“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.

“… millions of properties are being held off the market. This “shadow inventory” is well-known (tens of thousands of people are living rent and mortgage-free in homes that the [...]]]> Charles Hugh Smith had a good read recently concerning the current state of the crippled housing market. A few snippets about how we got there:

“… millions of properties are being held off the market. This “shadow inventory” is well-known (tens of thousands of people are living rent and mortgage-free in homes that the banks have yet to even put in the foreclosure pipeline), so no one has any confidence that “the bottom is in.” Confidence cannot be restored until the market clears the inventory and a real bottom is established.”

Here’s another idea being tried that has worked brilliantly:

“Lower the rate that banks can borrow from the Fed to zero, and then pay the banks interest on all funds deposited at the Fed.

“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

“The Fiscal Times had an interesting article on the subject that is worth a look:

Call [...]]]> What a way to start the New Year, but apparently it is on the minds of the Federal Reserve also. A recent recommendation floated by the Fed suggests having Fannie Mae/Freddie Mac convert more REO’s to rentals.

“The Fiscal Times had an interesting article on the subject that is worth a look:

Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home. The effective homewonershiprate, which excludes borrowers whose homes are underwater, stands at 62 percent, down from 69 percent in 2006, according to a 2010 report by the New York Federal Reserve.

Those trends are just the beginning, concludes a July report from investment bank Morgan Stanley: the United States is becoming a nation of renters and home ownership will keep falling. And that, say some experts, could be good for the country.”

“Good for the country.”

Did you get that? These are probably the same people that told us that high homeownership numbers were good for the country a few years back during the bubble.

The full article –

http://www.thefiscaltimes.com/Articles/2012/01/04/The-New-American-Dream-Rent-Dont-Buy.aspx#page2

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

Apparently, for many, not too well:

“Zillow.com, the real estate information company, says the average price [...]]]> The Wall Street Journal had an article  on Tuesday worth considering. It revisits the subject of the tax credits to home purchasers offered by the Government back in 2009 and 2010 and analyzes how that all worked out.

Apparently, for many, not too well:

“Zillow.com, the real estate information company, says the average price of an American home fell again last month to $171,500 — the lowest level in eight years. That’s down 4.4% from a year ago, although it’s been about stable over the summer.

Now compare the average prices with those that people paid in 2009 and 2010, when they took advantage of the credits.

Zillow tracks prices closely in 157 cities and major towns around the country. Humphries says that in 110 of those, prices today are more than $8,000 lower than they were in June 2010.

The picture is even worse when you compare prices today with the average for the entire year-and-a-half that the credits were in place. By that measure, prices have fallen by more than $8,000 in about 130 cities and towns.”

The full article –

http://www.marketwatch.com/story/the-great-26-billion-real-estate-swindle-2011-11-08

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