FSBO BLOG

Did you buy your first house in your 20’s? Now that you are older, do you know young people in their 20’s that not only have not bought their first house, but in fact, have moved back into their parents home? To answer the headline question, watch the 20-30 year old’s and when they start to buy, you know your property will go up in value. Until then, sales should increase next year with inventories and interest rates low, but it may take time for the increase in values to follow.

Led by improved expectations, consumer sentiment is at its highest level since June, though it remains relatively low, according to data by University of Michigan and Thomson Reuters. Consumer sentiment rose to 64.2 for November, compared with October reading of 60.9  These readings cover how consumers view their personal finances as well as business and buying conditions, averaged about 87 prior to 2008.

the number of positions waiting to be filled in the U.S. rose in September to the highest level in more than three years according to the US Labor Dept. Job openings increased by 225,000 to 3.35 million, the most since August, 2008. Payrolls grew by 80,000 workers in October, and gains in the prior two months were revised up.

The rate that mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion, the credit reporting agency.

6.44 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.88 percent in the third quarter of 2010, and from 5.82 percent in the 2011 second quarter.

Mortgage rates hit the low of the decade in October 2011 and FSBO.com is calling those rates the lowest for the next 10 years. Why? Mortgage rates track the US Govt 10 yr treasury notes and after being pushed down by govt intervention the past two years, the 10 yr was hovering around 3% until mid summer 2011. Then two big items occurred to push the 10yr rate below 2%. First, the European financial crisis caused large (I mean 100’s of billions) of European money to be deposited in US banks as a safe haven. Knowing this could be a short term deposit, US banks bought Treasuries. Second, the Federal Reserve announced in August 2011 that they would buy over $400 billion of 10 yr treasuries. These large purchases by the banks and Federal Reserve are about to end. The European crisis has peaked and will slowly be solved. We think rates are about to go up and fast!

Right now, 11 million borrowers owe more on their mortgages than their homes are worth. To help these homeowners, the govt can either help increase the value or spend money to help refinance. Increasing the value would benefit these 11 million plus the 40 million not under water, thus helping the majority. How do you do that? FSBO.com has been saying for two years, get the govt & bank owned properties into the hands of homeowners/investors. So simple!!

Instead, the govt HARP (Home Affordable Refinance Program ) started in 2009 has helped fewer than 895,000 borrowers. To qualify, borrowers must be making on-time payments on loans owned or guaranteed by Fannie Mae or Freddie Mac.

Sales of existing homes fell in September, with purchases dropping 3 percent to a 4.91 million annual rate.  Homes on the market fell 2 percent to 3.48 million. At the current sales pace, it would take 8.5 months to sell those houses, an improvement from last month. All cash sales continue to be over 30% of the market.

Less inventory will lead to higher prices, which will lead to less people walking away from their homes/mortgaes, which will lead to a housing rebound. Hopefully in the peak spring selling season.

Construction of multifamily homes such as condominiums and apartment buildings increased 15 percent in September as demand for rentals continued to climb according to the Commerce Department.

20 - 30 yr olds are moving out of Mom and Dad’s basement, but they are renting or buying apartments rather than homes.

There’s no secret that vacant/bank owned properties bring down housing values. Well, short sales have increased the past six months because banks are working to get these done. Typically, short sales sell at a discount of about 20 percent to homes not in financial distress, compared with a 40 percent price cut for bank-owned homes. Look for new headlines stating ‘inventories’ have come down.

And Homebuilder sentiment picked up in October to its highest level in a year and a half according to the National Association of Home Builder. Lower inventory and improved traffic.

with a down payment, good job, but bad credit. If you are willing to work direct with a buyer, no agents and no banks, these buyers are out there. Advertise with these words: “owner will carry the paper” or “owner financing available” and the unconventional buyer will find you. Always use an attorney to draw up the paperwork plus give advice. Besdies getting your house sold, these buyers will pay 5, 6 or 7% interest to you, while banks are paying you less than 1%