I thought this was very instructive. It shows how pervasive and invasive the federal government is in our lives. This is an article that appears in the March/ April issue of the national REALTOR magazine. When you hear about how government regulations are killing businesses, this is a fair example. 

I read the other day that Sweden was well on the way to becoming a completely cashless society. No paper money, no coins. This from the country that brought us the first bank notes ever in the mid 1600's too. Won't be too long before they even quit printing banknotes all together.


In most of their cities, you can't pay for a bus ride or train with cash. All tickets are either prepaid or bought with a cell phone app at the point of purchase. Many of their banks have even stopped dealing in cash transactions. The banks are making money on each and every electronic transaction instead. Clear to see who is the winner and who is the looser here. This has even extended its evil tentacles into their churches for God sake!


Paper money and coins make up only 3% of Swedish transactions. Sounds shocking doesn't it? Well here's an even bigger shocker, at least to me. In our country cash transactions account for a total of only 7% of monetary transactions. Who'd a thunk it?


The cashless advocates say its a matter of security. From the silly, "if you don't have any cash what would robbers do?" To the notion that there would be fewer bank robberies. These guys have all the answers. The Swedish Banker's Association states that robberies of banks are actually down from 110 in 2008 to only 16 in 2011. Accordingly they state that less cash in circulation makes it safer for the banks as well as the public. But more on that later .  . . .


They also state that the digital trail that electronic transactions generate is leading to a decline in graft and corruption in Sweden. Adding to this is the observation that other countries with a stronger reliance on cash, like Greece and Italy have a bigger problem with corruption. Cash is a common way to avoid paying Value Added Tax in those countries as well. It contributes to the underground "grey" market economy. Power to the people!


All well and good. But lets talk about the other side for a moment. So bank robberies went from 110 to 16. Computer fraud cases went from about 3,300 in 2000 to 20,000 in 2011. So we went from thugs robbing banks with guns  to nerds robbing banks with keyboards. Sounds like a case of  law enforcement Whack a Mole to me.


What about our privacy? How about some consideration to our personal rights as American citizens? Currently there are no anonymous payment methods available. If you want to support a charity or give to a family member on the QT, you can't. You will be traceable. I know I expect to be left alone in my dealings with my money. I am getting too much help as it is from the powers that be. I prefer to be left to my own devises. How can I resist having to use my IPhone when I want to buy a newspaper at a rack, or some junk food or Coke at a vending machine? How do I record it to keep my bank account balanced? What about the small business person that has this vending machine route? They are getting charged every time someone buys a Snickers from one of their machines. So much for profit margins.The banks have found another way into our pockets. What about any of the "Dollar" type stores that are out there? Going to have to change their names to the $1.08 Store to account for the bank fees?


This brave new world is a threat to liberty and the American way. Thee is no doubt about it and no way around it. And you ask, what does all this have to do with real estate anyway? Nothing, It's just something that I read and found very interesting, so I thought I'd share it with you. 

I keep hearing that the housing market needs to improve for the economy to turn around. Pundits and government types are always spouting off about the importance of this. I also read frequently how government regulation is strangling business and any hope of recovery.

What I’m witnessing in our housing market is more of the latter. Its not the first time either. We had a similar mortgage melt down in the late 80’s in the savings and loan industry. Once again it was caused by easy money due to improper government oversight. The consequence of that was a 9 year crash of the construction cycle in our area and the nationwide destruction of a thriving savings and loan industry that fed and educated tens of thousands of American families.

The consequence this time has been the destruction of a thriving mortgage industry that fed and educated tens of thousands of American families.

You never see a savings and loan any more, you never see private mortgage business either.

The government is further upping the ante by onerous regulation on the banking business that has become the principle funding source for home loans. The regulatory environment has become so restrictive that no new bank has been chartered in the whole country last year. That’s the first time that has occurred in close to 50 years. This is some serious stuff. Can’t start new banks, existing banks are forced to consolidate, competition is down, home loans are down, the economy is down, and I’m not feeling so good myself. 

Here it is! Tampa Bay Area numbers for the last quarter including February 2012 . . .
Once again, it ain't pretty.

 Hillsborough County 

                  Total Active                    Sold for month                          Sold Last Year 

Dec-11      5,991                                   1,355                                          1,402 

Jan-12       5,616                                   1,062                                          1,121 

Feb-12      5,326                                   1,196                                          1,282 

 Pinllas County 

Dec-11      7,946                                    1,278                                          1,363 

Jan-12       7,729                                      985                                              794 

Feb-12       7,466                                   1,099                                           1,141 

 So February was better than January by a dab. Both counties showed an 11% increase in units closed. Still its 7% less than last year. Homes listed for sale are still decreasing. That's a trend that has persisted. We are still seeing Foreclosed properties make up 15% of the market and short sales about 20%. The balance is traditional homes for sale. The statistic that really pops out at me is in Hillsborough County the pending sales is just about equal to al the active homes for sale. Very strange number. I wish I knew what it means. Pinellas has a 3 to 1 ratio actives to pendings. Regardless what conclusions I can draw, this is not a healthy market.

You heard it here first! We are in a seller's market in the Tampa bay area right now! Move in ready properties are selling quickly. In many instances they are receiving multiple bids and are selling for CASH well above what they would ordinarily appraise for compared to the recent sales. I have been personally experiencing cash buyers over bidding on foreclosure properties by as much as 20%, causing the baseline price per square foot to start trending upward. My buyers are going in at full price and coming out in second place or worse. I have also run across this recently on non distressed listings, IE: I showed a buyer a town house priced at $169,900. Comps showed us lucky to get it to appraise for $150,000. We bid $152,000. A cash buyer appeared on the same day and bid full price. Great for the seller! I called on another property this week. It was a higher end condo in the Channelside area. It had been on the market for 3 days. The agent told me she had multiple offers including a full price cash offer for $400K. Wow! I have agents that work for me experiencing the same thing. She has clients that are facing bidding situations at every turn and are unable to get a property under contract yet. Our low inventory is partly contributing to this. Pent up buyer demand is also strong.

The National Association of Realtors produces a monthly confidence index that’s full of interesting information. For instance, the latest report shows that a third of all real estate transactions in December failed to close. There were three major factors; poor condition of the house, failed to appraise and buyer’s inability to get a mortgage. Only two thirds of all transactions did not have appraisal problems. Hard to get prices to rise if you can’t get them to appraise. We looked at the refinance market this week, looking for a better deal on our home. Here’s what we learned. The new HARP program (Home Affordable Refinance Program) the government is offering has an interesting disqualifier. Your income must not have decreased since 2002 or you’re out. Good job looking out for the folks, government. We know you’ve got our backs! Also, rates for a regular refi were lower by a little bit. Rates were in the middle to low 3’s. I have experienced a lot of buyer demand that is going unfulfilled. This is mainly due to low inventory. It seems no matter what price range I am looking in, I am finding fewer and fewer homes to show my buyers. Sellers that don’t have to sell are holding out. The prices that they can get for their properties are unacceptable to them. Many are turning to the rental option as an alternative to selling. Many times good homes priced right for the market go under contract in a week or less. There is competition for them.

Now this is interesting. The Associated Press announced that the five biggest mortgage lenders, and we all know by now who they are, have agreed to overhaul the banking business after their deceptive foreclosure practices crippled home ownership in our country. Now get this, a draft settlement between the banks and states has been sent to the state officials for approval. They are generously providing all 50 states with a grand total of $25 billion to distribute to current homeowners that were affected by their actions. Now let me get this straight, These are the same banks that took hundreds of billions of our tax dollars from our treasury. Now they want to distribute $25 billion of that to about 750,000 homeowners that have not been foreclosed upon yet? All the folks that have been tossed out of their homes are just out of luck! Too bad, so sad. Really? So now we have what's left after the carnage eligible for assistance under the deal. That comes out to about $1,800 each. Sounds like its missing a few zeros to me. Let's see . . . You paid $200,000 for a home in 2005. Its now worth $130,000. Your payment is still based on the $200K and they are suggesting maybe giving you $1,800 would help. Sounds like the deal of a lifetime to me.

There has been a resolution to the previous story I wrote about recently. It seems that the folks in Plant City who were being foreclosed upon by Bank of America even though they had sold their house many years ago are being vindicated. Somebody with a brain finally discovered that there was a deed correction filed fixing the technical glitch in the legal description of the property. Tax Collector's office knew it. Their records showed the correction. Nobody from BOA or their legal team could figure it out though. This is the kind of thoroughness that got the bank into this kind of trouble in the first place. Doesn't look like these bankers have learned anything about the errors of their ways. The poor former home owners were so stressed by all this and now are so relieved that they are not thinking about calling BOA out on this distressing fiasco. Maybe in time they will rethink it. We can't allow these bullies to threaten innocent folks so needlessly. Wake up Bank of America, pay attention to details. Fire someone over this harassment. Get more competent legal council, do something positive!

Maybe you read or heard about the folks in Plant City that sold their home about 8 years ago and are now being foreclosed upon by Bank of America. They are not even a client of BOA. The short version is the title company that closed their transaction so many years ago made a minor technical error on their legal description. This is the kind of error that is unfortunately somewhat common. That's why we all sign a form at closing stating that we will willingly come in and sign any correction that is necessary. Well, the title company is out of business, good luck with that. So, instead of contacting the folks like a normal person would do, and ask them to sign a correction, the thoughtful attorneys for BOA decided to include them in the foreclosure proceedings. Did wonders for their credit. Did I mention that the house was sold several other times in between? None of those owners/sellers were included in the foreclosure action. Great attention to detail BOA attorneys! Now if I were the folks that are the current owners, I'd find a lawyer that would challenge Bank of America's right to even foreclose on them at all. Since the legal description is for a different house how can they foreclose on them? They don't have a lien on the correct property. And if I were the other folks that are being included in the foreclosure proceedings, I also sue BOA for destroying my credit. It was frivolous and needless. It could have been resolved simply with a piece of paper correcting the error but wasn't.

Had a strange experience today. Went to a vacant rental property and found strangers moving in! I called my friend the Deputy Sheriff who had a little chat with them. Turns out some low life told them that he was the landlord, charged them a bunch of money and told them it was OK to move in. Know whom you are dealing with and let the buyer beware! There's now a family in Tampa who needs to move, lost their money to a crook and still looking. If they had only given it some thought, they would have know that the deal was way to good to be true. They were being offered a 3 bedroom home in Tampa in a decent neighborhood for $500 a month. The villan did not want them to fill out any application, just pay him rent and a deposit. I strongly suggested that the call my deputy acquaintance and have the man arrested when he brought them the lease to sign, if that ever really happens. Hope they do, but I have my doubts. regarding the rental market, started to slow down just before Halloween, there seems to be fewer lookers. I expect it will continue that way until after the first of the year. I have two very nice rental properties left, so If you hear of families that are looking, don't forget to tell them about me! I only accept high quality owners that take good care of their properties. I have actually fired landlords that will not keep up their rentals. I refuse to be a slum lord. People have a right to a decent home to live in regardless what they pay for rent.

There was an article in the paper the other day stating that home prices in the Tampa bay area went down another 8.2 % in October. Then it went on to state if the foreclosures were discounted, the decline would be more like 1%. That made the home owner in me feel a bit better.
I'm finding that there are two distinct markets in the Tampa, St Petersburg, Clearwater area. The distressed properties, both foreclosures (REO homes) and many of the short sale properties sell at a significant discount from the move-in-ready homes. Condition is a one word answer that has nuances to it. One of the elements that condition includes is the ability to get the property financed by a lending institution. Yes, houses need to be qualified by the bank, not just home buyers. We're not just talking about appraising here, although that is another consideration. Lender considerations include such things like, does it have a stove (range), Does it have a functioning air conditioning. In other words, can you close on it today and move in tomorrow and live in it. If not, the home does not qualify for a bank loan.
Move in ready homes command a premium in this market, but they aer being price damaged by the culls in the market place. Now that makes the home owner in me feel very ticked off.