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Are You on ActiveRain? September 29, 2009

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If you are a real estate agent, broker, insurance agent or anyone in between, you should be on the ActiveRain network. With over 160,000 members (and counting) ActiveRain is a hub for real estate professionals looking to engage, interact and communicate with one another, just check out my profile. I’ve received some great responses from some of the articles I’ve produced. It has certainly helped grow my network.

‘The rain’ has many useful features. Members can host a blog, create a group, acquire ‘associations,’ and is great for getting referrals. The more ‘active’ you are on ActiveRain, the most points you acquire, pushing you to the top of pack in your specific area. Most blog post – if directed at a particular local market – could get you to the top of Google searches as well.

But most of all, ActiveRain is a great place to meet great people and share interesting ideas. And it’s FREE. So sign up today and get active!

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Single Family Housing Starts: Dog Days of August August 18, 2009

Posted by John Watch in AccuriZ News, News Feed.
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As we all sit inside our air conditioned offices wondering what will be the next “big” news regarding real estate, the Commerce Department released its estimate of New Single Family Home Construction today.

Stop!  We can be happy with this news or we can take it in stride.  Every article that I have read, the author comes from a point of strength in that there is some unique data set that only they have access to.  There never appears to be any common sense applied and invariably there are always quotes from interested “economic advisors”.  The latest news is a classic example. 

581,000 new single family homes were built in 2009, according to public records.  Now that is a dismal number compared to the hay day of 2005/2006 when over 2 million homes were being built (See Housing In Crisis Report). But is this really a bad number?  Based on property data records, every year in the United States each market replaces existing inventory with new inventory because older homes need to be rebuilt and because of natural disasters.  There also is the market for individual, non development homes that are built to meet unique demands of property owners.  So 581,000 is a good number.

But let’s not forget that over 3.5 million vacant housing units that were newly built remain in the market.  Let’s not forget that Supply and Demand need to be in balance for a healthy real estate economy to exist.  And let’s not forget that supply is reduced by people buying homes and presently this is occurring through natural population growth.  So with the national population growing at about 4 million people annually, we will only see about 1 million of the excess inventory absorbed annually.  This means three more years before true market levels begin to appear.

Of course in areas where overdevelopment was held in check, the housing markets are already in full recovery.  But for areas in Florida, Nevada and Arizona, recovery may be five years away.

Let us know what you think, what you are experiencing in your communities and what you think about the housing recovery!

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Afternoon Real Estate News: 8/18/09 August 18, 2009

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Where is the Real Estate Market Today?

Surf’s Up! Here come another foreclosure wave!

New York City Sales Activity 70% below 2004

Home Prices: There’s No Quick Recovery Ahead

Foreclosure Plan Presented for Discussion

Ten Key Charts on Property Values

Housing Market Dominates Headlines

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Afternoon Real Estate News:8/17/09 August 17, 2009

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NYC Square Footage and Median Price Difference

Mortgage Assistance Program for Homeowners

Real Estate is: Cyclical, Seasonal and Emotional

Housing In Crisis

Home Buyers want a Bargain: Are Sellers Getting the Message?

Landlords with Violations get Stimulus Funds

Home Sales grew in Second Quarter in 39 States

The New American Dream: Renting

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Freddie Mac’s Outlook Cautious about Seasonal Home Sales August 10, 2009

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After releasing a report on positive 2nd Quarter gains – with some gains attributed to the slight uptick in home sales – Freddie Mac remains cautious with their property data of the housing market. Remember that real estate is three things: Cyclical, Seasonal and Emotional.

“While we are seeing some early signs pointing to a housing recovery — including a modest uptick in house prices in some markets — our outlook remains cautious due to rising foreclosures, growing unemployment, tight lending standards and buyers’ reluctance to re-enter the market,” Interim CEO John Koskinen said.

What are your predictions for Fall home sales?  Will the public records show that we will continue to see improvements in the housing market? Or will there be some declines as the spring/summer season comes to a close?

For more information regarding Real Estate Reports and the Mortgage Assistance Program, visit AccuriZ HERE.

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Great News for American Taxpayers! But Really… July 10, 2009

Posted by John Watch in Uncategorized.
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Excerpts from HousingWire.com 

In a rare occurrence over last six months, we’ve finally received some good news coming from Washington about the economy. Yesterday, the House Finance Services Committee heard testimony on a bill for possible Troubled Asset Relief Funds (TARP) reinvestments.

HR 3068, or the TARP for Main Street Act of 2009, proposes to reinvest $6.5 billion to the home ownership and housing efforts. Public records show that as of June 30, the US Treasury Department issued $399 billion of the $700 billion TARP funds, which received back $70.1 billion from stock repurchases and $6.7 billion in dividend payments on preferred stock through the Capital Purchase Program.

The proposed $6.5 billion would be distributed as such;

  • $1 billion to build affordable housing
  • $1.5 billion for the US Department of Housing and Urban Development to distribute to state and local government for the redevelopment of abandoned and foreclosed homes
  • $2 billion in emergency mortgage relief  
  • $2 billion to HUD to stabilize multi-family properties that are in default or foreclosure or have recently been foreclosed.

As the initial $399 billion of the TARP funds have been distributed effectively, why is there an additional $1 billion being used to build NEW housing? With an additional $1.5 billion for ‘redevelopment?’ One of the critical factors of the housing bust was, and still is, the housing oversupply. At last year’s end, there was an excess of 5 million homes that needed to be absorbed. Why add on to this already incredibly high number?

Critics of the bill had this to say.

Rep. Spencer Bachus, R-Ala., in a statement on the bill, criticizes the $1.5bn that would go toward the Neighborhood Stabilization Program, which he says could be accessed by the community group ACORN. Bachus, ranking member on the House Financial Services Committee, said the group is “notorious” for its efforts to commit voter fraud and more funds available to the group would undermine the administration’s efforts for transparency and flexibility o the Treasury Department to strengthen the financial system.

“One of the best things we can do to stabilize the credit markets and promote long-term economic growth is to restore fiscal discipline and stop the reckless government spending,” he said. “As institutions begin to pay back their TARP assistance, we need to end the bailouts and return that money to the taxpayers thereby reducing the deficit.”

These arguments surely hold merit. But if they really want to promote economic growth and return money to the taxpayers, some of the $6.5 billion should be allocated towards helping the small business industry, which accounts for 85% of employment. Stimulating the economy should not come with pumping more money into contractors and local and state governments for building and redevelopment, but to the workers and consumers whose dollars they rely on. Up to this point, the TARP funds have been used for these corporate issues, and rightfully so. But some ground level redevelopment needs to be addressed. If even $2 billion were to be given to small business owners to help stimulate their practices, employees could be hired, consumer confidence could get a boost and the economy could be strengthened. An immediate impact could be generated. As the employment rate continues to rise, what good does it do to build more homes? If the foreclosures are rising, what good does it to add on to the supply?

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Does it add up? Metro reports NYC property values down nearly 25% July 9, 2009

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  “The real estate crisis that’s slammed the rest of the country is finally catching up to New York, with home prices dropping by nearly 25 percent.”

Price plunge
Manhattan: Down 19% to $1.3M
Queens: Down 13% to $403,000
Brooklyn: Down 12% to $503,000
Staten Island: Down 10% to $388,000
Bronx: Down 9% to $356,000

Above reported by: NYC Metro Newspaper

For starters, according to the price plunge graph above, the only borough that has property values down anywhere in the vicinity of 25% is Manhattan with 19%. And since Manhattan “usually bolsters the citywide average” as the article states, it shouldn’t be cited as the true indicator for all of NYC.

The problem that continues to persist in today’s market analyses is the complete neglect of property data reporting on a micro level. Based on our findings in recent reports and public records, property value declines affect some units differently than others, based on price per square footage.

So does it add up? It depends on the sector of the market that is being analyzed. Based on price per square footage, some units have flat property values while others suffer declines. But the findings in most of today’s reports DO NOT qualify as legitamate observations for the entire market. They just don’t. Because whenever you compare apples to oranges, you never can get a complete understanding of what’s really go on.

So if the newspapers and the media can’t get it right, who can you trust?

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Causes of Housing Bust Part II: Housing Affordability July 8, 2009

Posted by John Watch in AccuriZ Reports.
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Reported from: Housing In Crisis

Housing Affordability factors have been key in the progression of the economic downturn, according to the latest report by AccuriZ entitled ‘Housing In Crisis.’

Housing Affordability

Housing Affordability

             CLICK to MAXIMIZE

Based on AccuriZ property data and public records, historical trends of the median sale price of homes and the median income of owners has fallen slightly under 3. In the recent decade however, the rate is slightly above 4. “Many housing analysts site this factor for justification of further declines in the overall value of housing. There is sufficient evidence from the banking industry that can be used to counter this argument,” as stated in the report.

When home ownership standards were lightened, there was a surge. “Beginning in the late 90’s the percentage of home ownership began to increase, reaching a peak of approximately 71.8% in late 2006 early 2007. This represented an increase in ownership of approximately 3.5 million housing units for individuals who previously rented, ” the report said. This is all while renter levels remained stable. People who previously weren’t qualified for mortgages now had the ability to own, and they did.

So the question is, which came first? Was there an initial oversupply of housing? And because of these circumstances, mortgage standards were relieved to fulfill the overwhelming vacancy? Or were the mortgage standards relaxed, and because of this new surge in housing demand, home construction rapidly increased? We have reason to be believe that it was the former. But whatever the case is, these two critical pieces of information; oversupply and ownership surge played a pivotal part in the boom and the bust of this recent economic cycle.

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Manhattan Home Prices…Plunge? CNNMoney.Com July 7, 2009

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1210_14_23---Manhattan-Skyline-New-York-City_web

Report from CNNMoney.com.

A couple of things I wanted to point out in this article.

NEW YORK (CNNMoney.com) — “The housing bust has finally clobbered super-pricey Manhattan home prices.”

I’ve never heard the word ‘Clobbered’ used for real estate.

 

“Prices fell between 13% and 19% compared with the same quarter last year.”

That doesn’t sound like much of a “Plunge” to me. Decline maybe. Especially when only compared to LAST YEAR.

“Driving the increase were sales of studio apartments and one-bedrooms, both of which gained market share,”

Shouldn’t these properties be evaluated on their own criteria and standards then? Or is it just me…

“It’s value-based shopping,” said Pam Liebman, chief executive of the brokerage Corcoran Group. “People are coming back into the market, but nobody is going to overpay.”

That’s right, so why compile high-value and low-value property data and public records?

Of course, in Manhattan “value” means studio prices that go for a median of $400,000 and one-bedrooms that fetch $650,000.

That’s “high-value” in most cities.

“There are still risks to the economy, both national and local,” Greg Heym said. “But job losses have slowed, consumer confidence is higher and the stock market returned more than 30% during the quarter.”

The only risk is repeating the same process that got us into the mess

“But people shouldn’t think that a bottoming out means a quick rebound,” he said.

Right.

“The entry level market did not fall as far as the high end,” Miller said. “The difference was a jumbo versus a conforming mortgage.”

So seperate the data for the entry level vs. the high end. “Jumbo data vs. Real data”  I guess…

Once the economy recovers, the prospects for the Manhattan housing market are good. The market could quickly tighten again. There’s little new building going on. As a matter of fact, not a single building permit was filed in all of February, according to Heym.

Not so good for builders and contractors. But good for a possible “recovery.” We already have an oversupply.

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Why MLS is not credible: More home sales prices kept secret in Dallas MLS | June 22, 2009

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More home sales prices kept secret in Dallas MLS | News for Dallas, Texas | Dallas Morning News | Dallas Business News

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Situations like these are critical in understadning why various MLS are not credible sources for property values across the nation. As real estate agents, buyers and sellers fight to save their own hides, everyone from the first-time home buyer to the economist can possibly be getting screwed due to skewed property data and public records.

“The trend is troubling some market watchers because Realtors and appraisers use the service to set prices and prepare offers. And everyone who depends on the data – including the economists who track the North Texas housing market – is getting only part of the housing picture.”

With the trend increasing, it’s hard to decipher who’s right, who’s wrong, and where the real information lies. Who can we trust?

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