Janice Petteway

Florida, the land of perpetual summer, is finally emerging from the economic winter that has characterized our state for the last few years. According to an indicator compiled by e-forecasting that shows economic direction, the state has shown dramatic improvements since its low point in April, 2009 and will show positive improvement for the first time since November, 2006. Increases in indicator scores often signal general economic improvement in the following months, which bodes well for business in 2010.

Nationwide, the indicator is based on 10 factors

1. Unemployment claims

2. Improved outlook for international travel

3. Increase in consumer sentiment

4. Rising national stock markets

5. Improved interest rate spreads

6. Boost in the national technology index

7. Building permits

8. Weekly hours for production workers

9. Manufacturing exports

10. Willingness of U.S. residents to take vacations

The last four factors are still lagging in most states. These things tend to show improvement (or decline) before the state economy does. Since the Florida economy is so dependent on tourism, discretionary spending, and construction, recovery in the state tends to lag behind national recovery.

While business owners haven't seen a major turnaround yet, University of Florida researchers seeing rising consumer sentiment. When consumers feel more confident, they increase spending, which impacts other factors. This is great news for Florida , which has been among the hardest hit state in the current recession.

An improving economy makes it a great time to buy a home or condo. Prices remain low and inviting. If you are looking for your first home in the Orlando and other Central Florida cities, Janice Petteway and the Exit Results Real Estate team can help you find the home of your dreams.

Now is the time to purchase your first home. Not only is the $8,000 first time buyers credit a great incentive for some, The Orlando Regional Realtor Association just announced that the month of August brought the Orlando area a surprising median home price drop to $128,000.

In August, Orlando Realtors sold 2,115 homes, a 65 percent increase when compared to the same time last year. Last month's sales included 850 bank-owned transactions and 188 distressed properties. These two categories accounted for 49 percent of the sales.

Home Sales UP!

There was a 71 percent increase in existing home sales in the Orlando metropolitan statistical area, which includes, Lake, Orange, Osceola, and Seminole counties. In August 2008 the total amount of home sales in the Orlando metropolitan was 1,589, compared to 2,720 this year.

Prices Down!

The median price range for homes was $84,050 for bank-owned, $125,800 for distressed, and $165,000 for a conventional transaction.

The increase in home sales is attributed to the drop in prices. The August inventory is 34 percent lower than August 2008.

Optimism continues since pending sales have more than doubled from 3,220 in August 2008 to 8,237 last month. There were 3,324 sales contracts filed last month, which is a 96 percent increase when compared to August 2008's 1,699.

Affordability

The Orlando affordability index saw improvement with lower median home prices that helped the index rise to 193 percent. An affordability index of more than 100 qualifies those earning the state median income of $52,535 to qualify to buy one of 8,964 homes in the multiple listing service for the maximum of $257,142.

The first-time homebuyer affordability increased to 137.5 percent last month. That means a first-time buyer earning median income of $35,724 would qualify to buy one of 5,629 area homes priced up to $155,428.

In August 2009, the typical home spent an average of 93 days on the market before being sold at 94 percent of its listing price.

Great Condo Values!

Condos also had excellent resale numbers, at nearly four times higher in August of this year when compared to last year. There were 116 condos sold in 2008 compared to 417 last month. The best selling price range for condos was for $50,000 and under with 223 closings. The $50,000-$60,000 price range had 54 closings and only seven units sold for more than $250,000.

Now's the Time

With so many incentives to buy, don't let $8,000 in free money slip by. Time is ticking away on your first time homebuyer credit opportunity! Some good supporters like the National Association of Realtors and National Association of Home Builders are behind efforts to extend it. With health care and other spending priorities on Congress's plate, there is no certainty that it will be extended.

The deals are so good that any homebuyer will benefit from making a move now. If you are looking for your first home in the Orlando and other Central Florida cities, Janice Petteway and the Exit Results Real Estate team can help you find the home of your dreams.

Maybe you have heard so much about the $8,000 first time homebuyers credit that you don't even listen any more. But if you are in a position to buy an Orlando home right now it is time to listen up: the tax credit is about to expire on November 30. Since processing your loan, appraisal, and paperwork for the home takes longer these days, October 15, or to be safe, even October 1, is the deadline. Only those who have closed on their homes before December 1 can claim the credit.

You know the basics of the credit: you can get up to $8,000 or 10% of the value of the house for your purchase. Did you know though, that the credit is good on a variety of single and multipurpose dwellings, including mobile homes? Maybe your first home is not what you want in the long run, but all you have to do is live in it for three years. You can sell it and apply the equity toward the downpayment on your next home.

At the moment in Orlando, there are plenty of bank owned properties up for grabs. If you want to buy them, renovate them, and flip them, the credit is not for you. But if you buy one, you can use the $8,000 credit in conjunction with a 203K loan to renovate a primary residence where you will live for three year before you sell it or rent it out. If you want to be a landlord, you can buy a two family now, live in one suite, and convert the other to rental property in three years.

In general, homes are affordable. Recent figures from the Orlando Board of Realtors indicate that the median sales prices in Orlando is $128,000. The affordability index is now 193% which means that a family earning $52,535 can afford to buy one the 8,964 selling for up to $257,142. For first time homeowners, the index is 137.5%. First time homebuyers with a median income of $35,724 can buy one of 5,629 homes in the MLS. Home prices are 36% lower than in August 2008.

As a new homeowner, $8,000 can help you in many ways.

Since you have to claim it as a credit, the $8,000 in cash will help you get the things you need for your home and subsidize your first few mortgage payments. Cash is often tight when you move in. Who wouldn't like to have Uncle Sam buy new drapes, put on a deck, or re-landscape the yard? Or who wouldn't like to transition from an apartment to a home with a cushion of money?

Knowing that $8,000 is enroute can help you get more home than you planned. It is never a good idea to buy more home than you can comfortably afford, but the credit can effectively bring down the cost of the home so you can buy a home at the upper end of your price range. Since many lower-end homes are going quickly in Orlando, it is to your advantage to be able to look at a wider price range of properties. Since many homes are already priced to sell at incredible prices, you can still plan on lowering your total lower cost by $8,000 when you apply this credit to the principle.

If you need the money toward a down payment, there are several ways to do use it for this purpose. As a result of a new policy change announced in May, 2009, you can have the credit monetized for any part of your down payment over the3.5% required by FHA or can use it toward closing costs. You can also go to a state housing agency, certain non-profits, or certain lenders to have the credit monetized via a bridge loan or second mortgage to be repaid when the credit comes back. If you are short on your down payment or need help with closing costs, the credit could help you now.

Need a home? Have questions? Janice Petteway and the Exit Results Real Estate can show you the best properties in Orlando and other Central Florida cities.

Imagine buying your Orlando dream home and experiencing a string of problems with it before you've even written the first few mortgage checks. The house has a funny smell and your wife and kids have had headaches and nosebleeds ever since you moved in. After you've lived there awhile you notice that the copper pipes, electrical wiring, and air conditioners are corroding as well as your microwave, phones, & computers. You fear that the drywall could be a fire hazard.

Imagine being a builder in the midst of one of the worst times in recent history for new home construction. You had built a few hundred homes in Florida just as Hurricane Katrina rebuilding was in high gear, and drywall supplies were short, so you used Chinese drywall to finish the job. Now, a couple years later, complaints are flowing in about peculiar things happening in the homes. Your inspections find that the wall board used in the home could be causing the problem, so you sue a major foreign supplier along with drywall suppliers and installers. Choosing to be pro-active in fielding customer complaints, you set aside $40 million to fix the 400 homes involved. Your action solicits a similar response for some other builders, but not all.

The scenarios described above are real life horror stories for builders and homeowners throughout the U.S. Some 500 million pounds of Chinese drywall was imported and installed in 100,000 homes between 2006-2007. Half to two thirds of the supply was used in Florida, but consumers from 23 states have complained to the Consumer Product Safety Commission, which set up a Drywall Information Center. Fixing the problem - replacing the drywall and the corroded systems - is expected to run over $100,000 per home. These figures might not include any additional costs for the homeowners to paint or wallpaper the wall surfaces or for other personal property destroyed by the chemicals in the drywall, or for health care for drywall-induced illnesses.

The Environmental Protection Agency (EPA), U.S. Consumer Product Safety Commission (CPSC) and the Florida Department of Health (FLDOH) are all testing samples of the drywall to discern the dangers it poses. No one questions that the homes smell but the issue at hand is whether the drywall is poses a verifiable health hazard or other safety risk. On August 22, the CSPS and FLDH released a report that declared the drywall did not emit dangers levels of radioactivity.

Knauf Plasterboard Tianjin, the manufacturer named in the lawsuit by builder Lennar Corp., concedes that its drywall emits carbon disulfate and carbonyl sulfide, but not as levels that could harm health. They say the health complaint are "non-specific" and could be caused by a number of things. FLDOH and CPSC tests are evaluating these claims while pondering the question of whether it is safe for people to stay there in the meantime.

Attorneys for Knauf have conceded that the sulfate gasses emitted do corrode metal but do not pose a fire hazard. They have ruled out their method of extracting gypsum for the wallboard in the manufacturing process and have localized the smelly drywall. They believe that one mine in Shandong Province produces a foul smelling off-color gypsum used on some product. The CPSC is trying to figure out why this drywall is emitting more sulfur-compound gases that domestic drywall

Knauf supplied only 20% of the drywall shipped in the U.S. between 2004-2007, but did not ship any after October, 2006. They are examining ways to remedy the problem without tearing out all the drywall. Regardless of what they come up with as a way to make things right for their customers, that leaves the responsibility for fixing the other 80%.

As the testing continues and the lawsuits pile up, consumers wait. Even if all the testing somehow determines that the drywall does not pose a health or safety issue, the homes still smell. No one want a pricey home that smells like a sewer. Hence, our final scenario:

Imagine owning a home that smells, causes respiratory distress, and cannibalizes the systems that make your home function - regardless of what the government tests conclude. You want to sell in a market that is already problematic, either to get away from this home or because you've been transferred out of state. You're already prepared to take a beating on your $320,000 home due to the market, but your online research indicates that if you disclose the problems in the home (a legal and moral requirement), the value could drop to $20,000. Your builder won't help you, your homeowners' insurance doesn't cover construction defects, you can't afford to get the house stripped of bad drywall and replace corroded systems or relocate while the home is renovated. You are strongly tempted to walk away from the home mortgage...

The way this drama plays out will have a big impact on the housing market in Florida and throughout the country. Stay tuned for updates from Janice Petteway. In the mean time, want to make sure the home you buy is free of Chinese drywall problems? Call Janice at Exit Real Estate Results for trouble-free Central Florida homes.

This warm but rainy August day offers a good chance to look over the highlights of Orlando real estate happenings. In a nutshell, sales are up, prices are down. Foreclosures are skyrocketing, which may assure future sales and affordable prices. At the moment, 84% of the nearly 17,000 homes for sale are foreclosed properties.

Sales are up. Single family sales in Florida rose 23% in the second quarter of 2009, while condo sales rose 29%. In the Orlando area, the increase was 36% for homes and almost 300% for condos. This is a vote of confidence for the Orlando area and living proof of how affordable housing sells.

Prices continue to fall. Spurring increasing sales were decreasing prices. Median sales prices statewide are $143,600 down from $203,200 a year ago. Condo prices are $111,000, down from $179,800. For Orlando, the figures for median home sales are $144,400 from $216,000 last year, while condos dropped to $52,000 from 127,000, a 59% drop. These trends mean that housing is very affordable, especially to first time buyers. According to area appraisers, property values are back to 2003 levels, when the Florida market was steady. This is good news to sellers who won't have to continue to decrease their asking price, while buyers feel confident that their new home won't lose much value.

Foreclosures continue to rise: The sunshine state was second only to Florida in July foreclosures, as nearly 57,000 homes were in some stage of the process. This is up 37% since last July. Orlando County showed a 41.9% increase, Seminole 67%, and Lake 50%Only nearly Osceola dropped by 19%. This may be a devastating circumstance for displaced homeowners but buyers have steady variety of homes.

Days on the market down. An average central Florida home is on the market 3.47 months or 104 days, a 2007 level. Though this means that successful sellers have to price their home right (which may mean less than they would like) this means buyers will have a fresh supply of homes as older ones drop form the market.

High percentage of cash sales. Nearly 43.5% of May and June home sales were cash transaction, while 26.2% were financed via conventional loans and 21.6% FHA. Less than 1% are ARM adjustable loans. This reflects increasing confidence that housing is a good enough investment to tie up money in. Unlike much financing in the past, the new sales are equity based.

Right now, first time homebuyers still have a couple months to take advantage of the $8,000 tax credit. Getting free money is always a great deal but when you can use it to reduce your housing costs, that's even better. Fulfilling a dream like home ownership is a wonderful achievement but it's better if you can get more for your money like you can right now.

Janice Petteway of Exit Real Estate Results can show you new and pre-owned homes, including foreclosure and bank owned bargains in Central Florida.