Monday, February 28, 2011

Wall St. Journal "Why 2011 May be the End of Housing Crash"

There might finally be some good news this year about the nation's dismal housing market. Or, at least, the bad news could stop.
Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.
[27LEDE] Andrew Roberts
For sure, last week we learned the widely watched S&P/Case-Shiller home-price index fell 1% in December, its fifth straight decline. The index tracks 20 major markets.
But that figure belies real reasons to be optimistic, according to some experts. If they are right, it might make sense to jump into real estate. The trick is avoiding getting burned again, and it doesn't necessarily mean owning a home.
First, let's recap the economic signs a bottom is close.
Houses Are a Good Deal
Housing is the most affordable it has been in decades, according to analysts at Moody's Analytics. They don't just look at house prices. They also look at incomes.
Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.
At the peak, midway through the last decade, a home in Los Angeles cost the equivalent of 4.5 years' pay. The average price has since fallen to just over two years' income now. That's well below its pre-bubble average of 2.6 years. This means average Los Angeles homes are cheaper in "real terms" than they were typically during the period 1989 through 2003.
The opposite is true around the Washington beltway, where it will take 26 months of pay to buy a home, versus the historical norm of 22 months.
In the end, it will be affordability that will drive people to buy homes.
"Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own," says Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla.
It is definitely bullish. But what about timing?
"Housing prices will probably bottom in 2011," says Scott Simon, a managing director at money-management firm Pimco in Newport Beach, Calif. He foresaw the housing crash, helping his firm dodge losses that plagued Wall Street.
Mr. Simon says prices might dip another 5%. Still, in the scheme of things, that's small. Consider this: In some markets, home prices have fallen by half or more since 2006.
For instance, in once-hot Miami you can snap up an average house for under $166,000, according to recent data from the National Association of Realtors. That's down from $371,000 in 2006. Another 5% drop would take it to $158,000.
Investors Stepping Up
Here's another sign the market is nearing a bottom: Investors have started to buy up houses and condos, in some instances paying entirely in cash. That's a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.
Take Miami again. Last year, more than half of all transactions were made entirely in cash, according to a recent report in The Wall Street Journal. That compares with 13% of deals in the last quarter of 2006, the height of the bubble. Similarly, in Phoenix 42% of sales in 2010 went to all-cash buyers, up threefold since 2008.
It's a sign that these investors are betting on a rebound. Investors buying at current prices are looking for deals, or so-called bottom fishing. They typically like to pay entirely in cash (or with a relatively small loan) to speed up transactions. That can be vital for an investor wishing to lock in a deal fast.
If this is a turn in the market, then it might make sense to go out and buy a home. But, warns Pimco's Mr. Simon, "buy in areas you really know."
Plan to Stay Put
Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won't be back any time soon. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years, explains Jack Ablin, chief investment officer at Chicago-based Harris Bank.
Also remember that borrowing money to buy a house can still be risky. If you pay for a $100,000 property with $20,000 cash and borrow the rest, a dip in the value of $20,000 would leave you with zero equity. On top of that, you'd have to pay to maintain and repair the property, something not necessary when renting.
Home Buying Without a House
There are other ways to benefit from a real-estate rebound than directly buying a house. Such investments include stocks, mutual funds or exchange-traded funds. Unlike homes, which typically cost tens of thousands of dollars, these financial investments can be made in smaller amounts and typically are easy to sell.
Weiss Research's Mr. Larson says although new homes are oversupplied, home builders might benefit from a rebound as the situation rights itself.
Rather than pick individual stocks, he says, it probably makes sense for small investors to pick broader investments that hold many different stocks. In particular, he points to the SPDR S&P Homebuilders ETF (XHB), which tracks a basket of home-builder stocks.
Mr. Larson also highlights specialized mutual funds such as the Fidelity Select Construction & Housing fund (FSHOX), which tracks home builders as well as home-improvement retailers like Home Depot and Lowes that would also likely benefit from a housing recovery.
—Simon Constable is author of the forthcoming book "The WSJ Guide to the Fifty Economic Indicators That Really Matter: From Big Macs to 'Zombie Banks,' the Indicators Smart Investors Watch to Beat the Market."

Monday, February 7, 2011

Gorgeous Susets over Tampa Bay

Feb. Fishing Report...Go Coastal... Tampa Coastal!!

Hello Anglers,

       I have good news and I have bad news. The good news is that I am not looking out the window at 3 foot of snow trying to figure out this global warming stuff. The bad news is I would have a better chance of figuring out the global warming than I would the fish. January was a very unusual month in the way that the days that we had good weather and good tides the fish did not cooperate. On the other hand we had some very good days when the weather should have held back the bite. I can usually get a good feel for the pattern of the fish with the conditions, but January had me stumped. Hopefully February will be different. My focus for February will be Trout, Redfish, and Sharks. The Sharks at the power plant have started to thin out with this warm snap we have had but should migrate back as we are not finished with winter. That is not saying I will not take a shot at other species but those three will be my focus. Sheephead have been the one fish that the weather has not had much impact on the bite. They are not the same Sheephead as the northern fish, and yes they are good to eat. Actually, very good. Spring is around the corner and I cannot wait to get back to white bait and a bigger variety of fish to target. Until next time, good luck and be safe on the water. Remember: don't let your kid be the one that got away, take them fishing. 

      Other news - The radio show that I co-host on Saturday mornings has moved from ESPN 1040am to CBS 1010am. We have partnered with Tampa Fishing Outfitters and look to have a better show with a better format and more giveaways. Foe those of you in the listening area we would love to have you listen and call in. 


Capt. Ric Liles

Tuesday, February 1, 2011

Feb. Tampa Bay Real Estate update


Bonnie Fagoh
February 2011
Buyin' or Sellin'....Call Bonnie Helen! (Fagoh)
(813) 390-7606
Copyright © 2011 Realty Times
All Rights Reserved.

What's Driving Buyers
To Buy Homes?

  The Wall Street Journal is reporting that "affordability" is the top reason for home buying in 2010.
      That makes sense, especially in unstable market conditions. Buyers, as always, are looking for a bargain but, more than ever, they’ve been enticed by low home prices and low interest rates, according to a survey by Weichert Realtors, Inc.
      The survey gathered information from 1,261 of the company’s customers who bought homes between July 1 through December 31, 2010.
      What about pride in homeownership? it appears that buying a home because

Mortgage Rates
U.S. averages as of January 27, 2011:

30 yr. fixed:   4.80%
15 yr. fixed:   4.09%
1 yr. adj:        3.26%

View current rates

they didn’t want to rent, was not the driving force. Instead, it came down to price. This differs from survey results five years ago when respondents (26%) said, "the desire to own their home and stop paying rent" motivated them to buy, according to the Wall Street Journal.

It is the Best time in History to buy waterfront properties in Florida

Let me show you.

How Much Home Can I Afford?

     Home prices skyrocketed in the early 2000's, with things really heating up between 2005 and 2007. According to the New York Times, HUD conducted a survey in 2007, finding that home values had risen 16 percent in just those two years. The housing bubble burst in the Spring of 2007 and markets tanked.
      Now house values are resetting, with some areas still experiencing declines. In high boom areas, such as Florida, Arizona, and California, homes are having to correct from staggering rises of 20, 30 and even 40 percent in home values. This means values rose, and millions of homeowners bought at the top of the market, now finding themselves upside down in their loans.
      Despite the crisis, there are still buyers on the market. But many are wary to make a mistake of buying a home they can't pay for. How much home can you really afford? Home affordability, in general, is dependant on a range of factors. These include:
      Employment status: Do you have a stable job and income? Lenders will want to know if they can rely on you to make monthly payments for many years to

Use Experts to Navigate Homebuying Process

     When millions of foreclosures suddenly flooded the market at the onset of the housing crash, home owners knew little to nothing about holding onto their homes or how to recover if they got the boot.
      Misinformation and fraud compounded the effects of slow regulatory action and lackadaisical response from the lending industry.
      Uncharted waters were submerged in rumors, speculation, conjecture and ignorance.
      Years later, foreclosure myths endure.
      Freddie Mac, one of the nation's largest home loan investors, initially charged with expanding opportunities for home ownership and now focused on the liquidity needs of the mortgage market, is also about myth busting.
      To set the record straight on foreclosures, it offers "Top Foreclosure Myths" and the truth behind those false beliefs.
      To wit:
Myth: You should stop paying your mortgage so you can leverage assistance with your mortgage payments.
      The approach, called a "strategic default," can become a tactical trap.
      It isn't necessary to default on your mortgage payments in order to qualify for help.
      If you are struggling to stay current

Reduce, Reuse, and
Recycle Your Closet

     It's really no secret. We are a nation of consumers. Watch television for just one evening and you'll know of a dozen sales and promotions happening in your local area. Whether it's retail or sale, there are more than a handful of us that have consumed our ways to a stuffed closet.
      Call it early Spring cleaning. Call it a simplification. Organizing and cleaning out your closet can be a great selling tip, because buyers do and will open your closet during a walk-through. And one stuffed to the rafters will appear small and cramped, no matter it's real size.
      There is, however, the altruistic side. Today there is an unemployment rate of nearly 10 percent. This translates into around 15 million unemployed Americans. That is why it is important to lend a helping hand to members of your community. Unemployed families still

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