Doral Bank, a Puerto Rico-based bank with a presence in Florida, recently reaffirmed its commitment to real estate by announcing a partnership with San Juan Board of Realtors. During the oath ceremony of the Association’s new board, Doral Mortgage addressed the Board of Realtors and confirmed its support of the continued education program. Jesus D. Mendez, the operations EVP at Doral Bank Puerto Rico, took the oath of the new San Juan Board of Realtors president Eduardo Santos Alvarado at the event.
Alvarado acknowledged Doral’s support, and stated “It’s important to work together to achieve the goals we all have in the mortgage market. Our present is challenging, therefore, it’s important to know the existing opportunities to provide successful solutions to consumers in a responsible manner and that’s what we are looking for with our partnership with Doral.”
Doral bank also issued a statement, explaining that it “is essential to establish such partnerships in times of economic change, emphasizing that Doral has always distinguished itself by extending services of opportunities and alternatives for citizens in programs aimed at the acquisition of homes. With programs such as HARP (Home Affordable Program Refinance) and FHA Streamline, they have followed families to refinance their mortgage at a lower interest rate even at a time when the value of the property has been affected, allowing a significant financial relief for these families.”
It seems that Florida is looking up vis-à-vis jobs and housing in particular and its economy in general. The Florida Legislature now has the capacity to develop close to 9,000 jobs, rendering a staggering $900m for the 2012-13 fiscal year. It will be able to do this by getting money from the state and local housing trust fund which often ends up in the category “general revenue” and pretty much gets lost.
Great Florida Housing à Great Florida Economy
The bottom line is that the more recovery there is on the Florida housing market, the better the entire state’s economy will fare. If capital is taken from the housing trust fund, it can be used to renovate abandoned homes, which would give those working in the field of construction, jobs, and thus boost the economy. So it just makes sense to invest in the state’s real estate market. Doing so will result in property value stabilization for everyone while supporting firms that deal in all sorts of construction areas (material provision; contractors; supervisors; workers and more.
Ultimately, Florida needs its sales taxes to generate revenue and when funds set aside for housing are not used for this purpose, there is an increase in sales revenue, which results in a reduction of the state budget deficit.
Current Florida Real Estate Issues
The US housing market is up and down. It’s good for some people; bad for others. Looking at the fact that there are properties on the market which have lost around 50% of their value, this should make it a great time to buy a home. But that’s just the theory. It seems the reality is somewhat different.
Other Economic Factors
While it’s true that house prices in distressed areas are selling at pretty much an all-time low, if one has no money, there is no money no matter how cheap they are! In other words, with high unemployment, it doesn’t matter how low property prices are plummeting, there is no capital with which to make a purchase.
On average, a 30-year mortgage has now dropped to less than 4 percent. But with people worried about whether or not they are going to remain in gainful employment and thus banks becoming less willing to lend money to these individuals, it becomes way harder to purchase property. Potential buyers now have to really be put through the ringer as they are requested to produce comprehensive tax returns and income verification.
Where Florida Fits In
Unfortunately Florida is pretty typical of what is going on now vis-à-vis the challenging real estate market. People simply cannot buy homes with no jobs or if they sense severe job insecurity. The four largest cities in Florida are at this point this right now. Thus it seems there is quite a way to go before the Florida housing downturn encounters a real recovery. Potential buyers – or those who should be potential buyers – are sticking to what they know and not taking any risk. They want to make sure they have a steady income before thinking about taking out a huge loan for a house that could ultimately result in a foreclosure.
According to a report from Zillow, in the third quarter of 2011, those selling their homes in Palm Beach County lost money on almost 46 percent of occasions. This was an increase of 3.4 from the second quarter. As well, in September, national figures were 34 percent of homes selling for a less which is three percent more than for the same time frame last year.
And it looks like there is more bad news along the way. According to one economist at Zillow, home prices are meant to plummet a further three to five percent before hitting rock bottom nationwide. The economy isn’t doing great with unemployment, negative equity and more. With such features plaguing the economy, is going to be a long time until the housing market stabilizes.
Close to 50 percent of homeowners in Broward, Miami-Dade and Palm Beach owed more on their mortgages than the worth of their homes during the third quarter. This figure has slightly increased since the second quarter. It also looks like next year, the values on South Florida homes will be hitting bottom. At that point, banks will have to start unloading all these homes. The one silver lining on the cloud according to the Zillow report is that there has been a reduction in pace of home-values.