Easter Weekend Open House Saturday 10-1pm…..Egg-Ceptional Value, under $100 per SQ FT

The good ole days……. so they thought

Like any frontier town, Cape Coral’s first businesses included a grocery, a bank, a newspaper and, well, like any Florida frontier town, a realty—aptly named Wonderland Realty, as most early buyers were wondering what they had gotten themselves into. They seemed to be abandoned in the middle of a strip-mining operation. In one direction, nothing but miles of white sand and raw canal banks; in the other, glittering water. They were marooned in “Wonderland.”  more

Average U.S. 30-year Mortgage Rate Falls

Screen Shot 2014-03-24 at 6.13.01 PM

 

Average U.S. rates on fixed mortgages declined last week, edging closer to historically low levels.

Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year loan fell to 4.32 percent from 4.37 percent last week. The average for the 15-year mortgage eased to 3.32 percent from 3.38 percent.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago.

The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low.

Deeming the economy to be gaining strength, the Fed announced in December and January — and again on Wednesday — that it was reducing its monthly bond purchases.

The Fed said after its latest two-day policy meeting that even after it raises short-term interest rates, the job market strengthens and inflation rises, the central bank expects its benchmark short-term rate to stay unusually low.

Fed Chair Janet Yellen stressed that with the job market still weak, the Fed intends to keep short-term rates near zero for a “considerable” time and would raise them only gradually. Yellen also suggested that the Fed could start raising rates six months after it halts its monthly bond purchases, which most economists expect by year’s end. That means short-term rates could rise by mid-2015.

The National Association of Realtors reported Thursday that sales of U.S. existing homes slipped in February, the sixth decline in seven months as severe winter weather, rising prices and a tight supply of homes discouraged buyers.

Still, there were some signs that the market could pick up in the coming months. Sales improved in the South and West, where weather was less of a factor. And more people decided to sell, boosting the supply of available homes.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.

The average rate on a one-year adjustable-rate mortgage edged up to 2.49 percent from 2.48 percent. The average fee remained at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 3.02 percent from 3.09 percent. The fee was unchanged at 0.4 point.

Average Home Upsized Post-Recession

Screen Shot 2014-02-26 at 9.15.09 PM

 

The average new-home size has increased more than 300 square feet since 2009, growing from 2,362 square feet in 2009 to 2,679 square feet in 2013, according to recently released Census Bureau data.

With that added square footage, new homes are adding more bedrooms, bathrooms, and amenities than they had in 2009.

Forty-eight percent of homes built in 2013 had four bedrooms compared to 34 percent with that number in 2009.

Thirty-five percent of homes in 2013 had three or more full baths compared to 23 percent in 2010.

Also, homes today are also accommodating more garage space. Twenty-two percent of homes built in 2013 had garage space to fit three cars or more compared to 16 percent in 2010.

The amenities that builders say they are most likely to include in new homes are a walk-in closet in the master bedroom, low-e windows, a laundry room, and a great room, according to the National Association of Home Builders. Amenities favored by many builders are granite countertops, double sinks, and a central island in kitchens, as well as nine-foot or higher ceilings, a front porch, exterior lighting, and a patio.

Bigger homes are also meaning higher prices. The average sales price rose from $248,000 in 2009 to $318,000 in 2013.

At the bottom of the list of features that builders will include in new homes in 2014, according to NAHB: laminate kitchen countertops, an outdoor kitchen, an outdoor fireplace, a sunroom, a two-story foyer, and a whirlpool in the master bathroom.

5 Housing Trends Winter 2014

Screen Shot 2014-02-27 at 12.44.53 PM

 

If you plan to buy a house this winter, we have good news for you. Buyers will face less competition and will likely find a greater number of homes available for sale.

Now the bad news: Mortgage rates will keep climbing in 2014. They won’t necessarily spike overnight, but you may run out of time to grab the best mortgage rate if you wait too long. The size of your loan also may have to be adjusted after new rules and new loan limits go into effect this year.

Not sure this is the right time for you to buy a home? Maybe renting is a better option for you, but depending on where you live, expect rents to climb, as well.

Here are five housing trends you can expect to see this winter.

 

Mortgages Get More Expensive

It’s time to kiss extra-low mortgage rates goodbye.

Several factors will put upward pressure on rates in the next few months, including the Federal Reserve’s recent decision to scale back on its bond-purchasing stimulus program.

Higher mortgage fees on Fannie Mae and Freddie Mac loans also will make mortgages more expensive in 2014, as they will result in higher rates for borrowers, says Brian Koss, executive vice president for Mortgage Network in Danvers, Mass.

The fee hike could affect many borrowers because Fannie and Freddie own or guarantee about two-thirds of new mortgage loans.

With the higher fees, even borrowers with credit scores above 740 would pay more for mortgages, regardless of the size of their down payments. In addition, Fannie and Freddie have plans to raise the fees they charge lenders, which will translate into higher mortgage rates for consumers.

Mel Watt, the incoming director for the Federal Housing Finance Agency, which oversees Fannie and Freddie, says he will delay the implementation of higher fees, but has not offered details on when they could go into effect.

“It doesn’t make sense to add additional barriers now that the market is healing,” says Lawrence Yun, chief economist at the National Association of Realtors. Still, he says buyers should act quickly if they are ready to make a commitment now.

 

Buyers Face Less Competition

The housing market will march at a slower pace this winter. That’s good news for potential buyers who struggled to ink a deal during the fall.

Home sales have taken a dip after more than two years of year-over-year increases. A housing report by Re/Max found that home sales dropped 15.9 percent in November, compared with the previous month, and 7.8 percent compared with a year ago. The report is based on Multiple Listing Service data in 52 metro areas.

Home prices won’t follow the same trend as home sales, Yun says.

“But there will be less of a bidding frenzy than before,” he says. And don’t dare call this a buyer’s market yet. “It’s slightly tilted towards favoring the seller over the buyer.”

Still, buying a home should be a bit easier this year as the inventory of homes for sale increases.

“We are going to see more inventory coming online,” says Errol Samuelson, president of Realtor.com. “Homebuilders are calling for 1.1 (million) to 1.2 million housing starts next year, which is much better than a couple of years ago. And as home prices appreciate, people who were underwater will feel more comfortable putting their homes on the market.”

Loans Shrink

The Federal Housing Administration has reduced the maximum loan amount on FHA loans in 650 counties across the country. The new limits went into effect Jan. 1.

In high-cost areas the loan limit was reduced from $729,750 to $625,500. You may think that’s not such a big deal, but it affects the purchasing power of many buyers with low down payments in cities like New York and San Francisco.

The FHA also drastically reduced the loan limits in some counties. Limits in Salt Lake County, Utah, for example, dropped from $729,750 to $300,150.

Fannie Mae and Freddie Mac also are considering reducing their loan limits from $417,000 to $400,000 in most markets, but have not made a final decision.

These reductions could hurt the housing market as buyers who want to buy outside the loan limits would face stricter underwriting requirements, says Matt Hackett, operations manager for Equity Now, a mortgage bank in New York City.

“In general, the reduction in explicit and implicit government-backed loan amounts pushes buyers on the margin into ‘non-agency’ loans, which tend to have more stringent qualification standards, reducing the overall pool of buyers which can qualify for a loan,” he says.

New Mortgage Rules

A series of new mortgage rules goes into effect in January. Most of the rules were created to protect consumers from lender abuses and to shield the mortgage market from the irresponsible lending standards seen during the last housing boom.

You may have heard that the new rules will make it harder for consumers to qualify for mortgages, will hinder mortgage lending and hurt the housing market. But in reality, most borrowers won’t be affected by the new rules when applying for a mortgage.

One controversial part of the new Qualified Mortgage rule, or QM, says a loan to a borrower with debt-to-income ratio of more than 43 percent will lack certain legal protections for lenders. Debt-to-income ratio is the percentage of monthly income that goes toward debt obligations.

Loans will be exempt from the 43 percent DTI cap for seven years, as long as the loans meet FHA, Fannie or Freddie Mac guidelines.

“Generally speaking, (the underwriting requirements) will stay about the same for most people,” says Michael Becker, a mortgage banker for WCS Funding in Baltimore.

Another part of the rule, which puts a cap on maximum points and fees that borrowers can be charged, could hurt borrowers seeking smaller loans, he adds.

Rents Get Less Affordable
As homeownership gets more expensive in 2014, many Americans may choose to rent instead of buy. That could put more pressure on already unaffordable rents.

Although rent growth has somewhat stabilized after a steady rise in 2011, rents are still increasing at a faster pace than overall inflation, according to a recent study by the Joint Center for Housing Studies of Harvard University. One in four renting households spend more than half of their income on rent and about half spend more than 30 percent of their income, according to the study.

Demand for rentals continues to grow, especially for single-family homes, says Wally Charnoff, founder and chief executive officer of RentRange LLC, a rental market data company.

“We are seeing a shift where people seem more comfortable renting single-family homes in suburban neighborhoods instead of apartments,” he says.

Rents aren’t increasing everywhere in the nation, he says. But they are more likely to rise in areas with strong job growth, shows the Harvard study.

More Home Owners Tap Into Equity Again

Screen Shot 2014-02-26 at 9.18.41 PM

A wave of home owners reportedly are borrowing against their home’s equity once again as home prices rise.

“After a home equity credit binge during the housing bubble, banks shut off the tap as home prices plummeted,” the Los Angeles Times reports. “Sobered home owners stopped viewing equity as free money for cars, vacations, and college educations.”

But home equity lines of credit are back on the rise. Bank of America said that its home equity business rose 75 percent last year compared to 2012. In the fourth quarter, BofA reported it issued $1.9 billion in new home equity credit lines, up from $1 billion a year earlier.

The most popular use of equity lines is home improvement, followed by debt consolidation, says Kelly Kockos, Wells Fargo’s senior vice president of home equity. Some borrowers are also using the credit to buy a second home.

Home equity lines of credit are a second mortgage with a type of variable rate that can allow home owners to borrow up to a pre-set amount. For example, a home owner with a $200,000 first mortgage on a $400,000 house could opt to take out a $100,000 line of credit. “If the home owner borrowed the maximum, the mortgage debt would total $300,000 — 75% of what the house would bring in a sale,” The Los Angeles Times explains.

While home equity lines of credit are back on the rise, lenders say they are not as easy to get as they once were. Home owners getting approved tend to have higher credit scores and must show ample savings and equity in their homes, lenders say.

Sellers Getting Ahead of Spring Rush

Screen Shot 2014-02-18 at 2.17.16 PM

 

The spring selling rush may already be under way, as some home owners are already throwing their properties on the market to take advantage of rebounding home prices and improved equity.

Paul Reid, a real estate agent with Redfin in Temecula, Calif., says some sellers are listing properties earlier than usual in anticipation of the spring season.

Sellers are “nervous about what the spring is going to bring,” says Reid. “They don’t know if everybody will list this spring — then you’ll have a big counterbalance toward too much inventory — or if there’ll be a crunch again. They figure they’ll get out ahead of the market, list, sell, and be done with it.”

Inventory shortages persisted last year, when supply was at a 12-year low leading into the spring. The shortages helped boost home prices, but gave home buyers limited choices and sparked bidding wars in many markets. New-home construction is now at a third of its 2006 peak, which likely will keep inventories tight this spring. But, economists say, improved home prices will likely convince more sellers to sell this year, and that should relieve the inventory crunch in many markets.