Welcome to the first market data report for Brevard County Real Estate of 2010.  While 2009 turned out to be a good year for both the reduction in inventory, and sales of existing inventory, it also proved to be the year of lending changes, and bottoming out prices.  With 2009 in the distant past, we now get our first glimpse into the new decade for 2010. 

        Not too surprising, the vast majority of sales were under $200,000 with 76% of all residential transaction selling between $0 and $199,999.  This trend has been consistent over the past year as the first time homebuyers are greatly incentivized to come in and purchase.  However, we did see an increase in the average price sold of homes to $160,079 in January 2010 versus $148,474 in January 2009.  This data could be telling us that we have hit bottom, and are going up. 

        The biggest surprise for January is the sheer number of cash transactions that are taking place.  This January 2010 we had 252 cash Transaction which accounted for 52% of the market.  Again, Real Estate has historically been a decent investment, and with so few places to put your money right now, buyers are choosing to use their cash instead of financing.  When the cash on the sidelines starts coming into the game at this pace, that is a sign that we have hit bottom. 

        Whether or not the Brevard County market has hit its bottom or not, one thing is certain: it is an outstanding time to buy real estate.  If you are a first time homebuyer, the government is still offering the $8000 tax credit, however, there is an end date, so you better act soon to find your home and claim your government incentive.  Also, we know that the federal government will stop their Mortgage Backed Security purchase program which will almost instantly add to the increase of interest rates.  So, if you are on the fence, or if you know someone who is thinking about buying, now is the time to act.  If you have any questions, please contact me.

Here is a powerful and positive little fact: sales for single family residences for Brevard County are up over 22% for July of 2009 verses July of 2008.  That is an astounding year over year number.  Additionally, new listings are down slightly over 20% this July verses last July.  So, it looks like sales are up and inventory is down; this is a strong sign that the market is improving, and we are bottomed out.  If we continue on this track, this current real estate “sale” could end.

There are no real surprises in the market data from July against that of June.  Sales continue to show strong numbers, and inventory is decreasing.  With 78% of the sales being under $200,000, buyers are really looking for the bargains.  One thing that we have found is that these “bargins” are going fast, as 36% of July sales sold in less than 30 days.  That means that if the price was right, the house sold fast!

With 66% of homes being financed in the Brevard County area, buyers are still taking advantage of the historically low interest rates.  With the majority of the financing being done through FHA and VA loans, many are enjoying the benefits of these government insured and guaranteed loans.  With the $8000 First time Home Buyers credit still being offered, first time homebuyers are rushing to the market to find their dream home.

All in all July’s Brevard County mortgage and market data proved to be in line with the theme that the market is improving.  Sales are up, inventory is down, rates are still low, and with incentives to purchase for first time homebuyers, it is an amazing time to be purchasing real estate!  So, make sure that you speak with a mortgage professional to get an idea of you purchasing power and financing options, and then go out there and get yourself a deal before the “sale” is over!

With the continual arrival of new foreclosed properties in the market place, I thought it would important to review and dispel some myths about bank owned properties from my personal experience.  This information comes purely from personally experience, and has not been derived from things I have read, or things that are taking place in other markets.  This information has come from the purchase of Real estate Owned (REO) in Brevard County.

Myth 1) Banks will not pay any closing costs.

Banks look at the bottom line.  They are holding onto a depreciating asset, and are motivated to sell properties in order to mitigate future losses.  With this in mind, they are willing to do what a normal seller would do in this buyers market; this includes paying closing costs, contributing down payment and closing costs to a gift fund, and sometimes even paying for repairs.

Myth 2) I can low ball an offer on a foreclosure.

While there are many great deals out there, banks are looking to get as close to market value on their listings as possible.  Before a foreclosure is listed a BPO is done, as well an appraisal.  The bank has a good idea of the real market value of the property in its current condition.  Also remember that foreclosures are usually listed on the low end of market value, so there may be many parties interested in the property.  You may not have the ability to go back and forth with the seller.  You may only have one shot to give your highest and best.  Make sure your offer is strong.

Myth 3) You’re the only party interested in that foreclosed property.

In many cases I have seen multiple offers on the same property.  I have even seen foreclosures sell above the list price.  I have also seen over 30 offers in on the same property.  Granted the property was a great deal, it just shows that others are out there looking for that great foreclosure deal.  Again, make sure your offer is strong.

Myth 4) This is like any other real estate transaction.

For the most part the above statement is true, however, it can become slightly more complicated.  Remember, the seller you are dealing with has an oversupply of product, and an undersupply of staff.  Things can take longer than expected, and have the capability of becoming slightly more complex.  Most issued are solved, and most transaction close as long as all parties are in agreement.  It is always best to work with people who understand the process.

Myth 5) The foreclosure property will be move in ready.

While foreclosures remain an excellent way to get a great deal on a property, there may be some downside.  Many of these properties may have been vacant for months, poorly maintained, damaged, vandalized, and in some cases gutted.  If the house has been poorly maintained, and there is apparent damage, it is possible that the house may not qualify for conventional or standard government financing.  These properties may be excellent candidates for rehabilitation or construction financing.

While you may hear that this is a buyer’s market, once you start looking, you may find that is not the case.  With properly priced properties moving at a decent pace, it may take a couple of offers on different properties before you actually come to an agreement. With some outrageous deals out there, interest rates still low, and the first time homebuyer incentive is still in effect, it is a great time to be a homebuyer.  Don’t wait, you may just find that you missed your window of opportunity!

                The Brevard county real estate market continues to improve at a rapid pace.  Looking at the data for May 2009, sales are up 7% over April 2009.  Sales are also up over 18% year to date through May verses last year.  Sales are up, rates are low, and prices are still favorable.  This is a great time to buy a house.

                Even if you think that prices may still drop, the impending increase in interest rates will more than likely outweigh a small decrease in price (check out this article on this subject).  And with sales on the rise, it is only a matter of time before pricing rebounds.

                While most of the single family residences sales in May seem to be below $100,000, 62% of the sales are above $100,000.  The properties below $100,000, in addition to the first time homebuyer credit, still present an excellent opportunity for those first time home buyers.  If you want to buy a house, but are waiting, you may lose $8000.

                Don’t forget, contrary to popular belief, financing is still available.  66% of those homes purchased in May of 2009 were financed.  Rates are still historically very low, and people are closing on homes with financing.  It is always in your best interest to consult a mortgage professional to go over your purchasing power and financing options.

                     Homes are still priced very aggressively, and interest rates are also at historical lows.  If you have the means to do so, or are even thinking about it, you need to speak with a professional to see if you can make it happen.  Not only will we not see these low prices again, we may not see these low interest rates; and if you are a first time homebuyer, or have not owned a property in three years you may be entitled to an $8000 tax credit.  Now go out there and buy a house!

 

Opportunity Everywhere!

 

After completing my market analysis for April, I continue to see that Brevard County remains one of the best values in coastal florida.  Between the rivers, and the beaches, where else can you enjoy such a high quality of life, and pay such a reasonable price for a house?

Check this out!  80% of the sales of single family residences in the month of April are under $200,000.  That means that home pricing has presented an opportunity for more people to achieve the dream of home ownership.

While the low priced sales get the majority of the attention, we are still experiencing many move up buyers, and first time buyers in the $200,000 to $500,000 range.  With 98 sales in this range, many are finding outrageous bargins that simply can not be passed.

                As you can see from the financing stats, cash is still king!  35% of buyers in April chose to pay cash for the property.   This is a good thing; this means that people are looking at the real estate in our market and saying that the prices are so low, it is worth risking their cash to purchase the property.  In years past, roughly 10% of purchases were done with cash.

One of the biggest misconceptions is that there is no financing and lending available right now.  I am here to tell you that is just not the case.  With the overwhelming majority of 64% of the transactions being financed, you may clearly see that money is available.  Not only that, the money is cheap!  Buyers have been getting historically low interest rates.

As a professional living and working in Brevard County, it is great to see home prices that are affordable to many.  It has been said many times over that in times of disparity there is opportunity.  Right now you can buy a house at a deep discount, at historically low interest rates, to give you one outstanding opportunity!  If you have the means to purchase a home, there is truly no better time than right now.