Florida Renaissance Festival in Key Biscayne

Real Estate 2010: The Year of the Intervention

This past year has been very challenging for real estate. The market was defined by outside intervention. This intervention tugged at historic trends. Government involvment caused market fundamentals to be distorted beyond recognition. Unpredictability was the only thing we could predict. Modifications The administration’s announced goal of the modification program was to save 3-4 million families from losing their homes. The actual number of homeowners assisted will come in at less than one million. Most consider the program a failure. However, we believe that there was a secondary unannounced goal of the modification program: to slow the flow of foreclosed homes to the market. Putting homes through the modification process prevented banks from moving forward with the repossession process as quickly as they normally would. Limiting supply was one of the ways the administration used to help stabilize home prices. However, the administration has recently slowed the modification process (see graph below from the latest Economic Letter from the Dallas Fed). Going into 2011, a larger number of foreclosed properties will enter the market. Interest Rates The administration began to control rates back in 2009 with the purchase of mortgage-backed-securities. When it was announced that the government would back off the purchases in the spring of 2010, everyone (including us) believed that mortgage rates would climb back to historic norms (6-7%) by the end of the year. The exact opposite took place. Rates fell to almost 4% on 30-year mortgages before jumping back to the 4.5 – 5% range at the end of the year. The most amazing part was that the lower interest rates did not seem to spur buyer activity as sales softened while rates continued to fall through the year. Interest rates, at best, helped in maintaining demand in 2010. Home Buyers’ Tax Credit Again, the administration’s goal was to stabilize home values. The tax credit was supposed to drive housing demand. And it did – for the first four months of the year. However, it now appears that the tax credit did not increase demand, but instead, just pulled that demand forward. (see graph below which is also from the Dallas Fed). Bottom Line By decreasing supply (mortgage modifications limited the number and impacted the speed of foreclosures entering the market) and increasing demand (lowering interest rates and issuing a tax credit), the administration tried to stabilize the housing market. They accomplished some of their goals in a limited way. We will not see this magnitude of government intervention in 2011 however. What will that mean to housing next year? We will give our thoughts on that in tomorrow’s blog. This article is by The KCM Crew If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191

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Key Biscayne Holiday Boat Parade

When: December 18, 2010

Where: Boats will sail from  KB Yacht Club
             to No Name Harbor in Bill Baggs  Cape Florida
             State Park.
             Boat assembly starts at 5:30 PM


Bring lawn chairs, blankets, picnic baskets, flashlights, and umbrellas!!
If you would like to have dinner at Boater's Grill, reservations
are highly recommended. 305.361.0080

Daily Details for Key Biscayne, FL (33149) [ English | Metric ]

Today Sat, Dec 18 Sun, Dec 19 Mon, Dec 20 Tue, Dec 21 Wed, Dec 22 Thu, Dec 23 Fri, Dec 24 Sat, Dec 25 Sun, Dec 26                                       Hourly Forecast    more details 6 am 65°F Feels Like 65°F 9 am 72°F Feels Like 72°F 12 pm 77°F Feels Like 80°F 3 pm 76°F Feels Like 79°F 6 pm 71°F Feels Like 71°F 9 pm 69°F Feels Like 69°F

If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191

Insider Secrets To An Optimal Credit Score As you prepare to apply for credit (like a home mortgage) understand that it is significantly better to have your best possible credit profile BEFORE applying.  Working to improve your score during the mortgage process can be done, but there are two problems.  One, time to clear up items can become an obstacle when compared the time you are anticipating a closing.  And two, lower scores upfront can give an underwriter an additional reason to be uncomfortable with a file.  “Sooner, rather than later” should be the mantra of credit score improvements.  Here are some tested ways to do it: Credit Cards – Revolving Debt proportions Look on the credit report for revolving debt (not installment loans, or “open” accounts) As a general rule of thumb, the balance should be no more than 30% of the credit limit.  So, if it’s more than that, have you should make every attempt to pay it down. If there are many revolving accounts with high balances, you will most probably need to pay down most or all of them for the best score. If there is nothing derogatory on the credit report, just high balances on revolving debt, you can often improve the score significantly.  But, if there are many derogatory items on the credit report, paying down revolving debt may not help the score very much. Many lender have software programs that can quickly determining for you which (if any) revolving accounts need to be paid down, and to what balance. Collections/Judgments: Paying off or satisfying such a derogatory account does not normally improve the score because the derogatory account still exists, and so still hurts the score.  In fact, paying off an old collection may even make the score drop. However, for collections, the borrower can ask for the account to be completely removed or deleted.  If you have not yet paid the collection, you can use that as a bargaining chip. If there are many collection accounts, removing just 1 or 2 may not do much good.  You always need to look at the overall credit picture. Charge-off accounts behave a little differently than collections.  You can sometimes gain points by paying those off. Your lender likely has a What-if Simulator to experimentally see what affect removing an account has on the score. Late Dates When you look at the overall credit report and you see LOTS of late dates, especially ones from within the last year, there is not much you can do to help the score…those lates simply need to drift into the past. However, if you just see 1 recent late date on 1 account, and just 1 other recent late date on another account, you should call those creditors and ask…beg…for those single late dates to be removed as a courtesy.  It may also be that the late dates were a mistake, but don’t push the creditor to admit to making an error.  Just ask them to remove it as a courtesy since you have an otherwise perfect payment history with that creditor. Your lender can use the What-if-Simulator to experimentally see what affect removing a late date has on the score. Authorized User Accounts-removing or adding Piggybacking on someone else’s account can help or hurt your score. If that account has recent late dates, you can most probably improve the score by having the actual account holder remove you as a user. If the account is a revolving credit card and it’s “maxed out,” you might also improve the score by removing it, but only if you will still have other revolving credit cards on your report. What about adding someone as an authorized user to a credit card?  This may help, but the better course of action is to get the actual card holder to make it a joint account with you.  This guarantees that the account will show up on the credit report within a month or two.  But be careful…the account should have a lot of history, no late dates, high credit limit, and low balance. Other things to help Keep old revolving credit cards open…don’t close them. Regularly check your credit report to catch errors early.  You get a free one each year from each bureau.  Go to www.annualcreditreport.com.  Don’t do all 3 bureaus at the same time…space it out throughout the year. Learn more about credit from websites like www.myfico.com and to get addresses to write the bureaus. While I trust that some of your questions were answered in this blog, I bet many questions were also raised about your individual circumstance.  Credit Score Optimization is one of the central reasons why you should engage the expertise of a good loan officer right NOW. This article is by The KCM Crew If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191

Market Update 2010: Year in Review by Ron Shuffield, President of EWM REALTORS

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Are Homes Actually UNDERVALUED? Posted: 14 Dec 2010 04:00 AM PST We have been barraged with headlines and news stories telling us that home values will continue to soften for the next several quarters. Some experts are predicting that today’s values will drop and not be seen again until the middle of 2012 at the earliest. We concur with these estimates based on the current demand for housing in relationship to current supply of both the visible and the shadow inventory of houses. Here we are discussing ‘market value’. However, there is another way to value residential real estate. Housing analysts look at the ratio between current wages and sales prices. They use a multiplier to determine how much home the average buyer can afford and compare that to the average price at which a home sells. DSNews just ran an article on this subject. They stated: The sharp fall in residential property prices in the third quarter means that housing in the United States has become even more undervalued, according to the analysts at Capital Economics. Based on the latest S&P Case-Shiller index, Capital Economics has concluded that house prices are now 17 percent undervalued relative to disposable income per capita. Housing has never before looked as undervalued, the firm pointed out in a research note released to DSNews. Looking at the data included in the index compiled by the Federal Housing Finance Agency (FHFA), residential home prices are 14 percent undervalued, which is also a record, according to Capital Economics. The National Association of Realtors (NAR) has their own Housing Affordability Index. According to NAR: The affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.  In their article, DSNews also addresses the NAR index: The housing affordability index from the National Association of Realtors (NAR) remains close to its record high. Capital Economics explained that NAR’s affordability assessment indicates that a median income household with a 20 percent down payment can now more easily afford the monthly mortgage payments on a median-priced home than at any time in the last 30 years. By each of these historic measurements, homes are at all time values!! Bottom Line Lack of consumer confidence has caused many buyers to refrain from taking advantage of the golden opportunities that exist in housing today. However, buyers should look at COST (price and interest rate) not just price. People who purchase today will reap the reward of buying an undervalued asset and should enjoy excellent appreciation when inventory levels return to normal levels. This article is by The KCM Crew If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191

Weltklassik goes Grand Piano at Key Biscayne Presbyterian Church

Weltklassik goes Grand Piano!" is a monthly series of classical piano recitals on the island of Key Biscayne, just six miles off the coast of Miami, Florida. Performances take place in the intimate sanctuary of Key Biscayne Presbyterian Church at 5pm on the last Saturday of every month.

This piano series is an extension of Germany’s "Weltklassik" piano programs which are played in over 300 concerts and 20 towns throughout Germany each year. The German series made its debut in 2004 in a 10th century village on the North Sea, and the American series is being launched in the little paradise that is Key Biscayne.

Superior pianistic quality is ensured by three leading piano jurors and pedagogues – Prof. Bernd Goetzke and Prof. Vladimir Kraniev from the Hannover Music Conservatory in Germany, and Prof. Matti Raekallio from the Juilliard School in New York. By selecting the pianists, these patrons of the concert series guarantee the musicians’ virtuosity and interpretative maturity. All of the pianists have met with international acclaim and are winners of major piano competitions. Representing a host of nationalities in conjunction with unique personalities, the pianists bring joy to every concert and an afternoon for all to remember.

The programs of “Weltklassik goes Grand Piano!” comprise a potpourri of pieces by the world’s great composers: Albeniz, Bach, Beethoven, and Brahms, Granados, Haydn and Mozart, Chopin, Liszt, Schubert and Schumann. Here is your chance to savor the unforgettable compositions of the Baroque, Viennese Classical and Romantic periods.

We are looking forward to greeting you on Saturday.
Kathrin Haarstick – Dr. Jean-Aimè Medici

Entrance fee: $35 adults, free for youngsters up to 18.
Latecomers will not be admitted until intermission.


Saturday December, 18, 2010 @ 5PM


For more information including 2011 piano recital dates: www.weltklassik.de/keybiscayne

If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191

Forbes: Housing Had a Superb Decade Posted: 08 Dec 2010 04:00 AM PST Has real estate been a good investment over the last decade? Many people would be quick to answer ‘no’ to that question. However, they would be wrong. Real estate prices in this past decade have appreciated nicely despite the challenges over the last four years. Forbes.com reported on this issue two days ago: With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit:   Housing had a superb decade. According to Radar Logic, the value of a square foot of housing in the U.S. is up 58% from its January 2000 level. That represents an average annual gain of 4.3% in the value of one square foot of housing. According to the Case Shiller Pricing Index, home values are still up 34.9% over 2000 prices. How did real estate compare to the stock market? Forbes answered this question: The growth in average U.S. housing values looks pretty impressive compared with that of other assets, especially stocks. The S&P 500 is lower now than it was in January 2000. So is the Nasdaq. Even factoring in inflation, which ran between 2.5% and 3.5% for most of the decade, a home purchase really did produce wealth for anybody who opted to sell some stocks and buy at around the time the dot-com crash got rolling. Bottom Line Even in what many consider a sub-par decade for the housing industry, real estate proved to be an excellent investment. This article is by The KCM Crew If you are interested in selling or buying your property, give me a call, text me, or e-mail at matta.m@ewm.com Key Biscayne, a wonderful place to live.     Marilina Matta     Coconut Grove Office     305.519.8191