OPINION: Does COVID-19 Mark the Top of the Orlando Building Boom?

[nite owℓ]

6 hours ago, Jvest55 said:

15 or 30 year. Makes a big difference. 

True, but if s/he bought within the past 3 years would it really matter?

Can I pick your brain because damn... I'm drooling over that rate. I tried to refinance in the past, but I wouldn't have saved much. I'd def consider a 15 year refi @ 2%. I'm currently at 4.75% approx 10 years in, no debt other than mortgages and my credit score is almost perfect. Seems worth looking into...

[codypet]

8 hours ago, nite owℓ said:

True, but if s/he bought within the past 3 years would it really matter?

Can I pick your brain because damn... I'm drooling over that rate. I tried to refinance in the past, but I wouldn't have saved much. I'd def consider a 15 year refi @ 2%. I'm currently at 4.75% approx 10 years in, no debt other than mortgages and my credit score is almost perfect. Seems worth looking into...

I'm at 4.38% and I'm 5 years in.   I'm chomping at the bit.

Edited March 24, 2020 by codypet

[Uncommon]

16 hours ago, orange87 said:

Homebridge Financial. The market is so crazy right now that the rates are fluctuating by the day by a lot. I know someone who works at that bank and told him to give me a call when the rate drops in the 2s so he can lock it in.

What about closing costs? Or did the bank roll that into the back end of the loan?

I’m like 8 months in at 3.99. Just checked a few days ago and even a 3.5% rate wouldn’t save me any money factoring in the $4-7k cost of closing. 

[nite owℓ]

28 minutes ago, codypet said:

I'm at 4.38% and I'm 5 years in.   I'm chomping at the bit.

Run it through one of those online refi-calculators and see if you could pull it off. In my experience, there always seems to be a catch - upfront cost of the refi and/or having to buy points to achieve the advertised rate. I'm striving to be totally debt free so I'd rather pay a little more and go with a 15 year mortgage. The Great Recession shaped my view of juggling debt and COVID-19 cemented my beliefs. Just gotta be sure to keep a little savings for rainy days and keep my hands in many pots. I've seen people lose everything by putting all of their eggs into one basket during the Recession.

[jack]

17 hours ago, orange87 said:

Homebridge Financial. The market is so crazy right now that the rates are fluctuating by the day by a lot. I know someone who works at that bank and told him to give me a call when the rate drops in the 2s so he can lock it in.

When did you lock it? I tried last week and the lowest was 3.35% for a 30 which I thought was too high for my credit score. The next day it was 4%! 

[codypet]

1 hour ago, nite owℓ said:

Run it through one of those online refi-calculators and see if you could pull it off. In my experience, there always seems to be a catch - upfront cost of the refi and/or having to buy points to achieve the advertised rate. I'm striving to be totally debt free so I'd rather pay a little more and go with a 15 year mortgage. The Great Recession shaped my view of juggling debt and COVID-19 cemented my beliefs. Just gotta be sure to keep a little savings for rainy days and keep my hands in many pots. I've seen people lose everything by putting all of their eggs into one basket during the Recession.

BoA was quoting me a half percent lower for a 15 year over a 30.  Hmm.

Edited March 24, 2020 by codypet

[Jvest55]

11 hours ago, nite owℓ said:

True, but if s/he bought within the past 3 years would it really matter?

Can I pick your brain because damn... I'm drooling over that rate. I tried to refinance in the past, but I wouldn't have saved much. I'd def consider a 15 year refi @ 2%. I'm currently at 4.75% approx 10 years in, no debt other than mortgages and my credit score is almost perfect. Seems worth looking into...

I too had a 4.75% rate and refi'd to 3.12% for a 30 year. The difference between 3.12% and 2.85% or so, is very little dollar wise for me. So it wasn't worth trying to get a lower rate. I locked in rates on March 6th, which was the very bottom so far (pure luck). This is a screen shot of "averages", one can get higher or lower than this numbers, but the reported date is the average. From what I have seen, since that day, rates have surged higher due to a boom in refinances. Literally, lenders raised rates to keep people from refinancing because they couldn't handle the work load. Things will settle down eventually, but the question remains, will people see rates on average below 3%? I am not sure about that. The difference of 4.75% and 3.12% is almost $500 for me, so it was a no brainer not to wait. I would suggest you just reach out to a lender and see where rates are today. It's different for each person of course. The benefit of a 30 year is your payment will always be lower, the 15 year is more risky for investors and thus the rates are not as low as they should be now. In a time where people are losing income, stick with the 30 year and just pay it off sooner. 

 

By the way, this is the main reason why rates have been all over the place, it's a volatile market right now 

 

Edited March 24, 2020 by Jvest55

[nite owℓ]

2 hours ago, Jvest55 said:

I too had a 4.75% rate and refi'd to 3.12% for a 30 year. The difference between 3.12% and 2.85% or so, is very little dollar wise for me. So it wasn't worth trying to get a lower rate. I locked in rates on March 6th, which was the very bottom so far (pure luck). This is a screen shot of "averages", one can get higher or lower than this numbers, but the reported date is the average. From what I have seen, since that day, rates have surged higher due to a boom in refinances. Literally, lenders raised rates to keep people from refinancing because they couldn't handle the work load. Things will settle down eventually, but the question remains, will people see rates on average below 3%? I am not sure about that. The difference of 4.75% and 3.12% is almost $500 for me, so it was a no brainer not to wait. I would suggest you just reach out to a lender and see where rates are today. It's different for each person of course. The benefit of a 30 year is your payment will always be lower, the 15 year is more risky for investors and thus the rates are not as low as they should be now. In a time where people are losing income, stick with the 30 year and just pay it off sooner.

I guess it depends on your goal: lower monthly mortgage payment vs saving $$ over the life of the loan. I'd rather save money by shaving off total interest paid over the life of the loan vs having lower monthly mortgage payments. I'd gladly pay an extra $100 monthly in order to save $20K+ in the end and get rid of any remaining debt earlier on in life.

2 hours ago, codypet said:

BoA was quoting me a half percent lower for a 15 year over a 30.  Hmm.

Numbers? I think 15 year rates tend to be lower in general, but half percent lower doesn't seem like very much - maybe someone can correct me on this because this area is not my forte. Might also be beneficial to run numbers to see if making extra payments towards the principal would work out better in the long run and/or in addition to a refi.

What pisses me off is that despite having great credit, it doesn't mean a damn to lenders other than the fact that they don't have an excuse to totally screw me lol. Either way, they have a set "floor" and there doesn't seem to be a way to break through that bottom number that they advertise to the public. Either that, or it's because I'm a horrible schmoozer.

Edited March 24, 2020 by nite owℓ

[Jvest55]

I don't think you understand. You can pay a 30 year mortgage down in 15 years and not run the risk of missing a payment because the 15 year is higher. Essentially you pay double, and you have no risk. 

[dcluley98]

At a 2.75% interest rate, I would be seeking the longest term possible. 

[codypet]

1 minute ago, dcluley98 said:

At a 2.75% interest rate, I would be seeking the longest term possible. 

Yep that's the cheapest money you're gonna get.

[dcluley98]

Yikes: 

Orlando’s Marriott Worldwide Vacations to furlough staff, shutter U.S. timeshares over coronavirus pandemic

Timeshare giant Marriott Vacations Worldwide said Tuesday it will shut down operations and furlough its workers because of a massive drop in business related to coronavirus.

Among seven properties and two corporate offices in Central Florida, Marriott Vacations Worldwide employs 3,300 people.

All new hires, with the exception of mission-critical needs, have been frozen.

It is deferring its employee 401(k) match.

https://www.orlandosentinel.com/coronavirus/os-ne-coronavirus-marriott-timeshare-furloughs-20200324-q3kbt7xdkjegnf325njvwk7xu4-story.html

[Jvest55]

Add that to the many many many reasons why one should never "buy" into a timeshare. 

[Jvest55]

Under the Executive Order announced by Orange County Mayor Jerry L. Demings and Orlando Mayor Buddy Dyer today, you should stay at home, unless it is absolutely essential.

This takes effect this Thursday, March 26 at 11 p.m.

 

[codypet]

The actual stay at home order exempts a ton of businesses.  Ends up being no change for our group.

[AmIReal]

6 hours ago, codypet said:

The actual stay at home order exempts a ton of businesses.

Thank goodness vendors that sell packaged alcoholic beverages are allowed to stay open...

[neoanderz]

Im buying a house in Thornton Park (started before this got real bad) and it has me really questioning things but I believe I will just continue going forward and whatever happens to the housing market will happen.   My job is very stable (healthcare) and I think I can ride this out.  I’m hopeful this is not really going to destroy real estate like 2008 did.  Maybe things will take a temporary hit but I’m hoping we won’t see a 50% drop in real estate prices like before.  Who knows though.

[JFW657]

1 hour ago, neoanderz said:

Im buying a house in Thornton Park (started before this got real bad) and it has me really questioning things but I believe I will just continue going forward and whatever happens to the housing market will happen.   My job is very stable (healthcare) and I think I can ride this out.  I’m hopeful this is not really going to destroy real estate like 2008 did.  Maybe things will take a temporary hit but I’m hoping we won’t see a 50% drop in real estate prices like before.  Who knows though.

Maybe you should wait to see if prices take a plunge, then buy.

[nite owℓ]

3 hours ago, neoanderz said:

Im buying a house in Thornton Park (started before this got real bad) and it has me really questioning things but I believe I will just continue going forward and whatever happens to the housing market will happen.   My job is very stable (healthcare) and I think I can ride this out.  I’m hopeful this is not really going to destroy real estate like 2008 did.  Maybe things will take a temporary hit but I’m hoping we won’t see a 50% drop in real estate prices like before.  Who knows though.

Just a hypothetical question... If you changed your mind about moving forward, does your contract contain a contingency which would allow you to back out? If not, the seller could keep your deposit and potentially sue for breach of contract.

[codypet]

IIRC I believe they can keep the deposit, I don't know about the breach of contract.  I think that's what the deposit is for.

[Jvest55]

Unlike the financial crisis, I think we bounce back. The thesis of downtown hasn't really changed other than in the very short term (couple months hopefully?) where lending might be cut off and everyone is in a cash crunch. Once the virus issue fades, the economic engines turn back on and everyone is hustling to get back into everything. COVID marking the top of the Orlando boom doesn't mean forever, it's a blip, hopefully. 

I would use this situation to your advantage to negotiate price.

[AmIReal]

The cruise industry has obviously suffered as much or more than many from this pandemic (see the attached article for graphic). I mentioned in a different post that I did not think they would qualify for any subsidy for their losses, but I was not certain since President Trump had indicated he wanted to provide support to them. 

Turns out the bill that was sent to his desk today EXCLUDES the cruise industry by way of requiring the company be based in the US. All of the major cruise lines are based elsewhere, including Disney which is sails under the flag of the Bahamas.

This article has an interesting graphic of the BEACH stocks and loss of market value since 2/19/20 (Carnival has lost 67%).

 

Edited March 27, 2020 by AmIReal

[spenser1058]

19 hours ago, AmIReal said:

The cruise industry has obviously suffered as much or more than many from this pandemic (see the attached article for graphic). I mentioned in a different post that I did not think they would qualify for any subsidy for their losses, but I was not certain since President Trump had indicated he wanted to provide support to them. 

Turns out the bill that was sent to his desk today EXCLUDES the cruise industry by way of requiring the company be based in the US. All of the major cruise lines are based elsewhere, including Disney which is sails under the flag of the Bahamas.

This article has an interesting graphic of the BEACH stocks and loss of market value since 2/19/20 (Carnival has lost 67%).

 

The trick appears to be where the companies are incorporated more than where the ships are flagged. Companies like Carnival are actually incorporated outside the US and would thus  not be eligible, unlike Disney.

That said, The Donald is BFF  with Micky Arison, Carnival’s CEO, so look for maneuvers on this.

https://www.orlandosentinel.com/coronavirus/os-ne-coronavirus-cuise-lines-frozen-out-20200327-u2vbtdacjnfmrnc2xul5uw3q3e-story.html

From the Sentinel 

The cruise lines were deliberately set up to skirt US laws on things like minimum wage and pollution regs so I have only a limited sympathy for their quandary. That said, they do pay a lot in things like port fees to US jurisdictions. Given how large the cruise industry is in Florida to places like Port Everglades (Broward), Port Canaveral (Brevard) and the Port of Miami, it does affect this state in particular.

Edited March 28, 2020 by spenser1058

[Jvest55]

Orlando-based marine theme park operator SeaWorld Entertainment Inc. (NYSE: SEAS) said in an SEC filing on March 27 that it temporarily will furlough 90% of its workforce companywide as of April 1.

The workers will not receive compensation during the furlough period. The company said the length of time for the furlough is unknown.

[nite owℓ]

On 3/26/2020 at 4:53 PM, codypet said:

IIRC I believe they can keep the deposit, I don't know about the breach of contract.  I think that's what the deposit is for.

I'm not making an argument for or against, but anything is possible so I'm sure both parties would refer to the verbiage of the contract to determine how to proceed with a lawsuit and let the courts decide. The earnest money deposit is minuscule when compared to the loss a seller might experience. When you enter a contract, you are obligated to fulfill the duties of the agreement - granted there are exceptions to the rule, contingencies/provisions to be met, etc. I'd also imagine how far along in the sale would also affect the feasibility of a lawsuit: if the buyer is still within the inspection window, still has not secured financing, etc. vs trying to walk away from the sale at closing (especially while still employed). I'm sure luxury real estate would make the stakes even higher, perhaps a jilted seller would consider a lawsuit if they moved out of the residence and/or now carry two mortgages in anticipation of the sale, etc.

"If the buyer breaches the contract by walking away, the seller can sue for specific performance by asking the court to compel the transfer of the subject property to the buyer. Then, if specific performance is awarded, the seller can then recover from the buyer the full purchase price as contemplated in the contact plus any incidental damages.  Clements v. Leonard, 70 So.2d 840 (Fla. 1954)." https://www.sweeneylawpa.com/specific-performance-for-contracts-concerning-the-sale-of-florida-real-property/

Real estate contracts will allow an out for events beyond anyone's control like terrorism, war, "Acts of God", etc. People are currently trying to determine whether COVID-19 can also be considered an Act of God.  https://www.americanbar.org/groups/litigation/committees/real-estate-condemnation-trust/articles/2020/winter2020-coronavirus-force-majeure-clauses-real-estate-contracts/

Regardless, some people are now adding a coronavirus clause to their contracts. "Real estate associations in states like California and Florida have drawn up a form to tack onto sales contracts that spells out buyer protections in light of the health crisis." https://www.mansionglobal.com/articles/faced-with-uncertainty-home-buyers-seek-coronavirus-clauses-in-contracts-213364