Friday, August 19, 2011

Five Real Estate Trends to Watch for

If the housing market were human, it would look like just wrestled a few alligators, after running an obstacle course through a snake pit.  
The market is beaten and bruised, but still trying to emerge from the recession, which is why Greg Rand, a 20-year real estate veteran and author of Crash Boom ( from Career Press, wants people to know about five new trends that could help them beat the housing blues.
“One of the key elements of a free market is chaos,” Rand says. “Chaos is how the markets figure out how to move forward. The important thing to realize in the midst of all these people talking about ‘the housing market’ is that the market isn’t some nameless, faceless thing that lumbers around aimlessly as if it has a life of its own. The market is made up of buyers and sellers. People, just like you and me, are trying to figure out how to buy low and sell high. It doesn’t matter if you’re a homeowner or an investor. The secret to making sure your real estate doesn’t turn into a money pit is to watch the trends so you can predict where the prices will rise and where they won’t.”
Rand’s five trends to watch include:
• Short-Term Pain – Show me a market where home prices are back to 2002 levels, and I will show you a market that is overcorrecting.
Overdevelopment One of the reasons the market is overcorrecting is overdevelopment and speculation, as is the case in Florida. Another reason is that the job base has eroded, like in Detroit. Isolated, explainable, short term distress is the secret. Find your Florida.
• Jobs, Jobs, Jobs – Track employment trends to see where companies are moving, and you will see a harbinger for long term housing demand.
• Lifestyle – Nothing drives migration patterns long term more that the pursuit of happiness. Look at climate (the Carolinas), leisure trends (Colorado) and cost of living (Texas) for triggers on where the market may shift.
Responsible Government Look at the state government. Does the state and city in question reward or punish risk-takers? Are you likely to suffer if you succeed there? If so, find somewhere that appreciates entrepreneurs. There’s nothing worse than putting your money on the table, only to have it redistributed.
“It comes down to the idea that no matter how the markets change, no matter which way the winds shift, people will always need a place to live,” Rand adds.
“That’s been true of America since the first log cabin. If you plug into that concept, and leave fear in a box on the shelf, you can be ahead of the curve and ride the wave of the trends that matter.”
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Tuesday, August 16, 2011

California home sales slowed from June to July

SAN FRANCISCO—A real estate tracking firm is reporting that sales of California homes slowed last month.San Diego-based DataQuick said Tuesday that nearly 35,000 new and resale houses and condos were sold statewide in July. That represents an 11 percent decline from June and 1.4 percent decrease from July 2010.

DataQuick says the median California home price in July was $252,000, down 0.4 percent from June and 6 percent from July last year.

The median price peaked in early 2007 at $484,000 and hit bottom in April 2009 at $221,000.
The firm says more than half of resale home sales last month were foreclosures or short sales, when a lender allows the owner to sell for less than what is owed on the mortgage.
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Saturday, August 6, 2011

Raising the Debt Ceiling: How Will It Effect Real Estate?

The effects of politicking in Washington led to some historic events for our country. Unfortunately, our most recent events have all been rather negative, to say the least. So, we are once again hearing that mortgage interest rates are at all-time, historic lows. I would not want to give our Washington elites too much credit for being the reason for these low rates. But the truth of the matter, is that due to our debt issues, our financial system must continue to make money as affordable as possible to those borrowing. This will help improve the velocity of money and hopefully spark more interest in Real Estate purchases.

Why are rates so low, and how long will it last? If we take a look at the 10-year bond, we can see that it is tremendously low. This particular indicator represents a beacon, so-to-speak, for how banks will adjust interest rates, particularly the 30-year fixed loan product. Things might change pretty soon, however. So, I am putting out the warning to everyone out there seeking to buy a new home or refinance - DO IT NOW!

Inflation is a general increase of prices and a decrease in the purchasing value of money. Our politicking led us to this crisis, and the only choice is to have Ben’s Print Factory (Federal Reserve) print more money. Lots of it!

Pumping more money into the system decreases its value. More than ever, our dollar will begin to fare poorly against other currencies. What does this mean for mortgages?

Very simply, we are going to have to pay higher interest rates for borrowed money in the near future. This means that we go from the perfect storm in Real Estate (low prices/low interest rates), to the difficult, downward spiral of our economy. As we know, it’s tough for the younger crowd to get into real estate after witnessing the massacre of the last five years. But the reality is, home ownership is a positive thing.
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