Lots of Real Estate News

Be sure to read today's (7-25-11) Herald Leader's front page article on the housing market. http://www.kentucky.com/2011/07/25/1823118/census-measures-the-shift-in-state.html
The Fayette County PVA office has a detailed report out on the real estate numbers. Click on this link to read....http://fayettepva.com/content/pdffiles/2011AnnualReport.pdf.

Wilma Langfels reports....INFO THAT HITS US WHERE WE LIVE.....lLast week included both problems and progress in the housing market. Getting the problems out of the way, June National Existing Home Sales came in down 0.8% versus May, to an annual rate still below 5 million units, lifting the months' supply to 9.5. But all the sales decline was from condos and coops, single-family sales staying the same. We appear to be bouncing along a bottom, as the median price of an existing home rose for the month and is now up 0.8% from last year. Average prices are up 2.7% versus a year ago, nationally.

Columnist Lou Barnes made some very interesting comments...he says the newest real estate data said a lot by saying nothing. The Philly Fed index, new unemployment, sales of existing homes, starts of new homes, home prices, mortgage applications - - all flat. Neither sinking back into recession nor going anywhere.

Everyone should note but no one did that yesterday was the 150th anniversary of the bloody collision of 60,000 Americans near Manassas Junction and Bull Run creek, the first real battle of the Civil War. As defeated Union soldiers streamed back into Washington, the reality of a long, hard war arrived with them.

Those demoralized by our termporary difficulty with self-governance, struggling with mere money, might mark yesterday's occasion by remembering our strength in serious trial, and our ability to join together and to heal.

Phoebe Chongchua shares an idea we can use in this market...The adage when it comes to real estate has been "location, location, location." A recent survey, though, shows that lifestyle options are also a high priority. These include health and safety, access to cultrual activities, and family-friendly neighborhoods.

Here are some of the results. The survey found the following lifestyle options are top priorities for buyers.

• Ease of commuting by car: 38%


• Access to health and safety services: 34%


• Family-friendly neighborhood: 33%


• Availability of retail stores: 32%


• Access to cultural activities: 21%


• Public transportion access: 19%


• Nightlife and restaurant access: 18%


• Golf-friendly area-access to golf course: 6%

If you're a seller what should all this mean to you? It's an opportunity to target buyers based on their interest. Just like businesses need to know who their target market is so that they can build a brand and solicit to those consumers, so too, for sellers.

If you're selling your home and you know that the above priorities can influence buyers, it only makes sense to play up the lifestyle options that apply to your home.

April 2011 Statistics

Again, our Lexington Bluegrass Association of Realtors Report is not good news… sales down 23%, pending sales off 40% from April 2011.

I have pontificated for some time (2007) that we are in a ten year major climatic and cultural shift, in general, but specifically effecting housing and to add flame to the fire Lou Barnes says “It is no longer polite to speak of housing. The Fed does not, the White House does not, and the Treasury Secretary is too busy” to give housing adequate attention.

The two big disconnects are still out there,(1) Banks are loaning money…nonsense, and (2) The economy and unemployment are seriously improving …yes but at the same glacial pace the North Pole is vanishing…slowly but surely.

Anything positive? Yes. Most distressed properties owners understand the need to meet the markets demand for bargain pricing. It is not going to get any better quickly because the Feds have 355000 homes in inventory to come on the market. The non distressed homes that do sell have three things in common, they are: priced to this market, are in great shape and are aggressively marketed, adjusting immediately to needed price reductions and the quirks and desires of the legitimate buyer’s appraisal and inspection issues.

Our company has multiple solutions: great marketing on the internet, Auction option for 30 day cash in hand sale, and Property Management lease…..we can’t get enough homes to lease.

Robbing the Demand.....New Home Sales

I am always asked, "how is the market?" Everyone wants me to say it is getting better because the historically robust spring market has always added anticipated enthusiasm to the market. However, spring or not we are only four years in this ten year correction cycle. The statistics below are additional measurements as we redefine the bottom.

"February's sales numbers add to the mounting evidence that the housing recovery is hesitating along with the inconsistent progress of the economic recovery," said David Crowe, chief economist for the National Association of Home Builders (NAHB).

"Falling housing prices of existing homes are robbing demand for new houses and until that changes, the housing market will be in trouble,' said Yelena Shulyatyeva, an analyst at BNP Paribas.

The NAHB also noted that "even qualified buyers who are ready to make a purchase are facing frustrating challenges in terms of tight consumer lending conditions and inappropriately low appraisal values on new construction."

Prices will continue to fall until the distressed inventory is significantly reduced and of course, the economy must turn around to bring equilibrium to the supply and demand that we learned about in Economics Class 101.

The Scale is Still Tipped in Favor of Bad News

(1) Monthly existing home sales are near record lows. New home starts are at record lows.

(2) Shadow (distressed) inventory will take years to clean up.....51 months for New Jersey, 29 months for Florida, months and months where ever you live.

(3) A ship this big on the wrong course will take a long time (3 more years) to return to smooth waters.

Some telegraph messages are good.

Two marketing directors told me that on hand heavy machinery inventory has been significantly reduced in the last 6 months and a recreational vehicle marketing director reported that four wheel vehicles (think golf carts and hunting ATVs) can't keep up in production.

A regional bank is taking a gamble by financing several upper end homes to be built on their existing REO lots........what do they see coming?

Foreclosures Slowing for a Reason

Foreclosures are slowing for a reason.....not necessarily a good one. It appears they are simply bogged down. Broker's Insider reports:

"Foreclosure filings were reported on 261,333 U.S. properties in January, a 1 percent increase from the previous month but a 17 percent decrease from January 2010, according to RealtyTrac. One in every 497 housing units received a foreclosure filing during the month.

January marks three consecutive months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months when the total exceeded 300,000. However, RealtyTrac CEO James J. Saccacio says that's because lenders are bogged down in reviewing procedures, resubmitting paperwork, and formulating legal arguments, not because housing has recovered."

Inman News reports, "While fewer homes are entering the foreclosure pipeline, it's taking them longer to get through it. Among homes in the foreclosure process in January, the average number of days delinquent was 507, up from 410 days in January 2010 and 319 days in January 2009."

Kentucky had 1,210 foreclosures filed in January 2011, a 22% increase from December, and a 5% increase from a year ago.

A "Real" Hard Look at the Market

Here is the link to a great article by Lou Barnes (Prime Credit News) with a real look at the real estate market today.


He and I both are still searching for those building blocks that will staircase us off of the bottom. Although new home starts have again fallen by 12%, we have seen in our local market large, new, spec home starts ($750,000 and above) for the first time in over 3 years. The inference would be that these builders hope to be available as the market turns positive. Today's prime lending report states "Inventories are now at their lowest level since 1967."

http://search.lbar.com/images/files/Stats%20to%20post%2009_09.pdf

September 2009 sales increased 7% over September 2008. 711 sales were reported closed on LBAR’s MLS. YTD sales are down 13% over same period in 2008. Months of inventory are down to 8.8 months from a high of 10.8 months. Pendings reported in September are equal to pendings sales reported in August and are up from 650 in September 2008 to 759 in September 2009.

Overall, we have seen two positive “incremental” increases in sales. (1) First-time homebuyer’s $8,000 tax incentive has helped the $125,000-175,000 market. (2) There has been some general movement in the existing home market when the homes are priced to today’s market and are in excellent condition.

The jumbo-loan ($417,000+) home sales remain weak. Over $750,000 homes are being punished with unacceptably high interest rates and large down payments.

We see no abatement in the foreclosure numbers… banks continue to buy back the majority of Master Commissioners of Sales.