Heather Vandermyde, Senior Broker

Home Issues- by John VanderMde

2012-02-16T11:12:00.001-08:00

Home Issues, post 3, Siding.

Siding is much more important on the OBX than most other areas... why? Because it doesn't rain straight down here very often, so it pays to think of the siding as performing the same function as a roof - it MUST be designed and installed in such a way to channel water away from the vulnerable openings and structural elements of the home.

I'm going to list the different types of siding, and their relative advantages and problems, but first, let's talk about what's under the siding - the "vapor barrier" or "house wrap". Siding can and will fail, so it's VERY important to have an waterproof material underneath, and there is only one proven material for this purpose on the OBX - saturated felt paper, more commonly known as "tar paper". Some builders try to use Tyvek or Typar plastic house wraps - and this tends to be a very bad idea. Both of those materials will allow moisture to penetrate through to the sheathing, and I've seen homes that needed all the framing and sheathing on an entire side replaced due to rot.

Tar paper is MUCH more water resistant, and has stood the test of time on countless oceanfront homes taking the full beating from mother natures storms. It seems to allow the sheathing to dry out better too when water does make it in through a crack or knot hole somewhere when compared to plastic house wraps.

Ok, on to some common siding materials, and the good and bad points of each one:

Vinyl Siding - It's quick and easy to install, and doesn't need paint. However, it's also the first to come off in a windstorm, and it's color will fade over time with sun exposure. The fake shingle is generally the best type, as it's heavier and less prone to tearing off in high winds. Vinyl tends to "hang" on the house rather than be attached securely to it, as the nails must not be nailed tight to the siding to allow for expansion during hot weather.

Textured Plywood Siding (T-111, etc) - Cheap and easy to install, you'll find this on many older homes. It must be kept painted though, as it will break down over time with sun exposure, to the point it will erode off the walls.

Wood Lap Siding - Commonly found on older homes, it generally performs well if kept painted and caulked. However, the quality of the wood has dropped while the price has increased, so you will rarely find it on newer homes. Keep an eye on knots, cracks, and splits that might let water penetrate.

Cedar Shake Siding - My personal favorite, and a traditional choice on the OBX. It can be painted, but it generally works well without paint if it's the red cedar variety. Some oils can prolong the shingle life, especially where exposed to strong sun. It's the most waterproof of the wood sidings, as there is a triple layer of wood at each point - the shingles are 18" long, but only 6" is exposed, so you have a bit of redundancy should one shingle crack or split, plus the nails in each shingle are protected from the elements so they don't rust.

HardiPlank Siding - This is a material made from concrete and wood fibers, and is generally found as Lap Siding, though it can be used in sheet or shingle form too. It must be painted, but the paint will last much, much longer than paint will on wood. Care must be taken to use stainless steel nails or rust streaks will mar the home eventually - "Blind Nailing" will help with this, but the end of each board will still require a face nail or two. HardiPlank has the potential to be the longest lasting and lowest maintenance of any of the siding types generally used - it's only been in widespread use for 15 years or so, but with no failures I know of, and many homes still have the original paint.

From John VanderMyde- Home Issues, post 2

2012-01-31T13:01:00.000-08:00

Home Issues, post 2

In the last post I covered some typical issues found on the ground level, and now I'm going to discuss from the ground to the first floor.

Pilings & Plumbing:

Many homes here are built on pilings, which is an excellent foundation system for sand. Instead of "pressure" bearing, pilings are "friction" bearing, which means they are much less susceptible to shifting or cracking over time when compared to a masonry foundation.

Look for pilings to be 8"x8" rather than the 6"x6" size that was used in the 70's. Look where the pilings meet the ground for any sign of rot. Look for pilings to be braced with large "X"s of 2x10s rather than smaller "Y" supports under the beam.

The one disadvantage of pilings is that the house will shake more than on a masonry foundation, especially if there are no rooms on the ground level. Enclosed garages and storage areas can really help the rigidity of the house by creating "shear walls" of plywood between pilings.

Next, look to see if any plumbing is exposed. If there are any supply side pipes exposed to the wind, you can bet they will freeze during a winter cold snap. Copper pipes will burst or split, and so will polybutylene (gray pipes). PEX (white or red) will handle freezing weather better, but if the sun shines on the pipes, make sure it's the red PEX as that type is UV resistant.

The grey Polybutylene pipes have other problems which have been well publicized, but here's a synopsis: If there are plastic elbows with aluminum crimps - plan on replacing all the plumbing. It WILL leak. If there are copper elbows and copper crimps, it should be ok in conditioned spaces, but will still have a high incidence of failure when exposed to temperature extremes outside. PEX is a far superior material, and it usually only costs around $1000 per bathroom to replace, plus any drywall repair.

More to come soon!

CALLING INVESTORS!!! 7 Masters and 71/2 Bath home-$739k

2012-01-27T04:21:00.001-08:00

Video Blog 1 (outer banks real estate)

2012-01-24T12:22:00.000-08:00

http://youtu.be/pawmr60Wb8w

See links to all 3 new listings below-

Click Here to View Listings

If the above link 'Click Here to View Listings' does not function, copy and paste the following link into your browser address bar:
http://obarmls.fnismls.com/publink/default.aspx?GUID=d4a1731e-5129-42fe-8427-8fbc547a94b1&Report=Yes

VanderMyde Real Estate has some big changes for our clients! We know you'll be pleased.

2012-01-17T16:36:00.000-08:00

I've teamed up with a past co-worker from Kitty Hawk Land Company/The Currituck Club, investment partner with a "rental machine" in Salvo, and now a partner in real estate at RE/MAX Ocean Realty. Stephanie Massoth is everything I'm not,and our clients are going to have the best of both worlds. Satisfaction Guaranteed, your success is our livelihood!

From Broker/Owner REMAX Ocean Realty- David Perrot

I am excited to announce that Stephanie Massoth will be partnering up with Heather VanderMyde. Heather and Stephanie worked together from 1995 – 2001 at Kitty Hawk Land Company. From 2001 – 2010, the Massoths and the VanderMydes were also successful business partners owning a vacation rental property in Salvo.

About Stephanie…

Stephanie Muzikar Massoth was born and raised is eastern North Carolina and while attending East Carolina University moved to the Outer Banks during the summers. Stephanie brings over 25 years of experience in the Real Estate Industry.

Recently, Stephanie worked for Seaside Vacations as the Businesses Development Manager and with Coldwell Banker as an Associate Broker.

Stephanie worked with Kitty Hawk Land Company for 14 years wearing many hats including Associate Broker, Executive to the President Mickey Hayes, Office Management, Sales Assistant and Closing Coordinator processing almost 1500 contracts to closing. Stephanie has also been involved with buying and selling personal properties since the age of 25.

Stephanie and Chris Massoth have been married over 11 years. They reside in Southern Shores with their black lab, Stella Rose. Stephanie helps Chris with the family business, Chris Massoth Painting Company. Spare time is enjoyed with family and friends and an occasional Surf Trip in the winter.

Just sold Oceanfront Townhome in Pelican Watch, in Southern Shores

2012-01-09T04:09:00.000-08:00

Words of Wisdom.. from a General Contractor.

2011-12-22T13:05:00.000-08:00

"Typical Beach Home Issues, from the Ground Up" - by John VanderMyde, N.C.G.C.

After you've found a house you like, but before paying for a home inspection, it might be worth your time to look for some basic maintenance issues affecting many homes as the beach.

In this first post, I'm going to address what to look for on the ground level.

First, start by walking around the exterior, looking where the house meets the ground. There should be no siding or untreated wood in contact with the ground - if there is, you can bet on termites. Look at the edge of the slab - it should be visible all the way around the house. Look closely for "mud tubes" - any dirt on the slab might be a termite highway to the tasty untreated wood. Termites must return to the ground for moisture, and they hate sunlight, so making sure they have no way to get to their woody snacks will ensure the house is termite free.

Second, "blown out" slabs are a common problem - look for wind erosion around the corners of the house - if the slab has been undermined, it's an easy fix early, but will quickly become a major problem if allowed to continue.

Many well built homes will have some kind of river rock around the edge of the slab - this is the best defense against both termites and wind erosion.

On homes built over a crawl space with no slab, find the access and smell underneath as soon as you open it - if it's "musty" - there may be a moisture issue. Look at how the house sits - does the ground slope away on all sides, or is there a low spot underneath where water might collect during heavy rains?

Use a flashlight to inspect the insulation and duct work - it's very easy for both to get water logged if the crawlspace does not stay completely dry.

Next post - what to look for on the first level.

Investors are scooping up property... Are you an investor?

2011-12-03T04:49:00.001-08:00

Investor Sales Surge

Posted By susanne On November 27, 2011 @ 1:04 pm In Consumer News and Advice,Home Owner News,Real Estate Information,Real Estate News,Real Estate Trends,Today's Marketplace | No Comments

Low home prices and strong demand for rental properties are causing a surge in
investor buying, driving up the market share of homes purchased by investors.
According to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey,
investor purchases hit 22.3 percent of closed transactions for the month of October,
up from just 19.6 percent as recently as July. For the past three months, investor
participation has exceeded 20 percent, continuing a long-term trend of increased i
nvestor interest in the housing market.
All-cash sales accounted for 29 percent of purchases in October, little changed
from 30 percent in September and 29 percent in October 2010; investors make up
the bulk of cash transactions.
The National Association of REALTORS® reported recently that its survey
of REALTORS® found that investors purchased 18 percent of homes in October,
compared with 19 percent in September and 19 percent in October 2010.
First-time buyers accounted for 34 percent of transactions in October, up from
32 percent in September; they were 32 percent in October 2010.
A combination of low home prices and growing demand for rental units make purchasing
damaged Real Estate Owned (REO), fixing up the properties, and then collecting monthly
rents, an attractive financial play, the Campbell survey reported. In October, average prices
for damaged REO hit $101,100, the lowest price recorded in two years. In contrast, home
prices for non-distressed residential properties averaged $266,700 in October.
Distressed homes – foreclosures and short sales typically sold at deep discounts –
slipped to 28 percent of sales in October from 30 percent in September
(17 percent were foreclosures and 11 percent were short sales); they were
34 percent in October 2010.
One factor pushing down average home prices overall is the high proportion of
distressed properties found in today’s housing market. The total proportion of distressed
home sales, as represented by the HousingPulse Distressed Property Index (DPI),
rose a full 4 percentage points to 48.4 percent in October, up from to 44.4 percent in
September.
Meanwhile, the gap between the supply of distressed properties and their absorption
by first-time homebuyers widened to 13.7 percentage points in October, from a
reading of 8.8 percentage points in September. This shows that first-time
homebuyers have become less active in the distressed property housing market.
“However, in some areas we’re hearing about shortages of foreclosure inventory
in the lower price ranges with multiple bidding on the more desirable properties,”
says NAR Chief Economist Lawrence Yun. “REALTORS® in such areas are calling
for a faster process of getting foreclosure inventory into the market because they have ready buyers. In addition, extending credit to responsible investors would help to absorb inventory at an even faster pace, which would go a long way toward restoring market balance.”
Demand for rental units remains strong. Campbell Surveys estimates that 61.6
percent of investor properties purchased during the month of October will be rented out, with the remainder being flipped.
“Investors are prominent in the city of Las Vegas.
They both flip and rent and buy properties in bulk. Renting single family homes is an
extremely viable option and seems to be a growing trend in the valley with the decreasing
of prices. Our inventory is dropping so we are seeing more investors becoming aggressive with their offers,” reported a real estate agent from Nevada in the latest HousingPulse.
“Given the current conditions in the market here locally, many of the investors are
purchasing homes to rent until the market turns around then possibly looking to sell in
a few years. Yes, at this point renting homes is a better option than flipping because the
gap between what an investor can buy a house, fix it and flip it does not cover the cost of
re-selling it,” added an agent from California.
For more information, visit www.realestateeconomywatch.com ^[1].
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com ^[2].

The Bottom Line by MSN-Foreclosure crisis only about half over...

2011-11-21T13:12:00.001-08:00

By John W. Schoen, Senior Producer

If the U.S. foreclosure crisis were a baseball game, we’d probably be in the bottom of the fourth inning.

That’s roughly the message from the latest data on home foreclosures and delinquencies released by an industry association Thursday.

The pace of new home foreclosures edged up again in the third quarter and the number of borrowers falling behind on their payments eased a bit, according to the Mortgage Bankers Association. The good news was that the rate of borrowers who have fallen three or more months behind on their payments has dropped to about 3.5 percent of all mortgages. That’s down from a peak of 5 percent in late 2009. But it’s still three and a half times the “normal” rate of about 1 percent that prevailed before the mortgage meltdown hit in late 2007.

“If you look at the pace of improvement I think we’re three to four years away from the typical pattern of seriously delinquent loans," said Michael Fratantoni, MBA's vice president of research and economics.

That pace of new foreclosures may begin to ease more, though. The delinquency rate –- the number of borrowers who have fallen behind on their payments -- fell in the third quarter to the lowest level in nearly three years. For all loans, the rate fell to 7.99 percent from 8.44 percent in the second quarter. That’s down from 9.13 percent a year ago and the lowest level since the fourth quarter of 2008.Since the mortgage meltdown began in 2007, roughly six million homes have been lost to foreclosure. (Estimates vary somewhat because multiple foreclosures are often recorded on a given property as the homeowner and lender try to avoid it.) Another four million homes are estimated to be at some stage in the foreclosure process. New foreclosures are currently started at the rate of about two million a year.

Borrowers with subprime adjustable mortgages saw the biggest jump in new foreclosures in the third quarter. Some 4.65 percent of those subprime loans entered the foreclosure pipeline. That's up from 3.62 percent in the second quarter, a 28 percent increase. The MBA said the rise was due in part to an increase in the number of loans that failed to get lender approval for a modification. Some states also ended their moratoriums on foreclosures during the quarter. Overall, the pace of new foreclosures for all loans edged up to 1.08 percent in the third quarter from 0.96 percent in the prior three month period. That’s down from 1.34 percent in the same period a year ago.

A lot depends on the outlook for the economy which, though showing gradual signs of improvement, is not creating jobs fast enough to put much of a dent in the unemployment rate, which is hovering at around 9 percent.

The uptick in the pace of foreclosures comes as the U.S. homebuilding industry is beginning to show a pulse three years after nearly shutting down. Though still on track this year to set a record low since 1960, when data were first collected, single family housing starts were up 3.9 percent, and permits jumped 10.9 percent. (Many economists believe permits are a better barometer of housing market strength because they are less affected less by weather and signal a pickup in future construction.)

“This was a good report," said Patrick Newport, an economist at IHS Global Insight. “It has supporting evidence that the single-family market is finally getting off the mat.”

Continued improvement in home sales and prices, though, will depend heavily on the volume of foreclosed homes coming back on the market. Thursday’s MBA data showed that lenders have barely made a dent in the overall backlog of foreclosed homes. Since it began rising in 2007, the foreclosure inventory rate -– the percentage of loans in foreclosure -– has remained stuck at roughly 4.5 percent. That’s four and a half times the “normal” rate of about 1 percent of all homes in the foreclosure pipeline.

Not all of those homes will eventually be seized. Some foreclosures can be “cured” with a loan modification or by a homeowner catching up on missed payments. But the remainder will sit on a lender’s books until they can find a new buyer, often at a “distressed” price. Each new home that enters the foreclosure pieline becomes part of that “shadow” inventory.

“The large number of homes still in the shadow inventory will cast a cloud over the housing market and the wider economy for a few years yet,“ said Paul Dales, a senior economist at Capital Economics.

Dales figures there were something like 4.2 million homes waiting to hit the market at the end of the third quarter. As they do, they’ll continue to depress home prices, which have begun falling again after stabilizing this summer. Falling prices put more borrowers at risk of foreclosing as they burn through the remaining equity in their home and end up “underwater,” owing more than their house is worth. Some 11 million homes, or about 22 percent of all mortgaged homes, are currently underwater. Another 2.4 million have less than 5 percent equity, according to CoreLogic.

Underwater borrowers are more likely to enter a so-called “strategic” default by simply walking away from their home and no longer making mortgage payments. The rate of that default varies widely from state to state, based on both housing market conditions and state laws governing a lenders’ ability to collect the unpaid debt. Some “non-recourse” states protect homeowners from those collection efforts.

s more homeowners fall underwater, strategic default has become a bigger headache for mortgage lenders. A recent study by the MBA's Research Institute for Housing America found that strategic defaults tend to cluster around homes already in foreclosure as friends, family and neighbors exchange advice on whether to walk away.

“It’s a concern because of the manner in which it’s become part of the public conversation,’ said Fratantoni.

Estimates of the levels of strategic default are all but impossible to make, the study found, largely because it’s very difficult to determine whether a default was truly “voluntary.” But the study found that one of the most critical variables affecting the pace of such defaults was the length of time a given home was in the foreclosure process.

The longer that process takes, the longer the idea of strategic default has to spread from one borrower to another. Today, foreclosures can take several years to play out in some parts of the country, up from historical levels of three to five months, according to the study.

“This is disastrous for a housing sector trying to recover from a crisis,” the MBA researchers said.

Income gap b/n you and older Americans at is largest ever!

2011-11-17T05:05:00.001-08:00

Income gap between young and older Americans at its largest ever

Pew graph

CNN

1:52 p.m. CST, November 7, 2011

NEW YORK (CNNMoney) -- Older Americans are now 47 times richer than the youngest generation, marking the largest wealth gap ever recorded between the two age groups.

In 2009, households headed by adults 65 years and older held a median net worth of $170,494, while households headed by adults 35 years and younger held a net worth of $3,662, according to a report by the Pew Research Center.

While it's typical for older generations to hold more wealth than younger ones who've had less time to save, the gap between the two age groups has widened rapidly.

A generation ago, the older age group was richer than the younger by a 10-to-1 ratio. Now, that gap stands at 47-to-1.

Compared to their same-aged peers in 1984, the younger group has actually seen its net worth decline 68%, but the older group has seen its wealth rise 42%.

So why the growing chasm?

Housing trends have played a major role, the Pew Center said. While rising home equity helped drive wealth gains for the older generation over a long timeframe, the younger generation has had less time to ride out the housing market's volatility -- especially its most recent boom and bust.

"Most of today's older homeowners got into the housing market long ago, at 'pre-bubble' prices," the report said. "Along with everyone else, they've been hurt by the housing market collapse of recent years, but over the long haul, most have seen their home equities rise."

"For young adults who are in the beginning stages of wealth accumulation, there has been no such luck, at least so far."

Meanwhile, the younger generation is also taking longer to enter the labor force and get married. And surging college costs are also leaving them burdened by more student loans than prior generations.

Oct. stats from Outer Banks Board Of Realtors

2011-11-10T04:34:00.001-08:00

Sellers this is for you, a closing calculator. Ever wonder how much you're going to net with a certain offer?

2011-10-24T07:10:00.001-07:00

Quick Reverse and Regular Closing Cost Calculators

Here's a basic spreadsheet we use for closing costs - using the reverse calculator, you can see what price is needed to end up with a desired net amount.

Closing Cost Sheet Excel Version

Here's another link to a Google Docs version in case you don't have Excel

Closing Cost Sheet Google Docs Version

I'll add my cash flow spreadsheet too soon!

-John VanderMyde

Ike, Max, and Mommy in Duck at Cook Drive Beach Access Oct. 18th 2011

2011-10-19T11:34:00.001-07:00

Big Drop in Home Ownership: 180 Degree Theory - BUY NOW!!!

2011-10-11T03:22:00.001-07:00

CNN Money

Home ownership: Biggest drop since Great Depression

By Les Christie October 7, 2011: 7:26 AM ET

NEW YORK (CNNMoney) -- The percentage of Americans who owned their homes has seen its biggest decline since the Great Depression, according to the U.S. Census Bureau.

The rate of home ownership fell to 65.1% in April 2010, 1.1 percentage points lower than it was in 2000. The decline was the biggest drop since the 1930s, when home ownership plunged 4.2%.

The most recent decade-over-decade drop, however, only tells half the story.

Home ownership during the 2000s "was really high in the middle of the decade, up to almost 70% at one point around 2004," said Ellen Wilson, a survey statistician with the bureau.

The crash from that peak was more than 4 percentage points in just about five years -- a far more dramatic decline than the 1.1% drop over the 10-year period.

A rough 10 years for the middle class

Certain regions have been hit harder than others. The West had the lowest home ownership rate at 60.5%, while the Midwest had the highest rate at 69.2%.The South came in at 66.7% and the Northeast at 62.2%.

Among the states, New York had the lowest home ownership rate of 53.3%, but the District of Columbia's home ownership rate was below that at 42%.

West Virginia (73.4%) led the way with the highest home ownership rate, while Minnesota (73%), Michigan, Delaware and Iowa (all 72.1%) were also well above the norm.

Number of vacant homes grows by 44%

Thanks to the housing bust there has been a substantial increase in empty homes. The number of vacant housing units jumped an astonishing 43.8% to 15 million (or 11.4% of all housing units) in 2010, up from 10.4 million in 2000.

During that 10-year period, the number of homes in the U.S. increased by 16 million to 131.7 million housing units, according to Census.

Many Sun-Belt states suffered large vacancy increases. In Nevada, ground zero for foreclosures over the past few years, vacancies grew nearly 120% to 14.3% of all homes. Georgia vacancies jumped 82.7%, Florida's 62.6% and Arizona's 61%.

Although vacancies in Maine grew by only 23%, the state had the highest percentage of vacant homes overall at 22.8%. Vermont was close behind with 20.5% of its homes empty. Florida was third with 17.5%.

Foreclosure backlog deepens

Many of the nation's residents have also become renters, especially in large metropolitan areas.

Of the 10 largest cities, New York had the highest ratio with a whopping 69% of all homes in the five boroughs -- Manhattan, Brooklyn, Queens, the Bronx and Staten Island -- occupied by renters. Los Angeles had a 61.5% rental rate and Dallas was 55.9%.

San Jose had the lowest percentage of renters for any of the 10 largest cities with just 41.5%. San Antonio (43.5.%) and Phoenix (42.4%) had comparatively few renters as well.

Housing market is terrific...wish I had money!

2011-09-26T10:17:00.000-07:00

USA TODAY ARTICLE

Housing market is terrific, if you are rich
NEW YORK – It's starting to feel as if there are two housing markets. One for the rich —and international buyers — and one for everyone else.

Consider foreclosure-ravaged Detroit. In the historic
Green Acres district, a haven for hipsters, a pristine, three
-bedroom brick Tudor recently sold for $6,000 — about
what a buyer would have paid during the Great
Depression.Yet just 15 miles away, in the posh suburban enclave of
Birmingham, bidding wars are back. Multimillion-dollar
mansions are selling quickly. Sales this August were up
21% from the previous year. The country club has ended
its stealth discounts on new memberships. And Main
Street's retail storefronts are full."We're getting more showings, more offers and more sales," says Ronnie Keating, a real estate agent with
Sotheby's International.Think of this housing market as bipolar. In the luxury
sector, the recession is a memory; sales and prices are
rising. Everywhere else, the market is moving sideways
or getting worse.In the housing market inhabited by most Americans,
prices have fallen 30% or more since the peak in 2007.
That's a steeper decline than during the Depression.
Some people have had their homes on the market for a
year without a single offer.Almost a quarter of American homeowners owe more on their house than it's worth. Another quarter have less than
20% equity. About half of homeowners couldn't get a
mortgage if they applied today, says Paul Dales, senior
U.S. economist for Capital Economics. Then, there is the other housing market, occupied by1.5% of the U.S. population, according to Zillow.com.
Here, houses have outdoor kitchens and in-home spas,
his-and-her boudoirs and closets the size of starter
homes. This market is not local but global, with
international buyers bidding in cash. And the gyrations of
the stock market are cause for conversation, not cutting
expenses. In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7% since February, according to Zillow. Prices of houses under $1
million have fallen more than 1.5%.Normally, these two segments of the housing market rise and fall together. Now, they're
moving in opposite directions."Luxury is the best performing segment of the housing market right now," says Zillow.com
chief economist Stan Humphries.After every recession since World War II, housing has led the economic recovery. Not this
time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery.
This bifurcation in the market is yet another reason Michelle Meyer, chief economist at Bank of America Merrill Lynch, says her housing outlook is "increasingly downbeat." The phenomenon is not limited to real estate. You can see the same split elsewhere in the economy. Sales at Saks vs.Walmart. Pay on Wall Street vs. Main Street. Corporate profits
vs. family balance sheets. The divide also is making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can't get a mortgage?
Banks aren't granting credit to anyone "who even has a smudge on their application," says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages are at 10-year lows.
Across the U.S., prices on high-end homes fell after the subprime crash in the fall of 2008.The price on the $25 million mansion became $20 million, then $15 million. Such"bargains" are pushing luxury buyers to commit to more deals.There are other factors, too. In Detroit, a recovering auto industry is helping propel highend sales. All those car executives who helped turn around the auto industry used to rent homes. Now they are using their performance bonuses to buy.Wall Street's recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of real estate closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley,
twice as many homes have sold for $5 million or more this year than last.
But in the other housing market, an apartment tower built in 2007 in San Jose, Calif.,recently converted to all-rental. The building had not sold a single unit.In Miami, a city that exemplifies the foreclosure epidemic, idle cranes dot the skyline.Unemployment shot up again this summer from 12% to 14%, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and jogging paths that you can pick one up for $25,000, 66%
off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.
"In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not," says Peter Zalewski, founder of the real estate firm Condo Vultures.
One big factor in the divide in the real estate world is foreign cash. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida,
international buyers account for a third of purchases, up from 10% in 2007.
"Luxury properties are drawing buyers from all over the world," says CoreLogic's chief economist, Mark Fleming.
That's true even in such seemingly all-American enclaves as Detroit. Step off a plane at the city's futuristic new airport and the internationalization of the Motor City is obvious. All the signs — as well as the announcements on the public address system — are in both Chinese and English.
In the middle of the terminal sits a five-star Westin Hotel, the better to serve the global executive class that jets in and out as the U.S. auto industry regains its footing. Many of them are buying in Birmingham, Mich.,, where home values are up 3.1% this year, according to Zillow.com.
In Birmingham, store owners say business is as good as it was during the boom years last decade. Chasta Fase, who owns Old World Olive Press, a boutique shop that sells $30 bottles of olive oil from around the world, says business "has been just awesome" since she opened in November. And since April, she says, customers have been spending more
than ever.
Real estate agent Keating says the same is happening to her sales. In June, she sold a lakefront mansion in Birmingham to a Russian entrepreneur. He had purchased a local steel company that he plans to turn around.
"They're coming from all over," says Keating, who for the past 30 years has sold most of the car barons their homes, from Roger Smith, former CEO of General Motors, to former Chrysler CEO Bob Nardelli. "I don't know who any of them are anymore."Copyright 2011 The Associated Press.

Good news!

2011-09-21T07:55:00.001-07:00

Existing-Home Sales Jump Nearly 19% From Last Year

09/21/2011BY: CARRIE BAY

ales of previously owned homes came in 18.6 percent higher last month when compared to August 2010, according to data just released by the National Association of Realtors (NAR).

Completed transactions rose 7.7 percent on a month-over-month basis to a seasonally adjusted annual rate of 5.03 million, up from 4.67 million in July.

The latest numbers far surpassed market expectations. Many analysts were forecasting a decline while others were predicting a much more modest increase, with projections for the annual rate ranging between 4.61 million and 4.80 million.

The research firm IHS Global Insight issued its forecast last week ahead of NAR’s report, with a word of warning that the market should be expecting “the lowest sales pace in 10 months.”

The firm’s analysts explained their rationale on declining consumer demand to buy homes, even as mortgage rates have dropped to record lows.

They noted that in August, the Mortgage Bankers Association’s purchase index dropped for the fifth straight month, plunging 11.9 percent.

“Based on this reading, and on the 1.3 percent drop in the Pending Home Sales Index in July, we project that existing home sales dropped 1.3 percent to a 4.61-million-unit annual rate in August,” IHS said.

But Lawrence Yun, NAR’s chief economist, says he sees “some positive market fundamentals,” even in the face of such headwinds as tight credit and appraisal problems, along with regional disruptions created by Hurricane Irene.

“Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” Yun said.

“Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation,” Yun added.

(developing story)

Calling all investors, now is the time to buy on the outer banks.

2011-09-20T12:23:00.001-07:00

Housing industry problems dragging down economy

Doldrums will linger until sector improves

By Michael E. Kanell

The Atlanta Journal-Constitution

It barely rated a mention during either the president’s speech Thursday or the Republican candidates’ debate the previous night.

Enlarge photo

APForeclosures is one of many elements plaguing the housing market in metro Atlanta and nationally. “Housing is the story,” said Dean Baker, co-director of the Center for Economic and Policy Research. “We lost 6 percent of the GDP and we need something to replace it, and we’ve got nothing to replace it.”

More business news

Yet the moribund housing industry — and the record number of foreclosures tied to it — have been critical factors in perpetuating this weak economy.

“Housing is the story,” said Dean Baker, co-director of the Center for Economic and Policy Research. “We lost 6 percent of the GDP and we need something to replace it, and we’ve got nothing to replace it.”

Housing prices have fallen nationally to 2003 levels. In Atlanta, homes have lost a decade of gains. That has left many homeowners “underwater” — owing more than their home is worth. Meanwhile, new construction has dwindled to a trickle.

About the only surge has been in foreclosures. The combination of subprime and other questionable mortgages, and massive layoffs left millions of homeowners unable to make their payments.

Many economists believe that a plan for recovery that doesn’t confront the housing crisis may be just tinkering around the edges.

The economy must grow at a pace of about 3.5 percent to lower the painfully high jobless rate — 9.1 percent nationally and 10.1 percent in Georgia. But since emerging from recession in 2009, expansion has been far weaker.

Housing’s drag guarantees that growth will stay anemic, said Mark Vitner, senior economist at Wells Fargo.

“Until housing begins to grow again, it will be very hard for the economy to grow faster than 2 percent for more than a quarter or two,” Vitner said.

The damage has been worse than average in metro Atlanta, which repeatedly led the nation in housing starts for more than a decade.

Tens of thousands of jobs vanished — some directly tied to housing, like builders, bricklayers, painters and brokers. But many others went away, too — real estate lawyers, accountants and workers in carpet factories.

And with the disappearance of each paycheck, so did some spending on clothes and jewelry and entertainment. The result: a hobbled local economy.

Housing woes hurt the economy in a number of ways:

When people feel richer, they spend more money. That wealth effect is reversed when home prices fall and people feel poorer.
Confidence also spurs spending. Confidence is contagious. So is fear.
Many homeowners — even those with good jobs — are no longer able to use their home equity as a backstop against unexpected expenses.
Borrowers who are underwater generally cannot refinance mortgages to lower rates.
Many homeowners are unable to sell. That makes it hard to take a job elsewhere — that is, if one can be found.
Economic mobility also is undermined by the crisis, according to a study by the Pew Center on the States. “Housing in and of itself is a real important asset, the largest asset held by many Americans,” said Erin Currier, project manager for the study. “With housing’s collapse, we are seeing a deterioration of assets, and that has long-run aspects in terms of people’s mobility.”
Perhaps most critically, when the price keeps falling for resale of homes, there is little incentive to build new ones.

“New construction is at a 50-year low, and new construction is jobs,” said Steve Palm, president of Marietta-based SmartNumbers, a real estate research and consulting company.

Housing growth lines up with job growth. In the three years before the burst of the housing bubble, metro Atlanta added 165,200 jobs. In the three years after, the region lost 220,700 jobs.

Another way to look at it: Each housing start accounts for creation of roughly 2.5 jobs directly and at least one more job in indirect spending, said Vitner.

Metro Atlanta had been accustomed to construction of 50,000 homes a year, he said. “That’s almost 200,000 jobs that would be there. That’s how many jobs we are short.”

Nationally, housing starts before the boom ran at about 1.6 million a year, Vitner said. “So we are 1 million short — that’s 3.5 million jobs that do not exist because housing is as it is.”

What’s more, the market is unlikely to recover until foreclosures work their way through the system. That will take a while: More than 2 million homes are in the foreclosure process and nearly as many other mortgages are seriously delinquent, Vitner said.

More than $22.25 billion in mortgage loans have been foreclosed on in metro Atlanta since the end of 2007, Palm said.

In his high-profile speech on jobs, President Obama’s only reference to housing was to say that his administration would “work with federal housing agencies to help more people refinance their mortgages.”

The administration’s Home Affordable Modification Program was meant to help up to 4 million homeowners avoid foreclosure. It has assisted less than 750,000.

If housing is so important, why the lackluster response?

Politics is one answer. The government, Fannie Mae and Freddie Mac are partially blamed for the financial crisis that caused the recession in the first place. So, some believe, it doesn’t make sense to give them additional resources to right the ship.

Also, some solutions are inhibited by the sheer complexity of dealing with an intricate system that has several players — including sellers, buyers, brokers, lenders, Wall Street firms and investors in mortgage securities — with diverse interests.

What could be done, assuming it became politically feasible?

Allow defaulting borrowers to stay in their homes as renters. Some have suggested having governments or public-private partnerships buy the property, while others say let the banks take ownership. Or Congress could pass a law requiring lenders to permit them to remain as renters.
Require banks to accept refinancing of homes at lower interest rates, even if homeowners are underwater.
Have federal agencies issue low-interest loans to homeowners that let them stay current on their mortgages.

“There will not be one solution to this problem,” Vitner said. “There will be a number of solutions. It will require some out-of-the-box thinking.”

Meanwhile, pessimists fret that housing has much more damage to do.

After overbuilding for years, the nation has roughly 2.5 million more homes than needed, said New Jersey-based economist A. Gary Shilling. At the rate that new households are being formed — and some new homes still being built — it will take about five years for the market to be back in balance.

Average home prices are down about 33 percent. With supply outstripping demand, home prices might fall 20 percent more to return the market to the pre-boom trend, he said.

That would nearly double the number of homeowners who are underwater and slash the amount of equity that others have in their houses, Shilling said. “It would be devastating to consumer spending,” he said. “And that is a recipe for recession, if it happens in a short time.”

Got a child in college? You may like to know top 10 College Towns for Buying Foreclosures?

2011-09-14T06:28:00.001-07:00

Top 10 College Towns for Buying Foreclosures

August 30, 2011
By Joel Cone, Staff WriterText Size A A A

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It’s the time of year when proud parents are sending their kids off to college while booster clubs are revving up for the impending college football season. What better time to consider the best college towns for investing in foreclosures?

For parents, buying a home off campus for their kids to live in can be a very pragmatic business decision. Investing in college-town real estate can also make sense for alumni or other investors looking for a property that generates a steady cash flow in a location they love — if they’re willing to put up with the heightened potential for property damage, continuous repairs and occasional evictions from student tenants who don’t feel responsible for taking care of the property.

Thanks to foreclosure sales data compiled by Foreclosure News Report for the first half of 2011, we have put together a Top 10 list of college towns for buying foreclosures.

The primary criteria for these Top 10 were the average discount on a foreclosure purchase — the percentage difference between the average sales price of properties in foreclosure and the average sales price of properties not in foreclosure — along with the percentage of all sales that were of properties in foreclosure.

Palo Alto, Calif. | Stanford University
Known as the “birthplace of the Silicon Valley,” 94 foreclosure properties sold in Cardinal territory for an average price of $350,886 during the first half of the year — an astounding 69 percent below the average price of properties not in foreclosure during the same time period.

Foreclosures accounted for 17 percent of all homes sales in the area during the period, indicating there are plenty of foreclosure deals available but not so many as to drag down the entire market.

Columbus, Ohio | Ohio State University
For the first six months of 2011, Buckeye fans paid an average sales price of $57,700 for foreclosure properties — a 58 percent discount off the average sales price of properties not in foreclosure.

A total 999 foreclosure properties sold during the period, accounting for 17 percent of all home sales in the area, again showing plenty of deals without foreclosure activity overwhelming the local housing market.

Louisville, Ky. | University of Louisville
The city that Cardinal fans call home base had 889 foreclosure properties sell during the first six months of the year, representing nearly 25 percent of all home sales during the period.

Properties in some stage of foreclosure sold at an average sales price of $84,495 during the first six months of the year, 51 percent below the average sales price of properties not in foreclosure.

Evanston, Ill. | Northwestern University
Just 20 miles north of downtown Chicago, Evanston had 74 foreclosure properties that sold in the first half of 2011 for an average sales price of $190,930 — a discount of 47 percent off the average sales price of properties not in foreclosure that sold during the same time period.

Foreclosures accounted for 24 percent of all home sales during the first half of 2011 in Wildcat territory.

Baton Rouge, La. | Louisiana State University
Foreclosure sales in LSU Tiger country accounted for just 14 percent of all home sales in Baton Rouge during the first half of the year, with 221 properties in some stage of foreclosure selling during that time period — an almost 15 percent increase from the previous six months.

Foreclosures in Baton Rouge sold for an average price of $115,043 — a 45 percent discount.

Tucson, Ariz. | University of Arizona
Fifty percent of all residential sales in the home of the Arizona Wildcats were foreclosure sales through mid-year 2011, allowing for investors to pick from a plethora of deals.

For the first six months of the year, 3,068 foreclosure properties sold in Tucson for an average price of $116,916 — 41 percent below the average price of non-foreclosure properties. Foreclosure sales were up almost 13 percent from the previous six month period.

Knoxville, Tenn. | University of Tennessee
Foreclosures accounted for only 8 percent of all residential sales in Volunteer territory during the first six months of 2011, with 431 properties in some stage of foreclosure selling in Knoxville during the first half of the year.

Foreclosures sold at good discounts, with an average sales price of $108,595 — 41 percent below the average sales price of properties not in foreclosure during the same time period.

Tallahassee, Fla. | Florida State University
The Florida state capital, Tallahassee was rated one of the nation’s Top 10 Bargain Retirement Spots by U.S. News & World Report earlier this year.

For the first half of 2011, the home of the Seminoles had 339 foreclosure sales, a 14 percent increase from the previous six month period and up 11 percent from the first half of 2010. Foreclosure properties in the area sold for an average sales price of $112,790 — a 35 percent discount. Foreclosure sales accounted for nearly 29 percent of all home sales during the period.

Lubbock, Texas | Texas Tech University
The home of the Red Raiders documented 74 foreclosure sales for the first half of the year, selling for an average sales price of $91,454 — a 33 percent discount. Foreclosure sales accounted for only 5 percent of all residential sales in Lubbock during the six-month period.

Ann Arbor, Mich. | University of Michigan
Wolverine boosters saw 130 foreclosure properties sell during the first six months of the year, 24 percent of all residential sales during the period. The average foreclosure sold for $181,766 — 31 percent below the average sales price of properties not in foreclosure that sold during the same time period.

With an average foreclosure discount of 44 percent, these 10 college towns offer parents, alumni and other prospective real estate investors plenty of opportunity to purchase a bargain property in a stable housing market anchored by a large university providing a steady stream of potential renters.

________________________________

This article was excerpted from the August 2011 issue of the Foreclosure News Report, published by RealtyTrac. Order a free issue of this award-winning newsletter.

July Stats-Sales during first 7 months are up 5% as compared to sales for same time in 2010.

2011-09-12T05:05:00.000-07:00

The biggest gains were in land sales which increased 28%. The median sales price for end of July for Residential Sales (not including condos) was $352,469, as compared to 2010 at $330,425. Another interesting stat is the number of Residential listings listed as a potential short sale has dramatically declined while the number of sold bank owned sales have dramatically risen. See charts below from Outer Banks Board of Realtors.

Good News for real estate and life!!!

2011-09-01T11:35:00.000-07:00

White House could unveil mortgage plan next week

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Analysis & Opinion

Home prices face tough road ahead

Tue, Aug 30 2011

Related Interactive

Housing Market

By Margaret Chadbourn

WASHINGTON | Wed Aug 31, 2011 9:43am EDT

(Reuters) - The Obama administration is considering unveiling new plans next week to revive the ailing housing market and reduce foreclosures, including an effort to help troubled borrowers refinance their mortgages.

The administration has been working for weeks on how to implement a mortgage relief program. President Barack Obama could include a nod to the plan in a speech on job creation next week, sources familiar with the administration's plans said.

The refinancing initiative would allow certain borrowers to refinance loans that are backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, the sources said.

A broad-based effort to automatically refinance millions of mortgages is not in the works, yet the administration is looking to take targeted changes to an existing program that would allow more borrowers to take advantage of low mortgage rates, including allowing borrowers to refinance even if they owe a significant amount above their property's current value.

The idea is to help struggling borrowers refinance at current low interest rates, which would cut their monthly payments and free up cash for other spending. The hope is that this could drum up overall business activity.

The average rate on a 30-year fixed loan was 4.22 percent last week, close to the lowest level in more than 50 years, according to Freddie Mac.

Fannie Mae, Freddie Mac and the FHA, which together account for 90 percent of the U.S. residential mortgage market, would be given permission to begin refinancing plans for borrowers that are current on their mortgage payments and not considered seriously delinquent, according to the sources.

While the administration is under pressure to firm up the details, it is not yet clear whether borrowers seeking to take out a loan that is more than 80 percent of the value of the home would qualify for refinancing. The White House has kept the specifics of the refinancing plan closely guarded as it attempts to work out the details.

White House officials had long been wary of trying aggressive new programs to revive the housing market. The prevailing view at the White House over much of the last two years was that any remedies would cause at least as many problems as they solved.

A mainstay of the administration's housing initiative, rolled out in April 2009, has fallen short of expectations. Known as the Home Affordable Refinance Program, it was originally intended to help 4 million to 5 million homeowners avoid foreclosure. As of May it had helped only about 810,000 homeowners refinance into loans with lower rates, according to the Federal Housing Finance Agency.

But Democrats close to the White House said the weakness in the economy and the drop in mortgage rates have led officials to take a second look at ideas that could bolster the housing market and ease the strain on household budgets.

Analysts who favor action say housing is at the heart of the economy's woes and that its moribund state is creating a risk of a Japanese-style "lost decade" of economic stagnation.

"We can either spend the better part of a decade allowing households to gradually work off their debt burden," said William Galston, a scholar at the Brookings Institution think tank. "Option number two is that we try to jump-start the process."

"I think it's time to go back to the drawing board," he added.

CHICKEN OR THE EGG

Some economists, however, believe the strain the housing market is putting on the rest of the economy can be addressed in other ways, such as using infrastructure spending and tax credits to encourage hiring in order to reinvigorate growth.

Christina Romer, a former top economic adviser to Obama, said that compared to other measures to address the economy's woes, a housing-specific program could be expensive. She noted that homeowners tend to be wealthier than the general population so such programs would not be targeted to people most in need.

"A bold jobs program might be just as effective and better targeted to those who need help the most. Also, healing the economy is as likely to heal the housing market as programs aimed directly at housing," said Romer, a professor at the University of California, Berkeley.

And while refinancing has accounted for the majority of mortgage applications for many months now, according to weekly data from the Mortgage Bankers Association, there is no evidence that the refinancings are providing a spur to consumer spending.

The refinancing initiative under consideration by the Obama administration mirrors a plan contained in legislation co-authored by Senator Barbara Boxer, a California Democrat, and Senator Johnny Isakson, a Republican from Georgia.

In a letter on Monday to Edward DeMarco, acting head of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, Boxer argued that the plan would provide a "dual benefit."

She said it would help Fannie and Freddie avoid losses, since fewer borrowers would fall delinquent, while providing a boost to the economy.

BONDHOLDERS ON THE LOSING END

The loudest objections are being registered by holders of mortgage bonds, who would take a hit if loans are paid off early.

Some fund managers have loaded up on agency mortgage-backed securities, those bonds backed by mortgages guaranteed by Fannie Mae, Freddie Mac and the Government National Mortgage Association, because they offer higher yields than U.S. Treasuries.

Last week, the $5.4 trillion agency MBS market recorded one of its worst weeks in a year as traders dumped mortgage bonds out of concern the White House would put forward a plan that would shoulder them with losses.

While mortgage rates have been hovering around record low levels, banks remain stingy with lending although they are sitting on more than $1 trillion in excess reserves. Homeowners without a job or good credit histories have been essentially shut out of the refinancing process.

Some investors say the economic benefit of a government-encouraged refinancing wave would be minimal.

"It's a political hail Mary. It's unclear why they want to throw a monkey wrench into a $5 trillion market," said John Kerschner, head of securitized products at Janus Capital Group in Denver. He said the net benefits for the economy are negligible, perhaps adding $20 billion to $30 billion "at best" to the U.S. economy.

(Additional reporting by Richard Leong in New York; Editing by Leslie Adler)

The founder of For Sale By Owner.com Uses and agent to sell his home!

2011-08-10T11:28:00.000-07:00

^-A A ⁺A

ForSalebyOwner.com Founder Uses Agent to Sell Home

DAILY REAL ESTATE NEWS | TUESDAY, AUGUST 09, 2011

The founder of a popular for-sale by owner Web site used a real estate broker

to help sell his 2,000-square-foot, two-bedroom New York apartment after

it lingered on the market for six months. Colby Sambrotto, the founder and

former chief operating officer of ForSalebyOwner.com, tried to sell the

property himself by listing it online and through classified ads, but after six

months of it sitting on the market, he sought the help of a real estate broker.

Broker Jesse Buckler told Sambrotto the condo was priced too

low and wasn’t attracting the right buyer for the condo. "At first he wouldn't

let me increase the price," Buckler said.

"I told him I know what I am doing—the market is picking up."

The condo soon attracted multiple offers and ended up closing

recently for $150,000 more than the original asking price.

Source: “DIY Guru Gets Broker Help,” The Wall Street Journal (Aug. 3, 2

JUNE 2011 STATS from Outer Banks Board of Realtors

2011-08-04T06:08:00.000-07:00

Overall- Sales for June were up by 3% from one year ago and 12% from last month. Residential Property Sales in 200k to 499k range were the hottest properties with sales up 7% since last year and 48% since May.

Distressed Residential Property Sales were down 6% from last year, however the number of sold short sale units was up 81% from a year ago. In comparison the number of sold bank owned units were up 11% from May, but was down 48% from last year.

Median Sales price for single family detached homes was down 7% from last year and down 17% from last month. The median sales price for condos was down 36% from last year, however the median sales price was up 28% since last month.

Inventory- Overall inventory has declined over past year by 14% and land has declined 15%.

Foreclosure Report- Dare County foreclosure are up 28% in June/2011 with 50 units over May/2011 with 39 units.

Buyers, what are you waiting for? Check out the link below....

2011-07-26T03:31:00.000-07:00

If thinking about investing in this market but not sure, you may want to look at the link below. Now is the time to buy with interest rates the lowest we've seen in years.

Seller's if your home isn't selling you may want to think about reducing your price. I recently pleaded with one of my sellers for a reduction which I hated doing b/c I got yelled at everytime I asked. After my lashing they decided to listen and we ended up getting multiple offers and going 20k over reduced price. My sellers were so excited and thankful they reduced. Many buyers that couldn't dream of owning on the outer banks in 2005, are now taking advantage of low interest rates and home values only to make dreams of ownership on the outer banks a reality.

http://www.mcimageserver.com/IR/2011_7_18/2066___.pdf

Distressed Sales-- 12% of total listings,but 40% of total Sales....

2011-07-19T03:24:00.000-07:00

3 yrs needed to clear out distressed properties says managing director of quantitative research for National Association of Realtors.

2011-07-11T12:27:00.000-07:00

3 years needed to clear ‘distressed’ homes

July 9th, 2011, 1:00 am · 36 Comments · posted by Jeff Collins

Jed Smith is managing director of quantitative research for the National Association of Realtors. He says that short sales and bank-owned homes will account for around 35% of U.S. housing deals for the next three years. We asked him how he sees the outlook for housing …

Us: What will the industry’s mood be in November when Realtors gather for NAR’s annual convention in Anaheim?

Jed: Realistic optimism in terms of sales and price expectations may be the important issues. Most sources appear to view the market at or near its bottom with modest recovery in a number of regions. People recognize that the economic and job recoveries are slow, but there is a general belief that we have already seen the worst of the bad news.

There is also recognition, however, that we really can’t predict anything — given that governmental, international, and consumer trends and actions have become increasingly unpredictable with the prolonged Great Recession. Unknown unknowns, frequently mentioned as Black Swans, are increasingly an important factor. Therefore, to the degree that we can foresee and predict, I think the outlook will be one of cautious optimism.

Us: The housing recovery is on anything but warp speed. How much longer will this downturn go on?

Jed: Sales have fluctuated, ranging on an overall yearly basis between 4.9 million and 5.2 million since 2008. As of May, home sales were in the 4.8 million range annualized, and we expect approximately 5.1 million existing home sales for 2011 and 5.3 million in 2012 as the economy continues to recover and create additional jobs.

Jobs are the key driver of sales, and the disappointing job market over the last few years appears to have impacted the existing home sales market. We now appear to be in a recovery mode.

It looks like home sales will be stronger in the second half of the year, but healthy job creation is necessary to ensure a solid recovery in both housing and the overall economy. The job market has sputtered recently, and because variations in local job creation impact housing demand, the housing markets will recover unevenly around the country.

Prices have been a major disappointment in recent years. Part of the price weakness in existing home sales has been to the overall deleveraging in the economy, and part of the price situation has been driven by the significant number of distressed home sales (foreclosures and short sales) that have driven the markets. Approximately 35% of existing home sales are distressed, and while the number will fluctuate from month to month, we expect to continue to have a distressed property situation for the next three years.

We expect price stabilization in the forthcoming years, with modest increases in areas where jobs are created and distressed inventories decrease. Absorption of inventory is the key to price improvement, and we expect this to occur in forthcoming months.

Us: What’s holding the housing market back?

Jed: As a result of the Great Recession we have issues of job creation and loan availability. We think that there is a significant level of pent-up demand given the overall growth in the number of households in the past 10 years, but pent-up demand can only be realized if there is a meaningful gain in jobs.

In addition, low interest rates are not particularly beneficial if financial institutions have unrealistically high credit standards due to excessive risk aversion. Finally, some additional recovery of consumer confidence, which will probably occur as people realize that the Great Recession is over, will help to facilitate the housing markets. We are already seeing modest improvements on a local basis in home sales and prices, and hopefully the recovery will gather steam.

Us: Can the market get back on its feet with so many underwater and defaulting homes out there?

Jed: The existing home sales market is absorbing distressed properties as they come onto the market. Unfortunately, distressed properties tend to sell at discounts of 20% to current market prices. The total level of foreclosures and short sales has been in the neighborhood of 35% of overall existing home sales for the past several years, sometimes more, sometimes less on a monthly basis.
The outlook for the immediate future is for moderately rising sales and increasing price stability, with modestly rising prices in areas with good job recovery and loan availability. We would like to be able to forecast a booming recovery; however, the realistic outlook is for modest improvements on a continuing basis.

Us: Most say the market is hampered by tight lending standards. Has the pendulum has swung too far?

Jed: Interest rates continue to be near historic lows, but credit availability is limited. Many consumers are simply unable to obtain loans — even with substantial down payments in hand and credit scores in the 800 range. We get approximately 1,000 comments every month in response to our Realtors Confidence Index survey, and our members cite numerous examples of responsible potential buyers being unable to get mortgages. Financial institutions appear to have become unduly risk averse. This has a major negative impact on the housing markets.

The pendulum has indeed swung too far. Dr. Bernanke has recently noted that credit availability is an issue — and he should know, being chairman of the Federal Reserve Board. Our view is that if banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.

Us: Any final thoughts?

Jed: There is a tendency to focus on prices and housing as an investment when discussing the existing home sales markets. However, people buy houses because of lifestyle preferences — the desire to own a home for personal and family reasons.

In addition, NAR surveys indicate that homeowners currently own a home, on average, for approximately 8 years; monthly or even yearly fluctuations in value are actually of no significance to most homeowners.

Although there are clearly financial benefits to owning a home, the clear benefit of homeownership is the actual enjoyment of the home as a place to establish roots, build a future, and live your life — not the maximization of a financial portfolio strategy.

July 4th in Colington Harbour...

2011-07-06T06:02:00.000-07:00

What a great place to enjoy July 4th festivities. You don't have to leave the island and tackle the beach traffic. You can stay right here in our gated community and enjoy the fun all day.

Boat Parade Started at 1pm. This is where decorated boats ride through the canals with super soakers and have water fights with other boats and spectators. You'll see my family is setting up for the parade below. The kids were bummed b/c the water hose didn't reach the boats.

Wade and Zoey drinking their virgin margaritas!

Cousin Kimberly and Zoey getting ready for their first boat parade (colington style)

This boat is decked out in flags.

The J-Ellis band started at 4:30 at soundside beach/park, so we loaded up the boat and went over to see the band and have hot dogs and hamburgers. See festivities below. It was nice to have fun with my fellow Colingtonians. What a fun community. This is the first summer we've spent in the Harbour in 3 years, and my first boat parade, but not my last. Next year we're getting super soakers ready and decorating the boat! Below you'll see soundside fun.

Lew Molton dancing with Isla and getting ready for baby number 2 (due July 4th) :)

Preggers Amber looking at daddy and Isla having fun and ready for the new addition to the fam

Mike showing Ike how to jam.

The cousins enjoying the soundside park

Jay Ellis and Kenton jamming! Thanks for playing Jay, we love your band!

You can see why living in Colington Harbour is one of the best boating communities on the outer banks. Not only do we have fun, and beat to a different drum, our canals fit all size boats unlike a lot of soundfront communities on OBX. We have a soundside beach/park,saltwater pool where water aerobic classes are offered,a Clubhouse that hosts parties, activities, yoga, and zumba classes. Love my community!

Freddie Mac Economist says 2nd half of 2011 looking up for housing market

2011-06-28T11:02:00.001-07:00

Monday, June 27th, 2011, 11:44 am

Freddie Mac Chief Economist Frank Nothaft said the overall economy should begin to accelerate in the second half of 2011 with an improved housing market close behind.
Nothaft said with the continued support of the Federal Reserve, monthly job gains will continue, bringing the unemployment rate toward 8.6% by the fourth quarter, according to his blog post Monday. Mortgage rates, he said, should remain between 4.5% and 5% over the rest of the year and recent price drops pushed affordability even higher.
Economic indicators sagged this spring. Unemploymentinched up to 9.1% in May. Consumer confidence hit a six-month low and existing home sales plummeted 15.3% that same month. Confidence among small businesses and homebuilders lingers at historically low levels.
Nothaft said consumers uncertain about the overall economy are holding back on purchasing "big-ticket items" such as homes.
"Some potential buyers who have the means to buy are awaiting clearer signs that home values have firmed," Nothaft said.
When that occurs remains in question. The Standard & Poor's/Case-Shiller Home Price Index officially double-dipped this spring. Research from Altos Research said values should bounce up and down for an extended period of time. And Capital Economics analysts said a lack of demand should keep prices from a consistent rise until 2014.
But Nothaft said the rental sector is a lone bright sign in today's housing market. The National Multi Housing Council reported new debt and equity financing became more available. Vacancy rates on buildings with at least five apartments dropped over the past year and monthly rents rose.
"Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, a number of positive signs in the economy indicate that growth will continue and is likely to accelerate in the second half of this year," Nothaft said.
Anthony Sanders, a professor of real estate finance atGeorge Mason University, said with tumultuous changes coming to the housing market such as tightened purchasing standards and heightened guarantee fees at Fannie Maeand Freddie Mac, the future for housing remains cloudy.
"Mortgage rates are very low. House price declines are slowing in many areas of the country and level if not increasing in others. Mortgage delinquencies have slowed down," Sanders said. "But the economy is in a 'soft patch' and it is unclear how long that will last."
Nothaft remains optimistic, pointing to the encouraging signs in the rental market and noting home sales remain above last year's pace when tax credits first began to dry up.
"Look for a gradual improvement in housing activity in the coming year," Nothaft said.
Write to Jon Prior.