Ocala Real Estate Talk

Archive for June, 2009

Do you qualify for the Ocala first time buyers tax credit? If you haven’t owned a house in the past 3 years you probably do qualify. This is free money. You don’t have to pay it back. You don’t need to owe $8,000- in taxes.

You do need to start looking for a house soon. The tax credit expires the end of this year. In order to close by the end of 09 you will need to be under contract by mid November at the very latest.

Not all offers get accepted. Deals fall apart for a lot of reasons. Don’t wait for the last minute. Start shopping early for the best deal.

Everything you need to know about the First Time Buyers Tax Credit in Ocala

People contact me about Ocala foreclosures on a regular basis. Now this is not unusual because I write about them all the time and I can be found all over the Internet. The problem is that you have to be some what flexible when looking for foreclosures here in Ocala. For example there are very few to be found in the 55+ communities. You will find a few farm properties but once again not too many. There are a lot of newer homes that were lost by investors but many if not most of these need work even if they were never lived in. Most of these investor homes were never landscaped and many never had the builder go through a final punch list fixing all those things that sub contractors didn’t get quite right. A buyer has to be flexible about location and condition when looking at foreclosed homes in the Ocala area.

Home sales here in Ocala have really picked up in 2009. That’s because prices have dropped so much. The median home price here in Marion County went down 16% in 2008 and much more in some sub divisions. The other factor in affordable homes besides just price is interest rates. Interest rates are the subject of this post.Seeing our elected leaders have proposed record deficit spending, are higher interest rates inevitable? The government finances it’s spending not by printing money but by selling bonds. The higher our deficit the more we have to sell and the only way to increase the sales of bonds is to increase the interest rates that they pay.

Can the increase in interest rates wipe out the gains in affordable housing created by lower home prices?

A $100,000.00 mortgage at the current rate of 5.5% would be $568.00 a month.

If rates shoot up to 7.5% the monthly payment would be $700.00 a month.

A $125,000.00 mortgage at 5.5% is only $710.00 a month.

I hope you can see how just 2% interest can wipe out such a big chunk of buying power. Interest rates are at historical low and there is no where to go but up. I think we are at a sweet spot in the market that just can’t last forever, low rates and low prices. This is the time to buy and I mean right now.

Before getting to the weather in June here in Ocala let’s look back at May. May was one of the rainiest months of May on record. That’s a good thing because May is usually very dry and the Ocala area has had a drought.

June is the beginning of the wet season. In the afternoon winds from the Atlantic collide with winds off the Gulf causing instability in the atmosphere resulting in thunderstorms.

The humidity also returns to Ocala in June. The temperatures are in the low 90′s almost every day and the night time gets down to only the mid 70′s. There is no doubt about it the air is very humid.

June is also the beginning of hurricane season in Florida. Although the ocean water really isn’t warm enough yet to really get hurricanes going. Ocala, being in the middle of the state is one of the least hurricane prone areas in all of Florida.

I drive by this For Sale by Owner almost every day. This poor guy has had his over priced house listed by a couple of Realtors with no luck. The last time it was listed, the house was at least $75,000.00 over priced. I don’t know why an agent would list a home at a price like that. The owner has had a For Sale by Owner sign in his front yard for almost a year.

The thing that the owner doesn’t realize is that he can’t sell his house unless it will appraise. That’s because most buyers need financing. To get financing a lender will order an appraisal. A house that much over priced will fail the appraisal and all real estate contracts have a finance contingency that will let the buyer walk away unless the seller will drop his price to that of the appraisal.

The only way this FSBO could sell that house is to get a cash buyer. A very unsophisticated cash buyer, totally unfamiliar with the Ocala market, who didn’t look at other competing houses either in person or online. What do you think the chances of that happening?

The moral of this story is “You can’t sell a house if it won’t appraise”.

In Ocala foreclosures the term, Highest and Best Offer, seems to be coming up more and more. Foreclosures here in Ocala are very hot. Banks are now trying to get buyers to bid against each other.

Here’s how it goes. You find yourself a nice foreclosure and make an offer. A few days later the listing agent sends your buyers agent a form or email asking you to submit your Highest and Best Offer. The reason being that there are multiple buyers interested in the same house.

Not all foreclosures are created equal. Some are just a lot more desirable than others. Banks can’t get away with this on every property.

There was a time a few months ago when this practice was rare but it is becoming more common as more and more buyers are looking for a great buy on a foreclosure here in Ocala Florida

Sales in May were 259 homes in Marion County. That’s a large increase over January at 142, February at 188, March at 220 and April at 229. This is a steady upward trend. Total listings are finally below 6,000 which is great news.

Of course the main reason for this increase in sales is that prices have gone down here in Marion county. The median home price fell 16% in 2008. More so in areas hard hit by foreclosures like The Shores, Marion Oaks, Rainbow Park, Rolling Hills and several others.

I’m seeing a huge increase in hits to my web site. I’m getting between 50 and 75 visitors a day. I think people are realizing that we are near the bottom of the market and now is the time to jump in and get a deal.

A very hot subject in Florida real estate is Chinese drywall. Chinese drywall is actually a German company Knauf, who manufactured drywall in a plant in China. Apparently the housing boom of 2003-2008 combined with the destruction of hurricanes Katrina, Rita and Wilma caused a shortage of drywall. To make up for this shortage drywall was imported. There are materials present in the Chinese drywall that are not used in the manufacture of American drywall. These compounds cause copper pipes and wires to corrode.

I never new anything about Chinese drywall until a few weeks ago and now it’s all over the news.

Is there Chinese drywall in Ocala Florida? According to a map on the Florida Department of Health web site there have been cases reported in Ocala. As of the writing of this post there have only been a few cases. Most of the problem seems to be in south Florida.

How do you know if your house has Chinese drywall? This link is to a self assessment guide from the Florida Department of Health.