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Barclays Analyst Sees Housing Rebound Coming in 2012

by bmadmin

Barclays Capital (BCS: 11.52 -4.24%) analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support.

“In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.

In mid-2010, the federal homebuyer tax credit expired, leaving the housing market without training wheels for the first time since the 2008 economic meltdown. Yet, prices in some housing markets remained stable on the back end.

With its new outlook in the market, Barclays upgraded D.R. Horton‘s (DHI: 12.44 -1.97%) stock to buy and raised price targets for D.R. Horton, Lennar (LEN: 19.305 -1.51%),Toll Brothers (TOL: 20.38 -2.63%) and Meritage Homes (MTH: 22.63 -2.16%).

At the same time, the investment bank raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte (PHM: 6.23 -3.41%) and Toll Brothers, while lowering its estimates for KB Home (KBH: 8.07 -1.22%).

“Thus, the key to timing housing’s recovery depends primarily on when these first-time buyers decide it is safe to buy a house,” Kim concluded.

Courtesy of HousingWire.com.

You Need to Work With Experts

by bmadmin

In today’s real estate market, it is easy to get confused. There seems to be an overabundance of information and much of it seems to be conflicting. As an example, we offer you two headlines that appeared within 24 hours of each other last week.

National Delinquency Rate Falls to Lowest Level in Three Years

– Mortgage Bankers Assoc. 11/17/2011

Second Consecutive Increase in First Mortgage Default Rates

– Standard & Poors 11/18/2011

(Remember, foreclosures impact home values and the cost of mortgage money. This makes current delinquency rates an extremely important data point.)

Though these headlines seem to be saying opposite things, both are actually correct. Each report was looking at different data points over different periods of time.

In their article regarding the MBA report, DSNews explains:

“Industry data released Thursday indicates the number of borrowers in the United States behind on their mortgage payments is showing signs of improving. The Mortgage Bankers Association (MBA) reported that the national delinquency rate for residential home loans fell to 7.99 percent in the third quarter.”

In their post, S&P claims:

“First mortgage default rates rose from 1.99% in September to 2.08% in October.”

Bottom Line

Make sure you are dealing with local real estate and mortgage professionals. They will help you and your family decipher the hordes of information available so you can truly understand your best options.

Photo credit: http://www.flickr.com/photos/abiesudiono/

New Home Sales Rose 5.7% in September

by bmadmin

New home sales surged 5.7% month over month to 313,000 in September, which was much stronger than the 300,000 expected by consensus after sales slipped 0.3% to 296,000 the month before. Sales in the south and the west reported monthly gains (up 11.2% and 9.7%, respectively), while the northeast and the midwest saw declines (down 4.2% and 12.2%, respectively).

Total new home sales are down 0.9% from last year, on sharp year-over-year declines in the northeast and midwest (down 34.3% and 14%, respectively). The south was up 9.8% over last September while the west was flat. The months’ supply of homes dropped to 6.2 months from 6.6 months in August, and near the 5.5 to 6 month historic average.

The median price fell to $204,400 from $210,900 in August, and is down 9.9% over last September.

Post courtesy of housingviews.com.

13,780 Homes Sold Yesterday

by bmadmin

To all those who have declared the real estate market dead, we want you to know that over 13,780 houses sold yesterday, 13,780 will sell today and 13,780 will sell tomorrow.

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 7.7% over the month before and 18.6% over the year before. According to the report, annualized sales now stand at 5.03 million. Divide that number by 365 (days in a year) and we can see that, on average, well over 13,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may never see those numbers again (and that is probably a good thing). But to say that the current real estate market is dead or that houses are not selling is totally inaccurate. We have over 13,000 pieces of evidence to prove that.

Courtesy of KCMBlog.com

The Rental Economy is Booming for Real Estate Investors

by bmadmin

The rental market is booming for real estate investors right now even though homeownership is the most affordable its ever been.

If you look at the pro’s of purchasing a home right now, we see:

  • Low 30 year fixed rate loans
  • Home prices down 30-50% in some areas from the 2005-2006 peak
  • Lots of homes to choose from

These same reasons can be applied to owning rental property as well. Prices are cheap, loans are cheap, and the rental market is increasing. Those are all good reasons to buy an investment property. Its much simpler to purchase a rental property than you may think and we will guide you through the entire process.

Take a look at this video from CNBC and contact us today:

 

 

Low Interest Rates vs. Economy Jitters [VIDEO]

by bmadmin

Historically low interest rates combined with incredible deals on real estate have created the perfect time to buy a home.

“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.” -John Paulson

Check out this video from CNBC.com about the current real estate market and why renters should seriously consider homeownership.

What If You Could Buy Shoes…

by bmadmin

What if there was a shoe store that had:

  • An unparalleled selection of shoes of every size, color, and price range
  • The shoes were discounted 30% or more
  • You had a credit card that would finance the shoes for 30 years at 4.5%

How many shoes would you buy? My bet is there would be a line around the block. Well, today, real estate is like that shoe store (incredible selection, terrific bargains and excellent financing terms). But there’s more….

  • Shoes go in and out of style. Homeownership is still the American Dream.
  • Shoes are worth less once you wear them. Homes will appreciate in value over time.
  • Shoes get disposed of. Homes are lasting.

And while many can recount memories created in certain shoes, everyone can remember their first home, their first family gathering, the countless holidays shared. There is also the ability to decorate to your tastes, the stability (and lower crime rate) in homeownership neighborhoods and the higher level of education achieved by kids who grow up there.

If you’d stand in line to buy shoes, what’s stopping you from exploring a home? Despite some media perceptions, there is mortgage money available with reasonable down payment requirements at extremely low rates…talk to a loan officer. There are some great deals out there with short sales, foreclosures and regular transactions also!

Happy Shopping!

5 Real Estate Headlines You’ll see in the Next Six Months

by bmadmin

This is great insight from our friends at KCMBlog.com:

 

Making predictions can be the ‘kiss-of-death’ for a blog. Even if we get four out of five correct (80%), there are those in the industry who will kill us on the one we got wrong. We believe strongly that when making a real estate decision for you and your family you must look forward and take into consideration how the housing market may change.

For this reason, we are willing to take on the possible wrath of our counterparts by sticking out our necks and predicting these will be the major real estate news stories from now until the end of the year.

Interest Rates Rise

Many, including us, have been surprised that rates have not risen already. However, the next several months are going to see three distinct changes that will propel rates upward.

  1. As the government starts to leave the mortgage market, private industry will step in. Private industry demands a higher rate of return on their investments. Mortgages will be no different. Studies have shown that 30 year mortgage rates could increase by 1 to 3% over the current rate.
  2. In many higher priced markets, rolling back Conforming Loan Limits means that rates for the mortgages on these properties will resort back to the rates on private jumbo loans. The FHFA informed us that last year, the difference between mortgage rates for jumbo loans and jumbo-conforming mortgages has varied between about ½ and ¾ of a percentage point.
  3. As the economy gets better (and we believe it will), the pressure to keep rates low to stimulate growth will abate.

Some Loan Requirements Tighten but More Can Now Get a Loan

Lending institutions have already started to introduce stricter mortgage guidelines. Whether the Quality Residential Mortgage (QRM) requirements are instituted as originally proposed or eased somewhat, there is no doubt that guidelines will continue to tighten as we work through the year. However, we believe the private sector will again start introducing alternative mortgage financing but at a greater expense to the consumer. You WILL be able to get a mortgage. It will just cost you more.

Housing Sales Increase

Contracted sales have shown consistent improvement over the last six months and we feel this will continue and actually begin gaining even greater momentum. We believe there is a ‘pent-up’ buying demand caused by the volatility of the market over the last several years. When interest rates start to move upward and alternative financing becomes more available, these buyers will start to jump off the fence. We believe there will be a major upswing in sales over the next six months.

Distressed Properties Increase Markedly

More people are paying their mortgage on time and that is great news for housing in the long term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and foreclosures. The numbers will be staggering in some areas.

Prices Continue to Soften in Most Markets

The current housing inventory for sale and the distressed properties about to come on the market will vastly outnumber the increased supply of purchasers we will see over the next six months. There will be more houses for sale then there will be buyers purchasing them. That oversupply will continue to put downward pressure on prices through the rest of this year and into 2012.

You now know what we believe will take place in real estate between now and the end of the year.