Category: National News (6)

Are we in a bubble_

ORLANDO, FL – December 29, 2017 – According to many news sources, including our Schmidt Report, we have said that we are NOT in a bubble.

The Best Real Estate Blog states: With home prices rising in many areas of the country, many people are worried that we’re headed for a housing crash like the one we suffered in 2008.

But here’s the thing: it’s just not true. While it’s understandable that people would look at the current market, consider it a “housing bubble,” and assume it’s going to pop, the truth of the matter is the market today couldn’t be any more different than they were before the crash of 2008.

Let’s take a look at four reasons why we’re not headed for another housing crash:

1. Banks have tightened their lending practices
The biggest contributor to the crash of 2008 was risky lending practices. Financial institutions had extremely loose standards in terms of who they’d lend to; they were giving out mortgages to people with low incomes, bad credit, and who were unlikely to be able to pay their mortgage once their interest rates increased. Getting a mortgage was easy, regardless of your financial situation. While this made homeownership possible for people who previously would have needed to rent due to lack of income or bad credit, it also led to serious problems when millions of people began defaulting on their loans, leading to the housing crash and the ensuing economic crisis.

Today, those predatory and unethical lending practices have been completely overhauled. Mortgage standards are much more strict, and lenders are much more cautious in who they grant loans to and the terms of those loans. This has led to greater stability in the market and will prevent another crash like the one we experienced in 2008.

2. Fixed rate mortgages are the norm
As mentioned, a huge part of the housing crisis of 2008 was subprime mortgages. The mortgages given to the riskiest borrowers were adjustable rate mortgages. Once the introductory period was over, borrowers saw their interest rates skyrocket and their mortgage payments quickly double or triple in size, making them completely unaffordable and leading to mass defaults on loans across the country.

But today, while adjustable rate mortgages still exist, they’re significantly less common. Fixed rate mortgages are the norm. When people borrow, they know exactly how much their mortgage payment is going to be for the life of their loan. This allows them to assess their budget and only borrow as much as they can afford, making it much less likely they’ll default on their loans in the future.

3. Today’s rising prices are a supply and demand issue, not the makings of a bubble
In 2008, prices rose rapidly because everyone wanted to buy property. Real estate experts called it a “mania” because so many people who weren’t able to buy property suddenly had the ability to do so. Purchasing a home in the US accelerated to a frenzied pace, which drove up prices.

But today, prices aren’t rising because there’s a flood of frenzied buyers in the market. Instead, it’s a supply and demand issue. People are staying in their homes longer, which means there’s less inventory available in competitive markets. When there’s less inventory, there are more people vying for the limited homes available, which drives up property prices. This kind of price increase is just a normal part of a competitive market, not a reason to worry we’re headed for another housing bubble.

4. There’s economic growth to support rising prices
Perhaps the biggest reason you don’t need to worry about the US heading for another housing crisis, is the fact there’s economic growth to support rising prices.

The reason the most competitive markets in the country (like Silicon Valley or Seattle, WA) are rapidly growing and showing historic price increases is due to economic growth. The most competitive housing markets in the US are the markets with the most opportunity. People are flocking to areas where there are jobs, stable economic growth, and opportunities for the future. Potential homebuyers want to purchase property in a place they know will offer them plenty of career and economic opportunities.

When there’s economic growth to support growing prices like there are in today’s hottest cities, it makes for a much more stable market—and a market unlikely to head towards a housing crash.

If you’re worried that rising housing prices are an indicator another housing crash is on the horizon, take a deep breath. The conditions in the market today are completely different from the conditions in 2008, and thanks to the changes made in lending practices after the crash and our booming economy, you can rest assured we won’t see a housing crash anytime soon.

See Full Article Here: http://www.bestrealestateblog.com/4-reasons-not-headed-another-housing-crash?m=fisaHboqeyqdUDVMmvuA

ORLANDO, FL – October 24, 2017 – The REALTORS® Confidence Index (RCI) survey[1]  gathers monthly information from REALTORS® about local real estate market conditions, characteristics of buyers and sellers, and issues affecting homeownership and real estate transactions.[2] This report presents key results about market transactions from September 2017. View and download the full report here.

Market Conditions and Expectations

• The REALTORS® Buyer Traffic Index registered at 61 (59 in September 2016).[3]

• The REALTORS® Seller Traffic Index registered at 45 (44 in September 2016).

• The REALTORS® Confidence Index—Six-Month Outlook Current Conditions registered at 65 for detached single-family, 55 for townhome, and 52 for condominium properties. An index above 50 indicates market conditions are expected to improve.

• Properties were typically on the market for 34 days (38 days in September 2016).

• Eighty-five percent of respondents reported that home prices remained constant or rose in September 2017 compared to levels one year ago (84 percent in September 2016).

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Characteristics of Buyers and Sellers

• First-time buyers accounted for 29 percent of sales (34 percent in September 2016).

• Vacation and investment buyers comprised 15 percent of sales (15 percent in September 2016).

• Sales of distressed properties (foreclosed or sold as a short sale) accounted for four percent of sales (four percent in September 2016).

• Cash sales made up 20 percent of sales (21 percent in September 2016).

• Twenty percent of sellers offered incentives such as paying for closing costs (eight percent), providing a warranty (eight percent), undertaking remodeling (two percent), and providing appliances (one percent).

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Issues Affecting Buyers and Sellers

• From July–September 2017, 73 percent of contracts settled on time (63 percent in September 2016).

• Among sales that closed in September 2017, 87 percent had contract contingencies. The most common contingencies pertained to home inspection (27 percent), obtaining financing (22 percent) and getting an acceptable appraisal (20 percent)[4].

• REALTORS® reported “low inventory” as the major issue affecting transactions in September 2017. REALTORS® also reported concerns regarding the hurricanes’ impact in Texas and Florida.

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About the RCI Survey

• The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month.

• The September 2017 survey was sent to 75,000 REALTORS® who were selected from NAR’s nearly 1.2 million members through simple random sampling and to 5,543 respondents in the previous three surveys who provided their email addresses.

• There were 2,370 respondents to the online survey which ran from October 2‒12, 2017. The survey’s overall margin of error at the 95 percent confidence level is two percent. The margins of error for subgroups and sample proportions of below or above 50 percent are larger.

• NAR weighs the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.

The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org.

ORLANDO, FL – October 16, 2017 – Amid improving macroeconomic conditions, residential lending continued to increase in 2016, based on the recently released 2016 Home Mortgage Disclosure Act (HMDA) data. [1] [2] The number of first-lien loan originations for the purchase of one-to-four unit properties intended for owner occupancy rose to 3.46 million in 2016, a 10 percent increase from 3.12 million in 2015. Although residential lending has been growing at double-digit rates since 2012, loan originations in 2016 were only at three-fourths of the peak level of 4.83 million in 2005. Lending has not fully recovered due to the interplay of factors relating to the borrower’s capacity to obtain a mortgage, tighter lending standards, and the faster appreciation of housing prices relative to income growth amid a lack of housing supply. An increasing share of originations has gone to high-income earners.[3]

loan originations

By type of loan, conventional loans accounted for 61 percent, well below their 90 percent share in 2005-2006, when loan originations rose to a peak of 4.42 million. FHA-insured loans accounted for 25 percent, up from 5.5 percent in 2005, but the level is well below the 40 percent share in 2009-2010 when FHA increased lending as conventional lending collapsed. FHA’s share to loan originations has declined in part because of the increase in upfront and annual mortgage insurance premiums and the change in duration of payment of premiums to the full term of the loan for loans that have more than 90 percent loan-to-value ratios.[4] Meanwhile, VA-guaranteed and RHS/FSA-guaranteed loan originations have generally continued to increase since 2004, except in 2005-2007 when the number of loans decreased slightly. VA-guaranteed loans accounted for 10 percent of originations, while RHS/FSA accounted for three percent.

Low-to-Middle Income Borrowers Were More Likely Obtain FHA and FSA/RHS-Insured Loans, While High-Income Borrowers Were More Likely to Obtain Conventional and VA-Guaranteed Loans

Residential lending has not fully recovered to pre-crash levels due to the interplay of demand (borrower) and supply (lender) factors. On the borrower side, the fast pace of house prices relative to income growth may be one factor. As of July 2017, the median sales price of existing homes sold has increased by 68 percent since 2012 compared to 15 percent growth in median family income. On the lender side, tighter lending standards (loan-to-value, debt-to-income, credit scores) have also made obtaining a mortgage more difficult or costly, especially for low to middle-income households/earners. The chart below shows that shows that applicants whose gross annual incomes are “high” (relative to the U.S. median household income of $59,039 in 2016[5]) were likely to obtain a conventional loan: the median applicant income on approved conventional loans in 2016 was $90,783 and the median applicant income on approved VA-guaranteed loans was $74,863. Applicants with incomes that were in the range of the U.S. household median income were more likely to obtain an FHA-insured and FSA/RHS loans: the median applicant income on FHA-insured loans was $60,007 and the median applicant income on approved FSA/RHS loans was $47,211.

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Although applicants with lower incomes were more likely to obtain an FHA-insured loan, the median loan amount was also small, at $179,172. Conventional and VA-guaranteed originated loan amounts were typically larger, but borrowers typically had higher incomes and were more likely to put in larger downpayment, as suggested by the lower loan-to-income ratios on conventional loans.

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The share of loan originations going to “high” income applicants (applicant income is 80% to 120% of the median metropolitan area income where the census tract of the property is located) has been steadily rising. As of 2016, 46 percent of loan originations went to applicants whose incomes were above 120 percent of the metropolitan area median income, up from 35 percent in 2009.

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Amid rising home prices, jumbo loans —loans that exceed the loan limits that the government sponsored enterprises (Fannie Mae and Freddie Mac)— rose to nine percent of originations[6], higher than the 4.3 percent share in 2004.

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Not Meeting Debt to Income Limit is Major Reason for Denial

HMDA does not collect data on credit scores, loan-to-value, and debt-to-income on individual applicants, so an evaluation of why applicants with incomes higher than the household income were denied is difficult to assess. However, HMDA allows the lender to provide up to three reasons for the denial (in no order of preference). Based on the first reason listed (which may be deemed to be a random sample of the denial reasons), not meeting the debt-to-income (DTI) ratio was the major reason provided by lenders why applicants were denied (29 percent), followed by credit history (22 percent) and insufficient collateral or downpayment (15 percent). Not meeting the debt-to-income ratio was the major reason applications were denied across all loan types. (In this regard, Fannie Mae’s decision in July 2017 to increase its back-end DTI ratio limit from 45 percent to 50 percent is a positive move to ease the constraints for mortgage borrowers with 50 percent DTI whose risk profile is not significantly different from the risk profile of borrowers with 45 percent DTI.)

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Rising House Prices, Lack of Downpayment, and Weak Credit Profiles Made Homes Less Affordable

For middle-income borrowers, an FHA loan is the best option (i.e., the borrower is more likely to get approved), but the faster appreciation of home prices relative to income growth has increasingly made a home purchase less affordable. Since 2012, house prices have increased by 68 percent, while incomes have increased by 15 percent.

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Low downpayment conventional loans are available, but middle-income earners may be hard pressed to meet the downpayment on a bigger loan. Moreover, borrowers with less than sterling credit profiles and with little downpament bear additional costs associated with a higher mortgage rate that government-sponsored enterprises (Fannie Mae and Freddie Mac) charge to reflect the higher borrower risk (called loan level price adjustments, which reduce lender’s fees). [7] For example, Fannie Mae assess an LLPA of 1.5 percent of the loan ($1,500 on a $100,000 loan) on a loan it will purchase from a lender where the a borrower has a 680 FICO score and a loan with a 95 loan-to-value ratio (or 5 percent downpayment), The LLPA rises to 3.5 percent ($3,750) for borrowers with less than 620 FICO score. LLPAs increase the mortgage rate charged to borrowers because lenders make up for the reduction in fees arising from the LLPA by increasing the mortgage rate charged to the borrower.

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In summary, the latest 2016 Home Mortgage Disclosure Act data indicates that residential lending has been growing at double-digit rates since 2012. However, loan originations remain below 2005 levels for reasons related to the interplay of borrower’s income and credit profiles, tighter lending standards, and rising home prices due to inadequate supply. For these reasons, an increasing share of originations[8] has gone to high income earners.


[1] The author thanks Hua Zhong, Data Scientist, for writing the code that greatly facilitated the tabulation of the HMDA data.

[2] The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and was implemented by the Federal Reserve Board’s Regulation C. On July 21, 2011, the rule-writing authority of Regulation C was transferred to the Consumer Financial Protection Bureau (CFPB). Regulation C requires lending institutions to report public loan data. Federally-insured banks, savings institutions, credit unions, and non-depository mortgage financial institutions that meet Regulation C requirements for asset size, presence in a metropolitan area, number of originations, and whose loans are intended for sale to the GSEs, are required to report their lending transactions. In 2016, there were 16.3 million HMDA records from 6,762 financial institutions. According to FDIC, there were 9,498 FDIC-insured and FIDC-supervised institutions as of June 2017. See https://www.ffiec.gov/hmda/https://www.ffiec.gov/hmda/pdf/2013guide.pdf, https://www.fdic.gov/bank/statistical/stats/

[3] First-lien, one-to-four family, owner occupied, home purchase originated

[4] The annual mortgage insurance premium increased from 0.55 percent of the loan amount to 1.35 percent of the loan amount from 2010 to 2013 and it was reduced to 0.85 percent for most borrowers in 2015 (loans less than or equal to $625,500 and greater than 95% LTV). The upfront mortgage insurance premium was increased from 1.75 percent, to 2.25 percent, then 1.0 percent in 2010 and then raised to 1.75 percent in 2012. Starting with cases in June 3, 2013, loans with more than 90% LTV are charged the annual MIP for the term of the loan. See https://www.fha.com/fha_requirements_mortgage_insurance

[5] U.S. Census Bureau, 2016 Annual Social and Economic Supplement of the Current Population Survey.

[6] Again, first-lien, one-to-four family, home purchase, owner occupied.

[7]LLPAs as not added directly to the mortgage rate. Rather, the LLPAs are deducted from the lender’s fees (e.g., fees for underwriting, appraisal, recording)) when they sell the loan to the GSEs. Lenders recover the reduction in fees by charging the borrower a higher mortgage rate.

SOURCE: NATIONAL ASSOCIATION OF REALTORS
Lakefront Real Estate Expert in Windermere and Orlando, FL

World-Renowned Water Ski Lake For Sale

WINDERMERE/WINTER GARDEN, FL – May 18, 2017 – Owned by water ski world champion, Sammy Duvall, you immediately know this is a prime lakefront property near Windermere in Winter Garden, Florida, located on a world-renowned water ski lake.

This lakefront property at 13433 Lake Butler Blvd, Winter Garden, offers 7 acres and is perfectly and privately situated on spring fed Lake Roper, one of the sport’s most sought-after waterski lakes in the nation, this rare lakefront compound boasts over 1000-feet of wrap-around lake frontage and spans over 2.5 acres of high and dry land.

Custom built by Master Custom Builder Scott Green, this one-story, 3-way split floor plan sprawls across 4,408 square feet with 5 bedrooms, 3.5 bathrooms and a spacious 3-car garage. Open to the rest of the home, the gourmet kitchen features soaring ceilings, double island, large eat-in nook and is flooded with light through picture windows that capture the sparkling pool and lake views. Built for entertaining, the open concept floor plan flows seamlessly with plenty of room to gather inside or out, on the oversized lanai with screened enclosure and covered dining/living areas. The master bedroom is generous in size and also offers large windows and captivating views of the backyard oasis. An expansive master bathroom features a jetted tub, walk-in shower, and his-and-her vanities and spacious closets. The office was custom created with an abundance of built-in shelving with beautiful accent lighting and plantation shutters to match. Additional guest suites are found in two private alcoves, one of which is currently used as a bonus room. Numerous upgrades have been done over the years including new HVAC, new exterior and interior paint and no HOA! Located in close proximity to Winter Garden Village and major roadways, the property offers busy lifestyle convenience!

Numerous upgrades have been done over the years including new HVAC, new exterior and interior paint and no HOA! Located in close proximity to Winter Garden Village and major roadways, the property offers busy lifestyle convenience! 

Sammy Duvall’s career started in 1968, where he won six world titles and became a water ski world champion. The USA Water Ski Foundation stated, there are numerous titles in the U.S. Masters and the U.S. Open and Sammy was a consistent winner for a decade on the professional tour. Sammy has also set six World Jumping records, and, except for a period of two months in 1992, he held that record constantly.

If the purpose of the Hall of Fame is to honor competitors, it would be hard to find a better example than Sammy Duvall. Tell him how many slalom buoys or trick points he needs, and he manages to get them. Tell him how far he has to jump to win an overall title, and that’s how far he will go, even if it takes a new record to do it.

Featured in the WaterSki magazine, Sammy’s name is splashed across one of the most recognized ski boats on the water, and he has his own line of skis. Serious spectators and casual recreational skiers approach industry people and ask with childlike idolatry, “Do you know Sammy Duvall?”

According to WaterSki, “Duvall, like Joe Montana in football or Michael Jordan in basketball, was the guy you wanted on your side when the pressure was at its highest. At the ’85 Worlds, facing a hostile crowd in Toulouse, France, and needing to jump 185 feet to win overall, Duvall went 186. Two years later at Thorpe Park, England, he needed to go 194 to win the jump title and 199 for the overall crown. Fired up after a heated confrontation with Mike Hazelwood’s father on the dock, Duvall jumped 196 feet for the jump gold and moments later landed a 200-footer to win his fourth straight overall title.”

To view more on this property, click here.

For a private tour of this lakefront compound, contact Julie Bettosini at 321-689-9594 or jbettosini@stockworth.com.

 

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About Stockworth Realty Group

Stockworth Realty Group is a concierge real estate brokerage serving the Orlando area.  Created by Tavistock Group, a globally respected real estate developer, Stockworth was founded to service the real estate needs of luxury clients outside the gates of both the Isleworth and Lake Nona Golf and Country Clubs. Stockworth has a successful track record in Central Florida and averages more than four closings per week with a dedicated, select group of experts.

As the preferred referral company for Tavistock Development, Stockworth has the privilege of serving as the official relocation company for Lake Nona’s Medical City, the United States Tennis Association and many other major employers in Central Florida. Nobody knows the Orlando real estate market better than our team who has been entrusted for years to relocate some of Central Florida’s most exciting new companies.

With experience in the fast-growing and dynamic marketplace of Central Florida, Stockworth Realty has a very experienced and sophisticated team to assist you in finding creative ways to get you the highest price and the quickest sale.

Media Contact: Sara Cohen; 407-909-5900; scohen@stockworth.com

Leading Luxury Real Estate Company in Windermere, Orlando and Central Florida Communities

FOX NATIONAL NEWS COMES TO ORLANDO, FLORIDA AND SHOWCASES LUXURY HOMES

Bob Massi of The Property Man tours luxury homes with Isleworth/Stockworth President Mark Hayes

Windermere, Fla. (January 10, 2016) – The second season of Fox News networks’ The Property Man show, featuring celebrity Bob Massi, came to Florida. The premier show was filmed in Las Vegas and for this Florida season, the Fox team toured Orlando among a few other major cities including Miami and Tampa.  Orlando will have the most coverage on The Property Man, with the FOX team touring Lake Nona and Isleworth with Mark Hayes.

Mark Hayes, President of Isleworth and Stockworth Realty, is interviewed by Bob Massi on four segments, showcasing the Isleworth Golf & Country Club community and touring four luxury homes.

Bob Massi has been with the FOX News Channel (FNC) Continue reading ..

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