Armor Realty Blog

The chart above shows that since 2000, real estate has been a solid investment, even considering the drop in values the market experienced over the past few years.

Let’s say you had $100,000 to invest in 2000.  Had you put it in the DOW, that $100,000 would now be worth $106,700.  You would not have faired as well had you placed it all in the S and P where your $100k would now be worth only $88,000 or the NASDAQ where it would be worth only $70,000.  Real estate would have been the clear choice since that $100,000 would have gained 43% on average, which means that $100k is now $143,000!!

Source:  Steve Harney (Keeping Current Matters)

Multiple Signs Point to an Uptick in Real Estate Market

http://rismedia.com/2011-10-24/multiple-signs-point-to-real-estate-rebound/?utm_source=twitterfeed&utm_medium=twitterarket

Mortgage Applications are UP!

http://www.linkedin.com/news?actionBar=&articleID=870072430&ids=0VejoPc3oRdzwIczwNczgVdjoUb30Pd38Tc30Te2MVcjcTcP8SdzwId38ScPsMdjoU&aag=true&freq=weekly&trk=eml-tod-b-ttle-44&ut=3vEioe68RbFkY1

Mortgage Interest Rates Change Little This Week—Remain at RECORD LOWS!!

http://realtytimes.com/rtpages/20111028_rates.htm

Renters Spend 5% More than Homeowners!

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=266711

Investors See Bigger Profits from Rising Rents

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=5&id=266727

Builders Cut Prices Resulting in 5.7% More New Homes Sales

http://realtormag.realtor.org/daily-news/2011/10/27/builders-slash-prices-new-home-sales-rise-57

Pending Sales Slip From Aug to Sep, but are UP Compared to Last Year

http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=266723

Existing-home sales were down in September on the heels of a strong gain in August, but
remain well above a year ago, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 3.0 percent to a seasonally adjusted annual rate of 4.91 million in September from an upwardly revised 5.06 million in August, but are 11.3 percent above the 4.41 million unit pace in September 2010.

Lawrence Yun, NAR chief economist, said the market has been stable although at low levels, and there is plenty of room for improvement. “Existing-home sales have bounced
around this year, staying relatively close to the current level in most months,” he said. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable — this speaks to an unfulfilled demand.”

Market Issues

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.11 percent in September, down from 4.27 percent in August; the rate was 4.35 percent in September 2010.

Contract failures were reported by 18 percent of NAR members in September, unchanged
from August; they were 9 percent in September 2010. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.

NAR President Ron Phipps said access to credit is unbalanced. “All year we’ve been discussing the fact that many creditworthy home buyers are being denied mortgages,” he
said. “On top of that, loan limits have been lowered, which means buyers of higher priced homes, including many in more expensive housing markets, now have to pay a higher interest rate for a jumbo mortgage than buyers who can qualify for a conventional loan. We need to remove the roadblocks to a housing recovery—not place more obstacles in the way of financially qualified buyers.”

Who’s Buying? What’s Selling?

All-cash sales accounted for 30 percent of purchase activity in September, up from 29 percent in August and 29 percent also in September 2010; investors make up the bulk of
cash purchases.

Investors purchased 19 percent of homes in August, down from 22 percent in August; they
were 18 percent in September 2010. First-time buyers accounted for 32 percent of   transactions in September, unchanged from August; they were also 32 percent in September 2010.

The national median existing-home price for all housing types was $165,400 in September, down 3.5 percent from September 2010. Distressed homes — foreclosures and short sales typically sold at deep discounts — accounted for 30 percent of sales in
September (18 percent were foreclosures and 12 percent were short sales), down
from 31 percent in August and 35 percent in September 2010.

Total housing inventory at the end of September declined 2.0 percent to 3.48 million existing homes available for sale, which represents an 8.5-month supply at the current
sales pace, compared with an 8.4-month supply in August.

Single-family home sales fell 3.6 percent to a seasonally adjusted annual rate of 4.33
million in September from 4.49 million in August, but are 12.2 percent above the 3.86 million-unit level in September 2010. The median existing single-family home price was $165,600 in September, down 3.9 percent from a year ago.

Existing condominium and co-op sales rose 1.8 percent a seasonally adjusted annual rate
of 580,000 in September from 570,000 in August, and are 5.6 percent above the 549,000-unit pace one year ago. The median existing condo price was $163,800 in September, which is 1.0 percent below September 2010.

Around the U.S.

Regionally, existing-home sales in the Northeast rose 2.6 percent to an annual level of
790,000 in September and are 6.8 percent above a year ago. The median price in the Northeast was $229,400, down 3.3 percent from September 2010.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.09 million but are 17.2 percent higher than September 2010. The median price in the
Midwest was $137,400, which is 1.4 percent below a year ago.

In the South, existing-home sales declined 2.6 percent to an annual level of 1.89 million in
September but are 10.5 percent above a year ago. The median price in the South was $144,400, down 3.0 percent from September 2010.

Existing-home sales in the West fell 8.8 percent to an annual pace of 1.14 million in
September but are 10.7 percent higher than September 2010. The median price in
the West was $207,400, which is 4.5 percent below a year ago.

“The falloff in Western sales from a surge in August was expected because many lenders had lowered mortgage loan limits over concerns that sales wouldn’t close before the
higher loan limits expired at the end of the September,” Yun said. “Given the concentration of higher cost housing in the West, particularly in California, many buyers were motivated to close in the months leading up to the changeover while they could still get low interest rates on conventional mortgages. Unless Congress reinstates the higher limits, the overall housing market recovery will be slower than it otherwise could be, and will hold back the broader economic recovery.”

Reprinted from REALTOR®Magazine October 2011 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2011. All rights reserved.

The Tallahassee Area (Leon County) saw the same trends we saw regionally and nationally.  September sales were down from August (175 sales in Sep vs 210 Sales in Aug), but were up compared to September Sales a year ago (175 Sales Sep 2011 vs 168 Sales Sep 2010).  The graph below shows additional information.

CASH FLOW IS KING!!

THERE’S NEVER BEEN A BETTER TIME TO BUY REAL ESTATE!!! INTEREST
RATES ARE AT RECORD LOWS, THERE IS PLENTY OF INVENTORY, PRICES ARE LOW, MANY SELLERS ARE WILLING TO BARGAIN!!  THE LOW PRICES AND RENTAL RATES HAVE RESULTED IN AN ENVIRONMENT WHERE CERTAIN INVESTMENT PROPERTIES ARE CASH FLOWING AGAIN!

–Let’s go over a scenario:  It is certainly reasonable to assume an investor will be able to purchase a rental townhome for $90,000 (or less!!!) that brings in $825 per month rental income.  Let’s assume that an investor is able to get a loan where the total monthly payment, including taxes and insurance is $585.  (Reasonable Assumptions:  $72,000 loan amount–20% downpayment, 4.875% 30 year fixed interest rate, $1,700 in annual property taxes due).  In this scenario, the investor could see an income of $240 per month!  He/she could use the $240 per month to pay down the principal faster or to save up for maintenance repairs/upgrades to the property.

–It gets even better!  Most of the expenses the investor incurs may be tax deductible (taxes, insurance, mortgage interest, utilities, repairs, mileage to and from the property, depreciation, etc…)

–Also,the investor is likely gaining equity as he/she pays makes the mortgage
payment…..using the TENANTS money!!  Or equity can be gained as the home appreciates.

–As always, please check with your accountant/lawyer for professional advice

–The chart below illustrates the long term success of real estate as an investment.

We recently attended the Leading Real Estate Companies of the World regional conference in Atlanta, GA.  Business Consultant and Speaker, Mike Staver gave a powerful presentation regarding how to stay positive when times are tough.  Here are
four simple steps we can take each day:

1)  Gratitude:  Think of 5 things you are thankful each morning (life, faith, family,
country, city, successes, home, pets, life’s comforts, etc….)

2)  Abundance:  Think of the things you have an abundance of (love, family, friends,
food, clothing, shelter, knowledge, experience, etc…)

3)  STOP watching/listening to the news and STOP reading the paper!  We are constantly
bombarded with negative news.  The vast majority of the stories are useless because they rarely cover the topics in depth, they rarely cover varying perspectives, and they rarely focus on solutions.

4)  FOCUS ON THE THINGS YOU CAN CONTROL!!  For example:
While we cannot control the economy, the housing market, our home’s
appreciation/depreciation, our investment returns, the media, the weather, etc….we
can certainly control the amount of time and effort we put into our work and we
can certainly control our attitudes and the way we treat others!  The simple truth is that our chances for success and happiness dramatically increase when we work hard and have a positive attitude.

THERE’S NEVER BEEN A BETTER TIME TO BUY!!! RATES ARE AT RECORD LOWS, HOUSING AFFORDABILITY IS AT ITS HIGHEST LEVEL IN YEARS, THERE IS PLENTY OF INVENTORY, PRICES ARE LOW AND MANY SELLERS ARE WILLING TO BARGAIN!!!

Here are some reasons to BUY rather than rent:

–It may actually be CHEAPER to BUY than to rent. We recently ran a cost analysis for a $90,000 home in Tallahassee. Assumptions:  FHA loan, 30 year fixed rate of 3.75%, $406.24 per month for principal and interest, $66.66 per month for property taxes, $62.50 per month for homeowners insurance, and $82.53 per month for mortgage insurance. The total monthly payment for the home turned out to be about $618.  The rents in this particular neighborhood are around $825 per month.  A person who chooses to buy a home here instead of renting could realize a savings of $207 per month!!!  Or they could possibly buy a larger, nicer home with the same $825 per month payment that is currently charged for rent!!

–There may be even MORE savings involved. Many buyers would be able to take advantage of the mortgage interest deduction each year. The mortgage insurance paid may also be tax deductible! Furthermore, the new homeowner may be eligible for the rebates/credits available for those who desire to upgrade to more energy efficient appliances.

–ADDITIONALLY, Over time, the buyer may build up equity. A portion of the mortgage payment goes toward paying down the “principle” each month. This does not happen when one pays rent. Rent is basically money down the drain. Furthermore, the new owner could build up equity if the home appreciates over the years. Equity is certainly a way to create long term wealth.

–Budgeting Stability: In this case, the $618 monthly payment STAYS THE SAME for 30 years (or less if it is paid off earlier)!!! In the case of renting, there’s a good chance the rent will go up each time the rental agreement comes up for renewal. This could really add up over the years!

–Freedom: When you own the home, it’s yours! This means you can decorate, paint, improve, landscape, etc….the way you want it done (make sure you comply with the neighborhood covenants and restrictions)

–Safety and Security: An important reason families buy homes is because they want a good place to raise children and provide them with a good education. They also want a place where they can feel safe and secure and where they can build long term friendships and relationships with their fellow neighbors

–For more in depth “buy vs rent” calculations, see: _

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

–How do fellow Americans feel about homewonership? See below:

Existing-home sales increased in August, even with ongoing tight credit and appraisal problems, along with regional disruptions created by Hurricane Irene, according to the NATIONAL ASSOCIATION OF REALTORS®.  Monthly gains were seen in all regions.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.

Lawrence Yun, NAR chief economist, said there are some positive market fundamentals. “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” he said. “Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation.”

Investors accounted for 22 percent of purchase activity in August, up from 18 percent in July and 21 percent in August 2010. First-time buyers purchased 32 percent of homes in August, unchanged from July; they were 31 percent in August 2010.

All-cash sales accounted for 29 percent of transactions in August, unchanged
from July; they were 28 percent in August 2010; investors account for the bulk
of cash purchases.

“We had some disruptions from Hurricane Irene in the closing weekend of August, when many sales normally are finalized, along the Eastern seaboard and in New England,” Yun said. “As a result, the Northeast saw the smallest sales gain in August, and some general impact is expected in September with widespread flooding from Tropical Storm Lee. Aberrations in housing data are possible over the next couple months as markets recover from disrupted closings and storm damage.”

Yun said an extremely important issue currently is the renewal and availability of the National Flood Insurance Program, scheduled to expire at the end of this month. “About one out of 10 homes in this country need flood insurance to get a mortgage, and we would see significant negative market impacts without it,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.27 percent in August, down from 4.55 percent in July; the rate was 4.43 percent in August 2010. Last week, Freddie Mac reported the 30-year fixed rate fell to a record low 4.09 percent.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the market is remarkably affordable for people with secure jobs, good credit and long-term plans. “All year, the relationship between home prices, mortgage interest rates and family income has been hovering at historic highs, meaning the best housing affordability conditions in a generation,” he said.

“The biggest factors keeping home sales from a healthy recovery are mortgages being denied to creditworthy buyers, and appraised valuations below the negotiated price. Buyers may be able to find more favorable credit terms with community and small regional banks, and Realtors® can often give buyers advice to help them overcome some of the financing obstacles,” Phipps said.

Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price – were reported by 18 percent of NAR members in August, up from 16 percent July and 9 percent in August 2010.

The national median existing-home price for all housing types was $168,300 in August, which is 5.1 percent below August 2010.  Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 31 percent of sales in August, compared with 29 percent in July and 34 percent in August 2010.

Total housing inventory at the end of August fell 3.0 percent to 3.58 million existing homes available for sale, which represents an  8.5-month supply at the current sales pace, down from a 9.5-month supply in July.

Single-family home sales rose 8.5 percent to a seasonally adjusted annual rate of 4.47 million in August from 4.12 million in July, and are 20.2 percent above the 3.72 million pace in August 2010.

The median existing single-family home price was $168,400 in August, which is 5.4 percent below a year ago.

Existing condominium and co-op sales increased 1.8 percent a seasonally adjusted annual rate of 560,000 in August from 550,000 in July, and are 8.3 percent higher than the 517,000-unit level one year ago. The median existing condo price was $167,500 in August, down 3.3 percent from August 2010.

Regionally, existing-home sales in the Northeast increased 2.7 percent to an annual pace of 770,000 in August and are 10.0 percent above a year ago. The median price in the Northeast was $244,100, which is 5.1 percent below August 2010.
Existing-home sales in the Midwest rose 3.8 percent in August to a level of 1.09 million and are 26.7 percent above August 2010. The median price in the Midwest was $141,700, down 3.5 percent from a year ago.
In the South, existing-home sales increased 5.4 percent to an annual pace of 1.94 million in August and are 16.9 percent higher than a year ago. The median price in the South was $151,000, which is 0.8 percent below August 2010.
Existing-home sales in the West jumped 18.3 percent to an annual pace of 1.23 million in August and are 20.6 percent higher than August 2010. The median price in the West was $189,400, down 13.0 percent from a year ago.
Reprinted from REALTOR®Magazine September 2011 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2011. All rights reserved.

It’s almost here!  This weekend’s game between 5^th ranked FSU and number 1 ranked OU  has been built up to be one of the most important games in college football this year!

The hype was intensified when ESPN announced it was going to telecast its
weekly “College Game Day” show here in Tallahassee.  The game is set for 8 pm on Saturday.  Here are some suggestions to keep the fans busy prior to kickoff.

–Friday Night:  Go to the Seminole Block Party
and “Downtown Getdown” on Adams St and Kleman Plaza
from 5 to 10 pm.  This party will be huge
and includes special live entertainment from Corey Smith and Tyler Reeves.

–Saturday Morning:   Go to FSU’s Langford Green for the live ESPN Game Day telecasting that begins at 9 am.  Lots open at 7 am.

–Saturday Morning to Game Time:  Go to Doak Campbell Stadium and TAILGATE!!!  There will be lots going on besides the ESPN Game Day telecast.  Closer to game time, the area around the “Unconquered Statue” always has lots of food, music, and fun activities.  You can also shop right there at the stadium for all your FSU fan items.

–Don’t want to head to Doak Campbell Stadium that early?  There’s nothing like pre-game beer and oysters.  Barnacle Bill’s and Calico Jacks (CJ’s) are two great place to work into your college game day schedule.

–For more information about things to do in Tallahassee this game day weekend, see:

http://fallfrenzy.visittallahassee.com/

RATES REMAIN AT RECORD LOWS!!  NOW IS THE TIME TO BUY!!
http://realtormag.realtor.org/daily-news/2011/09/02/mortgage-rates-hover-around-record-lows

FALL FIXES FOR YOUR HOME!

http://realtytimes.com/rtpages/20110907_fixes.htm

SHORT SELLING MAY BE A GOOD OPTION

There’s encouraging news for the homeowners who need to get out from under a mortgage they can no longer afford.  More banks are agreeing to “short sales” instead of going through the foreclosure  process.  This provides the homeowner a way out and it helps the bank avoid the costly foreclosure process.  Short sale closings are up 19%.  As a general rule of thumb, they sell at a 21% discount when compared to a normal “arms length”sale.   National stats show that foreclosures sell at a 40% discount.