Warren Buffett and his Real Estate Investment Advice | South Salem Real Estate
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South Salem Real Estate Weekly Report | South Salem NY Homes
| South Salem NY Weekly Real Estate Report | 2/24/2013 | |
| Homes for sale | 50 | |
| Median Ask Price | $732,500.00 | |
| Low Price | $199,900.00 | |
| High Price | $12,200,000.00 | |
| Average Size | 3086 | |
| Average Price/foot | $368.00 | |
| Average DOM | 223 | |
| Average Ask Price | $1,213,764.00 | |
4 signs the real estate market is in trouble | South Salem NY Real Estate
wish I’d said this (and in a few weeks I will have, I’m sure) but Ramsey Su at Acting Man Blog did it first and in a way I’ve been searching for the words to explain.
Every week or so we get another indicator that’s supposed to tell us how the housing market is doing.
And every part of the industry trumpets whichever metric best serves its own purpose. Thus you have the Mortgage Bankers Association touting this “good news” about interest rates, while the National Association of Realtors touts how rising home prices are a great sign, and on and on.
But none of these measures – home sales, home starts, home prices, interest rates – tell the real tale.
Then along comes this boy named Su, who gets right to the heart of the matter:
The strength of the real estate market should not be measured by price appreciation, or the number of new and existing home sales. It should be measured by the support of underlying fundamentals and whether they can help to withstand economic cycles without policy makers having to go hog wild just to avoid a total collapse.
How healthy is the real estate market today?
He looks at some troubling measures we’ve noted at HousingWire – the decline of income growth, the bulk of Americans having subprime credit, and the fact that there’s nothing left in the Fed for another bailout if (when) things go pear-shaped again.
1. The Subprime Majority
Recently, I came across a report by the Corporation for Enterprise Development (CFED) titled Assets and Opportunity Scorecard. Some of their findings are quite interesting. According to the CFED Scorecard, 56% of all consumers have sub-prime credit. Sub-prime is “earned”. A consumer has to miss a few payments, or default on a loan or two to earn that status. These 56% cannot, or should not, be taking on more debt, especially a large debt like a mortgage. They may also be struggling with a mortgage that they should not have taken out in the first place.
And with so few companies willing to loosen credit standards, even the worthy subprime don’t have many options.
2. Liquid Asset Poor
CFED found that 44% of households in America are Liquid Asset Poor, defined as having saved less than three months of expenses. As one would expect, 78% of the lowest income households are asset poor, but 25% of middle class ($56k to $91k) households also have less than three months of expenses saved.
How much of a down payment can you expect them to have on hand?
http://www.housingwire.com/blogs/1-rewired/post/28994-signs-the-real-estate-market-is-in-trouble
Could You Afford a Median-Priced Home in These US Cities? | South Salem NY Homes
According to a new report by HSH.com, an online mortgage and consumer loan information site, it depends. The cost of owning the roof over your head fluctuates considerably from city to city.
A hefty $115,500 annual salary will get you an average house in the San Francisco metropolitan area, where the median home price is $682,410, leaving you with a $2,700 monthly mortgage payment.
If that seems too expensive, simply head east to Cleveland, the cheapest city for housing on HSH’s list, where $19,000 a year in pay will buy you an average home with a $453 house payment. Median-priced homes in Cleveland go for $112,800.
In Seattle, a base salary of $59,130 is enough to purchase a median-priced home of $344,400. On the East Coast, Atlanta homes average $142,400, requiring a $24,391 paycheck to cover the $569 mortgage payment.
Do these numbers seem reasonable to you? Actually there’s a huge caveat with these figures.
Using its mortgage rate data and fourth-quarter median home prices from the National Association of Realtors, HSH.com calculated how much a homebuyer would need to earn to afford the principal and interest payments on a median-priced home. The figures do not include property taxes, insurance and other expenses.
http://finance.yahoo.com/news/could-afford-median-priced-home-225740361.html
Washington housing market uneven in fourth quarter | South Salem NY Real Estate
Washington state’s housing market softened in the fourth quarter of 2013 compared to the quarter before, but remained stronger than a year ago, according to the Runstad Center for Real Estate Studies at the University of Washington.
Sales of existing homes declined 8.6 percent in the September-December quarter of 2013, but still were 9.2 percent higher than the same time in 2012.
The seasonally adjusted sales rate was 91,340 homes, meaning that if the quarter’s pace continued unchanged for a year, that number of homes would be sold.
“Washington’s housing market is finding its balance,” said Glenn Crellin, associate director of the Runstad center. “Sales throughout 2013 totaled 93,730 units, well above any of the last five years, but still well below the pre-recession frenzy.”
An inadequate supply of listings available for sale continues to be a problem and contributes to increases in home prices, Crellin said.
The statewide median home sales price during the fourth quarter was 6 percent above a year ago at $256,300. Price increases were especially strong in the metropolitan Seattle area.
Median prices were lower than a year earlier in 16 counties, but most declines were less than 2 percent. Median prices ranged from $70,000 in Lincoln County to $421,000 in King County.
http://south-everett.villagesoup.com/p/washington-housing-market-uneven-in-fourth-quarter/1117564
Grossly overvalued real estate won’t qualify for charitable tax deduction | South Salem NY Real Estate
First Person: Why Generation X Needs to Be Mortgage Free | South Salem NY Homes
According to some headlines, Generation X has the most financial stress compared to any other generation. Many of us bought homes during the housing bubble. We are sending our children to college at a time when private college tuition costs as much as a house (not a house payment). In order to feel less stressed financially, I have made paying off my mortgage my No. 1 goal. So many experts scoff at the idea of putting extra money toward a mortgage when interest rates are so low. I have a mortgage rate of 2.75 percent. Because my interest rate is so low, I don’t usually have enough mortgage interest to make it worth my while to itemize my deductions. Therefore, I don’t deduct my mortgage interest. According to a recent article by The Street, people who are 35 to 44 have the most financial worries. A Pew study shows Generation X lost an average of $33,000 per person after the Great Recession. Although I’m dealing with stagnant wages, layoffs in my family and high college costs, I know owning my home outright will provide economic security for the rest of our lives.
Owning instead of renting
If I could come out ahead even though I bought a home during the top of the housing bubble, I am confident my Gen-X peers will come out ahead by buying a home at this time. Even though real estate prices are not at the bottom, it’s still more affordable to buy now than it was during the housing bubble. We pay just $900 a month to own our home, but renting a similar home would cost $1,300. When we retire, we will just have to pay property taxes as well as optional home owner’s insurance.
How to Add a Skylight or Light Tube | South Salem NY Homes
Puget Sound area home prices up as much as 17% in January | South Salem NY Real Estate
With more houses on the market and sales prices rising, the housing market is “definitely in full recovery mode” in the Puget Sound area, a Realtor said Wednesday.
The median price of King County houses and condos that sold in January was nearly $364,900, or 17 percent higher than in January 2013, according to the latest report from the Northwest Multiple Listing Service. Median sale prices in Pierce and Snohomish counties rose 12 percent and 14 percent, respectively.
“We are finally going to be looking at the ‘housing crisis’ in the rear view mirror,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “In 2014 we are definitely in full recovery mode.”
The inventory of residences on the market, while improving, continues to be a source of worry, he said.
“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014.”
http://www.bizjournals.com/seattle/news/2014/02/05/puget-sound-home-prices-up-as-much-as.html
Flipping Moves on Up as Profits Rise 19 Percent | South Salem Real Estate
Higher prices and fewer foreclosures have not put a dent in the flipping business. In fact, last year saw 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16 percent from 2012 and up 114 percent from 2011, according to RealtyTrac’s Year-End and Q4 2013 Home Flipping Report.
Homes flipped in 2013 accounted for 4.6 percent of all U.S. single family home sales during the year, up from 4.2 percent in 2012 and up from 2.6 percent in 2011. Flips accounted for 3.8 percent of all sales in the fourth quarter, down slightly from 3.9 percent of all sales in the third quarter and down from 7.1 percent of all sales in the fourth quarter of 2012 — the highest percentage of sales represented by flips in a single quarter since RealtyTrac began tracking flipping data in the first quarter of 2011.
The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from 52,746 in the fourth quarter of 2012, a 19 percent increase.
http://www.realestateeconomywatch.com/2014/01/flipping-moves-on-up-as-profits-rise-19-percent/