Insurance

As I alluded to in the previous post, I wanted to discuss the topic of Insurance and specifically Condo Association Insurance. Again, as I've stated while writing the Market Trends post, this also has been a topic in the news that is of great concern to many of us.

Insurance in itself has gotten out of control in the State of Florida. I won't deny that I am not sure as to the rest of the nation, but in Florida we are probably pushing toward an epidemic of sorts.

If you are not aware of what is occurring, than let me recap for a moment. Firstly, the cost of most housing insurance has skyrocketed in the State of Florida. I started becoming more aware of this situation while helping a client who was relocating to the western side of the State much earlier this year. Now, granted, we expected the insurance to be higher because there was a pool involved, but when quoted that the least expensive would cost $2300/year, we were totally astonished. Couldn't believe that we were getting rates upwards of $2800.

Anyway, we've most likely heard about people being dropped by their insurer, therefore, not being renewed and having to search out other options. In Florida, we have a state insurance fund of last resort, Citizens Insurance. Unfortunately, we've heard the debacle that they are in. Oh by the way, we are all paying for that with surcharges on our policies, whether you are with Citizens or another carrier.

Citizens actually has to have higher rates so that they are not in direct competition with the other insurers that wish to do business in Florida and write policies. Citizen has also become the largest insurer in the State of Florida due to others pulling out. This has put all of us in a precarious position.

OK, enough of that doom & gloom. Now to another aspect of the insurance industry that is also quite scary and will affect so many lives & unfortunately be devasting to quite a few. When you purchase a condo, you should get homeowners insurance. Now the condo association also has a master policy covering the association, buildings, common grounds, etc.

Here's the first part of the sad part. There are fewer & fewer insurers that are wishing to provide this for these associations. Many are just dropping these assocations, while many others are in some instances quadrupling the association rates. I know of one community where I've been told that because of the rate increase they are going to have to raise the monthly maintenance fees that the condo owners pay at least $100. In the Orlando Sentinel, it was mentioned last week, that Lake Villas in Altamonte Springs off of Maitland Ave. has their rates increasing from approximately $33K/year to $197K. This in turn is requiring them to increase the monthly maintenance fee by $200/month.

Can you believe that? Do you understand how this will effect the owners there, many probably on fixed incomes. This will force people from their homes into uncertainty. This for many is like an additional mortgage payment.

Unbelievable, but what really gets me are the insurance companies. All of a sudden we are hearing of their supposed wows. Bunk!! How dare they! Do they give us breaks when they are making lots of money? I don't think so! But, we surely do hear them complain when they have to pay out large sums for the natural catastrophes that we've experienced in the last couple of years.

But & this is what really gets me, they have actuaries. An actuary's job is that of a statistician to compute risks & therefore premiums. So, they had a few years where they had to pay out. How about all of those years in which they didn't have to pay out so much? Again, did they give us a refund? Anyway, we all know that the weather is cyclical. We've gone through periods of this before. This is not something new. But the insurers are asking for increases & getting them, royally.

Where does this put us all? Unfortunately, like I stated at the outset, insurance in the State of the Florida is heading toward epidemic proportions. The state needs to do something and quickly. That means NOW!! Do you think they are listening?

Until next time...Marc It Sold!

Market Trends

My original intention with this blog, was to include more tips on caring for your home & to tell you more about me. But it seems that the slant has been more towards market trends. To some this may be boring & I apologize for that. But it is very important to us. Real Estate has become a much published topic. We read about it in the newspapers & on the net. We hear about it on the evening news. We've seen it & it's effect in our daily lives.

Granted, a lot of what I've written is my educated opinion, obviously derived from my experience; sources that I've read; and, speaking with other real estate professionals. I've mentioned before that I really like numbers. They don't tell the whole picture, but do give us a great insight into what is happening. This is why I've tried to back up my opinions with facts & numbers, so it doesn't seem as if I'm just spouting off at the mouth. Goodness, knows I can do that also.

But the reason that I've written more about the market trends, is that this effects us all and is very important. With all that we've seen & heard in the real estate market, I think that it is something that needs to be addressed. We've all seen the doom & gloom articles & editorials and a lot of what I've read is pure bunk. My intentions are to try to give you a balanced account of the state of real estate. Yes, I do have my prejudices & biases, but I do try to keep those to a minimum when writing an opinion.

Sometimes, it is difficult for me to decide what to write about. There has been so much in the news that is of great concern. So, today, I am going to discuss the annual housing report released by the Harvard Joint Center for Housing Studies - "The State of the Nation's Housing 2006." http://www.jchs.harvard.edu/publications/markets/son2006/index.htm

The report overall is positive on the housing market - that "the housing sector continues to benefit from solid job & household growth, recovering rental markets, & strong home price appreciation," and as long as these remain in place, "the current slowdown should be moderate."

Households are expected to accelerate from about 12.6 million over the past years, to 14.6 million over the next ten which combined with projected income gains and a "rising tide of wealth" should "lift housing production and investment to new highs."

However, affordability will also intensify, as the economy is generating many low-wage jobs and land use restrictions are driving up housing costs. Incomes are rising much faster in the top ranges than in the bottom ranges for homebuyers. The number of households paying more than half of their income for housing has shot up & will continue to increase.

We've seen & heard about affordable rental housing disappearing. Just look at all of the condo conversions that we've seen around.

The report also goes into financing in that we've seen a shift from fixed-rate mortgages to adjustable-rate mortgages & other products. In just 2 years, the interest-only loan shot from relative obscurity to 20% of the dollar value of all loans & 37% of all adjustable rate loans in 2005. Payment option loans accounted for nearly 10% in 2005.

As bad as that sounds, the report says that only 3% of owners had equity less than 5% in their homes & 87% had a 20% or higher equity in 2004.

Housing gains are continuing even while home sales are softening. Driving housing will be the baby boomers who will boost markets for senior housing & second home.

Until next time when I plan to discuss the rising insurance rates & condo associations - Marc It Sold!

Is the Market Insane?

Wanted to Blog, but wasn't sure what to write & then I spoke with a friend & she was under the impression that the "Market is Insane!" I won't deny that I was taken aback by this. But from what we talked about, it seems that quite a few people think this.

Now, I know from talking with quite a few realtors that the impression is that buyers are waiting for prices to come down. I won't deny that I still see homes that are priced for the type of market that we saw last year. But, in general, it seems that people realize that they have to price their homes well to sell. With an inventory of over 15K available homes for sale in just Orange & Seminole county, sellers better price their homes well & possibly offer incentives if they wish their homes to sell.

But, now let's look at the other side of the coin. We are still selling near the same level of homes as was being sold last year. Many do not realize this, but that was a phenomenal year. We sold more homes than in previous recorded history. In fact, in March of this year, ORRA (Orlando Regional Realtor Association) noted that 2878 homes were sold & this compares to 2529 homes in March 2005.

This reverts back to what I've been saying in that we have a very healthy market in the Greater Orlando area. In fact, we've sold more homes in the first five months of 2006 than we did in 2005.

So, homes are selling. Even with the increase in interest rates. Homes that show well & are priced well - will sell, as long as they are marketed properly. I've said this before & even have read it recently, but we are in what most of us consider a 'normal' housing market. Granted, the median price has risen to its highest level at $252,990 (May 2006) with an average sales price of $311,119.

Homes are presently taking 74 days on the market & this will lengthen with time. Historically, we've seen worse & not all that long ago.

It just proves to me that people need to be educated to the facts. As with anything else, this does put things into their proper perspective.

I, myself, have always believed in education. That is why I've gone on and received my GRI (Graduate Realtor Institute) & still continue to read & try to improve myself. I also believe at the same time, that it is my job to educate you, the consumer. I believe that if I did not do so, I would be doing you a disservice. I am the Real Estate Professional. This is why you ask me for advice & hire me for my services. And, I wish to thank everyone for that!

Until next time - Marc It Sold!

Orlando Rankings

What a coincidence! After writing the previous post, I came across an article in the Orlando Sentinel by Lynn Thomasson, entitled, "Where Orlando Ranks."

Orlando is ranked #2 behind Las Vegas as a summer destination according to Expedia. But, it seems that we are 1st, according to the American Society of Travel Agents, as a domestic travel destination.

According the Milken Institute, Orlando is 6th in job creation & sustainability.

This all bodes well for the Greater Orlando area and proves out some of the things that I have written in regard to Orlando & real estate.

So, until next time, let's just Marc It Sold!

Rates, FSBO's, Pre-foreclosure

It's been a while. There are several things that I wish to mention today. Firstly, I wish to apologize because we are still working on the links on our website. That problem will be remedied in the near future.

The Fed made another increase, as was expected. Of course, there are the concerns for inflation. Mortgage interests have been climbing. Presently, they are hovering around 7%. Yes, this is higher than we've been experiencing in the past several years. But, when you reflect upon it, you realize that this is not so bad. Eight years ago we were at this level and even 1% higher the previous year. And, who can forget the 80's. My Goodness!! So, when you put it into perspective, it's really a different story.

Now, granted, housing costs have risen substantially in that same period of time. Have wages increased as much? We know the answer there. Now, I'm not going to get on my soapbox. But, we continually each day lock more and more people out of the housing market. Condos are costing in the 100K's; a nice relatively reasonable 3/2 single-family home will run approximately the mid 200's.

Enough of that, but it is something that we do have to keep in mind. We should never forget, because that only leads to possibly losing the lesson.

Real Estate has returned to what it was normally. The market is very healthy. We are very lucky in the Greater Orlando area, because we are a destination city. We are also the #2 city in the nation for Conventions, even knocking Chicago out of that position.

But, there is a lot of competition out there. There are over 19,000 MLS listings available. This is going to be a difficult time for For Sale By Owners, unless they are willing to wait, what I would think would be, quite a while.

I’ve even noticed what seems to be more homes going into pre-foreclosure. The summer of ’05 is no longer. I’m not saying this for doom & gloom. But this is reality. In regard to pre-foreclosures, people should speak to their lenders before it is way too late. And by too late, I mean, when they are already starting the papers. It takes several months before a homeowner is served with a pre-foreclosure notice. If you are late with your payments, there are some lenders that will allow you to tack those onto the end of your loan period. Granted, this will definitely cost you, but what will losing your home cost you?

There are also other ways, but you must speak with your lender. You have to understand that the lender does not really wish to own your property. They are not making money on it. They make money from the payments that you send in each month. Anyway, enough for now.

Call me & I’ll be more than happy to discuss this and any other topics with you.

Until next time….Marc It Sold!

#'s of Homes on the Market

In answer to Vicki's comments - There are many more factors that come into play, but you are most suredly correct with your assumption.

Today (6/16), 20% of the available homes in Orange & Seminole counties have a build date of 2005 or later. I need to clarify this a little further. In several instances, I have come across the condo conversion that has the year built listed as 2005, which is quite erroneous. One of the other factors that has fueled what we are currently seeing in the market, is that early last year we had people seeing others making good profits in buying some new construction for resale.

These people saw this and decided, "Well if they can do it, why can't I?" Well unfortunately, a lot of people placed contracts on homes to be built, but most were not taking possession until at least 10 months later. The Market Changed!!

There is a large subdivision near where I live. Currently, there are 72 homes listed for sale, 30 of which were built in the last year and a half. WOW!! Not only are some of these people that bought homes for investments facing other investors for competition, but also owner occupied homes & the builders themselves. And this does not even take into account that only some of the builder's lots are listed for sale, they have many more in addition to this. We will touch more on this in a future blog.

Till next time - Marc It Sold!

What A Difference A Year Makes!

OK, I really like numbers & stats. Granted, they are not everything, but they do portend the current situation. So, I was just checking some stats for a project that I'm working on. Presently, there are 12,971 available single-family homes, condos, townhomes & villas in Orange & Seminole Counties. Last year at this time, there were 3710 available properties listed in the MLS in the Greater Orlando area, not just the two counties. Right now we have almost a 7 months supply of inventory compared to 1.19 months last June. Additionally, at that time it took approximately 27 - 30 days on the market. Today, the average is over 50 days on the market. This is just some information. Make your own conclusions, but take into consideration that we are still in a healthy housing market. The supply just greatly outranks the demand. But, the sales volume of sold homes is at pace or ahead of the previous couple of years. Thus making, at this point, 2006 a very strong year.