Moody's Economy.com, an economic consulting firm, predicts strong job growth for the state of Florida during 2011. Moody's predicts Florida will experience the strongest increase in jobs during 2011 when compared with all the states in the US.
The company predicts a 3% increase in jobs in 2011 over 2010. The construction industry is expected to account for the largest part of the increase in jobs; the estimate is for a 27% increase in positions in the field. Others areas of growth for Florida jobs is predicted to be in the following industries: mining, leisure and hospitality, education and health services; ranging in growth levels of 5% to 3%.
The large percentage of unemployed workers and the continued loss of jobs in the state is among the biggest reasons for the large amount of distressed properties in the state of Florida, in our view. Should more jobs be created in the state, we think this would atleast help provide a floor for housing prices. The reason is simple, less distressed properties on the market for sale and more money available to purchase homes.
However, given the current state of the economy, it is still not clear that jobs will rebound as robustly as Moody's predicts. However, it is a good sign for our prediction of a housing bottom during the next 12-to-18 months.
Markets tend to run in advance of actual results. The housing market should be no different. So, if Moody's is indeed correct in their assessment of job growth in the state of Florida, those buyers "on the fence" should start to act now.
If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Showing posts with label Income. Show all posts
Showing posts with label Income. Show all posts
Friday, November 12, 2010
Saturday, November 6, 2010
Real Estate Appraisals: What Sellers and Buyers Should Know
What some sellers and buyers do not understand is that a home appraisal can kill some deals.
Sellers must realize the home should be priced within a reasonable range of the appraised value. The reason is that a buyer may want to purchase the home at a higher price; however, the mortgage company may deny the loan based on the appraised value of the subject property.
Three common issues to be aware of as it relates to home valuation/appraisals:
1) In areas with many foreclosures and short sales, appraisers are sometimes left with little choice but to include them in the comparable analysis. This tends to reduce the appraised value of the subject property. Certain states that have a large number of distressed property sales, such as Florida, should be mindful of this.
2) Lower the credit score and/or the higher debt-to-income level, the greater the scrutiny of the colleral's value (i.e., home valuation). If there is some uncertainty, the extra focus on value could impact whether or not the lender approves the loan at the appraised value.
3) The fluctuations of the market can make some sellers apprehensive about selling at market value as they may start to believe the value will appreciate.
Sometimes sellers tend to want to get as much for the home as they can. And this is reasonable; however, it may wind up killing a deal when a lender is involved. On the other hand, some buyers fall in love with a home and are willing to pay more than fair value. If the buyers have "iffy" credit history or "just enough" to meet the loan-to-value requirements for a loan, they may be denied by their lender.
Please see some of our previous pieces on home and market valuations.
If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Sellers must realize the home should be priced within a reasonable range of the appraised value. The reason is that a buyer may want to purchase the home at a higher price; however, the mortgage company may deny the loan based on the appraised value of the subject property.
Three common issues to be aware of as it relates to home valuation/appraisals:
1) In areas with many foreclosures and short sales, appraisers are sometimes left with little choice but to include them in the comparable analysis. This tends to reduce the appraised value of the subject property. Certain states that have a large number of distressed property sales, such as Florida, should be mindful of this.
2) Lower the credit score and/or the higher debt-to-income level, the greater the scrutiny of the colleral's value (i.e., home valuation). If there is some uncertainty, the extra focus on value could impact whether or not the lender approves the loan at the appraised value.
3) The fluctuations of the market can make some sellers apprehensive about selling at market value as they may start to believe the value will appreciate.
Sometimes sellers tend to want to get as much for the home as they can. And this is reasonable; however, it may wind up killing a deal when a lender is involved. On the other hand, some buyers fall in love with a home and are willing to pay more than fair value. If the buyers have "iffy" credit history or "just enough" to meet the loan-to-value requirements for a loan, they may be denied by their lender.
Please see some of our previous pieces on home and market valuations.
If you are looking to buy, sell, rent or invest in the South Florida real estate market, please feel free to contact me.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
http://michaelfriedman.rmlsfl.mlxchange.com/?Page=7395217 <--property search link to cut and paste into your Web browser
Boca Raton FL real estate for sale and surrounding areas including real estate properties for sale in: Belle Glade, Boca Raton, Boynton Beach, Bryant, Canal Point, Dania, Deerfield Beach, Delray Beach, Fort Lauderdale, Hallandale, Hialeah, Hobe Sound, Hollywood, Indiantown, Jupiter, Key Biscayne, Lake Harbor, Lake Worth, Loxahatchee, Miami, Miami Beach, North Miami Beach, North Palm Beach, Opa Locka, Pahokee, Palm Beach, Palm Beach Gardens, Pembroke Pines, Pompano Beach, South Bay, West Palm Beach, Lang Realty
Sunday, September 19, 2010
Housing Market- A Look At Income And Valuations
There has been so much written and talked about concerning when the housing market will reach the bottom. One way of valuing real estate is to compare it with income.
Ned Davis research and CNBC published a chart recently that looked at valuation ratios of home prices to median income from 11/30/1976 to 3/31/2010. The chart showed a high of about 5.2 times in 2005 and a low of about 3.5 times on during the 1983 recession.
The mean valuation multiple was 4.1 times during the period described above. As of March 2010, the ratio stood at 4.3 times. The recent stabilization can be attributed to the recent federal government intervention.
Does this mean we are near the bottom as we approach the mean valuation multiple?
Well, a few factors should be discussed. One is the federal government has let some of its incentive programs expire, such as the first time homebuyer credit.
Another factor is psychology of the consumer. With unemployement holding steady in the mid-9% range and continued increases in distressed properties could damage consumer sentiment. The most recent US Consumer Sentiment Index hit 66.6 in September from 68.9 in August; this was the lowest level in a year.
With the housing bubble continuing to deflate, unemployment being at sustained high historic levels and tougher lending requirements, it's not unlikely that we will see the valuation multiple dip below the average in the near-term.
Nonetheless, if you are a first time homebuyer and plan to live in the home for a sustained period of time, now might be a good time to purchase a home. If interested, please see our post on the advantages of homeownership versus renting. Mortgage rates are near historical lows and it is still a buyer's market.
Please feel free to contact me about South Florida real estate. I represent buyers, sellers, renters and landlords. I also work with distressed homeowners and investors.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
Ned Davis research and CNBC published a chart recently that looked at valuation ratios of home prices to median income from 11/30/1976 to 3/31/2010. The chart showed a high of about 5.2 times in 2005 and a low of about 3.5 times on during the 1983 recession.
The mean valuation multiple was 4.1 times during the period described above. As of March 2010, the ratio stood at 4.3 times. The recent stabilization can be attributed to the recent federal government intervention.
Does this mean we are near the bottom as we approach the mean valuation multiple?
Well, a few factors should be discussed. One is the federal government has let some of its incentive programs expire, such as the first time homebuyer credit.
Another factor is psychology of the consumer. With unemployement holding steady in the mid-9% range and continued increases in distressed properties could damage consumer sentiment. The most recent US Consumer Sentiment Index hit 66.6 in September from 68.9 in August; this was the lowest level in a year.
With the housing bubble continuing to deflate, unemployment being at sustained high historic levels and tougher lending requirements, it's not unlikely that we will see the valuation multiple dip below the average in the near-term.
Nonetheless, if you are a first time homebuyer and plan to live in the home for a sustained period of time, now might be a good time to purchase a home. If interested, please see our post on the advantages of homeownership versus renting. Mortgage rates are near historical lows and it is still a buyer's market.
Please feel free to contact me about South Florida real estate. I represent buyers, sellers, renters and landlords. I also work with distressed homeowners and investors.
Michael Friedman
Realtor, Certified Distressed Property Expert (CDPE)
Lang Realty
561-989-2100
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