Highly Ranked Schools continue to have a Positive Effect on Home Values

Given the strong correlation between high-performing schools and surrounding neighborhood home values, buyers and sellers should be aware of the ways in which well-ranked districts can affect values, especially in highly ranked areas.

So, what does this mean?

According to an article by Matthew Strozier in The Wall Street Journal last month, “schools have always been a driver for home buyers.” If purchasing a home in one of the higher ranked areas, buyers with school-age children can rest assured that their kids will be receiving a top-notch education. Buyers are making an investment in the future value of their home. It was also reported there were fewer foreclosures in high-ranking school districts, and Seattle was one of the cities included in the study, which showed that as the ranking of the school districts went up, the percentage of foreclosures decreased.

People will always seek the best education available for their children, and there is always competition to get into a great school district. For homeowners, this means the value of their property will hold as the market fluctuates. As Strozier writes, “Higher-rated school districts also maintained higher home-sale prices, and higher home prices per square foot.” For the residents of areas with high ranked public schools, this means that sellers can ask for a higher price than an equivalent home in a lower-ranked district.

Buying a home is a serious investment. Before taking the leap, educate yourself about the school system and the districts in your areas of interest. Don’t be afraid to ask questions. Don't allow national or regional statistics to make you believe otherwise. Even now there are well-qualified buyers wanting to buy homes in areas with good schools. Even if children aren’t in your future plans, owning a home in an area with high ranking schools, will greater ensure the value of your home especially in these uncertain economic times.

Ken Urman
Real Estate Broker, CDPE
(206) 230-0833

The Hyper-Local Housing Market: Mercer Island Isn't King County

At the beginning of this month The Seattle Times published a story about a 15% year-over-year drop in King County home prices. Although there has been an overall countrywide dip in home values, it doesn’t mean that everyone in King County will experience a full 15% decrease. Citing the Northwest Multiple Listing Service, the article reported that the median price of homes sold last month was $320,000, dropping 15% from October 2010. There are multiple factors that should be taken into account when looking at these statistics, especially the positives for our local area, as well as first-time buyers.
As the article mentions, interest rates are at a historic low, in some cases coming in beneath 4% for a 30-year term loan. Even if they show signs of dipping further, not all buyers can or will wait until rates hit their lowest point. Despite the shaky economy, people carry on with their lives, families expand, and those who have been gainfully employed might wish to purchase a larger (or first) home. As unemployment drops in Washington State the number of buyers on the market is likely to increase. For first-time buyers, low interest rates coupled with a flourishing market of homes for sale below $200,000 make the option of purchasing a home more viable than in previous years. As these first-time buyers enter the market they create a “push-up” effect, and more established buyers often look for larger homes or properties located in more affluent areas such as Bellevue or Mercer Island.
Interestingly, sales volumes in the state were up for the fifth straight month. The key to this statistic is that while the homes that are selling are smaller homes, more of them are being sold each month. The reason for this trend is unclear; perhaps it is first-time buyers, or maybe people are shying away from the erstwhile “McMansion” fads. Either way, the positive is clear: more people are buying homes. 
One of the most important facts that the article takes into account is that statistics from a single month do not constitute a trend. The real estate market constantly fluctuates. According to local online real estate brokerage firm Redfin, customers writing offers sharply increased in mid-October, right after interest rates dropped below 4%. These placed offers should bring an uptick to November closings. It should also be noted that King County encompasses a very large region including north and south Seattle, areas that include some of the lowest-priced properties on the market. In higher priced areas in the Seattle area and the Eastside, the decline in home sales prices was far less than 15%, in the single digits, meaning that homes in these areas held their values; a solid fact to consider when making an real estate investment.
We may not be able to ignore the numbers when it comes to home prices and interest rates, but there is more than one way of looking at them. National trends don’t dictate regional numbers, and for first-time buyers low interest rates and home prices are a boon.

Donald Trump: Why Now Is The Best Time Ever to Buy a House | Daily Ticker - Yahoo! Finance

Donald is keen on buying bank owned properties. One time I fully agree with Donald!

Donald Trump: Why Now Is The Best Time Ever to Buy a House Daily Ticker - Yahoo! Finance

Underwater Borrowers Hold Back Sales

I see this everyday.  A healthy economy and active Real Estate market depends on move-up action.

Daily Real Estate News | Wednesday, September 14, 2011

Declines in home values have pushed a high number of home owners to be “underwater,” in which borrowers owe more on their properties than they are current worth, and it’s hampering home sales, according to new data by CoreLogic. 
About 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter, down slightly from 22.7 percent in the first quarter, CoreLogic reports. What’s more, about 2.4 million borrowers had less than 5 percent equity, which CoreLogic refers to as “near-negative equity,” in the second quarter. 
Since the peak in home sales in 2005, nondistressed sales in ZIP codes with low negative equity have dropped 61 percent, compared to an 83 percent sales decline in high negative equity ZIP codes. 
“The typical seasonal changes in sales volume in high negative equity ZIP codes is very muted, which indicates that nondistressed sales are being heavily impacted by the high levels of negative equity in their neighborhood, even if sellers have equity,” according to CoreLogic’s report. 
“High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” says Mark Fleming, chief economist with CoreLogic. “The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices.” 

Why buy a bank owned property.....

A bank owned property is held and sold by the bank or institution with no sentimental attachment to the property.  Banks do not have an emotional stake, so they’re unlikely to enter into complicated negotiations.  Just the facts with no emotional attachment.

Banks and Investors favor Short Sales over Foreclosure

Reasons why:

• Short sales help neighborhoods
• Bank owned properties (REO's) sell for 10 to 15% less than Short Sales
• It helps borrowers save face and not face the embarrassment of a foreclosure
• The borrower can go back and buy another home a lot sooner after a short sale
• Short sales save the time to put an REO on the market
• Short sales help customers, buyers, agents, investors who own the notes and the neighborhoods

Foreclosure - don't let the process control you!

Take action now! Don't "bury your head in the sand". I often see situations where people have fallen behind and wait too long to seek help.  Bad strategy.  The better strategy is to do everything you can to remain in control of the situation.  Reach out - seek help.  Don't let the process control you!

You can't squeeze water from a stone!

Although I know banks that have tried.  For Short Sales, typically I believe if a borrower is facing a true hardship and has no assets nor means of making a mortgage payment, the lender is unlikely to try to force the borrower to pay back any of it. It does not mean a lender is not entitled to a deficiency judgment, if circumstances warrant.

"Can I short sell my house if I have not stopped making payments?"

The answer to this depends on your lender, the investor on the mortgage and timing.  In most cases lenders will consider an “Eminent Default Short Sale” provided the property is listed for sale. So if you are currently making your payments, but you have circumstances which will make it impossible for you to make the payments in the future then you are likely to have an eminent default and can potentially qualify for a short sale.  With short sales there are no guarantees. If you have any questions about short sales and have property on Mercer Island or the Eastside please contact Ken Urman, Distressed Property Specialist with Ewing and Clark, (206) 232-5700.

Just announced incentive for buyers of Fannie Mae REO properties

Buyers of Fannie Mae backed REO properties will receive 3.5% of the purchase price towards their closing costs. For many homebuyers, the added expense of closing costs is an unpleasant shock. This promotion may take some pain out of that first step in homeownership.

Promotion Guidelines:

• Buyer’s or seller’s agents must request the incentive with the initial offer
• Offer must be submitted on or after April 11, 201,1 and close by June 30, 2011
• The buyer must use property as a primary residence, and will have to sign an Owner Occupant Certification Rider included with the purchase contract
• If buyer’s closing costs are less than 3.5%, there is no credit for the difference

This is a terrific step towards clearing their portfolio of their

Proud to be Certified by RES.NET as an REO Agent

Just want to brag that I passed a rigorous certification course.  I am now a professional member of RES.NET with REO certification. 

SHORT SALES DO WORK.

Just closed one with great overall success.  All parties extremely happy. 1st time home owners, sellers starting over and an asset off the books for the bank.  Des Moines, Washington; 4br over 2,000 sq. ft.

A Fairer Foreclosure Process!

Mortgage Loan servicers made several concessions in their version of a settlement proposal that they recently submitted to federal and state regulators.
In an excerpt of the draft, obtained by DS News, servicers agree to stop “dual tracking,” or proceeding with a foreclosure while a borrower is under review for or in the process of completing a loan modification.  I'm sure we'll hear more about this in the next few weeks.

Double-digit rent rise is coming!!!!

According to Lesley Deutch of John Burns Real Estate Consulting. In San Diego, she anticipates rents will rise more than 31% by 2015. In Seattle rents will climb 29% over that period; and in Boston, they may jump between 25% and 30%. Read more....

Negotiating with Bank and Lenders

Keep communicating and keep pushing.  Always ask to speak to a superior / upper manager, the squeakiest wheels get the grease!  

Your battle with the banks can’t be personal, the person on the other end of the phone is not making judgments specific to you, they are following a criteria.  Think about it this way, if it fits they say yes, if it’s a little out of "shape" and it doesn't fit they say no.  Their system has little accommodation for any considerations or grey area.  You must be persistent and escalate whenever possible to get the outcome you desire.

Bullish on Housing!

Almost five full years into the housing downturn, it's still cool to be bearish on real estate. But cool isn't always right: Despite headwinds such as looming shadow inventory, a lackluster job market, and geopolitical instability, there are plenty of reasons why rose-colored glasses may be the real estate eye wear of choice.
Here are 10 solid reasons why it may finally be time to be bullish on housing ... of course there's always caveats like local and regional trends, but overall there's reason to be optimistic. Read further.
http://finance.yahoo.com/news/10-Reasons-to-Be-Bullish-on-minyanville-2628619.html?x=0&sec=topStories&pos=7&asset=&ccode

Word for today. "Recovery Score" or how long will it take to close a short sale?

It's a strategic way to prioritize collections and short sale process. I don't completely understand, but it just shows how complicated and hidden the banks can get with the process.

For prime mortgage servicers, GMAC conducted short sales the fastest, averaging roughly six months per transaction. Also, 53% of their dispositions were short sales. It had a recovery score of 59.3.
The next fastest servicer was Citigroup's servicing arm CitiMortgage, which did a short sale in about seven and a half months, and 56% of dispositions were short sales for a recovery score of 54.4.
Third, was Wells Fargo, conducting short sales in roughly eight months for 34% of its total dispositions. It had a higher recovery score than Citi, however, at 55.6.Countrywide, acquired by Bank of America, had the slowest short sale timeline. It took more than 13 months on average to conduct a short sale there. BofA took more than 11 months, but 59% of its dispositions were short sales. BofA had the lowest recovery score at 45.5.
More Info here:With short sales growing in demand from both distressed borrowers and banks, Deutsche Bank published a "recovery score", examining the speed at which the servicers conducted a short sale and the percentage these transactions take of overall property dispositions over the last year.http://www.housingwire.com/2010/06/23/deutsche-bank-ranks-servicers-on-speed-of-short-sales

Time to Invest!

According to Marcus & Millicahp a Real Estate Investment Service Company in the Seattle area there is growing confidence in apartments, hotels and even the downtrodden retail sector is helping pull investors off the bench and back into the game.  Some 55% of all respondents to a survey conducted by National Real Estate Investor and Marcus & Millichap Real Estate Investment Services believe that now is the time to buy apartments, followed by retail (32%), undeveloped land (29%), hotel and mixed use (26%), and office and industrial (24%). That enthusiasm is even strong among investors who already own apartment properties, with 70% indicating that now is the time to buy. Conversely, only 36% of office owners believe now is the time to buy office properties. Apartment owners also are bullish on rents, with 41% anticipating that rents will increase over the next 12 months.

"The rental market is just going to continue to improve" for landlords, said Tom Cain, president of research firm Apartment Insights Washington.

Perhaps a sign the shift may be coming?

http://seattletimes.nwsource.com/html/businesstechnology/2013469757_alto19.html

I hope they're right!

DELAYS????????

Mortgage servicers -- the companies that process monthly payments -- have been ill-equipped to handle the large volume of foreclosures. While it may seem counterintuitive, they seem to have reasons to drag their feet:
· Servicers' philosophies and directives are "constantly in flux,". One may need to raise cash to meet regulatory guidelines, while another may have too much inventory of unsold real estate on its books. Staid corporate cultures and high staff turnover contribute to slow decision-making.

· Servicers don't want to take on the legal and financial responsibilities of owning more homes. As soon as the foreclosure is completed, the lender "immediately assumes liability and carrying costs,". Examples of such costs include property taxes, casualty insurance, repairs and maintenance, and homeowner association dues.
Read more: What delays a mortgage foreclosure http://www.bankrate.com/finance/mortgages/a-foreclosure-takes-forever-here-s-why-1.aspx#ixzz180oiNHsY

Six hundred days. That's how long, on average, mortgage loans in the foreclosure process in New York have been delinquent. That's the longest average in the nation, but not by much, according to LPS Applied Analytics, in Jacksonville, Fla. Loans in foreclosure in Florida, New Jersey, Hawaii and Maine have been delinquent more than 500 days, on average, while home loans in California and Nevada have been delinquent 461 and 427 days, respectively. In the two speediest states, Nebraska and Wyoming, loans in the foreclosure process are delinquent by an average of 358 days.