Posts in category: Housing Market

Thanksgiving comes late this year, which means a shorter-than-usual holiday shopping season. If you’re not the type to buy gifts throughout the year, getting an early start on holiday shopping can help ensure you have enough time to find gifts for everyone on your list, and perhaps, most importantly, save money.

Here are three things to do now to save money and time this holiday season:

Create a list (and budget) for everyone on your list

Greet the holiday season with cheer by keeping an organized list of names of everyone you need to shop for and an estimated budget for each. From family and friends to hair stylists and teachers, more names will likely appear on your list than you originally planned. Holiday shopping can be overwhelming, but if you approach it with an organized plan, you’re likely to avoid overspending and can better stick to your budget. Gift cards are a great option this year, since they are the top gift people want to give and receive, according to a recent shopping survey from Discover.

Savvy shopping tip: Look into your credit card rewards programs to see if you can cash in your accumulated rewards for gift cards, some of which are offered at a discount. Redeeming rewards for store gift cards is one of the easiest and most valuable ways to save cash, which means you won’t need to reach as deep into your pockets this season.

Do your research on sales and promotions

From gifts to groceries, holiday shopping includes a wide range of items, so it’s important to try to find the best prices on everything. According to the survey, Americans are most influenced by sales and promotions when it comes to their holiday spending plans. In fact, 70 percent of consumers are planning to take advantage of Black Friday and Cyber Monday deals. Whether you’re brave enough to face the crowds on Black Friday or prefer the convenience of Cyber Monday, shopping these big sales is a great way to stick to your budget and make a large dent in your holiday shopping list.

Doing your homework before making holiday purchases can also help you save even more. Price monitoring sites, like PriceGrabber, can compare and contrast prices for more than 1 million items, including electronics, appliances and clothing, and can be accessed right from your mobile device. If you’re shopping online, your credit card may offer extra rewards on online purchases this season that’ll help you save money on holiday gifts.

Savvy shopping tip: Mark your calendars with the dates of big sales and keep coupons in your wallet so you can use them at a moment’s notice. If you’re shopping online, do a quick search for coupon codes that provide extra discounts, as well as free shipping or gift wrap.

Use credit card benefits and rewards to save extra cash

Whether you prefer to shop in-store or online, credit cards can enhance your savings and provide added value to your shopping. Many credit card companies provide rebates, rewards and discounts on holiday essentials – at no added cost. Once the hustle and bustle of the season is over, you might find an item you want to return, but what happens if your purchase is no longer eligible? You won’t have to write it off as a loss if the purchase was made with a credit card that offers a return guarantee.

Savvy shopping tip: Use a credit card that provides added security and purchase protection including warranties and return guarantees that will help you save in the long run.

Taking a little extra time to shop smart and plan ahead will help you save and stay organized while shopping for holiday gifts and essentials. You may be surprised by how many resources are available to help stretch your budget further this holiday season.

If you’re shopping for a home this holiday season, contact a professional NEW HOME RESOURCE agent for all of your needs!  Let Broker Joanna Piette, Realtors Denise Moreno Thrasher, Evelyn “Beng” Kern, Jessica O’Brien, Lance Partin or Kathy Paterniti be your guide!

Recovery to Continue in 2014, Says NAR; Rates and Home Prices Predicted to Rise

By Nick Caruso

The real estate market will continue its road to recovery in 2014, with home prices rising 6 percent and mortgage rates hitting 5.4 percent. In addition, demand is predicted to plateau, all according to Lawrence Yun, chief economist and senior vice president of Research for the National Association of REALTORS®, who presented his 2014 market forecast during last week’s REALTORS® Conference and Expo.

Other factors aim to set the market back on the right path. Although there could be a possible negative impact due to rising mortgage rates, job creation and loosening underwriting standards should balance out 2014’s sales volume.

“There were two million jobs created in the past few months and we’ll see the same next year,” says Yun. “These people could potentially enter the market.”

Yun does not see, however, an increase in unit sales nationwide, as inventory levels remain an issue to keep an eye on. Currently, the nation is under one million and this number needs to increase 50-60 percent in order to get back to normal numbers.

“I don’t foresee that next year, but maybe we can at least make up half the needed gain to steadily reduce the inventory pressure,” he says.

While existing home sales are expected to remain flat at roughly 5.1 million units, new homes could rise by 25 percent from 430,000 to 510,000 next year.  This part of the market is still in recovery due to the difficulties for smaller builders to obtain financing. This should continue easing throughout the next year.

When prompted further about how the rising mortgage rate will affect sales and the market, Yun responded: “Assuming nothing changes further, I believe it takes about 10 percent right off the top in terms of people who qualified this year versus the same people who would qualify next year. If need be, NAR will be pushing for new legislation to clarify what QM and QRM are so that we don’t get hit by that 10 percent.”

With the housing market is recovering for most Americans, homeowners will be more concerned than ever about their home values in 2014. Actual price increases for 2013 was 11 percent, which is now expected to be a six percent rise next year. The way to relieve home price pressure is for more inventory to come into the market, says Yun.

“We were surprised by how fast inventory would decline, but there was always a fresh set of inventory trickling in as it went out,” he says.

Overall in 2013, investor activity has been normal, but numbers slightly declined. Though, more small-time investors entered the market, staying one step ahead of the population, consistently punching numbers to see what transactions made the most sense for them. “If investors remain active, it implies that housing is a good buy,” says Yun.

Despite some cautionary areas, the real estate market has its beacons of potential. The industry may not be back to its best numbers yet, but we are still heading in the right direction and making our way down that road to recovery.

“We’ve had a decent year this year and next year will be roughly the same.”

 
Reprinted with permission from RISMedia. ©2013. All rights reserved.

Are Dated Appraisals Holding Back the Recovery?

By Andrew King

Some of the most beaten down real estate markets are finally experiencing that long-awaited bounce back from the crash. Cash offers are yielding more sales. Pent-up demand is driving prices higher. But something’s missing.
Brokers in the faster markets, such as Nevada, California and Florida—where the soaring prices almost defied gravity leading up to the crash five years ago—are finding it hard to move all these homes, even though there are plenty of willing buyers. While the homes are available, the mortgages are not. More specifically, they say, the appraisals are not.
While a would-be buyer could be more than qualified to pay back a $1 million loan for an Arizona McMansion, in many cases, the banks can’t sell them that mortgage—even if the loan officer wants to—because the appraiser won’t sign off on that $1 million valuation.
“It happens a lot in an escalating market,” says Gino Blefari, president and CEO of a brokerage in the red-hot San Francisco Bay area. “You have to go back to the appraiser and say, ‘look, there were 27 offers on the property. Now that we’re having more sales, we’re better.’”
It’s becoming a heated issue across the country as low appraisals continue to squash real estate deals that already have the blessing of would-be buyers, sellers and banks.
At the heart of all the tension are the comparable properties, or “comps,” that appraisers use to base their valuation. The system is designed to keep everything fair and square for the buyer and seller while limiting the banks’ risk. However, conservative appraisals based on the most recent sales—deals made prior to the bounce—can inadvertently stall an otherwise healthy recovery.
To get around these appraisals, more and more buyers are using cash for the purchase and paying more than what they could have gotten with a mortgage. The practice has caught on so drastically—with cash deals accounting for 40 percent of all sales—that the latest national data shows a major reversal in the price of cash deals as they relate to mortgages.
This influx of cash deals, however, doesn’t always make it into an appraiser’s comp pool, skewing market realities and becoming a point of controversy.
“Cash investors are very aggressive,” says Mark Stark, CEO of a real estate group that has seen a huge increase in all-cash deals in Arizona and Nevada. While all-cash deals have usually comprised 7-10 percent of his business, he says that over the last 18 months, they have grown to 21.5 percent. A lot of this, he says, is due to institutional investors who have come into the market to take advantage of the low prices.
Speculation, bidding wars and rising home prices are generally seen as signs of a healthy economy, but Stark thinks that too many borrowers are being left out of the market due to overly conservative appraisals. The problem, he says, is that many appraisers are not taking these cash deals into account when they determine the value of a property—even though they are perfectly valid comps.
Appraisers will often throw out unrealistically low sale prices, such as those that result from a foreclosure or an arm’s-length transaction, when conducting an appraisal. They also throw out prices that are unrealistically high. But many real estate agents don’t think this should include cash deals from institutional investors.
John Brenan, director of appraisal issues at The Appraisal Foundation, a private nonprofit recognized by the government as the source for appraisal standards and recommendations, says that while the appraisal industry is regulated, there are still a lot of gray areas when it comes to comps.
He says that high comps should be thrown out only if they don’t truly reflect fair market value. An institutional investor should not be disqualified as a comp just because they’re a fund or someone who is looking to lease or flip the property. Brenan says an unusually high cash sale would get thrown out if someone paid significantly higher than what others recently paid for surrounding properties without a good reason.
“If someone paid an extra $50,000 on a property because it’s the exact color they wanted,” says Brenan, “that would not be a realistic example of the market and shouldn’t be counted as a comparable property in the appraisal.”
On the other hand, appraisers shouldn’t be using foreclosures or REO properties as comps either, Brenan says. Still, a block full of short sales can’t just be ignored when gauging the marketplace. “That (bad) sale in and of itself does not make a market, but it does play a role,” explains Brenan.
Brenan adds that appraisers should be looking at the most recent data available, but that might not necessarily include current events. Part of the tension has to do with the fact that appraisals represent a fixed point in time—what a house is worth on a particular day. It doesn’t always leave room for the greater economic trend.
“The appraiser is working off historical data,” Blefari says. “If it’s a cash deal, they should use it as a comp.”
Blefari emphasizes that the market has so much pent-up demand right now that it will drive prices higher through the end of the year and beyond. He says the recovery is completely genuine and appraisals need to reflect that.
Andrew King is an award-winning journalist with 15 years of experience with the Gannett newspaper company, appearing in The Journal News (Westchester, N.Y.), Asbury Park Press and USA Today. He also contributes to The Real Deal, TheLadders.com and TechPageOne.com.

Reprinted with permission from RISMedia. ©2013. All rights reserved

The Las Vegas housing market is finally on the way up after being labeled the “Foreclosure Capital”.

With rock bottom prices, Las Vegas is seeing an influx of cash buyers as investors are grasping the opportunity for rental properties.

With over 59% of homes sold in February purchased by cash buyers, the market made a new record for Southern Nevada.

How should you play this fast-paced market to ensure the best price?

1. Cash offers are more likely to be accepted by home sellers, due to quick closings and no appraisal valuation issues.
2. Those with financing should not be discouraged, however, overbidding and guaranteeing the seller your offered price (regardless of appraisal) seems to be the way offers from financed buyers are being considered.
3. The answer is not to be the ‘first’ offer, but the ‘best’ offer.
4. Get aligned with a New Home Resource agent who is at the pulse of the market and knows how to get in the game!

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