Archive for August, 2010
HOW TO MAKE MONEY IN SHORT SALES?
by: Maria Hass
The conditions surrounding today’s real estate market are interesting and something most of us have not seen in our lifetimes. Short sales continue to dominate the inventory, and if you are a savvy investor with cash or enough to make a large down payment, you might take a chance on purchasing short sales to rent out.
Although short sales take a longer time to close, the properties are oftentimes occupied by tenants who would like to continue renting from the new owner. Many starter homes in Pinal County, San Tan Valley, Apache Junction cost 50 percent less to buy than to rent.
Say for example, a 3-bedroom, 2-bath home I listed recently in a great location in Apache Junction. A Canadian cash buyer purchased the home for $70,000 in one day. If it were financed, the monthly mortgage payment would have been around $300 – $350. The going rental rate in that neighborhood is $850 – $900 a month. This means an immediate 75 percent positive cash flow — way better than what you can get for stocks or bonds.
I have another listing in San Tan Valley. The home is in a popular neighborhood and in pristine condition, listed at $105,000. The monthly mortgage payment is estimated at $450 and the rentals in that area are going for $1000 per month. This is over 50 percent positive cash flow.
The rental market remains strong, as many people leave their homes due to foreclosures and short sales.
If you are thinking of making money in real estate the right way, please contact my office at 480-650-0075.
THE FUTURE OF FANNIE AND FREDDIE
Airtime: Tues. Aug. 17 2010 | 6:10 AM ET
Treasury Secretary Timothy Geithner addresses a summit: “The Future of Housing Finance,” and discusses the role of Fannie & Freddie in the housing market.
http://www.cnbc.com/id/15840232?video=1568158875&play=1
Our future lies in the hands of Fannie Mae and Freddie Mac which our government recently took over. Majority of homes are owned by Fannie and Freddie. In simple terms, the government owns your home. Uncle Sam has not come up with a plan that works. Hopefully, this plan would solve the housing mess as quickly as possible. The executives of Fannie and Freddie should also face legal scrutiny for taking on loans without enough reserves to cover the losses. They should be held accountable for bad and deceitful decisions they made which resulted to their private gain at the expense of heavy taxpayers losses. Who among our corrupt leaders be the first to say that outloud?
WHAT IS THE SOLUTION TO THE HOUSING CRISIS?
By: Maria Hass
“Mortgage Amnesty” is key to finding an end to America’s national housing crisis.
The source of this mess goes back to homeowners owing more than their house is worth. Lenders continue to value homes based on prior levels of the real estate hype, not at current values. Lenders should consider reducing the mortgate principal of homeowners based on current, realistic values to stop foreclosures and short sales. By doing so, their investments on these properties will appreciate sooner and consumer spending will increase if borrowers have equity on their homes.
Instead, banks’ loan modification efforts will just prolong the pain and agony faced by the lending industry and the economy. Many loan modifications approved by the banks DO NOT reduce the principal mortgage — ironically it increases the loan. Homeowners will have to stay in their homes 20 to 25 years to repay such loans. Most people will sell their homes before that and because they are still upside down, their only options are short sale or foreclosure.If short sales and foreclosures continue, home value appreciation will be hard to achieve. Demand for houses will decline as buyers are waiting to hit bottom and inventory will increase, thereby forcing prices to decline further. This will result in “deflation” in the housing market and the economy as a whole.
To solve the housing crisis the question must be asked: “What does it take for true appreciation to take place?”
Let’s begin by clearing out the short sales and foreclosures. Once people are convinced that true appreciation of home values has been achieved, real estate activity will increase dramatically as more buyers feel the sense of urgency to buy NOW rather than wait.
Fannie Mae and Freddie Mac own 80 percent of the mortgage loans. The federal government gave them 13 Million courtesy of our tax dollars to help homeowners avoid foreclosure. Our future now rests in the hands of Freddie and Fannie.
RENTAL MARKET IN METRO PHOENIX GAINS STRENGTH IN TROUBLED TIMES
By: Maria Hass
Chandler.azcentral.com reported on July 31, 2010 that rental vacancies have gone down in South East Valley. This is not surprising as more homeowners who leave their homes due to short sales and foreclosures turn to renting apartments or single family homes. As the surge of distressed homeowners continue, demand for rental living spaces will increase and rental values may improve. In four to five years, more renters than homeowners will emerge. Many of whom will not be able to buy a home due to a foreclosure or short sales. Others prefer to rent while watching the market hit bottom. What this means for displaced homeowners is, to plan ahead on arranging their future home to be certain that you have a place to stay at values you can afford prior to being forced out of their homes.
April-June Vacancy Rates in 2010 Compared to the same Period in 2009
Ahwatukee Foothills 6.2% from 9 %
North Tempe – 10% from 13.1%
South Tempe – 7.1% from 9.2%
North Mesa – 13.4% from 13.5%
South Mesa -11.3% from 14.3%
East Mesa/Apache Junction 5.9% from 10.1%
Gilbert/Supersiton Springs 7.1% from 7.2%
South Gilbert/Queen Creek 7.2% from 11.1%
Chandler 8.7% from 10.6%
Arizona Bargain Homes Weblog 