Sorry to Learn of the Passing of Peter Falk...

This has absolutely nothing to do with real estate, but wanted to share the sad news of Peter Falk's passing at the age of 83.  He was from my hometown, Ossining, New York, and, like so many other Ossining folks, I always felt a special connection to him, though I never knew him personally.  His parents owned a dry-goods store on Main Street and he was our town celebrity.  A fine actor, known by most for his role as TV Detective Columbo, Falk had an impressive career on both stage and screen.


Oh, just one more thing... we'll miss you, Columbo.

Monthly Average $/SF Overtakes the Annual Average

Courtesy of The Cromford Report

When a market is falling the monthly average $/SF for sales transactions is consistently lower than the annual average $/SF. When this ceases to be true we have a signal of a market that is attempting to turn round. On June 23 we see a monthly average of $83.85 and an annual average of $83.74. The difference is only slight but like the olive leaf carried by Noah's dove, this is a promising sign that price declines have abated.

We can certainly say that pricing for sales closed between May 23 and June 22, 2011 was on average higher, on a price per sq. ft. basis, than sales between June 23 2010 and June 22, 2011. We saw a similar thing occur in November 2009 confirming price rises that unfortunately did not hold once the tax credit ran out. This signal turned negative again in July 2010 and has stayed negative until the last three days.

If market pricing continues to improve this positive advantage for the short term average over the long term average will likely hold. Stock traders will recognize this kind of signal from their market. For stocks prices turn round frequently, but for residential real estate these signals tend to stay either positive or negative for months if not years.

See Cromford Report at PookBellini.com for June 21st Mid-Month Market Update.

Some Great Consumer Resources

Today, with so many of us looking for ways to get the most value for our dollar, I thought I'd take this opportunity to share some great websites for consumers. I originally shared this info back in 2008, but thought it was a good time to share it again.  I know there are many other great sites out there, so if you have a favorite you'd like to share, please email it to me and I'll include it in my next Pook's E-News. 

Air Travel:These are four of my favorite resources for air travel:

• AirfareWatchdog.com - "A dedicated team of airfare experts searching for airfares for people like you."  Airfarewatchdog is part of the Smarter Travel Media Network. The site was created by George Hobica, a travel journalist specializing in consumer issues.
• kayak.com -  A great portal for finding great airfares.
• seatguru.com - The ultimate source for information on airplane seating and in-flight amenities.  This is the place to go to before you choose a seat.
• SmarterTravel.com - Sign up for email notification of great airfare deals and articles on travel. Especially good info for Seniors.

Automobiles:
Edmunds.com - A great resource when you're looking to buy a car (prices, reviews, information, inventory).
Kelley Blue Book - Valuable information on New Car Prices and Used Car Values

Grocery Coupons:
http://shortcuts.com/home
http://www.printgrocerycoupons.net/
http://www.couponmom.com/

Misc. Resources:
ClarkHoward.com - "Save more, spend less and avoid rip-offs."

A Window of Opportunity for House Sellers

Courtesy of Keeping Current Matters/The KMC Blog
Posted: 21 Jun 2011

There has been much confusion as to where housing prices are headed. We have actually blogged on the issue recently. Today, we want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices later this year and the first half of 2012.

Why renewed downward pressure?

Any item’s price is determined by ‘supply and demand’. In many parts of the country existing housing inventory is already high and actually increasing. In addition, an inventory of distressed properties (foreclosures and short sales) will be coming to market later this year. This inventory has been delayed for the last several months because of faulty paperwork by the banks when they originally attempted foreclosure proceedings on these homes.

Celia Chen, of Moody’s Analytics explains:

“Foreclosures are weighing on the outlook for U.S. house prices, and the slow resolution of issues surrounding the so-called robo-signing scandal is keeping distressed homes off the market”.

The New York Times also recently reported on this issue. They looked at the delays in certain states. As an example, this is what they found in New York:

“Last September, before the documentation crisis, nearly 1,500 New Yorkers lost their houses as a result of foreclosure, according to LPS. The average over the last six months: 286. That is far lower than at any point since the recession began.”

Banks are now correcting these errors.

There is evidence that the banks are getting their documentation in order and about to again increase their foreclosure repossessions. Housing Wire reported:

“Since major lenders delayed foreclosures to fix a broken process late last year, the amount of filings declined, but in May signs emerged the effect might be wearing off.”

They went on to quote RealtyTrac CEO James Saccacio:

“…lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory… Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask.”

What will this mean to home prices?

As this inventory comes to market, it will impact prices in two ways:

1. It will provide discounted competition for buyers
2. It will impact the appraisal values of all homes in the area

Again, we quote Celia Chen:

“It is quite possible that house prices will pick up slightly in the second or third quarter of this year, as foreclosure sales remain depressed while nondistress sales pick up…By the fourth quarter of this year, however, the distress share will rise, sending the house price index back down…
House prices will founder until early next year and start rising in earnest at the end of 2012.”

Bottom Line

There is a window of opportunity currently which sellers should take advantage of. Waiting until later this year or until next year will not guarantee a higher sales price. If anything, it probably guarantees the exact opposite.

Are Short Sales Getting Easier?

Courtesy of Keeping Current Matters/The KMC Blog
Posted: 22 Jun 2011

Short sales (where the lender agrees to accept less than the mortgage amount due on the sale of a property by a seller) have never been easy to complete. We are not suggesting that they now will be easy. However, there is mounting evidence that the banks are seriously favoring short sales over the option of foreclosure. Here is the evidence that has led us to this conclusion.

Banks Net More Money on a Short Sale

RealtyTrac’s latest data tells us that a short sale sells at approximately a 10% discount. A foreclosure sells at approximately a 35% discount. Obviously, the bank will net more by agreeing to short sale than they would by bringing the home to foreclosure.

Banks Are Beginning To Pay Short Sale ‘Bonuses’

In a recent article, HousingWire reported on a new program being instituted by CitiMortgage an affiliate of Citigroup:

CitiMortgage, is paying borrowers an average $12,000 after completing a short sale this year.
Justin Rand, the senior vice president of loss mitigation at the bank, said servicers are putting more of an emphasis on streamlining the process and pursuing a short sale ahead of foreclosure.

There is no better proof that some banks prefer a short sale than the fact that they are paying bonuses to homeowners who pick that option.

The Numbers Already Show an Increase in Short Sales

In the same article mentioned above, CitiMortgage said the percentage of troubled loans that now go to short sale route have quadrupled (4% to 16%) in the last two years.
And in a separate article, Bank of America reported they completed over 95,000 short sales in 2010 which more than doubles the number in 2009. BofA also reported that they completed more short sales than it sold previously foreclosed homes every month for the last year and a half. Last month (May), BofA completed roughly 9,000 short sales compared to 7,000 foreclosures sold.

Bottom Line

There are many advantages to a short sale over a foreclosure for the seller (they get to plan their move, there is less embarrassment with friends and neighbors, the negative impact on their future ability to purchase is much less severe). Luckily, it now seems that the banks also think it is in their best interest to pursue a short sale.

Donations and Volunteers are Needed to Help Pets Impacted by the Wallow Fire

A local pet services company, Villa La Paws, has organized a campaign to collect items to help pet owners who have been displaced by the fire in the White Mountains.  Below is a list of items they are looking for at this time:

• Vaccines:
  • Amoxicillin for cats
  • DHPP vaccines dogs & cats
• Large hard shell crates for dogs
• Clorox bleach wipes
• Stacks of newspaper
• Dog & Cat Food
• Cat Litter
• Disposable litter boxes
• Small food dishes
• Plastic trash bags
• Box Fans/stand up floor fans
• Collar & leashes
• Sheets
• Towels
• Blankets
• Tarps
• Pet kennels
• Bottled water
• Cash donations

Donations can be dropped off at any of the three Villa La Paws locations:

Villa La PAWS Canine Training Academy (Main Drop-Off)
10630 N 32nd St
Phoenix AZ, 85028
Training@villalapaws.com
1-888-855-7833
in the Paradise Hills Shopping Center
N/W Corner of 32nd St & Shea
Hours: 8 AM - 7 PM M-F, 8 AM - 5 PM, Sat
Sun - By appointment

Villa La PAWS on Bell Rd
2734 W Bell Rd
Suite 1390
Phoenix AZ, 85053 AZbell@villalapaws.com
1-888-855-7833
In the Bell Canyon Pavilions
N/W Corner of I/17 & Bell
Hours: 7 AM - 7 PM M-F, 8 AM - 5 PM, Sat
Sun - By appointment

Villa La PAWS on Shea Blvd10640 N 32^nd St
Phoenix AZ, 85028 AZshea@villalapaws.com
1-888-855-7833
in the Paradise Hills Shopping Center
N/W Corner of 32^nd St & Shea
Hours: 7 AM - 7 PM M-F, 8 AM - 5 PM, Sat
Sun - By appointment

Please check out their website for more details.  Your support during this difficult time will be greatly appreciated!

The 4 Stages of Wealth Building As a Homeowner

Courtesy of Keeping Current Matters

One of the primary objectives of owning a home is to let the home appreciate over time and become a pillar of a family’s financial strength.  But before we can discuss “wealth”, we need to identify the stages to get there.

Stage 1

Having “Emergency Cash” is the first stage. It’s having $5-7,000 liquid for life’s inconveniences (the boiler breaking down, the car needing work, etc). When faced with the inevitable challenges that arise, many people are forced to run to their credit cards to make it through. They become stuck with high interest rate, non-tax deductible borrowing.

Stage 2

The second stage is the elimination of “Bad Debt”. We define “Bad Debt” as any debt whose interest is not tax deductible. Obviously, those high interest rate credit cards must be the first to go. But we also want to divest ourselves of the borrowing associated with car loans, boat loans, student loans, and personal loans because it typically can be done cheaper.

Stage 3

Shockingly, when you arrive at stage three, you will be considered in the Top 5% of Americans in terms of financial security. Stage three is accomplished when you have 3-6 months of your total expenses in reserves. The average homeowner (who is logically financially better off than the non-homeowner) has less than one month’s expenses in reserve! When life shows them more than a minor inconvenience (like a job loss, an illness/disability, or worse), most people are in a panic situation. With 3-6 month’s reserves, you will have time to weigh options and make better choices.

Stage 4

True financial security is attained when you become “Debt Free”. But not without debt. We consider our clients “Debt Free” when they have enough liquid assets to pay off whatever mortgage they have outstanding. Wealth building almost requires utilizing the tax benefits of having a mortgage in combination with strategies that utilize The 3 Miracles of Money…

The 3 Miracles of Money

1. Compound Interest – The impact of money left to grow upon itself can be dramatic. If you had $1 on Monday and you could double it every day ($2 on Tuesday, $4 on Wednesday, etc.), by the end of 20 days, you would have $1,048,576.00!!! Now, you can’t double your cash every day, not even every year, but the concept holds true…..compounding interest is a good thing!
2. Tax Free Growth – The ability to accumulate assets without giving Uncle Sam a third of it (in the form of Federal and State Income Taxes) is how the $1 became $1 million. If the growth was taxed at 33% ($1 on Monday gave you $1.67 on Tuesday – instead of $2- and so on), your $1 would only grow to $28,466.20 after 20 days!!! THAT IS NOT A TYPO! You would have “lost” over $1 million.
3. Leverage and Arbitrage – If you can put up minimum of cash and take title to a significant asset (like a down payment on a home….the smaller the down payment the better), you can leverage that cash investment to large returns. At the same time, if you can take the cash that you don’t bury in home equity and effectuate a spread between your “after tax cost of money” (mortgage payment) and your investment options (hopefully, in a tax free environment), you can gain the exponential growth that creates wealth.

Bottom Line

Please take the time to investigate all that is possible, by harnessing the POWER of a mortgage to help you move your family towards wealth. Work with a loan officer who can educate you on the power behind properly leveraged real estate via tax savings and reallocation of equity.

Mortgage Rates Move Even Lower This Week

Courtesy of REALTORmag.org
6/9/111

Fixed and adjustable-rate mortgages sank to new lows for the year, continuing a downward spiral for the eighth straight week, Freddie Mac reports in its weekly mortgage market survey.
Here’s a closer look at how rates fared for the week:
▪ 30-year fixed-rate mortgages averaged 4.49 percent this week, down from last week’s 4.55 percent average. A year ago at this time, 30-year rates averaged 4.72 percent.
▪ 15-year fixed-rate mortgage rates averaged 3.68 percent--its lowest level since November 2010. A year ago at this time, the 15-year rate averaged 4.17 percent.
▪ 5-year adjustable-rate mortgages averaged 3.28 percent this week, slipping from last week’s 3.41 percent average. A year ago at this time, the 5-year ARM averaged 3.92 percent.

Source: “Mortgage Rates Move Lower Following Weak Jobs Report,” Freddie Mac (June 9, 2011)