Good Housing news on the way?

Recent national reports are saying that the existing house sale market began rebounding by the end of 2010 ending with a strong month in December. You can learn more by visiting this link. http://www.realtrends.com/go/view_media.php?mp_id=10255&cat_id=1545

Investing in commercial real estate

Now is a good time to buy investment real estate because prices are low and interest rates for well qualified or capitalized investors are favorable. But there are a few things to consider to ensure you are making the right decision for your investment group.

• You should be able to profitably hold the property as a rental unit for several years to come as most real estate markets will continue to be soft through 2011. A slow recovery is predicted. Work with your realtor and financial advisor to know cap rates and expenses.
• Be careful not to over-improve rental properties in lower income areas. Lending guidelines have tightened and there is a diminishing demand for home ownership so re-selling to first time home buyers will be harder.
• Protect your cash flow and stay liquid to protect against vacancies and rental defaults.
• Selling a property quickly for cash in order to liquidate may not be an option.

But for the well capitalized investor in it for the long term this is a great time to buy!

Tidbits....

I thought I would share a recent summary of market conditions from the National Association of Realtors (NAR). There were a few interesting facts and figures that I am often asked about.

Many buyers perceive a foreclosed property or short sale as a chance to get a home at "basement bargain" pricing. I have heard expectations of 50% savings or more. But on average nationally foreclosures sold at a median discount of 15% this past November and short sales sold at a median discount of 10%. And keep in mind that dealing with bank owned property you do not always have the ability to negotiate contingencies and many homes are sold "as-is".

Affordability continues as mortgage interest rates and home prices are still historically low. But the NAR is predicting a market recovery to a sustainable healthy market in 2011 and is predicting gradual interest rate increases in 2011. Buying this 2011 winter will still provide many great opportunities for buyers as there are fewer buyers competing during these winter months. Expect the competition to heat up this spring.

October and November 2010 data shows that 32% of homes purchased were first time home buyers showing that for good credit buyers the bank financing is available. Lock into a 15 or 30 year mortgage now and it well may be one of the smartest investment decisions you will make in the next 30 years. Investors accounted for 19% of home buying transactions.

And specifically in the Northeast existing home sales rose in November by 2.7% and the median price was $242,500 - 9.2% higher than a year ago.

Condo verses Townhouse?

What is the difference between a condo verses a townhouse?

• A condominium shares walls, often called "part walls" with other similar units and involves individual ownership of the airspace within the unit itself, plus shared ownership of any common facilities such as hallways, surrounding lawn and grounds, pools, tennis courts, etc. as undivided interests with a fee simple title.  The ground underneath the condo is not owned by the individual homeowner.  Condos can be a popular option with homeowners who want the security of owing property but not the responsibility of caring for and maintaining a single family home.
• Town houses are built on lots owned by the individual homeowners. They could be connected by common " party" walls, or they could be freestanding homes separated by airspace and attached to each other by exterior shingles, shared garages or other structural elements.

Other types of dwellings besides condo and townhome include: the traditional single family home, cooperatives (not too many of these in Vermont), duplexes, twin-homes, retirement communities, manufactured housing, modular homes, and time-shares.

Call me to learn more about any of these!