Real Estate in Northeast Florida and Around the World

This year Thanksgiving marked a new milestone in my life-being a grandparent.  As I sat at my dinner table with my family all around, I remembered a time that seemed like yesterday, before my own children were at my dinner table, when I was one of many grandchildren at my grandparents' dinner table enjoying the bounty.  How quickly the time has passed and the table expanded from 2 place settings, to 3, then 4, then 5 and more.  This year we had 8 around the table, with my granddaughter enjoying the taste of her gramma's mashed potatoes.

The weekend has passed quickly, but the memories will remain as though it happened yesterday.  I am thankful for my family, for the friends that I have been blessed with for one or many seasons and for the God that continues to bless me every second of every day.

The Northeast Florida Association of REALTORS® report recently released reflecting September data continues to show encouraging, yet slow, improvement in the housing market.  Closed sales increased .09% over the same period last year, the median (or middle, not average) sales price decreased only 4.6% from the same time last year - compared to a 5.6% decrease posted this past July.  The inventory level change continues to be most reflective of a housing market trying to recover.  The inventory has dropped 32.4% in Northeast Florida from this same time last year - and the months' supply of inventory is down to 7.7 months.  Remembering that a 6 month supply is considered to be a "normal" supply, we are seeing the levels decrease ever so slightly every month now.  Even in July, we saw the supply at 8.2%, so month over month, this trend is continuing.

Distressed sales are also showing signs of reducing.  Still, 46.7% of the sales that closed in September were distressed sales.  However, the number of lender-mediated sales decreased 14.2% from the same time last year, and this is encouraging. 

You can see more details on your neighborhood of interest in the report published by NEFAR, which I have made available through my website at this link:

http://www.missihowell.com/NEFLMktData

The last 3 weeks have been an amazing journey for me.  Because there are so many people from Germany that are investing in second home and rental property in the U.S. right now, I planned a business development trip more than a year ago, to find new connections and begin relationships with Immobilienmaklers - real estate agents - in Germany. 

Each of my contacts from around Germany were very interested in how we do the business of real estate in the USA.  There are many misunderstandings and miscommunications that I was able to clarify, from explaining the customs of who pays what in the U.S. (which is very different than who pays what in Germany), to explaining our multiple listing service.  The MLS is something that most Americans and real estate agents take for granted, as this is not the custom in pretty much the rest of the world.  I have to say that I was taken aback by the pleasure they seemed to have in having a personal contact in Florida and in the United States.

I also had the opportunity to meet with the Communication Director for the Immobilienverband Deutschland (IVD), which is somewhat the equivalent of our National Association of Realtors.  Their association is relatively new, only 7 years old.  Just as the National Association of Realtors has had challenges in its past in soliciting members and helping members to understand the benefits, the NAR has had over 100 years in establishment to create a professional organization with over 1,000,000 members.  The IVD has 6,000 members currently, with over 12,000 firms (not agents) located throughout Germany.  Germany has no official real estate licensing requirements, nor certification process.  Members of the IVD agree to participate in continuing education each year, and also to abide by a code of ethics similar to those created by the National Association of Realtors.

So, I come back from Germany delighted to have met all of my new friends, honored to have such professional people included in my network, and feeling blessed for the opportunity to have made this journey.

Now.....if I can only find a bakery back in Jacksonville that makes this wonderful bread I have grown accustomed to having every morning..... 

I must apologize to regular readers for my lack of blog postings in the last month.  My business has been blossoming.  When I began this business 4 years ago, I said it was like my garden.  Everyday I tend to it, and have to put in much labor before there is any harvest.  When there is a drought, you have to work especially hard each day.  This is what I have been doing and sure enough, harvest time is here.

This past week I flew to Germany to begin face to face business development here.  I have been planning this business trip since last fall, making contacts and determining what is needed, where I need to go, etc.  I speak a little German, but know that I need to improve this skill a little to help German customers that do not speak much English.  As a Certified International Property Specialist, we learn that "with no relationship, there is no business".  This is so true when dealing with cultures outside of the United States (and it is also true in the United States, but many people do not follow this rule).  The best way for me to improve on the German language skills that I have, is to immerse myself in it.

My heritage is German, Irish, Scottish, English and American (Iriquios) Indian.  The only roots that I have been able to trace fully are my German roots.  This search was about 12 years ago, and it not only gave me wonderful information about my heritage, it also brought distant "cousins" to me that are now considered very close family to me.  With this comes the opportunity to learn more about his culture from an up-close and personal stand.

So in the next few days and weeks I will provide updates as to my journey, what I am learning, the people I am meeting, and hopefully the opportunity to make this world a little smaller for all of us.

This week has brought about a wild and crazy ride in the financial world.  Volatile for sure, the instability of the markets has left many feeling a little queazy.

One of the bright spots is on the home financing rates.  The rate for a 15 year conventional fixed rate is below 4% as of yesterday afternoon with no discount points.  The 30 year fixed rate for a home loan was just a little above 4%.  This is incredible. 

If you have not purchased a home yet, you best get cracking.  Inventories are shrinking - despite what you are hearing on the news.  Remember, real estate is local, not national, and the national media doesn't have a clue what is happening in Northeast Florida.  To be able to buy in this interest rate environment, when prices are at their lowest - well, it is hard to say that times will get much better for doing this.

If you currently have a home loan, you may want to call a lender and inquire to refinance - you might save a few pennies in doing so.  You will want to compare the costs of refinancing against your savings.  Here's a quick tip - determine what the costs to refinance will be, and divide the monthly savings into the closing costs.  This is the number of months it will take you to recoup your refinance costs.  If you don't think you will keep the home beyond those number of months, then you are better off not to refinance.  For example, if your closing costs to refinance will be $4,000, and the different in your old principal and interest payment compared to your new payment is $150 per month, $4,000 ÷ $150 = 26.67.  It will take over 2 years to recoup that $4,000.  But if you intend to keep your property for longer than 27 months, the $150 a month becomes true cash savings after that.

Be sure to compare lender's rates and terms, and compare the same product (do not compare an adjustable rate mortgage to a fixed rate mortgage). 

Whether you are buying a home or refinancing, to ignore these historically low mortgage rates and purchase prices would be a shame. 

Boy is it hot out there!  We have been having some close to record-setting heat this year in Northeast Florida, and showing property means being prepared to deal with the heat.

One of the things that I have noticed this year, is the number of properties that I enter that has power and air-conditioning.  I know this seems like a strange realization, but you see last summer was the summer of a huge inventory of distressed properties for sale.  Almost every property I showed last year had no power and thus, had no air conditioning.  This year it is a welcomed change.  Almost every house I show has power and air conditioning, and boy are my customers glad for it too.

Another sign that the inventories are trying to return to normal.....a strange sign, but a sign for sure.

One common question that many people have when purchasing a home relates to whether the house is located in a flood zone.  Guess what?  Technically almost every property is located in a flood zone.  But not every property is located in a "Special Flood Hazard Area".  This is the phrase that should most interest home buyers.

FEMA describes a Special Flood Hazard Area as follows: 

The land area covered by the floodwaters of the base flood is the Special Flood Hazard Area (SFHA) on NFIP maps. The SFHA is the area where the NFIP's floodplain management regulations must be enforced and the area where the mandatory purchase of flood insurance applies. The SFHA includes Zones A, AO, AH, A1-30, AE, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, VO, V1-30, VE, and V.

Wow, did that leave you scratching your head too?  So, what this basically means is that if the property is located in one of the zone categories above (A-V), then you must purchase flood insurance IF, you are financing the property with a lender that is insured by any of the governmental corporations (i.e. FDIC), and/or to provide eligibility to participate in any federally approved disaster funds that may become available for distribution if a flood were to occur.  These of course are general statements, and you should always check with your property insurer to obtain their advise on whether you should purchase or may be required to purchase flood insurance.  Flood zones change, and as such, so do the maps.

If you are unsure whether any of the improvements to your land is located in a Special Flood Hazard area, you can check the flood zone maps at FEMA.  You will find additional information about FEMA and other national emergency situational resources throughout the FEMA website, so take a few minutes and look around. 

The Northeast Florida Association of Realtors has released the latest market data for our housing market showing activity through June 30, 2011.  The trend appears to be generally positive, although you have to look a little closer to the information to find all of the bright spots.  If you look at the monthly data only, it seems as though there is no improvement.  However, when you compare this year to the same time last year, you can see that we really have improved in most critical areas.

A few data points that I believe warrant attention are:

• Average Closed Sales price overall increased by 7% from $169,750 to $181,000, from June 2010 to June 2011
• The Housing Affordability Index is 208, meaning that the median household income is 208% of what is necessary to quality for a median priced home in the area
• Inventories decreased 28.8% from an 11.8 month supply of homes available to 8.4% months supply (a normal market is considered to be a 6 month supply)
• Pending sales increased 34% from last year.  In addition, pending sales have reflected an increase in 8 of the previous 13 months
• The prices of homes that showed the strongest increase in activity is in the price range of $500,000 - $999,999, a sign that the "move up" buyers are finally getting off the fence.

These are all good signs of a steadily improving market, not of a flash in the pan recovery. 

For more information further details about the Northeast Florida Housing Market and the June 2011 data, click on the "Market Data" tab to the left.