I was talking with a group of teachers the other day and for the first time in a few years I didn't hear them say "We can't afford to take this position in Southwest Florida". This was not the case over the past couple of years and I think that we as a community missed out on several young teachers that could have made major differences in our children's lives if the only could afford the housing at the time.

With real estate prices moving downward and more affordability coming back into our market it now makes since for young professionals to make the move from the cold and down to 85 degree weather in February. The biggest part of the downward spiral is the ever so popular foreclosure segment of our market. Now as I can't speak for all areas of the country; Southwest Florida experienced a huge growth in a very short time and was fueled by speculators thinking the rise would never stop. Whether it was greed or pure stupidity the gravy train came to a screeching halt and started to "drain" the investors on a monthly basis. Eventually those who were unable to make obligations to their monthly payments had to surrender those properties back to the banks and now the banks need to unload them.

Move forward two years and that is where we are today, when a young professional who might only make “starter pay” can now move to our area and buy a three bedroom, two bath home under $90,000 they can make since of their payment. They can live the SW Florida dream with the rest of us and not feel that they need to go stock shelves at night or deliver pizzas just because they have a passion to teach our children or protect us while we sleep.

The foreclosures will pass over the next few years and I hope that the people who are buying today don't repeat the same cycle in the short amount of time again and the primary residents who are buying today will enjoy making fun of their friends up north while they bask in the warm sun of SW Florida.

Contact Bill Mitchell at Marc Joseph Realty

Here are some things to keep in mind when considering a distressed property purchase:

1. Foreclosures are the most problem prone and strenuous type for real estate purchase.
2. You never get a perfect house. You get price per-square-foot. You must be willing to put in the time and money to create your perfect house.
3. You must have capital to purchase a distressed property. On average, you need 10 percent market value in cash to reinvest in the property.
4. Most if not all of the time the seller has no knowledge of the properties previous history. So, the inspection process on the house is more costly. It is also recommended that the potential buyer do more than a typical inspection. For example, a potential buyer should consider paying for a “Sewer Scope,” which costs about $250.00.  Moreover, hire a contractor and get a written estimate to repair the foreclosed home.
5. In many distress properties the water and electricity is shut off. The trust company — and or the seller — will not turn them on the water and electricity. So buyers should test the plumbing and electrical systems as part of the inspection. In most cases, the buyer will have to pay to have those systems turned back on. In other words, you have to “pay to play.”
6. The house has to be livable in order to get financing.
7. Banks have a bottom line too. They will only go so low no matter what the issue is with the property. Lending institutions are loosing billions of dollars, a few hundred dollars matters to them. You have to be willing to take on the issue for the price or walk away.
8. You will be scared. You will be nervous. You will have doubt. Your Realtors job is to negotiate that price to a large enough margin; so if you screw up, you will not be upside down in your purchase.
9. If there is no commission built into the purchase price, you will have to add it to the purchase price. You are making money, and so should your Realtor. 

Contact Nova Ukariha Shank or post comments below.

Battle lines are being drawn in New York’s real estate market, pitting Freddie Mac and Fannie Mae against subprime lenders in New York. Last week, New York Governor David A. Patterson signed into law a subprime lending reform bill (S.8143-A/A.10817-A), creating stringent lending guidelines for subprime lenders. Under the new law, investors, including loan buyers like Freddie Mac and Fannie Mae, are held liable for mortgage fraud. It also lays out requirements for brokers to act in borrowers’ best...(read more)

U.S. foreclosure activity in July increased 8 percent from the previous month and 55 percent from July 2007, according to the RealtyTrac Foreclosure Market Report released today.

View state-by-state details.

Bank Repossessions (REOs) accounted for 28 percent of all activity during the month, while defaults accounted for 41 percent and auction notices accounted for 31 percent. That is in contrast to REOs accounting for just 16 percent of all activity in July 2007, while defaults in July 2007 were still at 41 percent and auction notices were at 43 percent. This shift in percentages shows that a higher proportion of properties that enter the forecosure process are ending up repossessed by lenders.

 

Things seem to be going from bad to worse for Ed McMahon, former sidekick to Johnny Carson on “The Tonight Show” and corporate spokesman for the American Family Publisher’s sweepstakes....(read more)

The results of a new survey released today by the Federal Reserve confirms what many people looking to buy or refinance already know — it’s hard to get approved for a loan.

The Fed’s July 2008 Senior Loan Officer Opinion Survey, which covered 52 domestic banks and 21 U.S. branches and agencies of foreign banks, found that 75 percent of those banks had tightened lending standards for prime loans since the previous survey, in April. Standards were tightened even more for “nontraditional” loans — 85 percent of banks that originate that type of loan said they had tightened standards on those loans. And six out of seven banks that originate subprime loans said they had tightened lending standards on those loans in the last three months.

The outlook for the remainder of the year isn’t much friendlier for easy financing. About 45 percent of loan officers from domestic banks said they expected their banks to tighten lending standards on prime home loans in the second half of they year, and about 65 percent said they expected standards on nontraditional and subprime loans to continue to tighten during the same time period.

It’s good that banks are adopting more stringent lending guidelines than the virtually nonexistent ones they employed with the 2005 to 2007 vintage mortgages —  which turned out to be highly susceptible to foreclosure. But could the banks be overreacting with these tighter lending standards and thereby prolonging the housing slump? Or is this exactly what the market needs to ensure that home prices stay grounded in the reality of what homebuyers can truly afford?

Did anyone really expect anything else out of Ben Bernanke and the other 10 members of the Federal Open Market Committee this time around? No, they didn’t. And they got just what they expected....(read more)

Mention the word “foreclosure” and most investors conjure up images of run-down and dilapidated properties located in undesirable neighborhoods. But now some of the ritzy residences are increasingly falling into foreclosure. As more and more well-heeled homeowners default on their mortgages and property taxes, homebuyers can scoop up these tony trophy properties. ...(read more)

Owning instead of renting, even in the current climate, pays a financial dividend, the authors explain.

With home prices continuing to fall -- and expected by many experts to decline further before finding a bottom -- it's very easy to play that "woulda, shoulda, coulda" game and envision how life might have been different had you sold that home back in 2005 and run off with the profit to Tahiti.

Improper installation or product sizing can get in the way of any instant energy savings. Before installing, consider all the specifications.

STEVE BROWNELL has a dim view of his tankless water heater, and he's in denial about his utility bills.

But with few projects on the horizon, good deals that are available now may not last.

Saving up for a brand-new condo that's move-in ready? Just want to turn the key and unpack your boxes? Condominiums are a popular alternative to single-family homes because of their relative affordability and low upkeep. But with little construction on the horizon, there will be fewer newly built units to pick from down the road.

With more firms in financial trouble, buyers could be left holding the bag.

It's always wise for would-be home buyers to make sure that the builders they choose are on solid footing. But at a time when many companies are teetering on the brink of financial ruin, it's necessary to be as picky about the builder as the floor plans and options he offers.

The Housing and Economic Recovery Act doesn't only stave off foreclosures and help troubled lenders. First-time buyers, older homeowners and others also benefit.

Tax breaks for owning real estate are undergoing another shift, thanks to the Housing and Economic Recovery Act recently signed into law by President Bush.

-- Deep in the nearly 700 pages of the new housing bill just signed into law is a complicated tax code change that could affect substantial numbers of people who purchase second homes or rental investment real estate in the coming decade with an eye to occupying them as their main residence later.

Dear Liz: I have read in your columns and elsewhere that people shouldn't spend more than 30% of their gross incomes on housing.

The drop in prices may mean it's time to jump in. Or is it too soon? Experts offer pros and cons.

Southern California median home sale prices are down about 30% from their peak. That's about as far as they fell in the 1990s real estate downturn, and enough of a decline to have many asking: Is it time to buy? ¶ Some are already answering with their checkbooks. In the inland areas where prices have crashed hardest, buyers are slowly returning. ¶ But many of those who study housing markets say the worst is yet to come for real estate. Buy now, they warn, and you'll regret it as prices continue falling. ¶ Others contend that prices are low enough that renters who aspire to own should buy now so they can start building their equity. ¶ Predicting price trends is a dodgy business, and there's no one right answer for everyone. But if you are thinking about buying now, here are some pros and cons to consider.