Real Estate News

Building wealth.  Buying low/ selling high.  Equity income.  Tax deductions.   Positive cash flow.  Interest deduction.  Let’s even throw appreciation in there because, well, we will see it again.  I have posted on here numerous times about the benefits of buying rental or investment property.  These deals are real, affordable, and available now.  The deals I speak of: buying a duplex and renting out one side.  Purchasing a townhome that cash flows with little maintenance.  Snatching up a single family home, that with a little TLC that turns into a nice income producer.  Buying property close to college for your children and others to rent while attending. These deals are real and happening and you don’t have to be Trump to get in on it.  I would decline to self promote if it weren’t true, easy and if I weren’t helping people do it.  Disclosure on the self promotion, I’m not creating the environment or the potential, it’s there.  It’s the buyers that are smiling and making agreat deal, I am just having fun counseling, coaching, and helping them achieve it.

A bill was introduced in the U.S. House of Representatives that would waive withdrawal penalties on certain retirement plans if the money is used to buy a home that has been in foreclosure for a year or more.  This bill was introduced recently by congressman and real estate professional Bill Posey, R-Fla, and is expected to apply to Roth IRAs, 401(k) plans, and company pensions.

The intent is to promote purchases of these types of properties by owner occupants or second homes rather than people looking to “flip” them.  According to the bill, purchasers must agree to hold the property for at least two years to avoid penalties associated with the withdrawals.

The “second home” idea could be an inviting one as California (25%)and Florida (9%) accounted for nearly 34% of foreclosure activity during the first quarter according to RealyTrac.

The bill has been sent to committee for further consideration.

A substantial majority of both home owners and current renters agree that owning a home is a smart decision over the long term. That’s according to the results of a National Association of Realtors® survey of 3,793 adults conducted online by Harris Interactive.

The American Attitudes About Homeownership survey found that in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of home owners are happy with their decision to own a home – 93 percent of owners surveyed would buy again.

“Home owners and renters agree that home ownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The results of this survey illustrate just how important issues related to home ownership are to people in this country.”

The survey uncovered some differences between home owners and renters, as well. While more than half of owners are “very” or “extremely” satisfied with the overall quality of their family life, only one-third of renters report the same levels of satisfaction. Similarly, 43 percent of home owners are very/extremely satisfied with their community life, compared with 30 percent of renters.

A majority of renters – 63 percent – said that it was at least somewhat likely that they would purchase a home at some point in the future. Among this group, young adults (18-29 years old) have the strongest aspirations for home ownership; only 8 percent of young adults said that it was “not at all likely” that they would purchase a home at some point in the future.

In today’s market, many aspiring home owners are faced with worries about job security and creditworthiness. Among renters who are very or extremely likely to buy a home in the future, three out of five consider confidence in job security and creditworthiness to be an obstacle.

One point of agreement between renters and home owners was support of the mortgage interest deduction (MID). Seventy-four percent of owners and 62 percent of renters say it’s “extremely” or “very” important that the MID remain in place.

“At a time when the middle class is under increasing economic pressures, both home owners and renters agree that the mortgage interest deduction should not be targeted for change,” said Phipps. “Given strong public support of and aspirations toward owning a home, we need to keep policies in place that support and encourage responsible, sustainable home ownership for our future.”

http://www.realtor.org/press_room/news_releases/2011/01/owning_home

Home Owners Recoup More with Exterior Replacement Projects, REALTORS® Report

As part of the 2010-11Remodeling Cost vs. Value Report, REALTORS® recently rated exterior replacement projects among the most cost-effective home improvement projects, demonstrating that curb appeal remains one of the most important aspects of a home at resale time.

“This year’s Remodeling Cost vs. Value Report highlights the importance of exterior projects, which not only provide the most value, but also are among the least expensive improvements for a home,” said National Association of REALTORS® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Since resale value can vary by region, it’s smart for home owners to work with a REALTOR® through the remodeling and improvement process; they can provide insight into projects in their neighborhoods that will recoup the most when the owners are ready to sell.”
Nine of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. The steel entry door replacement remained the project that returned the most money, with an estimated 102.1 percent of cost recouped upon resale; it is also the only project in this year’s report that is expected to return more than the cost. The midrange garage door replacement, a new addition to the report this year, is expected to recoup 83.9 percent of costs. Both projects are small investments that cost little more than $1,200 each, on average. REALTORS® identified these two replacements as projects that can significantly improve a home’s curb appeal.
“Curb appeal remains king – it’s the first thing potential buyers notice when looking for a home, and it also demonstrates pride of ownership,” said Phipps.

http://www.realtor.org/press_room/news_releases/2010/12/home_owners_recoup

In showing some homes in Lakeville, MN, some clients pointed out something to me. They hadn’t seen any for sale by owner signs lately. In doing a little research, I found that homes sold without the help of a real estate professional dropped to a record low over the past year. According the the 2010 NAR Profile of Home Buyers and Sellers, unrepresented sellers made up only 11 percent of the market, down from 2009. Considering most for sale by owners sell to someone they already know, the actual number of homes sold on the open market without professional assistance was a record low 5 percent. This current market can bring some challenges especially when purchasing foreclosed property or trying to sell your home as a short sale. If you’re in Lakeville, MN or in any of the surrounding suburbs and considering for sale by owner, consider interviewing a Realtor about the complexities and obstacles you might encounter and how a professional might help you overcome those challenges.

REALTOR® Magazine-Daily News-Voters Say: Don’t Mess With the MID.

Outside the voting area at Hosanna Church in Lakeville, MN I was having a conversation with someone about 1^st time buyers, investors and the interest rates.  Most indicators and industry professionals point to the rates not being this low for too much longer and predict them to go higher in 2011. This person is looking at purchasing to rent out the home versus living in it, but in either case, investing or buying as a principle residence, short sales or foreclosures, home prices and interest rates make this a great window of time to buy.

As the mercury inches downward outside, grab your favorite hot beverage and let’s review the buyers and sellers weekly dance card. Bear in mind that current activity may look especially slow compared to last year’s tax-credit-induced performance.

For the week ending October 9, sellers continued to pick up their tempo by introducing 1,479 new listings to the marketplace. That’s only 4.1 percent fewer new homes than last year at this time, as the year-over-year comparison gap continues to narrow. Buyers danced to a slower beat. The 523 pending sales for the week were 44.8 percent fewer than last year. That’s the largest decline in 13 weeks.

With seller activity slowly returning and buyer activity remaining sluggish, inventory levels are still high. There were 26,866 active listings as of October 18. Keep a close watch on this metric, as it emphasizes the dynamic balance between supply and demand—the most critical forces affecting the market.

There is some good news in the mix. At 220, housing affordability is at an all-time high. The availability of low cost homes combined with low interest rates have created an extraordinary buying opportunity

While a lot of this information is personal experience mixed with some documented fact, it unfortunately cannot be held as 100% gospel as the rules seem to be ever changing and sometimes foggy from the beginning. I have been hearing a lot of people discuss with strong opinion that you can get a better deal on a short sale. In fact, a lot of banks are pricing foreclosure listings so competitively they are getting multiple offers. Also, with a short sale, you are never guaranteed that the sale will actually ever happen, depending on if if some screening was done prior to the property being listed. Short Sales do take much longer between offer, final acceptance, and closing, but you likely will get some more disclosure on the property and in some cases are receiving a home that was still being very well cared for. Some foreclosure transactions are very heavy with bank addendums indemnifying them from just about everything you can imagine in the conveyance of the property to you. Obviously, it is best to handle your potential purchase on a house by house basis with your agents and sometimes attorneys help.

Pending home sales edged down with near-term sales expected to be notably lower in contrast to the spring surge when buyers rushed to take advantage of the home buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”