When we hear that today’s market is a “shifting market”, that is right on target.  It keeps shifting, and shifting, and shifting . . . Every time we turn on the news, there’s a new development that affects our economy and therefore the ability of buyers to buy and sellers to sell.

SHIFT, the most recent book by Gary Keller, co-founder and Chairman of Keller Williams Realty Inc., begins with the following paragraph:  “The Real Estate Market has shifted drastically and dramatically.  Sales volume and the number of transactions have dropped significantly.  Inventory has reached an all-time high.  Buyers have never been more reluctant.  Fear is rampant, anxiety is high, and people are getting out of the business left and right.  Sound familiar?  Sure it does.  The year was 1979!”

Does it make us feel better to know that this has happened before?  What did we learn from it in 1979?  Fast forward to 1987 and it happened again.  Changing tax laws this time had a disatrous affect.  Well, guess what?  History repeats itself.  Now we are faced with this again in 2008, but this time there are real differences.

In 1979 mortgage interest rates topped 18%.  Recently, buyers are getting approved at around 6%.  That is a huge difference!  Today’s sellers, with the help of their real estate agents, are becoming realistic with today’s pricing, bringing our market back on track.  The real estate business is “cyclical”.  An experienced real estate agent and a mortgage broker will understand this and be prepared to give counsel that is in tune with the current market.  Remember though, the news you heard last week is “old news”, so stay in touch with your local trusted real estate agent for updates on this ever changing market.

Our agents are participating in seminars, conference calls, webinars, and many other training events to stay on top of the game to better assist you!  Real estate remains your single most valuable asset if handled correctly.

Conditions are ideal for buyers to find their dream home.  Inventory is plentiful.  In Florida’s three largest markets alone, more than 125,000 homes were for sale at year’s end in 2007.  Even with these high inventory levels, economists predict that number will go down by the end of 2008.

Favorable interest rates multiply buyers’ financial power.  Even one half of one percentage point difference means a buyer could save more than $1,000 per year on a median priced home.  Buyers can get more home for the money!

Home ownership is a wise long-term investment.  Benefits are: deductions on your income tax return, locked in payment with a fixed rate mortgage, home price appreciation if you plan to stay for a few years, and a monthly mortgage payment comparable to rent payments.

International buyers benefit from the weaker U.S. dollar, multiplying their purchasing power.  Buyers also appreciate the relatively low costs of Florida property compared with similar homes in their countries.

With extensive inventories in urban and suburban locales, buyers can live closer to work, schools, and rapid transit lines.  First-time homebuyers also have many affordable options in the townhome and condo markets.

And let’s not forget Florida’s great climate, world-class beaches, vibrant economy, and diverse population!

1. Long term economic and demographic trends continue to favor Florida. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing income.

2.  People continue to move here. Based on recent trends, experts project Florida should add about 300,000 residents a year during the next two to three years.

3.  Five of the top 15 cities in the Milken Institute’s 2007 “Best Performing Cities” survey, which looks at sustainable economic growth, are in Florida.

4.  Florida’s unemployment rate is the lowest among all ten of the most populous states in the U.S.

5.  Jobs are plentiful. 7 of the hottest 15 job markets are in Florida, according to a recent study by Bizjournals.

6.  Fortune Magazine recently reported “Economists and geographers who have studied how natural disasters affect real estate values have generally found there to be no lasting impact.”  Meaning that hurricanes shouldn’t have a long term effect on Florida’s real estate market.

7.  Residents move away and home prices fall only when natural disasters start becoming regular occurrences in an area, not when they happen periodically, according to experts.

8.  State government and business leaders are committed to finding real solutions to the escalating costs and shortage of property insurance in Florida, as well as much-needed property tax reform.

9.  Interest rates are still low, on a par with interest rates in the 1960’s.  Home prices continue to stabilize, inventory is plentiful, and homebuyers have lots of options.

10. Homeownership has value.  It provides a variety of benefits, tangible and intangible, to the community as well as the individual homeowner.

11. Studies show that home equity is still the largest single source of household wealth.

12. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction.

13. Studies show that children raised in homes owned by their families are more likely to stay in school and have a higher lifetime annual income.

14. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs.

15. Homeowners join up to 41% more civic organizations than renters, vote in local elections 15% more often, and enhance their neighborhoods with gardens 12% more often.

16. 2007 Florida Association of Realtors President Nancy Riley says, “Florida Realtors know buying a home is a very personal investment - an investment in a family’s future.  Although research shows it is the largest single investment most families make and helps to provide security for the future, owning a home isn’t just a financial investment.  Ownership is about having a place to call home:  a place where families build a future and become part of a community.

17. Over the past five years, the average Florida homeowner saw a statewide median home price increase 52.5% from November 2002 to November 2007.  Experts project that prices will rise about 2% next year.  Average home price appreciation should return to historical averages of around 6%.

18. Florida is a great place to live and work.  According to Enterprise Florida Inc., the state has one of the nation’s strongest tourism industries, is 4th in the nation in high-tech jobs, is the third largest exporter of high-tech goods and services, and is ranked as one of the best states in the nation to be an entrepreneur.

19. Several prominent economists report that housing recovery has begun, and the Florida housing market with strengthen in 2008 and will be booming again by 2010.

20. Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put Florida at the top of Harris Poll’s “most desirable places to live” survey.

In turbulent economic times, the media can’t wait to report what interest rates are doing.  There is a fixation on what rates are doing.

When should you buy a home based upon interest rates and WHEN IS THE RIGHT TIME?  Let’s look at what an interest rate move of 1/4 percent really does to a $200,000 mortgage.  Say a 30-year interest rate at 6.00 percent “jumps” to a 6-1/4 percent rate.  Should you sit on the sidelines, thinking such a move is suddenly unaffordable?  No!  The payment on a $200,000 loan only “jumps” by about $32 a month.

Right now, buyers should have more urgency than ever.  Home prices have declined enough to make buying more affordable than it’s been in recent memory.  Interest rates (whether at 6 percent or 6-1/4 percent) are historically low.  It’s time to act.

Rates are important, but they are not the only consideration in the home buying decision.  Interest rates over the past few years have been in a very tight range, with few major swings.  Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

By David Reed 

You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!

We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers.  It seems the press just can’t get enough of all the gloom and doom in the housing industry.  The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required.  You just need to know where to look.  Who are these lenders? They’re right down the street.

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part?  FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying.  No wonder FHA is moving up the charts!

Please contact our agents if you would like more information about FHA loans or help getting into your first home.

Welcome to Keller Williams Realty of Manatee’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Bradenton.