by Steve McLinden

Friday, January 7, 2011

Must we endure yet another year of housing crisis? What choice do we have? No amount of optimistic projections and statistical manipulation can remedy this protracted housing pain.
Historically speaking, five to seven years has been a standard interval for house prices to stabilize following serious corrections. By that measure, the worst should be behind us.

There is some good news: Mortgage rates remain at their lowest point in nearly 60 years, and prices are settling in several markets. Real estate is becoming more affordable and needs-based instead of speculator-driven, making a home primarily a shelter once more.

Meanwhile, some see another year of value declines in 2011, perhaps up to 7 percent. Several more waves of adjustable-rate mortgages are set to ratchet upward for homeowners in 2011. “Strategic defaulters” are surrendering their upside-down loans as a financial strategy, not because of extenuating circumstances. And unemployment remains stubbornly high.

Yet, people still move up and still move down — buying and selling homes to meet those ends. For them, here are 10 real estate tips for 2011.

Tip 1: Sellers: Redefine “Market Value”
If your home has been on the market far too long, there’s a good chance you’re not facing market realities. The value of your home isn’t what the tax assessor says it is, or the sum on that two-year-old appraisal you have filed away. It’s not what a similar-size home that sold across town. It’s what a buyer is willing to pay today. To arrive at that sum, the sales prices of foreclosures and short sales must be factored into the equation, along with the average value of seller concessions in your submarket. These factors are advanced by the Federal Housing Finance Agency, or FHFA, in its appraiser code-of-conduct revisions to ensure more accurate documentation of market conditions. If your agent tells you that you’re overpricing your house, he or she may not just be trying to grease the wheels for a quick commish, as you might suspect.

Tip 2: Buyers: Hire Personal Peeps
As tempting as it is to share the seller’s agent to save a couple grand, don’t. The same goes for using the other party’s inspector and appraiser. They were hired by the seller and have a fiduciary allegiance to the person who’s paying them. Don’t automatically opt for real estate professionals referred to you by your agent either. A huge capital purchase is not the time for such friendly accommodations. Briefly interview three of each by phone. Make sure your appraiser and your inspector (and perhaps a separate termite inspector) are appropriately state-licensed or state-certified and, ideally, have been practicing for at least five years and have done more than 200 inspections or appraisals. Compare the results of your inspector’s findings with the inspection findings of the other party, and you’re likely to stumble on disparities or omissions.

Tip 3: Sellers: Extend the Selling Season
Spring is the best time to find the broadest universe of buyers and sellers. Parents don’t want to uproot their kids from schools mid-term and would like to settle in a new neighborhood by mid-summer. Many sell at the same time they buy. These days, “spring” really means late winter. So if you’re going to sell in 2011, get your house ready for showings by late February. That will give you nearly five months until this buying-and-selling group starts dwindling by mid-July.

For Tips 4-10 visit http://tylerfreed.web864.com/2011/01/19/10-tips-for-real-estate-in-2011/

Seattle Real Estate Tyler Freed

Last Thursday at the Pierce County Auction I ran into a group called DataSnap. That had a lot of valuable information to share and I told one of their members, Zach Flowers, that I’d love for him to highlight how they assist investors purchasing at the auction. Here is a little bit about what his company does. Thanks Zach for the information!

DataSnap Background

DataSnap is a company that is set up to provide information on foreclosures from county to county, and also to introduce resources to make the financing of these properties possible. We do a great deal of research in an effort to sift through hundreds of foreclosing properties, so that we’re able to put only the best opportunities before our investor base. The amount of opportunities varies from week to week, mostly dependant upon what the banks decide will be the “minimum bid” on any particular property.

Within our group, we have a great deal of experience in dealing with almost any real estate related issue that could come up. Our services are guided toward those who wish to purchase, renovate, and sell, however we also present unbelievable opportunities for holding rentals, and also for individuals to purchase homes to live in. As a general rule of thumb, we do not assist investors in purchasing properties at auction unless they are at or below 75% of their estimated market value. This can vary if the investor is purchasing with the intention of holding as a rental or to live in because the deal may still make sense.

In evaluating what we consider to be a deal, we take a good look at what’s happening within a 1/4 mile radius around the property. We try and be very specific in determining values, and are very conservative in doing so. We have drivers who drive the properties throughout the week prior to their auction date, and we use their information to estimate fixup values so that we can have the best possible idea of what it will cost to do any particular deal. Overall our goal is to present viable investment opportunities to our investor base using our experience and expertise in the field of real estate.

To learn more about what we do and to meet us in person, we hold an Introduction to the Auction Workshop at our office located at 5825 Tacoma Mall Blvd in Tacoma, WA 98408. The workshops start at 6pm and are usually finished by about 7:30pm (depending on questions).

Seattle Real Estate Tyler Freed

Northwest MLS Brokers Report $17 Billion in Home Sales During 2009
KIRKLAND, Wash. (Jan. 26, 2010) – Members of Northwest Multiple Listing Service tallied more than 52,000 closed sales of single family homes and condominiums during 2009, about 3.7 percent fewer than the total for 2008. Last year’s completed transactions had a combined sales value of more than $17 billion.
In its annual statistical summary, Northwest MLS reported 45,222 sales of single family homes totaling more than $15.1 billion, plus 6,883 condo sales valued at nearly $1.9 billion. The report reflects activity of members in 19 counties encompassing nearly eighty percent of the state’s population. (NWMLS expanded services to two more counties, Ferry and Clallam, at year end.)
Although the number of sales nearly matched 2008 levels (down 3.7 percent), the dollar volume fell by double digits, dropping nearly 14.6 percent. Closed sales in 2008 totaled more than $19.9 billion, but fell to about $17.2 billion last year. Brokers attribute the drop to a combination of factors, including lower selling prices and higher volumes of distressed sales, such as short sales and foreclosures.
Among the 19 counties in the NWMLS recap report, San Juan claimed the highest median sales price for single family homes that sold there last year, at $443,500. King County followed with a median sales price of $380,000 for last year’s closed sales. System-wide, the median price (half sold for more, half for less) for single family homes that sold last year was $280,000.
For condos, the median selling price was $235,000 across the 19-county market area, down 7.3 percent from 2008 when the median price was $253,500. King County accounted for six of every 10 condo sales, and they sold for a median price of $254,000.
Among other highlights in the annual MLS summary:
• More than eight of every 10 transactions (83 percent) was a “co-op” sale, meaning it was listed by one office and sold by a different office.
• Single family homes accounted for nearly 87 percent of total sales area-wide, measured by units, and nearly 89 percent of total dollar volume.
• Member-brokers added 117,583 new listings of single family homes and condos to the inventory during 2009.
• Members represented an average of 39,212 home sellers (active listings) each month.
• Reported 802 sales of single family homes that fetched $1 million or more. The MLS map area for Bellevue/west of I-405 had the highest volume of million-dollar plus sales (120 closed sales). The highest priced home sale in the MLS system for 2009 was $15,560,000 for a home on Mercer Island.
• Reported 66 sales of condos that sold for $1 million or more; 392 condos sold for $500,000 or more. The highest priced condo sale last year was in downtown Seattle. It sold for $9,750,000.
-more-
page two (2000 Annual Highlights) Jan. 26, 2010
• Newly built homes sold by NWMLS members commanded a sales price about 12 percent higher than existing homes (resales): The median sales price of a pre-owned, 3-bedrooom home (built 2007 or earlier) ranged from $140,000 in Grays Harbor County to $512,000 in San Juan County. The median price of a 3-bedroom new home (built 2008 or 2009) ranged from $158,225 in Grant County to $655,000 in San Juan County.
• Comparing school districts, the most expensive single-family homes, based on last year’s closed sales, are located in the Mercer Island District, where the median sales price was $832,500. It was followed by the Bellevue School District, which had a median sales price of $569,000.
• In the four-county Puget Sound region (King, Snohomish, Pierce and Kitsap), about 15.3 percent of single family homes sold for under $200,000 – more than double the 7.3 percent from 2008.
• Another indicator of activity, pending sales, showed a 16 percent increase in 2009 compared to 2008. Members reported 75,345 pending sales during 2009 (offers accepted, but not yet closed), up from 64,872 pendings for the previous year.
• The pace of sales as measured by “months supply” (an estimate of how long it would take for all inventory of active listings to sell at the current pace assuming no new inventory is added) showed improvement in many areas. In the four-county Puget Sound region, there was a 5.36 months supply at year-end; at the end of 2008 the months supply was at 7.9 months. System-wide, at the end of 2009 there was a 6.25 months supply, which compares to 8.66 months supply at the end of 2008. (Economists consider a supply of 3-to-6 months to be a balanced market, meaning the market favors neither buyers nor sellers.)
Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in western and central Washington. Ferry and Clallam counties are now included in the monthly statistical reports.
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Seattle Real Estate Tyler Freed

Foreclosures weigh on home appraisals
It appears that in neighborhoods with high foreclosure rates, values for all homes are being pulled lower than in areas where there are few or none.

By Alex Veiga

The Associated Press

LOS ANGELES — It wasn’t the first time that Katherine Scheri ruined a real-estate agent’s day with a low property appraisal.

Scheri, a real-estate appraiser, had sized up a three-bedroom, two-bath house in Santa Ana, Calif., for $30,000 less than what the buyers offered to pay. A typical deal-killer for a seller.

The agent urged the lender to force Scheri to consider several other properties that could back up the original $310,000 sale price. Then he tried good old-fashioned guilt, telling Scheri her appraisal was going to ruin the buyers’ shot at the American dream.

“That’s what he laid on me,” Scheri recalled. “And I said, ‘Don’t you care they could be potentially spending $30,000 too much for a house?’ ”

Across the country, agents and homebuilders are complaining too many appraisals are coming in low, scuttling deals.

The National Association of Realtors says nearly one in four of its members has reported clients losing a sale due to appraisals. The National Association of Home Builders, meanwhile, said low appraisals were sinking a quarter of all new home sales and argues it’s not fair to compare distressed properties to brand-new homes.

And that gets to the heart of the problem.

Roughly 40 percent of all home sales this year were foreclosures or short sales, meaning the property sold for less than the mortgage. In some markets, like Las Vegas and Phoenix, they’ve hit more than 50 percent.

Appraisers determine the value of a property by looking at recent sales of comparable homes. They take an apples-to-apples approach, excluding or making adjustments for certain features, such as a swimming pool or a finished basement. And generally, a foreclosure isn’t used as a comparison for a standard sale.

But in some areas, appraisers like Scheri contend they are only sizing up homes according to the reality of the market, though they concede its becoming increasingly harder to pinpoint what a home is worth.

Home prices in many large metro areas, including Los Angeles and San Diego, hit bottom earlier this year and are recovering, data shows. Yet there are many neighborhoods across the country where foreclosures and other financially distressed sales are still rising.

“It used to be a very infrequent thing that you did an appraisal and the value wasn’t supported,” says Scheri, who is based in San Diego. “Now, it’s more common than not.”

So, if you’re trying to sell your home in a neighborhood where foreclosures and short sales are predominant, an appraiser could determine your home is actually worth less than what some buyers may be willing to pay.

Part of the problem, critics contend, is that many real-estate appraisers are now hired under new industry rules. Designed to limit conflicts of interest that can bias an appraisal, the rules bar mortgage brokers from ordering appraisals themselves, forcing them to do so through a mortgage lender.

Lenders may order appraisals through in-house staff or appraisers hired by outside firms known as appraisal-management companies. But neither may talk to the appraisers about the value of the property they’re evaluating.

The result, however, can mean that low-cost appraisers are hired from outside the area and don’t have the local knowledge to find homes that can be a better benchmark for regular homes.

Chris Heller, agent-owner of Keller Williams Realty in northern San Diego, recently had the sale of a home nearly thwarted for the second time because of a low appraisal.

The three-bedroom, two-bath house in the Poway suburb of San Diego was appraised for $55,000 less than what the buyer agreed to pay. The seller wasn’t willing to drop the price to $400,000, but knocked off $20,000 when the buyer agreed to come up with $35,000 in cash.

“The seller is taking less because of the appraisal,” Heller said, noting that almost all of the comparable homes used to gauge the property’s value were distressed sales.

Still, the buyer is paying a premium not to have to deal with the risks involved in buying a foreclosed home or a short sale, which can take several months to close.

So, should distressed homes sales be compared with other homes? Is one inherently worth more than the other?

A new analysis of foreclosure and nonforeclosure sales by Zillow.com found that even when most of the market is made up of bank-owned homes, nonforeclosures sell for as much as 30 percent more. Another study by Harvard’s Joint Center for Housing Studies came up with a similar conclusion.

In Las Vegas, which has one of the highest foreclosure rates in the nation, the median sale price for bank-owned homes sold in September was about 23 percent less than other types of properties, according to the Zillow study.

“There are two markets, two very distinct markets,” said Zillow economist Stan Humphries.

That doesn’t mean foreclosures don’t weigh down the value of nearby homes, although there’s loud disagreement on how much.

The Joint Center for Housing Studies examined home sales over 20 years in Massachusetts and found that a foreclosure within less than 100 yards of a home lowers the price of that home by 1 percent.

So it appears that in neighborhoods with high foreclosure rates, values for all homes are being pulled lower than in areas where there are few or none. That means you can live in one area of Las Vegas and values can be down twice as much as they are in another neighborhood just a few miles away.

When it comes to appraisals, that leaves a lot of room for interpretation.

Seattle Real Estate Tyler Freed

US Treasury sets guidance on housing short sales
Mon Nov 30, 2009 4:15pm EST

More Business & Investing News… NEW YORK, Nov 30 (Reuters) – The U.S. Treasury on Monday set guidance on a plan for mortgage companies to use “short sales” and other loan modification alternatives to stem a rising tide of foreclosures.

The Home Affordable Foreclosure Alternatives Program simplifies the procedures for completing short sales, a growing practice in which a house is sold for less than the principal owed on existing mortgages, according to an announcement on the Treasury’s website.

(Reporting by Al Yoon; Editing by Dan Grebler)

((albert.yoon@thomsonreuters.com; +1 646-223-6347; Reuters Messaging: albert.yoon.reuters.com@reuters.net))

Seattle Real Estate Tyler Freed

Time for our September update on Foreclosure activity in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary: September 2009 King: 796 NTS, up 31% YOY Snohomish: 421 NTS, up 42% YOY Pierce: 479 NTS, down 11% YOY Not surprisingly, as the newly-mandated 30-day pipeline begins to fill up, foreclosures seem to be resuming their upward trend across the Sound. It’s interesting to note that as of the end of the day yesterday, Trustee Deeds (the actual re

Seattle Real Estate Tyler Freed

Panel Says Obama Plan Won’t Slow Foreclosures In a report mild in language but pointed in substance, the Congressional Oversight Panel — a watchdog created last year to keep tabs on taxpayer bailout funds — said the administration’s program would, “in the best case,” prevent “fewer than half of the predicted foreclosures.” The report rebuked the administration for failing to shape a program that addressed the most significant engines of the foreclosure crisis — soaring joblessness and exoti

Seattle Real Estate Tyler Freed

Bulk REO Investing In Today’s Market – lakefrontlandandlots.com 10/07/2009 Bulk REO Investing is proving to be one of the most lucrative fields of investment during 2009 and beyond. Bulk REO Investors profit by purchasing groups (commonly called portfolios) of properties from lenders who have repossessed the properties and have urgent need to release pressure from their balance sheets. Real Estate Investing In Today’s Market – financeandmoneyarticles.info 10/07/2009 Bulk REO

Seattle Real Estate Tyler Freed

Los Angeles Foreclosures Jump 69 Percent over Q4 2007; Miami Foreclosures Increase by 18 Percent and New York City by 25 Percent Says PropertyShark.com Report

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Seattle Real Estate Tyler Freed

May 2008 Foreclosure Report Issued by PropertyShark.com ; Los Angeles, Miami, Seattle and NYC Foreclosures All Up 50-233 Percent over May 2007

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Seattle Real Estate Tyler Freed