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5 Ways to Spot a Home with Hidden Potential
Trulia | August 23, 2012
Remember metal detectors? When I was a kid, they were all the rage, holding the emotional rush of a game with the a potential real-life treasure chest at the end.

Half of Homeowners Under 40 Are Still Underwater
The New York Times | August 23, 2012
The less time you’ve been in your home, the more likely you’ve accumulated little equity and seen the value of your property fall since 2005.

Short Sales vs Foreclosures: The Banks’ Preference
The KCM Blog | August 23, 2012
For months now, we have been letting everyone know that banks were going to begin shifting their focus when liquidating distressed properties. They would start supporting short sales over foreclosures. There is no longer any doubt this is now the new normal.

New Home Sales Up 3.6% in July, Matching Two-year High
The Los Angeles Times | August 23, 2012
Sales of new single-family homes rose to a seasonally adjusted annual level of 372,000 units in July, matching a more than two-year high for total sales, the Census Bureau said.

US Home Prices Make Big Quarterly Jump
FOX Business | August 23, 2012
Home prices rose 1.8% in the April-June period compared with the first quarter of the year, the Federal Housing Finance Agency said Thursday.

Some States Rank High on ‘Housing Misery’ Index
REALTOR Mag | August 23, 2012
Are some housing markets still suffering from the blues? Trulia’s Housing Misery Index takes into account the percentage of change in home prices from a state’s peak during the last decade compared to today as well as the percentage of mortgages that are either severely delinquent or in foreclosure.

Household Income Drops Sharply
The Washington Post | August 23, 2012
Inflation-adjusted median family income fell to $50,964, below where it stood before the recession.

Lost Decade for Shrinking Middle Class
The Wall Street Journal | August 22, 2012
The middle class — defined as households with between two-thirds and double the nation’s median income — has shrunk considerably over the past few decades, a decline that has been greatly exacerbated by the recession and housing bust.

We are happy to announce that last week we had another successful Wisconsin short sale closing, this time in Marshall. As you have likely heard, short sale transactions can be complex, and an experienced Short Sale Realtor® is a must.

This was a great home that the new owner is sure to enjoy! If you are thinking of selling or buying a short sale home in Wisconsin, our short sale specialists would be happy to assist you. Give Rock Realty a call at 877-774-7625.

Or, if you are considering a short sale for your home, feel free to fill out our no obligation

Short Sale Home Evaluation Form

Case Shiller report shows a deceleration in the annual growth rates in 17 of the 20 MSAs. Housing generally leads the economy out of a recession. This time its not, housing is simply suffering. Not only is money tight but job creation is still a big hurt. In some cities, the decline over the last year was quite sharp.

David M. Blitze,chairman of S.&P.’s index committee tells the NY Times that a double-dip could be confirmed before spring. He goes on to say the series is now only 4.8% and 3.3% above their April 2009 lows. Certainly nine cities set new lows, and with the only positive news concentrated in southern California and Washington DC, the data point to weakness in home prices.

S&P sounds dismal, indeed. David Wyss, S&Ps chief economist tells martketwatch that The recovery in home prices has not only stopped, it's going in reverse, that it's going to get worse before it gets better

Some Balance Is Needed

Artificial Stimulus
The tax credit
First, the index to a positive spike due to the tax credit, an artificial inducement to buy. Well it worked, and we saw buyers flood the market. But comparing new data to a spike that doesnt represent normal market behavior, but a artificial spike in home sales due to the tax credit can skew the true picture.

Seasonality
This is the slowest part of the year for home sales and must have something to do with the steep decline

Weather
Could the weather have been worse for the mid west and east coast? Winter is traditionally a poor indicator of market health.

Certainly, this market needs no excuses and Im not second guessing S&P, but lets not lose perspective - winter data is hardly a leading indicator for housing markets and there is more to the story than the data is expressing.

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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.

REsourced from http:// www.yourpropertypath.com
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