Archive forNovember, 2008

Lighthearted After-Thanksgiving Trivia

FDR tried (twice) to move Thanksgiving ahead by a week for purposes of Consumer SpendingWhen we hit the day after Thanksgiving, shopping takes over… at least historically nationwide[ surprise!] and, this year, analysts are paying extra attention to sales figures since the news has been so negative about the economy.

Dubbed “Black Friday” in reference to red ink representing loss and black ink representing gain, today’s start to the Christmas [again... I am not afraid to call it Christmas] Shopping season and it is believed to be the day that retailer balance sheets finally cross over to profitability. [I never quite understood why you would stay in a business that wasn't profitable until the 12th month of the year... but... okay.]

But the accounting connotation of the phrase “Black Friday” wasn’t its original usage — it’s a media-coined term.

When the phrase was first used in Philadelphia in 1975, it was in reference to the day after Thanksgiving being the busiest shopping and traffic day of the year.

There’s other Black Friday trivia out there, too:

Did you know? Black Friday is neither the largest, nor the most profitable, shopping day of the year. Contrary to popular wisdom, it’s the 5th biggest, not the first. The two weekends before Christmas are usually the “biggest” series of days.

Did you know? In an attempt to spur the economy in 1939, President Franklin D. Roosevelt proposed to move Thanksgiving ahead by 7 days. 7 more days of shopping, he thought, would help retailers and help the economy. Eventually, the idea dubbed “Franksgiving” failed.

Did you know? To protect competitors from price matching “deals”, some retailers copyright their Black Friday advertising. Others won’t print prices at all.

Did you know? Last year, 14 percent of Black Friday shoppers had made a purchase prior to 4:00 A.M. with an average ticket of $347.

Black Friday is of special significance this year because consumer spending accounts for two-thirds of the U.S. economy. If Americans are shopping in full force, expect economic optimism and a mild rebound in the stock market. Unfortunately for home buyers, this should also lead mortgage rates higher.

By contrast, if sales figures are weak, expect talk of recession to grow.

Sources
Black Friday (Shopping)
Wikipedia
https://en.wikipedia.org/wiki/Black_Friday_%28shopping%29

Geek Trivia: Early bird special
Tech Republic
Jay Garmon, Nov 22, 2005
https://articles.techrepublic.com.com/5100-10878_11-5958978.html

(Image courtesy: Give Congress Back)

Chris Brown
All Around Good Guy
Trinity Mortgage
153 Parliament Loop
#1001
Lake Mary, Florida, 32746
Work: 407 377 0500 x 210
Chris@OrlMtgPro.com

Comments (1)

The TRUTH about Thanksgiving not being taught in Public Schools

This is not meant to be a political post, but merely a post about truth andImage Ref: 9906-09-8 - Harvest Thanksgiving, Viewed 18184 times how it is not being taught in the public school system. It is no mystery that the public education system is failing our children, but I think only a small part falls at the feet of the front line… it is more of an institutional and union issue in my mind, but I digress….anddddd… this isn’t a rant post.

Like him or not, and I know that some of my readers will not be able to get past this, Rush nailed this True story of Thanksgiving. We are taught that the Pilgrims were an incompetent group of boobs and were saved by the Indians… revisionist history at best. Brace yourself… you may never have heard this before and i encourage you to seek out the FACTS yourself if you doubt the balance of this post.

The Mayflower set sail in the summer of 1620. On its deck it carried a group of just over 100 people [including 40 Pilgrims] led by William Bradford. On the journey, Bradford set up an agreement, a contract, that established just and equal laws for all members of the new community, irrespective of their religious beliefs.

Where did the revolutionary ideas expressed in the Mayflower Compact come from? From the Bible. The Pilgrims were a people completely steeped in the lessons of the Old and New Testaments. They looked to the ancient Israelites for their example. And, because of the biblical precedents set forth in Scripture, they never doubted that their experiment would work.

But this was no pleasure cruise, friends. The journey to the New World was a long and arduous one. And when the Pilgrims landed in New England in November, they found, according to Bradford’s detailed journal, a cold, barren, desolate wilderness. There were no friends to greet them, he wrote. There were no houses to shelter them. There were no inns where they could refresh themselves. And the sacrifice they had made for freedom was just beginning.

During the first winter, half the Pilgrims – including Bradford’s own wife – died of either starvation, sickness or exposure.

“When spring finally came, Indians taught the settlers how to plant corn, fish for cod and skin beavers for coats.” Yes, it was Indians that taught the white man how to skin beasts. “Life improved for the Pilgrims, but they did not yet prosper! This is important to understand because this is where modern American history lessons often end. “Thanksgiving is actually explained in some textbooks as a holiday for which the Pilgrims gave thanks to the Indians for saving their lives, rather than as a devout expression of gratitude grounded in the tradition of both the Old and New Testaments.

Here is the part [of Thanksgiving] that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors in London called for everything they produced to go into a common store, and each member of the community was entitled to one common share. This will seem like a familiar ideology to some of us that follow politics.

“All of the land they cleared and the houses they built belong to the community as well. They were going to distribute it equally. All of the land they cleared and the houses they built belonged to the community as well. Nobody owned anything. They just had a share in it. It was a commune, folks.

Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives.

He decided to take bold action. Bradford assigned a plot of land to each family to work and manage, thus turning loose the power of the marketplace.

“That’s right. Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened?

It didn’t work! Surprise, surprise, huh?

What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation!

But while most of the rest of the world has been experimenting with socialism for well over a hundred years – trying to refine it, perfect it, and re-invent it – the Pilgrims decided early on to scrap it permanently.

What Bradford wrote about this social experiment should be in every schoolchild’s history lesson. If it were, we might prevent much needless suffering in the future.

“‘The experience that we had in this common course and condition, tried sundry years…that by taking away property, and bringing community into a common wealth, would make them happy and flourishing – as if they were wiser than God,’ Bradford wrote. ‘For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense…that was thought injustice.’

Why should you work for other people when you can’t work for yourself? What’s the point?

“Do you hear what he was saying, ladies and gentlemen? The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford’s community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property.

Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result?

This had very good success,’ wrote Bradford, ‘for it made all hands industrious, so as much more corn was planted than otherwise would have been.’

Is it possible that supply-side economics could have existed before the 1980s? Yes.

“Read the story of Joseph and Pharaoh in Genesis 41. Following Joseph’s suggestion (Gen 41:34), Pharaoh reduced the tax on Egyptians to 20% during the ’seven years of plenty’ and the ‘Earth brought forth in heaps.’ (Gen. 41:47)

In no time, the Pilgrims found they had more food than they could eat themselves…. So they set up trading posts and exchanged goods with the Indians. The profits allowed them to pay off their debts to the merchants in London.

And the success and prosperity of the Plymouth settlement attracted more Europeans and began what came to be known as the ‘Great Puritan Migration.’”

Is this lesson being taught to your kids today — and if it isn’t, why not? Can you think of a more important lesson one could derive from the pilgrim experience?

So in essence there was, thanks to the Indians, because they taught us how to skin beavers and how to plant corn when we arrived, but the real Thanksgiving was thanking the Lord for guidance and plenty – and once they reformed their system and got rid of the communal bottle and started what was essentially free market capitalism, they produced more than they could possibly consume, and they invited the Indians to dinner, and voila, we got Thanksgiving, and that’s what it was: inviting the Indians to dinner and giving thanks for all the plenty is the true story of Thanksgiving.

The last two-thirds of this story simply are not told.

Some other countries don’t have a prayer because they have no incentive. They live under tyrannical dictatorships and governments.

The problem with the world is not too few resources. The problem with the world is an insufficient distribution of capitalism.

I wish I could claim more credit for the content in this post but the real story provided here, with exception of the links I inserted for the readers benefit to research the facts themselves, was provided by the modern voice of the conservative movement, Mr. Rush Limbaugh. By the way, if you are looking for a great Christmas present for yours truly… 24/7 would be well received. LOL. Oh and Rush, if you are reading this, I have several days in December in which I am able to meet with you if so desired. =0)

Happy Thanksgiving America!

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Talk of Deflation - What Lake Mary First Time Home Buyers Need?

Plunging consumer prices brings on fears of deflationLake Mary First Time Home Buyers… perk up.  We all know what inflation is and the ugliness that can go with it.  Most of us know that deflation is the opposite of inflation…. but don;t know much more than that.

In fact, business TV and newspapers have inflated deflation [sorry for the play on words... but I like doin' that] as a hot topic this week and, since Monday, Google has tracked 13,000 mentions of it.  Make this 13001.

Deflation is a recurring cycle in which the prices of goods and services fall.  Suh-weet… falling prices that is so cool, right?  Well, um, not really.  Why?  Human nature.

When prices are declining  across many industries at the same time, IT CAN SHUT DOWN THE ECONOMY!

If you think about it, is rather obvious why falling prices shut down the economy.  Well, maybe not super obvious because as I type this, the first thing that came to mind was not the REAL reason it does.  Anyway, here it goes.

Rather than buy things on the cheap, people stop buying anything at all. And why would they? The same items will cost less tomorrow than it does today in a deflationary environment.

And this is the problem with deflation — it stops folks from spending and consumer spending is about 2/3  of the U.S. economy. When it stops, the spiral begins

  1. People stop spending, which leads to…
  2. Layoffs of the workforce, which leads to…
  3. Less consumer spending, which leads to…
  4. Dwindling corporate revenues, which leads to…

And the spiral continues.

Deflation can be much more insidious that its expansionary counterpart — inflation. Inflation is when the prices generally rise over time and it’s an economic condition through which governments can comfortably navigate. Deflation, on the other hand, is more rare and, therefore, fewer practical control measures exist.

Whether the U.S. economy will slip into deflation is a matter of debate, but if you look more closely, at least with Lake Mary real estate, isn’t that what has been happening here in the local Orlando real estate market?  I talk to many prospective buyers that have been sitting on the sidelines, because of that same reason. ‘it will be cheaper tomorrow.’

The Fed has cut the Fed Funds Rate to promote economic growth and those changes can take up to 12 months to work their way through the economy. Deflationary pressures we’re seeing today, in other words, may have already been addressed and corrected by Bernanke’s 10 rate cuts in the last 14 months.

Until the market figures it out, though, expect that each mention of deflation will hurt the stock market and help the bond market — including the mortgage-backed variety. This should help lower Lake Mary mortgage rates and make homes more affordable for all sorts on buyers… including the first time home buyer that has been chomping at the bit to get into the market and take advantage of these great deals.  Couple that with the $7500 First Time Home Buyer Tax Credit… and you got some serious buying power.

Word of caution though… FHA loan limits are going down in 2009 and the credit goes away in 2009 as well.  If you have been wondering when the right time to jump in was?  Guess what?  Merry Christmas!  Fill out your application today.

(Image courtesy: The Wall Street Journal)

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LOWER cost of living for Altamonte Springs Real Estate Owners

CPI fell by a 61-year monthly high in October 2008If the presence of inflation causes mortgage rates to rise, then the absence of inflation should cause mortgage rates to fall. And, in most markets that’s true.

Today, it’s not.

Despite a deep, month-over-month dip in consumer prices not seen since 1947, Altamonte Springs mortgage rates not steady by any stretch of the imagination…  they are still as volatile as ever!

The main reason why rates are fluctuating so, is that the Cost of Living didn’t just ease last month — it plunged.

In fact, the monthly drop was so severe that Wall Street now questions whether this summer’s record-breaking inflation will lead to equally-strong deflation this winter.

In economic terms, deflation is the opposite of inflation — it’s when prices and wages chase each other lower… have you been watching oil?  It was like $54 dollars a barrel today! The two can be equally bad for the economy. What’s often best for Americans are moderate, steady readings. [What does steady look like?]

Because of the rapid decline, markets fear that Consumer Prices may have swung way past moderate in October and started a downward spiral. As always, however, market opinions can change quickly and when they do, they usually take mortgage rates with them.

(Image courtesy: The Wall Street Journal Online)

Comments (1)

Finally! The Urgency Longwood Real Estate Buyers Need…

Housing Starts fell to 791000 in October 2008So you wanna deal on Longwood Real Estate. I completely understand… I do to, in fact with the gloom they are painting for retail this Christmas [and Yes, iI am one of the ones still willing to CALL it Christmas] I have thought about scooping up a deal on one of those super-duper flat-screens… but I digress. Back to your needs… not mine. =0)

When it comes to housing info, there are always 2 questions to think about:

  1. How does this impact Longwood real estate buyers?
  2. How does this impact Longwood real estate sellers?

Since these are commonly on opposite sides of the see-saw, housing data is rarely negative or positive on a universal level — one group of us is going to see a benefit.

Today, it’s home sellers. [Sorry buyers, the longer you sit on the sidelines, the greater the chances you are going to miss it. For those seeking Orlando FHA loans... that may be even more pronounced as the guidelines become more restrictive next year with higher down payment requirements and lower loan limits.]

Can I take a tangent here for a sec?

I recently came back from a mortgage conference and heard a very powerful speaker in the form of Gary Keller… one of the founders of Keller Williams Realty. He made a very profound statement that resonated with me. He mentioned that they call it a ‘buyers’ market… not a ‘waiters’ market. The main reason so many miss it is that they buy during a sellers market because they are afraid of ‘missing out’ but when a true buyers market arrives, to many sit on the sidelines. Since I do not know who the reader of this is, I can ‘call you out’ without being confrontational…

are you one of those?

Sorry back on track now, I promise. From the government, we learn that Housing Starts fell to their lowest levels since 1947 last month. Let’s define that. Housing Start - a new housing unit on which construction has started. One step further back therefore reflective of the future… building permits are down, too.

This is all good news for people selling their homes in the coming months but may be troubling for those deciding to wait till next Spring to buy… they may have missed the bottom by waiting. As fewer homes are built, existing inventory is consumed and therefore creates a movement in the supply - demand ratio that favors sellers.

With fewer new homes coming on the market, owners of “used” homes may feel less pressure to lower asking prices or to make other concessions. Home buyers often pay more when home supply is falling, or find that sellers are less willing to add “throw-ins” to a contract.

If you want to make sure you are primed to make a move in the Longwood Real Estate market before it is too late, getting pre-approved for a Longwood Mortgage is a great first step… I can even introduce you to one of Longwood’s Top Real Estate Resources.

(Image courtesy: The Wall Street Journal)

Chris Brown
All Around Good Guy
Trinity Mortgage
153 Parliament Loop
#1001
Lake Mary, Florida, 32746
Work: 407 377 0500 x 210
Chris@OrlMtgPro.com
Visit MyBlogLog and get a signature like this!

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Florida FHA Loan Limits are going DOWN for 2009

It is important for Florida Home buyers to know that Florida FHA loan limits are going down for 2009.  For 2008 Seminole County loan limits, it is a HUGE drop.  The new loan limits per county are as follows:

MSA Name MSA Code Division County Name County
Code
State One-Family Two-Family Three-Family Four-Family Last Revised Limit Year
GAINESVILLE, FL (MSA) 23540 ALACHUA 001 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
JACKSONVILLE, FL (MSA) 27260 BAKER 003 FL $304,750 $390,100 $471,550 $586,050 01/01/2009 CY2009
PANAMA CITY-LYNN HAVEN, FL (MSA) 37460 BAY 005 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 BRADFORD 007 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PALM BAY-MELBOURNE-TITUSVILLE, FL (MSA) 37340 BREVARD 009 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
FORT LAUDERDALE-POMPANO BEACH-DEERFIELD BEACH, FL 33100 22744 BROWARD 011 FL $345,000 $441,650 $533,850 $663,450 01/01/2009 CY2009
NON-METRO 99999 CALHOUN 013 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PUNTA GORDA, FL (MSA) 39460 CHARLOTTE 015 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
HOMOSASSA SPRINGS, FL (MICRO) 26140 CITRUS 017 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
JACKSONVILLE, FL (MSA) 27260 CLAY 019 FL $304,750 $390,100 $471,550 $586,050 01/01/2009 CY2009
NAPLES-MARCO ISLAND, FL (MSA) 34940 COLLIER 021 FL $448,500 $574,150 $694,000 $862,500 01/01/2009 CY2009
LAKE CITY, FL (MICRO) 29380 COLUMBIA 023 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
ARCADIA, FL (MICRO) 11580 DE SOTO 027 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 DIXIE 029 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
JACKSONVILLE, FL (MSA) 27260 DUVAL 031 FL $304,750 $390,100 $471,550 $586,050 01/01/2009 CY2009
PENSACOLA-FERRY PASS-BRENT, FL (MSA) 37860 ESCAMBIA 033 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PALM COAST, FL (MICRO) 37380 FLAGLER 035 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 FRANKLIN 037 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TALLAHASSEE, FL (MSA) 45220 GADSDEN 039 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
GAINESVILLE, FL (MSA) 23540 GILCHRIST 041 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 GLADES 043 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 GULF 045 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 HAMILTON 047 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
WAUCHULA, FL (MICRO) 48100 HARDEE 049 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
CLEWISTON, FL (MICRO) 17500 HENDRY 051 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA) 45300 HERNANDO 053 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
SEBRING, FL (MICRO) 42700 HIGHLANDS 055 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA) 45300 HILLSBOROUGH 057 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 HOLMES 059 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
SEBASTIAN-VERO BEACH, FL (MSA) 42680 INDIAN RIVER 061 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 JACKSON 063 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TALLAHASSEE, FL (MSA) 45220 JEFFERSON 065 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 LAFAYETTE 067 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
ORLANDO-KISSIMMEE, FL (MSA) 36740 LAKE 069 FL $274,850 $351,850 $425,300 $528,550 01/01/2009 CY2009
CAPE CORAL-FORT MYERS, FL (MSA) 15980 LEE 071 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TALLAHASSEE, FL (MSA) 45220 LEON 073 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 LEVY 075 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 LIBERTY 077 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 MADISON 079 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
BRADENTON-SARASOTA-VENICE, FL (MSA) 14600 MANATEE 081 FL $285,200 $365,100 $441,300 $548,450 01/01/2009 CY2009
OCALA, FL (MSA) 36100 MARION 083 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PORT ST. LUCIE-FORT PIERCE, FL (MSA) 38940 MARTIN 085 FL $316,250 $404,850 $489,350 $608,150 01/01/2009 CY2009
MIAMI-MIAMI BEACH-KENDALL, FL METROPOLITAN DIVISIO 33100 33124 MIAMI-DADE 086 FL $345,000 $441,650 $533,850 $663,450 01/01/2009 CY2009
KEY WEST-MARATHON, FL (MICRO) 28580 MONROE 087 FL $529,000 $677,200 $818,600 $1,017,300 01/01/2009 CY2009
JACKSONVILLE, FL (MSA) 27260 NASSAU 089 FL $304,750 $390,100 $471,550 $586,050 01/01/2009 CY2009
FORT WALTON BEACH-CRESTVIEW-DESTIN, FL (MSA) 23020 OKALOOSA 091 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
OKEECHOBEE, FL (MICRO) 36380 OKEECHOBEE 093 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
ORLANDO-KISSIMMEE, FL (MSA) 36740 ORANGE 095 FL $274,850 $351,850 $425,300 $528,550 01/01/2009 CY2009
ORLANDO-KISSIMMEE, FL (MSA) 36740 OSCEOLA 097 FL $274,850 $351,850 $425,300 $528,550 01/01/2009 CY2009
WEST PALM BEACH-BOCA RATON-BOYNTON BEACH, FL METRO 33100 48424 PALM BEACH 099 FL $345,000 $441,650 $533,850 $663,450 01/01/2009 CY2009
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA) 45300 PASCO 101 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TAMPA-ST. PETERSBURG-CLEARWATER, FL (MSA) 45300 PINELLAS 103 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
LAKELAND, FL (MSA) 29460 POLK 105 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PALATKA, FL (MICRO) 37260 PUTNAM 107 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
PENSACOLA-FERRY PASS-BRENT, FL (MSA) 37860 SANTA ROSA 113 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
BRADENTON-SARASOTA-VENICE, FL (MSA) 14600 SARASOTA 115 FL $285,200 $365,100 $441,300 $548,450 01/01/2009 CY2009
ORLANDO-KISSIMMEE, FL (MSA) 36740 SEMINOLE 117 FL $274,850 $351,850 $425,300 $528,550 01/01/2009 CY2009
JACKSONVILLE, FL (MSA) 27260 ST. JOHNS 109 FL $304,750 $390,100 $471,550 $586,050 01/01/2009 CY2009
PORT ST. LUCIE-FORT PIERCE, FL (MSA) 38940 ST. LUCIE 111 FL $316,250 $404,850 $489,350 $608,150 01/01/2009 CY2009
THE VILLAGES, FL (MICRO) 45540 SUMTER 119 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 SUWANNEE 121 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 TAYLOR 123 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 UNION 125 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
DELTONA-DAYTONA BEACH-ORMOND BEACH, FL (MSA) 19660 VOLUSIA 127 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
TALLAHASSEE, FL (MSA) 45220 WAKULLA 129 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009
NON-METRO 99999 WALTON 131 FL $325,450 $416,600 $503,600 $625,850 01/01/2009 CY2009
NON-METRO 99999 WASHINGTON 133 FL $271,050 $347,000 $419,425 $521,250 01/01/2009 CY2009

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Are Florida’s Foreclosure Deals Good for Second Homes?

California, Florida, Arizona and Nevada accounted for more than half of the foreclosures nationwide in October 2008

Foreclosure - especially in Florida is a hot topic among the press lately and it is interesting to see a staggering number of the sales in today’s market are comprised of foreclosures and/or short sales… especially in South Florida.  It’s hard to turn on the TV or open up a paper without seeing a sensationalized story about it.

But what’s even more interesting about the foreclosure situation is that they appear to be consolidated in certain areas of the country.  Of the four primary states… two of those were head and shoulders above the others.  [Woo hoo... we never do anything half baked here in FL!]  Okay, sorry, that wasn’t funny.

Drum roll please:  California, Florida, Arizona, and Nevada take the cake.  Something worthy of note about these states is that they share some similar characteristics:

  1. They all have relative [no pun intended] popularity with retirees
  2. Popular with real estate investors
  3. They have had large home value jumps during this decade

This creates some extraordinary opportunities for folks looking to buy a second home in Florida.

Everyone else… yeah… they are normal.  the other 46 states account for the remaining 48.8% of foreclosures, or a mere 1.06% average per state of October’s foreclosures.

Now, this isn’t meant to make light of the impact of these foreclosures on the economy — nope. Foreclosures harm to the nationwide home market because many mortgage lenders are national… at least on the wholesale level. I do like to highlight statistics like this, however, to show that the foreclosure “crisis” isn’t as bad as most of the mainstream media would have you believe around the country.

Moreover, lending institutions are jumping in in order to help curb the flow of defaults nationwide. Following the lead of JP Morgan and Bank of America, CitiMortgage just announced a sweeping plan to help homeowners stay out of default and stay in their homes.

Okay, what does this mean FOR REAL though?  I get that question a lot and is likely why many of you like my style of writing and informing.  For as good as this news is for home owners, it’s just as bad news for homebuyers .

As the amount of Florida foreclosures go down in any given market it, by default, reduces the inventory of homes available for sale. Remember Supply and Demand?  Lower supply levels often lead to higher sale prices and less room to negotiate. This may be, in part, what the banks are trying to accomplish.

What that means to you as a Home buyer [work with me here] is that by the time you hear this stuff in the news… you missed it.  Now is likely a time to seriously consider your home buying options.  To further that point, FHA loan limits are decreasing in Seminole County Florida next year, and for the first time home buyer, if you coupled the higher limits this year with the $7500 First Time Home Buyer Tax Credit… the deck is stacked in your favor.

You may choose to complete an application to see if, indeed, now is the right time to make that move towards a purchase.

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Does less jobs mean Cheap Lake Mary Real Estate Deals?

The economy shed 240,000 jobs in October 2008How come everything in Orlando gets cheaper when everyone is worried about their job and don’t want to spend any money!!

Okay, so it is a rhetorical question and the answer is somewhat obvious, but how cool would that be if, everything got cheaper and you just got a raise!?

I feel your pain.

Well, on the first Friday of every month, the Bureau of Labor Statistics releases the ‘jobs report’… officially called the ‘Non-Farm Payrolls report.’  Well, the October’s data is trending with the rest of 2008.  See the pretty graph?  Don’t let the green fool you.

After dropping another 240,000 jobs last month like a newbie at a craps table, the economy has now put 1.2 million Americans out of work this year and unemployment rates [Like a professional at a craps table] have climbed to 14-year highs.

BEHOLD - A Positive, however!  As a strange twist, though, the most recent weak jobs data may lead to a positive turn for the economy and for housing in 2009.  “How”, you ask?

In the wake of the jobs report, members of Congress are already calling for both tax cuts and direct stimulus to reverse the course of the economy. Both of these actions would put money back into U.S. citizens’ household budgets, spurring consumer spending nationwide.

While I think this is a short sighted approach, it is true that consumer spending accounts for 70% of the economy, and an effort like this would be expected to push the economy forward at a time when it natural forces are slowing it down.

In addition, markets are betting that the Federal Reserve will cut the Fed Funds Rate below its current 1.000 percent level. This, too, would spur spending because the Fed Funds Rate is directly tied to consumer credit card rates and business credit lines… not to mention your Lake Mary Home Equity Lines.

Expectations for stimulus are one reason why Lake Mary mortgage rates have not risen as high as they otherwise would have if this were a “normal” market.

Mortgage rates are slightly elevated as we move into the week, but don’t be surprised if there’s a late-afternoon push that brings them lower. For active Lake Mary home buyers, this could help home affordability as we cruise towards the holiday season.

(Image courtesy: USA Today)

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Lake Mary Refinances: ARM Rates FALL

As LIBOR settles down, ARM adjustments settle down, too

SO how are the evil mortgage products doing?  Huh, they may actually be better than the fixed products?  Maybe they aren’t evil after all… just different.

It is true that some of the wrong people got bad advice from some neophyte mortgage ‘professional’, but the good news is that those folks are back waiting tables.

The interest rate against which adjustable-rate mortgages [ARMs] change is continuing to fall — This could very likely be the evidence we need indicating that the worldwide banking system is starting to stabilize.

On any ARM, the initial “start rate” remains fixed for some period of time [typically 3 - 5 - 7 - or 10 years], and then adjusts according to some pre-determined agreement.  It is more a hybrid than it is a pure “ARM”.

For a conforming mortgage, an ARM will typically adjust once per year after that initial locked period, based on this formula:

[index] + [margin] = Adjusted Rate

Where the index is often assigned to 12-month LIBOR, and the constant is often fixed at a number between 2.250% and 2.75%.

LIBOR is the equation’s variable… that is why it has the attention of ARM holders… of which I am one.  ARMs can be great financial tools… in the right hands.  Check with your Lake Mary Mortgage Broker to see if ARMs are something you should consider. LIBOR is the rate at which banks lend money to each other. The 12-month LIBOR, therefore, is the borrowing rate for a 1-year, interbank loan.

So, to take the formula and make it real world for a Lake Mary Home Owner,  your adjusted mortgage rate would be equal to whatever the 12-month LIBOR is at the time of adjustment, plus another 2.25 - 2.75%.

Looking at the chart, note LIBOR spiked in September in direct correlation to the September 15 failure of Lehman Brothers. That bank shutdown started a wave of “who’s going to be next?” anxiety on Wall Street but as global governments stepped up support for banks, LIBOR predictably fell.

For homeowners with adjusting mortgages, this is terrific news.

Okay, now follow me on this:

However, mortgage markets have rallied a bit as of late, creating an interesting opportunity for some holders of ARMs. Depending on credit scores and the amount of home equity, Lake Mary mortgage rates on a new home loan may be lower that the soon-to-be-adjusted mortgage rate of the old one.

In other words, getting a new loan may be smarter than letting your current mortgage change. Contact your mortgage lender to see which plan fits you best.  If you are orphaned now that 65% of the industry has ‘left the building’, please feel free to contact me, Chris Brown, directly for your Lake Mary refinance.

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Buying Longwood Real Estate buttt… ‘renting’ the current residence huh?

New conforming mortgage guidelines threaten owners of second homes and investment propertiesConforming mortgage guidelines are the Home Loan Rule Book for Longwood real estate, Lake Mary real estate… and well… pretty much anywhere these days. This Orlando Home Loan ‘Rule Book’ helps in delineating between applicants that get approved for an Orlando mortgage and those that do not.

Well, the rule book just got a little bit tougher.

According to Fannie Mae, homeowners converting their current Longwood home into an investment property will be subject to additional underwriting scrutiny. [Can you hear the evil laugh?] Fannie Mae is leery of lending to people that may be over-extended.

I can shoot you the complete underwriting update if you like, just contact Chris Brown here and ask for it. Just for grins though, here are some of the more important points, divided into sections for people possibly looking for Second Homes in Florida and those living here wanting to buy a new Longwood home and turn their current into an Investment Property.

Second Home Guideline Changes

  • Without 30 percent equity in the second home, mortgage applicants must have 6 months worth of PITI reserves for both properties in their bank accounts.
  • With 30 percent equity, the PITI reserve can be reduced to 2 months.

Previously, there was no minimum reserve requirement.

Investment Property Guideline Changes

  • With 30 percent equity in an investment property, 75% of the monthly rental income can be applied toward the applicant’s monthly household income.
  • Without 30 percent equity, rental income may not be applied to the applicant’s monthly household income and 6 months PITI is required for both properties.

Previously, 75% of the rental income was allowable regardless of equity, and minimum reserve requirements were 2 months.

Even though just a small percent of Americans own a second home or investment property, the conforming mortgage guideline changes impacts Florida homeowners regardless of where they are.

Changing mortgage guidelines impact the supply and demand curve for housingThis is because more restrictive guidlines lead to two separate, but concurrent, outcomes:

  1. The demand for homes reduces because fewer buyers qualify for mortgages
  2. The supply of homes increases because fewer sellers can refinance into more affordable home loan

Less demand and more supply places downward pressure on home prices. Yeah, that is what we need, is it not!!??

Now, remember that mortgage guidelines continuously evolve and what’s accurate as August 1, 2008, may not be accurate in the near future… especially since the election is past. In other words, confirm what you’re reading about Orlando mortgages online with your trusted loan officer before making any Longwood real estate-related decisions.

To find out what you qualify for Today with the current guidelines, complete a Mortgage Planning Questionnaire here.

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