new home sales

Real Estate News & Commentary by Chris McLaughlin, March 25, 2009
http://www.shortsalesriches.com/welcome.html

——–

Brand New Investor Makes It Happen!  If you

missed the amazing testimonial from a newbie

real estate investor who made $51,000+ on her

first deal, go here now to watch this video:

http://www.youtube.com/shortsalesriches

Then grab a spot for yourself before they all

disappear in our no-cost, no-obligation
webinar right here live Thursday at 8:30 PM

ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/288115497

———

New home sales on the rise

It was reported that new home sales rose 4.7% to a seasonally adjusted annual rate of 337,000 in February from a revised 322,000 in January.  It was the first increase since July.  Economists were expecting a sales rate of 300,000, according to consensus estimates compiled by Briefing.com.  The report also showed that the median sale price of new houses in February was $200,900, down 18% from $245,300 a year ago.  Are we starting to scrape the bottom?

Mortgage applications jump

U.S. mortgage applications jumped last week as record low interest rates spurred a surge in demand for home refinancing loans, data from the Mortgage Bankers Association showed on Wednesday.  The MBA said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20.  Refinancing accounted for 78.5 percent of all applications.  Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.63 percent, down 0.26 percentage point from the previous week, reaching a record low, the MBA said. 

Approval rates fall
Most people who apply for loans still receive them, with the pull-through rate – the percentage of applicants whose loans are approved – running about 60%, but that’s significantly lower than the pull-through rate the Mortgage Bankers Association recorded during the height of the housing boom.  In 2003 nearly 79% got their loans.  Borrowers with scores of 750 or above accounted for 38% of loans issued during the second quarter of 2008, compared with just 23% just two years earlier, according to the MBA.  Those with low credit scores of 650 or less represented only 15% of loans during the first three months of 2008, compared with 28% during the first quarter of 2006.

Debt?  What debt?
President Obama used a prime-time news conference last night to defend his $3.6 trillion budget plan (or $9.3 trillion in debt over the next 10 years, if the non-partisan Congressional Budget Office can be believed) , digging in on his ambitious spending and tax proposals one day before the plan begins to move in Congress.   Obama says the government should spend now on renewable-energy development, education and a health-insurance overhaul that would put the economy on a sounder footing once it recovers.  However, a lot of people wonder how a “sounder footing” will come about by creating a system that will almost certainly create an inflationary bubble and demand high taxation on the middle class to maintain.  Just because it’s “the rich” today doesn’t mean it won’t be you tomorrow.

Markets up

Stocks jumped this morning after better-than-expected reports on durable goods orders and new home sales.  The Dow Jones gained 180 points, or 2.4%, 35 minutes into the session, and seems to be hanging onto its gains as of the time of this writing.  The S&P 500 index rose 19 points, or 2.4%, and the Nasdaq composite added 37 points, or 2.4%.  The Census Bureau reported that durable goods orders – an important gauge in measuring manufacturing – rose 3.4% in February.  Orders were expected to decline 2.5%, according to a consensus of estimates from Briefing.com.

Now on to our real estate investing education section…

Luxury Short Sale Homes – Bargain or Big Mistake?

If short sale real estate represents a buying opportunity for most Americans than luxury home short sales should really big a big bargain; after all, the relative decline for homes above the median sales price are typically experiencing even more dramatic declines than the housing market as a while. So, should investors and homebuyers take advantage of these once in a lifetime buying opportunities or pass due to the current economic climate? Here to help you sort through the clutter and confusion are the facts about buying luxury short sale homes including who should buy and who should think twice.

1. Define Luxury. The first step is to actually define what luxury means to you; after all, luxury – like beauty – is often in the eye of the beholder. Many builders and real estate brokers attempt to make a home sound luxurious by mentioning upgrades like appliances, granite countertops and so forth. However, amenities alone do not make a luxury home. Neighborhood is a critical consideration as is the financial aspect. Typically speaking, a luxury home is one that is above the non-conforming limits and appeals to no more than the top 10 percent of income earners in the area.
2. Negotiate Amenities. Standard home buyers searching for a home with luxury amenities and upgrades can save substantial sums on the cost of a home by discounting upgrades. This was previously covered in-depth on the shortsalesriches.com/blog in an article about Hedonic Pricing. Suffice to say, many upgrades simply aren’t worth what they used to be –especially those that require high maintenance and associated fees. Always go with the builder’s model pricing when possible.
3. Shrinking Options. Thanks to the financial melt-down in the stock market, many retirees and upper middle income earners have watched savings and investments dwindle to nothing. This means very real buying opportunities for those interested in a true luxury home or condo. While the price of affordable housing may have declined by as little as 10 to 15 percent in many areas, luxury homes are selling at 30, 40 and even 50 percent from their former highs. Tight credit and dwindling investment portfolio’s mean a lack of liquidity for many would be former buyers. Those in the position to buy now are likely to realize tremendous savings whether buying their dream home or investing in the future.
4. Keep Your Options Open. If you have always wanted to improve the lifestyle of your entire family now is the time to take action. Imagine purchasing a million dollar home for half that amount or a $750,000 home for only $375,000…it’s possible if you know where to look and how to structure the offer. A lifestyle formerly unavailable could suddenly be available to you and your children thanks to the current economic crisis – but it won’t last forever. Be sure you have the staying-power to avoid joining the ranks of sellers attempting to avoid foreclosure then consider searching for homes that may have formerly been out of your reach.

See you at the top!

Chris McLaughlin

http://www.shortsalesriches.com/welcome.html  

P.S.

Don’t miss out webinar Thursday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/288115497

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.com 
http://www.sixfigurebpo.com *************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…

http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month

   * Long-time authority on real estate investing
      and rapid flipping of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties

    * Owner and Supervising Broker of one of Florida’s
     largest Real Estate firms, running 4 different
     offices, supporting nearly 450 agents, uniquely
     positioning him to help thousands of investors
     make money in the biggest market opportunity ever!

     * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building

     * On twitter: http://twitter.com/mclaughlinchris
     * On facebook: http://www.facebook.com/addfriend.php?id=709199143

—

Real Estate News & Commentary by Chris McLaughlin, March 17, 2009 – Happy St. Patrick’s Day!
http://www.shortsalesriches.com/welcome.html

——–

“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live on Tuesday night at
8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/661793179

Why would I do that for no charge?  Because
I want a chance to tell you about the other
high-income opportunity, too.

And I can’t do it in an email.

But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early.  See if there’re any spots
left:

https://www2.gotomeeting.com/register/661793179
———
New Housing Starts Up

Apartment construction was primarily responsible for the surprising 22% gain in new housing construction in February, according to the US Commerce Department.  For the month there were 583,000 units built.  The increase was broad based, affecting all regions of the country except the West, and defied economists’ predictions of a slowdown to around 450,000 units.  Housing construction is still down to nearly half what it was a year ago. 

Banks in for a rough time in 2009

Meredith Whitney, a former analyst at Oppenheimer who recently opened her own firm, told CNBC today that banks are in for a rough year in 2009.  She predicts “breakups and M&As on a grand scale” as the industry faces additional write downs and called loans due to growing unemployment.  Whitney says the government should focus less on its ever-changing rescue plans and instead start helping smaller institutions ramp up their community lending to local businesses and homeowners.

AIG Update

Uncle Sam has stepped in four times to help AIG through $170 billion in bailout packages, and the fury over $165 million in employee bonuses shows no signs of abating.  Obama said Monday that he has asked Treasury Secretary Tim Geithner to use the government’s role as a majority owner of AIG and “every legal avenue” to stop the bonuses, and New York Attorney General Andrew Cuomo plans to subpoena AIG for details of the employee bonuses.  However, because the bonuses are contractual, it’s unlikely they can be stopped unless the government is willing to risk future lawsuits.  Given the political hot potato this has become, I think we can expect few lawsuits ahead.

A Sign of the times: Auto delinquencies

Auto delinquencies may shoot to their highest point in a decade by the end of the year.  The percentage of auto loans past due 60 days or more rose 8.9 percent in the fourth quarter of 2008, compared with the prior-year period, according to credit reporting agency TransUnion.  Since the recession began in December 2007, auto loan delinquencies have jumped 25 percent, compared with a 10 percent increase in the 2001 recession.  Some analysts predict a rise to 15 or 16% before peaking.

Companies reducing salaries/bonuses

A growing number of companies are freezing salaries, reducing bonus pools and making other major changes to their executive pay programs, Watson Wyatt reported Tuesday.  The number of companies that have frozen salaries jumped to 55 percent, from 21 percent when the companies were first polled in December 2008.  Of 145 companies surveyed during the first week of March, roughly half plan to decrease this year’s bonus pool by an average of 40 percent.  However, The Wall Street Journal reported Tuesday that some Wall Street firms are adjusting their pay programs to get around new federal limits on compensation.

Now on to our real estate investing education section …

Stimulus Information & Resources

You have probably heard the current Economic Stimulus plan will not help speculators – while that is mostly true the refinance portion of the program may actually allow some home buyers and short sale investors to obtain a better rate. Here to help locate elusive information on the refinance program for yourself or potential clients that might be sitting on the sidelines waiting for a big bail-out check from Uncle Sam, or for those of you who would just like to learn how your hard earned tax dollars will be spent to bail-out your arrogant neighbor here is the best list of stimulus related resources around:

General Stimulus Information For Clients or Consumers

The government has established a consumer friendly website with the latest news, budget information and guidelines about the stimulus plan and other funding activities located at www.Recovery.gov or visit the U. S. Treasury website at http://www.financialstability.gov/ .   Clients and current homeowners that aren’t sure whether or not they will qualify for help may also want to visit http://www.mymoney.gov/ for free calculators and other information provided by the U.S. Financial Literacy and Education Commission in conjunction with www.ControlYourCredit.gov.  

Local Credit Counseling Services. Locate a HUD approved counselor online by visiting http://www.hud.gov/offices/hsg/sfh/hcc/fc/ .  

Housing Related Stimulus Information

The U.S. Department of Housing and Urban Development or HUD website has created a website related to the American Recovery and Reinvestment Act of 2009 at http://www.hud.gov/recovery. Learn about tax credits, funding allocations for each state and access links to apply for more information in your area.

Taxes, Banking and Finance Related Stimulus Information

The U.S. Department of the Treasury website is located at http://www.treas.gov/recovery/. You can even sign up to purchase foreclosed or seized property online.

Take a look at your current mortgage. If it is owned or guaranteed by either Fannie Mae or Freddie Mac then you may be eligible for a faster refinancing program. If you aren’t sure whether or not your mortgage is underwritten by either of these programs call your mortgage lender or servicing company or visit www.fanniemae.com or https://ww3.freddiemac.com/corporate/ or call 1-800-7FANNIE or Freddie at 1-800-FREDDIE to find out who owns your mortgage. Those with an existing mortgage underwritten by Freddie or Fannie who wish to refinance might be eligible for streamline processing even for some rentals or second homes. If you aren’t sure where to begin, use the FHA Lender Finder located at http://www.fhaoutreach.gov/lender/lender.do.

Veterans – Veterans in need of loan assistance should contact the Department of Veterans Affairs or visit http://www.homeloans.va.gov/ondemand_vets_stream_video.htm to learn about programs that will help veterans avoid foreclosure including refinancing homes with low interest rate loans, special mortgage programs to purchase or upgrade to energy efficient homes and foreclosure prevention programs just for veterans.

Small Business Loans & Grants. Learn about government stimulus programs that provide free money in the form of grants by searching the Catalog of Federal Domestic Assistance CFDA website at www.cfda.gov or the federal government grants website at www.grants.gov. Both are sponsored by the United States government and provide a comprehensive list of available funds, eligibility requirements and how to apply. 

HOPE for Homeowners was the original troubled homeowners program that has now been expanded to include additional assistance in the form of counseling and referrals to mortgage companies and other services designed to provide the resources to prevent foreclosure.  Homeowner’s HOPE ™ Hotline at 888-995-HOPE (4673) or visit www.hopenow.com.

See you at the top!

Chris McLaughlin

http://www.shortsalesriches.com/welcome.html  

P.S.

Don’t miss out webinar this coming Tuesday night at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/661793179

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.com 
http://www.sixfigurebpo.com *************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…

http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month

   * Long-time authority on real estate investing
      and rapid flipping of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties

    * Owner and Supervising Broker of one of Florida’s
     largest Real Estate firms, running 4 different
     offices, supporting nearly 450 agents, uniquely
     positioning him to help thousands of investors
     make money in the biggest market opportunity ever!

     * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building

     * On twitter: http://twitter.com/mclaughlinchris
     * On facebook: http://www.facebook.com/addfriend.php?id=709199143

—

Where is the outrage?  My perspective …

Mid-Day Market News & Commentary by Chris McLaughlin, November 25, 2008
http://www.shortsalesriches.com/welcome.html

——
Sorry there was a glitch that brought our webinar down for a few hours … so we’re reposting it for today only:

http://www.shortsalesricheswebinar.com

Don’t miss it – everyone that has watched it says it is perhaps the most useful tool in understanding what’s going on in the real estate market, and how to make money in today’s environment!
—–

Where is the outrage?

The jets arrived in Washington.  Corporate jets, that is.  Usually cost about $20,000 per trip within the U.S.  And they had all the nice amenities.   Perhaps a sip of champagne while thinking of how many billions to ask Congress for?  Perhaps a bon bon here or there, to help cleanse the palate.

And when they touched down, they were met with gas guzzler SUVs to help bring their big wig corporate honchos to Capitol Hill.

Three CEOs from the 3 big US automakers prepared to tell Congress who they are cutting costs left and right … and they’d like $25 billion from the taxpayers.

Yeah, let’s spend $20,000 on a trip to Washington while asking for $10 – $12 billion.

Did you know that General Motors leased seven corporate jets before everyone starting crying foul?

They’re going to get out of a few leases now.

Where is the outrage?

Here on Main Street.  That’s where.  No one else seems to care.

The same place it has always been.  By the people that actually pay the taxes.  The folks that aren’t participating in the “bailout.”

Citigroup gets bailed out by the government, with Uncle Sam backing over $300 billion in loans and providing another cash infusion of $20+ billion … and what do we learn that Citigroup has done?

They freakin’ spent $400,000,000 for the naming rights for the New York Mets stadium.   That’s $400 million!  And what does the CFO Gary Crittendon say about the waste? “That was a decision made in a different time.”

Well, actually Gary, Citigroup’s financials were pathetic last year as well.  And I really doubt you’re going to see a $400 million influx of new business by naming a stadium after your company.   Can you imagine how many new online banking relationships you could have if you spent $400,000,000 in online advertising with google and other pay for performance mediums?  No, you clowns will go waste $400 million on a stadium.

Where is the outrage?

Here on Main Street.  That’s where.  No one else seems to care.

Here’s another idea on blowing money… Tiger Woods just lost his $7 million dollar endorsement deal with General Motors .   That actually brought Buick back from the dead, and made it cool again (if it ever was cool).  Citigroup should bail out on the dumb stadium idea, and then have Tiger Woods as their celebrity endorser. 

The only problem is that Woods has an image to protect.  He probably won’t want to get caught up in this bailout mess.   But hey, I think we all know he pays a lot in taxes, so if they wanted to blow some money on him I’d be OK with it.  Sure beats a stadium for the Mets.

And while we’re talking about idiotic ideas, let’s not forget about the clowns working at AIG.  These folks actually spent $100 million to sponsor Manchester United, the UK soccer team.   And when word got out about the $150 billion bailout from Uncle Sam, some folks wondered whether AIG would try to unwind out of the deal, perhaps sell its new found marketing concept to another company that’s not essentially broke?

Nope, and AIG spokesperson confirmed it was still business as usual.

Where is the outrage?

Here on Main Street.  That’s where.  No one else seems to care.

But I bet you do!

Now on to our real estate investor education section…

The Top Trends to Watch in 2009

As the Thanksgiving holiday approaches in the midst of one of the most volatile financial markets in decades, it might seem there is little for short sale investors to feel thankful about. As the old adage goes, there is a silver lining in every cloud and despite the downturn in the real estate market, it could turn out that investing in short sales is the best decision you ever made.  Not only does it diversify your earnings potential but if these top trends for 2009 hold true, it may turn out to be one of the few ways to hold your own during the next year.  I’m about to tell you some brutal facts…but keep your head about you when you read them—remember that if you know what you’re facing you’ll be able to figure out how to benefit from it!

1.     Lowered Retail Sales. During what is typically the most robust period of retail sales, stores are showing more than sluggish results; they are showing downright discouraging spending patterns as the seasonally adjusted retails sales experienced their largest decline ever for October 2008. Experts expect the trend to continue well into 2009 and only worsen after this holiday season.

2.     Reduced Motor Vehicle Sales. As the Big Three auto makers line up for their turn at federal funds just to make it to 2009 it should come as no surprise that motor vehicle sales have experienced their worst performance since WWII. Experts agree this is a long term trend for 2009 and perhaps beyond.

3.     Housing Starts = Housing Stops. The 2009 forecast for housing starts is so bad it actually resembles a stop instead. Not only is there a 1 to 2 year existing inventory for homes but housing starts for single family homes have recently posted a low of .54 in September 2008 with no end in sight.

4.     Negative New Home Sales. While existing home sales recently experienced a slight upturn, new home sales are still falling and expected to lag throughout 2009.

5.     Stagnating Treasury Yields.  The world is seeking safety over substance in any form they can obtain it so don’t expect Treasury bonds or securities to do more than the bare minimum throughout 2009. After adding taxes and the impact of inflation, actual yields are zero or actually negative…which still beats the stock market!

6.     Dropping Consumer Confidence. Rising unemployment, reduced access to credit and diluted retirement accounts have finally taken their toll on typically optimistic Americans; in fact, the perpetual optimism has given rise to abject fear as they scramble to reduce living expenses and cut back to the basics. Short sale owners holding affordable housing will find their properties in high demand in the coming year.

7.     Rising Unemployment. Outside of the government (not exactly known for its high paying illustrious positions), most industries are cutting back or planning to cut back during 2009. Expect to see more demand for homes located near convenient locations and short commute times combined with Escalating Consumer Debt. As the cost of food, insurance and other necessities merges with unemployment and other costs consumers are turning to credit cards and other debts to make up the difference. Meanwhile, banks are increasing lending standards and raising interest rates. The result is a toxic combination sure to take a toll during the next year.

Now hold on! I know you’re thinking, I’m tired of reading all this negative stuff!  Folks, the reason I’m telling you this is so that you’ll get excited about the opportunities that distressed properties will bring.  You need to know facts about what’s really going to happen.  There won’t be a “bailout” of everyone … so there is going to be plenty of opportunity for those in the know to make money!

See you at the top!

Chris McLaughlin

P.S.:

Sorry there was a glitch that brought our webinar down for a few hours … so we’re reposting it for today only:

http://www.shortsalesricheswebinar.com

Don’t miss it – everyone that has watched it says it is perhaps the most useful tool in understanding what’s going on in the real estate market, and how to make money in today’s environment!