Emerald Coast Real Estate Update
Trusted Real Estate News Blog
Is an FHA Mortgage Really the Better Option?
Most everyone has been told that a mortgage loan through the Federal Housing Authority is the best thing since sliced bread, especially for first time home buyers. For the most part, FHA loans are available in resort areas like Pensacola or any beach, as long as you’re financing a primary residence. But is it always the best idea? Here are some reasons why a conventional loan might be better.
One of the biggest reasons in years back to choose an FHA loan was the low down payment. Where conventional loans required as much as 5-10% down, FHA mortages will finance all but 3.5% for the down payment. But guess what? Times have changed, and now a conventional mortgage can actually accept as much as 97% financing - or a 3% down payment. So it pays to check both!
This one is tricky. While FHA loans will usually have a lower interest rate, there is a caveat involved. If you choose to put down less than 20% on either type of mortgage, you'll be required to purchase Mortgage Insurance, or PMI. This is an extra insurance policy to help protect the lender because a lower down payment means a bigger risk of default or foreclosure. The extra monthly payment amount to cover PMI can be significant if you're on a tight budget.
A conventional loan has the advantage here, though. Once you have made enough payments to equal having 25% down on your home or condo, you can petition the conventional mortgage holder to drop the PMI insurance. If your credit is good and you've made the payments on time, they will usually remove the requirements and your payment will be noticeably lowered. If you were required to purchase the PMI on an FHA loan, it remains in effect (and out of your pocket) permanently. Over the life of a 30 year loan, this can represent a large savings.
Debt to Income Ratio:
In this, the FHA loan has the decided advantage. The FHA allows you to have more debt in almost every case. If you've got a big car payment or student loan, you may need the extra leeway with your debt to income ratio requirements.
Qualifying for the Loan:
The FHA loan will be easier to qualify for than the conventional loan. If your credit or FICO score is not perfect, you may have to accept some of the less than optional requirements to overcome this. All credit requirements are less strict now than they were after the real estate crash in the 90's, but the FHA loan qualifications will be more forgiving of minor credit issues.
Speaking with a mortgage professional during the pre-approval process will address all these pros and cons and help you to decide which one is more beneficial to you. We can help with this. If you're looking to buy a home in Pensacola or a Destin condo as a primary residence, be sure and ask about this when getting pre-approved. As your Pensacola Realtor, we can refer you to a mortgage broker who will discuss these things and help you decide.
It has been six years since the housing market bottomed out on the Emerald Coast in 2008. Pensacola property sales have been climbing ever since and 2014 residential sales were reached 6930 units, exceeding 2013 sales by 12%.
One way to determine how a real estate market is doing is to look at the average number of days on the market; the fewer the days on the market, the more active the market is. In January 2013 the average number of days on the market for residential properties in the Greater Pensacola Area was 133 days. Today that number has decreased to 94 days, which represents a 45% decrease.
The real estate market here is heating up. Clear evidence of this is the decrease in the number of days on the market as well as the rise of multiple offers on properties for sale. Homes that are priced correctly, sell quickly.
You can see from the chart below 2014 was the strongest year since 2006. Many people that have been waiting to buy are finally ready and further encouraged by low interest rates. 2014 is the fifth best year ever for sales in the history of real estate sales here and 2015 is even looking better.
These residential sales numbers represent all homes, condos and townhomes that have sold in Escambia county and Santa Rosa county, Florida since January 1999.
Buyer categories in 2014 consisted mainly of primary home, first -time buyers, military family relocation, retirees, second homes, beach resort buyers and investors looking to turn a profit. We saw an abundance of people investing towards long term wealth as well as more people looking to flip properties for quick profit.
The outlook for 2015 is bright. Residential sales prices are up and are moving in a positive direction. The average price increase from January 2014 to January 2015 is up 15%, while the median price is up 17%.
The number of “upside-down loans” are decreasing dramatically; this declining trend is continuing as property prices increase. More sellers and buyers are being attracted to the current real estate market since prices are rising and distressed properties are on the decline.
The amount of internet traffic has increased by people seeking properties. Buyer statistics show that the internet is where most people begin to look for a home.
For more market information and charts is “Pensacola Market Sales Trends” or contact Emerald Coast Realty.
The pictures on this page give visitors a glimpse of what makes Destin such a popular destination. If you have photos you would like added here please contact us.
Looking at the Destin beachfront over the sand dune sea oats.
Two people putting a lot of effort into building a sand castle on the beach.
Many people like step out of their condominium directly onto the beach.
A lone seagull on a sunny day.
A nice view of the pool at the Palms of Destin Condominium.
The current Pensacola Bay Bridge linking Gulf Breeze and Pensacola via US Hwy 98 was constructed in 1960. Although, officially named the Philip Dane Beall, Sr., Memorial Bridge it is locally known as the "Three Mile Bridge" in reference to its three-mile drive across the bay.
I am not sure when initial plans to replace the existing bridge first came to light, but I have found one article dating back to 2001 that references a two-year study to commence the same year. To say this has been in the works for some time now would be an understatement. The bridge has been the topic of many meetings, plans, and studies over the years, all of which caused delays for various reasons. It now appears the new Pensacola Bay Bridge to Gulf Breeze has a projected start date of early 2017 according to "Buz" Eddy, Gulf Breeze City Manager.
The impact and potential loss of use of Wayside Park and the boat launch have been a topic of heated discussions over the years. The new bridge will be significantly higher than the existing one; 15-22 feet higher. While this elevation offers some benefits for the park, it does not address the concerns of local businesses.
The new bridge will have six lanes, a bike path, and a protected pedestrian way. These features are a huge improvement over the existing four-lane bridge. Today a stalled car or a minor accident can result in extensive delays. Runners, walkers or cyclists make a precarious trek across the bridge.
These improvements will be positive for transportation, recreation, and tourism, but the completion date is 2022 which is still a long way off. Construction will inevitably create delays and other inconveniences but in the long run this is a good and necessary change that will positively affect Gulf Breeze real estate and home values.
Change is difficult but inevitable. The bridge will be built; the question is when?
New Low Down Payment Requirements for Home Mortgages
In an effort to boost the real estate industry and ease up the tight restrictions on mortgages put into place after the market crash a near decade ago, the government's mortgage backers Fannie Mae and Freddie Mac have announced a new change in requirements.
Before the market crash, banks had reduced income requirements for home and condo buying to ridiculous levels, allowing just about anyone to get a mortgage - whether they had the monthly income to support the payments or not. What started with wealthy investors buying preconstruction condos and new homes to "flip" and re-sell for large profits became a popular sport for nearly everyone exposed to the opportunity, including many who lived from paycheck to paycheck.
Early on, many people made a lot of money. But by the time the average person got involved, the market was slowing, and soon bottomed out entirely. Even the investors had pushed the limits and often went too far, trying to capture the last profits. The aftermath exposed thousands of mortgages made that couldn't be fulfilled. Foreclosures were rampant, and the US economy was nearly brought to its knees.
Since that time, restrictions have been so tight that only those with cash, impeccable credit, and stable high paying jobs have been able to buy a home or vacation property, which has put a damper on the recovering real estate industry. Income restrictions made sense; a mortgage that can't be paid back helps nobody. But down payments have always been at a minimum of 20 percent on mortgages backed by Freddie and Fannie, and banks are now reluctant to make a mortgage that isn't. With the average home price of $200,000, buyers have been required to come up with a whopping $40,000 down payment. First time buyers, young couples and families, and even those with average incomes have trouble acquiring that kind of cash.
So in an effort to spur the real estate market to faster recovery, they have decided to reduce the down payment required for moderate income levels and first time buyers to an all-time low of ONLY 3% down! Other tight restrictions will still apply, and payments can't exceed 43% of the borrower's monthly income. This makes sense to allow middle or low income home buyers an opportunity to fulfill the American dream of owning a home, without allowing the irresponsible borrowing of the pre-bubble era. What a win-win for all concerned!
Fannie Mae may begin to offer the new loan guidelines by Christmas, aimed at first time buyers, requiring PMI or mortgage insurance payments, and a financial counseling program to qualify.
Freddie Mac is looking towards March of 2015, geared at low and middle-income buyers only, also requiring PMI and counseling. Monthly payment restrictions will remain at the 43% maximum levels for both.
Many young people and those who thought they could never buy a home will have a whole new and exciting option open to them, and maybe even find the dream of home ownership dropped down their chimney when Santa rides by this year. If you want to buy your first home or condo, call us right now to get started!
It was a warm fall day in West Pensacola as I turned off Fairfield Drive toward my destination at 7917 Comet Ct. The house sits at the end of a short street on a cul-de-sac.
As I stepped out of the car and gathered my photographic equipment, I found the surroundings were very quiet and relaxing.
This home is bright and clean with wood and tile flooring in the main parts of the house and carpet in the bedrooms. There are two full bathrooms and five bedrooms with plenty of storage space inside and out. There is even a large hobby room with access to the carport.
The roomy kitchen has nice oak cabinets and granite countertops, and an open floor plan is well suited for entertaining friends and family. There is a living room, family room, and large den; all totaled there is close to 2000 sq ft of living space.
The yard is quiet and has plenty of space for children and pets without excessive yard area to upkeep.
If you are looking for a roomy family home in Pensacola at an affordable price, then this is one property you must visit. Watch this Youtube Video for a virtual tour or contact Emerald Coast Realty in Pensacola to arrange a specific time to view this property, 850-437-5618.
The latest predictions from Frank Nothaft and other Freddie Mac economists should please investors, real estate agencies, and everyone who benefits from the industry.
The Federal Home Loan Mortgage Corporation is a public government-sponsored enterprise that works with mortgage lenders to help people get lower mortgage costs and easier access to home financing. Best known as Freddie Mac, the institution is widely recognized as one of the best authorities for their economic niche. And their Economic and Housing Market Outlook in November is heartening.
The economy as a whole is expected to sustain about a 3% growth next year. Reasons cited were lower energy costs supporting consumer spending and investment from businesses, loosening of the strict credit requirements enacted since the market crash, and an overall better consumer outlook and confidence in the US economy.
According to chief economist Nothaft, these conditions will create better paying jobs, more new jobs, and more money to spend on home buying or upscaling.
Other predictions from Freddie Mac for 2015 include:
1. Home prices and appreciation that have been running around 9.3% will slow to 4.5% by the end of 2014. While an individual homeowner/seller might not be too pleased with this, it is a good thing for the industry as a whole. Combined with certain increasing mortgage rates, a "too-high" appreciation will make it harder for buyers to afford a home.
2. Mortage rates will increase in 2015, probably rising to an average of 4.6%, and perhaps as much as 5% by the end of next year. Presently below 4%, this is a pretty big increase.
3. The building of new single-family homes is expected to rise by about 20% in the coming year, creating an increase of about 5% in total home sales.
4. While mortgage refinances of single family homes should slow (and has already slowed), new mortgages for condos and townhomes have surged by around 60% in the last 3 years. Freddie Mac is expecting this surge to continue in 2015...increasing again by about another 14%. This is particulary great news for resort areas like Pensacola where condos are so plentiful and need a boost in sales.
These are all good signs that Pensacola area real estate will continue to get better in the coming years and help the public to feel better about home ownership!
Today was a cold and windy fall morning in Pensacola as I pulled up to a nicely renovated East Hill bungalow at 1225 E Scott St. This attractively landscaped home is surrounded by a classic white picket fence.
Behind the fence a lovely front porch with wicker chairs and a swing, the pastel green house color completes the picture. What a great place to spend an afternoon sipping tea.
As I entered the warmth of this home, I was stunned by the rich wood floors and ceiling in the living room. The fireplace was ablaze and welcoming on this chilly morning. As I continued through the house, there were stunning wood floors everywhere. There are two bedrooms; the master bedroom has a master bathroom with small black and white tile floor, a legged bathtub, pedestal sink and an oval window that poured light into the room.
The kitchen has a gas stove and range, which all cooks prefer, and rollaway Island for addition counter space while cooking. Adjacent to the kitchen is the formal dining room that is abundantly lighted by large windows. On the end of the kitchen, there is a cheery dinette with plenty of windows and a delightful spice cabinet that is made from an in-wall antique ironing board cabinet.
The real bonus here is there are two residences on the property, the main house and a second small house that is ideal for family members or visitors. There is a large living area, large bedroom and several nice niches for relaxing, studying and lounging. See the YouTube Video of this fine house.
This wonderful property in the heart of East Hill is listed for sale with an asking price of $349,400. To schedule a tour, contact Kim Gibbons, Broker at Emerald Coast Realty in Pensacola, 850-437-5618.
There are a lot of reasons that East Hill is highly desirable for so many people in Pensacola. The tree-lined streets, well maintained older and historic homes are which give the East Hill neighborhood a feel of "time gone by".
The sense of community is strong here, and the East Hill Preservation District strives to protect and preserve the character and charm this area holds.
The East Hill house being photographed today is 2130 North 12th Ave, Pensacola FL 32503. Located at the corner of Maxwell and North 12th Ave property is situated one block from J's Pastry Shop, City Grocery and Jacobs Chiropractic.
Commonly referred to as just "Twelfth Ave", that is home to many businesses, professional establishments, schools, churches and restaurants. Conveniently located, 12th Ave is between downtown and the mall/airport.
This three bedroom and two bathroom house was renovated with attention to detail throughout and looked fantastic. The kitchen has all new fixtures, lighting and appliances including a wine cooler, slate floors and granite countertops. Likewise, in both bathrooms, all fixtures are completely renovated with very nice stone and tile work, this house pops. The floors in all the other living spaces have bright bamboo flooring, and the paint throughout is tastefully chosen. This home is fully finished and move in ready. View this YouTube Video for a complete virtual tour of this property.
You can arrange a tour by calling Kim Gibbons, broker at Emerald Coast Realty in Pensacola, 850-437-5618 or any of the other 26 real estate agents in our company.
Today's photo shoot takes me to the waterfront community of Innerarity Point, on Pensacola's west side. As you turn off of Perdido Key Drive and travel down Innerarity Point Road, there is a distinct change in atmosphere.
The feel is relaxed, and time seems to slow down a little. The tree lined streets lead me to an elevated home located on Callaway Pond at 14264 Massey Drive, Pensacola, FL. This pond is about one acre in area, which provides great waterfront views. Many trees give you the impression of a forest lacustrine setting.
The open floor plan of this home showcases the great room which has wonderful forest and water views from the two sliding glass doors and windows. There is a food bar that merges with the kitchen and a wood burning stove for the cool fall nights. There are two bedrooms and two bathrooms. See the Youtube video for this property
The home is raised construction, with decks on three sides and has with plenty of covered parking and storage below.
This homes is for sale, to schedule a tour contact Kim Gibbons, Broker at Emerald Coast Realty, 850-437-5618.