Market on the Mend?

According to a new Consumer Outlook Survey for the first quarter of 2013 just released by Prudential Real Estate show Americans becoming more optimistic about the nation's housing market.

 

Here are some of the highpoints of the survey:

 

OVERVIEW: Prudential Real Estate’s Q1 Consumer Outlook Survey, conducted in February 2013, showed that American’s sentiment toward real estate is growing  

increasingly favorable.  Buyers and sellers alike said they are motivated for the

spring buying season, attracted by low mortgage rates, attractive home prices

and other factors.

Here are key survey findings:

MARKET ON THE MEND

77% of consumers feel confident about the housing market and property value recovery; a 4 point improvement from our year-end results and a 7 point increase over the same period a year ago.

This confidence is exceptionally high among Millennials (80%) and Generation X (79%) and in recovering residential real estate markets like the South (81%) and West (79%).

Favorability of the U.S. real estate market also has increased to 65%, it’s highest

level in a year.

However, Americans are cautious and 42% of those surveyed believe the housing recovery will be slow.

Ultimately, owning a home is still important to 96% of Americans and exceptionally important to Millennials (97%), Generation X (98%) and women (78%).

For those who’ve been watching market fluctuations in recent years, 74% of respondents say that interest rates are historically low and 87% say the time to buy is now while mortgage rates and average home prices are attractive.

SPRING BUYING SEASON

Finding a good deal in a home (80%) and job stability (59%) are the most important factors for prospective homebuyers this spring.

Respondents who feel it will be easier to buy a home this spring feel that way because market conditions are right and “homeowners want to sell.”

Prospective buyers are motivated; 48% of respondents said they are willing to explore neighborhoods they hadn’t previously considered to find their home.

Prospective home-sellers indicated that “finding the right house to buy first” and “making a profit” were the primary reasons they would list their homes this spring.

87% of sellers are committed to seeing a sale through if their home doesn’t sell quickly.

67% of sellers are open to additional guidance from their broker/agent on how to better market their home.

62% of sellers are willing to make repairs or redecorate in order to attract more interest

in their properties.

CONTEMPLATORS

“Contemplators” are defined in the survey as those who have considered buying or selling real estate in the past year but didn’t. Contemplator confidence in the real estate market and property values continues to rise with a 12 point increase from mid-2012.

Additionally, contemplator favorability of the real estate market has jumped 10 percentage points since mid-2012.

Primary reasons why contemplators haven’t made a move include “waiting for the right opportunity” and “haven’t found the right home.” 

Also included is an infograph illustrating the results of the survey.  The following infograph doesn't appear very large on my blog, however, I am posting the original size one on our Facebook Page.  It can be found in the upper right hand corner of this blog post.  "Like" us and be kept up to date on the real estate market here in Alaska.  You can also go directly to it at Greg's Facebook business page

Based on the results of the survey, it appears more and more that the housing recovery that we are experiencing may be gaining more and more traction!

Will 2013 be the year of the real estate recovery?  Here in Alaska, I absolutely believe so...and more of the lower 48 is feeling that way too.

With it staying light now until nearly 11PM there is plenty of time to shop after work!

Greg

$30,000 in Relocation Assistance From Some Lenders

The Brainerd Lakes area of Minnesota was an area that was hit extremely hard by the bursting of the real estate bubble starting in 2006.  As such, many home sellers found that the equity in their homes was suddenly gone and due to new financial hardships were not in an equity position to sell...meaning that they owed more on the property than what it was worth in the current market.  "Underwater", "Upside down" were terms that often described the situation.

In the years that followed, we began a relationship with Markve and Zweifel, PLLC, a law firm in Minneapolis that specialized in assisting sellers through the process of short sales, and worked with the banks to negotiate a sale by which the seller of the property could still sell, but sell short.  Meaning that the bank would accept the current market value of the property and the difference between current market value and the mortgage COULD be exempt from deficiency judgements under a law passed in congress.  That law was set to expire on December 31, 2012, but was extended one more year.

Although we are no longer selling real estate in Minnesota, I still keep abreast of the market back there and Markve and Zweifel's practice.  The following link is to their blog and contains some of the current offerings that some of the lenders have available.  http://www.mzlaw.us/pages/Blog/  These offerings change frequently and what is offered today, may not be offered tomorrow.

While the "short sale" real estate market in Alaska pales in comparison to Minnesota's, there is a need to get the information out there.  Having been through the process and professionally trained, I have the skills to help those sellers in need of help get through a very difficult period in their lives.

With the new deadline only just a few short months away, teamed with the short sale process taking longer than a traditional sale, the time is now to have a consultation to see if a short sale is the right answer.  If you live in Minnesota and aren't sure who to call, let me know and I will direct you to a professional REALTOR that can help you based on your location.

Feel free to "Like"our Facebook page at the right or at www.Facebook.com/AKHomeSellers to learn more about us and the services that we can offer.

I look forward to helping!

Greg

"But isn't it always dark in Alaska?"

It's one of the most common statements that I most often hear when talking to others about Alaska.  Many have been here in the summer and know how light it is then, but the majority of non-Alaskans think that it is dark for the other 6 months of the year.

After close to a week of clouds and snow, we had a break in the weather yesterday and the sun came out after the clouds moved on.  With us now gaining 6 minutes a day of light, it is a noticeable difference after not seeing the sun for a few days.  At 9:36PM, I took a photo of the backyard to illustrate how much light we have.  And as I watched the sunset off to the northwest and the last light of day diminished behind the Talkeetna Range at nearly 11PM, it seemed like the right time to set the record straight about our daylight in Alaska.

There are many people that would have an interest in buying real estate in Alaska and relocating here, but dismiss the idea due to the fear that the perceived lack of daylight would be more than they could handle.

Born and raised in west central Minnesota, we were subject to large swings in daylight from the solstice in December to the solstice in June.  It wouldn't get dark in June until after 10PM!  We are way past that already...and it is the beginning of April.

After living here through a couple of winters now, I can absolutely say that there is less daylight per day here in the winter than in Minnesota.  But it is only for about 3 months...the remainder of the year we have so much more daylight per day than there.  A client mentioned the other day that we have 8 hours more daylight per day than we had in December...and she's right!  That's amazing when you think about it.

The following link is a reference to our current sunrise and sunset times.  http://www.timeanddate.com/worldclock/astronomy.html?n=18  Check it out and put in your location to see how you compare to here.

Have a good week and be careful if you are going out to Arctic Man!

Greg

The Matsu Valley Real Estate Market is at full swing

The market has hit full swing in the last couple of weeks now...and could be stronger yet with more inventory (homes for sale).  With the severe lack of inventory that is experienced in Anchorage, not only the buyers, but also the Anchorage and Eagle River real estate agents are coming out to the valley as well trying to find housing for their clients.  

The shortage appears to be in all segments, but in particular the $250-$400K range.  I am working closely with one buyer in particular that is in that range and we have exhausted every listing that fits their criteria in their preferred location and there just isn't anything.  If you know of a property that could be for sale in the Palmer area that is in that price range that could be for sale, call me asap.

With around 8 hours of more light per day than on the first day of winter, combined with temps in the 40's, we are absolutely fully into the busiest time of the year for selling real estate in Alaska!

Spring has sprung! 

The race is on!

Across many parts of the country, there is a severe shortage of inventory.  Stated differently, if you are a buyer coming into one of those markets, you will find that you will have to move fast, and often are faced with multiple offer transactions.  And that is absolutely the case in the Matsu and Anchorage Alaska real estate markets.

But why??

We've all been conditioned over the last 5-7 years to hear about how bad the housing market is, and we a nation have literally seen trillions of dollars of equity evaporate as home prices fell like a brick in most places across the country. With "For Sale" signs on every other home then (it seemed) they are now suddenly gone...

But why??

Here is what I think is going on...

The market has begun to recover nationally and as such, a couple of things are coming into play that are facilitating the changes that we are currently seeing.  I think that first and foremost, the largest wave of foreclosed properties AKA Real Estate Owned (REO) has cleared the market.  And although there are still more to come, the volume of them appears to be fewer than the glut that we just went through.  The reason for that is quite simple and has to do with the timing of when most of those properties were sold and more importantly, how they were financed.

As most real estate markets across the country boomed in the late 90's and early 00's there was almost a hysterical level of buying frenzy...values were skyrocketing as a result of liberal lending programs that put many buyers into homes before they could have been just a few years prior.  "No-Doc", "Stated Income" et al were commonplace and when teamed with 3-1 and 5-1 Adjustable Rate Loans, Interest Only Loans etc. etc. etc. it was like throwing gas on a brush fire.  Millions of homes were sold during that period...more than any other time in our nation's history.

And then the adjustable mortgages started to adjust...

And home owners were faced with dramatically increased payments.  For example if a home buyer purchased a $250,000 home using a 3-1 ARM over a 30 year period with a fixed rate at 3.5% for the first 3 years with it set to adjust to market rate at the end of the 3 year period, saw their principal and interest portion of their loan go from $1,123/month to $1,580/month with a 6.5% rate.  An increase in their monthly payment of nearly 30%!!

So millions of decisions were made to put homes on the market across the country in order to get out from the increase in mortgage payments.

But it was too late....

As millions of other homeowners realized their dilemmas, the markets became flooded with homes that were purchased during the boom simultaneous with one another.  Ironically...these were the same homes that had buyers literally fighting over them just a few years earlier, to now fighting over whom could lower their prices lowest in order to try to attract a buyer.

And the bubble burst...

The banks started to foreclose on the properties and because they didn't even realize the depth of the problem, they too flooded the markets with their own REO inventory and in a sense were competing against themselves in a race to hit bottom.

And this is where we are today.

This morning Home Services CEO and former President of my former company, Edina Realty, was on Fox Business sharing some insight as to where the markets are currently at and what he predicts in the coming months.  Here is a link to that interview.  Interview with Home Services CEO Ron Peltier

It also is worth mentioning that at our weekly sales meeting the head of Alyeska Title indicated that they are doing a tremendous amount of refinance closings currently.  Someone else added that homeowners are trying to take advantage of the low interest rates that we currently have.

But I don't think that is the case.

My position is that this re-fi boom that they are currently experiencing has less to do with the low interest rates, but more so because prices are starting to recover enough so that homeowners have enough equity in their properties that they can now refinance that debt at the lower rates.  We have been at these rates for long enough to have been through the lion's share of homeowners that could actually refinance.

And as thousands of homeowners get out of negative equity positions (mortgage is higher than home is worth) we will see more refinance making it so their home is more affordable allowing them to stay in it, putting further downward pressure on inventories, making home values increase that much faster.

There is a lot of information contained in this, and if you have questions on how all of this can be used whether you are buying, selling or both, feel free to call and we can analyze your own personal situation and come up with a plan that is right for you.