Here is a summary of our local real estate market, as reported by ORRA.
Orlando home sales in May 2010 were up 38.42 percent over May 2009.
Of the 2,605 sales in May, 921 “normal” sales accounted for 35.36 percent of all sales, while 1,091 bank-owned and 593 short sales made up 64.64 percent.
Pending sales are up 56.76 percent, with 10,351 pending homes in May of this year compared to 6,603 in May of last year.
Condo sales in the Orlando area increased by 56.61 percent in May when compared to May of last year. Duplex, town home, and villa sales increased 40.24 percent.
The median price of all existing homes combined sold in May 2010 increased 0.33 percent to $115,380 from the $115,000 recorded in April 2010. May 2010’s median price is a decrease of 11.25 percent compared to May 2009’s median of $130,000.
May’s $115,380 median price encompasses all types of sales situations and home types. The median price for “normal” sales is $160,000. The median price for bank-owned sales is $81,800 (up 12.52 percent from last month’s $72,700), and the median price for short sales is $110,000 (down 4.35 percent from last month’s $115,000).
The Orlando affordability index increased to 225.86 percent in May from 220.51 percent in April 2010. First-time homebuyer affordability in May increased to 160.61 percent.
Homes of all types spent an average of 85 days on the market before coming under contract in May 2010, and the average home sold for 94.58 percent of its listing price.
There are currently 15,963 homes available for purchase through the MLS. The May 2010 inventory level is 16.52 percent lower than it was in May 2009 (19,123). The current pace of sales translates into 6.13 months of supply; May 2009 recorded 10.16 months of supply.
TAX CREDIT OVERVIEWWho Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people whohave not owned a home within the last three years) may be eligible for thetax credit. The credit for FTHBs is 10% of the purchase price of the home,with a maximum available credit of $8,000.Single taxpayers and married couples filing a joint return may qualify forthe full tax credit amount.
Current Owners: The tax credit program now gives those who already own aresidence some additional reasons to move to a new home. This incentivecomes in the form of a tax credit of up to $6,500 for qualified purchaserswho have owned and occupied a primary residence for a period of fiveconsecutive years during the last eight years.Single taxpayers and married couples filing a joint return may qualify forthe full tax credit amount. What are the New Deadlines?In order to qualify for the credit, all contracts need to be in effect nolater than April 30, 2010 and close no later than June 30, 2010.
Who is Eligible fort FTHB Tax Credit?Anyone who has not owned a primary residence in the previous 36 months,prior to closing and the transfer of title, is eligible.This applies both to single taxpayers and married couples. In the case wherethere is a married couple, if either spouse has owned a primary residence inthe last 36 months, neither would qualify. In the case where an individualhas owned property that has not been a primary residence, such as a secondhome or investment property, that individual would be eligible.As mentioned above, the tax credit has been expanded so that existinghomeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for atax credit of up to $6,500.How Much are Current Home Owners Eligible to Receive?The tax credit program includes a tax credit of up to $6,500 for qualifiedpurchasers who have owned and occupied a primary residence for a period offive consecutive years during the last eight years.
Please call Amy Hodges at 407-252-7049 if you have additional questions, or for information on any home for sale.
The Down Payment
The amount you have available for a down payment will affect what types of loans for which you can qualify. Down payments typically range from 3.5 to 20 percent of the sales price for the property.
Tips for Accumulating a Down Payment
SaveLook for ways to reduce your monthly expenditures to save toward a down-payment. You could enroll for an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. Most people save a couple of years for their down payment.
Borrow the down payment from your retirement planCheck the provisions of your retirement plan. You can borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure you understand the tax consequences, repayment terms and/or possible early withdrawal penalties.
MoveYou may be able to save additional funds if you can move into less expensive housing.
Reduce other higher interest rate debtPaying off credit cards will initially reduce your savings, but the money you will save from higher interest rates will pay-off in the long run.
Make a deal with the sellerIn some circumstances, it is appropriate to ask the seller to carry a second-mortgage to cover your down payment. Typically, you will pay a slightly higher rate for this second mortgage.
Sell some investments
Get a second job and save your earnings
Skip a year's vacation
Gift from Family Parents and other family members are often anxious to help children buy their first home and may have the means to give you a gift of money for a portion or all of your down payment.
Alternative Sources
No-down and low-down Mortgages
FHA LoansThe Federal Housing Authority (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low- to moderate-income families qualify for mortgages. FHA assists first-time buyers and others who would not qualify for a conventional loan, by providing mortgage insurance to private lenders. Interest rates for an FHA loan are usually the going market rate, while the down payment requirements for an FHA loan are lower than conventional loans. The required down payment can be as low as 3.5 percent and the closing costs can be included in the mortgage amount.
VA LoansVA Loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
Piggy-back LoansA second mortgage that closes with the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The home buyer covers the remaining 10% with their down payment. (Some lenders will write a second mortgage of 15% or even 20% of the purchase price.)
"Carry Back" MortgageIn the case of the seller "carrying back a second mortgage", the seller loans you part of his or her equity. In this scenario, you would finance the majority of the loan with a traditional mortgage lender and finance the remaining amount with the seller. Typically you will pay a slightly higher interest rate on the loan financed by the seller.
Housing Finance AgenciesThese agencies offer special loan programs to low- and moderate-income buyers, buyers interested in rehabilitating a home in a targeted area, and other groups as defined by the agency. Working through a housing finance agency, you can receive a below market interest rate, down payment assistance and other incentives.
The primary mission of Housing Finance Agencies is to boost home ownership in targeted areas, among first-time buyers and those with little money for down payments. Most of these non-profit agencies were funded with state government seed money and now operate independently.
Click here for a list of Housing Finance Agencies.
Documenting Your Down Payment
Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.
Take extra care to document the sources for any monies to be used for the down payment or closing costs.
Acceptable Down Payment & Closing Costs Sources Cash in a bank account Mutual funds / stocks / IRA / 401K Proceeds from the sale of another property Gift from an immediate relative
Acceptable Down Payment & Closing Costs Sources
Click here to learn more about verifying your down payment, closing costs, income and debt.
Amy Hodges
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