The continuing effects of the government shutdown.

After my last blog about the government shutdown and real estate world, the effect has continued to interest me.

This week, Fannie Mae and Freddie Mac have loosened up on the rules for the banks to approve mortgages. Before, Fannie and Freddie required that borrowers must verify their incomes with the IRS before being able to close on a mortgage. However, due to the government shutdown, the IRS has been having trouble getting through all of these verifications.

Now, Freddie and Fannie have decided to allow the lenders to do loan the money without waiting for the IRS to verify. To me, this raises some red flags and some banks agree. Many of the lending banks are concerned about the lack of IRS credibility for borrowers that claim to be making x amount of money from self employment income sources. For an economy that already has a low-risk attitude after the recent fiscal crisis, some lenders may decide to wait until the shutdown is over.

Wells Fargo, who originally said that they would wait until the shutdown was over to continue mortgage applications, has decided after Fannie and Freddie eased up on the rules that they would continue to push applications down the line without IRS verifications.

What this could mean for the economy is interesting. The risk is high, and after the bubble bursting and the real estate market taking a catastrophic hit, why would you cut down on procedures on an already sensitive market?

Just my thoughts, share yours!

Federal Housing Administration will continue to lend.

I’m sure that everyone has heard of the news this morning. With the government under a shutdown process, I decided to take a look into how that affects the current housing market.

As of Monday night, the House and Senate remained at a standstill over the funding for Obama’s new health care law, sending the government into a shutdown. Because of this shutdown, we’re seeing many federal run places take a hit. As of today, the Statue of Liberty, National Zoo, Grand Canyon and parks across the country will be closing its doors. The entire DC area is seeing massive door closings due to this indecision.

Luckily for us in the Real Estate world, it looks like the Federal Housing Administration (FHA) will not stop working on applications for housing loans like it previously said it would do. The Department of Housing and Urban Development has retracted its previous statement saying that they would completely shut down all applications. And given the fact that FHA will be working with a much smaller staff than the normal staff, 96% less actually, at least we aren’t seeing a complete shut down.

That’s all for now! Thanks for reading, and please comment!

This month in real estate…

Last month, Marketing Director, Kristina Skalak and Broker In Charge, Joe Salvo, traveled to Washington DC to promote Seabrook Island at the Ideal Living Resort and Retirement Real Estate Expo. Some 900 registrants from the metro area signed up to attend and about 50 other communities from the South East were represented.

It was a great opportunity to talk “one on one” with folks who are getting ready to retire to our part of the country. One thing quickly became clear, but not a surprise, to us as attendees visited our beautiful Seabrook Island booth. The big draw is our unbeatable combination of our Ocean Beaches, Privacy and proximity to Charleston.

They spent hours in very detailed discussions with attendees and came back with hundreds leads from potential Seabrookers with whom we will follow up. There is nothing better than face to face contact with prospects and we will be doing more of these shows in the coming year, while adding the new Seabrook Island branding messages at the same time.

In the meantime, the number of sales on Seabrook Island will grow for the fifth straight year in 2013. Right now Joe projects it to be up about 15-20% from 2012, with some 140+ closed sales versus last year’s 119. This is great progress from the low of 79 at the depth of the national recession in 2009 as we move toward getting back to annual sales of 200 plus.

That’s all for now!
Thanks for reading!

Good News for Charleston/Seabrook Area

At the risk of sounding overly positive at a time when it is not fashionable, there has been some recent good news. For those who have not heard, Charleston has now overcome San Francisco as the #1 tourist destination in the country. This, along with the coming PGA tournament, bode well for the Charleston area in 2012.

At the same time the Real Estate inventory in the greater Charleston market is down by some 20% from the high. That’s about 8000 properties on the market versus 10,000 at the high water mark. However, this is still double what the inventory was when sales were at peak numbers in 2005 and 2006.

While most of Charleston real estate statistics do not relate directly to our coastline resort and second home market, the second half of 2011 has also been more positive for Seabrook Island than the first half of the year. In the third quarter, Seabrook Island saw 6 properties sell that were listed over $1 Million, two of which were listed over $2 Million.

Market Messages!

One day the Wall Street Journal says that “Energy is increasing in the second home market” and that the higher stock market is providing cash to buyers who see the best bargains in years in vacation properties.

The very next day a Bloomberg article told us that theUS housing market is “Crawling up from rock bottom” but we still have to deal with the “foreclosure mess” and 2011 will be the year to do it.

It’s clear that market forces on both sides are working hard to get back the balance between real estate buyers and sellers. More and more “experts” are saying that 2011 is the transition year that will bring us back to a more balanced market.

To current sellers unfortunately it means that prices are still the driving force and all properties must be priced correctly and aggressively in order to sell.For buyers it means that “now” is the time and short of another economic collapse, next year might be too late.

On another note, the final market share numbers are in and thanks to all of you, Seabrook Island Real Estate maintained its’ market dominance with 69% of all Seabrook Island sales listing volume sold by our Sales Executives.

This loyalty meant that in 2010 Seabrook Island Real Estate turned over to the Club a pre-depreciation year-end profit of more than $100,000 – which was $250,000 better than the loss budgeted for 2010.

Thanks again and please feel free to call me directly to discuss anything regarding the current real estate market. (843) 768-7796.

Signs of a Bottom?

The final 2010 sales numbers point to more people taking advantage of values created on Seabrook Island by the economic downturn at the same time they display their confidence in Seabrook Island’s bright future.

Five significant positive signs are evident in the 2010 numbers versus 2009.

  1. A 30% increase in sales volume over last year.
  2. A 17% increase in unit sales over last year and even 10% higher than 2008.
  3. A 12% increase in the overall average price of the sales in 2010
  4. An 8% decrease in property inventory from one year ago.
  5. An increase in approvals for construction of new homes on Seabrook. There were just 7 in 2009, but 19 in 2010

Unfortunately these increases are born out of the ashes of our national real estate crisis. The market is still very fragile and all property sales remain extremely price sensitive.

The 94 Seabrook Island closings in 2010 are still well below the 10 year average of 193, but at least now headed in the right direction when compared with the 79 in 2009 and 82 in 2008.

Most of the increases in 2010 sales occurred in the single family home category.Villas and unimproved lots showed the number of sales little changed from 2009. Average sale prices for villas and lots was down from the year before.

Please feel free to call me or your favorite Seabrook Island Real Estate Sales Executive today for more real estate market information (843) 768-2560.

More new homes being built on Seabrook!

The number of new homes approved to be built on Seabrook Island in 2010 improved dramatically and this could be a major indicator of confidence building in the overall economy and Seabrook Island itself.

2010 saw 19 new applications approved by the Property Owners Association for the construction of homes on Seabrook Island, compared to only 7 in 2009.  Even more important, the number is also significantly greater than the 13 approved in 2008. 

What was construction like during the height of the market?  Well, in 2007 there were 55 applications approved by the POA.  There are a number of “experts” who feel that with the reduction in the number of new homes being built during the economic downturn, there will actually be a shortage of new construction inventory in the near future.

There are about 500 (+or-) remaining unimproved lots on Seabrook Island and given the limited numbers,  they could be among the best pure investment plays on the island. 

Incentives, rentals and timing make villas a good buy right now!!!!

There a a lot of good reasons for existing Club members to purchase an investment villa right now!

  1. Last summer was one of the best rental seasons ever on Seabrook; next year is expected to be the same and the flood of publicity is already beginning about the PGA coming in 2012.
  2. The Club is offering existing Club Members (who have a Community membership or higher) a $10,000 savings on a second membership. The Community Membership joining fee is just $2,000 for Club members buying a second villa or home for rental purposes.
  3. Villa prices have stabilized in price ranges we haven’t seen in several years, with mortgage rates we may never see again.

NEW LISTING!

This totally renovated and upgraded Creek Watch Villa with spectacular views was just listed at only $352,000.

Some recent price reductions:

  • Sealoft Villa – $395,000
  • Treeloft Villa – $320,000
  • Pelican Watch Villa – $349,900
  • Tarpon Pond $275,000

Call your favorite Seabrook Island Real Estate Sales Executive to find the best investment buys on the island.

New Sales

Seabrook Island Real Estate has recently taken deposits on two Summerwind Villas, both listed between $319,000 and $329,000.  We’ve also taken a deposit on the home at 3016 Baywood Drive (see picture below), listed at $699,000. 

Through October 31st, 78 properties have closed on Seabrook (thru the multiple listing service) with an average sale price of $539,000.  This is compared to 67 closings for the same period last year at an average sale price of $496,000.