Archives for July 2015

June 2015: Emerald Coast Real Estate is Hot, Hot, Hot!

Image via Kozzi

It’s not just the weather that’s heating up this summer. Looking at the June 2015 real estate sales data, real estate along the Emerald Coast is just as hot. Sales and prices were up for single family homes and townhouses/condos, and inventory dropped. Some data even broke records. The national real estate statistics followed a similar path. All sales data is a year-over-year comparison between June 2015 and June 2014.

Single Family Home Sales

Emerald Coast

Closed sales increased 24.2%
Pending sales rose 4.8%
Median prices increased 7.7%
Inventory decreased 5.1%
Months supply decreased 22.6% to 6.6 months of inventory

Okaloosa County

Closed sales increased 25.7%
Pending sales increased 4.9%
Median prices increased 7.7%
Inventory decreased 4%
Months supply decreased 21.5% to 5.6 months of inventory

Walton County

Closed sales increased 28.3%
Pending sales decreased 0.4%
Median prices increased 3.7%
Inventory decreased 7.9%
Months supply decreased 27.5% to 7.7 months of inventory

Townhouse and Condo Sales

Emerald Coast

Closed sales increased 29.7%
Pending sales increased 0.6%
Median prices increased 17%
Inventory dropped 3.6%
Months supply decreased 0.2% to 9.8 months of inventory

Okaloosa County

Closed sales increased 21.7%
Pending sales decreased 22.8%
Median prices increased 2.8%
Inventory decreased 1.3%
Months supply increased 7.2% to 11 months of inventory

Walton County

Closed sales increased 48.5%
Pending sales increased 22.2%
Median prices increased 12.6%
Inventory decreased 11.9%
Months supply decreased 17.9% to 8.2 months of inventory

A few things to remember…

The current reporting system began in 2011 and the local market was hot enough to melt a few records:

Emerald Coast

661 – Highest number of total single family home closings since 2011
$240,000 – Highest single family home median price since 2013
6 months – Lowest single family home inventory months’ since 2011
$310,000 – Highest condo/townhouse median price since 2011

Okaloosa County

401 – Highest number of total single family home closings since 2011

Walton County

240 – Highest number of single family home closings since 2011
7 months – Lowest single family inventory months’ supply since 2011

A healthy real estate market (meaning neither buyer nor sellers have an “advantage”) is a six to eight month inventory. Below six months, it’s thought to be a seller’s market and above eight months is considered a buyer’s market. Single family home inventory in Okaloosa County borders on a seller’s market – with buyers having fewer options. This is great for sellers who price their home well and stage it properly.

Inventory can decrease while the months’ supply can increase – as well as the reverse. As inventory falls, buyers have less options. If the available inventory shrinks too much, sales can slow down which will increase the months’ supply of homes for purchase. This also contributes to quicker offers for well-priced and positioned homes, as well as multiple offers.

Median prices increased in all categories for the month of June. The median price is determined, in part, by the price ranges buyers are selecting and the inventory available in those price ranges.

Pending sales are only an indication of the month ahead. In months with an increase in pending sales, you can expect sales to increase for the following month. A decline in pending sales may be an indication of lower sales the next month. It is not an automatic as sales often take more than 30 days to close.

All sales data is from the Emerald Coast Association of Realtors® (ECAR) Multiple Listing Service (MLS) and is compiled by Florida Realtors®, the state association for Florida. The Emerald Coast statistics cover both Okaloosa and Walton counties as well as surrounding areas based on the listings entered into the MLS by ECAR MLS participants.

Is Now the Time to Buy a Home?

Across the country, a similar messaging is being repeated over and over again. Rent prices are on the rise, and renting becoming unaffordable for many people.

Renters need to ask themselves a question. Is now the time to buy a new home?

Owning a home isn’t for everyone, but in many cases, the answer may be, “Yes!”

Rents on the Rise
- Housing is becoming increasingly unaffordable for many renters. Recent data released by the Harvard Joint Center for Housing Studies shows that half of all renters (20.7 million) spent more than 30 percent of their income on housing in 2013 – and costs have only continued to rise since then.
- Worse still, about 11 million renters spent more than half their income on rent and utilities. That’s a 37 increase from 2003.
- In an ideal situation, housing should cost less than 30 percent of your income. But that’s just not the case.
- The middle class seem to be getting hit the hardest. Families with incomes between $45,000 and $75,000 seem to being feeling the pinch more than ever. Between 2003 and 2013, 72 percent of families in this income bracket spent more than half their income on housing.
- On the flipside, though, only about 25 percent of homeowners (19 million people) spent more than 30 percent on housing, which is the lowest amount in ten years.
The Case for Owning Your Home
- There are plenty of misconceptions about buying a new home. Let’s clear a few of those up.
  - Myth 1: You need to save a 20 percent down payment.
    - Not true! Conventional loans are available for as little as 5 percent down and FHA loans are available for as little as 3.5 percent down.
  - Myth 2: You have to have perfect credit to get a mortgage.
    - While mortgages aren’t as easy to get as they were several years ago, perfect credit is not a requirement for every loan type. For FHA loans, your FICO credit score can be as low as 580 and still qualify for a low down payment mortgage.
  - Myth 3: There’s no value or long-term wealth in housing, especially since the recession and housing crash.
    - According to a Federal Reserve study in 2014, the average net worth for a renter is $5,400. The average net worth of a homeowner is $194,500.
- For many renters, buying a home is more of a reality than you may realize. Former renters across the country are saving money each month as homeowners. Finding the right mortgage and the right home isn’t always easy, but for many renters, it may be worth the effort

Is Your Bank Account Ready for a Pet?

While research has shown that bringing a pet into your home can do wonders when it comes to lowering blood pressure, lessening anxiety and even boosting your immune system, anyone who has ever owned a pet can attest to the fact that it’s not a cheap undertaking. From food to toys to veterinary costs—and everything in between—owning a pet is an expensive proposition. And the money adds up quickly through the course of a year, let alone a lifetime.

Before you surprise your family with a new pet, it’s crucial that you understand the finances associated with owning—and caring for—your new family member.

The following chart, from the American Society for the Prevention of Cruelty to Animals (ASPCA), provides an accurate look at the annual costs associated with caring for a variety of species.

Small Dog $1,314
Medium Dog $1,580
Large Dog $1,843
Cat $1,035
Rabbit $1,055
Guinea Pig $705
Small Mammal $340
Small Bird $270
Fish $235

Can You Buy a Home Again After a Foreclosure, Short Sale, or Bankruptcy?

Image via Stuart Miles/Kozzi.com

A few short years ago, we all found ourselves in the midst of the worst recession since the Great Depression. Businesses collapsed. Housing collapsed. Jobs were lost.

There’s no need to recap a history that is still vivid in many of our minds.

The economy, thanks in a large part to housing, is recovering. Not as fast as some would like, but things are improving.

If you found yourself dealing with a short sale, foreclosure, or bankruptcy, you might be wondering if you can ever own a home again. The answer may surprise you.

Boomerang Buyers

Anyone who has completed a foreclosure, short sale, or bankruptcy and now qualifies for a mortgage because the waiting period ended and the foreclosure, short sale, or bankruptcy has fallen off your credit report is a possible boomerang buyer. You owned a home until the economy tanked and regardless of your reasons (job loss, exploding interest rates for adjustable rate mortgages, whatever), you took a bit hit to your credit. Now, enough time has passed that your credit score is no longer affected.

If you qualify for a mortgage and want to buy a home, you are a boomerang buyer.

A few facts:

7 million people went through a short sale, foreclosure, or bankruptcy between 2006 and 2014
1 million people have already restored their credit
350,000 people were return (boomerang) buyers in 2014
2 million people will meet mortgage requirements to become return buyers over the next 5 years

What does this mean?

You aren’t alone in this. And, if you choose to, you can own a home again.

For Those with Recent Credit Blemishes

While it’s always better to have the best credit possible before you apply for a mortgage, there are options for people who’s credit hasn’t repaired itself yet.

Some non-bank lenders are lending to buyers who have gone through a foreclosure, short sale, or bankruptcy more recently, according to a recent Wall Street Journal report.

This isn’t a golden ticket for anyone with poor credit.

Lenders still verify income and look at credit history. For a buyer who’s only problem was a lost job or a catastrophic illness – situations beyond their control – who maintained a decent credit score outside of losing your home, you might have more options than you realize.

While some of these lenders will consider someone with a FICO score as low as 500, the vast majority of these buyers had high credit scores before the job loss, illness, etc. and maintained a good credit score after the event. Be prepared to pay much higher interest rates, though, which could fall anywhere between five and 10 percent.

For those who dream of owning a home, all is not lost. Talk to a lender. Check your credit report. And continue to save for a down payment. Depending on your situation, you may qualify for a mortgage sooner than you think. You can be a homeowner again.

3 Reasons to Feel Optimistic About Real Estate Right Now

Image via Kozzi

Last week, optimism dominated the real estate headlines. It all pointed to a healthier real estate market, and good news for both buyers and sellers.

FHA Loans Hit a Two-Year High

In April, the Federal Housing Administration (FHA) endorsed 108,386 residential loans. Those loans account for $21.624 billion (yes, with a “b”) in home loans. That number includes traditional loans, home-equity mortgages, and Title 1 loans. The last time this many loans at such a high value were endorsed by FHA was in May 2013.

Why should you care? FHA loans offer lower down payments, work with buyers from moderate incomes, and have less stringent requirements for borrowers. While there are plenty of good loan products out there other than FHA, more FHA loans is a good sign that first-time home buyers and other buyers are returning to the market.

Mortgage Sales Outnumber Cash Deals in Florida

For the first time since 2009, May saw more homes purchased by buyers with mortgages than those with cash. The 64-month streak has been broken. In May, cash deals counted for 47 percent of all home sales.

Why should you care? Many cash investors swooped in and purchased lower priced homes, which in some areas caused an inventory shortage for buyers with mortgages. What was often left behind were higher value homes or the low-end foreclosures that needed work to be done to make them liveable. The increase in mortgages means that more people are entering the market and qualifying for a mortgage. All of this is good for buyers and sellers.

U.S. Consumer Confidence Increased in June

According to the latest U.S. Consumer Confidence Index, American consumers are becoming more confident about business and employment. More people believe jobs are “plentiful,” while less believe they’re “hard to get.”

Why should you care? More optimistic consumers often leads to a willingness to spend money in the near future. As long as buyers feel they can keep their job because business is good or can find a job if they need to, it’s easier to make the commitment to a new home and a mortgage.

Not everything in the real estate market is perfect. Lending is still difficult for specific pricepoints and specific buyers. There are inventory shortages in some areas. But, whether you’re a buyer or seller, you can feel more optimistic as we move through the summer months. On the Emerald Coast, business is good.