The real estate market has been hindered by shadow inventory since its collapse five years ago, but CoreLogic reported that the supply dropped in July.
The firm’s Shadow Inventory Report showed a six-month supply of 2.3 million units in July, a 10.2 percent decrease from a year ago when it was 2.6 million units. Of the 2.3 million units, 1 million are seriously delinquent, 900,000 are in a stage of foreclosure and 345,000 are real estate-owned.
“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing.”
Shadow inventory is believed to put downward pressure on home prices if it hits the market all at once, but experts don’t believe that will happen, according to the Orange County Register.
Michelle Lenahan of ForeclosureRadar told the newspaper that she doesn’t believe the shadow inventory will be dumped on the market in a single wave, but rather bit by bit.
Posted by: RET Staff
In March, roughly one-third of all sales were cash, meaning a large number of buyers are not dependent on lender financing, the sale of their existing home or a settlement that might be 45 to 60 days in the future.
Instead, they can act quickly and, in many cases, seek properties which can be bought today and occupied tomorrow.
To ready a home for sale in today’s marketplace, Forsythe says owners should consider six basic keys to selling success.
Six Keys to Success
1) Curb appeal counts. Most home buyers want homes which look great from the outside. It’s not just a question of curb appeal — it’s about perception. If a home looks good from the street, it probably means the property is ready for a new occupant without a lot of cost or hassle.
Buyers tend to pass on a home that doesn’t appeal to them from the street–not even bothering to look inside. An experienced local REALTOR® can show you how to generate the most curb appeal with the least cost.
2) A clutter-free home. With the new emphasis on cash sales and speed, owners must show homes which are free and clear of clutter. A clutter-free home will make interior spaces look larger and eliminates the need to get rid of stuff when you are in the throes of moving. It makes sense to donate or reduce clutter before a home is placed on the market — not only as a sales tactic, but also as a practical step toward relocation.
3) Working condition. Having your home’s systems in good mechanical condition is an advantage in today’s market. Most distressed homes can’t compete when it comes to such basics as working heating, plumbing and air-conditioning. Properties that can readily pass a professional home inspection are often easier to finance, and are generally more appealing to buyers who don’t want to face the unknown costs and delays sometimes associated with major renovations.
4) List and negotiate properly. According to Forsythe, “A seasoned REALTOR® can show owners how best to market a particular home according to such factors as location, price, condition and financing. Owners want to work with us because our experience brings value and confidence to a transaction, factors that are enormously important in a changing marketplace.”
5) Seek prequalified buyers. While many sales may be for cash, the majority still require financing. It would be frustrating to enter into a sales contract with a potential buyer who ultimately cannot obtain financing to purchase your home — meaning you have lost time — and potentially money — and then you have to start over. When a home is shown by appointment, the buyer should have a pre-qualification letter in hand.
Such letters from lenders are not binding, but at least show that the purchaser sat down with a loan officer and has some realistic sense of what he or she can reasonably afford.
6) Distressed properties. Roughly 30 percent of today’s home sales involve “distressed” properties — a term which includes short sales and foreclosed properties owned by lenders. You need to consider the distressed properties in your neighborhood when pricing and marketing your home. These properties typically sell at discount, especially in major foreclosure centers and sometimes require substantial repair and rehabilitation.
“Home sellers can compete with these offerings,” according to Forsythe. “There’s no question that a large number of distressed properties in a local market will impact prices, but price is not the only factor buyers consider. While distressed homes work for some purchasers, they’re not the right choice for buyers who want homes that offer move-in condition — homes in better shape that can often command higher prices.”
While the housing market is just in the beginning stages of a recovery, it’s still possible to successfully sell your home by making sure you’re catering to the kind of buyers in the market today, and by making sure that you — and your home — are ready to move as quickly as these buyers are.
To view the original article, visit RISMedia.com.
Hello and thank you for finding my blog!
I hope you have been well and enjoying the spring weather. I ran across this interesting blurb about the housing market along the Front Range of Colorado and thought I would share this great news with you. What I have experienced in this spring rush is the current market is “red hot” and I feel it’s a great time for both buyers and sellers. The inventory levels of homes for buyers to choose from are very low and I’m receiving multiple offers on homes that I have listed and the interest rates for buyers are still phenomenal floating around 4.0%.
Please click on this link and enjoy the good news.
If you are considering purchasing a home or selling your existing home please call me. We can discuss the current market conditions and if it makes sense to make a move. Thank you for your attention and look forward to speaking to you. Have a great spring.
Legacy Real Estate Group
Saw this great article from Nation Association of Realtors, explains “Echo Boomers” and the impact on your housing investment…
Daily Real Estate News | Tuesday, March 13, 2012
Aging Baby Boomers and their “Echo Boomer” children will significantly impact trends in the nation’s housing market over the next 20 years. In a new report released by the Bipartisan Policy Center, “Demographic Challenges and Opportunities for U.S. Housing Markets,” researchers at the National Association of REALTORS®, The Urban Institute, and the University of Southern California analyze key demographic trends and their likely influence on housing and homeownership in the United States.
Over the next two decades, the aging baby boomer generation will swell the nation’s senior population by 30 million. That demographic shift will likely help increase the supply of housing, since people over age 65 typically release much more housing than they absorb.
“The Northeast and Midwest are most likely to see a large number of older home owners selling their homes to younger home owners as the baby boomers age,” says NAR Chief Economist Lawrence Yun. “This increased supply could mean additional buying opportunities for Echo Boomers. That generation will absorb 75-80 percent of the available inventory of owner-occupied housing by 2020.”
The Echo Boom generation includes nearly 65 million people born between 1981 and 1995. NAR’s analysis illustrates the potential impact of economic and housing policy on this generation’s demand for homes as they come of age.
“Housing, jobs, and the economy are inextricably connected,” Yun says. “A strong recovery with favorable housing market conditions would encourage substantial growth in Echo Boomer households, which would help absorb the current vacant inventory and stabilize conditions for residential construction. Under a reasonable ‘middle’ recovery scenario, approximately 12 million new households will be formed over the next decade, requiring construction of up to 15 million new housing units.”
NAR President Moe Veissi notes that current market trends favor would-be home owners of all ages. “As the supply of rental housing continues to fall, rents are increasing,” he says. “At the same time, affordability for home owners is at a record high. For buyers who qualify and are ready to assume the responsibilities of owning a home, opportunity is knocking.”
Daily Real Estate News | Wednesday, February 29, 2012
Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBC’s “Squawk Box” recently that he’d “buy up a couple hundred thousand” single-family homes if it was practical.
Buffett said that’s because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now.
“Housing will come back, you can be sure of that,” Buffett wrote in his annual letter to shareholders recently.
Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon.
“People may postpone hitching up during uncertain times, but eventually hormones take over. And while ‘doubling-up” may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure,” Buffett said.
Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be “dead wrong.”
Source: “Housing Market Forecast Beyond 2012 From Warren Buffet,” International Business Times (Feb. 28, 2012) and “Warren Buffet on CNBC: I’d Buy Up ‘A Couple Hundred Thousand’ Single-Family Homes If I Could,” CNBC (Feb. 27, 2012)
Fluctuating home prices: What causes this?
When your property appreciates you have more equity to borrow against, and you’ll create a greater profit when you sell. Property values in the area shift for many different reasons, so how do you know what you’re buying right now won’t depreciate the day after you close? The most important thing is that you select a real estate agent in your area who knows the factors that influence local prices.
Location in a community – Most people want homes in the areas with the easiest access to features, such as our work and schools. So when it comes to retaining their value, these regions often appreciate better than others.
Recent sales – Your real estate agent should provide you with figures on the recent real estate sales in the districts that you’re asking about. You’ll want to know average time on market, selling versus listing price and more.
History of appreciation – In the last 5 to 10 years, have home prices increased or decreased? Does location or affordability affect how desirable the neighborhood is believed to be?
Local economy – Is there a good blend of job types in an area, or does it count on just one industry? Have businesses moved into or away from an area? Are local businesses hiring? Each of these items plays a part.
With so many predictions out there, it’s hard to decipher the real from the hype, but take a look at what US News Weekly has to say – pretty interesting article.
I personally have experienced extremely low inventory levels in the past few weeks. What’s that mean? It means there are NOT ENOUGH homes for sale. I know, it may sound like the opposite of what your used to hearing, but that’s why it’s so important to stay on top of the absolutely latest information.
This article ran in US News Weekly.
What’s in Store for the Housing Market in 2012?
Tanking home prices are likely to level off
By MEG HANDLEY
Is 2012 the year the housing market turns around? Of course, no one can say for sure, but plenty of economists say signals are pointing in the right direction.
“It has become increasingly apparent that the pieces for a housing rebound next year are beginning to fall into place,” wrote Barclays Capital analyst Stephen Kim in a recent report.
[Still, obstacles remain for the housing market. Here’s look at what to expect in 2012:
Home prices bottom out. Nationally, home prices have plummeted almost 24 percent off of their peak, and most economists expect prices to continue to decline as much as 4 or 5 percent before leveling out in late 2012.
While experts don’t expect a rapid conclusion to the saga of ever-declining home prices, “the trend of eroding expectations for the housing market recovery has come to a halt,” said Terry Loebs, founder of Pulsenomics, in a release.
Nationally, prices could start seeing a modest bump in 2013, but some markets are already recovering. “[T]hese national indexes mask the sizable variation in local house-price performance,” Frank Nothaft, chief economist at Freddie Mac, wrote in a recent report. “Some markets have appreciated over the past year and are likely to gain further in 2012, while those markets with higher vacancy rates and relatively large distressed sales will continue to see downward price pressure over the next year.”
Low mortgage rates. Rock-bottom low mortgage rates are likely here to stay, at least through the first half of 2012, in large part due to the Fed’s commitment to keep interest rates low to spur borrowing.
All bets are off, though, if politicians come to a decision on the qualified residential mortgage measure included in the Dodd-Frank financial reform act. “One of the most substantial things that will impact the market will be the definition of the qualified residential mortgage,” says Cameron Findlay, chief economist at LendingTree. “That has the potential of entirely changing the way mortgage rates are offered to consumers and it has the risk of raising rates by about 1.25 percent.”
Rising rents. The foreclosure crisis has converted millions of previous homeowners to renters and many would-be homebuyers have continued to stay on the sidelines and rent, waiting for prices to “hit bottom” before jumping into the housing market fray.
With more demand comes rising rents, a trend already being seen in many metro areas across the nation. Ultimately that can be a good thing for the housing market, since it generally tips more people into buying homes.
[“Rising rents have traditionally been a good factor for home sales,” says Lawrence Yun, chief economist at the National Association of Realtors.
Also, with rental demand heightened, real estate investors’ ears have perked up. With prices in many metro areas at historic lows, investors are taking advantage and scooping up properties to convert into rentals, Yun says.
Home sales pick up. The end sum of all these factors is an expected uptick in existing and new home sales next year. “There are so many improving factors that support home sales that we are calling for about a 5 percent increase in [existing] home sales in 2012 over 2011,” Yun says.
New home sales should also see an even bigger bump between 10 and 15 percent, Yun says, because the inventory of new constructions is so low. “The builders will be ramping up production,” he says.