Wednesday, March 28, 2012

Home Prices Have Been Rising for Three Months

As you may already know, bay area housing price is going up in the past 3 months. Multiple offers are everywhere. I've heard 28 offers on a house.


Standard & Poor’s reported Tuesday that it’s closely watched Case-Shiller index declined in January for the fifth straight month, with both the 10-city and 20-city composite readings slipping 0.8 percent from December.
But according to John Burns Real Estate Consulting (JBREC), that’s stale news and doesn’t reflect what’s actually happening in the market right now. In fact, the independent research company says home prices are rising.

Read more here.

Monday, March 26, 2012

Taking a year or more to foreclose a property?

The average loan in foreclosure has been in the process for 571 days, but judicial states are weighing heavily on that average.
Foreclosures in judicial states have aged an average 654 days, while foreclosures in non-judicial states have aged an average 297 days, according to Moody’s. 
To be relevant to you or to California, which is a non-judicial state, it will take 10 months to foreclose a house. 
Read more here.

Thursday, March 15, 2012

In Stockton, Calif., slow fall off financial cliff

The city of 290,000 that rode the wave of the housing boom in the late 1990s and early 2000s now finds itself littered with foreclosed homes, saddled with pension, health care and other obligations it can't afford, and unable to pay its bills.
The City Council voted last month to suspend $2 million in bond payments and begin negotiations with bond holders, creditors and unions. A new California law requires that cities begin a 60-day mediation process before filing for Chapter 9 bankruptcy, though city leaders can file at any time if negotiations stall.
Though many communities across the country are struggling with their finances and some already have filed for bankruptcy — Pennsylvania's capital of Harrisburg, Jefferson County, Ala., and little Central Falls, R.I. — Stockton's litany of problems stand out.
The unemployment rate has doubled over the past decade and now hovers around 16 percent. A fifth of residents live below the poverty line.
Read the whole article here 

Wednesday, March 14, 2012

Zillow report: Median Rent Prices on the Rise as Home Values Drop

While homes prices continue to be on the decline, rent prices are actually on the rise and showed a 3 percent increase from January 2011 to January 2012, as opposed to home values, which dropped 4.6 percent during that same period, according to the January Zillow Real Estate Market Reports. Zillow data also showed year-over-year gains for 69.2 percent of metropolitan areas covered by the index while only 7.3 percent of metros saw increases in home values. Based on the Zillow Rent Index, the states with the greatest increases in median rent over a year were New Jersey (+16.5), New York (+13.7), Kansas (+10.2), Indiana (+10), and Michigan (+10.0). » Read More

Monday, March 5, 2012

Warren Buffett's View on Single Family Home Investment

On Monday, February 27, 2012 Warren Buffett appeared live on CNBC for his annual “Ask Warren” marathon. During this interview he mentioned that one of the best investment opportunities around right now in the United States are Single Family Homes!


BUFFETT: I would say that single-family homes are cheap now, too.
BECKY: You would?
BUFFETT: Yeah, single-family homes— but if I had a way of buying a couple hundred thousand single-family homes and had a way of managing— the management is enormous— is really the problem because they're one by one. They're not like apartment houses. So— but I would load up on them and I would take mortgages out at very, very low rates. But if anybody is thinking about buying a home— five years ago they couldn't buy them fast enough because they thought they were going to go up, and now they don't buy them because they think they're going to go down. And interest rates are far lower. It's a way, in effect, to short the dollar because you can— you can take a 30-year mortgage and if it turns out your interest rate is too high, next week you refinance lower. And if it turns out it's too low, the other guy's stuck with it for 30 years. So it's a very attractive asset class now.
BECKY: If you are a young individual investor at home and you have your choice between buying your first home or investing in stocks, where would you tell someone is the better bet?
BUFFETT: Well, if I thought I was going to live— if I knew where I was going to want to live the next five or 10 years I would— I would buy a home and I'd finance it with a 30-year mortgage, and it's a terrific deal. And if I— literally, if I was an investor that was a handy type, which I'm not, and I could buy a couple of them at distressed prices and find renters, I think that's— and again take a 30-year mortgage, it's a leveraged way of owning a very cheap asset now and I think that's probably as an attractive an investment as you can make now.