If I had a nickel for every Seller (with some level of equity) in their home who has told me: "We've decided not to sell right now because the market just won't bring us our price",....I'd be a rich man.
So when is a LOSS really a GAIN? Is that even possible? YES.
When you are a Seller becoming a SELLER in a real esate market JUST LIKE THIS ONE, you can actually turn what feels like, or IS a loss, into a nifty financial gain as you "move up" to that next home.
Today we discuss what that looks like and why many Sellers are missing a great opportunity to move-up in today's real estate market.
Coming to you from Historic Jackson Square in New Orleans, LA!!! I just had to mix it up a bit, didn't I?
I was in town for the Keller Williams "Family Reunion" where I've had the chance to hear from the absolute best of the best in terms of real estate economics and more. I am typing this to the tune of loud rock music and the hum of nearly 9000 people filing into a session - WOW!
Before running on to real estate, a few short words about New orleans:
1. I figured out why they call it Bourbon Street quite quickly. NOT family friendly!
2. The rest of the French Quarter is exactly what you would imagine - idyllic. Gas lamps, horse-drawn carriages and more.
3. Don't buy the T-shirts.
4. If you ever get a change to stop by "Cafe Du Monde" for freshly fried "Beignets" - make every effort to do so. Cheap and SO.....GOOD.
On to real estate:
We are in a confusing spot in the real estate market currently. A huge boom was followed by a huge crash and now that things have settled significantly, most of us are wondering: "what's next?"
The truth? I'm not sure. BUT, there are 5 "vital signs" that define the health of any real estate market in the world. These signs are looking really good but the mainstream media doesn't share them. Mostly because they don't really understand them.
If you want to look REALLY smart when talking real estate with your buddies, study them, internalize them, and be prepared to shock them with your stunning good looks AND apparently vast knowledge of all things real estate.
1. Sales: Total home sales in the U.S. for 2009 were 10th highest EVER!
2. Home Prices: While 99.9% of crying about our home's value, we need to keep perspective. After the "crash" values are now where they were supposed to be had we kept a "regular" appreciation rate.
3. Inventory: Yes, it's higher than we want, but in St. George real estate inventories are down over 15% from a year ago!
4. Interest Rates: Interest rates began being tracked in 1971. GET THIS: They are the lowest they have EVER BEEN since that time! 5% right now vs. 7.48% in 1971 (and nearly 20% in early 80's!)
5. Affordability: This is the "crown jewel" of real estate vitals. In my opinion, this is the one factor (besides consumer confidence0 that can save our economy. At current levels + interest rates = the most affordable it has EVER BEEN to buy a home....EVER!
Remember that just because it's on the news doesn't mean it's accurate, OR that it even applies to our local market.
If you have a question about what is REALLY going on in our area, or a specific question about your home's value or how much your neighbor sold for, just shoot me an email to larkin@gostgeorge.com and get the REAL scoop!
Nearly 2 years have passed from that day and in many ways, Short Sales still DO suck, but their time of “sucky-ness” (don’t look that up, NOT a word) may be soon coming to an end.
As we are all so very aware, the Federal Government has decided to stick their fingers in just about everything we do with the exception of which sugar cereal we feed to our children. (that’s probably coming…)
In a rare flash of brilliance, some of their new legislation could actually be the best thing to hit Buyers, Sellers and Real Estate in General in a long time.
The problem with short sales has always been summed up in a few major points:
Short Sales take too long (as in 3 to as many as 10 months!)
The eventual outcome of the Buyer’s original offer is always unknown (The chances of actually getting the home you offered on was a literal craps shoot)
They were a miserable ton of work for every single person involved in the transaction
See, the bank that the Seller is no longer making a mortgage payment to (in most cases) typically hasn’t APPROVED the sale of the home at the list price. So Buyers come along looking at a home listed for $150k that the bank may only let go for $170k. That’s just not right, totally confusing and emotionally painful.
New legislation proposed by the US Treasury would make the following changes to the Short Sale process:
1) Banks would be FORCED to respond in 10 days or less! (Vs. 30-90 in a typical case)
2) Sellers – yes, the SELLERS who couldn’t pay their mortgages could possibly get up to $1500 for relocation costs
3) 1st Mortgage Holders could get $1000 per closed short sale
4) 2nd Mortgage Holders (the stickiest short-sale killers in the business) could get $3000 per closed sale
Will this come to pass? I don’t know. You can bet they will be taking money from mine and your pockets to fund the plan though, which is one of the negative side-effects of the plan. Does the “disease merit the treatment?”
Shoot me some feedback.
BUYERS – have you been involved in trying to secure a short sale? What kind of experience was it?
SELLERS – are you in that same position? Honestly, is it a HUGE pain in the neck or what?
Doesn't it seem like the real estate discussions get a little "SERIOUS?" I think so, which is why I wanted to kick off February 2010 "quick and light" with a brief discussion about some of the great things going on in St. George this Winter & Spring!
Heritage Days Celebration, a.k.a. "St. George's Birthday": This actually already passed, held the week of January 15th. As you will see in the video above, I ran into St. George Mayor Dan McArhur, along with the entire St. George Council, dishing out free Root Beer Floats and chumming it up with the public.
Why you don't want to miss next year: In addition to root beer floats, St. George City offered free swimming at Sand Hollow Aquatic center and free bus rides on the "SunTran" system all day long.
St. George Area Parade of Homes - 20th Anniversary, February 12-21, 2010: My wife enjoys a "love-hate" relationship with the parade of homes. She LOVES the homes, then HATES ours when she gets home!
Why you don't want to miss: I have always maintained the most luxury of those on parade rival the most lavish of fine homes anywhere in the country, the weather is great, and for $12.50/person you can see 25 of the greatest homes in St. George.
Ford Ironman St. George - May 1, 2010: This is HUGE news. There are only 7 Ford Ironman events in the Continental US, and even fewer held on Saturday. 2.4 mile swim at Sand Hollow Reservoir, 112 Mile bike that runs through Gunlock & more, wrapped up with 26.2 mile FULL marathon. In 1 day. Ouch.
Why you don't want to miss: While I haven't completed an Ironman, I HAVE done a marathon and ridden 100 miles, including most of this course. This is an EPIC course, perhaps the toughest in the U.S. If you thought the buzz for the St. George Marathon was big, just wait until you feel the electricity (and incoming marketing $$) from Ford Ironman. Unreal!
So St. George has come a long way from Dick's Cafe, Old Highay 91 over Utah Hill and our beloved 9-hole Dixie Red Hills Golf Course. I feel blessed not only be a resident, but to be a true local!
If you want more details or thoughts on the above events and other great activities, shoot me an email at larkin@gostgeorge.com.
Don't want to READ this? Watch the video instead! Why St. George Real Estate will SURVIVE - then THRIVE! Welcome to episode 3 of 52 for our 2010 St. George Real Estate "Insider's Report." Something we will be trying to do this year is periodically feature local businesses, people and events that we think are just worth talking about. NO ONE IS PAYING US FOR THESE PLUGS!
We did that in this episode with Town & Country Bank. These guys are just plain "cool" and their "Concierge Banking" is banking like you've never imagined! Check them out in our video.
Now the question on MANY people's minds right now is this: "What is in store for St. George Real Estate?"
It's a question that could be answered with many other questions, but here is my 2-cents as we plow into 2010 in earnest.
5 Reasons St. George Real Estate will Survive (and eventually THRIVE)
Affordability – In 2007 only 20% of homes in Washington County were affordable based on national guidelines....TWENTY PERCENT! Recent data tells us that we are now at 60% and climbing.
Safety - In a recent Farmer's Insurance study on safety, Washington County was ranked #1 in safety for communities under 150,000 residents. Have you READ the news about violent crime in other cities lately?
Baby Boomers – This group continues to flee places like Phoenix and Palm Springs to capture what those communities were 30 years ago. St. George is it.
Investors – I have said multiple times in recent months: When savvy investors begin to pay full (list) price on certain listed properties, you know that prices are getting back where they need to be. You would be SHOCKED at how many transactions in 2009 were full CASH deals!
Fresh Pool of Buyers – These are the people that did NOT buy in the "hay-day" market of the mid-2000's. Instead, they continued to further their careers, pay down debt, and save for bigger down payments. As such, there is an entirely NEW pool of QUALIFIED Buyers looking to purchase a home!
There you have it, Jeremy Larkin 101 on why St. George Real estate will continue to be something worth while to live, work and invest in.
This has been a long time coming. On February 1st HUD will relax their rules and allow buyers to get an FHA loan on homes that are owned by the seller for less than 90 days – a move that will help expedite the rehabilitation and resale of foreclosure properties.
In English? After the "go-go" market of the mid 2000's and a ton of property "flipping", the government came out and said "you can't buy a home and flip it until you have owned it for 90 days." They call this "seasoning" and as is implied, it is designed to keep people from buying a home, inflating the price above market, then flipping it again.
After a long period of that rule in place, they've realized it is hampering the market.
"Property Flipping", or "Upside Down House?" (real estate humor!)
In a housing market where tighter lending requirements have made FHA financing the only option for some buyers, this 90-day policy has (1) kept some homebuyers from being able to purchase affordable homes and (2) prevented the quick resale of foreclosed properties, which affects the ability of communities to stabilize and rebuild.
If you are an Investor looking to flip homes: This change is great news because you can now go STRAIGHT to marketing the home in the MLS, etc immediately after purchasing rather than waiting 90 days.
If you are a Buyer looking for your next home: This change is great news because many of these investors put their homes back on the market at below-market prices to ensure a quick sale and naturally this will add to your options as a Buyer.
"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."
To ensure FHA borrowers are protected from inflated prices, the policy has certain restrictions, including:
All transactions must be arms-length and there can be no identity of interest between the buyer and seller (i.e. their business partners, cousins, aunts, uncles, siblings, etc.)
If the sales price of the property is 20 percent or more above the seller's acquisition cost, the lender must meet specific conditions for the waiver to apply. (referring to fact that an investor with buying power of CASH may buy a home for $180k at auction, then be able to sell in open "retail" market at $200k+)
The temporary waiver will be in effect for a period of one year, unless extended or withdrawn by the FHA.
It's easy to knock the government for being overly involved, but this is a well-placed effort on their part that should do much good for the market.
*Guest Blogger Chantry Abbott is Mortgage Professional with SGI Mortgage and knows his stuff! He is also skilled in handling reverse mortgages and loan modifications. He can be reached directly at chantabbott@gmail.com or 435-979-1775.
Part 2 of 52...really! FIFTY-TWO!!! As promised, every single week in 2010 we are doing a brief video update on what is either "going on" in the market, or of exactly what we are up to and facing in the current REO / Short Sale distress market. I'm referring to the actual day to day "slog" of working with banks, trashing out stinky house, etc.
This week Jeremy & team show a brief clip of a new bank foreclosure asset inspection. He broke his AAA card trying to gain access ahead of the locksmith. This home was built in 1947. You CANNOT break into old homes, but the new ones are easy. "They don't make em' like they used to" is the proper description!?!
If you didn't receive this video as part of our "insider's" email list, you will be missing out on our brand new listings, price reductions, and brand new bank foreclosures PRIOR to the rest of the market seeing them! Shoot me a msg to larkin@gostgeorge.com to get added!
With this post the Larkin Group is officially kicking off our 2010 weekly "Insider's Report" series dedicated to St. George, Utah real estate. YOU DO NOT WANT TO MISS THIS!!
It will look like this:
Every Tuesday, 52 weeks of the year, come rain or shine
ONLY every Tuesday. No spam, just a great report you can count on weekly, no more, no less.
WILL CONSIST OF THE FOLLOWING:
3 to 5 minute video "interpretation" of market (not just a bunch of stats you don't understand)
Every single new Larkin Group listing & price reduction
HERE IS THE REALLY FUN PART!: Every one of our "pre-market" bank foreclosures 2-4 weeks in ADVANCE of them hitting the market. This means our friends and clients will be truly getting "1st dibbs" on inside information.
That's it, and we promise to keep it interesting if you promise to give us some feedback.
As I write this post I am officially sinking into “Holiday Mode”, listening to Josh Groban’s “Noel” album, and of course gazing out my window onto St. George Boulevard and the fall colors.
Getting into “Holiday mode” is not so much an “event” for me, but rather a “process.” It begins right after Halloween when the sadistic retailers start cramming Christmas down our throats. We all saw we hate it, but secretly I love to see the Christmas stuff go up!
In late November I start to run into Christmas music on various radio stations and the day before Thanksgiving (today), I always “let go” and play my own stuff at the office. Thanksgiving festivities, Black Friday sales and the St. George temperatures, colors and blue skies carry us into December and then Holiday mode is undeniable.
But I digress…
My family eats, I pay my bills, drive a vehicle, enjoy my bicyle and even occasionally vacation – all because of our amazing St. George Real Estate clients who allow us to help them buy, sell, invest in, or simply discuss all things real estate.
In this industry I am BOMBARDED daily with bad news, talk of foreclosures, pre-foreclosures, bankruptcies, and more. I am just grateful for our loyal clients and the business we enjoy because of them. I know that the Holidays don’t put an end to any of our misery, sufferings or trials, but they bring with them an unmistakable spirit of good will and love.
All my best to you and yours this season and into 2010.
It is VERY rare that I will place one of our properties in the blog feed - it's kind of a "no-no" to do alot of straightup "advertising" in the blogoshpere, but I'm making an exception this time.
There is a LONG story behind this property but let me summariize it up like this:
240-acre Parcel against Hurricane Cliffs
Zoned for 1300 units...the highest density EVER APPROVED in Washington County
Master planned in an OVER THE TOP fashion by a group called "HOK" out of Chicago - these guys are the best of the best.
Laid out for homes, upscale multi-family and commercial, all according to highest "green" standards available
KILLER DEAL but my clients whom I am very close to are in some serious financial pain trying to hold on to it as this is not their core business
Here is where it really gets painful. It is now listed for $6.9 million. They had lookers at nearly 4x that.......OUCH. See my last blog post about "manning up" on your list price HERE.
For a "big hitter", developer or other wise, this is an amazing opportunity, but it will certainly require holding power. If you know anyone who may know someone else who may be interested in this parcel, get me their phone and/or email immdiately. Who would this be? That uncle, friend, former boss who says "my ______ knows this dude who is a major player in real estate development and...." - that is the person!
If you didn't watch the video yet, do so now - it is gorgeous!
