Which house will the choose? I cannot say, because I am sworn to secrecy. Watch HGTV's House Hunters tonight at 9:00pm (check your local listings outside Orlando) to find out which home Lisa and Doug will pick. I would love feedback from everyone on my performance as "the Realtor". I am not only a Realtor in real life, but after tonight I can say that I play one on tv too.
I am also pleased to say that my blog is getting a lot of attention. One of my posts has been quoted by the Colorado Springs Business Journal; I have had my posts quoted in the Orlando Sentinel; and I am now a featured blogger at Realtor.com - the number one real estate website in the world. Go to Talk.Realtor.com, and look for me on the right side of the screen. My posts are regularly featured, and I have also been asked to answer questions on Ask A Realtor. My blog is also in the running as one of the top blogs in Orlando. Please vote for me by clicking on the Orlando Sentinel.
I sell real estate here in Orlando too, so tune in tonight then give me a call tomorrow and we will talk about your real estate needs.
Orlando Real Estate, David Welch Real Estate Optimist
There is an article in the Orlando Sentinel today about just how bad our condo market is here. Economics is about supply and demand of course, but sometimes consumers demand something that they do not have the cash to purchase. In these situations, consumers turn to financing options. The real estate market thrives on the availability of mortgage funds. When those funds are not available the market (buyers) shrinks. Sellers who must sell have a couple of options: reduce their price to a point that there are buyers who can pay cash, or offer seller financing. In the case of the Orlando condo market, these sellers are mostly the banks at this point. They won't offer financing, so the only option they have left for themselves is reducing the price. The article mentions the option of FHA financing for some complexes. Unfortunately, even FHA has tightened up their guidelines (recently loosened slightly). Even FHA approved condominiums are scrutinized for the number of investor owned and second home units. Hello - this is Orlando - it is very hard to find a condo community that does not have a majority of the units owned as either investments or second homes. While this does not prohibit financing it does require higher down payments limiting the number of buyers who qualify.
I suggest the banks come up with at least some form of financing for condos without huge down payment requirments. Take a page from their own commercial lending operations, and put in 10 year balloons. This could open up the pool of potential buyers, and get these condos turned around in a hurry. The other thing that could help turn the condo market around quickly is the approval of short sales. A Bank of America executive actually told our office that they make more money on a foreclosure than they do a short sale. I thought how can that be? For the most part the banks don't own these loans; they just service them. Apparently, they get paid more to handle a foreclosure than they do to negotiate a short sale. If you are one of these investors holding mortgage backed securities listen up. Short sales that are closing in Orlando are averaging about $40,000 higher sales prices than the foreclosures. Since The Fed is buying up these bad securities, you might want to consider making the negotiation of short sales a priority. Better yet, take it away from the banks altogether. Bank of America is exceptionally incompetent at handling the short sale process as are most other large banks. However, I did just close on a Wachovia short sale that was approved in four days (it was the second contract). My understanding is that they have put an incentive in place to get these deals approved. Amazing how quickly the process works with the right incentives.
Orlando Real Estate, David Welch Real Estate Optimist, As Seen on HGTV's House Hunters
Relax, no it doesn't. I have still come across a few people who did not get the message that the tax credit was extended and expanded to help repeat buyers as well as first time home buyers. The credit is now good through June 30, 2010, but only if you are under a binding contract by April 30, 2010. The income limits have been raised, so that it is easier to qualify for the credit. The credit also includes buyers that have owned a home for five consecutive years out of the last eight. The repeat buyer credit is good only up to $6,500, and only for the purchase of a primary residence under $800,000. You do not have to sell your existing residence however.
If you are at least 62, this may be a great time to use a reverse mortgage for the purchase of a home here in Orlando. It may also be a great time to move up and take advantage of the terrific lower prices and rock bottom interest rates. You can use the tax credit to absorb some of the costs of selling, and getting into that bigger home. Think about it while you enjoy Thanksgiving with your family, then give me a call or text me Monday at 407-924-7670.
Orlando Real Estate, David Welch Real Estate Optimist, As Seen On HGTV's House Hunters
You are running out of time to vote for www.RealEstateOptimist.com. Tomorrow is the deadline to choose David Welch's Orlando Real Estate Blog as the top real estate blog in Orlando. Google already says David Welch has the top two blogs for Orlando real estate. Check for yourself, just google "Orlando real estate," and see who has the top two spots. This is organic not paid results. Thank you for your vote.
Reuters reported that housing starts fell over 10% in October compared to the rate being built in September. At least a part of that was caused by a huge drop in multi-family. These types of project are up and down, and with commercial real estate on its heels right now it does not surprise me that these projects are so volatile right now. The single family side of the equation has to be evaluated in the context of everything that is going on. The first time home buyer tax credit was quickly approaching expiration, and I believe earlier in October there was sentiment that it might not be extended. Although talk of extending the credit has been around since July and August, what seemed like a sure thing ran into some challenges. First, the deficit for last fiscal year came in at a whopping $1.4 trillion. Second, there was not a lot of evidence that the tax credit was creating a turnaround as much as helping to stabilize the housing market. Third, news broke in October, I believe, that there were 100,000 suspected fraud cases related to the existing credit.
I believe that this growing sentiment that the credit might be extended guided some buyers toward resales. Even when it became apparent the credit would be extended and expanded there were rumors out there that if you contracted before December 1st, you would not qualify for the new credit. This type of misinformation, could have also had the effect of buyers putting off decisions to contract for a new home if they were hoping to take advantage of the new tax credit provisions. Maybe I am completely off base with my analysis of this situation, but here in Orlando we saw tremendous sales in October with more than 2,200 sales closed last month and nearly 4,000 contracts (not offers, contracts) written in Ocotober. I believe that was the most contract written so far this year. I continue to say if banks will start making decisions on short sales, REO's and getting loans closed we will get through this faster and healthier. Orlando continues to post around 9,000 pending sales, while our active inventory remains around 16,000.
I titled my blog Real Estate Optimist for a couple of reasons. First, the obvious one is that I sell real estate. I became convinced that I wanted to have a career in real estate in graduate school at Rollins College. In one of my Investments classes we discussed a study the University of Chicago conducted analyzing all types of investments along what is called the efficient frontier. The efficient frontier is a curve that defines the optimum portfolio return for a given level of risk. The only investment found to be in every efficient portfolio was...wait for it...wait for it...real estate. They did not just include the typical stocks and bonds type of investments either. Commodities, art, wine, coins and stamps and other types of investments were included in this study that went back to the stock market crash of 1929. It made intuitive sense to me since, owning your home provides a sense of security and safety from market factors.
But why Optimist and not Realist? Let's face RealEstateRealist.com would be a great play on words, but I have seen time and time again on my customer surveys that my enthusiasm is what attracted people to me. Believe me, I get down in the dumps too, it's easy to be a pessimist. When was the last time you picked up the newspaper and read good news. OK, if you are a UCF Knights fan like myself, the Orlando Sentinel has had lots of great articles about UCF's first ever win over a top 25 ranked team. Our men's basketball beat UMass in their season opener, and our women's soccer made the NCAA's ranked in the top 20. So there has been a lot of great news for UCF athletics this weekend. I have been a fan since 1982 when I started at UCF. I have traveled to Troy, and sat through pouring rain in 27 degree weather, and Georgia Southern, Eastern Kentucky, Georgia, Georgia Tech and a couple of trips to Florida. There was not so much good news back then, but I was optimistic.
Real estate has been a reliable investment in the past, and it is again now that the market has stabilized. If you don't believe me, what about all those investors buying up foreclosures?
Orlando Real Estate, David Welch Real Estate Optimist, As Seen on House Hunters
Well my world premier video aired last night on HGTV's House Hunters, and friends from all over the country watched with me. I want to send a big thank you out to Doug and Lisa, the buyers, because if it was not for them I would not have had the opportunity. I would also like to thank the crew and producers who managed to keep me from looking too goofy. I didn't even look that fat - yeah! If you did not get to see last night's show, it will be on several more times over the next couple of months. You can check the HGTV website for other dates and times.
Today, it is back to reality. I have a walk-through this morning, closing this afternoon, contract extension, a buyer's CMA, and an offer to follow up on. If it was only as easy as it is on tv. Show three houses, pick one and move in. For more on buying and selling real estate, check out my homepage www.davidwelch.com. I have a number of tools right on the main page for buyers and sellers. Right at the very top of the page you can search for Orlando area real estate. This is a new tool I have just added to give you a complete listing search of our area. Sellers, I also have tools right on the front page for valuing your home as well as several pages devoted to helping you with marketing tips. Let me know how I can help you with all your real estate needs.
Tomorrow, Thursday November 12th at 9:00pm look for me on HGTV's House Hunters. The last time I checked, my episode was still scheduled to air at that time. Check your local listings though to make sure. I want to thank Lisa and Doug for asking me to be part of this home search, and also for applying to be on the television show. I would not have thought to apply to be on the show myself. Since being part of this, I have been checking and House Hunters has actually already been to Orlando a few times this year. My friends at Talk.Realtor.com tell me that Orlando is pretty much at the top of the list for real estate searches.
I cannot think of a better place to be practicing real estate. Despite all the negative press you read every day, the bad times only last for a little while. I suspect we may very well be dealing with foreclosures for another three years as the banks work through their backlog. In the mean time, we are writing 3,500 contracts (not offers) a month and closing more than 2,000 transactions. The closings are what I would expect for our market, and the contracts are exceptionally strong numbers. I believe these numbers indicate a renewed demand in Orlando real estate. It is no wonder Orlando real estate searches have been so strong on Realtor.com and so many House Hunters episodes have been filmed here in The City Beautiful.
Orlando real estate prices have been very stable for seven months now bouncing along the bottom between $125,000 and $135,000 since April. With the big push by first time home buyers to get into a home before the November 30th tax credit deadline, I am expecting prices to take a tumble this month. First time home buyers purchase less expensive homes for the most part, so I expect prices to be a bit lower in November and probably December. Looking at the pending inventory of nearly 9,000 homes, there are 3,775 that are expected to close this month with a median list price of $124,500. There are a couple of factors to consider though. First, 3,775 will not close this month. Looking at recent history, we can probably expect about 2,000 of them to close including the 250 or so that have already closed. The other consideration is the role short sales will play regarding prices. A lot of the ones that will not close are short sales which have much lower prices than "normal" sales. However, the short sale prices are typically much higher than the REO's. In the end it has typically been a wash with short sale prices hovering just below the overall median price.
With the list price running at $124,500, I expect our median sales price to be around $120,000 this month. While the impending end of the tax credit might have accounted for more lower priced sales this month, the extra competition for well priced homes likely pushed offers closer to the asking price. With the extension of the tax credit, I suspect many of these sales will end up closing in December as the urgency to close by November 30th wanes. With the extension and expansion of the tax credit, I am expecting the tremendous demand continuing well into next year. Until hiring picks up though, look for our prices here in Orlando to stay in a very affordable range. I do believe that we will see a slight tick up in hiring in the first quarter. I believe we may already be seeing a little improvement in hiring this quarter, but nothing to get too excited about yet.
By the way, watch for me on HGTV's House Hunters this Thursday November 12th at 9:00pm. Check your local listings.
The extension and expansion of the home buyer tax credit is on it's way to the White House for the President's signature as part of a broad financial package that will extend unemployment benefits. Notice that I did not call it a first time home buyer credit, because it is more than that with the expansion. First time home buyers (those who have not owned a home in the past three years) still qualify for up to $8,000. The income restrictions have been raised significantly to $125,000 for singles and $225,000 for joint tax filers. However a limit of $800,000 has been placed on the value of the home purchased. So, if you have been waiting to cash in that trust fund to purchase your first $1 million McMansion try scaling back to $800k to qualify for the credit. This latest extension of the credit begins December 1, 2009 and is good for closings through June 30, 2010. You must be under a binding contract by April 30, 2010 however to qualify for the credit.
Repeat purchasers get a little less back from Uncle Sam. If you have owned and used a home as your principal residence for five consecutive years out of the last eight, you can qualify for a credit of up to $6,500. The same income and home price restrictions apply. It is also important to note that the credit is only for primary residences. Repeat purchasers cannot use the credit for a second home. I cannot understand why this was important to law makers. Frankly, if you look at the states that need home buyers the most, they are also the states that probably have the greatest number of second home buyers (Florida, Nevada and California). There are other provisions in this legislation to help deter fraud, but I have not heard specifically what they are. Personally, I see the April 30 to June 30 period as having a tremendous potential for fraud as buyers and sellers once again come under pressure of the deadline.
On a completely unrelated subject; my House Hunters episode is tentatively scheduled to air November 12, 2009 at 9:00pm. Check you local listings.
I have seen a real improvement in my Google page rank since being featured on the Realtor.com blogsite. There are so many social media outlets out there as well as blogsites, and people ask me what is best for SEO. I am not a techie expert even though I have a background in technology. I have always sought technology that makes me more productive. I measure productivity as a combination of effectiveness and efficiency. If your search for search engine optimization is weighing you down and keeping you from your customers, then you may be less productive. Sometimes keeping it simple is the best plan. If you get into Facebook, then use it to promote your website with a fan page and advertising in the marketplace. If Twitter is your thing, set up your phone for mobile tweets. I have a pretty basic phone, and I tweet from the street - just not while driving. My wife says I am four thirds full of crap, and if that is you then try blogging. Try to keep it relevant, but it is ok to express your opinion.
David Knox is real estate speaker that I really enjoy, because of his use of humor in his message. One of his sayings that stuck with me, and is very true of the internet is "You don't have to be good - You just have to be there." If you are not there, then nobody knows just how good you are. If you cannot be found, you may never get the opportunity to help that prospective customer. Get found first. Once you are found then provide information that is helpful and useful, and people will keep coming back. These basic rules work for any type of social media including face to face - the original social media.
My blog "Real Estate Optimist" has been nominated as one of the top blogs in Orlando in the area of business and technology. Please click on the button above to cast your vote for my blog. Thank you for your support.
October closed out our fifth month in a row with over 2,000 closed sales. So far 2,004 have been posted for the month with a median sales price of $130,500. We have been hovering around $130,000 for seven months now ranging between $125,000 and $135,000. Of the 2,004 closes sales 832 or 41.5% were bank owned, almost 21% were short sales with 415 and the remaining 757 were "normal" sales. As usual we are seeing a pretty big difference in the median prices of these three groups. REO's came in at $80,000 while short sales were just under the over all median with $127,000 and "normal" sales had a median sales price of $180,000. The 415 short sales closed represent only about 7.5% of the total number of short sales under contract.
Total pending sales stand at 9,072 with 1,782 being REO'snd a whopping 5,544 classified as short sales. That leaves on 1,746 "normal" pending contracts. The "normal" sales tend to be higher priced homes, but also tend to close a bit more quickly once they are under contract. Short sales continue to be a drag on the entire real estate system taking six to eight months to obtain approval. The total inventory is down slightly to 15,778 with 1,255 bank owned properties and 5,583 short sales. Combined distressed properties represent just over 43% of our active inventory.
My blog post about the extension and expansion of the home buyer tax credit was featured on www.Talk.Realtor.com.
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