Wednesday, August 29, 2007

Real Estate and Mortgage Market

A former colleague of mine, turned realtor, sent me this to post for him. Good stuff...

Mortgage Market Woes
By Bryan Pearl

We are expecting a new report on housing from NAR this month.
Most everyone has figured out we have been in an over-heated housing market for a long time. Are we in a melt-down? I have heard everything from complete economic crash, to mild correction, as the description for what we are going through.
I think it is partly both, and here is why.

We have become a society so focused on profit we see what appears to be wide swings. The stock market correction of 2000 took six years to come back to solid strong record-breaking years. We don’t really notice conditions until they are bad. Well, they are bad now. Some analysts are predicting a correction of upwards of 30% reduction in home values.

For mortgage and banking markets this is practically a meltdown. A good indicator is when the largest mortgage lender is talking bankruptcy. The mortgage industry has been practically giving mortgages to anyone who could sign their name on the dotted line, and that is bad business.
While all this money has been floating around freely everything has been good. Many consumers I have talked with are financed to the hilt buying new cars and taking vacations on the equity of their greatest investments. The money supply has dried up, and with it, will come an avalanche of foreclosures and bankruptcies. The savvy investor will also be there to help clean up this mess at the fire sale.

In June existing home sales fell 3.8% nationwide from almost 6 million units in May. It is the lowest since November five years ago. The greatest decline has been in the Northeast and in the West, with the least amount of decline in the South.

In June, houses did appreciate by 0.3% after several months of decline. Over all the housing numbers have improved slightly creating some hope for the industry. The real thing to watch is the regulating of the money supply. As bank standards tighten, they are trying to make themselves more stable. This requires tighter lending controls. The average person will not be able to get money out of their homes as they did just two months ago. The tighter money supply will slow down purchases and new construction projects.

Like all markets this one will return. This is no different than the stock market. There are winners and losers in every industry and investment. You can still make solid investments. The rental market will get stronger as we see foreclosures climb. You can get many of these properites for cheap prices.

Watch the markets and make wise investments. By watching the numbers closely you can begin to discern market direction. Be careful and make solid smart investments.

Bryan Pearl is an expert in Huntsville Alabama Real Estate.
He is with the second top producing company for Huntsville Homes for sale, Keller Williams Realty.

Friday, August 17, 2007

Los Angles Photographer Can Help Realtors Sell

Ed Carreon, Architectural Photographer
A friend of mine, Ed Carreon, has a couple of websites promoting his photography business, and

we conferred long ago about his search placement and such. At the time, I had suggested that he might consider getting a little more involved with building and architectural photography, since the real estate boom was going strong and I knew that my folks were always needing good photographers.

Ed and I talk frequently, and I'm embarrassed to say that I haven't really looked at his site in a while...just so much to do these days. And today for some reason I happened to end up on the page that he had made for this. To say that I was astounded would be understatement.

I know this guy is good. I've seen his work personally. He's even been the staff photographer at several of the PubCon conferences in Las Vegas for webmasters. But I've never seen these pictures before, and they are just AWESOME. If any of you real estate people are near Los Angeles, or even perhaps Las Vegas, you can probably sell your homes and commercial buildings just from his photographs.

I've done a little amateur picture taking for my Myrtle Beach condo guys, and I know how hard it is to get inside photos to reflect some of the beauty of luxury furnishings. But I guess that's why he's a PROFESSIONAL and I'm just a web marketer...:-)

I've put a couple of the photos here...but this doesn't do justice to the page. Do go and see what Ed can do, and if you need a photographer in the Los Angeles area, don't hesitate to find him.

He's worth every penny.

Ed Carreon Photography

Ed Carreon, Los Angeles Photographer Photos
Myrtle Beach Web Design

Wednesday, August 15, 2007

Great Agent Information for selling condos

From Realty Times, excellent article.

What You Need To Know To Sell Condos
by Blanche Evans

If you're a Realtor who doesn't know much about the condos, now's the time to brush up on one of the housing market's perfect solutions for many homebuyers. Here's fresh information designed to blow away those myths and prejudices that are still hanging on about condos that you can use to improve your condo sales.

Condos aren't just small houses -- any more than children are tiny adults. While condos are a form of housing that rises and falls like any other, there are some distinct differences in how condos as a market should be viewed.

Condominiums are a type of home ownership in which homeowners own individual units of a building or property, such as an apartment within a high-rise, or a single-family townhome in a community. They also jointly own common parts of the property, such as the grounds, parking lot and the building itself, if the condo is in a building. Because of shared ownership and responsibility, condos are frequently managed by a property management company hired by the homeowners association. Homeowners pay dues, usually one to four times a year, to fund the upkeep of the building and grounds, and pay employees such as bellmen, porters, and guards. Dues include payment toward immediate expenses and escrows for future maintenance, such as roof replacement, so that owners can avoid expensive special assessments.

Condominiums are designed to provide multi-family housing in densely populated environments, such as cities and vacation spots where land is at a premium, but there are also other considerations -- changing attitudes among homebuyers as to what constitutes a good home.

People are choosing homes to suit their lifestyles. In seeking condos, homebuyers likely want low-maintenance beauty and peace of mind; access to amenities they perhaps couldn't afford on their own, such as pools, spas and clubrooms; stronger security, both manned and electronic; and a sense of community with other homeowners nearby to socialize with.

In the past, when home buyers were dominated by married couples with children, condos weren't the preferred product of choice for families, unless they were located in highly populated areas where families had no other choice in housing to own, or they were second homes or vacation homes where occupancy periods would be brief.

But what has many Realtors still skeptical about recommending them is the fact that speculators tend to favor them and rising rental rates threaten homeowners who find that banks won't loan money to homebuyers in buildings where there are too many rentals. Worse, when a housing market falls, condos tend to fall harder and faster in value than single-family homes, causing desperate owners to rent their units, thereby justifying lenders' and Realtors' worst fears that condos are a poor investment.

But things change. Condos set housing records for 10 years straight, before falling 10.4 percent in 2006 says the Commerce Department. That's nearly two percent more than the existing home market fell, which is a high percentage for approximately 12 to 13 percent of all housing transactions. The reason? Condos are simply more volatile, but that volatility can be turned to advantage by smart Realtors.

"When developers and converters dump huge stocks on the market at the same time that sales slow and investors pull out, naturally prices will fall -- but it's not an indicator of what the single family market will do," says Walt Molony, senior associate and spokesperson for the NAR.

Why? Homebuyer demographics are changing, no one's making any more land, and many homebuyers prefer multifamily home environments. That's why condominiums today are full of mythbusters. According to a recent study by the Mortgage Bankers Association, most condos are in single-family structures like townhomes, they're in the suburbs, not the city, and they're more than two thirds occupied by owners, not renters.

There's more. Consider the following:

In 2006, the number of married households fell below the 50 percent level to 48 percent, according to the U.S. Census, meaning more singles and non-traditional households are the majority of housing consumers.

Households are increasingly headed by singles. Young people are delaying marriage. The Census Bureau says that women today marry after age 26, while women in 1960 married at age 20. Half of marriages end in divorce.

Single women homebuyers make up nearly a quarter of the market, according to the National Association of Realtors, accounting for nearly 30 percent of total homeowner growth between 1994 and 2002, according to the Harvard Center for Joint Housing Studies in 2003.

Single females make up 42 percent of condo buyers. Single males make up 20 percent, while married couples constitute 30 percent of condo buyers.

The Tax Relief Act of 1997 has introduced unprecedented liquidity and mobility to the housing market, making it possible to own a home, occupy it for a minimum of two years, and move out in two years without taking a tax hit.

NAR's Profile of Home Buyers and Sellers 2006 says that condo buyers (median age: 43) are older than single-family home buyers (median age 41.) "The median age of condo buyers skews older because condos attract the bookends of the housing market -- first-time buyers, and empty-nesters (boomers) and retirees, who no longer need a large single family home but like lots of amenities in a simpler lifestyle," explains Molony.

Lenders have relaxed lending standards to allow younger and single homebuyers to buy homes by removing obstacles (such as differing credit standards for divorced women,) and creating a wide variety of adjustable or interest-only hybrids that don't penalize borrowers for short-term ownership. This has boosted the first-time homebuyer market as well as single female homebuyers.

Condominium buildings offer products not easily found in single-family homes, such as one-bedroom, one-bath configurations which appeal to singles and first-time homebuyers. "Among all condo buyers, the percentage of first-time buyers are highest among single-female households (59 compared to 48 percent among all condo buyers," says Molony.

One out of ten homeowners owns a second home, often a condominium in the city or a favorite vacation spot.

The tenure in condos is shorter (4 years in buildings with 5 or more units), while the median for detached single family homes is 6 years. Realtors who know this won't freak out when multiple units go up for sale in the same building.
All of the above suggest a strong market for condo sales, which is a good reason for Realtors to know as much as possible about them.

But no statistic speaks as loudly as this one to homebuyers growing preference for multifamily living:

"While the median price per square foot is highest for the condos ($169 compared to $118 for all homes purchased), median income of condo buyers is lower than the median income of all buyers ($59,100 vs. $71,800)," says Molony. "The price per square foot of condos is higher than single family homes because there is a concentration of condos in higher-cost housing markets. Within a given area, condos typically cost less than single-family homes -- with the exception of upscale units in urban cores."

Condos aren't always about buying something smaller that's cheaper. They're about choices.

Published: May 29, 2007
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