Realtor Coaching & Training: Fort Lauderdale
This new report shouldn’t be a surprise to any HREU students. We have been preparing our students for nearly 3 years for this. There is a real estate contagion that is spreading.
Here is how it happens….
1) Home loses value. Studies prove that the rate of walk-aways dramatically increases once a homeowner is 20% upside down.
2) Homeowner walks away (foreclosure) or if they are smart they sell the home via a short sale. Either way, home sale recorded reflecting the lower market price.
3) Neighbors learn of the sale…discover that their home is upside down….and they too decide to deleverage out of their own toxic asset.
4) Rinse, wash and repeat.
Nearly half of all owners of single-family homes in the Miami-Fort Lauderdale metropolitan area were underwater at the end of the third quarter, meaning their homes were valued at less than the mortgages owed against them.
Forty-six percent of South Florida homeowners, representing 387,157 homes, were underwater at the end of Sept. 30, compared to 47 percent in the second quarter, according to a new report from Web-based real estate services firm Zillow.com
Nationally, 21 percent of homeowners were underwater as of Sept. 30, down from 23 percent in the second quarter, as home values stabilized in the short term and more underwater borrowers lost their homes to foreclosure, Zillow said.
Agents, in this market…what choice do you have other than learning how to be a Short Sale Listing Specialist. You already know that the listings that are selling are the short sale listings. Learn now how to easily list and sell short sales. Watch the FREE Agent Short Sale Secrets video and then download the FREE Agent Short Sale Secrets book.
Zillow’s home price index showed that the median price of a single-family home in the area was $168,400, down 17.1 percent from the same period a year before. Values were down 2.1 percent from the second quarter.
The Zillow index measures values of all homes, not those sold in a particular period. While values continue falling, the firm said September marked the eighth consecutive month of decreasing year-over-year price declines.
Additionally, 50 percent of all homes sold in September sold at a loss, the firm said. A small percentage, 5.5 percent, saw their values rise over the past 12 months.
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Underwater Homes
Breaking News:
No HREU Students should be surprised by this new report….last year we predicted on this blog that nearly 50% of all homeowners (with mortgages) would be upside down in their homes. So, what do you do with this information?…should you panic and run for the hills?
No way!
You need to learn what this real estate market demands and take action!
Aug. 5 (Bloomberg) — Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.
The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011, Karen Weaver and Ying Shen, analysts in New York at Deutsche Bank, wrote in a report today.
Agents, what does this mean to you? Simple, 50% of all sellers will need listing agents who know how to do short sales! OR they will lose the home to foreclosure. Watch the FREE Agent Short Sale Secrets video now…and then grab your free Short Sale how-to book!
As of March 31, the share of homes mortgaged for more than their value was 26 percent, or about 14 million properties, according to Deutsche Bank. Further deterioration will depress consumer spending and boost defaults by borrowers who face unemployment, divorce, disability or other financial challenges, the securitization analysts said.
“Borrowers may also ‘ruthlessly’ or strategically default even without such life events,” they wrote.
Seven markets in states with the fastest appreciation during the five-year housing boom — including Fort Lauderdale and Miami, Florida; Merced and Modesto, California; and Las Vegas — may find 90 percent of borrowers underwater, according to the report.
The share of borrowers owing more than 125 percent of their property’s value will increase to 28 percent from 13 percent, according to Weaver and Shen.
Home prices will decline another 14 percent on average, the analysts wrote.
Agents, learn how to be a Short Sale Specialist. Do you really have an option at this point other than learning how to do short sales? Watch the FREE Agent Short Sale Secrets video and grab your FREE Short Sale How-To Book!
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Unless we see a recovery in the housing market, we won’t really see a recovery in the economy. But is the housing market approaching a bottom? Or does it still have a ways to go?
The answer is critical to understanding the current economic depression.
This is a chart of the S&P/Case-Shiller Home Price Index.
As you can see, it’s plummeted over the last 18 months or so. It shows that U.S. house prices have been spanked hard. And, unfortunately, it shows no sign of bottoming anytime soon.
This makes sense considering the flood of foreclosures hitting the market. In Fort Lauderdale, Florida, homes that were selling for $250,000 during the peak are now going for $70,000 in foreclosure. Repeat this scenario across the country, and you’ll see that home prices still have further to go.
Making matters worse is the 8.1% U.S. unemployment rate and the fact that nobody can find credit to buy a home with. (Less credit means fewer mortgages.)
As the year drags on and foreclosures keep hammering house prices, this trend will continue to drain cash from homebuilders. That means homebuilders such Lennar Corporation (LEN) should continue to see lower share prices as the year wears on.
Thanks to our friends at SeekingAlpha.com for this article.
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Realtor Coaching Clients…the REO listings opportunities of your career are just getting started…read this article from Bloomberg. Be sure to download your free Agent REO Secrets guide book. Free Instant download here.
U.S. foreclosure filings climbed 28 percent in November from a year earlier and a brewing “storm” of new defaults and job losses may force 1 million homeowners from their properties next year, RealtyTrac Inc. said.
A total of 259,085 properties got a default notice, were warned of a pending auction or were foreclosed on last month, the seller of default data said in a report today. That’s the fewest since June. Filings fell 7 percent from October as state laws and lender programs designed to delay the foreclosure process allowed delinquent borrowers to stay in their homes.
“We’re going to see a pretty significant storm next year,” Rick Sharga, executive vice president of marketing for Irvine, California-based RealtyTrac, said in an interview. “There are two or three clouds that suggest a pretty heavy downpour.”
Rising unemployment, expiring foreclosure moratoriums and state efforts that “run out of steam” will push monthly filings toward the record of more than 303,000 set in August, Sharga said. The number of homes that revert to lenders, the last stage of foreclosure and known as “real estate owned” or REO properties, will increase to 1 million from as many as 880,000 this year, he said.
Job Losses
“The forces leading to foreclosure are hard to offset in most cases and impossible in many,” Robert Hall, a Stanford University professor and chairman of the National Bureau of Economic Research committee that calls the beginnings and ends of recessions, wrote in an e-mail. “Job loss is a major source of defaults at all times, and job losses are running at extreme levels now.”
Initial jobless claims increased to 573,000 in the week ended Dec. 6, the highest level since November 1982, while the number of workers staying on benefit rolls reached 4.429 million, also the most since 1982, the Labor Department said today. U.S. companies slashed payrolls by 533,000 last month, the fastest pace in 34 years, for a total of 1.9 million job cuts so far this year.
“The labor market is facing its worst crisis since 1982, and it is certainly not over yet,” said Harm Bandholz, a U.S. economist at UniCredit Markets and Investment Banking in New York.
Home prices have fallen by about a fifth from the mid-2006 peak, according to the S&P/Case-Shiller home price index.
‘Devastating Consequences’
“The decline in prices and its devastating consequences” will continue next year with no indication of when they will stabilize, Hall said. Programs that modify the terms of loans, including efforts by Fannie Mae, Freddie Mac, JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. can’t help thousands of borrowers, he said.
“Something like 70 percent of subprime foreclosures are beyond the reach of modification programs because the owners are investors, because the owner is in default for the second time on the property, or because the owner has disappeared,” Hall said.
The share of mortgages delinquent by 30 days or more in the third quarter rose to a seasonally adjusted 6.99 percent while loans already in foreclosure rose to 2.97 percent, both all-time highs, the Mortgage Bankers Association said in a Dec. 5 report. The gain in delinquencies was driven by an increase in loans with payments 90 days or more overdue.
No Improvement
“Until we see a turnaround in the job situation, we’re not going to see these numbers improve,” said Jay Brinkmann, chief economist of the Washington-based bankers group.
In November, one in every 488 U.S. households received a foreclosure filing, RealtyTrac said. Nevada had the highest rate for the 23rd straight month with one in 76 households in some stage of foreclosure, more than six times the national average. Filings more than doubled from a year earlier to 13,962.
Florida had the second-highest rate, one in 173 households, and the second-most filings at 49,190, an increase of 68 percent. Arizona had the third-highest rate, one in 198 households, and ranked fifth in total filings with 13,136, up 128 percent.
California, Michigan, Georgia, Ohio, Colorado, Utah and Idaho also ranked among the top 10 highest rates, said RealtyTrac, which collects property data from more than 2,200 U.S. counties that represent more than 90 percent of the population.
California
California had the most filings with 60,491, up 51 percent from a year earlier, and a rate of one filing for every 218 households, more than twice the national average.
Michigan ranked third in filings with 14,594, up 27 percent, and had a rate of one for every 309 households, according to RealtyTrac. Nevada, Arizona, Ohio, Georgia, Illinois, Texas, and Virginia were among the top 10 states with the most filings.
New Jersey had the 15th highest rate, one in 622 households, and had 5,582 filings, up 32 percent from a year earlier. New York had the 39th highest rate, one in 3,040 households, and had 2,601 filings, a decrease of 55 percent, RealtyTrac said.
Florida had three metropolitan areas among the top 10 highest rates, including Cape Coral-Fort Myers in first place with one in 59 households in a stage of foreclosure. Fort Lauderdale was seventh at one in 117 households, and Port Lucie- Fort Pierce was eighth at one in 118 households.
Las Vegas ranked second at one in every 61 households in a stage of foreclosure.
California had six metro areas in the top 10, led by Merced in third place with a rate of one in 76 households in a stage of foreclosure. Modesto, Stockton and Riverside-San Bernardino ranked fourth through sixth, Bakersfield was ninth and Vallejo- Fairfield was 10th, according to RealtyTrac.
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With the amount of listings that Fannie Mae hold in those two states, this does not surprise. We did a online review on Fannie Mae REO Property listings.
Fannie Mae is rethinking how it will handle the tens of thousands of properties being repossessed as the real estate market continues to plummet.
Clearly, one of the best opportunities in this market is being a REO listing agent. Banks and the FHA are now looking for agents to handle the enormous number of REOs that must be sold. There is a free book available for agents looking to get in on the REO business. Download the free book here.
To that end, it is opening two satellite offices, one in California and another in Fort Lauderdale, Fla., to manage and sell its foreclosed properties in those states, said Marilyn Kornfeld, a spokeswoman for the Washington, D.C.-based company.
Nationwide, Fannie Mae has repossessed more than 54,000 homes as of June, exceeding all of last year’s repossessions.
“Forty-eight percent of our credit losses were from four states: California, Arizona, Nevada, and Florida. These states saw the most dramatic run-up in prices, and are now seeing the most rapid declines,” Fannie Mae CEO Daniel Mudd told investors during a conference call earlier this month.
Home prices have cratered in certain markets since the peak. In California, Riverside was down 40 percent and Modesto and Stockton were down 50 percent.
“So, the housing market has returned to earth fast and hard,” Mudd said. “Some signs do offer rays of positive light. Foreclosures actually fell in Michigan. Same-period home sales were up in California. And, as the GSE provide most of the liquidity to the primary market, that market is functioning and a safe center of credit risk; pricing and product is being restored.”
Fannie Mae said it hopes its new offices in Florida and California will reduce defaults and better manage the property it has taken in foreclosure.
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2009 Money Magazine Housing Devaluation Predictions.
Money Magazine recently put out a city-by-city home price forecast as well. Using data from Fiserv Lending Solutions, First American CoreLogic, city and county assessors, and realtors, the magazine determined that U.S. home prices will fall an average of 9.7 percent.
Miami is expected to see the most lost equity. Money Magazine is predicting a 24.9 percent drop. Cities in Texas and New York are expected to fare the best.
Metro Area Median Home Price Forecast May 09 (% chg)
Albuquerque, NM $174,000 -10.5%
Atlanta, GA $205,000 -2.3%
Baltimore, MD $264,000 -12.5%
Boston, MA $363,000 -10.5%
Chicago, IL $279,000 -6.8%
Cleveland, OH $145,000 -4.3%
Denver, CO $254,000 -10.8%
Detroit, MI $120,000 8.6%
Edison, NJ $358,000 -15.8%
Fort Lauderdale, FL $309,000 -22.2%
Honolulu, HI $625,000 -16.2%
Houston, TX $150,000 1.2%
Jacksonville, FL $197,000 -9.6%
Kansas City, KS $148,000 -0.6%
Las Vegas, NV $277,000 -18.3%
Los Angeles, CA $528,000 -16.8%
McAllen, Texas $109,000 4.0%
Miami, FL $329,000 -24.9%
New Orleans, LA $158,000 2.2%
New York City, NY $471,000 -13.2%
Philadelphia, PA $200,000 -11.1%
Phoenix, AZ $237,000 -18.3%
Portland, OR $306,000 -14.7%
Riverside, CA $340,000 -16.9%
Rochester, NY $121,000 2.7%
Sacramento, CA $330,000 -8.9%
Salt Lake City, UT $229,000 -9.8%
San Diego, CA $522,000 -9.7%
San Francisco, CA $840,000 -10.1%
San Jose, CA $750,000 -12.5%
Seattle, WA $430,000 -9.0%
Springfield, MA $195,000 -9.5%
Stamford, CT $562,000 -13.9%
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