Headlines – Week of February 13, 2011
February 22, 2011
Baby Boomers Change Housing Priorities
According to an article in the Chicago Tribune, baby boomers are again expected to change housing priorities as they soon re-emerge in the real estate market.
Many housing experts predict retiring boomers will want a greater variety of housing styles, smaller homes, and developments that are restricted to older buyers.
Other high priorities they expect from this age group:
- Younger boomers will want to continue to work so homes close to job hubs will be important, and more houses will include a home office in the floor plan.
- The group ranks walking trails as its No. 1 amenity.
- Also ranked as important: gated access to communities and security.
- Boomers also want expanded storage in their garages.
100 Florida Condo Projects Lose Fannie Mae Financing ApprovalAccording to a report from CondoVultures.com, more than 100 new, Florida condominium projects, including 28 in South Florida have lost their financing approval certification from Fannie Mae in the last six months, making it more challenging for buyers to obtain mortgages when purchasing units in any of the buildings.
As of February 2011, there are 160 new Florida condominiums with the required financing certification needed for lenders to provide mortgages that would qualify to be resold on the secondary market to the public-private entity Fannie Mae and others.
As a result, financing a new condo in Florida just got tougher for those buyers who lack the cash to purchase a unit with no mortgage. Dozens of projects have failed to renew their certification with Fannie Mae.
The question being asked is, did the scrutiny become more stringent or did the projects simply decide the approval was unnecessary given the resistance by banks to originate mortgages for new, Florida condo purchases.
Fannie Mae certification is essential for lenders that originate mortgages with the intention of reselling the loans on the secondary market. Residential loans that fail to meet Fannie Mae’s guidelines are typically maintained for the term of the loan by the lender that originated the mortgage.
Miami-Dade County had 17 projects drop off the Fannie Mae list while Palm Beach County had nine projects dropped off the Fannie Mae list.
Florida’s real estate outlook perks up in several areas
According to a survey by the University of Florida, optimism has increased slowly but steadily in Florida real estate markets through the fourth quarter of 2010.
The fourth quarter Survey of Emerging Market Conditions found improvement in several key categories, including the outlook for sales in new single-family homes and condominiums, office occupancy, retail occupancy, land investment and capital availability.
Much of the optimism derives from politics with the defeat last fall of Amendment 4, a proposed constitutional amendment that would have required a referendum for all changes to local government comprehensive land-use plans. The conclusion of mid-term elections also eased respondents’ uncertainty as it provided a clearer picture of the future.
Survey respondents’ expectations for occupancy and rent increased across every property type. The investment outlook rose in a majority of the property types, and the statewide outlook was the highest since the survey’s inception in 2006. Additionally, private capital is abundant as investors seek the few good products on the market. Overall, the market appears to be improving and will continue to improve at a slow pace over the next year.
Despite the positive outlooks in many asset classes, respondents’ optimism is tempered by troublesome economic factors, most notably Florida’s high unemployment rate of 12 percent. Respondents also relayed fears over federal, state and local budget issues.
The outlook for single-family and condominium sales increased slightly in the fourth quarter but home builders continue to have a negative outlook because financing is difficult to obtain and lower prices in the foreclosure and short-sale market take potential customers away from the new housing market.
Expectations for office and retail occupancy continued to improve. Occupancy expectations in the office sector increased, and the outlook for rental rates increased slightly but is expected to continue lagging inflation. In the retail sector, occupancy expectations improved for all property types.
Respondents believe occupancy will increase in neighborhood centers and large retail centers. Accordingly, the investment outlook in retail increased for neighborhood centers while declining for the remaining property types.
Land investment and capital availability also rose this quarter. More respondents believe land is beginning to be priced at levels that support longer-term investment, despite the fact that lack of financing for land purchases continues to be a concern. The optimistic outlook for capital is due in large part to respondents’ belief that future availability will increase.
Expectations for apartment occupancy and the industrial sector were mostly stable.
Posted by Scott R. Lodde