Archive for May, 2013

U.S. housing market recovery gains momentum

Friday, May 31st, 2013

A review of the first five months of 2013 shows:

1. Sales of Bank owned property the lowest since 2008

2. Bank properties sell for 20% below the average price of a home sale

3. Fewer properties going into the foreclosure process

4. Foreclosed property sales fell to 20% of all sales compared to a high of 35%

5. Inventories still low, interest rates still low, but rising

6. Pent up demand to own real estate has increased

7. Sale prices are up

These are all good news for those owning your home and even better news if you are planning to sell. Based on these trends we feel this is the year to sell. Next year prices will be up slightly, but competition will increase. The length of time on the market to sell will be longer. Mortgage rates will be higher, so buyers will be able to afford less house. Internet marketing and financing real estate will continue to be a major factor in how people buy and sell property.

Interest rates have jumped!

Tuesday, May 28th, 2013

For the past two years I have blogged about mortgage interest rates being low and not going any lower. That means at some point they will be higher, much higher. We are seeing the beginning of this now. Mortgage rates follow the 10 year US treasury notes. Today, these treasury notes reached 2.13%, the highest in over a year. They just went from 1.63% to 2.13% in the past three weeks. They could easily go to 2.4%, then quickly to 3% in the next 60 days. Whether you are a buyer or seller, you must know a mortgage person. Call them and ask: “What have mortgage rates done the past two weeks”. If you do not know a mortgage person, you need to meet one. This is just part of doing your homework when buying or selling. Here is a 5 year chart.

Spring is the busy time

Wednesday, May 22nd, 2013

Again this year, even more than last year, Spring time activity in real estate is escalating. The difference this year is the activity involves properties selling and inventories reducing. In the past it was more and more properties on the market and just sitting. Price reductions, extending the listing period, changing photos, etc kept us busy. This year it is ‘take my home off the web, it has sold and I keep getting calls’. FSBO property sales are happening and happening fast. Agents are so desperate they are canvassing neighborhoods trying to get the MLS listing. It’s a sellers market. Get your property in good shape, price it reasonably and the buyers will come a knock’n. Mortgage rates below 4%, still have not gone below the August, 2012 low. Sale prices are up and now with some history, we see early 2012 being the lows. Investors continue to buy any distressed property coming on the market. Investors feel we are only in the 3rd inning of the real estate boom. And then there is the banks, yes, banks continue to get in the way. They still have tight requirements for lending, unless you have perfect credit and high income. Bank cash balances are at all time high and they need to invest the monies but can’t figure out how to do it. Government regulation doesn’t help either. The mountain of paperwork you have to sign at closing for the mortgage company keeps getting bigger. In the end, we all need a place to live. Whether renting or owning, make the best choice for your situation and consider short and long term objectives.

Foreclosed owner bomb threat

Wednesday, May 8th, 2013

Many are trying to help reduce the number of foreclosures each month and it is working for most, but not all. The Federal Government through it’s Harp program, banks through Short Sales, and Investors bidding up home prices so less are under water. Yet, not all foreclosures are being eliminated. News yesterday of a disgruntled home owner calling in a ‘bomb threat‘ to the county court house where his property was being auctioned. I happened to be at the Cobb County auction when the 911 call came in. After watching the Boston Marathon situation, it was¬† eerily¬† similar, except goods news, there was no bomb. For those that have never been to an auction, let me explain. Investors show up with cash/bank checks and wait for the attorneys to show up, anywhere from 10am to 4pm. It’s a long day of waiting around. So, the investors bring coolers, backpacks, lawn chairs and briefcases full of paperwork. It looks a little like a tail gate party. Yesterday at 11am, several county sheriffs appeared and announced: “Everyone, I want you to pick up your personal belongings off the ground, NOW!!” After about 60 seconds, he repeated the message. All attorneys reading off the auctions stopped in place. Everyone was amazed. Then the Sheriff announced: ” I want everyone to walk across the street, NOW!” It is about 100 yards to the other side of the street. As we all got there, more police cars, fire trucks, sniffing dogs and the media appeared. For 30 minutes we all waited and watched as the sheriffs did their search of the grounds. Thank goodness, nothing was found and the foreclosure auction resumed. I go to these once or twice a year to get a sense of participation and sale prices. In 10 years, I would have to say yesterdays was the largest amount of investors I have ever seen at an auction and the prices they paid were much higher then six months ago.

Foreigners money helps the real estate market

Wednesday, May 1st, 2013

Foreigners money keeps flowing into the United States. They own $13 trillion in American securities (stocks & bonds), which is easily tracked. Not so easy to track is the amount going into real estate. I have blogged about this before. The largest countries are China and Japan holding $3.4 trillion ($2.4 trillion of that amount is in the Treasury bonds). The continuous increase in purchase of treasuries have kept interest rates very low. This is one way foreigners have helped the real estate market. Our own Treasury Department contributes by buying $85 billion of treasuries per month. The second way Foreigners help is the purchasing of foreclosed property, fixing them up to improve the value of the property and the neighborhood. They also buy vacation properties in Florida, Arizona, New York, Las Vegas and California. Eventually the world economy will improve and these foreigners will move their money back home. This is called ‘unwinding’ and it is at that point the interest rates will spike. As one expert said: “if it’s nailed down, refinance, and if it’s not nailed down, sell it”