A cooling trend in real estate flipping. These days, it takes caution and savvy to find the right fixer and then turn a profit. "Flipped" houses, considered by analysts to be those owned for six months or less, accounted for 3.2% of all home resales statewide in 2006, down from 4.2% in 2005, according to HomeSmartReports.com, a market-tracking website. Flipping also proved less profitable last year as 24.9% of such sales resulted in a loss for the seller, compared with 7.5% in 2005. In 2006, flippers sold for a median $45,000 more than they paid (not factoring in improvement costs), down from $52,000 in 2005. Source - The Los Angeles Times.
Robert Bruss, Real Estate Q&A: If a fixture is not built-in, it belongs to the seller. Any movable appliance that is not permanently attached to the structure or built-in is not a fixture and remains personal property. The law of fixtures can sometimes be difficult to apply — although not in your situation. For example, some large refrigerators have panel doors that match the kitchen cabinets. One could argue such a refrigerator is a built-in fixture automatically included in the sales price. However, if the refrigerator easily slides out without damage to the structure, then it is arguably personal property belonging to the seller. Real estate agents who are experienced make certain that the sales contract specifies personal property and fixtures the buyer wants are included in the price. Unless listed, and usually conveyed by a bill of sale, such items remain personal property, which the seller can remove. Read more from the source - The Los Angeles Times.
USC Lusk Center Experts Discuss How Shifts in Real Estate Lending Will Affect Commercial and Residential Markets. Investors are pulling back: Collateralized debt obligations (CDOs), backed by pools of sub-prime home mortgage loans, have fallen out of favor on Wall Street. As more borrowers default on these high-risk mortgages, lenders are requiring home buyers to put more money down, demonstrate greater income levels, and pay higher interest rates. All this means less money available for buyers with less-than-perfect credit, resulting in fewer homes being sold. Declining returns make investors shy away: How will the recent bear market affect investment in REITs? Now that speculators have backed away from housing markets, prices could continue to fall. REO and short sales reenter the lending lexicon: As “teaser” rates on adjustable rate mortgages (ARMs) start to shift higher, more borrowers will fall behind on their home mortgage payments, and more defaults could result. Real estate owned (REO) departments could get busy again as foreclosures become common in areas with major job loses (Michigan). Short sales – selling the home for less than the amount owed – will help the bank avoid being a landlord and the borrower’s debt may be forgiven. Are the vultures on the way back?: Buyers for distressed properties could be coming back, looking to snap up mortgages or real estate at a discount, confirming that there is always an opportunity in every kind of market. A move to suburban infill: As investors cool on mortgage-backed securities in general, exotic mortgages featuring interest-only, no money down and deferred payment instruments could be a thing of the past in the commercial sector. Developers who use these mortgages to finance higher-priced projects in the urban core might move farther out to lower-cost suburban areas. Less is more: A lower inventory of homes for sale helps to stabilize prices on new and resale homes. The latest surveys showing fewer new-home sales bode well for local markets. Builders have become more sophisticated at anticipating demand and responding to market shifts. Surf’s up: People will continue to flock to cities in Florida, Texas and California so demand will keep home prices steady even in the face of massive building. The Census Bureau predicts 65 million more residents in the United States by 2030, with almost half in these three states. Read more from the source - Business Wire.
Economic bulletins from Federal Reserve. Reports on economic conditions from the Federal Reserve's 12 regional bank districts. The survey was released Wednesday. SAN FRANCISCO: Retailers reported modest gains. Manufacturers reported growth in demand, and semiconductor sales expanded at a solid pace. Producers of commercial airplanes and defense products also saw further growth in orders. The housing market cooled further in most parts of the region, although there were scattered signs of stabilization of market conditions, notably in California. In agriculture, sales of most crops and dairy products expanded and prices remained firm. But California spinach producers have been struggling with weak demand, held back by lingering concern about food safety following a crop contamination in September. A recent cold snap has damaged citrus, avocado and some vegetable crops. Read more from the source - Business Week.
Timing puts spin on prices. Fresh data shows 2005 pricing was in vogue late last year. All four indexes reminded folks that hefty gains were history. Three price markers showed meager annualized appreciation. The other index, from California's Realtors, showed a price drop of 1.5 percent since January 2006. The folks hoping that recent housing sluggishness was going to end soon got nothing to build hope on. Unless they think that any evidence of price gains can be market-turning news. Who's exited the market? I'm guessing it's primarily the marginal buyer. These shoppers worry about a household budget that would be badly stretched by a home purchase. These folks likely buy lower-priced homes: Condos, for first timers; cheaper homes in a neighborhood, if they're owners considering moving up. These shoppers probably balked because they hope homes will only get cheaper, or because aggressive financing they might once have used is no longer readily and cheaply available. So who's buying? My guess is that this decidedly shrinking group is a better-financed crowd than we've seen previously. This type eyes trendier condos or the nicest home in a tract. Trust me, they didn't acquire their solid finances by being fools. They bought relative bargains, good deals on above-average homes. These wealthier buyers may be inflating price indexes. That's one challenge of price measures, no matter how they're calculated. It's tricky to account for the ever changing mix of buyers and the homes they like. Read more from the source - The Orange County Register.
~Tina Jan~
Coldwell Banker Kivett-Teeters
1655 E. Sixth St.
Beaumont, CA 92223
Work: 951-845-5520 Ext. 105
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tina.jan@coldwellbanker.com
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