Florida Home Loan Guru: Home Values Will Remain High

Florida home loans and the value of houses for potential buyers is a constant issue of interest. The Orlando Sentinel recently published an interview with Beverly Pindling. She’s a broker/Realtor with Orlando Real Estate Professionals and president of the Orlando Regional Realtor Association. What did she have to say about Florida home loan prices?

Q: We’ve seen the real-estate market in Orlando and Florida cool from last year’s record pace. Is it going to continue to slow?

A: I don’t think you’ll see a reduction in [intangible] value; let’s put it that way. Value and price are different things. You probably won’t see a reduction in value, but maybe in prices, meaning you can pay less but it’s worth more. Value is how much that particular piece of property is worth to you.

Q: Do you think there’s a national real estate bubble?

A: We really and truly had a rolling situation. Some places were selling and some were not selling around the country, in various places. And so you look back at the history and it was a frenzy of buyers in some markets, yes, but it was not a bubble that you would put a pin in there and it would pop.

Q: We’ve gone from a low existing-home sales inventory last year to a record level right now. Will sellers be forced to slash prices?

A: They are [slashing prices]. But let’s look at the builders and what is going on there. The builders are offering $5,000 to $50,000 in incentives, not off the price but in everything else. And when a buyer sees that, they go to the builder and they get X-amount for this and X-amount for that - the granite countertops and the other upgrades - and they take that in a heartbeat over an existing home.

Q: The huge swing in the inventory level in such a short period shows the market responding to demand as prices rise. The government promotes homeownership in various ways, such as tax breaks for mortgage interest. Do you think the government should do more in the housing-supply arena?

A: They could do more in affordable housing, or we really should say the work-force housing. Affordable is relative. But work force means you work for Disney or [you are] a teacher, police, even a nurse. How many rookie cops can buy a home? Let’s face it: Everybody wants a piece of the American Dream, but it’s getting out of grasp for some people.

Q: What about the hot condo-conversion market right now? Your thoughts?

A: It’s going crazy all over, not just Florida. But when it first started, if you were priced reasonably — and I mean under $200,000 — it’s a way of getting some people into the American Dream. But depending on the lender’s ratios [for how much they will finance], if they are tight and then you add on the association dues, that can knock you right out of the market. You pay mortgage, taxes, insurance on personal belongings, and if they pay association fees — most condos survive on those dues. You have the building to take care of and the grounds and homeowners have to pay for that. Some of these dues are $150, $200, $300 a month.