First Quarter Sets the Pace for 2011’s Real Estate Market

After a good year for the real estate market in 2010, this year’s results have big shoes to fill. So far, according to the first quarter numbers, 2011 is competing passively with the previous year. Depending on your area however, you could have a better chance at landing a good sale on a house. There were a few factors that went into last year’s success, including cheap supply of lumber due to the effects of weather on lumber companies in the southeast part of the U.S. Another harmful factor in the market being that the net cash required by operating activities was $1.2 million for the first quarter of 2011, which compares to net cash provided of $4.4 million a year ago.

So far, Q1 has failed to meet last year’s net sales by nearly 3 million dollars, as has the net income, falling behind 2010’s results by an incredible 2.16 million.

It shouldn’t shock anyone to know that home ownership is on the decline. With an increase in foreclosures, a tough job market and President Obama backing off from policies that encourage home ownership, it’s no wonder. Obviously, the loss of jobs in our economy and the downgrade of income has put a lot of input into the market, as has the decrease in housing supply. That’s right, I read the other day that the real estate market is actually encouraging buyers to consider building houses instead because of our dwindling number of move-in-ready homes. It makes sense, that we’d see a threat to the number of built houses available, since deforestation, clean water, and polluted air all seem to relate as a result of over-populated areas.

I’m very curious as to what will happen in the following quarters if numbers continue on this rapid decline. The current trend is a little scary for potential home owners, like myself, who would one day like to move away from renting. At the height of real estate market, the rate of home ownership nationally was 69%. In 2010, the rate dropped to 66.9%. All of those things are reflecting in the home ownership rate that is still somewhat declining, and it’s generally favoring the rental market.

I read in a recent LA Times article, that 25-to-29 year-olds are looking towards renting more than home ownership.There are several reasons for this:

-  Shrinking middle class wealth (Mom & Dad used to be able to help the kids out with home buying and that is less likely now)

-  Large student debt

-  Uncertainty in the job market makes the flexibility of renting more desirable

This information is actually pretty concerning for me personally, as I’m sure it is for many other individuals of my generation who are in the awkward in-between of renting for a few years and hoping to own one day. Hopefully, like most things in our economy, these numbers will fluncuate again and there will be a calming gap of decent home ownership!

Out with the 2010 Market—2011 Brings New Floor Plans to the Table

The focus of the U.S. real-estate market lately has been the number of foreclosures and people trying to purchase cheap housing. But chief economists say that if Americans don’t start focusing on building new houses, the market will have a much bigger problem on its hands.

It is said that we need one and a half million houses per year just to keep up with population growth. And then if you throw in, you know, fires and tear-downs and just worn-out properties, we need even more—roughly 1.6 million or more per year. Right now, we’re down to about six and a half, seven months’ inventory whether you look at new homes or existing homes.

Maybe it’s because home buyers are focused on the quick, easy, assisted home purchase that can take effect immediately. Personally, if I had the option of buying a new house, I would love to be able to build. The process of choosing a floor plan, personalizing the layout, and creating a team of designers, contractors, and builders makes for a lot of work don’t get me wrong, but what an unbelievable project to put under your belt!

To be able to inhabit a personally created home, raise a family, and develop memories with your loved ones sounds irreplaceable to me.

Especially with a rising market, houses that are already equipped with modern appliances and features are most likely going to shoot the price through the roof. For those who are up for it, what about the possibility of fixing up a foreclosure? There are so many fixer-uppers out there that uninhabited and unknown that one might think is incapable of ever being legitimate.

I believe that more potential home buyers should start thinking outside of the box. In order to help our real estate market, we should start being more objective in home buying and become more willing to do the work that goes into creating your masterpiece.

Is 2010 the Year to Purchase a House?

Is 2010 the year to buy a house? It certainly looks that way: After a steep run-up in prices during the first half of the decade, home values have plummeted back to 2003 levels. Fixed mortgage rates are sitting near record lows. And the foreclosure epidemic—while painful for many home owners—has created some wonderful opportunities for bargain hunters. If that’s not enough, Uncle Sam is handing out thousands of dollars in tax credits to nearly all first-time buyers and the bulk of existing home owners who close a purchase by June.

But while the 2010 outlook appears inviting, there’s one key catch. You need to have a stable job. The economy is showing signs of life, but the unemployment rate is already at 10 percent and expected to go higher. And while those mortgage rates are attractive, buying a house makes sense only if you can bank on your income stream. So before you consider purchasing a home, take a hard look at your job, your company, and your industry.

After more than three years of falling, real estate values have shown signs of stabilization in recent months. At the national level, home prices slid nearly 9 percent between the third quarter of 2008 and the same period this year, according to the S&P/Case-Shiller home price report. That’s a notable improvement from the second quarter’s nearly 15 percent annual drop and the first quarter’s 19 percent decline. This improvement will give way to a bottom in home prices—finally!—in 2010, but not before additional declines. It’s projected that home prices will hit bottom in the third quarter of 2010 after logging a peak-to-trough decline of roughly 37 percent, based on the S&P/Case-Shiller national home price index.

With prices still falling, mortgage rates remaining historically attractive, and additional homes hitting the market in the form of foreclosures, the dynamics of the real estate market will continue to favor buyers over sellers in 2010. That means those looking to buy a home next year should not feel pressured to act impulsively. You don’t need to have a sense of urgency, but understand that as time progresses the balance of power as we get into 2010 is going to slowly but surely shift away from buyers. It’s is not going to be a strong seller’s market, but it will be more evenly distributed as the year goes on. Data from the real estate firm Zillow show that home buyers are already losing the leverage they once enjoyed. While home buyers landed a median discount of 4.6 percent off listing prices in January, the size of the gap fell to 2.7 percent by October. Expect this gap to close further as 2010 marches on.

Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter—the highest delinquency rate in the 37-year history of the Mortgage Bankers Association’s National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate—which already stands at 10 percent—will peak at about 10.5 percent in the first quarter of 2010. Additional job losses mean more borrowers won’t be able to pay their mortgage bills.

Perhaps if you were thinking of purchasing a home within the next few years, you should consider taking action now. Mortgage, tax, and prices are on the rise, and you can potentially avoid all the unfortunate changes that are in the works for the real estate market.

A Ray of Hope for the Economy

With the current state of the economy is there a ray of hope shining through? According to a recent article found at money.cnn many economists are seeing signs of recovery as early as this summer! Even though New York unemployment is at a 25 year all time high there could be a silver lining right around the corner. Economists are saying they are seeing indicators bottoming out left and right. Starting with job losses peaking in January to increased home sales and stocks. Even better news is because the economy took such a steep fall they are hopeful that the recovery will be that much stronger.

Some economists are saying recovery could be as close to four months away! Such as economist Lakshman Achuthan, managing director of Economic Cycle Research Institute. He says his firm’s readings on long-term and short-term economic indicators give him significantly more hope that the economy is closer to a turnaround than he had thought even a month ago! Among the more than dozen different things his firm looks at are home prices, the jobs picture and stock prices.

Mark Zandi, chief economist of Moody’s Economy.com, also believes that a recovery could be closer than most people think. However, he said an end to the recession would largely depend on improvement in the labor markets. His first concern is getting job losses under control. He says if we can help improve job losses that will help build consumer confidence back into the economy and stocks.

I say the sooner the better! I love reading good news…

The Economy - How bad is bad?

Unfortunately the economy in its current state is being compared to the great depression of 1873! The great depression started the exact same way as our current economy with the stock market crashing, Wall Street panicking and business shutting down across America.

Is it really fair to compare today to 1873? James Kolari, an economist disagrees with this comparison. His argument is that it is unfair to compare now to then because the federal government was fair more passive then they are today. Back then the federal government let 15,000 out of 30,000 banks fall!

But Nelson, a historian who has studied the panic of 1873, says today’s economy might even be worse than the American economy in 1873! It took America four years to recover in 1873 and current predictions for the current economy recovery is around 5 years!

Either way you look at it, it is not a good situation. My feeling is Obama brings hope. I am all for his $787 billion stimulation plan if it could possible helps the current situation! We are living in scary times and the best thing to do is have hope.

The Top Abandoned Cities

When you think of bright lights and a big city one of the first places that comes to mind is Las Vegas. With the economy the way it is, unfortunately it is at the top of the list for abandoned cities. Las Vegas is an adults play ground if you have the dough, but if you have no dough like the state of many adults your main concern is putting food on the dinner table, not buying a stack of poker chips. Las Vegas is an expensive treat and one that is just not a priority to very many people at this time. On top of that the once lavish construction sites and economic growth areas have all come to a screaming halt!

So what comes in at number two you may ask? Well remember Detroit known as the backbone for the American industry? You guessed it, it is the number two most abandoned city. Detroit is suffering from the great economic decline because of the role the city played in the past.

While Las Vegas and Detroit were neck in neck for the title, Las Vegas pulled ahead with all of the vacant houses. According to Forbes abandoned cities were determined by pulling a combination of rental and homeowner vacancy rates, with Las Vegas suffering the most because of bad loans and decreasing property value.

So what is to come for these two troubled cities? Time will only tell…

Stores to Watch Out For

We all know that the economy is not in a very good spot as we speak. I wanted to do some personal research and find out which stores were going out of business and which stores are in fear of going out of business. According to Forbes.com Circuit City, Linens ‘N Things and Mervyn’s stores are all going out of business! More pain is predicted along the way as a women’s survey suggested that one third of the women claimed they did not plan on purchasing any new clothing in 2009! Lane Bryant, Gap, and Starbucks are some of the companies that we are supposed to keep our eye on, as they are not predicted to do well in the New Year.

Research suggests that the market will not be the same for a long period of time and could take easily up to 10 years to get back on track. Eddie Bauer, Pacific Sunwear, along with Zales, the big jewelry chain are other stores to keep watch over. All of these retailers are currently having a really hard time making it in the market. It is tough to survive right now and only the strongest will survive as retailers struggle more and more. Stay tuned for continued up dates…

With a Change in the Economy top 5 places to now live…

Since the economy has changed so much recently so has the top five states to live in. With a new list of top five states there are a lot of things to consider when choosing a new location for a home. There are many things that people are looking for including comfortable living and a stronger economy and a safe environment to raise a family.
The best place to live with plentiful jobs, excellent schools and affordable housing, an active outdoor culture and low crime is Plymouth Minnesota.
Coming in second is Fort Collins Colorado, with a bike lane on every new road built even the carless can get around.
Third place goes to Naperville Illinois. In Naperville the walk able down town area is packed with restraints, shops and the jobs are plentiful!
Forth place goes to Irvine California. Many people consider Irvine the perfect place to live with its school districts winning numerous awards and the majority of the jobs provided by the University.
At fifth place Franklin Township New Jersey. With plenty of high tech, pharmaceutical and research development plants there is more then enough of jobs to go around! So next time you are looking to relocate make sure to check out these places especially if it is in the next couple of months!

The State of the Economy

If you are one of those people who are not worried about the state of economy and you want to buy a new home right now here is some advice that will help point you in the right direction.

First of all take the time to find the right place. Do not pay attention to seller’s asking price and bid 10% lower then what comparable homes are selling for. If the seller does not want to budge then move on!

Mortgage rates are low so right now is the time to buy, waiting could be more costly! Financing is getting more expensive the so the longer you wait the more you pay in financing. Also even if prices fall more there could be a penalty for waiting!

Always strive to purchase a home in a neighborhood with good schools. Schools with higher rating represent stability, and especially right now that is very important. If you are looking into a foreclosed property that usually reflects instability if there are a lot of them in the area, this could mean a lower quality of life which you want to stay away from. When you are buying a property you are also buying the neighborhood, so keep that in mind!

I hope these suggestions help you make the right decision.

Real Estate in the state of a recession!

If you are looking for a real estate then I am sure you are aware that the recession has a huge impact on the market! I wanted to find out who was surviving the best out of all the cities in the United States and here is what I found: Oklahoma City is one of the country’s strongest housing markets and is in the best position to handle the crises. They have a solid growth rate in agriculture, energy and manufacturing all contributing to what makes them the strongest.

The next city is San Antonio with solid employment rates and affordable home prices. The other cities that are staying strong are Austin, TX; Charlotte, NC; Dallas, TX; San Jose, CA; Raleigh, NC; Salt Lake City, UT; and Seattle, WA. When gathering statistics Forbes.com looked at many different areas in the country and focused on the fifty largest metro areas.

The statistics that they used include unemployments rates, job growth, construction, education, health services, financial activity, transportation, trade, and many other figures. They also looked at the median home price and compared growth from forth quarter 2006 to fourth quarter 2007. In conclusion if you are looking for an area to find solid real estate opportunities you will have to look outside of your city if you are not in these cities!