September 29, 2007

Recent Housing Markets: How Bad Is It

Following is a compilation of some views and statson the housing markets from credible sources:

CBS Marketwatch: Glut of unsold homes rises to 18-year high. Home prices falling at fastest pace in 16 years, Case-Shiller says. The Case Shiller monthly survey of 20 Metro Markets shows us that the declines are still with us. Shiller is a professor of Economics at Yale University.

Atlanta Federal Reserve Board: "Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said "I believe the bottom of the housing downturn could be a ways off -- potentially the second half of 2008 or later,"

US Dept of Commerce: Sales of new one-family houses in August 2007 were at a seasonally adjusted annual rate of 795,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.3 percent (±12.4%)* below the revised July rate of 867,000 and is 21.2 percent (±9.0%)below the August 2006 estimate of 1,009,000.

Finally, I think I caught a little light in all of this gloom. CBS Marketwatch Also quoted Lawrence Yun, senior economist for the real estate trade group, as saying he credit-market freeze in August no doubt contributed to the decline in sales ". Many loans that had been committed to fell through, Yun said, so the sales couldn't close. Existing-home sales are measured at closing.
An informal survey of real estate brokers showed about 10% of jumbo loans were failing to close, Yun said. The increase in inventories was driven mostly by lower sales, not by more supply hitting the market.
The emphasis is mine..... I wouldn't make the case we are seeing a bottom but it is always good to know that some of the recent worst was due to the credit problem, no longer with us

Thanks for Reading

Howard Bell

Your Property Path

September 27, 2007

Moving/Buying: Check Out Your Rotten Neighbor First

Im not at all sure whether this is a good idea, but i wanted to share this beta website with all of you. Now we all have rotten neighbors and wish if we only new....we would never buy or move near one of those rude entitled neighbors that can really ruin a life.

There is a web site that amounts to a database of neighbors beyond the pale. Anyone can enter their story and it is seachable by zip code. Not only can you find out if you are about to have a really rotten neighbor experience, but you can find out exactly what type of rotten experience you are about to have.

Personally, I wonder if we are getting just a little too personal and I can certainly see thundering lawsuits screaming slander. But, I do know that some Credit Reporting Agencies link to bad tenant data bases. If you are a landlord, its possible to search a rental applicant to see if any other landlord has had such a bad experience they went to the trouble of adding that name to the data base.

Your Property Path

September 25, 2007

Buying or Selling online; End of Days?

We know that the computer has provided a wealth of information and search ability for buyers and sellers. The next question is will it replace the agent? Can a deal be made completely on line and if so, will people trust it and use it?

There are a few sites that are testing this hoping to be the next "killer app" or the next disruptive technology. Disruptive technologies such as the computer or email app or even the cell phone really change our lives and make the early developers rich. You know they will try hard and attract a lot of development money.

Now there are a few sites testing the nets ability to offer a complete transaction without the agent, thereby saving the buyers and sellers money.

Industry stats tell us that 8 of 10 use the net to search for property. This is a good thing, because we all prefer informed clients. They are easier to work with because they know what they want and are less likely to be time wasters.

NAR weighs in: According to an article in the Wall street Journal; "Walt Molony, spokesman for the National Association of Realtors, says that's not likely. He says that the trade group's research shows that more than half of Web surfers begin their searches on metropolitan multiple listing sites or on the industry's own For-sale-by-owner (FSBO) sales are at "historic lows" of only 12% -- and 5% of those transactions occur between people who already know each other, according to NAR. Furthermore, he says, no matter what tools a Web site offers, many buyers and sellers will still want a professional to guide them through a home-sale transaction."

The world rarely is a matter of one of two choices. I think that the agent will remain the central focus for transactions, but that we will see more competition from web sites that will offer a variety of ways to buy or sell. Following are some sites that offer competing services to traditional methods are worth looking at:

MLS type sites:



Housing Tracker

Transaction type sites:

Real Umbrella


Real Estate Auctions


Realty Trac

Realty Bid

Thanks for Reading

Howard Bell for Your Property Path

September 19, 2007

At the Right Price Buyers are Everywhere

From an article at cbsmarketwatch, we find that one of the major homebuilders, Hovnanian Enterprises decided to drop prices due to painfully high supply of new homes. Faced with declining sales and declining profit margins Hovnanian bit the bullet and lowered prices dramatically. They dropped homes $100,000 which some saw as an indication of how bad things are - fair observation, however the stock went up $3.22 or 28%. Thats quite a lot of applause!

Heres whats amazing: Home sales went up at ten times the recent sales rate. "There are interested buyers in the marketplace," Hovnanian said, but they are hesitant because they want to catch the bottom. "Competitors are likely to respond with even bigger discounts, so deals for home buyers are likely to get even better over time," wrote Banc of America Securities analyst Daniel Oppenheim in a research note this week.

At the right price buyers are everywhere...

Thanks for Reading

Your Property Path

September 15, 2007

How Bad is the Foreclosure Situation Really

The Sept Mortgage Bankers Association press release reveals some unexpected good news. Its hard to see any good news in a report about the state of foreclosures, yet the numbers where encouraging......

The national numbers for foreclosures would have dropped except for four states, which had such a high spike in foreclosures that it skewed the national average, California, Florida, Nevada and Arizona.

Were it not for those four states the survey finds, we would have seen a nationwide drop in the rate of foreclosure filings. "Thirty four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four,” said Doug Duncan, MBA’s Chief Economist and Senior Vice President of Research and Business Development.

We all know how numbers can be used to paint a picture and we understand that the press will always write emotionally about trends because it grabs attention. Its good to know that clearly there is a lot of pain out there, but their seems to be some light at the end of this tunnel.

Thanks for reading

Howard Bell for Your Property Path

September 6, 2007

The Credit Crunch is Over: Money is Available

But The Standards Have Tightened

I came across a an interesting article at the Wharton School of business at the U of Penn. According to Joseph Gyourko director of Wharton's Samuel Zell and Robert Lurie Real Estate Center, the Mortgage freeze, whereby people with good FICO scores and solid downs could not get a mortgage is over. Now that is good news that should help stabilize the markets.

The article goes on to quote Todd Sinai, an associate professor at Wharton who makes the point that although money is available, the standards have tightened ( the reform correction after a bust) and that homes that need to sell may come down in price to meet the buyer.

The pendulum of any boom bust cycle is to go from a relaxing of the rules that allows too many weak players into the market to a washing out process of those players through a generally painful correction.

Often there is a stepping back as the markets reassess the risks (lending standards and cost of money are impacted by this). Reforms are instituted and the slowly markets get a life. This is the quiet period characterized little market activity and buyer shock. You can help your sellers price more realistically if they understood that their will be quite a few less buyers in the marketplace due to stricter rules.

Hang in There and Thanks for Reading

Howard Bell for Your Property Path

September 1, 2007

Increased Apartment Demand

As the residence market slows and tips over in many sections of the country, one property sector is still shining. The increase in rents has been staggering in some areas of the country, especially in a strong job growth markets as buyers eek to rent soaking up available supply and pushing multi family cash flow up

The national Multi Housing Council reported on August 2 that although residences have been severely impacted by the sub prime meltdown its been a positive for the multi family sector.

We have tracked this before and its good to see some sectors still shining. The report goes on to say:

"On average, survey respondents reported few changes in the strong market conditions recorded three months ago, with the exception of a significant worsening of debt market conditions.

When asked specifically about the impact of the subprime mortgage meltdown on the flow of apartment residents leaving to become homeowners, 18 percent said that there has been a big decrease and 37 percent noted a small decrease. The continued strong demand conditions suggest that any supply spillover from the excess inventory in the for-sale market into the rental market has not exceeded the growing demand for apartment residences."

Thanks for Reading