The Anna Maria Island Sun Newspaper

Vol. 13 No. 49 - October 2, 2013

REAL ESTATE

East money not so simple for homeowners

 

When it comes to money nothing is easy. It’s not easy to save it, it’s not easy to borrow it and sometimes it’s not even easy to spend it, unless you’re the Federal Reserve whose middle name is “easy-money.”

On Sept. 19, the long awaited report by the Federal Reserve came as a shock to the financial community driving the stock market up. Federal Reserve officials decided to keep their bond-buying program in place in an effort to continue to stimulate the country’s economy. The quantitative easing program is designed to promote hiring by holding down interest rates while encouraging individuals and businesses to spend money.

Even with short-term interest rates near zero the easy money policies of the Federal Reserve have not made the impact that was anticipated. In fact Ben Bernanke, the head of the Federal Reserve, indicated that the economic indicators are mixed with some job growth and better housing numbers but that we still have more pain ahead.

The same day the Federal Reserve announced their plan, the National Association of Realtors reported sales of existing single-family homes rose in August to an annual rate of 5.48 million units from 5.39 million units in July, higher than the expected 5.25 million units. This was the highest sales rate since 2007. As good as this sounds, existing home sales are still about 27 percent below the figures from mid-2005.

So what does this mean to mortgage interest rates that have been slowly climbing recently? Most people, even real estate and banking professionals, think that the Federal Reserve interest rate has a direct effect on mortgage rates. However, mortgage rates are based on mortgage bonds or mortgage backed securities and do not always follow a reduction in the Federal short-term interest rates which are designed to stimulate consumer spending. Short-term interest rates have an effect on credit card rates, car loans and lines of credit but generally not on long-term mortgage rates.

When short-term interest rates are lowered, or in this case not raised, investors see an opportunity to move from the safety of mortgage backed securities and take a risk in stocks. When this happens, the stock market rallies which happened when the Feds made their announcement, causing the mortgage backed securities to sell off, causing interest rates to go up. So looking for a dramatic reduction in mortgage rates based on the Federal Reserve’s easy money policies probably won’t happen immediately.

Nevertheless what the Federal Reserve does is not totally irrelevant to mortgage interest rates and frequently have a delayed and indirect impact on rates. Assuming this is true the Fed’s decision to leave interest rates low could also help to keep mortgage rates low. Remember that mortgage money is still a fabulous bargain with today’s fixed rate loans being less than in 40 of the past 42 years making buying property very attractive to both investors and homeowners. In mid-September the fixed rate was 4.57 percent which was more than a percentage point higher than in January but less than the average rate for all of 2010.

The economy is still struggling in many areas but real estate is chugging along. Without really knowing how mortgage interest rates are going to go it’s probably a good time to dive in now while there is still easy money available.

Real Estate Transactions
Real estate transfers as of May 2013
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

06/03/2013 549,000 530,000 614 N Bay Blvd 1120 72x81 2 Br/2 Ba SFR
06/04/2013 779,000 767,000 109 Palm Ave 1290 50x110 2 Br/2 Ba SFR
06/14/2013 825,000 780,000 107 Willow Ave 2880 50x110 5 Br/3 Ba SFR
06/10/2013 399,000 380,000 710 Rose St 1564 50x79 3 Br/2 Ba SFR
06/14/2013 473,500 415,000 252 Gladiolus St 1428 85x101 2 Br/1 Ba SFR
06/21/2013 412,000 455,000 524 South Dr 1212 60x110 2 Br/1.5 Ba SFR, Reo/Bank Owned
06/27/2013 1,900,000 1,875,000 799 N Shore Dr 2340 50x125 2 Br/3 Ba SFR
06/06/2013 229,000 210,000 522 Pine Ave # 1b 822 2 Br/1 Ba Condo
06/13/2013 230,000 215,000 522 Pine Ave # 5a 822 2 Br/1 Ba Condo
06/14/2013 825,000 780,000 107 Willow Ave 2880 25x110 Inc
06/04/2013 399,000 350,000 505 South Bay Blvd 73/x100 Vac

Bradenton Beach

06/06/2013 495,000 463,000 601 Gulf S Dr # A & B 1656 50x100 4 Br/3 Ba SFR
06/03/2013 150,000 169,900 2312 Avenue C # 4 651 2 Br/1 Ba Condo
06/07/2013 489,000 472,500 1007 Gulf N Dr # 202 1259 2 Br/2 Ba Condo
06/07/2013 143,000 130,000 611 Gulf N Dr # A13 698 1 Br/1 Ba Condo
06/14/2013 279,000 230,000 703 Gulf S Dr # 3 1050 2 Br/2.5 Ba Condo
06/18/2013 149,000 132,000 1603 Gulf N Dr # 34 380 1 Br/1 Ba Condo
06/27/2013 299,000 250,000 703 S Gulf S Dr # 4 1050 2 Br/2.5 Ba Condo
06/27/2013 239,000 225,000 501 Gulf N Dr # 115 1128 2 Br/2 Ba Condo
06/28/2013 279,000 275,000 1325 Gulf N Dr # 136 675 2 Br/2 Ba Condo
06/28/2013 299,650 285,000 901 Gulf S Dr # 10 962 2 Br/2 Ba Condo
06/06/2013 495,000 463,000 601 Gulf S Dr # A 1656 50x100 Inc.

Cortez

06/05/2013 289,900 275,000 12607 Safe Harbour Dr. 105x117 Vac.

Holmes Beach

06/04/2013 699,000 650,000 515 67th St. 1891 80x111 3 Br/2 Ba SFR
06/04/2013 269,999 269,999 2911 Gulf Dr. 1650 50x100 3 Br/3 Ba SFR, Reo/Bank Owned
06/05/2013 675,000 600,000 602 Key Royale Dr. 1936 3 Br/2 Ba SFR
06/07/2013 315,000 295,000 311 59th St. 1000 2 Br/1.5 Ba SFR
06/10/2013 764,000 685,000 652 Key Royale Dr. 3400 3 Br/2.5 Ba SFR
06/14/2013 429,000 395,000 208 Haverkos Ct. 2181 65x98 3 Br/2.5 Ba SFR
06/17/2013 599,000 575,000 507 77th St. 2164 90x100 4 Br/3 Ba SFR
06/21/2013 734,999 685,000 612 Hampshire Ln. 2317 95x105 4 Br/3 Ba SFR
06/14/2013 399,000 425,000 129 52nd St. 2047 100x100 4Br/2 Ba SFR,Short Sale
06/27/2013 549,900 511,400 624 Foxworth Ln. 1823 3 Br/2.5 Ba SFR
06/24/2013 598,000 570,000 214 69th St. 1425 90x107 2 Br/2 Ba SFR
06/28/2013 399,900 370,000 622 Key Royale Dr. 1972 100x103 2 Br/2 Ba SFR
06/25/2013 995,000 965,000 307 66th St. # A 2800 6 Br/4.5 Ba SFR
06/27/2013 400,000 400,000 2809 Gulf Dr. 1420 50x100 2 Br/2 Ba SFR
06/17/2013 349,000 305,000 5806 Gulf Dr. # 104 1128 2 Br/2 Ba Condo
06/11/2013 319,900 319,000 5806 Gulf Dr. # 201 1164 2 Br/2 Ba Condo
06/25/2013 299,999 246,000 6200 Flotilla Dr. # 294 985 2 Br/2 Ba Condo, Reo/Bank Owned
06/28/2013 225,000 198,000 3000 Gulf Dr. # 3 756 2 Br/1 Ba Condo
06/28/2013 249,500 220,000 6300 Flotilla Dr. # 104 1212 3 Br/2 Ba Condo
06/14/2013 399,000 399,000 6250 Holmes Blvd. # 52 1536 2 Br/2.5 Ba Condo
06/20/2013 255,000 242,250 600 Manatee Ave. # 127 1222 2 Br/2 Ba Condo
06/11/2013 249,000 245,000 432 62nd St. 1080 2 Br/2 Ba Half Duplex

 

Source: Manatee County Property Appraiser’s Office


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