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  • Do Appraisers Use Distressed Properties as Comparables?

    5:14 pm on February 8, 2012 | Comments:0
    Tags: , , , , pricing, , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Home owner information, pricing, Property Appraisal, Seller Info, Short Sale, Short sales

     

    Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

    “Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

    On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

    “An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
    And they explained the possible differences between short sales and foreclosures:

    “A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

    A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

    Bottom Line

    Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

    http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/

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  • Where Are House Prices Headed in 2012?

    9:15 am on January 19, 2012 | Comments:0
    Tags: , , , , , , pricing, , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Housing Market, investment, Median Sales Price, pricing, Second Home Buyers, Seller Info, Supply and Demand, The Housing Market

    by The KCM Crew on January 18, 2012

    There is no shortage of opinions as to where home prices are headed in 2012. From Clear Capital’s expectation that prices will show a ‘slight uptick’ this year to Fitch’s projection that prices ‘will fall another 13 percent’, there seems to be no consensus as to where real estate values are headed. How can there be such a disparity of opinion among industry experts? Prices are determined by the relationship between supply and demand and there are many unanswered questions regarding both of these components.

    Questions about Demand

    Will this be the year that the 5.9 million adults between the ages of 25 and 34 that are still living with their parents decide to purchase a home of their own?

    With mortgage payments lower than rent payments in the majority of the country, will first time buyers finally decide it makes more financial sense to buy rather than rent?

    Will the baby boomers take advantage of the great deals available and start purchasing vacation and retirement homes?

    Will investors continue to purchase large quantities of distressed properties?

    Will hedge funds negotiate a deal with the banks for bulk purchases of foreclosures?

    Questions about Supply

    Will 2012 be the year that builders again increase inventories of newly constructed homes?

    Will baby boomers put their primary residences up for sale and relocate to their retirement destinations?

    Will 2012 be the year that the shadow inventory of foreclosures finally makes its way to market?

    If prices depreciate, it will force more homes into a negative equity situation. Will this create another surge in short sales and foreclosures?

    Will the government put together a plan to convert large numbers of foreclosures into rental properties?

    Bottom Line

    With so many unanswered questions regarding both the demand for housing and supply of properties, it is very difficult to determine where prices will be at the end of the year. We suggest you contact a local real estate professional to help you determine where values are headed in your area.

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  • 15 Cities Where Listing Prices Are Rebounding

    11:50 am on September 27, 2011 | Comments:0
    Tags: , , , , , pricing, , ,   Filed under: Buyer Info, Charlotte County, Consumer news and advice, Manatee, NAR, National Association of Realtors, pricing, Sarasota, Seller Info, The Housing Market

    Daily Real Estate News | Friday, September 23, 2011

    By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

    Prices are rising in Florida: Florida cities have had the largest year-over-year increases in average list prices, according to the latest real estate data from Realtor.com. Florida cities make up 9 of the top 10 places for highest year-over-year list price spikes, based off of August data of 2.2 million listings in 146 markets.

    Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.

    Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices. 

    1. Miami
    Average list price: $640,332
    Year-over-year increase: 27.4%

    2. Fort Myers-Cape Coral, Fla.
    Average list price: $443,570
    Year-over-year increase: 26.27%

    3. Central-Fla.-RSA
    Average list price: $405,809
    Year-over-year increase: 19.41%

    4. Punta Gorda, Fla.
    Average list price: $267,066
    Year-over-year increase: 16.37%

    5. Macon, Ga.
    Average list price: $193,520
    Year-over-year increase: 15.98%

    6. Sarasota-Bradenton, Fla.
    Average list price: $466,785
    Year-over-year increase: 15.86%

    7. Naples, Fla.
    Average list price: $713,087
    Year-over-year increase: 15.13%

    8. West Palm Beach-Boca Raton, Fla.
    Average list price: $591,895
    Year-over-year increase: 14.68%

    9. Ocala, Fla.
    Average list price: $193,360
    Year-over-year increase: 12.07%

    10. Lakeland-Winter Haven, Fla.
    Average list price: $181,409
    Year-over-year increase: 11.48%

    11. Oralndo, Fla.
    Average list price: $319,419
    Year-over-year increase: 10.56%

    12. Portland-Vancouver, Ore.-Wash.
    Average list price: $314,537
    Year-over-year increase: 10.52%

    13. Boise City, Idaho
    Average list price: $212,588
    Year-over-year increase: 10.43%

    14. Springfield, Illinois
    Average list price: $174,537
    Year-over-year increase: 9.12%

    15. Shreveport-Bossier City, La.
    Average list price: $211,414
    Year-over-year increase: 8.34%

    Read More:
    August Existing-Home Sales Leap Despite Headwinds

    http://realtormag.realtor.org/daily-news/2011/09/23/15-cities-where-listing-prices-are-rebounding

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  • Top of the Class

    9:24 am on August 22, 2011 | Comments:0
    Tags: , , pricing,   Filed under: Consumer news and advice, Global Affiliates, International, Mayfair International, pricing, Seller Info

    By Nick Churton, Mayfair International Realty

    August 22, 2011

    Everyone knows that selling real estate is like shelling peas. Right?  Brokers and agents have it easy.  They just put on the internet – and the property is as good as gone at its ambitious asking price. Right?

    Wrong!

    What about selling real estate at a time when not so many are interested in buying?  When buyers are strapped for cash; when the banks aren’t lending so much or so easily; when the country is facing a harsh austerity period and at a time of tenacious financial uncertainty.  What about selling real estate when a seller may be demanding more than the market will stand?  What about selling real estate when people have more pressing things to think about?  And how about selling real estate for someone whose personal circumstances – joyous, sad or desperate – crucially depend on an agent’s efforts, despite all the above negative market conditions. Then selling real estate is not quite so easy as many might suggest.

    But, cometh the moment cometh the agent.  Of course when the market is in overdrive it is easier to sell homes.  But now, in many areas, matters are more serious.  Selling property in this market needs an agent with experience, with heart and foresight and skill and purpose. One with a steady hand who understands that moving home is often played out over two legs. There’s the home leg, selling, and the away leg, buying.  This is a time to play the long game and to see and understand the bigger picture – and to be able to communicate this to anxious clients.  There comes a time when selling property has to be put into the hands of someone who is seriously good at what they do. This is the time for hiring the top of the class.

    If you want the agent who – even against your own optimistic judgement – has priced your home way higher than every one else, do go ahead if that makes you feel good.  But what will really make you feel good is selling your home and moving on to another.  And for that, right now, you need a professional.

    Red Adair, the famous oil well fire fighter said it perfectly, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur!”  

     

     

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  • Florida Realtors Sales Reports June 2011

    12:08 pm on July 26, 2011 | Comments:0
    Tags: , , , pricing, , ,   Filed under: Buyer Info, Condominiums, Consumer news and advice, Florida Association of Realtors, Home owner information, Manatee, pricing, Sarasota, Seller Info, Statistics

     Click on charts for a printable format.

     

     

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  • High Rollers Move Up

    9:15 am on July 12, 2011 | Comments:0
    Tags: , , , pricing,   Filed under: Buyer Info, Consumer news and advice, Luxury, pricing, Seller Info, The Housing Market

    By Steve Cook

    RISMEDIA, July 12, 2011—While a third of homeowners struggle to stay above water on their mortgages, nearly a quarter of those in the upper income tiers have been trading up to take advantage of deals in the luxury home market.

    Lured by lower prices, one in four U.S. consumers with annual income of $150,000 or more have bought a residential property since 2008 at a median purchase price of $509,000, up 3.2 percent from the 2005 to 2007 period. Most new residences (83 percent) are single-family homes and two-thirds of these are in suburban settings. Seventeen percent plan to purchase additional property this year, while 23 percent of those younger than 50 plan to buy in 2011.

    According a new survey by the Luxury Institute and the Institute for Luxury Home Marketing, high net-worth homeowners are taking advantage of the downturn to trade up into higher-priced new primary residences. More than one-third (37 %) of the wealthy value their homes at $1 million or higher, while 32% assess their primary residence to be worth $500,000 or less.

    Seventy percent of wealthy home buyers used a real estate agent to help with their property purchase and two-thirds of those say that they would work again with the same agent.

    “Luxury home buyers recognize that many premium homes are available at relative bargains,” says Milton Pedraza, CEO of the Luxury Institute. “Similar to the luxury retail landscape, luxury home sales provide more evidence of durability at the high end of the market.”

    “Luxury is the good news story in real estate,” says Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing. “The number of wealthy households has jumped back to pre-recession levels and affluent home buyers are actively purchasing. The National Association of REALTORS®’ statistics show that national home sales at $1 million and above were up more than 18 percent year-over-year in 2010. Strong activity continues this year as well.”

    For more information, visit http://www.realestateeconomywatch.com.

    http://rismedia.com/2011-07-11/high-rollers-move-up/

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  • A Window of Opportunity for House Sellers

    1:38 pm on June 21, 2011 | Comments:0
    Tags: , pricing,   Filed under: Foreclosure, pricing, Seller Info

    by The KCM Crew on June 21, 2011

    There has been much confusion as to where housing prices are headed. We have actually blogged on the issue recently. Today, we want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices later this year and the first half of 2012.

    Why renewed downward pressure?

    Any item’s price is determined by ‘supply and demand’. In many parts of the country existing housing inventory is already high and actually increasing. In addition, an inventory of distressed properties (foreclosures and short sales) will be coming to market later this year. This inventory has been delayed for the last several months because of faulty paperwork by the banks when they originally attempted foreclosure proceedings on these homes.

    Celia Chen, of Moody’s Analytics explains:

    “Foreclosures are weighing on the outlook for U.S. house prices, and the slow resolution of issues surrounding the so-called robo-signing scandal is keeping distressed homes off the market”.

    The New York Times also recently reported on this issue. They looked at the delays in certain states. As an example, this is what they found in New York:

    “Last September, before the documentation crisis, nearly 1,500 New Yorkers lost their houses as a result of foreclosure, according to LPS. The average over the last six months: 286. That is far lower than at any point since the recession began.”

    Banks are now correcting these errors.

    There is evidence that the banks are getting their documentation in order and about to again increase their foreclosure repossessions. Housing Wirereported:

    “Since major lenders delayed foreclosures to fix a broken process late last year, the amount of filings declined, but in May signs emerged the effect might be wearing off.”

    They went on to quote RealtyTrac CEO James Saccacio:

    “…lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory…Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask.”

    What will this mean to home prices?

    As this inventory comes to market, it will impact prices in two ways:

    1. It will provide discounted competition for buyers
    2. It will impact the appraisal values of all homes in the area

    Again, we quote Celia Chen:

    “It is quite possible that house prices will pick up slightly in the second or third quarter of this year, as foreclosure sales remain depressed while nondistress sales pick up…By the fourth quarter of this year, however, the distress share will rise, sending the house price index back down…

    House prices will founder until early next year and start rising in earnest at the end of 2012.”

    Bottom Line

    There is a window of opportunity currently which sellers should take advantage of. Waiting until later this year or until next year will not guarantee a higher sales price. If anything, it probably guarantees the exact opposite.

    http://kcmblog.com/2011/06/21/a-window-of-opportunity-for-house-sellers/#more-8264

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  • 5 Reasons You Should Consider Selling Now

    12:06 pm on May 10, 2011 | Comments:0
    Tags: , , , pricing, ,   Filed under: Buyer Info, Consumer news and advice, Foreclosure, mortgage, pricing, Short sales

    by The KCM Crew on May 10, 2011

    If you plan on moving anytime in 2011, you should strongly consider selling your house now rather than waiting. Here are five reasons why:

    1.) This is when your house will get the most exposure 

    The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW! (More …)

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  • Spring Warms Luxury Demand

    8:48 am on May 5, 2011 | Comments:0
    Tags: , , pricing, , ,   Filed under: Buyer Info, Consumer news and advice, Luxury, pricing, Seller Info, The Housing Market, Wealth

    By Steve Cook

    RISMEDIA, May 5, 2011—It’s still very much a “cold” buyer’s market according to the Institute for Luxury Home Marketing’s April 24 Luxury Housing Report, but early numbers from the spring home buying season suggest that demand is warming up.

    Inventories of homes over $1 million built up over the winter, but even with more properties coming on market with warmer weather, increasing the national inventory from 27,500 to 32,500 since January, days on market have dropped markedly in recent weeks. (More …)

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  • Almost 14,000 Houses Sold Yesterday

    12:06 pm on May 3, 2011 | Comments:0
    Tags: , , , , pricing, , ,   Filed under: Buyer Info, Consumer news and advice, Foreclosure, NAR, National Association of Realtors, pricing, Seller Info, Statistics

    by The KCM Crew on May 3, 2011

    One of the biggest misconceptions in today’s housing market is that homes are not selling. That is simply not true. Last month’s Existing Sales Report from the National Association of Realtors (NAR) showed that homes were selling at an “annual rate of 5.10 million”. That’s an average of 13,973 every day – 365 days a year!

    And the monthly Pending Sales Report, which measures the number of houses going into contract each month, has showed increases in six of the last nine months prompting Lawrence Yun, NAR’s chief economist to say:

    “Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own. The index means modest near-term gains in existing-home sales are likely.”

    We realize that 40% of the sales are distressed properties and that 22% of buyers are investors. Yet, that still doesn’t negate the fact that homes are in fact selling… and 60% of them are NOT foreclosures or short sales.

    And Yun believes this uptick will continue:

    “Based on the current uptrend with very favorable affordability conditions, rising apartment rents and ongoing job creation, existing-home sales should rise around 5 to 10 percent this year.”

    Bottom Line

    Homes are selling. You probably will need to offer a compelling price if you put your house on the market. But if you do, it will sell.

    http://kcmblog.com/2011/05/03/almost-14000-houses-sold-yesterday/

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