May 14, 2013

It Feels Like That Feeding Frenzy Again

The Sun Sentinel reports from Florida. “South Florida investors flipped 4,299 homes last year, up 36 percent from 2011. They bought at an average price of $138,064 and resold at an average of $189,291. Orlando was the top market for flipped homes, with a 63 percent gross profit, RealtyTrac said. ‘When I put a house back up for sale, it usually goes very quickly,’ said Bruno Duarte, a 34-year-old former stock broker. ‘Prices since last year have risen a lot. Houses I used to buy for $70,000 or $75,000 cost $80,000 now. They’re costing a little more to buy, but they’re also selling for higher prices, too.’”

The Herald Tribune. “A little-known component of a U.S. immigration reform bill snaking its way through Congress could bolster foreign retirees’ ability to purchase Florida homes. Under the proposed federal reform, the stays in the U.S. of Canadian visitors and real estate buyers could be extended. It also would grant temporary visas to foreigners from any country who pay cash for luxury real estate in the U.S. Area Realtors hope relaxed immigration rules could further lift sales to a segment of buyers that already is energizing the housing market, especially Canadians and Europeans, who typically travel to the area for vacations.”

“‘I go up to Canada every year, show them pictures of palm trees and beaches, and they come on down,’ said Bill Weed, a Realtor with brokerage firm Michael Saunders & Co. in Lakewood Ranch. ‘It feels like that feeding frenzy again.’”

From Florida Today. “When Bobbie Dyer of Dyer Mortgage Group was able to secure a loan for first-time home buyer Emelee Arbuckle, the latter started crying. They were tears of happiness from the 22-year-old Arbuckle, who was taking a big step with her future by purchasing a home in Rockledge. ‘I had looked into renting, and I could rent a two-bedroom apartment for around $700 to $800 a month and that wasn’t including the other essentials,’ said Arbuckle, a production coordinator at The Highland Mint in Melbourne. ‘I could buy a house and pay a mortgage, and end up owning it for as little as $700 a month,’ she said.”

“The house cost Arbuckle, who eventually wants to become an art therapist, $100,000 and she pays $780 for her mortgage. Arbuckle, who attends Brevard Community College and operates a small design business, said the housing crash a few years ago was a good teachable moment to reflect on, but it didn’t paralyze her from deciding to purchase a home.”

“‘Yes and no it had an impact,’ Arbuckle said of the housing market swing. ‘I know how bad it can get because the value of my parents’ home skyrocketed and then it plummeted within a year. I know there’s a risk. But I’m not spending this money and having it going to waste.’”

The Palm Beach Post. “In West Palm Beach, new rental applications increased from 296 in 2011 to 399 last year, with a hefty number coming from international and out-of-state buyers, said Sandy Wuraftic, the city’s license permit supervisor. But not everyone follows the rules. ‘We have one person who owns 150 homes and hasn’t registered any of them,’ Wuraftic said. ‘We’ll eventually catch up to him.’”

“The fragile sense of community in homeowner Bryan Melzard’s neighborhood - the impromptu chats on the sidewalk, shared gripes about overzealous condo commandos - is fading. More renters are moving into his Greenacres, Fla., development of about 100 homes, filling investor-owned properties. Melzard said the condo commandos in his community have lost their enforcement enthusiasm with the increase in renters. He believes the softening may be because the association is just thankful for getting healthy dues again from previously delinquent units.’

“‘It can be kind of a free-for-all,’ Melzard said. ‘There’s no such thing as a neighborhood anymore.’ With a 5-month-old baby, he and his wife are moving to central Florida to be closer to relatives. The couple already has a buyer for their home, an investor from California.”

The Orlando Sentinel. “Builders in the four-county metro area started work on 1,801 single-family houses during the first three months of the year, up from 1,386 housing starts for the same period in 2012. Construction starts have jumped 46 percent during the most-recent four quarters compared with the 12-month period prior to that. At a time when the inventory of existing homes listed for resale on the local market has edged down to less than a three-month supply, the inventory of new-but-vacant homes and those under construction increased by 21 percent from a year earlier.”

“‘The number of units in housing inventory has increased recently, but primarily in under-construction units. Completed houses are being occupied as soon as the house is finished,’ said Anthony Crocco, regional director for Metrostudy’s Orlando and Jacksonville markets.”

The New York Times. “Of the 22,000 condos created in downtown Miami during the boom years, only about 600 remain unsold — thanks mainly to an influx of Latin American investors seeking a safe haven for their money. Developers are reacting to the shrinking inventory predictably enough — by building more condos. The most ambitious project by far is the $1.05 billion Brickell CityCentre, a development that will add about 800 condos in two 43-story towers, a hotel, luxury movie theater and a wellness center aimed at tourists from Latin America.”

“‘This will be our Rockefeller Center,’ said Robert Kaplan, a principal with the Miami Beach office of Ackman-Ziff, a New York-based mortgage brokerage, referring to Brickell CityCentre.”

The Miami Herald. “Concerns are rising that South Florida’s recovering luxury residential real estate sector may be losing momentum as an increasing amount of inventory — a combination of resales and new construction — comes onto the market at higher and higher prices in Miami-Dade, Broward and Palm Beach counties. At the current 2013 sales pace of about 235 luxury properties transacting monthly, South Florida now has about 20 months of high-end inventory available on the market at a median price of more than $540 per square foot, according to an analysis of Southeast Florida MLXchange data.”

“As the resale activity has slowed in South Florida in 2013, the number of luxury residences on the market has grown to more than 4,550 properties priced at a minimum of at least $1 million each. As of April 15, 2013, more than 3,950 luxury residences — about 87 percent of the available luxury inventory — are on the market in South Florida with an asking price of between $1 million and $5 million each, according to the data.”

From WFSU. “Florida Gov. Rick Scott is considering whether to sign a bill meant to speed up the home foreclosure process. But foreclosure lawyers are saying the measure is unfair to consumers, and they’re threatening a legal fight if it becomes law. Courts are still getting crushed by the backlog of foreclosure cases. As of February, about 340,000 foreclosure cases sat unresolved in Florida courts. And it’s predicted an additional 680,000 cases will be opened in the next two years.”

“Sen. Darren Soto (D-Kissimmee) said, banks are purposely processing foreclosures slowly so they don’t flood the market with properties. Soto wrote a letter to Scott urging a veto, saying the bill would mark the biggest reduction in homeowner property rights in generations.”

“During debate on the Senate floor, he said, ‘And the innocent people we’re protecting? Hedge funds. Flippers. Foreign investors. These aren’t families buying these houses in foreclosure, they’re sophisticated investors that know the risks they have. But the people who are losing their houses. They are our constituents. They are Florida’s families.’”

The Tampa Tribune. “Pasco County Property Appraiser Mike Wells said he would release his official projections later this week, but the state Office of Economic and Demographic Research has reported Pasco’s tax base grew by 2 percent in 2012. Last year the conference projected Pasco County would see just a .6-percent loss in taxable value, so the county’s budget office was shocked when the actual tax roll showed a 5.2-percent drop.”

“That’s one reason Wells said he hasn’t even looked at the state projections for this year. He said reports that Pasco home prices have increased by double-digit rates are wildly inaccurate. His comments would appear to confirm the state’s finding that overall home prices grew by less than 1 percent. In the executive summery, the conference reported that Housing Price Index, while on the rise, excludes sales of foreclosed homes.”

“‘In this regard, the conference is particularly concerned that the foreclosure inventory of residential properties in Florida remains high, and its future effects are not reflected in the current HPI readings,’ the report states.”

“‘I keep reading about all these 10- and 12-percent increases,’ Wells said. ‘It just isn’t happening. Some neighborhoods are going up, but I have to consider the whole county. There are plenty of areas where the home prices are still going down.’”

Bits Bucket for May 14, 2013

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