Two areas in Florida that attract a lot of retirees to move to, Central Florida and Miami, are looking a little better in separate reports on the two regions issued recently, but while some refinancing has picked up in the former region and sales increased in the latter, financing remains relatively scarce.
Refinancing in Central Florida nearly doubled during the month, rising to almost 20% of mortgage transactions during September, according to FBC Mortgage, Orlando. While a high number of homes in the region were bought and financed when prices were much higher than they are today, making origination of new or refinance loans in the area a challenge, the pickup in refis suggests there are two favorable trends that have made it possible for some to refinance recently.
Rob Nunziata, president and co-CEO of FBC Mortgage, said that it appears rates have gotten low enough that those who had enough equity to refinance before are refinancing again. Also the regional jump in refinancing suggests enough home sales have been made at relatively lower post-downturn prices to create some refinancing opportunities in that borrower segment, he said.
However, Nunziata said the housing and mortgage market in the region is far from recovery given the persistence of many borrowers whose loans remain greater than the present value of their homes. He said he would like to see a new proposed government program aimed at aiding borrowers of this type who make timely payments, or something similar, pan out.
He noted that there has been a lot of frustration on the part of underwater borrowers in the area who make their payments given that recent government programs tend to be aimed more at helping underwater borrower who are not making their payments.
Other regional statistics show Miami home sales increased 25% year-over-year in August. But home prices trended lower during the period and the biggest increases were in sectors of the market where purchases tend to be cash-based rather than financed.
In August, 9,638 new and resale houses and condos closed escrow in the metro area comprised of Miami-Dade, Palm Beach and Broward counties, according to DataQuick. That was up 24.9% from a year earlier and the highest level for an August in five years. (September numbers were not available at press time for Miami even though they were for other metro areas due to differences in the availability of data from local officials, according to a spokeswoman.)
La Jolla, Calif.-based DataQuick said the sales gain is attributed in part to the high number of business days in the month. Also home sales fell off sharply beginning early last summer as federal and state homebuyer tax credits expired. In addition, there were large gains in transactions below $200,000 and above $800,000.
When asked about the activity in the low and high ends of the Miami market, DataQuick president John Walsh said, “I think there's a couple things going on.” Among these, “we've seen some significant price reductions in the low end of the market in Miami” that he said stemmed largely from cash purchases.
“I think that's going to continue for awhile,” he said of the cash buying, a characteristic of the low-end market that is “probably true on the high end of the market as well. The lending environment is still very, very tough despite historic low interest rates.”
Overall, the median sales price for all new and resale homes and condominiums sold in the Miami region dropped for the 47th consecutive month to $132,000. This was down 5.7% from a year ago.
