Real Estate Trends

The view in January: November and December housing numbers all looked very good. Inventories are declining which is interesting because that’s going to have an impact on the price of homes.

Basically right now is the optimal time if your going to buy a house. If your a 1st time home buyer, you still have the tax credit. Free $8,000. If your an existing home buyer and have lived in your house 5 in the last 8 consecutive years. Free $6,500. Secondly, interest rates are starting to stabilize and maybe even starting to see a tick up in the interest rate numbers. That happened last week, I believe we are going to continue to see it through this coming week and maybe through the month of January based on what I’m hearing through the lenders. Now that’s all signs that the economy is improving. It’s going to start to impact the availability of money and where we go. If your trying to second guess and maybe get a better scenario, I don’t recommend it.

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1. Hanging on the fence for the market to improve or not buying at all. No one can see the future or where the market is going, so waiting for the BEST time to buy is pointless. If you’re financially ready to be a homeowner, it’s always a good time to buy for one reason or another.
2. Making an offer without a contingency. A “way out” is a smart move for home buying. If the home as an unfix-able problem, the appraisal comes in under the contract price, or you are denied financing, a contingency gives you the right to cancel the contract to purchase.
3. Not doing your homework. If you didn’t read the fine print or have your Realtor review all your paperwork with you, you may be in for an unexpected surprise at closing. Request a copy of the most crucial documents ahead of time and review them with your Realtor or Closing Attorney.
4. Not getting a home inspection. Even if you love everything about the home and you “see” nothing wrong. It’s a big mistake to presume that it’s trouble free. All homes have shortcomings, even new construction, so getting a professional inspection is key.
5. Falling in love with the first house. If you don’t preview several houses, you could miss out on a good deal or regret your purchase down the road.
6. Buying more than your budget can handle. A lender can tell you that you can afford a certain amount. But do they really know your other financial responsibilities. Only you do. As a rule of thumb, your mortgage payment should be less than 28% of your gross monthly income.
7. Buying an investment property or renovation project before looking into the costs. Don’t be fooled by the “deal” and remember that repairs can be an aggravation and expensive.
8. Not exploring the neighborhood. It may be your dream home but not your dream neighborhood. It should be a good fit for your way of life such as work commute, amenities, school districts, etc. A nice neighborhood will increase your home’s value, while a not so nice one will bring it down.
9. Not thinking long-term. It should feel like home to you and your family. Never forget that this is a large investment, it pays to think of resale in the future.
10. Not getting pre-approved by a lender. Know what price range you should be looking in. Not only does this let you know how much house you can afford, it lets sellers know that you’re serious and qualified.

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Welcome 2010! We at Rinehart Realty look forward to a positive and prosperous New Year!!

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REALTOR® Magazine-Daily News-Another Big Gain in Existing-Home Sales.

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A court case in Connecticut that involves property rights has been an interesting piece of news in the last couple of weeks. The case is the Kelo case in which the city of New London decided it was in it’s best interest to take Mrs. Kelo’s house, which was an ocean front property, for a private development to further economic development in the city. That private development was to develop a building for a small company known as Phizer. Well, when Phizer decided they were not going to go into New London, it left out 1500 jobs and the entire basis for the economic development reasoning the city used. So, it’s not always in the best interest of a city to take property. Unfortunately, now we’ve had another case in New York City. A private developer in Prospect Heights, Brooklyn, NY has now gotten the go ahead for redevelopment of an area of public property so that he can continue developing and again this is for private property development that the city is taking the property. Now being an attorney by trade, we always look at case law and when you’ve got 2 cases back to back supporting this, that is not good for people who want to hold onto their property. They’re saying that recovery of blight (urban decay) areas in a major city is of more importance than me (the individual property owner). Now, our SC State Legislature has addressed this in SC. So know that this would be a very unusual thing in SC. But it is a concern that is sweeping the nation and of course legislature can change their mind, so it’s something to watch long term.

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As we are starting to roll towards the end of the year, a lot of people are beginning to think about year end planning. Specifically tax planning. Believe it or not, there is tax planning that occurs even in a recession. There are a lot of people who look at opportunities to get a check back from Uncle Sam. Certainly as your looking toward the end of the year, you need to be talking with your tax advisor and also your financial planner. It is time to take those losses in the stock market or for a lot of people that I’ve been talking to recently the gains. Now may be a perfect opportunity to balance out the 2008-2009 losses and gains. There may be opportunities to look at whether or not to get rid of property this year (that being real property) and maybe investing in new property going forward. There are always opportunities in the 1031 exchange marketplace where when your dealing with commercial or residential rental (investment) property that you might be able to move that into a different investment. I’ve said before it’s a buyers market and in the commercial market we have seen some price adjustments. We know what the tax law is right now, but we are really uncertain about what it will be next year. It’s going to be higher, there’s no way around it. So maybe you should act now rather than later. In the NAR tax committee meetings in San Diego, one of the discussions was capital gains and whether or not we are at the lowest point in history at this 15% tax bracket. Something to think about….

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The entire state of SC got a big Thanksgiving gift and a Christmas gift for the next 10 or 20 years with the announcement of Boeing bringing their huge assembly plant to the Charleston area. This is a new world that we live in and announcements like that are few and far between.  I gather it will lead to more of our smaller upstarts. One of the funniest things that happened while I was in San Diego was our contingent from Washington State seeking out the SC group. Those were interesting discussions. But where the good part of the Boeing acquisition for our state comes in is the additional ancillary jobs that it creates. Don’t underplay the large numbers that come out of Boeing, when we start talking about 150 million dollar investment and the creation of 12,000 to 60,000 jobs. Those are big numbers but one of the things that don’t make the news is the 2000, 5000 and 10,000 square foot acquisitions that happen to help support businesses. Also, don’t under estimate those acquisitions of property during this time and how it’s going to add to our recovery. I mean 10,000; you can put almost 100 people in an office environment with 10,000 sq feet. That’s a big building and that’s a lot of jobs.  As the recovery occurs you are going to start seeing little retail spaces starting to be gobbled up and also office spaces, so as those for lease and for sale signs start to disappear. Know that our residential market is also recovering and we are going to start seeing, in my opinion, some price increases.

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I have been at the National Association of Realtors yearly meeting in California and there has been a lot of positive buzz. However, the key thing is getting the banks to open the “vault” so that the home builders can get back into the market place and start building the inventories. The new home starts are below the replacement inventory levels. Most builders are small businesses and until the banks free up some money and allow small business starts to occur, then our economic recession will be a jobless recovery. So we need to get some money out into the hands of the builders, plumbers, electricians, etc. All of these people that can help us in the recovery and also help build the market place. Which causes people to go out and spend money on retail and other items and get this economic engine going. Real Estate is the catalyst for the economic recovery as we’ve shown time and time again. Of course congress is now agreeing with us by extending and revising the tax credit and The Obama Administration agrees as well because the day after it was passed by the house, he signed it 12 hours later.

The mortgage money is available, the underwriting criteria is just unbelievable in some areas. So while the money is there, a lot of lenders are ski-dish about housing prices in different areas of the country.

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Wow-what a fall.  It’s a GREAT time to BUY or SELL!!

By the way, have it said: It’s a GREAT time to BUY or SELL!

In case you have not heard: It’s a GREAT time to BUY or SELL!

Let me explain why:

1. Congress IS GOING TO EXTEND THE TAX CREDIT!!! While we do not have a final version of what is going to be the opportunity, we KNOW that it is going to be extended to EVERYONE.

2. If I am a first time  home buyer that was going to miss the Nov 30, 2009 deadline- welcome back to the market.

3. If I am a home seller- welcome back to the table with new buyers.

4. If I am ANY home buyer– YIPPEE!!

With supplies of good quality inventory homes at a low for the year, now is the time to get your home on the market. Lower supply with increased demand means stable pricing and motivated buyers. With buyer motivation at a recent high due to the tax credit, what a great time to look for that new home that you always wanted.

As always check us out at rinehartrealty.com or contact YOUR Rinehart Team member.

This will be a continuous process so keep checking back!

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Check out this “good news” article!
http://www.thestate.com/746/story/990662.html

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