Pending sales of existing U.S. homes surprisingly rose in February, even as bad weather and weakness in the subprime lending sector put a crimp in the national and Florida housing market, a real estate agents’ trade association said Tuesday.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February, rose 0.7 percent to 109.3 from a downwardly revised level of 108.5 in January.

Wall Street analysts polled ahead of the realtor report were expecting the index to come in at 108.2.

Jon Basile, an economist with Credit Suisse of New York, said Monday’s data “gives a feel that existing home sales has stabilized because they are higher than the lows of last year. At the very least, housing demand is not getting any worse.”

Higher delinquencies among bad credit Florida mortgage borrowers with damaged ratings will put downward pressure on home sales this year, said David Lereah, NAR’s chief economist.

Manufacturing index weakens
“Problems in the subprime mortgage market will become more apparent over time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses,” Lereah said.

The pending home sales figure has largely held steady since July.

A sale is listed as pending when the contract has been signed but the transaction has not been closed. Sales are usually finalized within one or two months of signing, following the Florida mortgage loan application process.

SOURCE: CNN Money

Florida mortgage applications dropped in volume last week.

And Sunshine State borrowers weren’t the only ones staying away. Americans bought far fewer newly built homes than expected last month in a worrying sign for the economy, government figures showed on Monday.

Sales of new homes fell 3.9 per cent to an annual rate of 848,000 in February, while purchases in January were also sharply lower than previously thought.

The trend comes amid the vital spring selling season - and will shake construction industry confidence that demand is stabilising.

Gary Bigg, an economist at Bank of America securities, said: “This suggests that the recovery in residential construction may be stretched out beyond the first half of 2007.”

Sales last month were 18 percent lower than a year ago and many economists fear the market could be pushed lower by the bad credit national and Florida mortgage crisis.

Defaults on high-risk loans have caused the collapse of more than 24 subprime mortgage lenders and prompted fears that more than two million Americans could be at risk of foreclosure in the next two years as payments jump on popular teaser-rate Florida home loans.

Michael Moskow, president of the Chicago Federal Reserve, said: “This could become an issue for the macro[economic] outlook if these troubles spilled over to the availability of credit in markets more generally.”

Mr Moskow said the indications of improvement were “uneven” following a report last week that showed sales of existing homes rose. The figures suggest some builders were over-optimistic in their planning for an early rebound, said analysts.

The slow pace of sales and an increase in completed homes pushed inventories of unsold houses to a 16-year high: more than eight months of supply at the current rate of sales.

The housing market continued to show a more sustainable pace of sales in February, while still-low Florida mortgage rates sparked buyer interest, according to the Florida Association of Realtor (FAR).

Statewide, sales of single-family existing homes totaled 10,779 last month, compared to 14,080 homes sold in February 2006 for a 23 percent decrease.

Real estate industry experts across the state think the outlook for Florida’s single-family residential housing market has brightened, according to a quarterly survey conducted by the University of Florida. The survey shows that a growing number of those polled find home prices are staying even with inflation.

“If you’re thinking of buying a house, there’s probably not much to be gained by holding out at this point,” says Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “It doesn’t look like [Florida housing prices] are going to fall anymore. We see that as a benchmark. When prices maintain the same level as inflation, then we’re probably in some kind of equilibrium. It indicates the market is stabilizing.”

Florida’s median price for existing single-family homes in February was $235,500; a year ago, it was $242,500 for a 3 percent decrease. The median is the midpoint; half the homes sold for more, half for less. In February 2002, the statewide median sales price for single-family homes was $131,800, for an increase of about 78.7 percent over the five-year-period, according to FAR records.In January 2007, the national median sales price for existing single-family homes was $209,200, down 3.5 percent from the previous year, according to the National Association of Realtors. This should be encouraging to Florida mortgage applicants looking for a deal.

Existing home sales likely will gradually rise this year and into 2008, according to NAR’s latest housing outlook.

“Underlying trends point to a housing recovery in 2007, but it will take a couple months for us to get a better handle on it,” says NAR Chief Economist David Lereah. “Existing-home sales are expected to slowly improve from what appears to be the cyclical low last fall.”

Sales of existing condominiums in Florida also decreased last month, with a total of 3,172 condos sold statewide compared to 4,397 in February 2006 for a 28 percent decline, according to FAR. The statewide median sales price for condos last month remained flat at $212,200; a year ago, it was $213,000. NAR reported the national median existing condo price was $222,200 in January 2007.

Last month, interest rates for a 30-year fixed-rate Florida home mortgage averaged 6.29 percent, up slightly from the average rate of 6.25 percent in February 2006. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Sarasota-Bradenton Metropolitan Statistical Area (MSA) reported more sales of existing homes and condos in February. A total of 598 existing homes sold last month compared to 568 homes sold a year ago for a 5 percent increase. The market’s median sales price for homes was $294,500; it was $324,200 in February 2006 for a 9 percent decrease.

“People who were simply looking (at homes) before are now starting to make offers,” says May Aston, president of the Manatee County Association of Realtors and a founding Realtor with RE/MAX Gulfstream Realty in Bradenton. “Why wouldn’t you buy now? Mortgage rates are still incredibly low and buyers are able to consider a range of inventory. People are drawn to Manatee County for a number of reasons, including our relaxed lifestyle, yet we’re conveniently located near the hustle and bustle of Sarasota and Tampa.”

Lance VandeBerg, president of the Spacecoast Association of Realtors and Florida mortgage broker-owner of VandeBerg Real Estate & Investment Inc. in Merritt Island, agrees the pace of home sales is starting to pick up as buyers show renewed interest in the housing market.

“The Space Coast has a strong high-tech business climate and offers great values for housing opportunities, especially for coastal properties,” he says. “And, with mortgage rates continuing to be so favorable, right now is a great time to buy.”

Looking to buy a new home?

You may be in the minority in the near future.

The trouble in the Florida mortgage market could spread beyond the subprime sector, with tighter lending standards cutting demand for new homes by as much as 15% and further squeezing home-builder profits, according to an analyst following the industry.

“We expect lending standards to tighten further, based on our expectation of further [home] price declines in 2007,” wrote Banc of America Securities analyst Daniel Oppenheim in a Tuesday report. The analyst lowered his stock-price targets for the home-builder group by 15%, and also cut his profit estimates for several companies.

Oppenheim said mortgage-liquidity problems aren’t confined to just bad credit Florida home loans. The distress will cut 15% of new-home demand, while loans with low credit scores and high cumulative loan-to-value ratios “will end or tighten with many buyers choosing to remain as renters,” he wrote.

A big issue facing residential home builders is the oversupply of homes on the market after the speculative bubble. More home buyers are walking away from contracts, pushing builders’ cancellation rates well above historical norms.

The inventory glut combined with lower demand resulting from stricter lending standards “will lead to lower prices and likely exacerbate mortgage delinquencies and foreclosures,” Oppenheim said.

Lower Florida home prices will lead to more write-downs at the home builders, which are taking impairment charges on land as they slow their production machines, according to Oppenheim, who expects few builders to stay profitable in 2007.

SOURCE: MarketWatch

The pace for Florida’s existing home sales remained slow in January, though the inventory of homes began to drop in many markets across the state, according to the Florida Association
of Realtors (FAR). Statewide, sales of single-family existing homes totaled 9,382 last month compared to 12,906 homes sold in January 2006 for a 27 percent decrease.

Existing home sales likely will gradually rise this year and into 2008, according to the latest housing outlook from the National Association of Realtors(R) (NAR).

“Home sales may appear weak in comparison with the record surge in 2005, but they will be sustained at historically high levels that are in line with long-term demand,” says NAR Chief Economist David Lereah.

As inventory levels become more balanced over the next few months, analysts also expect to see some modest price gains. The median Florida housing price for existing single-family homes in January was $239,300; a year ago, it was $243,200 for a 2 percent decrease.

In January 2002, the statewide median sales price for single-family homes was $128,900, which represents an increase of about 85.6 percent over the five-year-period, according to FAR records.

In December 2006, the national median sales price for existing single-family homes was $221,600, unchanged from the previous year, according to NAR. In California, the statewide median resales price was $567,690 in December; in Massachusetts, it was $335,000; and in Maryland, it was $304,789.

Last month, interest rates for a 30-year fixed-rate Florida mortgage averaged 6.22 percent, up slightly from the average rate of 6.15 percent in January 2006. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Jacksonville housing market reported slower sales of single-family homes in January, though more existing condos changed hands. A total of 783 existing homes sold last month compared to 938 homes sold a year ago for a 17 percent decrease. The market’s median sales price for homes was $185,000; it was $194,100 in January 2006 for a 5 percent decline.

“The Jacksonville area continues to offer some of the best values in the state for housing opportunities - what buyers can get for their dollar is a strong draw for our market,” says Hank Oltmanns, president of the Northeast Florida Association of Realtors and Florida mortgage broker-owner of A Broker’s Choice Realty. “We’re the largest geographic city in the lower 48 states, the land prices here are better than in many other areas and we still have room to grow; all of these factors give us a depth of market variety. Plus, our strong diversified labor market and business base is a definite asset.”

Among the state’s smaller markets, the Pensacola MSA reported a total of 279 homes sold in January compared to 317 homes a year ago for a decrease of 12 percent. The existing home median sales price rose 1 percent to $159,200; a year ago, it was $158,100. A total of 27 existing condos sold in Pensacola last month compared to 43 condos the previous January for a 37 percent decline.

Doug Gooch, president of the Pensacola Association of Realtors and office manager for Palm Realty of Pensacola, says people are drawn to the area’s scenic beauty and more relaxed lifestyle.

“We have some of the most beautiful and pristine beaches in the state,” he says. “Plus, we offer
buyers a variety of housing options in different price ranges to suit their budgets. It’s a great place to live, and with mortgage rates continuing to be so favorable, right now is a great time to buy.”

Two charts showing statistics for the Florida home loan market and its 20 MSAs are attached.

Here’s the bad news from last year: An index that measures pending home sales dropped 10.1 percent in 2006 compared to 2005, according to preliminary data released today by the National Association of Realtors.

But here’s the good news for this year: A real estate experts predicts a big comeback for the national and Florida housing market. We’ll get to that shortly.
The Pending Home Sales Index, based on contracts signed in 2006, reached 111.8 in 2006 compared with 124.4 in 2005. A sale is listed as pending when the Florida mortgage contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.

Regionally, the index dropped 14.8 percent in the West, 13 percent in the Midwest, 9.3 percent in the Northeast and 6 percent in the South in 2006 compared to 2005.

“A steady narrowing from year-ago readings has been observed since last July when the level of unsold housing inventory peaked at an all-time high,” according to the report.

The index is based on a large national sample - typically representing about 20 percent of transactions for existing-home sales. The Realtor group demonstrated that the level of monthly sales-contract activity from 2001-04 parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales.

David Lereah, chief economist for the association, said in a statement: “I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity. 2007 promises to be the fourth-best year on record.”

In other words: breathe easy, seller. Florida mortgage loan activity will pick up again in the near future.

Fannie Mae has come out with the following prediction for 2007: Sales of new and existing homes will continue their slide this year, due largely to investors pulling out of the housing market.

In an economic and housing outlook, Fannie Mae said sales of new homes are expected to drop by 7.1% in 2007, while sales of existing homes are expected to drop 8.1% this year.

Fannie Mae economists said the projected sales for 2007 would be the lowest since 2002. Florida mortgage applicants should use this forecast to their advantage, negotiating down prices because they’ll have little competition when dealing with sellers.

The two-year drop in sales during 2006 and 2007, the economists said, would be the largest since the 1989-1991 housing downturn.

“We expect additional declines later this year as investors continue to leave previously hot housing markets, although the largest drops may be behind us,” wrote Fannie economists, including chief economist David Berson.

Across the country, home prices should fall by between 1% to 2% this year, Berson predicted at a press briefing Wednesday.

However, he said, “most of the United States will probably not see home price declines at all - simply more modest gains.” He said the modest gains combined with significant declines in some parts of the country would produce the estimated 1% to 2% overall gain.

Later in the year, an end to the glut of unsold homes may help prices rise.

Berson also told reporters at the briefing Wednesday afternoon that the national and condominium market is suffering as investors are pulling out.

Also, Fannie is projecting drops in national and Florida home mortgage originations for last year and this year.

For 2007, Fannie Mae is predicting a decline of 11.2% in purchase originations. It would follow an estimated drop of 3.1% in 2006.

Florida mortgage refinance activity, meanwhile, is projected to change little this year thanks to refinancing out of upward-adjusting adjustable rate mortgages, or ARMs.

The hot Orlando housing market lost much of its spark in the second half of 2006, though the year still wound up as the second-best on record for local existing-home sales, the Orlando Sentinel reports today.

The Orlando Regional Realtor Association reported Wednesday that 27,378 homes were sold last year through its members in the core Orlando market, down from the record 31,230 sold in 2005, but ahead of the 26,088 in ‘04.

Even as sales fell last year compared with 2005 - they were down more than 12 percent - the median price of the homes sold in 2006 continued to rise:

Buoyed by strong home and condo sales, the December median - half the homes sold for less, half for more - was up 4.2 percent to $250,000 compared with December a year ago.

Local Realtor President Randy Martin said home sales are now being driven by economic fundamentals, rather than speculative buying, so the slower pace of the appreciation is a “sustainable price-growth trend, good for the long term.”

The number of homes for sale in December dipped below 20,000 properties for the first time since July, to 19,537 listings. But that still represented a more than 11-month supply at the recent, more sluggish sales pace - well above the six-month supply that’s generally considered the dividing line between a seller’s market and a buyer’s market.

The double-digit-percentage price gains that local homeowners marveled at in 2004 and 2005 are clearly a thing of the past: The median price in the core market - mainly Orange and Seminole counties - has essentially been stuck at $250,000 since May.

“We’re not going to see the kind of appreciation we saw for several years there,” said Mary Lou Lee, a relocation specialist for Watson Realty in Longwood. “But what happened was, we just caught up with the rest of the nation in terms of the pricing of properties.

“That’s a hard thing for some buyers to accept.”

Lee said she does see some areas of strength in the local market, including a rebound in the number of companies buying homes from employees to make it easier for those workers to relocate - a key factor in this era of Florida home mortgage costs stretching families too far.

Sales of condominiums ended the year down just 1 percent compared to 2005, largely because monthly activity didn’t tail off until late summer.

New-home sales also have slowed in recent months, and local home builders - who have cut back on construction as buyers move to the sidelines - contend that the huge volume of existing-home inventory has been a drag on new-home purchases.

William Weaver, a finance professor at the University of Central Florida, warned that even with lower mortgage rates, many home buyers who bought at or near the market’s peak in 2004 or 2005 using “various exotic mortgages” and adjustable loans with low “teaser rates” will be trying to sell in the weaker market.

Many risky Florida home loans will soon be adjusting upward, despite a generally stable interest-rate environment, pushing the monthly carrying costs out of reach for some.

“Those folks are going to be in trouble,” he said.

But the median sales price has held steadier in the Orlando market than in many other parts of the state and nation, Weaver noted, and at least some “investor” owners are resisting the pressure to cut asking prices and are instead renting out properties until Florida mortgage demand improves.

“People will hang tough if they have a choice,” he said.

Home building, one of the most battered sectors of the U.S. economy in recent months, showed surprising strength in November.

New homes sold at an annual pace of 1.05 million, up from the revised annual rate of 1.01 million in October. The signs are there that Florida home mortgage activity is returning.

Median prices, new home supply

The median home price came in at $251,700 in November, up from the $248,500 level in October. This figure had shown declines earlier in the fall due to a glut of homes available for sale on the market.
The national median price is now back to the second-highest level on record, trailing only the $257,000 level reached in April of this year.

The inventory of completed new homes available for sale continued to creep up, setting yet another record at 169,000. However, all new homes available for sale - which includes those with permits but not yet started as well as those under construction - was slightly lower. That took the inventory of new homes on the market down to an estimated 6.3 months supply in November.

And while the pace of home sales is down 15.3 percent from the white-hot sales rate of a year ago, it’s up nearly 7 percent from the trough hit in July of this year, when revised figures put the annual sales pace at just under a million.

John Tomlinson, an analyst with Majestic Research who covers the major publicly-traded builders, said the government report is missing some signs of weakness in the new home market, including orders for new homes which are cancelled by buyers or incentives offered by builders, such as covering closing costs or extra features on the homes for free, in order to support sales in the weak market.

“I’m not so sure that the pricing has bottomed here,” Tomlinson said. “There’s still a ton of inventory on the market. When inventory comes more in line with demand, we’ll be ready to see an upturn.”

In other words, buyers: Go send in a Florida mortgage loan application while you can. Take advantage of low prices while you can.

The pace of home sales in Florida continued to slow in October, though some markets report that the inventory of homes available for sale also eased last month.

A total of 12,773 existing single-family homes sold statewide last month, a decrease of 22 percent from the 16,407 homes sold during the previous October, according to the Florida Association of Realtors(FAR).

Statewide, the existing-home median price remained level at $242,500 last month; a year ago, it was $243,400, according to FAR. Therefore, those considering Florida mortgages can at least take comfort in reasonable prices in the state.

Future of Florida housing market

Following current market adjustments, existing-home sales in the U.S. are expected to remain at about the same level next year, according to NAR’s latest market outlook, which predicts 2006 to be the third strongest sales year on record nationally.

NAR Chief Economist David Lereah notes that conditions for buyers have improved, Florida mortgage interest rates remain near historic lows and most sellers - those who have been in their home for a normal period of homeownership - are still seeing very healthy returns on their investment.

Looking to the Florida condominium market, sales of existing condos also decreased in October, with a total of 3,440 condos sold statewide compared to 5,001 in October 2005 for a 31 percent decrease, according to FAR. The statewide median sales price for condos last month was $209,200; a year ago, it was $213,600 for a 2 percent decrease.

According to Freddie Mac, a 30-year fixed-rate mortgage averaged 6.36 percent last month, up from 6.07 percent in October 2005. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after Florida home mortgage contracts are written.

Breaking down various housing markets

Among the state’s larger markets, the Fort Lauderdale housing market reported 591 existing homes sold last month, compared to 561 homes sold a year ago for a 5 percent increase.

The market’s median existing home price decreased 5 percent at $349,400; a year ago, it was $368,900. A total of 580 existing condos changed hands in Fort Lauderdale in October for a 21 percent decrease over the 737 condos sold the previous year.

“Inventory levels appear to be stabilizing and sales prices also are leveling,” says Dorine Longhini, president of the Realtor Association of Greater Fort Lauderdale and manager of the Lighthouse Point office of Coldwell Banker Residential Real Estate Inc. “This is good for buyers, who have more options in the market, while the biggest impact has been on speculative buyers.”

Of the state’s smaller markets, the Fort Pierce-Port St. Lucie sector reported a total of 367 existing homes sold in October - compared to 334 homes sold a year earlier for a 10 percent increase in Florida mortgage demand.

The area’s median existing home sales price was $242,400 last month; a year ago, it was $263,500 for an 8 percent decrease. Fifty-three existing condos sold in the area last month for a 31 percent decrease from the 77 condos sold a year ago.

“I see evidence that the real estate market is on the rise,” says Jerry Mabus, president of the Realtors Association of St. Lucie and broker associate with All Florida Realty Services in Port St. Lucie. “We’re on the cusp of growth in a new direction: School officials here say that they’re projected to spend $2 billion on new schools through 2025; and since May, we’ve had 3,000 new students coming into our schools.

We have five quality universities that have developed satellite campuses here in St. Lucie County and Torrey Pines molecular research institute is moving its headquarters here. With this kind of growth comes greater economic stability.”