Orlando Real Estate News

What you should do to receive benefits of Amendment 1 (Property Tax Reform)
 
To receive some of the benefits of the changes enacted January 29th, certain citizens must take action by March 1, 2008.
 
The Constitutional amendment created four new opportunities for taxpayers to obtain tax relief:
 
1.    Increased homestead exemption
2.    Portability of “Save our Homes” benefit
3.    $25,000 exemption for tangible personal property
4.    10% annual assessment limitation for non-homestead property
 
What taxpayers must do to receive these new benefits:
 
1.       Increased homestead exemption - Homeowners that are currently receiving the homestead exemption will automatically receive the increased homestead exemption. No action is necessary.
 
2.       Portability of “Save our Homes” benefits - If you received the homestead exemption in 2007 on a home that you sold or otherwise abandoned during 2007 and have purchased a new home by January 1, 2008, you are eligible to take some or all of the benefit of “Save our Homes” to your new home. In order to receive this benefit, you must apply by March 1, 2008 to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes” benefit to your new homestead for 2008. Form DR501t is attached.

3.       $25,000 exemption for tangible personal property - Tangible personal property taxes apply only to certain taxpayers in Florida - typically businesses and certain owners of mobile homes. The tax does not apply to homesteaded property. In order to receive the $25,000 exemption for tangible personal property, taxpayers subject to the tax must file a tangible personal property return with their property appraiser by April 1, 2008.
 
4.       10% limit on annual assessment increases for non-homestead property - The 10% limitation does not apply until next year. No application is necessary for 2008.
If you have any questions about what action you must take to receive these new benefits, please contact your local property appraiser. For information on how to contact Florida’s property appraisers, go to http://dor.myflorida.com/dor/property/appraisers.html.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 0.4 percent to a seasonally adjusted annual rate(1) of 4.89 million units in January from an upwardly revised level of 4.91 million in December, and are 23.4 percent below the 6.44 million-unit pace in January 2007.

Lawrence Yun, NAR chief economist, said many potential buyers remain on the sidelines.  “Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” he said. “As the increased limits for FHA and conventional loans are implemented, more buyers will have access to safer FHA loans and lower interest rate loans in high-cost areas, which could lead to steadily higher home sales later in the year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.76 percent in January from 6.10 percent in December; the rate was 6.22 percent in January 2007.   Last week, Freddie Mac reported the 30-year fixed rate rose to 6.04 percent.

The national median existing-home price(2) for all housing types was $201,100 in January, down 4.6 percent from a year ago when the median was $210,900.  Because the slowdown in sales is greater in high-cost markets, there is a downward pull to the national median from a year ago when there were relatively more sales in higher priced areas.

Price changes within metropolitan areas are more meaningful for consumers.  The latest data shows roughly half of the metro areas in the U.S. with price gains, with healthy increases in markets such Buffalo, Peoria and Amarillo.  “Some markets like Barnstable, Mass., which had been weakening in the past year, may have turned the corner,” Yun said.

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said some buyers in high-cost are waiting for higher limits on conventional loans.  “Keep in mind the biggest slowdown in home sales last year was in high-cost markets, which were hard-hit by the credit crunch and notably higher interest rates for jumbo loans, but relief is on the way,” he said. 
 
 “Once buyers have greater access to higher loan limits, it will take a few months for increased shopping activity to translate into higher sales,” Gaylord said.  “We should see some movement of pent-up demand by this summer, but higher loan limits need to be implemented fully and promptly to have maximum benefit.”

Total housing inventory rose 5.5 percent at the end of January to 4.19 million existing homes available for sale, which represents a 10.3-month supply(3) at the current sales pace, up from a 9.7-month supply in December. 

Single-family home sales rose 0.5 percent to a seasonally adjusted annual rate of 4.34 million in January from 4.32 million in December, and are 22.4 percent below 5.59 million-unit pace in January 2007.  The median existing single-family home price was $198,700 in January, down 5.1 percent from a year ago.

Existing condominium and co-op sales fell 6.5 percent to a seasonally adjusted annual rate of 550,000 units in January from 588,000 in December, and are 30.2 percent below the 788,000-unit level a year ago.  The median existing condo price(4) was $220,400 in January, which is 1.0 percent lower than January 2007.

Regionally, existing-home sales in the Midwest rose 3.4 percent to an annual pace of 1.20 million in January, but are 20.0 percent below January 2007.  The median price in the Midwest was $154,200, down 4.0 percent from a year ago.
 
Existing-home sales in the South slipped 0.5 percent in January 2007 to a level of 1.95 million and are 22.0 percent below a year ago.  The median price in the South was $164,300, which is 5.9 percent lower than January 2007. 

In the West, existing-home sales declined 2.1 percent to an annual rate of 930,000 in January and are 28.5 percent below January 2007.  The median price in the West was $300,100, down 6.7 percent from a year ago. 

Existing-home sales in the Northeast fell 3.6 percent to an annual rate of 810,000 in January, and are 25.7 percent below a year ago.  The median price in the Northeast was $270,800, up 3.1 percent from January 2007.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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(1) The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months.  Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity.  For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.  However, seasonal factors cannot compensate for abnormal weather patterns.

Each February, NAR Research incorporates a review of seasonal activity factors and fine-tunes historic data for the previous three years based on the most recent findings.  Revisions have been made to monthly seasonally adjusted annual sales rates for 2005 through 2007, as well as the inventory month’s supply data.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings.  This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit.  Because of these differences, it is not uncommon for each series to move in different directions in the same month.  In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

(2) The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns.  Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.  Changes in the geographic composition of sales can distort median price data.  Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

(3) Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982.  Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).

(4) Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price.  In a given market area, condos typically cost less than single-family homes.

Existing-home sales for February will be released March 24.  The next Forecast / Pending Home Sales Index is scheduled for March 6.
 
Source: NAR

For information about how to receive these new benefits, please read below or visit the Department of Revenue’s Web site online at www.myflorida.com/dor.  You may also wish to contact your local property appraiser’s office.

Citizens will gain the freedom to purchase a new home without huge tax penalties. Rental home owners, second home owners and businesses will benefit from limits on future tax increases.  The amendment contains two provisions that we have long advocated: doubling the homestead exemption and the ability for Florida families to take with them their Save Our Homes tax savings.

 Specifically, the constitutional amendment: 

1.   Doubles the homestead exemption for almost all homeowners, providing an average savings of about $240 annually.  The new exemption applies fully to homesteads valued over $75,000, and partially for homesteads valued between $50,000 and $75,000.  This new exemption does not apply to school taxes.                                       

2.   Allows portability:  The Governor has heard from many Floridians that they feel trapped in their homes.  Portability allows homeowners to transfer their Save Our Homes tax benefits from their current home to a newly purchased home within any Florida county.  Portability applies to homes purchased in 2007 and later, and the benefit is capped at $500,000. 

3.   Provides an assessment cap of 10 percent for all properties not previously capped:  While homestead properties are already capped at three percent, now all other properties, including rental properties, second homes, and business properties, will be protected from huge tax increases.  This new exemption does not apply to school taxes.

 4.   Creates a new $25,000 exemption for business property, including office furniture, computers, machinery and equipment.

 The passage of Amendment 1 will help jump start Florida’s housing market and make Florida even more business friendly.  Again, I encourage you to please read below or visit the Department of Revenue’s Web site online at www.myflorida.com/dor for information about how to receive these new benefits.

 What you should do to receive benefits of Amendment 1

 On January 29, 2008, an overwhelming 64 percent of Florida voters helped change Florida’s property tax system.  To receive some of the benefits of the changes enacted on January 29, certain homeowners must take action by March 1, 2008.

 The Constitutional amendment created four new opportunities for taxpayers to obtain tax relief:

1.      Increased homestead exemption

2.      Portability of “Save our Homes” benefit

3.      $25,000 exemption for tangible personal property

4.      10 percent annual assessment cap for non-homestead property

 What taxpayers must do to receive these new benefits:

1.   Increased homestead exemption – Homeowners that are currently receiving the homestead exemption will automatically receive the increased homestead exemption. No action is necessary.

2.   Portability of “Save our Homes” benefits – If you received the homestead exemption in 2007 on a home that you sold or otherwise abandoned during 2007 and have purchased a new home by January 1, 2008, you are eligible to take some or all of the benefit of “Save our Homes” to your new home. In order to receive this benefit, you must apply by March 1, 2008 to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes”     benefit to your new homestead for 2008.

3.   $25,000 exemption for tangible personal property – Tangible personal property taxes apply only to certain taxpayers in Florida – typically businesses and certain owners of mobile homes. The tax does not apply to homesteaded property. In order to receive the $25,000 exemption for tangible personal property, taxpayers subject to the tax must file a tangible personal property return with their property appraiser by April 1, 2008.

4.   10 percent limit on annual assessment increases for non-homestead property – The   10 percent limitation does not apply until 2009. No application is necessary for 2008.

 If you have any questions about what action you must take to receive these new benefits, please contact your local property appraiser. For information on how to contact Florida’s property appraisers, go to http://dor.myflorida.com/dor/property/appraisers.html.

 Apply by March 1, 2008, to transfer your “Save Our Homes” benefit to your new home.

 The Florida homestead exemption “Save Our Homes” benefit is now “portable” because of the passage of the constitutional amendment on January 29, 2008. The “Save Our Homes” benefit is the difference between the assessed value and market value of a homestead property due to the annual limit on increases in assessed value. Portability means that, from now on, you can transfer some or all of your old home’s “Save Our Homes” benefit to your new home.

 You must apply to your property appraiser to transfer your “Save Our Homes” benefit. For contact information on Florida’s property appraisers, go to http://dor.myflorida.com/dor/property/appraisers.html.

Portability for 2008

Portability first becomes available for homeowners who had a 2007 homestead exemption on their Former home and established a new homestead by January 1 ,2008.

If you moved into a new home by January 1, 2008, you have through March 1, 2008, to apply to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes” benefit to your new homestead for 2008.

If you have already applied for a homestead exemption on your new home, you must complete a separate application by March 1, 2008, to transfer the “Save Our Homes” benefit to your new homestead.

Portability for 2009 and after

If you move into a new home after January 1, 2008, and prior to January 1, 2009, and had a previous homestead exemption in either 2007 or 2008, you must apply for your 2009 homestead exemption and the transfer of your “Save Our Homes” benefit by March 1, 2009.

In future years, you will be able to transfer your “Save Our Homes” benefit to a new home if you had the homestead exemption on your old home in either of the two preceding years.

The multi-month decline in the number of homes available for purchase in the Orlando area reversed its trend in January, when 1,426 homes were added to the inventory. January historically sees an upward spike in inventory as a result of owners who hold out until after the holidays to put their homes on the market, explains the Orlando Regional Realtor Association.

The median sales price of a single-family home in the Orlando area in January 2008 dropped in one month by 1.22 percent ($2,750), from $225,000 in December 2007 to $222,250. The median sales price for January 2008 is 11.06 percent below that of January 2007 ($249,900).

The decrease in the median home price to $222,250 means that the area’s affordability index continues to improve – in January 2008 the index jumped again, to 104.9 percent. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $51,392 can qualify to purchase one of 7,713 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $233,140 or less.

The first time homebuyer affordability index climbed in January as well, to 74.6.

The number of sales in the Orlando area declined by 48.54 percent in January 2008 compared to January of last year (756 to 1,469), and the number of sales that took place in January 2008 also decreased over the number of sales that occurred in December 2007 (1,076). The number of homes under contract increased from December to January by more than 200.

The area’s average interest rate was 5.60 percent in January 2008, a continuing downward trend since a high of 6.60 percent in August.

Homes of all types spent an average of 120 days on the market before being sold in January 2008; the average home sold for 94.21 percent of its original asking price. In December those numbers were 113 and 92.75 percent, respectively.

The majority of single-family homes (142) that changed hands in January 2008 were sold for between $200,000 and $250,000. Another 85 homes sold in January for between $250,000 and $300,000. Two hundred sixteen homes sold for less than $200,000 in January, and 186 sold for more than $300,000. On the far ends of the scale, 18 homes were sold for $1 million or more while only four homes sold for less than $50,000.

Inventory

There are currently 25,724 homes available for purchase through the MLS. Inventory increased by 1,426 homes in January 2008, which means that 1,426 more homes entered the market than left the market. During the holidays, inventory had remained steady and even dropped by as much as 1,874 homes in one month (December). Compared to last year, the January 2008 inventory level (25,724) is 21.00 percent higher than it was in January 2007 (21,266).

The inventory level reflects a 34.03-month supply at the current pace of sales.

There are 19,354 single-family homes currently listed in the MLS. Most (6,999) are listed in the $200,000 to $300,000 price range. Condos currently make up 4,184 offerings in the MLS, while duplexes/town homes/villas make up the remaining 2,186. Most condos (552) are priced at $120,000 to $140,000, but nearly equal numbers are posted in both the $140,000 to $160,000 and $160,000 to $180,000 ranges. The majority of duplexes/town homes/villas (536) are listed in the $200,000 to $250,000 range.

Condos and Town homes/Duplexes/Villas

The sales of condos in the Orlando area declined by 73.00 percent in January: A total of 77 condos changed hands in January 2008 compared to 288 in January 2007. In a month-to-month comparison, January 2008 condo sales (77) decreased by 20.00 percent from December 2007 (96).

The most (10) condos that changed hands in January 2008 fell into the $200,000 and $249,000 range.

Orlando homebuyers purchased 50 duplexes, town homes, and villas in January 2008, which is a 53.00 percent decline from January 2007 when 106 of these alternative housing types were purchased. Duplex, town home, and villa sales in January 2008 were down by 60.00 percent compared to the number of sales that took place in December 2007 (125).

The majority (10) of duplexes, town homes, and villas sold in January 2008 fell into the $180,000 to $200,000 category.

MSA Numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in January were down by 49.90 percent when compared to January of last year. Throughout the entire MSA, 884 homes were sold in January 2008 compared with 1,763 in January 2007.

Seminole County’s January 2008 sales dropped 47.60 percent below that of January 2007 (185 to 353), while Orange County fell 51.80 percent (437 to 906). Lake County saw a 37.10 percent decline in the number of sales in January 2008 compared to January 2007 (154 to 245), and Osceola County experienced a 58.30 percent drop (108 to 259).

Each county’s year-to-date sales comparisons are as follows:

Lake: 37.10 percent below 2007 (154 homes sold in 2008 compared to 245 in 2007);
Orange: 51.80 percent below 2007 (437 homes sold in 2008 compared to 908 in 2007);
Osceola: 58.30 percent below 2007 (108 homes sold in 2008 compared to 259 in 2007); and
Seminole: 47.60 percent below 2007 (185 sold in 2008 compared to 353 in 2007).

Six top mortgage lenders and servicers Tuesday launched a new program aimed at staving off foreclosure for seriously delinquent borrowers in the hopes that new, more affordable loan terms can be worked out.

 ”Project Lifeline,” backed by the U.S. Treasury and Department of Housing and Urban Development, would pause foreclosure proceedings for borrowers more than 90 days in arrears while services determine whether they could make payments under new terms, the lenders said in a statement.

The effort would cover all types of home loans, unlike an earlier plan aimed at freezing interest rates for subprime mortgage holders who cannot afford rates that reset to higher levels.

On a pilot basis, the plan will involve six of the largest mortgage lenders, in hopes that more lenders will sign on. The participants are Bank of America, Wells Fargo, Washington Mutual, JPMorgan Chase, Citigroup and Countrywide Financial.

All six are involved in Hope Now, an effort the Bush administration brokered with the mortgage industry late last year to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose teaser rates are jumping sharply higher. Since then, Treasury Secretary Henry Paulson has urged lenders to expand that effort to cover struggling homeowners with conventional mortgages.

The new plan applies to seriously delinquent homeowners, those whose mortgages are 90 days or more past due.

With home prices falling, even some people with good credit have gotten behind on their payments. Like many subprime borrowers, they signed up for adjustable-rate mortgages that allowed them to make smaller, steady payments for several years until a higher fluctuating interest rate kicked in.

Some borrowed against their rising equity as home prices climbed, assuming they would be able to refinance or sell their homes before the higher payments began. But as prices have plummeted, many homeowners now owe more than their home is worth, and banks have tightened their lending practices, leaving even people with stellar credit struggling with higher payments.

The Hope Now alliance, which includes lenders, investors and nonprofit groups, said last week that it helped nearly 8 percent of subprime borrowers in the second half of 2007–more than its original estimate.

The group said it helped 545,000 subprime borrowers with spotty credit in the second half of last year, compared with its January estimate of 370,000. That works out to 7.7 percent of 7.1 million subprime loans outstanding as of September.

Among the subprime borrowers aided, 150,000 were helped through permanent-loan modifications, such as lower interest rates, while 395,000 negotiated repayment plans, which often involve a borrower getting back on track even after missing a few payments.

Consumer groups, however, point out that many borrowers still can’t keep up, even after loan workouts. They say many of the borrowers in the Hope Now effort have negotiated short-term loan modifications or repayment plans, which often involve a borrower getting back on track after missing a few payments. A full-fledged refinancing at a lower rate is preferable, they say. 

The NATIONAL ASSOCIATION OF REALTORS® congratulated the U.S. Congress for quickly passing a national economic stimulus package and thanked President George W. Bush for his leadership and willingness to promptly enact legislation that will help thousands of families, the housing market, and the U.S. economy.

“We believe the economic stimulus bill that Congress sent to the president today is strong legislation that will quickly impact the nation’s families and economy,” said NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “We are pleased that both the Federal Housing Administration (FHA) and the Fannie Mae and Freddie Mac (GSE) loan limits have been increased, even if only temporarily. This will be a major stimulus for the housing industry and for people who want to own a home.”

Increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home, according to NAR research. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the severely stressed housing finance market by immediately infusing much needed liquidity into the nation’s mortgage market. “While such an increase will not solve the full range of housing challenges, it will play a vitally important role in improving the nation’s economy and making the dream of homeownership more attainable for thousands,” said Gaylord.

An economic impact study conducted by NAR earlier this month estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points. “These are real results and will have an immediate and sustainable impact for families across our country,” said Gaylord.