For almost a decade now, every time we talked about real estate we immediately discussed money. We didn’t talk about the value of a home but instead about the price of the house. We didn’t worry about a roof over our heads but instead the ceiling on our interest rate. We didn’t care as much about where we raised our family as we cared about how much we increased our family’s net worth.
That will change in 2011. The KCM Crew believes very strongly that real estate will return to what it has been for the 200+ year history of this country: a place for us and our families to live comfortably. It will also prove to be a great long term investment as it always has been.
Our parents and our grandparents didn’t buy their homes as a short term financial investment. They bought it so they had a place of their own to come home to at the end of the day; a place to raise their family; a place they could feel safe.
Sure they dreamed of a ‘mortgage-burning’ party. They realized it was a form of forced savings. They were taught that, if they paid their mortgage every month, they would wind up with a little retirement account decades later.
And, they realized that wouldn’t happen if they rented.
However, in the last decade, we somehow forgot that the financial aspect was the serendipity not the major reason to buy. We believe that 2011 will be the year that people return to the historic reasons families purchased a home. This is the year when we again remember that homeownership is a major part of the American Dream.
What about the challenges to a housing recovery? Let’s look at them.
The Economy
Most reports are showing that the economy is doing better than expected. This shopping season provided additional proof of this point. As the economy recovers, so will consumer confidence. This will be great news for housing.
Unemployment
There is much talk about a ‘jobless recovery’. We agree that unemployment will continue to be a challenge. However, when you talk about housing, it is not the unemployment rate that is all telling. Instead, it is the change in the rate. As unemployment skyrocketed, people started to worry about their own job. Any change creates concern. Unabated concern turns to fear. Fear causes paralysis. The spike in unemployment has plateaued. People no longer have the felling that ‘they are next’. The fear will diminish and people will start moving on with their lives. This too will be great news for housing.
Interest Rates
It seems the bottomless pit in which rates have been falling does have a floor after all. And it seems we have found it. Those purchasers who had been waiting for the best interest rate may have already missed it.
Prices
Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.
Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.
Bottom Line
This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.
Reprinted from KCM Blog
Wednesday, December 29, 2010
Monday, December 27, 2010
Dr. Doom, Mr. Bear and Real Estate
Trying to negotiate the current housing market is difficult. There are so many external variables impacting real estate it seems almost impossible to project where sales and prices are headed. But, there were two people who saw the challenges we are currently experiencing back in 2005-2006. They looked at the market and predicted we were in for the collapse that occurred. Who are these men? How do they see real estate today? What are they doing to take advantage of the current market?
Dr. Doom
Nouriel Roubini is a teacher at New York University. He warned that borrowers defaulting on their mortgage loans would unleash a housing bust and deep recession.
According to the Wall Street Journal Roubini is:
…the New York economist whose warnings of a housing collapse earned him the nickname “Dr. Doom” … Ever since much of his dire forecasting came true, Mr. Roubini has become one of the world’s most recognizable economists. He has been in demand as a speaker and consultant, often shuttling around the globe to advise central bankers and finance ministers.
Mr. Bear
John Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?
According to Forbes John Paulson is:
…a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago.
Why discuss these gentlemen today?
The interesting thing is that both these gurus just purchased real estate in New York. The Wall Street Journal reports Roubini:
just plunked down $5.5 million for an East Village penthouse loft, public records show … Real-estate people in New York were quick to seize on his purchase as a healthy sign for the local property market.
“Even the most bearish think our market has nowhere to go but up,” said Frederick Peters, president of Warburg Realty Partners.
“Dr. Doom is a little late to catch the bottom, but there’s still plenty of upside at this point.”
Paulson also just closed on a multi-million dollar home:
Mr. Paulson purchased a two-bedroom apartment at Olympic Tower, a luxury condominium on Fifth Avenue across the street from St. Patrick’s Cathedral and Rockefeller Center, for $2.85 million, according to public records. The 51-story building was developed by Aristotle Onassis and is popular with part-time residents from abroad.
Bottom Line
It seems that Mr. Bear and Dr. Doom are looking at the real estate market quite differently right now. Does that mean the market is at its bottom and about to turn for the better? Mr. Paulson recently put it this way:
“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”
Dr. Doom
Nouriel Roubini is a teacher at New York University. He warned that borrowers defaulting on their mortgage loans would unleash a housing bust and deep recession.
According to the Wall Street Journal Roubini is:
…the New York economist whose warnings of a housing collapse earned him the nickname “Dr. Doom” … Ever since much of his dire forecasting came true, Mr. Roubini has become one of the world’s most recognizable economists. He has been in demand as a speaker and consultant, often shuttling around the globe to advise central bankers and finance ministers.
Mr. Bear
John Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?
According to Forbes John Paulson is:
…a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago.
Why discuss these gentlemen today?
The interesting thing is that both these gurus just purchased real estate in New York. The Wall Street Journal reports Roubini:
just plunked down $5.5 million for an East Village penthouse loft, public records show … Real-estate people in New York were quick to seize on his purchase as a healthy sign for the local property market.
“Even the most bearish think our market has nowhere to go but up,” said Frederick Peters, president of Warburg Realty Partners.
“Dr. Doom is a little late to catch the bottom, but there’s still plenty of upside at this point.”
Paulson also just closed on a multi-million dollar home:
Mr. Paulson purchased a two-bedroom apartment at Olympic Tower, a luxury condominium on Fifth Avenue across the street from St. Patrick’s Cathedral and Rockefeller Center, for $2.85 million, according to public records. The 51-story building was developed by Aristotle Onassis and is popular with part-time residents from abroad.
Bottom Line
It seems that Mr. Bear and Dr. Doom are looking at the real estate market quite differently right now. Does that mean the market is at its bottom and about to turn for the better? Mr. Paulson recently put it this way:
“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”
Tuesday, December 21, 2010
5 Reasons To List Your Home Now!
Selling your house in today’s market can be extremely difficult. It is for that reason that every seller should take advantage of each and every chance that appears. There is a fantastic opportunity available right now. Meet with your real estate agent and mortgage professional today and see whether it is the right time for you and your family to make a move.
Here are five reasons you should consider selling in the first 90 days of 2011.
1. Interest rates have spiked up.
Rates have jumped over 1/2 point in the last several weeks. The short term result of increasing rates is a surge of buyers jumping off the fence to purchase in fear that rates may continue climbing upward. This is a short window of opportunity. If rates fall again, buyers will jump back on the fence. If rates continue to rise, it limits the number of buyers who can qualify at each price point. Now is the best time to sell your house.
2. If you are moving up, you can save thousands.
If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams a at bargain basement price, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.
3. During the winter months, the buyers are serious.
We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are either staying warm (in the North) or just busy with other priorities. The home buyers left in the market are serious and are more apt to buy. Less showings – but to more motivated purchasers.
4. You beat the rush of inventory that is coming next year.
Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. Here is the number of listings available for sale in 2010.
January – 3,277,000
February – 3,531,000
March – 3,626,000
April – 4,029,000
We believe there is a pent-up selling demand (homeowners who have held off selling over the last year) that will lead to an increase in these numbers this spring. You won’t have to worry about this increasing competition if you sell now.
5. You have less ‘discounted’ inventory with which to compete.
This year, sellers of non-distressed properties have been given an early holiday present. With banks trying to rectify their foreclosure procedures, there has been a large supply of discounted properties removed from competition. No one knows how long it will take banks to return to the normal flow of foreclosed properties to the market. However, until they do, every homeowner has a better chance of selling their property.
Bottom Line
If you are looking to sell in 2011, there may not be a more opportune time than this right now. Serious buyers, great move-up deals and less competition from super-motivated sellers and foreclosures creates the perfect selling situation. Don’t miss it!
Reprinted by permission from Keeping Current Matters Blogsite.
Here are five reasons you should consider selling in the first 90 days of 2011.
1. Interest rates have spiked up.
Rates have jumped over 1/2 point in the last several weeks. The short term result of increasing rates is a surge of buyers jumping off the fence to purchase in fear that rates may continue climbing upward. This is a short window of opportunity. If rates fall again, buyers will jump back on the fence. If rates continue to rise, it limits the number of buyers who can qualify at each price point. Now is the best time to sell your house.
2. If you are moving up, you can save thousands.
If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams a at bargain basement price, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.
3. During the winter months, the buyers are serious.
We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are either staying warm (in the North) or just busy with other priorities. The home buyers left in the market are serious and are more apt to buy. Less showings – but to more motivated purchasers.
4. You beat the rush of inventory that is coming next year.
Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. Here is the number of listings available for sale in 2010.
January – 3,277,000
February – 3,531,000
March – 3,626,000
April – 4,029,000
We believe there is a pent-up selling demand (homeowners who have held off selling over the last year) that will lead to an increase in these numbers this spring. You won’t have to worry about this increasing competition if you sell now.
5. You have less ‘discounted’ inventory with which to compete.
This year, sellers of non-distressed properties have been given an early holiday present. With banks trying to rectify their foreclosure procedures, there has been a large supply of discounted properties removed from competition. No one knows how long it will take banks to return to the normal flow of foreclosed properties to the market. However, until they do, every homeowner has a better chance of selling their property.
Bottom Line
If you are looking to sell in 2011, there may not be a more opportune time than this right now. Serious buyers, great move-up deals and less competition from super-motivated sellers and foreclosures creates the perfect selling situation. Don’t miss it!
Reprinted by permission from Keeping Current Matters Blogsite.
Friday, December 17, 2010
How Will Foreclosures Affect Home Prices?
Three months ago, it was revealed that many banks were guilty of improperly processing the paperwork on their foreclosures. Most banks at the time declared a foreclosure moratorium while they reviewed their paperwork and corrected any errors. Today, we want to give you an update on the situation and explain how the housing market will be affected.
The banks have admitted to some procedural errors. The severity and intent of these errors is still being investigated and the proper sanctions are being debated (one state attorney general is threatening jail time). However, there seems to be no evidence that families were incorrectly forced from their homes.
So what does mean to the housing market?
When this discounted inventory enters the market, it will put downward pressure on house values. Foreclosures entering the market put downward pressure on the non-distressed properties trying to sell. A foreclosure is competition to other homes as they sell for a 41% discount.
When will this inventory come to market?
Celia Chen of Moody’s Analytics on when this inventory is expected to hit the market:
The “robo-signing” scandal is beginning to show up in U.S. foreclosure data. The inventory of homes in foreclosure rose sharply in the fall, reflecting the fact that a number of large mortgage servicers placed a moratorium on foreclosures midway through October, and were thus unable to complete these foreclosures and reduce inventories. Servicers have already lifted some of these moratoriums and it is likely business will return to usual by the beginning of 2011.
…sales of REOs to third parties and other types of distress sales such as short sale or auction sale to a third party will step up in the first quarter of next year as servicers resolve the foreclosure processing issues.
What impact will it have on house prices?
Prices will be affected. The question is to what degree. Ms. Chen explains it simply:
…the larger the ratio of distress sales to normal, nondistress sales, the greater the downward pressure on prices.
How many distressed sales are out there? According to Daren Blomquist, managing editor of the RealtyTrac:
“Even with this big drop in November we do have a continuing building inventory of properties in foreclosure or REO. We’re estimating those properties plus delinquencies to equal 3 million to 4 million homes waiting to hit the market.”
Bottom Line
With the enormity of the challenge, prices can be impacted in a big way. Ms. Chen in her report said she sees a 5% decline in prices through the first three quarters of 2011.
Reprinted from KCM Blog by permission
The banks have admitted to some procedural errors. The severity and intent of these errors is still being investigated and the proper sanctions are being debated (one state attorney general is threatening jail time). However, there seems to be no evidence that families were incorrectly forced from their homes.
So what does mean to the housing market?
When this discounted inventory enters the market, it will put downward pressure on house values. Foreclosures entering the market put downward pressure on the non-distressed properties trying to sell. A foreclosure is competition to other homes as they sell for a 41% discount.
When will this inventory come to market?
Celia Chen of Moody’s Analytics on when this inventory is expected to hit the market:
The “robo-signing” scandal is beginning to show up in U.S. foreclosure data. The inventory of homes in foreclosure rose sharply in the fall, reflecting the fact that a number of large mortgage servicers placed a moratorium on foreclosures midway through October, and were thus unable to complete these foreclosures and reduce inventories. Servicers have already lifted some of these moratoriums and it is likely business will return to usual by the beginning of 2011.
…sales of REOs to third parties and other types of distress sales such as short sale or auction sale to a third party will step up in the first quarter of next year as servicers resolve the foreclosure processing issues.
What impact will it have on house prices?
Prices will be affected. The question is to what degree. Ms. Chen explains it simply:
…the larger the ratio of distress sales to normal, nondistress sales, the greater the downward pressure on prices.
How many distressed sales are out there? According to Daren Blomquist, managing editor of the RealtyTrac:
“Even with this big drop in November we do have a continuing building inventory of properties in foreclosure or REO. We’re estimating those properties plus delinquencies to equal 3 million to 4 million homes waiting to hit the market.”
Bottom Line
With the enormity of the challenge, prices can be impacted in a big way. Ms. Chen in her report said she sees a 5% decline in prices through the first three quarters of 2011.
Reprinted from KCM Blog by permission
Wednesday, December 15, 2010
Negative Home Equity - Decreasing
Back in October, we posted that falling home prices would drive more homeowners into a negative equity situation where their home was worth less than the amount of their mortgage (also known as the house being ‘under water’ or ‘upside down’). If a homeowner falls further into negative equity, it increases the chances that they will walk away from their mortgage obligation. This is known in the industry as a strategic default. This could dramatically increase the number of foreclosures coming to market and cause house values to fall further.
The Wall Street Journal reported on the impact of negative equity on strategic default:
Most defaults are typically driven by a combination of income shock and negative equity, or what’s known as the “double-trigger” hypothesis. While borrowers who lose their jobs but have equity in their homes can sell and avoid default, those without any equity are left with fewer options.
The most recent Fannie Mae National Housing Survey looked at how people viewed walking away from their mortgage obligation. Here are some of their findings:
Underwater delinquent borrowers are the most likely to have considered stopping their mortgage payments.
Delinquent borrowers are almost three times as likely to have considered stopping their mortgage payments if they know someone who has defaulted on their mortgage.
17% of all people who are delinquent believe the amount they owe on their mortgage is 5-20% more than the value of their home. That number jumps to 29% when they believe the amount they owe on their mortgage is at least 20% more than the value of their home.
The CoreLogic 3rd Quarter Negative Equity Report released Monday showed
… equity data indicating a third consecutive quarterly decline in negative equity for residential properties. CoreLogic reports that 10.8 million, or 22.5 percent, of all residential properties with mortgages were in negative equity at the end of the third quarter of 2010, down from 11.0 million and 23 percent in the second quarter. This is due primarily to foreclosures of severely negative equity properties rather than an increase in home values.
Obviously, the fact that the number is declining is good news for the housing market. However, with prices again falling there is concern that the current situation could worsen. Mark Fleming, chief economist with CoreLogic said
“Negative equity is a primary factor holding back the housing market and broader economy. The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement in negative equity.”
Radar Logic addressed the CoreLogic report yesterday in an opinion piece:
According to research by CoreLogic, borrowers become more likely to default the further underwater they become in their mortgages. Thus, falling home prices could increase defaults, foreclosures and, as a result, the inventory of bank-owned properties. Based on our analysis, homes sold by financial firms sold for 38 percent less, on average, than homes sold by other sellers as of September 30, 2010. As such, foreclosed homes represent a low-priced alternative to homes for sale by owner/occupants, and as sales of foreclosed homes become a larger percentage of total sales, owner/occupants face increasing pressure to reduce their asking prices in order to compete. So falling prices could create a self-perpetuating cycle of negative equity, foreclosures, and further price declines.
Bottom Line
If people fall into negative equity, the chances they will strategically default increases. This would lead to more foreclosures which will mean more downward pressure on home values. More homeowners will see themselves in negative equity as prices fall. And round and round we would go. Let’s hope prices hold thus preventing this from happening.
Reprinted from KCM Blogsite
The Wall Street Journal reported on the impact of negative equity on strategic default:
Most defaults are typically driven by a combination of income shock and negative equity, or what’s known as the “double-trigger” hypothesis. While borrowers who lose their jobs but have equity in their homes can sell and avoid default, those without any equity are left with fewer options.
The most recent Fannie Mae National Housing Survey looked at how people viewed walking away from their mortgage obligation. Here are some of their findings:
Underwater delinquent borrowers are the most likely to have considered stopping their mortgage payments.
Delinquent borrowers are almost three times as likely to have considered stopping their mortgage payments if they know someone who has defaulted on their mortgage.
17% of all people who are delinquent believe the amount they owe on their mortgage is 5-20% more than the value of their home. That number jumps to 29% when they believe the amount they owe on their mortgage is at least 20% more than the value of their home.
The CoreLogic 3rd Quarter Negative Equity Report released Monday showed
… equity data indicating a third consecutive quarterly decline in negative equity for residential properties. CoreLogic reports that 10.8 million, or 22.5 percent, of all residential properties with mortgages were in negative equity at the end of the third quarter of 2010, down from 11.0 million and 23 percent in the second quarter. This is due primarily to foreclosures of severely negative equity properties rather than an increase in home values.
Obviously, the fact that the number is declining is good news for the housing market. However, with prices again falling there is concern that the current situation could worsen. Mark Fleming, chief economist with CoreLogic said
“Negative equity is a primary factor holding back the housing market and broader economy. The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement in negative equity.”
Radar Logic addressed the CoreLogic report yesterday in an opinion piece:
According to research by CoreLogic, borrowers become more likely to default the further underwater they become in their mortgages. Thus, falling home prices could increase defaults, foreclosures and, as a result, the inventory of bank-owned properties. Based on our analysis, homes sold by financial firms sold for 38 percent less, on average, than homes sold by other sellers as of September 30, 2010. As such, foreclosed homes represent a low-priced alternative to homes for sale by owner/occupants, and as sales of foreclosed homes become a larger percentage of total sales, owner/occupants face increasing pressure to reduce their asking prices in order to compete. So falling prices could create a self-perpetuating cycle of negative equity, foreclosures, and further price declines.
Bottom Line
If people fall into negative equity, the chances they will strategically default increases. This would lead to more foreclosures which will mean more downward pressure on home values. More homeowners will see themselves in negative equity as prices fall. And round and round we would go. Let’s hope prices hold thus preventing this from happening.
Reprinted from KCM Blogsite
Tuesday, December 14, 2010
Are Housing Prices Undervalued?
We have been barraged with headlines and news stories telling us that home values will continue to soften for the next several quarters. Some experts are predicting that today’s values will drop and not be seen again until the middle of 2012 at the earliest. We concur with these estimates based on the current demand for housing in relationship to current supply of both the visible and the shadow inventory of houses. Here we are discussing ‘market value’.
However, there is another way to value residential real estate. Housing analysts look at the ratio between current wages and sales prices. They use a multiplier to determine how much home the average buyer can afford and compare that to the average price at which a home sells. DSNews just ran an article on this subject. They stated:
The sharp fall in residential property prices in the third quarter means that housing in the United States has become even more undervalued, according to the analysts at Capital Economics.
Based on the latest S&P Case-Shiller index, Capital Economics has concluded that house prices are now 17 percent undervalued relative to disposable income per capita. Housing has never before looked as undervalued, the firm pointed out in a research note released to DSNews.
Looking at the data included in the index compiled by the Federal Housing Finance Agency (FHFA), residential home prices are 14 percent undervalued, which is also a record, according to Capital Economics.
The National Association of Realtors (NAR) has their own Housing Affordability Index. According to NAR:
The affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.
In their article, DSNews also addresses the NAR index:
The housing affordability index from the National Association of Realtors (NAR) remains close to its record high. Capital Economics explained that NAR’s affordability assessment indicates that a median income household with a 20 percent down payment can now more easily afford the monthly mortgage payments on a median-priced home than at any time in the last 30 years.
By each of these historic measurements, homes are at all time values!!
Bottom Line
Lack of consumer confidence has caused many buyers to refrain from taking advantage of the golden opportunities that exist in housing today. However, buyers should look at COST (price and interest rate) not just price. People who purchase today will reap the reward of buying an undervalued asset and should enjoy excellent appreciation when inventory levels return to normal levels.
Reprinted by permission from KCM
However, there is another way to value residential real estate. Housing analysts look at the ratio between current wages and sales prices. They use a multiplier to determine how much home the average buyer can afford and compare that to the average price at which a home sells. DSNews just ran an article on this subject. They stated:
The sharp fall in residential property prices in the third quarter means that housing in the United States has become even more undervalued, according to the analysts at Capital Economics.
Based on the latest S&P Case-Shiller index, Capital Economics has concluded that house prices are now 17 percent undervalued relative to disposable income per capita. Housing has never before looked as undervalued, the firm pointed out in a research note released to DSNews.
Looking at the data included in the index compiled by the Federal Housing Finance Agency (FHFA), residential home prices are 14 percent undervalued, which is also a record, according to Capital Economics.
The National Association of Realtors (NAR) has their own Housing Affordability Index. According to NAR:
The affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.
In their article, DSNews also addresses the NAR index:
The housing affordability index from the National Association of Realtors (NAR) remains close to its record high. Capital Economics explained that NAR’s affordability assessment indicates that a median income household with a 20 percent down payment can now more easily afford the monthly mortgage payments on a median-priced home than at any time in the last 30 years.
By each of these historic measurements, homes are at all time values!!
Bottom Line
Lack of consumer confidence has caused many buyers to refrain from taking advantage of the golden opportunities that exist in housing today. However, buyers should look at COST (price and interest rate) not just price. People who purchase today will reap the reward of buying an undervalued asset and should enjoy excellent appreciation when inventory levels return to normal levels.
Reprinted by permission from KCM
Monday, December 13, 2010
November 2010 MLS Report
This is a report prepared by David Flore of Cunningham & Company and is an excellent summary of how the market in our MLS area performed. For those of you who like statistics, this is an excellent read. There is also a good summary of the Carolina/Kure Beach market included in this report. The Charts and Graphs would not copy into my blog, so if you would like the full report, please let me know and I'll send it to you.
David’s Comments –
Season’s Greetings while this is the last report for 2010 we still have 19 days to get home sales closed. My January report will sum up our 2010 sales production. The Holiday Season offers us an opportunity to reflect on the good times of this past year and a chance to set goals and plans for the coming year. I want to say Thanks to all of you that I have worked with over the course of 2010. We have a lot to accomplish in 2011, especially a new Sales Contract. I wish you and yours the best during this holiday season.
Have a Merry Christmas & A Happy New Year
November’s average sales price has managed to exceed last month as well as Nov 2009 & 2008 average sales price. While the numbers of sales were down from last month and as well as down from a year ago. Our average sales price is up 6.8% over last month and up 11.2% from Nov 2009 and up .05% from Nov 2008. When we look at our year to date average sold price we are only down 1.9% from Nov 2009. Our median sold price is up from last month by 5.6% and up by 6.0% from last November. Our median sold price has rebounded and has risen. Our rolling 12 months we are up 4.5% in sold units and our average sold price is only down by 2.3%. Sold units are only 3 units down from last month and down 90 from last November.
In the month of November we saw a decrease of 143 homes in our listing inventory, we have 5,007 homes on the market as of December 1st. This continues to put us in a strong buyer’s market with a listing inventory of over a 16.3 month supply. With the low sales in November this affects our month supply with an improvement of .5 months from last month. Our average list price has stayed below the $400,000 range for the last year; we are currently at $353,465. In November we saw an increase in our seller concessions, it is now 28.2%. Our average days on the market remain 121 days. The list to sold ratio is 93.2% this number needs to continue to get better. The number of homes that sold in 15 days or less continues to remain very low, 14.4% of November sold homes. The 30-year fixed-rate mortgage (FRM) averaged 4.61% with an average 0.7 points for the week ending December 9, 2010. We have hit historic lows in mortgage rates and they are possibly on the rebound. Call me so I can show you or your clients how they can get the benefit of these rates. Have a great week and let me know what I can do to help you and your clients.
Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.
Listing Inventory
In November we saw a decrease in listing inventory of 143 units. We are about 106 units under December 1, 2009. We have 5,007 single family homes for sale in our MLS. The average list price of $353,465 is down by $10,632 from last month. The average list price has decreased by 6.8% from December 1, 2009.
Monthly Average Sold Price
Our monthly average sold price is up by 6.8% from last month and up 11.2% from November 2009 and up .05% from November 2008. Our average sold price is up by $16,103.00 from last month. November average sold price ($251,522) shows an increase of 7.3% from year end 2009. Our average sold price is up by $25,368.00 from last November and up $1,343.00 from November 2008.
Monthly Sold Units
This month’s decline in the number of homes sold when compared to previous year is down 90 units. The number of sold homes is down 3 homes from last month and down 22.7% from November 2009. Last month we had 309 sold units and this month 306 sold units, last year in November we had 396 sold units.
Average Sold Price Year to Date
Year over year our year to date numbers have dipped a little.
2003 year end average sale price $ 186,137
2004 year end average sale price $ 210,048
2005 year end average sale price $ 254,080
2006 year end average sale price $ 264,498
2007 year end average sale price $ 273,408
2008 year end average sale price $256,498
2009 year end average sale price $234,379
2010 year to date average sale price $230,335
While our current year to date numbers are lower than Year End 2009 they do show promising signs that our sales are on the upswing. The eleven months of 2010 has a 130 sold unit gain over first eleven months of 2009. The average sales price is down 1.9% for the first eleven months of 2010 than the first eleven months of 2009. Our median sales price is just .01% behind 2009.
Rolling 12 months
When we look at December 1st, 2009 to November 30st, 2010 we have 4,499 sold units and when we compare December 1st, 2008 to November 30st, 2009 we have a 193 unit gain (4,306 sold units). When we look at the same rolling 12 months for average sold price we see that we are only down by 2.3%. So the dates of 12/1/2009 to 11/30/2010 we have an average sold price of $230,335 while from 12/1/2008 to 11/30/2009 we had an average sold price $235,715.
Median Sold Price
Our Median sold price rebounded this month an increase of 5.6% from last month, up to $190,000. Our national numbers lag by one month. Our median sales continues it small climb while the national median has some smaller declines. I am hoping we can see the national median sales price reverse its downward trend.
Pending
Pending Sales – A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Sales are typically finalized within one to two months from signing. I look at the total pending units on a regular basis and this is how they chart out. We saw our peak pending numbers about May 3rd. Our pending index is dropping to our winter lows; November is 5.7% down from last month and down 11.0% from last year this time.
Market Absorption rate – The number of homes sold in November, 306 divided by the current listing inventory, 5,007 gives us a 16.3 month supply of single family homes. This decreased by .50 months from last month. We need to get this inventory back under 12 months. With a large inventory and the few sales in November this affects our market absorption. With rates where they are and plenty of inventory; we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $269,991 and the average sold price is $251,521 for November which gives us a 93.2% list to sold price ratio – a .20% change from last month. We have now managed to stay under 95% for over a year and several months.
Seller Concessions – We had 28.2% of sold properties report a sales concession for November, an increase of 3.5%. We want this number to go lower.
Days on Market – The average days on market for the sold properties is now at 121 for November. That is about 4 months to keep a property on the market. Only 14.4% of the properties were placed under contract in less than 15 days for the month of November.
Carolina & Kure Beach
There are currently 392 single family homes for sale and this represents a 13 unit decrease over November 1, 2010 and 7.8% of our total WRAR inventory. The average list price is $401,925 a decrease of about $10,434 from November. In November there were 29 homes sold, divide that by the homes available and you have a 13.5 monthly supply of homes in Carolina and Kure Beach. The average sold price for the month of November was $253,917 and is down $9,522 from last month. When we look at our rolling 12 months December 1, 2009 to November 30, 2010 we have 335 homes sold at an average price of $281,225. While December 1, 2008 to November 30, 2009 we had 278 homes sold at an average price of $301,186. 2010 continues to be a better year than 2009 for Carolina Beach and Kure Beach.
This data was pulled on December 11, 2010, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through November 30, 2010.
The Market
Bond Yields Rise so do Mortgage Rates
Freddie Mac released the results of its Primary Mortgage Market Survey®, which found that once again, both fixed- and short-term mortgage rates rose this week. This was the fourth week in a row where fixed-rate mortgage rates were up.
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.61 percent with an average 0.7 point for the week ending December 9, 2010, up from last week when it averaged 4.46 percent. Last year at this time, the 30-year FRM averaged 4.81 percent.
15-year FRM this week averaged 3.96 percent with an average 0.7 point, up from last week when it averaged 3.81 percent. A year ago at this time, the 15-year FRM averaged 4.32 percent.
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
"After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November, which for a $200,000 conventional loan amounts to $50 more in monthly payments.
"Housing demand appears to be picking up recently. Existing pending sales jumped 10.4 percent in October to the strongest pace since April, according to the National Association of Realtors®. More recently, mortgage applications for home purchases rose for the three consecutive weeks ending on December 3rd, representing a 17.7 percent increase and the strongest pace since the week of May 7th, based on figures released by the Mortgage Bankers Association."
Freddie Mac
30 Year Fixed Rates
The Offer to Purchase and Contract – January 1, 2011
Are you Ready for the New and Improved - Offer to Purchase Contract? I guess the real question should be – Is your Lender Ready? At Cunningham & Company – We are Ready!
We are prepared to work with your clients in advance of contract to get them “Buyer Ready”. The new contract advises the buyer to consult with a lender prior to signing the offer. With a “Buyer Ready” you and your client can go house hunting with confidence. All we will need is a property, sales contract, acceptable appraisal and a flood certification. Your buyer benefits because they have a better negotiation position and could offer a shorter Due Diligence period. As an agent you benefit with your buyers credit and financial issues resolved prior to writing a contract. You come away with smarter time management and a happier client. Contact me for further info on getting your client “Buyer Ready”.
At Cunningham & Company we can provide you with the right mortgage to meet your specific needs.
I offer these key statistics to keep you informed as to how our market is moving. With 20 years of real estate sales and management and finance in my background I am able to evaluate the current conditions and provide you with accurate data. With key information from your clients I can evaluate their needs and offer them the best plan for their current mortgage. Call me today for a quote.
Cunningham & Company is a full service Mortgage Banker - we handle everything in house. We do first time buyers, USDA, FHA and VA loans, Conventional and Jumbo Loans, 100% financing and we have a large selection of adjustable rate loans as well as several interest only programs. Call me today with my background in real estate and the resources of Cunningham & Company working together... you can't miss. A loan in the crowd.
David Flory
David’s Comments –
Season’s Greetings while this is the last report for 2010 we still have 19 days to get home sales closed. My January report will sum up our 2010 sales production. The Holiday Season offers us an opportunity to reflect on the good times of this past year and a chance to set goals and plans for the coming year. I want to say Thanks to all of you that I have worked with over the course of 2010. We have a lot to accomplish in 2011, especially a new Sales Contract. I wish you and yours the best during this holiday season.
Have a Merry Christmas & A Happy New Year
November’s average sales price has managed to exceed last month as well as Nov 2009 & 2008 average sales price. While the numbers of sales were down from last month and as well as down from a year ago. Our average sales price is up 6.8% over last month and up 11.2% from Nov 2009 and up .05% from Nov 2008. When we look at our year to date average sold price we are only down 1.9% from Nov 2009. Our median sold price is up from last month by 5.6% and up by 6.0% from last November. Our median sold price has rebounded and has risen. Our rolling 12 months we are up 4.5% in sold units and our average sold price is only down by 2.3%. Sold units are only 3 units down from last month and down 90 from last November.
In the month of November we saw a decrease of 143 homes in our listing inventory, we have 5,007 homes on the market as of December 1st. This continues to put us in a strong buyer’s market with a listing inventory of over a 16.3 month supply. With the low sales in November this affects our month supply with an improvement of .5 months from last month. Our average list price has stayed below the $400,000 range for the last year; we are currently at $353,465. In November we saw an increase in our seller concessions, it is now 28.2%. Our average days on the market remain 121 days. The list to sold ratio is 93.2% this number needs to continue to get better. The number of homes that sold in 15 days or less continues to remain very low, 14.4% of November sold homes. The 30-year fixed-rate mortgage (FRM) averaged 4.61% with an average 0.7 points for the week ending December 9, 2010. We have hit historic lows in mortgage rates and they are possibly on the rebound. Call me so I can show you or your clients how they can get the benefit of these rates. Have a great week and let me know what I can do to help you and your clients.
Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.
Listing Inventory
In November we saw a decrease in listing inventory of 143 units. We are about 106 units under December 1, 2009. We have 5,007 single family homes for sale in our MLS. The average list price of $353,465 is down by $10,632 from last month. The average list price has decreased by 6.8% from December 1, 2009.
Monthly Average Sold Price
Our monthly average sold price is up by 6.8% from last month and up 11.2% from November 2009 and up .05% from November 2008. Our average sold price is up by $16,103.00 from last month. November average sold price ($251,522) shows an increase of 7.3% from year end 2009. Our average sold price is up by $25,368.00 from last November and up $1,343.00 from November 2008.
Monthly Sold Units
This month’s decline in the number of homes sold when compared to previous year is down 90 units. The number of sold homes is down 3 homes from last month and down 22.7% from November 2009. Last month we had 309 sold units and this month 306 sold units, last year in November we had 396 sold units.
Average Sold Price Year to Date
Year over year our year to date numbers have dipped a little.
2003 year end average sale price $ 186,137
2004 year end average sale price $ 210,048
2005 year end average sale price $ 254,080
2006 year end average sale price $ 264,498
2007 year end average sale price $ 273,408
2008 year end average sale price $256,498
2009 year end average sale price $234,379
2010 year to date average sale price $230,335
While our current year to date numbers are lower than Year End 2009 they do show promising signs that our sales are on the upswing. The eleven months of 2010 has a 130 sold unit gain over first eleven months of 2009. The average sales price is down 1.9% for the first eleven months of 2010 than the first eleven months of 2009. Our median sales price is just .01% behind 2009.
Rolling 12 months
When we look at December 1st, 2009 to November 30st, 2010 we have 4,499 sold units and when we compare December 1st, 2008 to November 30st, 2009 we have a 193 unit gain (4,306 sold units). When we look at the same rolling 12 months for average sold price we see that we are only down by 2.3%. So the dates of 12/1/2009 to 11/30/2010 we have an average sold price of $230,335 while from 12/1/2008 to 11/30/2009 we had an average sold price $235,715.
Median Sold Price
Our Median sold price rebounded this month an increase of 5.6% from last month, up to $190,000. Our national numbers lag by one month. Our median sales continues it small climb while the national median has some smaller declines. I am hoping we can see the national median sales price reverse its downward trend.
Pending
Pending Sales – A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Sales are typically finalized within one to two months from signing. I look at the total pending units on a regular basis and this is how they chart out. We saw our peak pending numbers about May 3rd. Our pending index is dropping to our winter lows; November is 5.7% down from last month and down 11.0% from last year this time.
Market Absorption rate – The number of homes sold in November, 306 divided by the current listing inventory, 5,007 gives us a 16.3 month supply of single family homes. This decreased by .50 months from last month. We need to get this inventory back under 12 months. With a large inventory and the few sales in November this affects our market absorption. With rates where they are and plenty of inventory; we can get this number down.
List to Sold price ratio – the average list price of the sold properties is $269,991 and the average sold price is $251,521 for November which gives us a 93.2% list to sold price ratio – a .20% change from last month. We have now managed to stay under 95% for over a year and several months.
Seller Concessions – We had 28.2% of sold properties report a sales concession for November, an increase of 3.5%. We want this number to go lower.
Days on Market – The average days on market for the sold properties is now at 121 for November. That is about 4 months to keep a property on the market. Only 14.4% of the properties were placed under contract in less than 15 days for the month of November.
Carolina & Kure Beach
There are currently 392 single family homes for sale and this represents a 13 unit decrease over November 1, 2010 and 7.8% of our total WRAR inventory. The average list price is $401,925 a decrease of about $10,434 from November. In November there were 29 homes sold, divide that by the homes available and you have a 13.5 monthly supply of homes in Carolina and Kure Beach. The average sold price for the month of November was $253,917 and is down $9,522 from last month. When we look at our rolling 12 months December 1, 2009 to November 30, 2010 we have 335 homes sold at an average price of $281,225. While December 1, 2008 to November 30, 2009 we had 278 homes sold at an average price of $301,186. 2010 continues to be a better year than 2009 for Carolina Beach and Kure Beach.
This data was pulled on December 11, 2010, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through November 30, 2010.
The Market
Bond Yields Rise so do Mortgage Rates
Freddie Mac released the results of its Primary Mortgage Market Survey®, which found that once again, both fixed- and short-term mortgage rates rose this week. This was the fourth week in a row where fixed-rate mortgage rates were up.
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.61 percent with an average 0.7 point for the week ending December 9, 2010, up from last week when it averaged 4.46 percent. Last year at this time, the 30-year FRM averaged 4.81 percent.
15-year FRM this week averaged 3.96 percent with an average 0.7 point, up from last week when it averaged 3.81 percent. A year ago at this time, the 15-year FRM averaged 4.32 percent.
Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
"After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November, which for a $200,000 conventional loan amounts to $50 more in monthly payments.
"Housing demand appears to be picking up recently. Existing pending sales jumped 10.4 percent in October to the strongest pace since April, according to the National Association of Realtors®. More recently, mortgage applications for home purchases rose for the three consecutive weeks ending on December 3rd, representing a 17.7 percent increase and the strongest pace since the week of May 7th, based on figures released by the Mortgage Bankers Association."
Freddie Mac
30 Year Fixed Rates
The Offer to Purchase and Contract – January 1, 2011
Are you Ready for the New and Improved - Offer to Purchase Contract? I guess the real question should be – Is your Lender Ready? At Cunningham & Company – We are Ready!
We are prepared to work with your clients in advance of contract to get them “Buyer Ready”. The new contract advises the buyer to consult with a lender prior to signing the offer. With a “Buyer Ready” you and your client can go house hunting with confidence. All we will need is a property, sales contract, acceptable appraisal and a flood certification. Your buyer benefits because they have a better negotiation position and could offer a shorter Due Diligence period. As an agent you benefit with your buyers credit and financial issues resolved prior to writing a contract. You come away with smarter time management and a happier client. Contact me for further info on getting your client “Buyer Ready”.
At Cunningham & Company we can provide you with the right mortgage to meet your specific needs.
I offer these key statistics to keep you informed as to how our market is moving. With 20 years of real estate sales and management and finance in my background I am able to evaluate the current conditions and provide you with accurate data. With key information from your clients I can evaluate their needs and offer them the best plan for their current mortgage. Call me today for a quote.
Cunningham & Company is a full service Mortgage Banker - we handle everything in house. We do first time buyers, USDA, FHA and VA loans, Conventional and Jumbo Loans, 100% financing and we have a large selection of adjustable rate loans as well as several interest only programs. Call me today with my background in real estate and the resources of Cunningham & Company working together... you can't miss. A loan in the crowd.
David Flory
Friday, December 10, 2010
How Interest Rates Impact Payments When Buying A House
There has been much volatility in the 30 year mortgage rate over the last few weeks. According to Freddie Mac, rates have soared almost a half of a percent in just the last four weeks and now are as high as they have been in the last six months.
Frank Nothaft, vice president and chief economist of Freddie Mac, explained:
After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November.
No one knows for sure w4hat will happen as we move forward. The only thing we know for sure is that rising rates have a tremendous impact on a buyer’s payment. There are home buyers standing on the sidelines waiting for the prices of real estate to bottom out. If you are one of these buyers, be careful. You should be as concerned about the monthly COST as much as you are concerned about the PRICE.
Below is a table showing the impact rising rates have on the monthly payment – even if prices continue to soften:
Impact of Rates on Payment
6.0 $2,158 $2,218 $2,278 $2,338 $2,398
5.75 $2,100 $2,160 $2,218 $2,276 $2,334
5.50 $2,044 $2,100 $2,158 $2,214 $2,272
5.25 $1,988 $2,044 $2,098 $2,154 $2,208
5.0 $1,932 $1,986 $2,040 $2,094 $2,148
4.75 $1,878 $1,930 $1,982 $2,034 $2,086
4.5 $1,824 $1,874 $1,926 $1,976 $2,026
$360,000 $37 0,000 $380,000 $390,000 $400,000
-10% -7.5% -5.0% -2.5% LOAN
Bottom Line
You want the best value possible whenever you purchase anything. When buying real estate, the best value is not determined by price alone. Value is determined by price and financing costs. Take both into consideration when timing your purchase.
copied from KCM Blogsite
Frank Nothaft, vice president and chief economist of Freddie Mac, explained:
After Europe made strides in its debt situation, investors left the security of U.S. Treasury debt causing bond yields to rise and mortgage rates along with them. Interest rates for 30-year fixed mortgages are now almost a half percentage point higher than the record low set in mid-November.
No one knows for sure w4hat will happen as we move forward. The only thing we know for sure is that rising rates have a tremendous impact on a buyer’s payment. There are home buyers standing on the sidelines waiting for the prices of real estate to bottom out. If you are one of these buyers, be careful. You should be as concerned about the monthly COST as much as you are concerned about the PRICE.
Below is a table showing the impact rising rates have on the monthly payment – even if prices continue to soften:
Impact of Rates on Payment
6.0 $2,158 $2,218 $2,278 $2,338 $2,398
5.75 $2,100 $2,160 $2,218 $2,276 $2,334
5.50 $2,044 $2,100 $2,158 $2,214 $2,272
5.25 $1,988 $2,044 $2,098 $2,154 $2,208
5.0 $1,932 $1,986 $2,040 $2,094 $2,148
4.75 $1,878 $1,930 $1,982 $2,034 $2,086
4.5 $1,824 $1,874 $1,926 $1,976 $2,026
$360,000 $37 0,000 $380,000 $390,000 $400,000
-10% -7.5% -5.0% -2.5% LOAN
Bottom Line
You want the best value possible whenever you purchase anything. When buying real estate, the best value is not determined by price alone. Value is determined by price and financing costs. Take both into consideration when timing your purchase.
copied from KCM Blogsite
Thursday, December 9, 2010
Improve Your Credit Score
As you prepare to apply for credit (like a home mortgage) understand that it is significantly better to have your best possible credit profile BEFORE applying. Working to improve your score during the mortgage process can be done, but there are two problems. One, time to clear up items can become an obstacle when compared the time you are anticipating a closing. And two, lower scores upfront can give an underwriter an additional reason to be uncomfortable with a file. “Sooner, rather than later” should be the mantra of credit score improvements. Here are some tested ways to do it:
Credit Cards – Revolving Debt proportions
1. Look on the credit report for revolving debt (not installment loans, or “open” accounts)
2. As a general rule of thumb, the balance should be no more than 30% of the credit limit. So, if it’s more than that, have you should make every attempt to pay it down.
3. If there are many revolving accounts with high balances, you will most probably need to pay down most or all of them for the best score.
4. If there is nothing derogatory on the credit report, just high balances on revolving debt, you can often improve the score significantly. But, if there are many derogatory items on the credit report, paying down revolving debt may not help the score very much.
5. Many lender have software programs that can quickly determining for you which (if any) revolving accounts need to be paid down, and to what balance.
Collections/Judgments:
1. Paying off or satisfying such a derogatory account does not normally improve the score because the derogatory account still exists, and so still hurts the score. In fact, paying off an old collection may even make the score drop.
2. However, for collections, the borrower can ask for the account to be completely removed or deleted. If you have not yet paid the collection, you can use that as a bargaining chip.
3. If there are many collection accounts, removing just 1 or 2 may not do much good. You always need to look at the overall credit picture.
4. Charge-off accounts behave a little differently than collections. You can sometimes gain points by paying those off.
5. Your lender likely has a What-if Simulator to experimentally see what affect removing an account has on the score.
Late Dates
1. When you look at the overall credit report and you see LOTS of late dates, especially ones from within the last year, there is not much you can do to help the score…those lates simply need to drift into the past.
2. However, if you just see 1 recent late date on 1 account, and just 1 other recent late date on another account, you should call those creditors and ask…beg…for those single late dates to be removed as a courtesy. It may also be that the late dates were a mistake, but don’t push the creditor to admit to making an error. Just ask them to remove it as a courtesy since you have an otherwise perfect payment history with that creditor.
3. Your lender can use the What-if-Simulator to experimentally see what affect removing a late date has on the score.
Authorized User Accounts-removing or adding
1. Piggybacking on someone else’s account can help or hurt your score.
2. If that account has recent late dates, you can most probably improve the score by having the actual account holder remove you as a user.
3. If the account is a revolving credit card and it’s “maxed out,” you might also improve the score by removing it, but only if you will still have other revolving credit cards on your report.
4. What about adding someone as an authorized user to a credit card? This may help, but the better course of action is to get the actual card holder to make it a joint account with you. This guarantees that the account will show up on the credit report within a month or two. But be careful…the account should have a lot of history, no late dates, high credit limit, and low balance.
Other things to help
1. Keep old revolving credit cards open…don’t close them.
2. Regularly check your credit report to catch errors early. You get a free one each year from each bureau. Go to www.annualcreditreport.com. Don’t do all 3 bureaus at the same time…space it out throughout the year.
3. Learn more about credit from websites like www.myfico.com and to get addresses to write the bureaus.
While I trust that some of your questions were answered in this blog, I bet many questions were also raised about your individual circumstance. Credit Score Optimization is one of the central reasons why you should engage the expertise of a good loan officer right NOW.
Reprinted from Keeping Current Matters Blog
Credit Cards – Revolving Debt proportions
1. Look on the credit report for revolving debt (not installment loans, or “open” accounts)
2. As a general rule of thumb, the balance should be no more than 30% of the credit limit. So, if it’s more than that, have you should make every attempt to pay it down.
3. If there are many revolving accounts with high balances, you will most probably need to pay down most or all of them for the best score.
4. If there is nothing derogatory on the credit report, just high balances on revolving debt, you can often improve the score significantly. But, if there are many derogatory items on the credit report, paying down revolving debt may not help the score very much.
5. Many lender have software programs that can quickly determining for you which (if any) revolving accounts need to be paid down, and to what balance.
Collections/Judgments:
1. Paying off or satisfying such a derogatory account does not normally improve the score because the derogatory account still exists, and so still hurts the score. In fact, paying off an old collection may even make the score drop.
2. However, for collections, the borrower can ask for the account to be completely removed or deleted. If you have not yet paid the collection, you can use that as a bargaining chip.
3. If there are many collection accounts, removing just 1 or 2 may not do much good. You always need to look at the overall credit picture.
4. Charge-off accounts behave a little differently than collections. You can sometimes gain points by paying those off.
5. Your lender likely has a What-if Simulator to experimentally see what affect removing an account has on the score.
Late Dates
1. When you look at the overall credit report and you see LOTS of late dates, especially ones from within the last year, there is not much you can do to help the score…those lates simply need to drift into the past.
2. However, if you just see 1 recent late date on 1 account, and just 1 other recent late date on another account, you should call those creditors and ask…beg…for those single late dates to be removed as a courtesy. It may also be that the late dates were a mistake, but don’t push the creditor to admit to making an error. Just ask them to remove it as a courtesy since you have an otherwise perfect payment history with that creditor.
3. Your lender can use the What-if-Simulator to experimentally see what affect removing a late date has on the score.
Authorized User Accounts-removing or adding
1. Piggybacking on someone else’s account can help or hurt your score.
2. If that account has recent late dates, you can most probably improve the score by having the actual account holder remove you as a user.
3. If the account is a revolving credit card and it’s “maxed out,” you might also improve the score by removing it, but only if you will still have other revolving credit cards on your report.
4. What about adding someone as an authorized user to a credit card? This may help, but the better course of action is to get the actual card holder to make it a joint account with you. This guarantees that the account will show up on the credit report within a month or two. But be careful…the account should have a lot of history, no late dates, high credit limit, and low balance.
Other things to help
1. Keep old revolving credit cards open…don’t close them.
2. Regularly check your credit report to catch errors early. You get a free one each year from each bureau. Go to www.annualcreditreport.com. Don’t do all 3 bureaus at the same time…space it out throughout the year.
3. Learn more about credit from websites like www.myfico.com and to get addresses to write the bureaus.
While I trust that some of your questions were answered in this blog, I bet many questions were also raised about your individual circumstance. Credit Score Optimization is one of the central reasons why you should engage the expertise of a good loan officer right NOW.
Reprinted from Keeping Current Matters Blog
Wednesday, December 8, 2010
Has Real Estate Been A Good Investment This Decade?
Has real estate been a good investment over the last decade?
Many people would be quick to answer ‘no’ to that question. However, they would be wrong. Real estate prices in this past decade have appreciated nicely despite the challenges over the last four years.
Forbes.com reported on this issue two days ago:
With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade.
According to Radar Logic, the value of a square foot of housing in the U.S. is up 58% from its January 2000 level. That represents an average annual gain of 4.3% in the value of one square foot of housing. According to the Case Shiller Pricing Index, home values are still up 34.9% over 2000 prices.
How did real estate compare to the stock market?
Forbes answered this question:
The growth in average U.S. housing values looks pretty impressive compared with that of other assets, especially stocks. The S&P 500 is lower now than it was in January 2000. So is the Nasdaq. Even factoring in inflation, which ran between 2.5% and 3.5% for most of the decade, a home purchase really did produce wealth for anybody who opted to sell some stocks and buy at around the time the dot-com crash got rolling.
Bottom Line
Even in what many consider a sub-par decade for the housing industry, real estate proved to be an excellent investment.
Many people would be quick to answer ‘no’ to that question. However, they would be wrong. Real estate prices in this past decade have appreciated nicely despite the challenges over the last four years.
Forbes.com reported on this issue two days ago:
With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade.
According to Radar Logic, the value of a square foot of housing in the U.S. is up 58% from its January 2000 level. That represents an average annual gain of 4.3% in the value of one square foot of housing. According to the Case Shiller Pricing Index, home values are still up 34.9% over 2000 prices.
How did real estate compare to the stock market?
Forbes answered this question:
The growth in average U.S. housing values looks pretty impressive compared with that of other assets, especially stocks. The S&P 500 is lower now than it was in January 2000. So is the Nasdaq. Even factoring in inflation, which ran between 2.5% and 3.5% for most of the decade, a home purchase really did produce wealth for anybody who opted to sell some stocks and buy at around the time the dot-com crash got rolling.
Bottom Line
Even in what many consider a sub-par decade for the housing industry, real estate proved to be an excellent investment.
Monday, November 29, 2010
Impact of Supply & Demand
For some time now, I have attempted to shed light on the fact that pricing in today’s real estate market will be determined by the concept of ‘supply and demand’. If supply continues to increase and demand softens (or even remains constant) prices will continue to fall. Even the National Association of Realtors (NAR) has acknowledged this to be true.
The supply of inventory in the real estate industry is defined by the current months’ supply of homes that is available for sale. There are no steadfast rules that will apply to every category of housing. However, here is a great guideline by which to go:
1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
5-6 months’ supply creates a balanced market where historically home values appreciate at a rate a little greater than inflation.
7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.
Where do we stand today?
According to NAR’s most recent Existing Sales Report, there is currently a 10.5 months’ supply of homes for sale. We can see, based on the guideline above, we are in a buyers’ market and that prices will continue to soften. The other statistic we must watch is the number of months’ of shadow inventory which will be coming to market.
CoreLogic just released their November report (which covers August). They estimate shadow inventory:
… by calculating the number of properties that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders and that are not currently listed on multiple listing services (MLSs). Shadow inventory is typically not included in the official metrics of unsold inventory.
The report showed that shadow inventory jumped more than 10% in the last year, pushing total unsold inventory to 2.1 million houses.
That represents another 8 months of supply.
The Wall Street Journal reported that some analysts have said CoreLogic estimates look rather low.
Laurie Goodman, senior managing director at Amherst Securities Group, has warned that as many as seven million homes could end up in banks hands unless more aggressive modification regimes are put in place.
Barclays estimates that another 3.76 million homes are either in the foreclosure process or are at least 90 days delinquent but not yet in foreclosure.
Bottom Line
Most industry experts are projecting just that – an additional fall in prices of between 5-20%. Mark Fleming, chief economist for CoreLogic commented:
“The weak demand for housing is significantly increasing the risk of further price declines in the housing market. This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing.”
If you are thinking of selling, give me a call immediately. In most parts of the country, selling sooner may be better than later. I will be glad to give you the exact number of months of inventory for your market area and help you price your home to sell before the shadow inventory or foreclosures hit the market.
Reprinted from Keeping Current Matters Blogsite.
The supply of inventory in the real estate industry is defined by the current months’ supply of homes that is available for sale. There are no steadfast rules that will apply to every category of housing. However, here is a great guideline by which to go:
1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
5-6 months’ supply creates a balanced market where historically home values appreciate at a rate a little greater than inflation.
7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.
Where do we stand today?
According to NAR’s most recent Existing Sales Report, there is currently a 10.5 months’ supply of homes for sale. We can see, based on the guideline above, we are in a buyers’ market and that prices will continue to soften. The other statistic we must watch is the number of months’ of shadow inventory which will be coming to market.
CoreLogic just released their November report (which covers August). They estimate shadow inventory:
… by calculating the number of properties that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders and that are not currently listed on multiple listing services (MLSs). Shadow inventory is typically not included in the official metrics of unsold inventory.
The report showed that shadow inventory jumped more than 10% in the last year, pushing total unsold inventory to 2.1 million houses.
That represents another 8 months of supply.
The Wall Street Journal reported that some analysts have said CoreLogic estimates look rather low.
Laurie Goodman, senior managing director at Amherst Securities Group, has warned that as many as seven million homes could end up in banks hands unless more aggressive modification regimes are put in place.
Barclays estimates that another 3.76 million homes are either in the foreclosure process or are at least 90 days delinquent but not yet in foreclosure.
Bottom Line
Most industry experts are projecting just that – an additional fall in prices of between 5-20%. Mark Fleming, chief economist for CoreLogic commented:
“The weak demand for housing is significantly increasing the risk of further price declines in the housing market. This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing.”
If you are thinking of selling, give me a call immediately. In most parts of the country, selling sooner may be better than later. I will be glad to give you the exact number of months of inventory for your market area and help you price your home to sell before the shadow inventory or foreclosures hit the market.
Reprinted from Keeping Current Matters Blogsite.
Friday, November 19, 2010
20,000 Homes Will Sell This Weekend!
There is no doubt that demand for housing has slowed. The National Association of Realtor’s 3rd Quarter Existing Homes Sales Report showed that sales were down in all fifty states and the District of Columbia (3rd quarter vs. the 2nd quarter). The decline was in double digits in all but two states (Nevada and California). Those are the facts.
But let us not allow the facts to get in the way of the truth. The truth is that over 4 million homes will have sold in this country by the end of the year.
That averages out to be over 10,000 houses a day! Every day – 365 days a year!
Houses are selling. The question is will your house be one of the 10,000 that sell today. That is entirely up to you. You and your family can move on with your plans and dreams immediately. You just have to be willing to price the house at what today’s purchaser is willing to pay. Will you be able to sell it for what it would have sold for in the past? Probably not. Will you be able to sell it for the price you had desired? Probably not.
You must weigh the cost of selling today (a reduced profit on your home) against the cost of not getting on with your life. There is no doubt that money is important to everyone, especially today. Being able to follow your plans and dreams is also important however. Don’t allow money to ultimately control that decision.
Decide what is best for you and your family – AND DO IT!!
Reprinted from Keeping Current Matters Blog.
But let us not allow the facts to get in the way of the truth. The truth is that over 4 million homes will have sold in this country by the end of the year.
That averages out to be over 10,000 houses a day! Every day – 365 days a year!
Houses are selling. The question is will your house be one of the 10,000 that sell today. That is entirely up to you. You and your family can move on with your plans and dreams immediately. You just have to be willing to price the house at what today’s purchaser is willing to pay. Will you be able to sell it for what it would have sold for in the past? Probably not. Will you be able to sell it for the price you had desired? Probably not.
You must weigh the cost of selling today (a reduced profit on your home) against the cost of not getting on with your life. There is no doubt that money is important to everyone, especially today. Being able to follow your plans and dreams is also important however. Don’t allow money to ultimately control that decision.
Decide what is best for you and your family – AND DO IT!!
Reprinted from Keeping Current Matters Blog.
Tuesday, November 9, 2010
5 Good Reasons To Hire A Real Estate Agent
Should you spend the money on a real estate commission or save that money by selling your home by yourself?
That is a question many home sellers ask themselves. Today, we want to discuss why it is crucial to have a true professional guiding you through the mine field of challenges that exist in the current real estate market.
The housing market today is more challenging than it has ever been and seems to be becoming more difficult each day. What impact will foreclosures have on prices? Which loan products that were available just last month are no longer available? How do you convince perspective purchasers to pull the trigger on an offer when everyone is telling them that they should see another 100 houses before they make a decision? These are tough questions for a trained, experienced professional. The lay person would find it almost impossible to keep abreast of this rapidly evolving industry.
Here are five important reasons to use a real estate professional:
1. Pricing Is Difficult
Just a few years ago, you didn’t have to worry about overpricing your home. If it was too high, all you needed to do was wait as historic appreciation was taking place. The situation is quite different today. With experts calling for another drop in home values, overpricing your property will cost you time. In this market, time costs you money. A professional real estate agent will discuss how increasing inventory could dramatically impact the value of your property in the months to come. They will help you set the right price in today’s market.
2. Negotiating Ability Is Crucial
Buyers today have an almost unlimited supply of homes from which to choose. They realize that puts them in a great negotiating position. Most buyers are now also being represented by an agent. Sellers need to also be represented by a professional expert trained to negotiate real estate contracts.
3. Mortgaging Is Key to the Deal
The biggest impact of the housing market collapse is that lending standards are much stricter today than they were a few short years ago. Rules are constantly changing. Even FHA has gone through a guidelines overhaul in the last several months. You need a real estate expert who has teamed up with a knowledgeable mortgage professional to make sure that the buyer in the deal is in fact capable of obtaining a mortgage. Losing time with an unqualified buyer costs you money in a market prices are falling.
4. Your Family’s Safety
I have always found it puzzling that the same person that will lock every door and window and set the alarm today will then allow total strangers into their house tomorrow. The real estate industry trains its practitioners to take steps to protect themselves and their clients. Take advantage of putting a person between you and the person calling on an ad or yard sign.
5. You Probably Have More Important Things to Do
Selling a home could turn into a full time job. Learning the necessary disclosures, coordinating the dates of your closings, dealing with a challenge regarding your appraisal and re-negotiating the offer after an engineer’s report are just a few of the concerns you may face. You would probably be better of spending that time with the items important to you and your family and leaving the challenges to your agent.
Bottom Line
To make sure the sale of your home is handled professionally – hire a trained professional. In the long run, you will wind-up with more money in your pocket and have less challenges with the move.
Copied From KMC Blog by Permission
That is a question many home sellers ask themselves. Today, we want to discuss why it is crucial to have a true professional guiding you through the mine field of challenges that exist in the current real estate market.
The housing market today is more challenging than it has ever been and seems to be becoming more difficult each day. What impact will foreclosures have on prices? Which loan products that were available just last month are no longer available? How do you convince perspective purchasers to pull the trigger on an offer when everyone is telling them that they should see another 100 houses before they make a decision? These are tough questions for a trained, experienced professional. The lay person would find it almost impossible to keep abreast of this rapidly evolving industry.
Here are five important reasons to use a real estate professional:
1. Pricing Is Difficult
Just a few years ago, you didn’t have to worry about overpricing your home. If it was too high, all you needed to do was wait as historic appreciation was taking place. The situation is quite different today. With experts calling for another drop in home values, overpricing your property will cost you time. In this market, time costs you money. A professional real estate agent will discuss how increasing inventory could dramatically impact the value of your property in the months to come. They will help you set the right price in today’s market.
2. Negotiating Ability Is Crucial
Buyers today have an almost unlimited supply of homes from which to choose. They realize that puts them in a great negotiating position. Most buyers are now also being represented by an agent. Sellers need to also be represented by a professional expert trained to negotiate real estate contracts.
3. Mortgaging Is Key to the Deal
The biggest impact of the housing market collapse is that lending standards are much stricter today than they were a few short years ago. Rules are constantly changing. Even FHA has gone through a guidelines overhaul in the last several months. You need a real estate expert who has teamed up with a knowledgeable mortgage professional to make sure that the buyer in the deal is in fact capable of obtaining a mortgage. Losing time with an unqualified buyer costs you money in a market prices are falling.
4. Your Family’s Safety
I have always found it puzzling that the same person that will lock every door and window and set the alarm today will then allow total strangers into their house tomorrow. The real estate industry trains its practitioners to take steps to protect themselves and their clients. Take advantage of putting a person between you and the person calling on an ad or yard sign.
5. You Probably Have More Important Things to Do
Selling a home could turn into a full time job. Learning the necessary disclosures, coordinating the dates of your closings, dealing with a challenge regarding your appraisal and re-negotiating the offer after an engineer’s report are just a few of the concerns you may face. You would probably be better of spending that time with the items important to you and your family and leaving the challenges to your agent.
Bottom Line
To make sure the sale of your home is handled professionally – hire a trained professional. In the long run, you will wind-up with more money in your pocket and have less challenges with the move.
Copied From KMC Blog by Permission
Monday, November 8, 2010
Quantitative Easing
The economy is still struggling. Employment numbers are not improving. The housing market is stagnant. The Federal Open Market Committee (FOMC) decided that a new form of stimulus was necessary to kick start the job market and the economy. They decided to ‘put more money’ into the market. The term for the new stimulus package is ‘quantitative easing’ (QE2).
We want to take a look at what happened, what it means to the economy and ultimately what impact it will have on the residential real estate market.
What Happened?
The Washington Post reported on the FOMC’s actions:
The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August.
What Does This Mean for the Economy?
In the same article mentioned above, The Washington Post explained:
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
The Impact on Real Estate
Patrick F. Stone is president and CEO of Williston Financial Group, in an Inman News article, explained:
We have seen meaningful increases in commodity prices and stock prices in anticipation of QE2. With the implementation of QE2, and the hoped-for inflation, house prices will stabilize and — depending on the degree of impact and length of impact — housing inflation is a logical byproduct. Any meaningful housing appreciation will have a tremendously positive impact on the economy.
The U.S. News and World Report on their Money Blog addressed the issue of what opportunities now exist because of the FOMC action.
Interest rates have never been lower. It seems that just about every week mortgage rates set a new low. And this week the Fed is expected to undertake a second round of quantitative easing, QE2 for short, by buying up more government debt. As a result, incredibly low interest rates may go even lower.
But low rates don’t do us any good if we fail to take advantage of them.
The report went on to give the five ways one could take advantage of lower rates. Number one? Buy a home:
The combination of low rates and falling real estate prices make for a perfect time to buy a home. Particularly for first time buyers, there may never be a better time to take the plunge into homeownership than over the next year. Some say home values may still fall over the next year, so knowing exactly when to buy can be a bit of gamble. But locking in incredibly low rates on a 30-year mortgage is a great way to reap the benefits of the current interest rate environment.
Bottom Line
Interest rates will remain low and inflation will increase slowly if the Fed’s actions work as hoped. After that, home prices will appreciate and interest rates without government intervention will return to historic norms. If you are looking to purchase, now is the time. If you can wait 12-18 months to sell, perhaps it makes sense to wait.
If you are looking to sell in the next several months, we don’t believe the impact of the government actions will take place within that time frame. Please call me to discuss your options.
We want to take a look at what happened, what it means to the economy and ultimately what impact it will have on the residential real estate market.
What Happened?
The Washington Post reported on the FOMC’s actions:
The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August.
What Does This Mean for the Economy?
In the same article mentioned above, The Washington Post explained:
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
The Impact on Real Estate
Patrick F. Stone is president and CEO of Williston Financial Group, in an Inman News article, explained:
We have seen meaningful increases in commodity prices and stock prices in anticipation of QE2. With the implementation of QE2, and the hoped-for inflation, house prices will stabilize and — depending on the degree of impact and length of impact — housing inflation is a logical byproduct. Any meaningful housing appreciation will have a tremendously positive impact on the economy.
The U.S. News and World Report on their Money Blog addressed the issue of what opportunities now exist because of the FOMC action.
Interest rates have never been lower. It seems that just about every week mortgage rates set a new low. And this week the Fed is expected to undertake a second round of quantitative easing, QE2 for short, by buying up more government debt. As a result, incredibly low interest rates may go even lower.
But low rates don’t do us any good if we fail to take advantage of them.
The report went on to give the five ways one could take advantage of lower rates. Number one? Buy a home:
The combination of low rates and falling real estate prices make for a perfect time to buy a home. Particularly for first time buyers, there may never be a better time to take the plunge into homeownership than over the next year. Some say home values may still fall over the next year, so knowing exactly when to buy can be a bit of gamble. But locking in incredibly low rates on a 30-year mortgage is a great way to reap the benefits of the current interest rate environment.
Bottom Line
Interest rates will remain low and inflation will increase slowly if the Fed’s actions work as hoped. After that, home prices will appreciate and interest rates without government intervention will return to historic norms. If you are looking to purchase, now is the time. If you can wait 12-18 months to sell, perhaps it makes sense to wait.
If you are looking to sell in the next several months, we don’t believe the impact of the government actions will take place within that time frame. Please call me to discuss your options.
Tuesday, November 2, 2010
Where Will Rates Go?
Almost every mortgage expert predicted that interest rates would skyrocket earlier this year as the Fed backed out of purchasing mortgage-backed-securities. They were wrong and most have refrained from making any new projections ever since. Last week, our own friend and adviser, Dean Hartman, said they may go lower. This week, Market Watch reported on the Mortgage Brokers’ Association’s (MBA) projections:
Mortgage rates may be as low as they’ll get — rates are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s economic forecast.
It seems that the MBA is in line with the projections of the National Association of Realtors who also believes that rates will increase over the next several quarters. Here are the comparative projections:
NAR MBA
2011 2nd Qtr. 4.7 4.8
2011 3rd Qtr. 5.1 5.0
2011 4th Qtr. 5.4 5.1
2012 1st Qtr. 5.6 5.2
2012 2nd Qtr. 5.8 5.4
Bottom Line
If you are thinking about buying a home but are waiting for prices to soften further, be careful that the ‘cost’ of the house isn’t heading upward because of interest rates.
Mortgage rates may be as low as they’ll get — rates are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s economic forecast.
It seems that the MBA is in line with the projections of the National Association of Realtors who also believes that rates will increase over the next several quarters. Here are the comparative projections:
NAR MBA
2011 2nd Qtr. 4.7 4.8
2011 3rd Qtr. 5.1 5.0
2011 4th Qtr. 5.4 5.1
2012 1st Qtr. 5.6 5.2
2012 2nd Qtr. 5.8 5.4
Bottom Line
If you are thinking about buying a home but are waiting for prices to soften further, be careful that the ‘cost’ of the house isn’t heading upward because of interest rates.
Friday, October 29, 2010
Will Prices Be Higher In The Spring?
This is a question anyone thinking about selling must ask. Should they sell now or should they wait for the spring? Most years that would be an interesting question. There is a belief that many buyers come out in the spring and, with that increase in demand for housing, prices may appreciate. This year is unlike any year in recent memory. Most experts believe there will be continuing depreciation of home values throughout the next 18 months.
As we posted on recently, there may be a window of opportunity throughout the rest of 2010 as the banks try to straighten out the paperwork on thousands of foreclosures. Once that paperwork is corrected, the flow of distressed properties coming to the market at discounted prices will begin again.
This was mentioned in the latest Home Price Expectation Survey. Robert Shiller, MacroMarkets co-founder and chief economist said this:
“Over the past month, the average projection for 2010 nationwide home price performance improved slightly among our experts, but for each year thereafter it deteriorated. One plausible explanation for this month’s more negative overall sentiment is recent news concerning foreclosure processing questions and the related possibility of extending the supply pipeline.”
Other experts are also reporting that prices will soften next year
In October’s RPX Monthly Housing Market Report, CEO Michael Feder commented:
“We are at a flex point in housing valuation. With record supply, already paltry demand and systemic threats to a possible correction, we remain terribly concerned about forward home prices.”
The very next day, in a special release, Clear Capital reported a “sudden and dramatic” drop in U.S. home prices:
Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months.
Bottom Line
If you plan to sell within the next year, you shouldn’t wait for the spring market. Price the home at a compelling price to make sure it sells in the next sixty days.
As we posted on recently, there may be a window of opportunity throughout the rest of 2010 as the banks try to straighten out the paperwork on thousands of foreclosures. Once that paperwork is corrected, the flow of distressed properties coming to the market at discounted prices will begin again.
This was mentioned in the latest Home Price Expectation Survey. Robert Shiller, MacroMarkets co-founder and chief economist said this:
“Over the past month, the average projection for 2010 nationwide home price performance improved slightly among our experts, but for each year thereafter it deteriorated. One plausible explanation for this month’s more negative overall sentiment is recent news concerning foreclosure processing questions and the related possibility of extending the supply pipeline.”
Other experts are also reporting that prices will soften next year
In October’s RPX Monthly Housing Market Report, CEO Michael Feder commented:
“We are at a flex point in housing valuation. With record supply, already paltry demand and systemic threats to a possible correction, we remain terribly concerned about forward home prices.”
The very next day, in a special release, Clear Capital reported a “sudden and dramatic” drop in U.S. home prices:
Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months.
Bottom Line
If you plan to sell within the next year, you shouldn’t wait for the spring market. Price the home at a compelling price to make sure it sells in the next sixty days.
Thursday, October 28, 2010
4 Tips When Applying For a Mortgage
As underwriting guidelines for lenders become more stringent, it becomes clearer what a good mortgage application looks like. As prospective home buyers begin their search, there are a few things they can do to help get their loans approved (and with the best possible terms), and, at the same time, lessen some of the stress that goes along with the mortgage process.
1.) Income Documents
Most lenders want to see a full month of pay stubs and two year’s complete Federal Tax Returns. Assembling them ahead of time and holding on to every pay stub you get is a good idea that will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expense are often crippling factors that, if explained and dealt with upfront, can make your loan approval smoother.
2.) Asset Documents
Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because they can signal a new loan that wouldn’t show up on your credit report yet. What’s a “large deposit”? Typically, any deposit that would represent more than your representative income. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period); therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place. Got a gift? You will need a Gift Affidavit, proof of the donor’s ability, and transfer of the funds. Any and all questions should be discussed with your loan officer.
3.) Credit Score Optimization
Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit card, as that will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, look to get a new credit card, or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don’t do anything that will require having your credit run without first discussing it with a mortgage professional who knows the impact it could have.
4.) Appraisal Concerns
It’s unlikely you will make an offer to purchase without checking out comparable home sales. It’s also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently available, and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions.
Overall, it is recommended that you hold onto copies of everything financial, think before allowing your credit to be run, and you work with an agent and loan officer who can use their experience to put your loan application in its best possible light…as soon as you start thinking about buying a home.
1.) Income Documents
Most lenders want to see a full month of pay stubs and two year’s complete Federal Tax Returns. Assembling them ahead of time and holding on to every pay stub you get is a good idea that will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expense are often crippling factors that, if explained and dealt with upfront, can make your loan approval smoother.
2.) Asset Documents
Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because they can signal a new loan that wouldn’t show up on your credit report yet. What’s a “large deposit”? Typically, any deposit that would represent more than your representative income. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period); therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place. Got a gift? You will need a Gift Affidavit, proof of the donor’s ability, and transfer of the funds. Any and all questions should be discussed with your loan officer.
3.) Credit Score Optimization
Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit card, as that will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, look to get a new credit card, or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don’t do anything that will require having your credit run without first discussing it with a mortgage professional who knows the impact it could have.
4.) Appraisal Concerns
It’s unlikely you will make an offer to purchase without checking out comparable home sales. It’s also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently available, and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions.
Overall, it is recommended that you hold onto copies of everything financial, think before allowing your credit to be run, and you work with an agent and loan officer who can use their experience to put your loan application in its best possible light…as soon as you start thinking about buying a home.
Thursday, October 21, 2010
Home Are Leveraged Too!
Some people define leverage as using other people's money but another way to describe it is when a small down payment controls a large asset by placing a high loan-to-value mortgage on it. There are not many investments that allow leverage but homes certainly do and especially with FHA or VA loans.
Let's assume a couple has the down payment and good credit that would allow them to buy a home. We'll compare some alternatives to see where their best outcome may be.
If a person put $6125 in a certificate of deposit that earned 2% annually, it would be worth $6,762 in five years and the profit would be taxed as ordinary income. If a person could take a little more risk and pick the right stock, the $6,125 might grow to $7,817 and the profit would be taxed at favorable long-term capital gains rates if they held the stock for more than one year.
On the other hand, if the $6,125 were used as a down payment for a $175,000 home that went up in value only 1% per year, the equity would grow to $30,575 in the same five year period of time based on appreciation and amortization. In most cases, the gains on principal residences are excluded from income tax subject to limits.
The difference is dramatic and is one more reason that buyers should be taking advantage of the great selection of homes, the lower prices and incredibly low interest rates to fix thier cost of housing for years to come. There may never be a better time to buy a home than now.
Reprinted from the Pat Zaby blog
Let's assume a couple has the down payment and good credit that would allow them to buy a home. We'll compare some alternatives to see where their best outcome may be.
If a person put $6125 in a certificate of deposit that earned 2% annually, it would be worth $6,762 in five years and the profit would be taxed as ordinary income. If a person could take a little more risk and pick the right stock, the $6,125 might grow to $7,817 and the profit would be taxed at favorable long-term capital gains rates if they held the stock for more than one year.
On the other hand, if the $6,125 were used as a down payment for a $175,000 home that went up in value only 1% per year, the equity would grow to $30,575 in the same five year period of time based on appreciation and amortization. In most cases, the gains on principal residences are excluded from income tax subject to limits.
The difference is dramatic and is one more reason that buyers should be taking advantage of the great selection of homes, the lower prices and incredibly low interest rates to fix thier cost of housing for years to come. There may never be a better time to buy a home than now.
Reprinted from the Pat Zaby blog
Tuesday, October 19, 2010
5 Reasons To Sell right Now
Selling your house in today’s market can be extremely difficult. It is for that reason that every seller should take advantage of each and every opportunity that appears. Each fall, such an opportunity presents itself. This fall, that opportunity may be just too good to pass up.
Below are five reasons you should consider pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.
1. Entering this time of year, the buyers are more serious.
We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are at the stores doing their holiday shopping. The home buyers left in the market are serious and are more apt to make a purchasing decision. Less showings – but to more motivated purchasers.
2. If you are moving up, you can save thousands.
The Chicago Tribune stated in an article last week that sellers who want to ‘trade up’ should act now:
It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.
A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath. But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.
Keep in mind the spread may be even greater. There’s a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.
3. Interest rates just fell again – to 4.19%.
Professor Karl E. Case, the founder of the Case Shiller Pricing Index in an article in the New York Times last month actually did the math for us:
Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833 … housing has perhaps never been a better bargain.
5. You have less ‘discounted’ inventory with which to compete.
This year, sellers of non-distressed properties have been given an early holiday present. With banks declaring a suspension on the sale of many distressed properties (foreclosures), there has been a large supply of discounted properties removed from competition. No one knows how long this self imposed moratorium will last. However, while it does, every homeowner has a better chance of selling their property.
Bottom Line
If you are looking to sell in the near future, there may not be a more opportune time than this fall. Serious buyers, great move-up deals and less competition from foreclosures creates the perfect selling situation. Don’t miss it!
Reposted from Real Estate Matters Blogsite
Below are five reasons you should consider pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.
1. Entering this time of year, the buyers are more serious.
We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are at the stores doing their holiday shopping. The home buyers left in the market are serious and are more apt to make a purchasing decision. Less showings – but to more motivated purchasers.
2. If you are moving up, you can save thousands.
The Chicago Tribune stated in an article last week that sellers who want to ‘trade up’ should act now:
It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.
A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath. But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.
Keep in mind the spread may be even greater. There’s a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.
3. Interest rates just fell again – to 4.19%.
Professor Karl E. Case, the founder of the Case Shiller Pricing Index in an article in the New York Times last month actually did the math for us:
Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833 … housing has perhaps never been a better bargain.
4. You beat the rush of inventory that is coming next year.
Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. As an example, here is the number of listings available for sale in each of those months in 2010.
January – 3,277,000
February – 3,531,000
March – 3,626,000
April – 4,029,000
You won’t have to worry about this increasing competition if you sell now.
5. You have less ‘discounted’ inventory with which to compete.
This year, sellers of non-distressed properties have been given an early holiday present. With banks declaring a suspension on the sale of many distressed properties (foreclosures), there has been a large supply of discounted properties removed from competition. No one knows how long this self imposed moratorium will last. However, while it does, every homeowner has a better chance of selling their property.
Bottom Line
If you are looking to sell in the near future, there may not be a more opportune time than this fall. Serious buyers, great move-up deals and less competition from foreclosures creates the perfect selling situation. Don’t miss it!
Reposted from Real Estate Matters Blogsite
Friday, October 15, 2010
The Foreclosure Mess- A Silver Lining?
There is no doubt that the current foreclosure mess is creating havoc in the housing industry. Listings are being removed from the market and many closings are being delayed and, in some cases, even canceled. No one is sure what the full impact of the situation will be or when it will be rectified. However, there could be a silver lining to this gigantic cloud of doubt.
First, let’s try to define the challenge. The Wall Street Journal quoted Adam Levitin, associate professor of law at Georgetown University, as saying there are three scenarios that could take place:
1.) In the best case scenario, the issues are simply technical, the situation is resolved and the foreclosure process continues. Many believe housing won’t recover until the glut of foreclosed homes clears the market.
2.) In the medium-case scenario, litigation ensues and the matter takes years to sort out. That will inflict more pain onto the already troubled housing market.
3.) In the worst case, the issues become a “systemic problem” that grinds the mortgage market to a halt and title insurers refuse to insure mortgages involving existing homes.
How long might it take to rectify the situation?
The deeper the problem gets the longer the solution will take. At first, the banks were talking in terms of weeks. Now people are guessing it could take months.
Calculated Risk reported excerpts from the JP Morgan conference call yesterday:
Analyst: The foreclosure suspension, it’s a matter of weeks instead of months, did I hear you say that?
JPM: No. I didn’t say weeks to clean up the files. We actually have to have little in depth conversations with regulators and AGs and stuff like that. So I don’t know exactly when. I’m hopeful that it all starts to move at one point. I don’t know if it’s going to be three weeks or five. But I think it will be a real shame if we don’t get this resolved and moving again.
Analyst: In all likelihood you should be allowed to foreclose as we go into next year.
JPM: I hope so. It’s not up to me.
Fox News reported yesterday:
Foreclosed homes that would have been sold by lenders now will be sold seven or eight months from now … said Andres Carbacho-Burgos, an economist at Moody’s Economy.com.
Diana Olick of CNBC probably said it best:
Anyone who says that the banks will fix all this in a few months is seriously delusional.
Where is the silver lining?
We often talk in this blog of the concept of ‘supply and demand’ and how it applies to future home prices. We have warned that prices will face downward pressure as the banks release their foreclosure inventory to the market. It appears that the release of much of that inventory will now be delayed for months. That creates an opportunity for any seller to sell their house now without facing that discounted competition.
The Wharton School of Business at the University of Pennsylvania addressed this issue. In the article, they said:
Wharton real estate professor Susan Wachter says the foreclosure freeze might temporarily buoy prices by keeping foreclosed properties off the market.
In the Fox News reported mentioned above, Carbacho-Burgos said:
That’s good news if you’re a homeowner looking to sell in the near term, because there won’t be as much competition from deeply discounted foreclosed properties.
Bottom Line
We are not suggesting that prices will begin to increase, just that they won’t fall as rapidly as originally predicted. It will be better to sell now rather than wait and compete against the flood of foreclosures that will be released once this challenge is corrected.
From the Real Estate Matters Website
First, let’s try to define the challenge. The Wall Street Journal quoted Adam Levitin, associate professor of law at Georgetown University, as saying there are three scenarios that could take place:
1.) In the best case scenario, the issues are simply technical, the situation is resolved and the foreclosure process continues. Many believe housing won’t recover until the glut of foreclosed homes clears the market.
2.) In the medium-case scenario, litigation ensues and the matter takes years to sort out. That will inflict more pain onto the already troubled housing market.
3.) In the worst case, the issues become a “systemic problem” that grinds the mortgage market to a halt and title insurers refuse to insure mortgages involving existing homes.
How long might it take to rectify the situation?
The deeper the problem gets the longer the solution will take. At first, the banks were talking in terms of weeks. Now people are guessing it could take months.
Calculated Risk reported excerpts from the JP Morgan conference call yesterday:
Analyst: The foreclosure suspension, it’s a matter of weeks instead of months, did I hear you say that?
JPM: No. I didn’t say weeks to clean up the files. We actually have to have little in depth conversations with regulators and AGs and stuff like that. So I don’t know exactly when. I’m hopeful that it all starts to move at one point. I don’t know if it’s going to be three weeks or five. But I think it will be a real shame if we don’t get this resolved and moving again.
Analyst: In all likelihood you should be allowed to foreclose as we go into next year.
JPM: I hope so. It’s not up to me.
Fox News reported yesterday:
Foreclosed homes that would have been sold by lenders now will be sold seven or eight months from now … said Andres Carbacho-Burgos, an economist at Moody’s Economy.com.
Diana Olick of CNBC probably said it best:
Anyone who says that the banks will fix all this in a few months is seriously delusional.
Where is the silver lining?
We often talk in this blog of the concept of ‘supply and demand’ and how it applies to future home prices. We have warned that prices will face downward pressure as the banks release their foreclosure inventory to the market. It appears that the release of much of that inventory will now be delayed for months. That creates an opportunity for any seller to sell their house now without facing that discounted competition.
The Wharton School of Business at the University of Pennsylvania addressed this issue. In the article, they said:
Wharton real estate professor Susan Wachter says the foreclosure freeze might temporarily buoy prices by keeping foreclosed properties off the market.
In the Fox News reported mentioned above, Carbacho-Burgos said:
That’s good news if you’re a homeowner looking to sell in the near term, because there won’t be as much competition from deeply discounted foreclosed properties.
Bottom Line
We are not suggesting that prices will begin to increase, just that they won’t fall as rapidly as originally predicted. It will be better to sell now rather than wait and compete against the flood of foreclosures that will be released once this challenge is corrected.
From the Real Estate Matters Website
Tuesday, October 12, 2010
The Foreclosure Mess
Last week, we reported on the beginnings of the mess the banks created by using ‘robo-signers’ to fast track foreclosure filings. We detailed the challenge and said that “the process of foreclosing may grind to a screeching halt”. And, it has. Bank of America has announced that it has halted foreclosures in all fifty states. Other major lenders have ceased foreclosures in 23 states and some politicians are calling for a total industry-wide moratorium.
Today, we want to explain what is actually taking place and what impact the situation may have on you and your family over the next several months.
Currently, many banks have ceased foreclosure procedures in all states which require a judicial process. You can find out whether your state requires such a process by visiting All Foreclosure.com which lists foreclosure procedures by state. It is our belief that all fifty states will eventually be impacted by the controversy.
How will it impact you?
That depends on where you are in the real estate process. We will look at three situations: your home is in foreclosure, you are selling or you’re buying a foreclosure.
You are a homeowner in the foreclosure process
It appears that some banks will be backing away from following through with normal foreclosure processes until they can be assured that their paperwork is in order. Early estimates are calling for a potential 30-90 delay to many foreclosure procedures (notices, repossessions, sales, etc.) However, there is absolutely no way for anyone to be sure whether your particular situation will be delayed.
You are currently selling a house
We have reported often on the affect foreclosures have on home prices in a community. The actual impact is measurable.
According to RealtyTrac, bank-owned properties went for an average of 35% less than non-foreclosure sales. Foreclosures not only absorb buyers but also impact the appraisals of the homes that surround them.
Obviously, if there are less distressed properties coming to the market, there will be less downward pressure on pricing in the short term. The Washington Post, in an article last week, reported:
Stretching out the foreclosure process would reduce the number of houses dumped on the market over the next six months, which could help firm up housing prices in the short term and put some extra support under a sagging economy.
There may be a window of opportunity for a seller to maximize the price they receive for their home if they sell in the next 90 days.
You are currently buying a foreclosure
A portion of the inventory of foreclosed homes on the market has been frozen. Banks and title companies (who insure good title to the property a buyer purchases) want to make sure the bank actually owns the property legally before they sell it.
The Washington Post in an article last week reported:
Nick Chaconas, a Maryland real estate agent, said he was one week from completing a foreclosure deal for one client, who was buying a $470,000 fixer-upper in Potomac, when an e-mail arrived putting the deal on the skids.
The e-mail, from the title insurance company involved in the deal, said the mortgage lender PNC was suspending foreclosure sales for at least 30 days “due to a review being undertaken on all foreclosure files.”
If you are buying a foreclosure, anticipate potential delays. We do not believe there will be large numbers of cancellations. Be patient and realize that you are getting a substantial savings on the purchase.
How long will the challenge persist?
The impact this will have on the housing recovery will be determined by both the depth and width of the challenge. Are there large numbers of homes that were mistakenly foreclosed on? We doubt it. Will the instances where errors (or even fraud) did exist cause mass delays? Maybe.
Peter J. Henning who follows issues involving securities law and white-collar crime for DealBook’s White Collar Watch explained:
The revelation of potential problems stretching across the foreclosure landscape means that civil suits against the parties to the process are inevitable. In individual foreclosure proceedings, homeowners would probably challenge any attempt to take title to the property, which may allow them to remain in their houses a while longer, or even stop the proceeding altogether.
On a larger scale, there are likely to be two potential classes of plaintiffs pursuing civil suits against the banks and others for their roles: first, homeowners who earlier lost their properties to foreclosure in which questionable documents were filed, and second, title insurance companies that may be on the hook for claims by purchasers of foreclosed properties who now have a cloud on the title to their house. Each may claim that the faulty documentation in the foreclosure cases caused them harm.
If class actions suits start to dominate this story, it could be a long time before we normalize the situation.
How will it impact the market overall?
There could be widespread ramifications. The Washington Post in an article last week:
It would not help the recovery of the economy, or the real estate market, if the foreclosure process became so hopelessly tangled that banks and investors effectively lose the ability to recoup the remaining value of their collateral. That would provide some immediate financial relief to households facing foreclosure, but it would encourage many more homeowners to begin shirking their mortgage payments in the belief that they would also be able to avoid the consequences. The long term consequences of that would be that mortgage rates would be higher and mortgage loans would be smaller and harder to get.
Bottom Line
As we said last week, fewer foreclosures coming to the market right now will mean prices will be less impacted. However, these properties will eventually come to market; if not now, than later. That will delay the housing recovery – perhaps for years.
Today, we want to explain what is actually taking place and what impact the situation may have on you and your family over the next several months.
Currently, many banks have ceased foreclosure procedures in all states which require a judicial process. You can find out whether your state requires such a process by visiting All Foreclosure.com which lists foreclosure procedures by state. It is our belief that all fifty states will eventually be impacted by the controversy.
How will it impact you?
That depends on where you are in the real estate process. We will look at three situations: your home is in foreclosure, you are selling or you’re buying a foreclosure.
You are a homeowner in the foreclosure process
It appears that some banks will be backing away from following through with normal foreclosure processes until they can be assured that their paperwork is in order. Early estimates are calling for a potential 30-90 delay to many foreclosure procedures (notices, repossessions, sales, etc.) However, there is absolutely no way for anyone to be sure whether your particular situation will be delayed.
You are currently selling a house
We have reported often on the affect foreclosures have on home prices in a community. The actual impact is measurable.
According to RealtyTrac, bank-owned properties went for an average of 35% less than non-foreclosure sales. Foreclosures not only absorb buyers but also impact the appraisals of the homes that surround them.
Obviously, if there are less distressed properties coming to the market, there will be less downward pressure on pricing in the short term. The Washington Post, in an article last week, reported:
Stretching out the foreclosure process would reduce the number of houses dumped on the market over the next six months, which could help firm up housing prices in the short term and put some extra support under a sagging economy.
There may be a window of opportunity for a seller to maximize the price they receive for their home if they sell in the next 90 days.
You are currently buying a foreclosure
A portion of the inventory of foreclosed homes on the market has been frozen. Banks and title companies (who insure good title to the property a buyer purchases) want to make sure the bank actually owns the property legally before they sell it.
The Washington Post in an article last week reported:
Nick Chaconas, a Maryland real estate agent, said he was one week from completing a foreclosure deal for one client, who was buying a $470,000 fixer-upper in Potomac, when an e-mail arrived putting the deal on the skids.
The e-mail, from the title insurance company involved in the deal, said the mortgage lender PNC was suspending foreclosure sales for at least 30 days “due to a review being undertaken on all foreclosure files.”
If you are buying a foreclosure, anticipate potential delays. We do not believe there will be large numbers of cancellations. Be patient and realize that you are getting a substantial savings on the purchase.
How long will the challenge persist?
The impact this will have on the housing recovery will be determined by both the depth and width of the challenge. Are there large numbers of homes that were mistakenly foreclosed on? We doubt it. Will the instances where errors (or even fraud) did exist cause mass delays? Maybe.
Peter J. Henning who follows issues involving securities law and white-collar crime for DealBook’s White Collar Watch explained:
The revelation of potential problems stretching across the foreclosure landscape means that civil suits against the parties to the process are inevitable. In individual foreclosure proceedings, homeowners would probably challenge any attempt to take title to the property, which may allow them to remain in their houses a while longer, or even stop the proceeding altogether.
On a larger scale, there are likely to be two potential classes of plaintiffs pursuing civil suits against the banks and others for their roles: first, homeowners who earlier lost their properties to foreclosure in which questionable documents were filed, and second, title insurance companies that may be on the hook for claims by purchasers of foreclosed properties who now have a cloud on the title to their house. Each may claim that the faulty documentation in the foreclosure cases caused them harm.
If class actions suits start to dominate this story, it could be a long time before we normalize the situation.
How will it impact the market overall?
There could be widespread ramifications. The Washington Post in an article last week:
It would not help the recovery of the economy, or the real estate market, if the foreclosure process became so hopelessly tangled that banks and investors effectively lose the ability to recoup the remaining value of their collateral. That would provide some immediate financial relief to households facing foreclosure, but it would encourage many more homeowners to begin shirking their mortgage payments in the belief that they would also be able to avoid the consequences. The long term consequences of that would be that mortgage rates would be higher and mortgage loans would be smaller and harder to get.
Bottom Line
As we said last week, fewer foreclosures coming to the market right now will mean prices will be less impacted. However, these properties will eventually come to market; if not now, than later. That will delay the housing recovery – perhaps for years.
Friday, October 8, 2010
Luxury Market Moving
The news about the housing market still seems to be dominated by stories of pending disaster. Headlines report that some believe that there is a 25% chance of a ‘double-dip’ in home prices. We can understand the concern. The last Existing Home Sales Report by the National Association of Realtors (NAR) showed that sales were down 19% from the same time last year. Obviously, the real estate market is still struggling
However, there is a segment of the housing market that is rapidly gaining momentum –LUXURY REAL ESTATE! Just last week we reported that NAR’s 2nd Quarter Report on Home Sales Statistics showed a 6.1% increase in sales of homes over a million dollars.
The latest home sales report mentioned above (covering August closings) shows an 11.5% increase in sales over that million dollar mark! (It also showed a 4.6% increase in sales of homes between $750,000 and $1 million). Though overall sales fell almost 20%, sales of upper end properties are escalating.
That Also Includes the ‘Super Luxury’ Market
The ‘super luxury’ market is defined by different prices in different markets. Any market however would consider homes over $4 million in this category. The Wall Street Journal last week reported on the Manhattan real estate market:
A report by Brown Harris Stevens and Halstead found that the number of co-op sales selling for more than $7 million in Manhattan doubled in the third quarter over a year earlier.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. On their website, they reported 20 sales of homes with a final listing price of over $ 4 million dollars in the last two months, covering eight different states!
Proper pricing is essential
The more affluent buyer is beginning to see opportunity in this real estate market. Make no mistake however. Whatever the price point, the luxury buyer must see value.
Hall F. Willkie, president of Brown Harris Steven, says that more affluent buyers “in the higher price point” were driving up the average price. “You are definitely seeing people feeling confident as long as they were getting good values,” he said…Pamela Liebman, president of Corcoran Group, said that there was a lot of strength in the market…”People are willing to spend large amounts of money for real estate because they feel they are getting more for their money,” she said.
Bottom Line
The wealthiest families in the country are re-entering the real estate market. That should tell everyone that the market is beginning its turn for the better.
Copied from Keeping Current Matters Blog
However, there is a segment of the housing market that is rapidly gaining momentum –LUXURY REAL ESTATE! Just last week we reported that NAR’s 2nd Quarter Report on Home Sales Statistics showed a 6.1% increase in sales of homes over a million dollars.
The latest home sales report mentioned above (covering August closings) shows an 11.5% increase in sales over that million dollar mark! (It also showed a 4.6% increase in sales of homes between $750,000 and $1 million). Though overall sales fell almost 20%, sales of upper end properties are escalating.
That Also Includes the ‘Super Luxury’ Market
The ‘super luxury’ market is defined by different prices in different markets. Any market however would consider homes over $4 million in this category. The Wall Street Journal last week reported on the Manhattan real estate market:
A report by Brown Harris Stevens and Halstead found that the number of co-op sales selling for more than $7 million in Manhattan doubled in the third quarter over a year earlier.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. On their website, they reported 20 sales of homes with a final listing price of over $ 4 million dollars in the last two months, covering eight different states!
Proper pricing is essential
The more affluent buyer is beginning to see opportunity in this real estate market. Make no mistake however. Whatever the price point, the luxury buyer must see value.
Hall F. Willkie, president of Brown Harris Steven, says that more affluent buyers “in the higher price point” were driving up the average price. “You are definitely seeing people feeling confident as long as they were getting good values,” he said…Pamela Liebman, president of Corcoran Group, said that there was a lot of strength in the market…”People are willing to spend large amounts of money for real estate because they feel they are getting more for their money,” she said.
Bottom Line
The wealthiest families in the country are re-entering the real estate market. That should tell everyone that the market is beginning its turn for the better.
Copied from Keeping Current Matters Blog
Luxury Market Moving
The news about the housing market still seems to be dominated by stories of pending disaster. Headlines report that some believe that there is a 25% chance of a ‘double-dip’ in home prices. We can understand the concern. The last Existing Home Sales Report by the National Association of Realtors (NAR) showed that sales were down 19% from the same time last year. Obviously, the real estate market is still struggling
However, there is a segment of the housing market that is rapidly gaining momentum –LUXURY REAL ESTATE! Just last week we reported that NAR’s 2nd Quarter Report on Home Sales Statistics showed a 6.1% increase in sales of homes over a million dollars.
The latest home sales report mentioned above (covering August closings) shows an 11.5% increase in sales over that million dollar mark! (It also showed a 4.6% increase in sales of homes between $750,000 and $1 million). Though overall sales fell almost 20%, sales of upper end properties are escalating.
That Also Includes the ‘Super Luxury’ Market
The ‘super luxury’ market is defined by different prices in different markets. Any market however would consider homes over $4 million in this category. The Wall Street Journal last week reported on the Manhattan real estate market:
A report by Brown Harris Stevens and Halstead found that the number of co-op sales selling for more than $7 million in Manhattan doubled in the third quarter over a year earlier.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. On their website, they reported 20 sales of homes with a final listing price of over $ 4 million dollars in the last two months, covering eight different states!
Proper pricing is essential
The more affluent buyer is beginning to see opportunity in this real estate market. Make no mistake however. Whatever the price point, the luxury buyer must see value.
Hall F. Willkie, president of Brown Harris Steven, says that more affluent buyers “in the higher price point” were driving up the average price. “You are definitely seeing people feeling confident as long as they were getting good values,” he said…Pamela Liebman, president of Corcoran Group, said that there was a lot of strength in the market…”People are willing to spend large amounts of money for real estate because they feel they are getting more for their money,” she said.
Bottom Line
The wealthiest families in the country are re-entering the real estate market. That should tell everyone that the market is beginning its turn for the better.
Copied From Steve Harney's Blog
However, there is a segment of the housing market that is rapidly gaining momentum –LUXURY REAL ESTATE! Just last week we reported that NAR’s 2nd Quarter Report on Home Sales Statistics showed a 6.1% increase in sales of homes over a million dollars.
The latest home sales report mentioned above (covering August closings) shows an 11.5% increase in sales over that million dollar mark! (It also showed a 4.6% increase in sales of homes between $750,000 and $1 million). Though overall sales fell almost 20%, sales of upper end properties are escalating.
That Also Includes the ‘Super Luxury’ Market
The ‘super luxury’ market is defined by different prices in different markets. Any market however would consider homes over $4 million in this category. The Wall Street Journal last week reported on the Manhattan real estate market:
A report by Brown Harris Stevens and Halstead found that the number of co-op sales selling for more than $7 million in Manhattan doubled in the third quarter over a year earlier.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. On their website, they reported 20 sales of homes with a final listing price of over $ 4 million dollars in the last two months, covering eight different states!
Proper pricing is essential
The more affluent buyer is beginning to see opportunity in this real estate market. Make no mistake however. Whatever the price point, the luxury buyer must see value.
Hall F. Willkie, president of Brown Harris Steven, says that more affluent buyers “in the higher price point” were driving up the average price. “You are definitely seeing people feeling confident as long as they were getting good values,” he said…Pamela Liebman, president of Corcoran Group, said that there was a lot of strength in the market…”People are willing to spend large amounts of money for real estate because they feel they are getting more for their money,” she said.
Bottom Line
The wealthiest families in the country are re-entering the real estate market. That should tell everyone that the market is beginning its turn for the better.
Copied From Steve Harney's Blog
Wednesday, September 29, 2010
Is Now The Time To Buy A Second Home?
All you read in the news today is that real estate prices have fallen dramatically in many areas. However, are lower prices a chance for purchasers to buy that second/vacation/retirement home they always dreamed of owning? We want to look at the second home buyer and see whether the current market presents a tremendous opportunity for this segment of the population.
Does buying make sense right now?
Senior Housing News this month did an article comparing the advantages of owning vs. renting for boomers and seniors. When discussing a possible purchase, they said:
Even though the returns from investing in real estate may be in question for the next few years, the benefits of purchasing a home now remain important as pricing may be at or near a bottom, there is a substantial amount of available homes for sale, interest rates on financing are the lowest they have been in a generation and the interest paid on a home mortgage is deductible.
Unity Marketing, in a recent survey of high income families, found that one out of nine respondents (11%) had plans to buy a second/vacation home in the next twelve months. The wealthiest in the country have decided that now is the time to jump make into the real estate market.
Where are the best deals?
This past week, Reuters ran an article in their Personal Finance section which said now might be the time to buy that second home in the Sunbelt:
Look for a retirement or vacation home now. If you’ve been thinking you’d like a second home now or a future home in the traditional retirement Sunbelt, go shopping. Those markets are depressed by overbuilding, a lack of buyer interest and a boatload of foreclosures. You’ll be able to get a good deal.
In an article this week by Housing Watch, the South Florida market was discussed:
The forecast is that significant improvement will occur in a year to a year and a half. For South Florida, though, the forecast is what works in the area’s favor. It’s still a place where folks want to move and migrate to, thanks to the weather — perhaps a winter retreat for six to eight months or a second home. Once folks are more confident in their economic situation, they likely will begin migrating to the Sunshine State again.
Bottom Line
Now might be time to buy that second home. Prices in many regions of the country have dropped substantially. You should check with a local real estate professional in your current area that can get you great information on the areas that might interest you and your family.
Copied from Keeping Current Matters Blogsite.
Does buying make sense right now?
Senior Housing News this month did an article comparing the advantages of owning vs. renting for boomers and seniors. When discussing a possible purchase, they said:
Even though the returns from investing in real estate may be in question for the next few years, the benefits of purchasing a home now remain important as pricing may be at or near a bottom, there is a substantial amount of available homes for sale, interest rates on financing are the lowest they have been in a generation and the interest paid on a home mortgage is deductible.
Unity Marketing, in a recent survey of high income families, found that one out of nine respondents (11%) had plans to buy a second/vacation home in the next twelve months. The wealthiest in the country have decided that now is the time to jump make into the real estate market.
Where are the best deals?
This past week, Reuters ran an article in their Personal Finance section which said now might be the time to buy that second home in the Sunbelt:
Look for a retirement or vacation home now. If you’ve been thinking you’d like a second home now or a future home in the traditional retirement Sunbelt, go shopping. Those markets are depressed by overbuilding, a lack of buyer interest and a boatload of foreclosures. You’ll be able to get a good deal.
In an article this week by Housing Watch, the South Florida market was discussed:
The forecast is that significant improvement will occur in a year to a year and a half. For South Florida, though, the forecast is what works in the area’s favor. It’s still a place where folks want to move and migrate to, thanks to the weather — perhaps a winter retreat for six to eight months or a second home. Once folks are more confident in their economic situation, they likely will begin migrating to the Sunshine State again.
Bottom Line
Now might be time to buy that second home. Prices in many regions of the country have dropped substantially. You should check with a local real estate professional in your current area that can get you great information on the areas that might interest you and your family.
Copied from Keeping Current Matters Blogsite.
Tuesday, September 28, 2010
How Will Foreclosures Impact Housing Prices?
Foreclosures have had a major impact on house prices over the last several years. The next six months will again see a flood of distressed property inventory coming to the market. Will this cause a ‘double dip’ in home values as some are predicting? We want to take a very objective look at this issue and try our best to help explain the impact foreclosures and short sales will have on home prices as we move forward this year into next.
Do foreclosures really impact prices?
The Wall Street Journal in an article on September 13th reported:
The speed at which house prices fall over the next few months could depend less on mortgage rates and Americans’ appetite for home buying than on how banks decide to manage the huge number of foreclosed homes they own or may take from delinquent borrowers in the near future. Unlike home owners, banks often are much quicker to slash prices to unload properties quickly. The upshot is that, the more homes being sold by lenders, the faster prices tend to fall.
And the WSJ is not the only one concerned about the flow of distressed properties to the market. Last week, Bloomberg reported: that Rick Sharga, RealtyTrac’s senior vice president said:
“If the market is left to fend for itself, you may see more serious price depreciation. Whether things fall precipitously depends on government and lenders controlling the inflow of new foreclosure actions.”
Is this foreclosure inventory growing?
Rather dramatically. According to an article in Housing Wire last week:
As the approximate 2.5 million homes in foreclosure complete the process, national delinquencies will fall, and REO inventory and short sales are expected to trend upward, according to a report released today by John Burns Real Estate Consulting.
In the article mentioned above, Bloomberg states:
U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc. Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005.
“We’re on track for a record year for homes in foreclosure and repossessions,” Sharga, said in a telephone interview. “There is no improvement in the underlying economic conditions.”
Ivy Zelman, chief executive of research firm Zelman & Associates and one of the first to warn of trouble five years ago was quoted in the WSJ article as saying:
“We see the perfect storm brewing with rising supply and falling demand.”
She estimated that distressed sales could account for half of the market by year-end if traditional sales didn’t rebound.
What will this mean to house prices?
Celia Chen, of Moody’s Analytics, in a September 16th article explained the impact foreclosures will have on home prices going forward
Prices, which rebounded more strongly than expected in the second quarter, will head south again. Prices will begin to fall outright as a growing number of highly discounted distressed homes hit the market at the same time that non-distress sales decline. Prices will descend until distress sales represent a smaller share of total home sales.
As we have forecCoast for some time, house prices will be the last measure of housing to improve, but the timing of the bottom has been moved from the first quarter of 2011 to the third quarter…the decline still to come has increased from 5% to 8%.
Distressed properties will keep prices descending. By 2013, enough excess supply—in the form of distressed inventory—will have been removed from the market to allow for strong price appreciation.
Bottom Line
Home values will continue to fall as more distressed properties come to market at discounted prices. Ms. Chen says this may continue through 2012. If you are considering selling in the near future, DO IT NOW!
Copied from a Post by "Keeping Current Matters".
Do foreclosures really impact prices?
The Wall Street Journal in an article on September 13th reported:
The speed at which house prices fall over the next few months could depend less on mortgage rates and Americans’ appetite for home buying than on how banks decide to manage the huge number of foreclosed homes they own or may take from delinquent borrowers in the near future. Unlike home owners, banks often are much quicker to slash prices to unload properties quickly. The upshot is that, the more homes being sold by lenders, the faster prices tend to fall.
And the WSJ is not the only one concerned about the flow of distressed properties to the market. Last week, Bloomberg reported: that Rick Sharga, RealtyTrac’s senior vice president said:
“If the market is left to fend for itself, you may see more serious price depreciation. Whether things fall precipitously depends on government and lenders controlling the inflow of new foreclosure actions.”
Is this foreclosure inventory growing?
Rather dramatically. According to an article in Housing Wire last week:
As the approximate 2.5 million homes in foreclosure complete the process, national delinquencies will fall, and REO inventory and short sales are expected to trend upward, according to a report released today by John Burns Real Estate Consulting.
In the article mentioned above, Bloomberg states:
U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc. Bank repossessions climbed 25 percent from a year earlier to 95,364, the most since the Irvine, California-based data provider began keeping records in 2005.
“We’re on track for a record year for homes in foreclosure and repossessions,” Sharga, said in a telephone interview. “There is no improvement in the underlying economic conditions.”
Ivy Zelman, chief executive of research firm Zelman & Associates and one of the first to warn of trouble five years ago was quoted in the WSJ article as saying:
“We see the perfect storm brewing with rising supply and falling demand.”
She estimated that distressed sales could account for half of the market by year-end if traditional sales didn’t rebound.
What will this mean to house prices?
Celia Chen, of Moody’s Analytics, in a September 16th article explained the impact foreclosures will have on home prices going forward
Prices, which rebounded more strongly than expected in the second quarter, will head south again. Prices will begin to fall outright as a growing number of highly discounted distressed homes hit the market at the same time that non-distress sales decline. Prices will descend until distress sales represent a smaller share of total home sales.
As we have forecCoast for some time, house prices will be the last measure of housing to improve, but the timing of the bottom has been moved from the first quarter of 2011 to the third quarter…the decline still to come has increased from 5% to 8%.
Distressed properties will keep prices descending. By 2013, enough excess supply—in the form of distressed inventory—will have been removed from the market to allow for strong price appreciation.
Bottom Line
Home values will continue to fall as more distressed properties come to market at discounted prices. Ms. Chen says this may continue through 2012. If you are considering selling in the near future, DO IT NOW!
Copied from a Post by "Keeping Current Matters".
Friday, September 24, 2010
Island Happenings
September 24, 2010
Blues Legend LEON RUSSELL
PLEASURE ISLAND SEAFOOD BLUES & JAZZ FESTIVAL
CAROLINA BEACH LIFE GUARDS
September 25th & 26th
Carolina Beach Life Guards will be on duty on Saturday, September 25th and Sunday, September 26th from 10:00 am until 5:00 pm. (weather permitting). For the safety and enjoyment of our visitors and our locals, the Town Of Carolina Beach has extended the season for the lifeguards. For more information, contact the Town Of Carolina Beach at (910) 458-2999 or at www.carolinabeach.org
PARROT HEADS 14th ANNUAL BEACH SWEEP
Saturday, September 25, 2010
Pleasure Island Parrot Heads host the 14th Annual Beach Sweep on Saturday, September 25, 2010.
Meet at Carolina Beach Boardwalk or the Kure Beach Pier at 9:00 am to once again clean the Island from End to End and in between. The World Famous Britt's Doughnuts will be provided along with coffee and juice. Upon your return, there will be Papa Murphy's pizza and discounts at several restaurants for lunch.
Saturday night at 8:00 pm, the "Party with a Purpose" continues at the Lazy Pirate to the sounds of Full Dish. There will be a silent auction and raffles to raise money for The American Red Cross Cape Fear Chapter and the American Legion Post 129.
Carolina Beach Farmers Market
Only 3 More Saturday Markets for the Season
Even though the first season of Carolina Beach Farmers Market is drawing to a close
with only 3 more Saturdays, there are still crowds coming to Carolina Beach Lake every Saturday morning.
The weather is perfect, the people are friendly, and the shopping is great. What better way is there to spend a Saturday morning?
The market is from 8 to 1 pm around the lake on Lake Park Blvd.
Thanks to Paul Boroznoff of Southern Digital Art for his fantastic panoramic photographs of last week's Farmer's Market and Art Show.
"BOO-th" Space Still Available
The North Carolina Aquarium at Fort Fisher invites businesses and organizations to sponsor booths at the eighth annual "Trick or Treat Under the Sea" on Wednesday, October 27 and Thursday, October 28.
The event, also known as TOTUS, features indoor trick-or-treating for children from 5:00 pm to 8:30 pm. Sponsoring a booth is a wonderful way to promote your business by interacting with families in the community at this fun and popular event. Vendors can also win prizes for their decorating efforts.
Booth space is available for $75 per day. A $10 discount is offered to vendors who book both days. Vendors may attend one or both nights. Sponsors decorate booths and provide enough treats for the several hundred children expected each night. Sponsors bring their own tables, decorations and power cords.
Booth sponsorships are available first-come, first-served. For more information or to register, call Special Events Coordinator Terry Bryant at 910-458-8257 ext. 218 or 202.
NC Aquarium at Fort Fisher is located just south of Kure Beach, near the mouth of the Cape Fear River, on U.S. 421. The site is less than a mile from the Fort Fisher ferry terminal. Hours: 9:00 am to 5:00 pm daily (closed Thanksgiving, Christmas, and New Year's days). Admission: $8 Ages 13-61, $7 Ages 62 and up, $6 Ages 3-12, Free for children 2 and under, NC Aquarium Society members and pre-registered North Carolina school groups. General information: www.ncaquariums.com/fort-fisher.
ISLAND KIDS ART SHOW!
October 9, 2010
HISTORY OF CAROLINA BEACH
October 17, 2010
Chamber Events
Events Ribbon Cuttings
TONIGHT
September 24th
Ribbon Cutting at 5:30 pm
Island Florals by Roxanne
250 Racine Dr., Unit 10
Wilmington
September 26th
1:30 PM
ISLAND DAY
Carolina Beach Lake
Please call (910) 458-8434 for more information
New Members
Half Price Ice
(910) 409-0532
www.gbigley@bellsouth.net
Tell your business acquaintances, friends and associates to join you at the Pleasure Island Chamber Of Commerce
click for more info
SAVE THESE DATES
ISLAND DAY
September 26, 2010
chris@fishbonedesign.us
CHRISTMAS CARD & ORNAMENT SIGNING RECEPTION
September 26, 2010
www.islandoflights.org
CBPD BENEVOLENT FUND GOLF TOURNAMENT
October 2, 2010
tess.casals@carolinabeach.org
PLEASURE ISLAND SEAFOOD BLUES & JAZZ FESTIVAL
October 9th & 10th
www.pleasureislandnc.org
TRYON PALACE TOUR
October 7, 2010
(910) 458-8216
SALTY PAWS FESTIVAL
October 16, 2010
www.SavingAnimal
DuringDisasters.org
HISTORY OF CAROLINA BEACH
October 17, 2010
www.federalpointhistory.org
CBFD
ANNUAL BARBECUE
October 23, 2010
WORLD WAR II AVIATORS MEMORIAL DEDICATION
October 25, 2010
(910) 793-6393
ISLAND WEEKEND PARTY
The Last Resort
This Friday, September 24th, The Last Resort is kicking off ISLAND WEEKEND with a customer appreciation party. This means we are rolling back pricing to 1990's:
• 50% Well liquor drinks ($2.50 a drink)
• 50% off SKY flavored Vodka drinks
• Miller Lite, Bud Lite, Coors Lite & PBR - $1.50 a bottle
LETHAL INJECTION - the best Rock and Roll Band in North Carolina will be playing Friday Night's ISLAND PARTY.
LIVE BAIT will rock the house again on Saturday Night.
SUNDAY-ISLAND DAY bring the kids to the Lake to play a fun game and win prizes at the Last
PIZZA HUT - WINGSTREET
Welcome New Chamber Members
New Chamber Members
Starting Monday, September 27th, Pizza Hut-WingStreet will be helping to welcome our New Chamber members. Each Friday, Pizza Hut-WingStreet will select and contact one New Chamber Member and bring them lunch on Monday!
"We're very excited to be part of welcoming new members to the Chamber! The Chamber means a whole lot to us and we want to spread the word to our neighboring businesses.", Diane Lane, Pizza Hut Area Supervisor & Rick Bordeau, Pizza Hut RGM.
LAZY PIRATE SPORTS BAR & GRILL
at the Drifter's Reef Motel
Make your Company Christmas Party one that will show your employees how much you appreciate them by letting the Lazy Pirate Sports Bar & Grill at the Drifter's Reef Motel host it for you.
Contact Danny at 458-5414 for reservation information, entertainment details as well as menu selection. Book early to get prime time and dates for your company. The memories of your appreciation will be something your employees will not forget. We look forward to serving you this Holiday season.
BEACH TV CABLE CHANNEL 3
ECONOMIC SPECIAL
The Beach TV Video Tour Guide Charter Communications
Airing on Cable Channel #3 from Ft. Fisher North to 1 mile North of Monkey Junction
` October - April -- $100 per month
May - September -- $250 per month
One Year -- $1950
Production Cost for a (90) second spot is $375
S P E C I A L
1. We will waive the production cost for a one year contract
2. You may customize your 12 months!
3. You can divide the annual cost evenly by 12 ($162.50/month)
4. Pay in this manner and we will lower it to $150.00 per month
WE WANT TO HELP
5. If you are interested in this or the Weather Crawl, we do offer discounts. Talk to us. We will listen.
Call Armont Communications at 799-0954 and ask for Monty or email at armontcom@ec.rr.com
PICC PSA
(Pleasure Island Chamber Of Commerce Public Service Announcement)
If you are a member of the Pleasure Island Chamber of Commerce and would like to be featured in a future edition of the PICC PSA, please contact Greg Reynolds at (910) 458-8434 or at greg@pleasureislandnc.org. Deadlines are Wednesday at 5:00 PM for the Friday's PSA. Please submit via email including desired text, pictures and logos in a jpeg format. We will run your announcement subject to space availability.
`
Blues Legend LEON RUSSELL
PLEASURE ISLAND SEAFOOD BLUES & JAZZ FESTIVAL
CAROLINA BEACH LIFE GUARDS
September 25th & 26th
Carolina Beach Life Guards will be on duty on Saturday, September 25th and Sunday, September 26th from 10:00 am until 5:00 pm. (weather permitting). For the safety and enjoyment of our visitors and our locals, the Town Of Carolina Beach has extended the season for the lifeguards. For more information, contact the Town Of Carolina Beach at (910) 458-2999 or at www.carolinabeach.org
PARROT HEADS 14th ANNUAL BEACH SWEEP
Saturday, September 25, 2010
Pleasure Island Parrot Heads host the 14th Annual Beach Sweep on Saturday, September 25, 2010.
Meet at Carolina Beach Boardwalk or the Kure Beach Pier at 9:00 am to once again clean the Island from End to End and in between. The World Famous Britt's Doughnuts will be provided along with coffee and juice. Upon your return, there will be Papa Murphy's pizza and discounts at several restaurants for lunch.
Saturday night at 8:00 pm, the "Party with a Purpose" continues at the Lazy Pirate to the sounds of Full Dish. There will be a silent auction and raffles to raise money for The American Red Cross Cape Fear Chapter and the American Legion Post 129.
Carolina Beach Farmers Market
Only 3 More Saturday Markets for the Season
Even though the first season of Carolina Beach Farmers Market is drawing to a close
with only 3 more Saturdays, there are still crowds coming to Carolina Beach Lake every Saturday morning.
The weather is perfect, the people are friendly, and the shopping is great. What better way is there to spend a Saturday morning?
The market is from 8 to 1 pm around the lake on Lake Park Blvd.
Thanks to Paul Boroznoff of Southern Digital Art for his fantastic panoramic photographs of last week's Farmer's Market and Art Show.
"BOO-th" Space Still Available
The North Carolina Aquarium at Fort Fisher invites businesses and organizations to sponsor booths at the eighth annual "Trick or Treat Under the Sea" on Wednesday, October 27 and Thursday, October 28.
The event, also known as TOTUS, features indoor trick-or-treating for children from 5:00 pm to 8:30 pm. Sponsoring a booth is a wonderful way to promote your business by interacting with families in the community at this fun and popular event. Vendors can also win prizes for their decorating efforts.
Booth space is available for $75 per day. A $10 discount is offered to vendors who book both days. Vendors may attend one or both nights. Sponsors decorate booths and provide enough treats for the several hundred children expected each night. Sponsors bring their own tables, decorations and power cords.
Booth sponsorships are available first-come, first-served. For more information or to register, call Special Events Coordinator Terry Bryant at 910-458-8257 ext. 218 or 202.
NC Aquarium at Fort Fisher is located just south of Kure Beach, near the mouth of the Cape Fear River, on U.S. 421. The site is less than a mile from the Fort Fisher ferry terminal. Hours: 9:00 am to 5:00 pm daily (closed Thanksgiving, Christmas, and New Year's days). Admission: $8 Ages 13-61, $7 Ages 62 and up, $6 Ages 3-12, Free for children 2 and under, NC Aquarium Society members and pre-registered North Carolina school groups. General information: www.ncaquariums.com/fort-fisher.
ISLAND KIDS ART SHOW!
October 9, 2010
HISTORY OF CAROLINA BEACH
October 17, 2010
Chamber Events
Events Ribbon Cuttings
TONIGHT
September 24th
Ribbon Cutting at 5:30 pm
Island Florals by Roxanne
250 Racine Dr., Unit 10
Wilmington
September 26th
1:30 PM
ISLAND DAY
Carolina Beach Lake
Please call (910) 458-8434 for more information
New Members
Half Price Ice
(910) 409-0532
www.gbigley@bellsouth.net
Tell your business acquaintances, friends and associates to join you at the Pleasure Island Chamber Of Commerce
click for more info
SAVE THESE DATES
ISLAND DAY
September 26, 2010
chris@fishbonedesign.us
CHRISTMAS CARD & ORNAMENT SIGNING RECEPTION
September 26, 2010
www.islandoflights.org
CBPD BENEVOLENT FUND GOLF TOURNAMENT
October 2, 2010
tess.casals@carolinabeach.org
PLEASURE ISLAND SEAFOOD BLUES & JAZZ FESTIVAL
October 9th & 10th
www.pleasureislandnc.org
TRYON PALACE TOUR
October 7, 2010
(910) 458-8216
SALTY PAWS FESTIVAL
October 16, 2010
www.SavingAnimal
DuringDisasters.org
HISTORY OF CAROLINA BEACH
October 17, 2010
www.federalpointhistory.org
CBFD
ANNUAL BARBECUE
October 23, 2010
WORLD WAR II AVIATORS MEMORIAL DEDICATION
October 25, 2010
(910) 793-6393
ISLAND WEEKEND PARTY
The Last Resort
This Friday, September 24th, The Last Resort is kicking off ISLAND WEEKEND with a customer appreciation party. This means we are rolling back pricing to 1990's:
• 50% Well liquor drinks ($2.50 a drink)
• 50% off SKY flavored Vodka drinks
• Miller Lite, Bud Lite, Coors Lite & PBR - $1.50 a bottle
LETHAL INJECTION - the best Rock and Roll Band in North Carolina will be playing Friday Night's ISLAND PARTY.
LIVE BAIT will rock the house again on Saturday Night.
SUNDAY-ISLAND DAY bring the kids to the Lake to play a fun game and win prizes at the Last
PIZZA HUT - WINGSTREET
Welcome New Chamber Members
New Chamber Members
Starting Monday, September 27th, Pizza Hut-WingStreet will be helping to welcome our New Chamber members. Each Friday, Pizza Hut-WingStreet will select and contact one New Chamber Member and bring them lunch on Monday!
"We're very excited to be part of welcoming new members to the Chamber! The Chamber means a whole lot to us and we want to spread the word to our neighboring businesses.", Diane Lane, Pizza Hut Area Supervisor & Rick Bordeau, Pizza Hut RGM.
LAZY PIRATE SPORTS BAR & GRILL
at the Drifter's Reef Motel
Make your Company Christmas Party one that will show your employees how much you appreciate them by letting the Lazy Pirate Sports Bar & Grill at the Drifter's Reef Motel host it for you.
Contact Danny at 458-5414 for reservation information, entertainment details as well as menu selection. Book early to get prime time and dates for your company. The memories of your appreciation will be something your employees will not forget. We look forward to serving you this Holiday season.
BEACH TV CABLE CHANNEL 3
ECONOMIC SPECIAL
The Beach TV Video Tour Guide Charter Communications
Airing on Cable Channel #3 from Ft. Fisher North to 1 mile North of Monkey Junction
` October - April -- $100 per month
May - September -- $250 per month
One Year -- $1950
Production Cost for a (90) second spot is $375
S P E C I A L
1. We will waive the production cost for a one year contract
2. You may customize your 12 months!
3. You can divide the annual cost evenly by 12 ($162.50/month)
4. Pay in this manner and we will lower it to $150.00 per month
WE WANT TO HELP
5. If you are interested in this or the Weather Crawl, we do offer discounts. Talk to us. We will listen.
Call Armont Communications at 799-0954 and ask for Monty or email at armontcom@ec.rr.com
PICC PSA
(Pleasure Island Chamber Of Commerce Public Service Announcement)
If you are a member of the Pleasure Island Chamber of Commerce and would like to be featured in a future edition of the PICC PSA, please contact Greg Reynolds at (910) 458-8434 or at greg@pleasureislandnc.org. Deadlines are Wednesday at 5:00 PM for the Friday's PSA. Please submit via email including desired text, pictures and logos in a jpeg format. We will run your announcement subject to space availability.
`
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