Freddie Mac News Archive:� Freddie Mac Grants Three-Month Suspension of Mortgage Payments for Borrowers Affected by Hurricane Katrina.: "Return of Some September Payments to Cash-Strapped Storm Victims Planned
McLean, VA – Freddie Mac (NYSE:FRE) today announced several special policies intended to put emergency funds in the pockets of single-family mortgage borrowers impacted by Hurricane Katrina.
'We are determined to do all that we can to help the victims of this disaster,' said Freddie Mac Chairman and CEO Richard F. Syron. 'Therefore, we are instructing our servicers to suspend mortgage collections for the months of September, October and November in some of the key major disaster areas designated by the Federal Emergency Management Agency. This temporary suspension will apply to every borrower with a Freddie Mac-owned single family mortgage in these FEMA designated zones, regardless of the condition of their home,' Syron said."
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Friday, September 09, 2005
Monday, September 05, 2005
After the Storm
When I wrote the previous post about calm weather ending for Cocoa Beach because of a small tropical storm, I couldn't have known how devastating a storm Katrina was destined to become. We have all been moved by the tragedy of the storm's effects in Louisiana and Mississippi. If you haven't helped out yet, please consider giving money to the American Red Cross or, if possible, volunteer your time to the Volunteers of America or any of the many organizations who are helping. In times like these the pulse of the Cocoa Beach market seems trivial when so many have lost everything.
Wednesday, August 24, 2005
Calm in Cocoa Beach
I shot this view one morning last week looking back at Cocoa Beach from about 8 miles offshore. Conditions have been extremely calm and beautiful on the ocean recently.
The market is still calm, as well. Sellers for the most part don't seem to be responding to the slowed rate of activity and I continue to see very optimistic pricing. We currently have a 90 week supply of over-$500,000 condos in our MLS. That number will grow as current and planned projects add supply. I think the long-term effect will be beneficial for lower-priced properties but I would not want to be holding a pre-construction contract in the high range unless I planned to live in the property. Investors in a few of the luxury buildings have been progressively reducing prices as completion approaches and the reality of having to close becomes imminent. Are the great days of rapid appreciation over? Who knows. I browsed listings in my old home of Destin, Florida and found quite a few listings in oceanfront buildings for over $1000 per square foot. Compared to that market, our $350 to $400 per square foot range appears downright cheap.
Mortgage rates took a breather last week and actually pulled back a bit. According to Freddie Mac, the national average for a 30 year fixed-rate mortgage is 5.8%.
MLS Stats for August 24, 2005
contracts last 14 days
condos over $500,000____ 3
condos under $500,000__ 31
homes over $500,000____ 2
homes under $500,000___ 4
active listings
condos all prices_______451
condos over $500,000__ 137
homes all prices_______ 57
homes over $500,000__ 36
Another interesting statistic is the number of new condos for sale. According to the MLS there are 133 condos built in 2005 currently for sale.
The calm ocean will be changing very shortly as Tropical Storm Katrina approaches. Expect a windy weekend. If you'd like an honest informed agent to help you find property in Cocoa Beach and Cape Canaveral, email me or call me at 321.917.5786.
The market is still calm, as well. Sellers for the most part don't seem to be responding to the slowed rate of activity and I continue to see very optimistic pricing. We currently have a 90 week supply of over-$500,000 condos in our MLS. That number will grow as current and planned projects add supply. I think the long-term effect will be beneficial for lower-priced properties but I would not want to be holding a pre-construction contract in the high range unless I planned to live in the property. Investors in a few of the luxury buildings have been progressively reducing prices as completion approaches and the reality of having to close becomes imminent. Are the great days of rapid appreciation over? Who knows. I browsed listings in my old home of Destin, Florida and found quite a few listings in oceanfront buildings for over $1000 per square foot. Compared to that market, our $350 to $400 per square foot range appears downright cheap.
Mortgage rates took a breather last week and actually pulled back a bit. According to Freddie Mac, the national average for a 30 year fixed-rate mortgage is 5.8%.
MLS Stats for August 24, 2005
contracts last 14 days
condos over $500,000____ 3
condos under $500,000__ 31
homes over $500,000____ 2
homes under $500,000___ 4
active listings
condos all prices_______451
condos over $500,000__ 137
homes all prices_______ 57
homes over $500,000__ 36
Another interesting statistic is the number of new condos for sale. According to the MLS there are 133 condos built in 2005 currently for sale.
The calm ocean will be changing very shortly as Tropical Storm Katrina approaches. Expect a windy weekend. If you'd like an honest informed agent to help you find property in Cocoa Beach and Cape Canaveral, email me or call me at 321.917.5786.
Wednesday, August 10, 2005
Irrational Exuberance
Will this man kill the real estate market?
Alan Greenspan would like to think that he can cool the real estate market with monetary policy and rhetoric. Even with repeated speeches about bubbles and irrational exuberance, the fact remains that long term rates have moved down over the last year as the Fed raised short-term rates. We're starting to see a reversal of that trend as mortgage rates creep upward. This is not a surprise after this long run of historically low rates. Should you be concerned about mortgage rates as a real estate investor? Definitely. If you're still holding on to an adjustable-rate mortgage, it may be time to lock in while long term fixed-rates are still below 6%. The bigger question for many is should I take profits or should I continue to add properties to my portfolio. That is a more difficult question to answer.
There's a change in the air here in Cocoa Beach and Cape Canaveral and it's more than just the approach of peak hurricane season. As I mentioned in a recent column, things are slowing in the real estate market here and it's not evident whether it's the normal dog days slowdown or the end of the ride for runaway appreciation. Regardless, the reality is, at least to me, that the easy money has been made and things are changing. If you want a place in a great little beachside community, Cocoa Beach is still right at the top of my list. If you want to speculate on real estate here hoping for double-digit annual appreciation, you may want to reconsider. We are seeing strong resistance to the ever-rising prices and properties are not moving like they were only a few months ago. If you already own investment property here, I would hold on. We may see the market take off again in January as it usually does. Until January, however, expect little activity. Pre-construction? That's another story altogether.
If you're thinking about investing in pre-construction condos, stop right now and think through your strategy. If you can't afford to close and begin making mortgage payments, I would advise you to not play this game. The stakes are too high and you have way too much competition. Many recent pre-construction prices (not all) have already factored in strong appreciation and, if that appreciation does not happen, you may be looking at closing on a unit that is not worth any more than you paid at pre-construction. Of particular danger are the multi-building developments. If you buy pre-construction in an early building during a market softening, you will be competing with the developer when you try to sell your unit. We are seeing this exact scenario being played out right now at several developments, most notably Island Pointe in Merritt Island and at Solana on the River in Cape Canaveral. Early buyers are trying to sell their completed units for a profit while the developer is still offering pre-construction units in the later buildings. It's comparable to trying to beat the house in a casino game. The house always has the edge. Keep an eye on Magnolia Bay in Cocoa Beach and Mystic Vistas in Cape Canaveral.
OK, that's the negative news for the week. On the positive side, Discovery is safely back on Earth and Cocoa Beach is still a wonderful place to live and visit. The fish are biting and a small storm swell is expected tomorrow from Tropical Storm Irene. If you'd like to find a special property in our community, I can help. As a buyer, you have more power right now than at any time in the last few years. Call me at 321.917.5786 or email me.
If you're spending time at the beach, don't forget your sunscreen and drink plenty of water. Have fun and watch for baby turtles and nesting mother turtles early evenings.
MLS Stats for August 10, 2005
contracts last 14 days
condos over $500,000____ 6
condos under $500,000__ 26
homes over $500,000____ 0
homes under $500,000___ 1
active listings
condos all prices_______443
condos over $500,000__ 129
homes all prices_______ 62
homes over $500,000__ 36
Alan Greenspan would like to think that he can cool the real estate market with monetary policy and rhetoric. Even with repeated speeches about bubbles and irrational exuberance, the fact remains that long term rates have moved down over the last year as the Fed raised short-term rates. We're starting to see a reversal of that trend as mortgage rates creep upward. This is not a surprise after this long run of historically low rates. Should you be concerned about mortgage rates as a real estate investor? Definitely. If you're still holding on to an adjustable-rate mortgage, it may be time to lock in while long term fixed-rates are still below 6%. The bigger question for many is should I take profits or should I continue to add properties to my portfolio. That is a more difficult question to answer.
There's a change in the air here in Cocoa Beach and Cape Canaveral and it's more than just the approach of peak hurricane season. As I mentioned in a recent column, things are slowing in the real estate market here and it's not evident whether it's the normal dog days slowdown or the end of the ride for runaway appreciation. Regardless, the reality is, at least to me, that the easy money has been made and things are changing. If you want a place in a great little beachside community, Cocoa Beach is still right at the top of my list. If you want to speculate on real estate here hoping for double-digit annual appreciation, you may want to reconsider. We are seeing strong resistance to the ever-rising prices and properties are not moving like they were only a few months ago. If you already own investment property here, I would hold on. We may see the market take off again in January as it usually does. Until January, however, expect little activity. Pre-construction? That's another story altogether.
If you're thinking about investing in pre-construction condos, stop right now and think through your strategy. If you can't afford to close and begin making mortgage payments, I would advise you to not play this game. The stakes are too high and you have way too much competition. Many recent pre-construction prices (not all) have already factored in strong appreciation and, if that appreciation does not happen, you may be looking at closing on a unit that is not worth any more than you paid at pre-construction. Of particular danger are the multi-building developments. If you buy pre-construction in an early building during a market softening, you will be competing with the developer when you try to sell your unit. We are seeing this exact scenario being played out right now at several developments, most notably Island Pointe in Merritt Island and at Solana on the River in Cape Canaveral. Early buyers are trying to sell their completed units for a profit while the developer is still offering pre-construction units in the later buildings. It's comparable to trying to beat the house in a casino game. The house always has the edge. Keep an eye on Magnolia Bay in Cocoa Beach and Mystic Vistas in Cape Canaveral.
OK, that's the negative news for the week. On the positive side, Discovery is safely back on Earth and Cocoa Beach is still a wonderful place to live and visit. The fish are biting and a small storm swell is expected tomorrow from Tropical Storm Irene. If you'd like to find a special property in our community, I can help. As a buyer, you have more power right now than at any time in the last few years. Call me at 321.917.5786 or email me.
If you're spending time at the beach, don't forget your sunscreen and drink plenty of water. Have fun and watch for baby turtles and nesting mother turtles early evenings.
MLS Stats for August 10, 2005
contracts last 14 days
condos over $500,000____ 6
condos under $500,000__ 26
homes over $500,000____ 0
homes under $500,000___ 1
active listings
condos all prices_______443
condos over $500,000__ 129
homes all prices_______ 62
homes over $500,000__ 36
Wednesday, August 03, 2005
A different kind of bubble
I was reminded yesterday why I love and live in Cocoa Beach. The morning began with one of those sunrises that make you want to charge into the day and live life to the fullest.
After checking the morning update for new properties and for the previous day's activity, I attended a short meeting where we discussed a specific sale last week by a condo owner who was so determined to avoid paying a real estate commission that he advertised and sold his condo entirely on his own. He was successful and achieved his goal of paying no commission, yet he accepted an offer of $175,000 that was conservatively $50,000 less than reasonable value. In this particular case, good comps would have been easy for the owner to get, yet he was so fixated on commission that he shot himself in the foot.
After the meeting, I settled into my office to write a new update about the whole subject of valuation when I received a phone call. "Dude, tide's almost low and the waves are fun." What's an earnest real estate agent to do? This agent bailed on work and paddled out for a lunchtime surf break. I'll trade real estate bubble for ground swell bubble most any day.
The ocean today was warm and the water was as clear as the Bahamas. The waves were small and fun. At least one other real estate guy was seen in the water.
This is one of those things that we have to think about when we talk about the "bubble". Will appreciation cool off? Probably. Will Cocoa Beach become undesirable? Never. Days like today remind me that special places like my home of Cocoa Beach have an attraction that will not go away no matter what the real estate market does as a whole. If you're investing in real estate, special places make more sense and seem more prudent than generic locales. And you can always ride a wave in your back yard as you enjoy the financial benefits.
Cocoa Beach is geographically restricted. Ocean to the east and Banana River to the west. Simply put, there is no more available land for new construction. We also have density and height restriction (no more buildings over 4 floors). What this means is that our supply will not be increasing much more. The character of our small city should always be much as it is today. Jim Cramer likes to say, "When investing, buy best of breed." Considering our location, our finite supply and, of course, our surf, Cocoa Beach qualifies as best of breed. As always, I could be wrong. I'm definitely biased. Here's a shot of one of my retired neighbors playing yesterday afternoon.
Friday, July 29, 2005
Oceanfront Pick of the Week
I'm getting tired of all the talk of impending doom and the collapse of the real estate market, so, instead of repeating my somewhat tired commentary on the "bubble", I'm going to pick out my favorite property this week and explain my reasons for picking it. First, a little background that supports my pick. Most investors' favorite target in real estate these days is pre-construction. Today I have 2 closings in a new riverfront condo project in Cape Canaveral. One of the closings is in danger of failure because the investor who purchased the unit is having trouble getting financing and may not be able to close by today's deadline. If that happens, he loses his deposit. Developers are far less flexible when it comes to extending closings for strapped buyers. For that reason, and the fact that developers' contracts usually contain no financing contingency, pre-construction carries considerably more risk than normal purchases. If you can't close, for whatever reason, your deposit is at risk.
Considering that risk, I think that carefully selected existing properties may be more suited to the average person wanting to invest in beachside real estate. We are seeing continued strong appreciation in waterfront properties with increasing demand in the lower price ranges. With that in mind, my pick this week is a cute little one bedroom condo in an oceanfront building in my favorite part of the beach, Crescent Beach. This unit has been completely redone with new tile, new kitchen and bathroom and has an excellent ocean view from a large balcony for $285,000. It's small, 750 sq. ft., and has no garage, BUT, it's under $300,000 and it's on the beach. This is not my listing, so, this is not a self-serving selection, just an honest opinion. Others may disagree. Here is the view from the balcony.
There are others that I like but if I have to pick one, this is it this week.
Interest rates continued their upward crawl this week according to Freddie Mac. If you're investing in this market, I can't stress enough the importance of knowledge and due diligence. If you don't know the market, find an informed agent who knows what's going on and let them guide you to the perfect property for you. There are dangerous investments right now and there are excellent ones. The difference is often not obvious. As always, use sunscreen, drink plenty of water if you're spending any time outdoors and be loyal to your hard-working agent.
Considering that risk, I think that carefully selected existing properties may be more suited to the average person wanting to invest in beachside real estate. We are seeing continued strong appreciation in waterfront properties with increasing demand in the lower price ranges. With that in mind, my pick this week is a cute little one bedroom condo in an oceanfront building in my favorite part of the beach, Crescent Beach. This unit has been completely redone with new tile, new kitchen and bathroom and has an excellent ocean view from a large balcony for $285,000. It's small, 750 sq. ft., and has no garage, BUT, it's under $300,000 and it's on the beach. This is not my listing, so, this is not a self-serving selection, just an honest opinion. Others may disagree. Here is the view from the balcony.
There are others that I like but if I have to pick one, this is it this week.
Interest rates continued their upward crawl this week according to Freddie Mac. If you're investing in this market, I can't stress enough the importance of knowledge and due diligence. If you don't know the market, find an informed agent who knows what's going on and let them guide you to the perfect property for you. There are dangerous investments right now and there are excellent ones. The difference is often not obvious. As always, use sunscreen, drink plenty of water if you're spending any time outdoors and be loyal to your hard-working agent.
Tuesday, July 26, 2005
Discovery is up
Proud Cocoa Beach residents watch Discovery leave Earth while surfers enjoy the surprise north swell and beautiful conditions. All work in Cocoa Beach ground to a halt as everyone turned their eyes skyward.
Monday, July 25, 2005
Space Shuttle Set To Go
The shuttle is poised for a second try at launch tomorrow. It's been a while since we've seen a shuttle flight and Cocoa Beach is excited. Our real estate market is less than excited and seems to be in a slow simmer at the moment. Over half of all condo sales in the last 14 days were under $400,000. The upper range continues to languish and we're seeing properties in all price ranges sit longer than they did earlier this year. Summer is historically slower, so, I'm unwilling to call this anything but a seasonal slowdown.
An interesting footnote is the fact that no Portside Villas units have gone under contract in the last 14 days. That's with 26 units actively for sale on the MLS. Word is that the first 2 buildings will close in August or September.
MLS Stats for July 25, 2005
contracts last 14 days
condos over $500,000___ 3
condo under $500,000__ 32
homes over $500,000____ 2
homes under $500,000___ 4
active listings
condos all prices______420
condos over $500,000__ 126
homes all prices______ 59
homes over $500,000__ 36
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