Current Parket "Psyco"ology

http://www.tysellshouses.com/tys-blog.asp

Lexington Number 6 Place to Live

Good article today about Lexington.


By Jaclyn Colletti and Joel Weber, researchers
updated 10:37 a.m. ET, Tues., Oct . 20, 2009

From the moment she finds out she's expecting, a new parent's mind begins to construct a fantasy of the perfect place to build a nest: a community that's safe, nurturing, stimulating, and economically sound. A neighborhood where parents reflect your values — education, health and fitness, concern for the environment — and raise their children the same way. The kind of place where a child can slip on her rubber boots, grab her colorful umbrella, and play on the quiet, tree-lined street outside her home without worry.
The editors of Children's Health wanted to find where in America such places existed and how we can make the communities we live in today more like that ideal, so we embarked on a comprehensive statistical analysis to rank 100 noteworthy American cities scattered across the country. We considered more than 30 factors that parents deem vitally important, including crime and safety, education, economics, housing, cultural attractions, and health. (See the criteria used.) When we crunched the numbers, these were the cities that best complemented family life.


http://today.msnbc.msn.com/id/33385798/ns/today-parenting_and_family/

Lexington home sales up 13 percent, region up 7 percent

By Scott Sloan - ssloan@herald-leader.com
The Lexington-Bluegrass Association of Realtors said home sales in and around Lexington grew in the third quarter, with September particularly strong. Residential sales rose 13 percent in Lexington and 7 percent in the region as a whole.
The growth for the full quarter, although lower, was still growth, which has been tough to come by as the real estate market suffered during the recession.
The number of residential real estate sales that closed during the third quarter in Lexington increased 4.7 percent, the Lexington-Bluegrass Association of Realtors said Thursday. In the 14-county area served by LBAR's members, single-family sales were up 4 percent.
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During the quarter in Lexington, 1,194 sales closed, up from 1,140 in the same quarter of 2008. Sales were gaining momentum as the quarter ended, with a 13 percent rise in September with 347 sales, 40 more than a year ago.
During the quarter in the region, 2,110 sales closed, up from 2,028 in the same quarter of 2008. Sales also gained momentum as the quarter ended with a 6.7 percent rise in September. That month saw 651 sales, 41 more than a year ago.
September is the first month this year that home sales in the region exceeded their 2007 figures, according to the data provided by LBAR's members.
Sales declined 0.7 percent in the region in August but were up 6.2 percent in July.
In Lexington, sales were up just 1.7 percent throughout July and August. The months are not broken out separately in LBAR's statistical report.
Year-over-year price changes varied during the quarter. Lexington saw a substantial decline in the median sales price for residential sales in September: The price fell 7.5 percent to $149,838 from $162,000 a year ago.
The region saw varied results. In July, the median sales price for residential homes was $147,398, down 1.7 percent year-over-year. In August, it fell to $144,000 from $152,900 in August 2008, a drop of 5.8 percent. In September, the percentage drop-off narrowed to 1.8 percent with a median sales price of $140,000.
Central Kentucky's drop in sales prices has not been as pronounced during the recession as other areas of the country.
The average days on the market for a single-family home in the region was 78 at the end of the quarter, down from 93 a year earlier. Lexington was better with an average days on market of 66 compared to 69 a year ago.
The inventory of homes also was down in the region, with 6,238 for sale in September 2009, a drop of 5.4 percent.
"Interest rates are very low; there is a good selection of homes on the market and there is no reason not to be able find the home of your choice," LBAR president Gale Fulton said in a statement.

Does this Sound Familiar?

Not that I am for taking the horse farms and turning them into subdivisions, I am not, but maybe we could learn something from here in Central KY?

Urban planning to blame for housing bubble? - REAL Trends Between 2000 and the bubble's peak, inflation- adjusted housing prices in California and Florida more than doubled, and since the peak they have fallen by 20 to 30 percent. In contrast, housing prices in Georgia and Texas grew by only about 20 to 25 percent, and they haven't significantly declined. In other words, California and Florida housing bubbled, but Georgia and Texas housing did not. This is not because people don't want to live in Georgia and Texas: since 2000, Atlanta, Dallas-Ft. Worth, and Houston have been the nation's fastest-growing urban areas, each growing by more than 120,000 people per year. According to a new study by the CATO Institute and Randal O'Toole, this suggests that local factors, not national policies, were a necessary condition for the housing bubbles where they took place. The most important factor that distinguishes states like California and Florida from states like Georgia and Texas is the amount of regulation imposed on landowners and developers, and in particular a regulatory system known as growth management. In short, restrictive growth management was a necessary condition for the housing bubble, says the study. Read more click here.
Real Trends Comment: Thomas Sowell's book, "Housing Boom and Bust" is one great read to understand how it was government involvement at all levels, local, state and federal, that was mostly responsible for both the boom and the bust in housing. At local and state levels, governmental action to reduce the land available for development and the cost of development caused huge price bubbles that exacerbated the wild swings in prices in such markets as San Francisco and Los Angeles when compared to cities like Atlanta and Houston. At the federal level the stimulus to accelerate low income households entry into homeownership caused Fannie and Freddie to purchase too many low downpayment and low credit scoring families - ending with the high foreclosure rates even before the recession.

To Extend or not to Extend

I will make this short and sweet, which is unusual for me, but anyone either in the market to buy or sell, or a real estate professional has an opinion on this current first time buyer tax credit. Now to debate the actual effects of the credit, good or bad, or how it is or is not market manipulation or control at some level is beyond the scope of this post, no matter how well founded or accurate they may or may not be. But like the cash for clunkers this is indeed creating a real shift in demand at least in the short term. Again the long term effect will be another matter all togeher for another time. So here are the top 3 pros and cons as I see it as a real estate professional and a property investor. And my idea to continue the plan so there is no cash for clunker type hangover period should it expire as set to do so in a matter of weeks.
Pro's:
1. Stimulates many on the fence buyers to go ahead an purchase property now rather than later
2. Helps to reduce the inventory available and in theory stabilize prices in the target price range.
3. Gives real a tangible monetary benefit to the average person, not an untangible corporation or group
Con's:
1. Limited to the typical first time home buyer target market and price range which may not address problems that created the current climate
2. Artificial inducement to act may create hangover effect in the future and creates minimum expectation standard for the future, and which may arguably be the root of the problem in the first place
3. By creating a hard deadline creates problems by rushing to act by too much of a sense of urgency to act.
My solution:
Now the numbers are arbitrary and can and should be adjusted as required for area and budget reasons. But here is a plan I think could be introduced to extend and most importantly expand the current credit.
The Ty Brown Real Estate Stimulus and Recovery Act of 2009
- $8,000 Federal Tax Credit in the first year for ANY owner occupied purchaser to be given to the buyer similar to the same current guidelines, except open to ALL buyers.
- and additional $1,000 interest credit towards federal taxes for each of the next 6 years the purchaser remains in the home.
- $2,000 incentive to purchaser to make home more energy efficient should home be in need, again similar to current guidelines -or-
-$8,000 principal reduction credit for a current seller that must sell their home that in turn purchases a new home that will lower their monthly mortgage payment by at least 20%. Then they would not be eligible for the $8,000 credit but would be eligible for the $1,000 interest credit and energy efficiency credit.
So this would be a great deal for someone that wanted to sell their home and couldnt because the value has decreased. They could lower their price by $8,000, the buyer could still use the $8,000 toward the purchase, and both could go to a new home and use the remaining credits.
The two biggest hurdles are 1. Who would fund the $8,000 principle reduction, and 2. Again is this TOO much artificial stimulus in a open market....

Florida Tile to move headquarters to Lexington

Florida Tile to move headquarters to Lexington
By Emily Ulber - eulber@herald-leader.com
State officials announced on Thursday the relocation of a Florida company to Lexington.
Florida Tile Inc. will move its headquarters from Lakeland, Fla., to Lexington, which will bring the company's corporate offices closer to its manufacturing plant and national distribution center in Lawrenceburg.
The move, which should occur in the next year, will result in the initial creation of 25 new jobs, growing to 51 over the term of the agreement. The project represents a capital investment of $3,732,500 for the state.

Kevin Verhoven, a broker for The Gibson Co., is representing the developers handling Florida Tile's move to Lexington. It will be housed in a 10,000-square-foot property in Beaumont Circle, he said.
The move might prompt other companies the size of Florida Tile to look at Lexington in a more favorable light, Verhoven said
The project is one of the first to be approved by the Kentucky Economic Development Finance Authority under the Kentucky Business Investment Program.
KEDFA preliminarily approved Florida Tile for up to $1,275,000 in tax incentives, which can be earned over a 10-year period through corporate income tax credit and wage assessments. The maximum annual approval amount to be earned is $127,500.

Housing Market Is Bouncing Back???

Housing market is bouncing back
By Alan Zibel and Alex Veiga - Associated Press
WASHINGTON — New-home sales rose last month at the fastest clip in more than eight years as buyers eagerly took advantage of bargain prices — a clear sign, economists said, that the real estate market might finally be bouncing back.
Historically low interest rates and a federal tax credit for first-time homeowners also helped push home sales to their highest level since November, the Commerce Department reported Monday.
Home prices are still falling around the country, but sales have risen for three months in a row. New-home construction is at the busiest level since last fall. And home resales rose in June for the third straight month.
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"The worst of the housing recession is now behind us," said David Resler, chief economist at Nomura Securities. And as with the overall economy, the "recovery" is likely to be slow and arduous, he said.
Put in perspective, the improvement in sales is modest. The pace of sales for new homes in June was 72 percent below the peak of four summers ago, and there is an enormous inventory of homes lingering on the market.
"There's been signs of improvement, but we're a long ways off from being back to a normal market," said Corey Barton, president of CBH Homes in Meridian, Idaho. Sales were up there in June, Barton said, but "it wasn't our biggest jump in eight years."
But there were clear signs the housing market is showing more life than at any point since the recession began. Keystone Custom Homes of Lancaster, Pa., founded in 1992, had its best June ever. July is looking good, and president Larry Wisdom expects an even stronger August.
"We doubled our sales in May, and then in June it took off," he said.
New-home sales for June came in at a seasonally adjusted annual rate of 384,000, blowing past the expectations of economists surveyed by Thomson Reuters, who expected 360,000.
The figure is up 11 percent from May, and May's number of 346,000 was higher than previously thought. The increase is the largest since December 2000, when investors scared by the tech-stock bubble were looking for more stable places to put their money.
Sales were strongest in the Midwest, where they jumped 43 percent from May's total. Sales climbed 29 percent in the Northeast and 23 percent in the West. They declined slightly in the South.
The median sales price was $206,200, down from $234,300 a year ago and $219,000 from May. Economists expect home prices to continue falling until the competition from low-priced foreclosures ebbs sometime next year.
To drum up sales, CBH Homes has had to slash prices by as much as 10 percent from last year's levels. The new homes CBH builds have to compete with the glut of foreclosures, which have drawn many first-time home buyers.
In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales must be completed by the end of November for buyers to take advantage.
"There's definitely more first-time home buyers in the market than what we've seen in the last several years," Barton said.
Fallout from the housing crisis played a central role in the U.S. recession, now the longest since World War II. Mortgages went bad, home builders pulled back and fired thousands of workers, foreclosures spiked, and lenders were shuttered by the dozen.
Although the real estate market appears to be starting a recovery, that doesn't mean it will instantly become a powerful economic engine. Construction is weak because builders have too many unsold homes sitting vacant.
At the current sales pace, there are enough new homes for sale to last nearly nine months. That's slightly less time than in May but much longer than the six-month mark that indicates a balanced market.
Falling prices mean homebuilding companies won't be making much money anytime soon, but their stocks soared nonetheless on the impressive June sales. Beazer Homes USA gained 13 percent, and shares of Centex and Hovnanian Enterprises rose 9 percent.

June new home sales rise 11 percent

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 1 hr 21 mins ago
WASHINGTON –

New U.S. home sales rose by the largest amount in more than eight years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades.
The Commerce Department said Monday that sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.
It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.
The report is another encouraging sign that the beleaguered housing sector is finally coming back to life. Last Thursday, the National Association of Realtors reported that home resales posted a monthly increase of 3.6 percent in June.
There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007.
Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.

For more people, scales tip toward buying a home

By ALEX VEIGA, AP Real Estate Writer Alex Veiga, Ap Real Estate Writer – Tue Jul 21, 5:52 pm ET

For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor.
Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room.
"We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple" to buy, said Carter, 20.
For Americans debating whether to buy or rent their homes, the scales are tipping toward ownership. Because of the slide in home prices, low interest rates and tax incentives, renters are realizing they could handle a mortgage for a just little more money.
An Associated Press analysis of 45 metro areas finds the gap between the monthly mortgage payment on a median-priced home and the median rent has shrunk from $777 a month to just $221 in the past three years.
It could mean a quicker end to the housing-market doldrums, as renters buy up unsold homes languishing on the market.
In some metro areas, including Cleveland, Atlanta, Indianapolis and St. Louis, the gap was less than $100 a month. And home prices are expected to fall faster than rents this year, which means the gap should get even smaller.
In once-inflated markets like Phoenix, Las Vegas and inland swaths of California and Florida, where prices have tumbled more than 40 percent, sales are rising because first-time homebuyers are snapping up bargain-priced homes.
They are getting help from a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers who earn up to $75,000 a year, or $150,000 for a couple. The credit expires at the end of November.
Cheap foreclosures in some of those markets are now drawing multiple bids. As supply and demand even out, home prices will eventually begin to rise. But for now buyers are having little trouble finding bargains.
Jere Ross, an Air Force vehicle operator, and his wife recently bought a four-bedroom, 1 1/2-bath house in Zephyrhills, Fla., a Tampa suburb, for $86,500 rather than jump into another yearlong apartment lease.
Ross, 23, used a Veterans Administration loan, which doesn't require a down payment, and got a 30-year mortgage at a fixed rate of 5.5 percent. His monthly payment comes to $700 a month, including property taxes and insurance — $110 less than he paid to rent an apartment nearly half the size.
"It just came to a point where we were just throwing our money away on rent," Ross said. "When it came to find out that we could own this house for, less than what we're paying in rent, it was a 'no duh!' kind of moment."
The study, conducted for the AP by Marcus & Millichap Real Estate Investment Services, used prices for the first three months of this year.
It calculated mortgage payments by assuming a 10 percent down payment, a 30-year fixed loan at 5.15 percent, and taxes and insurance that added up to 1.5 percent of the purchase price. It assumed borrowers used private mortgage insurance.
While the analysis found the gap between what it costs to own and rent is shrinking, it's still too wide for millions who live paycheck to paycheck.
Renters with jobs in the education, retail and transportation industries don't earn enough to rent the average two-bedroom apartment in many of these major cities, let alone buy, according to a recent study of 200 metro areas by the Center for Housing Policy.
Renters who want to become homeowners also face the obstacles of scraping together a down payment and qualifying for the loan. And renters with a record of paying bills late will have a hard time getting a low interest rate.
"There's still those buyers that are having trouble getting financed," says Brad Snyder, an agent with ZipRealty in Las Vegas. "A lot of them are still just looking for that easy way in, and it's just not there."
Homeowners also have to shoulder many costs renters don't face — association fees, insurance, some utilities. And there are still cities, among them San Francisco and Los Angeles, where it's usually still more affordable to rent — even though home prices have fallen more than 30 percent.
Mike Sigal, a longtime renter in San Francisco, has looked at buying a home for the past couple of years. But buying one comparable to the two-bedroom, two-bath apartment he has now would cost more than $600,000, meaning the mortgage would far exceed his $1,800 rent.
"The math doesn't come out," said Sigal, 42, who runs an information services company. "I've got extreme value for my rent."
Nevertheless, homes in some parts of country are more affordable than they've been in decades. Even Dean Baker, an economist who sounded early warnings about the housing bubble and sold his own condo in 2004, has come around.
Baker, co-director of the Center for Economic and Policy Research in Washington, bought a five-bedroom house last month for $650,000, which he figures is about 20 percent below what it would have gone for at the peak of the market.
"We feel we got a pretty good deal," Baker said.
By buying, he accepted the risk that he might lose money if home values keep dropping. "We'll probably end up more or less even," he said. "Depending how much further down they go."

Breaking News!

For the first time I have noticed in a long time, and yes its the last day of the month, and quarter, but pendings and solds, and even solds along have surpassed new listings. At least as of 4:21 pm. Note there are even 5 price increases...watch out!

LBAR 24-Hour Market Watch

New Listings 70
Back on Market 11
Price Increases 5
Price Reductions 53
Pendings 38
Solds 80
Expireds 19
Inactives 18

Asbestos and Insulation Tips

Kentucky Home Safety Tips & Asbestos Prevention

Purchasing or moving into a new home is the investment of a
lifetime. It will insure you and your family will have a safe and
healthy home for a long foreseeable future. However, it is also time
where additional responsibilities will be brought into your life.
Having the assistance of a reliable and honest Kentucky real estate
agent will make all the difference in the world.

Asbestos Tips

Used throughout the 20th century to insulate pipes, boilers and in
roofing, asbestos gained recognition due to its resistance to heat and
electrical conductivity. Homes built before 1980 may still contain
asbestos. Its main uses were found as insulation, piping, brake lining,
flooring and roofing. Asbestos exposure incidents in Kentucky have
mainly occurred as a result of industrial sites.

If asbestos is located, it must be left un-touched until a
professional can provide a course of action. In many situations, the
best action is no action. Asbestos that is disturbed or damaged due to
age is known as "friable" asbestos. This is a concern because its toxic
fibers can easily circulate and become inhaled.

Frequent and long term exposure to asbestos has been known to cause asbestosis and sarcomatoid mesothelioma,
two forms of asbestos lung cancer. Asbestos-related illnesses may not
appear until 20 to 50 years after exposure and may have symptoms which
are commonly found with less serious illnesses. This makes mesothelioma diagnosis even more difficult for physicians.

Sometimes, the best action is no action. If asbestos removal is
necessary, it should be performed by licensed abatement contractors who
are trained in handling toxic materials. The Kentucky Division for Air Quality strives to protect the environment and civilian health by monitoring and assisting in the disposal and removal of asbestos.

Green = Healthier and Cost Efficient Homes

Recently, congress passed the American Recovery and Reinvestment
Act. Included in this act were extensions to the tax incentives placed
for energy efficiency in 2005, as well as new credits for homeowners
who remodel or build using eco-sustainable methods. This promotes
incentives for home or business owners who implement green building
methods into their property.

Many locations throughout the United States are swiftly changing
their construction practices to suit the environment and the health of
human beings. Promoting new ways of building construction and
insulation, there are new regulations being put on older methods which
are now known to be harmful.

Most people are unaware to the fact that eco-friendly products can
cut energy costs by 25 % per year. These include the use of cotton
fiber, lcynene foam and cellulose. These alternatives have the same
flame resistant, durable qualities of asbestos, except they are
eco-friendly and safe. 

Conducting a study in 2003, the United States Green Building Council
also reported a savings of $50 to $65 for green constructed buildings. 
Rather than expensive and mal-treated wood, interior walls can be made
from steel and concrete, avoiding many of the problems associated with
asbestos and other insulation methods.

Jesse Herman
Mesothelioma Cancer Center
jesse@asbestos.com

Local vs. National News

OK once again I am going to say it, All Real Estate is Local, meaning I don't really care what Las Vegas is doing, and I REALLY do not care about California. So why is it that that is all we hear about? Florida is a little closer to home, and we New York is understandable, but still not relavant to Lexington, or Kentucky for that matter. However we hav to realize this is what our clients see everyday. Like the article on Yahoo today...

Home prices post 18.1 percent annual drop in April
Widely watched index shows home prices down by 18.1 pct. in April, but trend is stabilizing

Case-Schiller? Again that is only 20 cities, and none of them are in Kentucky. Plus it says that 8 of the 20 posted gains. WHO CARES ABOUT VEGAS!? But htis seems to contradict what NAR says...

Take a look at the recent local KAR and LBAR numbers to see what is happening in Kentucky and Lexington. Which one of these makes more sense to you and your clients who may be selling or buying a home? So share it...

Perspective is Key Cont....

Here are the answers I promised last week for my questions. #1 Should be obvious since it took a week for time to sit down and answer them....

1. Are you busy with real estate right now?
- Yes, June was the second best month I have had ever in 6+ years, really close to being the first and if I were real creative I could say it was the best, since one really closed in May, or if I included the properties I bought and sold personally it would be handsdown, but I'm not. The activity seems to have leveled off just a tad, but I am finding again that the good listings are selling. People are wanting to buy.

2. How many buyers have you seen NOT be able to get a owner occupied loan this year?
- If only real buyers are considered then 1 straight turned down no possibility, and 1 was borderline and they gave up.

3. What type and price range are people wanting the most right now?
- Under $250k and especially $100-150k which is surely due to the first tme home buyer incentives, I am starting to see a few looking more in the $300-500k but I am not ready to put a lot of stock in that yet.

4. How confident are you that the market will get better in the next year, HERE*, and why?
- Very confident. There are too many reason to but and not enough reasons not to buy right now. Why pay rent? You have to live somewhere....

Tow Your Own Listings

OK part of this is good but the day you see me pulling my next listing down the street behind my truck, I am getting out of the business.....

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=14127903&ch=4226720&src=news

Perspective is Key

In today's market it can be confusing, especially for people who are not in the real estate business everyday. Everywhere you turn there are conflicting messages telling you one thing, then seemingly another. Everything for example think of each of these and their current situation: North Korea, the UN, Iran, Goldman Sachs, Jodie Meeks, TARP, GM, Chrysler, Exxon, the price of gas, the economy, the housing market...I could go all day. It seems we never get the real story, only the story or the agenda whomever is reporting or telling the story wants you to have or hear. Since this is a real estate based site, then lets focus on that.
Here is the general overall take that most people get these days from all media sources.
"Everyone is in foreclosure, you can't get a loan, the market is falling even more, bank owned properties are a deal, don't buy, do buy, the time is now to buy, take advantage of the tax credit, market is bottoming out, by the end of the year the market will be rising again....again this could go all day. But take the pulse of the real market, get perspective. Call any Realtor or mortgage professional you know that will give you a straight answer, and ask them 4 questions.
1. Are you busy with real estate right now?
2. How many buyers have you seen NOT be able to get a owner occupied loan this year?
3. What type and price range are people wanting the most right now?
4. How confident are you that the market will get better in the next year, HERE*, and why?
* Here can be almost anywhere but the important thing is it is the town you are in.
I will answer my own questions tomorrow as well as pose it to a few friends of mine in the business and post their answers. I would be interested to hear what you find from these answers. Then next week I am going to get the question to people outside the real estate profession, common people and hopefully a reporter or two....I bet they are totally different.....

More on CentrePoint Fiasco

If CentrePointe financing fails, Webb has plans B and C, he said
By Beverly Fortune - bfortune@herald-leader.com
Developer Dudley Webb told the Lexington Forum on Thursday he has a Plan B and Plan C for financing for the CentrePointe project and if those plans don't work, he will look for fill dirt to level the site and plant grass.
Also, Webb said he remains optimistic that funding from his unnamed, deceased, financial backer will still come through. He said assets of the international investor's estate are being held in numbered Swiss bank accounts.
Conversations with the man's family indicate they are aware of his commitment of $250 million to finance Webb's luxury hotel and condominium project on West Main Street in downtown Lexington, Webb said.
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Their concern is, on the advice of their attorney, that the funds are there, Webb said.
Recently, Webb and the family reached a compromise that Webb will not look to them to finance CentrePointe if the money isn't the estate.
Webb was notified in late September of the death of the major investor in this project, Webb said. The investor had signed an agreement to provide the funding for the project in June 2008.
Webb and his nephew Woodford Webb are developers for the proposed project. A major portion of the land is owned by businessman Joe Rosenberg and his family.
Webb said he had evidence one year ago that the investor had earmarked $550 million for three projects in the United States, one of which was CentrePointe.
When Webb revealed in April that the investor had died without a will, concern was raised about whether the building would be built. Lexington Vice Mayor Jim Gray said the community had been hoodwinked.
"Believe me, neither the Rosenberg family or we would have gone in and torn down buildings if we didn't think the funding was there for building this project," he said Thursday morning.
Webb also revealed that an original partner in the CentrePointe, John Anderson, backed out of the project a year ago. Anderson had lined up financing with a bank in Atlanta, Webb said. Anderson has developed other project including Marriott hotels, Webb said.
Webb's Plan B includes another unnamed investor, he said. Plan C, he said, involves an unnamed bank "in the states that is interested in getting involved in helping us do this deal."
Earlier in the week, Webb said he had an offer of 20,000 cubic yards of fill dirt that could be used to level the site. If The Webb Companies could get the dirt for free, it would spread it and plant grass, he said. But he said, he "would hate to spend $200,000 to $300,000" to fill the building site hole when in 90 days, construction might begin.
However, he's tempted to take that step, "to shut these people up," he said, referring to the critics of the site.

LBAR Q1 Sales Top $100 Million

Residential real estate sales by members of the Lexington-Bluegrass Association of REALTORS® (LBAR) positively impacted the Fayette County economy in the first quarter of 2009 with 571 reported sales totaling $100,473,745. Sales continue to be a driving force in the Fayette County economy when considering the multiplier effect on the area of buyers and sellers who purchase appliances, carpet, flooring, landscaping, etc in response to their transaction needs.
The National Association of REALTORS® reported that the median sales price dropped 12.4% for the nation in March 2009. Median sales prices in Fayette County fell only 6% for the same time period. Median sales prices fell 3% for March 2009 compared to March 2008.
Additionally, for the Bluegrass region sales closed and pending inventory have increased over the past three months. LBAR President Gale Fulton says “While 2009 is different economic climate than 2008, we are seeing increases in sales, pending sales, stable median sales prices and days on market. This again shows that the Central Kentucky real estate market is not experiencing the crisis made so public by the national media.”
As the region’s leading advocate for homeownership, Lexington-Bluegrass Association of REALTORS® understands the value and joy of owning a home. LBAR represents more than 2,300 REALTORS® located in Anderson, Bourbon, Boyle, Clark, Fayette, Franklin, Garrard, Harrison, Jessamine, Madison, Mercer, Montgomery, Scott and Woodford Counties.

World Equestrian Games Rentals on WTVQ

http://www.youtube.com/watch?v=dT07kZOBv4g

Pending home sales rise 6.7 percent in April

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 1 hr 48 mins ago
WASHINGTON – The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Economists were encouraged by the report, and stock indexes advanced modestly.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
Economists surveyed by Thomson Reuters expected the index would edge up to 85 from a reading of 84.6 in March. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.
In early trading, the Dow Jones industrial average added about 20 points to 8,741, and at times traded above 8,776.39, its finish for 2008.
Still, some economists wonder whether rising mortgage rates will dampen home sales. Nationwide average rates for 30-year-fixed rate mortgages are around 5.3 percent this week compared with about 5 percent a week earlier, according to Bankrate.com.
And analysts cautioned prices will take longer to stabilize, because of the glut of unsold properties on the market.
"Even if sales volumes rebound, home prices will keep falling under the weight of the massive inventory overhang," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
The Realtors' index was 3.2 percent above last year's levels and has risen for three straight months after hitting a record low in January. A nearly 33 percent sales increase in the Northeast and a 9.8 percent jump in the Midwest led the overall surge. Sales contracts rose 1.8 percent in April from a month earlier in the West, but fell 0.2 percent in the South.
The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Barack Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, "we expect greater activity in the months ahead," Lawrence Yun, the Realtors' chief economist, said in a statement.
Still, Yun cautioned that the pending sales data is more volatile than in the past because many sellers need banks to agree to take less than the original mortgage — a so-called "short sale." That process is often difficult, time-consuming and can wind up falling apart before the deal closes.
The Federal Housing Administration last week released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the Internal Revenue Service.
Completed home sales rose 2.9 percent to an annual rate of 4.68 million in April from a downwardly revised pace of 4.55 million in March, the Realtors' group said last week.
Sales of inexpensive foreclosures and other distressed low-end properties have even sparked bidding wars in places like Las Vegas, Phoenix and Miami. But the market for high-end properties remains at a virtual standstill.
The national median sales price in April plunged more than 15 percent to $170,200, from $201,300 in the same month last year. That was the second largest yearly price drop on record, according to the Realtors' group.

National vs Local Stats

Not sure where to lead this discussion, but I am confused by the numbers.

National Real estate Numbers
http://finance.yahoo.com/news/April-existing-home-sales-apf-15357773.html
April existing home sales rise by 2.9 percent
Existing US home sales post 2.9 pct monthly increase in April as buyers snap up bargains prices way down.

Local Real estate Numbers
Sales down prices up.....
Summary
Year-to-date 09 vs. 08 sales are down 27%, likely due to the weakened national economy. Median sales prices fell 3% for single family residential listings for the same time period. Inventory is down 3.8% compared to last year. Pending inventory is on an upward trend, rising 19.5% from last month (Mar. 09). The Housing Affordability Index (HAI) increased 4.2% from April 08—meaning that the Bluegrass provides affordable options to buyers. Additionally, traffic to LBAR.com has risen over the past two months, with 97,184 unique visitors in Apr. 09.

My experience is that these numbers do not add up for April, at least for me. The TERRIBLE numbers for Condos is having a HUGE impact it appears, they were off 56%. But average prices in both categories were in the positive, 2% and 7% respectively! Now Oct. 08 - Feb. '09 were indeed terrible across the board, but March-Today I am very encouraged by the activity. I will be anxious to see the Q2 stats.

Day 3: The Missing Link

The Investor in Today’s Market…

Sure it’s daunting out there today. Especially any theory that has a missing link, like this one, is tough to prove. What is the missing link in today's recovery? The real estate investor. The real estate investor is a vital part of any upcoming recovery in the housing and real estate market. Without them, us, I don’t think it will be possible to recover. It’s no shame to admit that you are waiting on the sidelines. It’s hard not to do so when everywhere you look there is someone who knows the market is going to fall another 10% because Jethrow from so-and-so’s office said so last weekend at the yard sale. But sit back and think about it. When is the best time to buy anything? When is the best time to try something new? When is the best time to get into the market? Right; when it’s down, on sale, not working, when there is the right opportunity in front of you it usually is not wearing a big “Hello my name is: The Right Opportunity” sticker. (In my experience anyone with a name tag on is trying to sell you something anyway-think about it.) But if you do see one it’s up to you if you think that is weird or not, but in my opinion it will be a little harder to spot than that, even if it is just as obvious. Most people wouldn’t take any opportunity seriously that rolled in with a name tag on, but sometimes it is just that close and visible to you. It just takes you a little bit of commitment to convince yourself to say Hi and get to know it.
What is a real estate investor to do these days? What is the definition of a real estate investor anyway? Who are they? Where are they? What are they looking for? The answers are easy, every person that buys a property is an investor, whether it is for personal use or not. The traditional investors are not out there, at least not in force. Those who are are doing it behind the scenes quietly. But they all have one thing in common; they are looking for a “Deal”. The issue is what defines a deal? Is it a discount off of the listing price? If so who sets a fair listing price? What is the value? Is it a house that is below market value? Again what is Market Value these days? Is it a home that needs repairs? Is it a property with good rental cash flow? Cap Rate? Expense Coverage Ratios? Fully leased property? Wholesale? Refurbished? Good part of Town? Close to Campus? Close to Beach?...
Yes to all of these, and no to all of these. The answer is it depends, no one really knows these days. All that can be for certain is that in 10 years anyone who does not take advantage of the possibilities and opportunities out there right now, will be the same ones who ten years ago said gold was too high at $350 an ounce, and that gas will never go over $2.00 a gallon, or below $4.00 a gallon last year, said you can’t go wrong investing in Enron, or had a friend buying JDS Uniphase at $83 a share and would double his money in a week, said Google would never catch on…you know the type. The type that says it is never the right time or that his brother-in-law’s boss who-knows Chuck Norris’ friend who works for Warren Buffett thinks it is a bad idea. That type.
So what is the opportunity out there for today’s investor? The opportunity today is choice. Let’s face it good or bad the fact is there are thousands and thousands of properties out there that are empty, distressed, upside down, in foreclosure or soon to be in foreclosure. The banks and lenders are not sure what to d and what not to do. I think they are just waiting for more bailout money. (Apparently the big loan modification rescue plan is not working. The issue is just too big! Just yesterday there was an interview by Matt Lauer on the Today show of all places about how a financial newspaper columnist “quasi-genius” got wrapped up in it and is losing his house. The banks told him repeatedly they were too busy to work with him to fix the mess he was in with his loan I read that one large bank that had billions of dollars of tax bailout money, has modified 1 loan to date. That’s right 1! It wouldn’t matter if they did do it the time it would take to process it would negate half of them anyway. ) They are simply waiting, for what I am not sure, but at some point they will unload thousands of new properties on to the foreclosure market.
Checking the local commissioner sale website an average of 40 homes a week are being auctioned off for all of the upcoming sales listed. That is great except 95% of those are being purchased by the plaintiff aka the bank that has the mortgage from them, which adds to their REO inventory, which is precisely the business they do not want to be in, the property management business. All the time these and the others they already have taken back are just sitting, usually empty, or not being cared for if they are occupied. No matter how nice the neighborhood and how well they are watched, an empty house is a deteriorating house, period. Now the banks own properties that if they were to be sold even at a discount cannot be financed by the typical homebuyer as repairs are needed, as they are not in good shape they will not pass the minimum FHA guidelines in most cases. If they do the buyers will usually pass them up for others that need less work and are probably priced the same because the distressed sales are bringing their value down. This does not include the abandoned properties that are not yet in foreclosure or are simply vacant or empty and not distressed.
A new plan needs to be tried here, this is not working! Someone, The Investor, will have to step in and be a middle man and have the ability to get these properties at a wholesale type price, repair and refurbish them, then pass them to the end homeowner, or be able to use them as rental property to those that cannot or do not want to buy. The problem is they cannot get the money to do so! What about an incentive for these guys, to make feasible the purchase a responsible amount of investment property, by qualified educated buyers, and give them incentive and or subsidies to make it worth their risk and effort and allow them to have the opportunity to make a profit in the future. This does not mean the “Investor” needs to buy 5, 10 or 20 properties. I am simply stating if you own your own home already; why not look to buy a rental property in your neighborhood, or a duplex somewhere. Small time responsible investing is investing all the same. Do so responsibly, at your comfort level. This would quickly lower inventory, create affordable housing alternatives, and allow homes that otherwise could not be purchased by first time home owners, or low income home owners be available. Want specifics of my plan? Tune in tomorrow…….Day 4 for “The Plan”.

Day Two - What is Driving Today's Market?

What is driving today’s market?
The short answer is nothing really. It’s like an empty car in neutral rolling down a hill. Yes it will roll, and it will go until it either runs off the road or hits something big enough to stop it. Why? How? Gravity. No not a tractor beam (Borrowed Stimulus Money) sent from the mother ship (Gov’t) pulling it downhill, its gravity it has always been here.
Compare that visual to today’s burgeoning recovery (the car) which is starting to roll in many areas of the country the movement can be attributed to a few things.
1. The natural cycle (The gravity) for this time of year, the spring and summer naturally bring more activity, a good amount of stored up demand. (Which is in my opinion mostly due to the unfavorable, inaccurate, over generalized media coverage of the last year.)
2. Attractive first time home buyer incentives i.e. $8,000 tax credit, record levels of inventory, lower prices and increased affordability. The big if is the supposed increasing availability of mortgage financing available. (The road with a big 90 degree turn coming up)
While these are all nice, and depending on which party’s media machine you listen to, there are signs of optimism in the economy and overall direction of the housing market. There are signs of a bottoming out of the housing fall, an increased level of activity and consumer confidence in housing all over the place.
But for a true long term recovery there are a few items missing and a few time bombs (The Wall) lurking in the near future that could derail any recovery unless they are addressed; one of the most immediate being the $8,000 first time buyer tax incentive sunset of December 2009, not that this can continue indefinitely however. At some point virtually every person with the ability to purchase a home as a first time buyer is going to do so. Sure there will always be new people entering the market, but the level to drive a recovery will, has, level off and the effect will be less noticeable, they cannot drive the market for ever. Also the job market and banks starting to lend again are big deals, but those are obvious and yesterday’s news.
So what do I think is needed next? (Who can jump in our empty rolling car and steer us around that corner and away from that wall?) I think a new incentive should be introduced to spur the missing link in the housing recovery, the real estate investor. Not the jacked-up-on-HGTV flipping-manic-fly-by-night-know-it-all-jack-of-all-trades-price-war-bidding over exuberant type of the early to mid 00’s. But the professionals, and the rational small time investor looking to take advantage of an opportunity, and to make sound quality purchases of an asset that can never be worthless.* (As I have stated many times before, if you find a piece of property that is truly worth $0, tell me and I will buy it! Chernobyl excluded).
Tomorrow Day 3…The Investor the Missing Link

Good or Bad? Making me Dizzy!

http://finance.yahoo.com/news/Housing-construction-drops-apf-15288681.html

Housing construction, permits hit record lows
Housing construction, permits plunge to record lows in April; more signs of a bottom
Martin Crutsinger, AP Economics Writer
On Tuesday May 19, 2009, 10:49 am EDT
WASHINGTON (AP) -- A modest rebound in single-family home construction in April raised hopes Tuesday that the three-year slide in housing could be bottoming. But with the supply of unsold homes bulging, foreclosures rising and prices falling, no broad recovery is expected until next spring at the earliest.
The Commerce Department said construction of new homes and apartments fell 12.8 percent last month to a seasonally adjusted annual rate of 458,000 units -- the lowest pace on records going back a half-century. Applications for new building permits dropped 3.3 percent to an annual rate of 494,000, also the lowest on record.
All of last month's weakness, though, came in the volatile multifamily part of construction. Single-family construction and permits both rose, a signal that this bigger sector of home construction is starting to stabilize.
Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. Building permits for single-family homes were up 3.6 percent to a rate of 373,000 last month.
"U.S. housing remains very weak, but the stability in single-family units is encouraging," Benjamin Reitzes, an economist at BMO Capital Markets, said in a research note.
Multifamily construction plunged 46.1 percent to an annual rate of 90,000 units after a 23 percent fall in March. Permits for multifamily construction dropped 19.9 percent to 121,000 units.
Analysts said apartment construction is being hurt by a glut of condominiums on the market and by tightening credit conditions for commercial real estate.
They also said a real rebound for single-family construction remains distant as heavy job layoffs and record levels of foreclosures will continue to weigh on this sector.
The number of unsold homes on the market at the end of March fell 1.6 percent from a month earlier to 3.7 million, not including new homes, according to the National Association of Realtors. But since sales remain sluggish, it would take almost 10 months to rid the market of those properties, compared with about 6.5 months in 2006.
"Home building conditions remain weak," Paul Dales, U.S. economist for Capital Economics, said in a note to clients. "The excess supply of new homes for sale is still high and heavy discounts on foreclosed properties have made new homes less appealing. Any rebound in starts will be modest."
On Wall Street, stocks rose modestly in morning trading. The Dow Jones industrial average added about 20 points and broader indices also edged up.
The nation's current recession, the longest since World War II, began with a collapse in housing that triggered rising loan losses and the worst crisis in the financial sector in seven decades. The government has provided billions of dollars in support to try to stabilize the financial system and get banks to resume more normal lending to consumers and businesses.
Housing construction and sales are expected to bottom out in the second half of this year but economists are forecasting that prices will keep falling until next spring.
The median price of a new home sold in March was $201,400, down 23 percent from a peak of $262,600 two years earlier. The median price is the midpoint, which means half of the homes sold for more and half for less.
In April, housing construction fell 30.6 percent in the Northeast, the largest drop for any region. Housing starts dropped 21.4 percent in the Midwest and 21.1 percent in the South.
The West was the only region showing strength with a 42.5 percent jump in housing starts.
The National Association of Homebuilders reported Monday that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders.
The Washington-based trade group's index rose two points to 16, the highest reading since September. Even with the rebound, the index remains near historic lows. Index readings lower than 50 indicate negative sentiment about the market.
The housing slump has affected related industries such as home remodeling, but two nationwide chains reported better-than-expected earnings this week.
Home Depot Inc. said Tuesday its first-quarter profit climbed 44 percent on fewer charges, and the nation's largest home improvement retailer beat Wall Street's expectations despite lower sales. Smaller rival Lowe's Cos. on Monday reported a quarterly profit that also beat analysts' expectations and the company boosted its full-year outlook.
But the nation's top three homebuilders reported financial results earlier this month that give little hope the spring selling season will be strong enough to stop the red ink.
Pulte Homes Inc. and Centex Corp., which agreed to combine this year to become the largest U.S. homebuilder, said that while their quarterly losses narrowed, they continued to be battered by falling prices and a glut of unsold homes.
D.R. Horton Inc., currently the industry's No. 1 home builder, also reported that its losses had shrunk, but the company said it still faces challenges from foreclosures, high inventory levels, tight homebuyer credit, low consumer confidence and job losses.
The economy contracted by more than 6 percent in the final three months of last year and the first three months of this year, the steepest six-month downturn in a half-century. Analysts believe the recession will end sometime in the second half of this year but they are looking for the jobless rate, now at a 25-year high of 8.9 percent, to keep rising into 2010.
AP Real Estate Writer Alan Zibel contributed to this report.

Good or Bad? Is it me or is it not clear here?

Housing construction, permits hit record lows

By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 1 hr 24 mins ago
WASHINGTON – Housing construction plunged to a record low in April as a steep drop in apartment building offset a rebound in single-family construction. Permits for new projects also hit a new low.
The Commerce Department said Tuesday that construction of new homes and apartments fell 12.8 percent last month to a seasonally adjusted annual rate of 458,000 units, the lowest pace on records going back a half-century.
In a disappointing sign for the future, applications for new building permits dropped 3.3 percent to a new record low annual rate of 494,000.
Economists had expected home construction and building permits to post modest increases in April as signs that the worst collapse in housing activity in the post-World War II period was drawing to a close.
Even in last month's big decline, there were some signs of stabilization. Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. The stability in single-family construction likely will be viewed as a hopeful sign that the three-year slide in housing could be bottoming out.
The weakness last month came in the more volatile multifamily sector where construction plunged 46.1 percent to an annual rate of 90,000 units after a 23 percent fall in March.
Housing construction fell 30.6 percent in the Northeast, the largest drop for any region. Housing starts dropped 21.4 percent in the Midwest and 21.1 percent in the South.
The West was the only region showing strength with a 42.5 percent jump in housing starts.
The National Association of Homebuilders reported Monday that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders.
The Washington-based trade group's index rose two points to 16, the highest reading since September. Even with the rebound, the index remains near historic lows. Index readings lower than 50 indicate negative sentiment about the market.
Still, private economists viewed rising builder sentiment as an encouraging sign.
"Record high affordability, record low mortgage rates and the government's efforts to jump start economic growth are giving potential buyers optimism to step in and take a look around," said Jennifer Lee, an economist with BMO Capital Markets.
But analysts cautioned that the wave of foreclosures hitting the market means that builders still face tough competition to sell new homes.
The nation's top three homebuilders reported financial results earlier this month that give little hope the spring selling season will be strong enough to stop the red ink.
Pulte Homes Inc. and Centex Corp., which agreed to combine this year to become the largest U.S. homebuilder, said that while their quarterly losses narrowed, they continued to be battered by falling prices and a glut of unsold homes.
D.R. Horton Inc., currently the industry's No. 1 home builder, also reported that its losses had shrunk, but the company said it still faces challenges from foreclosures, high inventory levels, tight homebuyer credit, low consumer confidence and job losses.

Today's Market - Tomorrow's Market Part 1

I doubt there is anyone out there than can dispute that the home buying and selling process, whether new or existing, is a vital and important aspect of any economy. The velocity of money which accompanies each transaction is enormous. With so many different beneficiaries from builders, suppliers, real estate agents, insurance agents and companies, bankers, investors, lenders, inspectors, repairmen, roofers, local, state, federal tax coffers, attorneys,, ….the list can go on for a long time I think you get the point. Each property sale creates enormous income for many, people, who in turn take that money and spend it elsewhere, who take that and spend it, who take that….
I think it is time we take a step back and look at the reality of today’s market, to see what is really going on, and where it’s going tomorrow. What are the few key issues that are driving today’s market? Also what are the few missing pieces that are needed to bring the market back to a true recovery, or a true long term positive, sustainable healthy level?

That is what I am going to explore the next few days, and present my plan and my ideas. I would like your ideas too, so chime in as you please and I will use your input in the plan, good or bad. I will then present the final plan anyone that will listen, to see if anything happens....at worst we can look back and say we tried!

Tomorrow…What is driving today’s market?

Buyers can Tap $8,000 tax credit for downpayment---well almost

Buyers can tap tax credit for down payment
FHA drafting policy on first-time homebuyer creditBy Inman News, Wednesday, May 13, 2009.
Inman News
First-time homebuyers will soon be able to access their $8,000 federal tax credit when closing on a home through a short-term bridge loan that will cover their down payment on FHA-backed loans.
The Federal Housing Administration will soon publish a policy that will allow FHA-approved lenders, HUD-approved nonprofits, and state and local housing finance agencies to "monetize" the tax credit through short-term bridge loans, Secretary of Housing Shaun Donovan said Tuesday.
"We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment," Donovan told members of the National Association of Realtors gathering for their midyear conference in Washington, D.C. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit."
The Memphis Area Home Builders Association is believed to be the first group to obtain approval from the Department of Housing and Urban Development to offer such down-payment bridge loans, the Memphis Daily News reported.
The best rates on loans eligible for purchase by Fannie Mae and Freddie Mac require 20 percent down payments, and private mortgage insurers typically require minimum down payments of 5 percent to 10 percent. But FHA's minimum down-payment requirements remains relatively modest -- 3.5 percent.
FHA's market share has grown from 1.9 percent in the fourth quarter of 2006, reaching 23.7 percent in the last three months of 2008, and continues to grow, Donovan said. He said FHA is on track to guarantee $290 billion in mortgages in fiscal year 2009, and that the Obama administration's new budget asks lawmakers to approve up to $400 billion in loan guarantees in 2010, or about 2.25 million mortgages. Donovan said the first-time homebuyer tax credit will benefit communities struggling to deal with an oversupply of housing. He cited estimates by the National Association of Home Builders that the tax credit would spur 160,000 home sales -- 101,000 purchases by first-time buyers, and 59,000 purchases by existing homeowners who will be able to trade up because a first-time buyer purchased their home.
The Obama administration's Making Home Affordable initiative -- which is aimed at helping 7 to 9 million homeowners modify or refinance their loans -- will also help take pressure off of inventories, Donovan said. Fourteen of the largest mortgage loan servicers have already begun modifying loans under the initiative, he said, and have committed not to foreclose on borrowers unless they have been given an opportunity to qualify for a modification.
Over the next month or so, the administration expects to see a "substantial increase in loan modifications, which we anticipate will happen quickly and will help decrease the foreclosure sales numbers over the next few months," Donovan said.
Early signs that the market overall is stabilizing include home sales moving "up and down around a relatively stable number" since January, and signs that rapid declines in home prices are starting to abate, Donovan said.
"Although I think it's too early to say we are out of the woods until we get a couple more months of data, I am optimistic that housing markets will recover by the end of this year, if not earlier," Donovan said.

Too funny had to post this

http://www.youtube.com/watch?v=-JZgSIR_r_c

Why?

Why would this be news? Why would it be a big deal? I have a tree in my yard that needs to go....

http://www.kentucky.com/181/story/792098.html

Why?

Everyday I find something that makes me ask, why? Not that I think we are crazy or anything like that, but just why? Why does it matter? Why do we care? Why did you waste time printing this? Why was it 40 degrees last night? Why will it not stop raining? Why are you still in this business? Why didn't I think of that? Why was it (80 or 20)degrees this morning and (snowing or 90) now? Why is is still raining? Why do they keep hiring weather people in KY? Why, why, why....etc. So in real estate I have these too, everyday. Why would you do that to your walls? Why did you choose that carpet? Why are you wasting our time? Why are you wasting my time? Why can't all buyers/sellers be like you? Why did I answer the phone? Why does every sales person in the world call me? Why is it that you are the only company that can put me on top of Google? Why did the last person say he was the only one? Why do you like this house not the other 23 we looked at? Why did I get that postage meter? Why, Why, Why....etc. So just to risk the sake of losing the 2 people that actually read this BLOG I am going to start sharing mine, and any other why's I get from time to time.....

A weird one for me that happened today....."..when asking a prospect who had called me about a listing I have, "Why do you want to move to Lexington anyway?" This after rambling about how good his current hometown was particularly the schools there, and that we really seemed like a town that thought we were stuck up and too good, not that he had any pre-misconceptions (sic) of course of KY.
I asked him if schools were important to him, he said no.
I asked him if the price range of the home he called about was a factor? No.
The area of town? No.
The home in particular? No.
Then what is it what made you call me? Pause....
I thought you called me?
Me....Pause.....pause....uh no.
OK bye. Click....

Why?

Buffett.Munger Article

OK so its not exactly about Kentucky Real Estate, but its a good article an has a housing market section....


Business Musings From Woodstock for Capitalists
by Scott Patterson and Alistair Barr Tuesday, May 5, 2009 -WSJ

Buffett and Munger Play the Main Stage: Views on Newspapers, Triple-A Ratings, Complex Math and More
Here are some highlights of Warren Buffett's and Charles Munger's remarks at the Berkshire Hathaway Inc. shareholder meeting this past weekend.
Mr. Buffett on Newspapers
Mr. Buffett has long held himself out as a newspaper man. As a child, one of his first jobs was delivering newspapers. An Omaha newspaper Berkshire owned, Sun Newspapers, won a Pulitzer Prize in 1973 based in part on a tip Mr. Buffett provided. One of Berkshire's biggest investments in the 1970s was the Buffalo News, which it still owns.
But his view on the future of the newspaper industry is dismal. "For most newspapers in the United States, we would not buy them at any price," he said. "They have the possibility of going to just unending losses."
As long as newspapers were essential to readers, they were essential to advertisers, he said. But news is now available in many other venues, he said.
Berkshire has a substantial investment in Washington Post Co. He said the company has a solid cable business, a good reason to hold on to it, but its newspaper business is in trouble.
Mr. Munger called newspapers' woes "a national tragedy....These monopoly daily newspapers have been an important sinew to our civilization, they kept government more honest than they would otherwise be."
A Washington Post Co. representative couldn't be reached for comment.
Mr. Buffett on Insurance
In response to a question about the worst possible development for Berkshire Hathaway's vast insurance operations, Mr. Buffett responded: nationalization.
If inflation jumped and insurance policies became extremely expensive, pressure could rise on the government to nationalize the insurance industry, he said. "When people get outraged, politicians respond," Mr. Buffett said. It's highly unlikely that such a development would happen, he added. But he did note the example of Social Security, which is a form of a nationalized annuity.
Mr. Buffett on Housing
"In the last few months you've seen a real pickup in activity although at much lower prices," Mr. Buffett said, citing data from Berkshire's real-estate brokerage business, HomeServices of America Inc., which is one of the largest in the U.S.
In California, medium and lower-price homes -- under $750,000 -- have been selling more, though there hasn't been a bounce back in sale prices, Mr. Buffett said. "We see something close to stability at these much-reduced prices in the medium to lower part of the market."
Mr. Buffett on Moody's
Mr. Buffett was asked about Moody's Investors Service, which gave a triple-A rating to billions of dollars of mortgage securities that subsequently lost value. Berkshire has a 20.4% stake in the company.
"Basically, four or five years ago, virtually everybody in the country had this model in their heads, formal or otherwise, that house prices could not fall significantly," Mr. Buffett said. He later added that "it was stupidity and the fact that everyone else was doing it."
He said that if Moody's had started to take a negative view on residential real estate, the ratings provider would have been hauled before Congress to testify about why it was hurting the U.S. economy with its bearish ratings. "They made a huge mistake, and the American people made a huge mistake," he said.
A Moody's representative couldn't be reached for comment.
Mr. Buffett on Treasurys
Berkshire Hathaway had only one slide at this year's annual meeting. It displayed a Dec. 19 trade ticket showing a Berkshire sale of $5 million of Treasury bills. They were coming due on April 29 this year, roughly four months after Berkshire sold them. Berkshire sold the bills for $5,000,090.70. If that buyer had instead put their money in a mattress, by April 29 they would have been $90.70 better off, he said. Negative yields on Treasury bills show how tumultuous last year was, Mr. Buffett added. "We may never see that again in our lifetimes," he noted.
Messrs. Buffett and Munger on Math and Theories
Messrs. Buffett and Munger made clear their complete disdain for the use of higher-order mathematics in finance.
"There is so much that's false and nutty in modern investing practice and modern investment banking, that if you just reduced the nonsense, that's a goal you should reasonably hope for," Mr. Buffett said. Regarding complex calculations used to value purchases, he said: "If you need to use a computer or a calculator to make the calculation, you shouldn't buy it."
Said Mr. Munger: "Some of the worst business decisions I've ever seen are those with future projections and discounts back. It seems like the higher mathematics with more false precision should help you, but it doesn't. They teach that in business schools because, well, they've got to do something."
Mr. Buffett said: "If you stand up in front of a business class and say a bird in the hand is worth two in the bush, you won't get tenure....Higher mathematics my be dangerous and lead you down pathways that are better left untrod."
Mr. Munger on the Future
"As I move close to the edge of death, I find myself getting more cheerful about the economic future," Mr. Munger said.
Mr. Munger sees "a final breakthrough that solves the main technical problem of man," he continued.
By harnessing the power of the sun, electrical power will become more available around the world. That will help humans turn sea water into fresh water and eliminate environmental problems, Mr. Munger explained. "If you have enough energy you can solve a lot of other problems."

Lexington Urban Infill

Urban infill in Lexington
Innovative projects give old downtown buildings new life
By Tanya J. Tyler
The buzzword for downtown these days is “infill” – projects that create new and innovative living spaces out of older buildings that otherwise might have been demolished.
Today HomeSeller looks at four exciting and diverse Lexington infill projects.
CAMPBELL HAGERMAN FLATS
At 441 West Second Street, a former classroom building for a now-closed women’s college is finding new life.
Campbell Hagerman Flats will have five condominiums, one on each floor, said developer/renovator Michael Satterly. He is buying one floor himself and fixing up the others.
“I invested in a building two doors down (from 441) that I bought right out of college in 1984,” Satterly said. “This building had been sitting vacant for the past 15 years. It saddened me to see it in a state of disrepair. I’d been talking to the owners and trying to come up with a way that I could purchase it, and finally we came up with something that worked.”......

http://www.kentucky.com/985/story/669560.html

Lexington Named to Top 10 Places to Live in America

Relocate America has named Lexington one of the best places to live in AMerica...

Read Article on Lexington Here.......

See all 10 here...

New Construction Permits Up- Another Positive Sign?

There is an article in todays Lexington Herald Leader, that says construction activity is up 40% this year from last year. Good news unless you consider it was virtually zero for last year.....but all being told I think this is a good sign, see article here.

http://www.kentucky.com/181/story/766496.html

Pace of building picks up in Lexington
By Scott Sloan and Greg Kocher -
Long associated with only doom and gloom, the economy became the reason for hope last week when Lexington Mayor Jim Newberry pitched a city budget that proposed a 1.5 percent increase in spending for the next fiscal year.
Citing a 40 percent increase in building permits for single-family homes, Newberry said there's "legitimate optimism" about city revenues.
It's an optimism shared by those who follow building trends around Lexington, although it appears to have not yet spread to surrounding counties. Those in the city say the rise in permits might be an indication that the housing business, whose mortgage meltdown fueled the recession, could finally be turning around. .......................................

3 reasons why now’s the time for renter’s to become home owners.

If you are currently renting a home or apartment now is the time to consider becoming a home owner. There are 3 very simple reasons why this is true and here they are.

Sellers are motivated and there are some great deals out there
Over the past couple of months I have seen my clients get some great deal on property. I have had clients buy homes for several thousand dollars below appraisal. I have also had customers who have purchased foreclosures that require very little if any work and save a ton of money. In many other cases I have seen sellers make concessions like replacing old carpet, updating fixtures and paying all closing costs and pre-paid’s. The bottom line is if you don’t have a house to sell you are positioned as good as you could possibly be to get a great deal on a home. Make sure you are connected with a great Realtor and they will help you find it.

Mortgage Rates are at Historic Lows
The Federal Reserve is currently purchasing Mortgage Backed Securities in an effort to drive mortgage rates down to boost the housing market. (For an in-depth explanation of this see Marty Preston’s Blog entry titled A Mortgage Pro’s Take on the Market from April 2nd) What this mean to you is that interest rates have dropped to low’s that have never been seen. Take this example; I have a first time buyer client who was renting a 2 bedroom town home in the Hamburg Pavilion area for just over $900 per month. With the help of a local Realtor, we were able to find her a 3 bedroom home less than a mile away. The home was in great shape and needed no repairs. With a 3.5% down payment on an FHA loan (that was gifted to her by her parents) and today’s low rates we were able to get her a payment $10 per month less than her rent including taxes and insurance! At today’s low rates you can own a home for about what you are paying rent. Because of the amount of money the government is pumping into the financial system inflation will soon be on the rise. When it does mortgage rates will be to. Take advantage of the low rates now before it is too late.
The Government is going to give you an $8000 Tax Credit to Buy
As part of the recently passed stimulus package you will get an $8000 tax credit if you have not owned a home in the last 3 years and do it before December the 1st of this year. What this means in very basic terms is as long as you make less than $75,000 if your single and less than $150,000 if your married you will receive a line item credit for $8000 on your 2009 tax return. So think of it this way, if you normally get a refund take that amount and add $8000 bucks to it. If you normally pay, take $8000 away from what you would owe. This is a great incentive and something that everyone who can should take advantage of.

2009 is going to be the year of the first time buyer. The bottom line is if you choose to buy you are going to get a great deal, at a historically low rate and the federal government is going to give you 8 grand to do it. If you would to get to get pre-approved and receive a FREE Home Buyers Handbook give me a call today!

Happy Home Buying!


Brad Hacker, Senior Mortgage Planner
mymortgagepro
Toll Free Phone (866) 293-0411
Fax (859) 293-0511
Mobile (859) 351-6495

It's Everywhere

Now even the radio ads for cars are making uninformed remarks about the real estate market. Not that a KIA dealer would have any insight or knowledge of ANY real estate market in my opinion, but this advertisement caught me in a strange way.

Really Deep Cheesy Narrator "Would you pay 60% too much for a new house?"
Clueless buyer "Not in this market!"

So that leads me to the natural question, in what market would you ever pay 60% too much for a house?
She must be from Florida somewhere like Miami, or maybe California, Phoenix, or Las Vegas. One thing for sure she was not anyone I know. So if there are any real KIA shoppers out there willing to pay 60% too much, heck even 10% too much for a home, let me know. I have a bunch you can buy. And yes you will only need a job and a down payment.....

Ty

Commercial Lending

I would like to get someone to talk about their experiences lately with commercial lending, any takers let me know. I am currently in the process so I will throw my two cents in too.

FINALLY!!!!

I finally found it, a positive real estate article online. It is pretty generic and basically what we say everyday, but none-the-less....

http://realestate.yahoo.com/promo/10-mistakes-first-time-home-buyers-make.html

The market is really heating up, every agent I talk to is as busy now as ever.....

$8,000 Tax Credit for First-time Home Buyers

New $8,000 Tax Credit for First-time Home Buyers

Great news for first-time home buyers in 2009! The stimulus plan that President Obama signed into law contains a new $8,000 tax credit for qualified first-time home buyers. And, unlike the $7,500 tax credit from last year, this credit does NOT have to be repaid to the government, as long as you stay in the home for at least 36 months after the purchase date.
Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. This means the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.

Who?
First-time buyers or anyone who hasn't owned a home in the 3 years prior to a purchase of a primary residence may qualify for a tax credit of up to 10% of the purchase price or $8,000, whichever is less. To qualify for the full credit, the buyer's modified adjusted gross income must be less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a
joint return. Partial credit is proportionally reduced for incomes under $95,000 (single) or $170,000 (married). For married taxpayers, the homeownership history of both the home buyer and his/her spouse are taken into account. This means if you or your spouse has owned a principal residence in the last 3 years, neither you nor your spouse qualifies for the credit.

What?
According to the IRS, a primary residence is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence. If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

When?
The $8,000 tax credit is available for qualifying home purchases made from Jan. 1, 2009, until Dec. 1, 2009. This is not a typo. To receive the credit you must purchase a qualified home before December 1st, 2009 – not the end of the year.

How?
Unfortunately, you can NOT use the credit as a down payment. To receive the credit, you must purchase a qualified home first and then claim it on either your 2008 or 2009 taxes. If you make a qualified purchase after April 15, or after having already filed your 2008 taxes, you and your tax professional can submit an amendment to your return. To claim the credit, use
form 5405.

Why?
The current combination of lower home prices and lower interest rates makes for an amazing opportunity to buy real estate. Add to that this $8,000 gift from the government, and renting a home just doesn't make much sense.

If you or someone you know is ready to stop paying the landlord's mortgage and start building equity in your own home, give
us a call. We'll run the numbers and see what makes sense for your individual financial needs.

Sincerely,
Wade Kundinger
Royal Mortgage Company, Inc.
(859) 264-8183
wkundinger@insightbb.com

Mike Gooch Auctioneer

Here is the question session with Mike Gooch with the Gooch Auction Group, the name that sells!

1. What is your single best piece of advice for sellers in today’s market?
Price it right. Make it saleable (i.e. Clean the carpets, increase curb appeal etc.). Every seller really does not have the best house on the street. Take a reality check.

2. What is your single best piece of advice for buyers in today’s market
For them too, to take a reality check. We are not in Detroit, Las Vegas, or Florida. The market here is OK to good at best. If you want to make ridiculous, low ball offers, do it somebody else’s watch. I have sold 3 properties in the past week that have been scheduled for auction, before the auction, for good prices. Does that happen in a bad market? A big NO!!!

3. Where do you see the residential owner occupied market going in the:
a. Next 6 months?
Stabilizing
b. Next year?
Stabilizing
c. 5 years?
Who knows?! Better economists than me have guessed and failed, I’ll plead the 5th on this one and the next one
d. 10 years?
4. If someone has to sell a home before they can buy what strategy do you recommend currently
Explore the benefits of an Auction of course. No question.. Take a look at www.goochsells.com

5. Do you think it is a good time for investors to be in the market?
Absolutely!

6. What area of town or state do you see having the most attractive upside the next few years?
A place called Chicken Bristle, KY.. Definitely room to expand there!

7. What do you think are the most attractive features buyer are looking for today in a home?
Unfortunately -Price. Turn off the TV and get real.

8. Where do you see real estate, as a profession, going in the future?
Only the strong will survive. The 20% that is already doing 80% of the biz will be fine. The “part-timers”.. well the outlook is grim.

The commercial side of foreclosures are just beginning. “Hang on, this pony’s gonna buck!” Concerning the “big” picture this is probably going to hurt lenders more than the residential side. i.e. – Goodies/Circuit City etc. – (just to name two, there are many more!) going under pulling out of major strip centers & malls.

9. What has surprised you the most the last year in real estate?
Unreasonable Buyers & Sellers alike. Sellers wanting more than the property is worth, buyers wanting to pay less. We aren’t selling used cars here. It’s real estate.

10. What changes have you made in your business plan to adjust to this market?
The thought of hiring more help. My business has never been better.

Thanks to:
Mike Gooch, AARE Auctioneer/Broker
1795 Alysheba Way #1101
Lexington, KY 40509
Phone: (859) 494-SOLD (7653)
Fax: (859) 543-1644
info@goochsells.com

National Article = Local Effects

Gain Seen In Pending Home Sales, Housing Affordability Sets New Record

WASHINGTON, April 01, 2009
Pending home sales have edged up, hinting at a possible pickup of sales activity in coming months, according to the National Association of Realtors®.
The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in February, rose 2.1 percent to 82.1 from a reading of 80.4 in January, but is 1.4 percent below February 2008 when it was 83.3.
Lawrence Yun, NAR chief economist, said the market is continuing to underperform. “Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains,” he said. “More buyers are getting into the market to take advantage of stimulus incentives and much improved housing affordability conditions, but it will take a few months before we could see this turn up in measurable sales contract activity.”
Also in February, NAR’s Housing Affordability Index2 rose to a new high.
The PHSI in the Northeast rose 10.6 percent to 63.9 in February but is 11.2 percent below a year ago. In the Midwest the index jumped 14.5 percent to 83.1 and is 3.4 percent higher than February 2008. The index in the South rose 4.4 percent to 85.8 in February but is 0.1 percent below a year ago. In the West the index fell 13.5 percent to 89.6 and is 1.7 percent below February 2008.

Link to Entire Article:
http://www.realtor.org/press_room/news_releases/2009/04/phs_gain

My Questions Answered

Here are a few of the questions I asked other agents to give me their input on, but here are my responses....

1. What is your single best piece of advice for sellers in today’s market? Set your price for this market, not last year or two years ago. Also the condition of the home needs to be ready to sell, don't price or list it for sell with the idea that you can negotiate the price or fix it later. There probably will not be an offer to negotiate on...

2. What is your single best piece of advice for buyers in today’s market?- Just because it listed for $X does not mean that you can get it for a lot less. You still have to be willing to pay what it is worth, and the seller may have priced it at 100% of its real value. Do some research with your agent to see the real value. Use the real total value and cost, not just the list price as your gauge.

3. Where do you see the residential owner occupied market going in the:
a. Next 6 months? - Inventory coming down, prices stable. Good areas and first time buyer price ranges may be stronger than others.
b. Next year? - I think there will be a good demand for new construction as right now there are virtually none being built, but that is a good thing I think.
c. 5 years? - I think the demand for higher energy efficient homes and neighborhoods with a good community feel will be in demand.
d. 10 years? - Who knows, but I bet the ones who buy today will be very happy....especially with these rates.

How Weather Affects the Effect

The last few days are a classic spring in KY case study. Which gives an interesting chance to get into the psychology of how that affects buyers and sellers. One of my theories on real estate is that this time of year your clients motivation, and activity are directly affected by the weather. Take for instance this past weekend, weather was nice and sunny and people were driving around and the activity was high. Today its cold and about to snow and the activity is way down as a result. I relate it to the mindset of the economic factors that are currently in place, the "economic incentives to buy", i.e. tax credits, super low rates, high inventory, natural cycles, etc., are like the weather. When they are good, its good. When they are bad, its bad. But at some point both reach a tipping point, and too much of a good thing gets old and as a result has little effect. And it takes a little blip in the cycle, like the weather today, to cause you to step back and realise how nice it really was yesterday. So if you didn't take advantage of yesterdays weather, don't let the other good things pass you by don't wait for the next sunny day. Because you never know when that will be, and then when the incentives slowly start going away, you will be wishing you hadn't.

Buyers Coming Out of Woodworks?

I have spoken to several other Realtors and lenders the past few days, and we all agree on two things:

1. We are all busier than we have been in a year or two
2. Everybody "says" they want to buy, and are looking, but are they and can they?

So the buyers are coming out of the woodworks right? Are they really buyers or are they just tire kickers? That is the current trend I am watching and I will be asking everyone I talk to the next couple of days, as it will be the unofficial holiday weekend in Lexington, the first weekend of Keeneland, there will likely be a lot of voice mails being reached the next few days. Including mine I am taking the day off, BUT not for Keeneland.

Ty

Mortgage Pro's Take on Market

IS NOW THE TIME TO REFINANCE MY HOME LOAN?

Rates are at all-time lows
Freddie Mac, www.freddiemac.com, is reporting the average 30 year fixed rate to be 4.85% with 0.7% in points payable. This is the only source I use to track interest rates because these numbers are based on actual loans instead of advertised “quotes”. As we all know, many lenders tend to “low ball” their advertisements in an attempt to make the phone ring and unfortunately we find all too often that the advertised rates aren’t actually what gets sign at closing.

How did they get here?
Before we can understand where rates are heading, we must first understand how they got here. Mortgage rates are set based on the yield and price being paid for their bonds which are called mortgage backed securities. These bonds trade on an open market just like any stock you would look up. The lower the yield paid on the bond, the lower rates are at the time. Over the past 6 months, the US Government has invested hundreds of billions of dollars into these mortgage backed securities in an attempt to get the yields low and to keep them there. The first installment came from the Treasury under the direction of Hank Paulson and there have been two additional announcements from the FED. The most recent commitment was made from the FED on March 18th.

Where are they going?
The Treasury’s first injection in early November 2008 of approximately $500 billion pushed mortgage rates from over 6% down to just above 5% in just over a 30 day span. In early December the FED announced a similar investment commitment and projections of 4% rates began to run wild in the media. Jim Cramer predicted a 3.80% mortgage on his CNBC broadcast, WRONG! Those of us who follow these markets closely immediately realized the difference between the two plans and cautioned our clients that rates would not be hitting 4%. The Treasury bought the securities in bulk thus pushing the yield down very rapidly. The FED’s plan called for the purchases to occur over a 180 day cycle. This meant rates would remain low for the next six months as opposed to going significantly lower for a short period of time. The FED’s most recent announcement does the exact same thing except extends the time-frame through the end of this calendar year. The bad news is that rates aren’t going much lower. The good news is that rates aren’t going much higher.

Don’t take my word for it
On March 27th, Bloomberg quoted John A. Koskinen, Freddie Mac’s Chief Executive Officer, stating “mortgage rates are probably as good as they’re going to get and the housing market is likely to rebound sooner than some forecasts.” He went on to say, “interest rates are probably close to bottoming out, and therefore we are telling people to buy a house now.”

Now is the best time in the history of our market to either purchase a home or refinance your existing home loan. The key is working with someone who understands how a mortgage should properly integrate into your overall financial plan. Although a 30 year fixed mortgage is a simple product, you can cost yourself thousands of dollars by not having it tailored to fit your financial plan. The simple fact is that someone planning to move in the near future, someone with children entering college in the near future, and someone planning on living in their current home for the rest of their lives, all require a different plan. If your lender is simply quoting you a rate from today’s pricing sheet, there is a great chance you are about to cost yourself a lot of money.



Best,
Marty

Contact:
Phone (859) 293-0411 x234
Fax (859) 293-0511
www.martypreston.com
mymortgagepro