Monday, May 29, 2006

Happy Memorial Day from Cocoa Beach

Happy Memorial Day. I have decided to begin posting MLS stats again even though the accuracy is still doubtful. Treat these numbers as a general view of our market and not as exact statistics. Our system is still being manipulated intentionally and accidentally. One other misleading factor in these numbers is the high number of Portside units being closed now as the buildings have finally begun closing after a long delay. Many of these sales were contracted a year ago or more and don't really reflect recent activity. They will continue to close at a more rapid rate in the next few months and will inflate the total of closed listings.


Total condos and townhouses___1047
Total single-family homes______138

Total closed in April_____53
Total closed in March____74
Total closed in February__43
Total closed in January___24

A few outstanding buys from this past week;

6th floor direct ocean, 2/2, 1350 sq.ft. for $299,900 This unit needed work but at this price, was still an incredible deal. It sold immediately.

Brand new, 2/2 upstairs Portside unit with vaulted ceilings $178,000

Brand new, 1/2 upstairs Portside unit with vaulted ceilings $137,000

Those of you hoping to pick up deals in this market can see from these examples that some sellers are starting to capitulate. Call me or email if you want to be on my alert list when these deals show up. Larry 321.917.5786

Cocoa Beach passionfruit bloom

Thursday, May 18, 2006

Capitulation, my brother

Price drops this spring have been dizzying with Portside leading the race down. My most recent sales there have been at prices a third below the peak. While some sellers are still in la-la land, many have now come to terms with the new market. The harsh reality is that prices have retreated pretty much across the board as the herds of last year's buyers have evaporated. Some sellers cannot afford to ride out the downturn and have priced their properties to move. With 909 active condos in our MLS in Cocoa Beach and Cape Canaveral, motivated sellers must be aggressive with their pricing. By the way, of those 909 units, 236 are over $500,000.

I showed 26 different condos under $250,000 this past Sunday. Many were older 2 bedroom units around 1000 sq.ft. from $200K to $245K but smack in the middle of our list was a 1400 sq.ft. 3 bedroom unit with brand new cabinets, flooring, appliances and granite all tastefully done, offered for $250,000. This seller obviously has to sell and has priced accordingly.

Will prices drop further? Maybe. Will there be another unit in this condition in this same complex later? Who knows? If you're planning to buy in our great little town, now might be a good time to start looking. That special location or property that you're looking for may not be offered at exactly the market bottom, so, it might be prudent to be ready to move if your dream deal turns up. Good hunting.

Saturday, May 06, 2006

Mortgage Shenanigans

Do you have a mortgage? Did you get the best deal possible? Ever hear of "yield spread premiums"? According to some sources as many as 85 to 90 percent of all transactions include YSPs. Remarkably, these kickbacks are buried off-column on the HUD settlement statement and are often completely overlooked by the borrower. The short story is that these YSPs are bonuses paid to your mortgage broker by the lender for charging you a higher rate than you qualify for. If you got your mortgage directly from the lender, the YSP doesn't even have to be disclosed on the HUD. Check your HUD around lines 809 to 811 and look for cryptic notes with numbers. Those numbers you find there are probably money you paid your mortgage broker that came unknowingly from your own pocket. In 2002 the average amount per transaction was around $1850.00 and is probably higher now. Here's a good read on yield spread premiums.

This is not the only shenanigan I've witnessed but it seems to be one of the most widespread and least understood. Your good faith estimate will probably not disclose this premium. Tell your broker that you will not accept any YSP on the HUD, UNLESS it is known by you and being used in lieu of other upfront mortgage costs to offset your total closing costs.

Here is the section of the HUD where you will find the hidden gems. Not in the "paid from borrower's funds at settlement" column, but off-column to the left.

801. Loan Origination Fee %
802. Loan Discount %
803. Appraisal Fee to
804. Credit Report to
805. Lender’s Inspection Fee
806. Mortgage Insurance Application Fee to
807. Assumption Fee
808. Mortgage Broker Fee
809. -------------------somewhere
810. ------------------in this area is
811. ------------------where it will appear

Knowledge is power.