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According to a survey by Move.com, 12.1 percent of homebuyers intend to purchase an investment property this year, compared to only 5.6 percent of buyers polled in April. 

The percentage of investors shopping for property also jumps higher when it comes to foreclosed property.   42 percent of foreclosure buyers are purchasing for an investment.   57.6 percent of foreclosure shoppers plan to live in the home they buy.

The survey also shows that 23.6 percent of investors and buyers believe that home prices are already as low as they will go.  Nearly 20 percent feel a sense of urgency when searching for a bargain. 

Another factor motivating home buyer’s off the sidelines is the real threat of rising interest rates.  Wall Street guru’s, who agree on very little, warn that lending rates will rise in the near future.   With real estate prices at their lowest levels, buyers risk much more in waiting to purchase, than they do by locking in record low rates on their loan.

Prediction:  We believe the leading indicator of an interest rate hike will be  falling unemployment claims.  When unemployment claim filings fall below 500,000 per month, a rate hike is likely!

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The latest news about home sales through October 31st, was nearly more scary than Halloween.  Here are the high or low lights, depending on your market position.

1. Existing home sales were up 11 percent, due mostly to the $8000 tax incentives.
2. Sales prices were down 11 percent.  Average US home price is now $177,900.
3. One third of all homes sales were short sales or foreclosures.
4. Foreclosures are up nearly 90 percent.  And, the banks reported that one-third of all their foreclosures are being held off the market.  Their strategy is to trickle more homes on the market, in hopes of keeping inventory lower, and therefore, prices higher.  Bottom Line.  There will be a huge second wave of Foreclosures hitting the market in 2010.
5. The loan crisis isn’t over, it’s just starting in new places with new people.  Most defaulting subprime borrowers are already on the street.  When picturing the new homeless, visualize the bigger, Prime borrowers.  Expect foreclosures to rise dramatically in Salt Lake, Provo and Boise.  Also, expect a new surge of foreclosures in upscale, step-up homes and communities. 

Thank you for visiting InfoTube.net homes for sale and rent FREE website.   We have helped Americans sell homes since 1988.  Anyone can post a property listing for FREE, on our site or Search for great deals in complete privacy.  We never sell or distribute user information, EVER.  We are a US manufacturer, who sells to US retailers and that pays our bills!  We don’t need to churn email lists!!

3 Short Real Estate News Items of Interest.

1. Good news for US Housing.  For those of you still searching for a BOTTOM in the real estate market, we hit it in January 2009.  A double bottom, in fact.  Take a look at the CHART.
2. China raised its minimum down payment requirement to 40 percent, in an effort to slow down the overheated housing market in Hong Kong.  Conversely, in the US, we still offer financing with NO Money Down, when the tax rebate is combined with FHA or VA financing.  Quite startling in light of the lessons we learned from subprime loans.
3. Uncle Sam Added 5 Percent to Home Prices.  Government interventions in the housing market have inflated home prices at least 5 percent higher than they would have been.  Artifically low interest rates, $8000 tax credits, push for loan modifications and efforts to stall foreclosures may have created a false bottom.  Since the props won’t last forever, the risk of price decline in the future is significant. 

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In August, InfoTube warned its readers about the New Wave of Foreclosures that would be pounding the market, further driving up inventory and eroding prices.  Today, we learn that the Wall Street Journal agree’s with our accessment of the future market conditions for real estate.

Excerpt from the Wall Street Journal: 

“The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market . . . Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due.

As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages.

Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier.”

What this means for Home Seller’s:  Time is not your friend.  The shadow of inventory of distressed property will continue to place downward pressure on home prices.  Based upon our years of experience, we predict that home prices will fall an average of 7 percent in 2010.  

If you need to sell your home, DO NOT chase the market down.  Price your property aggressively, then market the home to as wide an audience as possible.  To learn about the best way to reach the mass buying market, CLICK HERE. 

Thank you for visiting InfoTube.net.  We have been connecting buyers with sellers since 1989.  We can help you, too.

It seems everyone these days is looking for a bottom in the housing market, or a sign of normalcy, as we’ve known it.  The truth may be that housing will never return to what normal has been in the past.   The reason isn’t the just the economy or tighter lending standards, it’s may be simple demographics.

Please consider why trends in housing may have changed, Permanently.

1. Baby Boomers:  The baby boomers (born 1946-1964) are the largest and spendiest generation in American history, and their 40 year shopping spree is coming to an end.  
2. McMansion Glut:  Boomers are buying fewer single family homes and they are getting rid of the suburban McMansions they purchased when their children lived at home.  Evidence already shows that boomers favor 2 and 3 bedroom condo’s over 4 or 5 bedroom houses.   The Boomer trend to a smaller house, combined with fears of gas prices and long commutes, mean that the big house in the burbs is not the ideal dream house or location that is has been in the past.
3. Baby Boomers, Again:  Boomers are reorganizing their finances.  After the stock market crash, and with retirement approaching, fewer boomers will be purchasing vacation and second homes. 
4. Generation X:  The generation born between 1965-1976 will be unlikely to bid up home prices.  First, there are only 44 million X’ers compared to 76 million boomers.   Secondly, they are not as wealthy as their parents, and they are deeper in debt, due in part to college loans. 
5. Migration Back to City Life:  Due to our aging population, smaller family size and energy costs, people are returning to urban area’s that have not been overbuilt and offer quality of lifestyle. 
6. Permanent Changes:  The days of buying a huge home on a big lot, and paying for it with a 2 hour commute, may be ending.  This trend could mean that owners in McMansion communities, with little to no public transportation, will havetrouble finding buyers.   Some people predict that the large, single family homes, located miles from urban centers, will be subdivided into inexpensive housing for low and moderate income families, as the car lovers who moved to the burbs return back to the convenience of city life.

One thing that is certain is that change happens.  As environmental, economic, political and cultural forces change the way we live, our view of residential home investing will change, too.

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The PMI Group rates 50 metro area’s for their risk of further housing price declines.   Their recent ratings found that the following 13 area’s have greater than a 90 percent chance of seeing further price erosion.

What does this mean for seller’s who need to sell?   If you live in one of the named locations, you should seriously consider reducing your price, before the market does it for you. 

In addition to a meaningful price reduction, seller’s in these cities need to get serious about their marketing efforts.  The single best use of your advertising dollars is to place your property on the MLS.   The MLS is ‘the’ database of available properties in this country.   If your home isn’t listed on the MLS, your property is essentially invisable to millions of home shoppers and thousands of real estate agents.

                         13 Scary Markets that Have Further to Fall

1. Ft Lauderdale-Pompano Beach-Deerfield Beach, FL
2. Riverside-San Bernardino, CA
3. Orlando-Kissimmee, FL
4. Miami-Miami Beach, FL
5. Tampa-St. Petersburg-Clearwater, FL
6. Las Vegas, NV
7. Los Angeles-Long Beach-Glendale, CA
8. Santa Ana-Anaheim-Irvine, CA
9. Jacksonville, FL
10. Phoenix-Mesa-Scottsdale, AZ
11. Sacramento-Arden-Arcade-Roseville, CA
12. San Diego-Carlsbad-San Marcos, CA
13. Oakland-Fremont-Hayward, CA

Note:  The PMI Risk Report examines major changes in mortgage and lending trends, as well as the rising unemployment and the impact of foreclosures to predict home prices for 50 major metropolitian area’s of the US.   To see the strongest markets, with the least risk of further price decline, please see our blog posting from October 9, 2008.

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