Palm Beach Real Estate and Loans

While my readers know that I typically focus on Palm Beach Gardens real estate and home loans, this morning its time to take a look at things on a national scale.  

This morning I recieved an email from Chris Griffith with a link to an article that had just come out in the Wall Street Journal.

Theres nothing like starting the day off with great news-

˜The Housing Crisis is Over by Cyril Moulle-Berteaux was a well thought-out piece that explains in great detail why the worst may be behind us.

It starts with:

˜The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market.’

While ˜bottom may sound ominous - dont forget that the decline has to stop before the recovery can begin, so the bottom is exactly what weve been looking for.

The ˜Boom that we experienced a few years ago was fantastic for those people who were skilled (or lucky) enough to buy low and quickly sell high.  But it also had the negative effect of making a home purchase way too expensive for many people.”

It was inevitable - the Boom went Bust.

˜Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s.

When you combine the fact that homes are becoming more affordable with the declining inventory of available properties, you see that the price declines are likely to turn around in the next few months.

‘In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.’

These improvements dont just mean an improvement in the real estate situation -

‘This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.’

I suggest reading all of Mr. Moulle-Berteauxs article here.

It is very rare to read good news these days about the real estate industry.  The majority of the media seems to delight in doing their best to report - or construct - information that does nothing but help to spread the negativity.  Why? Because negativity sells - newspapers that is, not real estate.

I feel like this WSJ article will go a long way toward convincing people that things are - or are about to - improve.

Real estate is cyclic - but when things are bad it’s sometimes hard to remember that.  We cant fix what already happened, but the future is looking pretty bright.

This is one of those things that sounds like a bad joke - until you realize that the person that you’re talking to ISN’T kidding!

Client: “I think I’ll take my home off the market for a little while.”

Me: “Why is that? Have you changed your mind about selling it?”

Client: “Oh no, not at all - I just think that taking it off the market will ________________________________ (fill in the blank with flawed logic).”

Makes absolutely no sense.  There is still quite a bit of Palm Beach Gardens real estate for sale so the only thing this temporary change does is remove ANY chance you have of getting an offer!

Some Sellers think that this is sort of a tease - as if the people that have been tracking their ‘one-in-a-million home’ will feel like they lost out and they need to spring to action!  Not at all.

If the inventory levels were low, this might not be so laughable.  But if your home falls off the list, any potential Buyer will just move on to the next AVAILABLE one.

Remember this - we are still in a Buyers Market and misguided Seller ‘tricks’ like this (and the equally poor ‘Price Increase’) only hurt your chances of selling your home.

What are the 3 most important things to consider when getting ready to sell your Palm Beach real estate?

Pricing,

Pricing

and, as you might guess-

PRICING.

It is true that location, condition, etc. all count - but if your real estate is over-priced you will be waiting a very long time for a closing - and that will most likely only be after several price reductions.

Any of you that follow my posts will realize that Ive said this many times already - but people continue to shoot for the stars only to be very disappointed!  If you start with a realistic price you will already be one-up on your competition.

The pricing problems are not just with Palm Beach real estate - its unfortunate but MANY areas are facing this same problem.

Take Bonita Springs for instance.

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Recently a friend and associate of mine - Chris Griffith - wrote an article in her local newspaper and on her blog that went over the effects of over-pricing property.

Was she right? Absolutely. 

Was she given an absolute TON of grief (I’m being polite) for publishing her views?  Absolutely.

If you disagree with someone, that’s fine - but some of the dissenting comments she received were beyond asinine.  Someone even took out a full-page ad to personally bash her & her opinions, I think that comes under the heading of ˜PATHETIC”.

I urge you to check her article and let me know what you think-

It comes down to a very simple point: If something is over-priced, it won’t sell.

It does not require a PhD to realize that!

At the beginning of last month I went over the basic information regarding Short Sales and (hopefully not) Foreclosures on Palm Beach real estate (see Part I and Part II).

If you have started to get behind on your mortgage and there just does not seem to be any way of bringing it current and keeping it that way you need to sell it before the bank takes it from you.

You need to price it so that it sells quickly - BUT if the mortgage balance is too high, you're going to have to try for a short sale.

Do not wait for the last minute!  The bank just might forgive what you owe to them IF a high enough offer comes in - however you have to prove to them that there is a REAL financial problem.

Get the following together immediately:

• Mortgage statements for every current loan on the property
• Copies of the your latest income taxes
• Copies of the last 3 months bank statements for every account that you have
• Copies of your last 2 months paystubs
• A list of all of your credit cards, how much you owe and the minimum monthly payments
• A list of your monthly housing expenses- all utilities, phone, cell phone, cable, food, entertainment
• Details on other debt - student loans, car loans
• The reasons for the current situation so that a Hardship Letter can be prepared and sent to the lender(s)
• In addition, the lawyer involved will have papers such as a Release & Authorization for you to sign.

Having the above items ready is extremely important if you want the process to be as smooth as possible.

Someone told me that they thought some of the items were 'intrusive' and none of the banks business.

Completely wrong!  Remember - you are asking the lender to forgive you for a debt that you voluntarily accepted.  They might, but you have to prove that there is a REAL reason.

Short sales are not easy, nor are they fast - but if your only option is forclosure they are a much better choice.

Call or email me if you have any questions.

It's great to report that activity is really starting to pick up for Palm Beach real estate.

The best part is that I'm actually experiencing it.

Between the 'overly positive' reports from within the industry and the hyper-negativity from the press there is an area where the common person is able to figure out things for themselves.

When those people start to call me from different areas of the country - all with basically the same thought - that they've been following the real estate market for a while and they think that NOW is finally the right time to buy real estate in Palm Beach...... Well, that's good news.

Just this week I've dealt with people from New Jersey, Connecticut, California and Canada.  They all had the same feeling, while last season was still a bit too pricey, they feel that the current prices are in line and if they want a good value, the time is now.

While I'm certainly not psychic (I still haven't hit the lottery..) I think that the great Florida price decline has ended.  I deal mainly with luxury property and while the owners have been amenable to price adjustments through the year, most people that I know have no intention of going any further.

It's the classic Have to vs. Want to Sell that I keep bringing up.  So many Sellers would certainly LIKE to sell - for a fair price.  They aren't desperate and they won't jump at just any offer.  They have no intention of dropping their prices any lower.

So as the general outlook continues to improve, more and more real estate transactions will close.  The number of homes available will drop and the word will get out that if you haven't bought yet, you're running out of time. Perceived value will increase and prices will start to go back up.

Business 101 - it can't get much simpler.