Research Firm Says Housing Currently Undervalued by 14% to 17%
December 13th, 2010
Today’s post contains a link to another article, which was first sent to me and other real estate professionals in Real Trend’s periodic email update on the industry. The article itself is from a web site called DS News.com, which bills itself as a site “delivering stories…impacting the mortgage default servicing industry.”
The article itself, as you’ll see, cites research by a group called “Capital Economics,” and it cites a number of other sources in arriving at the conclusion that overall, housing prices are now 14% to 17% undervalued “relative to disposable income per capita.” Low interest rates also play into the affordability mix. The point, as we’ve been saying for months, is that today’s buying opportunity is compelling. The article also muses over possible reasons why this record level of affordability hasn’t done more to spur sales. They finger the usual suspects: high unemployment, tight credit, and negative equity for many current homeowners.
We certainly agree that these are all factors at the margin, and will remain so for some time. We continue to believe, however, that plain old-fashioned fear is a bigger driver than any of the others. We continue to hear from buyers who are afraid to commit because they hear, or fear, that prices may fall further, and they don’t want to get in too early. While this widespread attitude may create a self-fulfilling prophecy in the short run, the fact remains that over the longer run, markets will always fight to return to balance, and a fundamentally undervalued market won’t stay that way for long.
We understand that, human nature being what it is, many people will wait until they see convincing evidence that we’ve reached the bottom before they take the plunge. In other words, they’ll wait until the bottom has passed, and then they’ll jump into a rising market. They may not gain anything by waiting, and may well lose a little, but they’ll feel better about it. We’re already seeing this phenomenon with relation to interest rates. 30 year rates have risen from 4.25% to 4.75% in the last few weeks, as we said they would. We’re starting to see buyer move to get in before they go higher. This may be the impetus to get prices themselves moving up soon, as inventories start to decline. In other words, the evidence is starting to mount that the “bottom” may have already passed.
Nick Woodard
www.nickwoodard.com
Hodges and Fooshee Realty
615.566.9839
Tuesday, December 14, 2010
Tuesday, June 15, 2010
New Goals!
Man is it HOT out there!!! And not just the weather.. the real estate market is heating up too. I have seen more and more buyers hitting the market as rates continue stay at record lows. Last week I had a client lock in at 4.5% intrest rate! That is a historic best for any client I have ever worked with. What an amazing opportunity.
Recently, I have started creeping up on a personal goal of mine. I have set a goal to sell 100 homes before I turn 31 years old. Last week I sold my 71st home to a wonderful couple and number 72 will be closing on Friday of this week. That gives me a year and a half to sell 28 more homes! I can't thank you all enough for your continued support of me and my career. Your business and referrals are such blessings to me and my family. I truly can't thank you enough. I pride myself in working harder than anyone else, educating my clients more than anyone else, and truly caring more than anyone else. I have surrounded myself with an amazing supporting staff that works just as hard as I do for my clients. God has truly blessed me with an amazing career and amazing people to work for. If I can ever serve you or anyone that you know, please give me a call. Thank you all again for stopping by. God Bless.
Nick Woodard
www.nickwoodard.com
615.566.9839
Recently, I have started creeping up on a personal goal of mine. I have set a goal to sell 100 homes before I turn 31 years old. Last week I sold my 71st home to a wonderful couple and number 72 will be closing on Friday of this week. That gives me a year and a half to sell 28 more homes! I can't thank you all enough for your continued support of me and my career. Your business and referrals are such blessings to me and my family. I truly can't thank you enough. I pride myself in working harder than anyone else, educating my clients more than anyone else, and truly caring more than anyone else. I have surrounded myself with an amazing supporting staff that works just as hard as I do for my clients. God has truly blessed me with an amazing career and amazing people to work for. If I can ever serve you or anyone that you know, please give me a call. Thank you all again for stopping by. God Bless.
Nick Woodard
www.nickwoodard.com
615.566.9839
Sunday, April 25, 2010
Will the tax credit be extended???
http://blog.hsh.com/index.php/2010/02/will-the-homebuyer-tax-credit-be-extended-again/
Monday, February 15, 2010
Rates drop below 5%
Rates on 30-year fixed mortgages fell slightly this week, dipping below 5 percent, the mortgage financier Freddie Mac said Thursday.
The average rate on a 30-year fixed mortgage was 4.97 percent this week, down from an average of 5.01 percent last week. Last year at this time, the rate for a 30-year fixed mortgage averaged 5.16 percent, Freddie Mac said.
Rates fell to a record low of 4.71 percent in early December. They have held around 5 percent thanks to a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.
The average rate on a 30-year fixed mortgage was 4.97 percent this week, down from an average of 5.01 percent last week. Last year at this time, the rate for a 30-year fixed mortgage averaged 5.16 percent, Freddie Mac said.
Rates fell to a record low of 4.71 percent in early December. They have held around 5 percent thanks to a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.
Friday, July 24, 2009
A new normal
> Title: A New Normal
>
> Date: For the Week of July 20, 2009
>
> People are beginning to realize (and even admit!) there are things to be learned
> from all that has caused so much pain, moaning, and bizarre reactions over the
> past year or so. The current recession has amounted to a wake-up call to some and
> a reminder to others.
>
> The reminder has come to those who have lived a bit longer and who climbed the economic
> success ladder through several decades of hard work. They remember what it was like
> before they could slap down plastic for every whim and be impulse shoppers. They
> recall things such as paying cash, saving to purchase, and repairing rather than
> tossing away and buying new.
>
> The wake-up call has been to the children and grandchildren of the people just described.
> It has even become trendy for them to compare notes with their once-extravagant
> peers about bargains found or the joy of eating at home. For some the motivation
> is not a shrinking paycheck so much as an enlarged environmental consciousness.
> Whatever the motive, the outcome is that simplicity is making a comeback. Thrift
> is in vogue. Frugal is fashionable.
>
> Michael Maniates, professor of Political and Environmental Science at Allegheny
> College, has been so bold as to put it this way: "Perhaps the silver lining [of
> the global recession] is that people are coming to realize they can live with less
> and their lives are richer for it."
>
> A Gallup Poll taken in April and reported last week in USA Today found that 27%
> of those interviewed say they are saving money now. What a contrast that is to the
> spending patters being reported two or three years ago! And 32% of those polled
> report they are not only spending less but also intend for the pattern of less spending
> and more saving to be the "new normal" for their lives.
>
> The 2009 MetLife Study of the American Dream produced another fascinating statistical
> insight. Nearly half of all consumers in the United States, 47%, report they already
> have what they need - up from only 34% in November 2006. I doubt the level of possessions
> owned changed so much as an attitude toward those possessions. Maybe something good
> has come from this mess.
>
> There is even a sneaking suspicion among some that we are looking at life through
> different eyes than we did in the greedy times of a quarter century ago. People
> seem to be valuing objects less but experiences and people more. We can only hope
> and pray it is so - and that such an attitude survives recovery.
>
> "Teach those who are rich in this world not to be proud and not to trust in their
> money, which is so unreliable. Their trust should be in God, who richly gives us
> all we need for our enjoyment. Tell them to use their money to do good. They should
> be rich in good works and generous to those in need, always being ready to share
> with others." (1 Timothy 6:17-18 NLT).
>
> Date: For the Week of July 20, 2009
>
> People are beginning to realize (and even admit!) there are things to be learned
> from all that has caused so much pain, moaning, and bizarre reactions over the
> past year or so. The current recession has amounted to a wake-up call to some and
> a reminder to others.
>
> The reminder has come to those who have lived a bit longer and who climbed the economic
> success ladder through several decades of hard work. They remember what it was like
> before they could slap down plastic for every whim and be impulse shoppers. They
> recall things such as paying cash, saving to purchase, and repairing rather than
> tossing away and buying new.
>
> The wake-up call has been to the children and grandchildren of the people just described.
> It has even become trendy for them to compare notes with their once-extravagant
> peers about bargains found or the joy of eating at home. For some the motivation
> is not a shrinking paycheck so much as an enlarged environmental consciousness.
> Whatever the motive, the outcome is that simplicity is making a comeback. Thrift
> is in vogue. Frugal is fashionable.
>
> Michael Maniates, professor of Political and Environmental Science at Allegheny
> College, has been so bold as to put it this way: "Perhaps the silver lining [of
> the global recession] is that people are coming to realize they can live with less
> and their lives are richer for it."
>
> A Gallup Poll taken in April and reported last week in USA Today found that 27%
> of those interviewed say they are saving money now. What a contrast that is to the
> spending patters being reported two or three years ago! And 32% of those polled
> report they are not only spending less but also intend for the pattern of less spending
> and more saving to be the "new normal" for their lives.
>
> The 2009 MetLife Study of the American Dream produced another fascinating statistical
> insight. Nearly half of all consumers in the United States, 47%, report they already
> have what they need - up from only 34% in November 2006. I doubt the level of possessions
> owned changed so much as an attitude toward those possessions. Maybe something good
> has come from this mess.
>
> There is even a sneaking suspicion among some that we are looking at life through
> different eyes than we did in the greedy times of a quarter century ago. People
> seem to be valuing objects less but experiences and people more. We can only hope
> and pray it is so - and that such an attitude survives recovery.
>
> "Teach those who are rich in this world not to be proud and not to trust in their
> money, which is so unreliable. Their trust should be in God, who richly gives us
> all we need for our enjoyment. Tell them to use their money to do good. They should
> be rich in good works and generous to those in need, always being ready to share
> with others." (1 Timothy 6:17-18 NLT).
Friday, July 17, 2009
136 Days till first time home buyer tax credit expires!
The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment,
You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
•1. Contact a Lenders and get prequalified,
•2. Contact Nick Woodard to talk about your housing needs
•3. Close on your home purchase by November 30, 2009,
•4. Ensure that you are a qualified first-time buyer under IRS guidelines. Decide which year to file under, 2008 or 2009,
•5. File an amended 2008 return or choose to apply the credit to your 2009 tax return.
Deciding When to Apply the Credit
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.
If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).
Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
•1. Fill out Form 5405 to determine the amount of your available credit, and
•2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return
Nick Woodard
Hodges and Fooshee Realty
www.nickwoodard.com
nick@nickwoodard.com
615.566.9839
You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:
•1. Contact a Lenders and get prequalified,
•2. Contact Nick Woodard to talk about your housing needs
•3. Close on your home purchase by November 30, 2009,
•4. Ensure that you are a qualified first-time buyer under IRS guidelines. Decide which year to file under, 2008 or 2009,
•5. File an amended 2008 return or choose to apply the credit to your 2009 tax return.
Deciding When to Apply the Credit
If you want the benefits of your credit as soon as possible:
You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.
If you anticipate a drop in income next year:
You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).
Your Next Steps
Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:
•1. Fill out Form 5405 to determine the amount of your available credit, and
•2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return
Nick Woodard
Hodges and Fooshee Realty
www.nickwoodard.com
nick@nickwoodard.com
615.566.9839
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