Tag Archives: REAL ESTATE

Builders, Realtors see signs of hope in Volusia-Flagler housing market

12/30/11

2012 highlights

Real estate professionals think 2012 will show a modest improvement from 2011. Here are some highlights:

– Foreclosure inventory could still be heavy for the next five years, but most people don’t foresee lenders releasing a “shadow inventory” and flooding the market.

– December has been better than usual, and homebuilders think that mild momentum will carry into the new year.

– Home inventory has plummeted in the Daytona Beach region compared to last year, falling 42 percent. Expect that to continue.

– Builders are seeing signs of life. One Volusia County builder expects to construct 45 to 50 homes in 2012, up from 34 in 2011 and 23 in 2010.

SOURCES: News-Journal research; Daytona Beach Area Association of Realtors

DAYTONA BEACH — After suffering through one of the worst economic downturns in modern memory, local home builders and real estate professionals foresee a modest turnaround in 2012.

It’s already started with a better-than-usual December, which traditionally is a slow time of year for new contracts.

The Volusia-Flagler housing market has been in shambles since 2007, when foreclosures overcame the area and home prices fell drastically. Flagler County has periodically had the highest number of foreclosure filings in the state, and Volusia County has been near the top.

While the inventory of homes for sale is still high, real estate professionals believe 2012 will improve, if only a bit.

“We are seeing a lot more people coming in, more than in the past three or four years,” said Luis Medeiros, president of Palm Coast-based custom builder New Coastal Homes.

“We just had three sales in December for next year starts,” he said. “For me, that’s great in the Palm Coast market.”

For the past couple of years, Medeiros has been building just three or four homes a year, so going into the year with three contracts is uplifting.

“The people looking to buy a home are looking at the short sales and bank-owned and not liking what’s available. They’re looking at a $150,000 home that needs work. But, for a little more they could get a new home with everything they want,” Medeiros said.

Even so, Karen Radcliff, president of the Flagler County Association of Realtors, said she expects foreclosures and short sale homes in the county to be “pretty heavy in the market for three to five years because we have job issues and unemployment issues.”

But the area’s foreclosure inventory isn’t as big as it was during the peak of 2008 and 2009, and she doesn’t expect a “shadow inventory” of foreclosed homes to overwhelm the market.

Flagler County has generally seen a drop in new foreclosures in 2011 compared to 2010, although new filings in November increased, according to the most recent data available from research group RealtyTrac.

Mark Dougherty, executive director of the Daytona Beach Area Association of Realtors, doesn’t predict any dramatic increase in residential sale prices, but thinks prices will start to flatten, barring a slew of foreclosed homes hitting the market.

“The bread and butter inventory, two- and three-bedroom single-family homes, those properties are probably going to stabilize,” he said. “And that’s the typical thing because there are way more of those than anything else.”

SIGNS OF IMPROVEMENT

Median residential sales prices for the Daytona Beach Area Association of Realtors fell more than 8 percent last month compared to November 2010, from $120,000 to $110,000. But two large indicators of improvement — inventory of homes for sale and pending sales — were much better.

There was an inventory of 2,443 homes for sale in November, a 42 percent drop from the 4,219 a year earlier, according to the Daytona Beach Realtors group. And pending sales, which measure signed real estate contracts, increased 70 percent, from 246 in November 2010 to 418 a year later.

West Volusia is also holding out hope for 2012.

Chris Bowley, planning and development services director for Deltona, said he’s seen an increase in building permit applications during the last three months. Most are for single-family houses built on vacant lots scattered throughout the city.

In the Live Oak Estates and Arbor Ridge subdivisions, though, there is some building going on and more is expected.

“During the downturn there wasn’t much activity there,” Bowley said of Live Oak Estates. “But now there’s new home construction. Same thing goes for Arbor Ridge.”

Bob Fitzsimmons with Gallery Homes of DeLand also is seeing a “more active winter.

“I’m working with three clients right now. That excites me because this is usually a slow time before mid-January, when things pick up again,” Fitzsimmons said.

Low land prices, down 50 to 60 percent from the peak period, and more buyers confident that the market has bottomed out, are driving the recent activity, Fitzsimmons said.

HIGH PRICED CONDOS GAIN

The condo market in 2011 reported strong gains in high-price sales. Scott Nieminen, a broker at Palm Coast-based Realty Executives and the 2010 president of the Flagler County Association of Realtors, expects a small appreciation in prices next year, started by an increase in higher-priced homes.

“Gated communities, golf courses, waterfront – those things have a tendency to see it first, but across the board it’ll be an improvement,” he said.

Jim Paytas, of Daytona Beach-based Paytas Homes, built 34 homes in East Volusia in 2011, up from 23 the previous year.

However, before the bust, Paytas Homes was building 100 houses a year.

“There is a renewed sense of urgency I’ve not seen since 2005. Prices have stabilized and buyers have to close on the lots now while prices are low and before they’re gone,” he said. “Following the recent trend, we could see 45 to 50 new homes in 2012. It’s not substantial, but better than what we’ve been doing.”

August 2011 Central FL Real Estate Market Statistics

Double-dip Recession?

The economy seems especially fragile these days, as if the United States is teetering on the edge of recession. That’s the way it is when GDP is gaining at a rate of 2% or less, as it has been for some months: There are stronger areas — Texas, North Dakota, Milwaukee, Washington, D.C., and San Jose, Calif., for example. And some weaker areas, including much of California as well as Nevada, Phoenix, Atlanta and Tampa, Fla.

With industries, the same spotty pattern prevails. Orders roll in for makers of medical devices, earth-moving equipment and a variety of exports. But housing and real estate are still in deep distress. Similarly, job seekers face a mixed picture: More than enough jobs for petroleum engineers, accountants and medical technicians. But teachers and other public sector employees are being laid off. And for the 7 million workers who lost their jobs during the downturn and still aren’t able to find work, the recession hasn’t ended. They continue to suffer.

But the odds of actually returning to recession — at least six months of declining national production — are still relatively low. Many of the economic hits this spring were one-time events and aren’t likely to be reprised — or at least they aren’t likely to pile one on top of another again. The combination of tornadoes ripping through broad swaths of the country, widespread Mideast turmoil sending gasoline prices near $4 a gallon, and the one-two punch of disasters in Japan was extraordinary.

The next few weeks will provide key signals about what’s ahead — indications of whether growth is in real danger of reversing course or will just continue weakly. The July 8 employment report for June, for example, needs to show much more vigor. Sustained economic growth requires net job gains of about 150,000 a month. So far this year, the average is just 72,000; for May, it was only 54,000. Also critical: no further slowing of manufacturing. (A July 1 purchasing managers survey will tell the story.) And an upward tick in June auto sales indicating that Japan’s economy and supply lines are coming back.

The best to expect is probably continued wobbly, weak GDP gains, with three or four more years to go before the economy begins to feel a great deal better. It’ll take that long for employment to again reach the prerecession high-water mark of 138 million and for unemployment to fall below 6% or so.

The fact is, this last recession was different from most. It was born in a housing bubble and sparked by financial crisis. It typically takes longer to recover from downturns arising from financial crises. And housing is usually one of the chief engines of growth following recessions; the Federal Reserve lowers interest rates, encouraging demand for mortgages and housing and spurring growth. That can’t happen this time.

Recovery will be slower, as the economy shifts to rely less on consumer spending and more on exports and business investment. It’s a worthy destination, but the trip won’t be a pleasant or smooth one.

FROM: http://www.kiplinger.com/columns/dekaser-practical-economics/archives/it-just-feels-like-a-double-dip-recession.html#ixzz1QNnITcm9

MORE GOOD NEWS: Existing home sales show signs of recovery

Existing home sales show signs of recovery

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 53 mins ago
WASHINGTON – The U.S. housing market is finally on the mend after its most far-reaching collapse in 70 years. That could help rebuild consumer confidence and revive the economy.

For the first time in five years, sales of previously occupied homes rose for the third consecutive month in June, while foreclosure sales and the glut of homes on the market both declined.

The figures, released Thursday by the National Association of Realtors, and a string of rosy corporate earnings reports sparked a rally on Wall Street as the Dow Jones industrials rose above 9,000 for the first time since January.

“People believe that the worst is behind us,” said Julie Longtin, a real estate agent with Re/Max Professionals in Providence, R.I., an area that has suffered deeply from record foreclosures of risky loans.

Sales also have risen for three straight months in 40 out of 55 major metropolitan areas tracked by the Associated Press-Re/Max Housing Report, also released Thursday. Prices rose during that period in about half of those areas.

Still, unlike past recessions, the turnaround in the real estate sector is likely to have a muted effect overall. That’s largely because homebuilders are expected to keep bulldozers idle as long as they face competition from bargain-priced foreclosures. And it’s likely to take at least another year before job losses and foreclosures peak.

The Labor Department said Thursday the number of newly laid-off workers seeking jobless benefits rose 30,000 to a seasonally adjusted 554,000 last week, though the government said its report again was distorted by the timing of auto plant shutdowns.

Unemployment insurance claims have declined steadily since the spring, but most private economists and the Federal Reserve expect jobs to remain scarce and the unemployment rate to top 10 percent by year-end.

“We’re not going to see much growth in (home) sales until the labor market turns around,” said Patrick Newport, an economist with IHS Global Insight. “People don’t move as much when they can’t find work.”

But companies should start hiring as their fortunes improve — and there were some early signs Thursday that’s starting to happen.

Ford Motor Co. surprised investors with a profit of $2.3 billion, due mainly to a huge gain for debt reduction, while manufacturing conglomerate 3M Co. and candy maker Hershey Co. raised their profit forecasts for the year.

The Dow Jones industrial average, the stock market’s best-known indicator, shot up almost 190 points Thursday to 9,069.29, its highest level since November, and all the big indexes gained more than 2 percent.

Analysts said signs that housing market is finally, gradually turning around could help spur demand as buyers become less fearful of losing their shirts.

“It’s been the abject pessimism about house prices that has placed a pall over the housing market,” said Mark Zandi, chief economist at Moody’s Economy.com. “As that psychology reverses itself, things start to work in the opposite direction.”

Home sales rose 3.6 percent to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. Sales are now around the same level as before last fall’s financial crisis.

Foreclosures, however, continue to put pressure on home prices. About one out of three homes sold in June was foreclosure-related, down from nearly half earlier this year.

And despite some buyers’ optimism, some still see potential problems ahead. A tax credit of up to $8,000 for first-time homebuyers expires Nov. 30. Mortgage rates are up from record lows reached last spring, and companies are still shedding jobs.

The nationwide median sales price was $181,800 in June, down 15 percent from year-ago levels but up slightly from $174,700 in May. And an Associated Press analysis shows the shows that the gap is narrowing between the sellers’ asking price and the final sales price, indicating homeowners have finally accepted that their homes are worth far less today.

Jim Dugan, a 53-year-old plumber, is looking for foreclosures and other low-priced properties in Providence. He wants to buy eight investment properties this year and is slated to close on a small bungalow next week for $62,500.

The property was originally listed for $85,000. But Dugan was able to snare a deal because he didn’t need a mortgage, instead tapping a line of credit and his savings.

“Cash talks,” he said.

Investor activity is helping to pare the number of homes on the market. Nationwide there are about 3.8 million, or a 9.4-month supply at the current sales pace. When the market balances at a 7-month supply, prices should begin to stabilize.

A healthy housing market is characterized by prices that rise a relatively modest 4 to 5 percent every year. But this year’s sales prices are still far lower than last year.

Those low prices combined with mortgage rates around 5 percent and a tax credit for first-time homebuyers have made homeownership more affordable than it’s been in decades.

“We are seeing contracts like crazy,” said Valerie Huffman, a vice president of Weichert Realtors, in Montgomery County, Md., where home sales are up by 42 percent over last year. “We’re having multiple bids on anything that’s priced well.”