Thursday, January 20, 2011

residential is it a good investment now?

This article points out the obvious, that smart people are buying up real estate now....
and the doom and gloomers wait.
It is clear since the bay area hit bottom in march that bay area real estate is a good deal right now! If you work with a realtor you will see how many listings are priced at an attractive price point. Just take a look!

Real Estate: Finally a Good Investment?
by Dave Kansas
Wednesday, January 19, 2011




The housing market still looks pretty bleak: There were a record one million foreclosures last year, home prices are still falling in many regions and the number of "underwater" properties is at a record high.

And things don't look much better in other areas of real estate. The number of construction jobs continues to decline, even as other parts of the economy have added jobs. And mortgage rates have moved higher as long-term Treasury yields have backed up during the past few months.

Basically, the real estate market remains a mess.

Real estate encompasses a wide range of markets — homes, apartments, hospitals, office buildings, strip malls, dormitories and other properties. But for our purposes, let's focus on residential real estate, or homes. Here are four reasons to think residential real estate might represent a bargain — with one big caveat.

Everyone hates homes.

Homes are probably the most hated asset class in the country. That's what happens when a bubble bursts. People avoid thinking about the value of their home. Sellers moan about no offers, buyers gripe about impossible lending requirements.

Hatred of an asset is often the precursor to contrarian interest, and being contrarian is at the heart of many investment strategies. To paraphrase Warren Buffett, be fearful when others are greedy and greedy when others are fearful. Mr. Buffett backed that idea when he invested in the stock market in the teeth of the financial crisis in late 2008 and early 2009.

Of course, being contrarian for its own sake isn't wise investing. Gold was hated for years ("dead money") before it recently became an attractive asset class. Still, a lot of smart ideas begin with the question: What does everyone hate?

Smart people are buying real estate.

This cohort is led by John Paulson, the hedge-fund manager who made $20 billion betting against the housing bubble. Last fall he said in a speech: "If you don't own a home buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."

Why is Mr. Paulson so adamant? Because he believes long-term interest rates are not going to get much lower. They have, in fact, risen since he gave that speech, but they remain remarkably low by historic standards. Low rates and the expectation that home prices will rise is his argument. For his part, Mr. Buffett has predicted the housing market will bottom this year.

Real estate performs well during inflation.

There's no inflation these days, but when buying a home one should take a longer view. And the longer view shows that the economy has enjoyed a disinflationary period since the early 1980s. A number of folks think that cycle is slowly reversing itself.

If that's the case, then convention would argue for holding assets that do well in an inflationary environment. That includes Treasury Inflation Protected Securities, commodities and real estate. Remember that during the stagflation nightmare of the 1970s, real estate had a strong run.

Inflation isn't a significant issue in the U.S., but it's a growing problem elsewhere. China and India have taken steps to fight inflation, the euro zone is getting flickers of inflation and the U.K. has had oddly higher prices (above 3%) for an extended period of time. If the cycle is slowly turning, real estate makes more sense.

Demand may be coming back.

Supply isn't as out of whack as it used to be. At the end of November, home builders reported 197,000 new homes on the market, the lowest level since 1968, according to Yardeni Research. The National Association of Realtors reports that the inventory of existing homes for sale fell 4% to 3.71 million homes, which represents a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October.

Those aren't pretty numbers, of course, but they are moving in the correct direction. And that may be a reason that many home builder stocks, such as KB Home (NYSE: KBH - News), Hovnanian (NYSE: HOV - News), Pulte (NYSE: PHA - News) and Toll Brothers (NYSE: TOL - News), have come off their lows in the past several weeks.

It's all comes down to jobs. There are a zillion caveats to any positive home thesis, but the big one is unemployment. If the economy is not creating jobs, the chance of a rebound in housing is diminished. It's hard to buy a home without a job, and folks who aren't working don't want to take long-term risks.

The job market is still struggling and the debate is hot about when it will recover. Optimists see recovery this year. Pessimists see pain for several years ahead. How this X factor gets resolved will say a great deal about whether housing will rebound.

___

Monday, January 03, 2011

Making selling easier for 2011

This article has a number of good tips!
I would advise sellers to not only look at homes at open houses but to get in the car with their realtor and actually tour the best comps that are close to their area.
That way they know they will be in line with the listings that come up as comps in their area.
Also I would advise for sellers to be more flexible as well. NO MORE APPOINTMENT ONLY listings.
This completely reduces the pool of available buyers by reducing their access to the home.
This is a terrible trend listing agents started when almost all homes were short sales and reos.
As the market begins to return to normal be the first seller to return to flexible viewing times in your area, as you will get a higher sale price with more buyers having access.
I think getting it listed before the rush this year is beneficial as well.
Keep dogs outside or in the garage if at all possible when buyers view the home.
Have all disclosures and inspections done early or before the home is listed to help the sales process. Hope this has been helpful!

Sunday, January 02, 2011

resolutions for home sellers from marketwatch

Resolutions for Home Sellers in 2011
by Amy Hoak
Sunday, January 2, 2011




If your New Year's resolution involves selling a home in 2011, you've got some work to do: There's lots of inventory out there and in a buyer's market like this one, getting an offer on a home can be challenging.


Still, for the committed seller willing to do some prep work and come to terms with the current value of his or her home, locking in a buyer isn't impossible.

By listing in early January, you might be able to catch some of those early birds who start browsing in the winter so that they can find a new home before school starts in the fall, said Louis Cammarosano, general manager of HomeGain.com, a real-estate website. In fact, many buyers tend to start their searches online right after Christmas, and continue throughout January and February, he said.

[Click here to check home equity rates in your area.]

"If you hit the ground running and you're a fresh listing that has done everything right, you've got the best shot," said Cammarosano.

Consider the following tips to give your home the best chance to get noticed -- and sold -- in 2011.

Price It Right from the Start

Many sellers suffer from attachment bias, said Tara-Nicholle Nelson, consumer educator for real-estate website Trulia.com. They believe that their home is worth more than they'd pay for it in another context. While it's always a bad idea to overprice a home, it's especially dangerous in times like this because there is so much competing inventory in many local markets.

Nelson's advice: Give yourself a reality check by looking inside comparable homes during open houses. That can help you get a clearer idea of your home's value.

[See 7 Towns Where Land Is Free]

You might even consider interviewing a few real-estate agents to get more than one take on how the home should be priced, Cammarosano said.

The longer something sits on the market, the more price reductions you might have to make and the more potential buyers will assume that there's something wrong with the home, he said. So more often than not, it's best not to try testing the waters with a higher price, he adds.

Don't be afraid to advertise in the listing and marketing materials that it's not a foreclosure or short sale, Nelson said. In markets where distressed sales are plentiful, there are buyers who simply don't want to deal with the extra hassle and uncertainty of a short sale or bank-owned property, she said.

Get the House Ready

Most sellers know they need to declutter, paint in neutral colors and generally stage the home as best as they can to help buyers envision themselves in the home. Often, this is done on the advice of a real-estate agent or professional stager.

The closer you can get your home looking like a photo from a Pottery Barn catalog, the better off you will be, said Beth Jaworski, a real-estate agent in the Milwaukee area.

And make sure that your cabinets and refrigerators are cleaned out and decluttered, too. "You want to have a minimum of 'stuff' in the house. The less stuff you have, the larger the closets, basement and garage will look," she said.

Jaworski also recommends having a home inspection done a month before putting the home on the market to identify any major defects that need to be corrected.

Provide as Much Information as Possible

Have energy bills and a list of updates available for buyers to see, Jaworski said.

"Buyers are always curious what the utility bills are, how old the roof is, how many layers it has, how old the major mechanicals are and when that addition was added," she said. "The more information you can provide on the house, the better."

Consider providing a floor plan with listings as well, Cammarosano said. That way the prospective buyers don't have to keep making return visits to determine how their furniture will fit in the space -- they'll have the dimensions in hand.

Make It Easy to Show

The more available you can make your home for showings, the better, said David Welch, a broker/associate in Orlando, Fla.

Make it easy for your real-estate agent to access the property and keep the place clean.

[See Make Money in 2011: Your Home Edition]

"You want your home to be easy to show because you don't know if you will get a second chance," Welch said. "Trust me, the buyer wants to like your house. Keep it in show-ready condition," he said, so they aren't turned off by a first impression.

Be Flexible

Buyers are in the driver's seat these days, and they know they can make all sorts of unusual requests without risking the deal. Be ready.

"Buyer wants to see the house at 7 a.m. on Tuesday, OK," Jaworski said. "Buyer wants to bring 10 family members and an inspector to check out the house for three hours this weekend, OK. Buyer wants you to include the kitchen table and chairs, the painting over the fireplace and your snow blower, OK."

"The more flexible you are," she said, "the better off you will be."

Amy Hoak is a MarketWatch reporter based in Chicago.