Challenges could impact 2015’s hot housing forecast

NEW YORK – Jan. 6, 2015 – Industry analysts and economists largely believe the real estate market will gain traction this year, but they acknowledge several challenges that pose a potential derailment to the ongoing recovery. CNNMoney recently highlighted several of those challenges:

Investors exit the market: Institutional investors accounted for 15 percent of all sales in October, a drop from 20 percent in January 2014, according to National Association of Realtors® housing data. "Rising home values are causing more investors to retreat from the market," says Lawrence Yun, NAR's chief economist.

Institutional investors purchased thousands of properties during the onset of the housing recovery, helping to propel the market in many areas of the U.S. But now with higher home prices, they may be looking to cash out.

"Home price appreciation has given those investors a good opportunity – and motivation – to sell and realize a solid return on many of their properties in many markets," according to a report by RealtyTrac that looked at institutional investor activity. RealtyTrac found that institutional investors who bought in 2012 could potentially earn returns of 38 percent to 43 percent if they sold in the current market.

But as investors lessen their stake in the market, first-time buyers, whose presence has been at 30-year lows, may be more poised to step in their place.

Lending criteria still tight: Realtors still say tight credit is holding many of their would-be buyers back and derailing transactions as buyers continue to struggle to qualify for a mortgage, though they have seen a slight improvement in lending recently, according to the latest Realtors Confidence Index.

"The increase in mortgage insurance premium payments for FHA-insured loans continued to be reported as an added financial strain for first-time buyers," the report notes. "Obtaining FHA financing for condominiums (typically the entry point for homeownership) continued as a major issue; many condominiums were reported as not meeting FHA eligibility requirements."

In December, mortgage-financing giants Fannie Mae and Freddie Mac announced they were easing lending standards, most notably with a 3 percent downpayment for qualified borrowers. But that doesn't mean all lenders will ease up on credit, Mark Zandi of Moody's Analytics told CNNMoney. Some lenders may continue to be uneasy about lending to borrowers with sub-par credit or who are unable to make large cash downpayments.

Rising mortgage rates: Mortgage rates are sitting near historical lows at the moment, under 4 percent for the 30-year fixed-rate mortgage, but don't expect that to last. Many economists predict rates will push up to 5 percent by the end of this year.

"If [the Fed] pushes rates up, it could have a big impact on the market," says Fannie Mae's Chief Economist Doug Duncan. Homebuyers – particularly in high-priced markets, such as San Francisco and Los Angeles – already paying large portions of their incomes to housing could face a further chip in affordability, economists say.

Foreign buyers buying less in U.S.: Foreign buyers helped fuel the housing market recovery, but there are signs their presence is receding. "As the dollar has strengthened, it made U.S. housing more expensive," Duncan says.

Chinese buyers continue to have a strong presence in the U.S. market, but buyers from Europe and Russia – where economies are starting to soften – are beginning to lessen their stake in U.S. real estate, says Yun. For example, in California alone, sales to international clients has plunged about 25 percent in the past year, according to the California Association of Realtors.

Source: "5 Biggest Threats to the Housing Market," CNNMoney (Jan. 2, 2015)

Naples-Marco Island expected to lead state in economic growth in 2015

NAPLES, Fla. - The Naples-Marco Island metro area is expected to lead the state in terms of gross metropolitan product growth in 2015, according to a report released Tuesday by Florida TaxWatch.

Naples-Marco Island should see 4.7 percent GMP growth over the next year, according to the report, which cites research by IHS Global Insight. Palm Coast and Orlando-Kissimmee-Sanford were second and third on the list with projected GMP growth of 4.6 percent and 4.4 percent, respectively.

The Cape-Coral-Fort Myers metro area was fourth on the list with projected GMP growth of 4.3 percent. It is also expected to have the most vibrant employment market in the first quarter of 2015 in comparison to 99 other metro areas across the nation, according to Florida TaxWatch, a nonpartisan, nonprofit taxpayer research institute.

Overall, the report paints a sunny economic picture for Florida in 2015.

Unemployment in the state is expected to continue its downward trend with the addition of thousands of jobs, led by the construction industry (8.7 percent projected growth) and professional and business services industry (3.7 percent projected growth), according to the report.

The report forecasts 111,500 total housing starts in 2015, up from 83,400 in 2014 according to the report, which cites University of Central Florida research. And although foreclosure activity in Florida is still the highest in the nation, the state is seeing fewer, with a notable 15 percent decrease in foreclosures from November 2013 to November 2014.

The continued strengthening of the U.S. dollar and slowing of the global economy is expected to increase Floridians’ purchasing power abroad, but could translate into more expensive Florida exports, the report says. It also could cause some international visitors to go elsewhere on vacation, and drive some international homebuyers to reconsider purchasing in Florida.

Source: Naples Daily News, Ryan Mills

3% down mortgages roll out at breakneck speed

WASHINGTON – Jan. 5, 2015 – Lenders' quick adoption of a recently announced decision to allow 3 percent downpayment mortgages created a nice holiday gift for the mortgage industry and homebuyers.

Lenders say they've sped up the normally cumbersome process because some things have changed. For one thing, they're able to get the new product out faster because many lenders now sell their loans directly to Fannie Mae and Freddie Mac instead of aggregators or wholesale lenders that have historically attached extra lending guidelines – called overlays – to the loan requirements.

Also, the qualified mortgage rule (QM), while stricter, has made it easier for lenders to assess quality control, underwriting and risk decisions because there are now fewer gray areas that require study.

Still, most consumers don't yet know that a 3 percent downpayment mortgage product exists – yet. The mortgage industry must now start to make consumers aware that the low downpayment loan products are available.

"If you want to push it, market it and get it out there, I think you should absolutely be able to increase your business if you market it to your clients and real estate agents and everybody else," says Michael Deery, president of San Diego-based mortgage brokerage Citywide Financial.

Source: American Banker (12/26/14) Finkelstein, Brad

Skin-Care Expert Nicholas Perricone Still Trying to Sell Vero Beach Mansion

Dr. Nicholas Perricone is an expert on healthy aging and skin care, and the 66-year-old feels confident enough in his future health that he’s willing to wait to find a buyer for his home in Vero Beach, FL. After all, he’s already waited more than 1,465 days—that’s just over four years.

A few notable events have taken place since Perricone’s place first went on the market:

- The U.S. planned to restore diplomatic and economic ties with Cuba.

- The Voyager 1 space probe left the solar system.

- Colorado became the first state to legalize marijuana use.

- Actor George Clooney got married.

In an effort to attract more potential suitors and avoid another four-year wait, Perricone recently dropped the asking price from $16.995 million to $15.995 million—a cool million-dollar cut. If the recent drop intrigues you, contact listing agent Cindy O’Dare.

This beachfront home is more than 14,000 square feet on over 2 acres of land in the exclusive John’s Island gated community. There’s access to over three miles of private beach, and downtown Vero Beach is minutes away.

The Georgian-style home has a living room surrounded by classic pillars and a series of French doors that open to the terrace by the pool.

An elegant kitchen features white wall cabinetry that provides a nice contrast with the dark brown island cabinets, and a gray tile backsplash ties it all together. The kitchen also has marble counters, a double oven, dual dishwashers, and a butler’s pantry.

The house has five bedrooms, six bathrooms, and two half-baths. The master suite is located on the ground floor so you can access the patio directly. The master bedroom not only has his-and-her walk-in closets, but also his-and-her bathrooms.

A second master suite is on the second floor, along with three other bedrooms. There’s also a gallery with a full-size bar that opens to a balcony that faces the beach.

The property also includes a 2,064-square-foot guesthouse with two bedrooms, three bathrooms, a gym, sauna, and juice bar.

Perricone, who is a board-certified dermatologist, considers himself the “father” of the theory that chronic and subclinical inflammation causes aging and disease. He has published several books, including The Clear Skin Prescription, The Wrinkle Cure, and Forever Young, and offers a line of popular skin-care products on QVC.

Source: Realtor.com - By: Roman Loyola

Former NFL Safety Darren Sharper Lists Florida Home Again

Former NFL safety Darren Sharper had an illustrious playing career: He won the Super Bowl with the New Orleans Saints to cap off the 2009 season, was named to the All-Pro team six times in his 14-year career and played in five Pro Bowls. Sharper also was a member of the 2000s All-Decade Team.

However, since he last played a game for the Saints in 2010, Sharper’s life has been a little less glamorous. Now, he’s attempting to sell an enormous South Florida home he purchased during his NFL heyday: Sharper is asking for $3.6 million for the house in Aventura, FL, with Dmitry Viner as the listing agent.

According to BlockShopper, Sharper tried to offload the home in 2009 for $3.3 million. He bought the property in 2007 for about $2.9 million.

The three-story Mediterranean house is 6,362 square feet and has four bedrooms, five bathrooms and a half bath. It features arched room entries, marble floors, high ceilings and floor-to-ceiling glass windows.

The house is part of the Villa Flora gated community in Williams Island area of Aventura, a northeast suburb of Miami. It’s located on the eastern shore of Little Maule Lake. A dock is available, if you have a boat.

Sharper was drafted by the Green Bay Packers in 1997, and he spent eight seasons roaming Lambeau Field. Sharper also played four years for the Minnesota Vikings (2005-08) before joining the Saints for his final two years.

Memories of his illustrious NFL career have been dimmed lately by the details of his alleged off-field behavior: Sharper was charged separately in Arizona, California and Louisiana with sexual assault in 2014.

Source: Realtor.com - By: Roman Loyola

Price Gap Widens Between New and Old Homes

Buyers who purchase new homes are paying much more than those who buy existing homes. The price gap between the two types of homes, which historically has been in the 15 percent to 20 percent range, has ballooned to between 30 percent and 40 percent in recent years, according to data from the National Association of REALTORS®.

"That suggests either existing-home prices are much cheaper in relation to the newly built homes and/or that there is just not enough new homes being produced," notes NAR Chief Economist Lawrence Yun at NAR's Economists' Outlook blog.

In November, the median home price of a new home was $280,900. In comparison, the median price of an existing home was $206,200, representing a gap of 36 percent.

New-home construction has been at low levels the last few years. Single-family housing starts this year reached 650,000, but a more normal rate for the sector is considered to be 1 million.

A shortage of new-home construction is putting higher premiums on new homes, Yun notes.

"Persistent underproduction of new homes is one key reason for pushing up prices," Yun writes on NAR's blog. "From 2004 to 2014, the price of a typical newly constructed home will have risen by 27 percent."

The price premium could widen more if housing starts do not rebound soon. NAR projects single-family housing starts to rise to 820,000 in 2015, which is still under the historical average.

Source: “Home Price Comparison: New Versus Existing,” National Association of REALTORS® Economists’ Outlook Blog (Dec. 30, 2014)

NBA’s Stephen Jackson Puts San Antonio Home Up for Rent

Back in February, NBA free agent swingman Stephen Jackson put his San Antonio, TX, home up for sale for $3 million. He’s since slashed the price twice, and the home’s now sits at the list price of $2.7 million.

However, Jackson still hasn’t found any takers, and the house just went up for rent for $12,500 per month; Kimberly Howell is the listing agent.

The monthly rent does get you a lot of house: the traditional, Colonial-style home is over 10,000 square feet on two-plus acres of land. There are seven bedrooms, 8.5 bathrooms and an 11-car garage.

Entering the house, you’re greeted by a dramatic double marble staircase—and while it’s tempting to go upstairs, you won’t want to miss the first floor’s shared spaces: The living room has large single-hung windows and a fireplace. Also, the family room is a spacious 34 feet by 30 feet with support columns that add flair to the room and recessed lighting.

The kitchen, with its big island and modern appliances, sits next the the family room, although there is a wall with an entryway that separates the two rooms.

The master bedroom has access to the outside, a sitting room, walk-in closets and a fireplace as well. The master bathroom has a huge shower and a whirlpool tub with a chandelier over it, to give it a little dramatic touch. This space also leads to a gym, which makes it easy to access for your morning workouts.

Other rooms include a study, a theater, a formal dining room and four “other” rooms that you can use based on your imagination or need. Outside, you’ll find a pool in the backyard with a large patio for gatherings. There’s also a separate cabana for getting ready for a swim.

The house is located in The Dominion, a gated community. Residents must pay homeowners association fees, which include access to The Dominion Country Club.

Jackson’s career in the NBA started in 2000 with the New Jersey Nets. He played for eight teams and won an NBA championship with the San Antonio Spurs in 2003. During his career, he has averaged 15.1 points, 3.9 rebounds and 3.1 assists per game. Jackson last played for Los Angeles Clippers in 2014.

Source: Realtor.com