Archive for December, 2011

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2011 in review

December 31, 2011

The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.

Here’s an excerpt:

The concert hall at the Syndey Opera House holds 2,700 people. This blog was viewed about 14,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 5 sold-out performances for that many people to see it.

Click here to see the complete report.

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Happy New Year

December 31, 2011

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I am so happy to still be in the business of selling real estate in Central Florida. No one can predict the future, not me, not the Mayans, and certainly no one from Cassadega. But it doesn’t matter because we need to remember to live fully in the present.

It has been a challenging few years in real estate and whether the market has bottomed or not…I see brighter days ahead. I look forward to sharing the good news with you.

HAPPY NEW YEAR friends and here’s to a great future.

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STOP massive sale of foreclosed homes.

December 16, 2011

There is a simple way to address our current housing crisis – the sale of distressed properties could be easily slowed or stopped with ONE SIMPLE STEP. Banks need to write down the loans on homes that are underwater and allow good borrowers to refinance at today’s lower interest rates.

The most distressing things for most homeowners is that their homes are so UNDERVALUED that they will NEVER see a time when their home will be worth what they owe on it. It’s a reality and it is discouraging. Banks can start to turn the economy and housing around by going to people who are not in distress and beginning the process of re-evaluating value and re-negotiating outstanding balances to make home ownership attractive. To ignore this is fact is going to result in increased defaults and more short sales and foreclosures. It’s going to happen!

Recently, Moody’s released the following statement on the sale of foreclosed homes: They found that on average, a foreclosed property will be valued about 18 percent lower than average home prices, and will be subject to an additional sales discount of about 15 percent.

The banking industry is creating the depreciation of home values when they are personally responsible for the sale of homes at 30% less than fair market rate resulting in the downturn in value on surrounding homes. Banks are making a bad situation worse. I am shocked that no one seems to address this issue in the media or in Congress.

Who wins? Investors. Who loses? Everyone else – especially the American public.

If this fact is true then why not reduce the principal balance on underwater loans by 30% thereby rewarding homeowners who choose to stay in their homes and pay their mortgages. Does anyone really think that people are going to pay their loans out of a sense of obligation and responsibility? Seriously? I predict a mass exodus as people figure out that they are better off renting and getting out from a debt they can never actually pay off and for which their home will never be worth.

Let’s get serious about solutions to real estate and the housing crisis. Do I think this is going to happen? Hell, no. We have a government that is ineffective and impotent and a banking industry getting rich on investments. The American public continues to struggle with no one reaching out a helping hand. Is there anyone out there who can make a stand for the people?

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Foreclosures and the Local Markets

December 7, 2011

Market Analysis Must Be Granular to Be Relevant

By: Krista Franks 12/06/2011

Home price predictions have traditionally been fairly straightforward, relying heavily on employment and income levels, according to Michael Sklarz, president of Collateral Analytics. However, the last cycle has posed challenges for analysts, Sklarz said during a panel at the Five Star MPact Mortgage Conference and Expo in Dallas, Texas Tuesday.

For example, one of the leading market indicators throughout the housing crisis has been foreclosure sales, which rise and fall at the inverse of home prices.

Another indicator throughout the past few years has been the ratio of sales price to listing price.

However, despite the best indicators and the best analytic data, national predictors – even if accurate – may not be relevant on a local basis.

During the discussion, Alex Villacorta, director of research and analytics at Clear Capital, used Phoenix as an example to show how much variation exists from market to market, and ZIP code to ZIP code.

Currently, Clear Capital predicts prices in Phoenix will remain relatively flat, falling just 3 percent. However, the analytics company predicts one Phoenix ZIP code will see a 17 percent decline, while a neighboring ZIP code will see a 34 percent rise in prices.

Another indicator, according to Thomas J. Healy, president and CEO of Level 1 Loans, Inc., is the ratio of median real estate value to median income.

Prior to the crisis, some ZIP codes were at 8.9, while others were at 1.5, according to Healy, reiterating the importance of granular data as opposed to national or regional data.

A ratio of about 3 or 3.5 is sustainable, according to Healy, and most markets that experienced a sharp rise during the bubble are now falling back to these levels.

At his keynote presentation at MPact Tuesday morning, Doug Duncan, chief economist at Fannie Mae, said we are now at the “new normal.”

Healy agrees. “There will be no rebound,” he said during the panel discussion. “We’re pretty much where we should have been at the entire time,” had the crisis not occurred, he said.

(Note: The Five Star Institute is the parent company of DSNews.com and DS News magazine.)

 
Courtesy of DWSNEWS.com