The national, state and local economies have pretty much “bottomed out,” and a gradual recovery is now likely, a prominent Florida economist said Friday. (more…)

Jumping into the construction business these days is like diving into a swimming pool… with no water. The Florida housing market simply isn’t there. (more…)

While existing-home sales in the Ocala area last month continued to bounce back, the number of homes sold was down 33 percent from the same month a year ago, when local real estate was red hot.

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The bad credit Florida mortgage crisis and tighter lending criteria may lead to the first dip in the median price for existing homes since 1968.

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As delinquency and foreclosure rates nationally hit record highs, Marion County’s number of foreclosure filings jumped almost 33 percent in February from the same period last year.

There were 142 foreclosure filings in the county last month, compared to 107 in February 2006, according to numbers from the Marion County Clerk’s Office. In January, there were 141 filings, up from 99 in the same month last year, for a 42 percent increase.

And amid a Florida housing market that’s full of unsold homes, investors are gearing up like never before to swoop in on foreclosure properties, said Heath Fleming, owner of Fleming Mortgage Services in Ocala.

“I’m seeing that a lot of people, investors, are positioning themselves to be liquid so that these people will have the funds to step in and purchase these foreclosure homes,” Fleming said.

A number of factors have contributed to the increase in late payments and foreclosures. During a once red-hot housing market, lenders doled out bad credit Florida mortgages to “subprime” borrowers. Now many are stuck with mortgage payments they can’t make.Delinquency and foreclosure rates were considerably higher for higher-risk subprime borrowers, especially those with adjustable-rate mortgages, according to the MBA report. The rate of all subprime loans starting the foreclosure process at the end of last year was 2 percent, the highest in three years.

Also, when the housing market was at its zenith, speculators bought homes in droves and then looked to sell them quickly - an activity called flipping - in hopes of making a quick profit. But speculators aren’t nearly as active. In the fourth quarter of 2006, home flips - homes resold within a six-month period - accounted for 2.82 percent of all resales in Marion County, according to HomeSmartReports.com, a California-based company that tracks real estate sales and values nationwide. That’s down from 4.45 percent in the last quarter of 2005.

Now those speculators are stuck with homes they can’t afford or unload. As a result home prices have dipped.

In Ocala, the average median sales price for an existing home dropped 4 percent in January, from $166,200 to $159,600, according to the Florida Association of Realtors.

“When home price appreciation slows, the foreclosures tend to rise,” said Darren Blomquist, communications marketing manager for RealtyTrac, a California-based national tracker of foreclosures.

Nationally, foreclosures were up 42 percent in 2006 from 2005 while Florida only saw a 2-percent increase, according to RealtyTrac. That could be because Florida mortgage holders are typically among the top borrowers in foreclosure activity, Blomquist said.

“In 2005, Florida already had a strong foreclosure rate,” Blomquist said.

Fleming said with the glut of inventory on the market and home prices continuing to fall, the number of foreclosures will likely continue to increase.

“We’re still in the very, very early stages of this,” said Fleming, who believes it will be “two to three years” before the local housing market correction is over.

SOURCE: The Star-Banner

The once-frenzied housing market in Marion County has cooled substantially, and sellers are getting creative in order to strike a deal, the Ocala Star-Banner reports.

From paying closing costs or even several months of the buyer’s Florida home loan payments to offering vacation packages or new home appliances, sellers are going out of their way to sweeten their sales pitches to area home buyers.

“There are quite a few incentives being offered today, now that we have more inventory here. Negotiability is back,” Wilbur Van Wyck, President of the Ocala-Marion County Association of Realtors, said.

While it’s a method real estate agencies have encouraged agents to use in previous years when the market favored the seller, it’s certainly more of an enticer now that home sales continue to wane. It’s definitely a buyer’s market out there in Central Florida today.

Paying off a buyer’s closing costs — which can typically range from 4-6 percent of the home’s purchase — has become a common practice in this new era of seller incentives.

Heath Fleming, owner of Fleming Mortgage Services, agreed that the buyer now holds all the cards.

“A year ago, a seller could name his price and say ‘That’s it. I’m not going to go one dollar less.’ That’s not the case now: You see signs all over saying reduced, reduced, reduced,” he said.

Edie Ousley of the Florida Home Builders Association in Tallahassee said builders are looking to unload properties in a flooded market and as a result, they are offering a smorgasbord of incentives.

“They include complete appliances, trips being offered. We’ve even seen some builders offer to put new cars in the garages,” Ousley said.

The sagging sales in Ocala for existing single-family homes are evidenced in recent numbers reported by the Florida Association of Realtors, which shows that existing-home sales in the Ocala metropolitan area, a big part of the Central Florida housing market, have fallen 32 percent in August from the same point last year.

Statewide, the housing market outlook also continues to look dour, even as Florida home mortgage loan costs remain at relatively low levels (though they have risen since a year ago). Prices have simply gone up past what most families are willing to, or are able to, pay.

That’s why when they are willing to buy, many people in Florida and other areas of the country are demanding that cash be given back to them as part of the closing terms. By enticing buyers through the payment of closing costs or other means, the seller gets to move their house at above market value while the buyer gets extra cash kicked back to them, money that can be used in any number of ways.

In many of those cases, the cash is kicked back to the buyer without the Florida mortgage lender being told. Van Wyck said that he hasn’t seen straight cash-back proposals being encouraged by lenders in the Marion County market.

“I would think banks would have a big problem with that,” Van Wyck said.

Fleming said he encourages buyers to accept offers from sellers who are willing to pay closing costs.

“I always tell my buyers keep money aside for a rainy day; you don’t want to be real estate rich and cash poor. To get the seller to pay closing costs is definitely an advantage,” he said.

But Fleming said if a builder or broker ever offered straight cash as part of the closing terms he would advise his client against taking the deal, especially if it meant an inflated value for the home.

“I would never advise anyone to buy a house above the appraiser’s value,” he said.

As for the downturn in the county’s housing market, Fleming said he expects lagging sales to continue for at least for another year, but not to bottom out, due to the continued arrival of baby boomers.

Some areas of the U.S. where the market has substantially slowed are expecting quicker turnarounds, but Fleming said Central Florida is a different animal.

“We have a tremendous growing baby boomer population, so the market is going to adjust itself differently,” Fleming said.

While the housing bubble may be leaking air in many areas of the nation, the building boom continues in Marion County, Florida, with a record number of residential and commercial construction starts in the past 12 months, the Ocala Star-Banner reports.

The Marion County Building Department reported issuing building permits for 6,355 homes from October 1, 2005 through September 30, 2006, a 12.6 percent increase from the same period the year before. New commercial construction starts during the past year also set a record for Marion County.

Despite a rise in Florida mortgage costs, local taxes and insurance over the past calendar year, the county’s Building Department issued permits for 122 commercial projects during the same 12-month period, 40.2 percent more than the year before.

But Building Director John O’Conner said that even though construction was on the rise in Marion County the trend likely would continue upward with no signs of letting up soon.

“We are the next targeted growth area as Orlando and Tampa developers look up the interstate,” he said.

Much of the new housing activity also has its roots in older subdivisions that never were fully developed before now, O’Conner said.

As the Central Florida housing market heated up during the past few years, buyers created a market for new construction within those underutilized developments. There are still thousands of empty lots in subdivisions such as Silver Springs Shores southeast of Ocala and Marion Oaks in southern Marion County, he said.

To keep pace, O’Conner plans to add 11 new staff members to his department to accommodate the soaring permit and home inspection requests. He currently has 87 employees.

Carolyn Roberts, of Roberts Real Estate, said that Marion County’s housing market is doing well, although selling in a buyer’s market is proving to take longer than during the height of the real estate frenzy earlier this year and in 2005.

“Our housing market is stable, Our county has job growth. I don’t expect a downturn,” she said.

But now many of those homes built on speculation (by real estate developers without specific buyers) will sit an average of 7-11 months before they’re bought, Roberts predicted. That’s a lot of excess inventory that still has to be absorbed.

Location one of the major issues that fuels new construction, she said. Ocala is close to Tampa, Jacksonville and Orlando, area medical facilities and the University of Florida, all of which contributes to the area’s popularity.

“You couldn’t find a more inviting place to move,” Roberts said.

The same rising Florida real estate tide in Marion County also is keeping the city of Ocala’s construction market buoyant.

The Ocala Building Department reported issuing a total of 703 permits to developers from October 2005 to September 2006 authorizing new housing starts within its city limits. That was an 11.2 percent increase from the year before.

Commercial development within Ocala during the past year surpassed that. During the past year, the city issued 130 permits allowing commercial real estate construction, up 5.7 percent from the previous year.

In addition, housing construction within Ocala, while high for the year as a whole, was declining month by month leading up to the fall. The steady rise in property tax rates, as well as insurance premiums throughout the state, have adversely impacted home sales.