Archive for October, 2009
Has The Real Estate Market Hit Bottom?
October 28th, 2009 categories: For Buyers
I read an article in the Chicago Tribune business section “Housing Market hits ’some kind of bottom’”.
In the article it sited a recent study by The Standard & Poor’s/Case Shilling Index of home prices in 20 metropolitan areas.
According to this study, home prices have showed a 1% increase in seasonally adjusted median home prices. The conclusion based on this study is that the housing market is at or close to being at bottom.
The article did point out that there were some sub-markets still struggling like Las Vegas, Charlotte N.C., Cleveland, and Phoenix. All of these cities are struggling with foreclosures.
But in general most markets were improving and the number 1 reason for the improvement was the Federal Governments First Time Homeowner Tax Credit of $8,000.00. The tax credit brought new home buyers out into the market and these buyers took advantage of lower home prices and low interest rates and began purchasing homes.
The conclusion of the article was ” The fundamental story is that housing got way too expensive, and now you could argue that housing is cheap again, and that is what it boils down to in 50 words or less.”
Are we to take this last statement for what its worth as fact. I think that this a simple answer to a very complicated situation. I have heard these arguments before like ” Too Big to Fail”, or ” The market will Correct itself” and I think they all have some major flaw. They generalize a problem to 1 simple answer and that is a problem in itself.
I have learned that Real Estate can not be viewed on a global level. Real Estate prices and values are based on sub-markets. These sub-markets can be from block to block.
Real Estate is based on Supply and Demand. If there is an over supply of property then price of a home will go down.
Real Estate is based on supply of money. When interest remain low then buyers can afford to buy.
If the Real Estate market relied on “Cheap Prices” as the article suggests then I guess we would all be millionaires by investing in Real Estate.
Lets not fool ourselves. We cannot predict when the market will hit bottom.
| Discussion: 2 Comments »
Is there A relationship between Foreclosures and Unemployment?
October 27th, 2009 categories: Market Data
Is there a correlation between the number of Foreclosures and Unemployment. Can we assume that those States with more unemployment will have more Foreclosures?
Below are the ranks for the Top 10 Foreclosure States according to Realty Trac. Illinois is listed as 10th by Realty Trac but other poles show Maryland as 10th and Illinois slipping to 12th.
1 out of every House Holds (HH) is the number of family households that has received a foreclosure notice. This information came from a recent CNBC poll.
The unemployment data comes from the Bureau of Labor Statistics.
From the data we can understand why Michigan is listed as number 1 in terms of unemployment with the loss of jobs from the automobile industry in Detroit by why are they ranked 8th in terms of unemployment. Will there be more foreclosures in Michigan due to the high unemployment?
Nevada is Ranked number 1 in Foreclosures and Number 2 in terms of unemployment. These statistics make sense.
Yet Rhode Island which is ranked 3 in terms of unemployment at 13% does not even make the top 10 list in terms of Foreclosures. What is Rhode Island doing that other states are not?
In contrast Utah which is 6th on the list of states with the most Foreclosures (1 out 251 households) has the lowest unemployment rate at 6.2 %.
It appears the statistics are inconclusive when it comes to a coorelation between State Rank in Foreclosures and Unemployment Rate.
| Foreclosure Rank | State | 1 out of every # of HH | Unemployment Rank | State % Unemployment |
| 1 | Nevada | 1-59 | 2 | 13.3% |
| 2 | Arizona | 1-179 | 22 | 9.1% |
| 3 | Calif | 1-154 | 4 | 12.2% |
| 4 | Florida | 1-158 | 8 | 11.0% |
| 5 | Idaho | 1-250 | 26 | 8.5% |
| 6 | Utah | 1-251 | 51 | 6.2% |
| 7 | Georgia | 1-265 | 14 | 10.1% |
| 8 | Michigan | 1-270 | 1 | 15.3% |
| 9 | Colorado | 1-342 | 39 | 7% |
| 10 | Illinois | 1-363 | 12 | 10.5% |
| Discussion: 1 Comment »
Family Searches Web For Help
October 26th, 2009 categories: For Sellers
By
Betty Cunningham
Re-Max Realtor and Staging Lady.
I recently received an email from a young couple who were on my website.
They were looking for an agent who could help sell their home.
After speaking with them it became apparent that the sale of their home was going to be a Short Sale.
They purchased the home 3 years ago, had multiple mortgages with no equity in the home. The recent loss of a job and having to care for 2 twins and a 4 year old has become a real hardship on the family.
I listed the home and continued to make price adjustments until I received a buyer for the home. We are in the process of negotiating the offer with the bank as a Short Sale.
| Discussion: No Comments »
Is On Line Bidding a New Trend ?
October 26th, 2009 categories: For Buyers
By:
Betty Cunningham
Re-Max Realtor and Staging Lady
A new trend in Real Estate is “On Line Bidding” . What is “On Line bidding” ? They are Real Estate Websites that allow Agents, Buyers, Seller, Asset Managers, a way to promote Bank Owned property for sale. These sites allow a buyer to view a listing of the property on line and submit an offer and track that offer until it is accepted on line.
After an offer is accepted on”On Line Bidding” sites the paper work is very much like a traditional real estate transaction and will require you to be involved with a Realtor.
It should also be stressed that ” On line Bidding” does not replace the advise of a Realtor. Remember buying a home is an emotional process and “On line Bidding” just like Real Estate Auctions can have buyers make higher offers than is necessary or more than what the property is worth.
The use of these on line services should be used with caution and are not without cost to a buyer. Realty Bid usually charges a $2,400 00 transaction fee to the buyer and OfferSubmissions.com charges a $300.00 non refundable fee per transaction in addition to a penalty of $100 a day if the closing is delayed.
Right now one of my buyers has an accepted offer on a property which was listed with Coldwell Banker but the offer had to be submitted www.OfferSubmissions.com. We are scheduled to close on November 13, 2009 and I will let you know how that works as a follow up to this blog article.
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Have You Paid Your Cook County Real Estate Taxes?
October 22nd, 2009 categories: Ask the "Specialist", Local Markets
Have you paid your Cook County Real Estate Taxes?
No! Because Residents of Cook County have not received the second installment of their Real Estate Taxes for the 2008 Tax Year.
Taxes in Cook County are paid in arrears. That means taxes paid in 2009 are for the 2008 tax year.
Taxes in Cook County are paid two times a year. The first installment is due in March and the second installment is due in November of each year.
As of October 22, 2009, Cook County residents have not received a tax bill for the second installment of their 2008 Real Estate taxes.
Much of the County Revenue comes from Real Estate Taxes. At a time when the County is struggling to provide services to the community it amazes me why the tax bills have not been mailed.
Cook County Facts
| Quick Facts | Cook County | Illinois |
| Population 2008 estimate | 5,294,664 | 12,901563 |
| # of Housing Units 2007 | 2,172,658 | 5,246,005 |
| # of Households 2000 | 1,974,181 | 4,591,779 |
| Persons per Household 2000 | 2.68 | 2.63 |
| Median Value of Owner Occupied 2000 | $157,700 | $130,800 |
| Median Household Income 2007 | $52,554 | $54,144 |
| Discussion: 1 Comment »
Top 2 Reasons Why A Short Sale Never Closes… and How to Prevent it
October 16th, 2009 categories: Short Sales
Here are my top 2 Reasons Why a Short Sale Never Closes and how to prevent it.
Number 1 Reason: ” Seller Ambivalence”
Most people want to keep their homes. This is true of most sellers in a Short Sale.
During some stage in the selling process you will be confronted with what I call ” Seller Ambivalence” . ”
“Seller Ambivalence” is like “Buyer Remorse”. Seller Ambivalence and Buyer Remorse is when second thoughts appear after a commitment to buy or sell has been made.
Seller will do almost anything to sabotage the listing if they are ambivalent. If you find your seller avoiding your phone calls, making it difficult to show, or has called the lender to negotiate a Loan Modification while doing a Short Sale then you must have a talk with your Seller bccause these are signs of Seller Ambivalence.
This talk with your Seller can prevent Short Sales from not closing.
Number 2 Reason: “Wrong List Price“
Critical to any sale today is having the right price to motivate buyers. Short Sales are not immune to this and must be priced right to motivate buyers.
As an agent you must make sure you understand your market, what the BPO price will be for a Lender and understand a buyer is looking to buy a property at a price at or below market value.
The following is an example of a home I think was priced too high, did not sell, and was canceled as a Short Sale Listing.
Subject property:
This house is a 7 Room, 3 Bedroom, 2 Bath Brick Bi-Level home.
List Price: $349,900
DOM: 136 Days (Days on Market)
Cancelled Listing
Market Data:
The market data shows 6 homes sold in the area. 3 homes were Short Sales and 2 homes were Bank Foreclosures. The lowest price home sold was $195,000 and the highest price home sold was $272,500. It is my opinion that the List price for this property should have been somewhere in between the low and high price.
Having the correct list price will prevent Short Sales from never closing.
| Discussion: No Comments »
You Say You Want to Make an Offer ….Wait in Line…
October 14th, 2009 categories: For Buyers
A Friend of Mine sent me this because she knew I am a Realtor who is active in the Foreclosure Market:
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Illinois Attorney General Sues Debt Settlement Company
October 12th, 2009 categories: Loan Modification, National News/Local News
Illinois Attorney General Lisa Madigan has filed a law suit against Dallas Based “Credit Solutions of America”. Madigan is attempting to stop them from doing business in Illinois and wants the company to pay restitution to its Illinois customer, pay a $50,000 fine for violating the state’s Consumer Fraud Act and pay additional fines of $50,000 for each instance of fraud.
In the lawsuit, Credit Solutions of America accepted money from Illinois customers but failed to negotiate a lower payment on their debt with the bank. While Credit Solutions claimed to be successful in reducing customers debt by 50% it actually left them deeper in debt according to the law suit.
Lisa Madigan and the Illinois Attorney Generals office has filed similar lawsuits against SDS West Corporation and Debt Relief USA.
Her office seeks to ban all Debt Settlement Companies from operating in Illinois, unless they meet the following requirements:
- Provide individual credit counseling:
- Become licensed and Bonded in Illinois:
- Disclose risks to customers about entering into a debt settlement contract;
- Provide a written contract with a right to cancel clause.
Over the past year the Attorney Generals office received over 12,000 complaints regarding debt an credit issues.
| Discussion: No Comments »
More than half of mortgage holders who get help fall behind again
October 1st, 2009 categories: Loan Modification
The following article is being shared from NY Daily News:
More than half of mortgage holders who get help fall behind again, just as lenders are ramping up efforts to avoid more home foreclosures, according to a new report by bank regulators.
More than 50% of homeowners with loans modified in the first half of last year had missed at least two months of payments a year later, government officials said Wednesday.
But the results were better among those who saw their payments drop substantially.
About a third of borrowers whose monthly payments were reduced by 20% or more fell behind again within a year. That compares with more than 60% of borrowers whose loan payments weren’t changed or increased.
The report on 34 million home loans highlights a significant challenge for the Obama administration’s plan to tackle the foreclosure crisis, backed by $50 billion in money from the financial industry bailout fund.
The administration’s effort got off to a slow start, but has picked up speed in recent months. As of last month, about 360,000 borrowers, or 12% of those eligible, signed up for three-month trial modifications. They are supposed to be extended for five years if the homeowners make timely payments.
Traditionally, most lenders have offered payment plans that allowed borrowers to catch up on missed payments. But those modifications often result in a higher monthly payment.
Under the administration plan, borrowers’ interest rates can go as low as 2% for five years. Bank regulators say they have pressed lenders to shift their focus to modifications that reduced borrowers’ payments.
My Comments to this article are below:
The success of any Home modifications will require lower monthly mortgage payments. Many people who want to stay in their home cannot afford the payments they have and are looking for lower mortgage payments. Unfortunately, loans being modified are not reducing these payments and therefore more people are defaulting on these modified loans. Also, there are people being offered modification programs who clearly do not qualify for this plan like those people who are unemployed. Its hard to modify a loan when you have no ability to pay? The success of any home modification plan will require the principal balance on the loan to be reduced to the “current market value”of the home. This is the only way to make the payment more affordable. Interest rate reduction and extending loan term are not enough. Finally, if the Fed really wants to help homeowners then it should guarantee the loss in the principal reductions. For example if a homeowner has a home loan worth $100,000 but the property is worth only $50,000 then the new loan should be modified at the current market value of $50,000 and the loss should be guaranteed by the Fed.
| Discussion: 1 Comment »
Pending Home Sales are The Highest Level Since March 2007
October 1st, 2009 categories: Investing in Real Estate, Market Data, Short Sales
Pending Home Sales are at the Highest Level Since March 2007. Short Sales and Complex Appraisals are causing delays in home sales from closing.
| County | # of Pending Sales | # of Pending Short Sales | % of Total Pending Sales | # of Short Sales Pending 100 + Days | % of Short Sales Pending 100+ Days |
| Cook | 5689 | 1058 | 19% | 700 | 66% |
| Lake | 1039 | 221 | 21% | 169 | 76% |
| Dupage | 1169 | 205 | 18% | 169 | 82% |
| Mchenry | 578 | 156 | 27% | 116 | 74% |
| Will | 1116 | 156 | 14% | 136 | 87% |
| Kane | 820 | 169 | 21% | 135 | 80% |
Summary:
Short Sales represent 14%-27% of all Pending Sales in all five counties.
66%-87% of all Short Sales are taking 100+ days to close.
| Discussion: No Comments »
