Posts tagged Real Estate Market

New home sales nationwide up 25% year-over-year through July

Positive news for the nationwide residential market, but new home sales are only at 8% of market share, compared to a long-term average of about a 15% market share. Existing resales are trending more towards traditional sales as distressed inventory slows and prices improve from more buyer competition.

 

HARP2 saving small % of underwater mortgages

The HARP2 program, combined with the $25B bank settlement (providing $20B in loan modifications), will save some underwater mortgages from foreclosure and help long-term market stabilization. However, part of the bank settlement requires banks to adopt standardized (and hopefully more efficient) servicing and foreclosure processing measures. I think better processing, combined with the sheer volume of underwater mortgages is going to keep the short sale floodgates open for quite some time.

According to researchers at CoreLogic, a leading analytics firm, 11.1 million or 22.8 percent of all residential properties in the United States were worth less than the amount their homeowners owed on the mortgages used to purchase them.

The federal government originally rolled out the HARP program in 2009 to help homeowners who were underwater or near underwater. However, the program was recently broadened to reach even more borrowers. Originally, HARP applied to 895,000 underwater borrowers; and now HARP II is expected to help up to double that amount. According to HUD, about 400,000 homeowners have taken advantage of the program since it launched in April 2012…that’s less than 4% of underwater mortgages.

HARP II allows underwater homeowners who are continuing to make payments to refinance their loan.¬†The new program offers a number of advantages over the original HARP loans. First off, there is no loan-to-value or combined loan-to-value restriction on fixed-rate loans with terms of 30 years and under. In other words, it doesn’t matter how upside-down borrowers are on their mortgages. Previously, there was a cap that restricted borrowers who owed more than 125 percent of their home’s current worth from accessing the program.¬†In addition, an appraisal may be waived if a value for the home can be automatically generated, and the borrower only needs to have a 620 FICO score.

There are three main components to qualifying for a HARP II refinance loan. The first requirement is that the loan must be owned by either Fannie Mae or Freddie Mac. Second, the loan must have been sold to Fannie or Freddie before June 1, 2009. Third, a HARP II refinance must benefit borrowers in at least one of four ways:

  • Reduce the loan’s monthly principal and interest payment.
  • Reduce the loan’s interest rate.
  • Reduce the loan’s amortization term.
  • Transition the loan to a more stable type of loan. (i.e. interest-only to fully-amortizing, adjustable-rate to fixed-rate, 30-year to 15-year).

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The end of suburban sprawl?

John Mcllwain with the Urban Land Institute makes some interesting points for the shift from suburban sprawl to urban infill housing. If there is a permanent shift in housing demand, which municipalities here in San Diego County are going to embrace the concept and create new policies to entice developers to build these new housing projects?

Full article: http://urbanland.uli.org/Articles/2012/April/McIlwainSprawl?utm_source=uli&utm_medium=eblast&utm_campaign=040912

Some good excerpts:

“An analysis by¬†USA Today¬†of recent Census data¬†suggests that current population growth is occurring in the more central, closer-in counties of metropolitan regions while many outer edge counties have been losing population since 2006. This is a startling turnaround and the first time this has occurred since the end of World War II more than six decades ago.”

“Development is driven by market trends, and what studies are consistently showing is that the two major demographic groups, the aging baby boomers (boomers) and their kids, the echo boomers or generation Y (Gen Y), have a growing preference for more urban living.”

“Gen Y, the largest generation in U.S. history, now in their twenties and early thirties, would under other circumstances provide strong support for suburban housing development as first-time homebuyers. Due to the recession, however, their homeownership rate is falling. There are a mix of factors behind this including their bleak job prospects, the overwhelming student debt they carry, and a sensible desire on their part not to buy a home while they remain uncertain about where they will find jobs.”

“Government finances are another constraint to sprawl. Outer-ring counties are financially strapped; there are no funds for more roads or for other infrastructure development. This has been causing a shift in planning in these counties as they begin to look for more compact and sustainable development that has a smaller effect on their budgets.¬†”

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Flat news at the USD Residential Real Estate Conference

We attended this years 12th Annual Residential Real Estate Conference at the University of San Diego and here is a quick summary of the event.

For both California and San Diego, the forecasts for 2012 are predicting only a slight decrease in the number of distressed homes and flat prices due to

  • Low consumer confidence
  • Tough credit qualifications¬†
  • Lack of hiring by employers.¬†

We are not yet at a long term equilibrium in home ownership rates and many more “strategic” defaults are in the pipeline for the banks & a higher % of distressed inventory is selling as short sales vs. REO. This strategy is helping banks minimize their losses and are processing the short sales in half the time.

 

At GII We can attest to all of this through our deals. It appears that not only will our single-family renovate and sell strategy fit the market conditions in 2012 it may be time to start buying and holding more properties.

 

Highlights from Fannie Mae chief economist Doug Duncan, PhD:

 

  • New housing starts at long term rate for household formation by 2015
  • 20% of us home values are underwater
  • 0% growth in small business hiring in 2012
  • 1.6% growth in US GDP in 2012
  • Gdp is at prerecession levels but employment has not recovered and will remain at same level through 2012
  • 75% of americans think economy is headed in wrong direction
  • Reaching levels of historical % of ownership and rental properties
  • Long term home ownership level expected to be 65%

Highlights from USD Assistant Professor Ryan Ratcliff, PhD:

 

  • 12% unemployment rate in CA
  • SD nonfarm unemployment increased 7%¬†and has only declined 3%
  • CA average resale home price down 5% year over year
  • SD resale¬†prices have only declined slightly¬†year over year
  • $100-300k is the price range of most distressed sales in 2011 in San Diego
  • Best CA employment gains were in high tech and business services, worst¬†sectors were¬†manufacturing and construction.

Highlights from USD Associate Professor Alan Gin, PhD:

 

  • Best SD employment gains were in health care services, admin. and support services, real estate and hospitality (theme parks)
  • SD gained 24k jobs in 2011
  • SD unemployment rate dipped just below 10%
  • Gin’s local consumer confidence indicator is down 2% in SD
  • Job growth in SD expected¬†to be¬†15-20k in¬†2012
  • 5k home and multifamily units authorized in 2011 – up from 3k in 2009 and 3.5k in 2010
  • 2.5k of the 5k in 2011 were¬†multifamily (comprised mostly from a couple big projects – this is up 128% from last year

Burnham-Moores Center Presentation Slides

Presentations from the 12th Annual Residential Real Estate Conference,
December 13, 2011:

 

 

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Transitioning to Commercial Real Estate

 

This year I have been invited to present a  morning and afternoon class for the San Diego Association of Realtor s annual real estate expo.

SDAR is hosting it so there is no cost (sdar charged $45 for this class when I taught in their offices last year) but I will be up-selling ginzu knives and snuggies

What do you get the dad who has everything for Christmas? A superman Snuggie

What do you get the dad who has everything for Christmas? A superman Snuggie

at the end of the presentation. Nothing like having snuggies for the whole family as long as yours is of Superman!

 

Just kidding. Any of you who have been to these courses know I don’t sell anything except……. the fact I am a buyer and that providing you with tools I have learned and used you’ll consider calling Gabhart Investments when you have a great property for sale.

Ok here is the sch-peel

In this class you will learn if the highly lucrative, highly competitive business of commercial real estate brokerage is right for you. This business niche is not for everyone, so attend this class and find out if you are up to the challenge.

Commercial Real Estate Course topics

  • What is commercial real estate?

  • Market outlook

  • How long will it be before I make money?

  • What are the risks?

  • Do I need experience in commercial real estate?

  • How to leverage your existing client base to turbo charge your success

  • Choosing the right company to work for

  • Additional resources to get more information on commercial real estate

  • Here is what we are not covering

  • How to analyze a property (I will talk about what you may want to know/learn and where to get that information)

  • This is a good intro if you are thinking about making a time or money investment into the commercial side of things.

It’s not for everyone so don’t expect a bunch of ra ra sis boom ba that anyone can get rich doing it. I will give you a no nonsense run down of the business as I have experienced it.

I will say that if there is a way to get into Real Estate with little or no money (not little or no time) then commercial real estate may be a great avenue. This is what allowed me to transition from doing Real Estate as a hobby to a career that has been very rewarding (and challenging – NO GET RICH QUICK GRASS HOPPAH)

 

I will say

Real Estate gives me flexible hours (not short hours but time availability to do things like see my kids plays at school during the day etc.)

And work from my H2Office while not in my physical office. Check out this awesome set up.

Real Estate gives you the flexibility to work from anywhere!

Real Estate gives you the flexibility to work from anywhere! My second home office…

 

 

 

 

 

 

 

 

 

This Friday at the Town & Country Resort in San Diego
http://www.sdarexpo.com/html/exhibitorOpp/Breakout.html
10:00 a.m. – 11:15 a.m & 2:45 p.m. – 4:00 p.m

 

Also don’t forget to follow our real estate adventures by going to our individual property websites…….

For the most updated information & news on real estate & Gabhart Investments go to our facebook & twitter pages

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That San Diego is so hot right now!

University of Nevada¬†may have beat Boise State’s football team,¬†but noone is laughing about either town’s¬†real estate market. Meanwhile, San Diego is on the move and getting recognition as one of the healthiest residential markets in the country.¬†Mortgage interest rates and home prices are¬†starting to rise,¬†so we’re likely to see more buyers¬†enter the market¬†that want a quality turn-key home with appreciation potential.¬†

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San Diego ranks #1 for home buyers in 2011

Read the full article here: http://realestate.msn.com/article.aspx?cp-documentid=26601873&GT1=35006

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