Ho-Ho HOME SALES!!

So in the real estate world, Nov. 23rd - Jan. 2nd is considered the "Holiday Season..." At the same time, any real estate agent or broker will tell you, there are no such things as "weekends" or "holidays" in this business... Nonetheless, my family and I decided to go to Hawaii this year for Thanksgiving, and as I packed the iPhone, the iPad, the lap top, and all my files, my wife says, "Chris... WE ARE GOING ON VACATION!!!" So, the hour long conversation I proceeded to have with her after that inspired my next blog... "Ho-Ho-Home Sales!!"
Because almost every other person on the planet takes time off for Holidays and goes on vacation, if you've been thinking about selling your home, why not do it at a time when other potential buyers may have held off because they have vacations planned, or family coming into town? Think about it, only REAL serious buyers will be out looking at homes the day after Thanksgiving or Christmas Eve. Why not list your home and take advantage of being a property that is available for these serious buyers to look at? For that reason I always advise sellers to go ahead and list their home during the holiday season rather than wait... Staging a home during the holidays is a big plus also. Something about the smell of pine and "stockings hung by the chimney with care..." it really seems to help people imagine spending their next holiday in that house...
So bottom line, if you've been thinking about listing your home, but wanted to hold off until after the first of the year, don't! The fact that a lot of people are thinking just like you and WILL hold off, means the market will be less populated, which means more attention for your property! And the type of attention that will be given during the holidays will be from serious buyers, who think finding a dream home is the best gift they can receive this year. And last but not least, that Douglas fur, and gingerbread cooking in the oven will help potential buyers feel like your home could be their home!
If you have any questions or would like more facts and tips about listing during the holidays just give me a call. I'm always available!

~Chris
916-834-7003

Patience and imagination are virtues ALL buyers need

All right, so for the last couple months I’ve been telling you that now is a good time to buy... With foreclosures and short sales currently on the market, and more to come in the next few years, a potential buyer can walk away paying 100k for a home that sold for 280k just three or four years ago… With that said, I came across an article this week that the Wall Street Journal did, and it pointed out an issue I realized I never talked about... That even though our current housing market is seeing an “oversupply of homes, it is also facing a new problem: a lack of attractive inventory.”

Here’s why…

Right now a lot of homes on the market are either short-sales or foreclosures. This means the homeowners living in them (or the tenants renting them) have no money at stake. They don’t care to make repairs to the home to make it more attractive for a buyer.  

They don’t care to touch up paint, or clean the walls to make the home look new. The owners or tenants of these homes aren’t getting any money from a short-sale or foreclosure and could care less if you see the home at its best… or its worst for that matter…

In the WSJ article, Slim Pickings Are Latest Headache for Home Sales, the author points out that because the inventory for 'regular' home sales are low, (not a short-sale, not a foreclosure) it may be hard for buyers to find their dream home, because a lot of homes they are looking at need a lot of work, and buyers just can’t see past it.

The bad news for buyers looking to find an immaculate home for a cheap price is, “regular” home sellers are pulling their homes off the market, rather than try to sell them at today's discounted prices.”

And really, you can’t blame them… How can they ask top dollar for their home, when the home next door is going for 100k less as a short-sale…?

So, like the title of my blog says, patience and imagination are virtues all buyers need in this type of market. Go into these short-sales and foreclosures knowing the situation. Know you may have to see past a lot of junk, dirty walls, stained carpet, chipped paint, broken sinks, cracked windows, trashed yards… If you can, you may just find your dream home, and at a great price. If you can’t see past it, and a lot of people can’t, just have some patience that the right home for you just hasn’t hit the market yet.

My wife always tells me, “all things in life happen at exactly when they are suppose to…” Purchasing a home is big deal. When it’s the right time, and right property, you’ll know.

Why you should become a landlord...

Over the last several weeks I’ve seen a reoccurring topic amongst Real Estate news: RENT.

So far in the last month I’ve read a handful of articles talking about the current “Rental Property Boom,” so thought it would make for a good blog.

CNN’s “Cashing in on Rental Property” article was one of the most informative that I read, and I really liked their, HOW TO FIND A GOOD DEAL section.

The meat of the article pretty much says, because of all the foreclosures that are inundating the market (see previous blogs) now is a great time to buy a rental property.

“…demand is up for rental properties and rents are rising. That's partly because foreclosures have turned more than 4 million former homeowners into renters, but also because many other prospective homeowners, worried about losing their jobs or housing prices falling a lot further still, are reluctant to buy now.”

“Many factors make this a great time to invest. Mortgage rates are at a 40-year low, and homes in many areas are ultra-cheap. Meanwhile, demand for rentals has risen in more than 500 cities, according to recent Census data. That, in turn, has enabled landlords to charge more.”

That last little sentence is the most important… “Landlords can CHARGE MORE.”

Being able to charge a renter more, means you will likely be able to get more money than what the mortgage payment is, which means POSITIVE CASH FLOW.

Here’s why… Typically banks require an INVESTOR to put down 20-25% of the loan price and prove they have enough funds to cover at least six months of the mortgage payment, taxes, and insurance… An example… A client of mine just purchased a rental property for 125K… He put 20% down, making his loan amount $100K. His monthly payment (including mortgage (PITI) and Water, Sewer & Garbage) is $800… After speaking to a local property manager he found out that the average rent in this area is $1200… That’s a POSITIVE CASH FLOW (PCF) of $400!!

I’ve found recently that an investor can have a PCF of upwards of $100.

To be honest, because I am a short-sale and foreclosure specialist and a lot of my clients are investors, the average PCF I’ve seen is around $600…

So, if you’ve ever wanted to invest in some rental property, now is certainly the time… Especially with more foreclosures expected to hit the market, and more previous homeOWNERS becoming homeRENTERS…

Some personal advice from me: I suggest finding an area you’d like to own in, then sitting down and talking to a good property management agency in THAT area… That way you can get a good idea of what your average rent would be… Then sign up with a local realtor who has access to foreclosure properties before they hit the market, this way you can get an offer in before anyone else… CNN Money also suggests, staying local…

“buying something you can get to in 10 minutes… Familiarity with the neighborhood also limits nasty surprises like a noisy bar or a nearby development competing for renters…Work with a local realtor who has experience with rentals and can help you assess how attractive a given home will be to tenants. “

Since this is MY blog, I am gonna go ahead and advertise that I would love to help you get into the rental property business. If you've been thinking about it, and have more questions just give me a call. 

916-834-7003!

Hope we can talk soon!

~ Chris 

Federal Reserve: “A sluggish Real Estate Market affects all sectors of the economy.”

So I got this article last week, but decided it was a great topic to kick off October with.

In my last blog I talked about how a housing market recovery wasn’t likely to happen any time soon, because more foreclosures were on the horizon.

“Remember, we can only say we are in an actual “RECOVERY” when home prices are higher, and people are actually making EQUITY on their investments.”

Well it turns out the Federal Reserve met in Sweden last Wednesday to discuss what more foreclosures means for the economy as a whole, and are finally realizing they may need to re-think how they are dealing with the situation…

Fed's Rosengren says allow underwater borrowers to refinance

So, as many of you may know, right now interest rates are at an all time low. ESPECIALLY on mortgages. True, this is GREAT news for people wanting to buy a home because they will be able to qualify for more money, but what about for those of us whom already have homes, but want to try and take advantage of those rates and refinance…?

"In the U.S., most homes are financed by 30-year fixed-rate mortgages, so a fall in long-term interest rates really only affects existing homeowners to the extent they refinance… This scenario is not working in an economy where many borrowers have fixed rates and homes underwater are keeping them from refinancing.”

That’s right… Interest rates being at an all time low mean nothing to those of us whom are already in a home, because the only way we can take advantage of those low rates is IF we can refinance… The only way a person(s) can refinance is if they actually have EQUITY in their home… EQUITY is something real hard to come by these days because home prices are dropping like crazy, due to SO many foreclosures hitting the market… See the cycle…?

The semi-good news is that this article is pointing out that the head of the Federal Reserve is now open to allowing banks to refinance a home, even though there is no equity in that home… The REAL-bad news is; just because he is open to the idea, doesn’t mean it will happen. In fact, in my opinion, it won’t happen any time soon because there is too much legislation that would have to pass in order for it to work…

The whole reason I wanted to blog about this topic is because I wanted to congratulate the Federal Government on realizing they need a plan B for their economic recovery, and good job on realizing that plan needs to start with aiding in the recovery of the housing market…

“Rosengren stressed that no recovery can be fueled without restoration of the housing market. Residential investment grew more than 30% in the first years of past recoveries, while in the recent recovery, residential investment actually fell in the first two years following the end of the recession… declines in real estate prices can have a substantial impact on the capital of financial institutions, which impacts their ability to finance not only the housing sector, but also other sectors of the economy…”

Here’s hoping it doesn’t take them another 10-years to actually get things going.

More foreclosures = decreased home prices and home values...

So first I need to apologize for taking so long to get a blog written. It seems I underestimated the amount of time needed to run a business. The good news is Capital West Realty is running strong, with three new agents! Scary I know, I am an employer. =)

Now that I’ve apologized, let’s get down to business.

About three times a day I get sent articles that relate to Real Estate and market trends, and the other day, one in particularly sparked my interest:

Surge in default notices portends more REOs

So if you have time you can read through it.

It has some pretty scary stats pertaining to foreclosure rates here in California, compared to those of the entire US. If you don’t have time to read it, that’s fine too, cause I will break it down for you. =)

According to RealtyTrac (which is a foreclosure tracking website) “foreclosure filings (including default notices, auction sale notices, and bank repos) went up seven-percent in August 2011... In fact, “default notices alone, went up 33% since July 2011.” That’s the biggest monthly increase in defaults since Aug. of 2007.

Now, “Notice of Default” is the first step of the foreclosure process… Usually the banks send out these notices after the mortgage holder hasn’t made a payment in three months… The letter, or “Notice,” usually says something like; Hey, you haven’t made a mortgage payment in three months and if you don’t make one soon, we (the bank), have the right to pursue taking the home back…

So basically this article is saying we will be seeing a lot more foreclosures in the near future… What is even more interesting, is that California has the highest percentage of these default notices in the nation.

“Calif. 55%, Indiana 46% and New Jersey 42%” – RealtyTrac.  

Considering California already has the highest number of foreclosures in the US, (1 in 226 homes in California is in foreclosure) this latest jump in defaults, means soon, even more foreclosed homes will be on the market.

So if anyone has been holding out on buying a home, now is the time to start looking and getting finances together. That home that sold for half- a-million-dollars two years ago, could soon be hitting the market for well less than that…

On the flip side… If you’ve been looking to sell your home, because so many homes are in foreclosure and selling so cheap, the value of your home is decreasing also... This means if you list your home, you may have to settle on selling it for less than what you purchased it for.

So more foreclosures = more inventory = depressed prices… Depressed prices mean a slow real estate recovery for the next few years. Remember, we can only say we are in an actual “RECOVERY” when home prices are higher, and people are actually making EQUITY on their investments. That is something I just don’t see happening while more and more foreclosures continue to infiltrate the market.

If you’ve been thinking about buying or selling, let’s talk. I am a short-sale and foreclosure pro, and can make sure you get exactly what you are looking for and understand ALL your options.

Until next time,

CP

(916) 834-7003

PS: Here are more of those “scary” stats I was talking about regarding California’s foreclosure rates:

- RealtyTrac:

-A quarter of all foreclosures in the US are in California.

-Eight of the top 10 metro areas in the US for foreclosures are right here in our backyard:

Modesto = 2, Stockton = 4, Sacramento = 7.

Hello & Welcome!!

Well... here we go. My first blog...

First off, thanks for stopping by. If you know me, you know I am new to this "blogging," "social networking" thing, and decided to kick things off this week with some information on what you will find in my new REALty Talk blog, and why I have a new work home...

 

I would like this blog to be a forum for information regarding trending issues in the real estate world, and where I post interesting stories and situations I come across in my daily duties. So after today, make sure you stop by occasionally to read up on new information or experiences I come across, and hopefully what I post will help you in a futre real estate situation.

 

Now to the BIG news me and my family are excited about!!! After 8-years of working for Lyon Real Estate in West Sacramento, my business partner, Marty Swingle and I, have decided to venture out on our own and open CAPITAL WEST REALTY in West Sacramento, specializing in real estate in West Sacramento & the surrounding areas. I have to admit, it was a really tough decision to leave Lyon. They gave me my start in real estate, and gave me the financial tools that allowed me to buy a home, start a family, and most recently, become a business owner. This move is nothing against Lyon, owning my own Real Estate company has just always been a dream, and now was the time to take the leap...

For those of you wondering, our new office is right behind Squeeze Inn on Harbor Blvd, in West Sacramento. The actual address is 1355 Halyard Drive #100. my number is the same, 916-834-7003. please call if you have any questions or email, chris@capwestrealty.com

Otherwise, let's meet here again in a few days!

Thanks for all your support,
-CP