Sanibel & Captiva Islands, Floirida, Florida, United States
Born in the U.K. Almost ten years’ experience in property management/rentals on the islands. Specialty — International customers/Seniors/Second Homes/Investment Properties.
Sally was born near Bristol in Southwest England. . She spent a decade traveling and gaining work experience around the globe until settling in the New York metropolitan area as a corporate travel consultant. She now specializes in guiding customers from overseas and the USA through the process of finding and purchasing real estate on the Islands.
Initially inspired by a postcard of Blind Pass, Sally began visiting Sanibel regularly before making it her full-time home in 1996. Prior to becoming a licensed realtor, Sally was one of the original employees at Royal Shell Vacations and uses her in-depth knowledge of the vacation rental market daily to the advantage of her customers.
She was recently awarded the designation “MCNE” (Master Certified Negotiations Expert) and also holds the designations S.C.I.S. “Sanibel & Captiva Island Specialist” from the Sanibel & Captiva Board of Realtors, e-PRO and “TRC” (Transnational Referral Certification).
Keeping you updated on the Market. For the week of March 25, 2013.
Home Builders Take a
The holiday we refer to is from optimism. Over the past 18 months,
builder optimism has moved meaningfully higher to a recent high of 47 from
a low of 9, according to the NAHB's sentiment index. This month, though,
sentiment dropped to 44.
Demand for new homes remains robust, but supply issues – in labor and
building-material – are hampering construction. Home builders are equally
frustrated by restrictive appraisals and tight lending standards. As for
lending standards, we concur. Underwriting standards remain too
For this, we can blame uncertainty and tighter regulations. We were
encouraged to hear Federal Reserve Chairman Ben Bernanke agree with our
assessment. In a press conference earlier this week, Bernanke told
reporters the Fed is seeing "much higher credit-quality
requirements" from potential borrowers. Bernanke cited the rule where
mortgages could be put back to banks as being particularly detrimental to
There are no free lunches. When the uncertainty and cost of doing
business rise, businesses – including mortgage lenders – take action to
mitigate uncertainty and to recover costs. Yes, the Fed gives on the one
hand by continuing to buy mortgage-backed securities at the rate of $40
billion a month. On the other hand, the pool of potential borrowers is
reduced by higher lender costs and the increased risk of doing business.
So we can understand why home builders might feel down from time to
time. But we did say the builders were taking a “holiday” from optimism.
Given strong demand for new homes and rising construction, we don't expect
them to remain down for long.
The good news is that home builders continue to break new ground at an
expanding rate. Housing starts increased 0.8% in February, pushing starts
up to an annualized rate of 917,000 units. The trend in permits portend
increased activity heading into spring. Permits rose 4.6% to an annual pace
of 946,000 units in February.
When viewed from a longer-term perspective, you can see home builders
have made significant progress and have room to accommodate more progress
Rising prices will continue to move the housing recovery along. Zillow
reports that home values rose for a 16th-consecutive month in February.
Zillow's home price index shows the average home value at $158,100. Of
course, within the context of an entire country that doesn't mean much. What's
meaningful is that monthly and annual price appreciation was recorded in 30
of the largest markets Zillow follows.
Rising prices, in turn, reduce negative equity. CoreLogic's research
shows that 200,000 homes were lifted into positive equity during the fourth
quarter of 2012. This brings the total number of homes that moved to
positive from negative to 1.7 million in 2012.
Time plays a role as well: amortization and rising prices are working
together to hurry the process along. In other words, time really does heal
all wounds, though it hardly feels that way at the beginning of the
Date and Time
New Home Sales
Tues., March 26,
10:00 am, ET
Low inventory and tight credit is hampering sales growth.
Wed., March 27,
7:00 am, ET
Higher lending rates have slowed applications, but the recent rate drop should
Pending Home Sales Index
Wed., March 27,
10:00 am, ET
Existing-home inventory is showing signs of expanding, which bodes well for
Gross Domestic Product
(4th Quarter 2012)
Thurs., March 28,
8:30 am, ET
This revised version of GDP points to an uptick in economic activity, which
could lead to an uptick in interest rates.
It Really is a Small
World After All
Mortgage rates were down significantly this past week. In
some instances, they were down over 10 basis points. For this, we can thank
(blame?) the tiny country of Cyprus.
It seems odd that a tiny Mediterranean-sea country of 1.1 million inhabitants
would influence interest rates in a country – the United States – with a
population of 313 million. So what's going?
Today's financial institutions are closely intertwined – though lending,
borrowing, trading, and market-making relationships. This raises the
contagion risk, where something bad in one country can quickly spread. We
saw that occur in 2008 when many of the world's largest financial
institutions were at risk of collapse.
In Cyprus' case, a banking panic was initiated when the European Union
insisted Cyprus implement a 6.75% tax on bank deposits less than 100,000
euros and a 9.9% tax on larger deposits. In exchange, Cyprus banks would
receive a ten-billion euro bailout. The fear is that other European
countries ( Italy in particular) could be forced to impose the same tax,
thus resulting in a mass run on those banks.
In short, fear and uncertainty again sent investors to the haven
investments of U.S. Treasury and U.S. mortgage-backed securities; hence the
lower mortgage lending rates, which we don't expect to last. Fear passes
quickly these days, so we suggest borrowers act quickly.