Saturday, August 28, 2010
Recent random real estate thoughts
Florida licensed real estate sellers should be getting a settlement from BP. After negotiations between the Gulf Coast Realtors Association and BP(via government rep.), it was agreed that all states bordering the Gulf of Mexico would get a payout based on the amount of home sales commissions lost because of the oil spill. The amounts have not yet been decided.
As expected, both new and existing home sales plunged to new depths after the expiration of government tax credits. This has happened despite a near-record low 30-year fixed rate mortgage interest of 4.21% in Florida. 15-year rates are now well below 4%. But people still are not buying. Many are no doubt waiting for both home prices and mortgage interest rates to go even lower, which it looks like they probably will.
The rate of new foreclosures in the Tampa Bay area does seem to be leveling off. This fact has done nothing for the backlog of homes already in foreclosure. Hillsborough County started running two-per-day foreclosure auctions at the courthouse this month and will continue through the end of the year. The intent is to deal with the 36,000 to 38,000 foreclosures already in the system. Any guesses what this is going to do to the housing inventory and pricing in the area?
All of the federal government’s programs designed to help ease the housing mess continue to be unmitigated failures. The feds just can’t seem to figure out that as long as these programs remain voluntary and continue to help the banks more than the homeowners that the banks are not going to cooperate. There is just no financial incentive in any of these programs for the banks to help the homeowners. As long as banks continue to make the most money(or lose the least) by following through on foreclosures, that is what they will do. They bankers are not going to renegotiate lower interest rates or reduced principal amounts just because they are such swell people and it is about time the government figured this out.