Miami Florida Real Estate for Sale | Miami Realtor

What is the “Shadow Inventory” and how it may affect your decision to buy!

Michael Schnabel — Fri, 18 Dec 2009 13:33:41 +0000

A lot has been written about “Shadow Inventory” but a recent Bloomberg news article “Shadow Inventory of U.S. Homes Climbs, Report Says” summarizes it the best.

The term “Shadow Inventory” is used in different ways, but it applies to all of the following:

Developer Units - These are properties (Condos, Single Family Homes or Townhouses) listed for sale by the Developer. With very few exceptions, these properties are not listed in your local Multiple Listing Service (MLS) which is not only used by Real Estate Agents, but also serves as the normal source of real estate statistics. Developer units are moving faster than you might think or read about.
Foreclosures in Process - These are properties that are in the process of foreclosure and seriously delinquent loans. Keep in mind that some loans may be in the modification process.Foreclosures in Process are a concern today! given the poor visibility/reading we are getting from Lenders. But wishful thinking suggest that the administration and their respective agencies involved in the lending process could surprise us favorably. More favorable news to come.
REO’s (Real Estate Owned) in process - Are bank owned properties that have not been put on the market yet.REO’s (Real Estate Owned) in process is a double side sword for Lenders. The speed of growth in REO portfolios has slow down substantially. Lenders are understandably more apprehensive take over properties and then selling them at below market prices. It is a snow ball effect they are trying to minimize.
Previously Listed for Sale in the MLS - These are homeowners who had their property listed for sale and for one reason or another did not sell. The primary reason being that owners had expectations of getting a higher price for the property. These owners are now waiting for comparable properties that are listed as Short Sale or REO to sell so they so that they may have a better chance at selling their own property at a higher price.Previously Listed for Sale in the MLS is a phenomenon that has always been present. It simply has increase with the current market conditions and will go back to a normal trend as economic conditions improve.
Undecided Homeowners - These are homeowners who are also entertaining the possibility of selling but are also waiting to list for sale for the same reasons as those owners who previously listed the property for sale on the MLS.Undecided Homeowners is also a common fact of life in the real estate business. Guessing this number is like guessing the lottery!

All in all, Shadow Market or Shadow Inventory refers to homes not yet listed for sale but that are likely to be listed for sale in the next 12 months or so.

The bottom line is that it is quite difficult to define the size of the shadow market. A report from First American CoreLogic released last 12/17/09 is a good example.

As the economy does better, the circumstances that affect all of the above today! are expected to substantially improve over time. In the months and years to come the term “Shadow Market” will be associated with the extreme economic recession of 2008 and 2009, just a thing of the past.

For more information or if you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Ben Bernanke just refinanced his home at 5%. What about you?

Michael Schnabel — Wed, 16 Dec 2009 22:29:08 +0000

Does Ben Bernanke, Chairman of the US Federal Reserve, know something about interest rates that the rest of us do not?

Maybe, but the likelihood of higher interest rates in 2010 and beyond is not much of a secret!

In a recent TIME Magazine interview, Chairman Bernanke says he refinanced his own mortgage a couple of months ago at 5%, and switched from a floating rate, which the Fed chairman said “exploded” in cost, to a 30-year fixed.

TIME: Do you have a mortgage?
Bernanke: Oh, yes, we refinanced.
TIME: Oh, perfect. When?
Bernanke: About 5%. A couple of months ago.
TIME: Good time.
Bernanke: Yes. We had to do it because we had an adjustable rate mortgage and it exploded, so we had to.
TIME: So, did you get a fixed rate at 5%? I think this might be the most valuable piece of information. (Laughter.)
Bernanke: Thirty years fixed rate at a little over 5%.

Although the motivations to refinance your home or finance a new purchase may vary from one family to another, it is clear that the low interest rates available today and the strong possibility of higher interest rates into 2010 and for several years to come is a strong motivation.

And for Buyers, lets not forget that low real estate prices will not last forever either.

If you are buying real estate or are considering refinancing your existing property, we can help! Give us a call at 305.450.0036

For more information or if you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Wealthy Investors continue to invest in Real Estate! Are you?

Michael Schnabel — Thu, 03 Dec 2009 23:13:45 +0000

According to a recent article published by the Wall Street Journal and a recent study published by Barclays Wealth, 75% of respondents felt residential real estate looks attractive from an investment perspective. And about half of the 2,000 respondents expect an increase in the value of their real estate investments over the next two years. Almost 40% of those with assets of $50 million or more have greater than 50% of their portfolio in real estate.

Miami offers today some of the best investment opportunities available in all price ranges.

For more information or if you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Treasury sets guidance to simplify “short sales”

Michael Schnabel — Thu, 03 Dec 2009 00:29:17 +0000

This article states the U.S. Treasury has finally set the guidelines for their “short sale” plan. Although there is nothing posted on the U.S. Treasury’s website yet, we are expecting the details to be released shortly at www.financialstability.gov. Please reference this website for the full details of the plan.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Congress Passed the Federal Homebuyer Tax Credit Extension and Expansion

Michael Schnabel — Fri, 06 Nov 2009 14:57:03 +0000

On November 4th, 2009, the U.S. Senate voted (98-0) to pass a bill which extended and expanded the federal homebuyer tax credit. On November 5th, 2009, the U.S. House of Representatives did the same (403-12). It’s now on its way to the President for his signature which is expected to happen as early as tomorrow!

CLICK HERE to view (and print) a one-page PDF document that outlines the final changes that were approved. All changes made to the current credit and the new additions will become effective when President Obama signs the bill. To summarize:

Amount: Up to $8,000
Who: First-time homebuyers — same definition as current law
Amount: Up to $6,500
Who: Repeat purchasers. Must have used previous home as a principal residence for 5 of the 8 previous years.
Income Limits: $125,000 for single filers/$225,000 for joint filers. Same for both first-time and repeat/move-up buyers.
Time Frame: December 1, 2009 to April 30, 2010
(also includes a 60 Day extension if binding contract is in place by April 30, 2010)
Limitation on cost purchased home: $800,000
Anti-fraud measures have been added.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Good news for homeowners facing foreclosure!

Michael Schnabel — Thu, 05 Nov 2009 21:05:32 +0000

Fannie Mae just released a new policy named “Deed for Lease Program” under which thousands of homeowners that are facing foreclosure will have the opportunity to remain in their homes as tenants.

Under the ”Deed for Lease” program, borrowers can transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

$8,500.00 New Home Buyers Tax Credit may be extended into 2010

Michael Schnabel — Thu, 29 Oct 2009 13:49:55 +0000

According to the Wall Street Journal, “Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain.” and a new tax credit of up to $6,500 for existing homeowners is also under consideration.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Buyers… get your act together, no time to loose!

Michael Schnabel — Wed, 23 Sep 2009 18:45:24 +0000

The most recent FOMC statement clearly signals better times ahead for the US Economy, and for that matter, for the US Housing markets.

The Federal Open Market Committee (FOMC) just released the following FOMC statement after their most recent two day meeting which just concluded.

Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

emphasis added

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This

Construction Loans Get Worse… What it means for housing inventory?

Michael Schnabel — Mon, 07 Sep 2009 12:00:39 +0000

The increased percentage of real estate construction loans in delinquency is another sign of bad news not just for commercial real estate but also for the banking sector.

Many argue that commercial real estate prices - which so far have suffered relatively little downward pressure - are heading for a substantial correction in the months to come. And by the way, the banking sector - one that has enjoyed a substantial 6 month rally in its stock prices in expectations of much better times ahead - could very well experienced a second act in troubled loans in the months ahead, specifically in commercial real estate loans.

WHAT IT MEANS FOR HOUSING INVENTORY

In short, get in before is to late.

With sales increasing, the current levels of inventory will eventually be a thing of the past by 2010.

And with limited financing for developers, don’t expect new building projects for several years ahead.

As of last September 2nd 2009, Miami-Dade county had 27,692 properties for sale. That represents a drop of 36% or 15,496 properties for sale in a period of 15 months. Don’t forget that the number of properties for sale in Miami-Dade county peaked at 43,188 properties for sale in June 2008. The drop in the number of properties for sale is expected to continue well into 2010.

Don’t miss on the buying opportunities available today. Prices are stabilizing and before you notice, prices will start to climb again.

Give us a call!

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Source:
Construction Loans Falter, a Bad Omen for Banks
FLOYD NORRIS
NYT, September 4, 2009
http://www.nytimes.com/2009/09/05/business/economy/05charts.html

See also:
For Commercial Real Estate, Hard Times Have Just Begun
TERRY PRISTIN
NYT, September 1, 2009
http://www.nytimes.com/2009/09/02/business/economy/02office.html

Share This

Select One: a) REO’s, b)SSL’s or c) none of the above

Michael Schnabel — Wed, 02 Sep 2009 14:27:46 +0000

Have you asked yourself what is the best deal out there. Is it on:

a) Bank Owned Property (REO’s)

b) Short-Sale (SSL’s)

c) none of the above

Most BUYERS have focused on REO’s and SSL’s, and failed to recognize that SELLERS of Non-REO’s and Non-SSL’s have increasingly become very competitive in their pricing and/or willingness to negotiate offers.

After all, if SELLERS do otherwise, they will not be able to sell until the inventory of REO’s and SSL’s is reduced substantially from the current levels. The following chart summarizes the current market.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Share This