Sunshine State retailers can expect a keep-your-fingers-crossed holiday shopping season in the upcoming months, experts predicted this week.

Due in large part to a sagging real estate market, analysts expect a modest 5 percent increase in holiday spending this year, compared with a 6 percent rise the year before. The University of Florida released a study Friday indicating most people plan to spend about the same as last year.

That assessment is seemingly at odds with still-affordable Florida mortgage costs, falling gas prices, rising stock prices and unemployment remaining comfortably low, particularly in Brevard County, where the jobless rate is 3.4 percent.

Retailers often count on sales in final months of the year to nudge them into profitability territory. That, in turn, affects their expansion and hiring plans, as well as the amount of sales-tax revenues that pour into county budgets. But UF’s survey results showed:

• 56 percent of people interviewed plan on spending the same as last year.
• 32 percent said they would spend less.
• 12 percent said would spend more.

A current rosy economic outlook in Florida is tempered by concerns about the housing market and the volatility of gas prices. Energy prices have been dropping considerably, but people still are concerned they could go up again. And, at a time when Florida home mortgage rates are still low, those with loans of the adjustable-rate variety are still getting pinched.

Monthly house payments will rise, leaving less disposable income.

Still, Scott Krugman, a spokesman with the National Retail Federation (NRF), predicts U.S. consumers will spend $457.4 billion this holiday, a 5 percent increase over last year. Holiday sales in 2005 were $435.6 billion, a 6.1 percent increase from the 2004.

“We had a very strong season last year, which leads to tough comparisons,” Krugman said.

Some shoppers are more optimistic than others about the state’s economic future, and that’s reflected in how much they plan to spend at stores. Lenita Kelly of West Melbourne, Fla., said she is upbeat about the economy. Her plans are to spend more on her two children this year than last year.

“The job market is better now,” Kelly said.

Carmen Cruz of Palm Bay will spend less.

“I’m retired, and I don’t have as much money as I did before,” Cruz said.

BOTTOM LINE: If you’re currently making payments on one or more exotic Florida home loans, consider refinancing to a fixed-rate mortgage. That way, even as energy prices and other living costs fluctuate, at least you will be able to count on consistent housing payments!

As the housing market has slowed down, many lenders have been pushing exotic Florida home loans on hopeful buyers. This creative form of financing can be dangerous, however, and federal banking regulators are doing something about it.

They published new guidelines today for banks to follow when originating and underwriting such nontradtional national and Florida home mortgages, those that carry potential payment shock for borrowers.

The problem with exotic Florida home mortgage loans

Many in the loan industry cite these mortgages as major contributors to the nation’s home-ownership boom because they’ve enabled numerous borrowers to purchase in high-priced markets where traditional mortgages were out of reach. But they’ve also led to defaults and foreclosuers when Florida mortgage rates were reset.

The new guidelines retain disclosure and underwriting provisions that some banks had objected to as too restrictive, including a requirement that lenders qualify borrowers at the fully indexed rate for interest-only and payment-option loans.

These updated guidelines will require lenders to analyze a borrower’s ability to repay not only the initial loan amount, but also any additional principal that may accrue in the case of a payment-option loan with negative amortization.

Testifying before members of the Senate Banking Committee last week, Kathryn E. Dick, deputy comptroller of the Office of the Comptroller of the Currency, said:

“Underwriting standards that do not include a credible analysis of a borrower’s capacity to repay their entire debt violate a fundamental principle of sound lending and elevate risks to both the lender and the borrower.”

Consequences for Florida home loan applicants

As a result of these changes, fewer borrowers will qualify for nontraditional loans that many in the banking and real estate industry say have helped buyers purchase homes they would not have been able to afford using a traditional Florida home mortgage.

Some borrowers may also be scared away by new disclosure requirements that spell out how monthly payments will increase if borrowers choose to make minimum payments or if interest rates adjust. Dick said last week that the new guidelines will allow “no equivocation about the risks of negative amortization and payment shock, if that’s what the product entails.”

This should be good news. While it may take you longer to quality, it means those that are approved for a Florida home loan are in less danger of defaulting on it. Submit our FREE online form now to see where you stand.

In a week where it’s becoming increasingly clear that the housing boom has gone bust, Florida home loan rates tumbled as well.

The 30-year fixed-rate mortgage, the industry’s benchmark loan, fell 0.15 percent to 6.29 percent, according to a Bankrate.com survey of lenders.

A similar survey conducted this week by the Mortgage Bankers Association pegged 30-year Florida mortgage rates even lower at 6.18 percent.

The mortgages in this week’s survey had an average total of 0.31 discount and origination points. One year ago, the Florida home mortgage index was 5.97 percent; four weeks ago, it was 6.49 percent. That reflects just how quickly rates have fallen off, mere months after they hit their highest levels in years.

The 15-year fixed-rate mortgage, a popular choice for those considering refinancing, fell 0.16 percent to 5.96 percent. The 5/1 adjustable-rate mortgage, meanwhile, fell 0.12 percent to 6.07 percent.

News heralding slower economic growth and the sagging state of the housing market in Florida and beyond dominated the past week. It hasn’t been looking good of late. The U.S. government, for its part, announced that durable goods orders fell 0.5 percent in August, marking the second straight month they have plunged.

In a challenging South Florida housing market, professional can benefit from all the advice they can receive.

Hence, the motivation for those that attend an event on October 27 at the Harriet Himmel Theatre at CityPlace in West Palm Beach. Once there, insiders will hear from Florida home mortgage expert, Terry Watson (pictured), as he reveals secrets for success in today’s difficult real estate industry.

Agents and Florida mortgage brokers will learn about market trends, how to sell themselves, choose real estate technology for ROI and create dynamic sales and marketing materials.

Watson, who is known for his trademarked slogan “Boredom is not an option,” frequently presents seminar topics such as negotiating real estate transactions, getting clients to sign and how real estate professionals can work successfully with first-time home buyers that are Generation X clients.

The half-day seminar costs just $25 (5$ discount for early registration) and will feature a continental breakfast, door prizes and special discounts on real estate tools and technology provided by sponsors Konica Minolta, eNeighborhoods, Sony and Imprev. The goal for all involved? Boost Florida mortgage loan demand and get the market moving again.

“We’re proud to be able to provide a seminar that can help real estate pros market themselves and their services more effectively,” said Louis Schuster, Vertical Marketing Manager at Konica Minolta Printing Solutions. “We know that compelling presentation materials are often key to winning the business in real estate, and we strive to provide the right technology at the right price.”

“There’s no doubt that agents who invest in marketing, technology and professional development will have the competitive edge,” said Greg Robertson, eNeighborhoods Executive Vice President of Sales & Marketing. “This seminar is more than motivational. It’s about real marketing and technology strategies that can be used every day.”

Palm Beach County commissioners reacted to a softening Florida housing market this week by reducing the number of cheaper homes developers would have to build under a proposed program devised to address the area’s affordability crisis.

For example, a development of 130 homes at two units per acre would have 22 workforce housing-priced homes, five fewer than previously proposed.

The decision does not affect west-central farmland where most development is expected, such as Mecca Farms and Callery-Judge Grove. There, 20 percent of the homes will have to qualify as affordable housing.

The concessions slightly gratified the local builders association, even if officials didn’t drop the number of workforce-priced homes development companies must provide to the levels they would have preferred.

And the program doesn’t guarantee significant headway will be made toward getting many of the 31,000 new affordable homes and rental units Palm Beach County projects it will need by 2010.

The mandatory program “will have an effect on projects that are proposed,” said Joshua Fowler, Executive V.P. of the Gold Coast Builders Association. “If they (builders) can’t make the numbers work, they’re not going to submit the project.”

Fowler said the association was pleased that the commission seems to have considered some things they hadn’t until now, specifically the bursting of the housing bubble. Developers had said their companies would lose jobs and be forced to build elsewhere under proposed stricter standards.

The Florida Association of Realtors this week announced the median price of an existing home in Palm Beach County dropped from $411,400 in August 2005 to $386,000 last month. Home sales have plunged and foreclosure rates are on the rise throughout the state.

Commissioners voted 5-2, with Mary McCarty and Chairman Tony Masilotti in opposition, to appease area builders but move ahead with the workforce housing program.

The program is aimed at producing homes in the $164,000-304,000 range for households earning between $38,600-96,600 a year.

Developers would qualify for bonuses that would allow them to build more homes in certain areas. Proposed county code changes would accommodate the extra homes, including traffic exemptions, changes in housing layout and a quicker permitting and review process.

As experts armed with Ph.D.’s defended the positions of Palm Beach County and the builders, commissioners agreed to reevaluate the program a year after it’s in place to consider real estate market conditions at that time. But some said it was time to do something about the affordable housing crunch.

“We are looking to one industry to solve the affordable housing issue. I don’t know whether or not that’s fair,” McCarty said. “As it stands, the construction industry is still a third of our economy. I don’t want to be drowning the industry.”

Some researchers argue that in a weak market, price increases are less readily accepted by market-rate home buyers, and the developer is less willing to build housing, either affordable or market rate. As Florida mortgage rates retreat somewhat, builders would like to wait and see what happens before being restricted under the new guidelines.

Barbara Alterman, director of the county’s planning, zoning and building department, said building permits have shifted toward multi-family homes and away from single-family homes.

In addition, the county is looking into luxury-home fees and an extra fee for commercial businesses to help pay for employee housing. A study is expected early next year.

Commissioner Burt Aaronson proposed the workforce housing formula approved by the board, and describes it as a compromise between what they endorsed in April and what local builders want.

“I want to encourage builders to keep on building. I want to keep builders employed,” Aaronson said.

Yes, new home sales in the state rose in August. It was surprising, good news for those that feared the slowdown in the Florida housing market was dire and headed for even worse levels.

However, in a sign that builders are facing a tougher industry than they were a year ago, the median price of a new home fell to $237,000, down 1.3 percent from a year ago. This means that buyers are still receiving the better end of the deal and it’s a prime time to look into a Florida home mortgage.

In its monthly report on the condition of the new home market, the Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 1.05 million, 4.1 percent higher than in July.

Therefore, the inventory of unsold new homes rose to a 6.6-month supply. In other words: at the current selling rate, it would take 6.6 months to sell the new homes currently on the market. At some point soon, sellers will have to drop prices even further or watch as the housing decline grows worse.

Good news for the Federal Reserve

While such news is unwelcome for anyone trying to sell a home, the slowdown in the housing market is just what policy makers at the Federal Reserve have been looking for. As inflation quickened over the past several months, members of the Fed, led by its chairman, Ben S. Bernanke, have said that cooling in the housing market would be essential to holding prices down.

At the same time, the government has tried to help with the Florida affordable housing problem. So far, the Fed’s economic forecast has been realized, with inflation slowing and home sales and prices falling.

On Tuesday, Miami-based Lennar Corp., - one of the nation’s largest home builders - said third-quarter profit fell 39 percent as the housing slump worsened faster than expected.

Earlier this week, the National Association of Realtors reported that for the first time in 11 years, the median price of an existing home fell on a year-over-year basis. In August, prices slipped 1.7 percent compared with a year earlier to $225,000.

Median prices also fell last month in the South Florida housing market: Broward’s median dropped $24,200 to $362,800, while Palm Beach County’s median declined $25,400 to $386,000.

As always, most of this is unsettling for sellers, NOT buyers. If you’re in the market for a Florida home mortgage loan, now is the perfect time to receive approval and make an offer. Let our brokers help by completing the COST-FREE FORM atop this page.

As the chart we’ve attached to this article depicts, it’s a buyer’s market. Many houses are going unsolde, providing those with pre-approval on a Florida mortgage loan to possess most of the leverage when making an offer.

Nevertheless, there are steps sellers can take in order to successful come to an agreement on their property.

1. Play the cards you’re dealt.
A successful poker night begins before you reach the table, when you resolve not to chase after hands that you have no realistic chance of getting. Similarly, a successful home sale begins before the house is listed, when you decide not to expect to make a killing.

“All you can do in a falling market, if you have to sell, is have the best possible product out there at the price it should be,” says Diane Saatchi, a real estate agent with Corcoran Group on Long Island, N.Y. “Not what you wish you could get, not what the neighbor got two years ago, but at the price you should get now. That’s the reality.”

It takes discipline to face that reality. For many sellers, “the only disappointment is that their friend, six months or a year ago, got more than they’re getting,” says Bill Christiano, a loan officer with MortgageIT in Westchester, N.Y. “Ego gets in the way when they’re trying to sell. Or stubbornness, I should say.”

2. Scope out other houses for sale.
Break through your ego and stubbornness by looking at the good deals that your neighbors are offering.

“The most important thing is to really shop the competition on the market right now,” says Elizabeth Razzi, author of “The Fearless Home Buyer,” published in 2006, and of “The Fearless Home Seller,” to be published in February.

Take a look at everything from a buyer’s viewpoint. Try to understand what Florida home mortgage seekers are looking for. Actively.

“Get out in the car and spend a weekend looking at everything you can,” Razzi says. “Visit some weekend open houses. Just get a feel for what your buyers are looking at.”

Visit newly built houses and find out which amenities and incentives builders are offering. Eavesdrop on other visitors to open houses to find out if there’s something in particular they’re looking for - something you should do to make your house more presentable.

3. Make it a turnkey, not a turkey.
The word “turnkey” is used in commercial real estate. It means a property is ready for immediate use. Your house has to be that way when buyers have a cornucopia of houses to choose from. This may mean applying for a Florida home improvement loan.

“You have to make it a 100 percent turnkey situation,” Razzi says. “Everything has to be ready to roll, because buyers never want to buy a house that needs a lot of work unless it’s an absolute bargain. You have to take away all their opportunities to say no.”

Remember: those that have received approval on a Florida home loan want to purchase property. You just need to present it to them in the right way.

You’ve gotta do what you’ve gotta do to make the Florida mortgage payments, even if that means thinking outside the box.

In the case of Karol Gajda, who lives right outside Orlando, he’s taking that mentality to new heights. Rather than trying to keep his home up for sale in this sliding Florida housing market, he is offering one person or company an advertisment on his garage door for a year.

In the coming months, Gajda will be moving from Central Florida back to his home state of Michigan. But with over 40 homes in his community for sale, and virtually none of them selling, he decided on a different way to pay his Florida home mortgage while he makes the move.

Lessening demand has yet to quell home price growth enough to bring priced-out buyers back into the market. As a result, the number of homes for sale is rising across the Sunshine State, and with that much inventory, properties languish for months on end.

Unwilling to try his luck against those odds, Karol is auctioning off an advertisement on his two-car garage door for a full year. The auction is running online through October 5, 2006. When asked how he thought of this idea, the creative homeowner said:

“I’d been writing down all the ideas I could think of with regards to selling my home. Nothing was jumping out at me as the way to go about it. Then, while eating dinner one night, I was thinking about outside advertising and wondering how I could integrate it into the sale of my house. The garage door ad just came to me. I [went online] and listed it right away.”

While it could end up being rather unsightly, you have to give Gajda credit for ingenuity. Plus, it’s not like he’s going to be living there!

We’re a Florida home mortgage brokerage. Our job is to assist hopeful buyers with questions they have pertaining to any aspect of this important process. Stock advice or information is rarely mentioned across this website.

However, recent insight into the mortgage insurance business sheds light on the housing market in general. So let’s get into it …

Burgeoning Florida home mortgage insurance world

These companies - that provide lenders and their secondary market investors with a hefty degree of comfort on low-down-payment Florida home loans - are rising out of trying times. Contrary to the cycle that generated the greatest housing and mortgage boom in history, mortgage insurers such as MGIC Investments, PMI Group, Radian Group, and Triad Guaranty didn’t fare so well over the past few years.

One of the main culprits behind the divergence was the proliferation of piggyback Florida home mortgages being pushed by lenders. In periods of low interest rates, the spread between first and second mortgage interest rates diminishes to a point where it’s actually cheaper for a borrower with less equity to have a first and a second mortgage, as opposed to the standard first with mortgage insurance.

Because lenders make more money with the piggyback loan, they tend to encourage customers to take a first and a second mortgage over the more traditional mortgage insurance approach.

Another factor that hampered the mortgage insurance industry had to do the rapid appreciation in home values. This allowed a number of borrowers to cancel mortgage insurance once they reached their lender’s loan/value target. (Mortgage insurance is required when the loan/value ratio exceeds 80 percent; borrowers can petition to cancel the insurance, and the monthly fee, when the increased equity satisfies the lender’s requirements.)

Shift in the housing market

Things are now changing in favor of the mortgage insurance industry. Higher rates mean fewer piggyback loans. Declining home values at a time when borrowers are turning in their adjustable Florida mortgages expands their market.

Higher rates also equte to less Florida home loan refinancing, which keeps the existing book of business from running off.

Mortgage insurers have gone international with a fair degree of initial success, as well. Australia has written mortgage insurance for the past few years, and it appears that the concept is gaining acceptance in Western Europe and Hong Kong.

While these facts may have no interest to future buyers, what they reflect about the Florida housing market in general is worth taking note of.

Across Florida, school principals, real estate developers and economic development officials are scrambling to solve a troubling mystery:

Where did the kids go?

Across a state plagued by shortages of teachers and classrooms, school-enrollment figures show declines or no growth this fall. Palm Beach County’s school system saw its first enrollment drop since 1971 — a 1.9 percent decline to 170,582 students.

Broward County, surrounding Fort Lauderdale, lost 3.1 percent of its students. Growth in Orlando and Tampa has slowed to roughly half its previous rate. Overall, the number of students in Florida public schools now is expected to grow by just 30,000 students to 2.67 million, well below recent annual increases of about 65,000.

The reason: A cooling Florida housing market.

With the median existing-home price up 90 percent since 2001 to $248,400 in August, housing costs are pricing young families out of the state.

Ranking fourth in population, Florida remains one of the fastest-growing places in the country, adding an average of 1,000 new residents a day to its total of 18.3 million. But the state’s tried-and-true formula of plentiful jobs, abundant sunshine and low taxes suddenly isn’t enough to hold onto thousands of families as speculators and retirees snap up homes.

What happens is a shrinking supply of affordable housing for newcomers who traditionally pumped up school enrollment. And despite being spared so far this year, there are signs of growing weariness following eight hurricanes that plowed into the Sunshine State in 2004 and 2005, causing insurance premiums rates to skyrocket and some residents to move away.

Last November, Kevin and Christy Kilpatrick left Plantation, near Fort Lauderdale, for rural Lawrenceburg, Tenn., to escape housing costs, as well as congestion and storms.

In October 2005, Hurricane Wilma knocked out their power and water for more than three weeks; the next month, they bought their four-bedroom Tennessee house on 10 acres for about $280,000 — a steal compared with most Florida real estate.

“We knew we couldn’t afford to get what we wanted down there. [We decided] this would be a better quality of life for our kids,” said Mr. Kilpatrick.

This remains the case even as Florida home mortgage rates have declined in the past two months, seemingly giving buyers more of an opening.

While school officials say a pause in the state’s breakneck enrollment growth will help them to catch their breaths after years of frenzied teacher hiring and building expansion, development officials are concerned that businesses will be deterred from moving to or expanding in Florida because of immense price appreciation from 2001-2005, and the possibility of not having enough workers.

Some officials insist that the surprising slowdown is a temporary blip, however, with school enrollment growth in Florida poised to accelerate later this decade because of rising births and immigration throughout the U.S. In addition, the weak housing market, including a 34 percent decline last month in sales of existing single-family homes in Florida.

Florida is home to four of the 10 most-overvalued markets in the U.S., with the Naples housing market leading the way. Still, many remain hopeful that conditions will approve.

“We will see the affordability of housing in Florida improve. Much of Florida is still cheaper than New York, Boston, California and other areas,” said David Denslow, an economics professor at the University of Florida.

Still, what’s happening in Florida contrasts sharply with school districts in other U.S. metro areas that have robust population growth. This fall, enrollment in the Wake County, N.C., public-school system, including Raleigh, rose 6 percent, or 7,388 students, to 127,767.

School growth rates are holding steady in Las Vegas and surrounding Clark County, the country’s fifth-largest school district. And enrollment in the suburban Atlanta district of Gwinnett County, Ga., increased by 5.1 percent to 151,903 students.

In Tampa, Shari Beaubien, principal at Chiles Elementary blames her school’s 10 percent enrollment dip — about 90 fewer students — on condo conversions. Four nearby apartment buildings became upscale condos. That pushed out many young families, and few newcomers have moved in.

When two apartment complexes in West Palm Beach for residents on public assistance became condos, enrollment at the nearest elementary school dropped by about 100 students, Palm Beach County Schools demographer Art Wittman says. In all, more than 12,000 rental units have gone condo.

Last year, the number of Floridians aged 4-19 rose 1 percent from a year earlier, its tiniest growth since 1991, according to Moody’s Economy.com, a West Chester, Pa., research firm.

More empty nesters and other property owners without school-age children isn’t necessarily bad for local school districts and municipalities, which get to collect their property taxes without having to take additional students. The longer-term concern is homeowners often opposing increased school spending and frequently rejecting tax increases.