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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. 

Thank you for visiting InfoTube.net a FREE homes for sale and rent website.  Since 1988, we have kept our fingers on the pulse of the housing market.  If you would like to receive a reminder when we release a new article, click on our feed below.

Not surprisingly, real estate industry lobbiest are attempting a full court press as they make a final push for extension of the first-time buyer tax credit.   

And, it’s little wonder.  The IRS estimates that 1.4 million homebuyers have claimed the credit through August, and the Realtors Association estimates the credit was crucial in pushing 355,000 of those buyer’s off the fence.   

If the real estate industry gets it’s way and the amendment passes, the $8000 tax credit would be extended to June 30th, 2010 and it would allow more taxpayers to qualify for the subsidy.  The amendment would increase the income limit to $150,000 for a single filer and $300,000 for a couple, up from the current limit of 95,000 and $170,000, respectfully.

The Pro’s: Why Vote “Yea”

1. Lenders are still in trouble, as more people default or fall behind on their mortgages.  Experts predict an additional 1.5 million foreclosures in 2010, increasing supply and further eroding prices and demand. 
2. Dems and Rep like it.  The proposal was introduced by a GA Republican, Johnny Isakson, and it is also supported by Democratic heavy-weights.  House speaker Nancy Pelosi and Senate Majority Leader Harry Reid support the extension, President Obama hasn’t taken a position for either side.
3. Still too Many Houses.  Although the supply of existing homes on the market has fallen from 1-5 months down to 8.5 months, a healthy market has only 5-6 months supply of house.
4. Unemployment is Rising.  With national unemployment levels at 10 percent, and some states reporting a far higher number, extending the taxpayer subsidy of housing market would likely create and preserve jobs.  In addition, people out of work usually means more loan deliquency, foreclosures and further downward pressure on pricing.

The Con’s:  Why Vote “NAY”

1. The Cost to the Taxpayers.  The extension comes with a heavy price tag of $16.7 BILLION over 5 years.
2. As bad as Sub-Prime.  Opponents argue that the subsidy has artifically propped up the prices of inexpensive homes, targeted by first-time buyer’s, thereby creating another potential mini-bubble in affordable housing.
3. Both Opponents and real estate industry admit that most people who claimed the $8000 deduction, would have purchased a home anyway due to historical low rates and steep price declines.
4. Fraud.  The IRS has identified over 100,000 cases of fraud involving the tax credit.  On Thursday, the House Ways and Means Committee is scheduled to take a closer look.
5. Did we mention the cost to taxpayers is $16.7 BILLION?

Yea or Nay???  We thank you for visiting InfoTube.net FREE homes for sale and rent website.  The website provides free legal forms and contracts, marketing and sales tools, real estate advice, news and updates for buyer’s, sellers, agents and builders.  We invite you to subscribe to our feed or leave a comment in the space below.

  

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. 

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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.

Thank you for visiting InfoTube.net homes for sale and rent website.  We invite you to place a FREE home listing on our site or search for your dream home in complete privacy.   Click on our RSS feed to stay current on our articles about real estate and if you have a comment or question, please click the link below.

Click Here to see the latest news on new home sales.  The easy to read charts, with comments, give instant insight to the housing market.  

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Foreclosures UP.  Unemployment UP.  U.S. home prices DOWN.

Home prices in the United States dropped another 6.8 percent in April from the same period only one year earlier.   The housing crash has now erased 26 percent of the equity in the median priced home, since the peak in July 2006.  The silver lining for renters is that home affordability is at near record levels.

Economists predict that the market will continue to see more home price declines, despite $8000 tax incentives and $275 billon in funding to keep some owner’s in their homes.

Analysts at Deutsche Bank said US home prices may fall another 14 percent before they stabilize.  Like sentiment was expressed by Robert Shiller, who co-founded the respected S&P Case-Shiller Home Price Index.   Many predict the worse declines could be even worse in New York and Orange County, CA.

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Charles McMillan, president of the National Association of Realtors, spoke in Ft. Worth, TX and reported to attendee’s that ”The dream of homeownership is alive and well in the US.”

Mr. McMillan began his real estate career in Ft. Worth, TX in 1983, one year after the Texas real estate market crashed in 1982.  Although McMillan did not address it, Texas home prices have not recovered to pre-1982 levels over the past 27 years.

Highlights from the speech include:

1. Consumers will buy houses if two conditions are met.  The home and financing costs must be at a bargain, basement price levels.
2. Keeping interest rates low and stable are necessary to stabilize the housing market.
3. The tax credit is working.  43 percent of all property sales have been first-time buyers.
4. Thanks to distressed property price declines of up to 52 percent, sales of existing home inventory has increased in CA, NV, AZ and FL.
5. The two biggest issues facing the real estate industry going forward are appraisal issues and healthcare.  Half of all real estate agents have no insurance.

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Dear InfoTube:   My husband and I are considering the purchase of a townhome.  We found a great unit, much larger than most for the money, but the builder has filed for bankruptcy.  Also, the development is not entirely finished and it has a lot of unsold units.

We would like to take advantage of the $8000 tax credit and low interest rates, so we are in a hurry.  Should we buy this unit?  Your thoughts and expertise would be a big help. 

Dear First Time Buyer:  You don’t say where you live, but bankrupt builders are common in this market.  The fact that the builder is insolvent doesn’t mean that the construction was sub-standard.   But, it does mean you won’t have the builder backing up his work.  Keep in mind that all warranties for appliances, roofing, flooring, etc. are backed by the manufacturer, not the builder, anyway, then make sure you have a very good home inspection before moving forward.

The issue of the unsold and unfinished development should probably be of more concern to you than construction or inspection problems.   There are issues that you need to discuss before considering buying into a paritally vacant, multi-family development.

1. How much do you want to live through??  Since the development is unfinished, it could take years before the project is completed.  And, you will have to tolerate construction noise and dirt while the work is done.
2. How long do you plan to live there?  You need to be aware that prices may drop subtantially on the completed unsold units before everything is said and done.  This means that you may lose your equity and owe more than the people who buy later for less money.  Also, when the remaining new buildings are finished, you will face a lot of competition from new or newer units than the one you own.  If you decide to buy here, make sure you can stay until everything is complete and the market has stabilized.
3. What about the Homeowners Association?  Unsold and vacant units mean that the association will need to cover their expenses.  If the development is large and has ammenities such as pools, tennis courts, greenbelt area’s, etc. you may have only a few owners splitting the costs of insurance, maintenance and upkeep.  This situation can dramatically raise dues beyond what most people are willing to pay.  Verify the financial situation of the HOA and make sure you understand the by-laws before jumping into a situation with no real ceiling on future expenses.

I would offer you one piece of advise for any property you are considering, never buy a home because of tax incentives.  Although the $8000 credit is very enticing, make sure you buy a home that is located in a good neighborhood and suits your families needs.  Low interest rates, and the tax credit are strong motivators, but make sure you are buying the right home, in the right spot and at the right price.

Thank you for writing to InfoTube.net homes for sale and lease website.  I hope I have answered some of your concerns and if you need more information, please let me know.

In light of a new wave of foreclosures and distressed property sales, home seller’s may need to lower their expectations about home asking prices.

Recent reports find that nearly one in every four current home sellers (not seller’s of bank owned property) have dropped asking prices an average of 10.6 percent from their original listing price.   In dollar terms, that is equal to another $27.4 BILLION, yes BILLION, slash in the equity of  US homes.  Ouch!

The good news for home seller’s is that higher interest rates and a rapidly approaching deadline for an $8000 tax credit is creating urgency among buyers.   A recent uptick in sales proves that homes priced aggressively are selling very fast.  But, homes priced above the competition continue to sit and languish on the market for months on end.  Simply put, there is great demand in the market now…at the right price.  Seller’s may need to sharpen their pencils, but buyers are actively purchasing homes.

Thank you for visiting InfoTube.net homes for sale or rent website.   Please feel free to place a free property listing or search our database for great values on US real estate.

Although all the news about real estate, housing and lending isn’t particularily bullish, there are some compelling new motivations for buying now.   Rising interest rates, Inventory Decreases and the $8000 tax credit which expires December 1.

1. Interest rates are soaring, as the dollar falls.  Economists predict that the low rates we saw only a month ago, aren’t likely to return anytime soon.   In April, 30 year fixed rate mortgages averaged 4.5 percent.  Last week, rates hit 4.98 percent.  And, this week, Bankrate.com is quoting 30 year fixed rates for prime borrowers at just over 5 percent.  Note: An increase of only 1/2 percent in interest rates raises the mortgage payment for a $170,000 loan by $52/month, $624/year or $18,720/over the life of the loan.
2. The deadline for qualifying for an $8000 tax credit is rapidly approaching.   Although, the December 1st deadline may seem a long way off, in real estate terms it really isn’t.  A lot of people are sitting on the sidelines, waiting to see if prices will drop another 1 or 2 percent over the next 6 months.   Lenders are already warning us that when all those buyers rush into the market in August or September, the backlog in loan applications will mean a wait of 60-90 days to close an average loan.  Note:  Given that the average buyer in this market looks at over 30 homes, over a 3 month period, buyers who don’t want to miss the boat on their $8000 gift, should get serious now.

For those buyer’s hoping to time the market perfectly, we think their ship may be sailing by.    Home inventories are dropping, prices are stabilizing, interest rate increases erase potential gains made by a further fall in prices and $8 grand is on the line, if the December 1 closing deadline can’t be met.   Serious buyer’s should jump on board now, before they find out that the ship has sailed and they missed the boat!!

Thank you for visiting InfoTube.net homes for sale or rent website.  Sellers can place a free property listing, download legal forms, print brochures and more.   Buyer’s can search for great deals on property from the privacy of their own homes and benefit from dealing directly with the owner or builder.  Check advantage of FREE today!!!

Sales for existing homes increased nearly 3 percent, on average, in April, slightly exceeding forecasts and expectations.  The report offered hope that home sales were stabilizing and we may be at the bottom of the housing recession.   Watch the short 1 minute video for more information about your local and national housing market.

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On Thursday, the government announced two programs that may help thousands of homeowners that are sinking in debt avoid foreclosure.

Treasury Secretary, Tim Geithner, said “Today we are announcing a new program component to help homeowners obtain modifications in areas suffering from price declines.  If a modification is not possible, we are announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future.”  Geithner went on to say that, “These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to your economic recovery”

The Program in a Nutshell:

1. Foreclosure Alternatives:  The program increases the odds of closing a short sale by streamlining the process and offering incentives to lenders for participation.  The program is designed for homeowners who are eligible for a loan modification, but can not qualify for one.  Under the new program, lenders may receive compensation up to $1000 for completing a short sale.  Borrower’s may receive up to $1500 for relocation expenses.  Holders of 2nd mortgages will receive up to $1000, if they agree to the terms of a short sale.

Why This New Program May Help:

1. A short sale is the last step before foreclosure, and is far less costly for lenders and borrowers.   Selling short is less damaging to the homeowners credit and they are less costly for banks and lenders.   Survey results show that losses from short sales average 19 percent versus losses of 40 percent in the case of foreclosure.
2. Currently, more than 75 percent of short sale contracts fall apart, despite sometimes heroic efforts on the part of the borrower.  Lenders have for the most part been uncooperative when responding to offers on short sales, which means the properties sit vacant and pull down values in the entire area.
3. The new program may provide a much needed boost to the current Making a Home Affordable program.  Despite good intentions, the program has only helped 55,000 homeowner’s modify their loans.   In comparison, there were 342,000 foreclosure filings in the month of April, alone.

  Stop The Sinking Feeling.   If you are struggling to pay your mortgage or you are falling behind on your payments…CALL YOUR LENDER TODAY!!   Don’t procrastinate, the problem will only become larger if you wait.   You may also waste valuable time in stopping a foreclosure on your property, which is the worst case scenario for borrower and lender alike.

Thank you for visiting InfoTube.net.  Since 1988, our business has been helping owners  market and sell their property.  If we can assist you or answer any questions, please use the comment link below.  All comments are anonymous and your privacy is assured.

In the annual Berkshire Hathaway shareholder’s meeting, Warren Buffett, the oracle of Omaha, predicted that inflation will hit the US economy due to the financial crisis.  Buffett told shareholders, “I haven’t had my taxes raised.  My guess is the ultimate price will be paid by a shrinkage of the value of the dollar”.  

If Warren is right, and he usually is, the average person can use his wisdom to profit with a smart real estate investment.    

• To invest safely, a home buyer should put 20 percent down and take out a 30 year fixed rate mortgage, locking in an interest rate around 4.5 percent.   If you haven’t owned a home over the past 3 years, you can cash in immediately with the $8000 tax credit.   When inflation hits, your mortgage costs will remain the same, as your salary increases.  This means that you have even more money to save and invest later on.
• If you are currently renting, there is another compelling reason to invest.   During periods of inflation, rents will rise.  If you don’t own a home, your monthly rent obiligations will soar. 
• Another reason to invest in real estate is that during times of inflation, home prices appreciate, if even at a slower pace.  History shows that during inflationary periods, real estate appreciation tends to beat inflation by 2-3 percentage points.
• Leveraged assets, such as real estate, outperform other asset classes.  Leverage magnifies gains because as your income rises, your debt payments will not.   You’ll be able to pay off the mortgage with money that is worth less than it was when you borrowed it.
• With home prices and interest rates hovering at historic lows, now may be the perfect time for investor’s to withdraw the cash they have sitting in savings accounts that is paying only a 2-3percent and buy a piece of property.   If you buy a property where the tenant covers the expenses and costs of ownership, then the investor can relax and wait for inflation to move up rents and home prices.

InfoTube.net and Warren Buffett agree that inflation, over the next 5 years, is a sure bet.   And, when we get rampant inflation, real estate is the perfect hedge.   Throw in low prices, cheap money, ridiculously low returns on cash investments and thousands of dollars in tax savings, and you have a powerful case for buying a home now.   

Thank you for visiting InfoTube.net.  Seller’s can place a Free Property listing on the site or add an MLS listing to their by owner strategy with the click of a button.  Bonus:  Buyer’s can search for thousand’s of homes in complete privacy.  We do not sell or distribute user information and there are no pop up’s or dead links anywhere on our site.

According to the National Association of Realtors (NAR), the number of people who purchased a vacation or investment home fell by 30 percent last year.   And, more than 40 percent of those who did purchase a second home paid cash.

“We expected vacation home sales to fall given the impact of a declining economy”, said Lawrence Yun, chief economist for the NAR.  “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix”, state Yun.

Vacation and second home sales mirrored the sales for primary residences in terms of price declines.  The median price of a vacation home dropped to $150,000 in 2008, down from $195,000 (or, 23 percent) from 2007 levels.

Other Findings from the March Survey are:

• Who was the “Average Buyer” of Vacation Property in 2008?  The average age of a vacation home buyer was 46 years old.  They purchased a property that was generally 316 miles from their primary residence.  Their median household income was $97,200.
• Who was the “Average Investment Home Buyer in 2008?  The average age of an investment buyer was 47.  They earned a median income of about $85,000 and purchased investment property nearby their primary residence.  The median distance for an investment purchase was 19 miles from their home.
• What type of Property was purchased for a Vacation Home?  70 percent were detached, single family residences; 18 percent were condo’s; 5 percent town or row houses; 7 percent other.
• Types of Property Purchased for Investment:  64 percent were detached single family homes; 22 percent condos; 8 percent town or row houses; 6 percent other.
• Where did Vacation Home Buyers Shop?  26 percent bought in small towns; 23 percent rural areas; 23 percent resorts; 20 percent suburbs; 8 percent cities or urban areas.
• Where did Investment Buyers Shop?  28 percent purchased in the suburbs; 20 percent in a city or urban area; 23 percent rural area; 8 percent in a small town; 6 percent in resort areas.

Hopefully, the survey results will help home sellers picture who the likely buyer of their vacation or investment property may be.  Picturing who the customer is likely to be is important when target marketing to their needs.

Please visit InfoTube.net to place a FREE property listing, or search our database for thousands of great deals on homes of all types.   Thanks for visiting and let us know if you have any questions or comments in the space below.

According to a report by the National Association of Realtors, 32 percent (1/3 of all buyers) of home buyers first saw the home they purchased on the internet.   Buyer’s who found their home through a real estate agent dropped 14 percentage points to 34 percent, during the same time period.

Despite the slowdown in the housing market, buyers and sellers have increased their use of the internet when buying or selling a home.  “The internet is a very important tool in today’s real estate market”, said Tommi Crow, CEO of Crow Erickson, Inc., the company that manufactures the InfoTubes and InfoBoxes found on real estate signs from coast-to-coast.  “Home sellers know that they can use the power of the internet to reach millions of home shoppers as effectively as a real estate agent would”, said Crow, and, they can save themselves thousands of dollars in the process”, said Ms Crow.  “Americans are successfully buying and selling real estate without using agents, and that trend continues to grow”.

Home seller’s who want to maximize their online exposure use InfoTube.net, combined with the services of Why 6 Percent.  The combination of the two marketing programs provide home seller’s with a home listing on their local MLS, Realtor.com, Google, Yahoo, MSN, Craigslist, Zillow, Trulia, Infotube, Homes for Sale Live and other major web portals, which attract millions of home buyers each month.

* Source: National Association of Realtors

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