Written by: Robyn A. Friedman, Sun Sentinel
Published January 8, 2007
Real estate is bound to be one of the most talked-about issues again this year.People this year are likely to be pondering when the real estate market will recover, what direction interest rates will go and where new development or redevelopment will occur.Just before Christmas, three leading housing economists held a roundtable to discuss some of the many questions that will arise regarding housing in 2007. With a new Congress in control and a housing slowdown under way, what’s in store for home buyers and sellers? Which way will mortgage rates go? How will the slowdown in the housing market affect the overall economy? Here’s a summary of what David Seiders, David Lereah and David Berson said in a recent teleconference.David Seiders, chief economist for the National Association of Home Builders: In 2004 and 2005, there was an “unsustainable housing boom,” with sales levels and price appreciation running above what he considered to be sustainable. As a result, 2006 brought an “impressive correction” that might threaten the nation’s economic expansion. Mounting mortgage delinquencies and foreclosures will affect consumer spending. Home mortgage rates will remain stable through 2007, with fixed-rate loans topping out at 6.5 percent. Sales of new single-family homes, which peaked in the third quarter of 2005, bottomed out in the fourth quarter of 2006 and will remain flat this year. Residential remodeling will grow through 2007 and 2008 due to a record level of homeowner equity.David Lereah, chief economist for the National Association of Realtors: Some economists are predicting that the housing market will get worse before it gets better, but Lereah thinks we’re pretty close to bottoming out. “That’s good news,” he said, because it means the contraction in the housing market will be shorter than it was in the previous two contractions we experienced the last 20 years. There is about a seven-month supply of existing homes for sale throughout the nation, but in some local markets — and he singled out South Florida as well as California — there are double-digit months of home supplies for sale.That means these areas will have a more prolonged correction. For the past three months, prices have dropped on existing-home sales, and he expects further declines for the next few months. But that’s not entirely bad; by bringing prices down, sellers are encouraging some buyers to return to the market. Most contractions in the real estate market are due to recessions and job losses, but this one is not. It’s due to affordability problems and investor flight, so the long-term prognosis is good. A quarter of the nation’s markets — those that had a big boom but are now “experiencing pain” — will undergo price corrections this year, but the other three-quarters of the country should be expanding in 2007.David Berson, chief economist for Fannie Mae: The housing downturn is “close to an end; it will not continue throughout 2007.” Prices and sales will continue to decline slightly, but by mid-2007, sales will start to pick up and prices will stop declining. Real estate is highly regional. Even if prices decline in some parts of the country, growth in other areas will sustain the industry as a whole and the national economy. Mortgage originations for purchases will decline this year, but refinancing should rise as people swap fixed-rate mortgages for adjustable rates or draw equity from their homes.Robyn A. Friedman is a freelance writer. Send tips to her at RAFriedman@att.net.

By Lou BarnesInman News

Long-term rates have confirmed their over-the-holidays rise, but are taking strong economic news very well, mortgages holding at 6.125 percent.
December payrolls grew by a healthy 167,000 jobs, way above consensus forecast, and wages rose .5 percent in the month, nearly double the forecast. The December purchasing managers’ manufacturing index rose above break-even to 51.4, out of its November trough, and the service sector held a strong 57.1.
Christmas sales were on the shaky side, but most of the weakness can be charged off to warm-weather damage to clothing sales.
Oil cracked $55/bbl early this morning, warm weather in play there, too. I suspect also at work is a delayed reaction to the price spike now 18 months old. It takes time for a spike to suppress demand and encourage supply, especially with a structural increase in consumption coming from China (ramping up at least a half-million barrels per day per year), but if you double prices, you’re going to get a downward price correction beyond the ability of OPEC to manage the market.
As oil goes, so goes wagering on inflation: gold is down 20 bucks today to $607, and with it the whole commodity complex. Cost-driven inflation shouldn’t worry anybody.
The biggest story of the week was the Fed’s release of minutes from its Dec. 12 meeting.
Fed Chairman Ben Bernanke-era communications are as different as can be from his predecessor, Alan Greenspan, who was a superb speaker and author, gave the nation a public voice of economic management and wisdom, but believed that the Fed’s policy thinking should be secret — elements leaked rarely and for effect.
Bernanke isn’t any good on his feet, and his previously clear and entertaining writing style has deserted him in office. However, he promised to run an open Fed, and he is — the most open in modern times. No grandstanding: the understated open door sits in his post-meeting minutes.
During Greenspan’s administration the minutes were a waste of time, just a bunch of bankers kicking the economic can around. Bernanke’s minutes are still pages and pages of that stuff, but he has begun to insert a crucial item: the forecast by the Fed staff. Less than a month after each meeting, Bernanke shares the actual inside forecast upon which the Fed made its decision: “The rate of increase in real GDP was expected to pick up gradually as the drag from the contraction in residential construction diminished, returning towards the end of 2007 to a rate close to the staff’s estimate of potential output growth.” —www.federalreserve.gov, page five of the minutes (put the other eight in the bird cage).
Forget a rate cut. And, any mention of growth approaching its “potential” means a Fed more likely to raise the cost of money than to cut it.
The ripples into the financial markets are not yet wave height, but getting there.
Surprising news of economic health should be good for stocks, but they are sinking, having bet too much on a rate cut. No cut, and the dollar suddenly looks better versus other currencies, based on interest-rate differential: the euro is down to $1.30 from $1.33, and the yen down from 115/buck almost to 119.
Bonds were certainly hoping for a rate cut, too, and are up-side vulnerable. However, the Fed’s worry about labor market inflation is late-year, and that threat is limited by globalization drag on U.S. wages. Bonds are strongly protected by another global force: the immense volume of cash needing a safe place to park, largely indifferent to yield. This inverted curve (10-year T-note .57 percent under the Fed) doesn’t forecast economic weakness, just cheap mortgage money.
Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.
For More Real Estate Information about Fort Lauderdale, Florida go to www.ekluxuryhomes.com

Wishful thinking will not sell your house
Tuesday, January 02, 2007
By Dian HymerInman News

Three months was more than enough time last year for home listings in many areas to sell and even close. But now listings are expiring unsold, often leaving sellers wondering what to do next.
It’s possible that the term of the listing agreement — often 90 days — was unrealistic given current market conditions in the area. Sellers of expired or soon-to-be-expired listings should ask their agent to provide a printout from the multiple listing service showing all the sales in the area of somewhat comparable properties. Make sure the data includes the number of days the listing was on the market from list date to pending date and from listing to closing. A listing is pending when the sellers have accepted a purchase offer.
You may discover that your expectations were out of line with the market because it’s taking more than three months to sell most homes in your area. If so, and if you’re satisfied with the marketing service your agent has provided, extend the listing agreement. Sellers may find going forward that the most professional and successful real estate agents initially will require more than a 90-day listing.
Some sellers blame their agents when listings expire unsold. There are certainly some agents who don’t understand marketing or how to provide high-quality service to their clients. But, before firing your agent, ask for a summary of all the marketing the agent has done on your behalf.
The most professional agents keep their clients up-to-date on their marketing efforts on a regular basis. However, not all agents do. If you decide to renew with your agent and you haven’t been receiving weekly updates, make sure that you receive them in the future.
HOME SELLER TIP: The most common reason a listing expires unsold is that it’s overpriced for the market. To sell in today’s market, you need to be realistic about the likely sale price of your home. Wishful thinking doesn’t sell listings. One reason to hire a real estate agent is for accurate pricing information. Unfortunately, there are agents who will tell you what you want to hear about the expected market value of your home rather than what the market indicates is an appropriate value.
Carefully selecting a real estate agent is more critical in a soft market than it is when listings virtually sell themselves. Be sure to find an agent who is candid, reputable and skilled at marketing. Sellers who discover that their homes don’t sell because their real estate agents misled them about the price should find another agent who understands the importance of honesty and professionalism. It ultimately could do more harm than good if you bring your home on the market way overpriced.
More often, the seller is the source of a high list price. If the list price is too high, it makes no sense to extend the listing with your current agent or change to a new one without adjusting the price. Overpriced listings that sit on the market too long get stale in buyers’ and agents’ minds. Your listing becomes the “White Elephant” that can’t be sold. You can erase that stigma by selecting a new “priced-to-sell” price.
THE CLOSING: The expiration of a listing is also a good time to see if there have been any other impediments to the sale such as a difficult showing procedure or tired décor. Correct these obstacles before you bring your home back on the market so that they don’t continue to hinder the sales effort.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
For More Real Estate Information about Fort Lauderdale, Florida go to www.ekluxuryhomes.com

Realty Q&A
Heed these tips to guard against mortgage fraud
By Lew Sichelman
Last Update: 8:50 PM ET Jan 4, 2007
WASHINGTON (MarketWatch) – Question: I have enjoyed your many articles on mortgage fraud, particularly a recent one about the mob getting into the act. But I was hoping to see some pointers as to what a consumer should watch out for. Any ideas? Jim Carvin, Power Brokers, Orange, Calif.
Answer: I’m sure I’ve written what you request somewhere along the line. But just in case I haven’t, let’s rectify that oversight right here and now.
For starters, don’t lend or sell your credit history to anyone. Not even your brother, or your best friend. Scam artists need good credit to convince lenders to give them money. Without decent credit, lenders won’t lend. Besides, it’s illegal and could get you in very serious hot water.
Second, deal with only reputable real estate and mortgage professionals. Get references and check them out. Also, check their licenses with the appropriate state, county and federal regulators. Make sure they are current, and make sure no disciplinary actions have been taken or are pending against the person or persons with whom you are dealing. See related story.
One of the things rogue brokers and agents do when they are caught is pull up stakes and go to another jurisdiction. So if your guy or gal hasn’t been in town very long, find out where he or she has been and check them out there.
Don’t jump at a contract offer that promises more than you are asking, certainly not in today’s largely buyer’s market, and certainly not when it involves a kickback of the overage to the buyer at closing. Chances are the buyer wants an inflated price on the property so he can take the additional money and run without every making the first payment. The old adage — “If it sounds too good to be true, it probably is” — comes to mind here.
“An outrageous promise of extraordinary profits in a short period of time signals a problem,” the FBI warns in its pamphlet, “Mortgage Fraud Awareness and Prevention Tips.”
Similarly, don’t let anyone convince you to borrow more than you can afford to repay. Don’t let anyone talk you into falsifying your income, the source of your down payment or the nature and length of your employment. You’ll be told it’s okay, and that “everyone does it.” But that isn’t true. Not everyone does, and those who do often find themselves in over their heads.
Also be certain you understand what you are signing, and if you don’t, don’t sign — at least not until you obtain a satisfactory explanation from a real estate lawyer or accountant. And never, ever sign anything unless the blanks are all filled in. If the agent or broker tells you not to worry, that he’ll fill them in later, worry. Worry plenty.
Beware of strangers and unsolicited offers. Ditto high-pressure sales tactics. Take your time and seek professional advice — from another professional, one of your choosing, not theirs.
Review comparable sales in your immediate area to make sure they are not inflated. Review the tax assessments for those properties. Frequently, tax assessments are way behind values. But at the very least, they should be in line with one another. In other words, if the value of one property is three times the assessment on one property but only twice the one for your property, something’s rotten — and it isn’t in Denmark. Before you purchase anything, research neighborhood prices to make sure what you are paying is in line with what others paid.
Also, review the title history of the property to determine whether it has been bought and sold multiple times in a short period. This is a sign of “flipping,” a scheme in which houses are sold quickly, several times over, each time at a higher and higher price until the selling price no longer has anything to do with reality.
Another popular scheme seeks to cheat people who are in financial difficulty and cannot pay their mortgage. Here, the con man misleads the troubled owner into believing he can save his house if he signs it over to him. Forgetaboutit! While he promises to make the payments for you, and collects what he can from you, he never pays your lender. Instead, he re-mortgages the property, pockets the proceeds and skeedattles. And you lose the property. If you can’t make your house payments — or even if there’s only a possibility you can’t make your payments — call your lender to see what kind of help the company can offer. It also might be wise to call a qualified credit counseling agency.
If you are in the market for financing, you might be the victim of a scam if your loan amount is greater than the value of your property. No legitimate lender would make such a loan. But a predatory lender would if his goal is to take the house away from you when you can’t make the payments.
If there are any unexpected costs at settlement that were not explained to you when you applied for a mortgage, don’t pay them. They are probably bogus. Also make sure that the amounts shown on the truth-in-lending statements — which you should have received shortly after handing in your loan application — match, or are reasonably close, to those on the final statement you receive at closing.
View more useful real estate information about the Fort Lauderdale, FL Real Estate luxury home and condo market. http://www.ekluxuryhomes.com/