No longer swamped in foreclosures,

Florida dominates list of “Turnaround Towns”

February 01, 2012 03:45PM

South Florida resale inventory down nearly 60 percent since 2008

Residential resale inventory in South Florida is down 58 percent since Thanksgiving in 2008, according to a report from Condo Vultures. There were almost 108,000 properties on the market in South Florida in November 2008, but that number has been reduced to less than 45,000 as of this week, according to analysis by Condo Vultures' CVR Realty brokerage. The number of residential properties under contract in the region has jumped to 22,000, despite a gloomy economic picture nationwide. That has come for a number of reasons, including the presence of international buyers and a foreclosure freeze that saw lenders hold back bank-owned properties from the market. -- Alexander Britell

Tags: condo vultures cvr realty

Canadians "endvestors" looking for cheap Florida real estate

November 23, 2011 09:45AM

The increasing number of Canadians buying Florida real estate on the cheap has earned them a new name: "endvestors," or those who buy properties in Florida looking to rent them until they retire. "These are people who get it," said Wayne Levy, who runs Florida Home Finders of Canada. "They understand that if they don't get a foot in the water now, there's a good chance they won't be able to afford a second home when they actually want it." Joe Waddell paid $120,000 for a three-bedroom, 1700-square-foot condominium in Fort Myers, and said he won't be using it for several more years. He's one of many Canadians doing so in Florida, particularly in South Florida. [Toronto Star]

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Realty Times December 10, 2011

Housing and Economic Forecast Points to Rising Activity

Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the REALTORS^® Midyear Legislative Meetings & Trade Expo here.

Lawrence Yun, NAR chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly. "If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better," Yun said. "We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million -- that's a sustainable level given the size of our population."

Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 -- still relatively affordable by historic standards.

"A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers," Yun said. "The problem isn't with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years."

Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans which provide better returns than bank accounts or CDs.

Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.

Housing starts are forecast to rise but remain below long-term trends, reaching 603,000 in 2011, up from 595,000 last year, and continue growing to 908,000 in 2012. New-home sales are seen at a record low 320,000 this year, rising to 487,000 in 2012. "A recovery in new homes will be slow because of the extra price discount in the existing home market," Yun noted. In March, the typical new single-family home cost $53,300 more than an existing home.

Inflation appears to be relatively modest for now, with the Consumer Price Index rising 2.9 percent this year. "We'll be closely watching the impact of fuel costs on consumer spending and inflation -- that would slow economic growth, job creation and home sales," Yun said.

Apartment rents are trending up, and are likely to rise at faster rates as vacancies decline. Following the correction in home prices, it has now become more affordable to buy in most of the country. "Twice as many renters had enough income to buy a home in 2010 in comparison with 2005, so we have a much larger pool of financially qualified renters," Yun said. "Rising rents and excellent housing affordability conditions will encourage potential buyers who've been on the sidelines."

Yun expects the median existing-home price to remain near $170,000 over the next two years, which would mark four consecutive years of essentially no meaningful price change.

Frank Nothaft, chief economist at Freddie Mac, holds similar views on the outlook. "Economic activity will accelerate this year -- there will be no double dip in the economy," he said. Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year.

Nothaft expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year, and for home sales to rise 5 percent. "National home price indices are close to a bottom and prices are likely to bottom sometime this year," he said.

Refinancing activity in 2011 will be only half of what it was last year. "As a result, banks may become more willing to lend to home buyers," Nothaft said.

The National Association of REALTORS^®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Florida Realtors hosts 2012 real estate & economic forecast event

ORLANDO, Fla. – Dec. 1, 2011 – The real estate market plays a vital role in Florida’s economy, and figuring out what may lie ahead in 2012 is a key question for policymakers, residents and Realtors alike.

Several nationally known economists will share their insights on the state’s real estate market and economy during Florida Realtors® 2012 Real Estate and Economic Forecast Conference on Dec. 6, 8:30 a.m. to noon. The conference takes place at Florida Realtors headquarters, 7025 Augusta National Drive, Orlando, FL 32822.

“Florida Realtors is bringing together expert economic forecasters to discuss what they see happening in Florida and nationally in 2012,” says Florida Realtors Chief Economist Dr. John Tuccillo. “It’s an opportunity to find out what may be in store for the real estate sector and the economy in general.”

While the event’s Orlando location has filled to capacity, Realtors in Florida can still participate, via a live feed, at many of the state’s local associations and boards. The event will also be recorded, and Florida Realtors Industry Data and Analysis department will send a DVD of the event to all local boards and associations in the state.

Speakers include Dr. Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors; Mark Vitner, a managing director and senior economist at Wells Fargo; and Dr. John Tuccillo, chief economist for Florida Realtors. Dr. Yun’s remarks will start the conference.

Following the featured speakers, a panel of Florida real estate professionals will discuss the outlook for several sectors of the real estate market. Panelists include Clark Toole, president and COO, Coldwell Banker Residential Real Estate Inc. in Florida, covering residential real estate; Cynthia Shelton, 2009 president of Florida Realtors and a director at Colliers International in Orlando, discussing the commercial market; and Dean Saunders, accredited land consultant and broker-owner of Coldwell Banker Commercial Saunders Real Estate in Lakeland, covering the market for land and undeveloped property.

“This is the first event of its kind hosted by Florida Realtors,” says 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “It’s definitely going to be exciting to hear what trends may be developing for next year.”

© 2011 Florida Realtors®

Sign of plans for Palm Beach Mall

November 14th, 2011 by Carolyn DiPaolo

The Palm Beach Mall is the home of a planned outlet center.

The first tangible evidence of change coming to the Palm Beach Mall has sprung up in the last few days.  A sign touting the planned Palm Beach Fashion Outlets has appeared in front of the property on Palm Beach Lakes Boulevard east of Interstate 95.

It lists a website – pbfashionoutlets.com – which is just a shell for now.

Here is the latest Palm Beach Post story, published after the deal closed in October for a total of $35.5 million.

Fashion outlets on their way to neglected Palm Beach Mall, developers say

By Emily Roach

Palm Beach Post Staff Writer

Updated: 5:02 p.m. Friday, Oct. 21, 2011

Posted: 6:04 p.m. Thursday, Oct. 20, 2011

WEST PALM BEACH — The Palm Beach Mall will be redeveloped as the Palm Beach Fashion outlets, bringing construction and ultimately hundreds of jobs to the mostly shuttered retail center.

Once revamped, it will offer an open-air outlet center beside a shopping center, according to a news release from New England Development, Eastern Real Estate and Lubert-Adler, all of which partnered to buy the 80-acre property.

Saks Fifth Avenue Off 5th and other luxury retail outlets have shown early interest in the location, New England Development Chairman Stephen Karp told The Post earlier this year. Marketing materials released at a retail conference showed premium outlets, including Nordstrom Rack, Bloomingdale's Outlet Store and Neiman Marcus' Last Call.

That scope of project could become a shopping destination for people from outside the county, said Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County.

"If it's anything like what we've seen in other parts of our state, it really is an attraction for people to come and visit," she said. Those shoppers tend to spend an overnight or weekend, and money could trickle into West Palm Beach's CityPlace and Clematis Street corridor, she said.

Mayor Jeri Muoio said the developers have worked with the city as they explored concepts. She was unsure how soon construction would begin. "I think they're trying to decide to rehab it or start from scratch," she said.

The fashion outlet center is expected to open in 2013.

Palm Beach Mall was the first regional mall in Palm Beach County and has some of the best interstate access in South Florida, as it is easily seen off the Palm Beach Lakes Boulevard exit of Interstate 95.

The deal - which includes purchase of the majority of the mall from ORIX Capital Markets and parcels owned separately by Macy's and Dillard's department stores - was initially reported in a news release as worth $40 million. The representative who released the information, however, later backed off of that figure. Neither Karp nor representatives from Eastern Real Estate and ORIX returned messages today to provide more information.

Multiple owners had been considered an obstacle to pulling the main property out of foreclosure, filed in April 2009 on $55 million in loans.

The court-appointed receiver, Madison Marquette's Chuck Taylor, was traveling today and unavailable to comment, but his assistant said the property was still under contract and had not closed. Wells Fargo Bank financed the acquisition, according to the news release.

Dan Lynch, managing partner of Atlantic Retail Properties' Jupiter office who brokered the deal, said J.C. Penney Co. would be "part of the future of the project." The retailer, as well as George's Music, stuck it out at the mall, even posting a sign earlier this year that says: "Here to Stay."

Once construction starts, whether it's demolition of the million square feet of space opened in 1967 or renovation of the existing buildings, Muoio said city leaders and neighbors will be relieved to see the "dead space" revitalized.

Palm Beach Lakes South association President Bernard Macon said a new mall will bring back jobs for young people in his neighborhood, which lies just to the west of I-95. And it will give people, young and old, a place to go again.

He and his wife used to walk at the mall, Macon said.

"There's nothing exciting in there," Macon said of the mall now. "You want to see things to make the walk interesting."

Palm Beach Post Staff Writer Alexandra Clough contributed to this story.

CoreLogic: Fewer U.S. homes have negative equity

SANTA ANA, Calif. – Dec. 1, 2011 – CoreLogic released data yesterday that showed 10.7 million residential properties with a mortgage, or 22.1 percent, had negative equity at the end of third quarter 2011. That’s down slightly from 10.9 million properties, or 22.5 percent, in the second quarter. Florida ranks third in percentage of homeowners with negative equity behind Nevada and Arizona.

An additional 2.4 million borrowers nationwide had less than 5 percent equity, referred to as near-negative equity, in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.1 percent of all residential properties with a mortgage nationwide in the third quarter, down from 27.5 percent in the previous quarter.

Negative equity, often referred to as “underwater” or “upside-down,” is the condition in which borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” said Mark Fleming, chief economist with CoreLogic. “The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

Data highlights

• Nevada has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent). This is the first quarter that Georgia entered the top five, surpassing California which had been in the top five since tracking began in 2009.

• The top five states combined have an average negative equity ratio of 41.4 percent, while the remaining states have a combined average negative equity ratio of 17.6 percent.

• There are nearly 22 million borrowers, or 45 percent of all borrowers, that have mortgages with an 80 percent or more loan-to-value (LTV) ratio, and 69 percent of those mortgages have above-market interest rates of 5 percent or more. Conversely, only 54 percent of borrowers who have less than 80 percent LTV have above-market interest rates. While above-market interest rates make refinancing at today’s historically low rates a cost-effective step for qualified homeowners, it can be more difficult for borrowers with above-average LTV ratios to qualify for refinancing.

• Of the 10.7 million borrowers in negative equity, there are 6.3 million first liens without home equity loans that have an average mortgage balance of $222,000. They are underwater by an average of $52,000, which equates to an average LTV ratio of 131 percent. The negative equity share for the first lien-only borrowers was 18 percent, and 40 percent had an LTV of 80 percent or higher.

• The remaining 4.4 million negative equity borrowers hold first liens and home equity loans with an average mortgage balance of $309,000. These borrowers are underwater by an average of $84,000 and have an average LTV of 137 percent.

• The negative equity share for first lien borrowers with home equity loans is 38 percent, or twice the share for first lien-only borrowers. Over 60 percent of borrowers with home equity loans have combined LTVs of 80 percent or higher.

• Of the total $699 billion in aggregate negative equity, first liens without home equity loans account for $329 billion aggregate negative equity, while first liens with home equity loans account for $370 billion. CoreLogic estimates that of the $370 billion first liens with home equity loans, $190 billion is due to the first lien component.

• There are 8.6 million conventional loans in a negative equity position that have an average mortgage balance of $272,000 and are underwater by an average of $70,000.

• There are 1.5 million FHA loans in a negative equity position that have an average mortgage balance of $170,000 and are underwater by an average of $26,000.

• Given that bank portfolios account for 15 percent of all first lien mortgage loans, CoreLogic estimates that 1.6 million properties valued at $105 billion of aggregate negative equity are in bank portfolios.

© 2011 Florida Realtors®