by Mike Sharkey
Staff Writer
The theme of this year’s Realtor-Builder Tradeshow was “Back to our Future.”
Given the state of the real estate and building industry the past 12-18 months and the impact it has had on the national economy, the theme isn’t just appropriate — it’s necessary.
Back to the days of simple 15-year and 30-year mortgages.
Back to the days of solid credit scores.
Back to the days of having a legitimate down payment.
Back to the days of having bona fide employment.
Back to the days of buying homes properly valued.
The 30th Tradeshow at the University Center on the campus of the University of North Florida wasn’t the biggest. That was likely 6-8 years ago when realtors were selling homes faster than developers could build them. But, Thursday’s event was a sellout — over 500 tickets and 66 booths. The enthusiasm factor is what can’t be measured. You simply don’t catch those folks sitting around crying in their beers.
Ask a realtor or developer or lender and their stories are eerily similar these days: they all truly believe the worst has come and gone and the industry will slowly recover, but with one major difference: it will recover smartly.
“It’s picking up and it’s on the rebound,” said Donald Ster, home mortgage consultant for Wells Fargo Home Mortgage and co-chair of the event along with Franchesca Swierz of Homes & Land Magazine. “It has bottomed out and there are some great incentives from the government.”
While Ster said mortgages are still readily available through the Federal Housing Administration — and people are working hard to take advantage of the $8,000 tax credit first-time home-buyers will get through Nov. 30 — other mortgages are tougher to come by. The days of getting a loan for more than the value of the home with virtually nothing down and little-to-no proof of valid income are gone for good.
“Now, we are as strict as possible,” said Ster. “The FHA loans — where you can have a 600 credit score and put 3.5 percent down are still out there.”
Using a $200,000 home as an example, Ster said the standard these days is a credit score of at least 620, the ability to put 10 percent down and valid, reliable income. Ster said his company has fared pretty well through the crisis.
“Wells Fargo was more on the strict side and the conservative side,” he said. “We saw the potential problems and stayed away.”
Meeting all of the criteria for a mortgage is one thing. Finding a home and wading through the red tape is another. Just ask Selby Kaiser of The Legends of Real Estate. She and her twin Linda McMorrow have been selling homes in the Jacksonville area for decades. Kaiser says things are still slow and that’s due primarily to the amount of time it now takes to get from an offer on a home to closing day.
“We are meeting new challenges every day,” said Kaiser. “We are working with the lenders, but these new regulations seem to be coming from out of left field. It takes so long to hear back from anyone whether it’s a short sale or a long sale.”
Kaiser said she understands the caution being shown by the lenders. However, she believes an “equilibrium” has to be found to help accelerate the recovery of the real estate industry not just in Northeast Florida, but nationwide. Kaiser also said the high-end market — homes for sale for $750,000 or more — is practically nonexistent.
Sherry Davidson is president of Davidson Realty, Inc. The company is based in the World Golf Village and is a major player in the development of that area. Davidson says the industry turned the corner earlier this year.
“Our activity has picked up dramatically since April. It was like someone flipped the switch,” she said. “I think everybody feels like the economy is improving and the stock market is improving. Overall, I think consumer confidence is rising. Our traffic is up, our calls are up and our contracts are up.”
Those contracts are still taking a long time. Davidson said sales often get to the third-buyer stage before a closing can occur.
“The process is so long,” said Davidson, explaining that often the first one or two potential buyers get frustrated with the process and walk away.
Still, Davidson’s market is relatively steady.
“The good news is in World Golf Village, we didn’t sell most of our homes during the peak years of 2005, 2006 and 2007. We were already established,” she said.
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