How Will Rising Mortgage Rates Affect Tampa Bay Real Estate Sales

Have you noticed how mortgage interest rates are rising? The 30-year fixed rate moved up up to 4.38% last week. Many are wondering how might this affect the Tampa Bay real estate housing recovery.

The home price index published by Case Shiller went up more than 12.1% nationally during the past year. Some real estate markets like Tampa Bay waterfront communities have had much more impressive gains, but the question before us now is - will rising interest rates kill off recent advances in home and condo sales and prices or will it have little or no effect here in Tampa Bay.

A driving force driving the housing recovery all across the United States has been "investors; people both foreign and domestic who have bought homes by the dozen (sometimes by the hundreds) at bargain prices planning to either hold onto them as rental properties or to hold them for a while and them "flip" them when prices rise further. In some cases, these investors have essentially walked into small towns and offered to buy every property on the market at a certain discount from their listing prices. Obviously, there is a limit to the number of such investors ready to toss millions into the market. Further, as prices are driven up by their practice, the number of opportunities to make a "quick buck" flipping homes and condos will dry up.

But, leaving aside these mega-investors with tons of money to invest, how will increasing mortgage rates affect the more typical home buyer? That's a mixed bag for sure.

The good news is that whenever mortgage rates start to rise, there is always a temporary surge of people wanting to lock in lower rates while they can. We've seen some of that in the new construction business in the Tampa Bay market. But with banks insisting on loaning only to those with near-perfect credit scores, it’s not clear that not many people are going to be in the "let's lock down an really attractive rate now" market this time around. Many families and first time buyers who would like to buy a home at these attractive rates simply cannot qualify for a loan under the tight credit rules.

Other families who would like to move up to a larger home can't do it because they are still "under water" on their current home. When you have negative equity in your current home, you cannot afford to sell it. The larger or nicer home they want is just beyond their ability regardless of the interest rate market.

Conversely many luxury real estate properties along the Tampa Bay waterfront from Clearwater and Sand Key down to St Petersburg Beach are selling in cash deals so tightened credit has little or no effect on these buyers of high-end homes and condos.

In summary, the Tampa Bay real estate market is in unchartered waters these days. We'll just have to wait and see how this turns out as the Fed begins to let mortgage interest rates rise over the next year or two.

Ten Step Process for First Time Home Buyers

The Key to a Stress-Free First Home Purchase

If you are a first-time home buyer in the Tampa Bay, Florida area, this is a great time and the real estate market right now is perfect for you because:

• You do not have another property to sell that you might lose money on.
  
  
• Mortgage rates are extremely low right now, and
  
  
• Price reductions have made homes much more affordable than they've been in over 10 years.

But you do need to understand that buying a home is a fairly complex process that takes time, some knowledge and the guidance of a real estate professional to make things go as smoothly as possible and for you to get the best possible deal. Here are 10 steps that will help you accomplish your goal of buying a first home that meets your needs and desires at a good price.

1. Buy a Notebook and get organized. Use this notebook exclusively for planning your first home purchase.

First, think about and then write down a summary description of the type of home and type of neighborhood you would like to find. Is it a ranch, a bi-level or tri-level, a two-story home, a duplex where you can rent the other half, or a condominium? Do you want a small lot to maintain, a maintenance-free community or a large lot of land where you can pretty much do whatever you wish without offending your neighbors? Do you prefer living in the city, the suburbs or in a more rural area?

Now, and this is a really important step, write down those things you REALLY NEED TO HAVE in the home for it to meet your needs for the next 7 - 10 years. Also list those things you’d REALLY LIKE TO HAVE but, if you had to, you could do without.

Keep this list handy and use it as a guide to judge every home you look at whether it’s a model home, an open house or part of a tour a Realtor has arranged for you.

2. You need to learn early on how much home you can afford. So, make a budget of your current expenses and use this to pinpoint how much you are willing and able to pay for the buying and maintenance of your new home. As a “rule of thumb,” keeping your monthly housing cost to 25% to 35% of your gross monthly income is a good place to start.

3. Meet with more than one mortgage lender. Bring you budget of current spending with you. Learn how much each lender believes you can afford to spend on a home and how much down payment will be required for the various types of mortgages available. Ask each lender for at least a pre-qualification statement. When you are reasonably sure which lender you would prefer to borrow from, ask if he or she will provide you with a "pre-approval" letter which you can attach to any offer you might make. Having a pre-approval letter already in place is a powerful price negotiating tool when you're ready to make an offer.

4. Introduce yourself to an experienced, full-time Realtor like Cheryl Stimac of Red Shoe Realty, Inc. Get to know the Realtor and make sure you feel comfortable dealing with him or her because you are going to be spending a fair amount of time together. Ask that realtor to act on your behalf as your "Buyer's Agent." Only when acting as your Buyer's Agent is a Realtor required to work for your benefit and yours alone. The Realtor whose name is on a For Sale sign in front of an Open House or a sales representative at a model home is NOT looking out for your best interest. They are working for and looking out for the Seller, not you.

5. Your Buyer's Agent Realtor will help you understand how your your housing affordability and your list of needs and wants fit with the market of for sale homes in Tampa Bay. He or she will then research the best home values and neighborhoods that meet your criteria and provide you with a list of homes currently on the market that fit your criteria.


6. With or without your Realtor, drive around visiting the neighborhoods with homes in your price range and identify those two or three neighborhoods and school districts you would most like to live in. This step will save both you and your Realtor a lot of wasted time and also help you to focus your criteria. After this step, you may want to sit with your Realtor again and adjust your list of "Needs and Wants" and make changes to your priorities of needs versus wants, if necessary. Remember, this list is only as useful as you have kept it in touch with the realities of your situation. It is natural to have started out with higher expectations than reality will allow, so do not be embarrassed or concerned if your list changes somewhat at this point. Update your list, share it with your realtor and carry on.


7. If you want to include "Short Sale" and "Foreclosure" homes in your search, be sure you fully understand how these procedures work (or in many cases, don't work) and the amount of time those processes can take. Your Realtor can explain the process by which these types of transactions occur and clarify for you the pros and cons of each of these home buying processes versus a normal purchase transaction.

8. Now get out there and get serious about finding that most perfect first home for you. There are wonderful homes available in Tampa and the Tampa Bay area at very attractive prices right now.

But, you need to be ready to act when you find that perfect one. The most desirable homes at the most attractive prices don't sit on the market for long, even in today's marketplace. Your "Needs and Wants" list, that hopefully you've kept up to date, will help you know when "this is the home for us."

9. Work with your Realtor to decide upon your offer price. Your Tampa Bay Realtor will help you by analyzing comparable properties in comparable neighborhoods to decide on an appropriate offering price. If you have secured a pre-approval letter from a lender, make sure it is still in effect, and attach it to your offer.

10. With the terms of your purchase contract agreed to by both you and the Seller, you will work your way through the multi-step contract-to-closing process. This process will include a home inspection, finalizing you mortgage application, and several other steps all of which your Buyer's Agent Realtor and your lender will help you with.

Eventually, on closing day, you will sign more papers than you'd ever imagined possible at the closing and then you'll be ready to move into your first home. Congratulations will definitely be in order at that point !!

The Federal Home Buyer Tax Credit is About to Expire

It's Time to Get Moving before It's Too Late

The first-time home buyer tax credit program which was extended and expanded to include existing homeowners expires on April 30th.

So, if you've been delaying a decision on buying a home or condo in the Tampa Bay Florida real estate market, it's time to contact a competent Realtor® TODAY and get a home purchase contract signed right away or you're going to miss out on the opportunity to gain up to a $8,000 income tax credit if you're a first-time buyer or up to $6,500 if you're currently a homeowner.

And don't forget that, in addition to the requirement to have a home purchase under contract (that means signed by both the buyer and the seller) by April 30, you must also close on the sale on or before June 30, 2010.

Who qualifies as a "first-time buyer" for up to an $8,000 credit?
The law defines a “first-time home buyer” as one who has not owned a principal residence during the 3-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.

If, for example, you have not owned a home in the past 3 years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the tax credit. However, there are exceptions. As an example, there is a possibility for unmarried joint purchasers to allocate the credit amount to any buyer who qualifies as a first-time buyer, such as if a parent jointly purchases a home with child. There are also rules about ownership of vacation or rental properties not used as a principal residence.

How is the amount of the first-time buyer tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000 but there are income limits.

So, you need to speak with a competent Tampa Bay Realtor to see if you do qualify.

Who qualifies as a existing homeowner buyer for up to the $6,500 credit?
The law defines a tax credit-qualified existing or "move-up" home buyer as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date of the new home. For married taxpayers, the law tests the home ownership history of both the home buyer and his or her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each. They do not, however, have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

How is the amount of the existing homeowner tax credit determined?
The tax credit is equal to 10% of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit. And, yes, there are income limitations. If your income is above the limit, you may still qualify for a partial credit.

It is very easy to become confused with the provisions of this law. Don't miss out on an opportunity that may not come again for a long. So, speak with a competent Tampa Bay real estate expert like Cheryl Stimac right now to see if you do qualify.

Aa a Realtor experienced in dealing with these types of situations, Cheryl Stimac can tell you after just a brief conversation whether or not you may qualify. But time is short so its definitely "Time to Get Moving."

You Don't Have to be a First-Timer to Take Advantage of the New Home Buyer Tax Credit

The first-time home buyer tax credit, that Realtors have reported jump-started home sales this Summer and Fall, but due to expire at the end of this month, has been extended through April 30, 2010 by Congress and is on its way to President Obama for his promised signature.

The extension expands eligibility for the home buyer tax credit to people with higher incomes as well as to people who have already owned a home for at least the past five years. In either case, the buyer must sign a purchase contract on or before April 30, 2010 and close on the purchase by June 30, 2010. The $8,000 maximum first-time buyer tax credit will continue but will now be available to individuals with incomes up to $125,000 and joint filers with annual incomes up to $225,000. Home buyers with incomes up to $145,000 and couples with incomes up to $245,000 will be eligible for somewhat reduced tax credits.

Under similar income limits, a $6,500 maximum tax credit will be available to people who already own a home and want to move up to a larger home.

Under the new income limits, two-thirds of all American families owning a home today may be eligible to buy a new home. While buyers will not be required to sell their current home to qualify, the tax credit must be used to buy a new "primary residence", not a vacation home or investment property.

To keep speculators out of the program, people who claim the credit but then sell the home or no longer use it as their primary residence within three years will be required to repay the credit. The intent is to exclude from the program speculators who might purchase a home intending to flip it for a fast profit, according to Max Baucus, chairman of the Senate Finance Committee.

Here's a "heads-up" to those who may have considered buying a first home under the prior program but didn't quite get around to it.

"Contact a Realtor and get started now. You only have until April 30, 2010."

Congressional legislators in both houses have indicated that this costly part of the stimulus program will not be extended a second time. Critics point out that only about one-fourth of the homes purchased under the prior program would not have been bought anyway without the costly tax-credit program. There are also concerns that the previous tax credit program encompassed high numbers of fraudulent transactions. In this version of the program, the Internal Revenue Service has been given much wider authority to oversee the process to root out fraud.

If you are considering buying a first home or moving up to a larger home in the Tampa Bay Florida area I invite you visit my Tampa Real Estate website or for more immediate service, contact me by phone at 813-263-6806. I would be delighted to answer any questions you have.

A Magical Hidden Property For Sale in Tampa Bay

MAGICAL is the word that describes this hidden property.

Calling old-time Florida lovers, this 7 acre tract in Hudson Florida, is a hidden time machine. The words tranquil, lush, wondrous describe this land.

Once you step on this property you will experience a transition to old Florida. Grand majestic oaks and enormous pines cover this private park. Own a magical piece of Florida, as this property has 3 fresh water springs. The property is mostly fenced.

Located close to the Hudson Marina, Hudson Beach, Hudson Elementary school, grocery stores and Bayonet Point Hospital. Owner financing is a possibility. Call to walk this property today. And, it is yours today for just $139,900. Call Cheryl Stimac, Broker at Red Shoe Realty, Inc. today at 813-263-6806 or cheryl@cherylstimac.com

Tampa Bay Real Estate Market Poised for Recovery

I read a very intriguing article this morning which was written by James A. Crumbaugh III, CEO of Allison James Estates & Homes. I am copying the content of that article here because I believe Mr Crumbaugh is absolutely right in his understanding of WHY the Tampa Bay real estate market is poised to have a much better year in 2009 than 2008 has been.
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RISMEDIA, Dec. 10, 2008- I’m always accused of being overly optimistic about the real estate market. You have to understand that after 35 + years in the business, everything is just a cycle to me and when we go through a cycle like we’ve been going through, then my thoughts become “How long will the cycle last?”

You may have read my previous article titled The Perfect Storm, where I discussed the reasons that I thought this real estate market was poised to turn around. We are seeing the market improve almost on a daily basis recently. Is it the facts that I stated in my article that is causing the turn around? Absolutely that’s part of the turnaround.

However, there is another dynamic at work here. I’ll call it the "Obama Effect." I voted for John McCain, but I’m sensing an optimism starting to build in this country. I will give President Elect Obama credit where credit is due, and I will be the first to admit that at this point he is being very proactive at turning around the financial crisis in this country.

As the optimism improves, and I think it will, from here to the inauguration, and for the honeymoon period following the inauguration, we will continue to see an improvement in the optimism in this country.

With the automotive bailout, real estate is bound to improve in the Michigan area and probably the entire rust belt, therefore improving Florida real estate. The retirees will be able to sell their homes in Michigan and retire to Florida or other states popular among retirees.

The public works project will put hundreds of thousands of workers back to work and at good wages. I still believe we have a pent up demand for the last three years of buyers wanting to buy. Once these buyers are employed again and flush with income, the market will start to improve.

Then you have very low fuel prices that allow the consumer more discretionary income to spend.

Then we have the potential for mortgage rates as low as 4½% .

When you start to take a hard look at where we are poised as an industry, no matter how pessimistic you are, you have got to believe we are in for a return of a good real estate market in Florida, if not an excellent real estate market.

The stars are lining up:

- An improved automotive market
- Low fuel prices
- Workers going back to work
- Good wages
- Low real estate prices
- Low mortgage rates

I’m becoming more optimistic just writing this article. I don’t believe you can argue the facts as I just them pointed out. Things are looking up for the Florida real estate industry..........

James A. Crumbaugh III is CEO of Allison James Estates & Homes.
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If you are a retiree, a real estate investor, or a broker or realtor, better times are coming in 2009 because the bear market in housing is about to turn around and it will turn around soon.

If you are ready to learn why, if you are going to invest in Florida real estate, Tampa Bay Florida is the right place to do it, contact me by E-Mail or complete my Tampa Florida Information Request Form. In a hurry ? Then call me directly at 813-263-6806.

Florida Set to Restore Everglades with Massive Project

An area of Florida with 300 square miles land may be returned to its natural state over the next decade.

U.S. Sugar, currently the largest producer of cane sugar in the U.S. is negotiating with the State of Florida to go out of business and for $1.7 billion, sell its 187,000 acres of land plus its refinery and other assets to the State of Florida as part of the state's plan to restore the Everglades. This plan was announced jointly by Florida Gov. Charles Crist and U.S. Sugar CEO, Robert Buker.

While negotiations are on-going and subject to approval by both the State government and the board of privately-held U.S. Sugar, officials hope to have a final agreement in place by September, 2008. Under that agreement, U.S. Sugar would be allowed to farm the land for 6 more years and then shut down operations. At that point, a very important 187,000 acres of land south of Lake Okeechobee, currently in use by U.S. Sugar, will be used to help restore the wetlands that support the Everglades.

That land is the virtual heart of the ecosystem which supports the Everglades and can be used to restore a more natural flow to the wetlands that has been restricted and diverted for years by agricultural and other development.

Jeff Danter, The Nature Conservancy’s state director, called the potential deal “an unprecedented opportunity to completely rewrite the course of Everglades restoration.” Frank Jackalone, of the Sierra Club, applauded the move saying, "If they can restore the flows, it can correct what's happened over the past 60 years."

The restoration effort will be the largest of its kind in the world. Returning the land to its natural state, including rerouting water from flood control projects, will help cleanse water flowing south from Lake Okeechobee into the Everglades filtering out fertilizers plus other industrial and automotive pollutants.

The plan calls for the state of Florida and the U.S. Government to be equal 50-50 partners. Florida so far has committed over $2 billion, while the Federal government has spent only several hundred million dollars. Congress authorized $1.8 billion for Everglades projects in 2007, but the money has yet to be allocated.

U.S. Sugar employs 1,700 people all of whom who will lose their jobs. But, U.S. Sugar has been under financial pressure for some time from lower-cost sugar imports. The State of Florida plans to offer job-retraining to the displaced employees. Closing down U.S. Sugar will not, however, completely end sugar production in the Everglades ecosysem. About 300,000 acres used by other sugar growers will remain in production.

Are You Ready For Hurricane Season ?

Well, It's June 1st and the start of hurricane season not only in Florida but all over the Southeastern coast of the United States.

Are you prepared to protect yourself and your family in case of any serious incident ? It's always better to be safe than sorry. You may want to take a few minutes now and read this Hurricane Readiness Article.

If you are interested in moving your family to the Tampa Florida or Tampa Bay area, or if you need to sell a property anywhere in Hillsborough or Pasco County, Florida, I invite you to visit my Tampa Florida real estate website.

Selling Your Tampa Bay Home Now Might Be A Smart Move

At first it might sound odd, but right now might be the best time to sell your Tampa Bay, Florida home.

Every home has things about it that you wish you could change. You may or may not have noticed these issues when you bought the home but you can't fix them now for various reasons. Maybe the cost would drive your investment in the home beyond what the local neighborhood would support. Or, maybe your home cannot be changed to suit your current needs and desires because of its physical structure, the lot size, it's locale, or changes in youe own personal circumstances. Maybe it was near a great school when you bought it, but now the kids are grown and that school nearby is just a source of noise and traffic congestion. Realtors call these home problems, it's "unchangeables."

"But why is right now a good time to sell when prices have dropped as much as 20%," you ask. Here's why. While the price you can get for your current home may be down, so is the price of a home that doesn't have it's drawbacks, or "unchangeables." With recent home price declines and interest rates at historically low levels, NOW may be the right time to step up to the home you originally wanted but just couldn't afford.

Let's take an example. Supposing you bought your home three or four years ago for $300,000, but it has lost 20% of its value and can now be sold for closer to $240.000 -- down $60,000. But, the home you originally wanted that sold then for $425,000 is now down by that same 20% to $340,000, a drop of $85,000, almost one and a half times the reduction your own current home took.

And with so many homes currently on the market, if the seller of that $425,000 home that's now worth only $340,000 needs to sell, it is very possible that, with the help of an aggressive Realtor, you can negotiate that price down even lower. Chances are that if you could afford the home you paid $300,000 for 3 or 4 years ago, you can probably afford the home you always wanted if you buy it now that prices are so depressed.

As a bonus, when home prices start to rebound, you'll not only have the nicer home, but that new home's price will rise even faster than your old one with those troublesome "unchangeables."

For help in finding the right Tampa Bay Florida home for you and your family, visit Cheryl Stimac's Tampa Florida Real Estate website. For more immediate help, call Cheryl at Red Shoe Realty, LLC on her cell phone at 813-263-6806 or E-Mail her today. You'll be glad you did.