Homeownership Low Among Young Americans

Homeownership Low Among Young Americans

The market stats for May 2014. We see increasing prices and decreasing days on market. Again !

Monthly Market Indicator - May 2014

Home prices: Your local forecast

384 markets tracked

After 2013's big gains, home prices are expected to moderate this year. CoreLogic Case-Shiller expects prices to increase by the mid-single digit percentages for the 12 months through September. See how your market is expected to fare.

Denver-Aurora-Broomfield, CO Metropolitan Statistical Area
Forecast change: third quarter, 2013 - third quarter, 2014	+2.7%
Forecast change: third quarter, 2014 - third quarter, 2015	+3.4%

Market fundamentals
Median Family Income (Second quarter 2013)	$78,100
Median Home Price (Third quarter 2013)	$290,000
Change in Home Prices (From Third quarter 2012 through Third quarter 2013)	+9.8%
Worst 1-Year Home Price Change (1980-2013)	-6.2% (2009:Q1 )

Forecast as of January, 2014, courtesy of CoreLogic.

June 03, 2014

April 2014 Home Prices Increased 10.5 Percent Year Over Year

Eight States Hit New Home Price Peaks

Thomas Vitlo    |    Housing Trends

Today, CoreLogic reported that April 2014 national home prices increased by 10.5 percent year over year, and increased by 2.1 percent month over month from March. This marks the 26th consecutive month of year-over-year increases in the CoreLogic Home Price Index (HPI). Excluding distressed sales, home prices increased 8.3 percent from April 2013 and increased 1.1 percent from the prior month. Including distressed sales, prices were still 14.3 percent below peak levels, and excluding distressed sales, prices were down 10.8 percent from the peak in April 2006.

Including distressed sales, year-over-year home prices were up in the District of Columbia and every state. California led the country with a 15.6-percent price increase from April 2013, followed closely by Nevada with a 14.8-percent increase. Excluding distressed sales, 45 states saw a month-over-month rise in prices, with Michigan (+2.9 percent) and Illinois (+2.9 percent) showing the largest increases and Massachusetts (-0.9 percent) and Montana (-0.6 percent) showing the largest decreases. No state showed a year-over-year home price decrease.

Colorado, Louisiana, Nebraska, North Dakota, Oklahoma, South Dakota, Texas and Wyoming all reached new highs in home prices in April 2014. Conversely, despite rapid appreciation, Nevada remained at 38.6 percent below its peak in 2006, followed by Florida (-34.5 percent). Figure 1 shows the current, maximum and minimum year-over-year growth rates for the 25 states with the highest year-over-year appreciation. The figure illustrates that some of the states now growing the fastest also fell the farthest in the housing crisis.

In addition to the overall price indices, CoreLogic analyzes four individual home-price tiers. The price tiers tracked by the CoreLogic HPI are calculated relative to the mean national home price and include homes that are priced 75 percent or less below the mean (low price), between 75 and 100 percent of the mean (low-to-middle price), between 100 and 125 percent of the mean (middle-to-moderate price) and greater than 125 percent of the mean (high price).

Figure 2 shows the levels of the four price tiers indexed to January 2011. The two lower-priced tiers have recovered the most from their trough levels (both hit bottom in March 2011), with the low-price tier recovering 35.8 percent from the trough and the low-to-middle tier recovering 30.5 percent from the trough. As of April 2014, the low-price tier increased 17.7 percent year-over-year, with 8.7 percent of that gain happening just in 2014. The two higher-price tiers both bottomed out in February 2012, with the middle-to-moderate price tier recovering 28.5 percent from the trough and the high-price tier recovering 24.6 percent from the trough. The high-price tier fell the least, at 27.6 percent peak-to-trough, and is currently 10.3 percent below its peak. The low-to-middle price tier fared the worst in the housing crisis, falling 37.3 percent peak-to-trough, and now 18.1 percent below peak levels.

Flipping a House – Is it Right for You?

Of all the reality TV shows that have come and gone since the fad started, very few have caused people to sit up and say, “hey, I can do that, and I can make a mint!” like the house-flipping shows that seem to be everywhere on cable these days. But is what you see on TV accurate? Can the process really be that easy? Let’s take a closer look.

The first step is analysing your finances to see if you can afford to take on a second home and remodel it. You should have an idea as to how much your total budget is going to be for the project, and make sure to factor in closing costs on the project home, contractor overruns because things are bound to take longer than you thought, and then money for incidentals and accidentals, as well.

Once you’ve got an iron clad budget, the next step is to find a home that you think is flappable. Most people go into these projects with a property already in mind, but for some, searching for a saveable house that is within their budget and at the same time will be sellable can be extremely difficult. There are many people out there looking to flip houses, so finding one for yourself can be a real chore. That's where a knowledgeable Realtor like myself comes into the picture. I can look for the right property and give you a good valuation. I have done may flips myself so I know the drill. A simple trick to find the neighborhood where flipping makes sense is to look for properties that have been sold twice within one year !

Once you’ve picked your property, you have to go through the buying process. Expect delays and make sure you have the property appraised by an independent appraiser. Also, be aware that closing costs can fluctuate dramatically.

So, the house is all yours. Now what? The best thing to do is to bring in an expert to help you see everything that needs to be done. From electrical to plumbing to interior design, flipping a house right is a huge job, and you have to be prepared to spend the money.

Once renovations have started, be prepared to dedicate as much time as needed to the project. The things that you can do yourself will save you money, but don’t be afraid to call in an expert for the big jobs.

Once the property looks like it should, have it reappraised, and once you’re ready to sell, don’t be afraid to embrace non-traditional methods of selling it, like the Internet or out-of-town newspapers. You need as many eyes on your flipped house so you can unload it as quickly as possible and stop making payments on it. The longer the property sits there, the less successful your house flip will be.

House-flipping has become one of the most fashionable ways to make money for hard working people. But be prepared to go into your investment with your eyes, and your wallet, wide open.

Successful real estate investor tips

Becoming a successful real estate investor

Becoming a successful real estate investor requires being able to find good real estate investment deals and put them together. Your job is not to become a closing attorney, a management expert, or a repair person. Use professionals!

You must determine the correct value of real estate. This information will help you make better investment decisions. I determine what a property is worth by looking at comparable sales similar property that has recently sold in the same neighborhood. I will provide you with a detailed valuation report within the hour.

What is the ideal market for investing?

There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets if the market keeps rising the probability of selling the property quickly for a large profit increases. In contrast but when property values are falling more bargains become available.

You need to be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a good enough discount to allow for a profitable sale at a later date.

Leverage

Leverage is very important for investors because the less cash you put down on each property the more properties you can buy. If the properties go up in value your rate of return goes up. However if the properties go down in value and you have a lot of debt on the property this can result in negative cash flow.

Since real estate is generally cyclical negative cash flow is only a short-term problem and can be handled if you have other income or a cash reserves. This makes “Nothing down” investing very helpful to protect against negative cash flow for high leverage investor.

If you are a long term real estate investor leverage will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt.

Strategies to limit risk

To limit risk become educated in your local real estate market first by understanding the large scale trends from global down to national regional and specific neighborhoods. Learn about target neighborhoods with the help of successful real estate investors in your area along the way.

Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market this month versus last month or last year. With this information it will help you make better investment decisions.

Exit strategies

It is important not to guess the future of a local real estate market you need to have a clear plan in mind when purchasing property. As a real estate investor you must know exactly how you will exit the property before you buy. And have a backup plan or two in case the first course of action doesn’t work. You must know your market and your plan before you begin to invest.