Now You Decide To Buy - What About Financing?

Cash buyers are prevailing in this market and sellers pay close attention to no-financing contingencies! Over 65% of transactions closed to date in 2011 were cash transactions. Lenders have tightened up their mortgage policies demanding higher down payments and stricter qualifying for even to most credit-worthy buyers.

As a matter of fact, through all of 2010, 3 of the major lenders provided over 1/2 of all US mortgages, according to the fourth quarter 2010 Mortgage Lender Ranking from MortgageDaily.com. Wells Fargo, Bank of America and Chase originated 56% of last year's business. The number of FHA-backed loans also rose from around 19.1% in 2009 to 19.8% in 2010. US lenders closed on about $1.530 trillion in 2010, down from $1.970 trillion in 2009. Well's Fargo remained #1 with $387 million.

If you are considering a purchase and require financing, be sure to check our resources. For Mortgage Info, click here. Or talk with us about lenders who understand this market and what it will take to get your financing accomplished.

What Do January Market Statistics Say? When Do I Buy???

The January Market Statistics for Pinellas County

are out and the full report is posted on our website. There are SO MANY people sitting on the sidelines reluctant to make a purchase. The media continues to be negative and buyers anxious to own property in Tampa Bay, whether as a second home or as a relocation, simply do not know whether to take the plunge.

With so many baby boomers nearing retirement... and the country experiencing one of the most brutal winter seasons this year... Florida has a lot of people anxious to not miss out on living the Florida lifestyle! Prices have reached unprecedented lows and over the last several months we have seen the results. We have targeted HOT DEALS for our clients and email them out within a day or so of them going on the market. It is amazing how many of these are under contract before the week is out! That is telling us something. The pent up demand is staggering. When you realize that in 2004 and 2005 over 1000 people were moving to Florida a day, once the pendulum does swing, it will be HUGE!

We keep a close eye on this chart and the Absorption Rate*... looking for trend lines. Look at the latter half of 2009 into 2010. There was a great deal of positive momentum! So what changed in June of 2010??? How about the understanding of how serious the BP oil spill in the gulf was? It took through the rest of the summer and beyond to cap the flow and throughout the world, people looked on in horror that beautiful Florida was now tarnished. It didn't matter that not one drop of oil reached our area. It was the PERCEPTION.

Our prediction is that it will unfold just like that. When the PERCEPTION changes (and the media says now is the time), there will be a feeding frenzy. There are a LOT of sellers out there not willing to sell at these current prices. Once this distressed inventory runs out, we will go to the owners willing to sacrifice what they have in their property. From there, we have those who won't. THESE DISTRESSED SALES RIGHT NOW ARE WHERE THE OPPORTUNITIES ARE!!!

Our recommendation... contact The PURTEE Team and get on the radar. What you are seeking may come on the market and be gone without you ever knowing about it.

*Absorption (Inventory Turnover) is determined by dividing the number of units sold during the month by the total number of listings in the MLS (Multiple Listing Service)

Back On Market! Contract Fell Through

In this market, things happen every day that simply make you shake your head in amazement. A client of ours upside down in a property in Clearwater Beach has been working for a year to do a loan modification with his lender... to no avail. Working with an attorney, he actually got an offer on the property that the bank ACCEPTED, then 2 days later they foreclose on the property! What??? Obviously they are repealing...

In this case, the owners of this gorgeous condo at Redington Shores Yacht & Tennis Club, going through their own financial and health issues, find themselves unable to keep up with this property weighted down with both a 1st and 2nd mortgage. They got a contract in which would be a short sale and presented it to the lender along with their hardship dilemma. After several weeks of intense scrutiny, the lender refused to even consider a short sale? So... the alternative??? Either let the bank foreclose on the property or be willing to accept a contract at a price where they can liquidate their future retirement and bring the balance of the funds to the closing table themselves.

So... that is the story with this condo. back on the market at $495,000 FIRM... $55,000 less than any other condo currently listed in the community! Seller will be ADDING close to $150,000 to the Buyer's purchase to make the transaction go through. Tough on the Sellers... an amazing opportunity for the Buyers. For information, click here.

What Will It Take To Recapture That Buyer Sense Of Urgency?

It has truly been an eye-opener to observe the difference in Buyer behavior over the last 7 years. One of our gulf front listings back in 2003 was listed at $995,000 and we were very aware of that $1 million threshold that had not been broken. It sold to the the condo owner next door for $950,000. Since this upscale complex offered two condos per floor, the new owner was able to merge the two into one dramatic penthouse residence.

Once the $1 million threshold was broken, things really began to heat up. Buyers were able to get financing on a "drive by" appraisal, or with "stated income", or the ever so attractive "interest only". Interest only was a seemingly great choice because appreciation was occurring at an unprecedented 19-21%/year! "Flipping" a unit (or reselling it for a higher price due to an original low entry price combined with appreciation) became an obsession to many ready to earn a quick profit. There was a point in 2006 where you could not get a property on water here in Tampa Bay for under $700,000! And buyers were flocking in, competing offers for prime properties, and bidding wars. Over 1000 people were moving to Florida a day!

Then a series of things happened... the hurricanes of 2004 wreaked havoc in Florida as 5 named storms made landfall, 3 of which with sustained winds of 115mph. Charley, Jeanne, Frances and Ivan became names not to be forgotten. When Katrina hit New Orleans in 2005, bringing national concern and attention to the issue, Florida found insurance premiums drastically increasing and some insurance companies pulling out altogether.

Simultaneous to this boost in insurance, the tax man was also on the way. Home values soared and along with it property taxes. So owners got a double dose of increased carrying costs which made owning these properties MUCH less affordable. If that wasn't enough, interest rates began to rise. This was the point when things began to go downhill. Buying a $700,000 condo carried with it a much higher cost and had lost its star appeal.

As property values plummeted, the Buyers had become cautious. No one knew where the "bottom" was and the concern was buying too high. We saw potential buyers begin to rent the properties that they might normally have purchased... as the rent was less that what it would cost to own. Sellers now found themselves competing for the few Buyers ready to take advantage of this time. And the Buyer's market brought out the merciless tactics of driving hard bargains and leaving Sellers unable to even cover their mortgages. Thus, short sales, foreclosures or in many cases the Seller bringing the shortfall $$ to the table.
But things are beginning to shift again. Insurance premiums have come back down, property taxes have lowered with the decrease in property value, and interest rates are at significantly lower numbers. What sparks that sense of urgency? The picture left is a project called Signature Place in downtown St Petersburg that took a beating in value as it was completed in 2008. An auction took place March 7th with 41 units being offerred at a fraction of their original prices. Attendance was great! Every unit sold above the minimum bid price, ranging from $174,000 for an 859 sq ft unit to $742,000 for a 2,319 sq ft unit. At least 10 additional units were sold and there are plans to bring more units onto the market shortly.

An announcement came out late Monday about a Builder Closeout for 20 waterfront units in Treasure Island ranging from $129,900 to $239,900. They will begin taking contracts on these units this Saturday at 9am. Speaking with the agent, they already have commitments from 40 Buyers interested in making an offer and 60 others planning to attend Saturday to take a look! To take advantage of this kind of opportunity, Buyers will be forced to make a decision and "pull the trigger" quickly. These are the kind of deals that spurred Buyers on in 2004 and 2005. It should be interesting to see how this unfolds.

Anyone interested in participating in this Treasure Island opportunity should contact us as soon as possible at 727-480-8219.

Short Sales - Buyer Strategy To Getting The Best Deals

If you are considering a purchase in the Tampa Bay, Florida area, you are no doubt expecting to take great advantage of this market and the opportunity to save BIG $$$ on your purchase! You may have heard about all the foreclosures, but how knowledgeable are you on
SHORT SALES?
In a Short Sale, the seller is in a pre-foreclosure situation. He is not able to continue supporting the property (both its mortgage and expenses). Because of the fall in market value, both sellers and lenders are discovering that the current value of a property simply won't cover the balance of the mortgage.

So... consider the following example:
A couple purchased the beach front condo pictured above in 2005 for $679,000. They put 20% in cash down and took out a mortgage for $543,000. Along the way, with prices still climbing, they took out an additional line of credit for $60,000. You see where this is heading, right? The total debt against this condo is around $600,000. BUT the market value has slid up to 20-25% in this case... bring the current market value to between $509,000 and $540,000. To get aggressive in selling the condo quickly, we as realtors advised them to price it at $499,000... 26.5% less than what the seller paid.

In a short sale, the lender (in some cases both first and second mortgage lenders) is faced with making the decision whether to accept an offer on a property that is less than what is owed. Many factors come into this situation such as 1) The stacks of files with similar situations and the workload it represents to the lender; 2) The impact of the negative assets on the lender's balance sheet; and 3) The ability to recoup any of the loss from the original seller.

For that reason, the process can take a while. Buyers looking for an exceptional value and willing to be patient can wind up with an incredible deal! Really good short sale deals are usually under contract within the first two weeks of coming onto the market. Though our Buyer Program, we can enter the exact criteria of what a buyer is looking for with one of those criteria being a short sale. When a new property comes on the market that fits that criteria, an email notification automatically goes out to the buyer within minutes of it coming on the market! This is absolutely one of the best ways for a buyer to take advantage of the current market and save $$$!