Friday, February 15 2013
To the extent that rentals reflect wider real estate movement, there is good news and bad news for Evansville tenants. It all depends on how they view it (and how they chart their personal housing strategy). The bad news was not unexpected: for the third straight year, rents were up across the nation in 2012, according to apartment housing industry expert MPF Research.
Although rents rose at a slightly slower pace than in 2011, national forecasts are calling for rent increases in 2013 that match last year’s. The research firm said that apartment rents climbed 3.0% in 2012, down from 4.8% in 2011, but again were above the long-term norm of 2.5% registered over the past 20 years.
For tenants currently in rentals -- both apartments and single-family homes -- rents may be heading up, but the good news is that this price pressure has not yet resulted in a less friendly home buying environment. “Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact,” according to MPF’s report. In other words, rentals are not being lost in large number even though rents are rising, so floods of first-time homebuyers are not yet adding significant upward pressure on single-family home pricing.
Even with housing prices on the rebound, first-time homebuyers who decide to leave the world of rentals to buy a home now will still benefit from the record low interest rates and distressed property bargains that result in historically affordable home prices.
Another group that would hail rising rental rates are investors. "Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock," according to Greg Willett, MPF’s vice president.
Whether you are looking to buy or sell a rental home in Evansville or the surrounding areas, conditions warrant a thorough look at the opportunities available now and those opening this spring. Call me to get started on a plan of action! You can reach me on my cell phone at 812-499-9234. Wednesday, February 13 2013
Yes, foreclosure rates across the country continue to drop, yet bargain-hunters can take heart: there still remain a goodly number of bank owned properties in Evansville. According to the National Association of REALTORS®, ddistressed homes accounted for 24% of national December sales; a large proportion, but significantly down from the 32% of just a year ago. Also known as “real estate owned” (or REO) properties, it is well-known that these homes can often be bought at a significant discount -- frequently by as much as 16% – 17% below market.
Before anyone updates his or her Facebook status to tell the world about the millions they are about to make by ‘flipping’ foreclosures, it’s good to bear in mind some key differences between buying regular homes and bank owned properties. To make an REO purchase successful, potential buyers need to plan for those special factors.
· Count on bank owned properties being more difficult to finance due to guidelines set by lenders: requirements that can prevent REO purchases from going through. Due to a property’s condition (which can sometimes be poor, even non-habitable), FHA and VA-approved buyers must gain pre-approval before submitting an offer.
· Bank owned properties are generally sold “as-is", often with fewer disclosure requirements. I always urge my buyers to be diligent about pre-purchase inspections – and with REOs, it’s doubly important. Purchasers of bank owned properties can have little or no recourse if defects or maintenance issues are discovered later.
· Lenders can run into additional costs when selling REOs -- costs involving liens, evictions, property taxes, insurance, etc. This motivates them to try to squeeze as high a price as possible from the transaction. In addition, banks may charge additional fees for extended closing and other services.
All of which goes to the point of how buying bank-owed properties in Evansville differs from run-of-the-mill home purchases…and why having a real estate agent well-versed in bank owned properties is so important. If you would like a look at the options currently available among local REO offerings, give me a call today! You can reach me on my cell phone at
812-499-9234. Tuesday, February 12 2013
“Mansion” is the Wall Street Journal’s entry into the high-end real estate magazine world. Well, not quite a magazine -- it’s an extra section they run on Fridays. It’s a nice diversion for those who want to read about really rich people selling their properties. More than that, it could actually be an important source of information if you decide to buy a vineyard in the middle of Los Angeles (Bel-Air, actually -- that one was featured last week).
It was another article that caught my eye on Friday, though; one that dealt with a topic we agents have long debated. The article was headlined “THE BEST DAY TO LIST A HOME IS…”. It summarized an elaborately executed study by a national brokerage revealing hard statistics on which day of the week is best for launching your listing. The author, Sanette Tanaka, brought up several ways to look at the question. While her focus was, of course, national, the unspoken allure was to zero in on which day will maximize our Evansville listing results.
I bet you want to know the answer, so here it is: …(drum roll, please) --
Friday. Houses listed on Friday spent the fewest days on market (2 fewer than Thursday, 7 fewer than the most ho-hum day for listing, Sunday).
But, reading further, there is a problem. Listing on Tuesday brought in the most requests for house tours -- by 8 thousandths of one percent over Thursday. For drawing house tours, Friday faded into the pack…
All of which points to something experienced agents already know: statistics are helpful, but not to the point where they detract from getting the job done. The best day to publish a listing is as soon as it’s ready – the instant it’s ready! Buyers are constantly combing the listings, and the ideal prospect may be long gone if we hold off for any reason.
If you are ready to sell your home, let's get your listing ready to go now! Our inventory is very low right now which is an added bonus for sellers. Monday, February 11 2013
Updating the outside of a home pays off, according to this year’s Cost vs. Value Report. Real estate professionals ranked exterior improvement projects as winning the buyers’ eye and providing sellers with the most return on investment. If your clients are wondering what home improvement projects will give them the best return on the sale of their home, tell them to think “curb appeal.” When buyers are shopping for a home, the exterior can make (or break) the first impression. According to the 2013 Cost vs. Value Report, exterior replacement projects are among the most valuable home improvements that sellers can currently invest in, starting with the front door. A steel entry door topped this year’s survey with an estimated 85.6 percent of the costs recouped at resale. The steel door replacement is also the least expensive of the 35 midrange and upscale remodeling projects included in the survey, costing $1,137 on average. This is the 15th year that Remodeling magazine — in cooperation with REALTOR® Magazine — has released the Cost vs. Value Report. This year’s survey included more than 3,900 appraisers, sales agents, and brokers across the country who provided their opinions and estimates. Exterior projects dominated the list with six of the top 10 most cost-effective midrange projects and eight of the top 10 upscale projects. Read more here: http://realtormag.realtor.org/home-and-design/cost-vs-value/article/2013/01/2012-13-cost-vs-value-make-first-impression-count Thursday, February 07 2013
Ultra-low mortgage rates mixed with housing affordability has made investing in a rental property pay off for investors. Many investors have eyed foreclosures, snagging them at rock-bottom prices, and turning them into rentals. Some home owners have also used the downturn in housing to purchase second homes and then rent out their first property, the Associated Press reports. Demand for rental housing remains strong. "In this market, at this point, it's a sweet spot," says Chris Princis, a senior executive at financial advisory firm Brook-Hollow Financial and owner of two rental properties in Chicago. "You're getting the market where it's just starting to rebound, but still at the bottom, with what's looking to be a great recovery." In earning a profit on a rental investment, Princis uses a formula: He charges 15 percent above monthly mortgage and maintenance costs. But it’s also important to know what comparable apartments are going for, and to be flexible in case you’re unable to find a tenant for months, experts note. The best investments for rentals typically prove to be in areas with a strong history of rental demand, such as neighborhoods near universities or homes in residential areas that are near schools to attract families. Source: “Got Cash, Good Credit? Experts Say Owning Rental Housing Can Pay Off Even as Market Recovers,” The Associated Press (Feb. 6, 2013) Wednesday, February 06 2013
After years of sluggish growth, home remodeling is rebounding and more home owners are tackling long-delayed house projects to spruce up their homes. The growth in remodeling is coming at a time when more home owners are once again seeing equity in their homes as the overall housing market picks up. “Home improvements can further boost home values and help sustain both the housing recovery and economic growth,” Realty Times reports. Spending on home improvement projects rose 9 percent in 2012 — the first increase since 2007, according to a study by the Joint Center for Housing Studies at Harvard University. "With the U.S. economy and housing market now recovering, investment in the nation's housing inventory is also picking up,” according to the JCH report. “Lenders and new owners are rehabilitating millions of foreclosed properties. Older home owners are retrofitting their homes to accommodate their future needs... And with the huge echo-boom population moving into the home buying market over the coming decade, the remodeling industry can look to an even more promising future.” The National Association of the Remodeling Industry expects growth to continue in home remodeling, particularly as more clients feel more stable in their finances and employment situations. Source: “Home Improvement Growth Latches onto Housing Recovery,” RealtyTimes (Feb. 5, 2013) Tuesday, February 05 2013
Sometimes, even after your mortgage application has been approved, you have to scratch your head at apparent non-sequiturs that attach to the process (for instance, when a loan is made contingent upon your repaying an ultra-low-interest credit account).
Even more so if your perfectly dandy financial situation results in a turndown. How could this happen? The answer usually makes perfect sense…but only if you understand that bankers and mortgage brokers are bound by policies and procedures that apply to everyone currently buying homes in EvansvilleKnowing the rules ahead of time can influence how readily mortgage applications are approved. Some guidelines:
Forget adding "mattress money."
Your bank account gets a thorough going-over, of course. If you have recently deposited a bundle of cash with no apparent source, it looks as if you are artificially hiking up the balance (perhaps with borrowed funds). Too bad about that garage sale: if the cash has not been on deposit for at least 90 days, it can be considered ‘unseasoned’ – likely to raise questions.
Disclose all pertinent info.
Many credit applicants in the process of buying homes assume the credit investigation will be limited to the information disclosed on the application. Not! Underwriters are trained investigators always on the lookout for anything that looks like fraud. Buying homes involves sums that deserve serious investigation; even relatively minor oversights are likely to be discovered. Answer: supply all the information asked for.
Avoid employment hopscotch.
Those who suddenly change jobs while in the process of buying homes in Evansville raise the odds of their application being affected. This is especially true of wholesale shifts in careers or industries. Even for otherwise praiseworthy professional moves, an employment outlook that appears unpredictable isn’t helpful.
Bottom line: those who will be buying homes need to prepare knowledgably for the policies that govern mortgage approval. If you are among those who will be buying homes in the Evansville area this winter, call me today -- I can put you in touch with a mortgage broker to start the pre-approval process! You can reach me on my cell phone at 812-499-9234. Monday, February 04 2013
The Weather Channel has nothing to do with it. What’s happening up in the ski resorts, likewise. The ‘snowball effect’ being discussed in print and on TV won’t soften anytime soon (even if the groundhog was right about winter being over).. This is an economic snowball -- one that’s gathering momentum following what CNN’s Money website describes as “the best year for U.S. real estate market in five years.” Businesses that stand to benefit from growth in the housing market are watching closely. The Wall Street Journal’s snowball report took form in last Monday’s Marketplace section, where the top headline read “Housing Recovery Opens Spigot…Makers of Products From Carpets to Air Conditioners Feel Effects of Rebound.” It was even more heartening as a counter to last week’s government indications that the greater economy seemed to slow. The housing sector’s performance was so strong it acted as a tonic to its many associated industries: among them, many local retailers. The snowball effect was noted widely. The company that makes Carrier air conditioners said that orders rose 20%; Honeywell International reported the “first sign of life we have had in a while.” Locally, fingers were crossed that Evansville businesses will be swept up in the snowball. National suppliers expected that to happen. “Housing is what we see leading the economy out of the doldrums,” according to the CFO of United Technologies Corp. The WSJ reported evidence that Americans are spending more to build and refurbish their properties. With sales of existing housing registering the largest annual jump since 2004, it should come as no surprise if Credit Suisse’s Daniel Oppenheim proves correct in predicting a 7%-8% rise in home improvement spending. He expects it to keep going for at least the next two years. That’s a pretty solid forecast, and in line with what most observers are saying. All in all, the boost from the housing recovery is one snowball no one seems to think is likely to melt soon -- regardless of what Punxsutawney Phil has to say about it. Thursday, January 31 2013
After the holidays, buyers tend to start getting more aggressive with their house hunting. Search activity usually peaks around March or April in most states, according to a new study of home searches from 2007 to 2012 conducted by Trulia. In September, searches slow down. By December buyer searches ebb to their lowest point of the year. “Home-search activity swings with the seasons in every state,” says Jed Kolko, chief economist of Trulia. “Buyers and sellers can use these ups and downs to their advantage. Sellers looking for the most buyers should list when real estate search traffic peaks. Buyers, however, should think about searching off-season, when there is less competition from other searchers.” The study revealed seasonal patterns of search activity state to state. Here are the months when online real estate searches peak in every U.S. state:
Source: “Trulia Reveals Best Home-Searching Season,” HousingWire (Jan. 29, 2013) Wednesday, January 30 2013
Anyone who is buying a house in Evansville-- or even just checking up on the market -- is likely to find that some of the rules of the game seem to have shifted. Particularly anyone expecting to be deluged by the kind of amazing deals being offered in 2008 and 2009 should see what I mean.
As the latest housing statistics continue to paint an upbeat picture, at least when it comes to bargain-priced properties, the days of multiple bids and ‘offers over asking’ are back. If you are weighing the advantages of buying a house in Evansville before interest rates and prices rise in earnest, it should be useful to take a look at some strategies that work -- and some that virtually never work:
1) Blanket Low-balling – Running around writing up a bunch of low-ball offers is a surefire way to get yourself ignored, or worse, miss out on an otherwise great property. A better approach? Work with a knowledgeable agent whose expertise in neighborhoods will allow you to check on the most recent comps, then write a serious offer.
2) Dismissing Imperfect Properties – The degree of your success in buying a house in Evansville can depend on starting out with a reality check: only very rarely is a property totally perfect for you and priced absolutely right.
3) Highest and Best - Unfortunately, the tempting low prices listed for some local bank-owned homes also means that it’s increasingly common to encounter the dreaded “multiple offer situation.” If you find yourself there, be prepared to submit your highest and best offer first -- you may not have another shot.
This changing market doesn’t mean we are headed into the kind of fever-induced ‘bubble’ we saw in the mid- 2000’s. But for those seeking a deal and waiting for the bottom of the market before buying a house in Evansville, the market does not seem to be waiting. 2013 is clearly the time to jump in! | |||||||
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The Trentini Team
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