How Long Will you be underwater?

About 16 million homeowners owe more on their mortgage than their homes are worth, which means they are "underwater." So long as that condition continues, they have no equity that can be used to help finance the purchase of another house.

On the contrary, they can't sell the house without digging into their pockets to pay the difference between what they owe and what they can realize from the sale net of expenses.

But time heals most wounds, and negative equity is no exception. The principal component of the monthly mortgage payment reduces the loan balance by the same amount.

Refinancing into a mortgage carrying a lower interest rate reduces the interest portion of the monthly mortgage payment, thereby increasing the principal component and the rate at which the balance is paid down.

Palm Beach Rents on the Rise 3.8%

The boom in demand for rentals, coupled with dwindling inventory – even as developers race to build multi-family housing in South Florida – is driving prices up fast, the Palm Beach Post reported. Despite the affordability of South Florida’s housing market, bad credit and slow lending are driving former homeowners toward rentals. “We’ve seen places jump $100 just like that,” said Dan Gallien, president of West Palm Beach-based Rent 1 Sale 1 Realty. “We tell people to offer full price. You don’t mess around for $50.” [Palm Beach Post]

Buying a No Pet policy Condo

 I am surprised that so many condos have a "no pets" policy. How strict is this policy? For instance, I have a cat that would not go outside, so would my cat be banned also?

A: As a devoted dog mom, this is an issue that's near and dear to my heart, especially as my first dog years ago was what I call a real estate rescue.

At the time, I was a real estate broker working in a big office, and adopted my Pekinese, Mr. Chom Chom Nelson (RIP), after answering the SOS email of an agent who was selling the home of some clients who were (you guessed it!) moving out of state, to a condo that wouldn't allow pets.

I have personally only owned single-family homes, and all the condo transactions I've managed have been in California, which has a law prohibiting no-pet condo deed restrictions (California Civil Code Section 1360.50), so I was completely outraged at the idea of such a ban. It was a real education for me to find out that in states like Florida and New York, it is extremely common for every condo complex in town to have an outright deed restriction on all pets.

New Homes Inventory Shrinking

Sales of new homes remain anemic by historic measures, but homebuilders have cut back so drastically on construction that new-home inventories are no longer bloated.

New single-family homes were selling at a seasonally adjusted annual rate of 343,000 homes per year during April, up 3.3 percent from March and 9.9 percent from a year ago, the Census Bureau reported.

That represents a supply of 5.1 months at the current rate of sales, down from 5.2 months in March and an all-time high of 12.1 months in January 2009. Many analysts consider a six-month supply of homes an even balance of supply and demand.

Sales of new single-family homes exceeded 1 million per year from 2003 through 2006, dipping below 500,000 in 2008 for the first time since 1982. The 306,000 new homes sold last year was an all-time low in records dating back to 1963.

South Florida - Distressed Home Loans

A greater proportion of home loans in South Florida are distressed than in any other region in the United States, according to data from Foreclosure-Response.org, the Sun Sentinel reported. The Web site is a joint initiative between Local Initiatives Support, Urban Institute and the Center for Housing Policy. It is the seventh quarter in a row in which South Florida has led the country in the rate of home loan delinquency. [Sun Sentinel]

10 markets to invest in realestate for foreign buyers

The 10 markets, ranked by highest share of foreign buyers, according to public records data, are:

1.Lakeland-Winter Haven, Fla.
2.Cape Coral-Fort Myers, Fla.
3.Orlando-Kissimmee-Sanford, Fla.
4.North Point-Bradenton-Sarasota, Fla.
5.Miami-Fort Lauderdale-Pompano Beach, Fla.
6.Phoenix-Mesa-Glendale, Ariz.
7.New York County, N.Y. (Manhattan)
8.Honolulu, Hawaii.
9.Tampa-St. Petersburg-Clearwater, Fla.
10.Las Vegas-Paradise, Nev.

Sales and closing prices of existing U.S. homes

Sales and closing prices of existing U.S. homes grew in April and listed inventory fell, indicating a strengthening recovery, according to data released today by the National Association of Realtors.

Completed sales on existing homes increased 3.4 percent from March to a seasonally adjusted annual rate of 4.62 million in April 2012. Sales are up 10 percent from the 4.2 million rate recorded in April 2011. The median price for all types of existing homes rose 10.1 percent from last year to $177,400.

The inventory of listed existing homes has fallen 20.6 percent from April 2011, although total inventory increased 9.5 percent to 2.54 million from March 2012.

“It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices,” Lawrence Yun, NAR chief economist, said. “The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”

Despite the importance of these apparent improvements in housing for national financial markets, the accuracy of the NAR’s past monthly existing-home data has been called into question and the organization had to adjust years worth of data because it had been gathered incorrectly. — Christopher Cameron