http://www.realty.com/ en matthew@matthewdenton.com Copyright 2009 2009-11-19T05:51:00-05:00 http://feedproxy.google.com/~r/Realty-Blog/~3/maBGmKTvBrY/ http://www.realty.com/blog/cities-set-to-boom-or-bust-in-2010/#When:05:51:00Z We decided to compile a list of winning and losing cities Even with the recession, some companies are announcing plans of expansion. But some are cutting jobs however. So we decided to compile a list of winning and losing cities in this very turbulent economy that are set to boom or go bust in 2010. Winner: North Charleston, SC Reason: Aerospace Goliath Boeing is set to locate its Boeing 787 assembly plant in this South Carolina area where more than 3,000 jobs will be available next year. According to Doug Woodward, economics professor at the University of South Carolina’s Moore School of Business, in a The Post and Courier interview, “Boeing is one of those rarefied companies which everyone knows and recognizes as a leader in the field, and to have that in South Carolina is an intangible benefit aside from jobs and income generated. It will help sell our state to other companies ... and I think it will put Charleston on a lot of people’s lists of the hottest places to be in 2010. This could attract not only local residents but also those from other states to increase the demand for housing in the area. Looser: Janesville, WI Reason: If the current tide of automobile company bankruptcies doesn’t speak much of trouble in other cities than Detroit, then you should be worried. By next year, close to 3,000 people will be out of job when the General Motors plant finally shuts down. This is due to the very poor sales of the car company’s SUV line. Don’t expect the local property market to gain a positive momentum anytime soon. Winner: Auburn Hills, MI Reason: What will salvage Chrysler is a heavy lift from European car manufacturer Fiat. Now they’re bound to reintroduce Alfa Romeo in the U.S. market in the hopes of gaining American’s trust in this popular Italian brand. This could retain or add more jobs in Chrysler’s existing plants and ensure continuous market activity in the mortgage market. Looser: Park Ridge, NJ Reason: Guilty or not, car rental company Hertz is hitting the breaks in the market. But that remains disputable after the company filed a complaint in a New Jersey court against Audit Integrity Inc. after it was included in the latter’s list of the top 20 companies most likely to go bankrupt next year. But the negative publicity that the company has earned is enough to send its shares falling. By next year, we expect affected employees to be scrambling where to pay for their mortgage. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-19T05:51:00-05:00 http://www.realty.com/blog/cities-set-to-boom-or-bust-in-2010/#When:05:51:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/hXGf8x4VIsA/ http://www.realty.com/blog/fha-mortgage-insurance/#When:05:48:00Z New rules have changed the way they do business. For most homeowners, the FHA mortgage used to be their better alternative to the high costs of private mortgage insurance considering the former’s low costs. However, the FHA decided to change hike its fees in response to the high risk that the property market started enduring. The new fees made effective last year are as follows: • 1.750% : All purchase and “standard” refinances • 1.500% : All “streamline” refinances • 3.000% : All FHASecure programs for delinquent mortgagors A higher loan fee will of course have a higher percentage cost to be paid at the closing. Unlike its private counterpart, the FHA bears this one-time closing cost. Whatever the reason for such new rules, the FHA clearly imposes higher charges to reflect the higher risk. But that doesn’t make it unaffordable. FHA mortgages remain to be attractive to those who cannot afford the produces of a private lender. In fact, the FHA has continued the FHASecure program amidst the growth in delinquencies. But remember, these were only affected by the increase in interest rates and the rise in insurance rates as well and not by their irresponsible behavior. In fact, the Wall Street Journal reports, “Some 59% of new home buyers are using government-backed loans from the FHA and other agencies, according to a survey of home builders by John Burns Real Estate Consulting, an Irvine, Calif.-based consultancy. The FHA accounts for nearly half of all mortgages, while loans from the Department of Agriculture and the Department of Veterans’ Affairs account for another 10% of all loans for new homes. The government’s share of the market rises even higher in certain areas. In Northern California, for example, builders said that the government accounted for 76% of all mortgages, while the government share stood at 65% in the Midwest and 62% in South Florida.” Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-19T05:48:00-05:00 http://www.realty.com/blog/fha-mortgage-insurance/#When:05:48:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/-azr3kJraVM/ http://www.realty.com/blog/c-s-home-price-indices-august-2009/#When:05:44:01Z Is the market already on a rebound? Is the market already on a rebound? If you’re referring to the latest Case-Shiller Home Price Indices , then chances are you’ll be misled on how home values take their course. The 20-city composite index shows a slowing drop in prices at only 11.3 percent YoY against August 2008. The biggest losers are still Detroit, Las Vegas and Phoenix with no home value taking a plunge larger than 22 percent. But remember how much 4Q08’s unemployment figures caused market commotion? That would reflect an entirely different picture in the reports in the coming months. The problem with the Case-Shiller figures is that it takes a two-month lag for the report to get published. Real time figures are best sourced from research firms like Altos Research . Furthermore, we should expect the first-time homebuyers’ tax credit to create a dent in the home values as it made an “artificial” effect on prices. But once the November 30 expiration takes effect, we’ll certainly go back to the same scene. There are also other more interactive sites that offer comparable home value rates at national levels. The Economist and the Foreign Exchange Clearing Bank LLC have their own data sets. The former uses a global comparison chart where home values in Switzerland, Australia and Belgium to name a few are included. The FECB’s chart however can only be accessed for a fee. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-19T05:44:01-05:00 http://www.realty.com/blog/c-s-home-price-indices-august-2009/#When:05:44:01Z http://feedproxy.google.com/~r/Realty-Blog/~3/a_NrK8Zf5D8/ http://www.realty.com/blog/nyc-is-now-cheaperfor-the-ultra-rich-that-is/#When:05:41:00Z One annual survey lists The Big Apple. For 33 years, the Cost of Living Extremely Well Index (CLEWI has been used by Forbes Magazine to measure the Consumer Price Index (CPI) of the people who don’t go to Walmart, who refuse to eat at fast food chains and who abhor the experience of riding in subways. In other words, the ultra-rich. But this year, the report has a different observation about the CLEW, “It rose by only 1%--a dramatically slimmer increase than last year’s 12%, and the slowest rise since Forbes began tracking the numbers. This is great news for the super-rich, who, new research shows, have taken to bargain-hunting--a habit they once considered unthinkable… Few have been immune to the global economic slide, and luxury consumers, who fear both appearing insensitive to the plight of others and for their future earnings, have curbed their spending.” So for this very select group of people, there’s good news although they’ve slightly zipped their wallets for this year. New York has gotten more affordable, ranking third in the list. The city trails London and Dubai after luxury goods registered cheaper prices in these two cities. Now, anybody set for a Dom Perignon at Sherry-Lehman? But we’re not that impressed with the basket of luxury goods that the publication has chosen even if these have been used for the past years already. Goods such as a coat, silk dress, pair of loafers, shirts, shoes, sheets, silverware, perfume, sauna, yacht, shotguns, thoroughbred, swimming pool, tennis court, cigar, airplane, helicopter, magazine subscription, Duffel bag, purse and yes, a train set are included not to mention services like face lift and psychiatric consultations. But what about properties? Nothing’s been included. And we’re expecting Forbes to modify their list. In order to keep up with the Joneses, the wealthy need to own properties in the priciest neighborhoods. In fact, there’s more prestige in owning a mansion in Scarsdale than a 1 ounce Joy Patou fragrance. If they factor in property values for a specific location, it can add more relevance to the index. As BusinessWeek’s Prashant Gopal states, “… residents are also paying a premium for the cachet that comes with having a certain Zip Code. They want to live with their peers, go to the same country clubs, and send their children to the same schools.” Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-19T05:41:00-05:00 http://www.realty.com/blog/nyc-is-now-cheaperfor-the-ultra-rich-that-is/#When:05:41:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/p1UOe9Hswmo/ http://www.realty.com/blog/would-you-pay-5000-for-real-estate-advice/#When:05:36:00Z What a Moneymaking Plan! Here’s a report by The Sacramento Bee . Belton Mouras Jr., the self-proclaimed “duplex king of Sacramento” and whose track record in real estate has been impressive for many years, is offering a real estate seminar for investors this month at $5,000 per person. But why is this seminar a big deal to us? It’s because the man has filed a Chapter 7 bankruptcy protection. He states that his assets are worth $55.4 million versus his liabilities of $85.9 million. Now would you pay $5,000 to hear him share his secrets? His bankruptcy attorney released a statement, “Mr. Mouras is offering to share with others his extensive real estate investment experience obtained over many years, both in good times and in bad, in finding properties to acquire at the right price, raising money to purchase them, rehabilitating them if needed, managing them and holding them for long-term investment or disposing of them for a short-term profit.” And before we neglect to write, the official website of Mouras states “This exclusive program is designed to assist junior and experienced investors with increasing their investment portfolios and is not meant for beginners.” The issue here is not a question of whether he has the experience to share but his credibility to prove that there’s enough reason to still invest in real estate this period – and yes, ask for a $5,000 fee. Mouras has the knowledge and industry experience but if we think now’s not yet the right time. He could have at least waited for his financial state to recover and prove that his industry expertise will work. In this way, he’d have more credibility. Whoever attends the seminar ought to squeeze out all knowledge from Mouras. It’s $5,000 and it’s no joke. And please ask how’s is he going to recover from bankruptcy. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-19T05:36:00-05:00 http://www.realty.com/blog/would-you-pay-5000-for-real-estate-advice/#When:05:36:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/7fNTv_2i9Og/ http://www.realty.com/blog/compensation-experts-therell-be-brain-drain/#When:16:56:00Z The plan to reign on executive compensation looms further Bank of America’s spokesman, Scott Silvestri , recently commented that competitors not subject to pay restrictions already “…are exploiting this situation by identifying our top performers and using pay concerns to recruit them away for fair market compensation.” He’s talking about the government’s gradual regulation over executive compensation with the leadership of pay czar Kenneth Feinberg.  If you’ve been following this blog, we’ve featured several posts about this controversial issue.  And until now, we’ve not been swayed by any defense that these rich folks are protesting.  It’s time for the government to get in the scene. But everything that those affected are saying is just plain silly to us.  Even Feinberg has reviewed their concerns and has made a solution: “…Feinberg did say exceptions were made “where necessary to retain talent and protect taxpayer interests.” Base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial.  Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.” Still, BofA and the rest of the banks are fearing an impending brain drain among top managers.  Other private companies and most likely foreign enterprises who can offer higher pays to attract these people will surely raise their demand.  But haven’t they thought of the following? We’d get rid of the same people who started the real estate slump. We’d lose executives who offered hybrid loans to most unsuspecting and uninformed borrowers. We’d dismiss any chance of having mortgage officers goad clients into loans that they won’t qualify but still have the possibility to avail. So would the public trade this for the feared brain drain among executives? Hasn’t it occurred that no matter how they regard themselves as the best among the crop of managers, they can still be replaced by top tier talents in the workforce who can practice business ethics?  That’s unless BofA and the rest, still prefer to defy mortgage standards. Even Warren Buffet agrees when he recently said, “I don’t look at Wall Street as ‘evil’. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities and all of that throughout the system. We have got a big capitalist system and we have to have a big capital market—but there is plenty of room for improvement.” Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-10T16:56:00-05:00 http://www.realty.com/blog/compensation-experts-therell-be-brain-drain/#When:16:56:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/hokSXWFC9uU/ http://www.realty.com/blog/consumer-protection-getting-ready/#When:17:50:00Z Congress is pursuing the plan seriously. Everyone’s eager to see if the House Financial Services Committee’s passing of a legislation that will create the Consumer Financial Protection Agency will turn out to be in line with Obama’s plan of regulating mortgages, credit cards and other forms of consumer credit.  As the plan slowly makes it way to becoming a law after a 39-29 vote in the committee, President Obama’s plan is slowly gaining ground. Here are the salient features of the bill from The Associated Press : — The agency would oversee such common financial products as mortgages, credit cards, payday loans and terms on savings accounts. — It would be in charge of implementing a law passed by Congress this spring that protects consumers from sudden interest rate increases on unpaid credit card balances. — Most banks and credit unions, already monitored by other regulators for “safety and soundness,” would be spared from agency examinations. Only banks with more than $10 billion in assets would need to open their books to CFPA officials. — While retailers would be exempt, financial institutions tied to them would not. For example, the bank that offers a store-brand credit card or the institution that provides financing through an auto dealer would still be subject to agency rules. — The bill does not include a mandate proposed by the Obama administration that banks offer standardized, “plain vanilla” products such as a 30-year fixed mortgage, as the administration wanted. — The bill also eliminated an administration proposal to require that banks take reasonable steps to ensure customers understand what they were buying. Democrats said the measure would be too hard to enforce. Take it from this last feature where banks must ensure customers understand what they are buying. How can the government exactly measure such rule is followed? Would you know that your mortgage application is thoroughly explained after you meet with the lender? Definitely not and it would be a hassle on your part if you file a complaint since borrowers can just find other lenders than contend with those who shortchange them. Some more review from our lawmakers, perhaps? Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-09T17:50:00-05:00 http://www.realty.com/blog/consumer-protection-getting-ready/#When:17:50:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/rf9YAdRYbTM/ http://www.realty.com/blog/foreign-buy-out/#When:15:19:00Z Non-Americans are taking advantage of extremely low property prices. So how do real estate demand and supply forces work in a battered economy?  It’s simple – try getting the folks out of the country to bring your existing supply to lower levels.  In other words, let them buy America’s bargain properties. In 2007, Canadians took advantage of the weak U.S. dollar and found out it was a good year to purchase U.S. real estate whether for investment or their own dwelling.  Here’s a clip from real estate expert Ozzie Jurock speaking about the heydays of buying: Of course, this “phenomenon” has occurred again this year when prices are way too low that foreigners can afford multiple investments already.  In fact, real-time real estate research team Altos Research released the latest 10-City Composite Price Index.  It states, “For the month of September, listed property inventory declined in 23 of 26 markets and was up in 3 markets.  Inventory declined by 1.7% across the 10 markets composing the Altos Composite index during September and 4.2% during the third quarter.  Inventory grew by the largest amount in San Diego - up 1.1% - and fell by the largest amounts in San Jose and Atlanta with drops of 5.4% and 4.5% respectively.” And if you think only the Canadians are interested, you must’ve been hiding in a cave.  The East Asians are slowly consuming both commercial and residential real estate that they can purchase.  An April 2009 report states, “…according to the Oriental Horizon program, 7.5 percent of U.S. residential property that was sold to foreign markets was purchased by customers in China, Taiwan or Hong Kong.  We know they can afford it – as of 2008, the Boston consulting Group reported China was home to almost 300,000 millionaires – a 20% increase from 2007, and the world’s fifth largest number.” Sounds too easy for them right? But 2007’s real estate condition is a far cry from what we have now.  It’s much harder time to take a subprime mortgage. David Levine , international tax manager with financial advisory firm Keats, Connelly and Associates, warns his countrymen, “Canadians can come in with cash and not have to worry about trying to raise a mortgage down here, then it’s really the perfect opportunity for them to buy right now.” Levine sounds he can tame down the buying but we’re absolutely losing our property to foreigners.  But who cares? Abu Dhabi now owns 75 percent of the Chrysler Building right? What difference does it make? Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T15:19:00-05:00 http://www.realty.com/blog/foreign-buy-out/#When:15:19:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/23pMMfilYtM/ http://www.realty.com/blog/billionaire-roth-buys-madoff-mansion/#When:15:00:01Z …and a thousand other news sites. The 1.2 acre, 3,000-sq.ft. beachside four-bedroom home of Bernie Madoff was recently bought by real estate CEO Steve Roth, former chairman of Vornado Realty Trust.  He paid a hefty $9.4 million for the property according to the Wall Street Journal … and a thousand other news sites.  Roth, a 2007 recipient of Institutional Investor magazines’ top CEO in the REIT industry, can buy whatever he wants.  He’s a billionaire by the way. This leads us to think, how come it’s a big deal for everyone?  It’s simple.  People would be so interested in knowing who were, are, and will be affiliated to Bernie Madoff.  And as a real estate businessman, you’ve got to give Roth the credit for risking his name in Madoff’s former assets. Take for example Michael Tadin, who’s controversial acquisition of a $4.5 million property last year sparked outrage from certain groups in Chicago when he won the bidding.  Apparently Tadin is a childhood friend of Mayor Richard Daley.  A year after the controversy, we’ve not heard much about this issue anymore.  So we’re expecting the same thing for Roth. But a few others are contending that this is just a mere publicity stunt of Roth.  He’s the shrewd type who won’t settle for anything less than what he has in mind.  Some however, believe that it was in his best interest to have entered the deal. Good or bad - publicity is still publicity.  In this case, Roth got the house , he got the exposure, and he got America talking about him. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T15:00:01-05:00 http://www.realty.com/blog/billionaire-roth-buys-madoff-mansion/#When:15:00:01Z http://feedproxy.google.com/~r/Realty-Blog/~3/OZw8quL_PeA/ http://www.realty.com/blog/the-truth-about-prepayment-penalties/#When:14:58:01Z Why you’re paying more. A friend of mine once asked why it cost her more than a thousand dollars to pay off her loan early.  She wondered, “…Shouldn’t I be even given a discount for paying way ahead of time?” I thought of one thing right away – prepayment penalties. A prepayment penalty is a fee that lenders collect from borrowers when the loan is paid off early.  My friend may not have been informed that her loan carries such rule in the contract.  In the end, she had no choice but to cover the cost. Keep in mind though that a loan may or may not carry a prepayment penalty.  Subprime loans for example, carry a fee from 1.5 to 3 percent of the loan balance.  Buying the loan out earlier will also increase the interest rate.  For those who can find loans without such fee, it may or may not work for you. Prepayment penalties may hurt you in different cases.  If it’s a soft prepayment fee, you’d only pay it when you refinance.  However, if it’s a hard prepayment penalty, you’d be paying it when you either refinance or sell the house.  But is it all bad? Not entirely.  Borrowers can use the fee to their advantage.  For example, if it would reduce the payment terms by a significant amount of time, it can make a huge difference in their personal savings.  That is, if the prepayment penalty is actually lower than the savings that he can get.  If not, then he’d be thinking twice on completing his mortgage payments. So the problem also lies in the part of most lenders who advertently skip the prepayment penalty explanation.  The result?  You’ll have frustrated borrowers who lose their trust on their lenders.  This is a good source of additional income for these scrupulous thieves who contend that they need the fees to cover the high cost of loan origination. In a report by the Wall Street Journal, “…Some consumer advocates and politicians contend that borrowers aren’t being adequately informed of the prepayment penalties, which critics characterize as a “predatory” lending practice aimed at low-income people who may not fully understand loan terms. ‘Prepayment penalties rip money out of people’s pockets,’ says Lisa Donner, a coordinator with the Association of Community Organizations for Reform Now, or Acorn, a nonprofit and activist group that often targets housing issues. ‘Owning a home goes from being a source of wealth into a constant drain.’” It will take a miracle to turn things in favor of the borrower when prepayment penalties will be banned like in the mid-1908s.  For now, borrowers should be aware that when originating their loans, they need to demand a thorough explanation for each statement that’s written on paper. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T14:58:01-05:00 http://www.realty.com/blog/the-truth-about-prepayment-penalties/#When:14:58:01Z