Another Bear Turns Bullish on Real Estate

This is another interesting perspective from the guys at:

by The KCM Crew on January 25, 2012

Two weeks ago, we posted When the Prophet Says Buy – BUY! In that post, we explained that a major bear on housing, John R. Talbott, is now bullish on the real estate market. Last week, another bear turned bull.
Chris Thornberg, a former UCLA economist and a founding principal of Beacon Economics, was very skeptical of the housing market in 2007. However, in an article by the Orange County Register on January 13^th, he is quoted as saying that now is:

“…a great time to buy a home…If you’ve been thinking about buying a condo in Vegas or buying a condo in Miami, buy now.”

We started off 2012 with two of the biggest bears on housing converting to bulls and telling us to BUY NOW! It might just be time to buy!!

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Rise in Home Sales Signifies Strengthening Market: Economists

The long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.

While admitting home sales “are still very low,” Paul Dales, chief economist at Capital Economics, says “it is clear that housing recovery is now well underway.”
The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December.
Lawrence Yun, chief economist for the National Association of Realtors (NAR), concurs with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”
Yun suggests consumers are gaining confidence from “record low mortgage interest rates, job growth and bargain home prices.”
In addition to the 5 percent increase in December, NAR reported a 1.7 percent annual increase in existing-home sales in 2011, a total of 4.26 million homes for the year.

Distressed homes made up 32 percent of sales in December, according to NAR’s existing home sales report for the month.
Foreclosed home sales closed at about 22 percent below market rate in December, a discount 2 percent higher than that recorded a year earlier.
Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.
Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.
Purchases by first-time home buyers declined in December – both from the previous month and the previous year. First-time home buyers accounted for 31 percent of purchases in December, down from 35 percent in November and 33 percent in December 2010.
Housing inventory is on the decline and fell to its lowest level since March 2005 last month, according to NAR. Approximately 2.3 million homes are available for sale currently.
“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.
However, listed inventory is only part of the equation, and according to CoreLogic’s latest numbers, shadow inventory stands at about 1.6 million.
Regardless, Dales believes sales will rise this year. “Housing still won’t contribute much to GDP growth over the next few years, but at least it will no longer subtract from it,” Dales says.

SOURCE: DSNEWS.com

10 Surprising Reasons You Can’t Get a Home

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• Anne Douglas from KCMblog.com makes 10 good points - which I think are important enough to pass along to you!
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Getting a home signifies financial security and an investment for the future. Owning a home is part of the American Dream. There are some surprising reasons why you can’t get a home.

1. Down Payment – You may have the required 10%-25% on the asking price of the home you are interested in but how you acquired it and how long you’ve had it could keep you from getting the home. Many times relatives offer young couples the down payment. Lending institutions take this into consideration when looking at the ability of a homeowner to keep up with mortgage payments. Saving the down payment over time lends to the credibility of money management.
2. Credit– Credit history is an ongoing process. Student loans are one of the first obligations a person may have as an adult. Late payments may have a bearing on your ability to acquire a home later in life. Credit scores are also affected by utility payments. Any recurring bill that is paid late may come back to haunt you even though your financial situation is now more sound. Your debt to income ratio ideally needs to be under 45%. Less than a 3 month asset reserve in a bank account will generally keep you from getting a home. Check your credit score with all 3 agencies and make sure there is nothing being reported incorrectly. You need to aim for a score of 660 or better.
3. Job Security – Your job history may be why you can’t get a home. Lenders look for stability. If you jump from job to job, regardless of monetary or career improvement, lenders see you as a financial risk. When the economy takes a downward turn, employers tend to retain employees with seniority. Also taken into consideration is the risk of the job.
4. Parent History – If your parents have a questionable credit history, you may be dealing under their shadow. If parents foreclosed, you may be affected. If they were late with mortgage or credit card payments, you may be looked upon as having the same traits. If you are asked information on parent particulars, you may need to look elsewhere for home financing.
5. Location – The location of a home may affect whether or not a lender is willing to risk mortgaging it. LNG routes, Super Site areas, fault lines, destructive weather patterns all have bearings on mortgage risks lenders are willing to take on.
6. Inspection – More and more, home inspections are being required to seal the closing deal. Hopes have been dashed to learn major expenses must be incurred to pass inspection for the approval of the sale.
7. Condition – Fixer-uppers may offer pricing that appears affordable. If you have no background of construction or home improvement projects completed, lenders are leery to finance such undertakings. They may require a lump sum amount be in an account to cover the improvements necessary to ensure the property does not result in a loss to the lender.
8. Liens – If you owned property before and were subject to liens for unacceptable reasons such as credit card debt or unpaid taxes, you may not get the home you desire. A current homeowner may also have substantial liens that need to be satisfied at closing either from the sale itself or as additional costs to the buyer.
9. History – The history of the home may be the deciding factor that keeps a lender from financing in your behalf. A murder, haunting, nearby sinkhole, or other less favorable activity, bear upon the lender’s willingness to finance such a home.
10. The Bank – Economic conditions and bank lending history may be the reason you can’t get a home. Banks may be leaning toward only very secure clients to up their lending credibility. If a bank turns you down, look to other options before you decide to settle on thinking you can’t get a home. FHA, VHA, or a first time buyer program offer other alternatives for which you may qualify.

If you can’t get a home loan with one lender, chances are good that another institution will also turn you down. You should take some time and work at increasing the good points that will work in your favor. Try again when your situation has improved.

SOURCE: anne Douglas KCMBLOG.com

Mortgage Rates Break Record Lows

With property values across the country at depressed levels and interest rates dancing around historical lows for months now, housing affordability has hit an all-time high. That affordability inched even higher this week, as mortgage interest rates broke through their previous record lows to fall further still.

Freddie Mac says all loan products covered in its regular weekly market survey eased to set new all-time lows for the week ending January 12, 2011.
The average rate for the 30-year fixed mortgage has been below 4.00 percent for six consecutive weeks now. This week, it dropped to 3.89 percent (0.7 point), down from 3.91 percent last week. Last year at this time, the 30-year rate averaged 4.71 percent.

The 15-year fixed-rate mortgage this week averaged 3.16 percent (0.8 point), falling from 3.23 percent last week. A year ago at this time, the 15-year fixed mortgage averaged 4.08 percent.
Adjustable-rate mortgages (ARMs) also declined to hit new record lows. The 5-year ARM is now averaging 2.82 percent (0.7 point), down from last week’s average of 2.86 percent. This time last year, the 5-year ARM was 3.72 percent.
The 1-year ARM averaged 2.76 percent (0.6 point) this week, compared to 2.80 percent last week. Dial back 12 months, and the 1-year ARM came in at 3.23 percent.
Freddie Mac’s chief economist Frank Nothaft notes that declines appeared across all loan products even with news of mixed indicators in the labor market.
“Although the economy added 1.6 million jobs in 2011, which was the most since 2006, the unemployment rate remained historically elevated. The 2009 to 2011 period had the highest three-year average unemployment rate since 1939 to 1941,” according to Nothaft.
He adds that “the Federal Reserve indicated in its January 11th regional economic review that most industries saw limited permanent hiring at the end of last year.”
Freddie Mac’s weekly mortgage rate survey is based on data gathered from 125 lenders – including thrifts, credit unions, commercial banks, and mortgage companies – from across the country.

SOURCE: DSNEWS.com

Blacktop bazaar: Site lets homeowners rent out their driveways

The growing popularity of web-based companies that let homeowners earn extra cash by turning their spare rooms or vacation homes into ersatz hotels is expanding to the garage. ParkatmyHouse, a British-based company that lets people rent out their driveways or parking spaces to people seeking scarce urban parking, launched in the United States this week.
Not every homeowner is wild about the idea of letting a stranger pay to crash in their spare bedroom or park in their driveway, but investors are very interested in companies catering to this niche, in spite of nagging security problems.
"We estimate the global vacation home rental market at more than $120 billion," William Blair & Co. analyst Ralph Schackart wrote in a report last month initiating coverage of HomeAway, which competes with similar companies including Airbnb and VRBO.

 

The companies have plenty of room for growth and offer a business model that is scalable and tends to attract repeat customers, analysts say. ParkatmyHouse, along with the home-sharing sites and car-sharing services like ZipCar, taps into a growing trend toward shared consumption, Schackart said.
Unlike ZipCar, ParkatmyHouse is a "peer to peer" service that lets homeowners or businesses who have space in a parking lot, garage or driveway advertise it for rent by the hour, day, week or long-term. People looking for a place to park can search by zip code, neighborhood or landmark. ParkatmyHouse charges owners a 15 percent fee of the agreed-upon rental price.
In a tepid economy, more people seem willing to consider either using a stranger's property or renting out their own, and analysts see growth potential for the parking business.
"I think it has lots of appeal," said Sam Hamadeh, founder and CEO of research company PrivCo.
"There's no question there is a market for the little guy," he said. "These rental sites do have an advantage in that they're covering a niche."
There's clearly buzz around the idea. ParkatmyHouse has earned spot owners roughly $5 million since its 2006 launch, mostly in the past year and a half, according to company founder Anthony Eskinazi.
Last year, the company received an undisclosed amount of funding from BMW i Ventures, a startup-funding venture of carmaker BMW. Eskinazi said the investment is part of a partnership that will include other innovations like a mobile app to help drivers find nearby parking spaces.
Tom Boyce, director of marketing at another parking-spot-rental business, ParkingSpotter, said the number of users and traffic to the site took off last year, although the site has been connecting drivers and spot owners since 2008. "Within the past 12 months we've seen about a 50 percent growth from where we were," he said.
Along with managing ParkatmyHouse's surge in growth, Eskinazi's challenge will be copying the successful parts of the home-rental business model while avoiding the pitfalls that have shadowed companies like Airbnb.
"There is a market for it, but it will face some of the same issues" as it grows, Hamadeh said. The biggest problem with rental sites in general is their potential use by criminals and scam artists, analysts say.
"As the market has grown, there's more and more fraud," Hamadeh said.

 

Airbnb was the target of bad press last year after a host's home was vandalized and burglarized. After what the blogosphere derided as an inadequate acceptance of responsibility, Airbnb rolled out a $50,000 liability guarantee for homeowners plus a host of verification and security features.
"I appreciate the U.K. is less litigious, so it hasn't been as much of a focus for us," Eskinazi said. He said that with the American launch of ParkatmyHouse, the company is working on a liability insurance policy that would protect property owners if a renter's vehicle is damaged or if the renter is hurt while on their property. Although Eskinazi said "self-policing" keeps scam artists away, some site users have posted reviews complaining about parking spots that were nonexistent or inaccessible.
"It is peer-to-peer so there are some inherent risks," he said, although he added that the company planned to follow in Airbnb's footsteps and implement verification of people posting spaces for rent.
Hamadeh said customers might be put off by a "buyer beware" business model. Companies like ParkatmyHouse need to take a page from eBay's playbook and implement security and verification practices if they want to thrive, he said. "EBay made sure they had a guarantee. That's the reason they've survived 15 years after founding."
SOURCE: BOTTOM LINEon MSNBC.COM by Martha C. White

Winter on the North Fork

Long stretches of deserted beach, forever expanses of dramatic sky, a million stars scattered across dark velvet nightscapes, silence. Walk your dog in your PJs. Hike endless trails. Bike for miles, uninterrupted. (Also in your PJs, if you choose!)

Great food, no reservations, traffic or hassle.

This is Winter on the North Fork.

Under 2 hours from Manhattan, but a world away.

“Come Home To The North Fork”

Victoria Germaise

Prudential Douglas Elliman

North Fork Region

Direct 631.298.6146

Victoria.Germaise@Elliman.com

Home Prices Down in 2011, but Market Stability Forecast for 2012

Hi Folks, ths following is another informative article from DSNews.com. The furure looks hopeful for those of you trying to sell your home. It continues to be a wonderful time to BUY.

While year-over-year home price measurements notched down in 2011, prices are expected to see a slight uptick in 2012, according to Clear Capital.

Should the valuation company’s predictions ring true, it would be the first time since 2006 that the change in annual home prices has landed in positive territory.
Data released by Clear Capital Monday shows year-over-year, national home prices were down 2.1 percent in 2011. The company says movement in home prices began to stabilize somewhat during the latter half of the year and REO sales as a percentage of total home sales began to decline, which helped to moderate depreciation for the year overall.
In 2012, Clear Capital is forecasting U.S. home prices to show continued stabilization with a slight gain of 0.2 percent across all markets. That would put national home prices near levels not seen since 2001.
“Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “With national prices down a little more than two percent for the year and sitting at their lowest point since 2001, our projections show that the current balance the market has found will continue through 2012.”
According to Clear Capital, the importance of micro-market analysis becomes plainly apparent as the 2012 forecast is for a flat U.S. market, but only 40 percent of individual markets (20 of 50) are projected to be stable.
Individual markets reacting to their local economic drivers will exhibit a wide range of performance levels, Dr. Villacorta explained.
When looking at distinct metro market areas, it turns out only 24 percent showed signs of stabilization in 2011, while the others are still moving more dramatically higher or lower, Villacorta explained.
“What’s most interesting is that the lower segments of appreciating markets are driving much of the current price growth,” Villacorta said. “In places like Florida, which have historically been hard hit, we are now seeing

considerable activity in lower-end properties as demand continues to heat up.”
Clear Capital’s report shows U.S. prices declined 0.4 percent in December on a quarter-over-quarter basis as markets gave back some of the gains of the summer buying season.
December’s quarterly assessment is the first cooling off after six monthly reports from Clear Capital showed minimal quarterly gains. In fact, the company says the most recent six months of the year saw national home prices flat, posting a decline of just 0.1 percent over the second half of 2011.
The 2.1 percent price decline over 2011 marked the smallest year-end change in either direction since the market gained 1.7 percent in 2006, according to Clear Capital.
Regional trends revealed a bit more price variability. The Northeast’s meager 0.1 percent yearly gain led the nation, comparing favorably to declines of 1.3 percent, 3.0 percent, and 4.4 percent turned in by the South, Midwest, and West, respectively.
While changes in prices across the U.S. were mild for 2011, there were notable extremes at the positive and negative sides of the market, Clear Capital says.
Four metros posted price declines greater than 10 percent. Atlanta, Georgia, led the way with 18.3 percent shaved off its home values in 2011, followed by Seattle, Washington, which posted a 15.1 percent annual decline. Birmingham, Alabama, and Detroit, Michigan, also rode the markets down with 11.1 percent and 10.8 percent price drops, respectively.
On the positive side, Dayton, Ohio, enjoyed 11.5 percent annual price growth in 2011. The next two strongest performers came from Florida, with Orlando and Miami laying claim to 6.7 percent and 5.6 percent price gains, respectively.
Each of the markets with double digit declines saw an increase in the percentage of sales that were REOs, while declines in REO saturation helped buoy the top performing markets to positive price growth in 2011.
Nationally, Clear Capital says REO saturation reached a new yearly low at the end of 2011 at 24.8 percent.
Clear Capital expects 2012 to play out much like the last half of 2011, with only a very subtle price change at the national level. A minimal decline in the beginning of the year is expected to turn into a meager gain by year’s end, the company explained.
At a more granular level, half of the 50 major metro markets included in Clear Capital’s study are expected to post gains for the year, with individual metros experiencing the full gamut of price movement, from double-digit growth to double-digit drops.

SOURCE: DSNews.COM