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.
Wednesday, May 27, 2009
Wednesday, May 20, 2009
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”.
Tuesday, May 19, 2009
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
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.
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.
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.
Monday, May 18, 2009
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?
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?
Wednesday, May 13, 2009
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.
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.
Tuesday, May 12, 2009
Monday, May 11, 2009
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
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?
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?
Monday, May 4, 2009
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."
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
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
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