March 21, 2011 by Mimi Miller.

http://www.bizjournals.com/denver/news/2011/03/16/steep-drop-for-colorado-urban.html

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March 21, 2011 by Mimi Miller.

Daily Real Estate News | March 15, 2011 | Share
What Buyers Want in Homes Today
Buyers have a long list of what they want when home shopping, but one of their biggest desires: A good deal.

“And no matter where a seller prices their property, they’re looking to negotiate,” says Patricia Szot, president of the MetroTex Association of REALTORS®.

But that’s not all they want. Bankrate.com recently asked real estate professionals to chime in on the top desires of their buyers when home shopping. Here are four things that made the list of top home buyer preferences:

1. Homes that are in good condition. “There’s not a lot of flexibility in that,” says Ron Phipps, president of the National Association of REALTORS®. Many buyers now take the attitude: “I’d rather spend the money getting into the house” and not have to spend more money later, Phipps says. One of the major reasons is that “buyers have limited amounts of cash,” he adds. “Even if they want to do a fixer-upper, they don’t have the money to do it.”

2. A bargain with incentives. Buyers are looking for a good deal, even when considering bank-owned properties, says Joan Pratt, real estate broker with RE/MAX Professionals in Castle Pines, Colo. “They want the short sales and the foreclosures and they want them to look like they’re owner-occupied,” she says. “They don’t want to paint. They don’t want to put carpet in. They don’t want to clean.”

And they aren’t only asking for a low price but they also want incentives to buy too. As such, sellers are offering everything from gift cards for new furniture to paint to financial assistance at closing.

3. Outdoor living areas. Homes with screen porches, outdoor kitchens, two-way fireplaces are becoming increasingly competitive in the marketplace as more buyers say they want more outdoor living space.

4. Open kitchens. “The wall between the kitchen and the family room is evaporating,” Phipps says. “The kitchen is becoming part of the gathering space.” (See Buyers Want Cozy, Connected Kitchens)

Source: “9 Items Homebuyers Desire in 2011,” Bankrate.com (March 2011)

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January 25, 2011 by Mimi Miller.

http://styledstagedsold.blogs.realtor.org/2011/01/14/hot-design-trends-debut-at-international-builders-show/

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November 4, 2010 by Mimi Miller.

From: BUILDER 2010 Posted on: October 15, 2010 2:54:00 PM
Rental Markets Are Picking Up Again
The country’s weak employment profile is spurring demand.
By:John CaulfieldRelated ArticlesSave / Share

FIXER-UPPER: The real estate investment services firm Marcus & Millichap recently brokered a deal for this building with 46 rental apartments in Union City, N.J. A dearth of new construction makes older prpoerties like these more attractive to investors, especially as the rental market continues to rebound.

Credit: Marcus & Millichap
Last week, Phoenix Realty Group (PRG), a national real estate investment manager with offices in New York and Los Angeles, paid $24.2 million for 548 distressed rental units in East Orange, N.J. That property, which consists mostly of one- and two-bedroom apartments, will be operated and upgraded by PRG’s partner in this deal, Newark, N.J.-based TreeTop Development.

Around that same time, Marcus & Millichap, the nation’s largest real estate investment services firm, was brokering a $15 million sale of Fresh Ponds, a 120-unit, 110,760-square-foot multifamily complex on 24 acres in South Brunswick, N.J.

These deals reflect an ongoing flurry of acquisition activity in the rental apartment sector, not only in the Garden State but also across the nation. For example, Avalon Bay Communities this month paid $146 million to acquire a 684-unit apartment community in Gaithersburg, Md., and a 348-unit community in Owings Mills, Md. On Sept. 30, Grubb & Ellis Apartment REIT closed on its purchase of the gated Mission Rock Ridge Apartments in Arlington, Texas, consisting of 225 one-, two-, and three-bedroom apartments.

Industry officials and observers assert that the outlook for rental is as strong as it’s been in several years. And the current levels of multifamily production—between 300,000 and 400,000 units in 2010, projects NAHB’s chief economist David Crowe—still fall short of anticipated demand, presenting growth opportunities for investors, property management companies, and even home builders that might be considering diversification.

Market dynamics are turning in rental’s favor, at a time when homeownership is precarious. Last week, the real estate website Trulia.com published its latest Rent vs. Buy Index, which ranks cities by their mortgage-versus-rent costs. While it’s still cheaper to buy a house in markets such as Miami, Detroit, and Phoenix, where home values have plummeted and foreclosures have soared, Trulia calculates that renting makes more sense in places such as New York, Seattle, Fort Worth, Omaha, Sacramento, Calif., Kansas City, Portland, Ore., San Diego, and San Francisco.

The recession has made homeownership less tenable for younger adults, 2.2 million of whom moved back with their parents between 2005 and 2009. In its Outlook report, Marcus and Millichap estimates that up to 4 million Echo Boomers could become part of the prime renter cohort between now and 2015.

That burst, if it does occur, could lead to unit shortages and higher rents over the next few years. In fact, that seems to be happening already. MPF Research, the research arm of the National Multi Housing Council, reported recently that during July through September, same-store rent changes nationwide turned positive for the first time in two years. MPF estimates that rental apartment absorption through the third quarter of 2010, at 283,000, was “one of the most robust totals recorded over the last two decades.”

“We’re in the throes of a recovery,” said Ryan Severino, an economist with Reis, a leading market research firm, during a conference in Las Vegas last week sponsored by Multifamily Executive, which is owned by BUILDER’s parent company Hanley Wood. “I don’t recall a time in the last 40 years that I’ve been more optimistic about our prospects over the next several years,” added another panelist, Steve Bell, CEO of Greensboro, N.C.-based Bell Partners, a diversified real estate investment and management company.

However, only 29,000 new apartments were added in the second quarter, down 18% from the same quarter a year ago, according to Marcus & Millichap, which projects that less than 30,000 more rental units would come online in the second half of the year. The nationwide apartment vacancy rate, at 7.8% in the second quarter, is expected to fall to 7.4% by the end of the year, and asking rents are expected to rise by 2% to 3%.

The buying and selling of rental properties in the second quarter hit its highest level since late 2008. Demand for these properties is ongoing, especially in markets such as New Jersey, where there hasn’t been a lot of construction activity, and where the rental vacancy rate is 5.3%. “If we start to see some job creation, I think developers are going to jump back in,” says Mike Fassano, vice president for Marcus & Millichap’s office in Elmwood Park, N.J. He’s also seen some evidence that financing is “loosening up,” especially from community lenders.

Keith Rosenthal, president of Phoenix Realty Group, agrees that more banks are now willing to release assets they’ve foreclosed on, which in turn is creating more acquisition opportunities.

Three components attracted PRG to the building in East Orange it acquired, he explains: The banks and agents who owned this distressed property were eager to sell; the building was under-occupied and needed physical improvements, so PRG could improve its net operating income through upgrades and fuller occupancy even if overall market conditions don’t improve immediately; and it fit PRG’s niche, which is acquiring apartment buildings in urban centers with access to mass transit for workforce renters, whom it defines as families with household incomes 80% to 200% of the area’s median income.

Rosenthal says his company has several other buildings under contract in both the New York and Los Angeles areas that should close in the fourth quarter of this year. He expects demand and rents to keep rising, primarily because production of new rental properties remains low. “Construction loans are being done, but on a very selective basis.” So far, at least, he’s seen no evidence of home builders wanting to jump into rental, which he says is “a totally different business” because rental properties need to be managed and maintained. Rosenthal also isn’t seeing conversions of existing single-family housing stock into rental, at least not as a strategy by banks or developers.

John Caulfield is a senior editor for BUILDER magazine.

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November 4, 2010 by Mimi Miller.

Mortgage Purchases Rise
Applications to purchase homes rose 1.4 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, purchases increased 0.2 percent last week compared to the previous week, but were down 28 percent compared to the same week a year ago.

Overall, mortgage application volume declined 5 percent over the last week on a seasonally adjusted basis because refinances decreased 6.4 percent.

Interest rate changes were mixed.
Average 30-year fixed-rate mortgages increased to 4.28 percent from 4.25 percent, while the average rate for 15-year fixed-rate mortgages decreased to 3.64 percent from 3.67 percent.

Source: Mortgage Bankers Association (11/03/2010)

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October 28, 2010 by Mimi Miller.

http://www.realtor.org/rmodaily.nsf/pages/News2010102704

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August 19, 2010 by Mimi Miller.

By Kathleen LynnPrint Article Print Article

RISMEDIA, August 19, 2010—(MCT)—As director of the Joint Center for Housing Studies at Harvard, Nicolas Retsinas has had a front-row seat for the real estate market’s dramatic boom and bust. After 12 years at the center, Retsinas left the director’s job to teach housing finance at Harvard Business School. He spoke recently with New Jersey’s The Record about why buyers got mortgages they couldn’t afford, and why real estate matters so much.

Were you surprised by the magnitude of the housing bust and how long it has lasted?
Nicolas Retsinas: Yes, by the severity of the housing bust but even more so, how credit just seized up.

When do you see any kind of loosening-up of the credit markets?
NR: I would suspect we’re likely to see the same dominance of the government at least through the balance of this year. One of the big issues facing public policymakers is what to do with Fannie Mae and Freddie Mac. If we want to attract private capital, not only from this country but also global capital, some part of that credit risk has to be borne by the government.

One of the biggest factors in the bust was that credit standards got too easy. Buyers who weren’t qualified got mortgages. Do you have any ideas about why this happened?
NR: In part, people were granted mortgages not on their ability to repay the mortgage, because it was clear that wasn’t going to happen. But there was an expectation that even if they couldn’t pay, the future increase in the value of the property would end up being the collateral for that loan. For a long time, that was a formula that worked. But we reached a point where even with these exotic—what turned out to be toxic—mortgage terms, they just weren’t affordable.

What has been the biggest human cost of the housing bust?
NR: The biggest human cost is the millions of people who have lost their homes. One can look back coldly and say, “Well, maybe a lot of them shouldn’t have bought a home in the first place.” But a lot of people lost their homes the old-fashioned way: they lost their jobs.

Who has benefited from the bust?
NR: Beside the investors who played with different sorts of financial products, I think the key winners probably have been first-time home buyers, who have maybe longed to buy a house but could not afford to. Now we’ve essentially transferred wealth from existing homeowners to new homeowners.

Some observers have been disappointed by the number of homeowners helped by the federal loan modification program.
NR: In defense of the government, when they designed this program 18 months ago, they based it on a premise that the principal problem in the housing market was egregious mortgage terms. And if those mortgage terms could be reset and recalibrated to more typical mortgage terms and could be afforded, through subsidy or whatever means, by the borrower, that would stem the hemorrhage of the defaulted loans and foreclosures.

As we moved into 2009, the problem was less about the subprime loans and more the traditional reason why people have problems making ends meet—which is that they lost their jobs. If you modify the loan so that your monthly payments are only 31% of your income, and your income is zero, that’s probably not going to work. The problem outran the solution.

Will home-price appreciation return anytime soon?
NR: The next couple of months will be an interesting test because we’ve had the withdrawal of the home buyer tax credit. I think we’re likely to have a sort of trawl-along-the-bottom type of recovery, a little bit lumpy for a year or so.

Congress is looking at new financial regulations. What effect are these likely to have on mortgages?
NR: I think it’ll make it more difficult to go back to the Wild, Wild West. There will be a new consumer financial agency, and I think that will be more likely to look at some of these (mortgage) products. I think that’s going to be critical. RE

(c) 2010, North Jersey Media Group Inc.

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July 13, 2010 by Mimi Miller.

The Role of Appraisal Inflation in Loan Securitization

By George W. MantorPrint Article Print Article

RISMEDIA, July 13, 2010—Street level appraisers have been getting a lot of heat for their role in the rise and collapse of real estate values and most of it is unfair. Without exception, every appraiser I have ever met was professional, direct, and considered the facts when arriving at his or her opinion of value.

That isn’t to say that there aren’t dishonest appraisers. I’m certain that just like any occupation, the percentage of bad apples probably mirrors the population in general.

And, there is no question that there is pressure, both subtle and not so subtle, to hit the “right number.” Opportunities certainly exist for appraisers to profit from either inflating or deflating values. But, blaming them or suggesting that they were responsible for the crash, fails to acknowledge the parties who had the most to gain from inflating values—like Wall Street.

Much of the misunderstanding emanates from an inaccurate view of the residential appraisal and its role in financing. The appraisal is not undertaken to determine the value of the property so much as to satisfy the underwriter that the risk is acceptable.

People are often shocked to discover that the appraiser already knows the contract price. But, the appraiser’s purpose is simply to verify that on the day in question, comparable properties were selling for similar prices.

It is but one piece of the financial intermediaries’ efforts at controlling risk. If the ability to collect on credit default swaps was contingent on a certain percentage of loans failing within a particular pool, then controlling risk is vital.

The appraisal is also part of the documentation used to support the quality of loans in a securitized pool. The financial intermediary wants the investor to believe that the value of the security is sufficient to justify the risk.

Comparable properties or “comps” are the meat and potatoes of the vast majority of residential appraisals.

There are other types of appraisal methods employed by lenders depending on either the uniqueness or complexity of the property being offered as security. But, for most residential lending purposes, underwriters rely on the comparable property method.

Most of the housing stock of the last fifty years has been tract development, both vertical and horizontal, offering only a few variations among thousands of homes.

Large areas of homogeneous housing make valuing homes fairly simple. They are a commodity. If they are clustered together, one can quickly see what a buyer in that area has to choose from.

That’s it. No complex algorithms or cryptic equations, just the principle of substitution. And that can change overnight if certain events occur.

Anything that brings more homes to market than the natural pace of activity can absorb will drive down the prices that buyers will negotiate.

One of the remarkable things about the period from 2004 to 2007 was the buyer’s willingness to pay more and more, and doing so because they believed that the replacement cost, i.e. the price of new construction was rising dramatically.

It is no mystery why the states that had the greatest amount of large scale new home construction also had the fastest appreciation rate despite the fact that you would think that all that over-building would keep prices flat or drive them down—but, no.

But, Wall Street had even more to gain than builders. Inflated values were a solution to a lack of borrowers. Demand was so great for the pools that they had to find a way to expand the market, and trigger the defaults.

They keep getting away with saying they didn’t know this would happen, and I keep saying that every consequence of this financial debacle was not only known to them, it was planned for, lobbied for, implemented by them in contravention of so many laws and regulations that run the gamut from local, city, county, state and federal that it suggests that there is literally nothing they would not do to make a buck.

They absolutely knew the consequences and got rich from them.

Remember, risk analysis is what they do. They are researchers, social scientists, accountants and lawyers.

They analyze risk and, as part of their business model, they are always keenly aware of value trends. They knew that one of the factors that would influence defaults would be a steep drop in values that would prevent the refis they promised and contribute to defaults across all pools of loans.

You may wonder, what difference does it make if they knew or didn’t know the consequences? It’s an element of proving fraud.

A misrepresentation is fraudulent if the maker (a) knows or believes that the matter is not as he represents it to be, (b) does not have the confidence in the accuracy of his representation that he states or implies, or (c) knows that he does not have the basis for his representation that he states or implies.

We keep forgetting the tool in all of this was information. The financial intermediaries had it and they studied it, and their denials that they knew this would happen fail in the face of their own research.

I found an interesting piece of that research, a little 20 page document called innocuously enough, “Global Economic Paper No. 177.”

It is produced by none other than Goldman Sachs Research Staff and its subject is Home Prices and Credit Losses.

“Regarding mortgage credit performance, feeding the predictions from the home price sales model into the mortgage loss model…”

Did you get that? They actually have pricing and default models. They know exactly what a home is really worth and they don’t even need an appraiser.

They knew exactly what circumstances were contributing factors to default.

They knew that the inclusion of certain terms in mortgage loan documents would cause foreclosure rates, which historically ran around 1% annually, to skyrocket to over 10%. Currently, as of mid-July 2010, nearly 13% of home loans are in default.

As a result, about a quarter of American homeowners have negative equity in their homes. Had the values been real, they would have held.

They knew that there were not nearly enough borrowers to place into loan pools to satisfy the demand.

They knew that wages had stagnated and affordability was becoming prohibitive to further lending.

The key to it all—inflated appraisals.

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May 25, 2010 by Mimi Miller.

Avert Disaster: Listen to Your House
10 red flags that signal your home’s weakest links
By Erik Forbes

Just like a car that sputters when something under the hood is amiss, houses send out warnings of their own. Protect your investment—not to mention your security—by learning some of the warning signs and seeking out help. Be sure not to blow off the red flags: Left untreated, these small problems can become big, expensive disasters.
Red Flag What’s Going On Get Help
1. Your water bill suddenly increases for no obvious reason
If you haven’t left the hose running for a few days by mistake, you may have a water leak someplace underground where it cant be seen. To confirm, shut off everything in the house and check the water meter reading over an hour. If the flow continues, you have a leak. Plumbing How-Tos
2. Slow flushing toilets and sluggish drains
Because toilets dump a lot of water down waste lines quickly they are usually the first to exhibit signs that there is a clog or trouble with a septic system. If other drains are slow too, you can be sure that it is the whole system that is not working properly and not just one cranky fixture. Untreated clogs can become a big, smelly mess. Unblocking a Cleanout
Emergency Drain Fixes
3. Rusty nails, dark wall stains and musty odors, but no leaks
Water damage does not need a leaky pipe or roof to occur. In many homes, problems with poor ventilation can cause water damage that is every bit as bad as a leak from a burst pipe. In fact, it can be worse because it often goes undetected longer and can cause health problems. Reducing Moisture Problems
Environmental Protection Agency
4. Doors and windows that will not close or keep opening, and mysterious cracks that keep getting larger
Sure your house could be haunted, but it’s more likely that your home is settling unevenly. Small expansion cracks in concrete or plaster are usually nothing to worry about but if there are more problems you should call a structural engineer. When it’s time to call a structural engineer …
5. You continually have to relight a pilot light on an appliance
The thermocouple is probably bad. (This is the safety device that shuts off the gas to an appliance when it senses that the pilot light is no longer burning.) A thermocouple is a “fail safe” device—that is, when it goes bad it performs its intended function regardless of need. So although your pilot may be on, the wayward thermocouple will still shut it and the gas off. Find someone to fix your furnace
6. Your clothes come out of the dryer too hot or still damp
Often lint will clog dryer vents that are too long or kinked. In some cases this will even lead to fires. To solve the problem dryer vents should be kept as short as possible and cleaned at least once a year Dryer Vent Maintenance Could Save Your House
7. Flu and allergy like symptoms whenever you are at home
Dirty air filters and dirty ducts in your home’s heating/cooling system can fill your home with sickening mold and bacteria. Other causes may include adhesives and chemicals in furniture and rugs and a lack of fresh air circulating into your home. Environmental Protection Agency
8. Hot switches and plugs, sizzling electric boxes, dimming lights and tripping breakers
These are symptoms of a seriously overburdened electrical system. Switches and plugs that get hot when you use them, sizzles and buzzes in electric boxes, lights that dim when you turn on other appliances and breakers and fuses that continually need to be reset or replaced are red flags saying you need to upgrade your electrical system. Unchecked, this problem could escalate into a fire hazard. Charting Electrical Circuits
9. Small holes in wood surfaces, mud tunnels along foundations, and sawdust
Sounds like termites are taking over. These pests are a problem everywhere, but especially in southern states. Because termites do most of their damage where it cannot be seen—inside the wood—you should always be on the lookout for warning signs. Have your home inspected if you suspect these monsters are present. Warm Weather Pests
10. Small piles of sand around roof drains and gutters
Just like sand in an hourglass, when an asphalt composite (tar paper) roof starts to go bad, the little grains of sand stuck to the paper start to fall off and flow down. When enough grains have fallen off that you see bare patches, it’s time for a new roof. Roof Maintenance Tips
National Roofing Contractors Association

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May 5, 2010 by Mimi Miller.

America’s Top Places to Live for 2010
Print Article
RISMEDIA, May 5, 2010—The three most important things to remember when moving and buying a new home are: location, location, location. As potential home buyers start looking for new homes, RelocateAmerica.com, a leading website in providing relocating consumers access to resources for their upcoming relocation, has released its 13th annual list of “America’s Top Places to Live for 2010.”

The “Top Places to Live” list features several breakout categories such as the Top 10 Recovery Cities, Retirement Cities, ‘Earth Friendly’ Cities, Recreation Cities and Small Towns.

New for this year, the Top 10 Recovery Cities focused on areas poised for swift economic recovery. Many of these communities did not see the massive real estate bubble that formed in other areas and have a more diverse economy.

To be considered for the list, a community is nominated at RelocateAmerica.com. From the thousands of submissions, RelocateAmerica.com’s editorial team reviews the nominations and selects the top places to live, as well as the Top 10 for each smaller category, based on interviews with local leaders; feedback from residents; and economic, environmental, education, crime, employment and housing data for the past year.

“Given the tough economic times our nation is facing, home buyers have re-evaluated their priorities and are looking to relocate to communities that offer plenty of perks, but minimal hassle and cost,” said Peter Meyers, Vice President, Research and Content Development, at RelocateAmerica.com. “While some cities are facing a road to recovery that could take years, others are poised for a quick rebound – and already have seen growth. We wanted to highlight those cities that are on the road back to economic health.”

Top 10 Overall Cities:

1.Huntsville, AL
2.Washington, DC
3.Austin, TX
4.San Diego, CA
5.San Antonio, TX
6.Tulsa, OK
7.Charlotte, NC
8.Raleigh, NC
9.Boulder, CO
10.Minneapolis, MN
Top 10 Recovery Cities:

1. Huntsville, AL
2.Austin, TX
3.Las Cruces, NM
4.Washington, DC
5.San Antonio, TX
6.McAllen, TX
7.Billings, MT
8.Albuquerque, NM
9.Everett, WA
10.Boulder, CO
Top 10 Retirement Cities:

1.Ashville, NC
2.Bella Vista, AR
3.Green Valley, AZ
4.Sarasota, FL
5.Prescott, AZ
6.Tampa, FL
7.Greenville, SC
8.San Antonio, TX
9.Hot Springs Village, AR
10.Colorado Springs, CO
Top 10 ‘Earth Friendly’ Cities:

1.Portland, OR
2.Boston, MA
3.Madison, WI
4.Boulder, CO
5.Austin, TX
6.Chicago, IL
7.Minneapolis, MN
8.Fort Worth, TX
9.Ann Arbor, MI
10.Huntsville, AL
Top 10 Recreation Cities:

1.Boulder, CO
2.Santa Cruz, CA
3.Flagstaff, AZ
4.St. George, UT
5.Ithaca, NY
6.Corvallis, OR
7.Salt Lake City, UT
8.Stevens Point, WI
9.Wilmington, NC
10.Portland, OR
Top 10 Small Towns (<40K pop.):

1.Grinnell, IA
2.St. Augustine, FL
3.Fairhope, AL
4.Stillwater, MN
5.Summit, NJ
6.Ashland, OR
7.Batavia, IL
8.Ithaca, NY
9.Peachtree City, GA
10.Trumbull, CT

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