Real Estate Investing

I had the privilege this morning of listening to Steve Murray, owner of REAL Trends (a leading source of analysis and information of the residential real estate industry) and editor of LORE Magazine which features success stories about some of the top agents in the nation.  Murray said REAL Trends has been tracking and predicting real estate data for years, including the 50 percent fall in the number of units sold from the peak 2005 to 2008.

In 2005, 8.3 million homes were sold. In 2008, that number had dropped to 5.4 million units.  The amount this drop in volume cost is estimated at $1 TRILLION.  Murray said 2009 is the floor with sales expected between 4.9 and 5.4 million units. We all now know the primary cause was due to the epic fail in consumer confidence coupled with NINJA loans = No income, no jobs, no assets.  Murray believes housing sales will resume their upward track in 2010 to 2011 and that housing prices will recover as sales increase.

Meanwhile, we will continue to see strategic defaults - or people who walk away from their mortgages when they 1) can’t afford the payments on 2) a house that’s no longer worth what’s owed.  These people will simply be OUT of the housing market for several years, however we wil see a gradual increase in housing sales and values in teh next five to ten years because the nation adds 1.2 to 1.4 million new households per year.

While we look to another year of flat real estate, you’ll see the exceptional agents flourish because superior service, transparency and trust mean more now than ever before.  It is really kind of an exciting time to watch who will be thriving this time next year.  Buyers and sellers will always go to the agents with the professional dedication and commitment to continue providing professional service.

I have to admit that I didn’t watch the Fowler episode of Wife Swap, but now I’m intrigued.  I think I’m fairly glad to have missed it after reading the scoop from The Front Steps:

Two million nine hundred twenty five thousand dollars could certainly buy a lot of home elsewhere. Hollywood? Not so sure. Missouri with all the “uneducated, overweight, dumb rednecks”? …uhhhhh yeah.

From Bigger Pockets, we have a link to Where Housing Will be in 2012 by Business Week.

2012 my seem like a long way off, but 28 months isn’t that far away. This Business Week article is a couple months old and it predicts a couple more down years followed by a return to normalization.

Real estate outlook: The recession is over from Realty Times.

One reason for the pick-up in consumer spending: People feel more confident about the direction of the economy in the months ahead. They see the stock market up, so their retirement funds and 401 K plans are bouncing back.

They see home values stabilizing or growing in most areas, so their equity is beginning to increase again.

The one big negative — and it’s definitely a drag for housing — is the unemployment rate, which Mr. Bernanke said won’t be coming down fast, even with the end of the recession.

Real estate sales are up!  What Do August Home Sales Numbers Really Mean? by CNBC.

New construction makes up 6.7 percent of total homes for sale. Existing, therefore, makes up 93.3 percent.

Inventories continue to come down for both new and existing, and there’s your bright spot.

Have a great weekend!

When I bought my first and second homes, I wanted to know what the square footage was.  Is it 1400 square feet or 2400?  Do you measure the outside of the house and add, or measure rooms and add them up to get the square footage?  According to an attorney who visited our office today, none of the above.

His advice to agents?  YOU should never measure a house yourself.  While it seems straightforward, figuring out the square footage of a dwelling can be tricky business.  There is no standard methodology for measuring - in fact three different appraisers, a professional measurer (is that a word?), an appraiser, and an agent could quite possibly ALL come up with a different number.

His next bit of advice?   If you publish the square footage of a home, always attribute where you got the number.  If it’s from the tax records, say that’s where you found it.  Additionally, agents would be wise to state in the MLS listing, “Information here not warranted or guaranteed” and add, “If square footage is important to you, you need to measure it yourself.”

Interestingly, in Texas - and perhaps other states - state law prohibits real estate agents from revealing the square footage according to the attorney today.  While I was unable to find evidence of that via my friend Google, I did see that square footage has not been listed for years in California.

Here’s an interesting discussion about the subject with points of views from many states.

Photo by Aussie Gall via Flickr Creative Commons.