Brevard County Market Watch 12
Sales of single family homes in Brevard County were up by 16% at the end of 2009, the first substantial increase since 2005. But, the median price was down by 17% to $104,100 from a year earlier. Statewide the median price dropped by 10% to $140,400. Home prices across the nation, on average, have seen a 1.5% increase.
New guidelines and changes in the real estate market are being made on a regular basis. We are hearing that interest rates on mortgages will begin inching their way upward, soon.
Effective Jan. 1 new lender disclosure rules apply when buying a house. To alleviate fraud and confusion that plagued buyers in years past, mortgage lenders are required to provide a Good Faith Estimate of closing costs within 72 hours of making loan application. They must now use a 3 page standardized form, so a buyer is able to compare apples to apples when comparing closing costs of multiple lenders. Lenders must disclose prepayment penalties, an increase in interest rate or a balloon payment; including when and how much. A new table on the GFE outlines comparisons to show the difference between paying more in upfront costs, with a lower interest rate vs. no additional upfront costs and a higher rate. 24 hours prior to closing, buyers must be provided with their closing costs, in writing. By law there can be very little deviation in the estimated figures on the GFE and the actual costs the buyer pays at closing. The new law is designed to protect the homebuyer and to alleviate surprises at the closing table.
The Federal Housing Administration, FHA has lifted the anti flipping rule. Previously, a home purchased for the purpose of renovating and flipping it could not be resold within 90 days, to an FHA or VA buyer. A new buyer had to wait 90 days from the date the investor purchased the property; 90 days from the date the deed was recorded. The wait was implemented because some flippers were involved in illegal schemes. And, house flipping was causing artificially, over inflated home values. Today, the ease on the ban is in hopes of making a dent in the inventory of foreclosures on the market. If investors can renovate these rundown properties it will provide FHA and VA buyers with a larger selection of good, clean homes to buy. VA buyers can close with 0% down and FHA buyers need a 3.5% down payment. So, more buyers are in the market for these types of properties. But, here’s the catch: the markups on these flipped properties cannot be more than 20% of the price the investor paid for the property. If an investor’s profit is over 20% he must be able to justify it to a new buyer’s lender with receipts, documentation, a second appraisal and often an inspection paid for by him. There are other restrictions as well. The 20% markup is meant to keep house prices at realistic levels. But, with only a 20% profit, it will be interesting to see if investors feel it’s worth the time, effort or their sweat equity to flip these properties
2010 is being called the year of the short sale, with owners selling their homes for less than their mortgage balance and lenders writing off the difference. Today, 4.5 million homes across the country are in foreclosure. One in every ten owners has missed a payment, the highest number in 37 years. A new program, HAFA, Home Affordable Foreclosure Alternative Program, is scheduled to begin in April. The government will be providing incentives to underwater owners to short sale their homes, instead of letting them fall into foreclosure. It is supposed to streamline the process. It will discourage lenders from filing deficiency judgments against sellers, for the difference between the sales price and the balance of the mortgage. It will encourage lenders to stop cutting real estate commissions below 6%. We don’t know how receptive lenders will be to the new guidelines as some reports indicate that this will be a voluntary program for the mortgage companies.
We have a team of professionals that can facilitate your short sale.