Real Estate Trends Nov. 28 2011

Minorities and immigrants will drive growth in housing demand in coming years, a new study reveals. Within the next 15 years, researchers say they expect this population segment to drive demand for condominiums, smaller starter homes, and first trade-up homes. Also, this growing demographic is expected to represent a rapidly growing segment of the middle and middle-upper markets for housing, finds a new report, “The State of Hispanic Homeownership,” by the National Association of Hispanic Real Estate Professionals. “The Latin boom has been forecasted for years but we are now seeing the front edge of it and it has the potential to help the nation’s housing system get back on track if we can create a safe credit environment for new buyers to get into the market,” says Carmen Mercado, NAHREP president. Hispanics make up the largest minority group in the country and represent a significant portion of the 26 to 46 age group most involved in home sales. Plus, Hispanics tend to value home ownership more than other demographics. For example, according to a recent study, 57 percent of Hispanics say they consider owning a home a symbol of success compared to 33 percent of all Americans.

Source: RISMedia

Home Buyer Point of View

I’m sure you’ve heard by now, that it’s a great time to buy a house. But is it the right time for you or me to buy? I’ve been at my current home for 12 years and figured that it wouldn’t hurt to take a look. With many homes down more than 25% off their peak, I’ve been scanning www.realtor.com more seriously now rather than drooling over the used to be multi-million dollar homes for decorating ideas (okay yes, still just ideas).




Lots has changed since I moved 12 years ago, but I started off with my top 5 list once again only this time revised since of course I’m a little older and wiser now. I had a much longer list the first time around and surprisingly it came down to 2 items not in my top 5: an attached garage and a sun filled housed (if you’ve ever lived in the Midwest during winter time – then both items make perfect sense). Luckily, my mother was there to look at all the other important aspects of home ownership.



But before I actually get myself up and out to look at a house this time, probably like you, I’m leveraging modern technology by virtually touring my way across listing after listing hoping something survives the top 5 list. So what makes or break the deal on a house for me? Location, operational costs, financing, neighbors, location, and oh yeah, location.



The biggest consideration for most of us is of course the mortgage. Today, Islamic financing is well established and those of us interested in structuring our financing Islamically do have options. I, more than likely, will choose Ijaraloans, considering my brother works there and will walk me through the process. (Which of course he does for all his clients, but I’d like to think I’m special.)



After I know what I can afford, the next question is will I be able to stay in the home? Realtor.com does provide useful information primarily about the individual property to determine your operational costs. Yup, that’s estimating what your monthly budget will be. For example, I can usually find a tax assessment or recent taxes paid along with all those great photos, and other useful details like asking price. With the recent taxes paid, size of home, I can estimate what my monthly operating costs might be like gas/electric bills, yard maintenance, home owner association dues, and other incidentals.



So after the approval process and knowing what you can afford, what’s next? Location, location, and location. Yes, it’s true what the realtors all say; location is everything. 12 years ago school districts were number 1 on just about everyone’s list I knew. Today, not so much due to the recent popularity of home schooling, charter and other private schools. For me, more than the school district, I’m looking at crime rates, proximity to places of worship & relatives (I won’t say if that’s to be closer or farther to my endearing family!), cost of living and who my neighbors will be.



So, it’s on to neighborhood statistics. My new favorite website is www.propertymaps.com along with the local county web sites. What I love about this site is that it gives me one stop for all kinds of information about the local area including crime rates, schools and recent sales. In conjunction with www.realtor.com’s property tax and county web sites tax assessment I have a good idea about the basics both on the house and vicinity.



So, on to my potential neighbors. There are natural life cycles to every neighborhood and since neighbors come and go, you can only gauge whose currently there. But whether or not it’s a blue or white collar neighborhood, if kids are freely play outside, or if there a beer cans decorating the yard next door, you probably can get a sense of what you’ll be in store for. While I was looking for an attached garage and a house full of light, luckily for me, my mother was busy checking out the neighborhood. Whatever your criteria is for location, how do you judge this virtually?



Realtors always tell you go by the house you want at different times of the day. That’s a bit harder to do virtually, but after settling on a neighborhood, I then take my MLS to the test of google maps. I click the little man onto the address and take a walk through the neighborhood. Then, with the mental image of my surroundings, try to figure out if I’ll be waking up to sound of birds and the warmth of morning light or will it be barking dogs or punk kids and their garage bands?? (Not that’s there’s anything wrong with punk kids- I used to be one) Well, not quite perfect since most of google maps are a bit out dated and they haven’t captured sound, but it’s at least a quick look.



Needless to say, I haven’t found my house yet. I sometimes question if technology helps or hurts us. I wonder if my dream home got cyber axed somewhere along the line. After all, a virtual tour misses the feeling you get when you walk into a home and know it’s home or realize that you don’t really care about taxes when you can live within walking distance to Mediterranean Bakery. There sometimes is no replacement for getting away from the computer and just getting out there.

By Romy Sharieff

Housing Crisis

After 52 consecutive months of declining inventory, there were 163,000 new houses for sale on the US market in September, unchanged from the month before. With new homes sales beginning to perk up from multi-decade lows, demand could quickly outstrip supply. At least in parts of the country, the next housing crisis could be a shortage of new homes. The stock of new homes for sale typically ebbs and flows with the broader business cycle. When the economy begins to slow, home sales drop off and the supply of houses begins to increase. The supply of new homes in months indicates how long it would take for all the new houses on the market to clear at the current pace of sales. Historically, that ratio has averaged about 6 months. At the height of the boom in the mid-2000s, demand vastly outstripped supply even as home builders added to the supply at a furious pace. When demand collapsed a few years later, homebuilders were slow to react, resulting in a huge supply overhang. As the crisis worsened, the inventory ratio eventually reached an all-time high of 12.4 months in 2009. Today, the housing market is showing tentative signs of healing with the supply of new homes again approaching 6 months. Existing home sales have stabilized, house prices have bottomed, the homeownership rate has ticked up, and the threat of a massive shadow inventory is fading. Economic growth is firming in parts of the country that missed the worst of the bubble and new workers will need places to live. Rental markets are getting tighter and new housing construction could soon follow, perhaps reflected in the recent improvement in home builder sentiment. With the supply of new homes at such low levels, even a modest pick-up in the pace of sales could have a dramatic impact. When the housing recovery gains real traction, the current supply of new homes could run out within a few months, leading to higher house prices, a boom in residential construction and an unexpectedly powerful lift to the US economy.

Source: Business Insider

Are short sales getting easier?

Are short sales getting easier? Some home owners are reporting that banks are now not only more willing to consider a short sale, but are even offering incentives to complete a short sale. For example, a home owner in Chicago says his lender approved his short sale and then gave him a $20,000 check after the deal was finalized for selling the home as a short sale instead of letting it sink into foreclosure. Lenders accepting a lower loan payoff from an underwater seller traditionally isn’t thought of an easy transaction to complete. Lenders weren’t so willing a few years ago. But as the number of Americans underwater on their home loans grow, more lenders are reconsidering as they try to avoid extra costs a foreclosure can cause. For 2011, short sales accounted for about 8 percent of total home sales, and rose 7 percent over 2010 totals, according to CoreLogic data. Short sales are up by 59 percent year-over-year in Illinois, 32 percent in Michigan, and 19 percent in Arizona alone, according to CoreLogic. “We’re starting to see that servicers and lenders are viewing short sales as a better alternative than they had in the past,” says Daren Blomquist, spokesman for RealtyTrac. “Some of that relates to the fact that it’s getting harder to foreclose. There are additional requirements in terms of paperwork and requirements that states and judges are imposing.” Short sales can still be complex and lengthy — they can take up to nine months to close and even after that, there’s no guarantee it’ll end successfully. “In general, it is a totally different type of transaction,” says Mike Cuevas, a real estate professional at Exit Realty in Chicago. “You’re not only selling a house, you’re negotiating debt.”
Source: MarketWatch

Listing a Home

List a home on Friday and you’ll have a greater chance of success when selling it, according to Redfin, which analyzed 1.2 million listings in 16 markets over 21 months to determine the best day of the week for selling a home. In every market analyzed, Redfin found that homes listed on Friday were 12 percent more likely to sell within 90 days. What’s more, the company found that homes listed on a Thursday or Friday sold for slightly closer to the list price: 94.4 percent compared with 93.9 percent for homes listed on a Sunday or Monday. Homes listed on Friday were viewed 19 percent more by buyers than homes listed on any other day of the week, according to Redfin’s study. "Our theory is that since home buyers tend to tour homes on the weekends (Saturday and Sunday have 2.5 times more tours per day than weekdays), homes listed on Fridays are the freshest in buyers’ minds when they’re making their weekend plans,” the brokerage said in a blog post about the findings. “It also seems likely that many home buyers sort their weekend ‘must see’ lists by date listed, going to see the freshest homes first so they have the best chance of getting in on a potential good deal before other buyers. These factors put homes listed on Friday in front of more touring buyers on the weekend. More tours leads to more offers, and more offers leads to a better price and a better chance of selling.”
Source: Inman News