Jacksonville Florida Real Estate

Jacksonville Florida makes the American Improving Markets Index (IMI) list!

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 10 Jan 2012 17:18:21 -0800

More good news! Three Florida cities (including Jacksonville) made in onto the American Improving Markets Index (IMI). The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.

If not for overly restrictive lending policies and the inventory of distressed properties conditions would most likely have improved even more. As market conditions improve so will home prices. I'll say it again. If you are waiting for the bottom, it has arrived. With record low interest rates and an abundance (for the moment) of homes to choose from conditions have never been better for investing in Jacksonville Florida Real Estate. Now is the time to make your move. To search all available Jacksonville Homes For Sale visit http://www.nativesunrealty.com .

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Federal Government Admits “Anti Flipping” Regulation Hurts the Housing Market

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 03 Jan 2012 17:09:23 -0800

On 1 January 2012 the federal government extended a waiver of the “Anti Flipping Regulation” which prohibits FHA insured mortgages for a single family property if the contract of sale is executed within 90 days of the acquisition of the property by the seller. The extension will be in effect until 31 Dec 2012. This regulation was originally implemented in an effort to protect homebuyers from investors reselling properties with an “artificially” inflated value. The regulation had the effect of increasing carrying costs to the investor which of course would eventually be passed on to the buyer which further contributed to the escalation of home prices. The rule also prevented FHA borrowers from taking advantage of recently renovated homes that could be sold within the 90 day period to buyers using non FHA insured loans.

In early 2010 HUD determined that a temporary waiver of this regulation on a nationwide basis may contribute to stabilizing real estate prices and neighborhoods. Since the original waiver went into effect on February 1, 2010, FHA has insured nearly 42,000 mortgages worth more than $7 billion on properties resold within 90 days of acquisition. With the extension of the FHA “Anti Flipping Regulation” waiver the federal government has admitted three things:

That implementing the waiver increased the availability of affordable homes for first time buyers and other purchasers and has helped stabilize real estate prices.
That other government measures such as the Home Affordable Modification Program (HAMP) have failed to keep families in their homes and reduce the foreclosure rate.
That private enterprise is the solution to improving the housing market and national economy.

The drop in foreclosures now being seen across the country can be directly attributed to the stabilization of home prices which is good for home owners and the entire economy. If recognizing that removing a regulation benefits the housing market is that not also an admission that reimplementation of that regulation is detremental and would hurt the economy? Is this yet another example of how over reaching government meddling in a free market economy serves to stifle growth and prosperity? One thing is certain. Now is the time to invest in real estate. With record low interest rates, drastically reduced prices, and rising rental rates investors are buying up the forclosure inventory and bringing new life into the real estate market.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Christmas in Jacksonville

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Sat, 17 Dec 2011 14:28:38 -0800

Once again Jacksonville has shown that the Christmas spirit is alive and well. Every year on Black Friday the Jacksonville Landing puts on a great Tree Lighting event that includes live performances by local artists and a fantastic fireworks display.

A beautifully lighted fountain across the river in Friendship Park also contributes to the spirit of the season with Christmas songs playing over speakers for all to enjoy.

While there may not be snow on the ground it still looks a lot like Christmas in Jacksonville.

Merry Christmas!

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Lending Industry To Probe Deeper Into Your Finances

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Wed, 19 Oct 2011 15:34:17 -0700

The FICO (Fair Isaac Corp) score. That all important number lenders use to assess a borrower’s creditworthiness may soon involve information other than your credit history when calculating your credit score. Lenders, in an attempt to develop a more “well rounded” picture of a person’s finances, now want to include payday loans, evictions, child support payments, utility and even cell phone payments to the information considered when determining whether or not to loan you money. Whether you pay off a payday loan on time is not the issue. The belief is that if you use a payday loan service you represent a greater risk of default. Commissioned sales people like REALTOR’s may at times use a commission advance service when they have a pending transaction. Should this be used against them when applying for credit?

Last month the big three credit reporting agencies (Experian, Trans Union, and Equifax) began providing estimates of consumer income as a credit report option. Estimates of income?? Will these “estimates” be as accurate as the Zillow “Zestimates” of home values which are notoriously inaccurate? Will the estimated income be used to prepare debt to income ratios? Since a lender will require income verification during loan processing why is an estimated income being factored into the credit score?

What has yet to be explained is how these factors will be scored. If you do not have derogatory entries in these areas will it improve your score or will the information only be used to reduce your score if you do? This is an important question since one of the reasons touted by lenders for gathering this information is to be able to increase loan volume by offering credit to borrowers with thin files. If this is true then why should this information be used for borrowers with ample credit histories? Since the average FICO scores of homebuyers who qualify for loans continues to rise could it be that lenders are looking for other reasons to tack on extra fees or charge higher rates?

The FICO score is a tool used by all businesses who base their rates, fees, deposit requirements and even hiring decisions on the perceived risk of the customer or applicant. This includes insurance companies, public utilities, cell phones, cable TV, etc.

Will this added information accurately reflect the rate of default? Should there be limits on what information is used or even when, where and how the FICO score can be used? Since the FICO score can affect almost every aspect of our lives I think we need to be careful about what factors are used in calculating it. The last thing a struggling real estate market and economy need are more obstacles to obtaining financing and credit.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Does the explosion of smart phones, tablets and other mobile devices mean the end of the PC?

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Wed, 07 Sep 2011 17:25:50 -0700

Recent events in the technology industry such as the resignation of Steve Jobs, HP’s decision todistance itself from the PC business, and Google’s $12.5 billion dollar purchase of Motorola Mobility have many claiming that the PC era is coming to an end. As smart phones get smarter people who need to remain connected to their business or network are free to travel away from their desk and still have the ability to respond quickly to digital inquiries and communications. Tablets with larger screens and can be used for mobile HD presentations eliminating the need to carry more bulky laptops. Some tablets now have the ability to record 3D video and many support mobile versions of popular programs traditionally used on a PC. These features have no doubt contributed to the huge spike in sales of mobile devices while traditional desktop PC sales have been flat for years.

But hold on a minute. Before you break out the shovel and start digging the grave for your PC let’s look a little closer. Kids, in particular, are avoiding desktop PCs and laptops and opting for smart phones and iPads to play games, use e-mail and do other tasks that do not require large screens. Mobile devices are also being used for watching movies, reading books, playing games, and looking at photos. So it looks like mobile devices are not really being used for traditional computing tasks and that, at least for the time being, the PC will continue to rule workplaces and have a place in the home.

It appears that instead of witnessing the end of the PC era we are simply entering a “PC-plus era” where mobile devices will be used to extend the power of the PC and make it available almost anywhere.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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On Second Thought, Maybe You Do Need Flood Insurance

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 30 Aug 2011 17:16:06 -0700

Hurricane Irene gave the media a big story to cover for about a week. Soon the coverage of the devastation will give way to the next “Breaking News” alert and those people not directly affected by the storm will forget it.

Not so for those that suffered damage to their homes. Irene came ashore as a category 1 storm packing winds of 100 MPH or less so wind related damage could have been much worse. In fact, the real damage delivered by Irene came from the storm surge and flooded areas located outside of designated FEMA hazard flood zones. Homes in these areas are not required to have flood insurance so most property owners did not have coverage believing that their hurricane policy would protect them. Not true. The only insurance that provides coverage for flood damage is flood insurance.

Most communities prone to hurricanes will have maps showing Storm Surge Zones and Evacuation Routes for each storm category. Even though FEMA flood maps may not require you to carry flood insurance it may still be wise to get it if you live in a storm surge zone.

Here is a link to the Storm Surge Zones and Evacuation Routes for Jacksonville Florida. As shown on the map the storm surge can impact properties far from the coast where residents may feel safe from the coastal effects of hurricanes.

I am frequently asked by home buyers if a home needs flood insurance. I make a clear distinction between what is required and what is needed. If your home is located in an area where storm surge flooding can be expected when hurricanes strike I say it’s best to be protected. Considering that the average flood insurance policy in 2010 cost about $600 a year and the average claim over the last five years wasabout $34,000. Maybe you do need flood insurance.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Housing Affordability In Jacksonville Near Record High

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Thu, 25 Aug 2011 16:10:29 -0700

According to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), housing affordability is near it’s highest level in 20 years. This is great news for people in the market for their first home or someone looking to own a vacation home or investment property.

The Housing Affordability Index has a value of 100 when the median-income family has sufficient income to purchase a median-priced existing home. A higher index number indicates that more households can afford to purchase a home. The HAI is calculated using the following formula:

HAI = ( Median Family Income / Qualifying Income ) * 100

Applying this formula to July statistics In Jacksonville:

145.45 = ($44,173 / $30,368) * 100

We see that the typical Jacksonville household had 145.45 percent of the income necessary to purchase the typical home. Homebuyers are regaining confidence in the market and finally making the decision to purchase homes. This may be why some housing markets across the country, including Jacksonville, have stabilized and are beginning to show signs of a budding recovery.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Jacksonville Florida, A Great Place To Live & Play

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Thu, 25 Aug 2011 15:57:36 -0700

When most people think of Florida I would say that Jacksonville is not the first city that comes to mind. After all, Mickey does not live here and the Gator's only come once a year. This does not mean that Jacksonville has nothing to offer. In fact, nothing could be further from the truth. Jacksonville has many business and recreational opportunities not found in other parts of Florida. The Jacksonville Port Authority (AKA JAXPORT) is the Florida port of choice for global trade and intermodal transportation. CSX coporation, and international shipping company, with over 30,000 employees has its headquarters in Jacksonville. Hanjin Shipping has also recognized the strategic position of Jacksonville and has a $300 million cargo terminal scheduled to open by 2016. Tourism is on the rise in Jacksonville with Carnival Cruise Lines embarking from Jacksonville to the Bahamas, Key West and other exotic ports of call. In addition to the shipping industry Jacksonville is one of the insurance and banking capitals of the south with the 617 ft tall Bank Of America tower, the tallest building in Jacksonville, and and Blue Cross & Blue Shield with 6,000 employees.

The are also several highly rated colleges and universities that have turned out notable alumni like Todd Haley, UNF grad 1991, head coach of the Kansas City Chiefs and David M. Walker, JU grad 1973, who served as United States Comptroller General from 1998 to 2008.

Jacksonville, also known as The River City, is a boaters heaven with hundreds of miles of inland waterways and easy access to the Atlantic Ocean.

This ia also a great time to be a home buyer in Jacksonville. Interest rates are at record lows, prices are way down form their highs in 2006, and there are lots of great homes to choose from. If you are looking for a home feel free to use my MLS search feature where you will have access to all available homes for sale in Jacksonville and North East Florida.

If you have not been to Jacksonville you may enjoy this video tour that covers some of the highlights and attractions Jacksonville has to offer it's residents and vistors alike. You may decide that Jacksonville is your place in the sun.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Housing Affordability In Jacksonville Near Record High

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Mon, 22 Aug 2011 23:14:02 -0700

HAI = ( Median Family Income / Qualifying Income ) * 100

Applying this formula to July statistics In Jacksonville:

145.45 = ($44,173 / $30,368) * 100

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale

Jacksonville Real Estate Market Showing Signs Of Recovery

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Mon, 22 Aug 2011 19:13:46 -0700

With all the negative publicity that’s been heaped upon the Real Estate Market locally and nationally I am happy to report that there are signs of improvement. Home prices, just like any other product or commodity, are impacted by supply and demand. When supply is low and demand is high home prices will increase as they did between 2002 to 2006. Conversely when supply is high and demand is low prices fall as they did from 2006 to present. In July of 2007 Jacksonville had nearly 13 months of inventory available for sale. This year the available inventory in July was just over 9 months.

Comparing home sales data from July 2010 to July 2011 shows that the supply of available homes has decreased 22 percent and the number of homes under contract has increased 13 percent. These figures show a sharp decrease in supply and a clear increase in demand. While 2 percent fewer homes were sold this year the sold volume or total cost of homes sold increased by 2 percent and the average sale price has increased 4 percent.

Another factor influencing home sales is the record low interest rates which has a huge impact on home affordability. Consumers are discovering that they can own a home for less than it costs to rent and are taking advantage of the current low prices while they last.

I would recommend anyone considering a home purchase to make their move now before prices go back up.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Being a Real Estate Agent can be a hazardous occupation

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Mon, 18 Apr 2011 15:38:54 -0700

The Bureau of Labor and Statistics reported that there were 75 deaths per year on average in the real estate, rental and leasing field between 2003 and 2009. Frankly I’m surprised that there are not more. Think about it. We REALTOR’s are all about customer service and willing to do whatever it takes to meet the needs of our clients and customers. Sometimes that includes meeting strangers at vacant homes in remote locations out of cell phone range or in the not so nice part of town. I’m sure we have all done it even though we know we shouldn’t. You may already be in the area where the home is located and your office is on the other side of town. The person on the phone sounded sincere and the price of gas is sky high so you say to yourself, OK, just this once. I say, don’t risk it. Even if the prospect is legit you’ll want to be there first to get the house opened up and ready to show. You may run into a squatter, abandoned animals or who knows what. This is becoming more of an issue with the sharp increase in vacant foreclosed homes.

What’s a REALTOR to do? Here are my suggestions.

1. Always arrange your first meeting at the office. It’s a good place to focus on getting to know one another, determine the customer’s needs and explain how you can help them achieve their goals.

2. Make a copy of their driver’s license. You need to do this for all new customers to avoid problems with claims of discrimination. This is important for your safety as well as the sellers of any homes you intend to show. If a burglary occurs during the listing period the police department will want to know who has been in the home. Will you be able to tell them?

3. Tell your office staff where you will be going and when you expect to return.

4. Trust your instincts. If you feel uneasy about travelling someplace alone with this person bring someone along with you.

While following these few steps will not guaranty your safety they will greatly reduce the chances of becoming a victim of a violent crime. If anyone has any other safety tips to share please do.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Three options to replace Fannie and Freddie guaranteed to increase mortgage rates and costs

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 29 Mar 2011 14:11:00 -0700

The 2008 mortgage crisis resulted in a $150 billion dollar bill to the taxpayer prompting calls for reform in the financial markets. I believe government meddling (CRA) played a major role in creating the crisis in the first place. Now that what had been forecasted for years has materialized the very same people responsible for the crisis in the first place are proposing more government regulation as a way to limit the taxpayer's exposure to mortgage risk. As usual the consumer is going to pay for it in the form of higher mortgage interest rates and fees.

1. Private market option. This option limits taxpayer exposure to only FHA,VA, and USDA loans. Maintaining these programs will continue to help low to middle-income borrowers get affordable mortgages. Eliminating government backing for other mortgages would make them more expensive for everyone else by increasing the risk to the private sector. As we all know, higher risk = higher rate.

2. Crisis Plan option. This plan is designed to make mortgage money available during times of "crisis" where a credit freeze makes is difficult to obtain loans, like now. Under this plan a government "guarantee fee" would be added to guaranteed loans. The fee would need to be sufficiently high so that these loans would only be competitive when a crisis occurs. Obviously the borrowers forced into this type of loan product would be unable to qualify for less costly loan options.

3. Catastrophe fund option. In this option, the government would continue to leave the mortgage market to private players outside of the FHA/VA/USDA programs but, would offer reinsurance for "securities of a targeted range of mortgages", most likely those that conform to the current Fannie Mae guidelines. One approach for this system would be to approve some private mortgage guarantor companies with capital and oversight requirements from the government. These companies would provide guarantees for mortgage-backed securities backed by loans written to strict underwriting standards. The government would then provide reinsurance on these securities, which would only be paid out to shareholders of these companies if they are "entirely wiped out." Again the cost of this insurance would be passed on to the consumer much as it is now in the form of PMI. The difference being that even those that meet the current 20% down payment will pay for it.

While it does appear that any of these options would reduce risk to the taxpayer they will also reduce the number of people able to purchase homes. Just what we need in this market.

I may not be a financial guru but I don't see where increasing the cost of homeownership is helpful at this stage of a very fragile recovery.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Still Time For Military Home Buyers To Receive The $8,000 Tax Credit

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Sat, 05 Feb 2011 15:05:03 -0800

Great news for the troops! Military first time home buyers can still receive the $8,000 first time buyer credit if they get a home under contract by 30 April 2011 and close by 30 June 2011. To be eligible the service member must have been on extended overseas duty for at least 90 days at any time between Jan. 1, 2009, and April 30, 2010.

Military service members are also exempt from the tax credit recapture rules if they are reassigned outside the area where the home is located. Typically, homes that are sold within three years of purchase are subject to repayment of the tax credit.

With several military installations in and around Jacksonville it is likely that there are military families with orders to Jacksonville that could take advantage of this extended opportunity. If you think you qualify and would like more information click First-Time Homebuyer Credit for details about the law from the IRS.

Click Homes For Sale in Jacksonville to view detailed information about homes for sale in and around Jacksonville and North East Florida.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale

Jacksonville Florida More Affordable to Buy Than Rent

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Thu, 03 Feb 2011 19:51:30 -0800

Which Costs More?

Jacksonville has been identified as one of the many cities around the country where it has become more affordable to buy a home than to rent one. This may be attributed to the increased demand for rental homes created by would be buyers who are renting while waiting for home prices to bottom out. Smart real estate investors are buying up distressed properties, making the necessary improvements and making the homes available to rent to meet the increased demand.

As with any product or service the increased demand for rentals is driving up the rent prices. For example rent prices in Jacksonville have increased 10% over the last year making the rent for an average 3 bedroom 2 bath single family home around $1,200 per month.

By contrast home prices have fallen 16% during the same period bringing the average sale price of a comparable home to $124,575. With interest rates hovering at around 5% for a 30 year fixed rate mortgage the monthly payment for this home including taxes and insurance would be between $900 - $1,000 per month with no down payment.

Without question the current Jacksonville real estate market represents a tremendous opportunity for buyers looking to save hundreds each month over what they are paying in rent.

To see for yourself check the current Jacksonville Florida Homes For Sale and compare the costs.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale

Talk of Mortgage Interest Deduction Gives Buyers Cold Feet

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 23 Nov 2010 17:09:03 -0800

It's no secret that the federal government is running up a huge budget deficit. The media has done a great job of showing the President proclaiming that giving tax breaks to the rich is irresponsible. What has not received much publicity is a proposal drafted by the presidents Deficit Reduction Commission for Comprehensive Tax "Reform". (Reform sounds better than increase) Page 26 of the proposal covers "Individual Tax Reform" where there are two items near and dear to homeowners. If enacted this "Reform" would:

• Repeal state & local tax deduction, cafeteria plans, and miscellaneous itemized deductions

• Limit mortgage deduction to exclude 2^nd residences, home equity loans, and mortgages over $500,000

I have heard people try to downplay the issue by pointing out that only those with mortgages over $500,000 would be affected. What about the interest on second homes, home equity loans, and state and local tax deductions. Eliminating these deductions would only impair the ability of Americans to own or invest in real estate and cause real estate values to decline even further. As word of this proposal spreads potential home buyers are beginning to fear that the mortgage interest deduction will not be available to them. It has also created uncertainty among current home owners who fear that they will not be able to claim the deduction and that their homes will lose even more value.

There have been three previous efforts to change mortgage interest tax policy in 1986, 1996, and 2005. Each of those attempts resulted in a detrimental impact on housing values and the economy. Based on this history NAR estimates that, if enacted, these provisions would further reduce home values by 15%. Clearly this would be devastating to an already beleaguered real estate market. Most people understand that the economy won't improve without a stable housing sector.

I agree that the federal deficit is a serious matter that must be dealt with. Eliminating wasteful government spending and a ban on earmarks is a good place to start. Tax policy must continue to nurture home ownership as it has since the inception of the Internal Revenue Code. Hands off the Mortgage Interest Deduction!

To read the entire draft click Deficit Reduction Commission Proposal

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Homebuyer Tax Credit vs Child Support

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Sat, 14 Mar 2009 13:32:36 -0700

The $8,000 tax credit is a great incentive if it actually goes to the first time homebuyer. Here is a situation where I was caught of guard. I had a buyer who closed on their new home in 08 and was eligible for the $7,500.00 tax credit. When he filed his tax return he was getting the full credit plus an added amount due to excess withholdings from his earnings during the year. He had already made several improvements to the home on credit and was planning to pay off the debt with the tax credit. Sounds like a good plan until he learned that his entire tax refund including the $7,500.00 tax credit went to his x-wife for back due child support. The real kicker is that he was awarded custody of the children who have been living with him since he bought the home. Apparently there was a period of time where he was unemployed and unable to make payments to the x wife while she had custody. Even though the court awarded him custody of the children the x-wife is still entitled to the back due payments. I did not consider this otherwise I would have counseled him to avoid spending the money before he got it.

It might be a good idea for all REALTOR's to make buyers aware that there may be situations where the tax credit goes to someone other than the home buyer. If he had adjusted his tax withholdings during the year based on the expectation of receiving the credit he may have been stuck with a bill from the IRS.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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HOPE for Homeowners or just postponing the inevitable?

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 27 Jan 2009 16:36:03 -0800

Passage of the Housing and Economic Recovery Act of 2008 (HERA) H.R. 3221 may offer some hope for homeowners facing situations that may lead to foreclosure. Since the vast number of foreclosures is having a negative effect on home values preventing even more homes from going into foreclosure may help to stabilize prices and restore confidence among potential homebuyers. At least this is the intent. To see the effect of foreclosure sales on the Jacksonville home values check out my "Jacksonville Florida Real Estate Market Trends" page.

One component of H.R. 3221 designed to reduce the number of foreclosures is the HOPE for Homeowners Act of 2008 (FHA Foreclosure Prevention Refinancing Program). One key provisions of the act is to authorize the FHA to insure refinance loans for distressed borrowers. This sounds OK at first but lenders who hold the current mortgage would have to agree to accept only 90% of the appraised value as payment in full. Not such a good deal for them. Basically the distressed borrower will be able to reduce the amount of the original loan to 10% below the current appraised value. These loans will also have fixed rates. This is a great deal for the borrower. For more details click HOPE for Homeowners Act of 2008

What about the responsible borrowers who have made sacrifices and lifestyle changes in order to continue to make payments as promised to the lender? What's in it for them? Well they get a pat on the back and the satisfaction of knowing they did the right thing. They will also benefit from the stabilization of home values that should result from the removal of foreclosures from the market. Many responsible homeowners who would like to refinance to take advantage of record low interest rates find that they do not have enough equity to qualify due to falling home values. Also, should responsible homeowners need to sell their home they won't be competing with foreclosure sales.

What's in it for the taxpayer? The FHA will get to keep a portion of the equity if the home is sold within certain time frames. From 100% of the equity if the home is sold within one year up to 50% of the equity if the home is sold after 5 years. There will also be a 3% up front mortgage insurance premium due at closing and an annual mortgage insurance premium of 1.5%

I believe that irresponsible behavior and decision making is what leads to most foreclosures. In effect this program rewards that irresponsible behavior. Psychologists will confirm that behavior that is rewarded gets repeated. If that is true then the HOPE act of 2008 will probably evolve into the Renewed HOPE act of 2010. Is this program destined to only serve to prolong the inevitable? We shall see.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

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Foreclosures VS Home Values

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Mon, 26 Jan 2009 18:42:25 -0800

What’s it going to take to stabilize home values? Here's my take on the situation. The Jacksonville real estate market continues to favor buyers with over 16 months of residential real estate currently for sale. Property values in Jacksonville and the immediate area have adjusted downward in response to a decrease in demand and a surge in short sale and foreclosure inventory. For example, there are currently 12,852 single family homes for sale in Jacksonville. 28% of those are listed with a title status of “pre-foreclosure” or “foreclosure”. In the last 30 days 757 single family homes were sold with 42% of those sales being pre-foreclosures, short sales, or foreclosures. The disproportionate number of foreclosure sales points to a trend among homebuyers to aggressively seek out bargains. In fact foreclosure sales have become a lucrative niche market for REALTOR’s specializing in in foreclosures. Sellers not in financial distress who need to sell are adjusting their prices downward in order to compete with the lower priced foreclosures. This activity is exerting downward pressure on home values which has resulted in an 11% decline in Jacksonville’s average sale price since Dec 07. A continued decline in home values will result in more short sales and foreclosures which will drive values down even further. It is a self perpetuating scenario. This is why selling off or reducing the existing foreclosure inventory by any other means is what is needed to stabilize and restore home values.

What motivates a bank to sell homes at fire sale prices? It’s strictly business. Banks are in the business of loaning money. When a bank exercises their right to foreclose on a home due to non-payment they now have money tied up in a non-performing asset. Each month the bank owns the home they loose money in lost interest and other costs associated with owning the property. It is in the best interest of the bank and their investors to convert that asset back into cash that can be loaned out as quickly as possible. Banks know that homes priced slightly below value will sell more quickly than homes priced at or slightly above market value.

How much lower will values fall? One guess is as good as another and I would take anyone’s opinion with a grain of salt. Everyone knows that real estate values rise and fall in cycles. A look back in history will prove that. Restoring confidence in the eyes of the consumer is critical in shortening the down cycle.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale

What happened to the Jacksonville Real Estate Maket?

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Thu, 11 Sep 2008 16:50:47 -0700

So what's causing the drop in home prices in Jacksonville? That's an easy one. With over 16 months of inventory as of August 2008 there are still too many homes on the market. As with anything else it is an issue of supply vs demand. An increase in supply drives prices down while and increase in demand drives prices up. Simple economics.

So what caused the increase in supply? This may be up for debate but here's my take on it. Adjustable rate subprime mortgages. During the boom years practically anyone could get a mortgage. If the borrower did not have the income to qualify they were offered the SISA (Stated Income Stated Asset) loan. Then they could state whatever income was needed to qualify without any documentation. Many of those borrowers opted for adjustable rate mortgages because they came with a lower rate. Tack on a pre-payment penalty period and they got another 1/8 point reduction. In some cases the pre-payment penalty period exceeded the fixed period of the loan. That's where the trouble started. When rates started to climb borrowers could not refinance without paying a hefty penalty which was usually equal to six months of mortgage interest. When they could no longer afford the higher payments the home would go into foreclosure or would be sold as a short sale. Adding those forced sales to the normal sale activity flooded the market with homes priced below market value. Higher mortgage rates reduced the pool of qualified buyers to buy them. There you have it.

So why did mortgage rates go up? When people hear that the Federal Reserve has cut short-term rates, they expect long-term mortgage rates to move in the same, downward direction. But it's a stubborn fact that when Fed rate cuts are deemed inflationary, long-term mortgage rates go up. Bond yields rise to attract investors and mortgage rates follow. And that's what has been happening in the past few months. Heres why. When the Fed cuts rates, the economy typically is the beneficiary. This means businesses will do better as more sales are made. Manufacturers, service providers and retailers will then be more inclined to raise prices in response to an increased demand. Lets say the Consumer Price Index (CPI) indicated that overall prices rose 0.4 percent last month. That translates into an annual inflation rate of almost 5 percent. That rise in inflation reduces the actual return on a fixed interest rate investment like bonds, so with 5% inflation, that 6.74% mortgage note returns only 1.74% "real" interest. By that measure, a rate of 6.74 percent for a 30-year mortgage seems like a bargain.

For detailed information about the Jacksonville real Estate Market visit my web site and click Jacksonville Real Estate Market trends.

http://www.lucienvaillancourt.com

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale

Jacksonville Real Estate Market Showing Signs Of Improvement!

Lucien Vaillancourt Jacksonville Florida Real Estate (Native Sun Realty, Inc.) — Tue, 06 May 2008 17:01:31 -0700

I'm sure most of us are sick of hearing the drum beat of gloom and doom coming from the mainstream media and are anxious to point to some good news for a change. Well I am happy to report that, at least in Jacksonville, FL, the real estate market is showing signs of improvement. The graph below from the North East Florida MLS shows that the inventory of available homes has declined for three consecutive months with just over 16 months of inventory as of 31 March 2008. Although 16 months of inventory still represents a strong buyers market if this trend continues we should achieve a balanced market of 4 to 5 months of inventory by years end. For more detailed market stats visit my market update page on http://www.lucienvaillancourt.com.

I have also noticed an increase in showing activity on our company listings. I think the news of possible rate hikes on fixed rate mortgages and a belief that the market may have bottomed out is bringing buyers back into the market. Although it is still a great time to be a home buyer in Jacksonville the window of opportunity to get the best deal on a home is begining to close. I would advise anyone waiting for the best time to buy to act now. If anyone else has some good news I'm sure we would all love to hear it.

Lucien Vaillancourt, Broker Owner, Native Sun Realty (904) 994-0493

info@NativeSunRealty.com

Visit Jacksonville Florida Real Estate to search Jacksonville Homes For Sale