Warren Buffet Speaks on the US Housing Market

Warren Buffet Making Big Bets on Housing Market –Global Edge

Warren Buffett, arguably the world’s most famous investor, is looking to take a $3.85 billion bet on a US housing market recovery.
His firm Berkshire Hathaway Inc has submitted a $3.85 billion bid for the mortgage and loan business of bankrupt Residential Capital LLC.

Buffett is taking a “picks and shovels” approach to his investment in a US housing recovery by buying firms he believes will benefit strongly from an upturn without purchasing real estate directly. He recently bought shares in a large US brick making company.
Encouragingly for agents and developers selling US property internationally, the world’s third richest man told CNBC earlier this year that his preference would be to invest directly in residential US real estate if the administration costs were not prohibitive.
“If I had a way of buying a couple hundred thousand single-family homes and had a way of managing—the management is enormous—is really the problem because they’re one by one. They’re not like apartment houses. So—but I would load up on them and I would—I would take mortgages out at very, very low rates,” he said.

The news on the US real estate market is not consistently positive but foreclosure have fallen on an annual basis for 20 straight months, according to RealtyTrac Inc., and home prices jumped 1.8 percent in March, the biggest monthly increase in at least two decades.  Here is the article from Global Edge.

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 If you have any questions regarding property management, buying, selling, or leasing South Florida Real Estate please call Whitney Dutton @ 954-614-6517 or by email at Sales@WhitneyDutton.com visit my website at www.whitneydutton.com

-Whitney Dutton - Agent - Lic # 3248950 -

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Supply Shrinks, Rentals Stay Hot, and Capital Gain Tax Grows!

Supply of Available Homes for Sale is at Record Lows

Pending home sales dropped in April and June for the first time in over 8 months, but not because of a lack of demand.  Homes sold have been outnumbering new homes coming to market for the past two years causing a trend that is starting to cause an obvious flat-line. 

What does this mean for prices?  If fewer homes come to the market and homes continue to go under contract; demand will outweigh supply and create an increase in home prices.  An increase in home prices will then hopefully draw the attention of the people who were on the sidelines waiting to sell i.e. those sellers who were once unable to sell their home due to being underwater and owing to much on their mortgage. 

CLICK TO SEE CHART OF PENDING SALES VS AVAILABLE HOMES

Investors are buying to “Hold” Instead of “Flip” to Maximize Return

With over 20% of all single family transactions selling to investors, many have decided to rent the home and make a solid 8-15% monthly return and wait for an increase in pricing before they sell.  2013 will be a big year for property managers as investors continue to take advantage of this shortage in supply.  With low supplies investors are not buying at low enough levels to command a margin to flip the property.  Instead, they will take advantage of the booming rental market and sell 2-3 years down the road for a sizeable profit.

First time homebuyers are not only faced with the difficulty from a very low supply of homes but also from the competitive edge cash strapped investors are bringing to the market.  Sellers are very eager to take a cash offer from an investor over the first time home buyers financed offer that may or may not appraise.  This is causing another sharp and steady increase in once interested buyers who are now faced to rent and sign that lease for at least another year.  

Capital Gains Tax Increase is Coming: Push to Sell in 2012!

As the political race comes near so does the end of the Bush Era Tax Cut.  Your capital gains tax rate is going to increase from 15% to 20% starting January 2013.  What does this mean to you as a real estate owner?  If you’re a home owner thinking about selling your home and stand to make more than the standard exemption of $250,000.00 or a real estate investor with a list of available properties that need sold you may want to think about a price reduction to increase traffic; you could be facing a 5% increase in your CG tax if your closing falls in 2013 .

Follow me on Twitter! @SouthFLRealEst8

 

 If you have any questions regarding property management, buying, selling, or leasing South Florida Real Estate please call Whitney Dutton @ 954-614-6517 or by email at Sales@WhitneyDutton.com visit my website at www.whitneydutton.com

-Whitney Dutton - Agent - Lic # 3248950 -

-Berger Realty Group-1955 N University Dr Coral Springs FL 33071

Market Frenzy - The Good, The Bad, and The Ugly

With all of the positive press out there regarding Real Estate you would think everyone would be enjoying this "Market Frenzy".  On LinkedIn alone this week (and its only Tuesday) there are seven articles referencing everything from the turn of the market to another fall in 30 yr interest rates.  Everything  is sounding so exciting for first time home buyers, sellers, and real estate agents.  However, the overall consensus of this market activity is pure frustration. 

The lack of inventory is stemming from two main sources.  The banks holding back property and underwater home owners.  The amount of people entering into foreclosure every month has been rapidly decreasing. That leaves two ways a property can enter the market; through the bank as a foreclosure / short sale, or the homeowner voluntarily.  The problem we're facing is although less people are entering foreclosure they are still underwater with their mortgage.  That simply means they owe more on the home than its worth and do not have enough money to cover the difference that someone is willing to pay.  For example, Jim Smith owes 100,000 on his home and the market shows that this home will only sell for 65,000.  Jim Smith would be required to come up with the balance in order to satisfy his mortgage.  This has created a situation where sellers would like to sell their homes but are unable to come to market.  Bank of America is offering a great new principal reduction program that they are beta testing to 200,000 underwater homeowners.  The link is below. 

Bank of America Principal Reduction Program 

Buyers Beware

Everyone has heard the story or knows a friend who knows someone who bought that half a million dollar foreclosure for $200,000!  The truth is right now every good home in a good neighborhood is being looked at by a swarm of people and selling in under 30 days.  That means accepting an offer within the first week!  Inventories are at all time lows and the foreclosure faucet has yet to be turned on with the alleged "shadow inventory".  I've worked with multiple buyers that are now upset, tired, and are becoming discouraged of this fast paced market.  They are becoming involved in multiple offer situations and can possibly lose the first 5-6 homes they bid on before being accepted.  This problem is a huge frustration for the buyer and their agent.   

My advice to all buyers is to ask your real estate agent to set up an alert system for your parameters and when a home pops on to the market, see it within 24 hours.  If you like the home make a strong offer within 72 hours.  Buyers - go in with the right expectations and a hungry realtor on your team.  Realtors - Be patient, increase your communication with your buyer and give an easy to understand explanation of the market. 

If you or anyone you know needs Real Estate Advice, help on short sales, foreclosures, or buying and selling their home please let me know. 

Follow me on Twitter @SouthFLRealEst8

You can contact me anytime at 
 954-614-6517 or whitney.dutton@hotmail.com 

Whitney J. Dutton

South Florida Residential and Commercial Real Estate

Buyers and Sellers Agent                  

954-614-6517              

whitney.dutton@hotmail.com             
Berger Realty Group - 1955 N University Dr, Coral Springs FL

Is South Florida Real Estate REALLY Heating Up?

I hope everyone is having a great start to 2012.  With April behind us December will be here before we know it.  I would just like to touch base and keep everyone updated with my thoughts on the ever changing Real Estate Market we have ahead of us.

March Home Sales Rise, Recovery in Motion

Foreclosures and Short Sales will remain King and Queen of sales

We certainly are seeing better numbers in the last 90 days with our current inventory of QUALITY foreclosures and S.S. starting to dry up.  In some areas foreclosures and s.s. are making up more than 50% of home purchases.  I’ve worked with several buyers looking to purchase QUALITY homes in the 150 – 250k range and we have settled on numbers above list price on three different occasions.  That could mean a few different things: 

1. Quality inventory is decreasing and consumer confidence along with demand is increasing.
2. The banks are simply not releasing homes in their inventory in order to control supply which will ultimately control the sale price of homes.
3. The banks are pricing these homes low enough to create excitement and attention from more buyers creating a multiple offer situation very similar to an auction process where competition can breed higher sale prices.

Either way you look at it I believe the bottom is near and now is the time to buy.  How long we will remain at the bottom is another topic in its own!  However, if you were one of those people waiting for the bottom, now is the time to start shopping.   Just remember if you see a great home in a great neighborhood at a reasonable price, MOVE FAST.

Rising Rents, What does it mean?

If you or anyone you know has any questions or needs my help buying, leasing or selling their real estate please let me know.  Our office also specializes in helping those people negotiate with the bank to avoid foreclosure and settle on a short sale.

Short Sales waiting on banks will get quicker responses

Follow me on Twitter @SouthFLRealEst8 

Whitney J. Dutton

 

Berger Realty Group

954-614-6517

whitney.dutton@hotmail.com

Check me out on LinkedIn!