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It seems that mortgage lenders are actually finally dealing with South Florida’s disastrous housing situation.  Today, the region ranks as one of the top metro areas vis-à-vis mortgage modifications. Ever since the Home Affordable Modification Program (HAMP) began back in 2009, a staggering 46,032 trial/permanent modifications have been approved in the following counties to date: Broward, Miami-Dade and Palm Beach.

But the question is, what’s the fine print?  Do these modifications really help, and, if so, how much?  Over 92,000 have been attempted in South Florida, which indicates that approximately 50 percent of them have failed.  Still, that means half have worked and since before the settlement was established one could only pay lower interest rates and add years on to the mortgage in a modification, today, there are more choices, which ultimately provide much better relief as lenders are offering more realistic and helpful assistance to homeowners, such as mortgage balance forgiveness.

What this means is, that homeowners become more motivated.  They see that they are being offered something real – the loan modification is going to actually help them.  One example was of a lender “forgiving” $112,000 in principal for a client who was paying approximately $4,000 per month on an underwater mortgage (whereby the property is worth less than what they are repaying).  As well, a slashing of bank interest rates from 7 to 2 percent, reduced the monthly payments further to $2,300.

It thus looks like there is a far greater grasp of reality on what people can afford which seems to be the most sensible way of assisting the present housing crisis in South Florida.

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The property market in Central Florida has not had a great rep over the last few years. But now, that situation may just be changing.   As house prices begin to increase, and there is a reduction of available homes for purchase on the market, the region is moving out of the red and into the black. 

Indeed, it seems that the median price in Central Florida has escalated 11 percent over the last six months since the beginning of the year, putting it at $120,000.  The Orlando Regional Realtor Association also figured out that by removing the distressed homes from the picture, the average price of a home in the region has increased to $160,000. And, perhaps even more noteworthy, the value of distressed homes has increased too, by 5 percent, putting it up to $108,000.

Orlando

Looking at East Orlando the situation is improving too.  Agents trying to sell houses on a daily basis are experiencing much more movement than they were in the past.  The hope is, of course, that this trend will continue.  But the fear is, that since the market remains full with many short sales and bank-owned properties, the reality is that housing has not completely bounced back from the depths of despair.  Still, the housing price increase, coupled with interest rates that currently sit at less than 4 percent, will probably translate into additional house sales.

In addition, for the fourth consecutive month, prices on homes increased in Orlando’s market in May 2012 which agents view as an extremely positive sign for it turning into a sellers’ market.  Indeed, things have been moving so fast that real estate agents in the area have noted that on some “hot list” properties, by the end of the first day, they could even have pending contracts.

 

Ultimately, what’s encouraging for agents like Vanesa Cortes who works with Coldwell Banker, there has been a stead increase in price which should encourage those who have been waiting to buy to take the plunge.  It is expected that by the end of 2012, this will happen for the region.

 

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Since it has at times been a challenge for the students at Florida Atlantic University (FAU) to find appropriate accommodation while studying, there could be good news ahead.  What was once a factory – Monier Lifetile – will now become a four-story complex housing close to 600 students. 

Located at NW 20th Street, it is hoped that this factory that once produced tiles and is hardly noticeable any more since it has been deserted for some time, will be rejuvenated with student activity.  So that sounds like good news.  However, not everyone is so pleased.  Officials from Florida Atlantic University and some employees from the city are not too happy about it this move that is slate for completion within the next three years. But proponents of the move, including the city’s Mayor, Susan Whelchel, argue that what is more likely to happen is that the area will get a facelift and become a pleasant village of shops and eateries specifically catering to the needs of students.  So in favor of the work being done on the project, that Whelchel herself made its construction one of “the most pressing council priorities for the coming year.”

Another FAU Building Issues

Besides, it is about time FAU got some positive reinforcement vis-à-vis its buildings issues.  As it is, its St. Lucie West extension has been described as “an embarrassment,” it’s such a mess.  Indeed, it is said that it is in such a poor state that it implies one of two things: either the city’s potential students are choosing other cities for their studies; or that there aren’t enough students who qualify for college acceptance, which gives the city a pretty poor academic reputation.

But if one just takes a look at the school’s accounting scholars program, it seems this is not the case at all.  One hundred percent of the program’s 23 graduates this year from the FAU are leaving with a job to go to, in their field.    As well, 80 percent of its undergraduate students have a summer internship.  As the School of Accounting’s director, Kimberly Dunn, proudly pointed out, “in its short history, the Accounting Scholars Program has developed an outstanding reputation of academic and professional excellence.” I am extremely proud of the tremendous success of our students and alumni.” Now that doesn’t seem consistent with a FAU having a poor academic reputation at all.

So it remains to be seen who is correct – the opponents of the work or people in Mayor Whelchel’s camp who are very much in favor of making this happen for FAU.

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Potential Florida home buyers are being connected with HomesJacksonvilleFlorida.com in an effort to lead them to purchase their dream homes.  The company offers: foreclosures, short sales, rent to own and owner financing houses for sale by owner.  Overall, the goal of this group of real estate investors is that, personal credit shouldn’t have an impact on being able to become a homeowner, especially now since the huge amount of foreclosures and distressed properties has resulted in a surplus of homes for the market.

How it Works

This team is attempting to help average people own special, dream homes.  The obstacle that these individuals face is that they are being haunted by various financial problems.  So this group – that owns real properties – facilitates the process for them, so much so that it can actually become easier than renting in Florida. 

What happens is, banks and mortgage lenders have to follow set rules vis-à-vis loan approvals, but HomesJacksonvilleFlorida.com, doesn’t have to abide by such restrictions. Instead, they make their assessment on their own set criteria and are more able to “bend the rules” as it were.  Indeed, according to one senior investment property advisor there, Kevin Thompson, “people with bad credit are often turned down by banks and mortgage lenders, but exploring creative financing is one of the best ways to get in a home fast.  Many hard-working people want to own a home and deserve to be given the opportunity.”

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After months – nay years – of far-from-positive news on the Florida housing front, it seems that there is something to smile about now for those navigating the South Florida housing market.  Maybe the crash will now – slowly at first – start to end.  Experts cannot say how long it will take for things to really turn around and there are likely to be some hiccups on the way, but the general feeling is that the bad news is about to end.  And, for those looking for more information, they should have made sure they were in attendance at the South Florida Housing Summit.

Why Good News?

So why the optimism?  First, there are less resale inventory since buyers are increasingly purchasing smaller properties at cheaper prices in the Broward, Miami-Dade and Palm Beach areas.  Second, the properties now owned by banks in South Florida only account for less than 22 percent of the close to 42,000 residences which is a drop from  over 100,000 properties that were on the market at the end of 2008.

In addition, there are already plans for the construction of a further 24 condo towers comprising 4,500 units in the tri-county region even though there is not nearly enough funding for construction available.  As Melanie Dawn recently tweeted, “low home prices begin looking up in South Florida.”

Resale Price Escalation

According to figures from the Florida Association of Realtors, in January 2012, there was a 13 percent increase in resale prices for single-family units in Miami-Dade County compared to the figure for the same time frame in 2011.

Of course, it has to be recognized that this could just be a blip, but if there are further increases in February and March this would show a stability in rising home prices for a longer stretch than it has encountered since February 2007.  It seems that house prices are increasing, in part due to the rising interest of international buyers.

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It must be understood that even though there seems to be a great deal of bad news vis-à-vis the housing market in Florida, it is not just bad news out there.  There is some good news and one looking into the market has to thus be able to distinguish the good from the bad. For example, right now, the personal buyer and investor can buy homes with low interest rates and reduced prices of 50 percent or more.  This may increase anxiety for sellers though but for buyers, there should be smiles on faces.  Those in South America and Europe – concerned about currency flops at home – are perhaps being a bit too enthusiastic in their purchasing power though, negating important factors such as quality and maintenance costs.  Russians too seem to see South Florida as their dream answer with many purchasing condos in markets that had not planned for such out-of-control growth.

In addition, those in Florida are moving around as South Floridians are heading north, seeking out better schools, lowered crime rates and in general, a higher quality of life.  They are even looking at the purchase of oceanfront homes and property on the Treasure Coast; something that hasn’t happened in many years.

But what is the advice on the street for those looking into purchasing homes in Florida?  Those who didn’t buy during the 2003-7 housing bubble might want to look now.  Don’t look into gated communities or single-family homes; rather stay on the coasts. And, perhaps most importantly, remember that when you look into news in Florida housing, it’s not all bad.

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The economic situation in both Florida and Michigan is pretty similar…and not in a good way. Along with high unemployment and mass foreclosures, this doesn’t bode well for politicians.  Rightly or wrongly, people in economic trouble turn to them to blame them for finance-based problems.  So when it came to the presidential primaries, of course it was going to have an impact. Ultimately though, Mitt Romney scored nearly half of the votes, coming in with 46 percent, the next closest contender to him being Rick Santorum who only got 13 percent.  He said, “we still believe in the America that is the land of opportunity and a beacon of freedom.”  Well, we’ll just have to wait and see how he relates this to the housing issue for the state. 

Both Michigan and Florida have been trying to deal with their economic plights but to what degree has this been successful? Not especially.  Foreclosures are so common because so many people lack a safety net.  So if a spouse gets sick or dies, the main breadwinner loses their work, or there is some other crisis, foreclosure is the next step.  And what’s worse for those in Florida is that since there was such an incredible housing boom, when the crash came, it was even more devastating.  Statistics show that of the 4.5 million borrowers who still have mortgage loans to repay, over 2 million of these now owe more than what their houses are valued at.  Nationwide the figure is around 28 percent, but in Florida it is closer to 48 percent.  Good people who have worked hard their whole lives, are now being forced to rejoin the workforce having taken retirement at 65.

So what impact has the political situation had on this?  Well, it seems like President Obama tried a couple of years ago.  But the Home Affordable Refinance Program he established was too little too late.  It was meant to assist those homeowners with little or no equity refinance.  Florida is now seeing the establishment of support groups for the foreclosed, with one meeting being held in downtown West Palm Beach.

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Americans are really struggling to pay their mortgages.  Currently, approximately 11million people are “underwater” in their homes and it seems Florida is one of the states being impacted heaviest with a staggering 45 percent of their homes in this category.  And one of the biggest gripes people in trouble are having is that the banks and financial firms that were somewhat responsible for this situation are not being penalized.

But things might finally be changing.  A recent poll was undertaken for attorneys general throughout the nation to determine if they are willing to fight the terrible practices undertaken vis-à-vis foreclosure practices in the late 2000s.

The settlement would force banks to provide assistance in the form of billions of dollars to those who have had their homes foreclosed or who are at risk.  Government officials have not been particularly active in forcing the large banks to change their ways and help these people.  Should the deal be activated, up to $17b would be set aside in order to pay for various relief for around a million borrowers who are not up to date on their payments but owe more than the current value of their properties.  As well it would give around 750,000 individuals who lost homes in the foreclosure checks worth $2,000.

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While we have already seen that it looks like 2012 is going to be a good year for the Florida housing market, figures coming in from last year are indicating that 2011 showed the state was recovering from its housing recession too. Indeed, looking at the figures it seems that compared to 2010, there was an 8 percent increase in Florida housing sales in 2011.

In addition, according to figures released from Florida Realtors, over the last few years, there has been a steady escalation in housing sales in Florida, since this latest increase marks the third time in three years that there has been growth.

However, looking at December 2011, it seems that there was a small plummet (of 2 percent) from figures for the year earlier. Again though, it was emphasized that recovery in Florida’s housing market will continue throughout this year.

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A new program – Hardest Hit – has provided Florida with $1bn to help those who are unemployed (or underemployed) keep their homes.  Around 3,400 home-owners are being helped in this way.  The program began nine months ago from Florida and since that time, around 23,320 have filled out applications.  A staggering $77.3 m has been given to those applications that were approved (or set aside for them).  Moving over to Palm Beach County, out of the 1,931 applications received, 348 were approved and $7.7m was paid out or reserved for this program.

Program Eligibility

To be eligible for the program, homeowners need to be Florida residents, using the property as their primary residence.  As well, they need to be unemployed/underemployed with a total household income that does not reach 140 percent of the area median income.  Finally, their financial hardship must be the result of something that the homeowner did not cause themselves.

Program Critics

There have however, been some critics of the program.  For example, some have complained that too many people are not eligible.  Indeed, close to 10,000 homeowners failed the eligibility test.  One of the reasons was that they were more than 180 days late for mortgage payments.  But that seems unfair as they probably did not pay because they were unable to and thus need the help from the Hardest Hit program. 

So while Hardest Hit is a great program, it definitely has room for improvement.