RISMEDIA, April 29, 2009-With distressed sales accounting for half of all home sales, many home sellers are finding that traditional sales are competing with discounted prices offered by foreclosed properties and short sales in their local area. To help home sellers attract buyers and compete against the discounted prices offered by distressed properties, here are some tips:
Price the Home Correctly: Home sellers need to price their home according to today’s market and not based on the high price that a neighbor might have received a few years ago. Using a licensed Realtor will help today’s seller price the home accurately based on recent sales activity.
Market the Home More Effectively: Traditional home sellers have access to more marketing channels than distressed properties, since not all distressed properties are found on the Multiple Listing Service (MLS), or by popular websites like Realtor.com. Traditional home sellers, can market their properties with these resources to reach a larger audience of buyers than financially distressed homes.
Keep the Home in Top Condition: Foreclosed homes are typically in disrepair and are in need of some repair or renovation after having been left vacant. It can easily cost a new owner tens of thousands of dollars and months of work to get the home back in shape. A home seller should stage their home to give it the appearance of being in “move-in” condition. The house, as well as all closets, should be kept clean and free of clutter to create the appearance of a more spacious home. Sellers can make their home stand out by doing things like landscaping the front yard to improve curb appeal, replacing worn-out carpets and old appliances, applying new paint in key interior rooms, and tackling other minor home improvement projects.
Offer a Quick Closing: An advantage of being a conventional home seller is being able to offer a quick closing, often an advantage for buyers who wish to move quickly. Distressed properties can take many months to reach a closing date. Sellers should be prepared to offer a 30-day closing date to attract buyers who want to move quickly.
Qualify Interested Buyers: Nothing is more discouraging than spending weeks with a prospective buyer, only to learn that he or she is unable to obtain a mortgage. To avoid such situations, make sure that your buyer is pre-approved for the loan amount necessary to finance the purchase of your home.
Wednesday, April 29, 2009
Tuesday, April 28, 2009
Finding Bottom: Where the Market Will Turn Around
By George W. Mantor Print Article
RISMEDIA, April 28, 2009-The end is near. When exactly, is hard to predict. It is also hard to predict what that end will look like. However, it is hard to escape the sense that some things will change forever. But what? Will law and order, if you can call this that, descend into chaos? Will nations withdraw from the global economy and seek self-sufficiency and protectionism? Will complex monetary systems that allow insider manipulation be replaced by barter? Will Brad and Angelina ever tie the knot? These are the great questions of our time.
Now, I bring up Brad and Angie, not to name drop or be forever connected to them on the Internet, but because whenever I see a picture of them, and you can’t not, I always imagine an infant wailing in the background. In fact, everywhere I go I’m tripping over strollers, dodging toddlers, and trying to escape the ear piercing shrieks of a full-on baby boom. It turns out 2007 was a year on par with the fifties, which illustrates an important point…life goes on.
From Bristol Palin to Nadya Suleman, there are a lot of women of child bearing age. According to the US Census Bureau, “…the Nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population size.”
And, what do growing families need? Take Nadya Suleman for example, she’s unemployed, but when her brood swelled to fourteen, she went out and bought a bigger house.
The population growth of the United States will, as it frequently has in the past, snap up all surplus housing that currently exists in growing regions. When that happens, prices will rise and builders will have sufficient incentive to return to the market in some, but not all regions. But first, selling prices must rise to the level that returns the cost of construction and a profit worthy of taking the risk.
America has a lot of problems to solve and only time will tell if we made the right choices. And, while some of us are totally paralyzed waiting for the next dispatch of really bad news, others must get on with their plans. The summer buying season is fast approaching and buyers continue to wrestle with uncertainty.
It’s no secret that qualified potential buyers are sitting on the sidelines waiting for some indication that real estate prices are at, or near, their bottom. While increasing sales prices are an obvious sign, buyers who have a strong desire for a wide selection at the best possible prices will need to act before that occurs.
For many potential buyers, it isn’t so much about getting the lowest possible price as it is feeling secure that they made a wise investment. If they plan to stay for 10 years, it matters less what happens in the next two years to sales prices than it does where they spend those two years. There are real and tangible benefits to owning where one lives. One we keep overlooking is satisfaction. I love my home, and I love owning it and doing what I want with it.
Even so, most potential buyers will need some assurances that things won’t fall much further. And, their will be signs. In the fall of 2005, with inventory low and prices at an all time high, I advised listeners of my radio program that if they intended to cash out, now was the time. I told them that we were short of houses and they could get top dollar with a quick sale. While I did not say that we had reached the absolute summit of sales prices, I knew we were close.
In finding bottom, here are some things to consider:
1. Local employment
One of the factors affecting the selling price of real estate is local employment.
At first, all the talk of the housing crisis was about over-leveraged consumers. But, we have now moved to a more critical phase. If you do not have a job and you have little to no savings, you can’t make a mortgage payment, period.
Nor do I believe that housing brought down the economy. It’s the other way around. Housing is benign. People buy houses, start families, and trade up when they are employed. And, because jobs are disappearing so fast, even those untouched by job losses are fearful they could be next.
What brought down the economy was fraud. Massive waves of, as yet not fully disclosed, fraud did this to us. ENRON, WorldCom, AIG, Tyco, Halliburton, Arthur Anderson, Madoff, the legal fraud perpetrated by greedy CEOs; fraud by their accounting firms, loan fraud by sophisticated organized crime from both in and outside the country, fraud by elected and appointed officials, and a bunch of garden variety fraud by small timers brought down the economy. It was a whole sale looting. They got a lot of our money and they burned through our prosperity like drunken whores, and now we are forced to bail them out. But, this too shall pass.
When the job trend reverses, when we begin to create a few hundred thousand jobs over a few months, an enormous pent up demand will return to a limited selection of good housing stock. At the moment, one in seven of the nation’s houses is vacant. Many are in various stages of disrepair, functionally obsolete, or located in the wrong place.
Unemployment filings will likely continue to fluctuate for a while and are sometimes more indicative of changing industry dynamics than the actual employment health of a local community. If your region is anticipating stimulus funds or has modern growth industries that will be developing jobs of the future, your employment picture should start to improve.
Local communities’ recovery time will vary, reflecting employment conditions. Some will never recover at all. Apparently, there is no bottom in Detroit where reports have surfaced of homes selling for as little as a dollar. But, Detroit has been in decline for decades. In the 70’s, so many Detroiters moved to Windsor, Ontario that there was a common bumper sticker which read, “Will the last person leaving Detroit please turn out the lights.”
Detroit has been losing jobs for a very long time, and the recent woes of the American automobile industry do not bode well for the future. But, in other places, where contemporary industry is growing, like Seattle-Tacoma or the Silicon Valley, the bottom is closer.
2. Return to historical baseline of sales
To understand the market dynamic, it is important to understand “normal” for your community. Every month, a finite number of residential real estate transactions occur. In a down market, the number might be as few as half the number of sales during a boom market. But over time, it tends to average out.
Determine a monthly baseline of sales for your community. Obtain a history of sales activity for the past ten years. This will give you a measure that includes sufficient market ups and downs.
In a recovering market, there will be a return to the historical baseline of monthly sales activity.
3. Reduction of available inventory
Just as there are historical baselines for sales activities, there are also similar baselines of available property offered through builders, the MLS, and occasionally, private sellers. Simply tracking the number of listings through the MLS will give you a clear picture of the direction of inventory.
Knowing the baseline of sales activity, you can determine how many months of available inventory are currently in the local market. If inventory is shrinking, the bottom is near.
4. Relationship to cost of new construction
In many communities, sales prices are actually below replacement cost. And, that in itself suggests the bottom is near. If builders cannot recoup their costs and make a profit commensurate with the risk, they will cease building until sales prices begin to rise. Recognizing that prices are actually starting to rise and that resale inventory is shrinking, pent-up demand will pour back into the market and here we go again. Remember, all the people not buying these days will combine with normal baseline demand and overwhelm the market.
5. Hidden price stabilization
Recent reports of sales prices often seem to assert that these sales prices are representative of the value of housing in general. First, that’s just what sold that month. Since distressed properties make up much of the market, it stands to reason that those prices would reflect smaller square footage and a discount equivalent to the cost of rehabilitation.
Some homes are more desirable than others. What about those homes with extra features or those located in good school districts? Are their prices holding? If so, your community may be on its way to recovery.
For potential buyers, finding bottom is less important than knowing that it is near. While it is impossible, given our unprecedented circumstances, for anyone to say for certain when prices will begin to rise in each community, the buyer who knows the signs of recovery will already be settled into the opportunity of a lifetime. In growing communities, housing must and will return to the cost of replacement or new construction.
George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm. Mantor can be reached at GWMantor@aol.com.
RISMEDIA, April 28, 2009-The end is near. When exactly, is hard to predict. It is also hard to predict what that end will look like. However, it is hard to escape the sense that some things will change forever. But what? Will law and order, if you can call this that, descend into chaos? Will nations withdraw from the global economy and seek self-sufficiency and protectionism? Will complex monetary systems that allow insider manipulation be replaced by barter? Will Brad and Angelina ever tie the knot? These are the great questions of our time.
Now, I bring up Brad and Angie, not to name drop or be forever connected to them on the Internet, but because whenever I see a picture of them, and you can’t not, I always imagine an infant wailing in the background. In fact, everywhere I go I’m tripping over strollers, dodging toddlers, and trying to escape the ear piercing shrieks of a full-on baby boom. It turns out 2007 was a year on par with the fifties, which illustrates an important point…life goes on.
From Bristol Palin to Nadya Suleman, there are a lot of women of child bearing age. According to the US Census Bureau, “…the Nation’s population is projected to increase to 392 million by 2050 — more than a 50 percent increase from the 1990 population size.”
And, what do growing families need? Take Nadya Suleman for example, she’s unemployed, but when her brood swelled to fourteen, she went out and bought a bigger house.
The population growth of the United States will, as it frequently has in the past, snap up all surplus housing that currently exists in growing regions. When that happens, prices will rise and builders will have sufficient incentive to return to the market in some, but not all regions. But first, selling prices must rise to the level that returns the cost of construction and a profit worthy of taking the risk.
America has a lot of problems to solve and only time will tell if we made the right choices. And, while some of us are totally paralyzed waiting for the next dispatch of really bad news, others must get on with their plans. The summer buying season is fast approaching and buyers continue to wrestle with uncertainty.
It’s no secret that qualified potential buyers are sitting on the sidelines waiting for some indication that real estate prices are at, or near, their bottom. While increasing sales prices are an obvious sign, buyers who have a strong desire for a wide selection at the best possible prices will need to act before that occurs.
For many potential buyers, it isn’t so much about getting the lowest possible price as it is feeling secure that they made a wise investment. If they plan to stay for 10 years, it matters less what happens in the next two years to sales prices than it does where they spend those two years. There are real and tangible benefits to owning where one lives. One we keep overlooking is satisfaction. I love my home, and I love owning it and doing what I want with it.
Even so, most potential buyers will need some assurances that things won’t fall much further. And, their will be signs. In the fall of 2005, with inventory low and prices at an all time high, I advised listeners of my radio program that if they intended to cash out, now was the time. I told them that we were short of houses and they could get top dollar with a quick sale. While I did not say that we had reached the absolute summit of sales prices, I knew we were close.
In finding bottom, here are some things to consider:
1. Local employment
One of the factors affecting the selling price of real estate is local employment.
At first, all the talk of the housing crisis was about over-leveraged consumers. But, we have now moved to a more critical phase. If you do not have a job and you have little to no savings, you can’t make a mortgage payment, period.
Nor do I believe that housing brought down the economy. It’s the other way around. Housing is benign. People buy houses, start families, and trade up when they are employed. And, because jobs are disappearing so fast, even those untouched by job losses are fearful they could be next.
What brought down the economy was fraud. Massive waves of, as yet not fully disclosed, fraud did this to us. ENRON, WorldCom, AIG, Tyco, Halliburton, Arthur Anderson, Madoff, the legal fraud perpetrated by greedy CEOs; fraud by their accounting firms, loan fraud by sophisticated organized crime from both in and outside the country, fraud by elected and appointed officials, and a bunch of garden variety fraud by small timers brought down the economy. It was a whole sale looting. They got a lot of our money and they burned through our prosperity like drunken whores, and now we are forced to bail them out. But, this too shall pass.
When the job trend reverses, when we begin to create a few hundred thousand jobs over a few months, an enormous pent up demand will return to a limited selection of good housing stock. At the moment, one in seven of the nation’s houses is vacant. Many are in various stages of disrepair, functionally obsolete, or located in the wrong place.
Unemployment filings will likely continue to fluctuate for a while and are sometimes more indicative of changing industry dynamics than the actual employment health of a local community. If your region is anticipating stimulus funds or has modern growth industries that will be developing jobs of the future, your employment picture should start to improve.
Local communities’ recovery time will vary, reflecting employment conditions. Some will never recover at all. Apparently, there is no bottom in Detroit where reports have surfaced of homes selling for as little as a dollar. But, Detroit has been in decline for decades. In the 70’s, so many Detroiters moved to Windsor, Ontario that there was a common bumper sticker which read, “Will the last person leaving Detroit please turn out the lights.”
Detroit has been losing jobs for a very long time, and the recent woes of the American automobile industry do not bode well for the future. But, in other places, where contemporary industry is growing, like Seattle-Tacoma or the Silicon Valley, the bottom is closer.
2. Return to historical baseline of sales
To understand the market dynamic, it is important to understand “normal” for your community. Every month, a finite number of residential real estate transactions occur. In a down market, the number might be as few as half the number of sales during a boom market. But over time, it tends to average out.
Determine a monthly baseline of sales for your community. Obtain a history of sales activity for the past ten years. This will give you a measure that includes sufficient market ups and downs.
In a recovering market, there will be a return to the historical baseline of monthly sales activity.
3. Reduction of available inventory
Just as there are historical baselines for sales activities, there are also similar baselines of available property offered through builders, the MLS, and occasionally, private sellers. Simply tracking the number of listings through the MLS will give you a clear picture of the direction of inventory.
Knowing the baseline of sales activity, you can determine how many months of available inventory are currently in the local market. If inventory is shrinking, the bottom is near.
4. Relationship to cost of new construction
In many communities, sales prices are actually below replacement cost. And, that in itself suggests the bottom is near. If builders cannot recoup their costs and make a profit commensurate with the risk, they will cease building until sales prices begin to rise. Recognizing that prices are actually starting to rise and that resale inventory is shrinking, pent-up demand will pour back into the market and here we go again. Remember, all the people not buying these days will combine with normal baseline demand and overwhelm the market.
5. Hidden price stabilization
Recent reports of sales prices often seem to assert that these sales prices are representative of the value of housing in general. First, that’s just what sold that month. Since distressed properties make up much of the market, it stands to reason that those prices would reflect smaller square footage and a discount equivalent to the cost of rehabilitation.
Some homes are more desirable than others. What about those homes with extra features or those located in good school districts? Are their prices holding? If so, your community may be on its way to recovery.
For potential buyers, finding bottom is less important than knowing that it is near. While it is impossible, given our unprecedented circumstances, for anyone to say for certain when prices will begin to rise in each community, the buyer who knows the signs of recovery will already be settled into the opportunity of a lifetime. In growing communities, housing must and will return to the cost of replacement or new construction.
George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm. Mantor can be reached at GWMantor@aol.com.
Monday, April 27, 2009
10 Steps to Building Wealth by Investing in Real Estate in Any Economy
RISMEDIA, April 27, 2009-There’s no question that America is in a tight spot. Every day seems to bring a new wave of recession-related bad news. But stop panicking for a second, tune out the negative chatter, and listen closely. The recent financial and housing crises have actually led to some serious opportunities for level-headed investors who want to get rich the right way rather than get rich quickly.
“The grand irony is that the financial and housing collapses actually create a favorable environment for real estate investing,” says Tyson, coauthor along with Griswold of Real Estate Investing For Dummies®, 2nd Edition. “Interest rates are down, property values are depressed in many parts of the country, and real estate is still a great long-term investment. That hasn’t changed. “It’s not for everyone, but if you’re in the right place financially and can afford to invest in real estate, there are plenty of opportunities out there,” he adds.
“Our core advice is as true today as it was before the recession,” says Tyson. “The fact is, there’s a right way and a wrong way to invest in real estate. The wrong way led to the recent real estate crisis. The right way can lead to great financial gains for long-term investors.”
Here, excerpted from Real Estate Investing For Dummies, are 10 methods for pursuing a real estate fortune the get-rich-right way:
1. Save, save, save. All real estate investors need a nest egg. That means even as you develop additional sources of income, you should hold steady on or preferably even cut current expenses in order to build up your savings. Even if you can find properties where the seller provides all the financing, you can’t escape certain out-of-pocket expenses or the opportunity cost of lost income as you expend your time and energy tracking down properties and performing due diligence.
2. Get your credit sparkling clean. The best opportunities and the most options are available to the real estate investors who have both cash and good credit. Sellers and lenders aren’t going to provide financing to a buyer with a poor credit history. Because the purchase of real estate virtually always necessitates the borrowing of funds, make sure that your credit report is as accurate and as favorable as possible.
3. Buy property in the path of progress. It’s usually a good idea to buy in areas that will continue to improve through new investment and economic activity. After you locate the best cities or neighborhoods, look for two types of underachieving real estate assets: Income properties that are tired and worn and have deferred maintenance, or those that are physically sound but poorly managed.
4. Buy the right property at the best price possible. Sounds like a no-brainer, especially in the current environment, right? Unfortunately, it’s often easier said than done. To be successful, you’ll have to follow certain guidelines. Get-rich-right investors rarely buy new or fully renovated properties unless they’re in the path of progress or a prime location. Why? Because the value-added or appreciation has already been taken by the current owner.
5. Don’t fall into the do-it-yourself trap if the “time” factor doesn’t make sense. Yes, doing the work yourself may be cheaper if you know what you’re doing. But it makes no sense to have a rental property off the market for three weeks while you spend evenings and weekends painting in a misguided attempt to save the $1,000 that a contractor would charge for painting that would take two days.
6. Keep abreast of market rents. One of the biggest challenges for most rental property owners is determining the proper rent to charge tenants for newly renovated rental units. But finding the right rental rate simply requires some homework and research. The best indications of the market value of your renovated property can be found through a market survey of comparable properties.
7. Recover renovation dollars through refinancing. A key element of the get-rich-right strategy is to keep your capital working and use leverage reasonably while maintaining sufficient equity to weather the ups and downs of local real estate cycles. Acquiring and renovating your rental property required cash, but you also have increased the income, which has created additional value. You can now use this increased value to refinance the property to cover your initial costs. While you should avoid borrowing too much and overleveraging your investments, you also don’t want to be too conservative and underestimate your cash needs. Borrow extra money or have an untapped line of credit available to allow for reserves.
8. Reposition property with better tenants. One of the best ways to increase the income and value of your newly renovated real estate investment is to reposition the property with new, more financially qualified tenants. Look to upgrade your tenants by marketing to a new target tenant profile and re-leasing the property. After all, the current tenants may be the reason that the previous owner sold the property.
9. Refinance or sell and defer again. Notwithstanding the decline in property values in most areas in the late-2000s, long-term rental property owners find that they have a considerable amount of equity tied up in their property because of the appreciation that has occurred over the decades throughout much of the country. Having some equity in the property is good and keeps you from faltering should the local real estate economics take a hit, but too much equity just sitting in a property lowers your overall returns.
10. Consolidate holdings into larger properties. Most long-term real estate investors find that they reach the point where their management responsibilities and duties no longer conform to the lifestyle that they can afford. They decide to simplify their lives and hire professional property managers to deal with tenants, turnover, toilets, and trash. But finding and paying for a qualified property manager for a diversified portfolio of small rental properties isn’t easy or cost-effective.
“In our experience, successful real estate investors tend to be savvy, hard working, conscientious individuals who enthusiastically perform comprehensive due diligence before buying a property,” says Tyson. “They don’t reinvent the wheel with each deal, because they know their market niche, personal skills, and available resources. They have a vision and use their tried-and-true game plan for each property. “If you develop these skills, you can uncover unique properties with value-added potential that are often missed by others,” he concludes. “So, take advantage of today’s buyer’s market, and get started now.”
About the Authors:
Eric Tyson, MBA, is one of the nation’s best-selling personal finance book authors and has penned five national bestsellers. His work has been featured and quoted in hundreds of local and national publications and media outlets. He was also a featured speaker at a White House conference on retirement planning.
Robert S. Griswold, MSBA, is a successful real estate investor and hands-on property manager with a large portfolio of residential and commercial rental properties who uses print and broadcast journalism to bring his many years of experience to his readers, listeners, and viewers.
“The grand irony is that the financial and housing collapses actually create a favorable environment for real estate investing,” says Tyson, coauthor along with Griswold of Real Estate Investing For Dummies®, 2nd Edition. “Interest rates are down, property values are depressed in many parts of the country, and real estate is still a great long-term investment. That hasn’t changed. “It’s not for everyone, but if you’re in the right place financially and can afford to invest in real estate, there are plenty of opportunities out there,” he adds.
“Our core advice is as true today as it was before the recession,” says Tyson. “The fact is, there’s a right way and a wrong way to invest in real estate. The wrong way led to the recent real estate crisis. The right way can lead to great financial gains for long-term investors.”
Here, excerpted from Real Estate Investing For Dummies, are 10 methods for pursuing a real estate fortune the get-rich-right way:
1. Save, save, save. All real estate investors need a nest egg. That means even as you develop additional sources of income, you should hold steady on or preferably even cut current expenses in order to build up your savings. Even if you can find properties where the seller provides all the financing, you can’t escape certain out-of-pocket expenses or the opportunity cost of lost income as you expend your time and energy tracking down properties and performing due diligence.
2. Get your credit sparkling clean. The best opportunities and the most options are available to the real estate investors who have both cash and good credit. Sellers and lenders aren’t going to provide financing to a buyer with a poor credit history. Because the purchase of real estate virtually always necessitates the borrowing of funds, make sure that your credit report is as accurate and as favorable as possible.
3. Buy property in the path of progress. It’s usually a good idea to buy in areas that will continue to improve through new investment and economic activity. After you locate the best cities or neighborhoods, look for two types of underachieving real estate assets: Income properties that are tired and worn and have deferred maintenance, or those that are physically sound but poorly managed.
4. Buy the right property at the best price possible. Sounds like a no-brainer, especially in the current environment, right? Unfortunately, it’s often easier said than done. To be successful, you’ll have to follow certain guidelines. Get-rich-right investors rarely buy new or fully renovated properties unless they’re in the path of progress or a prime location. Why? Because the value-added or appreciation has already been taken by the current owner.
5. Don’t fall into the do-it-yourself trap if the “time” factor doesn’t make sense. Yes, doing the work yourself may be cheaper if you know what you’re doing. But it makes no sense to have a rental property off the market for three weeks while you spend evenings and weekends painting in a misguided attempt to save the $1,000 that a contractor would charge for painting that would take two days.
6. Keep abreast of market rents. One of the biggest challenges for most rental property owners is determining the proper rent to charge tenants for newly renovated rental units. But finding the right rental rate simply requires some homework and research. The best indications of the market value of your renovated property can be found through a market survey of comparable properties.
7. Recover renovation dollars through refinancing. A key element of the get-rich-right strategy is to keep your capital working and use leverage reasonably while maintaining sufficient equity to weather the ups and downs of local real estate cycles. Acquiring and renovating your rental property required cash, but you also have increased the income, which has created additional value. You can now use this increased value to refinance the property to cover your initial costs. While you should avoid borrowing too much and overleveraging your investments, you also don’t want to be too conservative and underestimate your cash needs. Borrow extra money or have an untapped line of credit available to allow for reserves.
8. Reposition property with better tenants. One of the best ways to increase the income and value of your newly renovated real estate investment is to reposition the property with new, more financially qualified tenants. Look to upgrade your tenants by marketing to a new target tenant profile and re-leasing the property. After all, the current tenants may be the reason that the previous owner sold the property.
9. Refinance or sell and defer again. Notwithstanding the decline in property values in most areas in the late-2000s, long-term rental property owners find that they have a considerable amount of equity tied up in their property because of the appreciation that has occurred over the decades throughout much of the country. Having some equity in the property is good and keeps you from faltering should the local real estate economics take a hit, but too much equity just sitting in a property lowers your overall returns.
10. Consolidate holdings into larger properties. Most long-term real estate investors find that they reach the point where their management responsibilities and duties no longer conform to the lifestyle that they can afford. They decide to simplify their lives and hire professional property managers to deal with tenants, turnover, toilets, and trash. But finding and paying for a qualified property manager for a diversified portfolio of small rental properties isn’t easy or cost-effective.
“In our experience, successful real estate investors tend to be savvy, hard working, conscientious individuals who enthusiastically perform comprehensive due diligence before buying a property,” says Tyson. “They don’t reinvent the wheel with each deal, because they know their market niche, personal skills, and available resources. They have a vision and use their tried-and-true game plan for each property. “If you develop these skills, you can uncover unique properties with value-added potential that are often missed by others,” he concludes. “So, take advantage of today’s buyer’s market, and get started now.”
About the Authors:
Eric Tyson, MBA, is one of the nation’s best-selling personal finance book authors and has penned five national bestsellers. His work has been featured and quoted in hundreds of local and national publications and media outlets. He was also a featured speaker at a White House conference on retirement planning.
Robert S. Griswold, MSBA, is a successful real estate investor and hands-on property manager with a large portfolio of residential and commercial rental properties who uses print and broadcast journalism to bring his many years of experience to his readers, listeners, and viewers.
Saturday, April 25, 2009
Energy Efficiency Tax Credits - Are You Ready to Take Advantage?
RISMEDIA, April 25, 2009-This year, the federal government extended and expanded home energy efficiency tax credits through 2010 as part of the broader economic recovery package, and millions of U.S. homeowners appear poised to pursue them, according to a survey released by Johns Manville. More than two-thirds of survey respondents, or 68%, said they were aware of the newly created federal energy efficiency tax credits. Of those homeowners, 46% said they intend to make a home improvement-related purchase that qualifies for an energy efficiency tax credit, including nine percent of homeowners who said they had already done so during the first three months of 2009.
The energy efficiency tax credits were created earlier this year by President Obama’s economic recovery package, which sought to encourage consumer spending amid the recession, as well as persuade homeowners to become more energy efficient. The tax credits allow homeowners to claim 30% of the cost of qualified energy efficiency products, up to $1,500, including insulation, windows and doors, roofs, HVAC equipment, and water heaters.
According to the survey, saving money was a primary motivator spurring homeowners to pursue an energy efficiency upgrade. The survey found that 40% of the respondents who were aware of the tax credits cited monthly savings on their utility bills as the key reason for the planned home upgrades, followed by improving the comfort of their home (30%), reducing their carbon footprint (13%), and earning the energy efficiency tax credit (8%).
Despite the interest among many homeowners, 72% of survey respondents said they did not know exactly how to apply for any energy efficiency tax credits or rebates, including those offered by state governments or local utilities. And some respondents indicated the existing tax credits might not be big enough to spur action. A total of 41% of respondents said the tax credit would need to exceed 40% of the product’s purchase price to motivate them to pursue a home energy efficiency upgrade if they weren’t planning one for any other reason. Roughly 32% of respondents said a tax credit of 30% or less was sufficient motivation.
To earn an energy efficiency tax credit, homeowners must save their receipt for a qualified purchase, print a form provided by the product’s manufacturer and then claim the deduction on their federal income tax return.
“This recent survey clearly demonstrates that millions of U.S. homeowners are interested in making purchases that qualify for the newly created energy efficiency tax credits,” said Kateri Callahan, president of the Alliance to Save Energy, a Washington, D.C.-based nonprofit that promotes energy efficiency. “The new tax credits can help homeowners defray the cost of several types of energy efficiency upgrades, making them more affordable at this time of economic strain for many.” “By tightening up their homes with added insulation and caulking and sealing of doors and windows, homeowners will enjoy lower heating and cooling costs, too,” Callahan added.
The U.S. Department of Energy (DOE) estimates that homeowners can save up to 30% on their heating and cooling bills by adding insulation to adequate levels and air sealing their homes. In addition, an estimated 65% of U.S. homes, about 45 million, are under insulated, according to the Harvard School of Public Health.
The survey found that the most popular projects for respondents intending to pursue the tax credit included: energy-efficient windows and doors (19%); a water heater (14%); roofing (14%); insulation (13%); heating, ventilation, or air conditioning (12%); and a solar energy system (8%). A total of 53% of respondents said they did not intend to make a purchase that qualified for the credit.
The survey’s other key findings:
- Roughly six out of 10, or 63% of respondents knew that in addition to the federal energy efficiency tax credit, many states and local utilities offer energy efficiency rebates for certain home improvement-related purchases.
- More than half of responding homeowners (58%) underestimated how much a homeowner can potentially save on monthly heating and cooling costs by adequately caulking, sealing and insulating their home. About 21% of respondents answered correctly, pegging the savings at up to 20% to 30%.
- Homeowners making between $50,000 and $75,000 who were aware of the tax credit were the most likely to pursue an energy efficiency upgrade, with 59% of respondents saying they intend to do so during 2009.
“This is a perfect time for homeowners to make their homes more energy efficient,” said Mark Ziegert, a senior brand manager for Insulation Systems with Johns Manville. “With local and federal tax credits and rebates, the potential savings of lower heating and cooling costs, and product promotions offered by retailers, homeowners should have ample motivation to move ahead in 2009 with energy efficiency projects. If and when energy prices move higher, homeowners will be glad they added insulation and made other improvements. ”
Methodology
The telephone survey of 784 U.S. homeowners was conducted from April 3 - 6 by Opinion Research Corp., a national market research firm, on behalf of Johns Manville. The survey’s sampling error was plus or minus four percentage points.
About Johns Manville
Johns Manville, a Berkshire Hathaway company is a leading manufacturer and marketer of premium-quality products for building insulation, mechanical insulation, commercial roofing, and roof insulation, as well as fibers and nonwovens for commercial, industrial, and residential applications.
For more information, visit www.jm.com.
Thursday, April 23, 2009
Americans Staying Put - Residential Mover Rate Lowest Since 1948
RISMEDIA, April 23, 2009-The U.S. Census Bureau announced that the national mover rate declined from 13.2% in 2007 to 11.9% in 2008 - the lowest rate since the bureau began tracking these data in 1948. In 2008, 35.2 million people 1 year and older changed residences in the U.S. within the past year, representing a decrease from 38.7 million in 2007 and the smallest number of residents to move since 1962.
“Even though the number of people who changed residence in 2008 dropped by 3.5 million from the previous year, millions of Americans continue to move,” said Tom Mesenbourg, acting director of the U.S. Census Bureau. “As we gear up for the 2010 Census, we will be looking to get an accurate count of everyone in the country, regardless of whether they moved in the past year or not.”
By region, people in the South (13.5%) and in the West (13.2%) were likeliest to move in 2008. The Midwest and the Northeast had mover rates of 11.1% and 8.2%, respectively. In 2008, the Midwest saw the largest decline in its mover rate from 2007.
Among those who moved in 2008, 65% moved within the same county, 18% moved to a different county within the same state, 13% moved to a different state, and 3% moved to the U.S. from abroad.
Principal cities within metropolitan areas experienced a net loss of 2 million movers, while the suburbs had a net gain of 2.2 million movers.
Looking at the civilian population 16 and older who were unemployed, 21.3% lived in a different residence one year ago. This compares with 12.3% of the population who were employed and lived in a different residence one year ago. Among those not in the labor force, 9% lived in a different residence one year ago.
In 2008, renters were five times more likely to move than homeowners. More than one-in-four people (27.7%) living in renter-occupied housing units lived in a different residence one year earlier. By comparison, the mover rate of people living in owner-occupied housing units was 5.4%.
Other highlights include:
-While the number of intercounty movers who lived 500 or more miles from their previous residence one year ago (2.8 million) was not statistically different in 2008 than 2007, the number of intercounty movers who lived less than 50 miles away one year ago decreased from 5.1 million to 4.4 million between 2007 and 2008.
-The most common reasons for moving were housing related (such as the desire to own a home or live in a better neighborhood), representing 40.1% or 14.1 million movers. The distribution among those who gave other reasons for moving was: family related (30.5%), employment related (20.9%) and other (8.5%).
For more information, visit www.census.gov.
“Even though the number of people who changed residence in 2008 dropped by 3.5 million from the previous year, millions of Americans continue to move,” said Tom Mesenbourg, acting director of the U.S. Census Bureau. “As we gear up for the 2010 Census, we will be looking to get an accurate count of everyone in the country, regardless of whether they moved in the past year or not.”
By region, people in the South (13.5%) and in the West (13.2%) were likeliest to move in 2008. The Midwest and the Northeast had mover rates of 11.1% and 8.2%, respectively. In 2008, the Midwest saw the largest decline in its mover rate from 2007.
Among those who moved in 2008, 65% moved within the same county, 18% moved to a different county within the same state, 13% moved to a different state, and 3% moved to the U.S. from abroad.
Principal cities within metropolitan areas experienced a net loss of 2 million movers, while the suburbs had a net gain of 2.2 million movers.
Looking at the civilian population 16 and older who were unemployed, 21.3% lived in a different residence one year ago. This compares with 12.3% of the population who were employed and lived in a different residence one year ago. Among those not in the labor force, 9% lived in a different residence one year ago.
In 2008, renters were five times more likely to move than homeowners. More than one-in-four people (27.7%) living in renter-occupied housing units lived in a different residence one year earlier. By comparison, the mover rate of people living in owner-occupied housing units was 5.4%.
Other highlights include:
-While the number of intercounty movers who lived 500 or more miles from their previous residence one year ago (2.8 million) was not statistically different in 2008 than 2007, the number of intercounty movers who lived less than 50 miles away one year ago decreased from 5.1 million to 4.4 million between 2007 and 2008.
-The most common reasons for moving were housing related (such as the desire to own a home or live in a better neighborhood), representing 40.1% or 14.1 million movers. The distribution among those who gave other reasons for moving was: family related (30.5%), employment related (20.9%) and other (8.5%).
For more information, visit www.census.gov.
Wednesday, April 22, 2009
The Latest Census Bureau Population Estimates
In Focus
By the Numbers:
By NAR Research Staff
The Census Bureau recently released its latest estimates of the U.S. population. This report provides details on the fastest growing areas in the country – both metropolitan area and counties -- as well as raw population numbers for cities and counties. Below is a summary of the Census Bureau’s findings.
Largest Populations
New York claims the top position as the largest metropolitan area in the U.S. As of July 1, 2008, the New York metro had 19.0 million people. Los Angeles was second with 12.9 million and the Chicago
metro ranked third with 9.6 million. All in all, 14 metro areas had populations of 4 million or more.
The largest county was Los Angeles with 9.9 million persons. Cook County (which includes part of the Chicago metropolitan area) boasts 5.3 million. Overall, 12 counties had populations of 2 million or more.
Fasting Growing Areas
The nation’s 363 metropolitan areas account for almost 84 percent of the U.S. population. The majority of them posted a growth in their population between July 1, 2007 and July 1, 2008; only 50 of them actually saw their population decrease.
In percentage terms, the fastest growing metropolitan area in the U.S. was Raleigh-Cary, North Carolina. The metro’s population rose 4.3 percent between July 1, 2007 and July 1, 2008, gaining almost 45,000 people. Austin-Round Rock, Texas was the second fastest-growing metro, adding 60,000 to the area for a 3.8 percent increase.
In terms of actual numbers, the Dallas- Fort Worth metro area gained the most, adding more than 146,000 persons to its population. Three other metro areas also became home to more than 100,000 from 2007 to 2008, including Houston (130,000), Phoenix (116,000) and Atlanta (115,000).
Population growth in the nation’s 3,142 counties was a bit more balanced, with 1,974 counties growing, the population of 1,161 counties shrinking, and seven counties maintaining their 2007 population levels. The fastest-growing county (with more than 10,000 population) was St. Bernard Parish in Louisiana. That area grew 12.8 percent. Ranked second among counties was Pinal County in Arizona, increasing its population by 8.8 percent. Seven of the 10 fastest-growing counties were in the South. In addition, large metro areas — those whose populations in 2008 were a million or more – were located in nine of the 10 fastest-growing counties. They include the Chicago metropolitan area (Kendall County, Illinois, ranked fourth), Atlanta metro (Forsyth County, ranked fifth), and Dallas-Fort Worth (nine-ranked Rockwall County, Texas).
When looking at the actual number of new residents in counties, we get a somewhat different picture. Maricopa County in Arizona added more residents than did any other county – 89,550 persons.
Harris County, Texas was second, having increased its population by 72,153. Los Angeles and San Diego Counties in California were next in terms of absolute population gain. The top 10 counties gaining the most new residents were in Arizona, California, Texas, Nevada and North Carolina.
The Foreign-born Population
Metropolitan areas in the South in general are also among the fastest growing immigrant destinations. Phoenix and Atlanta both have well over a half million immigrants, and Las Vegas and Orlando each have more than one-quarter million foreign born residents. Immigrant populations in well-established gateway metro areas such as New York and Los Angeles are growing more slowly, a function of their large absolute size.
America’s immigrant population can, in some ways, still be viewed as geographically concentrated. More than half of all immigrants live in the top 10 metropolitan destinations: New York, Los Angeles, Miami, Chicago, San Francisco, Houston, Dallas-Fort Worth, Washington, Riverside-San Bernardino,and Phoenix. By contrast, a little over one-quarter of all Americans live in the 10 largest metro areas.
Dallas-Ft. Worth, Washington, D.C.,Atlanta, and Las Vegas have emerged as major destination areas only in the past two decades.
The Relationship Between Population and Households
It’s important to note that raw population numbers can only give us an idea of how many households reside in any particular area. It is, after all, households that purchase homes, not necessarily
individuals.
For example, the latest household estimates from the Census Bureau for the Raleigh-Durham-Chapel Hill metropolitan area show a total of 461,335 households, of which 301,698 were family households and 159,637 were non-family households (including 1-person households). Real estate professionals who are interested in “drilling down” to find out more detailed information about the number of households in their counties or metropolitan areas are advised to visit the Census Bureau’s web site or click directly on the Bureau’s “American Fact Finder” at http://factfinder.census.gov/.
By the Numbers:
By NAR Research Staff
The Census Bureau recently released its latest estimates of the U.S. population. This report provides details on the fastest growing areas in the country – both metropolitan area and counties -- as well as raw population numbers for cities and counties. Below is a summary of the Census Bureau’s findings.
Largest Populations
New York claims the top position as the largest metropolitan area in the U.S. As of July 1, 2008, the New York metro had 19.0 million people. Los Angeles was second with 12.9 million and the Chicago
metro ranked third with 9.6 million. All in all, 14 metro areas had populations of 4 million or more.
The largest county was Los Angeles with 9.9 million persons. Cook County (which includes part of the Chicago metropolitan area) boasts 5.3 million. Overall, 12 counties had populations of 2 million or more.
Fasting Growing Areas
The nation’s 363 metropolitan areas account for almost 84 percent of the U.S. population. The majority of them posted a growth in their population between July 1, 2007 and July 1, 2008; only 50 of them actually saw their population decrease.
In percentage terms, the fastest growing metropolitan area in the U.S. was Raleigh-Cary, North Carolina. The metro’s population rose 4.3 percent between July 1, 2007 and July 1, 2008, gaining almost 45,000 people. Austin-Round Rock, Texas was the second fastest-growing metro, adding 60,000 to the area for a 3.8 percent increase.
In terms of actual numbers, the Dallas- Fort Worth metro area gained the most, adding more than 146,000 persons to its population. Three other metro areas also became home to more than 100,000 from 2007 to 2008, including Houston (130,000), Phoenix (116,000) and Atlanta (115,000).
Population growth in the nation’s 3,142 counties was a bit more balanced, with 1,974 counties growing, the population of 1,161 counties shrinking, and seven counties maintaining their 2007 population levels. The fastest-growing county (with more than 10,000 population) was St. Bernard Parish in Louisiana. That area grew 12.8 percent. Ranked second among counties was Pinal County in Arizona, increasing its population by 8.8 percent. Seven of the 10 fastest-growing counties were in the South. In addition, large metro areas — those whose populations in 2008 were a million or more – were located in nine of the 10 fastest-growing counties. They include the Chicago metropolitan area (Kendall County, Illinois, ranked fourth), Atlanta metro (Forsyth County, ranked fifth), and Dallas-Fort Worth (nine-ranked Rockwall County, Texas).
When looking at the actual number of new residents in counties, we get a somewhat different picture. Maricopa County in Arizona added more residents than did any other county – 89,550 persons.
Harris County, Texas was second, having increased its population by 72,153. Los Angeles and San Diego Counties in California were next in terms of absolute population gain. The top 10 counties gaining the most new residents were in Arizona, California, Texas, Nevada and North Carolina.
The Foreign-born Population
Metropolitan areas in the South in general are also among the fastest growing immigrant destinations. Phoenix and Atlanta both have well over a half million immigrants, and Las Vegas and Orlando each have more than one-quarter million foreign born residents. Immigrant populations in well-established gateway metro areas such as New York and Los Angeles are growing more slowly, a function of their large absolute size.
America’s immigrant population can, in some ways, still be viewed as geographically concentrated. More than half of all immigrants live in the top 10 metropolitan destinations: New York, Los Angeles, Miami, Chicago, San Francisco, Houston, Dallas-Fort Worth, Washington, Riverside-San Bernardino,and Phoenix. By contrast, a little over one-quarter of all Americans live in the 10 largest metro areas.
Dallas-Ft. Worth, Washington, D.C.,Atlanta, and Las Vegas have emerged as major destination areas only in the past two decades.
The Relationship Between Population and Households
It’s important to note that raw population numbers can only give us an idea of how many households reside in any particular area. It is, after all, households that purchase homes, not necessarily
individuals.
For example, the latest household estimates from the Census Bureau for the Raleigh-Durham-Chapel Hill metropolitan area show a total of 461,335 households, of which 301,698 were family households and 159,637 were non-family households (including 1-person households). Real estate professionals who are interested in “drilling down” to find out more detailed information about the number of households in their counties or metropolitan areas are advised to visit the Census Bureau’s web site or click directly on the Bureau’s “American Fact Finder” at http://factfinder.census.gov/.
Are Banks Withholding Foreclosed Homes to Prop Sales?
By Leslie Berkman Print Article
RISMEDIA, April 22, 2009-(MCT)-Lenders for months have been holding back a high volume of homes in the foreclosure pipeline that could further depress home values if they are released at once into the market, industry experts say. The artificially created shortage of foreclosed homes for sale comes when there is a strong resurgence of home buying, with consumers finding, often to their surprise, that they must make multiple offers to compete for a diminished supply of bargain homes. Meanwhile, financial institutions have been encouraged by federal and state lawmakers to slow the foreclosure process to provide more time to work with borrowers on mortgage modifications in an effort to reduce foreclosures.
Scott Anderson, vice president and senior economist with Wells Fargo, said also by withholding a portion of foreclosed properties from the market, lenders may deliberately be preventing home prices from falling as fast as they otherwise would.
A tally by one company that closely monitors foreclosures showed only about a third of repossessed houses are being actively marketed. If this “phantom supply” of bank-owned houses is put up for sale at once, Anderson said, it would probably prompt another steep plunge in property values.
“The danger is this could be devastating for the banks’ balance sheets and for anyone else trying to sell a house or refinance their mortgage,” he said.
The banks “would be crazy to flood the market and cause prices to sink. Their own assets would be worth more if they brought the foreclosures in slowly,” said John Husing, a Redlands-based economist.
Husing has predicted Inland Southern California home prices will stop falling in the next couple of months because of shrinking inventory and growing buyer demand.
Sean O’Toole, founder and chief executive of ForeclosureRadar, a California information Web site, said mortgage servicers have told him “They want to be careful about putting out too many properties at one time because they believe supply and demand are affecting prices.”
The median price of an Inland house has dropped 43 percent in San Bernardino County and 39 percent in Riverside County in the past year, but the rate has slowed in recent months.
Statistics confirm that banks are keeping foreclosed houses off the market much longer than usual, said Rick Sharga, senior vice president of RealtyTrac, a company that monitors foreclosure trends nationally.
Sharga said RealtyTrac studied the 234,716 bank-owned California homes in its database as of the end of November and discovered that only 34 percent were advertised through the state’s dozens of multiple listing services, which is how bank-owned properties are normally marketed.
“We were frankly stunned by that,” Sharga said. Usually repossessed houses are processed, fixed up and listed for sale within 30 days, he said.
While the gradual release of foreclosed properties helps to prop up prices, it also could prolong the real estate recession, Anderson said.
Other objectives the banks may have, Sharga said, include deferring accounting losses they would have to show once foreclosed properties are sold at depressed prices. Or they may be waiting to see if the federal government will offer them more money for their defaulted mortgages than they could get by selling foreclosed houses on the open market.
Foreclosure Hiatus
Also, the foreclosure process has been interrupted repeatedly by federal and state moratoriums designed to encourage lenders to modify loans to help financially stressed homeowners keep their homes.
Two large government-controlled lenders, Fannie Mae and Freddie Mac, in November imposed holiday suspensions of foreclosure-related evictions that were repeatedly extended until March 31.
At the request of Congress, JP Morgan, Morgan Stanley, Wells Fargo, and Bank of America also agreed to suspend foreclosures of owner-occupied homes until the Obama Administration crafted a mortgage modification strategy. In California, legislation took effect in September that requires lenders to give borrowers 30 days notice before taking the first step toward foreclosure. And starting this summer, loan servicers in the state must delay for 90 days the foreclosure of owner-occupied homes or have a comprehensive loan modification program.
As the moratoriums expire, the number of foreclosures is expected to spike.
Meanwhile a surge of first-time home buyers and investors, attracted by low prices and mortgage rates and government tax incentives, are competing for a diminishing number of homes for sale.
Buyers are snapping up foreclosed houses, many of which receive multiple offers, faster than they can be replaced by new foreclosures.
“Sales are much higher than last year, but we are running out of houses to sell,” said Kim Kershaw, sales manager of the Corona office of Prudential California Realty and an agent who sells real-estate-owned (reo) property.
Buying Season
According to the Multi-Regional Multiple Listing Service on Tuesday, there were about 21,000 homes for sale in its territory, which includes the San Gabriel Valley, South Bay and Riverside and San Bernardino counties, with the exception of Victor Valley and the Coachella Valley.
The listing service said that is about half of the 40,000 active listings it had a year ago and the lowest number since March 2006, when the listing service did not include South Bay.
Of the 5,600 existing homes that sold in the multiple listing service’s region last month, about 3,000 were either bank-owned or sold for less than their mortgages, underscoring the key role of foreclosures in today’s housing market.
“At the rate they are dishing out these repos (repossessed houses) it will be years before they all sell,” said Kershaw, who claims that the banks are missing out on a great opportunity to clear out their foreclosures. “It is spring and we are in the big buying season. This is probably not the time to choke the market with no inventory. It is like not having iPods at Christmastime,” she said.
Copyright © 2009, The Press-Enterprise, Riverside, Calif.
Distributed by McClatchy-Tribune Information Services.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
RISMEDIA, April 22, 2009-(MCT)-Lenders for months have been holding back a high volume of homes in the foreclosure pipeline that could further depress home values if they are released at once into the market, industry experts say. The artificially created shortage of foreclosed homes for sale comes when there is a strong resurgence of home buying, with consumers finding, often to their surprise, that they must make multiple offers to compete for a diminished supply of bargain homes. Meanwhile, financial institutions have been encouraged by federal and state lawmakers to slow the foreclosure process to provide more time to work with borrowers on mortgage modifications in an effort to reduce foreclosures.
Scott Anderson, vice president and senior economist with Wells Fargo, said also by withholding a portion of foreclosed properties from the market, lenders may deliberately be preventing home prices from falling as fast as they otherwise would.
A tally by one company that closely monitors foreclosures showed only about a third of repossessed houses are being actively marketed. If this “phantom supply” of bank-owned houses is put up for sale at once, Anderson said, it would probably prompt another steep plunge in property values.
“The danger is this could be devastating for the banks’ balance sheets and for anyone else trying to sell a house or refinance their mortgage,” he said.
The banks “would be crazy to flood the market and cause prices to sink. Their own assets would be worth more if they brought the foreclosures in slowly,” said John Husing, a Redlands-based economist.
Husing has predicted Inland Southern California home prices will stop falling in the next couple of months because of shrinking inventory and growing buyer demand.
Sean O’Toole, founder and chief executive of ForeclosureRadar, a California information Web site, said mortgage servicers have told him “They want to be careful about putting out too many properties at one time because they believe supply and demand are affecting prices.”
The median price of an Inland house has dropped 43 percent in San Bernardino County and 39 percent in Riverside County in the past year, but the rate has slowed in recent months.
Statistics confirm that banks are keeping foreclosed houses off the market much longer than usual, said Rick Sharga, senior vice president of RealtyTrac, a company that monitors foreclosure trends nationally.
Sharga said RealtyTrac studied the 234,716 bank-owned California homes in its database as of the end of November and discovered that only 34 percent were advertised through the state’s dozens of multiple listing services, which is how bank-owned properties are normally marketed.
“We were frankly stunned by that,” Sharga said. Usually repossessed houses are processed, fixed up and listed for sale within 30 days, he said.
While the gradual release of foreclosed properties helps to prop up prices, it also could prolong the real estate recession, Anderson said.
Other objectives the banks may have, Sharga said, include deferring accounting losses they would have to show once foreclosed properties are sold at depressed prices. Or they may be waiting to see if the federal government will offer them more money for their defaulted mortgages than they could get by selling foreclosed houses on the open market.
Foreclosure Hiatus
Also, the foreclosure process has been interrupted repeatedly by federal and state moratoriums designed to encourage lenders to modify loans to help financially stressed homeowners keep their homes.
Two large government-controlled lenders, Fannie Mae and Freddie Mac, in November imposed holiday suspensions of foreclosure-related evictions that were repeatedly extended until March 31.
At the request of Congress, JP Morgan, Morgan Stanley, Wells Fargo, and Bank of America also agreed to suspend foreclosures of owner-occupied homes until the Obama Administration crafted a mortgage modification strategy. In California, legislation took effect in September that requires lenders to give borrowers 30 days notice before taking the first step toward foreclosure. And starting this summer, loan servicers in the state must delay for 90 days the foreclosure of owner-occupied homes or have a comprehensive loan modification program.
As the moratoriums expire, the number of foreclosures is expected to spike.
Meanwhile a surge of first-time home buyers and investors, attracted by low prices and mortgage rates and government tax incentives, are competing for a diminishing number of homes for sale.
Buyers are snapping up foreclosed houses, many of which receive multiple offers, faster than they can be replaced by new foreclosures.
“Sales are much higher than last year, but we are running out of houses to sell,” said Kim Kershaw, sales manager of the Corona office of Prudential California Realty and an agent who sells real-estate-owned (reo) property.
Buying Season
According to the Multi-Regional Multiple Listing Service on Tuesday, there were about 21,000 homes for sale in its territory, which includes the San Gabriel Valley, South Bay and Riverside and San Bernardino counties, with the exception of Victor Valley and the Coachella Valley.
The listing service said that is about half of the 40,000 active listings it had a year ago and the lowest number since March 2006, when the listing service did not include South Bay.
Of the 5,600 existing homes that sold in the multiple listing service’s region last month, about 3,000 were either bank-owned or sold for less than their mortgages, underscoring the key role of foreclosures in today’s housing market.
“At the rate they are dishing out these repos (repossessed houses) it will be years before they all sell,” said Kershaw, who claims that the banks are missing out on a great opportunity to clear out their foreclosures. “It is spring and we are in the big buying season. This is probably not the time to choke the market with no inventory. It is like not having iPods at Christmastime,” she said.
Copyright © 2009, The Press-Enterprise, Riverside, Calif.
Distributed by McClatchy-Tribune Information Services.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Sunday, April 19, 2009
Federal Housing Rescue Plan Launches
The Obama Administration’s program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.
Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.
The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.
Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.
Source: CNN, Tami Luhby (04/16/2009)
Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.
The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.
Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.
Source: CNN, Tami Luhby (04/16/2009)
Saturday, April 18, 2009
Homebuyers Give Government Stimulus Plans Lukewarm Reception
RISMEDIA, April 18, 2009-The Obama administration’s $8,000 tax credit for first-time homebuyers is motivating them to make a purchase this year, according to recent survey results from ZipRealty.com. The survey of active ZipRealty website users reveals that 62% of prospective first-time homebuyers are now more likely to buy in 2009. However, government plans provide little incentive for other buyers or for sellers, and confidence in the housing market overall remained largely unchanged since before the election, according to survey results.
“This survey indicates that the originally proposed $15,000 tax credit may have had greater impact on the economy overall,” said ZipRealty Chief Home Hunter Leslie Tyler. “A significant number of newly registered ZipRealty.com users felt uninformed about any of the Obama administration’s housing proposals, providing a great opportunity for agents nationwide to educate new buyers about the programs and resources at their disposal. Getting these first-time buyers into the market is crucial to economic recovery.”
Further survey results include:
-While 62% of first-time buyers were motivated by the $8,000 tax credit, 10% of first-time buyer respondents said they didn’t know enough about the program for it to influence them.
-Of the first-time buyers not motivated by the $8,000 tax credit, 29% said they believe the credit is not enough money to make a difference; 28% didn’t think they would qualify because of income or other restrictions; and 24% think home prices will decline more. The remainder cited mortgage and employment concerns.
-More than half of survey respondents (51% of potential buyers and 59% of potential sellers) indicated that the government’s housing stimulus plans have no effect on their home buying or selling plans this year. Forty-one percent of buyers and 31% of sellers said the government’s actions made them more likely to buy or sell this year.
Economic Impact-Twenty percent of all respondents said they did not know enough about the administration’s plans to form an opinion on the overall economic impact, while another 20% said the plans would not have much economic impact.
-Most respondents said they believed that struggling homeowners would benefit the most from the administration’s plan at 39%, versus just 15% of respondents who said buyers would benefit the most.
Market Confidence-More than half (55%) of buyers and 42% of sellers indicated their confidence in the housing market has not changed since before the election.
-Confidence has tipped more positively for sellers than buyers, with 28% of sellers now more confident about prices increasing, compared to before the election.
“This survey indicates that the originally proposed $15,000 tax credit may have had greater impact on the economy overall,” said ZipRealty Chief Home Hunter Leslie Tyler. “A significant number of newly registered ZipRealty.com users felt uninformed about any of the Obama administration’s housing proposals, providing a great opportunity for agents nationwide to educate new buyers about the programs and resources at their disposal. Getting these first-time buyers into the market is crucial to economic recovery.”
Further survey results include:
-While 62% of first-time buyers were motivated by the $8,000 tax credit, 10% of first-time buyer respondents said they didn’t know enough about the program for it to influence them.
-Of the first-time buyers not motivated by the $8,000 tax credit, 29% said they believe the credit is not enough money to make a difference; 28% didn’t think they would qualify because of income or other restrictions; and 24% think home prices will decline more. The remainder cited mortgage and employment concerns.
-More than half of survey respondents (51% of potential buyers and 59% of potential sellers) indicated that the government’s housing stimulus plans have no effect on their home buying or selling plans this year. Forty-one percent of buyers and 31% of sellers said the government’s actions made them more likely to buy or sell this year.
Economic Impact-Twenty percent of all respondents said they did not know enough about the administration’s plans to form an opinion on the overall economic impact, while another 20% said the plans would not have much economic impact.
-Most respondents said they believed that struggling homeowners would benefit the most from the administration’s plan at 39%, versus just 15% of respondents who said buyers would benefit the most.
Market Confidence-More than half (55%) of buyers and 42% of sellers indicated their confidence in the housing market has not changed since before the election.
-Confidence has tipped more positively for sellers than buyers, with 28% of sellers now more confident about prices increasing, compared to before the election.
Friday, April 17, 2009
Mortgage Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
Wednesday, April 15, 2009
5 Ways to Cut Costs and Save Time Online
RISMEDIA, April 15, 2009-The Internet is full of great information, but it’s also a useful cost-savings resource. During uncertain economic times, it’s more important than ever for consumers to understand all the ways they can make the most of the Internet.
Here are five lesser-known ways consumers can use the Internet to save both time and money:
1. Automate your comparison shopping
Many websites, such as my.earthlink.net, offer comparison shopping engines. Simply type in what you’re shopping for and a list of price ranges and product selections appear on screen. Using a comparison-shopping tool avoids wasting time visiting different sites to find the best price. Sites such as Expedia, Sidestep and Hotwire are great places to comparison shop for airfare and other travel deals.
2. Watch the market
If you’re in the market for a big-ticket item but you’re not in a big hurry, use online monitoring and research to “wait out” the best deal. Internet service providers like EarthLink offer an eBay widget for monitoring bids and items for sale. This way, you’ll know a good deal when you see one.
3. Look for additional features and services when picking an Internet service provider
Most Internet service providers offer their customers special offers and incentives. Browse through your Internet service provider’s product and services menu and take advantage of free Web space, anti-virus software and multiple levels of spam filtering. All of these applications help save money and provide a better Internet experience.
4. Use your time wisely
Make your Web time more productive by taking a few minutes to customize your local news, weather, sports scores, movie show times and TV listings. Also, bookmark your favorite websites, to go to them immediately without remembering specific Internet addresses or stopping to do an online search. For another time saver, use features such as e-mail preview which alert you to new messages without having to constantly check for them.
5. Sign up for offers using anonymous email address
Many providers like EarthLink offer “anonymous e-mail,” which provides several pre-selected e-mail addresses to organize and manage your e-mail. For example, you can use one email address just for online shopping and log offers/coupons in a separate mail folder, keeping regular email communications with friends and family separate.
There are many ways consumers can optimize their Internet experience and use a variety of special tools and options to compare prices, watch for deals and generally save money. In these economic times, it makes sense to use every tool at your disposal to stretch your family’s dollar.
For more information, visit http://www.earthlink.net.
Here are five lesser-known ways consumers can use the Internet to save both time and money:
1. Automate your comparison shopping
Many websites, such as my.earthlink.net, offer comparison shopping engines. Simply type in what you’re shopping for and a list of price ranges and product selections appear on screen. Using a comparison-shopping tool avoids wasting time visiting different sites to find the best price. Sites such as Expedia, Sidestep and Hotwire are great places to comparison shop for airfare and other travel deals.
2. Watch the market
If you’re in the market for a big-ticket item but you’re not in a big hurry, use online monitoring and research to “wait out” the best deal. Internet service providers like EarthLink offer an eBay widget for monitoring bids and items for sale. This way, you’ll know a good deal when you see one.
3. Look for additional features and services when picking an Internet service provider
Most Internet service providers offer their customers special offers and incentives. Browse through your Internet service provider’s product and services menu and take advantage of free Web space, anti-virus software and multiple levels of spam filtering. All of these applications help save money and provide a better Internet experience.
4. Use your time wisely
Make your Web time more productive by taking a few minutes to customize your local news, weather, sports scores, movie show times and TV listings. Also, bookmark your favorite websites, to go to them immediately without remembering specific Internet addresses or stopping to do an online search. For another time saver, use features such as e-mail preview which alert you to new messages without having to constantly check for them.
5. Sign up for offers using anonymous email address
Many providers like EarthLink offer “anonymous e-mail,” which provides several pre-selected e-mail addresses to organize and manage your e-mail. For example, you can use one email address just for online shopping and log offers/coupons in a separate mail folder, keeping regular email communications with friends and family separate.
There are many ways consumers can optimize their Internet experience and use a variety of special tools and options to compare prices, watch for deals and generally save money. In these economic times, it makes sense to use every tool at your disposal to stretch your family’s dollar.
For more information, visit http://www.earthlink.net.
Time to Get Your Mower in Gear
By Rick Rosen Print Article
RISMEDIA, April 13, 2009-(MCT)-With the arrival of Spring and April showers, homeowners find themselves with a list of new chores that need to be accomplished now that the weather is nice. Along with the showers comes the task of mowing the lawn while the grass seems to grow faster than you can tend to. Taking the time to maintain your lawn mower is one quick and easy way to help maintain the health of your grass.
A sharp mower blade, part of routine maintenance, is essential to maintaining a healthy lawn, say the turf experts at Texas A&M University. Dull blades leave a ragged top, which turns brown and makes the lawn look tired. More important, “ragged tops are prime points of entry for many fungal pathogens and small turf insects,” A&M says.
Shops that sell mowers also service them. If you’re not handy, getting them to do it could be a big relief.
With the proper tools and the time, you can do routine maintenance yourself. Here are some tips from DIY Network, Texas A&M and About.com:
1. Drain the gas tank, and run the engine until it stops.
2. Disconnect the sparkplug wire so there is no chance of the mower starting.
3. Remove the oil drain plug, and drain the oil into a drip pan.
4. Replace the plug securely.
5. With the mower on its side and using a putty knife, scrape matted grass from the underside of the mower’s deck, which is the housing for the blade. Use a hose sprayer to blast off remaining grass and dirt. If that doesn’t get it all, use a brush and soap and water.
6. Hold the mower blade with a rag or towel and, using a socket wrench, unscrew the mounting knob of the blade.
7. Sharpen the blade or have a lawn mower shop do it.
8. Turn the mower upright.
9. Clean or replace the air filter.
10. Find the spark plug, which will probably need to be removed with the barrel of your socket wrench.
11. With a wire brush, clean off carbon deposits. Or, replace with a new plug.
12. Screw in and tighten the sparkplug.
13. Fill the oil compartment with 30-weight oil (unless your owner’s manual recommends another kind).
14. Reconnect the sparkplug wire.
15. Lubricate all moving parts, including wheels. Tighten engine mounting bolts and any other nuts or screws.
16. Fill the mower with gas and you are ready to go.
Other words of advice:
-When you turn the mower on its side, turn it so that the air-filter side of the machine is up. Otherwise, oil drains out of the filter and the mower won’t start.
-If your machine’s engine runs roughly, you may need an expert to adjust it.
-Dispose of the used oil and filter properly.
Sharpening a mower blade:
-A grinding wheel is handy, but you can also use a file, and be sure to wear safety glasses.
-Use smooth, quick swipes across the grinding wheel or with the file. Try to keep the original angle of the blade.
-Dip the blade in cold water every few swipes so the steel doesn’t get too soft.
-After grinding, test for balance. Place the center hole of the blade on your fingertip or on a screwdriver. If it balances, great; if not, the heavier side needs more work. If you’re satisfied with the sharpness, leave the angle alone. It’s best to grind a little steel off the back or a corner of the blade to balance it.
-Carefully file off any burrs left by the grinder.
-Oil the bolt hole on the blade and reattach.
© 2009, The Dallas Morning News.
Distributed by McClatchy-Tribune Information Services.
RISMEDIA, April 13, 2009-(MCT)-With the arrival of Spring and April showers, homeowners find themselves with a list of new chores that need to be accomplished now that the weather is nice. Along with the showers comes the task of mowing the lawn while the grass seems to grow faster than you can tend to. Taking the time to maintain your lawn mower is one quick and easy way to help maintain the health of your grass.
A sharp mower blade, part of routine maintenance, is essential to maintaining a healthy lawn, say the turf experts at Texas A&M University. Dull blades leave a ragged top, which turns brown and makes the lawn look tired. More important, “ragged tops are prime points of entry for many fungal pathogens and small turf insects,” A&M says.
Shops that sell mowers also service them. If you’re not handy, getting them to do it could be a big relief.
With the proper tools and the time, you can do routine maintenance yourself. Here are some tips from DIY Network, Texas A&M and About.com:
1. Drain the gas tank, and run the engine until it stops.
2. Disconnect the sparkplug wire so there is no chance of the mower starting.
3. Remove the oil drain plug, and drain the oil into a drip pan.
4. Replace the plug securely.
5. With the mower on its side and using a putty knife, scrape matted grass from the underside of the mower’s deck, which is the housing for the blade. Use a hose sprayer to blast off remaining grass and dirt. If that doesn’t get it all, use a brush and soap and water.
6. Hold the mower blade with a rag or towel and, using a socket wrench, unscrew the mounting knob of the blade.
7. Sharpen the blade or have a lawn mower shop do it.
8. Turn the mower upright.
9. Clean or replace the air filter.
10. Find the spark plug, which will probably need to be removed with the barrel of your socket wrench.
11. With a wire brush, clean off carbon deposits. Or, replace with a new plug.
12. Screw in and tighten the sparkplug.
13. Fill the oil compartment with 30-weight oil (unless your owner’s manual recommends another kind).
14. Reconnect the sparkplug wire.
15. Lubricate all moving parts, including wheels. Tighten engine mounting bolts and any other nuts or screws.
16. Fill the mower with gas and you are ready to go.
Other words of advice:
-When you turn the mower on its side, turn it so that the air-filter side of the machine is up. Otherwise, oil drains out of the filter and the mower won’t start.
-If your machine’s engine runs roughly, you may need an expert to adjust it.
-Dispose of the used oil and filter properly.
Sharpening a mower blade:
-A grinding wheel is handy, but you can also use a file, and be sure to wear safety glasses.
-Use smooth, quick swipes across the grinding wheel or with the file. Try to keep the original angle of the blade.
-Dip the blade in cold water every few swipes so the steel doesn’t get too soft.
-After grinding, test for balance. Place the center hole of the blade on your fingertip or on a screwdriver. If it balances, great; if not, the heavier side needs more work. If you’re satisfied with the sharpness, leave the angle alone. It’s best to grind a little steel off the back or a corner of the blade to balance it.
-Carefully file off any burrs left by the grinder.
-Oil the bolt hole on the blade and reattach.
© 2009, The Dallas Morning News.
Distributed by McClatchy-Tribune Information Services.
Tuesday, April 14, 2009
Bargains Abound in These Hot Markets
RISMEDIA, April 14, 2009-Attention, potential homebuyers: home prices have fallen more than six percent over the past year, according to the Federal Housing Finance Agency, which tracks 292 U.S. metropolitan areas. If you are a homebuyer looking for a bargain, check out FrontDoor’s top 10 bargain market picks.
Stockton, CA - Inland California cities seem to be most affected by the housing market crumble. Stockton home prices, for instance, have plummeted a whopping 40%. But the good news is that the city’s proximity to San Francisco and Sacramento give it an advantage and will help it rebound in the future.
Naples, FL - Known for its artsy side and the natural wonder of the nearby Everglades, Naples was a vacation destination overrun with real estate investors during boom time. Prices plummeted nearly 33% over the past year, offering new buying opportunities for people looking to move to the beach.
Las Vegas, NV - Eager developers and investors flocked to Sin City looking to cash in big on the real estate boom. The risk didn’t necessarily pay off, as prices have plunged more than 32% since last year. The city is consistently ranked as a top foreclosure market, making it a prime bargain area.
Ft. Lauderdale, FL - In spite of its reputation as a spring break party spot, Ft. Lauderdale has redefined itself as a pedestrian-friendly community offering a mix of laid-back neighborhoods with trendy shopping and nightlife. Prices have fallen 26% since last year, giving way to newcomers seeking a lively lifestyle.
Miami, FL - The heat is on in Miami where home values have decreased 24% over the past year. New home buyers in this Florida burg won’t have to shell out as much cash to enjoy tropical weather, beautiful beaches and legendary nightlife year-round.
Napa, CA - Not unlike other vacation destinations, Napa saw a surge in speculative buying that inflated real estate prices. Now buyers can find homes - even multi-million-dollar properties - in beautiful wine country selling for 20% less than last year.
Phoenix, AZ - The Valley of the Sun is teeming with potential bargains, with home prices down 19% year-over-year. Stretched-thin investors in the Phoenix market may be willing to negotiate good deals. Homebuyers who can appreciate this rugged Southwest region can choose from many diverse neighborhoods.
San Diego, CA - Year-round sun, sand and surf make this Southern California destination a real gem. But with home prices down 18% over the past year, great deals are just waiting to be scooped up in this once super-hot market.
Detroit, MI - Recent job-loss-fueled foreclosures have driven home prices down 16% in this Midwestern metropolis. But Detroit is committed to restoration and revitalization and offers a nice mix of historic districts and new developments.
Washington, D.C. - The District of Columbia metro area - which includes nearby commuter cities in Virginia, Maryland and West Virginia - should be on the hot list for bargain-seeking homebuyers. The area has a low unemployment rate and boasts unique cultural opportunities. With home prices down 12%, this may be the time to buy in the nation’s capital.
For more information, visit http://www.frontdoor.com.
Stockton, CA - Inland California cities seem to be most affected by the housing market crumble. Stockton home prices, for instance, have plummeted a whopping 40%. But the good news is that the city’s proximity to San Francisco and Sacramento give it an advantage and will help it rebound in the future.
Naples, FL - Known for its artsy side and the natural wonder of the nearby Everglades, Naples was a vacation destination overrun with real estate investors during boom time. Prices plummeted nearly 33% over the past year, offering new buying opportunities for people looking to move to the beach.
Las Vegas, NV - Eager developers and investors flocked to Sin City looking to cash in big on the real estate boom. The risk didn’t necessarily pay off, as prices have plunged more than 32% since last year. The city is consistently ranked as a top foreclosure market, making it a prime bargain area.
Ft. Lauderdale, FL - In spite of its reputation as a spring break party spot, Ft. Lauderdale has redefined itself as a pedestrian-friendly community offering a mix of laid-back neighborhoods with trendy shopping and nightlife. Prices have fallen 26% since last year, giving way to newcomers seeking a lively lifestyle.
Miami, FL - The heat is on in Miami where home values have decreased 24% over the past year. New home buyers in this Florida burg won’t have to shell out as much cash to enjoy tropical weather, beautiful beaches and legendary nightlife year-round.
Napa, CA - Not unlike other vacation destinations, Napa saw a surge in speculative buying that inflated real estate prices. Now buyers can find homes - even multi-million-dollar properties - in beautiful wine country selling for 20% less than last year.
Phoenix, AZ - The Valley of the Sun is teeming with potential bargains, with home prices down 19% year-over-year. Stretched-thin investors in the Phoenix market may be willing to negotiate good deals. Homebuyers who can appreciate this rugged Southwest region can choose from many diverse neighborhoods.
San Diego, CA - Year-round sun, sand and surf make this Southern California destination a real gem. But with home prices down 18% over the past year, great deals are just waiting to be scooped up in this once super-hot market.
Detroit, MI - Recent job-loss-fueled foreclosures have driven home prices down 16% in this Midwestern metropolis. But Detroit is committed to restoration and revitalization and offers a nice mix of historic districts and new developments.
Washington, D.C. - The District of Columbia metro area - which includes nearby commuter cities in Virginia, Maryland and West Virginia - should be on the hot list for bargain-seeking homebuyers. The area has a low unemployment rate and boasts unique cultural opportunities. With home prices down 12%, this may be the time to buy in the nation’s capital.
For more information, visit http://www.frontdoor.com.
Monday, April 13, 2009
With Affordability Up, Home Buyers Return to the Market
RISMEDIA, April 11, 2009-Thanks to record low mortgage rates and declining home prices, 55 million families - or half of all U.S. households - can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB). “That’s an increase of 17 million households from conditions just two years ago and the best housing affordability number we have seen in years,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We are now seeing the first signs that buyers are returning to the marketplace.”
Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.
“With affordability up dramatically, reports from our builders in the field indicate that foot traffic in new homes is on the rise and consumer interest is increasing with each passing day. These are encouraging signs that the housing market may be finally reaching a bottom,” said Robson.
Entering the crucial spring home buying season, there are other signs that buyers are starting to return to the market.
Single-family permits were up 11% in February 2009, new and existing home sales also posted gains and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month among prospective first-time home buyers who indicated they were likely to purchase a home in the next two years, a majority - 78% - said that now is a good time to buy a home. Of those responding to the online poll, 68% said that now is a better time to buy than six months ago.
Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 first-time home buyer tax credit included in the recently enacted economic stimulus package. During February and March 2009, 1.5 million visitors logged on to NAHB’s consumer website, www.federalhousingtaxcredit.com, to learn more about the tax credit. Further, a new survey commissioned by Move, Inc. found that nearly 20% of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.
“With home values in many markets at the lowest level since 2003, an $8,000 tax credit available to first-time home buyers, fixed-rate mortgages under 5%, and an outstanding selection of homes to choose from, buyers are starting to recognize that this has the makings for a one-time opportunity to break into the market,” said Robson.
Housing is a critical component of the U.S. economy, accounting for about 15 cents of every dollar spent in this country, so any upturn in the housing market should be viewed as good news for the overall economy, said Robson.
Construction of an additional 500,000 single-family homes - the difference between today’s anemic construction rate and one that would move closer to meeting the underlying demand for housing - would generate 734,000 jobs and $35 billion in wages in the construction industry and another 790,000 jobs and $37.7 billion wages in manufacturing, trade, and service sector jobs, he noted.
Additionally, another half-million housing starts would bolster the tax base for government, generating $45 billion in federal, state and local tax revenues. And the benefits go well beyond the completion of each home. Within the first year after buying a home, those half million households will spend about $2.5 billion more on appliances, furnishings and property alterations.
“Clearly, housing will be central to any economic recovery we experience in the months ahead,” said Robson.
Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.
“With affordability up dramatically, reports from our builders in the field indicate that foot traffic in new homes is on the rise and consumer interest is increasing with each passing day. These are encouraging signs that the housing market may be finally reaching a bottom,” said Robson.
Entering the crucial spring home buying season, there are other signs that buyers are starting to return to the market.
Single-family permits were up 11% in February 2009, new and existing home sales also posted gains and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month among prospective first-time home buyers who indicated they were likely to purchase a home in the next two years, a majority - 78% - said that now is a good time to buy a home. Of those responding to the online poll, 68% said that now is a better time to buy than six months ago.
Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 first-time home buyer tax credit included in the recently enacted economic stimulus package. During February and March 2009, 1.5 million visitors logged on to NAHB’s consumer website, www.federalhousingtaxcredit.com, to learn more about the tax credit. Further, a new survey commissioned by Move, Inc. found that nearly 20% of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.
“With home values in many markets at the lowest level since 2003, an $8,000 tax credit available to first-time home buyers, fixed-rate mortgages under 5%, and an outstanding selection of homes to choose from, buyers are starting to recognize that this has the makings for a one-time opportunity to break into the market,” said Robson.
Housing is a critical component of the U.S. economy, accounting for about 15 cents of every dollar spent in this country, so any upturn in the housing market should be viewed as good news for the overall economy, said Robson.
Construction of an additional 500,000 single-family homes - the difference between today’s anemic construction rate and one that would move closer to meeting the underlying demand for housing - would generate 734,000 jobs and $35 billion in wages in the construction industry and another 790,000 jobs and $37.7 billion wages in manufacturing, trade, and service sector jobs, he noted.
Additionally, another half-million housing starts would bolster the tax base for government, generating $45 billion in federal, state and local tax revenues. And the benefits go well beyond the completion of each home. Within the first year after buying a home, those half million households will spend about $2.5 billion more on appliances, furnishings and property alterations.
“Clearly, housing will be central to any economic recovery we experience in the months ahead,” said Robson.
Friday, April 10, 2009
6 Landscaping Tricks That Wow Buyers
In today's market, sellers have to work harder to persuade buyers that their property is worth the bite.
By Barbara Ballinger | April 2009
Landscape designer Michael Glassman has cooked up a recipe for guaranteed curb appeal.
1. Add splashes of color. With every changing season, a landscape should provide a new display of colors, textures, and fragrances. "It’s best to use one or two and repeat them," Glassman says. Example: white iceberg roses that bloom in spring, summer, and fall as a backdrop; in front, a contrasting punch of purple salvia or lavender that will flower at the same time; and as an accent, a crape myrtle tree that provides changing leaf colors in fall and interesting branches come winter.
2. Size trees and shrubs to scale. These should be planted in the right scale for the house so that they don’t block windows, doors, and other architectural features on the home’s facade. A large two-story house can handle a redwood, Chinese pistache, sycamore, or scarlet oak, but a one-story cottage is better paired with a flowering cherry, crabapple, or eastern redbud. Too many trees cast too much shadow and cause potential buyers to worry about maintenance and costs.
3. Maintain a perfect lawn. A velvety green lawn demonstrates tender loving care, so be sure sellers’ homes don’t have brown spots. Some rocks, pebbles, boulders, drought-tolerant plants, and ornamental grasses will generate more kudos, especially in drought areas.
4. Light up the outside. Good illumination allows buyers to see a home at night and adds drama. Sellers should use low-voltage lamps to highlight branches of specimen trees, a front door, walk, and corners of the house. But less is better. The yard shouldn’t resemble an airport runway.
5. Let them hear the water. The sound of water appeals to buyers, and you shouldn’t just reserve this for your backyard. A small fountain accented with rocks provides a pleasant gurgling sound, blocks street noise, and is affordable.
6. Use decorative architectural elements. A new mailbox, planted window boxes, and a low fence wrapped in potato vines add cachet, particularly during winter months when fewer plants blossom. Colors should complement the landscape and home. Just don’t overdo it: Too much can seem like kitschy lawn ornaments.
Source: Michael Glassman, landscape designer, Michael Glassman and Associates, Sacramento, Calif., www.michaelglassman.com
By Barbara Ballinger | April 2009
Landscape designer Michael Glassman has cooked up a recipe for guaranteed curb appeal.
1. Add splashes of color. With every changing season, a landscape should provide a new display of colors, textures, and fragrances. "It’s best to use one or two and repeat them," Glassman says. Example: white iceberg roses that bloom in spring, summer, and fall as a backdrop; in front, a contrasting punch of purple salvia or lavender that will flower at the same time; and as an accent, a crape myrtle tree that provides changing leaf colors in fall and interesting branches come winter.
2. Size trees and shrubs to scale. These should be planted in the right scale for the house so that they don’t block windows, doors, and other architectural features on the home’s facade. A large two-story house can handle a redwood, Chinese pistache, sycamore, or scarlet oak, but a one-story cottage is better paired with a flowering cherry, crabapple, or eastern redbud. Too many trees cast too much shadow and cause potential buyers to worry about maintenance and costs.
3. Maintain a perfect lawn. A velvety green lawn demonstrates tender loving care, so be sure sellers’ homes don’t have brown spots. Some rocks, pebbles, boulders, drought-tolerant plants, and ornamental grasses will generate more kudos, especially in drought areas.
4. Light up the outside. Good illumination allows buyers to see a home at night and adds drama. Sellers should use low-voltage lamps to highlight branches of specimen trees, a front door, walk, and corners of the house. But less is better. The yard shouldn’t resemble an airport runway.
5. Let them hear the water. The sound of water appeals to buyers, and you shouldn’t just reserve this for your backyard. A small fountain accented with rocks provides a pleasant gurgling sound, blocks street noise, and is affordable.
6. Use decorative architectural elements. A new mailbox, planted window boxes, and a low fence wrapped in potato vines add cachet, particularly during winter months when fewer plants blossom. Colors should complement the landscape and home. Just don’t overdo it: Too much can seem like kitschy lawn ornaments.
Source: Michael Glassman, landscape designer, Michael Glassman and Associates, Sacramento, Calif., www.michaelglassman.com
Tuesday, April 7, 2009
Best Tips to Get Your House in Tip Top Shape
RISMEDIA, April 7, 2009-As the all-important spring selling season approaches in an historically slow housing market, sellers need to do all they can to market their home - and that includes staging it to attract and “wow” potential buyers. Home stagers know just the right moves to take a house from bland to grand and bring home the biggest return on investment. “Attention to detail throughout the home can make the difference between a house that sells and one that sits on the market,” explains Kate Hart, one of America’s top home stagers and owner of Hart & Associates Staging & Design.
“In particular, improvements to the kitchen and bath - the two rooms that sell a home - will always help bring in the buyers.”
Kate Hart shares some easy, effective home improvements and tricks of the trade that can make a big change without breaking the bank, and all the difference in selling and enjoying a home.
Curb appeal: First impressions are everything, and this has never been truer than in today’s market. To leave a positive impression on buyers, take care of any exterior maintenance issues before buyers arrive, such as power washing walkways and patios, cleaning your gutters, touching up peeling paint, replacing broken light bulbs, edging and mulching beds, and adding fresh annuals. Some free things you can do include polishing your front door hardware and sweeping away pesky cobwebs.
Kitchen: Give your kitchen a mini facelift on a budget by repainting your cabinets instead of replacing them. For a more contemporary look, consider a semi-gloss espresso brown. For a more traditional look, opt for a semi-gloss creamy white. Complete the makeover by adding new hardware. Considering professional help? Ask your local painter if they can spray a lacquer finish on your cabinets. This treatment is more expensive than painting the cabinets yourself but the result looks like a factory finish.
Bathroom: Give an outdated bath a pick-me-up by replacing your existing lighting, faucets and hardware with updated styles.
Bedrooms: Take your bedroom from lived-in to luxurious by creating a headboard that gives your room a more complete look. Measure the width of your bed and determine the height you prefer. Purchase a ¼ inch piece of plywood fitting these dimensions (ask the store to cut if for you) and cover it with 2 inch foam that fits the dimensions you selected. Wrap the foam and plywood with batting that can be purchased from a craft store. Finally staple gun a fabric of your choice around the headboard you’ve created. You can then hang the headboard behind the bed on the wall as if you were hanging a piece of art using “D” rings and hooks or attach it to your bed frame using bolts and washers.
Family room: Make your fireplace or great view the selling feature, not your entertainment center. Chances are your family room is currently centered around the things you do everyday, such as watch TV. Before showing, rearrange your room to showcase the architectural focal point of your family room.
Dining room: Keep the dining room de-cluttered and streamlined so buyers can imagine how they can enjoy this space with their families. Before showing, make sure to remove any knick-knacks and extraneous items from your china cabinet or sideboard. A rule to follow: pack up any items that are smaller than a softball such as salt and pepper shakers, wedding cake toppers, and small figurines.
Living room: Make sure you are selling your space, not your stuff. Before showing, remove any family photos from the mantle, end tables and bookcases. Give this space a less cluttered look by keeping no more than three items per surface. For example, go with a piece of art and a pair of candle sticks on the mantle instead of your favorite collection.
“It’s important to complete all your improvements before your home goes on the market because as the saying goes…you never have a second chance to make a first impression,” continues Hart. “And once the sign goes up, you need to keep up the clean, de-cluttered look because you never know when you’ll have a showing. It just takes one buyer to sell your home.”
Kate Hart is a pioneer in the staging field, having helped hundreds of families and realtors prepare homes for sale through her Philadelphia-area company, Hart & Associates Staging & Design.
For more information, visit http://www.hartstaging.com/.
“In particular, improvements to the kitchen and bath - the two rooms that sell a home - will always help bring in the buyers.”
Kate Hart shares some easy, effective home improvements and tricks of the trade that can make a big change without breaking the bank, and all the difference in selling and enjoying a home.
Curb appeal: First impressions are everything, and this has never been truer than in today’s market. To leave a positive impression on buyers, take care of any exterior maintenance issues before buyers arrive, such as power washing walkways and patios, cleaning your gutters, touching up peeling paint, replacing broken light bulbs, edging and mulching beds, and adding fresh annuals. Some free things you can do include polishing your front door hardware and sweeping away pesky cobwebs.
Kitchen: Give your kitchen a mini facelift on a budget by repainting your cabinets instead of replacing them. For a more contemporary look, consider a semi-gloss espresso brown. For a more traditional look, opt for a semi-gloss creamy white. Complete the makeover by adding new hardware. Considering professional help? Ask your local painter if they can spray a lacquer finish on your cabinets. This treatment is more expensive than painting the cabinets yourself but the result looks like a factory finish.
Bathroom: Give an outdated bath a pick-me-up by replacing your existing lighting, faucets and hardware with updated styles.
Bedrooms: Take your bedroom from lived-in to luxurious by creating a headboard that gives your room a more complete look. Measure the width of your bed and determine the height you prefer. Purchase a ¼ inch piece of plywood fitting these dimensions (ask the store to cut if for you) and cover it with 2 inch foam that fits the dimensions you selected. Wrap the foam and plywood with batting that can be purchased from a craft store. Finally staple gun a fabric of your choice around the headboard you’ve created. You can then hang the headboard behind the bed on the wall as if you were hanging a piece of art using “D” rings and hooks or attach it to your bed frame using bolts and washers.
Family room: Make your fireplace or great view the selling feature, not your entertainment center. Chances are your family room is currently centered around the things you do everyday, such as watch TV. Before showing, rearrange your room to showcase the architectural focal point of your family room.
Dining room: Keep the dining room de-cluttered and streamlined so buyers can imagine how they can enjoy this space with their families. Before showing, make sure to remove any knick-knacks and extraneous items from your china cabinet or sideboard. A rule to follow: pack up any items that are smaller than a softball such as salt and pepper shakers, wedding cake toppers, and small figurines.
Living room: Make sure you are selling your space, not your stuff. Before showing, remove any family photos from the mantle, end tables and bookcases. Give this space a less cluttered look by keeping no more than three items per surface. For example, go with a piece of art and a pair of candle sticks on the mantle instead of your favorite collection.
“It’s important to complete all your improvements before your home goes on the market because as the saying goes…you never have a second chance to make a first impression,” continues Hart. “And once the sign goes up, you need to keep up the clean, de-cluttered look because you never know when you’ll have a showing. It just takes one buyer to sell your home.”
Kate Hart is a pioneer in the staging field, having helped hundreds of families and realtors prepare homes for sale through her Philadelphia-area company, Hart & Associates Staging & Design.
For more information, visit http://www.hartstaging.com/.
Friday, April 3, 2009
6 Reasons Why It's Still a Good Time to Buy
The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available. (Sign up for a Webinar to learn more about the home buyer tax credit)
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.
4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Source: The Wall Street Journal, June Fletcher (03/27/2009)
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available. (Sign up for a Webinar to learn more about the home buyer tax credit)
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.
4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Source: The Wall Street Journal, June Fletcher (03/27/2009)
Thursday, April 2, 2009
Learn About the new stimulus credit up to $8,000
Join Us for a Free Seminar!
Buying a Home in 2009
What does it take to
buy a house in 2009?
Learn About the new stimulus credit up to $8,000
Attend a Free seminar by two of the most recognized experts in
mortgage lending and real estate and find out if you are ready to
buy your own home.
Here’s What You’ll Learn in this FREE Seminar:
• How can I qualify for a home mortgage loan?
• What can I afford to buy?
• What does my credit report say, and how will a mortgage banker look at it?
• What is the housing market like right now?
• How should I go about finding the right home?
Thursday April 23 2009 6:00 to 7:30pm
Saturday April 25 2009 10:00 to 11:30am
At the HOLIDAY INN DANBURY
80 Newtown Road, Danbury, CT 06810
Please Call
203-744-5544
or 203-767-3349
TO REGISTER
Remember, there is no cost for this seminar, and no obligation.
Tell them Bob Foss sent you
Buying a Home in 2009
What does it take to
buy a house in 2009?
Learn About the new stimulus credit up to $8,000
Attend a Free seminar by two of the most recognized experts in
mortgage lending and real estate and find out if you are ready to
buy your own home.
Here’s What You’ll Learn in this FREE Seminar:
• How can I qualify for a home mortgage loan?
• What can I afford to buy?
• What does my credit report say, and how will a mortgage banker look at it?
• What is the housing market like right now?
• How should I go about finding the right home?
Thursday April 23 2009 6:00 to 7:30pm
Saturday April 25 2009 10:00 to 11:30am
At the HOLIDAY INN DANBURY
80 Newtown Road, Danbury, CT 06810
Please Call
203-744-5544
or 203-767-3349
TO REGISTER
Remember, there is no cost for this seminar, and no obligation.
Tell them Bob Foss sent you
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