http://money.cnn.com/2009/05/18/real_estate/most_affordable_cities/?postversion=2009051813
Think about this....here are some reasons to call the bottom here:
1) Houses are the most affordable in 18 years
2) A 30-year fixed mortgage averaged less than 5% during much of the quarter, according to mortgage giant Freddie Mac.
3) $8,000 federal tax credit for first-time homebuyers
Once these facts sink in ..... I am expecting an end to the housing downturn......later in 2009.
Monday, May 18, 2009
Thursday, February 19, 2009
New Tax Credit Proposal creating some buzz
http://www.marketwatch.com/news/story/foreclosure-plan-tax-credit-wont/story.aspx?guid=%7B41112260-5F34-4F72-A962-E8626C1E41FD%7D&dist=msr_1
The excitement in the fellow describing the new Tax Proposals might be contaigous.
I am ready to swap any neighbors willing?
The excitement in the fellow describing the new Tax Proposals might be contaigous.
I am ready to swap any neighbors willing?
Tuesday, January 20, 2009
Story about 1 Million losing their homes in '08 but silver lining
The attached article has an attention grabbing headline: 1 Million Lost their Home in 2008. But inside we read that the president of foreclosure.com "believes the worst is behind the housing market." Now that .....if true... could be a little encouraging.
http://www.businessweek.com/the_thread/hotproperty/archives/2009/01/over_one_millio.html
http://www.businessweek.com/the_thread/hotproperty/archives/2009/01/over_one_millio.html
Thursday, October 23, 2008
Data show how foreclosures pull down Valley home values
This article describes how foreclosures are driving home value now in the Phoenix market. If you live in an area of high foreclosure it can cost you $20-40,000 if you need to sell:
In a normal housing market, most homes to go into foreclosure are sold at trustee-sale auctions. Since last fall, about 98 percent of all homes to go into foreclosure have instead been taken back by the lender.
What lenders resell foreclosure homes for now is driving home values, particularly in neighborhoods where a higher percentage of existing-home sales are foreclosure resales.
Foreclosure resales make up at least one-fourth of all sales in a many Valley neighborhoods now. In a few areas, the rate of foreclosure resale is much higher. In the El Mirage ZIP code 85335, there were more foreclosure resales than regular resales. The overall median home price in the area is $135,000. The foreclosure resale is $133,750. In most other Valley neighborhoods, the overall median price is $20,000 to $40,000 higher than the foreclosure resale.
"These foreclosure homes need to sell for the Valley's housing market to recover," said Brett Barry, a Phoenix real-estate agent with Realty Executives. "It's a good thing they are selling, but it's not going to make you happy if you are a homeowner in a neighborhood with a lot of these properties."
He said for buyers who are patient and will work with lenders, there are great deals in foreclosure resales.
Gloria Giroux recently bought a foreclosure-resale home from Deutsche Trust Bank. She paid $560,000 for a 3,400-square-foot Carefree home on a half-acre lot that had sold for $815,000 in 2005. "The pool was green. It needed work, and it was frustrating waiting for answers on my offers from the bank," Giroux said. "But I got it, and the house behind me is almost identical and sold for $839,000 in April of this year."
Gloria seems to have made $279,000 in equity (two or three years of hard labor for most) by putting up with a little frustration from the bank.
Link to full article
In a normal housing market, most homes to go into foreclosure are sold at trustee-sale auctions. Since last fall, about 98 percent of all homes to go into foreclosure have instead been taken back by the lender.
What lenders resell foreclosure homes for now is driving home values, particularly in neighborhoods where a higher percentage of existing-home sales are foreclosure resales.
Foreclosure resales make up at least one-fourth of all sales in a many Valley neighborhoods now. In a few areas, the rate of foreclosure resale is much higher. In the El Mirage ZIP code 85335, there were more foreclosure resales than regular resales. The overall median home price in the area is $135,000. The foreclosure resale is $133,750. In most other Valley neighborhoods, the overall median price is $20,000 to $40,000 higher than the foreclosure resale.
"These foreclosure homes need to sell for the Valley's housing market to recover," said Brett Barry, a Phoenix real-estate agent with Realty Executives. "It's a good thing they are selling, but it's not going to make you happy if you are a homeowner in a neighborhood with a lot of these properties."
He said for buyers who are patient and will work with lenders, there are great deals in foreclosure resales.
Gloria Giroux recently bought a foreclosure-resale home from Deutsche Trust Bank. She paid $560,000 for a 3,400-square-foot Carefree home on a half-acre lot that had sold for $815,000 in 2005. "The pool was green. It needed work, and it was frustrating waiting for answers on my offers from the bank," Giroux said. "But I got it, and the house behind me is almost identical and sold for $839,000 in April of this year."
Gloria seems to have made $279,000 in equity (two or three years of hard labor for most) by putting up with a little frustration from the bank.
Link to full article
Friday, September 5, 2008
Foreclosure Effect on Home Prices May Be Small
I found some encouragement in this article -- home prices are "quite sticky"
September 5, 2008, 3:58 pm
Foreclosure Effect on Home Prices May Be Small
Even though data Friday from the Mortgage Bankers Association indicated that U.S. foreclosures hit a record in the second quarter, that won’t necessarily translate into big declines in home prices.
(Getty Images)
That appears to be the conclusion based on the findings of a trio of economists in a National Bureau of Economic Research paper.
“Even in the face of an extreme foreclosure wave such as that experienced in 2007, our evidence indicates that foreclosure shocks have relatively small effects on U.S. house prices,” the authors, Charles Calomiris of Columbia University and Stanley Longhofer and William Miles of Wichita State University wrote.
The authors’ model incorporated MBA foreclosure and Ofheo home price data from 1981 to 2007, and used home foreclosure forecasts for 2008 and 2009 from Economy.com. The model included data on employment, building permits and existing home sales. In their paper, the authors said the study was first to estimate the effect of foreclosures on home prices for all the U.S.
Even under an “extreme” foreclosure shock scenario, with foreclosures up 75% compared to the baseline in 2008 and 2009, U.S. home prices only decline about 5.5% between the the second quarter of 2007 to the end of 2009, the authors estimated.
Home prices, they wrote, “are quite sticky,” and “fears of a major fall in house prices, with all of its attendant negative macroeconomic consequences, typically are not warranted even in extreme foreclosure circumstances.”
“We conclude that a reasonable estimate of the future path of U.S. housing market prices is that they will remain essentially flat, on average, for the next two years notwithstanding the large predicted increase in foreclosures,” they wrote. –Brian Blackstone
September 5, 2008, 3:58 pm
Foreclosure Effect on Home Prices May Be Small
Even though data Friday from the Mortgage Bankers Association indicated that U.S. foreclosures hit a record in the second quarter, that won’t necessarily translate into big declines in home prices.
(Getty Images)
That appears to be the conclusion based on the findings of a trio of economists in a National Bureau of Economic Research paper.
“Even in the face of an extreme foreclosure wave such as that experienced in 2007, our evidence indicates that foreclosure shocks have relatively small effects on U.S. house prices,” the authors, Charles Calomiris of Columbia University and Stanley Longhofer and William Miles of Wichita State University wrote.
The authors’ model incorporated MBA foreclosure and Ofheo home price data from 1981 to 2007, and used home foreclosure forecasts for 2008 and 2009 from Economy.com. The model included data on employment, building permits and existing home sales. In their paper, the authors said the study was first to estimate the effect of foreclosures on home prices for all the U.S.
Even under an “extreme” foreclosure shock scenario, with foreclosures up 75% compared to the baseline in 2008 and 2009, U.S. home prices only decline about 5.5% between the the second quarter of 2007 to the end of 2009, the authors estimated.
Home prices, they wrote, “are quite sticky,” and “fears of a major fall in house prices, with all of its attendant negative macroeconomic consequences, typically are not warranted even in extreme foreclosure circumstances.”
“We conclude that a reasonable estimate of the future path of U.S. housing market prices is that they will remain essentially flat, on average, for the next two years notwithstanding the large predicted increase in foreclosures,” they wrote. –Brian Blackstone
Friday, August 29, 2008
http://www.courant.com/business/realestate/hc-homesales0829.artaug29,0,7234560.story
Click on the "Related Links" Decline in the House Graphic.
I think this graphic is useful in showing the relatively modest decline in CT housing prices in the last year relative to the 7 years of amazing growth (58.6%) that preceded it.
One might project (i.e. guess) that a plateau in this chart could develop around $260,000 during 2009 before we return to the modest 3.5% growth rate in 2010 similar to that we enjoyed in the year 2000 and then the whole 10 year cycle begins again.
But we must hasten to point out that if someone bought a median priced home in 2000 for $170,000 and they used a 10% deposit ($17,000). Their house would have grown to be valued to about $288,000 by 2007. (Little Side note: We bought ours for $180,000 in 1998 and got an appraisal of $360,000 in 2007). So the increase in equity during those seven years on the median priced house is a whopping $118,000. So their initial $17,000 investment grew to $118,000 in seven years which is 694% or almost 100% each of the seven years.
Here is how the annual increase looks in a spreadsheet:
Median Price
$170,000 The year 2000 Price
$12,750 (yearly increase)
$182,750 The year 2001 Price
$13,706 (yearly increase)
$196,456 The year 2002 Price
$14,734 etc.
$211,190
$15,839
$227,030
$17,027
$244,057
$18,304
$262,361
$19,677
$282,038 The year 2007 Price
Notice that the compounding effect of this 90% leveraged position allowed the homeowner to get an average of about 100% return ($17,000) on their initial investment each and every year for the seven years of expansion.
The key to having a great investment is being invested in the house during the period of expansion which may not be as easy to determine in advance. So the advice would be to buy and hold real estate to take advantage of these surges when they take place realizing that during a typical 10 year time horizon you will do just fine.
Click on the "Related Links" Decline in the House Graphic.
I think this graphic is useful in showing the relatively modest decline in CT housing prices in the last year relative to the 7 years of amazing growth (58.6%) that preceded it.
One might project (i.e. guess) that a plateau in this chart could develop around $260,000 during 2009 before we return to the modest 3.5% growth rate in 2010 similar to that we enjoyed in the year 2000 and then the whole 10 year cycle begins again.
But we must hasten to point out that if someone bought a median priced home in 2000 for $170,000 and they used a 10% deposit ($17,000). Their house would have grown to be valued to about $288,000 by 2007. (Little Side note: We bought ours for $180,000 in 1998 and got an appraisal of $360,000 in 2007). So the increase in equity during those seven years on the median priced house is a whopping $118,000. So their initial $17,000 investment grew to $118,000 in seven years which is 694% or almost 100% each of the seven years.
Here is how the annual increase looks in a spreadsheet:
Median Price
$170,000 The year 2000 Price
$12,750 (yearly increase)
$182,750 The year 2001 Price
$13,706 (yearly increase)
$196,456 The year 2002 Price
$14,734 etc.
$211,190
$15,839
$227,030
$17,027
$244,057
$18,304
$262,361
$19,677
$282,038 The year 2007 Price
Notice that the compounding effect of this 90% leveraged position allowed the homeowner to get an average of about 100% return ($17,000) on their initial investment each and every year for the seven years of expansion.
The key to having a great investment is being invested in the house during the period of expansion which may not be as easy to determine in advance. So the advice would be to buy and hold real estate to take advantage of these surges when they take place realizing that during a typical 10 year time horizon you will do just fine.
Sunday, August 10, 2008
OIL-RICH FUND EYEING FORECLOSED US HOMES
This interesting article is very believable. This would be one more sign that the market is getting ready for a transition. When we read ... "Hanson is now willing to pay 50 cents to 60 cents on the dollar for a collection of California REOs worth at least $500 million " we may be reaching the bottom of the market.
http://www.nypost.com/seven/08102008/business/lost_sovereignity_123879.htm
http://www.nypost.com/seven/08102008/business/lost_sovereignity_123879.htm
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