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Home Affordability
Wow is this a crazy statistic from CNNMoney. “The typical American family who makes the nation’s median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009, according a quarterly report from the National Association of Home Builders and Wells Fargo”
Again this is due to low interest rates and property values declining over the past couple of years. If you are thinking of buying now is the time to see what you need to do to buy. I think it is so important to get pre-approved ahead of time and I am not saying a day before you go out with your realtor. Too many people, even those who own or owned a home before, have no idea what their payments will be and the costs involved. Be prepared.
Buying Foreclosures At Auction
I am not an expert on this at all. Truth be told I don’t know the first thing about it seeing as I have never attended one. I do know experts in the field and would be happy to refer you to one. Hopefully the article below can give you some insight with their 12 tips.
“Getting a steal at auction boils down to preparation,” says Friedman. The biggest auction mistake, Friedman says, is lack of homework. “You have to set out to quantify risk, inspect the property well, and then quantify the necessary repairs and run price comparisons, or ‘comps,’ in the neighborhood so you’ll know the values.”
http://www.bankrate.com/finance/real-estate/12-tips-to-buying-a-home-at-auction-1.aspx
For Housing Prices, Follow Rents
Where were all of these articles 5 years ago and how did all of these great economists not stop this bubble from happening. Another gauge to look at is inflation because that is about how much home prices appreciate over time.
The gauge to look at is where rents are compared to mortgage payments. In normal times they are around the same. Deutsche Bank’s study found “that families across America were spending about 87% as much to rent as to own in 1999. Hence, they were traditionally willing to pay a premium as homeowners, though not a big one.” Right now the article points out that it costs 10% less to rent than to own a home.
It gets interesting. “But by mid-2006, with the craze in full swing, the figure fell below 60%. At that point, Americans were spending an incredible 66% more to own than to rent. It was far worse in the bubble markets”
Cash For Appliances
The article below from The Wall Street Journal gives you tips on how to get cash for appliances.
The rebates–which range from about $50 to $250 per appliance with some limits–won’t last forever, or probably even very long in some cases, and are typically given out on a first come, first serve basis. They also aren’t retroactive, so if you just forked over cash for a new furnace and your state’s program hadn’t launched yet, prepare to be bummed.
Generally, anyone can participate though a handful of states are limiting funds to low-income homeowners. Qualifying appliances include: boilers, central air conditioners, clothes washers, dishwashers, freezers, furnaces (oil and gas), heat pumps (air source and geothermal), refrigerators, room air conditioners and water heaters.
http://online.wsj.com/article/SB10001424052748703525704575061442711986932.html?mod=rss_Lifestyle
Distressed Sales In South Florida
There are a lot which shouldn’t be a surprise to anyone. As attorney Jeff Weis states “for banks, short sales are much cleaner than taking the property back.” And much less expensive because you are less likely to have people stealing appliance, putting holes in walls, less in back taxes, and monthly association dues, etc.
I just thought the statistics were interesting in this article so make sure to take a look if you care. “Overall, more than half of single-family home sales in both Miami-Dade and Broward involved a bank-owned or short sale transaction.” I actually thought the percentage would have been higher. I guess that’s good.
If you haven’t seen this video about why banks don’t like doing loan modifications it’s a must watch http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1076783
http://southflorida.bizjournals.com/southflorida/stories/2010/02/15/story5.html?jst=pn_pn_lk
Martha Stewart & KB Homes In Florida
KB Homes has asked Martha Stewart to help them sell homes in Florida by offering “build-to-order kitchens inspired – and even designed – by the domestic diva.”
Anyway, I found it entertaining how we are doing whatever we can to get this housing market moving in the right direction again. Oh, and Martha Stewart keeps getting richer.
http://blogs.wsj.com/developments/2010/02/11/can-martha-stewart-save-floridas-housing-market/
Citi Mortgage’s Plan
This is interesting from Citi Mortgage. Finally it sounds like they are getting smarter.
Instead of borrowers falling further and further behind on their mortgages, leading to an eventual foreclosure sale, they can stay in their homes for up to six months, if they agree to then hand over the deed to the lender.
By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees. Because of those savings, CitiMortgage, a division of Citigroup (C, Fortune 500), will grant quite generous terms to participants.
Building On Spec
This is a good sign that builders are starting to take on some risk but only if they get them sold. Hopefully they aren’t being too optimistic and rates stay low because low rates and home affordability is what is selling homes more than the tax credit.
There seem to be some good deals out there on the newer homes and you are taking on the hidden costs like you are with short sales and foreclosures.
“The strategy is risky. If the buyers don’t materialize, builders could be saddled with unsold homes that will require heavy discounting to sell, hurting profits and slowing the housing recovery. New homes may also continue to lose market share to lower-priced foreclosed houses. Indeed, some economists expect an avalanche of foreclosures in the months ahead as lenders release homes they have been keeping off the market.”
Cash Is King When Buying A Home
I am not a real estate agent but I hear about how many investors are buying up properties with cash and it is making it hard for those who are getting financing to get an offer accepted especially here in South Florida just as the article mentions. There was an article in The Wall Street Journal that I wrote about where they were going to give people who are buying the home as a primary 14 days before they would let investors bid on the property. I haven’t heard anything since.
“I’ve never seen so many cash transactions in my career as I have in this market,” said Stephanie Vitacco, a Coldwell Banker agent in Woodland Hills, Calif., with 20 years in the business.
The article gives some tips on what to do if you are buying a home with financing. Always consult a real estate professional that is an expert with foreclosures and short sales.
http://www.msnbc.msn.com/id/35318471/ns/business-real_estate/
Seasonal Home Maintenance Guide
I have been trying to find this article online since I read about it in Money Magazine last month. I highly recommend anyone who owns a home or will be buying a home to take a look at this.
“You know that your house needs regular upkeep in order to stay in good condition. Not only can little maintenance issues become expensive and turn into major repairs, but nowadays problems that boom-time buyers might have overlooked can be huge liabilities when it comes time to sell, says James Carey, author of “Home Maintenance for Dummies.” Good thing that most crucial maintenance tasks can be done just once a year at a certain time. Read on for the right dates to mark in your calendar.”
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Miller on Mortgages 