Housing Markets: When do Buyers Come Back

Of course no one has the answer, but generally when assets bust after an extended boom, certain things must take place for the perception to shift. In real estate, the first caveat is that everything is local. Even Greenspan said that since there is no national real estate market, real estate cannot go down everywheres at the same time

Well....it did! Housing has just had its first national decline in price.

Some general rules about busts

1.The markets that didnt participate will be the safest and may even increase as people see safety and reasonable prices in those markets.

2. Markets that participated the most in the boom, generally feel the most pain when the correction comes.

3. When people see this kind of large loss taking place, they will freeze and not buy unless they have to. So, even when things have stabilized we have to wait for peoples perceptions to change

4. Journalism has a lot to do with perception. Headlines will ride things up/down and emphasize the trend. When the headlines are no longer doom and gloom and begin to cautiously express a little hope, then the turn around is coming.

What Will it Take?

1. Time

2. reform of the mortgage markets in the same ways that the S&L crises reformed banking

3. Lower Prices

4. A shift in the perception that real estate is is probably a good bargain

5. Cheap money or low stable housing prices

6. A strong job market. The few markets still holding up are Portland and Seattle and I do think that is due to the strong job growth of the new 2.0 surge in Internet business's like active rain.

Thanks for Reading

Howard Bell for yourpropertypath.com

Buying and Managing a Vacation Home

Buying a Share in a Vacation Home When You Can't Go It Alone

By Jennifer Openshaw From MarketWatch

Advantages of shared ownership. It isn't hard to see the advantages.

* Affordability. As an example, a one-fourth share in a four-bedroom Tahoe view home goes for $299,000, obviously far less than you'd pay outright. See sample listing on Dreamslice.com.

* Shared costs. Taxes, maintenance, insurance, snow removal, financing costs. The agency manages these things so you don't have to.

* Deeded ownership. As with all fractionals, you own something that can be bought, sold, borrowed against, or transferred to your heirs.

* Business relationship. No arguing with your in-laws about whether your mounted deer trophy can go over the fireplace, or whether they paid their share of the snow-removal costs.

* Flexibility. You can sell whenever you want, or you can buy out your common tenants as time goes by. Shared ownership can be a great way to get your foot in the door.

* Expanded possibilities. If you've got more to spend, consider owning more than one share in different homes in different places. You can get more than one vacation home experience for less than the price of one.

Naturally, there are downsides. Like other fractional developments, you can't decorate as you please. You can store some stuff, but not as much as if you owned outright. Shared ownership doesn't usually offer the country-club style amenities you might get with some fractional arrangements. And everything you do to the place -- or in it -- is governed by some kind of agreement.

Wall Street Journal

Imagine having a serious structural problem, like 40 gallons of water under pressure leaking and no ones home for hours or even days. I wrote an article I wanted to share. The entire article is located at Your Property Path

Do you need it

Absolutely. I have a friend with a second home in Idaho. They have a beautiful home on a small ranch that is for Christmas and summers. Its a short hop from northern California and its a beautiful state with inexpensive land values. They got a lot of land, great views and space for a very affordable price....at least to us Californians!

After being away from the ranch for most of the winter, the family arrived only to find that there had been a leak in the kitchen which had dripped for many months. Well, you can imagine the damage. The leak had wended its way from the P trap below the kitchen sink to flood the lino floors. It then slowly worked its way into the hallway and the floor boards of the first bathroom. The damage was extensive.

The Cure

Get a property manager. There are companies that offer management for vacation homes. They do manage a little differently, because they are vacant for long periods and therefore they must be visited. Property management firms in rural or vacation areas have services designed to deal with the vacation homes special needs. In addition to all the general property management needs all properties require
1. Find one that will visit the property bi weekly
2. Be sure they will visit before and after all major storms to be sure the house is shuttered and that any damage can be assessed and taken care of immediately.
3. Repairs: Be sure to have a cap on all repairs. Any major expenses should be approved and you should be sent receipts for any work done above the allowed amount. Try to keep the amount that does not need your approval below $750.00
3.Vacation Home Rentals: Vacation home property managers will manage holiday or off season rentals by the week or weekend. Some are set up to book rentals for you. You can expect some kind of revenue share or flat fee service, but it may be worth it.
4.Be sure they will provide cleaning services and schedule maintenance

Thanks For Reading

Howard Bell for yourpropertypath.com

Are We All Landlords Now?

Central banks inject billions more in cash

Central banks in Europe, Asia and the U.S. injected billions of dollars into banking systems Friday, moving to further boost liquidity in markets suffering the ripple effect of the subprime-credit crisis and saying they stood willing to provide more cash.
The European Central Bank said it had provided 61 billion euros ($84 billion) to banks in a three-day tender offer, and the U.S. Federal Reserve carried out two three-day repurchase agreements totalling $35 billion, while the Bank of Canada injected C$ 1.68 billion ($1.78 billion).
In Asia, the Bank of Japan supplied 1 trillion yen ($8.48 billion) after a rise in the overnight call rate. And The Reserve Bank of Australia added A$4.95 billion ($4.17 billion).

marketwatch.com

In Credit Crisis, Large Mortgages Grow Costly

When an investment banker set out to buy a $1.5 million home on Long Island last month, his mortgage broker quoted an interest rate of 8 percent. Three days later, when the buyer said he would take the loan, the mortgage banker had bad news: the new rate was 13 percent.

The investment banker’s problem was that he was taking out a so-called jumbo mortgage — a loan greater than the $417,000 mortgage that can be sold to the federally chartered enterprises, Freddie Mac and Fannie Mae. The market for large mortgages has suddenly dried up.

NY Times

Lets consider the management of a vacation home, now that the credit crunch makes it a difficult to sell. Owners will be seeing themselves as landlords and that is a very different role. Your Property Path has a ton of articles on property management, if your new to the game then this is a good stop.

How to Manage a Vacation Home

Do you need it
Absolutely. I have a friend with a second home in Idaho. They have a beautiful home on a small ranch that is for Christmas and summers. Its a short hop from northern California and its a beautiful state with inexpensive land values.
After being away from the ranch for most of the winter, the family arrived only to find that there had been a leak in the kitchen which had dripped for many months. Well, you can imagine the damage. The leak had wended its way from the P trap below the kitchen sink to flood the lino floors. It then slowly worked its way into the hallway and the floor boards of the first bathroom. The damage was extensive.

The Damage

First the lino had begun to lift up and the floor boards below were wet and molding. The lino had to be removed and the floor boards had to dry. Then a mold cleaner was professionally applied by a local company to be sure the family wasnt exposed.

Then the floor boards in the hallway had to be replaced because they were thoroughly wet and moldy. They would no longer lay flat and simply had to be pulled up and new boards laid down.

The entire house had a wet damp smell that would not go away. A wonderful family experience was ruined because they did not have anyone watching the home during their long periods of absence

The Cure

Get a property manager. There are companies that offer management for vacation homes. They do manage a little differently, because they are vacant for long periods and therefore they must be visited. Property management firms in rural or vacation areas have services designed to deal with the vacation homes special needs. In addition to all the general property management needs all properties require.

Howard Bell for yourpropertypath.com