Rent prices rose 5.6 percent in April compared to a year ago during the same month, Trulia reported. Rent prices showed even greater increases in places experiencing rapid employment such as suburban Detroit (Warren-Troy-Farmington Hills, MI) [...]]]>

While reports on home prices have been mostly uninspiring, with some flickering of hope here and there, rent prices continue to make significant strides, with rent increasing more than 10 percent compared to a year ago in certain markets, according to findings Trulia released recently.

Rent prices rose 5.6 percent in April compared to a year ago during the same month, Trulia reported. Rent prices showed even greater increases in places experiencing rapid employment such as suburban Detroit (Warren-Troy-Farmington Hills, MI) and Silicon Valley (San Jose, CA).

“Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners,” said Jed Kolko, Trulia’s chief economist. “But relief for strapped renters may be in sight. Construction of multi-family buildings revved up last year. These new rental units will come to market later this year, giving renters more choices and less fierce competition.”

Good news was also in store for asking prices, which compared to the previous month of March, increased 0.5 percent in April on a seasonally adjusted basis, according to Trulia, which also noted that asking prices lead sales prices by approximately two or more months.

On a quarter-over-quarter basis, seasonally adjusted asking prices in April rose 1.9 percent. When not adjusted for seasons, prices saw an even greater increase at 4.8 percent since prices typically jump in the springtime.

Year-over-year, asking prices rose 0.2 percent.

“Prices have joined the recovery, alongside sales and construction. But foreclosures threaten prices, especially in judicial-foreclosure states like Florida, New Jersey, Illinois and New York, where many more distressed sales are still to come,” said said Jed Kolko, Trulia’s Chief Economist.

Top 10 Metros With Largest Rent Increases
(Year-Over-Year Out of 100 Metros)

1. Edison-New Brunswick, New Jersey (15.6 percent)
2. San Francisco, California (13.2 percent)
3. Miami, Florida (12.3 percent)
4. Warren-Troy-Farmington Hills, Michigan (11.8 percent)
5. Indianapolis, Indiana (11.1 percent)
6. Colorado Springs, Colorado (10.2 percent)
7. Denver, Colorado (9.8 percent)
8. Middlesex County, Massachusetts (9.7 percent)
9. Kansas City, Missouri (9.6 percent)
10. San Jose, California (9.6 percent)

Top Ten Metros With Largest Price Increases
(Year-Over-Year Out of 100 Metros)

1. Miami, Florida (16.1 percent)
2. Phoenix, Arizona (15.8 percent)
3. Cape Coral-Fort Meyers, Florida (14.1 percent)
4. Pittsburgh, Pennsylvania (8.5 percent)
5. West Palm Beach, Florida (7.4 percent)
6. Warren-Troy-Farmington Hills, Michigan (6.9 percent)
7. Orlando, Florida (6.5 percent)
8. Denver, Colorado (6.3 percent)
9. Bethseda-Rockville-Fredrick, Maryland (5.2 percent)
10. Little Rock, Arkansas (4.8 percent)

The Orlando area, including distressed sales, saw a 6.4 percent increase in home prices in March 2012 compared to March 2011, the March Home Price Index report showed. Prior to that, home values in metro Orlando increased 4.5 percent in February 2012 compared to February 2011, according to Santa Ana, Calif.-based CoreLogic (NYSE: CLGX). Excluding distressed sales, year-over-year prices increased by 3.3 percent [...]]]> Metro Orlando saw another year-over-year increase in home values in March, according to a new report by CoreLogic.

The Orlando area, including distressed sales, saw a 6.4 percent increase in home prices in March 2012 compared to March 2011, the March Home Price Index report showed. Prior to that, home values in metro Orlando increased 4.5 percent in February 2012 compared to February 2011, according to Santa Ana, Calif.-based CoreLogic (NYSE: CLGX). Excluding distressed sales, year-over-year prices increased by 3.3 percent in March 2012 compared to March 2011.

Nationwide, Florida had the fifth-highest appreciation, including distressed sales, with a 4.5 percent increase. Wyoming took the No. 1 spot with a 5.9 percent increase.

Florida also had the third-largest peak-to-current declines including distressed transactions at 48 percent.

Nationally, home prices including distressed sales declined on a year-over-year basis by 0.6 percent in March 2012 compared to prices one year ago.

“With the first quarter of calendar year 2012 [...]]]> The Central Florida area proved to be a very attractive international destination for the first quarter of 2012. Orlando International Airport (MCO) recorded a more than 12 percent increase in international traffic for the month of March. Once again, the leading international markets contributing to the growth were Brazil and Canada. The volume of Brazilian travelers jumped 108.3 percent, while Canadian traffic saw a modest 13 percent rise when compared to last year.

“With the first quarter of calendar year 2012 behind us, we’re encouraged to see a growing trend in our international arrivals numbers. While domestic traffic has been relatively flat, international traffic continues to build upon last year’s record, ” says Phil Brown, Executive Director of the Greater Orlando Aviation Authority.

First Quarter 2012 Statistics:

• Over nine million passengers 9,042,103 have moved through Orlando International Airport the first three months of 2012
• Domestic traffic is down a fraction, less than one third of one percent (0.29)
• International traffic is up over 9 percent, 9.18
• Overall traffic is up half a percent over last year .59

March 2012 Statistics:

• Nearly 3.4 million passengers traveled through MCO. 3,393,002
• International traffic increased 12.13 percent with 338,758 passengers
• Domestic traffic declined (1.45) percent
• Overall passenger volume fell a fraction by (0.24) percent

New figures released Monday by the Census Bureau show the rate of U.S. homeownership fell in the first three months of this year to 65.4 percent. That’s down from 66.4 percent in the first quarter last year.

The last time the rate hit 65.4 percent was in the first quarter of 1997. [...]]]> The American dream of homeownership is at its lowest point in 15 years, the latest evidence of a housing market still far from recovering five years after the housing crash.

New figures released Monday by the Census Bureau show the rate of U.S. homeownership fell in the first three months of this year to 65.4 percent. That’s down from 66.4 percent in the first quarter last year.

The last time the rate hit 65.4 percent was in the first quarter of 1997. The rate peaked at 69.2 percent in the fourth quarter of 2004, during the high-flying days of the housing boom.

Recent housing and economic data have been encouraging, prompting some economists to predict a pickup in housing this year. But few believe the U.S. will ever return to its mid-decade peak.

January and February made up the best winter in five years for U.S. sales of previously occupied homes, although sales fell in March. Still, a report last week tracking the number of signed contracts to buy a home rose to its highest level in nearly two years in March. That could point to improved sales over the next couple of months.

Still, a backlog of foreclosures is expected to come on the market this year, weighing on home prices.

Banks are stepping up foreclosures in about half the states after slowing sharply last year while five of the nation’s biggest mortgage lenders sorted out foreclosure-abuse claims.

Many potential homebuyers are still holding off from purchasing a home. Despite recent job gains, unemployment remains high. Many buyers can’t qualify for loans, and lenders are requiring higher credit scores and larger down payments.

And some who can qualify are hesitant to buy because they worry home prices will keep falling.

On a regional basis, the Northeast, Midwest, South and West all posted lower homeownership rates in the first quarter than a year earlier. The Midwest had the highest homeownership rate at 69.5 percent, while the West had the lowest at 59.9 percent.

Americans 65 years or older accounted for the highest rate of homeownership during the quarter at 80.9 percent. That’s stayed pretty much the same going back to 2006.

Those under 35 represented the smallest group of homeowners, with a homeownership rate of 36.8 percent. That’s down from 37.9 percent a year ago.

The Census also sliced the latest homeownership figures by race.

Non-Hispanic, white Americans had a 73.5 percent rate of homeownership, down from 74.1 percent in the prior-year quarter. Blacks had a 43.1 percent homeownership rate, down from 44.8 a year ago.

The rate for Hispanics was 46.3 percent, down from 46.8 percent.

It’s probably not surprising that households with incomes equal to or greater than the national median family income had a higher homeownership rate (80.3 percent) than those who earned below the median (50.4 percent). But both sides of the income divide saw their homeownership rate decline by about 1 percent.

While homeownership is down, fewer homes and rental properties are empty.

The first-quarter Census figures show national vacancy rates for rental housing slipped to 8.8 percent, down from 9.7 percent a year earlier. Vacancy rates among homeowners fell to 2.2 percent from 2.6 percent.

By region, vacancy in rental housing was highest in the South at 10.8 percent, and lowest in the West at 6.3 percent. The rental vacancy rate in the Northeast increased from a year ago, while rates in the Midwest, South and West declined.

Among homeowners, the rate of vacancies was higher in the South than in the Northeast, but about the same as in the Midwest and West. Vacancy rates in the Midwest, South and West declined from a year ago. The rate in the Northeast was essentially unchanged.

All told, roughly 86.1 percent of rental housing and homeowner properties were occupied in the first quarter, while nearly 14 percent were vacant.

“The fear … is that the inventory of delinquent and foreclosed loans (will be released onto) an already weakened market,” says Tuccillo. “(But) the reality, even in Florida where [...]]]> The term “shadow inventory” hangs over the real estate market, suggesting a thinly veiled catastrophe seen through the mist, just as the passengers of the Titanic watched an iceberg draw closer. However, a white paper written by Florida Realtors Chief Economist Dr. John Tuccillo finds the fear of a shadow inventory overrated.

“The fear … is that the inventory of delinquent and foreclosed loans (will be released onto) an already weakened market,” says Tuccillo. “(But) the reality, even in Florida where distressed properties make up a significant portion of the market, appears to be different.”

Tuccillo says lenders have no reason to flood the real estate market with more homes if doing so would drive prices down and impact the lender’s profit. While some observers worry that lenders were holding back on purpose, Tuccillo says that’s not so – that the large number of distressed properties on hold was “largely the result of confusion over the rules of the game, and thus missteps by the lenders.”

In conducting an analysis, Florida Realtors Research looked at data from MLSs around the state and data provided by CoreLogic, a statistical analysis company.

“We looked at the recent history of distressed property listings and transactions relative to normal market data, as well as estimates for the shadow inventory, and came to some conclusions about the likely course (for the) future,” says Tuccillo.

Conclusions

• Florida remains one of the nation’s hardest hit states for distressed property sales.

• Distressed property sales and listings have declined since late 2010, except for single-family-home short sales.

• Average prices for distressed and normal property sales have been stabilizing.

• In general, Realtors and lenders have learned how to cope with distressed properties in a way that stabilizes the market.

• Florida’s highest percentage of distressed property (compared to total listings) occurs in the I-4 corridor and Southeast Florida; the lowest percentages occur in Northwest Florida.

• Currently, Florida’s shadow inventory was 550,000 units at the end of 2011, a decline of about 9 percent from its peak in the first quarter of 2010.

• Currently, the flow of new seriously delinquent (90 days or more) loans moving into the shadow inventory is offset by the roughly equal flow of distressed sales (short sales and REOs).

• The number of foreclosures and REOs was significantly lower in February of 2012 than one year earlier, suggesting slower shadow inventory growth.

Tuccillo predicts that distressed properties will be a significant feature of the Florida real estate market over the next ten years, but it will be considered just one property type a buyer can consider – one that has its own unique sales techniques and documentation.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking [...]]]> A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.

Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.

An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

“We very much believe we’ve hit bottom,” said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.

The Wall Street Journal’s quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months’ supply. In March, there was a 6.3-months’ supply.

Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.

Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York’s Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.

Increased competition is frustrating buyers and their agents. “We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive,” said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.

Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for “Buddy,” a white toy poodle.

Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.

In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation’s biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.

Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.

Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren’t concerned. “There’s an enormous appetite for foreclosures. Release the inventory. It will sell,” said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.

The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963.

Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.

Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is “entirely affordability driven, which tells me there will be strong resistance to price increases” by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.

Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.

Rates are “so low that we can afford a house that was out of our price range before,” said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country’s hottest real-estate markets.

Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her “aha moment” earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn’t even viewed the property.

“There are only so many buyers who are going to be in such a hurry, so we’re hoping it’ll top off soon,” she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven’t found out if they made the top bid.

On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. “I was floored. It was so fast, it was surreal,” says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.

Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell’s husband has commuted to Reno, Nev., for five years and they have decided to relocate.

Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the “trade-up” market has been stalled. These homeowners can’t sell their current homes, let alone come up with the down payment for their next home.

Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won’t appraise at the price that buyers have agreed to pay sellers.

Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.

“We just knew this house would go quickly,” says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house.

Orlando and St. Petersburg embody the Florida challenge: Creating a new economic reality in the shadow of enduring stereotypes.

In March, Golf Channel commentators broke from chattering about Tiger Woods’ and Ernie Els’ performances in the Tavistock Cup at Orlando’s Lake Nona Golf & Country Club to gush about a nearby complex of research labs, education facilities and hospitals that make up Orlando’s new “Medical City.”

Over piney treetops, viewers got a long look at [...]]]> An economic tale of two cities in Florida

Orlando and St. Petersburg embody the Florida challenge: Creating a new economic reality in the shadow of enduring stereotypes.

In March, Golf Channel commentators broke from chattering about Tiger Woods’ and Ernie Els’ performances in the Tavistock Cup at Orlando’s Lake Nona Golf & Country Club to gush about a nearby complex of research labs, education facilities and hospitals that make up Orlando’s new “Medical City.”

Over piney treetops, viewers got a long look at the biotech hub, which includes Sanford-Burnham Medical Research Institute and UCF’s medical school. The spotlight on Medical City was a rare glimpse at a part of the region’s economy that is usually defined in terms mouse ears, roller coasters and performing killer whales.

Orlando’s non-tourism economy had been evolving toward critical mass for more than a decade when the events of Sept. 11, 2001 — and the subsequent collapse of tourism — turbocharged the effort to diversify the region’s economy.

A local economic development agency commissioned a study to examine the city’s non-tourism assets and to develop a plan to promote them. The strength of the area’s technology sector, with a backbone in both simulation and digital media, surprised even some local officials.

Today, Metro Orlando Economic Development Commission’s marketing materials focus on the region’s tech sector. Tourism takes a back seat. Orlando Mayor Buddy Dyer held his state of the city speech in February at UCF’s College of Medicine at Medical City.

Word is getting out. Former President Bill Clinton cited Orlando’s success in the simulation industry as something other cities should mimic. Clinton referred to Orlando as a “prosperity center” and home of the “computer simulation boom,” boasting the city has 100 computer simulation companies during an interview last fall on MSNBC’s “Morning Joe” news program. “They are doing great,” Clinton says.

For their part, local economic developers say they’re happy with the visibility that tourism provides for the area — but they now feel confident they’ve got a lot more to sell. “All we are doing now is building on that great brand identity and really creating a brand platform that Orlando is also a great place to do business,” says Gary Sain, president and CEO of Visit Orlando.

Well, a new owner with a familiar face in Central Florida.

Atlanta-based F6OSTC LLC, an entity related to commercial real estate investment firm The Brookdale Group, spent $131.5 million, or $219.17 per square foot, to buy the 30-story office high-rise at 200 S. Orange Ave. in downtown Orlando. The firm acquired the property from Chicago-based SunTrust Center [...]]]> The nearly 600,000-square-foot SunTrust Center in Orlando has another new owner less than two years after it changed hands as part of a portfolio sale.

Well, a new owner with a familiar face in Central Florida.

Atlanta-based F6OSTC LLC, an entity related to commercial real estate investment firm The Brookdale Group, spent $131.5 million, or $219.17 per square foot, to buy the 30-story office high-rise at 200 S. Orange Ave. in downtown Orlando. The firm acquired the property from Chicago-based SunTrust Center Owner LLC, in a sale which closed March 29.

John Gilbert of CBRE Inc. in Orlando will continue to handle leasing at the building, which was an estimated 73 percent occupied at the time of the sale.

Stiles and Charter Hall Real Estate, whose parent company Charter Hall Office REIT (ASX: CQO) is a fund on the Australian stock exchange, in 2010 bought the building as part of a portfolio sale that also included the SunTrust Financial Centre, a 36-story, 527,000-square-foot office tower in downtown Tampa.

Meanwhile, new Orlando SunTrust Center owner The Brookdale Group had owned several buildings in office parks — including Central Florida properties — through 2005. The Brookdale Group and Charlotte-based Crescent Resources in 2001 created a joint venture to own and manage five office parks in Orlando, Tampa and Atlanta — including One, Two and Three Resource Square in Central Florida Research Park.

The SunTrust Center is Central Florida’s largest multi-tenant office building based on total square footage and had average asking lease rates of $26.50 per square foot, according to the most recent Orlando Business Journal research. Tenants include SunTrust Bank, law firms Holland & Knight LLP and Baker Hostetler LLP, as well as the Orange County Property Appraiser and cafe/coffee bar Simple Puur.

Business Review specifically cited the center’s guest experiences, including hospitality partner Centerplate’s three full-service restaurants and eight food courts, as well as remote airline check-in and on-site massage services.

The convention center also was singled out for its significant economic impact on the surrounding community, which provides tax savings to each Orange County household every year.

The Orange County Convention Center is the second-largest [...]]]> The Orange County Convention Center has been ranked the top convention center in the U.S. by Business Review USA.

Business Review specifically cited the center’s guest experiences, including hospitality partner Centerplate’s three full-service restaurants and eight food courts, as well as remote airline check-in and on-site massage services.

The convention center also was singled out for its significant economic impact on the surrounding community, which provides tax savings to each Orange County household every year.

The Orange County Convention Center is the second-largest convention facility in America, attracting more than 200 events annually to the Central Florida area. As a result, its 1.2 million attendees contribute $1.9 billion to the area’s economy each year.

The next phase of Storybook Circus will open in July 2012, which includes the second half of the Dumbo the Flying Elephant attraction and Casey Jr. Splash n’ Soak Station.

A small portion of the new Fantasyland opened to some guests last month, including the new Great Goofini roller coaster and the Flying Dumbo attraction.

Disney also announced the openings of sections related to popular films [...]]]> Walt Disney World has announced new opening dates for Magic Kingdom’s Fanatsyland, Central Florida News 13 reports.

The next phase of Storybook Circus will open in July 2012, which includes the second half of the Dumbo the Flying Elephant attraction and Casey Jr. Splash n’ Soak Station.

A small portion of the new Fantasyland opened to some guests last month, including the new Great Goofini roller coaster and the Flying Dumbo attraction.

Disney also announced the openings of sections related to popular films such as The Little Mermaid and Beauty and the Beast, which are expected to open around the holiday season, while a train ride based on the film Snow White and the Seven Dwarfs will debut in 2014.