U.S. new home sales up 0.7% in October

WASHINGTON (AP) – Nov. 26, 2014 – Sales of new U.S. homes edged up modestly in October, led by a big jump in activity in the Midwest.

The Commerce Department says new home sales advanced 0.7 percent last month to a seasonally adjusted annual rate of 458,000. That followed a smaller 0.4 percent gain in September and put sales at the highest point since May.

The strength last month came from a big 15.8 percent increase in sales in the Midwest and a smaller 7.1 percent rise in the Northeast. Those increases offset a 1.9 percent fall in sales in the South, which accounts for half of the new-home market, and a 2.7 percent drop in the West.

Housing has struggled to recover since the recession ended in June 2009.

Florida’s consumer confidence up 2 points in Nov.

GAINESVILLE, Fla. – Nov. 26, 2014 – Consumer sentiment among Floridians hit a post-recession high of 86 in November, an increase of two points over October, according to a monthly University of Florida (UF) survey.

"The last time sentiment was this high in Florida was March 2007, over 7 ½ years ago," said Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research, which conducted the survey. Bureau of Economic and Business Research.

Of the five components comprising the index, three increased, one decreased and one remained unchanged. Survey takers' perception that they are better off financially now compared with a year ago increased two points to 75, but their expectations of personal financial gains a year from now fell a point to 82.

The survey also shows that confidence in U.S. economic conditions over the next year rose three points to 85, while faith in the national economy for the next five years remained unchanged at 86.

Finally, respondents' view that now is a good time to buy big-ticket items, such as appliances, rose three points to 100, the highest that component has been since February 2007.

November's confidence rise was unexpected.

"We had been expecting a slight decline in sentiment in the November reading related to the election," McCarty said. "Since 2006, the index had fallen in the November of a presidential or mid-term election, in part due to the even split between Democrats and Republicans in Florida. Given the close race for governor, we expected a decline."

While confidence among Democrats did decline, he said, "it was not enough to outweigh increased confidence overall."

Improving economic conditions in Florida also helped lift public confidence. The state's October unemployment rate fell one-tenth of a percent to 6.0, which is slightly higher than the national rate of 5.8 percent. The state added 34,000 jobs since September, while the labor force rose by 22,000.

Housing in Florida remains strong. While the median price of a single-family home fell $3,000 to $177,000, that price is 4.6 percent higher than a year ago. Mortgage rates, meanwhile, are at near-historic lows with the average 30-year fixed rate below 4.0.

Growth in housing prices will help drive the recovery, but it could slow in the coming year as a number of factors, including the possibility of a Federal Reserve rate hike, may make housing less affordable, McCarty said.

Stock market record highs in November may have spurred an increase of four points for consumer sentiment scores for upper-income households, which are in contrast with lower-income households that showed a decline of seven points.

November gasoline prices averaged about $2.83 a gallon nationally, thanks in part to increased oil supply from fracking in the U.S., coupled with a decrease in demand internationally as Europe, China and many emerging markets lower their consumption due to slower economies, McCarty said.

"While we are still behind where we should be this far out from the end of the recession, this rise in sentiment bodes well for the holiday season," McCarty said. "Although retail sales have been mixed over the past year and actually declined in September, expectations are that this will be an excellent holiday season with growth forecast at more than 5 percent."

Cheaper gas prices, low interest rates, a booming stock market and relatively stable housing prices also should make consumers wealthier than they have been, McCarty said, "although much of that wealth is concentrated in upper-income households."

The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150. Conducted Nov. 1-20, the study reflects the responses of 414 individuals representing a demographic cross-section of Florida

What’s the next big home feature buyers want?

KNOXVILLE, Tenn. – Nov. 24, 2014 – Homeowners are showing a bigger appetite for smart home technology. Nearly half of consumers – 46 percent – say it's important their current home or the next home they purchase have smart home technology, according to a survey of nearly 2,500 consumers, conducted by ERA Real Estate and HGTV.

Survey respondents had recently participated in an HGTV national focus group on smart home technology.

Homeowners and buyers say they see the value in smart home technology for comfort, safety and cost savings, and 51 percent surveyed say they would consider installing smart home technology in their home to make their home more marketable to future home buyers.

The younger segment of the millennial generation is the most likely age group to spend money on smart home technology – 10 times more likely than the percentage of generation X members who say they'd consider adding smart home technology to their homes, the survey reported.

"While still a growing trend, smart home enhancements have the potential to increase savings, safety, and resale value," says Charlie Young, president and CEO of ERA Real Estate. "As we have seen through this survey and our one-on-one interactions with buyers and sellers, a smart home is one that is well positioned for the future and aligns with a growing reliance on mobile technology."

Indeed, 70 percent of millennials say it's important that smart home technology integrate with their smartphone.

While smart home technology has often been thought to be driven by mainly security, survey researchers did not find security as the main motivation for adding smart home technology.

Instead, homeowners say they're using or wanting smart home technology mainly because of the money-saving potential, such as through automated climate control, energy management, remote home monitoring and lighting control systems.

What's more, consumers of all generations said they'd automate their thermostats before their lighting or security systems, and one in 10 Americans say they'd automate their TV over their lighting or security systems.

Source: ERA Real Estate

Real Estate boom in Naples creates downtown demand

London Bay Homes is coming out from behind the gates of Southwest Florida’s upscale communities and into the heart of Naples. The company’s first downtown Naples home this year met with so much success that it is building another one next door and has plans for even more in the future.

“In the past we had built in Aqualane Shores and Port Royal, but with the downturn we kind of stepped out of that market,” explained Mark Wilson, president of London Bay Homes. “With the market back up we are stepping back into that market.”

For the past few years London Bay has been known for its upscale homes in Mediterra and Quail West. Now it is buying up scattered lots in Old Naples as it geasr up for its latest building strategy.

“There is a market demand for it,” Wilson said. “It’s not that one is better than the other; it’s the market demand and downtown is very much in demand, so therefore let’s go there and fill the demand.”

James Bates, a Realtor with Coldwell Banker and one of the top-producing real estate agents in Naples, confirms that the Old Naples area is in great demand now.

“Property is just getting snapped up by developers,” he began. “Definitely, prices are going up.”

Bates sells a lot of homes in Naples and said in just the last few months he’s seen prices soar. He said a lack of inventory adds to the escalation of prices.

“I think we have probably seen an almost 20 percent cost increase in the past 12 months and it is continuing that way,” Bates said. “Naples is the hot spot and it is moving down to the Moorings and Parkshore too.”

London Bay’s first fully furnished downtown model was the Southampton that sold for $2.6 million in March just as the model was being completed. Now construction is underway nearby on the Chelston, a two-story, three bedroom plus study home on Broad Court that will be complete next spring. The Chelston combines West Indies and Old Florida-inspired architecture and features transom windows, an entry water fountain and a tin-type roof. The home will be fully furnished by Romanza Interior Design. The 4,092-square-foot home will sell for somewhere in the $3.5 million range.

“The Chelston is like the Southampton on steroids,” Wilson exclaimed.

It will have higher ceilings, a larger great room, a more dramatic master bedroom and an upstairs loft with wet bar.

“Some was feedback from clients that went through the Southampton and some was the market was ready for a little more,” Wilson said. “The Southampton was designed in January of 2012. This is what the market wants today as opposed to two years ago.”

Another thing driving the bigger home is the bigger expense of lots.

“Homesites downtown are more expensive since January of 2012,” Wilson began. “Some of them have more than doubled in price so then you look to increase the square footage to do it.”

London Bay Homes recently purchased a lot on 1st Avenue North for $2.6 million, the same price as the entire Southampton home sold for.

“It was $2.6 million for the lot so it will be a $6 million home,” Wilson said. “First Avenue North is one of the most desirable spots in downtown. It is very pretty and one block from the beach.”

“Now downtown the lot entry price is in the high $2 millions to low $3 millions,” Wilson continued. “If you want to spend less than that you go further north like Moorings Park.”

London Bay built homes downtown in the early 1990s and was known for its expensive, luxury homes in Port Royal. The new furnished models mark a return to that area as the company aims to attract a buyer who doesn’t want the gated community life.

“It’s the individual that doesn’t want to be in a community and wants easy walking to downtown,” Wilson said. “People are paying a very healthy number to live there now.”

The newest model home will showcase what Wilson said today’s customer wants. Highlights of the new Chelston model include a great room with pocket sliders that open to an outdoor living area with a secluded fire pit and fully equipped outdoor kitchen. Inside there is a huge kitchen with an island breakfast bar and large pantry. The master suite features large walk-in closets, a bathroom with his and her vanities, a spa tub and walk-in shower. Double doors lead from the master suite to a private patio with a linear pool and raised spa.

Source: Andrea Stetson, Special to the News-Press

5 real estate predictions for 2015

WASHINGTON – Nov. 24, 2014 – Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac's U.S. Economic and Housing Market Outlook for November.

"The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 – only the second year in the past decade with growth at that pace or better," says Frank Nothaft, Freddie Mac's chief economist. "Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015.

"And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity."

Freddie Mac economists have made the following projections in housing for the new year:

Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.

Home prices: By the time 2014 wraps up, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. "Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers," according to Freddie economists. "Historically speaking, that's moving from 'very high' levels of affordability to 'high' levels of affordability."

Housing starts: Homebuilding is expected to ramp up in 2015, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.

Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.

Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.

Source: Freddie Mac

Foreign investors push Fla.’s real estate market to a new peak

TAMPA, Fla. – Nov. 24, 2014 – Commercial real estate in Florida has heated up to the point that foreign investors and lenders are chasing deals that extend beyond their comfort zones bringing the market to a crest.

U.S. partisan politics aside, foreigners from around the world are much more comfortable having their money here rather than in their homelands where political instability is much greater. South Florida has long been a favorite repository for cash moved from Latin America and South America. However, increased competition has pushed Miami-area prices so high that foreign investors are venturing north into central Florida and Tampa Bay in search of better values and cap rates.

Foreign investors continue to prefer multifamily and hospitality properties because they are familiar with the business models and more comfortable with the tangibility of the asset.

How they invest, however, is changing. The established model is to pay all cash for the first property and leverage the income gained for the second deal. Now, they are joining with others to buy an apartment building, convert it to a condominium, and sell the units to individuals in foreign countries who agree to leave them in the rental pool run by the management company. Why? Foreign investors are more comfortable owning units than shares in an LLC. These transactions are all cash transactions from the seller's standpoint.

Foreigners are also making regular use of syndicators who scout properties, which are often in the Miami area. Syndicators provide a second benefit of using their track records to help obtain financing. Due to the fact that these syndicators have or do own property in the country already, and have an operation, bank accounts, etc., a lender is able to qualify them in a traditional way. If a borrower approaches a bank and doesn't have any assets in the states already, they know they will not be able to go outside the country to collect on any deficiency in case of a default. On top of that, they can't know if the buyer or entity is getting their funds from drugs or other illegal affairs.

Lenders are also becoming much more accommodating than in recent years. The Florida banks that survived the Great Recession are returning the market. Their loan criteria put greater weight on the sponsor's track record than the property as they seek to minimize risk and regulatory scrutiny.

Lending has also ramped up by agents and affiliates of Wall Street firms that offer commercial mortgage-backed securities. They are less worried about default risk than in the past, a feeling supported by the fact that CMBS loan delinquencies stayed under five percent for a second month in September, according Fitch Ratings.

Adding to the frenzy, lenders are arriving from places as far as Silicon Valley, all eager to participate in the next Florida boom. Like homegrown institutions, they worked through their troubled assets and want to put their money to work again. Joining them are Fannie Mae and Freddie Mac, which compete in financing of the hottest of assets, multifamily housing.

Lenders are also willing to place debt on industrial and hospitality properties, as they expect demand for warehouse space and hotel rooms to increase with economic activity. Lenders are cooler to retail and office properties due to the perceived threat of the Internet making online shopping, oversupply of properties to lease, more efficiently designed retail and office space concepts, and working from home more popular reducing demand on office space.

The other big change is the type of borrower. Traditional, stronger, more experienced buyers have moved to the sidelines as values have increased. New buyers are getting into the market, and traditional banks are not that excited to lend to them.

The newest lenders on the scene are less concerned about risk and are putting up money for acquisition, development and refinancing. They are supporting urban infill, smaller retail developments, and re-development.

The aggressiveness extends to interest-only financing, which is coming from Fannie Mae and Freddie Mac for multi-family properties. It's likely that CMBS lenders will follow in that category. Despite the unease associated with this type of loan, banks are probably going to join in.

Investment and loan activity has risen to a point that the market is susceptible to risks that can end the upcycle. Rising interest rates could push properties from positive to negative returns. Sales are occurring at prices above replacement value. Available properties are drying up as owners realize that while they could take a big profit, they have nowhere to invest the money and achieve as high a return, so they decide not to sell.

While the overbuilt stage is visible only in retrospect, there are signs it has arrived. Lenders that financed development in the early stages are pulling back. Newer banks and new developers are taking their place, and these less experienced players are more prone to failure.

Much of the money is going into multi-family construction. Anyone who has lived through a few real estate cycles knows what happens when too many projects come out of the ground at the same time. We may be approaching that time again so investors and brokers alike should take a cautious approach to their 2015 strategies.

Prepare to Sell Your House

Millions of existing homes are sold each year and, while each transaction is different, every owner wants the same thing: the best possible deal with the least amount of hassle and aggravation. preparing home for sale

Home selling has become more complex than it used to be. New seller disclosure statements, longer and more mysterious form agreements, and a range of environmental concerns have all emerged in the past decade.

More importantly, the home selling process has changed. Buyer brokerage, the process in which REALTORS® represent home buyers, is now common nationwide and good buyer-brokers want the best for their clients.

The result is that, while hundreds of thousands of existing homes may be sold each week, the process is not as easy for sellers as it was five or 10 years ago. Surviving in today’s real estate world requires experience and training in such fields as real estate marketing, financing, negotiating and closing, the very expertise available from local REALTORS®.

Are You Ready?

The home-selling process typically starts several months before a property is made available for sale. It’s necessary to look at a home through the eyes of a prospective buyer and determine what needs to be cleaned, painted, repaired and tossed out.

Ask yourself: If you were buying this home, what would you want to see? The goal is to show a home that looks good, maximizes space and attracts as many buyers as possible.

While part of the “getting ready” phase relates to repairs, painting and other home improvements, it is also a good time to ask why you really want to sell. Selling a home is an important matter and you should have a good reason to sell, perhaps a job change to a new community or the need for more space. Your reason for selling can impact the negotiating process, so it’s important to discuss your needs and wants in private with the REALTOR® who lists your home.

When Should You Sell?

The marketplace tends to be more active in the summer because parents want to enroll children in classes at the beginning of the school year (usually in August). Summer is also typically when most homes are likely to be available.

Generally speaking, markets tend to have some balance between buyers and sellers year-round. For example, a given community may have fewer buyers in late December, but it’s also likely to have fewer homes available for purchase. As a result, home prices tend to rise or fall due to general patterns of supply and demand, rather than the time of year.

Owners are encouraged to sell when the property is ready for sale, there is a need or desire to sell, and the services of a local REALTOR® have been retained.

How Do You Improve Your Home’s Value?

The general rule in real estate is that buyers seek the least expensive home in the best neighborhood they can afford. This means you want to put on the market a home that fits with the neighborhood but is not over-improved. For example, if most homes in your neighborhood have three bedrooms, two baths and 2,500 square feet of finished space, a property with five bedrooms, more baths and far more space would likely be priced much higher and would be more difficult to sell.

Improvements should be made so that the property shows well, reflects community preferences and does not involve capital investments, the cost of which cannot be recovered from the sale.

Cosmetic improvements, paint, wallpaper, landscaping, etc., help a home show better and often are good investments. Mechanical repairs that ensure all systems and appliances are in good working condition are required to get a top price.

Ideally, you want to be sure your property is competitive with other homes available in the community. REALTORS®, who see numerous homes, can provide suggestions that are consistent with your marketplace.

By: Realtor.com Team

Celebrity Real Estate: Former NFL QB Byron Leftwich Sells South Florida Condo

Five years after he bought the place—and nearly two seasons after his last professional game—former NFL quarterback Byron Leftwich has sold his waterfront condo in Aventura, FL, for an even $1 million.

Located about 12 miles north of Miami Beach, Leftwich purchased the Peninsula I condo after he signed with the Tampa Bay Buccaneers in 2009. Built in 2003, the unit sits on the 21st floor and has stunning views of Dumfoundling Bay to the east and Little Maule Lake to the southwest.

Listed by Billy Brown, the 2,984-square-foot condo features a flow-through floor plan, two bedrooms, two full bathrooms, a half bath and a set of resort-like amenities.

Open the front door, and you find marble floors that run through the shared space of the condo, while the bedrooms feature hardwood floors providing atmospheric warmth and comfort. Plenty of natural light flows through the unit, too, thanks to the large windows.

The living room is large and ideal for entertaining, with access to a balcony that faces the water. The kitchen has modern stainless steel appliances, able countertops and a complementary backsplash. A dining room sits next to the kitchen, also with a view.

Both bedrooms have balcony access, and since the balconies face to the east and west, you can watch the sunrise as you wake up in the morning—and you can watch the sunset as you retire for the evening.

Or maybe the sunset is the signal for the fun to begin, and you don’t have to leave the building to find it: Peninsula 1 has two swimming pools to cool off during those hot summer nights, plus a full spa for relaxing after a long day. When you want to get a workout in, you can visit the two gyms or play on the tennis court.

If you have friends over, you can hang out in the trendy billiard room and shoot some stick or enjoy a barbecue in the picnic area.

Leftwich was picked seventh overall in the 2003 NFL draft by the Jacksonville Jaguars. He played for four NFL teams, amassing 10,532 passing yards and 58 touchdown passes, while compiling a 78.9 career passer rating. Leftwich won a Super Bowl ring as the backup quarterback to Ben Roethlisberger when the Pittsburgh Steelers won Super Bowl XLIII.

Fla.’s housing market: Rising sales, prices in Oct. 2014

ORLANDO, Fla. – Nov. 20, 2014 – Florida's housing market reported more closed sales, higher median prices and a rising inventory in October, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 21,894 last month, up 17.8 percent over the October 2013 figure.

The statewide median sales price for single-family existing homes last month was $177,000, up 4.6 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis (IDA) department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in October was $139,900, up 7.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

"October marks the 35th month in a row that statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties," said 2014 Florida Realtors®President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. "The state's housing market continues to benefit from more people moving to Florida, a steadily improving jobs outlook and growing economy."

Statewide, the inventory (active listings) of single-family homes in October rose 4.9 percent year-over-year, while new townhouse-condo inventory rose 3.4 percent.

According to the National Association of Realtors (NAR), thenational median sales price for existing single-family homes in September 2014 was $210,300, up 5.9 percent from the previous yearthe national median existing condo price was $205,200.In California, the statewide median sales price for single-family existing homes in September was $460,940; in Massachusetts, it was $325,000; in Maryland, it was $257,575; and in New York, it was $227,500.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 9,377 last month, up 7.4 percent compared to October 2013. The closed sales data reflected fewer short sales last month compared to the previous year: Short sales for condo-townhouse properties declined 55.6 percent while short sales for single-family homes dropped 47.6 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.

"Everything appears to be moving in the right direction, against a background of moderate and sustainable price changes," said Florida Realtors Chief Economist Dr. John Tuccillo, "Condo sales stand out, since they had been down for the first eight months of the year when compared with the previous year. However, it's unclear whether the October numbers signal a revival of the brisk-paced recovery in the housing market, or whether this is a one-month anomaly. The next several months will tell the tale.

"We could be seeing an early onset of the 'Winter of '13' effect, whereby snowbirds, fearing a recurrence of the bitter weather of last winter, are arriving early and looking to lock in homes before the main seasonal rush."

Inventory was at a 5.4-months' supply in October for single-family homes and at a 5.9-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.04 percent in October 2014, down from the 4.19 percent average recorded during the same month a year earlier.

RealtyTrac: Home flipping at lowest level since ‘09

IRVINE, Calif. – Nov. 20, 2014 – RealtyTrac's Q3 2014 U.S. Home Flipping Report, finds 26,947 single-family U.S. homes flipped (bought and resold within 12 months) in the third quarter – 4.0 percent of all single-family sales.

That's a drop from the second quarter when 4.6 percent of single-family sales were flips, and down from 5.6 percent year-to-year. It's the lowest level of flipped homes since the second quarter of 2009.

The current level of home flips has now reached its "historic norm," says Daren Blomquist, vice president at RealtyTrac. He says it's due to a drop in home price appreciation in many markets where flipping has been hot.

"Meanwhile, the record-high average profits per flip in the quarter demonstrate that flippers are still filling an important niche in an aging housing market with historically low levels of new homes being built," Blomquist says. "The most successful flippers are buying older, outdated homes in established neighborhoods and rehabbing them extensively to appeal to modern tastes.

Overall, investors averaged a gross profit of $75,990 per flip in the third quarter – a 36 percent gross return on initial investment – though that number doesn't include rehab costs and other expenses. The average gross return was up from 35 percent in the second quarter but down from 37 percent a year ago.

Blomquist says markets that have seen a flipping increase tend to have older, distressed inventory that can be upgraded. "Those discounted distressed properties have become harder to find, but a recent jump in scheduled foreclosure auctions could provide more fodder for flippers in the next three to six months."

"Investors have had a heyday in South Florida over the past five years. These third quarter numbers show that good opportunities still exist for those in tune to the market," said Mike Pappas, CEO and President of the Keyes Company representing Southern Florida.

Other findings

Metro areas with the most flips in the third quarter were Miami (1,190 flips), Los Angeles (1,170 flips), Phoenix (1,147 flips), New York (1,070 flips) and Tampa (789 flips). Among these top five, Tampa was the only to post an increase in the share of home flips compared to a year ago.

Markets with the best return on flips in the third quarter included Baltimore (88 percent), Pittsburgh (79 percent), Detroit (61 percent), Richmond, Va. (60 percent) and Mobile, Ala. (59 percent).

Flips completed in the third quarter took an average 185 days to complete, down slightly from 187 days in the previous quarter, but up from an average 133 days for flips a year earlier.

Homes priced below $100,000 represented 20 percent of all homes flipped during the quarter, up from 19 percent in the second quarter and 18 percent one year earlier.

Homes priced $100,000 to $400,000 represented 64 percent of all homes flipped during the quarter, down from 65 percent a year ago

Homes with a flipped price of $400,000 to $750,000 represented 12 percent of all flips, down from 13 percent a year ago.

Flips on homes priced above $750,000 accounted for nearly 4 percent of all flips in the third quarter, down slightly from a year ago.

The best returns on homes flipped in the third quarter were on homes with a flipped sale price between $1 million and $2 million, yielding a 45 percent average gross return on investment. Homes in the $100,000 to $200,000 price range had the second best return at 43 percent, followed by homes in the $200,000 to $300,000 price range with an average gross return of 41 percent.

Most lenders say mortgage approval still a challenge

WASHINGTON – Nov. 20, 2014 – A survey finds mortgage and housing industry professionals remain skeptical about a housing recovery, and most aren't planning to loosen credit scores to help more buyers qualify, citing fear of federal regulatory rules.

The survey of mortgage and housing industry insiders, conducted Oct. 16-31 for the Collingwood Group Mortgage Outlook Report, found that 71 percent of respondents said it's "somewhat" to "extremely" unlikely that they will lower credit scores for borrowers.

"It just isn't worth the risk," said one survey respondent.

Last month, Federal Housing Finance Agency (FHFA) Chairman Mel Watt signaled to mortgage bankers that they could loosen their lending standards. However, lenders said they don't think the feds will back them up if push comes to shove.

Survey respondents were almost evenly split on their feelings about business conditions compared to last year. Only 1 percent of respondents said that business conditions are "much better."

About half of the respondents dubbed conditions either "a little worse" (22 percent) or "a little better" (31 percent). Those who reported that business conditions are "a little better" said that they're "slowly originating more loans" and that the "purchase business provides a degree of stability not possible in a refinance environment."

Almost two-thirds of survey respondents said that Consumer Finance Protection Bureau (CFPB) rules cause them the most anxiety. Other respondents said that it's not one source of regulations that cause anxiety, but rather, the volume of complex and sometimes contradictory regulations is most burdensome.

"I think all the regulations combined have unintended consequences," said one respondent.

The data was collected via an online survey distributed to a diverse group of mortgage industry leaders. The mortgage and housing professionals surveyed represent various originators, lenders, servicers, and other industry participants.

Canadians snap up U.S. commercial real estate

TORONTO, Canada – Nov. 19, 2014 – Canadian investment in U.S. commercial real estate is on track to hit record levels this year, once Canada's second-largest pension fund closes a $2.25 billion deal to buy a landmark Manhattan property, according to data from property research firms.

Canadian pension funds and developers have been raising their investment in foreign real estate this year, primarily in the United States, as they seek alternatives to a consolidated domestic market.

The deal by Ivanhoe Cambridge – the real estate arm of Quebec's Caisse de depot et placement and Chicago-based Callahan Capital Properties – to buy the 42-story 1095 Avenue of the Americas building in Manhattan from Blackstone Group has not yet closed, two people familiar with the matter said. Caisse de depot et placement manages Quebec public and private sector pension funds and insurance funds.

A final announcement of the purchase may take weeks.

Canadians had already poured more than $8 billion into U.S. commercial real estate in the first three quarters of 2014, surpassing the $7.8 billion spent during the same period in 2013, according to Jones Lang LaSalle and Real Capital Analytics. Canadians spent $11.86 billion on U.S. commercial property in all of last year and they are on target to surpass that in 2014.

The domestic Canadian market is quite tightly held by the domestic pension funds, said Lucy Fletcher, vice president, international capital group and capital markets at Jones Lang. Very few of the assets are trading in the current market.

Canada has been the biggest foreign buyer of U.S. commercial property for the past four years, according to data from New York City-based Real Capital.

Since 2010, Canadian investors have bought $43.4 billion in commercial U.S. property – or 1,530 properties – spending four times as much as second-placed China.

The Ivanhoe deal was previously reported in the Wall Street Journal. Upon completion, it will mark the second-highest price paid for an office building in the U.S. since the 2008 sale of the General Motors building in New York for $2.8 billion.

A spokesman for Montreal-based Ivanhoe Cambridge, which has $40 billion in assets, declined to comment. The Quebec fund's other New York investments include Manhattan office towers 1211 Avenue of the Americas and 1411 Broadway.

The purchase would be the latest U.S. acquisition by Ivanhoe Cambridge with Callahan. The two formed an alliance in 2012 to expand Ivanhoe's U.S. commercial holdings.

Celebrity Real Estate: UCLA Football Coach Jim Mora Unloading Washington Home

When we talk about football in America, we discuss big tackles, long touchdowns and thrilling games won in overtime. Legendary coaches—like Bill Belichick, Jim Mora and Nick Saban, for example—evoke memories of great gridiron battles and a nation’s passion for football.

Those names also wind up on the move at times due to the fickle nature of the football coaching carousel.

Football scion Jim L. Mora, son of former NFL coach Jim E. Mora, took the head coaching job at UCLA in 2011 and left behind a luxurious home in the Seattle area. This Northwest home is a remnant of his unsuccessful one-season stint as the NFL’s Seattle Seahawks head coach in 2009.

The property in Yarrow Point, WA, is listed for $3.149 million. The six-bedroom, 4.5-bathroom contemporary residence is presented by REALTOR® Debbie Jaeger and has been totally overhauled since Mora originally purchased it.

Now filled with beautiful finishes and jazzy improvements, there are beautiful blonde hardwoods—sleek and satiny—that complement the home’s clean lines and sharp finishes.

The gourmet kitchen, with the requisite stainless steel appliances (side-by-side ovens with a six-burner gas range, a SubZero fridge and more) as well as custom cabinetry and an expansive island, is the heart of the home and appointed with every imaginable accoutrement.

There also is a master suite with a private deck, complete with gorgeous lake views. A theatre room, a gaming center, a wet bar and an art studio round out the special touches—not to mention seven built-in, flat-screen TVs.

On top of all of this, the property includes separate guest house with its own bath, as well as a relaxing patio and built-in BBQ station.

Jim Mora has led the Bruins to two straight bowl appearances in his first two seasons in Westwood, and he is aiming for an even bigger prize with this year’s squad, currently ranked No. 14 by the Associated Press: a Pac-12 championship.

Along with his wife, Mora also runs the Count on Me Foundation, a group that helps underprivileged children. He played collegiate football at the nearby University of Washington from 1980 to 1983 and began his coaching career there as a graduate assistant in 1984. Mora’s first head-coaching position was with the NFL’s Atlanta Falcons from 2004 to 2006.

Study: South Florida home affordability worsening

FORT LAUDERDALE, Fla. – Nov. 17, 2014 – Buying a home in South Florida became even more unaffordable in 2014 than in 2013 and 2012, according to a new ranking released Friday by Interest.com, a subsidiary of North Palm Beach-based Bankrate.com.

The tri-county Miami metro area was the fifth-least affordable of the 25 largest U.S. metro areas for households at the median income level, an annual study by Interest.com found. The four worse metros were San Francisco, San Diego, New York and Los Angeles.

Home affordability in South Florida worsened because of a widening gap between home prices and income, said Mike Sante, managing editor of Interest.com, in an interview Friday.

The rankings were determined by comparing median home prices from the National Association of Realtors with median household income data from the U.S. Census Bureau, along with median property taxes and homeowner insurance costs.

The Miami metro area earned an "F" affordability grade because a home with a $270,000 median price tag was out of reach of a family earning the $46,946 median income, the website found. Median income increased 0.64 percent while the median home price jumped 7 percent between 2013 and 2014, Sante said. In the 25 metros overall, median income rose 2 percent and median home prices 6 percent.

The degree to which the South Florida median income fell short of the income required for a median-priced home worsened over the past three years. The percent the median income fell short of the income required for a median-priced home – what the study called a "paycheck power rating" – widened from -12.6 percent in 2012 to -24.6 percent in 2013, and to -25.6 percent in 2014.

Among the 25 metros, only Tampa households had a lower median income in 2013 – $45,880, he said. But the median home price was $156,000, making homeownership there more affordable.

Also contributing to South Florida's unaffordability ranking was homeowner insurance costs – highest in the nation and at $1,933 nearly double the national median, he added.

The top-five most affordable U.S. metros were Minneapolis, Atlanta, St. Louis, Detroit and Pittsburgh.

Financing barriers stifle condo resurgence

LOS ANGELES – Nov. 17, 2014 – Demand for condo units is rising in urban areas nationwide, but mortgage financing continues to squeeze out entry-level buyers.

List prices for condos in major markets are rising faster than prices for single-family detached homes in many areas. Condos are surging in popularity as boomers look to downsize and other owners seek to live closer to urban workplaces and cities.

Lawrence Yun, chief economist for the National Association of Realtors®, estimates that condos have surged from about 8 percent of the market share to between 11 percent and 12 percent recently. In some markets, the share is greater: In Miami, for example, condos accounted for nearly 45 percent of home sales in September, and in Los Angeles, they accounted for about 27 percent, according to CoreLogic's DataQuick.

But financial barriers – particularly for Millennial and first-time buyers – may be keeping the condo surge from heightening more. The Times reports that the Federal Housing Administration (FHA) continues to severely restrict the availability of its low-downpayment mortgages in several condo projects. The FHA will insure mortgages in less than 7 percent of the nation's estimated 150,000-plus condominium developments, according to the Times.

In particular, the agency has stopped approving so-called "spot loans" in condo projects where condo associations have not received special certification. Several condo HOA boards have called the certification burdensome and say that the process often ends in rejection.

FHA tightened its financing of condo projects after being faced with significant foreclosures during the housing crisis.

However, the agency may be considering a change: The Times reports that FHA is drafting a major condo proposal for 2015, which could potentially bring back financing to more buyers and existing unit owners.

Source: "FHA Squeezing Loans for Condos Despite Surging Demand," Los Angeles Times (Nov. 9, 2014)

Can bankrupt homeowners void their second mortgage?

WASHINGTON (AP) – Nov. 17, 2014 – The Supreme Court said Monday it will decide whether homeowners who declare bankruptcy can void a second mortgage if the home's market value has dropped below the amount they owe on the first mortgage.

The justices will consider two appeals from Bank of America, which asserts that bankrupt homeowners should not be able to "strip off" a second loan even if they are underwater on primary loans.

Both cases involve Florida homeowners who were allowed to nullify second loans held by Bank of America. The Atlanta-based 11th U.S. Circuit Court of Appeals affirmed both cases, but Bank of America says the rulings conflict with Supreme Court precedent and every other appeals court that considered the issue.

Bank of America claims hundreds – and possibly thousands – of homeowners in states covered by the 11th Circuit have moved to void underwater second mortgages since the appeals court endorsed the practice two years ago. Those states include Florida, Georgia and Alabama.

"This case presents a critical issue of bankruptcy law affecting a large number of chapter 7 cases," lawyers for Bank of America said in a court filing. The company urged the high court to clarify the rules "and restore uniformity to the administration of chapter 7 cases across the country."

About 28 percent of mortgaged houses in Florida are worth substantially less than market value, ranking the state second only to Nevada in underwater mortgages, according to the real-estate-research company RealtyTrac.

Bank of America says in both cases that it loaned money to the debtors secured by a lien on the home. The company argues that even if the primary mortgage is underwater, that has no effect on the lien securing the second loan.

Attorneys for the homeowners argue that none of the other appeals courts dealt with second mortgages "that would be entirely worthless in foreclosure."

Want a mortgage tax forgiveness extension? Act now

ORLANDO, Fla. – Nov. 13, 2014 – The National Association of Realtors® (NAR) has issued two Calls for Action – a tool that fills senators' and representatives' inboxes with issue-related emails. Many times, lawmakers use their "number of emails" as a measure of voters' concerns, making NAR's Call for Action an important Realtor political tool.

It only takes 10 minutes to participate in a Call for Action. NAR's Realtor Action Center directs an email to your representatives in Congress, and it fills in the email's content, though Realtors are invited to add an independent note.

However, time is short. Congress has less than four weeks to pass pending legislation before the winter holidays, and NAR says the deadline for email participation in the Call for Actions ends Nov. 30, 2014 – less than two weeks from now.

Extend mortgage forgiveness tax relief

In the third quarter of 2014, the number of Florida short sales dropped 50.8 percent year-to-year, according to Florida Realtors Industry Data and Analysis (IDA) department. Yet at the same time, one in four (28 percent) Florida homeowners with a mortgage was still underwater, according to RealtyTrac.

Why the disconnect?

Without the "Mortgage Forgiveness Tax Relief Act" passage, mortgage money forgiven by a lender in a short sale or other mortgage workout is considered income. And as with all income, sellers will be taxed on the amount of this "phantom money" when they pay their federal taxes.

This "phantom money" wasn't taxed last year, but it will be early next year when sellers calculate their 2014 taxes.

The current bill in Congress, if passed, would extend mortgage tax forgiveness and make it retroactive to Jan. 1, 2014.

Visit NAR's Realtor Action Center now and ask them to pass mortgage forgiveness tax relief.

Extend terrorism insurance

The federal government created TRIA (The Terrorism Risk Insurance Act of 2002) after the 9/11 World Trade Center attack to keep coverage affordable for commercial real estate interests because the loss of affordable terrorism insurance would grind development to a halt in some cities.

U.S. terrorism insurance spreads the risk. It keeps commercial insurance coverage reasonable and costs taxpayers almost nothing.

"Sustaining a viable private market for terrorism insurance depends on the federal backstop," says NAR.

Visit NAR's Realtor Action Center now and ask Congress to extend terrorism insurance.

Expect ‘big data’ to impact real estate’s future

WASHINGTON – Nov. 12, 2014 – Mobile technology advances could radically change the ways consumers search for real estate online, according to speakers at the 2014 Realtors® Conference & Expo.

Technology will change and put more power into the hands of consumers – but that's not a bad thing if Realtors understand the tech trends and incorporate the changes into their business.

According to NAR Managing Director of Data Analytics Todd Carpenter, the "Internet of Things" (IoT) – which transfers data over networks without human-to-human or human-to-computer interaction – will transform the way consumers shop for real estate online. In fact, it has already changed Americans' lifestyles in some ways.

Carpenter shared big data examples: Mobile apps are already revolutionizing the way individuals go about their day, such as tracking daily physical activity, navigating traffic in real-time and managing a home thermostat from afar.

"A buyer could eventually ask an agent about how a home functions – such as how well it heats or the amount of electricity it uses during certain parts of the day – and receive an immediate answer with detailed graphics and analysis," said Carpenter. "That information may not be readily available to buyers today, but it's coming soon as more individuals use their smartphone to connect their home to the Internet."

Carpenter said that individuals already make more informed decisions about everything from transportation to healthcare industry based on data collected from their smartphone. "These (types of) advances in mobile technology will make it easier for Realtors to communicate valuable information to their clients during the home buying and selling process," he said.

Carpenter said IoT and predictive analytics help more than just consumers. They help the real estate industry too, because it has gained a better understanding of transaction and market data; and the amount of that data will continue to increase and better predict buyer and seller behavior. It will also offer more insights into trends in home preferences and neighborhoods, including highly customized home searches that might include factors such as proximity to the buyer's work, public schools and restaurants.

"Realtors should educate themselves about big data and be knowledgeable of how it's being collected through mobile devices," said Carpenter. "Buyers will increasingly use their smartphone during the search process – often before talking to an agent. Realtors who adapt and embrace big data will add considerable value to their relationship with clients."

Alternative mortgages making a comeback

ANAHEIM, Calif. – Nov. 12, 2014 – Adjustable-rate mortgages (ARMs), jumbo mortgages, interest-only home loans and piggybacks are some of the products that all but vanished after the economy imploded.

Now, however, they appear to be making a comeback in certain regions.

CoreLogic DataQuick finds that ARMs accounted for just 3.5 percent of loans used to buy Orange County, Calif., homes in the spring of 2009, for example. Since the first of this year, one in five Orange County purchase loans was an ARM.

Nationwide, nearly one in 10 loans was adjustable this past spring – an increase from one in 66 five years earlier, reports Black Knight Financial Services.

After bottoming out in 2012, mortgage credit has become increasingly available over the last couple of years, according to the Mortgage Bankers Association's mortgage credit availability index. That measure has climbed 17 percent since February 2012.

Nevertheless, credit remains very tight. MBA chief economist Mike Fratantoni says the index shows that it was nine times easier to obtain a loan in 2006 than it is today.

Source: Orange County Register (CA) (11/09/14) Collins, Jeff