A reason for hope
Two weeks ago, I said believe the unbelievable; the unbelievable being that our local real estate market was surging ahead in spite of all the bad news we’re swimming in. This week I’m going to give you a reason for hope and optimism.
The really big reason to slap a smile on your face is a report released on July 2, by Adm. Thad Allen, the face of the Coast Guard in charge of the Gulf oil spill. At that time he stated that a new and better containment cap might replace the present one that still allows for some leaking by July 15.
If the new cap works it could capture up to 80,000 barrels of oil a day, which a BP spokesman indicated might temporarily stop the entire flow. In addition, the first relief well is eight days ahead of schedule, as of this writing, and the second relief well is also on target.
However, the real reason for hope is the NOAA Long-Term Oil Threat model that shows a zero to 20 percent probability for the west coast of Florida to be impacted by the oil. The same probability factor applies from the eastern central Florida coast up to the Eastern Seaboard. Unfortunately, the Loop Current is expected to bring the oil to the beaches in Miami, Fort Lauderdale and the Florida Keys with a 61 to 80 percent probability.
This news, as horrific as it is for Florida real estate in the Panhandle and now a possibility in the Florida Keys and up the East Coast, should give us a welcome sigh of relief. Unless the experts are wrong, our beaches and waterways are safe, which can only give a bump to our real estate market that has already shown significant signs of recovery.
A second reason to feel hopeful, are the mortgage rates, which hit an all time low at the end of June. At that time, a 30-year fixed rate home mortgage could be obtained at 4.69 percent and a 15-year fixed rate mortgage at 4.13 percent. In mid-May, the 30-year fixed rate was 4.93 percent, which may not seem like a big difference until you translate that into actual money.
The difference between May and June on a 30-year fixed rate mortgage of $300,000 is almost $44 a month, which adds up significantly over the life of the loan. How long will the rates keep dropping, no one really knows, the only thing we know for sure is that eventually they will start to climb back up so now is the time to act.
And last, but certainly not least, and maybe the most important reason to feel hopeful is regarding flood insurance. On July 31, the Senate finally approved a House of Representative bill that was previously passed extending the federal flood insurance program.
The program, which is expected to be signed by the president, expired on June 1, after the Congress was unable to restructure the debt-ridden federally backed flood insurance program. The bill extends flood insurance to both homeowners and businesses through September 30th and makes it retroactive to June 1st.
Well, I feel better, and hopefully, you do too. So go ahead and call me a cockeyed optimist, like the great classic from South Pacific says, “Stuck like a dope with a thing called hope.” Of course, we still need to get through hurricane season. Sorry.