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Armonk NY Real Estate | Housing Becomes Hottest Trade of 2012

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While the risks can be large, sometimes the biggest paydays on Wall Street come from making a contrarian bet on the most hated sector on the planet. This was never truer than during 2012.

The housing sector, which brought the financial system to its knees in 2008 and continued to be an albatross around the middle class for the next three years, was the hottest trade this year as consumer confidence improved and as the Federal Reserve kept interest rates low. The central bank even went so far as to purchase mortgage-backed securities.

The iShares U.S. Home Construction ETF (ITB) surged more than 75 percent in 2012 as shares of homebuilders such as Pulte Homes and Lennar doubled or nearly doubled and construction-related stocks like Home Depot jumped. More complicated mortgage-backed securities were among the biggest winners for hedge funds brave enough to buy them.

“They took the painful writedowns and survived the hit,” said Barry Ritholtz, CEO of Fusion IQ and author of The Big Picture blog. “And have you priced a mortgage lately? It’s 3.25 percent for a 30-year fixed.”

True to its function as a discounting mechanism, these stocks starting moving higher early on in the year in anticipation of a relatively sizeable increase in home prices.

It got there when prices climbed at a 4.3 percent annual rate in October, according to the latest seasonally-adjusted S&P/Case-Shiller 20-City Composite Index. That was higher than many economists predicted, but no surprise for buyers of these stocks.

“Since the businesses that were able to survive the home construction nuclear winter became so lean, they were highly leveraged to a pickup in business,” said Mitchell Goldberg, president of ClientFirst Strategy. “The homebuilding sector was one of those stories that you knew it would turn around eventually, but it took a heck of a long time.”

To be sure, the Home Construction ETF is down more than 60 percent from its high back in 2006. And during those days, home prices were posting double-digit annual gains on a monthly basis, according to S&P/Case-Shiller.

(Read More: Robert Shiller: Don’t Await Housing Boom)

Many investors think the easy money has been made in this trade and there will be tough sledding ahead again for the sector as unemployment stays elevated and foreclosures pressure prices.

“A lot of people seem to think that if the market turns around, that means more of the same,” said Professor Robert Shiller, Yale economist and co-creator of those very indexes, in an interview with CNBC this month. “We might see home prices go up a little bit above inflation, but it is not likely that we’ll see a real boom.”

So what’s the most hated sector going into 2013? Going by ETF performance, it’s natural gas with the U.S. Natural Gas Fund(UNG) down 27 percent in 2012. Feeling lucky?

via cnbc.com

2012 Prices End With a Whimper | Armonk NY Real Estate

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As the year draws to a close, the median asking price for listings has fallen to just 2.6 percent above the level of a year ago, significantly below the year-over-year high for the year of 3.8 percent recorded in April on the housetracker.net database.

The national median list price fell to $223,492 as of December 24, down 2.4 percent from a month earlier.  The national media price was down 3.3 percent from the year’s high in April.  List prices on houstracker.net are not seasonally adjusted.

The decline listing prices will likely be reflected in other indices when they are released.  Year-over-year prices reached 4.3 percent in the October S&P Case Shiller 20-City Composite, the most recent report available.  Sellers’ asking prices recorded on the MLS listings used by the housingtracker database are generally higher than final sales prices used by Case-Shiller.

Though slightly higher than last year, this year’s prices are far below the peak reached during the housing boom.  The median asking price on housetracker.net for homes in the US peaked in June 2006 at $319,459 and is currently $93,817 lower, a peak-to-current decline of 29.4 percent.  From a low of $211,844 in January 2011, the median asking price in the US has increased by $13,796, or 6.5 percent, in nearly two years.

While price increases in 2012 were not dramatic, inventory shortages were.  Since this time last year, the national inventory of homes for sale has decreased by 23.6 percent and it has decreased 6.6 in the past month.  Housing inventory, which is typically highest in the spring/summer and lowest in the fall/winter, peaked at 1,560,162 in October 2007. The lowest housing inventory level seen was 695,660 in December 2012.

via realestateeconomywatch.com

For Sale By Owner Tips | Armonk NY Homes

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If your home is worth considerably less than when you bought it, you may consider trying to dodge real estate commission fees and sell the home yourself so you can at least walk away with a little something. Trying to sell without an agent isn’t for the faint of heart. But if you have the time, skills and emotional wherewithal to go it alone, here are a few things to consider in the ultra-important pre-sale phase.

Price it right

Taking into account its condition, what comparable homes in your neighborhood are selling for (search on Zillow to find out!) and the state of the overall market in your area, it’s really important that you price your home appropriately. Remember: fair market value! After all, studies show that homes priced higher than 3 percent of their market value take longer to sell. And the longer it sits on the market, the less interest there is from potential buyers. Want your house to move quickly? Consider pricing it 2-3 percent below competing offers.

Prepare your home

The idea is to make your home look as attractive as possible (think showroom condition) as its condition will affect how quickly it sells and the price the buyer is willing to offer. First impressions are the most important, so make minor repairs (leaky faucets), remove personal items and declutter so that the home looks both spacious and inviting. Can’t bear to part with years of possessions? There are professionals who can help. For about $85 an hour, the folks at clutterbusters.com will make your home more salable.  And a clean, organized home can only result in your getting a better sale price.

Stage your home

You might even consider staging your home. While it can be costly (several thousand dollars), staged homes tend to sell faster than non-staged homes, averaging only 29 days on the market versus 145 days for non-staged homes, according to one estimate.

Get the word out

Doing this yourself is no easy task. It’s really important that you nail down your target audience and make it easy for them to reach you. Beyond that, pay for a weekly spot in the real estate section of your local newspaper, list your property online on Zillow, appeal to buyers on social networking sites, send direct mailings out and host open houses on the weekends. To attract the most buyers, you may also consider piggybacking on the competition’s open house dates/times.

Consider gimmicks/promotional tricks

Looking to stand out from the crowd? Hold a drawing or throw in some freebies (such as a complimentary weekend getaway in the Caribbean) to generate publicity and attention. It can’t hurt and may even help.

via zillow.com