Friday, August 27, 2010

Why is there talk of a Double Dip Recession

There is some talk about how we may be headed into a double-dip recession and the job market will lose more jobs.  We shall see.  If so, we could see rates drop!
Guess what?  It looks like this is more and more likely to be true. Did you hear the news TODAY (8-24-10) about Existing Home Sales off 27.2%?
According to Yahoo Finance, Existing-home sales, which are completed transactions that include single-family, townhomes, condos and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales - accounting for the bulk of transactions - are at the lowest level since May of 1995.
The definition of a Recession is two negative quarters of GDP (Gross Domestic Product).  So, for us to have a Double Dip Recession we need to see 2 straight negative quarters of GDP. 
The funny thing is, is that the people who are saying Double Dip Recession, probably don't even know this - just saying!
Watch the Unemployment Report closely these next few months (it comes out the 1st Friday of every month).  When we see the economy starting to lose jobs, trust me, Interest Rates are coming down.  When you see the Economy starting to gain jobs, trust me, Interest Rates are going back up.
Where's all the talk about Deflation now?
You CAN NOT have Inflation without wages going up & housing prices going up.   Well, with the Existing Home Sales news TODAY, that doesn't look very possible now does it?  When home sales are down, what happens to housing prices?  So, can we finally get rid of this Deflation talk FOR A WHILE?
If you are refinancing or purchasing TODAY, please DO NOT pay closing costs, because if & when rates do come down some more, we can refinance you AGAIN for ZERO Cost.

There are new laws and guidelines when refinancing.  Every loan officer, real estate agent and homeowner needs to be aware of what a Good Faith Estimate is and how it is designed to protect you, the client!

Solomon Financial Mortgage, pays for escrow, title, appraisal ... all the costs that go into the cost of refinancing, we pay them for you and show you how and why this can be your BEST option when PURCHASING or REFINANCING. 
"Watch, listen and learn: True No Cost Loan Video" - 
  Frederick Solomon, Jr. and Solomon Financial Mortgage Team

Real Estate and Mortgage Division
Real Estate Education & Financial Coaching
(949) 222-0240 begin_of_the_skype_highlighting              (949) 222-0240      end_of_the_skype_highlighting, ext 221  /  Cell:  (714) 403-7334
 "Watch, listen and learn: True No Cost Loan Video

Tuesday, August 10, 2010

Is The Time Right To Buy In Florida?

South Florida home values see nation’s biggest drop in a year
MIAMI – Aug. 10, 2010 – South Florida home values suffered the worst decline of 25 large metropolitan areas in the second quarter of this year, falling 15 percent compared with 2009, according to a national real estate report.

The data, released Monday by analysts at Zillow, found that the median home value in Palm Beach, Broward and Miami-Dade counties fell to $146,500, down nearly 7 percent from the beginning of this year and a whopping 52 percent from housing’s peak values in 2006.

Nationally, median home value, including townhomes and condominiums, dipped 3.2 percent from the same time in 2009.

Zillow’s chief economist, Stan Humphries, called Monday’s study a “mixed bag,” with several areas in California seeing a continued increase in values.

In Los Angeles, home values jumped 5 percent compared with 2009. San Diego homes saw a 7 percent increase.

“Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values,” Humphries said. “High supply continues to be a challenge in states like Florida and Arizona.”

A separate report released Monday by analysts at Miami-based Condo Vultures showed a 4.6 percent increase in housing inventory in South Florida since May, with 68,254 single-family houses, condos and townhomes on the market.

Humphries predicts home values will bottom out nationally during the latter half of this year.

“But we continue to be cautious about the impact of declining home sales,” Humphries said.

The Phoenix area showed a 12 percent decline in median home value compared with last year, while Detroit values plummeted 14 percent.

The Zillow Home Value Index measures the median value of all homes, not just sales.

In Palm Beach County, values for single-family homes showed only a 1 percent decline, while Martin and St. Lucie had declines of 5 percent and 4 percent, respectively.

South Florida’s homes are treading water in one measurement, managing so far this year not to sink further into negative equity.

Zillow found that 44 percent of South Florida single-family homes with mortgages are underwater – real estate slang for owing more on a loan than the home is worth.

That’s about the same percentage as the beginning of the year and just below the second quarter of 2009, when 47 percent of homes were underwater.

In the Treasure Coast, 55 percent of homes with mortgages were underwater during the second quarter of this year, compared with 56 percent earlier in 2010.

Nationally, 21.5 percent of homes with mortgages had negative equity in the second quarter.

Humphries said foreclosures and bank takeovers help clean out the inventory of negative equity homes, but the typically lower sale prices of those homes also continues to weigh down values of neighboring properties.

Peter Zalewski, a principal for Condo Vultures, is more optimistic about Florida’s market turning around even with rising inventories. He believes financing opportunities are increasing, meaning more people will be able to buy.

“I think that 2009 will be the year most people realize was the bottom,” he said. “I would be surprised if there was another big increase in underwater homes.”

Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

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