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Real Estate News

Number of Homes Seriously Underwater at Two-Year Low

April 17, 2014

Florida Realtors

Number of homes seriously underwater at two-year low

IRVINE, Calif. – April 17, 2014 – RealtyTrac released its U.S. Home Equity & Underwater Report for the first quarter of 2014, and it finds that 9.1 million U.S. residential properties were "seriously underwater," where the combined loan amount secured by the property is at least 25 percent higher than the property's estimated market value.

The number represents 17 percent of all properties with a mortgage in the first quarter.

However, the number of underwater homeowners is at its lowest level since RealtyTrac began reporting negative equity in the first quarter of 2012. In the previous quarter, 9.3 million residential properties (19 percent of those with a mortgage) were seriously underwater. One year earlier, 10.9 million residential properties (26 percent) were seriously underwater.

The universe of equity-rich properties – those with at least 50 percent equity – grew to 9.9 million (19 percent of all properties with a mortgage) in the first quarter, up from 9.1 million (18 percent) in fourth quarter 2013.

Another 8.5 million properties (16 percent of all properties with a mortgage) were on the verge of resurfacing in the first quarter, with between 10 percent negative equity and 10 percent positive equity. It was 17 percent one quarter earlier.

Fewer properties in the foreclosure process also had negative equity. Nationwide, 45 percent were seriously underwater, down from 48 percent quarter-to-quarter and 58 percent year-to-year. Conversely, the share of foreclosures with positive equity increased to 35 percent in the first quarter, up from 31 percent in the fourth quarter and up from 24 percent in the third quarter of 2013.

"The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home," says Daren Blomquist, vice president at RealtyTrac. "But many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable."


Florida continues to rank high in the percentage of seriously underwater homeowners with a mortgage – 31 percent. It ranks second nationwide to first-place Nevada (34 percent), and it's followed by Illinois (30 percent), Michigan (29 percent) and Ohio (27 percent).

Two Florida cities also make the top-six list for underwater homeowners with a mortgage. Las Vegas tops the list (37 percent) followed by Lakeland, Fla., (36 percent), Palm Bay-Melbourne-Titusville, Fla., (35 percent), Cleveland (35 percent), Akron, Ohio (34 percent), and Detroit (33 percent).

Of Florida homeowners in the foreclosure process, 26 percent have equity, while 59 percent are seriously underwater. The remaining 15 percent are close to the break-even point.

© 2014 Florida Realtors®

Builders Continue to See Market Improvements

April 16, 2014


Builder Sentiment Steady

The March NAHB/Wells Fargo Housing Market Index rose one point from a one-point downwardly revised February to 47. This is the third consecutive month with the index below 50, the point where more builders see the market improving rather than getting poorer. Two of the three components of the index remained unchanged; the current sales index was at 51, the same as the one-point downwardly revised February index and the traffic index was 32, which is the same as the one-point downwardly revised February component. The heaviest weighted sub-index is the expectations for the next six months, which was up four points to 57.

The essentially unchanged index is the result of builders waiting on expected spring demand while holding any further optimism until actual sales occur. Many of the individual comments mentioned stronger traffic or more serious buyers but the interest has yet turned into contract signings. Builders continue to meet some supply constraints as buildable lot supply either is not available or is priced beyond what the builder feels can be recaptured in a sale.

Access to credit continues to be a concern across all parts of the country as builders search for credit to buy land and build homes and consumers apply for mortgages. A recent NAHB survey of builders found some improvement in builders’ access to capital and FDIC quarterly reports finally show some increase in bank holdings of AD&C residential credit. Lot supply will take longer to solve but access to credit is a critical first step. The housing recovery is likely to be hindered by these limitations just as demand begins to resurge.

NAHB expects 1.1 million housing starts in 2014 primarily driven by the pent up demand of existing home owners. The first-time home buyer will return more gradually as mortgage credit standards become more rational and young adults’ incomes stabilize and grow.


Mortgage Applications Increase in Latest MBA Weekly Survey

April 16, 2014

Title: Mortgage Applications Increase in Latest MBA Weekly Survey
Source:   MBA
Date: 4/16/2014

WASHINGTON, D.C. (April 16, 2014) — Mortgage applications increased 4.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 11, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 5 percent compared with the previous week.  The Refinance Index increased 7 percent from the previous week.  The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 16 percent lower than the same week one year ago.

The refinance share of mortgage activity increased to 52 percent of total applications from 51 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 8 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.47 percent from 4.56 percent, with points decreasing to 0.32 from  0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.39 percent from 4.49 percent, with points increasing to 0.18 from 0.14 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.14 percent from 4.19 percent, with points decreasing to 0.06 from 0.16 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.54 percent from 3.62 percent, with points decreasing to 0.24 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.15 percent from 3.26 percent, with points decreasing to 0.41 from 0.50 (including the origination fee) for 80 percent LTV loans.  The effective rate decreased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit, contact or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.


The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:


Top Closing Agent

March 28, 2014

Island Sun

Top Producers for February

John R. Wood Island Real Estate announced its top producers for the month of February. They include top closing agent Phaidra McDermott . . . 

FEMA Outlines Next Steps for Flood Insurance Law

March 27, 2014

FEMA Outlines Next Steps for Flood Insurance Law
WASHINGTON – March 27, 2014 – In testimony before a U.S. House subcommittee, Federal Emergency Management Administration (FEMA) Administrator Craig Fugate talked about the timing of implementation. He suggested that homeowners and buyers be patient – it may take awhile for the law’s mandates to filter down to insurance agents.
President Obama signed the flood insurance law on Friday, but FEMA has up to eight months to develop guidance for insurance companies, according to Lisa Jones, a consultant hired by the National Association of Realtors® (NAR) to navigate the complicated law. And after FEMA solidifies the new rules, insurers have up to six months to retool their software.
Rep. Steven Palazzo, vice chairman of the House Subcommittee on Emergency Preparedness, Response, and Communications, asked Fugate at a hearing yesterday if there was a way to fast-track the process.
According to Fugate, the first step is to explain the grandfathering clause – where a homebuyer pays the same rate as a home seller in areas where FEMA subsidizes some flood insurance rates – to insurance agents in the field because “It’s going to take time to get that out there to every agent and get that into the system.”
Fugate says buyers, at least in the short term, may have to work with both their insurance agent and FEMA to get the correct flood insurance rate. FEMA “may need to handle some of the immediate (flood insurance rate requests) – literally, hand-walk it through the process until the system is fully up and running with the new changes,” he testified.
Fugate pointed to one part of the new law that would take time to calculate: A mandate that no single premium exceed 18 percent, and “we’re looking at the timeframes you gave us to do refunds” for homeowners who already paid a higher flood insurance premium.
Fugate said the new mandatory caps will also impact all calculations for rate increases, and it will take FEMA time to do that, followed by software changes to programs that insurers use to quote rates to homeowners.
Fugate’s testimony is available in an online video.
Higher deductibles
In a flood insurance presentation earlier today, Jones told a group of Realtors that a little-noted provision of the new law could help drive down flood insurance costs over the long term: An option for homeowners to increase their deductible.
The new law allows deductibles as high as $10,000 for residential properties, which could drive the down the overall cost of flood insurance. The law also waives the mandatory purchase of flood insurance for detached structures.
Under the law, insurers must tell homeowners seeking or renewing flood insurance about the higher deductibles, along with the consequences should they choose a higher option. However, that change could also take time before it trickles down to homeowners and buyers.
© 2014 Florida Realtors®

John R. Wood Announces Top Producers in February

March 26, 2014

Island Reporter

Top Closings:  Phaidra McDermott . . . 

BREAKING NEWS - Flood Insurance bill passes US House of Reps

March 5, 2014

Subject: BREAKING NEWS - Flood Insurance bill passes US House of Reps
Reply-To: John Sebree <>

The US House of Representatives has just passed H.R. 3370, “The Homeowner Flood Insurance Affordability Act.”  This bill is expected to go straight to the Senate (versus go to “conference” with the flood bill the US  Senate passed previously).  If it passes the Senate without amendment it will then go to President Obama for his signature.  Attached is NAR’s letter of support and here is a synopsis of what the House bill accomplishes:

·         Reinstates Grandfathering - This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. All post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping – for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy. 

·         Caps Annual Rate Increases at 15% – This bill decreases FEMA’s authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, the class average cap was 10%. Currently (Post Biggert-Waters), the class average cap is 20%. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy (e.g., 1% of $250,000 = $2,500). 

·         Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates 

·         Permanently Removes the Sales Trigger – This bill removes the policy sales trigger, which allows a purchaser to take advantage of a phase in. The new purchaser is treated the same as the current property owner. 

·         Allows for Annual Surcharges - This legislation applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP. 

·         Funds the Affordability Study and Mandates Completion – This legislation funds the affordability study required by Biggert-Waters and mandates its completion in two years. 

·         Includes the Home Improvement Threshold - This bill returns the “substantial improvement threshold” (i.e. renovations and remodeling) to the historic 50% of a structure’s fair market value level. Under Biggert-Waters, premium increases are triggered when the renovation investments meet 30% of the home’s value. 

·         Additional provisions: This legislation includes several other provisions including preserving the basement exception, allowing for payments to be made in monthly installments, and reimbursing policy holders for successful map appeals. 

Stay tuned for word on when the US Senate will take up this bill.
John S

PS – Today was the first day of the 2014 Florida Legislative Session here in Tallahassee.  President Sherri Meadows has been in town since yesterday morning.  Just today she and I were guests of the Governor at his annual “State of the State” address.  In his address he highlighted his desire to see the legislature begin to phase out the sales tax on commercial leases!  Hope to see you all for GARD!


John M. Sebree

Average New Home Size Up 11% Since 2009

March 4, 2014

Average new home size up 11% since 2009

WASHINGTON – March 4, 2014 – Homebuilders continue to build bigger new homes, according to data from the U.S. Census Bureau.

The average size of a new home has risen more than 11 percent from 2,362 square feet in 2009 to 2,679 square feet last year. About 48 percent of new homes in 2013 had at least four bedrooms, up from 34 percent in 2009.

The share of new homes with at least three full bathrooms rose to 35 percent from 23 percent in 2010, and the number with three-plus car garages increased to 22 percent from 16 percent in 2010.

Also, 60 percent of new homes were two-story single-family properties – an increase from 51 percent in 2009. The average sales price for a new home rose to $318,000 last year from $248,000 in 2009.

Source: Mortgage Orb (02/26/14)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688


U.S. home prices rose at solid pace in January

March 4, 2014

U.S. home prices rose at solid pace in January

CoreLogic’s January report

The five states with the highest home price appreciation, excluding distressed sales, were Nevada (+17.2%), California (+16%), Florida (+12.7%), Arizona (+11.5%) and Oregon (+11.4%).

WASHINGTON – March 4, 2014 – U.S. home prices rose in January after three months of declines. A tight supply of homes might have helped boost prices and offset sales slowed by cold weather.

Real estate data provider CoreLogic says prices rose 0.9 percent in January after dipping 0.1 percent in December. Over the past 12 months, home prices have risen 12 percent, the biggest year-over-year gain in more than eight years.

CoreLogic's price figures aren't adjusted for seasonal patterns, such as winter weather, which can depress sales.

Snowstorms and low temperatures contributed to a sharp drop in sales of existing homes in January. The National Association of Realtors said sales plunged to their lowest level in 18 months. Still, the number of homes for sale remained low, a factor that might have helped increase prices.

Home sales and construction have faltered over the winter, partly because the weather has likely discouraged many Americans from house-hunting. The average rate on a 30-year mortgage is also about a percentage point more than it was last spring, which means buying costs are higher.

Most recent housing reports suggest that the market is slowing. Economists think the housing recovery could pick up once the spring buying season begins, though likely at a slower pace than last year.

A measure of signed contracts was unchanged in February. Signed contracts usually lead to a finished sale in one to two months. And builders broke ground on 16 percent fewer homes in January than in December, the government said last month. That was the second straight decline.

Other price gauges are falling. The Standard & Poor's/Case-Shiller 20-city home price index dipped in December, the latest period for which data are available, and its year-over-year gain slowed.

Nationwide, home prices are still 17 percent lower than at the peak of the housing bubble in April 2006, according to CoreLogic. Prices have set highs in three states: Louisiana, Nebraska and Texas. They are within 10 percent of their peaks in 19 additional states.

The five states with the biggest price gains in January, compared with a year earlier, were Nevada, where prices rose 22.2 percent; California, 20.3 percent; Oregon, 14.3 percent; Michigan, 13.7 percent; and Georgia, 13.4 percent. Mississippi was the only state to report a price decline.