Real Estate Information Archive

Is now the best time to invest in real estate?  I personally think so and here are my top three reasons why:.

1. First of all, it's the best time to take advantage of the market and buy an investment property in Orlando.  Interest rates are still at historically levels, Orlando home prices have dropped dramatically, and there are over 15,000 homes to choose from in the Metro Orlando area.
2. Investment properties will be easy to rent.  Since over 5 million past home owners have either lost their homes to foreclosure or had to do a short sale to gracefully exit from home ownership, these people need homes in to live in.  And since they currently don't have the credit to purchase a home, their only option is to rent an Orlando home.  With this being said, the demand for Orlando rental properties will continue to increase which will allow the rental prices to increase as more renters enter the market.
3. If you have a five or even better ten year business plan on holding these properties, by the time you sell these Orlando investment properties the market value will be at a much higher level than they are now.
4. Here's an extra fourth reason for free.  If you are able to pay cash for these Orlando investment properties, you will be able to achieve a positive ROI immediately.

So if you have the cash to buy a distressed Orlando home, you will be able to find a renter for it and achieve a positive ROI immediately.  And when you decide to sell that Orlando investment property in five to ten years, the market value on that investment property will be much higher than what you bought it for today.  Sounds like a pretty good business decision to me!  How about you?

For help in finding these distressed Orlando investment properties before, give us a call at 1-888-568-6637.  We are your Orlando distressed sales specialist and we are able to find these properties before anyone else.

I just listened to a conference call with Gary Keller (Keller Williams Realty) and Rick Sharga (VP of Realtytrac) and I thought that I would share some of the information with you which I thought you would find of value.  Realtytrac speicalizes in keeping track of how many home owners have received a foreclosure notice as well as how many have been foreclosed on.   During the interveiw Rick mentioned that we are not at the end of the tidal wave of foreclosures.  He feels that until the distressed homes are sold and absorbed into the market, we will continue to feel the negative effects of these properties on the market. He pointed out the following facts:

• Foreclosures will not peak until 2012.
• This year we will saw about 3.2 million home owners receive a foreclosure notice. This is a record and up from 2.8 million a year ago.
• Will also saw about 1.2 million bank reposessions this year.  This is also a record and up from 900,000 a year ago.
• There are currently 5 million seriously deliquent loans which are currently not in foreclosure (shadow inventory) and these homes will enter the pipeline over the next 18 months.
• In 2012 we will see continued levels of foreclosure activity although the numbers SHOULD get better as the year progresses.
• In 2013 we SHOULD get back to normal foreclosure activity on a monthly basis.  However there will still be an inventory of one million foreclosured homes which would still need to be absorbed into the market.

Based on these numbers depening we may not see a stabilization of prices until the middle or end of 2013.  They also both fel that the best way to improve these numbers is for more jobs to be created.

Something else I found interesting is that they thought the low end of the market (lower priced properties) may have already bottomed out, however the higher end of the market may still have some room to drop.  This makes sense because when you think about it, how low can a condo actually sell for?  You can't pay someone to start taking these properties.

They also mentioned that there will be a problem in the move up market.  Over the past couple of years 6 million potential buyers have been wiped out by either doing a short sale or a foreclosure on their homes.  Their credit has been shot and they won't be able to buy another home for the next 5 to 7 years. They mentioned that they think that the government may step in and give a mulligan for these past homeowners because if they don't where are the move up buyers going to come from?.  Time will tell!

In Orlando, we continue to see 65% to 70% of all homes being sold as distressed sales (Orlando bank owned homes or short sales).  Since a large majority of homes which are currently on the Orlando real estate market are distressed sales this trend will continue.

We all know that pricing on residential real estate peaked during the second quarter of 2006 and since then the pricing has dramatically fallen.  Some markets have fallen as much as 62% (ouch) while others have been more moderate. 

What we are starting to find is that some markets are started to "over-correct"!  This occurs when the pricing of homes actually falls below the "equilibrium home price" for a market.  The equilibrium home price takes into account local demographic information such as income, job growth, and housing affordability, to determine where prices should be sitting based on what the local market conditions can sustain.

But according to Local Market Monitor, a real estate forecasting and risk assessment firm, the 10 most undervalued housing markets in the United States and the percentage by which they are undervalued are:

1. Merced, California: 32%
2. Las Vegas-Paradise, Nevada: 27%
3. Killeen-Temple-Fort Hood, Texas: 25%
4. Akron, Ohio: 22%
5. Cleveland-Elyria-Mentor, Ohio: 21%
6. Warren-Troy-Farmington Hills, Michigan: 21%
7. Mansfield, Ohio: 20%
8. McAllen-Edinburg-Mission, Texas: 20%
9. Reno-Sparks, Nevada: 20%
10. Stockton, California: 19%

With all of the price declines we have had in our market, I'm personally suprised that Orlando was not on the top ten list.  In either case, it's a great time to take advantage of the market and buy a house!

I just read an article from DSNEWS.com which talked about how fewer sellers lowered their pricing in December than previous months.  Depending on your local market not lowering your price on your house may be the worst thing you could have NOT done.  Since the home values in Metro Orlando are still declining and are expected to continue to decline even further because of all of the distressed properties, pricing your house to sell is your best option.

The name of the game in a declining market is to sell your house before your neighbors do because if you don't, you will help them sell their house.  I'm not talking about giving your house away however I'm talking about pricing your house  well enough so that it shows value to the market place.  The worst thing you can do is to price your house too high and continue to follow the market down as it drops. 

I can go into MLS and pull down any neighborhood and clearly show you from the acctive listings which homes are following the market.  They all started at a price above market value and since then have continued to have multiple price drops with no success.  In order to get your house sold in today's real estate market in Orlando is to price it ahead of the market!  You will sell it faster and get more money from it than following the market and selling your house in six months for a lot less!

The key to getting your house priced appropriately is to speak with a full time professional REALTOR who is very knowledgable of the local market and has the expertise to get your home sold. 

According to a report from the National Association of Realtors (NAR), the number of homes sold plummeted more than 25%, compared with the previous quarter.  The national median price for a single-family home sold during the quarter was $177,900, down 0.2% from the same period a year ago and up 0.6% from the second quarter of 2010.  Single-family home prices rose 2.5% to $253,400 in the Northeast, the only region that showed price improvement. Midwest prices fell 3% to $145,600, prices dropped 1.9% in the South and 0.4% in the West region.  The metro area with the biggest gain was Burlington, Vt., where the median price of $286,300 was 17.6% higher than 12 months earlier. The biggest loser was Ocala, Fla., down 20% to $82,200. 

San Jose, Calif., recorded the highest median price -- $628,700 -- during the quarter, just nosing out Honolulu at $628,100.  Youngstown, Ohio, the old steel town, had the lowest median sale price, at $60,400.  Condo prices fared worse than those of single-family houses. The national median fell 3.9% from 12 months earlier to $171,400.  Palm Bay, Fla., had the biggest year-over-year loss: down 32% to $73,000; Jacksonville. Fla., was off 31% to $63,200. Phoenix condo prices also plunged, down 26.6% to $73,300.  Condo prices in the New York metro area soared, up 34.5% to $400,000, the most, by far, of any city.

With home sales this past summer at the lowest level in more than a decade, the lasat thing the real estate market needs is another kick in the teeth.  But as a scandal unfolds over mortgage lenders’ shoddy preparation of foreclosure documents, the fallout is beginning to hammer the housing market, especially in states like Florida where distressed properties are abundant.  Three major mortgage lenders — Bank of America, GMAC Mortgage and JPMorgan Chase — have said they are suspending foreclosures in the 23 states where they first need a judge’s approval.  They are also waving off Fannie Mae from selling any of the foreclosed homes whose loans they sold to Fannie. 

More broadly, the revelations about the sloppy paperwork are emboldening homeowners and law enforcement officials in many states to question whether lenders rightfully hold the notes underlying foreclosed properties — further chilling the housing market.  Distressed properties, many of which are in foreclosure, make up about a third of all home sales. “Foreclosures are going to slow to a crawl,” said Guy D. Cecala, publisher of the trade magazine Inside Mortgage Finance.  Of the 23 states where foreclosures need court approval, Florida has by far the most trouble — about a half-million cases clog its courts — and the moratoriums are having a noticeable effect.  Because most lenders sold their mortgages to Fannie Mae, it is largely that company that has been sending e-mails to real estate agents about putting off deals and removing houses from the market.

As the approximate 2.5 million homes in foreclosure complete the process, national delinquencies will fall, and REO inventory and short sales are expected to trend upward, according to a report released today by John Burns Real Estate Consulting.  There are currently 562,000 bank-owned homes and 2.5 million mortgages more than 90 days delinquent in the market.  Single-family starts as well as single-family and multi-family permits were down in August, leaving total completions last month 33% lower  than July, at 587,000 units.

Foreclosures grew by 4% month-over-month.  Shadow inventory is inevitably growing and affecting the market already hit hard by high levels of distressed mortgages, such as Stockton, Calif. and Orlando, Fla., which have an excess supply of inventory already. According to John Burns' data, the two cities have a 27 shadow months supply of homes, 22,344 and 81,309 homes, respectively.  CoreLogic reported that national home prices in July remained steady, but existing home sales decreased 2.6% in August compared to July, according to the National Association of Realtors. New home sales dropped 12% over the same period.

According the US Housing Market Monthly report by Capital Economics released yesterday, home sales have yet to hit the trough of the recession.  Further, the economics firm states that pending home sales will do little to push home sale numbers higher. In fact, the number of pending home sales is so diminished, down 32% in the wake of the tax credit expiration, that existing sales will only dip in the coming months as these mortgage agreements are finalized.  Analysts at Moody's Investors Service agree, stating that the odds of a near-term double-dip recession increased to one in four from one in five predicted this spring. If this double-dip happens, Moody's estimates home prices will fall along with sales — an estimated 20% before stabilizing in early 2012.  However, mortgage tech company Fiserv predicted only a 4.9% decrease in housing prices over the next 12 months. 

Pending home sales fell another 2.6% in June from May after deteriorating 29.9% in May from April. According to Capital Economics, this will be reflected in existing home sales in the months to come. Existing home sales in June fell by 5.1%.  The housing market is currently experiencing an excess of inventory as Capital Economics reported an 11% homeowner and rental vacancy rate in the second quarter of 2010, a new record high. Capital Economics states, "relative to the rising trend of the last 30 years, that suggests around 0.6m [or 600,000] properties than normal are currently sitting empty."  Capital Economics also suggested that builders are adding to the excess supply, noting a 28% annualized jump in residential investment in Q210 alongside a 19% decline in housing starts from April to June (down 14.9% in May and 5% in June). All of these statistics in addition to macroeconomic conditions is what economists at Moody's believe are hindering economic recovery.  "We expect  real GDP to advance nearly 3% this year, monthly payroll employment gains to average close to 125,000, and the unemployment rate to end the year back over 10%," Moody's reported. "With the economy slowly recovering, we expect home sales and residential construction to end up slightly stronger this year than last year while house prices will depreciate a bit more."