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The worst may be over for Tampa Bay’s housing market.

The median price of a single-family home fell to $110,000 in
January 2011, climbed steadily to $130,000 in August and has not dropped below
$120,000 since.

“It’s a clear indication that we have felt the bottom
of the market,” said Kevin Chadwick, a 30-year Realtor and owner of six
Keller Williams offices with more than 400 agents in Tampa Bay. “The
market is in the process of turning.”

Craig Beggins agreed.

“I believe the market is turning,” said Beggins,
who owns Century 21 Beggins Enterprises in Apollo Beach, with more than 200
agents. “This is what we have been waiting for.”

Real estate experts and economists believe the figures point
to rising prices and increased sales, basing their optimism on the following:

• The inventory of homes for sale has fallen to levels not
seen for years. The lower the supply, the stronger the market. The area has
less than a six-month supply of unsold homes, meaning it would take about six
months to sell the houses currently on the market. By contrast, Hillsborough
County’s unsold inventory peaked at 25 months in January 2008.

• Tampa Bay has added 36,900 jobs over the past year, and
the state’s unemployment rate continued a steady, yearlong retreat in 2011 by
falling to 10 percent in November, reaching its lowest point in 2½ years.

• Real estate professionals see more people inquiring about
putting their homes on the market. The owners are not in distress, and their
houses typically sell faster because the homes have not been neglected.

“It’s opening a whole new category of buyers,”
Chadwick said. “These people have been on the sidelines for four years
waiting to sell. This is exciting.”

University of Central Florida economist Sean Snaith said he
is being a little more cautious in declaring that the housing market has turned
the corner, adding, “It’s definitely a possibility, but I’d like to see
six months of consecutive gains.”

Gains in prices and sales are good news in a state decimated
by foreclosures and falling values since the housing market imploded.

Sales of single-family homes jumped 19 percent — 1,943 in
November to 2,315 in December — in Hillsborough, Pinellas and parts of Hernando
and Pasco counties, according to My Florida Regional Multiple Listing Service
data.

Although lenders tightened borrowing standards, some sales
could be attributed to mortgage rates hovering at an all-time low of about 4
percent.

As the inventory of unsold homes continues to drop to levels
not seen in more than five years, median prices also climbed last month for all
types of sales: short sales, conventional sales and foreclosures.

From November to December, median prices on short sales rose
from $99,250 to $105,000; conventional sales, from $155,000 to $157,000; and
foreclosures, from $66,900 to $69,000.

The Times reported last month that short sales jumped
more than 25 percent in the bay area as banks steered away from foreclosures
that now take about 806 days to wind through Florida’s court system.

Lenders, Snaith said, need to deplete their supply of
distressed properties in order for a full recovery to occur. As short sales
move more houses, the best of them will get more offers, forcing buyers to pay
more.

Ultimately, the very definition of a recovered housing
market is higher prices.

“I think banks have now embraced this in Florida,”
Snaith said about short sales. “This helps the healing process
along.”

Tony Polito, a housing consultant with Tampa’s Metrostudy, a
national company that tracks the construction industry, said starts on new
homes in the bay area also jumped 19 percent from the fourth quarter of 2010 to
the same period in 2011. Closings rose 4 percent.

The low inventory and the job growth, Polito said, are the
biggest reasons that the housing market is turning.

“We’re right at the change point,” he said.
“There’s a lot of positive signs that we’re pushing further away from the
bottom.”

While at the bottom, the Sunshine State lost construction
workers.

The jobs peaked at 94,800 in June 2006 — the height of the
real estate market — and fell to a low point of 47,500 last October.

Scott Brown, chief economist with Raymond James in St.
Petersburg, said home prices and sales should rise gradually, as long as the
economy doesn’t take on any major ripples.

“We have a long way to go before a full recovery, but
we are on our way,” he said.

Experts had predicted in 2011 that a tsunami of houses from
the “shadow inventory” would decimate the market. That inventory includes
homes with mortgages 90 days late and nearing foreclosure or homes already
seized by a lender but not yet listed for sale.

The shadow inventory no longer concerns some experts, as
they believe the market can absorb the extra homes as banks release them for
sale.

A healthy inventory supply is six months. The lower the
supply, the stronger the market.

Hillsborough’s housing supply peaked at 25 months in January
2008; Pinellas’ at 18 months in March 2007. Overall, Hillsborough now has an
inventory of 5.3 months for single-family homes. Pinellas is at 5.5 months.

Investors devoured lower-priced properties in 2011 as soon
as they hit the market. With the supply so low, they have to chase
higher-priced homes, Beggins said.

He added, “The sales prices have to go up.”

Liane Jamason, an agent with Smith & Associates Real
Estate, said potential buyers and sellers need to drown out that national
chatter about the real estate market being in the doldrums.

“It’s just not the case here from what I’m
seeing,” she said. “I’m having a harder time finding listings.”

Mark Puente can be reached at
mpuente@tampabay.com or (727) 893-8459. Follow him on Twitter at
twitter.com/markpuente.

]]> http://www.tamparealestatenews.com/archives/609/feed 0 http://www.tamparealestatenews.com/archives/602?utm_source=rss&utm_medium=rss&utm_campaign=obama-to-step-up-housing-reform http://www.tamparealestatenews.com/archives/602#comments Mon, 16 Jan 2012 23:10:43 +0000 TampaRENews http://www.tamparealestatenews.com/?p=602 January 16, 2012

WASHINGTON — I often hear people say they can’t stomach investing anymore. And I understand.

They’re scared about losing their money. But in my experience, contributing to the poor returns some investors receive are the bad decisions they made because they panicked, because they were greedy or because they didn’t investigate their investment choice.

“I am more convinced than ever that all investment mistakes are really investor mistakes,” writes Carl Richards, a certified financial planner and founder of Prasada Capital Management, a portfolio design firm.

Before you jump on Richards for blaming investors, especially given the many transgressions of financial professionals and the industry as a whole, hear him out. I did, and it’s why I’ve picked Richards’ newly released book, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money” (Portfolio, $24.95), for my first Color of Money Book Club selection for 2012.

“When you invest, you’re making a choice,” Richards writes. “That’s the part we often forget. At some point, we said yes to the investment. We had control over everything leading up to that point. We decided which (if any) questions to ask about the investment. We decided whom to ask. We decided how much to invest and when to invest.”

But when the investment doesn’t do well, people want someone else to blame.

“We blame the guy who sold it to us, the rogue investment bankers who wrecked the economy, out-of-control government spending, lies in the media, bad weather in Brazil … just about any scapegoat will do,” Richards says. Richards argues that investors should embrace two words — personal responsibility.

“We can’t blame the investment for our decisions,” he says. “At some point, we must accept responsibility. Otherwise we’ll keep making the same mistake. And in that case, we might as well give up trying to invest, put all our savings in fixed-rate bank CDs, and go enjoy our lives.”

Richards, who blogs for The New York Times, often uses a cocktail napkin to illustrate the irrational behavior of investors. He uses the napkins to explain how emotions play a huge part in the financial decisions we make. As an example, one napkin included in the book has two circles on which he writes “Investing based on past performance” in one, and on the second: “Driving while looking in the rearview mirror.” And under both he says: “Causes a lot of accidents.”

Richards ultimately is trying to help investors become better decision-makers so they won’t panic when with the markets do. He says:

– Stop chasing fantasies. It’s highly unlikely you’ll find the next great stock that will make you a multimillionaire. “We are not going to get what we want by beating the market or picking the perfect investment or designing the perfect bulletproof financial plan,” Richards writes. “In fact, when we try to do those things we get into big trouble.”

– Accept that risk is part of investing. “Our assumptions about the future are almost always wrong,” he says. “We can never think of everything, but we can take sensible steps to protect ourselves from life’s inevitable surprises.”

– Rely on your life plan and not on a financial plan. “The notion that plans are worthless probably sounds funny coming from a guy who makes a living as a financial planner,” Richards says. “But it feels really good to say it in public. A plan assumes you know what’s going to happen — even though you don’t.” However, the process of financial planning is vital, he contends. It requires you to chart a course headed in the direction you want to go.

– Know what you really want. I love this point. “When someone asks you what you really want out of life, you’re probably not going to say you want an investment that delivers good returns. Your financial decisions should align with what you know about yourself and the world.”

“I’ve seen firsthand the damage investors inflict on themselves by chasing hot investments,” Richards writes. “Slow and steady capital knows that the goal of investing is to accumulate the capital you need to fund your most important goals. Slow and steady capital is short-term boring. But it’s long-term exciting.”

What Richards offers is common-sense investment advice that has become far too uncommon.

I’ll be hosting a live online discussion about “The Behavior Gap” at noon Eastern on Feb. 2 at washingtonpost.com/conversations. Richards will be joining me to answer your questions.

Every month, I randomly select readers to receive a copy of the featured book, which is donated by the publisher. For a chance to win a copy of Richards’ book, send an email to colorofmoney(at)washpost.com with your name and address.

========

Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her email address is singletarym(at)washpost.com. Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.

Copyright 2012 Washington Post Writers Group

WASHINGTON — Though its demise drew little attention because of the partisan year-end brawl over the payroll tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively ratchet up the costs of homeownership this year.

The expiration of mortgage insurance deductibility will hit many low-down payment conventional loans originated since 2007, plus virtually all new mortgages closed this year where the down payment is less than 20 percent. Though industry experts do not have precise numbers, their estimates range into the millions of existing owners and new purchasers potentially touched by the deductibility termination. Borrowers using guaranteed veterans (VA) and rural housing loans, where down payments can drop to zero, also are affected.

The change in the law took effect Jan. 1 along with the expiration of 58 other tax code benefits that Congress failed to renew, such as credits for home energy improvements, credits for builders of energy-efficient new houses and deductions for state and local sales tax payments. They were all components of what would have been an annual “tax extenders” bill authorizing continuation of relatively noncontroversial expiring benefits for another year or more. Congress could still reauthorize all or some of the write-offs retroactively this year, but the current poisonous political atmosphere on Capitol Hill raises doubts about the timing of that scenario.
The mortgage insurance premium deduction dates to legislation enacted in 2006. It allows purchasers and refinancers who use either private mortgage insurance or federal insurance or guarantees, and who itemize on their federal tax returns, to write off their premiums. Borrowers who are single or married and filing jointly with adjusted gross incomes of $100,000 or less can write off 100 percent of their annual mortgage insurance premiums. Married homeowners filing singly can write off 50 percent of premiums. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.

In many cases, the post-tax savings for these borrowers are significant. New buyers with an income around $100,000 and a mortgage of $200,000 would save between $600 and $1,000 a year, depending on their credit score and loan-to-value ratio, according to MGIC, one of the largest private mortgage insurers in the country. For households with lower incomes, the impact would be less, depending on their marginal federal tax brackets.

David Stevens, who served as FHA commissioner and is now chief executive of the Mortgage Bankers Association, says the loss of deductibility of mortgage insurance “hits a segment (of consumers) — middle-income and first-time buyers — where affordability is especially important.”

But mortgage insurance was not the only housing-related casualty of the pre-Christmas skirmishing. As part of the temporary extension of the payroll tax cut, negotiators tacked an unusual provision that raises fees on the majority of conventional mortgages — those originated for sale to or guarantee by Fannie Mae and Freddie Mac. Starting in April, Fannie and Freddie will impose a surtax on the guarantee fees they charge private lenders equal to one-tenth of 1 percent. Lenders are virtually certain to pass those fees to consumers in the form of a higher note rate or loan charges up front. Industry estimates suggest the surtax could add an eighth of a percentage point to rates and raise costs to borrowers over the life of the loan by more than $4,000 on a $200,000 mortgage.

Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new funds will be sent directly to the Treasury to help pay for the $36 billion cost of the temporary payroll tax cut. FHA loans also will be hit with a fee increase by the payroll bill, raising the annual premiums it charges new borrowers by one-tenth of a point.

At a time when the Federal Reserve is warning that there can be no broad economic improvement until housing recovers, it may strike you as odd public policy to raise costs for homebuyers and refinancers in order to fund unrelated, temporary tax relief. But that’s not the way they saw it on Capitol Hill in the rush to holiday recess.

Bottom line: The mortgage insurance deductibility problem may disappear if mortgage insurance gets included in an election-year “extender” package. But the fee hikes on most new mortgages are here for the foreseeable future, so factor them into your housing budget.

========

Ken Harney’s email address is kenharney(at)earthlink.net.

Copyright 2012 Washington Post Writers Group

Mark Puente, Times Staff Writer

Home prices in Tampa Bay are predicted to improve 7.4 percent this year, according to a California firm’s report.

Sarah Bloom Raskin, a Federal Reserve governor, called mortgage servicers’ practices “sloppy and deceptive,” The Wall Street Journal reported Sunday.

It is necessary “that the severe misconduct that has been uncovered in the mortgage servicing sector be addressed through intensified public enforcement of the law as part of the overarching effort to rebuild our damaged communities and neighborhoods,” Raskin told a conference of the Association of American Law Schools.

Servicers are responsible for collecting payments on mortgages but aren’t necessarily the ones who grant the mortgage and hold it, the newspaper said.

Raskin said federal regulators have found 14 of the largest mortgage servicers have “significant problems,” including forged promissory notes, erroneous fees and illegal foreclosure actions.

“The Federal Reserve and other federal regulators must impose penalties for deficiencies that resulted in unsafe and unsound practices,” she said.

Copyright 2012 by United Press International