Investment Opportunities Not Going Away

A recent CNNMoney article entitled, "Foreclosures Make Up 26% of Home Sales" states that even though home prices are down, sales are up and deals are getting done.  That is because 26% of all homes sold last year were foreclosures or short sales.  Bargain hunters are buying and holding properties.  They buy at a good price and then rent it out.  These investment opportunities are not going away.  Nearly 30% of mortgage borrowers are underwater on their loans.  These owners are vulnerable to foreclosure so the number of distressed properties that will go on the market in the next year or two will probably remain high.  Read the entire article at this link.

In a somewhat contradictory article, CNN Money also reports that the number of foreclosure notices filed in February 2011 dropped 14% compared to a month earlier and 27% compared with a year ago according to RealtyTrac.  This could be an artificial drop as some mortgage servicers have slowed their foreclosures as they wait to see how settlement talks surrounding the robo-signing mess play out.  The good news out of this is that even if the decline is artificial, new home builders will find it easier to compete in the market.  New home builders have had trouble competing with the low prices on repossessed homes.  Home building contributes significantly to the overall economy more so than the sale of existing homes.  Read more here and make up your own mind of where it is all headed.

Marc

Marc Austin Highfill
Exit First Realty
Office:  804-527-3948
Cell:  804-840-9824
Email:  marc@marcshomes.com
Visit our website to find out more about my 99 Day Guarantee at www.ExitFirstGuarantee.info

Marketwatch.com ran a story comparing real estate to other investments, such as the stock market. Here's a quote from the story:

"...with home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today. "

This is an excellent article and is a must read. You'll find it at this link.

Marc

Marc Austin Highfill
Exit First Realty
Office:  804-527-3948
Cell:  804-840-9824
Email:  marc@marcshomes.com
Visit our website to learn how I will sell your house in 99 Days - Guaranteed

Don't miss our FREE Real Estate Investor Workshop tonight!

Are you looking to better understand real estate as a possible investment?   At our seminar you will learn how to break into the real estate investment market with little fear because we tell you how to do it step-by-step.  You will get access to a turn-key system that will find you the best properties priced at least $20,000 below market value.  You will get access to several homes before they even come up on the open market - available only to seminar attendees!

Tuesday, November 30, 2010 at 6:30 pm
Exit First Realty
11207 Nuckols Rd., Ste. E
Glen Allen, VA  23059

For more information and to register now click here:  www.richmondinvestorworkshop.com

Q. What are the new trends in home building? 

A. Every new home buyer has their own personal preferences, but according to a recent survey conducted by the National Association of Home Builders, there are some new trends in the new home building market.

Buyers surveyed wanted spacious garages with lots of storage, and many buyers wanted space for a workshop.  New home buyers want high-tech wiring for sound systems, computer networks, and entertainment.  One of biggest shifts is buyers are looking for fewer open floor plans, and preferred partial walls that separate areas.  Activity rooms were also important to new buyers.  This included space for a home office, game rooms, exercise areas, home entertainment areas, or a family room/den. 

Storage areas (kitchen pantry, walk-up attic, large closets, and special cabinets) were particularly important to new buyers.  New home buyers also wanted homes with lots of natural light.  Fewer buyers were interested in two story homes and preferred the master suite on the main floor with a walk-in shower stall. 

If you are buying or selling a home and need competent and caring representation, please call me, Marc Austin Highfill, at (804) 527-EXIT.

The news came Tuesday afternoon that Bank of America will repay the $45 billion it received as part of the U.S. government's Troubled Asset Relief Program. BOA's move might be a good sign for the recovering housing market and the overall economy.

First, it signals that the nation's largest mortgage lender has gotten itself back into decent shape. Whether that means more lending to home buyers remains to be seen, but it stands to reason that a healthier bank is in a better position to lend money.

Think of it this way: Would you rather have the nation's largest mortgage lender able to repay $45 billion or have it buckling under the weight of its acquisition of Merrill Lynch, which was in such bad shape that BOA hinted at backing out of the merger.

Although it's true that the move HAS to have something to do with its search for a CEO to replace out-going chief Ken Lewis -- the repayment will get BOA out from under the government's restrictions on CEO compensation -- the move is also good news for a couple of other obvious reasons.

First, the bank plans to raise capital to help pay for the repayment. This means selling stocks, which means it's counting on investors to be confident enough to pony up. And investors, as the bank probably hoped, are showing confidence already. Shares of BOA stock went up 2.2 percent after the announcement. Shares are around $16 after having hit a low of little more than $3 in March.

The second part of good news is that it would appear the government's moves to shore up the financial industry last year were the right ones. By helping to prop up BOA, which acquired Merrill and Countrywide Financial, the government helped the financial sector avert further meltdown. Yes, the $700 billion TARP was painful spending of taxpayers' dollars, but in hindsight, it appears to have been vital to the economy's overall health.

"We appreciate the critical role that the U.S. government played last fall in helping to stabilize financial markets," Lewis remarked in a BOA news release.

Now, some critics will argue that this repayment will be bad for consumers -- that the repayment will lift some restrictions on the company imposed by the government on banks that received TARP money. True, it will again let BOA decide on its own executive pay and bonuses -- topics that got big banks in hot water -- but the repayment will leave in place an element that is probably more important.

BOA, even in repayment, will have to maintain higher capital levels required by the government of all institutions receiving TARP money. Not having enough capital on hand -- banks were much less restricted earlier this decade -- is what got financial institutions in trouble when the credit crunch hit. And not-good-enough capital levels are blows to a bank's ability to lend money.

That the country's biggest mortgage bank is strong enough to repay its TARP money, is able to raise the money to do it and that it will be able to maintain healthy capital levels are good signs for the tight credit market.