Did I miss the opportunity to buy with really cheap interest rates? Are rates going to come back down?

The scaling back of QE is expected to increase mortgage interest rates by 50 basis points over the course of the year. Some believe that the recent increase in rates pre-absorbed that anticipated impact.

However, to put it all in perspective, 2001 marked only the second time in Freddie Mac’s history (1971) that rates averaged below 7%. 2010 marked the first year that rates averaged below 5%. So by comparison, at 4.5%, today’s rates are still very cheap and it is a great time to buy!

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com


Is the government shutdown impacting home sales?

In an indirect sense, yes it is. Specifically, one of the biggest impacts on the real estate market is the psychological effect that it has on buyers. As to VA, FHA, Fannie Mae and Freddie Mac, all is well. They are processing loan packages as normal.

An interesting development … Most all lenders had been requiring a form 4506 from the IRS when processing a home loan. This is a request for your tax return transcript. IRS is not processing such requests during the shutdown, so fortunately, almost all lenders responded by waiving the requirement!

For more info, please visit us at www.DestinFloridaRealEstate.com or for questions, email us at smith@realtor.com

Ed & Terri Smith, Broker Owners
RE/MAX Coastal Properties
850-837-5500 x1

How do we know if it’s best to get a 15 year fixed rate mortgage or a 30 year fixed rate one?

If you can easily afford the 15 year payment, do it. Not only do you pay the loan off much more quickly, but you will receive a lower interest rate as well. This serves to create a dynamic that will result in a much accelerated equity build up and a more financially favorable monthly payment.

As an example, a $250,000  mortgage at 4.25% for 30 years would result in a monthly payment of $1,230.  That same loan amount at 3.5% for 15 years would result in a monthly payment of $1,787. Then consider that over the life of the loan, the 30 year option would result in total monthly payments of $442,800 vs $321,697 in the case of the 15 year. That’s $121,103 in savings!

For more info, please visit us at www.Ed-Terri.com or email us at smith@realtor.com

Ed & Terri Smith, Broker Owners
RE/MAX Coastal Properties
850-837-5500 x1




We have read about how you can just deed your home to a “holding” company to avoid foreclosure. Does this work?

The one word answer … No! All standard mortgages today include a clause known as the “due on sale”. This clause states that if you sell, convey or transfer ownership of the property, the lender may invoke their right to acceleration, meaning they can “call the loan” making the entire balance due and payable.

Also remember that the mortgage, note and deed are entirely different animals. The deed only establishes ownership. It is the note that establishes who owes the money. The mortgage merely attaches the note to the property. You could deed a property to someone else, but the underlying note and mortgage (your obligation to pay) remain intact.

For more info, please visit us at www.destinfloridarealestate.com or email us at smith@realtor.com

BP paying waterfront property owners money for damages? What’s the catch?

True, the BP claims center has been paying “Coastal Real Property Damage” claims in the area as a result of the 2010 oil spill. If you owned a home or condo from April 20, 2010 to April 16, 2012 that is situated on tidal (connected to the Gulf) waterfront, you may qualify.

Visit the claims center website at http://www.deepwaterhorizoneconomicsettlement.com/  for more information, as well as a map to help determine your potential eligibility.  Paid claims in the $5,000 – $10,000 range are common.

For more information please visit www.DestinFloridaRealEstate.com or email us at smith@realtor.com

Assault on the Mortgage Interest Deduction

The big news story this month has been  the perceived “Assault on the Mortgage Interest Deduction” …  It is clear that Americans overwhelmingly oppose any action by Congress that would serve to reduce or (God forbid) eliminate the mortgage interest deduction, which has remained sacrosanct since its inception in 1913.  But as Congress and the White House wrestle with looming deficit reduction challenges, nothing seems safe.

Housing was the leading victim as the overall economy began to falter seven years ago, and it therefore only stands to reason that housing can help lead this economy out of the doldrums. Any tax code change that hinders growth in real estate will serve to hinder growth throughout our entire economy.

The elimination of the mortgage interest deduction would unquestionably weaken demand which would in turn result in lower real estate values. That is to say nothing of the negative impact on millions of American taxpayers with home loans today. Consider that even a modest-sized home loan could result in a $10,000 annual tax deduction for the homeowner.  The tax impact of the elimination of the mortgage interest deduction would be devastating.  Email, write or phone Congress to let them know what you think!

Ed Smith is the the president of RE/MAX Coastal Properties. With 25 years in real estate sales, Ed serves as President-Elect of Emerald Coast Association of Realtors and a Director at Florida Realtor. Ed and wife Terri are ranked among the top RE/MAX teams in Florida, year after year.

Amendment 4 – Good for Florida!

Amendment 4 Can Help!

  Encourages First-Time Homebuyers
  Amendment 4 offers property tax relief for first-time homebuyers, responsibly encouraging Floridians to buy homes, which grows our economy. 
  Protects Against Rising Property Taxes
  Right now, cities and counties can raise your property taxes, even if the value of your home drops. Amendment 4 allows the Legislature to put an end to property tax increases on homeowners if the value of the home does drop. 
  Helps Small Businesses & Creates Jobs
  Amendment 4 helps small businesses by ensuring that property taxes for non-homestead properties can not increase by more than 5% each year,instead of 10% per year.And, according to Florida TaxWatch, a non-partisan research group, Amendment 4 would create over 20,000 new jobs in Florida. 

That’s something Florida just can’t afford to pass up.




On November 6th,

Vote Yes On Amendment 4!




The Calm Before the Storm?

Due to the cessation of foreclosures following the robo-signing scandals of 2010, the backlog or “shadow inventory” of bank owned properties has grown significantly. Locally, actual foreclosure sales are down over last year by 50%. However, lis pendens (foreclosure) filings are now up 100%.

This would tend to indicate that we are in a lull, the period in which the lion’s share of the foreclosures have been absorbed by the market and when the banks are resuming foreclosure action. With the banks more aggressively pursuing delinquent homeowners, many expect a surge this year in bank owned inventory. Another consequence will likely be more short sales as more delinquent sellers begin looking for ways to avoid foreclosure.

The impact that this may have on Emerald Coast real estate values will depend much upon demand. Demand has been steadily increasing  over the past two years. Should this trend continue, the negative impact of additional distressed inventory on the market may be negligible.

Home Prices Fall 3.8%

According to the S&P/Case-Shiller Home Price Indices, January 2012 home prices fell 3.8 percent compared to January 2011. The report also indicates that prices fell from December to January in 16 of 19 markets tracked. Charlotte, N.C., was not included due to reporting delays. Phoenix, Detroit and Denver were the only 3 markets that experienced price gains. 8 of the 20 markets actually saw new lows in January. Those 8 markets are Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa. As illustrated by the graph below, the index shows that prices are back to early 2003 levels. January’s prices represent a 34% decrease from 2006 levels.


Conversely, the National Association of Realtors predicts that not only will home prices rebound this year, but that existing home sales will jump 7 to 10 % in 2012. If correct, that would represent the highest sales level seen in 5 years.

Metro area Change December-January Change from year ago
Atlanta -2.1% -14.8%
Boston -0.4% -2.8%
Chicago -1.9% -6.6%
Cleveland -2.0% -3.3%
Dallas -0.4% -1.2%
Denver -0.6% 0.2%
Detroit -1.1% 1.7%
Las Vegas -0.5% -9.0%
Los Angeles -0.8% -5.4%
Miami 0.6% -1.9%
Minneapolis -0.8% -1.8%
New York -0.8% -2.9%
Phoenix 0.9% 1.3%
Portland -2.1% -4.3%
San Diego -1.1% -5.3%
San Francisco -2.5% -5.9%
Seattle -0.7% -4.0%
Tampa -0.8% -3.8%
Washington 0.7% -0.6%
Composite-20 -0.8% -3.8%

Sources: S&P Indices and Fiserv.

Foreclosure and Delinquincy Rates Still High

According to Lender Processing Services (NYSE: LPS),  there are now more than 6 million delinquent mortgages in the U.S.  A delinquent loan is any loan that is at least 30 days past due, which of course includes those currently in foreclosure.  LPS is a loan servicing conglomerate that maintains a database of roughly 40 million mortgage loans at a given time, which gives them considerable perspective in terms of national trends and statistics.  According to their calculation, the mortgage delinquency rate (MDR) is nearly 8 percent, which does not include mortgages that are in the foreclosure process. Therefore, the national  foreclosure inventory is now estimated to be nearly 2.1 million. The actual mortgage delinquencies then total 4 million.  Of those delinquencies, a staggering 44.3% are more than 90 days delinquent.