Tracey Clay

Part of the Washington Stimulus Package from both last year and this year was the creation of an income tax credit for first-time home buyers. One significant change to the original credit this year was that the amount of the possible credit was increased to $8,000, up from $7,500 and that it does not have to be repaid.

Let's review the last part of this one more time. The tax credit extended does not have to be repaid. This means that if you qualify for an $8,000 credit, it is free money for you to choose what to do with at your discretion. If you have some revolving debt you want to pay off, so be it. Have a car loan less than $8,000, pay it off. Want to start a savings plan with the money because you have all your other ducks in a row? Congratulations, you are on your way!

There are some restrictions including maximum personal or household income and an expiration date of November 30, 2009 but if you qualify, get busy shopping. This is a great benefit we will likely not see again. The National Association of Realtors has reported that if Congress does revisit the tax credit, it will not likely occur before October.

Florida's existing home, condo sales up in June 2009

August 03, 2009 - Special to the Daily News

ORLANDO - Florida's existing home sales rose in June, the 10th consecutive month that sales activity showed gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors (FAR).

Statewide sales in June also increased over the previous month's sales level in both the existing home and existing condominium markets. And, for the second month in a row, the statewide median sales price for existing homes was higher than the previous month's statewide median.

Existing home sales rose 28 percent last month with a total of 15,850 homes sold statewide compared to 12,339 homes sold in June 2008, according to FAR. Statewide existing home sales in June increased 13.8 percent over May's statewide activity.

Florida Realtors also reported a 39 percent rise in statewide sales of existing condos in June; existing condo sales last month rose 8.3 percent over the total units sold in May.

Sixteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in June and 14 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for the past year (12 consecutive months).

Florida's median sales price for existing homes last month was $148,000; a year ago, it was $205,300 for a 28 percent decrease. However, the statewide existing home median price in June increased 2.49 percent over May's median price; it also was higher than the statewide median price reported each month since the start of 2009. According to housing industry analysts with the National Association of Realtors (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in May 2009 was $172,900, down 16.1 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $284,000 in May; in California, it was $267,570; in Maryland, it was $265,724; and in New York, it was $189,000.

NAR's latest housing industry outlook notes the $8,000 tax credit for first-time homebuyers is boosting the sector. "Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade," said NAR Chief Economist Lawrence Yun in a press release to the Daily News.

"However, the increase in sales is less than expected because poor appraisals are stalling transactions. The big question is how much the appraisal issue will impact the ability of contracts to go to closing."

In Florida's year-to-year comparison for condos, 5,241 units sold statewide compared to 3,771 units in June 2008 for a 39 percent increase. The statewide existing condo median sales price last month was $112,900; in June 2008 it was $180,400 for a 37 percent decrease. The national median existing condo price was $173,800 in May 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.42 percent last month, down significantly from the average rate of 6.32 percent in June 2008, according to Freddie Mac. FAR's sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state's smaller markets, the Punta Gorda MSA reported a total of 216 homes sold in June compared to 196 homes a year ago for a 10 percent increase. The existing home median sales price was $145,600; a year ago, it was $141,000 for a 3 percent increase. The market's existing condo median price last month was $140,000; a year earlier, it was $160,000 for a 13 percent decrease.

Where do home prices really stand?

NWF DAILY NEWS

June 29, 2009

WASHINGTON - Is the historic U.S. housing market crash close to being over, or is the end still far, far away?

While sales finally seem to be stabilizing, prices are still are likely to keep sinking well into next year and maybe longer. Prices have been cut in half in Las Vegas and Phoenix, according to one popular home price measurement.

But statistics like these mask the many complexities involved in trying to measure U.S. home prices.

Every home price gauge captures a somewhat different slice of the housing market, even when they all depict the same general trend.

Also, all real estate is local - some neighborhoods have largely escaped the housing bust, and price declines can vary sharply within a single metro area. In many parts of the country, faraway suburbs, where many buyers moved into new subdivisions and stretched to qualify for mortgages, have been hit harder than established, wealthy enclaves.

Here are some answers to common questions about how home prices are measured.

Q: How far have national home prices fallen?

A: It depends on what measurement you use. But according to the Standard & Poor's/Case-Shiller National Home Price index, the measure that's most widely watched on Wall Street, home prices have fallen 32 percent after peaking in the second quarter of 2006.

Q: How much will they drop in the future?

A: Analysts expect national prices to drop another 10 to 15 percent over the next year, depending on how long the recession lasts and its severity.

Markets that were last to be hit by the housing bust will be the slowest to emerge. Deutsche Bank, for example, projects prices in New York are still likely to fall another 40 percent. Los Angeles, meanwhile, has only another 11 percent left to go, according to the Wall Street firm's forecast.

Q: Do real estate agents have anything to say about home prices?

A: Yes. The National Association of Realtors' median home sales price - collected from real estate listing services around the country - is another prominent measurement. It peaked at $230,300 in July 2006 and has since fallen about 25 percent to a median of $173,000 in May.

Q: That's pretty easy to understand. Why not just use that?

A: Economists don't like using median prices because they can be skewed by a change in the mix of properties that sell in a given month.

A median is the point at which half of the prices are above, and half below. If many low-end properties sell in one month, that will push the median lower; if many high-end properties sell, the median goes higher. Economists want to make sure their data isn't distorted by those natural fluctuations.

Q: How do you fix that problem?

A: Economists have created indexes like the Case-Shiller reading that examine price changes for the same properties over time instead of calculating a median price for all houses sold during a particular month or quarter. Doing so prevents the data from being skewed by changes in the mix of houses sold.

Q: Does the government collect similar information?

A: Yes. One index, created by the Federal Housing Finance Agency, is calculated solely using loans that are bought or backed by government-sponsored mortgage companies Fannie Mae and Freddie Mac.

Importantly, that excludes many high-end properties, as well as many properties bought with some of the riskier varieties of home loans that went sour this year. Also, if an investor pays entirely in cash, those transactions are excluded.

As a result, this index paints a much more tempered picture of the housing bust. It shows home prices dropping by just over 11 percent from a peak in April 2007.

"It's missing much of the action," said Dean Baker, an economist and co-director of the liberal Center for Economic Policy Research in Washington.

By contrast, the Case-Shiller index, developed by Yale University economist Robert Shiller and Wellesley College economist Karl Case, peaked in mid-2006 and has shown far more rapid and dramatic declines.

Q: Which one is better?

A: Both are valid measurements - they just measure different things, experts say. Nevertheless, investors will be far more interested when they finally see some consistent positive trends in the Case-Shiller index - most likely a substantial slowdown in the rate of decline. That's likely to mean that the housing bust is finally wearing down.

Q: When will that finally happen?

A: It could be at least a year, economists say.

"House price trends, they're more like Mack trucks than Porsches," said Mark Fleming, chief economist with First American CoreLogic, which has its own home price index. "The truck is still in reverse."

Q: What impact do foreclosures have on prices?

A: They drag them way down. In fact, many real estate agents say that when you factor out foreclosures and other distressed properties, their markets look a whole lot healthier.

In Minneapolis, for example, median prices were down about 22 percent to a median of around $123,000 in the first three months of this year for distressed properties, but declined less than 4 percent to a median of $212,000 for traditional, non-distressed sales.

"We describe our market as a tale of two markets," said Mark Allen, CEO of the Minneapolis Area Association of Realtors.

Federal Reserve Surprises Financial Markets

Here we go again, with the talking heads on financial news misinterpreting the impact of the Fed's actions on home loan rates.

Here's the scoop. What the Fed just announced is huge - they have committed to buy another $750B in Mortgage Backed Securities, and $300B in Treasuries.

But what does this mean and why do you care?

Their actions provide a demand for Mortgage Backed Securities, which should help keep a ceiling on home loan rates moving much higher in the foreseeable future. That's good news, for homebuyers who are seeing the bargains out there and understanding that now is the time to act. Good news for those who are ready to refinance too.

But an important distinction - this does not mean rates may move significantly lower. Depending on exactly which coupons the Fed purchases when they go shopping for Mortgage Backed Securities, their actions may keep a lid on rates, but not push them very much lower. And based on what they've been buying since the beginning of this year when they started their purchasing program - that is exactly how it has played out.

Present home loan rates are within inches of historic lows. What is keeping you on the sidelines from acting now to refinance and get some dollars back into your own pocket, where they belong - or moving forward to buy the home of your dreams, while it is still on sale?

Unlike densely populated South Florida or theme-park epicenter Orlando, the western panhandle of Florida has no big cities, and trendy nightclubs are few and far between. The region is not exactly sleepy, with plenty of golf courses and resort developments, but for many years it hasn't drawn much attention from second-home buyers beyond nearby Louisiana, Texas and Alabama.

Not so any longer. Attracted by some of the best values in Florida (not to mention some of the state's most acclaimed beaches), buyers from all over the USA and Canada are heading to south Walton County. A new international airport scheduled for 2010 may bring them from even farther.

The main selling point is sand, so soft and white locals call it "sugar sand." The 26-mile stretch of coastline that constitutes the beaches of south Walton County has 14 towns or communities - including Seaside, the locale for the fictional picture-perfect town in the film The Truman Show. All 26 miles have been certified "Blue Wave Beaches," an environmental seal of approval from the Clean Beaches Council.

The entire strip is on a narrow peninsula between the Gulf of Mexico and Choctawhatchee Bay. More than 40% of the region is owned by the state and protected from development. There are numerous state parks and preserves, as well as an extensive network of protected sand dunes. All of it is linked by more than 200 miles of bicycle paths and hiking trails. But the landscape is not all nature: The strip has about a dozen golf courses.

The 14 communities are each distinct - some gated, some not; some planned, some evolved. The best known are Sandestin, Seaside, WaterSound and WaterColor. Among them, they contain an array of restaurants, art galleries, shops and recreational facilities. Most have a mix of houses, townhouses and condos. Prices also are diverse, from just over $100,000 to several million dollars.

"Compared to south or central Florida, we have a huge variety of product with a large number of affordable homes," says Joe Bracciale, director of real estate sales at Sandestin.

A look at three south Walton County neighborhoods

• WaterColor. This 500-acre mixed resort and residential development (watercolorflorida.com), designed in traditional Southern style, includes a boutique hotel, spa, beach club, marina, shops and restaurants. Residents also have access to a nearby Tom Fazio golf course. Home sites range from $96,000 to $1.5 million and houses from $575,000 to $4.6 million. The master plan calls for 1,140 homes.

• Sandestin. This huge development (sandestin.com) contains 30 subcommunities on 2,400 acres with thousands of homes and condos, some in high-rises. It also has four golf courses, a tennis club, spa, marina, 7 miles of beach and coastline, a shopping center, pedestrian retail village, 20 restaurants and several hotels. Condos begin as low as $129,000, and houses run as high as $3 million to $4 million, but "the majority of our residences are in the $250,000-$600,000 range," says Joe Bracciale, director of real estate sales.

Town of WaterSound. A sister property to WaterColor, this development (watersoundbeachclub.com) includes three neighborhoods, all designed in an architectural style inspired by Nantucket. WaterSound Beach is a gated, 256-acre beachfront community with mostly private homes. It has lots from $275,000 and houses from $865,000. WaterSound West Beach is a 62-acre coastal community surrounded by protected land with fewer than 200 home sites. Lots begin at $159,000 and houses at $699,000. WaterSound, on 1,400 acres, has the most residences planned, more than 1,200, and the most amenities, including a golf course and extensive trails. Lots start at $59,000 and houses from $459,000.

http://www.usatoday.com/travel/destinations/secondhomes/2009-01-15-south-walton-florida_N.htm