Jamie Schou Real Estate

NEW YORK (CNNMoney.com) — Existing home sales surged in October to the highest level in more than 2-1/2 years, according to a real estate industry report issued Monday.The National Association of Realtors reported that existing home sales rose 10.1% last month to a seasonally adjusted annual rate of 6.1 million units, up from the downwardly revised rate of 5.54 million in September.

The sales beat forecasts of 5.7 million annual units, according to a consensus estimate of analysts compiled by Briefing.com, and were 23.5% above the 4.94 million-unit pace of 12 months ago.

Sales activity is the highest since February 2007, when the annual rate was 6.55 million.

The gain was likely due to an influx of buyers looking to take advantage of an $8,000 tax credit that the Obama administration made available for qualified first-time home buyers, the report said.

The tax credit was scheduled to expire at the end of November, but it has been extended to April 30 and expanded to include more home buyers.

“Many buyers have been rushing to beat the deadline … and similarly robust sales may be occurring in November,” NAR chief economist Lawrence Yun said in a statement.

Make money in 2010: Your home
But such a spike means December and early 2010 will probably see a “measurable decline before another surge in spring and early summer,” Yun said.

Adam York, economist at Wells Fargo, agreed that “it’s really a story of the tax credit, and a payback is inevitable.”

Still, October’s 10.1% gain “was a big, big jump,” York said, and he expects only a 5% decline in the coming months.

“We will certainly will see some pickup into first part of next year,” York said. “The expansion of the tax credit could bring in a whole new segment of people to the market.”

Price and inventory. The median price of homes sold in October was $173,100, a 7.1% year-over-year drop. Distressed properties comprised 30% of the houses sold during the month.

Buy a foreclosure: 7 tips
The sales increase helped reduce some of the supply of homes on the market. Total housing inventory fell 3.7% to 3.57 million existing homes for sale. That’s a 7-month supply, down from an 8-month supply in September.

Sales by property type. Single-family home sales rose 9.7% to a seasonally adjusted annual rate of 5.33 million in October from a pace of 4.86 million in September, and are 21.4% above the pace 12 months ago.

Condominium and co-op sales jumped 13.2% to a seasonally adjusted annual rate of 770,000 units, from 680,000 in September, and are 40.8% above October 2008′s rate.

Sales by region. Total existing home sales rose the most in the Midwest, surging 14.4% in October to a pace of 1.43 million. That’s 28.8% above a year ago.

In the Northeast, sales rose 11.6% to an annual level of 1.06 million; sales in the South jumped 12.7% to 2.30 million; and the West saw the smallest increase, up 1.6% to 1.31 million.

For info on buying opportunities in Tahoe and Truckee contact me!  View all listings at http://www.jamieschou.com/search-properties/ 

Jamie Schou
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jschou@kw.com

NEW YORK (CNNMoney.com) — Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunters.

Just because prices are low doesn’t mean you should make snap decisions or buy something that isn’t right. Here are 7 tips for making sure you don’t get taken for a ride.

1. Don’t get caught up in a feeding frenzy

“Everybody and their grandmas are trying to buy foreclosures,” said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn’t mean you should lose your head.

Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity.

Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains.

Don’t get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price.

2. Contact lenders directly

Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market.

In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale — buying a home for less than what the current owner owes on the mortgage — she should talk directly to the property’s asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders.

3. Get pre-approved from the lender you want to buy from

If you’re trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it’s similar to others.

Plus, you’re not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.

4. Consider fix-ups

Most REOs, the industry term for bank owned properties, are sold as is. “The conventional wisdom is that banks will do nothing to the houses before the sale,” said Kelman.

That can be problematic today because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leaving

In 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder — one who doesn’t ask the bank to pay for repairs.

So be willing to consider a home that needs some work — but budget accordingly.

5. Hire a real estate attorney

Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.

The solution is to hire a real estate attorney — even in states where home sales are usually completed without one. Considering you’re making a six-figure investment, the legal fees are cheap insurance against the risks.

6. Wait to make an offer

Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in.

“Talk to the agent selling the property,” said Kelman. “The agent may tip his hand. Call up and ask, ‘Should I make an offer? What should I come in at?’”

The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders.

7. Tour properties with contractors

With so many REOs in seriously deficient shape, it’s essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them.

A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance.

By Les Christie, CNNMoney.com staff writer
First Published: November 19, 2009: 4:09 AM ET

Are you looking for a deal on a new home. The prevailing formula that home buyers and investors are looking for have a common characteristic. Is the home I am going to buy a good deal?Motivated sellers are what driving the market. And yes, banks who have REO property are considered motivated sellers. These are people that are willing to deal to sell the home, not those who are listing to see what happens or still expect 2006 prices.

Lets face it, all these government programs sound great on the evening news, but realistic home prices sell homes.

I learned a great lesson in college by a professor of marketing. When you go into McDonald’s, you will not buy a $10 dollar hamburger. It is just not going to happen. Yet if you are in a fancy restaurant, you would be confused by a $2.49 quarter pound burger.

Perspective is everything. If you think you are being overcharged you pull back and if you feel you are getting something inferior you will also postpone the buying decision.

That is why capitalism works so well. If the markets had their way, we would have been out of this mess a while ago. Prices would have fallen drastically as the bubble burst and then buyers would have raced in to get the deals. It would have been a painful and quick experience.

Instead we are in a period of slow decline as buyers wait for the next big government program, price drop, or indicator that we have a bottom.

It is the death of a thousand cuts.

So what markets where motivated sellers are dominant. They will drive prices to the point that buyers will know they are getting a fair deal and have the potential to make a profit.

Top 10 Smart Markets To Purchase A home In For 2009

Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose
Atlanta

via Forbes

Most states continued to experience rising existing-home sales in the third quarter, with prices moderating in many metro areas, according to the latest survey by the NATIONAL ASSOCIATION OF REALTORS®.Total state existing-home sales, including single-family and condo, increased 11.4 percent to a seasonally adjusted annual rate of 5.30 million units in the third quarter from 4.76 million units in the second quarter, and are now 5.9 percent above the 5.01 million-unit pace in the third quarter of 2008.
Sales increased from the second quarter in 45 states and the District of Columbia; 28 states and D.C. saw double-digit gains. Year-over-year sales were higher in 32 states and D.C.

Lawrence Yun, NAR chief economist, said the tax credit is a significant factor. “We can’t underestimate just how powerful a catalyst the first-time home buyer tax credit has been for the housing sector,” he said. “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.”

During the third quarter, 123 out of 153 metropolitan statistical areas2 reported lower median existing single-family home prices in comparison with the third quarter of 2008, while 30 areas had price gains.

The national median existing single-family price was $177,900, which is 11.2 percent below the third quarter of 2008; the median is where half sold for more and half sold for less. Distressed sales – foreclosures and short sales – accounted for 30 percent of transactions in the third quarter, which continued to weigh down median home prices because they sell at a discount relative to traditional homes.

“The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas, but we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market,” Yun said. “Foreclosures will continue to come on the market, but rising sales from the expanded tax credit should stabilize home prices by next spring and help to stem future foreclosures.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 5.16 percent in the third quarter from a record low 5.03 percent in the second quarter, but was dramatically lower than the 6.32 percent average rate in the third quarter of 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he is encouraged by recent actions in Congress. “Extending and expanding the tax credit to more buyers through the middle of next year is the right medicine,” he said. “Congress understands the impact of housing on the economy, so consumers who aren’t able to complete a transaction before the end of this month now have a second chance but must have a contract in place by April 30.”

The biggest sales gain between the second and third quarters was in North Dakota, up 42.3 percent; followed by Rhode Island which rose 26.5 percent; and Pennsylvania, up 25.6 percent.

The largest single-family home price increase in the third quarter was in the Cumberland area of Maryland and West Virginia at $122,100, up 19.2 percent from the third quarter of 2008. Next was the Davenport-Moline-Rock Island area of Iowa and Illinois, where the median price increased 14.3 percent to $115,600, followed by Oklahoma City, at $144,100, up 9.1 percent from a year ago.

“The wide range of market performance and reversals around the country, ranging from double-digit gains to double-digit losses in both sales and prices, underscores just how local real estate truly is,” Yun said. “The wide changes and mix of numbers also indicates a market in transition, hopefully to one that is becoming more balanced and stable.”

Median third-quarter metro area single-family home prices ranged from a very affordable $61,400 in the Saginaw-Saginaw Township North area of Michigan to $566,000 in the San Jose-Sunnyvale-Santa Clara area of California. The second most expensive area in the third quarter was San Francisco-Oakland-Fremont at $538,100; followed by the Anaheim-Santa Ana-Irvine area of California at $498,800.

Other affordable markets include the Youngstown-Warren-Boardman area of Ohio and Pennsylvania at $70,700, and Lansing-East Lansing, Mich., at $86,600.

In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was $178,000 in the third quarter, down 15.4 percent from the third quarter of 2008. Four metros showed annual increases in the median condo price and 51 areas had declines.

The metros experiencing condo price gains were San Diego-Carlsbad-San Marcos, at $215,100, up 13.3 percent; followed by the Cincinnati-Middletown area, up 2.0 percent to $119,700; the Toledo, Ohio, area, where the median price of $130,400 rose 1.7 percent from the third quarter of 2008; and the Indianapolis area at $114,400, up 0.8 percent.

Metro area median existing-condo prices in the third quarter ranged from $67,600 in Las Vegas-Paradise, Nev., to $432,800 in San Francisco-Oakland-Fremont. The second most expensive reported condo market was New York-Wayne-White Plains at $297,500, followed by Boston-Cambridge-Quincy at $293,700.

Other affordable condo markets include Reno-Sparks, Nev., at $81,300 in the third quarter, and Jacksonville, Fla., at $91,600.

Regionally, existing-home sales in the Northeast surged 16.7 percent in the third quarter to a pace of 930,000 units and are 6.9 percent higher than a year ago.
The median existing single-family home price in the Northeast declined 9.4 percent to $244,500 in the third quarter from the same quarter in 2008. The best price gain in the region was in Buffalo-Niagara Falls, N.Y., where the median price of $119,700 rose 4.8 percent from the third quarter of 2008; followed by Manchester-Nashua, N.H., at $237,600, up 2.6 percent; and the Pittsburgh area, where the median price rose 1.5 percent to $124,600.

In the Midwest, existing-home sales jumped 13.2 percent in the third quarter to a pace of 1.20 million and are 5.2 percent above a year ago.

The median existing single-family home price in the Midwest was down 5.5 percent to $150,200 in the third quarter from the same period in 2008. After Davenport-Moline-Rock Island, the next strongest metro price increase in the region was in Cedar Rapids, Iowa, where the median price of $145,700 was 7.6 percent higher than a year ago; followed by Bismarck, N.D., at $157,200, up 7.5 percent; and Ft. Wayne, Ind., where the median price rose 6.9 percent to $102,500.

In the South, existing-home sales rose 11.3 percent in the third quarter to an annual rate of 1.97 million and are 5.9 percent higher than the third quarter of 2008.

The median existing single-family home price in the South was $160,000 in the third quarter, down 7.9 percent from a year earlier. After Cumberland and Oklahoma City, the next strongest price increase in the region was in Shreveport-Bossier City, La., at $152,300, up 8.6 percent from the third quarter of 2008; Jackson, Miss., at $141,200, up 4.6 percent; and Durham, N.C., where the median price rose 3.6 percent to $184,300.

Existing-home sales in the West increased 5.6 percent in the third quarter to an annual rate of 1.19 million and are 4.6 percent above a year ago.

The median existing single-family home price in the West was $224,000 in the third quarter, which is 16.4 percent below the third quarter of 2008. The best metro price performance in the West was in Yakima, Wash., where the median price of $158,400 rose 2.7 percent from a year earlier; the Denver-Aurora area at $229,100, up 1.8 percent; and the Kennewick-Richland-Pasco area of Washington, where the median price rose 0.7 percent to $172,200.

Source: NAR

Here is a good explaination of the Homebuyer Tax Credit.

Please contact me with any questions.
Jamie Schou
Direct 530.798.1393
jschou@kw.com

Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of REALTORS®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9.The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8.

Lawrence Yun, NAR chief economist, said the momentum is understandable.
“What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

Watch a video interview of Yun as he talks about these latest pending-home sales trends.

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago. In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

- NAR