As a native Floridian, I know a lot about hurricanes and the one thing I know – Expect the unexpected.

Hurricanes are somewhat predictable. As the hurricane blows through you have destruction followed by a peaceful, tranquil lull where the sun may even reappear and you will walk outside your secured dwellings to survey the damage. It’s called the “eye” of the storm. For a short while, during which the eye passes over land – nothing happens and it is as if there is no storm. That’s where we are right now in FORECLOSURES. We are in the eye of the storm.

The federal government, banks and agents are all predicting we have hit bottom and personally, I think we have. But NO ONE is talking about the fact that the eye of the storm is upon us and a second wave of SERIOUS FORECLOSURES are about to hit the market. We are talking about people who once made a good living, bought an expensive home and are now underwater.

As a real estate agent, I see the forecast CLEARLY yet no one in Congress seems to understand the urgency of working to help homeowners – massive FORECLOSURES are forecasted. Congress needs to help homeowners negotiate the short sale process  or there will be a lot of homes foreclosed. In addition, there are so many people out of work, across all economic categories, that without a job - homes are lost. It’s just that simple.

Health care reform is important – but it is NOT as important as fixing our economy. With no jobs, massive foreclosures and people running out of savings – we are in crisis mode but because we are sitting in the eye of the storm – we don’t see what is coming on the horizon and it’s ugly.

WAKE UP WASHINGTON and start working on the economy and keeping people in their homes. The eye is upon us and the storm approaches.

As a real estate agent in the trenches, if you asked me to point the finger (and I don’t like to point) at anyone holding up the recovery of our economy – I would have to point at the banks.

Lenders received bail-out funds to stabilize their systems and promptly bonused their executives while then HOLDING the federal funds internally. In other words, the banks are doing exactly what they don’t want the general public to do – HOLDING ON TO THEIR CASH. They are certainly not re-distributing the wealth and they are certainly not giving out MORTGAGE LOANS to WORTHY borrowers.

To get a loan today is a lesson in frustration and there are no guarantees until the money is in the bank. LITERALLY. Recently one of my real estate transactions was cancelled one day before closing without cause and it took us two weeks to find another lender to consummate the transaction. Absolutely ridiculous!

Congress needs to take action to ensure that ALL LOAN NEEDS are being met; not just FHA underwritten loans – but loans for people who exceed FHA limits. The market over $400K has come to a screeching halt. I point the finger at the banks. They are so risk adverse that they aren’t willing to loan even to the most qualified buyers.

I understand the need to work on health care. What I don’t understand is how it takes precedence over economic and housing recovery. I will say it again – as the housing market goes – so goes the economy.

FHA on track for busiest year

WASHINGTON – Sept. 2, 2009 – Almost a year after the federal government launched its rescue of the housing market, nearly one in four new mortgages is insured by the Federal Housing Administration (FHA).

With less than a month to go in the 2009 fiscal year, the FHA is on pace for its busiest year.

From Oct. 1 through mid-August, applications for FHA single-family-home mortgages were up 50 percent, to 2.52 million, from the same period a year earlier.

Approvals for purchases, refinancings and reverse mortgages rose 70 percent to 1.67 million.

Eighty percent of the FHA mortgages for purchasing homes went to first-time buyers drawn to the FHA’s low-downpayment requirements, starting at 3.5 percent. Private lenders making conventional loans typically require at least 10 percent down.

The FHA’s market share, about 3 percent in 2006, has swollen to more than 23 percent. With credit still tight, many borrowers could not get a mortgage without FHA help.

FHA loans “are one of the most important sources in this market,” says Mark Zandi of Moody’s Economy.com. “Without FHA, the housing slide would be much more severe. We wouldn’t be talking about a recovery now. We’d still be talking about a crash.”

FHA loans also have become more popular because of the demise of many subprime lenders, which sometimes allowed buyers to purchase a property with nothing down and no documentation of income.

In addition, FHA increased its loan limits at the beginning of the year. Previously, the maximum had been $362,790. The new ceiling raised that to $729,750 in high-cost areas such as Boston, New York and Washington, D.C.

Also fueling demand for FHA-insured loans is this year’s tax credit of up to $8,000 for first-time home buyers.

But as FHA insures more loans, it is also assuming more risk.

Foreclosures on homes with FHA mortgages rose to 1.76 percent in June from 1.6 percent a year ago, and the default rate – for mortgages 90 days or more delinquent – was 6.88 percent, up from 5.57 percent.

“I’m very concerned about risk,” says FHA Commissioner David Stevens, who adds that risk is mitigated in part because applicants today are more solid than those in recent years.

Borrowers with FHA-insured loans now have average credit scores of about 690, compared with about 630 two years ago.

FHA also has tightened lending standards, requiring a 10 percent downpayment for those with credit scores below 500.

Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Stephanie Armour.

In today’s marketplace, the one thing I am now seeing more and more often is qualified renters looking for executive level homes.

Why? Because they have lost their homes due to foreclosure. That’s right…these are great tenants who, in good times, were paying up to $10,000 per month in mortgage payments but due to circumstances, they are now displaced and need a rental home. They have high standards though and while willing to downsize…they still want a respectable, executive type home for around $2,000 to $3,000 per month. They can afford it.

The Wall Street Journal recently published an article entitled “The New American Dream: Renting”  and it was very accurate in reporting that with 1 in 355 home currently in foreclosure – these owners need to move into a rental home.

If you are an investor or if you have a vacant home – it’s time to think about renting and making a profit on your home for a few years while the market fluctuates. No one knows what the future holds – it’s still a mystery – but one thing is certain…there is a demand for rental housing and you have great quality tenants now available to rent your properties. Call me if you want more information.

 http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html

When Headquarters Meets Living Quarters

Workspaces That Inspire

by Iyna Bort Caruso

As more people work from home, fewer of them are content to commandeer a spare bedroom for a makeshift office or carve out an alcove for a studio. Instead, they’re building wings, designing free-standing workshops and customizing floor plans to create live-work environments that are as architecturally arresting as they are inspiring.

Arthur Carter is one individual who has successfully balanced life and work in extraordinary surroundings.  The former investment banker, founder of The New York Observer and sculptor built a 1,100-square-foot studio on his 1,500-acre Connecticut farm.

Carter, whose works have been exhibited in galleries in the U.S. and abroad, uses the studio to sketch and sculpt. He says he carefully weighed the merits of building a standalone structure against integrating the workspace into his existing home, which dates back some 350 years.  Ultimately, however, “I didn’t easily see how I could add a good amount of space without compromising the integrity of the home’s architecture.”

He collaborated with Mark Simon of Centerbrook Architects in Centerbrook, Conn., on the design of the studio, which draws on the property’s 18th century roots. Simon says, “The common goal was to make a spacious studio fit in a delicate New England landscape with several old houses.”

The studio is a barn-like saltbox with a lead-coated copper roof and vertical cedar board siding.  The interior features a fireplace, kitchen and bathroom.  For Carter, maximizing daylight was an important factor in the design. That was accomplished through a large arched window, facing north for even lighting.

The New Must-Have Space

According to a 2007-08 consumer preferences survey by the National Association of Home Builders, 50% of recent or potential home buyers find a home office desirable.  And among properties of distinction, they are essential.  In Toronto, Ontario, Claudia DiPaola of Sotheby’s International Realty Canada says, “Ten years ago, an office was a plus. Today, for executives and professionals, it’s just a must.”

Broker-owner Vivian Bridaham of The Collection Sotheby’s International Realty in Bozeman, Mont., has two homes on the market that boast astonishing home offices.  Both residences are priced in the mid-$4 million range. One home, built out of 200 tons of stone, has a 182-square-foot exterior glass cube office that looks out onto the Bridger Mountains.  “The idea that you could conduct business all over the world from this gorgeous setting is incredible,” Bridaham says.

The home office of another estate in Bridaham’s portfolio has vaulted wrought-iron trusses, skylights, a large picture window and built-in cabinetry hand-constructed out of aged distillery wood.

“Most people coming here are in their 40s, 50s and 60s. They’re still working and they want to be able to work out of their house. And do it in an amazing environment,” says Bridaham.  “This setting is their reward.”

Blending Form and Function

For architects, the challenge is tailoring a workspace to the needs of the task and the comforts of the homeowner. Fernando Brave, founder of Brave/Architecture in Houston, Tex., was commissioned to design a 4,200-square foot building to house a photographic art gallery, working studio and private living quarters. 

The test for Brave was to construct the building — known as the De Santos Gallery — with a clear separation between the gallery, studio and living space so the public sections could be leased to a tenant, if necessary.  Brave segregated the function areas of the property both structurally and aesthetically.  The first floor houses the gallery, the second floor a studio and the third is a loft-like sleeping area that opens onto a large terrace.  The building is clad in two different materials. “The materials were chosen for simplicity of use and to express the two interlocking parts of the building. The private areas are expressed in galvanized metal while the public areas are in white cement stucco,” he says.

Argentina-born Brave maintains a small office in Buenos Aires, as well, where he says live-work spaces are prevalent. “Artists, professionals, architecture firms, design firms, shops, little factories and all kinds of food services. It’s common to see families living upstairs.”

Adding Flexibility and Value

While the De Santos Gallery overlooks downtown Houston, the transformed workspace of Justine Wetherington in Gainesville, Fla., overlooks 11.5 acres of oaks, sago palms, blooming agave plants and yellow peanut flowers. Wetherington bought the property last year, smitten by both the landscape and the unconventional bermed home, earth covering its windowless walls up to the roof. “When you find the perfect house, it will tell you,” she says.

Architect William Morgan, who also designed the Florida State Museum of Natural History, named it The Forest House for its lush setting when he built it in 1979.  As part of the renovation of her house, Wetherington transformed a 2 1/2-car garage, connected to the home via a 30-foot breezeway, into a jewelry design and fabrication studio for her company, Enamelation. “I knew whatever house I was going to buy was going to have to have an extra chunk of space that I could turn into a workspace with elbow room and more in the way of aesthetics,” she says.

The sloping garage floor was leveled off with concrete. The garage door was replaced with 16 feet of windows. The ceiling was plastered, outlets were added and the floor was painted a dark green in keeping with the property’s forest setting. 

Although Wetherington has no plans to sell, enhancing her real estate investment was on her mind during the overhaul of the 625-square-foot space. “The space is not defined as a studio,” she says. Empty it out, and it is flexispace that can be converted into a den, billiards room, woodworking shop or a home theater.

But for now, Wetherington has made it uniquely and joyfully her own.  “It’s so lovely that it does not feel like a work place.  I stare out the window for a while. The ideas percolate through.  Looking out there, it’s so beautiful one would feel somewhat ashamed not working on coming up with something equally beautiful.” 

http://online.wsj.com/ad/article/sir-living?WC=HPLivThumb

Buyers shouldn’t wait on falling prices

NEW YORK – Aug. 5, 2009 – Fear of overpaying for property is common these days, especially in places where prices continue to be unstable. If you encounter potential buyers afraid to commit based on a fear that they’ll pay too much, point out these factors:

• Waiting for the right time can be expensive. Some buyers would have more equity today, despite falling prices, if they had bought when they first considered it instead of continuing to pay rent.
• Financing is fickle. Some people who were highly qualified last year can’t find financing this year because the credit market has tightened or their personal financial situation now makes them an undesirable borrower.
• Interest rates are headed up. If prices decline by another 10 percent but interest rates increase by 1 percentage point, the monthly payment will be the same.

Source: The Wall Street Journal, Douglas Heddings (07/27/2009)

I recently read an article on REALTOR.com which listed six reasons a home sells and to be honest, they were all good reasons. But I don’t think they are the MAIN reason homes sell in this market.

The article contained “ideas” about helping a home to sell such as freshly painted front door, fix all leaks, etc. Basically, the same old and tired news. But honestly, in this market there are TWO reasons a home sells.

1. IT IS PRICED right. No amount of fix up is going to get you top dollar in this real estate market. Recently I sold a house that was absolutely stunning and totally renovated. It shined. But when the appraiser got involved it turned into little more than an “outhouse” in his narrow vision of value. The appraiser didn’t care about the renovations and the pristine condition. He cared about the foreclosure down the street which now jeopardized the value of this home. It was a fight but we got it sold. So I would say, PRICE IT FOR THE MARKET and be prepared to fight for your value.

2. LUCK – Short and sweet. Plain and simple – you need a little bit of luck on your side. In todays market all the rules and all the reasons are thrown out the window and are replaced by being in the right place at the right time. You are lucky. You have a willing seller (realistically priced – see #1) and a willing and READY buyer and the great good fortune to have a contract. Take the deal and run. You have, in essence, won the real estate lottery.

There you have it – a Reader’s Digest version of the reasons a home sells. GOOD LUCK.

According to CNBC – The Highest-End Real Estate has been adversely affected by the economy.

In 2008, with falling prices, sluggish sales and currency fluctuations, the credit crunch and global financial crisis have hurt real estate in places that have traditionally been the most expensive markets in the world.

On March 23, Knight Frank released the Wealth Report 2009, a survey of high-end, prime real estate around the world. The findings show big price fluctuations around the world in the 2008 calendar year, and even more dramatic swings from Q3 to Q4. The firm defines prime real estate as: “The most expensive 1% of property in each location. Commonly – but not always – this will relate to the US $1m+ segment – and often will comprise an international client base.”

This past Spring sales in the million dollar category are at a standstill and sluggish would be a generous term for sales in this market. Some economists are calling for a stimulus package for all buyers and not just the $8,000 first-time homebuyer credit. I’m in agreement that we need to jumpstart the sales of homes across our nation to help restore consumer confidence and increase demand!

I have some new statistics to share with all of you and they are pretty shocking when you consider the luxury market conditions and the number of home available for sale.

I would also like to say that I am so grateful to the many sellers out there that have confidence in my marketing program. I believe that the combination of a personalized marketing plan and Stirling Sotheby’s International Realty brand is a great team and we really try to do our best. I constantly try to look for new and creative marketing ideas to get my listings sold.

The May, 2009 update sums up the market quite well — only 1,055 homes sold in ORANGE COUNTY, Florida. This is a shocking number! 69% of the homes sold were sold for $200,000 or under. When you increase the sales price to $300,000 that accounts for 88% of all homes sold in Orange County, Florida. Over $1M luxury market is at .076% – in other word, almost non-existent with a mere 9 sales and a few of them short sales. One Winter Park estate home was original listed at $2.5M and sold for $1.4M.

Where do we go from here? We stay the course. In 23 years I have never seen market conditions like we are currently experiencing. We have a shortage of lenders willing and able to loan money unless the loan is backed by FHA. This explains why the average sales price for a home in Orlando right now is $130,000.

If your home is vacant, consider leasing at this time. At least it will cover some of your carrying cost until our elected leadership can figure out how to stimulate the economy and increase consumer confidence. As the housing market improves – so will the American economy.

For additional details on your neighborhood – call Linda at 407-898-9090 or my cell at 407-925-7721.  I am very excited to be busy and I still work hard to increase transactions in this difficult market.

Is it me or is everything getting smaller?

I know this a luxury blog but luxury no longer equals HUGE. Lavish displays of extravagant wealth are no longer de rigueur. You can be opulent and tastefully small.

I have watched, with our current market conditions, as homeowners are downsizing in record numbers. People still want to be surrounded by beautiful things – just not so much of them. Maybe there is too much of a good thing.

I have also watched people who had extraordinary home settle for something sweet and simple. When the world around you is teetering, just a bit, it is good to have something that is warm and cozy and feels like home.

In the end, this may not be a bad thing at all. Luxury in a box, a delicious, delightful and small box. I think I may try it myself.