Saturday, October 20, 2012
A new real estate boom appears to be taking root and spreading across the U.S., but is this really the investment opportunity of a lifetime or are we being set up for another exploding bubble?
What Would Warren Buffett Do?
Legendary investor Warren Buffett has been known to dominate the headlines and even made the cover of Time Magazine, so what's he talking about? Buffett's recent crusade has been focused on selling the benefits of real estate investing and pointing out an array of indicators which suggest a new, extended period of growth. This is a view being echoed around the country from veteran real estate agents who say, in certain markets, a seller's market is definitely here again.
The New Gold Rush is On ...
Those who can afford it are bidding on packages of 500 rental properties being offered by Fannie Mae, while others are racing to foreclosure auctions or bidding on as many short sales as they can.
Prices are as close to bottom as most can predict, and the fear is that soaring home prices (due to shrinking inventories), the potential evaporation of REO and short sale opportunities in the near future, and a potential rise in mortgage rates will cause the best opportunities to fade quickly.
In principal the strategy appears to be sound. After all, banks are now paying selected homeowners up to $35,000 to complete short sales and get out, making cutting deals a breeze for investors. But are we getting set up for another great fall?
Over-Confidence Breeds Dangerous Speculation: Are You Being Fooled?
It truly is a great time to invest in real estate for those who buy wisely, buy low and have the finances to do so. Unfortunately, the contagion of overconfidence already seems to be infecting the masses, luring novices into acquiring properties they believe they can flip like the investors on a reality TV show.
Stories are emerging of buyers overpaying for homes and multifamily apartment buildings and even a surge in investing in the junk subprime securities which were supposedly to blame for the whole housing crash six years ago. It seems some people will never learn or just enjoy gambling.
How to Invest Wisely in the New Rebound
When utilized wisely as part of a diverse portfolio, real estate investment can be the best move for most Americans to build wealth and subsidize their incomes in retirement. Between passive cash flow, appreciation as a hedge against inflation, and depreciation to offset taxes, it is incredibly attractive. However, there are a few rules which must be followed:
1. Define Your Goals
Before acquiring any property, ensure that you have defined your financial and personal goals and that your investment decisions are aligned with them.
2. Is Your Home the Worst Investment You can Make?
For many, purchasing a home can create forced savings and eventually become the best investment they ever make. However, your own residence and home equity should never be something to gamble with. It's where you live; your investments are for paying for that. Don't confuse the two.
3. Don't Invest in Real Estate Until You Are Financially Ready
Real estate is somewhere to put your money to work for you. No money down real estate investing is possible, and it can be a way to make money, but if you bite off more than you can chew and don't have any savings or reserves, you are asking for bankruptcy.
Make sure you are prepared for the worst, have separate personal savings which are sufficient to carry you through for several months, and have an exit strategy before you get in as well as a plan B and C.
Don't Believe the Hype!
There are many ways to invest in real estate and even more silver-tongued professional sales people to pitch them. Choose a solid strategy and be wary of distractions that can lead you into investing in all types of exotic locations and structures you don't really understand.
Note investing, construction, commercial properties and starting property management companies can all be exciting and profitable, but just as with stocks, it may be safer to invest in what you know.
Protecting Yourself Against Market Fluctuations
The most important thing for anyone considering real estate investment is to get educated. Don't worry, this doesn't mean having to go back to school or picking between tacky late-night infomercial products. However, it does mean learning more about the potential risks, how to protect against them, real estate cycles and the signs of negative fluctuations to watch for.
Buy-and-hold investing and creating a portfolio of rental properties is hot right now and has the potential to create incredible wealth over the long term. Just realize how long you may have to hold your investment and what the penalties could be if you need to cash out early in less buoyant times.
For more information on investing in this real estate market read more
Friday, July 6, 2012
Despite the pall and gloom surrounding the nation’s real estate market, there are pockets across the country showing some recovery signs. A new economic index released by the National Association of Home Builders measuring improvement in areas such as housing permits, employment and housing prices for at least six months found a string of cities slowly emerging from the housing slump. On the spotlight are: Alexandria, LA; Anchorage, AK; Bangor, ME; Bismarck, ND; Casper, WY; Fairbanks, AK; Fayetteville, NC; Houma, LA; Midland, TX; New Orleans, LA; Pittsburgh, PA and Waco, TX. “By examining key indicators of home prices, employment and housing permits data, we are using a comprehensive, but conservative method in determining which markets are improving,” said NAHB Chief Economist David Crowe in a press release. “Last year at this time, there was not a single market that showed improvement using these criteria, and now we can point to 12 examples of growth.” Crowe said many of the states represented in the list were energy-rich areas with strong employment driving housing demand. Whatever the reason, any sign of growth is a bonus these days and we can all surely hope that the good showing in these cities would rub off on its neighbors.
Low Mortgage Loan Interest Rates ContinueYet more nudging for potential homebuyers from the mortgage industry. Mortgage loan interest rates plummeted to the lowest level in four decades this week, according to Bloomberg. The average rate for a 30-year fixed loan slid 4.12 percent, down from 4.22 percent earlier, according to Freddie Mac. That’s the lowest in the company’s history since 1971, according to Bloomberg. The average rate for a 15-year fixed loan tumbled to 3.33 percent. But are homebuyers getting lured by the attractive interest rates? Apparently not, according to Patrick Newport, economist at IHS Global Insight. “The reason interest rates are dropping recently is that the outlook for the economy has gotten weaker,” Newport told Bloomberg. “A smart person would be very careful about buying a home unless he thinks his job is very secure.” Looks like a lot of people are considering the economic outlook. According to Mortgage Bankers Association, applications for mortgages decreased 4.9 percent in the week ended Sept. 2.
Refinancing Mortgage Loans May Not WorkRemember all that talk about making refinancing easier and stimulating the dreary housing market? A recent report by the non-partisan Congressional Budget Office said that it would “not address many of the problems facing the U.S. Housing market,” and the benefits would be not as significant when compared to the size of the housing market, the mortgage industry and the overall economy. The plan would be expensive for mortgage investors even though it would help borrowers and lower federal guarantee costs, the report said. The CBO paper would ruin the chances of an already shaky Team Obama finding broad support for its refinancing proposal, according to Reuters. The White House plan aims at cutting borrowers’ monthly payments and increasing their cash on hand. CBO estimated that it would provide $7.4 billion in savings for borrowers in the program’s first year, but private investors would take a hit of $13 billion to $15 billion. From the looks of it, it seems highly unlikely that the White House’s proposal will find supporters in Washington. We all may have to wait for some more new ideas to come through.
Group Warns Against Further Housing Market DeclineConsumer advocacy group National Mortgage Complaint Center wants Congress to act on legislation to restore buyer tax credit. The group, which follows and responds to complaints in the residential real estate market, is asking all qualified buyers be offered a tax credit. The group came down heavily on the Obama administration, calling the President’s attempts to help homeowners in foreclosures or loan modifications “an utter failure and a waste of taxpayer money.” "We desperately need to stabilize the US residential real estate markets, and we think restoring the Federal Tax Credit for a home purchase would a huge step in the right direction,” the group said in a press release. NMCC suggests that the tax credit be increased to $15,000 and should apply to everyone including investors.
Wednesday, April 11, 2012
Friday, January 13, 2012
conveniences, when people’s only option for their daily news was
Friday, January 6, 2012
It’s Time for Christmas Tree Recycling in Long Beach & Lakewood California
Several years ago I read a very cute poem about how a Christmas tree who didn’t understand how he could go from being the center of attention and so loved and adorned to being striped of all his fancy attire and then thrown out onto the sidewalk and abandoned.
Christmas tree recycling is a relatively new event but one that I welcome … to have our Christmas trees serve a new purpose somehow takes the sting of letting it go a little easier
And so the time has come for this ritual to begin again … I am always saddened by this act; this tree which has brought so much pleasure into our lives that we must now say goodbye to … it seems being sentimental about turning the lights out for the last time runs parallel with “get this thing out of here … I want to get the house back to normal”
Long Beach has a wonderful website with information on tips about Christmas tree recycling and more to the point … have your tree at the curb Saturday from 7 am on and it will be picked up
Lakewood has their own program and Christmas tree recycling information on their website as well. I hope you will join your neighbors in recycling your trees.
Jane Whitten – Realtor Serving the Long Beach & Lakewood Areas can be reached at 562-882-1581 or by visiting www.RealEstatebyJane.com
Friday, December 23, 2011
Well, this morning was no exception and I liked it so much I wanted to share it with you.
On this day in history (December 23rd) in the year 1823, the poem "Account of a visit From St. Nicholas" was published anonymously in the Troy (N.Y.) Sentinel; more popularly known as "Twas the Night Before Christmas," and was later attributed to Clement C. Moore.
So many traditions have been started by this one simple poem that it started me thinking about all of the holiday traditions we have that are woven into the fabric of our seasonal celebrations.
I hope you can take a moment to savor and enjoy the special holiday traditions you have and continue their legacy by building new memories for this holiday season of 2011.
Wednesday, April 27, 2011
This months video newsletter talks about how much time you should spend with a real estate agent ... take a quick peek at this video and then when your are ready to know more about selecting the perfect home … visit my website www.RealEstatebyJane.com or just give me a call 562-546-2486 I would be happy to answer your questions.