March Pending Home Sales Rise - Market Recovering

 Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9.  The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.
Click this link for the full article from Realtor.org

Mortgage payments at lowest level in decades

Click this link for the full article in CNN Money in which economist Patrick Newport says, "this is the best time in 40 years to buy."

Fannie & Freddie are Speeding Up Short Sale Process!

Click this link for the full article on how Fannie Mae and Freddie Mac are requiring loan servicers to either approve or disapprove a short-sale offer within 60 days.

Is Now the Time to Buy Real Estate?

Click this link for an interesting 8 minute interview with Alan Kendall

In my 43 years of selling real estate in Salt Lake I've never been so convinced that now is the time to buy real estate! The media and real estate experts continually report that 2012 is the year to buy real estate. Kendall says -In 2015 Home prices will be 30% more than they are in 2012 and Interest rates will be 1.5% more. This is because October 2012 the Alt-A and Option-arms loans will quit adjusting to higher payments for home owners causing short sales to diminish. When Short sales diminished after the aerospace recession in 1995, prices jumped 30% and interest rates jumped 1.5% withing 4 years. 2012 is the best year to buy and the best year to refinance. See my video, "Case Shiller index grossly flawed"

Since home values have dropped considerably, the U.S. median list price has dropped considerably, too. Couple that with the lowest interest rates they’ve ever been and it's a perfect storm of real estate buying opportunity, especially for starting out your career as a landlord.

Note: If you are one of those folks that believes you can predict the future and hopes prices will go down, they may. But interest rates might go up which would nullify any gain you would hope to obtain from any price decrease. But more importantly, all investments fluctuate in value over time. You should not be concerned about short-term fluctuations in a long-term investment, like real estate. If you buy sooner over later, ten years down the road not only will you own more properties overall than someone who waits, but you’ll most likely have earned significant equity in all of them. And you won’t care about any price fluctuations that might have occurred in 2012, 2013, or 2014.
Here are tips to get started. And, if you start a few years out of college, and amass several properties, you will probably be retiring early.
 
Go for the long haul -- Rarely do people increase their wealth by owning property for short periods of time. Long-term investing in cash flow-producing assets like real estate is the way to go.
Don’t’ give up your day job! – You need a solid job to be able to save money for a down payment and be able to obtain financing to buy properties.
Buy cash flow-positive properties – If you don’t understand why to do this, you might want to skip real estate ownership. See “What is a Good Real Estate Investment” article.
Buy a property that you love! – The more you love the property for all the right investment reasons, the better chances you’ll own it long term.
Skip the prize properties – Prize properties have negative cash flows and are NO prize, it’s the moderately priced properties that are the real prizes.
Buy as a personal residence to change to rental – Buy properties in life that make good rental property investment sense and first live in them as a personal residence. When you buy as owner occupant, you get the best financing and can put down a smaller down payment if you so desire. Plus you learn the property characteristics, issues, and can fix issues so they won’t be issues once you make it a rental. Then, move out after one to three years and into your next personal residence that will become a rental property a few years later. This also ensures you will only buy properties in areas where you are willing to live, and that’s very important to do as a real estate investor.
If it sounds too good to be true, it is! – Real estate is high risk as there are many things that can go very wrong. If it sounds too good to be true, be very careful. Once you take ownership of the property, you have to correct the problems and issues,or live with them.
Fully educate yourself for 3-6 months – Talk to other people who own properties, read books, go to the local real estate investment clubs, etc. The better you educate yourself, the higher the chances you will take the proper steps to reduce your risks and make smart and safe decisions.
Buy properties in good shape – Fixer-uppers are money pits and rarely sell at a large enough discount to compensate for all the work needed. Buy properties that are as close to rental ready as possible. A great move, if possible, is to buy a property with a good tenant already renting the property!
Be conservative on your expectations – Always overestimate the amount it will cost to renovate a property, underestimate the rental income you will earn, and overestimate the expenses you will have to pay. Then, when you blow it out of the water, you’ll have a big smile on your face and be able to gloat to all your friends!
Stay away from high vacancy areas or declining cities – Buy properties in nice, moderate, working class areas where there are not too many foreclosures, empty properties, or in a city or area that is in decline.
Start young, but not before you are settled in a particular city – You want to start early, but make sure you're somewhat settled before you take on this big responsibility. Have fun when you are young, there is still plenty of time to get rich on real estate. Just start saving your pennies for that first down payment.
Death, taxes, and…. – Those two items are guaranteed in life. But, there is one more item if you are a real estate investor, and it’s 100% guaranteed: If you own real estate, you will feel pain along they way. Things will go wrong, but you will recover and will likely look back on the journey with fondness when you retire early.
And let’s end where we started, once again with the most important item in real estate investing:
Go long! – Long-term ownership will give you the highest chances of entering retirement with a nice rental property cash flow stream. And long-term ownership equity gains will compensate for the hassles and issues you have along the way.

Five Month Supply of Housing Inventory

   According to the Salt Lake Board of Realtors, more homes continued to be sold in February, adding to a nearly year-long trend of rising sales. Sales of previously-owned homes in Salt Lake County in February increased 25 percent to 826 sales compared to 663 sales in February 2011. February was the ninth consecutive month of rising home sales.
   "Home sales in February were the highest on record for a February month in five years," said Donna Pozzuoli, President of the Salt Lake Board of Realtors. "Homes under contract (pending sales) in February were up 36 percent compared to last year at this time. We expect home sales to continue to show big gains through this summer."
   In the first two months of 2012, home sales were up 29 percent compared to the same two-month period in 2011 (1,597 vs. 1,240 sales last year).
   The median homes sales price (all housing types) in February was down slightly at $176,250, a 2 percent decrease compared to a median price of $180,000 in February 2011.
   The inventory of homes for sale in Salt Lake County in February fell to 5,161 units, down 30 percent from 7,418 units in February 2011. Based on current home sales trends in Salt Lake County over the past year, there is a 5.2-month supply of housing inventory. A five- to six-month supply of housing inventory is considered a normal market.
   Nationally, total existing-home sales rose to 4.59 million in February, up nearly 9 percent compared to 4.22 million homes sold in February 2011, according to the National Association of Realtors. Roughly one-third of all home sales across the country in February were all-cash transactions.

Deficiency on Primary Residence isn't Taxable Through 2012

Click this link  for the full article on how when a home goes into foreclosure or is sold in a short sale, the difference between the amount that is owed and the amount the lender ultimately collects will not be taxable as income for the primary residence borrower through the end of 2012.

Opening the Door to Homeownership Class

Utah State University is sponsoring a class on Homeownership that would be especially helpful to first time homebuyers.  It is a two part class being held on April 10th and April 11th from 5:30 to 9:00 PM. Here is the link for all of the details.

February Existing-Home Sales Up Solidly From a Year Ago

February existing-home sales declined from an upwardly revised January pace but are well above a year ago, while the median price posted a slight gain, according to the National Association of Realtors, Americas largest trade organization.  Locally more than 800 homes were sold in Salt Lake County in February, a 24 percent increase compared to 663 sales in February 2011.

"Home sales in February were the highest on record for a February month in five years," said Donna Pozzuoli, President of the Salt Lake Board of REALTORS. "Homes under contract (pending sales) in February were up 36 percent compared to last year at this time. We expect home sales to continue to show big gains through this summer." Donna also said listings are falling dramatically (down 29 percent in January compared to a year earlier).  Home sales in January represented the eighth consecutive month of rising home sales in Salt Lake County.

Year-to-date, home sales in Salt Lake County were up 28 percent in the first two months of 2012 compared to the same period last year. The increase in home sales in February was the ninth consecutive month of rising sales. Statewide, home sales in February rose 18 percent to more than 2,300 sales.

Nationally, total existing-home sales rose to 4.59 million in February, up nearly 9 percent compared to 4.22 million homes sold in February 2011.

Click this link  to read more about the national statistics.