ON CONFUSION:

I wanted a perfect ending. Now I've learned, the hard way,
that some poems don't rhyme, and some stories don't have a clear beginning, middle, and end. Life is about not knowing, having to change, taking the moment and making the best of it, without knowing what's going to happen next. Delicious Ambiguity........................Gilda Radner

Yep Gilda, that's exactly how I'm feeling these days. And let me tell you, this housing poem "don't rhyme!"....or does it?

If you're feeling confused about why everyone seems to be saying the "recession is over," yet there still are an amazing amount of houses for sale in your neighborhood, then take a look at the link I came across. Best I can tell, this is the most comprehensive explanation about why our housing market is not leading us out of this particular recession.

http://www.realestateeconomywatch.com/

As always, don't hesitate to call me with your questions.

Here's to our confusion!

Amy McLeod, CRS, GRI, CDPE

Oregon Principal Broker

RE/Max Equity Group, inc.

503-371-5209

What Should We Make Of This Uptick in Real Estate Sales?

Hey Everyone:

I was surprised to see so much encouraging news this week-end, out of the real estate market. I had my suspicions though! And then serendipitously, Anthony Mirhaydari writes a great article on the "why." I've copied it so there's no challenge with the link. He does a great job encouraging us to be judicious in our euphoria!

As always, call me with any questions.

Housing crisis set to enter new stage
Posted Aug 21 2009, 07:11 PM by Anthony Mirhaydari
Rating:
Filed under: housing, Anthony Mirhaydari

The march of good news continues for housing. Existing home sales jumped 7.2% between June and July -- the largest increase in over a decade and the fastest pace in nearly two years -- according to the National Association of Realtors (NAR). Prices are down 15% compared to last year.
A combination of cheap distressed properties, seasonal trends, low interest rates, and tax credits for first-time buyers is working its magic. But a number of issues have me worried that instead of an end to this epic housing nightmare -- we are about to enter a new stage.
Bing: More on home prices
The first problem is that the current buying trends are by no means normal with a large percentage of sales focused on foreclosures, short-sales, or other forced transactions rooted in financial distress.
According to a survey by Inside Mortgage Finance, only 10% of overall sales are coming from what could be considered a normal sales process. It's no wonder, with the Mortgage Bankers Association (MBA) reporting Thursday that more than one in eight mortgage holders are in some stage of delinquency or foreclosure. RealtyTrac reported that July foreclosures jumped 7% compared to June. In a situation like this, with the impetus on the seller to unload quickly, prices will naturally gravitate lower.
This brings us to the second issue: The change in focus from subprime borrowers unable to refinance loans because of falling home values to prime borrowers unable to pay their bills because of job loss. According to the MBA survey, 58% of new foreclosure starts originated in the well-to-do prime loan category, up from 44% last year. Meanwhile, subprime borrowers were responsible for only 33% of foreclosures, down from 49% last year. As foreclosures affect a larger and larger swath of the population, it will only add to the number of properties on the market.
The third problem is the looming wave of loan resets in 2010 and 2011. As you can see in the chart above, a large number of prime, Alt-A, and Option ARM borrowers will be facing the prospect of higher payments just as the housing market digests the fallout from the subprime problem of 2007 and 2008. Notice the pleasant dip in reset activity for 2009. Plus, should the economy actually start recovering, the Federal Reserve could be forced to raise interest rates during this period.
And finally, we have the inventory issue. Despite the uptick in sales, the inventory of existing homes for sale actually increased 7.3% to 4.1 million last month. I have talked about a "shadow inventory" of homes owned by people just waiting for a smidgen of good news to list their homes. Now we see the dynamic in action: Lawrence Yun, the NAR's chief economist, said the increase was the result of "some held back inventory coming back to the market."
It's also worth mentioning the crisis of confidence that is set to develop as the peak buying season ends and prices reaccelerate their downward slide. In its latest survey, Zillow found that a full 81% of homeowners believe their home won't fall in value over the next six months. Adding to the perception that people are losing touch with reality, only 60% believed the value of their home had fallen over the last year; when 83% of all homes actually lost value during that time.
The cold chill of falling home equity awaits many Americans this winter -- just in time for the holiday shopping season. Not only does this spell trouble for homebuilders like D.R. Horton (DHI), the U.S. Home Construction ETF (ITB), and the S&P Homebuilders ETF (XHB), but for aspriational retailers like Coach (COH) and big toy manufacturers like Arctic Cat (ACAT) as well.
Disclosure: The author does not own or control a position in any of the funds or companies mentioned.
Anthony Mirhaydari is a researcher for the Strategic Advantage investment newsletter. He can be contacted at anthony.mirhaydari@live.com. Feel free to comment below.

THE REAL SKINNY ON THE REAL ESTATE MARKET

Hey Friends,
I know it's been a long time since I blogged, but frankly I've been busy trying to sort out what's been going on in this crazy market.

It's confusing. One day the paper says the recession is over and the housing market is rebounding. The next day I would get the statistics from the Fed's and they said just the opposite.

I had formulated my own opinions, but I am always double checking myself.

So today, here came an article from our founder; Dave Liniger. Dave has one of the best real estate minds I know, so I think it's valuable for you to see what he sees.

His article is as follows. Let me know your thoughts.



Liniger in Chicago: 'Demand Will Come'

CHICAGO - Demand built on demographics and population – rather than questionable lending policies – will spark the next wave of strong home sales in the U.S., Dave Liniger told nearly 700 Affiliates at the 2009 RE/MAX Summer Conference for Broker/Owners and Managers on Monday.
The confluence of two massive population groups – 80 million Baby Boomers born from 1946-1964 and 74 million Millennials born from 1980-1995 – will fuel a huge increase in transactions from 2012 onward, the RE/MAX International Chairman and Co-Founder said at the conference's Opening General Session. Immigration and minority household trends will add to the upturn, he noted.
As the Millennials, who are 15-29 now, reach their prime homebuying years – the average first-time buyer is 33, though that number appears to be trending downward – the Baby Boomers will be selling and downsizing. The rise in demand will drive the market upward, Liniger said.
"Very good years are coming," he said, adding that RE/MAX International – through technology, training, social media and other initiatives – will help Broker/Owners and Associates connect with these consumers.
Being successful todayFor the time being, though, local markets will stay as they are, Liniger said. In fact, unemployment and a second wave of foreclosures in 2010 and 2011 are likely to make things worse before they get better. He urged Broker/Owners to help their Sales Associates close transactions through distressed properties, REOs, first-time homebuyers and investors. His constant theme: Affiliates cannot sit back and wait for a quick turnaround – because it's not coming.
"I'm not negative; I'm realistic," he said. "If you're not realistic, you can't make the adjustments you need to make in order to survive and prosper."
Liniger said RE/MAX leaders have met many times with key lenders and government officials to push for foreclosure solutions and a standardized and streamlined short-sale process.
He also called the Certified Distressed Property Expert (CDPE) course the best training he's ever encountered. More than 6,000 RE/MAX Associates have earned the designation, he said, and others should consider it.
"Short sales are the key for the next 18-24 months. Our people must be trained to handle them," he said, noting that true recovery simply isn't possible until the foreclosure problem is solved.

What Happened to Our Credit Scores?

A credit score of 680 used to mean something. Now, according to Bankrate.com the best rates and mortgage programs go to consumers with 700+ credit scores. Less than 700, and you may see additional fees.

The ever-changing landscape of credit markets and the economy is making the challenge of credit worse. Even a consumer who pays their debts faithfully may have seen a falling score.

So what's the cause? Some reasons include older and more established cards may have been closed due to lack of use. Credit limits may have been dropped. How much cash is left after paying debts on a monthly basis may also contribute.

So what is one to do?......besides getting debt free (yahoooo!!!)

1. Understand how credit works. People assume that if they pay their bills on time, everything will be all right. Although that's generally accurate, it's only part of the equation.

2. Credit & Debt Optimization; consumers need to look for ways to reduce credit card balances, thereby strenthening the credit score. Reduce interest rates, or move balances to lower rate alternatives.

3. Review credit at least three or four times a year. Monitor for changes that may have occured without anyone's knowledge

4. Last but not least - get debt free .... oh, I already said that!

(thanks to RisMedia Real Estate 5/2009 issue)

Honing my skills at "tweeting," blogging, & Facebook! Phew - that's a lot of technology right there!

SURVEY SAYS......

I was recently reading my favorite real estate publication when I came across an article titled,

"SURVEY: Owners Still Overvalue Homes." (RISMedia Real Estate/April 2009)

By the numbers, this is what their survey found:

• Close to 50% of homeowners think their houses should be priced 10% to 20% higher than their sales agents have recommended.
• Fewer than 20% of agents nationwide are reporting that homebuyers are telling them that homes on the market are priced fairly.
• Almost 60% of agents say potential buyers are telling them that home asking prices are too high.

Our own Willamette Valley Multiple Listing Service shows most sales in the Salem/Keizer area are occuring at about 90% of asking price!

Looks like we have an expectation gap!

Here's the bottom line; if you want to sell, most likely, get ready for some tough news - and let's not kill the messenger!

On the upside - think what you can buy!!!

The Real Status of Our Market

For more information please feel free to visit:

www.StopSalemForeclosures.com

We are here to help and offer information for those you know who may be in need.