ORLANDO, Fla., Aug. 24, 2010 – Sales of existing condominiums in Florida rose 11 percent in July, with a total of 5,557 condos sold statewide compared to 4,991 units sold in July 2009, according to the latest housing data released by Florida Realtors®.

Eleven of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in July, according to Florida Realtors. The statewide existing condo median sales price last month was $87,200; in July 2009 it was $108,500 for a 20 percent decrease. The national median existing condo price was $181,300 in June, according to the National Association of Realtors® (NAR).

Meanwhile, in the year-to-year comparison for existing home sales, a total of 13,589 single-family existing homes sold statewide last month compared to 15,762 homes sold in July 2009 for a decrease of 14 percent. Florida’s median existing-home sales price in July was $138,000; a year earlier, it was $147,600 for a decrease of 7 percent. The median is the midpoint; half the homes sold for more, half for less.

“The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market,” said Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “As we move past this second dip, which is evident in the July data, the continued recovery of the state’s housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.

“A healthy housing market depends upon a healthy Florida economy, and in particular, an improving labor market,” Snaith added. “Job growth and a declining unemployment rate will help sales continue to grow while at the same time reducing the number of foreclosures in Florida.”

2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville, noted that the Gulf oil spill, along with uncertainty over its impact, has affected the state’s housing market.

“Along with many local businesses in the Florida Panhandle and in other Gulf Coast states, real estate has experienced significant economic harm following the Deepwater Horizon drilling rig explosion and oil spill,” Davis said. “The announcement that a special allocation from the BP Oil Spill Fund is now available to help the claims of real estate professionals’ – Realtors and licensees – over loss of income or sales due to the Gulf oil spill is a positive action that will help bolster the state’s fragile economy recovery.”

The national median sales price for existing single-family homes in June 2010 was $184,200, up 1.3 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $331,150 in June; in California, it was $311,950; in Maryland, it was $265,268; and in New York, it was $220,750.

More jobs continue to be key to the housing sector’s recovery, according to NAR’s latest industry outlook. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” said NAR Chief Economist Lawrence Yun.

The interest rate for a 30-year fixed-rate mortgage averaged 4.56 percent in July, down from the 5.22 percent averaged in July 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

© 2010 Florida Realtors®

ORLANDO, Fla. – Aug. 11, 2010 – Sales of existing single-family homes in Florida rose 21 percent in second quarter 2010 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 51,564 existing homes sold statewide in 2Q 2010; during the same period the year before, a total of 42,604 existing homes sold. It marks the eighth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

Statewide sales of existing condominiums in the second quarter rose 45 percent compared to the same time the previous year. This marks the seventh consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

Statewide sales activity in 2Q 2010 also increased over 1Q 2010’s sales figure in both the existing home and existing condo markets, Florida Realtors’ records show. For 2Q 2010, statewide sales of existing homes rose 32.7 percent over the 1Q 2010 figure; statewide existing condo sales in 2Q 2010 increased 24.2 percent over the 1Q 2010 level.

Looking forward, the University of Florida’s Bergstrom Center for Real Estate Studies’ latest quarterly survey of real estate trends reported that job growth and the BP oil spill were cited as top concerns for the future outlook of the state’s real estate industry. The survey polls market research economists, industry executives, real estate scholars and other experts.

The center’s director, Timothy Becker, noted in the report that the oil spill has created “a cloud of uncertainty that is affecting all markets across the state. Our respondents indicate that the effect of the oil spill is being felt across Florida despite the fact that oil is only showing up on some beaches in the Panhandle.”

The survey reported the outlook for investment in industrial properties continues to brighten and is becoming increasingly positive.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in 2Q 2010 compared to the same three-month period a year earlier; 18 of the MSAs showed gains in condo sales.

The statewide existing-home median sales price was $141,300 in 2Q 2010; a year earlier, it was $143,000 for a decrease of 1 percent. The 2Q 2010 statewide existing-home median sales price was 5.6 percent higher than the statewide existing-home median sales price of $133,800 in 1Q 2010. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 20,986 units sold statewide for the quarter compared to 14,430 in 2Q 2009 for a 45 percent increase. The statewide existing-condo median sales price was $98,900 for the three-month period; in 2Q 2009, it was $110,300 for a decrease of 10 percent. The 2Q 2010 statewide existing-condo median sales price was 3.2 percent higher than the 1Q 2010 statewide existing-condo median sales price of $95,800.

Low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.91 percent in 2Q 2010; one year earlier, it averaged 5.03 percent.

© 2010 Florida Realtors®

MIAMI – Aug. 10, 2010 – South Florida home values suffered the worst decline of 25 large metropolitan areas in the second quarter of this year, falling 15 percent compared with 2009, according to a national real estate report.

The data, released Monday by analysts at Zillow, found that the median home value in Palm Beach, Broward and Miami-Dade counties fell to $146,500, down nearly 7 percent from the beginning of this year and a whopping 52 percent from housing’s peak values in 2006.

Nationally, median home value, including townhomes and condominiums, dipped 3.2 percent from the same time in 2009.

Zillow’s chief economist, Stan Humphries, called Monday’s study a “mixed bag,” with several areas in California seeing a continued increase in values.

In Los Angeles, home values jumped 5 percent compared with 2009. San Diego homes saw a 7 percent increase.

“Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values,” Humphries said. “High supply continues to be a challenge in states like Florida and Arizona.”

A separate report released Monday by analysts at Miami-based Condo Vultures showed a 4.6 percent increase in housing inventory in South Florida since May, with 68,254 single-family houses, condos and townhomes on the market.

Humphries predicts home values will bottom out nationally during the latter half of this year.

“But we continue to be cautious about the impact of declining home sales,” Humphries said.

The Phoenix area showed a 12 percent decline in median home value compared with last year, while Detroit values plummeted 14 percent.

The Zillow Home Value Index measures the median value of all homes, not just sales.

In Palm Beach County, values for single-family homes showed only a 1 percent decline, while Martin and St. Lucie had declines of 5 percent and 4 percent, respectively.

South Florida’s homes are treading water in one measurement, managing so far this year not to sink further into negative equity.

Zillow found that 44 percent of South Florida single-family homes with mortgages are underwater – real estate slang for owing more on a loan than the home is worth.

That’s about the same percentage as the beginning of the year and just below the second quarter of 2009, when 47 percent of homes were underwater.

In the Treasure Coast, 55 percent of homes with mortgages were underwater during the second quarter of this year, compared with 56 percent earlier in 2010.

Nationally, 21.5 percent of homes with mortgages had negative equity in the second quarter.

Humphries said foreclosures and bank takeovers help clean out the inventory of negative equity homes, but the typically lower sale prices of those homes also continues to weigh down values of neighboring properties.

Peter Zalewski, a principal for Condo Vultures, is more optimistic about Florida’s market turning around even with rising inventories. He believes financing opportunities are increasing, meaning more people will be able to buy.

“I think that 2009 will be the year most people realize was the bottom,” he said. “I would be surprised if there was another big increase in underwater homes.”

Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

ORLANDO, Fla. – July 1, 2010 – A massive condominium bill addressing everything from fire sprinkler retrofits to incentives for moving excess condo inventory is among the real estate-related legislation taking effect today.
 
“Legislators introduced more than 50 bills this session dealing with some aspect of condominiums and condominium associations,” says John Sebree, vice president of public policy for the Florida Realtors®. “At the end of the day, there was one – SB 1196 by Sen. Mike Fasano (R-New Port Richey). We worked hard to make sure this 103-page bill contained at least two of the many changes sought by Realtors: incentives for buyers of multiple condo units and repealing the requirement that individual owners carry hazard insurance.”
 
The “bulk buyer” provision seeks to stimulate condo sales by enabling investors to purchase condo units in bulk (seven-plus units) without incurring the legal and financial liabilities of the original developer. The hazard insurance provision repeals a 2008 law requiring unit owners to provide proof of insurance every year. If a unit owner failed to provide a certificate of insurance, the association was allowed to purchase insurance on the owner’s behalf and assess the unit owner for the cost of the insurance.
 
SB 1196 also specifies that:
 
• Florida law no longer requires owners to purchase individual unit owner insurance coverage, though it could still be required by lenders or through the Declaration of Condominium;
• Associations of condos over 75 feet high aren’t required to retrofit sprinkler systems;
• Lenders must pay more of past-due assessments on foreclosed properties;
• Associations may deny owners or occupants the use of common areas and recreational amenities when the owner is more than 90 days delinquent in paying financial obligations due to the association; and
• Associations may divert tenant rents to pay for delinquent assessments owed by unit owners.
 
Other laws taking effect today that impact real estate transactions or real estate practitioners provide that:
 
• Documentary stamp taxes on short sales are based on the purchase price, not on the amount of the outstanding mortgage balance. HB 109 by Rep. Evan Jenne (D-Fort Lauderdale) codifies into law a similar ruling in 2008 by the Florida Department of Revenue.
 
• Real estate and appraiser instructors and real estate school permit holders may serve on the Florida Real Estate Commission and the Florida Real Estate Appraisal Board under HB 713 by Rep. Ritch Workman (R-Melbourne).

• Home inspectors, mold assessors and mold remediators must be licensed by the state effective July 1, 2010. All applicants are required to complete a 120-hour course. But the Department of Business and Professional Regulation (DBPR) lacked authority to approve the course until July 1. Consequently, the DBPR says it won’t enforce the licensing requirements until July 1, 2011. Visit the department website [http://www.myfloridalicense.com/dbpr/pro/homein/happens.html] for details. On a related note, HB 663 by Rep. Gary Aubuchon (R-Coral Springs) allows these inspectors, as well as appraisers and real estate brokers and sales associates, to take distance learning courses to satisfy pre-license and post-license requirements. A grandfather clause allows some inspectors to get a license without taking the course, providing they’ve conducted at least 120 previous inspections over the past three years.

• More housing choices for individuals with disabilities. SB 1166 by Sen. Thad Altman (R-Melbourne) removes, among other things, a requirement that community residential homes for disabled persons be located 1,000 feet from each other within planned residential communities.

© 2010 Florida Realtors®

RICHMOND, Va. – June 4, 2010 – An insurance company doesn't have to pay for damages at a Virginia man's home ruined by Chinese-made, sulfur-emitting drywall, a decision by a federal judge Thursday that could affect how lawsuits by thousands of U.S. homeowners are settled.

Judge Robert G. Doumar in U.S. District Court in Norfolk said in the ruling that no coverage was owed under a homeowner's policy issued by Travco Insurance Co. to Larry Ward of Virginia Beach.

The judge said the policy does not cover removing or replacing the drywall, or any damages stemming from the material. That's because the policy excluded damage caused by latent defect, faulty materials, corrosion and pollution.

The ruling does not preclude further claims that could be covered under the policy.

According to court documents, Ward made claims under his homeowner's policy after the drywall in his home began to release sulfuric gases into the home and damaged his air conditioning, garage door and flat-screen televisions.

Attorneys representing both parties did not immediately return messages seeking comment. Ward also filed a lawsuit against several development and supply companies.

Randy Maniloff, a Philadelphia-based lawyer who has closely followed Chinese drywall insurance litigation, said attorneys for insurance companies and homeowners will carefully examine this case, as it is one of the first comprehensive decisions.

"This is one case out of many, many Chinese drywall cases," said Maniloff. "This is the first one that's going to get everybody's attention. This will become sort of the benchmark - rightly or wrongly."

Thousands of homeowners, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana, have reported problems with the drywall, which was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes.

The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects.

Copyright © 2010 The Associated Press, Michael Felberbaum, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

TALLAHASSEE, Fla. – June 4, 2010 – Preparation is key now for home, business and environment. The following Florida resources offer guidance or direct help.

 Landfall predictions

Projections from NOAA indicate weathered oil from the leading edge of the Deepwater Horizon oil spill could impact the Florida Panhandle as early as this week due to a shift in winds and currents.Any impact to Florida's shoreline will likely be highly weathered – tar balls, oil sheen, tar mats or mousse, a pudding-like oil/water mixture that could be brown, rust or orange in color.

• The National Oceanic and Atmospheric Administration is tracking the oil spill's movement. For an update, visit the NOAA website at: http://www.noaa.gov  
• If you spot oil on Florida's coastline report it to the State Warning Point at 1 (877) 2- SAVE-FL (1-877-272-8335) or dial #DEP from most cell phones.

 Onsite actions

A single website was created to coordinate federal efforts as well as BP initiatives: http://www.deepwaterhorizonresponse.com

 State and federal actions

• The State Emergency Operations Center remains activated at a Level 2 or partial activation.
• Governor Charlie Crist has issued three Executive Orders since April 30, 2010, declaring a state of emergency in 26 coastal counties that may see impacts. To read the Executive Orders, visit: http://www.dep.state.fl.us/deepwaterhorizon/default.htm#auth
• BP has opened claims offices in Florida. Visit the BP Claims Page toget addresses, phone numbers and to learn more: http://www.dep.state.fl.us/deepwaterhorizon/claims.htm

• On May 18, 2010, the Small Business Administration (SBA) opened eight offices in the Panhandle. To date, these offices have issued a total of 150 loan applications. Find an office (PDF format) at: http://www.dep.state.fl.us/deepwaterhorizon/files/small_business_admin.pdf

• The U.S. Environmental Protection Agency (EPA) conducted water and sediment sampling to use as a baseline for monitoring air quality data should it be affected by the oil spill. Read the reports and get updates as released at: http://www.epa.gov/bpspill

 Health effects

There are no indications of any health risks due to the Deepwater Horizon incident so far. The Department of Health and DEP are monitoring health and environmental impacts to Florida's beaches and will notice an advisory if conditions become unsafe. To read more about the possible health effects from oil, go to (PDF): http://www.dep.state.fl.us/deepwaterhorizon/files/faq_doh_051010.pdf

Fishing and seafood

• NOAA extended the boundaries of the closed fishing area in the Gulf of Mexico to the state water line in Alabama and the western tip of Florida's Panhandle. The federal closure does not currently apply to any of Florida's waters, and it's called a precautionary measure. For the latest update, check the Deepwater Horizon website at: http://www.deepwaterhorizonresponse.com. Scroll to "Current Ops" at the top and click on "Fish and Wildlife Report."
• Fishermen who wish to contact BP about a claim should call (800) 440-0858.
•  Report oiled wildlife to the Wildlife Distress Hotline at (866) 557-1401. For the safety of the public as well as the safety of animals, trained responders should conduct rescues.

Tourism

• Florida's tourism website, www.VISITFLORIDA.com, posts up-to-the-minute information on the status of any city or region in Florida. Vacationers may also view live Twitter feeds of any changes. Learn more at: http://www.visitflorida.com/florida_travel_advisory/.
• The Florida State Parks have not felt any effect, but updates on closings, if any, will be posted on their website: http://www.floridastateparks.org. Visitors can also get updates by calling 1 (850) 245-2157.

Tips for homeowners

• Coastal homeowners have inundated the state with calls about what they can do to protect their property. The state has offered suggestions on what is allowed and what to avoid in a single (PDF) file: http://www.dep.state.fl.us/deepwaterhorizon/files/protect_shoreline_tips.pdf

 Tips for businesses and consumers

• The Attorney General's fraud hotline is open to receive reports of fraud or price gouging by individuals or companies trying to take advantage of the Gulf oil crisis. Call the hotline at: 1 (866) 966-7226.
• The Florida Agriculture and Consumer Services Commissioner gas price-gouging hotline is also operational. The toll-free hotline number is: 1 (800) HELP-FLA (1-800- 435-7352).
• Coastal businesses should keep good records and make loss of earnings claims for damages incurred as a result of the oil spill. Businesses should file a claim with BP by calling 1 (800) 440- 0858. Learn more at http://www.myfloridacfo.com/oilspill/default.htm or by calling 1 (850) 413-3089 or toll-free at 1 (877) MY-FL-CFO (1-877-693-5236).

 Volunteer opportunities

• The Governor's Commission on Volunteerism and Community Service is encouraging Floridians and visitors to become a Coast Watch volunteer. To help or to get more information about scheduled beach cleanups and other volunteer opportunities at: www.volunteerfloridadisaster.org.
• BP established a volunteer program and set up a toll-free number for those interested in volunteering. Learn more by calling BP's community information line at 1 (866) 448-5816.

 Learn more about Florida's response

• DEP launched a Twitter account, www.Twitter.com/FLDEPalert, dedicated to providing updates on Florida's response to the Deepwater Horizon Oil Spill.
• For a list of Unified Command, BP and Florida phone numbers, visit http://www.dep.state.fl.us/deepwaterhorizon/default.htm#numbers
• The Oil Spill Information Line is available at 1 (888) 337-3569 from 8:00 a.m. to 6:00 p.m. seven days a week. Additional phone numbers have also been established for persons with disabilities: (800) 955-8771 (TDD) or (800) 955-8770 (voice).

TALLAHASSEE, Fla. – June 3, 2010 – Florida Gov. Charlie Crist signed into law Tuesday a sweeping condominium reform bill that's expected to help associations devastated by financial problems.

The bill, SB 1196, requires lenders that foreclose on condo units to cover 12 months of unpaid homeowner association assessments or 1 percent of the original mortgage debt, whichever is less. Previously, lenders had to pay six months of assessments or 1 percent of mortgage debt.

The measure also makes it easier for condo boards to opt out of expensive fire sprinkler, smoke detector and elevator upgrades that must be completed by 2014. In addition, the bill adds protections for bulk buyers of condo units and suspends voting rights for condo owners who are 90 days delinquent.

As foreclosures mount, condo advocacy groups have been urging Florida lawmakers to shift more of the burden of unpaid assessments to lenders. The associations face budget shortfalls because of the increase in vacant units. The reduced revenue has resulted in the postponement of maintenance and other services.

"Any time you can get lenders to agree to pay more, it's a cause for celebration," said Donna DiMaggio Berger, a Fort Lauderdale lawyer who helped draft the bill.

Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association, said lenders will adapt to the new law. But he said it could negatively affect condo lending in the short term.

"It might," he said. "We're not sure. Anytime there is more cost, you have to underwrite the loan differently."

With no line-item veto, Crist vetoed the bill last year. He sided with fire marshals and others, who said the lack of sprinkler systems was a safety issue.

Berger said some condo associations now will be able to collect twice as much money from lenders as before. But other lawyers argue that most banks never will have to cover an entire year's worth of unpaid assessments.

SB 1196 was sponsored by Sens. Jeremy Ring, D-Margate, and Mike Fasano, R-New Port Richey, and Reps. Ellyn Bogdanoff, R-Fort Lauderdale, Maria Lorts Sachs, D- Delray Beach, and Matt Hudson, R-Naples.

The Florida Senate approved the bill 38-0 in April, while the House later voted in favor of it 107-4.

Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune Information Services.

FORT LAUDERDALE, Fla. – June 3, 2010 – Before Larry Thomas unloaded his Pompano Beach, Fla., home last fall for a fraction of what he paid, he cut a deal that will keep him from worrying about a huge debt hanging over his head.

Thomas insisted that his lender, American Home Mortgage Servicing, agree not to come after him for the estimated $174,000 he still owed on his two mortgages. "I feel incredible relief," the 32-year-old restaurant manager said last week.

Others may not be as fortunate.

Lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don't result in enough money to pay the mortgages in full, real estate and legal analysts say.

"It will be a dramatic problem because the borrowers will not know it's coming," said Frank Alexander, a law professor at Emory University in Atlanta.

Laws vary from state to state. In Florida, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers' assets.

Before the housing meltdown, few lenders filed these lawsuits. Foreclosures and short sales – selling for less than the mortgage amount – were relatively rare at the time, and many of the homeowners didn't have sufficient assets to make it worth the banks' time and expense.

But following the heady days of the housing boom that spawned millionaire investors seemingly overnight, it's not uncommon for borrowers to default on mortgages while still holding lucrative investments.

As the next wave of the housing crisis plays out, those most in danger of getting slapped with lawsuits include angry homeowners who ransack properties they're losing in foreclosure and borrowers who walk away from "underwater" mortgages. In both cases, analysts say, banks will want to discourage other people from such behavior.

More than four in 10 homeowners said they would consider abandoning properties that are underwater, or worth less than the mortgages, according to a national online survey released last week by real estate firms Trulia and RealtyTrac.

Mortgage companies typically won't sue homeowners who negotiate in good faith or those who default on their loans because of job losses or other unforeseen circumstances, said Anthony Manno, an executive with Steelbridge Real Estate Services. The Miami-based company works with lenders on the resale of foreclosed homes.

Still, borrowers shouldn't rely on a lender's verbal commitment, Manno said. "Get something in writing."

Critics insist that spite will play a role in some of these lawsuits. Lenders deny it.

"We certainly would not do that," said Russell Greene, president of Grand Bank & Trust of Florida in West Palm Beach. "It's a business decision – not an emotional decision. It's very time-consuming to take someone to court."

Even if lenders don't pursue the judgments, they could sell mortgage debt to collection agencies at deep discounts. And it will be those debt collectors that will hound borrowers, said Shari Olefson, a Fort Lauderdale real estate lawyer.

"They paid money to be able to hassle you," she said.

Thomas, the former Pompano Beach homeowner, said he didn't have money for a downpayment but was approved for 100 percent financing on two loans in spring 2006. He bought a three-bedroom home for $245,000.

Thomas said he soon became responsible for the entire mortgage after his roommate lost his job. That became even more difficult after Thomas took a pay cut.

So he attempted a short sale, eventually finding plenty of prospective buyers interested in a property that had plummeted nearly 70 percent in value. He and American Home Mortgage accepted one offer for $80,000. After closing costs, the lender netted about $71,000, said his Fort Lauderdale lawyer, Joe Kohn.

But before the sale closed, Kohn had American Home Mortgage waive its right to collect on the remaining mortgage debt.

Christine Sullivan, a spokeswoman for the lender, wrote in an e-mail that she can't discuss Thomas' case because of privacy issues. But when homeowners seeking short sales demonstrate legitimate hardship, "we provide a full release of liability, and we do not pursue deficiency judgments."

Some banks say they won't file a lawsuit, though they aren't willing to put that in writing, Kohn said.

"I have no choice but to accept that," he said. "Even when you play by the rules, banks don't always do what we'd like."

Under new government guidelines for short sales that took effect this spring, lenders aren't supposed to hold homeowners responsible for any remaining mortgage debt. But not all short sales fall under the guidelines, while some lenders choose not to implement them, Kohn said.

A forgiven mortgage balance through 2012 is not considered taxable income on a primary residence as long as the debt was used to buy or improve the house. But borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount.

Homeowners who hand their properties back to the bank through so-called deeds in lieu of foreclosure also should make sure they won't be on the hook for any mortgage debt.

With friends facing deficiency judgments, Thomas said he's grateful he sought legal advice on how to avoid a lawsuit. He now rents a home west of Boca Raton, but he just found out the owner is in foreclosure.

"I've escaped my own problem, only to inherit someone else's," Thomas said. "But this is nothing. It's just a matter of picking up the pieces and moving on to the next rental."

© 2010 Sun Sentinel, Paul Owers. Distributed by McClatchy-Tribune News Service.

WASHINGTON – May 12, 2010 – The Federal Housing Administration (FHA) has played a fundamental role in helping stabilize the nation's housing market; however, FHA reform is critical for keeping the housing and economic recovery on the right track.

That's according to David H. Stevens, assistant secretary of the U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration commissioner. Stevens spoke to several thousand Realtors attending the National Association of Realtors^® Midyear Legislative Meetings & Trade Expo in Washington, D.C. this week.

Stevens credited increased homebuyer demand, brought about by the federal buyer tax credits, and the federal government's purchase of mortgage-backed securities for helping restore consumer confidence and get the economy moving.

"Home prices and sales are beginning to recover, inventories are down, private capital is beginning to re-emerge, investor confidence is coming back and the job market is showing signs of improvement. These all show renewed confidence in the housing market. We need to finish the job now and make the housing recovery sustainable and keep the economy on the right track," said Stevens.

Despite the signs of improving stability, Stevens said that the housing market continues to face challenges, mainly from unemployment and homeowners with negative equity. "These issues need to be dealt with responsibly, we need solutions to help the most severely distressed homeowners – those most in need and at risk – and when we can't help them we need to make the transition as smooth as possible."

According to Stevens, helping underwater borrowers is critical to stemming the tide of foreclosures, and recently announced revisions to FHA and the Home Affordable Modification Program will help stabilize home prices and keep more people in their homes. FHA refinances will help homeowners write down principal balances or modify and restructure loans into safer, sustainable products. HAMP program changes include a forbearance, or temporary assistance, for unemployed homeowners while they look for work.

Stevens said FHA continues to play a pivotal role in housing recovery and reemphasized that reform is critical. "After the housing market crashed, FHA had to step in to play a vital role. Over the past three years, FHA reacted by increasing its market share dramatically. There would be no housing market recovery without FHA; however, the program is at risk. We cannot continue to operate under the current construct if we don't shore up its fiscal situation. We need to make FHA stronger," said Stevens.

Stevens asked Realtors at the meeting to lend their support for the passage of H.R. 5072, the "FHA Reform Act of 2010," which would allow FHA to hold lenders accountable for the loans they underwrite and originate, and give FHA the flexibility to respond to changes in the marketplace by granting additional authority to adjust the annual mortgage insurance premium and reduce borrowers' upfront mortgage insurance premiums.

"Adopting these changes during the current fiscal year would replenish FHA's capital reserves and strengthen its financial position," said Stevens.

Stevens ended the session by reaffirming his commitment to continue working with Realtors to fully rebuild the housing market. "Realtors are the face of the real estate industry and of the American dream. Realtors know the community better than anyone else; indeed, there is no group in America that better understands homeownership," said Stevens.

More than 7,000 Realtors are expected to attend the Midyear Legislative Meetings & Trade Expo. During the week, they will also meet with legislators on Capitol Hill to urge action toward stabilizing the U.S. mortgage finance delivery system, strengthening housing stability, and improving liquidity for the commercial real estate market.

McLEAN, Va. – May 12, 2010 – Home prices are widely expected to fall now that a tax credit for homebuyers has expired.

That's raising concern about a possible double dip in home prices.

National housing prices stopped falling early last year and rose 0.3 percent over the 12 months ended in February, according to a study by real estate analytics firm CoreLogic.

The firm predicts prices will fall this year before starting to rise again in late 2010. Even so, next February's prices are likely to be 4.2 percent lower, it forecasts.

"Home prices will struggle for maybe another year," says Mark Fleming, CoreLogic's chief economist.

A shrunken pool of buyers due to the tax credit's expiration is one reason.

"The tax credit is the big reason home prices have been so buoyant, and sales will drop" with its expiration, says Paul Ashworth of Capital Economics. "You will see a double dip in housing prices."

Another reason is the number of distressed houses – including foreclosures and short sales – that are on the market or that will be in coming months.

Distressed homes, typically sold at discounted prices, accounted for 36 percent of first-quarter sales, the National Association of Realtors reported Tuesday. The first quarter's median single-family home price ($166,100) was roughly flat with a year earlier, despite gains in nearly two-thirds of 152 metro areas that the NAR surveys.

The NAR's survey isn't the first to show evidence of softening prices. The 20-city Standard & Poor's/Case-Shiller home price index has fallen for five-consecutive months through February.

"It is too early to say the housing market is recovering," David Blitzer, chairman of S&P's index committee, said when the Case-Shiller report for February was released last month.

There may be some good news for sellers in areas not hit so hard by foreclosures. When distressed sales are excluded, CoreLogic's home price index shows a 4.9 percent rise in U.S. prices from this February through next February.

While some economists expect home prices to weaken, they don't expect a major drop.

"I wouldn't expect anything like the meltdown we've had over the past couple years," says Jay Feldman, senior economist at Credit Suisse.

Copyright © USA TODAY 2010, a division of Gannett Co. Inc. Stephanie Armour.

NEW YORK – May 12, 2010 – Nicola Schon, an Italian restaurateur with homes in Monte Carlo, Milan and New York, wanted the perfect pied-a-terre in Miami, with plenty of space, water views and amenities such as a spa, concierge and room service.

So he bought a $1.8 million condo at Epic in downtown Miami – and persuaded 19 friends from Italy to buy there, too.

"The building is half-Italian now," joked Schon, who owns eateries Quattro and Sosta in Miami Beach. "We should put an Italian flag on the roof!"

International buyers are quickly converting their currency into real estate in South Florida, snatching up property at floor-sweeping prices. At high-end Epic, Schon paid about 25 percent less than he would have at pre-construction prices a few years ago.

Add low interest rates and a deadline for federal tax credits, and overall sales of single-family homes and condominiums in South Florida soared during the first three months of 2010, according to quarterly figures released Tuesday by Florida Realtors. The association's April numbers will be out May 24.

In Miami-Dade, sales of condos skyrocketed 46 percent during the first quarter, to 1,920, compared to the same period of 2009. Median prices fell 9 percent to $136,100, figures from Florida Realtors show.

The numbers reflect a real estate market where prices have generally bottomed out, said analyst David Dabby, president of Coral Gables-based Dabby Group Advisors.

"It's a continuation of the trend that has been in place for close to a year now. Prices have been reduced by 50 percent over the 2006 highs, and that has increased sales significantly," Dabby said. "Hopefully it will continue, because since 55 percent of the sales are [short sales and foreclosures], the more sales we have, the quicker we will be able to clear the foreclosure pipeline."

In fact, real estate agents say that buyers who were on the fence before are signing contracts, and renters are realizing it now makes sense to own.

Another reason sales have picked up is federal tax incentives. Buyers had until April 30 to sign a contract to purchase a primary residence and until June 30 to close on it to be eligible for the federal tax credit of up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.

In April, 907 condos sold in Miami-Dade, compared to 872 in April 2009, and 1,330 sold in April in Broward, compared to 1,003 the same month the previous year, according to figures from EWM Realtors, which compiles them from aggregated MLS data.

Veronica Cervera, president of Miami-based Cervera Real Estate, which specializes in condos on Brickell, downtown Miami, Miami Beach and Key Biscayne, said she has seen a surge in international buyers including those from Italy, Germany, Spain, Sweden, Greece and even China. Many are buying vacation homes, she said.

International clients tell her: "We know we'll never see prices like this in Miami again," said Cervera, who sold Schon his unit. "I know the market has turned – it's evident," she said. "We're in the process of negotiating more deals in the last two-week period than we did last year, in some of the buildings."

Fewer than 40,000 condominiums and town houses are now for resale in South Florida, the lowest number of available units on the market in the last 18 months, according to a new report from CondoVultures.com.

Resale units in Miami-Dade, Broward, and Palm Beach counties have dropped by 23 percent, compared to May 2009 when there were 52,000 on the market, the report said.

"As you look at inventory and what is being depleted, Dade is moving much faster than Broward," said Peter Zalewski, principal with Condo Vultures, a real estate advisory firm. "Miami is really ahead of the curve: it peaked first, it bottomed out first and it is now showing signs of stabilization – and the other counties are following behind."

During the first quarter, sales of single-family homes in Miami-Dade jumped 12 percent, to 1,530 homes, amid a drop in median prices of 6 percent to $191,200, Florida Realtors figures show.

In Broward, sales of condos rose 45 percent during the first quarter to 2,739, as median prices fell 15 percent to $71,900. Sales of single-family homes inched up by 7 percent to 1,756, as median prices dropped 6 percent to $196,700, the figures show.

Jeff Watts and his wife Najat, who had been renting in Fort Lauderdale and before that in Aventura, just bought a $360,000 townhome in downtown Fort Lauderdale's Rio Vista neighborhood for their growing family of four.

"When we ran the numbers of purchasing the townhome versus renting, it made economic sense to buy, because we had the money to put down," said Jeff Watts, 34, who works in banking. Luckily, they experienced a buyer's market, in terms of price negotiation and the amount of inventory, he said.

Liz Caldwell, the EWM Realtor who worked with Watts, said the townhome the Watts family purchased was priced at $550,000 to $600,000 at the peak of the market in 2006. She expects it to rise in value over time. "The worst is over probably in terms of values," said Caldwell, who specializes in Broward real estate from Weston to Fort Lauderdale.

"You will see some drop in value in the high-end, but for the average dual-income family looking to buy a $600,000-$700,000 house, those values have pretty much stabilized."

TALLAHASSEE, Fla. – May 5, 2010 – Florida Attorney General Bill McCollum issued a consumer advisory regarding the Deepwater Horizon oil spill in the Gulf of Mexico.

As with any natural disaster, scam artists see an opportunity to make money off other people's losses. However, fraud is illegal, and McCollum asked anyone seeing fraud to report it to Florida's fraud hotline at: (866) 966-7226.

According to McCollum, it's too early to know the extent of the problem since oil continues to escape into the Gulf of Mexico and attempts to stem the flow have been unsuccessful. As a result, Floridians should not waive any rights or sign any settlement documents from companies or corporations until they know the full extent of their loss, which could be significantly higher than the money offered initially.

Additionally, in what could be one of the most significant environmental clean-ups in Florida's history, Attorney General McCollum clarified that Florida statutes provide no cap on recoveries related to natural resources. During the past weekend, Attorney General McCollum met with the Attorneys General of Alabama, Louisiana, Texas and Mississippi to discuss a number of legal options to ensure costs and damages to Gulf coast states, businesses and residents are recouped.

Consumers can find more information on the Attorney General's website at http://www.myfloridalegal.com. Additional information on the State Emergency Response Team's efforts can be found at http://www.floridadisaster.org.

© 2010 Florida Realtors®

ORLANDO, Fla. – May 4, 2010 – Condominiums are now selling faster in Central Florida than they did at the peak of the real estate market four years ago, when renters, retirees and eager urbanites, seized by condo fever, were snapping them up in Metro Orlando at the rate of 20 a day.

In March, buyers closed on 790 condo units in the four-county metro area – 25 percent more than in March 2006, when real estate agents were celebrating a then-astronomical 630 sales.

With the region's population basically stagnant and unemployment at or near record levels, the question is: Who is buying all of these units?

According to brokers, industry reports and others, foreign buyers are largely behind the surge.

For example, about 80 percent of the sales these days at the Mosaic at Millenia, a south Orlando apartment complex that went condo in 2004, have been to international investors.

"They are paying all cash, and their primary purpose is to get a monthly rented unit that provides cash flow with the expectation of some appreciation," said Alec String, a broker with Coldwell Banker NRT Development Advisors in Longwood.

Unlike the deals that drove condo speculators during the homebuying frenzy of the mid-2000s, these sales aren't based on incentives or inflated promises of rental income, String added. And they aren't paying inflated prices, either: In March 2006, the median price of the condos sold in Metro Orlando that month was $159,600; by March of this year, the median had plummeted 69 percent to $49,700.

The sharp decline in prices since the market's peak in 2005-06 is part of the reason Florida accounted for almost one-fourth of all U.S. property purchases by international buyers in late 2008 and early 2009, according to a report by the National Association of Realtors. California was second with a 13 percent share of the foreign market.

Nationwide, those foreign buyers paid a median of $247,100 during the period studied, compared with a median of $198,100 for all buyers. About 70 percent of the purchases were single-family homes, 18 percent were multifamily, and the rest were commercial properties.

In Florida, most foreign buyers hail from the United Kingdom, other parts of Europe, and Canada.

James Black, managing partner of a London-based company, Ultimate Holdings, said the British outfit has raised about $50 million to purchase distressed properties in the U.S., starting with properties in the Orlando area.

In February, Ultimate Holdings purchased 122 units in a 240-unit Davenport condominium called the Village at Town Center, paying a combined $5.38 million. The company has improved the units, which start at $54,000 for a one-bedroom model, and says it has 37 buyers under contract. Most of its customers are from the U.K., Canada and Switzerland.

"We're a group that has invested in both the U.K. and in multiple locations outside the U.K.," Black said. "We're fairly experienced in looking for value ...and pretty much the best value lay in Florida, and specifically in Orlando. We were very confident that the bottom has passed, and the belief is that the city can recover."

Black said Ultimate Holdings is also negotiating to buy an apartment complex on Semoran Boulevard near Orlando International Airport, and it is shopping for deals in Miami and Chicago.

A recent survey by the Association of Foreign Investors in Real Estate ranked Orlando 12th among U.S. cities for investment opportunities. The group's 200 members own more than $842 billion worth of real estate globally, including $304 billion in the U.S.

"They really have expressed some strong interest this year, but they're having difficulties finding bargains," said Jim Fetgatter, the group's chief executive.

The last time members felt as strongly about U.S. real estate was in 2003, Fetgatter said. In the group's fourth-quarter survey, two-thirds of those who responded plan to increase their U.S. holdings this year compared with 2009.

An influx of foreign investors snapping up the region's distressed real estate is a two-edged sword, said Bob Daday, founder of the 40-member Oviedo HOA Presidents Association.

"People hoping to sell their condos or town homes – it's good for them that they can sell," Daday said. "The flip side is that we have 20 rentals in our community, and the difference in how they are kept – between homeowners and investors – is quite obvious."

The owner-occupied places, he said, generally have manicured lawns and attractive paint jobs, while the rental units tend to give the appearance that the property's owner doesn't care.

TALLAHASSEE, Fla. – May 4, 2010 – Gov. Charlie Crist declared the issue of drilling off the Florida coast effectively dead Monday as he monitored the latest news surrounding an oil spill caused by an explosion on a BP rig last month.

"It hasn't happened in Florida, but it happened in Louisiana and we may suffer as a result of it," he said. "But I think the timeliness of when this occurred is pretty extraordinary when you think about it because there may have been legislation in this last week that would have permitted it, but for this occurring."

Incoming Senate President Mike Haridopolos and House Speaker Designate Dean Cannon have pushed for offshore oil drilling in Florida for the past two years. The two have held hearings over the past year on the subject to garner support for the proposal. With the two of them set to lead the two chambers come November 2010, oil drilling was expected to become a major part of their platforms.

A committee led by Cannon had even released a report talking about the potential benefits of drilling.

But when the oil rig in the Gulf of Mexico exploded, the two incoming leaders were less fervent in their support of drilling, saying they needed to monitor the situation closely and tour the coastal areas.

"We're going to take the entire summer and fall to see, first and foremost, what happened in the Gulf," Haridopolos told reporters last week. "It gives me great pause. But a tragedy does not stop all progress."

Nearly every major candidate for office has weighed in on the issue. Chief Financial Officer and Democratic gubernatorial candidate Alex Sink called for disaster loans and an oil spill task force Monday afternoon. And Attorney General Bill McCollum said last week that he would veto Cannon's proposal if he were governor because it involved drilling too close to the shore.

"If I'm governor, he'll face a veto on my desk if he brings it up the way it is now," McCollum said last week.

State Sen. Dan Gelber, D-Miami Beach, who is running for attorney general, put out a release saying he was "inalterably opposed" to drilling. What potential Cabinet members think matters because under the proposal as it was last floated, the Cabinet would ultimately decide on new leases.

"I don't think we need to study it, I think we need to reject it outright and put the entire idea where it belongs: in our rear view mirror," Gelber said.

Scott Maddox, a Democratic candidate for agriculture commissioner, held a press conference Monday asking all candidates for Cabinet positions to sign a pledge saying they would not support offshore oil drilling in Florida.

"No state in the nation is dependent on its beaches for tourism the way Florida is," he said.

His Republican opponent, U.S. Rep. Adam Putnam, R-Bartow, also released a statement saying he was "deeply concerned" about the economic and ecological impact of the spill.

"It is clear to every elected official, from the President on down, that consideration of any new exploration closer to shore needs to be taken off the table and we need to have a thorough investigation into what happened and the inability of the industry to effectively respond," Putnam said.

WASHINGTON – May 4, 2010 – Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring homebuying season, according to the National Association of Realtors^® (NAR).

NAR's Pending Home Sales Index (PHSI) a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0; this follows an 8.3 percent increase in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, says favorable affordability conditions have been working with the tax credit. "Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales," he says. "Later, in the second half of the year and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and a return of buyer demand as they see home values stabilizing."

The PHSI in the Northeast declined 3.3 percent to 75.1 in March but remains 27.2 percent higher than March 2009. In the Midwest the index increased 1.2 percent to 98.9 and is 18.5 percent above a year ago.

Pending home sales in the South jumped 12.7 percent to an index of 121.2, which is 28.3 percent higher than March 2009. In the West the index rose 1.9 percent to 99.9 and is 8.8 percent above a year ago.

"Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages," Yun says. "As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up."

The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.