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Mainstreet Valuations BPO Fees

Posted by John Giammarco on October 8, 2011 at 12:36am

Hello,  Can anyone tell me more about Mainstreet Valuations.  I signed up with them a few months ago, and recently received a couple of BPO orders.  The problem is that both orders were more than 25 miles from my office and they were only paying $20 per order.  Is this thier standard BPO fee?   I can't do BPO's for $20 that is an insult.  Needless to say I turned them down. 

Is anyone doing $20 dollar BPO's for Mainstreet?  I have done property condition reports for other companies for $20  but they don't require comps. and it takes about 5 minutes to complete the form. But to do an entire BPO for $20 dollars seems unreasonable.  Am I missing something?

 

Thanks for your help.

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Property Transactor Has Been Updated!

Posted by A. T. Holt on September 11, 2011 at 7:00pm

Just an FYI.

 

The site PropertyTransactor.com has been updated to allow vendors and field reps to list their companies as available resources for REO Property Preservation.  The site also allows new agents and brokers to submit maintenance requests free for a year.  As an added value, vendors who register with PropertyTransactor.com will receive a listing in the Vendor List that is search engine friendly!

 

This is a new and emerging site, so its growth will be measured by the prefessionals who join the network as new members sign on.  I believe this will be a great resource for Real Estate Agents, Real Estate Brokers, Contractors, Sub-Contractors, Service Providers, Sourcers, Field Service Agents/Reps, Field Service Companies, Foreclosure Cleanup Companies and Real Estate Vendors.

 

I would love to know how this resource can work for you!

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Case Shiller: Thoughts From Around The Web

Posted by Howard Bell on April 28, 2011 at 3:44pm

Optimists

AP

A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.

If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market, said Celia Chen, senior director at Moodys Analytics. Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.

NAR

According to the latest Realtors Confidence Index, the gap between the indices of Prospective Home Buyer Traffic and Prospective Home Seller Traffic has narrowed, with an increase in Prospective Buyer Traffic. A continuation of the narrowing of the gap between buyer and seller interest would be favorable to the strengthening of real estate markets nationwide.

In many cases, and in recent years, market prices have already declined substantially. The size of the shadow inventory, mortgages, 30 days overdue or in foreclosure, suggests that problems may not be resolved for two or three years. However, the shadow inventory is declining in size and we may be near the end of continued price declines in many markets. Chart

Pessimists

Standard and Poors

There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing. says David M. Blitzer, Chairman of the Index Committee at S&P Indices. Ten of the 11 MSAs that recorded index lows in January fell further in February.

Wall Street Journal

The enormous supply overhang of existing homes (particularly factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time, said Joshua Shapiro, chief U.S. economist at MFR Inc. From a longer-term perspective, it is important to keep in mind that in the seven years leading up to the peak in July 2006, the nonseasonally adjusted national 20 city home price index jumped by 155% (126 index points)… So far, this index has dropped by 32% (66 index points) in the 55 months since the peak.

I could fill the page with pessimists, hardly a positive thought out there today. I think the most positive take away is that at least this is an orderly retreat, rather than the kind of screeching declines we have seen.

 

Thanks For Reading

www.yourpropertypath.com

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Disclosing a Death in a Mountain View Trust Sale

Posted by Marcy Moyer on April 18, 2011 at 10:00am

California has a lot of disclosure laws for the protection of all parties in a real estate transaction, particularly buyers. There are buyers who do not want to buy a home where there has been a death on the property, and there is a disclosure obligation to disclose if there has been a death in recent years.  This works very well if the seller has to fill out the Seller's Supplemental Disclosure or The Seller's Property Questionnaire and Supplemental and Contractual Disclosure forms. But many trust properties are exempt from those disclosures, and many of those properties would be more likely to have had a recent death.  So what do you do if you want to know if there has been a death on a Mountain View home that is exempt from seller's disclosures?

The answer is really simple, ASK THE SELLER.  What you have to do is for you or your agent to ask the seller's agent to ask the seller directly if the owner died in the house.  While the trustee or executor does not have to fill out the written disclosure asking about a death, they do have to answer honestly. Trust me, the person selling the house will know.

The trust advisory that the buyer is supposed to sign when they make an offer tells you to do that. It says "If the Property is being sold because of the death of an occupant of the Property, and if Buyer has concerns about the manner, location, or details of the death, then Buyer should direct any specific questions to the seller."

So if you are concerned, ask.

If you have any questions about buyer or selling a property in Trust or Probate anywhere in San Mateo or Santa Clara Counties, please fell free to ask me.

 

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

650-619-9285

marcy@marcymoyer.com

DRE  01191194

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Mortgage Bankers Weekly Update: Mortgage Applications Decrease as Rates Jump

Posted by Howard Bell on March 30, 2011 at 12:25pm


 We all know whats happening to the single family home markets. Over supply and shadow inventory and the subsequent price declines will continue until fear is overcome and inventory is soaked up.

The kinds of issues that led to a boom bust in housing did not take place with multi family. There was no build out leading to over supply and the lender market was much more rationlized. Little of the kind of lending that led to so many foreclosures, ultimately driving home prices down.

Lack Of Supply In The Rental Market
From 1997 to 2006, multifamily construction was about 342,000 new units per year, but by 2010 they new construction declined 66%. Government estimates indicate we will need 1.5 million additional units annually just to keep up with population growth. Quite a shortfall, indeed

Lack Of Lender Interest In Funding Any Real Estate
Adding to a undersupply is a real lack of lender interest in more housing of any kind. Although this appears to be a negative, it protected the sector from the boom mania and has kept the multi family market on a sound footing.

Foreclosure
Realty Trac reports annual foreclosure filings spiked from 1 million in 2006 to 3.9 million in 2009, and were about the same number in 2010. Finally, the huge foreclosure debacle is making renters out of all of us.

Demographics
The combination of immigration, retirees moving back in and a new generation up will equal the size of the boomers,creating a large pool of new renters. Now thats huge!

A Solid Market
The national vacancy rate for rentals fell 17% last year to 6.6%, according to Reis. And rents jumped. In New York, up 9% on average in the last five years; in San Jose, they're up 8% San Francisco, one of the best rental markets in the country has seen its vacancy rates drop as rentals in all neighborhoods post new highs.
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You may republish this article, as long as you do not edit and you agree to preserve all links to the author and www.yourpropertypath.com 


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Rent vs Buy End Of Year 2010

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20% Down Payment Rule Starts April 2011 | Mortgages For The Few, Renting For the Many

Posted by Robert Moreno on March 28, 2011 at 4:22pm

Agents, are you aware of the fact that new lending requirements (Starting NEXT MONTH)  will require 20% down payments on mortgages. Yes, you read that correctly…20% down will be the new minimum requirement thanks to the new QRW Lending Rules.

Welcome to the new world of QRM: Qualified Residential Mortgage

The new QRM requirements exclude FHA mortgages. However, as you will learn in this video the NAR believes that higher downpayment loan requirements will trickle down to FHA loans as well.  With non-FHA mortgages putting less than 20% down will require a very nasty interest rate and other added fees. Bottom line agents, unless something dramatic changes in the next 12 months you will see the mortgage products requiring less than 20% down disappearing.

In this housing market…the worst ever…does it make sense to require substantially higher down payments?

Bottom line, the new QRW rules may become the new rule April 2011 and be in full effect April 2012.

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Seven Habits of Highly Successful Property Preservation Reps

Posted by Will on March 5, 2011 at 7:25pm
Although there are many techniques and tricks for being a successful MortgageFieldrep, in our conversations with hundreds of MortgageFieldreps over the years,I have identified the following seven habits that help create lasting success.it1. Providing Quality Service: Most fledgling mortgagefieldreps focus on quantity instead quality because they feel that they will make a lot more money having a long list of clients. Although true, it is also important to consider that if you have a client with a large inventory, providing quality service would go a long way in separating yourself from your competiters. Your clients will also take notice and consider giving you additional coverage area to get more orders. Many successful Mortgagefieldreps find out from their clients what are some issues with the vendors that they can help resolve. Having the proper training is key for you, your staff and subs; and fieldservicetraining.com is the best place to start.2. Promote widely: Many successful MortgageFieldReps rely on a wide range of promotional methods (e-mail marketing, blogs,REO Pro, MortgageFieldRep.com, and pay-per-click advertising), since various promotional methods work well with particular demographics.3. Promote seasonally: Successful MortgageFieldReps tend to vary the services they promote based on the season. Clients tend to seek reps that can thoroughly complete numerous winterization orders in the winter season on there assets.4. Persevere through hardship: Many novice MFR's tend to assume they cannot be successful if their initial attempts to work with a new client don't go well. Nothing succeeds like perseverance. Stick to it and don't allow early disappointment to deter you. Many of our most successful MortgageFieldRep's have attained success after disappointing early results.5. Broaden your portfolio of services: In general, all services don't do well at the same time. When some services are doing well, other services are not. Promoting a variety of services will allow you to benefit by smoothing out the peaks and valleys in the lifecycle of each service.6. Proper Documentation: Since your commissions depend on the proof you can provide to your clients, it's very important for you and your subs have the tools you need to be successful. We strongly recommend you look into a great tech company to provide you with a streamlined system. With the ammount of photos,forms, and notes that have to be taken per day on each property, things can get chaotic quickly. We have a partnership with a variety of different service providers, so you can visit our site and have a look. If your client needs information on a particular property, you want be able to provide it with a few clicks of the mouse.7. Referral Source: In a business that continues to change, it's important to have access to a long list of clients. Its equally important to know where to look. Years ago we only had the phonebook to rely on to source our new clients. In recent years, it's safe to assume that the worldwide web is where you can do most of your research and networking. We have some partners that can cut the time you spend on this crtical activity in half. If you want to succeed and you're not networking online or at a conference, you're planning to fail. You can do a search on google or yahoo to find a few clients.Our top Mortgage Field Reps generates millions of dollars worth of business each year even in difficult economic times. By adopting these seven simple successful MFR marketer habits, perhaps now you can too!
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WHY ARE YOU WASTING YOUR MONEY ON OBTAINING CDPE DESIGNATION?

Posted by HARRY F. D'ELIA III on February 8, 2011 at 2:54am

WHY ARE YOU WASTING YOUR MONEY ON OBTAINING CDPE DESIGNATION?

 

4359148099?profile=original I have registered in March of 2011 to obtain my Certified Distress Property Expert (CDPE) designation to further my education in real estate. I made this announcement on my weekly radio show last week. I want to show the public that I am an expert in distressed properties. However, obtaining my CDPE alone will not make me an expert.

 

I am dealing with distressed properties on a daily basis since I assist real estate investors to purchase from the Arizona Trustee Sales on a daily basis. My real estate investors expect a lot from me. I deliver on a daily basis to obtain investment properties at a great loan to value. Yes, there are times when people are still in the homes. How do you deal with that problem? Well, one must be able to communicate with another human being to commit to a move out date so the investor can renovate the property. I have never had a problem over the last four years.

 

I am looking forward to the CDPE class. I will be the first one to inform you that I do not know it all. So, I would like to accomplish three things from the class see below:

 

  1. New knowledge on distressed properties
  2. Network with other real estate professionals
  3. Obtain my CDPE designation

The CDPE designation will also show asset managers that I am an expert in distressed properties when obtaining listing assignments to move their inventory with the best methods in the industry. I am ready for the challenge at all times.

 

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Rent Vs Buy Today

Posted by Howard Bell on December 29, 2010 at 2:10pm

NAR Existing Home Sales

Existing home sales which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6% to a seasonally adjusted annual rate of 4.68 million in November, but are 27.9% below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit. Median existing single-family home prices rose year-over-year in 77 of 155 metropolitan areas and fell in 76 metro areas.

NAR Pending Sales

A forward-looking indicator, rose 10.4% based on contracts signed in October from in September. The index remains 20.5% below a surge to a cyclical peak in October 2009, which was the highest level since May 2006.

Rent Vs Buy

The argument for affordability has a few key components. Price, cost of money and a comparison to a similar property rental.

Price
Home prices are running about 22% less than five years ago. Its hard to know when price has reached a point where willing buyers step up, but pending sales clearly point to a slowing trend. The Commerce Dept. report showed that new home sales rose 5.5 percent to an annual rate of 290,000 in November from the revised October rate of 275,000.

Price will continue to decline and increase affordability. There are some that think a double dip is in progress and we will see continuede price declines through 2011 or 2012.

Cost of Money
Lower tax rates just extended for another two years may boost growth. Mortgage rates responded by increasing to a six month high with rates up more than half a point in just the past month. NAR President Vicki Golder, points out: A decade ago, mortgage rates were almost double what they are today, and they’re about 1.5% lower than the peak of the housing boom....So still historically low.

Rates remain low and are still well below where they began the year. Low mortgage rates are an important factor affordability, which in October was the highest on record

Rent Comps
Rents increased for the second quarter in a row. Asking and effective rents increased by 0.5% and 0.6% respectively in the third quarter and vacancy rates dropped from 7.8% to 7.1% nationally.To summarize, price is dropping but cost of money is rising and so are rents. Most areas havent reached a balance between the cost of renting and the cost of buyi ng, probably the main arguement for home prices continuing to descend to meet a willing buyer.

Rule of thumb: Homes are probably fairly valued at about 15 times a year's rent. So, for example, if you're paying $15,000 a year to rent a place, think twice about buying a home that costs more than $225,000. Fifteen times is the historic average.

Your home is not a growth stock. You should look to justify multiples higher than 15 to 20 by considering personal needs, proximity to schools and transportation, your own cash flow situation and job security.

It would also be advisable to get a sense of what the property would likely rent for and see how far that rent would go towards paying the mortgage should you have to move. Home sales are slowing and if you find yourself a reluctant landlord, be sure you can carry the mortgage.

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Apartment Sector: The First One Out

Posted by Howard Bell on December 8, 2010 at 1:27pm
This is the one real estate area that seems to be looking up. There is no question that apartments really scream when it comes to actual performance and renewed investment confidence, says Hessam Nadji, managing director of research and advisory services at Marcus & Millichap. The apartments sector is leading the recovery. Nationally, apartment vacancies declined 20 basis points during the first half to reach 7.8%, setting the stage for rent growth.

Demographics: The rental sector is the one area that that is looking like its in a recovery. Residential housing was t was over built and overbought, while rental properties barely kept up with the demographics. Harvard studies indicate that if you couple the under 30 age group to new immigrants and retirees looking to move back to the city for convenience, as a whole they are a potential renter pool larger than the the boomer generation. That is huge!

Supply: Over 4.3 million loans are 90 days or more delinquent or in foreclosure. Moreover, the shadow inventory (chart) of REO properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current sales rate, according to an S&P report. S&P analysts concluded that \many servicers will likely shift from mortgage modification to loan liquidation. Hopefully, the banks will distribute supply onto the market with an eye to price stability or at least an orderly decline. With that in mind expect supply to continue to increase and prices to continue to decline.

Jobs: The average number of days delinquent for loans in foreclosure is a record 492 days. Its pretty obvious that jobs are the main culprit now and the expectation is that unemployment will remain more or less constant for the next year. Apartments look better partly because they never participated in the building boom that homes experienced and supply to renter pool favors lower vacancy rates and higher rents.

Investor Psychology: The Census Bureau releases a Housing Tenure, which measures the balance between owner occupied and renter occupied housing units. Owner occupied units have been on the decline and the number of renter occupied units has soared to 34.% in 2009. Of course, jobs are highly correlated to rent and vacancy rates, so this should be seen as fragile and early recovery. Yet rent rates have been increasing and vacancy rates have been declining, even in this weak job market. I think there has been a shift in the investor psychology that benefits the rental property.

Politics of Housing: Congress had mandated that the GSE emphasize home purchases at the expense of rental property. The Congressional Budget Office reported, the government in 2009, devoted nearly four times as much to support homeownership.$230 billion for homes and about $60 billion for multi family property, helping fuel the bubble. It was a primary cause for so many bad decisions…..loose money always is. My guess is that GSE money flow will now favor rental property and affordable housing in particular. The new real estate opportunity is in rentals, they will be the first to recover.

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How Does The Foreclosure Freeze Impact Housing

Posted by Howard Bell on November 10, 2010 at 1:05pm

The Optimists

Bank of America, JP Morgan Chase, Ally Financials GMAC mortgage division and PNC Financial, have all suspended home seizures in all 23 states where courts oversee foreclosures. Bank of America is halting foreclosures in all 50 states to examine its process. Past sales will stand, and if you are not already out of the house.

Eviction: you could be evicted unless the buyer was the bank, they will not evict during the freeze

Helps families: The foreclosure freeze may buy time for some families and allow them to catch up and stay in their homes which could help some families try to get back on their feet and catch up with payments.

Reduces housing supply: In the short term, the lack of new foreclosed properties coming on the market could help the housing industry by keeping supply off the market.

Better mortgage mods: If the banks cannot willy nilly foreclose on properties, they will be forced to lend a stronger hand to mortgage modifications benefiting many more people.

Writedowns: banks may finally realize that foreclosure is damaging and that loan writedowns could be taken more seriously as a less complicated option to getting inventory off the books and repairing balance sheets by making these assets whole

Short Sales: Banks may be more willing to accept a short-sale offer. If the foreclosure route is messy or even unavailable for some period,the banks may become more open to a short sale as an alternative to holding inventory.

The Pessimists

The moratoriums can be incredibly destructive to the fragile recovery of the housing and housing finance markets. Consumers looking to get back into housing are even more put off than before.

Inventory: Those freezes could delay the housing market's recovery and a moratorium would add time to the necessary process of washing out all that surplus inventory.

Price stability: It will be difficult for prices to stabilize as long as a large number of homes remain in the foreclosure pipeline. They are likely to hold off to see whether more supply would lower prices even more, leading to further house price declines.

Crime and disrepair: if some properties are not taken off the market and are allowed to be abandoned they can It will also create more crime since communities will have vacant homes sitting empty for longer periods of time

A freeze in sales: The title insurance protects the bank that issuing a new mortgage. Title insurance searches for problems with title and assures or insures that the propertry is free and clear and can be sold. No title insurance, no new mortgage and no foreclosure sale. Title Insurance payouts could be enormous.

The banks will pull it: Fannie & Freddie stand to lose billions and will take the banks to court to recoup.

Sales slow significantly: If title insurance companies start to shy away from insuring foreclosed properties because of unexpected claims, the housing market could take another hit. Sales could be hampered by difficulty in getting title insurance, at or by higher fees associated with higher risk assessment.

Related Articles
Deficiency Judgments: Did You Know?
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Banks to allow local groups to buy foreclosures

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National Apartment Survey: Rental Property The Better Investment

Posted by Howard Bell on November 3, 2010 at 11:39am
A Recent Survey
National Real Estate Investor and Marcus & Millichap

55% of all respondents to the survey believe that now is the time to buy apartments. Owners are beginning to see improvements in vacancy rates and rent rates are rising. We are coming off a low low bottom, but there is improvement. The study shows that 41% (31% in 2009) of owners responding to the survey think rent rates will improve over the next year and 70% feel that this is the time to buy.

Financing
Looking up

34% believe that institutional lenders are increasing their lending volume, 28% see an improvement in Commercial bank lenders and 19% in FHA. I wrote piece on how the FHA funding of single family homes has skewed the market. I think when reform comes to the FHA, the money allotted to rentals will be significantly higher than it has been. SEE LINK

Mixed Use Space
Risky bet

Rental property with commercial or storefront space remain risky. A two unit building with a store down is a liability in a recession. And in this one, with consumers paying down credit cards, we are seeing a spike in empty retail space. I would undervalue the benefits of storefront retail space until we see a pick up in job growth. Vacancy rates in retail spaces rose 10% in 2010, according to the survey

Rental Property
A Better bet

Morgan Stanley analysts expect housing prices to continue to slide, reaching new depths in 2012.Morgan Stanley expects 2011 home prices to fall 5% to 10% from this year with four years of flat prices after that, although the risk of slight additional downside in prices and extension of the trough to 2012, has increased. Via Housingwire

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Apartment Renter Demographics and What They Mean to You.

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Banks to allow local groups to buy foreclosures

Posted by Howard Bell on October 5, 2010 at 3:38pm

Following on the success of the First Look program many larger banks are going to take a page from first look program. Banks will now allow local governments and nonprofits the ability to buy foreclosed homes before they are sold to private investors.

The largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo have agreed to let the groups purchase the properties ahead of private investors. Neighborhood organizations will have up to 48 hours to evaluate bank owned property before professional investors get to view and bid for purchase. The idea is to level the playing field and allow those who would be stakeholders in the community helping stabilize real estate markets. HUD thinks they can move 100,000 properties through this program.

The National Community Stabilization Trust will collect information on foreclosed properties and help local groups to identify which ones to purchase.

From The Web Site
The National Community Stabilization Trust facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations to promote productive property reuse and neighborhood stability. In collaboration with state and local governments, the Stabilization Trust builds local capacity to effectively acquire, manage, rehab and sell foreclosed property to ensure homeownership and rental housing are available to low- and moderate-income families.

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Fannie Mae: First Look Gives Home Buyers An Edge

Posted by Howard Bell on October 5, 2010 at 3:37pm
First Look Program
Fannie levels the field

What Is It
Individuals and public entities are given a period of time, generally 15 days after a property is listed at HomePath.com. Homepath is the listing site for about 190,000 properties held by the GSEs. Individuals and public entities (read non profits) have a lead time over ionvestors to inspect and submit an offer to purchase. After 15 days, the listing is open to all potential buyers.

The idea is to offer first to those who would live in the home and become stakeholders, adding stability to the community and to avoid too quickly putting property back into a supply laden market. By offering a sneak preview to owners first, Fannie hopes to encourage home ownership without the edge professionals may have and avoid the pressures of bidding against professional investors.

Why Should I Care
Levels the playing field and its working.

Fannie has moved more than 29,000 homes out of its owned real estate portfolio of properties acquired by the through foreclosure to owner occupants. Some 800 non profits have also bought an additional 5000 properties through First Look.

New Incentives
Fannie Mae markets its REO through its HomePath Properties. Under the new incentive program, owner occupants and public entities that buy a HomePath Property between now and December 31, can receive up to 3.5% of the purchase price in closing cost assistance. The sale must close within 60 days of acceptance of the offer and no later than December 31, 2010. The incentive must be requested in the initial offer.

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FHA Reforms Shift The Game

Posted by Howard Bell on September 19, 2010 at 12:10pm
The coming FHA reforms will help stabilize FHA's financial viability. FHA will be allowed to raise premiums. The cap on the maximum annual FHA insurance premium increases from 0.5% to 1.5% and for loans with high loan To Value ratios, 0.55% to 1.55%. But the real importance is how the reforms will shift liquidity to rental property.

Multi Family
The bill also increases FHA's multifamily loan limits for elevator buildings and buildings in high cost areas, helping lenders finance the construction and rehab of rental housing.

Sales volume is up, debt and equity financing are more available and indexes for both sales volume and equity financing registered all-time highs. Apartment market conditions continue to improve across the spectrum said NMHC Chief Economist Mark Obrinsky.

The Politics Of Housing Shifts
Multi Family is a winner

Liquidity provided by Fannie and Freddie has enabled the apartment industry to build and maintain millions of units, including an overwhelming number of market-rate apartment properties needing no federal subsidies. With the Govt needing to repair its balance sheet, this is the better asset to back.

Rental Markets
Mark Zandi, chief economist at Moody's Analytics adds not everyone can or should have a single-family home. After the single family home market collapsed, many began looking at a major distortion in the markets...government support in the housing market is disproportionately larger for homeownership than rental units.

The Congressional Budget Office reported, the government in 2009, devoted nearly four times as much to support homeownership.$230 billion for homes and about $60 billion for multi family property.

Money always finds a home and opportunity follows. Given limited Government dollars, it stands to reason, going forward that liquidity and sales will shift to the rental property arena at the expense of single family homes.

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Related Articles
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Read more…

The Rental Sector Is Looking Up

Posted by Howard Bell on August 11, 2010 at 1:53pm


June vacancy rates in the largest 64 markets in the country averaged 6.6%, down from 8.2% at the end of 2009, according to MPF Research. We certainly see the increase in rental demand in 2010, and it's been a little more, frankly, than most apartment experts had anticipated," said Mark Obrinsky, chief economist for the National Multi Housing Council.

This may be the brightest sector and only strong story in a dismal market. There is a real sense of confidence building in the rental sector based on a few strong factors not present in the rest of the housing market. see chart Apartments never had the build out boom that homes did. High unemployment among echo boomers will keep a lid on rentals catering to the 25-34 year olds in the short term. The echo-boom generation, almost 80 million strong, along with a large immigration trend and retirees coming into the city, coupled with a drastic pullback in housing construction, points to strong rent growth starting in 2011, notes Marcus and Millichap. Quite a rental pool indeed!

Reis reports a widespread consensus that there will be a supply shortage of multifamily rentals as early as next year. This constrained supply may lead to robust rent growth. The leading indicator for housing has to be jobs. A lack of job creation will keep echo boomers at home longer or doubling up in roommate situations. Retirees coming to the city from the burbs, may no be able to sell or rent and so will have to remain in large homes. The optimists would see this as a staging area for real growth in 2011-2012. However, for the long haul investor/owner its simply a matter of time before an expanding economy unleashes the powerful demographic trio waiting in the wings.

Related
Filling The Vacancy
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Jobs Recovery and Rent

Posted by Howard Bell on June 16, 2010 at 10:44am
If history is a guide, what happens with jobs will matter the most to the strength of the housing rebound," said Eric S. Belsky, executive director of Harvard's Joint Center for Housing Studies. Jobs keep homeowners out of foreclosure and help others feel confident enough to buy. see chart

Monthly employment gains in May were the highest in a decade but point to a still weak private sector. Most hiring was due to the census project and like the tax credits and support for the secondary markets, the transition back to the public is key.

Defaults Cycle Through The Economy
Morgan Stanley report that 12% of mortgage defaults in February were strategic, other estimate an even higher These strategic defaults do put money back in the hands of home owners who are paying down credit card and other consumer debt. But more housing supply added to the marketplace only drives prices further down and further reduces confidence as buyers hold back and seek the bottom. This negative feedback loop only creates more uncertainty and weakness and more price declines.

Who Wins
Apartment owners will benefit from defaults as former owners become renters. Vacancy rates for all apartment buildings with 5 units or more declined to 12.1% from 12.5% in the previous quarter, according a National Multi Housing Council (NMHC). The national vacancy rate dropped to 7.2% from the prior quarters 8.2%, the lowest level for first quarter vacancy rates since late 2008.

According to a recent Marcus Milliahap study, by 2012 or 2013, the apartment sector will benefit from echo boomers which should contribute to rent growth. A Harvard study indicates that immigration combined with the echo boomers will create a young market equal in size to the boomer generation., creating a new market potential and certainly a greatly expanded renter pool. Now thats huge!

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REO MARKETING - WHO do you market?

Posted by Byron Blackburn on June 9, 2010 at 12:44pm

You should market your REO team that you work with. This would include your vendors. Such as:

1. Maintenance and Repair and/or

2. Property Preservationist

3. Accountants

4. Assistants

5. Listing Coordinators

6. Transaction Coordinators

7. BPO/MMR Coordinators


Sometimes asset management companies would like to know if you work with a team and what are themilestones you have reached. So if you do work with an REO team, you shouldtake the time to create a marketing package that includes a brief descriptionof each team members unique qualifications that contribute to the success ofyour REO team.


This also allows the asset company to see that you are equipped to take on a good amount of REO work and completeit successfully.

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Stock Market Insights For The Housing Markets

Posted by Howard Bell on June 1, 2010 at 4:23pm
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.

The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” the chief economist for NAR, Lawrence Yun said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.10 percent in April from 4.97 percent in March; the rate was 4.91 percent in April 2009.

Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale, which represents an 8.4-month supply2 at the current sales pace, up from an 8.1-month supply in March. Raw unsold inventory is 2.7 percent above a year ago, but remains 11.6 percent below the record of 4.58 million in July 2008. see chart

Regions

1. Northeast: Existing-home sales surged 21.1% and are 41.6% higher than a year ago.
2. Midwest: Existing-home sales rose 9.9% and are 29.1% above a year ago
3. The South: Existing-home sales increased 8.6%
4. The West: Existing-home sales fell 6.2% are 5.2 percent above a year ago.

In Stock Markets
Volume Precedes Price
This simply means that volume will indicate the end of an uptrend or a downtrend before the price changes indicate it. In the real estate markets price will not begin to firm until volume begins to decline. If this holds true the NAR study indicating increasing sales volume and continued price drops may be the early beginnings of a market bottom. The change in trend will begin in earnest when volume shrinks, until then we can expect prices to decline

Bouncing Along The Bottom
Whats it feel like

Well a lot like this. Its a place where asset price action is no longer declining as a long term trend. Price seems to go up and then back down. It simply means that not all the bad news is out of the markets and that healthier signs appear and are then clouded by another set of negative circumstances.

For example the EU crises precipitated by Greece caused money to flow out of the EU. This caused rates to drop in the US. It also raised the value of the dollar, making our exports more expensive to Europeans. Since four of our top ten trading partners are in Europe this is likely to impact job growth. So, cheaper mortgages might incentivize some people, but job uncertainty might disincentivize other people....not all the bad news has washed out.

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Case Shiller Price Observations

Posted by Howard Bell on May 28, 2010 at 3:41pm

The recent Case Shiller report shows price declines in front of the tax credit completion...The index gives us a slight 0.38% decline in the top ten market composite. Year over year the index is up 3.15% when compared to March 09. Recent strong price moves will come to a serious halt because the tax stimulus is behind us. The silver lining in this is that it proves demand is there, just waiting for the right price and for some of this historic uncertainty to settle. This chart Via Redfin shows the 2009 price spike . Price momentum is quite impressive and the recent downturn looks reasonable for at least San Francisco, San Diego LA, Washington and Boston.

These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist.

Beware the inventory surge
In our immediate future is a large wave of potential foreclosures as banks begin to off load inventory they have been holding back. Home owners also are placing their homes for sale at hefty pace. Many waiting for better times before listing are now beginning to do so. The supply surge increase the likelihood that will continue to see price declines as sales volume continues to increase. Most experts still agree that we are bouncing along the bottom, meaning we are no longer in a steep decline and that will have to do as the definition of price stabilization.

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