Federal Reserve chairman Ben Bernanke testified this morning and didn’t really bring to light any unexpected news about our economy. Labor markets are still weak and he intends to keep interest rates subdued for as long as possible without encouraging inflation. The housing markets need every possible incentive to encourage purchase activity.
As many of you know, our government is offering an $8000 first time homebuyer credit for any tax payer who purchases a home in 2009. In Florida, as of July 1st, that money can be used as down payment money. I would not ne surprised if this credit is offered in 2010 and the incentive is raised.
I decided to try to get a snapshot of housing market activity by comparing two distinctly different real estate markets. I service customers in 21 states so I decided to contrast the Florida and North Carolina real estate. To form my opinion, I called on two knowledgeable, experienced realtors; Marc Jablon of Jablon Homes in Boynton Beach, Florida and Danny Crowell of Crowell Homes in Kannapolis, North Carolina.
Florida is probably one of the four hardest hit housing markets in the country. Although he will not pretend to predict the bottom of the real estate market, Marc Jablon does see some positive signs as far as increased sales activity. The number of units sold is up and some excellent deals are being made. Properties are receiving multiple offers only days after entering the market place and presently offers are typically 7-8% below listing price versus several months ago when a typical offer was 15% below listing price.
North Carolina on the other hand didn’t experience the frenzy that occurred in places like South Florida and has done a wonderful job of maintaining values from 2006 through 2009. Immune to the huge swings in value steady North Carolina has lost maybe 5% to 10% of value versus Florida which has most likely lost 40% since 2005. According to Danny Crowell, the larger problem is getting potential buyers to qualify. Tighter lender guidelines and tougher job markets don’t help much. He has gone as far as instituting an interesting lease to own program where customers rent their dream home as they put their affairs in order before getting approved on the mortgage loan.
On the financing side I see some very good aggressive mortgage loan programs designed to help the first time buyer and our housing markets. The catch is the minimum credit score required is now 620 compared to two years ago when guidelines allowed for a 580 middle score. FHA allows for 96.5% financing or 95% financing if all of down payment money is a gift. USDA allows for 100% financing in rural areas. A HUD foreclosure can be purchased with $100 down. A Fannie Mae foreclosure can be purchased using 97% financing with no mortgage insurance. Buyers with a good real estate agent can structure their purchase offers to get the seller to pay closing costs and keep their out of pocket expense to a minimum. In my opinion it is a good time to buy if you have the job. Prices are discounted and rates are at historic lows. Who knows how long Mr Bernanke can keep them that way.
Written by Marc Jablon, Realty Associates
marcjablon@yahoo.com / 561 / 213 – 6139
www.marcjablonhomes.com/
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