Tag Archives: Armonk NY Real Estate

Armonk NY Real Estate

Brokerage also buys, rehabs, manages, and flips homes | Armonk NY Real Estate

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Real estate is a fairly segmented industry, and business models don’t change very much over the years. Brokerage companies buy and sell properties for prospective homeowners, investors buy properties for investments, property managers manage properties, and mortgage bankers finance properties.

Occasionally, someone wanders into the real estate business from somewhere outside of this universe and creates a totally a new model — either because he or she is brash, or not smart enough to realize this new invention is too good or too bad to be sustainable.

Such is the case with Erik Coffin, CEO of Gotham Capital Management, who is doing so many different things with his relatively new Beverly Hills-based company that I’m not even sure he can keep track of it all.

I asked him, “What’s the main thing Gotham Capital does?” He answered, without irony, “We don’t know. We make money.”

via inman.com

Lower Rates Benefit Richer Homeowners Most | Armonk Real Estate

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The Federal Reserve’s policy of buying mortgage-backed securities to keep mortgage rates low may be bolstering upper tier home values rather than helping to make homeownership more affordable for entry-level buyers.

For decades home buying demand has directly reflected mortgage interest rates, but no more.  One question that has baffled policy makers for six year is: Why haven’t housing markets responded to historically low mortgage rates?

In fact, record low rates have had an impact, according to a new analysis by three contributing editors of Home Value Forecast, just not the impact that the Fed anticipated.

“It is very likely that the top tiers of the owner occupied housing market are the ones benefiting the most from lower mortgage rates as this group has been less affected by credit score downgrades or more restrictive underwriting,” the economists said.

Since the housing crash in 2008, the economists, James R. Follain, Norman Miller, and Michael Sklarz, argue three factors have made lower mortgage rates relatively useless for lower income buyers.

  • Credit scores for many households have been impacted by defaults, loan modifications, foreclosures, job losses and the breadth of the impact has been sufficient to affect millions of households who now must become or are already renters. Even though buying may be cheaper than renting, such households have little choice but to sit on the sidelines for a few more years.
  • Tight underwriting has increased both the time required to secure a mortgage loan and the challenges for those with less secure income streams. Those paid based on self-reported productivity are being affected more severely since the lenders are now requiring more conservative assumptions on future earnings. Appraisals are also being kicked back if they are not conservative in the selection of appraisal comps, and so the risk tolerance pendulum has swung towards extreme conservatism.
  • The investment appeal of housing and presumption that prices can only go up has lost its shine. Many households had stretched in the 2000-2005 run up and some even invested in second homes or investment properties hoping to flip these units at higher prices. Those late to the party got burned.

The economists analyzed the impact of low rates for fixed rate mortgages on sales in two major markets, Chicago and Phoenix,

“Affordability is definitely improved when mortgage rates are lower and yet the beneficiaries of these more attractive mortgage rates are not evenly distributed among households of all incomes and wealth.  It is very likely that the top tiers of the owner occupied housing market are the ones benefiting the most from lower mortgage rates as this group has been less affected by credit score downgrades or more restrictive underwriting,” they concluded.

“At the same time we expect that investors have supported the lowest price tiers and are now bidding up the remaining REO sales in an attempt to lap up what is left of distress.  Prices in the bottom housing price tiers are still dealing with foreclosure inventory hangovers in some markets with slow and clogged foreclosure systems.  Markets where distress has been dispatched more expediently seem to be recovering the fastest,” they said.

via realestateeconomywatch.com

Hedge Funds are Fueling Foreclosure Inflation | Armonk Real Estate

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Though hedge fund purchases on a national level have had minimal impact, in the nation’s hottest foreclosure markets hedge funds, or institutional investors, are contributing to double digit foreclosure price increases and dramatic declines in REO inventories.

A new analysis of 16 of the leading foreclosure markets by CoreLogic economist Sam Khater suggests that institutional investors are driving up prices in six hot foreclosure markets where institutional investors’ purchases increased last year.

“The media has focused attention on institutional investors using cash to invest in single-family residential properties to rent, but relative to the overall market, the scale of their purchases is still very small,” Khater said. He noted that Blackstone, reportedly the largest hedge fund investor, has committed to buy 125,000 properties in 2013. By contrast, small investors purchased sone 600,000 homes using first-lien financing last year.

However, hedge funds are increasing their investments and in a few selected markets their impact was very large last year.

Phoenix saw prices rise 37 percent over 2011, Las Vegas rose 30 percent and in the balance of the six markets foreclosure prices increased by double digit amounts.

“More importantly, the ripple effects are greatly impacting the broader market,” Khater wrote. “Lower end home prices in markets with rising shares of institutional investors are up 15 percent from a year ago, compared to only 6 percent for the remaining markets.”

Khater said the large volume declines of foreclosures in Las Vegas, Atlanta and Phoenix are to do hedge fund activity, where declines in California markers are primarily to do individual investors.

Khater said institutional investors are clearly concentrated in five states: Florida, Georgia, Arizona, Nevada and North Carolina. In Miami last year, hedge funds accounted for 30 percent of REO sales; 23 percent in Phoenix; 21 percent in Charlotte; 19 percent in Las Vegas; and 18 percent in Orlando.

Hedge funds were much less active in California and the Midwest. In the Midwest, REOs remained elevated compared to Florida and Southwestern markets.

“Minneapolis and Chicago are drawing less interest from both types of investors generally, relative to these other markets. Only Detroit is garnering interest from institutional investors,” Khater said.

via realestateeconomywatch.com

Michigan, Florida Markets Top List of Most Dangerous for Investors | Armonk Real Estate

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Thirty-eight real estate markets have been tagged as “dangerous” for investors looking to make money on buying homes as rental properties in new quarterly data compiled by HomeVestors of America (known as the “We Buy Ugly Houses®” company) and Local Market Monitor.

The list categorizes markets according to different investor risk preferences and assigns a numerical score from minus-ten to plus-ten based on population, job growth, unemployment, home price changes, the market’s equilibrium home price (a proprietary measure of how much a market is over-priced or under-priced relative to local income) and the 12-month home price forecast.

“Despite the fact that home sales and home prices are increasing on average across the country, we are still seeing weaknesses in some markets,” said Ingo Winzer, president and founder of Local Market Monitor. “Sometimes weaknesses can signal opportunity for real estate investors, but not in the markets we ranked as ‘dangerous.’ In those markets, the risk far outweighs any opportunity.”

Leading the “dangerous” list is Battle Creek, Michigan, which drew a minus-four score because of its continuing job losses and weak home prices. Battle Creek is one of three Michigan cities-the others being Muskegon and Saginaw-that were ranked as “dangerous.” Only Florida had as many cities ranked as “dangerous” as Michigan. They are Port St. Lucie, Daytona Beach and Tallahassee.

The top ten “dangerous cities were, in order, Battle Creek, Salisbury (MD), Norwich (CT), Dalton (GA), Muskegon, Augusta, Decatur, Tuscaloosa, Dover and Port St. Lucie. The largest city to earn a “dangerous” label was Providence, Rhode Island, which ranks as number 26 on the “dangerous” list.

“All of the markets we ranked as dangerous have a combination of factors such as high-unemployment or weak job growth and falling or weak home prices,” said Winzer.

via realestateeconomywatch.com

Home Values Down 27 Percent from Peak | Armonk Real Estate

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Property values in January are 5.7 percent higher than they were a year ago, but they still have a long way to go to regain the equity that has been lost in the past six years.

Although home prices have improved significantly in the last 12 months, a six-year price comparison shows that current prices remain well below their near-peak levels. On average, today’s home prices are about 27.5% below January 2007. In hard-hit markets such as Las Vegas, Orlando, Miami, and Riverside, Calif., home prices are only half of what they were six years ago, according to the latest FNC Residential Price Index® (RPI)

Four markets that FNC tracks, Denver, San Antonio, Houston and Columbus, have regained all value lost in the past six years and now are registering gains higher than they did at the peak of the housing boom. However, values in Miami, Orlando, Riverside and Las Vegas are more than 50 percent below the levels of 2007.

FNC also reported that the recovery of underlying property values is driving sale prices closer to list prices, a sign that markets are transitioning from buyer’s to seller’s markets . The average list-to-sale price ratio increased to 93.5 in January, compared to 90.3 during the same period a year ago; in other words, the average asking price discount dropped to 6.5% from 9.7%. Foreclosures, as a percentage of total home sales, were 20.2% in January, down from 26.9% a year ago.

via realestateeconomywatch.com

Third-party websites’ problems are not mine | Armonk NY Homes

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A few months ago I wrote that third-party sites like Zillow and Trulia are not my competitors. I offer different services than websites and I can work without Internet access or electricity.

I love it when people get all excited about how many inquires through Zillow and Trulia and Realtor.com go unanswered. Some see it as a big problem.

I don’t see it as a problem at all, and I don’t care if consumers get a response when they inquire through a third-party website. The problem does not impact my income or hurt my reputation as an individual agent. If it did I might care about it.

There are any number of sites where consumers will see my listings, but because my name and phone number are not always apparent they call other agents. I honestly don’t have a problem with that — and if their calls go unanswered, that doesn’t bother me either.

via inman.com

Michigan, Florida Markets Top List of Most Dangerous for Investors | Armonk Real Estate

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Thirty-eight real estate markets have been tagged as “dangerous” for investors looking to make money on buying homes as rental properties in new quarterly data compiled by HomeVestors of America (known as the “We Buy Ugly Houses®” company) and Local Market Monitor.

The list categorizes markets according to different investor risk preferences and assigns a numerical score from minus-ten to plus-ten based on population, job growth, unemployment, home price changes, the market’s equilibrium home price (a proprietary measure of how much a market is over-priced or under-priced relative to local income) and the 12-month home price forecast.

“Despite the fact that home sales and home prices are increasing on average across the country, we are still seeing weaknesses in some markets,” said Ingo Winzer, president and founder of Local Market Monitor. “Sometimes weaknesses can signal opportunity for real estate investors, but not in the markets we ranked as ‘dangerous.’ In those markets, the risk far outweighs any opportunity.”

Leading the “dangerous” list is Battle Creek, Michigan, which drew a minus-four score because of its continuing job losses and weak home prices. Battle Creek is one of three Michigan cities-the others being Muskegon and Saginaw-that were ranked as “dangerous.” Only Florida had as many cities ranked as “dangerous” as Michigan. They are Port St. Lucie, Daytona Beach and Tallahassee.

The top ten “dangerous cities were, in order, Battle Creek, Salisbury (MD), Norwich (CT), Dalton (GA), Muskegon, Augusta, Decatur, Tuscaloosa, Dover and Port St. Lucie. The largest city to earn a “dangerous” label was Providence, Rhode Island, which ranks as number 26 on the “dangerous” list.

“All of the markets we ranked as dangerous have a combination of factors such as high-unemployment or weak job growth and falling or weak home prices,” said Winzer.

via realestateeconomywatch.com