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A New Housing Boom in 2015?

Category : Uncategorized

Daily Real Estate News | Monday, October 15, 2012

The housing market has been showing several signs of recovery, including home prices and home sales on the rise, new construction up, foreclosures falling, and mortgage rates near record lows. Some economists are getting very bullish about the housing recovery and even predicting that the market will return to its “boom” level days in just three years.

In a recent report, Barclays Capital predicts that home prices could be back to peak levels by 2015. Barclays is predicting home prices to rise 5 percent to 7.5 percent a year.

“In our view, the housing market had undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts,” says Stephen Kim, an analyst with Barclays.

Home construction is also expected to soar, rising 20 percent or more a year for the next year, according to some economists’ forecasts. The new-home market could return to its pre-bubble average of about 1.5 million new homes a year by 2016, CNNMoney reports. That would double the construction level expected this year.

“That turn in the [housing] market is occurring now and it should become a boom by 2015,” Roger Altman, chairman of Evercore Partners and former deputy Treasury secretary, told CNNMoney.

Source: “A New Housing Boom,” CNNMoney (Oct. 12, 2012)

Zillow To Show Homes In Foreclosure

Category : Uncategorized

By Mary Ellen Podmolik Tribune staff reporter8:12 a.m. CDT, October 25, 2012

Zillow will display detailed information on approximately 1.5 million homes that are in foreclosure but are not yet for sale, in a bid to position itself as the go-to web site for homebuyers.

All of the data that Zillow is making available is public information but until now, accessing it typically required buying a subscription to a website or a trip to county courthouses, digging through individual case records. By putting such personal data at consumers’ fingertips, the Seattle-based realty website acknowledges it may face criticism regarding privacy concerns.

However, the Seattle-based company views its latest site enhancement, which went live late Wednesday night, similarly to when it shook up the real estate market in 2006 by debuting a site that listing individual home values, called ‘Zestimates,’ of for-sale and not-for-sale homes. The site today has information on more than 110 million properties. Back in 2006, the stated goal was to make potential homebuyers more market-savvy shoppers. It doesn’t see the addition of foreclosure data any differently.

“It’s all part of the public record and what the buyer chooses to do with information is up to them and their real estate agent,” said Amy Bohutinsky, Zillow’s chief marketing officer. “Ultimately, what we’re trying to do is help buyers get a better picture.”

Anyone who logs in with a free account will have access to the information, which will also include completed foreclosures that have not been listed for sale.

The homes listed in ‘pre-market’ inventory will be properties where a foreclosure has been filed against the borrower but the action is not resolved. Among the details available for each property will be the address, the date and amount of the original mortgage, the unpaid balance and the dollar amount past due. It also will show the party that initiated the foreclosure action, an estimate of what the foreclosure sales price might be, based on the sales prices of nearby foreclosures, and details of where it is in the process. If the home was previously listed on Zillow as a for-sale home, that picture will be used. Otherwise, there will be a satellite view of the neighborhood.

The borrower’s names will not be listed.

When the additional information was added to the site late Wednesday night, it included 11,000 pre-market single-family homes and condominiums just within the city of Chicago.

Home shoppers have a need for the extra information, according to Bohutinsky, because the dearth of available homes listed for sale is constraining the housing market at a time when there are indications that the market has bottomed nationally and mortgage rates remain well under 4 percent for a 30-year, fixed-rate loan.

“What buyers can learn from this is what homes might be listed for sale soon, or they can actually try and buy the home out of the foreclosure process by making an offer to the owner or the bank,” she said. “It opens up a whole new category of inventory to people that they didn’t know existed.”

That so-called shadow inventory has been on the mind of real estate agents for years, as they waited for properties in foreclosure to make their way through the process and return to the market for resale. Foreclosure proceedings first slowed because of the volume of cases and more recently because of various state and federal investigations into how banks handled the cases. With many of those probes behind the mortgage lending industry, lenders are again seeking to push foreclosure cases through the system.

Still, according to RealtyTrac, it takes an average of almost two years to foreclose on a home in the Chicago area, so a property listed in Zillow’s pre-market inventory could be there a while before it’s officially listed for sale. On Thursday, RealtyTrac reported that foreclosure activity in the Chicago area rose 34 percent from 2011’s third quarter. During the past three months, notices of default, the first step in the foreclosure process were filed against 18,923 homes locally.

As information on those properties is entered in court databases, it would be added to Zillow’s site, which will be updated daily.

The company calls the addition of pre-market inventory a step forward in ‘consumer empowerment.”  Housing advocacy groups and counselors aren’t so sure.

“While, generally speaking, we support disclosure of public data, there is a big leap from the general case to a specific one,” said Katie Buitrago, a senior policy associate at Woodstock Institute, a Chicago-based research and public policy group. “It’s important to look at Zillow’s methodology, data coverage, and compliance with privacy laws before coming to any conclusions. Given that it’s not Zillow’s goal to help observers understand foreclosure trends but to facilitate real estate transactions, I would be concerned that they are not providing sufficient context for the general public to put foreclosure trends into perspective

Debra Olson, executive director of the DuPage Homeownership Center, worries that the easy access to personal data on homeowners’ financial problems not only makes them more likely to receive low-ball offers on homes but may also make them a target for mortgage-related scams.

“Many of the families that come in here that are in pre-foreclosure are able to get it turned around, either through the Illinois Hardest Hit program or through mortgage modifications or other means,” Olson said. “I understand that the information is already available through public court records but it takes some real digging. This just seems much too easy for predators.”

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Twitter @mepodmolik

Six Tips On Purchasing An Investment Property

Category : Uncategorized

By Tom Sightings
October 2, 2012 RSS Feed Print

If you’re fed up with the paltry returns you get on bonds, the insulting interest rates paid by banks, and the frenetic fits of the stock market, you might consider turning to rental real estate to supplement your retirement income. But it’s not for everyone. Walk through these six tips to see if real estate can help you construct a sound retirement portfolio. If the idea still seems solid, the next step is to do your homework.

1. Assess your goals. The days of buying real estate and flipping it for a quick profit are long gone. Rental real estate can provide a steady, long-term income, but it takes work. Are you prepared to do lots of research to secure a property in a good location that will be attractive to people in the rental market? Are you ready to crunch the numbers to figure out if a property will work out financially? Are you able to manage your own property, which may include fixing the plumbing, cleaning the carpets, and applying a fresh coat of paint for new tenants? If not, you will need to hire someone else to do it for you.

2. Know the neighborhood. Surely, you’ve heard the old maxim about the three important factors of real estate: location, location, and location. If you’re buying real estate you need to know what you’re getting into. Is there something special about the property, such as a view or proximity to waterfront or public transportation? What are the zoning laws? Is there a new highway on the drawing boards? You can never cover all the unknowns, but you can find out if the rental market is viable. Check with real-estate agents, go online to Zillow and Craigslist, and talk to people in town. You can’t accurately predict what the property will be worth in five years, but you should know if you can rent it next month, and at what price.

3. Buy local. There’s no neighborhood you’re more familiar with than your own. I know one couple who live in a lake community in Pennsylvania. They bought the house next door to them. They break even renting it out for the summer. They make their profit on what comes in during the shoulder season. And when it’s empty they don’t have to worry, because they can look out their window and make sure everything’s okay. The farther away you are from your rental property, the harder it is to do your job as a landlord. If it’s too far, you can’t do it at all. You will have to hire a property manager who will do the job but eat up your profit in the bargain.

4. Best bet: a one bedroom condo. Outside of vacation properties, the sweet spot in the rental market is for single people: young singles, divorced middle-agers, and retired widows. Most of these people do not need, and will not pay for, a larger unit. The one bedroom condo is the Honda Civic of the rental market. There’s nothing sexy about it, but for most people it offers the best value, and is the easiest property to manage.

5. Buy at a good price. An old rule-of-thumb says if you can buy a property for 12 times the amount of its annual rent, then you’re getting a good deal. These days you can do better than that—maybe nine or 10 times the annual rent. Of course, there are always variations, depending on the type of property, location, and the prospects for appreciation. But, remember, there’s no pressure for you to buy. You don’t pay up because you “fall in love” with a place. If you’ve done your homework, you have a pretty good idea what your monthly rental income will be. Don’t pay more than what your monthly cost is going to be. That amount is your limit for what you should pay

6. Make sure you have some reserve cash. If you already own your own home, you know that at some point you’ll inevitably face an unexpected expense—the dishwasher breaks, the roof leaks, or the condo association hits you with an assessment. You need to keep a cash reserve to take care of any surprises, including the possibility that your unit might be unoccupied for a (hopefully short) period of time. You also need to build these irregular expenses into your financial equation to help you decide, in the final analysis, if the whole project is worth it.

Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement, and other concerns of baby boomers who realize that somehow they have grown up.

Silver Lake Top Hipster Neighborhood in Nation

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Morgan Brennan, Forbes Staff

Silver Lake, Los Angeles, Ca

Want to roll out of bed and pick up a cup of single-origin java from a coffee shop on your corner? Or grab a gourmet grilled cheese sandwich from a food truck parked down the street? Does a dream weekend include foraging for organic veggies at a farmers market and watching the latest hot indie band play on a small stage through the wee hours of the morning? Then, my hipster friend, Los Angeles’ Silver Lake is the neighborhood for you.

Silver Lake takes the top spot on Forbes’ inaugural list of America’s Best Hipster Neighborhoods. Nestled between Echo Park and Los Feliz, the trendy community boasts some of the nation’s most lauded food trucks and farmers markets, a multicultural blend of residents with eclectic professions, and a booming arts scene. Even the buildings exude an avant garde aesthetic a hipster could love: Silver Lake is home to some of the most celebrated modernist architecture in the country, including Richard Neutra’s VDL Research House and John Lautner’s Silvertop.