“According to Steve Murray of REAL Trends, two-thirds of clients choose an agent because of a prior personal relationship or referral. They may [...]]]> The Economist had an interesting article last week on why in America  it costs roughly double in brokerage commissions what it costs to sell a home in the UK. Some thoughts:

“According to Steve Murray of REAL Trends, two-thirds of clients choose an agent because of a prior personal relationship or referral. They may be reluctant to haggle with realtors to whom they have social ties.

In most areas a few big brokers handle most transactions. They set high fees, which lure ever more people into the profession: between 1998 and 2005 the number of members of America’s National Association of Realtors grew by 67%. These agents waste time competing with each other for the exclusive right to sell each home, sapping productivity. According to Norm Miller of the University of San Diego, an average agent in Britain closes 40-50 deals a year, compared with just seven in America.”

Perhaps a few of the lessons then might be to choose a broker not based primarily on a personal relationship or referral, and to carefully consider the “benefits” of a large brokerage.

The full article –

http://www.economist.com/node/21554204

“US housing isn’t just cheap; it is the cheapest it has been in more than 40 years. And when one considers the possibility that inflation may rear its head soon, housing looks even cheaper still.

“Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them, [...]]]> It must be an election year. Bloomberg is reporting that the the HAMP loan modification program is being extended to investors who bought multiple homes. As reported:

“Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them, under the revamped Home Affordable Modification Program, also known as HAMP, according to Timothy Massad, the Treasury’s assistant secretary for financial stability. The program pays banks to reduce monthly payments by cutting interest rates, stretching terms, and forgiving principal.

By widening the program, the plan will inevitably offer aid to buy-and-flip investors who pushed prices higher during the boom by taking out mortgages with little or no down payment.”

No doubt this program would benefit many homebuyers that bought investment or second home properties in Ocean City Maryland during the bubble years.

The full article –

http://www.bloomberg.com/news/2012-03-05/boom-era-property-speculators-to-get-foreclosure-aid-mortgages.html

Hint: They can’t.

As repored:

“… the federal government is about to dump millions of the foreclosed homes at fire-sale prices to hedge funds and private-equity [...]]]> The Daily Reckoning had an interesting article yesterday about how ordinary investors can get in on bulk purchases of portfolios of REO Bank Owned properties sold at fire sale price.

Hint: They can’t.

As repored:

“… the federal government is about to dump millions of the foreclosed homes at fire-sale prices to hedge funds and private-equity firms with government connections. If you’re an individual investor who might like to get in on the action, forget it! You’re shut out of this deal.

Homeowners who might be interested in buying the foreclosure property next door? Out of luck. And retirees hoping for a return on their money more than 1.8% on a five-year CD find another avenue closed off.”

Well, folks, as George Carlin once said: “It’s a big club, and you’re not in it.”

We are back to buying REOs, mostly one property at a time, certainly at higher prices than the bulk sales envisioned above.

Be careful out there, folks. Seek experienced assistance.

The full article –

“Ocean City property owners started the new year with good and bad tidings, depending on how they feel about having a lower property assessment.

On the [...]]]> Ocean City Today on Friday reported that reduced property value assessments will be delivered to many Ocean City Maryland property owners by mail in the coming weeks:

“Ocean City property owners started the new year with good and bad tidings, depending on how they feel about having a lower property assessment.

On the one hand, a lower assessment reflects a possible loss in value, while on the other, it could mean a bit of a tax break. Either way, the new assessments were mailed out around Dec. 28 and nearly all of them are lower than in 2009.

According to Robert Smith, the state assessor for Worcester County, the value of 97 percent of properties being assessed are going down, in part because of the number of unoccupied condos in the resort.”

The full article –

http://www.oceancitytoday.net/news/2012-01-06/Front_Page/Reduced_property_assessments_mailed_to_resort_resi.html

Imagine that.

The net effect is that the housing bust we have experienced so far is much worse than the NAR had originally reported:

“A [...]]]> The Wall Street Journal is reporting in 2 separate articles recently that the National Association of Realtors (NAR) revised their last 5 years of sales data downward to reflect, apparently, reality.

Imagine that.

The net effect is that the housing bust we have experienced so far is much worse than the NAR had originally reported:

“A real-estate trade group said Monday it plans to lower its estimates of how many homes were sold in the U.S. since 2007, after analysts came up with evidence that the group was overestimating sales.

Earlier this year, outside analysts called into question some of the assumptions behind the trade group’s data. For example, Corelogic, Inc., an independent housing data firm, found a far smaller number of home sales by tracking property records through local courthouses.”

Links to both Wall Street Journal articles –

http://blogs.wsj.com/economics/2011/12/12/realtors-to-revise-2007-2011sales-data-down/

http://blogs.wsj.com/developments/2011/12/12/housing-bust-to-look-worse-with-sales-revised/

“According to Robert Smith, director of the State Department of Assessment and Taxation (SDAT) for Worcester County, most residential property owners in Ocean City will see their values decline by an average of [...]]]> The Maryland Coast Dispatch had an article Friday reporting another decline in the taxable value of Ocean City Maryland property values:

“According to Robert Smith, director of the State Department of Assessment and Taxation (SDAT) for Worcester County, most residential property owners in Ocean City will see their values decline by an average of 12 to 15 percent since the last reassessment three years ago.”

“The values are continuing downward as expected, but maybe not as much as the last three years,” said Smith this week. “The angle of decline is less steep than it was. We saw residential property values in the county decline by as much as 17 to 20 percent over the last few years, but Ocean City’s average decline this time around is coming in at 12 to 15 percent.”

The full article –

http://mdcoastdispatch.com/articles/2011/12/02/Top-Stories/15-Decrease-In-Property-Values-Reported-In-OC

“Seeking to breathe new life into a sagging economy, President Obama announced Monday he will attempt an executive branch rescue of homeowners trying to refinance underwater mortgages, with a [...]]]> This could be very big news, and probably is, and will certainly lead to a major uptick in residential mortgage refinancing. As reported everywhere yesterday:

“Seeking to breathe new life into a sagging economy, President Obama announced Monday he will attempt an executive branch rescue of homeowners trying to refinance underwater mortgages, with a new initiative that lets people with little or no equity get a better interest rateat a reduced cost.

The initiative, the first in a series of announcements expected this week by the president, applies to homeowners with federally guaranteed mortgages who are current on their payments.

The change is not a mass refinancing of everyone in America, but a targeted fix to open up the program to more people who are underwater. “

http://www.foxnews.com/politics/2011/10/24/white-house-to-announce-major-home-lending-revamp/

“Thousands of homes are on the market in the Baltimore region. But as the commercials say, wait — there’s more.

Tens of thousands of Baltimore-area homeowners are [...]]]> An article in the Baltimore Sun reported that, according to John Burns Real Estate Consulting, Baltimore’s “Shadow Inventory” of homes may be in the 50,000 range:

“Thousands of homes are on the market in the Baltimore region. But as the commercials say, wait — there’s more.

Tens of thousands of Baltimore-area homeowners are behind on their mortgage payments. At least some of their homes will end up on the market too, either as short sales or repossessed foreclosures.

California-based John Burns Real Estate Consulting, which does market research for homebuilders and banks, estimates this “shadow inventory” in the Baltimore region at 50,000 homes as of June. That’s how many properties the company believes will eventually become distress sales but aren’t yet listed.

“That equates to 14 months of supply based on the average resale sales volume for the area over the last 10 years,” Wayne Yamano, a vice president at John Burns, said in an email. “The U.S. average is about 9 months of shadow inventory in comparison.”

As Baltimore’s real estate market has historically been a good barometer of Ocean City’ market, it leads one to wonder what the “Shadow Inventory” number for Ocean City Maryland might be.

The full article –

http://weblogs.baltimoresun.com/business/realestate/blog/2011/09/firm_baltimorearea_shadow_inventory_at_50000_homes.html

“What our survey told us is that [...]]]> Trulia had an interesting article on the attitudes of Americans, generally, and young Americans in particular, about homeownership.  Apparently, notwithstanding what has happened to housing during the last 10 years or so (bubble, bubble bursting, bust, continuing bust…), Americans are still bullish on owning their own home:

“What our survey told us is that a whooping 70% of Americans said they still see homeownership as being part of their personal American Dream. When we asked this same question back in January, it was also 70%. What this means is being a homeowner is still on most Americans’ “I’ve made it in the U.S.A.” to-do list and that nothing (that’s happening politically or economically) is going to bring them down. Even when you look at the data by age (as we did below), most said their American Dream includes owning a home. In particular, we thought this sentiment was pretty strikingly high among young people – the children of the 90s and 80s in this case – especially when you consider the fact that most do not own their own homes.”

No surprising, really. Americans still want a place to call “home” and to enjoy as their own. The full article –

http://insights.truliablog.com/2011/09/trulia-american-dream-survey-fall2011/