Cape Coral Real Estate News
Posted here are some informational notes taken from news around the Cape Coral Area and even the entire country. You may find posts on upcoming events taking place in the general Cape Coral area which includes Fort Myers, Bonita Beach, Lehigh Acres, Estero and Naples.
Mortgage Rates are climbing!
Hold on to your wallets! Mortgage rates have risen for the last three weeks. Average long term United States 30 year mortgage rates have risen to the lofty height of 3.85% according to Freddie Mac the Mortgage Giant. Last week the number was 3.80%. Still a bargain as far as borrowing money to purchase a home goes. The fifteen year mortgage number is 3.07%.
Last year at this time the rate was 4.20% which was still cheap borrowing rates. A lot of the increase is tied to an improvement in the economy and 10 year Treasury notes. Also contributing to this data is unemployment, which fell to 5.4% which this country hasn't seen since about May of 2008.
This is great news and should build momentum for potential homebuyers to get their asses off the fence and become HOMEBUYERS! Really, what are these people waiting for? Maybe I should send the Easter Bunny to knock on their door and spell it out for them. Of course I'll include a "homebuyers basket" of goodies, things like a map to SW Florida and other trinkets.
Don't be a dumb Bunny sitting on the fence. I hear a lot from people telling me how they "should've bought" two years ago. Forget that, get your ass in gear and jump in so you don't say the same thing in 2017. All the data I'm seeing shows prices going UP - lack of inventory etc. Lock in now and get your property secured.
Florida is Number 2 for CEOs for Business
Chief Executive Magazine surveyed CEOs across the country to determine which states rank the best to do business in. Texas takes the top spot once again with Florida getting even closer to edging them out of the first place position. The magazine surveyed over 500 CEOs that they are familiar with to get the results.
Some items that were taken into account were: taxes, regulations, living environment and the quality of the workforce. Most CEOs like states that have a pro-growth low tax nature because there is hope to expand without getting raked over the coals. Speaking of getting raked over the coals, California is still considered the worst state to do business in because of the taxes and regulation issues. It has had this position of being the worst state for the last ten years in a row - OUCH!
Florida meanwhile is making leaps and bounds to move forward, past its tourism business stance to draw in other forms of bigger businesses. Florida is smart to employ this view in an attempt to move outside industry and businesses to the Sunshine State. As time moves forward, this is working to help Florida become known as a state that is good for all types of business and not just "Mickey Mouse" and the "Beach".
State governments use the survey from the magazine to gather data to see where they fit in compared to other states that are all competing to attract businesses to their state. Corporations use the data to see where the next move or expansion may be to locate offices or bases. Apparently California is taking the info and using it for toilet paper or they need some help reading it.
Next year - Hopefully Florida will be in the Number One top position.
Canadians that purchased years back are profiting
Canadians that purchased homes back when prices were low after the economy was flattened out about 3 to 4 years ago may be in a great position to sell. Now that the U.S. dollar is outperforming the Canadian dollar, purchasing power for the Canadians has weakened tremendously but selling could be another thing. Back when the homes in Florida were at their lowest point near the tail end of the recession, many Canadians were making home purchases. Now those homes have probably appreciated handsomely. With the sales prices on the rise and coupled with the exchange rate of the American dollar, some Canadians are enjoying a hefty profit on the sale of their vacation homes.
Even for some Canadians that purchased when prices were a little higher than they are now, the difference in the exchange rates can make the transaction a positive event. Some buyers that purchased for example - $30,000 higher in 2008 may actually break even on a sale now because the American dollar is paying about $1.20 over the Canadian dollar. Of course a seller has to do their calculations and take the normal selling factors into account such as commission charges and closing costs. Some items a seller can expect to pay are title charges and documentary tax stamps to the State of Florida which is a Real Estate transfer fee. The Transfer fee is calculated by taking the sale price - example - $300K divided by 100 is 3000 units. Take the 3000 units and multiply by $.70 (70 cents) which will yield an end result of $2,100.
If you're a Canadian owner of Real Estate and lightly thinking of selling your home in Florida, you may want to shift gears and do some serious thinking and number crunching. Remember, the exchange rates could flip anytime and an opportunity may be missed!
Fannie Mae has a 3% Closing Cost Aid Program
Fannie Mae's "Homepath Ready Buyer Program" is something new to aid first time home buyers. This program is aimed at potential homebuyers that haven't owned a home within the last three years.
For potential homebuyers, this program may qualify them to receive up to 3% of the home's purchase price in closing costs assistance. The program applies to homes purchased through Fannie Mae's Homepath Program and it does require the potential homebuyer to complete a homebuyer education course that Fannie Mae has instituted.
To give an example of the benefit, on a $150K home purchase, the program could save a homebuyer up to $4,500. Fannie Mae also says they will reimburse the homebuyer the $75 cost of the education program at the closing of the property. The program is definitely a help to the first time homebuyer that is usually cash strapped with limited funds for the down payment and closing costs. This assistance can be the helping hand that makes the difference between a homebuyer making the purchase or falling way short. It's a huge help in the homebuyer experience on the path to understanding and navigating the road to financial responsibilities to owning their own home.
The education program is an online course conducted through Framework, a nonprofit created by the Housing Partnership Network and the Minnesota Homeownership Center. The course entails various aspects of homeownership, buying the home and understanding the financial makeup of actually owning a home and all of the details of the overhead and obviously, the financials of possessing a home.
To be eligible Buyers must complete the full online course at "Homepath Ready Buyer Training" on https://www.homepath.com and receive the Certificate of Completion. Buyers must be first time homebuyers and make the home their primary residence. The request for closing cost assistance must be made when the homebuyers submit their initial offer on a property.
This is a great offer for first time homebuyers entering the Real Estate Arena. Coupled with low interest rates that are prevalent at this time - what else could a homebuyer ask for, a winning Powerball ticket perhaps?
Rents Going Up – Buy a Home Now
According to some of the top CEO’s of some of the nation’s largest rental companies, rents are going to be increased this year for single family homes. Not a good thing for the tenants, looks like it’s time to cut the landlord loose and make that home purchase! Rents are projected to be increased 5.7% this year as these companies take advantage of the high rental demand for the single family homes. They want to optimize the thousands of properties they already own. Sounds to me like a lot of greed going around, why can’t they be happy with the steady rent?
American Homes 4 Rent is one of this country’s largest publicly traded single family landlords with about 35,000 homes in its inventory. They feel that they are seeing the ability to move rents. This was a statement made by the CEO for the company – David Singelyn.
In times when the American people are still struggling with day to day overhead, rent is a huge part of that equation. Why take advantage of the public and stick it to them and keep raising the rent because the numbers says it’s okay to do it? Isn’t life hard enough?
American Homes 4 Rent isn’t the only one of course. Blackstone Group is another one, and Silver Bay, Starwood Waypoint, American Residential Properties, and of course there’s more. All of these companies have these great sounding names but underneath they are just a bunch of investing Wall Streeters that only eye a buck.
Didn’t GREED get us into the problem back in 2008?
Average U.S. Mortgage Rate drops to 3.65%
Mortgage giant Freddie Mac says that the average long term U.S. mortgage rates are down slightly this week to 3.65%. Again, these are historically low interests rates that homebuyers should be taking advantage of.
The average rate for a 15 year mortgage dropped to 2.92%. The 15 year mortgage is popular among homeowners looking to refinance.
One year ago the 30 year mortgage rate was averaging about 4.33 percent and the 15 year mortgage was about 3.39 percent. If anyone is keeping track, the lowest for the U.S. average 30 year loan rate was back in 2012 when the record low was 3.31 percent. The 15 year mortgage bottomed out in 2013 at a rate of 2.56 percent.
These low rates have continued even though the Federal Reserve had decided to stop monthly bond purchases, which usually are intentioned to keep long term rates down. In the calculations to determine the final average numbers, Freddie Mac surveys lenders all across the country at the beginning of each week. These surveys do not take into account extra fees, known as points, that most borrowers must pay in order to get these low rates.
As far as adjustable rates go, the average five year adjustable rate mortgage dropped to 2.84 percent from its lofty position of 2.88 percent. Not much of a drop but hey, how low can you go?
Bankrate.com did a poll of their own this week and 55 percent of mortgage experts had a prediction that nothing would change over the short term. Also, 36 percent predict an increase and the remaining 9 percent feel there will be a decline in mortgage rates.
This is a great lending environment for homebuyers that should be taking advantage of these low mortgage rates.
Americans Confident in Real Estate Investing
A Recent study/survey done by Gallup has indicated that Real Estate is moving up in the confidence of Americans to invest in Real Estate. About 31% of Americans felt that Real Estate was the top long term investment. This is the second year in a row that Real Estate has garnered this position. According to this news Americans have an increasing confidence in the Real Estate market which means that the overall housing market is in a state of recovery.
Real Estate scored higher than other avenues of investments such as stocks and mutual funds which about 25% of Americans rated it as a top long term viable investment. Gold came in at 25% for the long term, savings accounts and CD's came in at 19% and bonds at 6%.
After the big financial meltdown of recent years, financial security has taken a big spot in people's lives. A lot of money was placed in savings accounts and CD's to guard against any future losses until other more revenue generating prospects came along. The last two years has seen a boom in confidence in the Real Estate sector for investment.
According to Gallup, because Real Estate has showed up in the last two years in the survey regarding investment it is a definite thing, not any kind of a fluke. Obviously with a good amount of transactions being paid for with cash funds it's pretty apparent that Real Estate is coming along rock solid.
Let's all hope the trend continues.
Information for this article obtained from RIS Media, De Vita, Suzanne
Bank of America wants fine repealed
Bank of America is upset with the fine that has been assessed to them and they want it removed/repealed. The bank which is based in Charlotte, North Carolina say the case brought by the United States government never should have went to trial. In papers filed in New York courts the case filed against Bank of America was unfair and unprecedented. Sounds like they are not happy at all.
Bank of America is especially upset with Judge Jed Rakoff, whom is accused of possibly putting in too much of his own personal feeling into this case. In the appeal documents that have been filed, they (BOFA) insists that the judge be removed from the case if it is returned to the lower court because they fear he'll definitely put the screws to them. The judge is out to get BOFA. This is according to statements from the bank that while the big law case was being presided over by Judge Rakoff he had made many public statements in multiple forums calling for the prosecution of bank executives. It appears he had a thing for hanging bank execs or wanted justice for the big screw up of the mortgage meltdown.
Some of the important facts of the legal case that lead up to the huge fine of $1.27 BILLION DOLLARS was the "HUSTLE" program involving Countrywide lending that involved risky loans, and not the dance moves from the famous song/dance stuff some of us older folks may be familiar with from the 70's. The jury found that the Countrywide executives deliberately misrepresented the quality of the mortgages being sold, shame on them! Maybe Rakoff is right, and someone should have gone to jail. Bank of America purchased Countrywide in 2008 as the financial crisis was unfolding (or exploding?).
Anyway, BOFA wants the fine reduced to $1.1 Billion - saving a cool 170 million dollars for the work and expense of filing an appeal, which is definitely worth doing, at least in the eyes of the bank. Or, they want the appeals court to order a new trial, which I don't think will be happening in my lifetime.
Strong Dollar having effect on Some Foreign Owners of U.S. Real Estate
The euro has fallen dramatically recently in comparison to the U.S. dollar, and it may have a definite effect on some European owners of Real Estate here in Florida. Some Europeans may be in a position to profit significantly on the sale of the home, because prices have risen over time, and also on the money exchange rate - effecting a double dipping type of profit. A couple of things play into the scenario, depending on when they bought the property - possibly when the euro was stronger than the U.S. dollar and if the price rose enough.
Here's an example of a home in Florida, even if the selling price did not rise over the past year, it went up in value for Europeans because of the money exchange rate. If a home was worth $300K in May 2014 the euro exchange rate overseas was $218K. That same house today is worth $277K euros or an increase of 27% on slightly less than a year.
During 2014 there was quite a lot of Europeans investing in Florida Real Estate, taking advantage of the weak dollar according to Kelly Cutchin with Moneycorp. Now in the current time there is a decrease in Europeans buying property here - possibly as much of a 85% decrease. Now, the Europeans are listing their property for sale to take advantage of the "switching of the tables" in the money exchange arena.
After all, Real Estate is an item of value and it's just like a commodity any more. Don't get emotionally attached, watch the numbers - make a decision - make a profit - move on to the next move on the money making chess game of life.
Some Information for this article derived from: RISMedia, March 31st, 2015
National Association of Realtors President Chris Polychron talks to Congress about Mortgages
Chris Polychron talked to Congress recently about the tight restraints in the Mortgage Lending arena. The U.S. toughened mortgage lending standards in the wake of the housing meltdown to hopefully prevent a repeat performance. A lot of people in the real estate industry feels the pendulum has swung to far to the safe side. It is so hard sometimes to qualify an individual to get a home loan even though their credit is good, credit worthy homebuyers are failing in the American Dream of homeownership.
At a time when mortgage rates are unbelievably low more first time homebuyers should be taking advantage of, and succeeding in securing lending to purchase their home. In a lot of cases well intentioned , but over-corrective policies are ruining the opportunity for possibly millions of Americans trying to obtain a home loan. The NAR, and it's members feel, that we have yet to strike the correct balance between regulation and opportunity.
Because of this, first time home buyers is at its lowest point since 1987, in light of some of the lowest interest rates this country has seen. Also, homeownership rates have sunk to levels almost similar to that of 1990.
Some changes Mr. Polychron suggested were in the area of Condos. Less restrictive condo policies by the Federal Housing Administration (FHA) and Fannie Mae & Freddie Mac. This would ease the entry for a lot of entry level first time homebuyers, condos are frequently a first step approach to beginners in the Real Estate market.
Other suggestions were made regarding the upcoming changes to RESPA - Real Estate Settlement and Procedures Act - rules getting ready to roll out this August 1st which will impact closing dates and scheduling. Also the high guarantee fees that Fannie Mae & Freddie Mac charge to cover the loan in the event of a future default are impacting the Housing Market recovery. The higher fees make it harder for homebuyers to qualify and essentially raises the cost of homeownership.
Article obtained from the National Association of Realtors