Tuesday, November 30, 2010

Housings Future

I am copying an article I received from Franklin American Mortgage Company that puts some definition around reasons I believe the market is coming back.  Particularly, while some indicate that current conditions will direct more people to rent vs own, the statistics continue to support ownership.

"The average homeowner has a net worth that is about 41 times greater than that of a renter, according to a report from the National Association of Realtors. Homeowners’ net worth averaged between $150,000 and $200,000 this year, according to NAR. The trade group for Realtors said homeowner equity accounts for a substantial part of that net worth. NAR based its research on results from a 2007 Federal Reserve Survey that provides a snapshot of family income and net worth in conjunction with basic demographic makeup. The Fed survey is conducted once every three years. A 2010 survey has not yet been released. Homeowner net worth back in 2007 was 46 times greater than that of renters, reflecting the economic conditions before housing price declines and a decreasing equities market. The average net worth of a homeowner was above $200,000, while the average net worth of a renter in 2007 was $5,000. Source: HousingWire

Total housing sales in 2010 will be down about 8 percent from last year, and will mark the bottom of the downturn, says a monthly report from Fannie Mae economists. The economic outlook from Fannie Mae is fairly upbeat looking ahead. Foreclosures will keep housing sales subdued in the final quarter of this year, the report says, but sales will see gradual improvement in 2011. “We expect home sales to increase by about 3 percent in 2011, says Fannie Mae (OTC BB: FNMA) chief economist Doug Duncan. “However the pace of the recovery will be largely determined by labor conditions. If hiring improves at a faster pace than expected, home sales will likely see a stronger gain in 2011 and vice-versa.” Improving financial conditions and recent encouraging signs from the labor market should set the stage for an above-par growth trend by mid 2011, the report says. Source: Washington Business Journal

A tougher economy is changing the way people regard housing design. Here are some of the new realities:

• The ideal home size is less than 2,000 square feet, according to Trulia.com.

• Formal living rooms and dining rooms are out; flexible space that can double or triple as home offices,

guest rooms or dens is most appealing.

• Porches are back.

• Energy efficiency trumps everything, with a private wind turbine in the back yard a real winner.

Source: USA Today"

Thursday, November 18, 2010

Fifth & Poplar

There is a new listing at Fifth & Poplar that I find quite incredible.  It is on the 7th floor and is a large 2 br 2 ba unit.  It is a Short Sale, and the price is $224,000.  I showed it this morning and was very impressed at the size and finishes that it affords. 

I have mentioned before the great values that are available in this building.  To be sure, the tax value of the property remains high, and the HOA dues are high, and there is a monthly assessment surcharge of around $100 as well.

Despite that, this building is one of the best values in the city.  The amenities, including an interior park of about 1 acre, a swimming pool, a fitness center, a cyber lounge fully equiped, indoor and outdoor fireplace, a patio deck above the Harris Teeter, and of course, it sits on top of a grocery store.  Include with that a 24 hr a day concierge, and a location 2 blocks from the center of town.


Tuesday, November 16, 2010

More On The VUE

The VUE remains the biggest topic in this marketplace. Standing 51 stories tall, and looking front on to the Charlotte skyline it can hardly be missed. But the size is only one of the reasons it is a Big Topic here.

Born in the heady real estate days of the mid 2000’s, it promised to deliver a location, style, and ambiance that would be unsurpassed. Several other towers that were planned or in the works have either never developed (One Charlotte) or have disappeared due to legal and zoning battles (210 Trade Street).

The sale center for The VUE was prominently located at the center of town, on the corner of Trade and Tryon.

Back in the mid 2000’s per square foot pricing downtown was comfortably over $300, and in the case of Fifth and Poplar, The VUE’s next door neighbor, the prices were well over $350. A natural progression of value would have pushed the pricing levels to somewhere between $450—$500. Initially, all sales were handled internally by the developer. Several times during the sale cycle, changes were made to the staff. Some of the contracts that were written were done directly by that team, with the team acting as a Dual Agent, meaning representing both sides of the transaction.

Those of you who have purchased new from a developer will recall that the contract you signed was written specifically to cover the developer in almost every instance, only the 7 day right of rescission remained.

The VUE is complete now, just work on interior finishes or build out’s. Closings began in September, and of this writing, two units have closed.

Contract holders have received notices to set their closing, and they are finding that the appraised value of the property, that is the number that a lender gauges the amount of a loan they are willing to give, is coming in anywhere between 15% to 35% below the contract price. Faced with not being able to secure a loan for the balance of their purchase price, they will need to bring additional dollars to the closing.

The developer is sticking with the contracts in hand and can sue for non performance if the buyers do not close. Courts have upheld contracts when a buyer has the means to close.

There are no mulligan's in real estate. When you make a purchase make sure you have proper representation going in.

Foreclosure Myths Explained

Go to this article to read about common myths regarding Foreclosures.  It is important also to note that foreclosure is a process, and not a tangible thing.  This means that when you see the word "Foreclosure" it is referring to the process.

Today's market is providing plenty of opportunities to purchase at significantly below the market value.  It is unfortunate, but it is the market we are in.

Thursday, November 4, 2010

Ahead Of My TIme?

The article I have linked here discusses the potential beginnings of a trend away from car ownership.  The article talks of many reasons for not owning a car, but the best reason can be found in the last paragraph.  It appears these generation "Y"'s are realizing that they can best allocate the assets they have in other directions.