew the seeds for future wealth.

Looking to create your future wealth?