Mortgage Rates Still Under The Microscope

Industry analysts are having a difficult time agreeing on the direction of mortgage rates over the short term.  According to Bankrate.com, an even number (31% each) believes rates will either go up or stay the same over the next few weeks while 38% expect a further decline.

Mortgage rates, at a new record low of 3.62% for a 30-year fixed and 2.89% for a 15-year, tend to follow along with the 10-year US Treasury note.  As demand for Treasury bonds increase (considered a safer inventment in times of economic uncertainty), the yield falls.

This trending of the mortgage rates record lows has brought some relief to the slowly recovering housing market.  According to the National Association of Realtors, pending home sales rose in May, matching the highest level in the past two years, and are well above year-ago levels. Monthly and annual gains were seen throughout the country.

We are certainly seeing a strong come back here in the Tampa Bay market!  Inventory continues at record low levels and the mortgage lender still have a tight fist around our buyers taking advantage of these low rates.  Lawrence Yun, NAR chief economist, said longer term comparisons are more relevant. “The housing market is clearly superior this year compared with the past four years. The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”

If you are interested in exploring a purchase along the pristine beaches of Tampa Bay, let The PURTEE Team help!  We bring the advantage of excellent market knowledge and experience to every transaction.
Contact us today!

Mortgage Rates - How Low Can They Go?



 This week both 15-year and 30-year mortgages fell to new record lows. It is actually the 6th week in a row for such records!  Will it have the desired effect to bring the housing industry around?  Many attribute the modest gains to the fact that rates have remained under 4% since December for 30-yr loans. Another stimulus to the economy would occur if people choose to take advantage of the rates and refinance.

According to Freddie Mac, this week the 30-yr loan dropped to a record low of 3.67% (down from 3.75% last week).  The 15-year mortgage often chosen as a refinance option also declined to 2.94% (down from 2.97% last week).  Mortgage rates tend to track the yield on the 10-yr Treasury note.  This number fell last week to a 66-yr low!  To check rates or comparison shop for a loan, be sure to use our Mortgage Finder.

This is interesting news when over 62% of the sales in Pinellas County here in Tampa Bay have been all-cash purchases.  Many of our clients who would require a mortgage are either having difficulty qualifying for a home loan or not able to afford the larger down payments required by the banks.  None of the analysts are predicting rates to fall further. Actually 23% of the experts expect rates to increase over the next week.

With the demand for long term luxury rentals continuing to increase... we can see first hand the number of potential buyers who have opted instead to rent for awhile. This should be a very interesting trail to follow...

Bidding Wars? Seriously???

Well, if you thought bidding wars were a thing of the past... think again! Homebuyers here in the Tampa Bay area are finding more competition when trying to find their dream home. The problem is that buyers are getting frustrated that this is the current scenario.


Why are things getting so competitive? There are several factors that have fueled the increase in multiple offers during the first quarter.

1) Low inventory of homes for sale. [ See Absorption Rate Blog ] In Pinellas County alone there has been a DECREASE of 44% less inventory of homes or condos for sale, leaving homebuyers with fewer options and more bidding on the same property! During March, absorption rates moved over 20%!

2) Record low mortgage interest rates remain around 4%. It appears the Feds will support this rate for at least two more years making financing very attractive when combined with a great deal.

We have 3 real life examples going on at this very moment here with The PURTEE Team:

1) We listed a 3-bedroom beach front condo in an extremely popular 7-day rental complex in Indian Shores. The unit is bank owned and was listed at a "sell quick" price of $399,900. In less than two days there were multiple offers involved. Bank called for highest and best and accepted the highest offer... leaving the other 6 buyers high and dry, along with all those who simply hadn't made time to get an offer in. The sense of urgency is bank!

2) In Clearwater Beach there are a very limited number of condo complexes that allow weekly rentals making them highly desirable. Over the past couple of years, several units in each of these complexes have sold at highly distressed and de-valued prices. However, there was NOTHING available in any of these buildings. With the pent up demand, we listed a condo in one of these buildings on Tuesday of this week. It is a corner unit with solid rental history in place, fully furnished, over $10,000 in future bookings, a repeat renter group and two live and fully operational rental websites for the unit. It was listed at $485,000... $35,000 higher than the highest recent sale. For every realtor or buyer who is calling arguing about its price, there are two others trying to see it. This one will set a new bar in price and guess what... the next buyer will wish he got it at this price!

3) We submitted a full price buyer offer for a bank owned property that was listed at $39,250. Needed quite a bit of work but a lot of potential. 3 offers came in and were submitted to bank. Bank called for highest and best yet they held the property open for additional offers. This one is still in 'wait and see' mode.
The point is... read our blog about Low-Balling Offers. If you are a buyer or investor looking for a great property, USE A REALTOR AND FOLLOW THEIR ADVICE. You still may not get the property in this situation, but you at least have a fighting chance. The next tier of listings will come as sellers begin to enter their properties at non-distressed but still value packed prices. PURTEE advice: don't miss out!

Just Listed! Beach Front 3-BR In Indian Rocks Beach, Florida

Over the past few weeks, we have been discussing the shrinking real estate inventory here along the beaches of Tampa Bay. As non-distressed properties begin to emerge, this Indian Rocks Beach gem in Driftwood Sands is one to take special note of!

These particular owners purchased this condo in 2010... recognizing that it had all the good "bones" to give them an affordable 3 bedroom condo right on the beach. When they bought it, there was no furniture... it was white on white drab with carpet that was downright scary. Once they closed on the property, the work began. From painting with colors to coordinate with all the designer furnishings and window treatments, to brand new bamboo flooring in the master suite, to california closets throughout... the condo went through a transformation that is truly amazing! Check out the virtual tour

Unlike when it sold in 2010, this condo is being sold with all the bells and whistles included! Even down to the matching dinnerware! If you are looking for beachfront living but without the hassle of repairs and furnishing... this is the one. Driftwood Sands is a well maintained complex with resort style pool and sun deck area, along with outdoor kitchen/entertaining gazebo with multiple grills... and even shuffle board. You can start living the Florida Lifestyle RIGHT NOW! More details about this property, click here.

Low Ball Offers: Effective or Counter-Productive?

From the perspective of a realtor... we saw this coming. For those who listened, they truly reaped the rewards! Here in Pinellas County (the waterfront county of Tampa Bay that includes the beaches), in 2007 just as the market started to head downward there were a total of 18,504 property listings. Buying at such an unprecedented rate was slowing down. Seller began to realize that no offer could be ignored, even if it was 25% or more off the asking price!

Today, however, at the end of March there were 6,985 listings throughout the entire county... I checked today and that number is down to 6,935. If you combine a rebounding market with a severe depletion of inventory, we very quickly move away from a buyer's market. Those buyers need to understand that a more realistic buyer gets the home. There is nothing wrong with a low ball offer and everyone wants to get the best deal possible. However, we are finding buyers who make that stand losing out on the property. Multiple offers are becoming a norm.

"In a survey last year conducted by the National Association of Realtors® (NAR), one in 10 respondents cited low-ball offers as a concern. According to real estate columnist Kenneth Harney, a NAR survey conducted in March and not yet released found that almost no one complained about low offers. When the number of listings outpaced the number of buyers, many potential homeowners submitted a shockingly low offer on the theory that they had nothing to lose. If the seller balked, most would still counter with something below their asking price. Today, however, offers close to the asking price – or even beating it – will probably come in fairly quickly from someone else if a home is priced correctly in the first place."

The misconception is easy to understand, particularly for out of state and international buyers (which Florida has plenty of). The media is filled with news about Florida's foreclosures and short sales. The point is that this news is old. Markets are local and diverse and when you have one rebounding it is easy to miscalculate the time for a low ball offer. You never want to blame someone for trying to get the best deal possible. My concern is the buyer who says "I don't pay retail" or "I am patient and can wait for the right deal" "I am paying cash!" Even the sellers who don't get offended by a low ball offer are more frequently countering at only a little off their asking price. In this Tampa Bay market of 2012, if a property is correctly priced... it may well be counter-productive to low ball. Not only that but 63% of the local sales are all cash so that once admirable playing card doesn't have quite the punch as it once did.

Keep up with the real estate market and The PURTEE Team. Email is at info@floridagulfproperty.com to receive monthly updates and local market statistics.

Looking For Florida Rental Properties?Supply Is Drying Up!

Whether it is the allure of the mild winter, spring training baseball, the simple sounds of rolling sea, the vast amounts of sea life or the magnetism of a white sandy beach... people are drawn to the Tampa Bay beaches for a wide variety of reasons!
This spring season brought a dramatic increase in tourists to the area compared to the last several years. As a result, demand is already heating up for Winter and Spring 2013! A combination of things have happened... 1) With the downturn in the market, previous seasonal rentals have opted to replace with more steady income with annual rentals. So far we have seen each of the annual rental tenants renew their leases for a 2nd or third year; 2) As short sales of seasonal rentals finally made their way through the sales process, many of the new owners are opting to not rent out their property for various reasons; 3) With the upswing in the market, some sellers have decided to go ahead and sell their property rather than rent seasonally; 4) Renters who have found a great property are re-securing the property for the following year during their current rental.

So what does that mean? Just as properties on the market actively listed in MLS are seeing a dramatic decline in inventory... the same is happening in the seasonal rental market. Buyers active in the Tampa Bay real estate market who are savvy to this deficit are picking up rental properties, sprucing them up and raising rates accordingly. Check out our Vacation Rental Property Investment Newsletter. Contact The PURTEE Team to discuss rental property options which include both vacation rentals and multifamily housing.

Absorption Rate Continues Momentum!

Click on Chart For Larger View
As realtors, we have seen first hand that March brought about a buying frenzy and a continuation of the decline in inventory. The market statistics that were just released by the Pinellas Realtor Organization gave full credence to what we inherently knew. Take a look at the chart on the left... the Absorption Rate is determined by dividing the number of units sold during the month by the total number of listings in the MLS.

March saw a HUGE jump in the numbers and basically it is saying that 1 in 5 listings was sold during the month! Another important factor is that out of those sales, 69% were non-distressed properties! Distressed home sales are down 28% from a year ago while bank owned properties have fallen 57%. To take a closer look at the 2007-2012 statistics and comparison from listings to sales, click on either Single Family Homes or Condos to see for yourself.

Throughout 2011 The Purtee Team has been keeping their clients informed about the market which is reflected in their sales performance. Many of their clients got amazing deals by knowing when to enter the market and how to best get the property at the greatest value. On the other side, sellers that use The PURTEE Team have found that over 40% of those sales are with buyers brought to the closing table by The PURTEE Team... resulting in lower commission fees. Whether you are in a position to buy or sell in the Tampa Bay, Florida area, contact a member of this team first! Email us at info@floridagulfproperty.com.