Tuesday

 

Money Making Advantages Of Multi-Unit Investing

By David Lindahl, The "Apartment King"

Having rehabbed over 470 properties in the last seven years and collected over 600 apartment units I’m often asked, how can I become wealthier faster investing in real estate?

While most investors concentrate on some aspect of single family houses, I was always interested in multi-units (apartments) first, and then single family homes as a means of getting more multi-units.

From the very beginning of my investing in real estate, I liked the idea that a group of people (the tenants in a building) would get together and pool their money to pay down the mortgage on a property, and I liked the idea that they would also pool their money together to pay for all of the maintenance work for a building.

I especially liked the idea that they would give an owner so much money that the owner would have a bunch of money left over at the end of every month that could be used to either re-invest, save or to go out and have a good time with.

Essentially, I like the idea that other people were willing to help make me wealthy. I liked it even more when I started using management companies to manage my properties and no longer had to have contact with my tenants.

I soon came to realize that I could also wholesale, retail, pre-foreclosure, rehab, subject to and lease option apartment houses as well.

I also realized that there were certain advantages that investing in multi-units buildings had over single families.

The first was cash flow. Cash flow on a multi-family is always greater than that of a single family. Simply because you have more rents coming in.

The more units you have under one roof, the less risk you have. If you have a single family house and you lose your tenant, you’ve lost 100% of your income. In some instances, this could be your entire profit for the year. If you had a three family and lost a tenant, you still have two rent coming in to pay your expenses.

Economies of scale are in mulit-unit buildings. If you have six single family houses opposed to one six family, you have six roofs to be replaced or repaired, six lawns to be maintain, six tenants spread out through out your city or town.

In your six family you have one roof, one lawn and your tenants are centrally located. Economies of scale are in your favor.

There’s a lot less competition than there are in single family houses. Why? Because no one is out there teaching how to do it and all the single family guru’s make flipping single family houses sound as easy as chewing gum in the dark. The smart investors put multi-units in their portfolios along with single family houses.

Because of the bigger cash flows, you can afford to hire management companies to manage your tenants, thus eliminating that hassle while you go out and do what you do best (or should do best), find and finance them.

Your pay days are a lot bigger when you finally sell your property. This is because an apartment complex cost more than single family homes, because of this they obtain a greater dollar amount of appreciation. For example, a $100,000 single family house will in a market that appreciates 10% will be worth $110,000 while a three family house worth $300,000 in the same market (10% appreciation) will increase to $330,000. That’s $20,000 more money in your pocket!

You’ve know a few people who have made a lot of money flipping single family houses, but if you think of the all the people you know who have become extremely wealthy through real estate, you’ll realize that they did it through owning multi-units (apartments).

These are the five biggest advantages to investing in multi-units, there are many, many more. If you are interested in creating more wealth at a faster rate, adding multi-unit to your portfolio is the way to do it!

By David Lindahl

David Lindahl, also known as the “Apartment King” has been successfully investing in single family homes and apartments for the last eight years. He is the author of four popular, money making home study courses “Apartment House Riches”, “How To Estimate And Renovate House For Huge Profits” “Managing For Maximum Profits” and “The Real Estate Investors Marketing Tool Kit”. To learn more about his courses go here.

David Lindahl is also conducting a "Real Estate Marketing Boot Camp" in Dallas TX, from 29th April to May 1st. If you are interested and would like to take advantage, you can get more information on the boot camp here.

 

RealtyByAir.com launched

McElhanney Consulting Services Ltd, a premier provider of digital mapping, has just anounced the launch of RealtyByAir.com, a website for real estate agents in Vancouver, the Fraser Valley and Victoria to list their residential properties for sale using detailed colour airphotos as an informative backdrop.

MCSL developed RealtyByAir.com will provide real estate agents a listing tool that goes beyond the regular text-based listing tools. With RealtyByAir.com you can virtually “walk” your prospective buyers around a neighbourhood and give them a comprehensive review of a home’s location from an aerial point of view. More layers of information, from bus routes, schools, emergency services and more layers will be overlain on the airphotos. This site is targeted for use by real estate agents, appraisers, and home buyers. Imagine a real estate agent showing their client a property for sale, plus how close they are to schools, shopping, parks and transit.

Mr. Kliparchuk, GIS Business Manager from MCSL states, "RealtyByAir.com marks the evolution of real estate listings. People want to see the house they are considering buying along with the neighbourhood and surrounding amenities."

McElhanney is a Canadian consulting company, established in 1910, providing services in engineering, GIS, surveying, digital mapping, orthophotos, satellite image processing, remote sensing, land information and administration, to government and private companies around the world.

 

Homes sold in Virginia continues to climb

The number of homes sold in Virginia continues to go up.

This February nine percent more homes were sold in the commonwealth than one year ago. Prices continue to soar also. According to The Virginia Association of Realtors the average cost of a single-family home is up 25-percent. The group also predicts the real estate market will continue to be strong.

Saturday

 

Real estate markets - overheated, underheated, and just right

In some markets, housing prices are too hot. In some, they're too cold. And others are just right.

A study of the 99 biggest housing markets in the United States has sorted out which is which.

The report, by National City Corp., a financial holding company, reveals the extent to which these markets were overheated, underheated, and just right. more information here..

National City found that California was home to the top seven most overvalued real estate markets, with the city of Chico leading the way. A buyer pays a 43 percent premium there.

Non-California "bubblette" markets include West Palm Beach, Florida, where the premium is 26 percent, and Las Vegas (24 percent).

The most underpriced market is Salt Lake City, where houses sell at a 23 percent discount to what National City deems the "correct" price. Trailing Salt Lake for the title of biggest bargain were Memphis, at a 20 percent discount and Macon, Georgia, at 17 percent off.

The report judged two cities, Louisville and Tucson, to be priced -- just right.

Wednesday

 

Real estate prices grow 20% in California

The median price of an existing home in California in February increased 20.4 percent and sales increased 3.2 percent compared with the same period a year ago, the California Association of Realtors reported today.

February typically accounts for the smallest monthly share of annual sales in any given year, so it's expected to see a slight dip compared to January. Year-to-year, the median price continued its upward climb, increasing 20.4 percent compared to February 2004. While the number of homes available for sale has improved, the short supply of homes on the market contributed to price appreciation.

Closed escrow sales of existing, single-family detached homes in California totaled 608,170 in February at a seasonally adjusted annualized rate, according to information collected by association from more than 90 local Realtor associations statewide. Statewide home resale activity increased 3.2 percent from the 589,220 sales pace recorded in February 2004.

The statewide sales figure represents what the total number of homes sold during 2005 would be if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

While mortgage interest rates remain low by historical standards, upper-end markets may soften as affordability concerns impact households trying to stretch their purchasing power with adjustable rate loans. Job growth in California in 2004 was stronger than originally projected, and a strengthening job market this year should have a positive impact on household incomes and housing market activity.

Tuesday

 

Largest private land auction

In what is being touted by its organizers as the "largest private land auction" in Nevada history, more than 250 acres in the Las Vegas Valley, 160 acres in Pahrump, 3,700 in West Wendover and 250,000 acres in Elko County will be put up for bid in May in a land sale expected to bring in $250-$350 million.

The total could move closer to 350 acres in the Las Vegas area that could be set out for bid on May 4 at the Cox Pavilion once all the contracts are signed, according to Sperry Van Ness Transwestern. The firm already has 30 signed contracts, with another eight or nine expected.

Monday

 

Reverse Mortgages

Reverse mortgages are becoming more and more popular every day. This is not surprising, considering senior citizens are facing an increased cost of living and decreased sources of revenue. The average social security check doesn’t cover even the most basic living expenses of the typical senior citizen. Up until recently, senior citizen homeowners faced having to sell their homes and moving into low income senior housing to afford a basic standard of living. Reverse mortgages now offer a solution to that problem.

There are many benefits to a reverse mortgage. Seniors no longer have to sell their homes in order for them to be able to afford their medications or to have extra spending money. Reverse mortgages allow them borrow against the equity in their homes. There are no payments due on the mortgage for the entire time that the homeowner lives in the home, making this option an affordable solution to a financial crisis. This turns the home into a source of income for the homeowner, and puts the home’s equity to work for them. Other benefits that a reverse mortgage offers is the income received from the reverse mortgage is tax free and there are no minimum income requirements to qualify.

There are some things that must be considered when one is thinking about taking advantage of the benefits a reverse mortgage has to offer. While a reverse mortgage is the answer for many, it is not for everyone. Sure, it’s great to have access to extra cash, but you want to make sure that you’re not sacrificing something else in the process.

There are many government aid programs that senior citizens qualify for when they meet certain income and cash asset criteria. If a senior citizen is participating in one or more of these programs, they need to make sure that their benefits will not be affected by the income that would be generated by taking out a reverse mortgage.

Many seniors also do not like the fact that the homes that they worked so hard to own free and clear will now have a large debt against it, even though the debt will be paid off from the proceeds of the sale when the home is sold. The heirs of the individual taking out the mortgage generally do not like the idea of a reverse mortgage since it cuts deeply into their inheritance amount, since the equity in the home is being borrowed against and is no longer an asset. However, it is important for the homeowner to do what is right for them, and not necessarily their heirs.

It is important to weigh both the pros and the cons and determine what is right for you in your specific situation and circumstances. Reverse mortgages can be an invaluable benefit for many, but is not right for everyone.

Written by Craig Romero

Craig Romero is an author and expert mortgage analyst dedicated to helping homeowners maximize the investment in their homes.

His amazing book Mortgage Cycling reveals how incredibly simple it is to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less, and the happy part is it can be done without making biweekly mortgage payments or changing your current mortgage. To learn more visit his site : here.

Sunday

 

Economy picking up!

The U.S. leading index, a key barometer of economic conditions, rose 0.1 percent in February, The Conference Board reported today. The leading index now stands at 115.6 (1996=100). Based on revised data, this index decreased 0.3 percent in January and increased 0.3 percent in December. During the six-month span through February, the leading index decreased 0.1 percent, with five out of 10 components advancing.

The leading index was on a rising trend from early 2003 until mid-2004, but this trend was interrupted by a decline from June to October 2004. This decline was similar in magnitude and duration to an earlier decline from May to October 2002. The leading index has increased in three of the last four months, making it likely that the upward trend has not ended. The current behavior of the leading index (compared to its long-term trend of 1.5 percent) suggests the economy should continue to expand in the near term, but perhaps more slowly than its long-term average rate. In addition, there has been about an equal mix of strengths and weaknesses among its components.

Five of the 10 indicators that make up the leading index increased in February. The positive contributors - beginning with the largest positive contributor – were average weekly initial claims for unemployment insurance (inverted), stock prices, real money supply, vendor performance, and manufacturers' new orders for consumer goods and materials. The negative contributors - beginning with the largest negative contributor – were average weekly manufacturing hours, interest rate spread, building permits, and index of consumer expectations. The manufacturers' new orders for nondefense capital goods held steady in February.

The coincident index, an index of current economic activity, increased 0.4 percent in February, and the strength in the coincident index continues to be widespread. At the same time, real GDP increased at about a 4 percent average rate in the second half of 2004, up from 3.3 percent in the second quarter.

Thursday

 

Flipping - is it illegal?

by Mike Jacka

There has been a lot of controversy over the term “Flipping”. Is it illegal or not? The bottom line is no, it is not illegal. What’s illegal is mortgage and appraisal fraud.

Here is a quick overview about why the term “Flipping” has received such a bad rep:

This all started back when some investors, realtors, mortgage brokers and appraisers got together and designed a plan to make some quick cash in real estate. First they found a buyer that would qualify for a 75% - 90% mortgage with decent credit. They would give the buyer a list of properties that was in the price range of what the buyer could afford. They told the buyer to go and look at the properties on the list and once the buyer found one he/she liked, the investor/realtor would go and make an all cash offer at a small discounted price; a price that would, more than likely, be accepted by the seller.

Once they got that property under contract from the seller, they would turn around and sell it for about 20% or so over the true market value of the property. The appraiser would then appraise the property at the over inflated price. The mortgage broker would write up the mortgage at the percentage that the buyer would qualify for and the investors/realtor would end up carrying back a second.

In short, here’s what happened in these types of transactions:

Let’s say the buyer could qualify for an 85% first mortgage. The investors would find a property that was truly worth $100,000 after it was fixed up but was maybe listed for $80,000. They would try and get the property for $60,000 - $75,000. Maybe the investor would even spend $3,000 - $5,000 for clean up, fix up and paint the property. They usually would not do a great rehab job on the property. They would then sell it to the buyer for $120,000 with the seller/investor paying the closing cost for the buyer. This way the buyer could get into the property with nothing down.

The appraiser would then appraise the property for the $120,000 purchase price and the buyer would get a first mortgage of say 85% or $102,000 and carry back a second of $18,000 with every intention of forgiving the second mortgage.

If the investor paid the closing cost of $4,000 for the buyer and had $5,000 in cleanup and fix up costs, they would have spent about $9,000. They would conduct a simultaneous closing with the seller and buyer.

The seller would get their $60,000. The investor/realtor would recoup their $9,000 and would end up with a profit of about $33,000. As far as they were concerned, the property was only financed at about 100%. The problem is, the buyer was only qualified for 85%. They took the money from the loans and usually forgave the second mortgage as a bad dept and were able to write them off their income taxes to offset the income they made from the transaction.

Here’s where the problems started:

Many of these buyers never made their first mortgage payment and there was a high record of first payment defaults. The lenders started to check into this issue and discovered all the fraud that was taking place with the over inflated appraisals and the second mortgages that were being written off. They also discovered the poor condition of the properties. Even though the investor made some improvements to the properties, they never fixed them up to meet the appraisal.

Because this all occurred through simultaneous closings, the media termed it “Flipping” which is what it was. The problem was the fraud, not the fact that the property was flipped.

After this became an issue, the mortgage industry decided to change their rules so that this would not happen to them in the future. They started requiring seasoning of ownership. This created a problem for the honest rehabbers in the business.

If a rehabber bought a property for say $60,000, put $20,000 into rehabbing it and sold it 4 months later, the lenders would not finance the new buyer. That hurt a lot of investors because they needed to get their money out of the property to start the next rehab; now they had to wait another month or two to be able to sell it so that the lenders would feel comfortable giving the buyer a new loan.

FHA was one type of loan that did not require the seasoning of ownership. However, now they do. They are also requiring a 90-day minimum ownership before they will allow an FHA insured loan to be placed on a property.

Click Here to read the news release from FHA on this issue.

For the most part, the “Flipping” issue has settled down and a lot more lenders are relaxing their rules and guidelines for seasoning. They are requiring that you document the condition of the property when you buy it and the work that was done to the property. I actually think this is a good thing. It will force rehabbers to do a good rehab on the properties and weed out some of the bad investors in the business.

I still “Flip” properties today; there is nothing illegal about flipping a property. Don’t commit fraud! Document your transactions and everything will work out ok.

We should start using a different term for the word “Flipping”. I have been starting to use the term “Quick Turn”, that’s from Ron LeGrand.

Wholesaling properties is also a “Flip”. The term “Wholesaling” sounds a lot better today than “Flipping”. There are many ways to flip (I mean “Quick Turn”) a property and there are many advanced, creative real estate strategies that don’t require quick turning properties.

One of my favorites is to “Slow Turn” a property. I sell the property on terms, whether it is a Lease with Option or a Contract for Deed. By the time your buyer gets a new loan to cash you out, the seasoning issue is no longer an issue.


Wednesday

 

Home sales in Central Ohio Up!

Home sales in Central Ohio during February were up from their year-ago level, setting a record for the month, according to the Columbus Board of Realtors Multiple Listing Service.

Realtors reported 1,436 residential home sales last month, up 2.2 percent from the 1,405 homes sold in February 2004.

"That's the highest number of homes ever sold during the month of February," according to the president of the Columbus Board of Realtors. "So far, Central Ohio home sales are up about 1.6 percent for the year."

The average sales price jumped 6.6 percent from $159,581 last February to $170,177 last month. "From an investment perspective, housing here in Central Ohio continues to provide valuable appreciation, but with continued low rates, buyers can still afford the price of a home. It's the best of both worlds".

Tuesday

 

New report maps real estate foreclosures nationwide

RealtyTrac has launched a monthly U.S. foreclosure market report, providing a graphical map that illustrates foreclosure percentiles by state, as well as the total number of homes in some stage of foreclosure nationwide and by state over the preceding month.

Foreclosure properties are broken down into categories, including: notice-of-default, notice of trustee sale, and real estate owned, or REO properties, that have been re-purchased by a bank. Data is also available at the individual county level.

"In January, there was a slight decrease in foreclosure rates nationwide, but with continued hot spots of activity across the country. Specifically, Florida, Illinois, New Jersey, Texas and Washington were above the national average for properties in some stage of foreclosure," RealtyTrac CEO Jim Saccacio said.

www.realtytrac.com publishes a national database of pre-foreclosure and foreclosure properties, with more than 550,000 properties in more than 1,900 counties across the country. The company offers a 7 day FREE trial! here.

The company in February launched new asset management software that enables investors and consumers shopping for REO properties online to make offers and counteroffers on the Internet. The RealtyTrac Asset Management System enables asset managers and agents to post, manage and sell their REO properties online.

Monday

 

Robyn Thompson Junkers to Millions Boot Camp

Widely know as the Queen of Rehab! Robyn Thompson Junkers to Millions Boot Camp goes underway this month-end.

Advanced Rehabbing & Retailing Boot Camp

Learn more..


An overview of what will be covered at the Junkers to Millions Boot Camp..

14 of The Best Kept Secrets for Locating the most profitable deals in your city.

How to estimate the renovation cost accurately in 10 minutes without a calculator or any previous experience. You'll learn the techniques we use to streamline and complete over $2 million in renovations on houses per year. A $20,000 renovation project has been done in as little as 9 days.

Little known techniques for writing powerful offers that get accepted almost every time. These secrets took Robyn 4 years to learn and aren't taught anywhere else.

11 reasons why owners are motivated to sell and why you'd better know them if you want to work real prospects and eliminate time wasters.

How to work effectively with Realtors to get deals not available to the market and get first show at the hot foreclosures.

The magical mathematical formula to determine "What to Offer" on any house in any condition in any market. Robyn's fail safe, simple system will prevent you from making avoid costly mistakes.

How to get top dollar for your houses and why you shouldn't be listening to anyone who tells you the way to sell a house is lower than the price. That's crap and Robyn will prove this.

The 5 repairs that beginners always under estimate and probably should never undertake. These mistakes are deadly and I've seen them put good people out of business or cause a financial burden. It's Robyn's job to help you eliminate these errors and take 5 years off your learning curve and that's exactly what she'll do.

How to prescreen out bad contractors before they take your money and put a leash on the good contractors to force them to get your job done on time, on budget and keep every promise they make. Robyn's days of getting fleeced by contractors are over. With this system, so will yours. This session alone is worth your whole investment of time and money. One contractor seminar can cost you much more than her boot camp. No need to pay that price.

How to handle violations & citations from lead and mold and why they are a rehabber's friend, not a feared enemy. You can make a fortune when you know how to handle these deals. They'll make you big bucks.

How to sell a problem house quickly and turn a lemon into lemonade with a few tricks learned the hard way.

The Impact of Holding Cost on profits and how to reduce yours by getting in and out while your competition is still fighting with contractors.

The 9 reasons a house won't sell and how to eliminate all nine.

Learn the step-by-step process for getting your cash out without carrying paper. Almost all my deals are 100% cash outs. While others are taking back seconds Robyn has been taking their rejects and getting them funded for the full amount. It took her about 100 deals to learn this and Robyn is going to hand it to you on a silver platter.

She'll make sure you understand credit scoring, regarding credit reports and how to turn poor credit into qualified buyers quickly.

How to streamline the mortgage process to get you checks in less than 30 days while others are being jerked around by mortgage brokers and lenders.

How to get buyers approved in 48 hours so you know your deal is going to close before you wait 30 days only to start over.

10 sources for buyer to find down payments legally so you can sell to people with no money. Imagine how many doors that will open.

What to legally do if a buyer doesn't have quite enough income to qualify.

The magic words to put on your flyers to attract buyers like a magnet.

How to determine if your buyer will qualify in 5 minutes flat so you'll know if their a time wasters.

Should you own an office or rent one or work from home. Big question. easy answer. Robyn will show you how they operate their streamline office with skeleton crew and low overhead.

The best computer program to use to manage your office and renovation projects. It costs very little but saves a lot of money and time.

How to identify the 7 common deals breakers that cost Robyne a bundle before she got the answer.

How to invest $5,000 and turn it into $625,000 in 18 months like Robyn did. Yes you really can do this.

What to do with your cash once you get it and how to make it grow to obscene amounts almost overnight and never pay taxes on it.

How to attract Millions of dollars of private capital to fund your deals and never speak to a single banker, even if you have bad credit.

5 strategies for successful cash flow management I wish I knew in my first 3 years.

The 4 prescreening questions to locating an excellent loan officer to get your deals closed quickly and with little cost to you.

Cut your income taxes by 50% using a few strategic moves my CPA taught me.

Network with other investors and from lifelong friendships and create million dollar contracts all over North America.

How to build your financial future using none of your money or credit and live the rest of your life like a millionaire. Robyn did it and she will be honored to show you exactly how with a step by step, easy to implement, 6th grade simple plan, many of her students have copied. She'd like to see you get the word "Budget" out of your life forever and follow her one-year plan to make $250,000.

It's easier than you think. Spend 5 days covering every single detail and leave nothing out. Everything you need to know about buying, rehabbing and selling junkers will be discussed and made so simple you can get your 12 year old to run the business.


Link : Robyn Thompson's Junkers to Millions Boot Camp


About Robyn Thompson : Robyn Thompson owns and operates Home Buyers, LLC, a real estate investment company which specializes in purchasing, renovating, and selling single and multi-family homes in and around Waterbury, CT. Under Robyn's direction, Home Buyers LLC has grown phenomenally over the last few years. Robyn Thompson has purchased 50 homes in 1998. In 1999, only her fourth year of operation, she will purchase 52 homes! Robyn cashes out 97% of her houses to "A" credit buyers in record time. She has made retailing a science and knows every technique imaginable to reduce rehab time, minimize holding costs, attract and qualify good credit buyers, and expedite closings!

Sunday

 

Real estate prices rise in Twin Cities region

For the third straight year February's number of closed sales of residential homes in the 13-county Twin Cities market has remained relatively unchanged. Last month 2,712 homes sold in the metro market, down only 0.7 percent over a year ago.

"Given the level of activity I've seen the first two months of this year, there is little doubt in my mind that 2005 could rival last year's record high," said the president of the Saint Paul Area Association of Realtors. He added, "The Federal Reserve is going to be very measured about any hikes in the interest rates so inflationary pressure will remain under control, we're experiencing a relatively healthy economic expansion, and the active Realtors are being more aggressive with their marketing and price recommendations to sellers."

A total of 6,905 new listings were added to the metro inventory during February 2005, an increase of 3.06 percent over the same period in 2004. While still the highest number of listings added during any February on record, it was also the smallest percentage increase reported in that month for the past six years.

When compared to January's 6,516 listings added to the inventory, February showed a gain of 5.97 percent over the previous month. Historically, the number of listings added during February has been less than the number added in January. February's median sales price for the 13-county Twin Cities metro area increased 7.74 percent over the same period in 2004. However, this price was 0.98 percent less than one month prior in January 2005

Compared to February 2004, the only counties showing an increase in closed sales during February 2005 were Scott (39.13 percent), Carver (20 percent), St. Croix, WI (15.52 percent), Washington (5.1 percent) and Hennepin (1.24 percent). The counties with the biggest gains in pending sales, on a percentage basis, were Rice (61.76 percent), Carver (33.64 percent), Sherburne ((20.47 percent), Washington (16.66 percent) and Chisago (12.3 percent).

Housing statistics include existing single-family homes, condominiums and townhouses. Statistics are provided by the Saint Paul Area Association Realtors and are based on the closed existing homes sales as reported by the Regional Multiple Listing Service.

The Saint Paul Area Association of Realtors represents more than 4,000 members involved in all aspects of the real estate industry.

Meanwhile, the Minneapolis Area Association of Realtors projects year-end closed sales of 58,500 units, which is similar to 2004.

"Typical home pricing will start their upward climb in March," said the MAAR president. "We expect home price growth to reach in the 6 percent range."

The Housing Affordability Index (HAI) remains high at 145 leading into March. An HAI of 145 means the median family income is 145 percent of the necessary income to qualify for the median priced home using a 20 percent down payment and a 30-year fixed rate mortgage. Income levels, home prices and interest rates will affect the Housing Affordability Index.

The Twin City Housing Affordability Indexes are as follows:

20 percent down payment: 145 (primary HAI)
10 percent down payment: 124 (secondary HAI)
5 percent down payment: 115 (secondary HAI)

The market is balanced, but is expected to transition to a sellers market in the lower price range, according to the president-elect of the Minneapolis Area Association of Realtors. The market is on pace to equal record number of homes sales in 2004.

Tuesday

 

Real estate foreclosures drop

The number of new foreclosed residential properties sank 7 percent nationwide in February from the previous month, according to Foreclosure.com, which tracks residential foreclosures and for-sale-by-owner properties.

According to data released on Monday, 18,824 new foreclosed residential properties were listed for sale in the United States during February 2005, down from 20,279 reported in January. The total number of U.S. residential foreclosure properties available for sale during the month of February was 72,877, also down 7 percent from 78,694 reported in January.

"Following a year of heavy growth in foreclosure inventory levels in many parts of the county, foreclosures have leveled off in the first two months of 2005. The 7 percent drop in both new and total foreclosures in February can largely be attributed to the short month," said Brad Geisen, president and CEO, Foreclosure.com. "Many states with historically high inventories, such as Texas, South Carolina, Pennsylvania, Missouri and Florida, saw a higher than average decline in February. As a result of this decline, prospective home buyers should track new foreclosures on a daily basis in order to identify strong property investment opportunities as soon as they arise."

The states that reported the highest number of new foreclosure listings in February included Texas (2,449); Georgia (1,632); Ohio (1,577); Michigan (1,163); and Indiana (1,071).

The states that reported the fewest number of new foreclosure listings in February included Rhode Island (3); Hawaii (4); Vermont (4); Washington, D.C. (5); and Alaska (9).

Boca Raton, Fla.-based Foreclosure.com has access to a large inventory of residential foreclosure real estate, including Real Estate-Owned (REO) properties; Department of Housing and Urban Development (HUD), Department of Veterans Affairs (VA), Fannie Mae, and other government agency and financial institution properties; as well as listings from an extensive network.

Wednesday

 

Real estate prices grow fastest in Pacific states

For the seventh consecutive quarter, the Pacific states lead the nation in annual house-price appreciation, growing at 17.7 percent from the fourth quarter of 2003 through the fourth quarter of 2004, according to (FM) Freddie Mac's Conventional Mortgage Home Price Index.

Nationally, the index rose 10.7 percent, on an annual basis, up from an 8.4 percent growth rate for the prior year.

The South Atlantic states were second, with a growth rate of 14.1 percent, followed by the Middle Atlantic states, which grew at a slower, but still impressive rate of 13.5 percent for the year. The New England states were fourth in growth with an annual appreciation rate of 12.6 percent.

The Mountain states came in after that with an annual home-price growth rate of 9.8 percent. Following the Mountain states, the West North Central states posted an increase of 6.2 percent, while the East North Central states showed an increase of 5.8 percent. Finally, the East South Central states had gains of 5.6 percent and the West South Central states had the slowest annual appreciation – a 4.3 percent annual rate.

Nationally, home values increased by an annualized rate of almost 9 percent in the fourth quarter of 2004, according to Freddie Mac's index. The annualized growth rate in the third quarter of 2004 was revised upward to 17.5 percent.

"Home construction and sales were exceptional last year," said Freddie Mac's vice president. "Sales of new and existing houses and pre-owned condominiums all set records in 2004, with total sales of 8 million. We expect that mortgage rates will gradually rise throughout this year, with 30-year fixed mortgage rates averaging near 6.25 percent at year-end, and home sales likely declining about three percent from last year's volume.

"We are forecasting annual home price appreciation nationally at between 7 and 8 percent in 2005. Strong home sales and higher values should propel purchase-money mortgage originations to another record this year – at around $1.51 trillion, up from 2004's estimated $1.48 trillion – but total originations will likely decline due to smaller refinance volumes caused by the predicted rise in interest rates."


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