Inventory shortage for home buyers – possible new housing boom and more – The Duncan Duo Radio Show

    [background music intro]

    The Duncan Duo Real Estate Show. Now, your host: Andrew Duncan.

    [background music intro]

    Andrew Duncan:              Good morning, Tampa Bay. We’re with you for another week to talk about the local real estate market. I’m excited that today we’re going to have some calling guests. We’ve got some realtors from across the state of Florida. They’re going to be calling in to give some insights as to what’s going on in other markets across the state of Florida. So, if you own property in another part of Florida, know someone in another part of Florida or you are just interested in what’s going on in other Florida real estate markets, stay tuned for the rest of the show today. We’ll be talking to several top realtors from several different companies throughout the show today. And we’ve also got Nate Davis from Plant City Mortgages on the show with us today. And, Nate, I don’t out of the gate you wanted to get to one topic that was new regarding some financing condition changes.

    Nate Davis:                         Yeah. I will basically just paint a quick picture for you here: majority of the nation’s loans that are going out throughout the nation, are loans that cannot be backed by the Federal Government’s different programs. It might be the Fanny Mae, Freddie Mac, FHAVA, USDA, all the alphabet suit entities out there. Basically, they provide lenders with software that you can punch in some information, it takes a look at your credit and it gives you an automated approval or denial, depending on what the credit risk is. And, any time that they change in the backend the requirements in that software model, it can have a big impact on the lending landscape out there since so many of the nation’s loans are going through these entities. One of the biggest ones that is coming out – this is going to change on Fannie Mae loans October 20th, is that, right now, if you are a self-employed borrower or a commissioned borrower and let’s say you are buying…

    Andrew Duncan:              When you say ‘commissioned’ meaning ‘earning commission’ income.

    Nate Davis:                         Earning commission income, that’s right. So, you know, you work and you’re on a variable income level base off your sales or what have you. Right now, if you have like a really good credit score and you made a down-payment, that system will allow you don’t say: “You know what, we just need one year tax return right now because you look pretty strong and good.” They will say the most recent year. While, historically, they would always average the last two years and what happens is: if your income is declining from say 2010 tax return to 2011 tax return, they’re going to use the worse year. So they’re going to take 2011 divided by 2012 to give you a credit for as your effective income.

    What’s really nice about this is if you have a borrower who in 0-10 had a very bad year and lost money, but now in 0-11 they’d made money, they could credit you with that system and then: ‘bang’ – all you’ve got to do is use the 0-11 year and they’re in business, they’re buying homes, refinancing or what have you. And, one of the things that they’re doing with this change here is they’re actually going to go back to not allowing just one-year tax returns. So, if you’re a prequalified buyer, if you’re a real estate agent, if you’re anyone out there who’s working with someone who’s been preapproved, and they are self-employed or they’re commissioned, they need to re-visit that because…

    Andrew Duncan:              It’s going to change.

    Nate Davis:                         It’s going to change. So by the time they’ve found a house, they’re going to have to get rerun through this new system and it’s going to change those findings. I know some folks who, in 2010 literally, lost money and 2011 break out year with the economy. That’s a game-changer, you know.

    Andrew Duncan:              Yeah. And when is the effective date for that?

    Nate Davis:                         October 20th.

    Andrew Duncan:              Alright. So…

    Nate Davis:                         And that’s for Fannie Mae only

    Andrew Duncan:              Hurry up and buy now!

    Nate Davis:                         Yeah, buy now. [laughing]

    Andrew Duncan:              You’ve got a week.

    [both laughing]

    Andrew Duncan:              Alright. So, we have a Lisa Treu with the Treu Group on line one, in Palm Beach County. Lisa, how are you doing this morning?

    Lisa Treu:                             Hi, I am doing great. Thanks for having me on.

    Andrew Duncan:              Oh, you’re welcome. So, Lisa is a part of the radio group that we meet with pretty regularly and a top producer down in the Palm Beach County, the Treu Group. The website, I think, is the treugroup.com but it’s ‘T-R-E-U’ group dot com.

    Lisa Treu:                             That’s correct.

    Andrew Duncan:              So, what’s going on in Palm Beach? How’s the market ticking there?

    Lisa Treu:                             Well, Palm Beach is really rocking right now. We are, in most communities within the County, we are now in a sellers’ market, seeing multiple offers on pretty much anything under of about $350,000 right now.

    Andrew Duncan:              And that’s  comparable to what we’re seeing here, although I would say our price point for where we’re seeing multiple offers is maybe a little lower. That’s not to say we don’t see it on the high-end but I would say for us it’s probably three or two-fifty and below and it’s bidding wars on just about everything.

    Lisa Treu:                             Yes, it’s an exciting time. Actually, right now County-wide we have less than five month of inventory and then there are some cities where we have a one to two months of inventory. It’s really a very interesting kind of throw back to the boom time, for sure.

    Andrew Duncan:              And how many foreclosures are you seeing? Are you seeing a lot of foreclosures, not very many?

    Lisa Treu:                             You know, we’re not seeing very many. We’re short on inventory and that’s part of the issue as the foreclosures are just not on the market right now. We’re seeing the banks who are really working well with our short sale approval, which is good news. Helping people avoid foreclosure. Prices are still good, however they are rising. Year of year we’re up in single-family homes about 12 percent.

    Andrew Duncan:              That’s awesome. That is really comparable to what we’re seeing. We are up about 10 percent year over year on appreciation and I say it really quietly [whispers]. I say ‘appreciation’ because I don’t want to scare anyone [laughing]. But we are. We’re seeing it right now.

    Lisa Treu:                             Yeah and it’s interesting because even though the prices are up with interest rates being so affordable, buyers still can get great deals and so we’re seeing a lot first-time buyers that have been waiting for the bottom. They’re strong in the marketplace and it’s really great. One of the things – I don’t know how your market is – that we have in Palm Beach County is one out of every four buyers is actually a foreign purchaser.

    Andrew Duncan:              I wouldn’t say…Yeah, we’re not as high as one out of four but we are seeing a heavy percentage.

    Lisa Treu:                             That’s wonderful.

    Andrew Duncan:              So, what’s the average sale price in your market?

    Lisa Treu:                             Our average sales-price per single-family homes is $345,000 right now.

    Andrew Duncan:              Alright. So you’re up higher than we are. Ours for single-family – our medium home price in the entire Tampa Bay area is about 175 but for single-family I think our last look at it was around 230. What about time on market before a sale? What are you seeing – not just for you because I know you’re killing the market; I know your price sells a lot faster than the market down there – but what are you seeing as the market average for how long it takes for a home to sell?

    Lisa Treu:                             Well, that’s interesting because it’s actually down, as well. It’s down at 8.5 percent. It’s still a 107 day-stays on market for single-family homes. The County’s market’s actually about the same. Ours is substantially less but 107 is not bad.

    Andrew Duncan:              Yeah! I think we are at about 80 days.

    Lisa Treu:                             Oh, wow.

    Andrew Duncan:              For our market, so it will probably deal with a little less inventory. I think here – last time I looked it was like three and a half months of inventory, so it’s definitely been strong. Lisa, I greatly appreciate your call. Thanks for tuning in. If you’re looking for a realtor in Palm Beach County, check out the treugroup.com. Have a great rest of your Sunday, Lisa and thanks for the calling.

    Lisa Treu:                             Thanks so much. Bye, bye.

    Nate Davis:                         Andrew, can you clarify when you’ve said “days on market” – is that for the time it gets listed to the time it’s closed and sold or just on the contract?

    Andrew Duncan:              On the contract.

    Nate Davis:                         On the contract? OK.

    Andrew Duncan:              Yeah. That’s what we generally track.

    Nate Davis:                         [illegible] then?

    Andrew Duncan:              Yeah. The challenge is that it depends. There are two different statistics you can look at: you can look at active days on market or you can look at days till sale.

    Nate Davis:                         OK.

    Andrew Duncan:              The short sales do…

    Nate Davis:                         Days on sale will skew that number.

    Andrew Duncan:              Yeah.

    Nate Davis:                         OK.

    Andrew Duncan:              Yeah. And then, the MLS actually a few years ago they figured out that realtors were kind of smart sometimes. We like to trick the system. And in our local real estate board you used to only have one days-on-market field. So you have ADOM, which is days on market before sale, before it goes on the contract. Then they changed the CDOM so the reason they did that was because you’d have realtors pull the property out of MLS put it on again.

    Nate Davis:                         Uhm.

    Andrew Duncan:              Or you’d have a home that would change realtors. The one realtor who would get fired or quit or whatever and then you’d have new realtor come on board and now the CDOM brings those two together. The consumer doesn’t always see the CDOM date but a broker can and then they can look at it and say: “OK, that home has actually been on market yet. It’s only been on 17 days of that realtor but it’s been offered for two years with four other brokers.

    Nate Davis:                         Right.

    Andrew Duncan:              It’s a little bit more transparency on the data.

    Nate Davis:                         It’s amazing: there is so much data out there with realtors and agency. A lot of times people are looking at it selling their home or buying a home – it’s more of a gut feeling. There’s like statistics, there are like betting averages out there for you guys: here’s our stats to list a home, sell a home, average price.

    Andrew Duncan:              Oh, yeah.

    Nate Davis:                         There’s all these numbers out there that people are unknown to that.

    Andrew Duncan:              Right.

    Nate Davis:                         Unless they bring it up they might not get brought up.

    Andrew Duncan:              Right. We bring it up with every client.

    Nate Davis:                         Because you guys have all those stats, of course.

    Andrew Duncan:              We have good statistics, yeah.

    Nate Davis:                         But if someone’s not bringing the stats that might be something to think about.

    Andrew Duncan:             Yeah. And I’ll tell you: it’s interesting because we live in the world that’s like that. Performance is heavily tracked and it’s just the way it is today. One other thing that I wanted to get to you, Nate: it looks like there was a new Bill introduced in the House this week, the Responsible Home-Owner Refinancing Act. Sounds like it’s a modification of HARP to maybe make it a little bit easier for some people who cannot get HARP or for different backed-loans and what not but, more or less, it sounds like it’s making it easier for responsible home-owners to take advantage of lower interest rates on mortgages and refinances.

    Nate Davis:                         Yep. What’s going on right now with the HARP program, it’s basically a program that says: look, if you have a loan that’s backed or guaranteed by Fannie Mae-Freddie Mac – you won’t know that unless you punch this at your address on one of the websites because your lender’s name is not going to be Fannie Mae-Freddie Mac, it will be someone else – but if that loan is guaranteed or backed by Fannie Mae-Freddie Mac, you’re able to refinance your home right now despite of what you owe. So, if you owe three hundred grand and the home is worth $100,000, you can actually refinance that right now. But what’s occurring in the industry – and this isn’t just for the HARP program, this is everywhere for a multitude of different lending options – is lenders have what they call “self-imposed overlays” so there will be products such as HARP out there and it says: “You know what, we’ll loan it to you no matter what you owe on your house.”

    That’s the way the program is set up. But then when every lender’s implemented that program, some of them will say: “You know? We will only loan you 125 percent of the value of your home in today’s market.” Whereas the program is designed to say: unlimited. Or some of those will say: “You know? If you have mortgage insurance on your loan now, we won’t do those loans.” And it will always have all those little things and what it’s doing it is basically giving them a more conservative book of business. However, that’s not the way the program was designed. At our office, all of our programs we have with no overlays so we are able to get them approved just as a program’s intended to be, which is a huge benefit for us, however, I think what this design will do is basically open that up more. Let more people with more different options.

    Andrew Duncan:             So if you’ve got questions about what we’re talking about today – questions about the real estate market, home-buying, home-selling, refinancing, foreclosures, short sales, the impact of the election on the real estate values – whatever it is, if you have a question related to real estate, feel free to give us a call: 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352. All of our phone numbers end in ‘9352’ and when we aren’t on air, you can check our Facebook or Youtube channels. You can actually search for The Duncan Duo and you can go to facebook.com/theduncanduoshow, post questions on there as well, we’ll make sure to get to those either in today’s show or on the next show.

                                                   Couple of things that I’m going to talk about after a break – it’s interesting to see the low inventory and I think I’ve heard that repeatedly from realtors across Tampa Bay and obviously across the rest of Florida – we’re dealing with the a challenge when we don’t have as much inventory as home buyers want to buy. And we’re seeing bidding wars and a lot of it happening. Home prices across the US have risen, they’re most point in six years, in Tampa we’re at the highest point that we’d been in a long time. We did see – I’ll talk about this after the break – we did see a little bit of a dip in Tampa for the average sale-price from August to September. The first light dip we’ve seen of that in a while. As well as an article from CNN: they’re predicting a new housing boom and that home values could jump back to the peak numbers as soon as 2015. So, we’ll talk about that after a quick break here on the Duncan Duo Show.

    [break]

    Andrew Duncan:              So, we’re back here on the Duncan Duo Show, answering your real estate questions. We’ve got Richard from Palm Harbor. He’s been waiting patiently on the line for us. He’s a got second home and he’s curious whether he should refinance it, keep it, sell it, rent it. How can we help you, Richard?

    Richard:                                Hey, how are you guys doing?

    Andrew Duncan:              Doing great.

    Nate Davis:                         Doing good.

    Richard:                                We’re just debating on our previous house and what we’re going to do with it because our kid and his girlfriend and my grandson are likely to be moving into it. Should we sell it? Somebody told us to put it in an LLC and rent it out to them.

    Andrew Duncan:              OK. Now, do you – so you’re thinking about renting it out to your children?

    Richard:                                Yes.

    Andrew Duncan:              What’s your interest rate right now?

    Richard:                                On that house? Well, we only have three years to pay the house off.

    Andrew Duncan:              OK. And what, roughly, do you owe you think?

    Richard:                                Oh…three years I’ve got…maybe we might owe like 15,000 on it?

    Andrew Duncan:              And the house itself – is it in pretty good condition?

    Richard:                                Oh, yeah: three bedrooms, three baths and that, modern kitchen, gas appliances.

    Andrew Duncan:              What would you guess the property to be worth?

    Richard:                                From what I heard now it’s up over…including lot value of Sunset Point…we’re looking at…I was told the house now values somewhere around 98 to 110.

    Andrew Duncan:              OK. So we’ll just call it a hundred grand for ease of math. In terms of refinancing, Nate, what can he do in terms of a cash-out? Could he cash out, how much?

    Nate Davis:                         Yeah, he could pull out about 75 percent of the value. He gets a loan for about $75,000. You can get an interest rate in threes  on an investment home right now on a 30-year fixed-rate term.

    Richard:                                OK. But that’s one thing we were looking at because we may just  refinance the house – that way we could pay off the house we’re on, totally and then some – and then we would just put that house…and then we would just rent it and then he’d just pay it in payments on time.

    Andrew Duncan:              That’s a good option. And, again, you obviously get some cash out of it, you lock it in a low interest rate, you could certainly pay it completely off and still rent it, too. At that point…In terms of whether or not you’d put it in a LLC – that’s more a legal advice and I cannot really give you but what I can say, though, another thing you can do that’s an alternative to that, we see people a lot of times will just keep it in their individual names, especially if they’re renting it in the family and then just buy a larger insurance policy; get larger coverage, more liability protection and that sort of thing to…Certainly, putting it in an LLC is viable and we personally do that but, again, when it’s talking about one property it’s going to create some additional tax, some additional cost and things like that. But we do recommend consulting an attorney to see if that’s the right path for you.

    Richard:                                Yes, but we transferred all of our homestead stuff and our millage rate after the house in Palm Harbor which I know that tax guy wasn’t really happy but, you know: oh, well.

    Andrew Duncan:              Right.

    Richard:                                And even our neighbors were like: “How can you get that low taxes? You’re paying less than we are”.

    Andrew Duncan:              How long have you owed the property, Richard?

    Richard:                                Err…28 years.

    Andrew Duncan:              And when is the last time you occupied it as a primarily residence?

    Richard:                                Oh, just within a year.

    Andrew Duncan:              So, if you sell it you’re going…whatever you gain you’re not going to pay any income taxes on with the laws that are in place right now. That’s one benefit of selling it as that would take the gain and not pay taxes because you’ve occupied it within two of the last five. So, there are some benefits of that. Certainly, viable but if you’re going to end up…if you need family to live in it, and it’s an asset that’s not as likely to go down much more.

    Nate Davis:                         Would you not want to sell the home to your son? Just have him buy it from you?

    Richard:                                Well, I thought about that but he’s…twenty years old and twenty-one years old, that’s just not an option for him to come up with cash to do that.

    Nate Davis:                         He really wouldn’t need any. You can do…

    Andrew Duncan:              He could do an FHA loan.

    Nate Davis:                         Yeah, there’s a number of ways he can do it. You can even do a gift of equity. I’m doing one for someone right now where someone’s buying a home from their parents and their cash in the transaction…

    Andrew Duncan:              But it would also depend on his credit score and all that or they would do owner financing possibly, too.

    Nate Davis:                         Yep. Yeah, but money alone shouldn’t impact on that because, technically, even family member can gift the money to buy the home.

    Andrew Duncan:              Right.

    Nate Davis:                         So there’s really ways to do it. Money shouldn’t be limiting factor and if that’s why you want to get a second opinion.

    Richard:                                You know we were thinking we would sell it to him probably in ten years when we think they will have their money to put up and they’ll be able to do a lot more in ten years than what they can right now because right now they’re – like I said. The house right now, we have it rented out for eleven-fifty a month.

    Nate Davis:                         Uhm.

    Andrew Duncan:              Well, I’ll tell you what: that’s a great yield. You shouldn’t have a problem selling the property with it yielding that kind of money and if you think about that’s a segment of our market that’s chugging along pretty nicely. Richard, we’re going to get to a break but hopefully we helped to point you in the right direction.

    Richard:                                Thank you.

    Andrew Duncan:              Appreciated. So, again, you’re listening to the Duncan Duo Real Estate Show here, on 970WFLA and we’ll be right back, after a quick break.

    [break]

    Andrew Duncan:              We’re back here on the Duncan Duo Show, talking about the local real estate market. We’ve got Andrey Bustamante from Orlando, waiting patiently for us on line two. We’re going to talk to him a little bit about what’s going on in the Orlando market. Andrey, how is it going?

    Andrey Bustamante:      Hey, good morning, Andrew. I’m doing great. Thanks for having me on the show.

    Andrew Duncan:              Oh, no problem. I appreciate the opportunity to talk to you. For all our listeners out there that are maybe sometimes – you and I ran into this a lot: Andrey has a radio show in Orlando that runs this afternoon or I think an hour after mine. I think it runs at 11:00, right?

    Andrey Bustamante:      Yep, from 11:00 to 12:00, actually.

    Andrew Duncan:              So, we constantly have clients, we’re exchanging clients back and forth because we have the people coming from Orlando to Tampa back and forth on my show, but then they call him and then call…Anyways, so how’s the market in Orlando? What do you see happening?

    Andrey Bustamante:      The market’s blowing up my friend. It’s relevant of 2005 numbers. We’re basically – like Lisa Treu said earlier and what you’re noticing in Tampa – we have no inventory and as you know and I both know, real estate is all about supplying the demand. And right now there’s a tremendous amount of demand but there’s no supply. We’re seeing fewer properties on the market today that we did even in 2005, right in the boom of the market. We’re down to inventory levels of 3.09 months.

    Andrew Duncan:              That’s…Yeah, and that’s comparable to us, too. I mean, no inventory, so prices are starting to tick up, you’ve got buyers getting frustrated. What about REOs – do you see many foreclosures at the market?

    Andrey Bustamante:      None at all, man. But, again, I think politics is getting in the way of these foreclosures hitting the market.

    Andrew Duncan:              I would agree.

    Andrey Bustamante:      We’re seeing very little REO. As a matter of fact, last month normal sales accounted for 48 percent of all sale types. REO sales were only 23 percent, when about two or three years ago, it was like 50 or 60 percent, all REO sales.

    Andrew Duncan:              That’s remarkable. And what about…so you’re looking at three months inventory. What’s the average sale-price in your market, in Orlando?

    Andrey Bustamante:      Average sale-price is $120,550 – that has actually been going up for the…we’re up year over year but this month it actually dropped a little bit, just like in Tampa.

    Andrew Duncan:              Yeah, we saw the same thing. And some of it is seasonal.

    Andrey Bustamante:      It’s seasonal, that’s what I was going to say it is. It’s exactly that. But it’s a crazy market. It seems like anybody that puts a home on the market at a realistic price, you’re going to receive three, four, five offers at least. There is, in that sense, in a normal price-range of, say, 200 to 250.

    Andrew Duncan:              Right.

    Andrey Bustamante:      If you look at the investment deals, $90,000 or $100,000 properties, there was a big REO broker here in our market and one of my buying agents submitted an offer and he had 90 offers on that house.

    Andrew Duncan:              Yeah, that’s amazing. What about in terms of the days-on-market? What’s your average there? Ours is hovering right around 80 days on market before home goes on the contract. What are you guys seeing is your average? I know you blowing it out of the water with your team but what’s the market’s average?

    Andrey Bustamante:      We’re glad to be able to perform at the rate you’re performing. We’re doing about 28 days average days in the market and the MLS average is 80, as well.

    Andrew Duncan:              OK. And…

    Andrey Bustamante:      Similar to Tampa

    Andrew Duncan:              How about foreign investment. Are you guys seeing a lot of that? People buying vacation condos and properties around the Disney Parks and are you seeing a lot of that happening?

    Andrey Bustamante:      We’re seeing a lot of money coming from Canada.

    Andrew Duncan:              That’s what we are, too.

    Andrey Bustamante:      We’re seeing a lot of money coming from the South America, Brazil, Venezuela, Colombia, the British love Orlando. It’s a big, big push coming from foreign money.

    Andrew Duncan:             And what about in terms of…so you talk about…we started to talk about appreciation in our market. Where do you see your market a year from now?

    Andrey Bustamante:      Ummm…

    Andrew Duncan:              I know it’s hard to predict that. But do you see in some ways is this going to hedge on some political stuff that happens? I mean, do you see it to continue to chug along and continue to appreciate or do you think that some bank foreclosures are going to hit and saturate it?

    Andrey Bustamante:      Here’s the way I look at it: I think from the price-range of, say, 250 and under, I think we’re going to see appreciation. I think if you’re looking at 350 – which, for us, is a little bit towards the higher-end – it’s 500 plus, there may be some depreciation. I think investors have figured out that we’re going to see the market come back to its peak level and we’re probably going to see that in the next three or five years so they’re starting to buy up everything in the lower-end inventory.

    Andrew Duncan:             Yeah and I think that we’re seeing a lot of this similar stuff here so. Well, Andrey, I appreciate you calling in and I have to jump on your show some time in the future and thank you for tuning in. What’s the best website to catch more information on your Orlando real estate team, Andrey?

    Andrey Bustamante:      You can just visit orlandohomesold.com

    Andrew Duncan:             Awesome. Hey, enjoy the rest of your Sunday and good luck on your show today, Andrey.

    Andrey Bustamante:      Thanks a lot, Andrew. Thanks for having me on.

    Andrew Duncan:              You’re welcome. So, again, you’re listening to the Duncan Duo Real Estate Show. If you have questions about this, feel free to give us a call: 813-990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352.

    CNN Money article this week: new housing boom. They’re predicting – and they talked about the building market, the financing – they’re predicting values to go back up to peak levels as soon as 2015, at least Barclays Capital who was featured in the article. I’m not saying that CNN Money is, but they printed the article. It’s interesting when we see this – and I don’t know if I necessarily completely agree with that but we’re starting to see that activity in that core price-range; that middle-upper price-range that just, literally, stuff flying off the shelf.

    Nate Davis:                         One of the factors that I tend to think is understated out there. With this low as rates are – everyone knows rates are low, but a lot of times they really don’t know just how low they are. So we’re having people call us, there’s always that moment when they are like: “Are you serious? That’s all it costs?” It is like: “I promise you. That’s it.” “And that’s on a 15-year term?” I’m like: “Yes, you can get this home on a 15-year term for x amount of dollars.”

    What I think is happening is, yes, you are supplying the man working out there but a big factor, too, is that a first-time home buyer right now can buy a home and pay less than they’re paying in rent. I mean, they save money. So, even if values drop, and you’re saving money compared to where you would have been, I don’t know how you could miss that up.

    Andrew Duncan:              Let’s talk about it. There’s an article out of Minnesota this past week. Some young, first-time home-buyers are skipping to start a home. And Andre talked about it. We talked about it and, again, when you see that happening, sometimes that’s a good advice. If you know all the competitions in the hundred, two hundred thousand dollar range and those are the homes flying off the shelf, can you squeeze up buying the three hundred thousand dollar home or get a better deal because there’s not as much competition? And when it all factors out, yeah, a lot of times you can! You’re going to maybe save a little bit off the asking…If you look at the statistics in Tampa, you see that there is the list to sell price ratio, more in favor of the buyers who climb the price chart.

    Nate Davis:                         Correct. There’s more price elasticity to the top.

    Andrew Duncan:              Right.

    Nate Davis:                         Yeah, and anyone that knows me will tell you I’m a financially conservative guy and I would never advocate anybody to go out of their comfort zone and buy this massive home that’s going to cost them this money but what happens is people put their mind: “OK, this is my value that I want to buy a home at: this range.” Maybe it’s 150, maybe 200 – who knows? And I always tell them. I say: “Look, you need to do whatever you feel comfortable with for you and your family. But let’s just go through this exercise. I want to show you what it would be for a 300,000 loan on a home.” Because the rates are so low, there are always astonished that a payment just simply does not move nowhere near what they thought it would move to.

    Andrew Duncan:              Yeah. I mean, what would you say? What would you locking in people right now: good credit scores on 30-year fixed and then what do you do with a 15-year.

    Nate Davis:                         30-years is in a low threes right now. Like, for example, if someone’s an FHA buyers. 3.5 percent down as a down-payment, 3.25 percent and there’s no cost on that loan as far as…there’s no lender fees – nothing at all: no points – nothing to add at all. In fact, a lot of times they actually get a credit towards it, to apply it to another cost. So, when you run numbers on that, it’s just astonishing when you see what it would cost. It’s just nothing.

    Andrew Duncan:              What are 15-year rates looking like?

    Nate Davis:                         On conventional, we are seeing 2.75….

    Andrew Duncan:              Remarkable.

    Nate Davis:                         That’s a fixed. That’s no points, there’s no fee. It’s just a great loan.

    Andrew Duncan:              So, let’s talk about the Tampa real estate statistics. We’ve been talking about this for a while. The last several months we’ve seen prices continue to climb month after month after month and finally we have a month where [sound effect]. It stopped. We had a little crash. Average sale-price in Tampa went from about 176 to 169 from August to September. But again, keep in mind that 169 for September is up about 10 percent, no, excuse me, about 6 percent over last year’s September number. And some of it is seasonal: you got the kids coming back in school and September is not always a fantastic real estate month. It’s usually not one of the better months.

    But the end of the year tends to be a little stronger in Florida than people give it credit for because you have an influx of population, people are trying to buy before the end of the year – the people who’d missed the market in summer. So our average sale-price down to 169, 274, you’ve got 1798 sales, which is pretty close to what we did last year but we continue to see a low inventory: 3.9 months of inventory and 82 days for the average on days on market. So, look, our Tampa real estate statistics still continue to show a good continuum trend.

    So, we’ve got Bill from line one. Bill, you have a question on the next wave of foreclosures. How can we help you?

    Bill:                                         Yes, sir. The statistics are interesting. You remember the banks shut down the foreclosure markets for a while looking at all their ‘legals’ and there are interesting law suits that are floating around in the legal system, some at at the appellate level, which may revolutionize the mortgage industry – one with Wells Fargo, specifically. But you have still 50 percent of the houses in the state of Florida under water with the present mortgages and the present values. You have almost a doubling of foreclosure filings in the last quarter compared to the quarter before so you have another huge wage of foreclosures coming.

    Andrew Duncan:              Absolutely.

    Bill:                                         And then you have another low and you’ll have a third wave of foreclosures.

    Andrew Duncan:              So, what’s your question, Bill?

    Bill:                                         The question is: it’s deceptive by the real estate people because they’re pumping up the market, controlling the media by telling that the housing market is improving, it’s very similar to the press being in the bag for Obama. And it’s false positive.

    Andrew Duncan:              Well, and I would disagree with you. I think the statistics support that more and more banks are doing short sales, they’re avoiding foreclosure, they’re working out things with borrowers but there’s no question – I talked a couple of weeks ago that I think the foreclosures are being held off. They need to put some of them on the loan market in Tampa. We’ve got light inventory, we could use more inventory. I think the secondary thing is – I mean, I said that I thought there was a conspiracy theory; I thought that the Obama Administration maybe in with the banks and holding off foreclosures intentionally to make the real estate market look better. But the facts are that the statistics are better: homes are selling, they’re appreciating – we’ve seen a 10 percent year over year appreciation. We can only deal with the facts. And the facts are that there are…homes are selling more quickly and for better prices.

    Bill:                                         Let me interrupt you.  between Wells Fargo and Bank of America, there’re almost twelve thousand short sale applications a month. They’re closing, combined, less than a thousand. So, even though yes their short sales are popular, but it’s just incredible amount of time.

    Andrew Duncan:              Oh, there’s no question. And there’s going to be a lot more foreclosures. But I think the key is the banks have figured out how to trickle those out so that it doesn’t have this double-dip. And I think that’s what they need to do. We appreciate your call, Bill. We’re going to run into a quick break here, on 970WFLa.

    [break]

    Andrew Duncan:              So we’re back here, on the Duncan Duo Show. I want to get to a couple more points that I couldn’t finish up with Bill – the guy that called in before we had to go to a break. A couple other things though on that side point: there’s no question that the foreclosures are being held off. I think I’ve repeated on the show if Bill regularly listened, numerous times that we need the foreclosures to hit the market. However, I think the banks have figured out that loading all foreclosures and throwing them out there – it’s not going to happen; they’re aren’t stupid. I mean they’re not going hurt their values.

    Nate Davis:                         Hurt home values.

    Andrew Duncan:              Right. They’re going to hurt the ability to loan; they’re going to hurt appraisals; they’re going to hurt the market. So, they’re going to be smart about it – they’re going to trickle them out. And I think, again, they should trickle them out a lot more quickly in Tampa Bay. We need the inventory because we have buyers.

    Nate Davis:                         We need inventory in Tampa Bay.

    Andrew Duncan:              But, secondly, the other thing is that we cannot predict if any of those homes ever hit the retail market. The banks have figured out how to sell homes in bulk to investors. There’s a large group of investors buying homes direct from the bank that never hit the retail market, that don’t show as retail sales because they agree to rent them out. So, you know, the notion that we’re going to have the shadow inventory – I’ve been hearing about the shadow inventory since before President Obama got elected.

    Nate Davis:                         Uhm. Yes, but been around forever.

    Andrew Duncan:              And we’d been waiting for the shadow inventory: it’s coming, it’s coming, it’s coming. And it’s kind of like saying that the South Tampa canals are going to get dredged. I’ve been hearing that for decades, too, and that didn’t happen. So, I don’t put a lot of faith in my analysis of the market in terms of unknowns or unknown variables or things that might happen. You try to buy a home today and tell me it isn’t more competitive.

    Nate Davis:                         And here is the first time home buyers mind, too. It is: “I can buy a house and save money every month over renting? Let me think about that.”

    Andrew Duncan:              Right.

    Nate Davis:                         Whether there is this going on or that going on – I mean: hey!

    Andrew Duncan:              Yeah. There is no question: foreclosures – and there are lots of foreclosure actions and there are all kinds of the judicial stuff going on – but the fact is real estate market is most impacted by homes that go on the retail market. That’s how appreciations are termed and that’s how the demand is determined. You don’t have supply if it’s not having a sign in the yard and it’s not on the market. Outside of that, the banks – like I said, they’re getting more creative with working out things with home owners, more short sales and they’re doing more bulk sales to these large-scale investors. I mean, we’re seeing it. We’re seeing tons of homes being sold before they ever hit the market to investors that are, in turn, turning them into rental properties, you know.

    Nate Davis:                         And the other thing, too, is the foreclosures: it is not like these foreclosures hit the market and they just sell real low. A lot of them are being sold at the courthouse and then what’s happening is those who are buying the homes

    Andrew Duncan:              Fix them up, sell them for profit!

    Nate Davis:                         Yeah! So it’s not like just low sales sitting there. I mean they turn into a nice sale.

    Andrew Duncan:              Right, because that’s really who they want to sell it to. They don’t want to sell it to the first-time home buyer, financing then record a low sale. They don’t want that. They want a court. They prefer that to happen and then you’ve got a better pricing scenario and a better for the market. But the fact of the matter is you look at the market a year or two years ago and compare it to today and it is definitively better. You have homes sell more quickly and for better prices and it’s a much improved market dealing with – what we can deal with:  the homes that go on the market for sale. We can speculate all day long and pull out our expert hat and tell people how smart we are about what’s going to happen but the fact is we can only control what is happening. What is happening is every home that hits the market, in a certain price-range, flying off the shelf, there’s not much inventory and we have a lot more buyers who want to buy the inventory than we have sellers. Those are facts. You can look at the statistics and know for sure. No speculation there. It’s I get a listing at $200,000, it’s sold in a week and I got multiple people who want to buy it.

    Nate Davis:                         Right.

    Andrew Duncan:              Again, a couple of websites I want to tell you about: tampabaysmokingdeals.com. We talk about tampabaysmokingdeals.com every week. It is a hand-picked list of the best bargains in the real estate market from my real estate team: top 50 to 70 homes. We’re talking about homes, condos, waterfront properties, foreclosures, short sales, from Apollo Beach to New Tampa, to Tierra Verde, to South Tampa – basically, entire Tri-County area is covered on the website. If you don’t find what you want on TampaBaySmoking Deals.com, you can search the entire MLS on the website, as well. We put a lot of time and energy into the website to find the best bargains.

    And for everyone out there who attempted to sell your home a year or two ago and maybe you couldn’t and you’re looking for an evaluation: free evaluation at tampamarketanalysis.com. Our team puts that together. It’s a better than Zillow pricing estimate, I believe, then you get at that website. So, tampamarketanalysis.com – check it out. It’s a great opportunity if you couldn’t sell a year or two ago, if you’re curious about what’s going on in your neighborhood, curious about what’s home neighbor’s home sold for, good opportunity to check that out and know where you’re at.  Then, the report comes to you every month so you kind of get a feel for what’s going on in your neighborhood each and every month at tampamarketanalysis.com.

    So, we’ll be here with you next week at 10:00am. We’re going to be talking to a couple of different builders, as well. We had a builder show last week and good opportunity to talk to some of those folks about what they’re seeing. So, thanks for tuning into the Duncan Duo Real Estate Show, have a great rest of your Sunday.