We’ve noted for some time that the cheapest Orlando condo foreclosures are attracting a great deal of attention. In recent weeks things have got crazier. The truth is that at the moment, the market is red hot in the under $60K bracket. So hot in fact, that it’s become almost impossible to buy anything. Condo inventory is dropping rapidly as more and more investors decide that Orlando is now at bottom.
Whereas before Christmas we had a better than even chance of making the winning bid on any given Orlando condo, the chance of winning the bid right now seems more like 10%. Of the literally dozens of contracts we’ve submitted to banks lately, only one or two have been accepted. The rest? A better offer came in. Sometimes as many as half a dozen better offers came in.
So please bear with us and understand that the only way to win these bids is to place a large deposit, close quickly and make an all-cash offer - sometimes significantly over list price. You may need to place offers on multiple properties before your bid is the winning bid. Persistence is key. A stick of Head On might help.
The Florida Consumer Collection Practices Act Prohibits Associations From Posting Delinquency Lists and Taking Other Actions to Collect Assessments and Maintenance Fees.
There have been a number of newspaper articles explaining actions taken by community association boards and managers to collect delinquent assessments. The Miami Herald reported that some associations post lists of the names of the owners behind on their fees and others deny security access devices to tenants of delinquent owners. The Wall Street Journal reported that some associations were taking control of the unoccupied units and renting them on a short term basis until the bank foreclosed.
While we are all familiar with the idiom “drastic times call for drastic measures”, community leaders and property managers should understand that Florida law prohibits unfair or abusive tactics with regard to debt collection, including the collection of assessments. Although the prohibitions in the Federal Fair Debt Collection Practices Act do not apply to the person or entity owed the debt (the ‘creditor’, which in this case is the Association), both community associations and their managing agents are responsible for compliance with the Florida Laws.
The Orlando Business Journal reports today that Veranda Park condo developer Kevin Azzouz and Fifth Third Bank have been ordered to work out an issue relating to a bankruptcy filing and foreclosure auction at the Veranda Park condo project in MetroWest.
The filing concerns multiple ventures, including the office space as well as The Residences at Veranda Park, a 157-unit residential condo building on Hiawassee Boulevard. The condos are scheduled for foreclosure on July 14 if Azzouz’s ownership entity, VP Phase III LLC, doesn’t pay $59.7 million owed to Wachovia Bank NA/Wells Fargo and Regions Bank.
My guess is that the loan won’t be repaid, so look out for foreclosed units at Veranda Park - coming soon. Contact us here at Condo Metropolis for more info.
We’re well into the worst housing bust most of us will ever witness, yet we still get calls from bemused buyers who take it very personally when we tell them they can’t get a loan on an Orlando condo. “That’s ok, I have a great credit score” they say. “And a good job. And great pay. Don’t worry about it.” It’s almost as if they haven’t read a newspaper in the last 2 years.
And I do worry about it. Because you won’t get a loan right now (unless your community is FHA approved). Even Donald Trump couldn’t get a loan right now. No, not even with a large downpayment. And here’s why. It’s nothing personal. On the contrary: it’s not about you, the buyer, any more. It’s all about the community you want to buy into.
Thanks to Krista Falcon down at Mirabella condos near Disney for sending this over. (Incidentally, Mirabella is FHA approved… a big deal in the current market place) Contact Krista directly for more info on Mirabella condo sales: TEL 407-239-6269.
For more info on FHA loan changes, see this article.
The South Florida residential real estate market is at bottom and likely to experience some appreciation within a year, the National Association of Realtors Chief Economist Dr. Lawrence Yun said.
Yun joins Jim Cramer (Mad Money) and a host of other economists who feel that bottom is basically here.
“I think the prices have already pretty much bottomed in the South Florida market,” Yun said. “The rest of the country is more difficult to say but I think here, given the buyers, the prices have already bottomed in Florida.”
Yun spoke on June 11 during a keynote address to a lunch crowd of the International Real Estate Congress and Expo. Given the growing number of residential deals occurring in South Florida despite no readily available financing, Yun projects that today’s buyers could actually realize some home price appreciation as soon as next year when credit is expected to be available once again.
“Soon you will reach the point of equilibrium where home prices begin to show growth,” Yun said. “It is always difficult to precisely predict. I think that many people who are buying today in this month - June of 2009 - if they look back a year from now in June 2010, I think many people will see that they have actually gained in equity.”
Yun acknowledged that Florida market conditions - a diverse community with limited developable land, attractive weather, and an international appeal - give the region an advantage over many other areas in the United States. Sales are up about 100 percent from one year before.
The Orlando real estate market is generally doing even better than south Florida since it never had quite the glut of inventory found in cities like Miami. The Orlando condo market in particular hasn’t taken the hit that it did in Miami where the supply of Miami condos is still a considerable problem - despite Yum’s comments.
Question: I have often wondered where the pound limitation came from in HOA pet policies. I have always considered small, yappy dogs to be more of a nuisance than larger dogs that don’t have the usual frenetic personality of smaller dogs. The only vicious dog I have ever owned was a miniature dachshund. Wouldn’t it make more sense to control the behavior and not size of the dog?
Answer: Most pet restrictions have more to do with noise and wear and tear of the common area and less about aggression. But when it comes to aggression, dachshunds may bite but pit bulls can kill. So there is a deadly difference when it comes to size. Certain breeds have a reputation for aggression. While it’s not true in the case of every dog within a breed, pet policies often err on the side of caution. In any case, pets are a politically charged issue so the board should consider opposing views before enacting any new policy.
For more innovative homeowner association management strategies, see Regenesis.net
Editor’s note: In Orlando condos, the most common dog restriction is to disallow dogs over 50lb. There are often breed restrictions also, disallowing ‘dangerous’ breeds such as Pit Bull terriers and Rotweillers. ‘Exotic’ pets such as snakes are also not usually permitted.
On-site Realtors - feel free to let us know what your particular restrictions are!
There’s increasing evidence that those waiting around for Orlando real estate to hit bottom are not only going to miss the mark, but will also be trading minor potential price drops for increased monthly payments as interest rates soar.
While most economists seem to agree that bottom is here, the storm cloud on the horizon is that mortgage rates have been moving up - fast. Bailout money will cause inflation and interest rates can’t stay low for much longer. And if you’re waiting around to save $5K here or there on price, those gains could be more than wiped out by increases in interest rates.
As Kenneth Harney said: “No one can predict precisely how high rates are headed, but in the past two weeks they’ve jumped by more than a percentage point. The Mortgage Bankers Association reports that last week alone average 30-year fixed rate jumped to 5.6 percent from five and a quarter the week before. Some analysts project rates to hit and surpass the 6 percent mark if current trends continue. Bottom line: Given that house prices have turned around, and interest costs are soaring, value-conscious shoppers need to get their contracts and loan applications in - quick!”
The truth is that some of our “perfect storm” variables are evaporating. The $8K tax credit expires at the end of this year, prices appear to have bottomed out in Orlando and interest rates are on the rise.
Low prices and low interest rates are causing those with cash to jump in and scoop up some of the best condo deals Orlando has ever seen. Since the beginning of the year, condo inventory has dropped by thousands as savvy investors have been taking advantage of the fact that today, like never before, “cash is king”. This is because the only way to get a loan on an Orlando condo is to find one that is FHA approved - not an easy feat when so many condos are blacklisted due to the glut of foreclosures most communities are suffering. With mortgages on condo conversions all but impossible, investors with cash have been able to take advantage of the many bargains on offer. Sales were up over 150% over the same time last year.
Why the sudden rush? It seems that many folk have decided simultaneously that bottom or not, it really doesn’t matter any more. If it cashflows - it works. In a recent article on cnnmoney.com, Les Christie reported that housing affordability is at almost an all time high (Most Over- and Under- Valued Housing Markets), with our very own Vero Beach, Florida top the list of the most undervalued towns in America. Of the 330 housing markets studied in a recent IHS Global Report, 248 were considered under-valued… as much as 42.5% in Vero Beach (pictured).
As we’ve been arguing for some time now, there comes a point when it no longer makes sense to argue that the value of a property is “whatever the market will bear.” There comes a point, where a condo is so cheap that it has an intrinsic value as a place to live, or as an investment - regardless of what the market is doing. This is only true in extraordinary markets of course, which is exactly where we find ourselves.
For assistance in finding some of these once in a lifetime foreclosure deals, contact us here at Condo Metropolis - or call 407-290-3408.
So, everyone jokes that we’ll all be speaking Chinese in the next century because they’re “buying America piece by piece”. Well, how much does China really own of us? And how do they own us?
Let’s take a second to look at our torrid love affair with the Chinese. Why do we buy stuff from China? Because it’s cheap. It’s usually cheaper than a domestic equivalent. Why is it so much cheaper? Well, having a sixth of the world’s population available for inexpensive labor doesn’t hurt. But that’s not enough to create the cost imbalance.
Their stuff is cheap because they keep their currency artificially devalued.
It’s one of the many numbers games that got us into this seemingly interminable dross. You see, if we kept giving them money for their stuff, our currency would weaken and theirs would strengthen due to trade imbalance. And, since their stuff is cheap to begin with, China’s not going to turn around and buy the stuff we make. But they have to give the money back somehow.
Just listed! This 2/2 unit at Bermuda Dunes condos in MetroWest, Orlando is for sale at just $51,500. (Used to sell for over $300K.) I looked at it this evening and it’s in move-in condition. It’s a first floor unit with golf course views and is one of the best deals I’ve seen this year. It has pool, fitness center, tennis courts, sand volleyball court and raquetball. See the complete listing here. For more info on how to buy a bank owned condo see our Orlando foreclosure page. Serious buyers should call us for more info on 407-290-3408. We expect this unit to be under contract within 72 hours of the bank reviewing offers. (HOA fees show $250/month and taxes will be reviewed in accordance with new purchase price upon application. Info taken from MFRMLS.)
Good news: The $8000 tax credit for first-time homebuyers can be applied toward your down payment or closing costs at the time of purchase. YAAAY!! I believe that warranted the bold-print. Realize, however, that FHA still requires 3.5% of the down-payment come out of your pocket, so unless you’re getting a grant, still no free homes. But still, good stuff! Great things are continuing to happen to make homeownership for you 1st-time homebuyers more and more affordable.
And now the bad news: Remember last week when I said that rates would ‘eventually’ head higher? Well, ‘eventually’ arrived last Wednesday, when the 2nd consecutive long-term treasury bond auction drew a weak crowd.
Evidently the old “two strikes and we PANIC IN THE STREETS” rule seems to be in effect.
So here’s what’s up: If no investors bid for bonds at a certain yield (let’s say 4%) then bond sellers (like Uncle Sam) have to jack up the interest rate to attract greater attention. Since Treasury bonds (the bonds our government issues in order to finance it’s debt) compete on the open market with mortgage bonds (the bonds that determine the rates that I can offer you), an increase in one will usually mean an increase in the other. Continue Reading »
Orlando condo prices seem to be stabalizing at last with the first wave of bank owned deals starting to dry up.
It seems likely there will be a second wave, as short sales fail and become foreclosures, then again, it may be that these will be withdrawn in favor of loan modification - in which case we may already have seen the best of the best deals.
At the prestigious Star Tower condos downtown Orlando, prices have dropped. Take a look at some of these deals on the right for a sampling of current inventory.
For those of more modest means, you can still pick up a decent condo for about half this amount - although loans are still a problem - and for investors who have about $40-50K to spare, you can still find a 2/2 that used to cost more like $200 if you know where to look and can handle an all-cash transaction.
As always, give us a buzz on 407-290-3408 if you have any questions.
News just out from HUD: Bridge loans received the go-ahead that enable first-time buyers to use the benefits of the federal tax credit upfront (instead of having to wait for the tax write-off).
Under the guidance, FHA approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent. However the loans can’t be used to cover the minimum 3.5 percent downpayment - a sign that the government wants home owners to have at least some skin in the game.
There are also sources of assistance for qualifying buyers who need help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.
For more info on FHA approved condos contact us here at Condo Metropolis: 407-290-3408.
In other good news, more than More than 90 percent of economists think the recession is nearing its end, although no one expects the economy to soar anytime soon. Source: The Associated Press, Jeannine Aversa (05/27/2009)
We first posted the opening of the Sanctuary Diner in March 2009 as it re-emerged from its prior life as French-themed Fifi’s. Unfortunately, the Diner didn’t make it. Nor did Graze, it’s upscale neighbor.
According to the Orlando Business Journal, both restaurants under the Sanctuary condo building simultaneiously closed their doors on May 26th. Both restaurants were owned by Steve Kodsi, the developer of both the Sanctuary condos and Star Tower condo buildings. You can read the Condo Metropolis interview with Steve here.
One of the indicators of a change in the market will be the instant hardening of sellers (in particular developers) towards buyers with the loss of incentives and a refusal to budge on price.
At the Bella Piazza condos in Davenport, we’re starting to see some of this now. This community still has some units left but the Bella Piazza pricing we talked of month or two ago has already increased.
For those interested in securing a unit, contracts that are mailed away to another state must be signed and returned within 48 hours of contract being emailed along with a receipt of wire transfer for the minimum $5,000.00 or full 10%. Bella Piazza offers to “hold the condo off the market for 48 hours to receive all intended items. The buyer may fax, scan & email or overnight the contract back to our office. If those items are not received within the 48 hour period, the condominium will return to “for sale” market status with no exceptions.”
The latest memo also states that Bella Piazza is only accepting cash contracts, a pretty tough stance with purchase prices in the low to mid $100’s. While there are plenty of buyers with cash in the $50K condo conversion arena, there are far fewer with $150K to play with.
For a tour of the remaining Bella Piazza condo units or more info call us on 407-290-3408 or email Admin@CondoMetropolis.com
