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NOVEMBER #2 2011

REAL ESTATE NEWS

Best Markets for ShortSales

In the second quarter, short sales accounted for 12 percent of all residential real estate sales nationwide. In total, 102,407 short sales were sold to third party buyers in the second quarter of 2011, a

significant increase over the first quarter, in which

86,059 short sales transactions occurred.

Realty Trac recently ranked the top 10 markets to

buy a short sale based on availability and the average discount buyers received compared to

normal market sales.

In the ten markets below, buyers of short sales, on average, are getting greater than a 25% discount compared to buying via non distressed sales.

1. Los Angeles

2. Phoenix 3. Cape Coral/Fort Myers, Florida

4. Oxnard/Thousand Oaks/ Ventura, CA 5. Reno/Sparks, Nevada

6. San Francisco 7. San Jose

8. Portland 9. Atlanta

10. Milwaukee

Can We Come Over?

This 4,300 square foot home contains 4 bedrooms and 4bathrooms and sits on a 15,560 square foot oceanfront lot.Recently remodeled in 2005, this home features anoceanfront master suite, guest suites (plus a guest cottage),exercise room, media room, meditation room, your own pathto the beach, and the outdoor living space above.

The address: 30804 Broad Beach Road, Malibu, CA 90265

Asking Price: $14,749,000

2010 Tax Bill: Over $32,000

Current Owner: Kurt Russell and Goldie Hawn

As The Number of Renters Increase, So Do Rents

In the last twelve months, the number of households in rental housing increased 1.4 million, a 4% rise. The US Homeownership rate fell about 1.5% in the last year; it currently sits at 65.9% (in other words, for every

10 new households that are added, 4.5 move into rental housing. Compare this to 3 out of 10 in the year 2000). For those under the age of 25, the homeownership rate fell by 4.4%, landing at 21.9%. For those between the ages of 25 and 29, the homeownership rate fell by 7%, landing at 34.7%. There are now 1.5 million more young adults (aged 18 to 34) living at home than would be expected in a normal

economy. As a result of all this, asking rents rose by 1% quarter over quarter. Fannie Mae expects rents to grow between

46% over the next year.

A lot of investors are taking advantage of these increased rents and rental demand and buying up rental properties.

Picture courtesy of trulia.

FOR ALL OF YOUR REAL ESTATE NEEDS

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Lenders reposed 67,829 properties in July 162,680 bank owned homes to third parties in the 2nd

quarter of 2011 Nevada posted the highest foreclosure rate in the US; 1

in 115 housing units received a foreclosure filing in July

(in the City of Las Vegas, 1 in 99 units got a filing) 10 states account for 73% of the foreclosure activity inthe US in July

One in every 611 housing units in the US received aforeclosure filing

Sales of bank owned or homes in some stage of foreclosure accounted for 31% of all sales in the US inthe 2nd Quarter

The average sales price of a bank owned home or homein foreclosure was 32% below the price of other homes

REOs had an average sales price nearly 40% below the

average price of no n non REOs Pre-foreclosure sales (i.e. short sales) had an averagessales price of 21% below the average sales price of non-foreclosure homes

Lousiville, KY was the metro area that posted thebiggest foreclosure discount, with foreclosure or bank owned homes selling 54% below the average price fornon-foreclosure or bank owned homes

6 Worst Home Fixes For Your Money Weve all heard of certain improvements that pay for themselves when you sell but what about the other end? Below are the six improvements that rank last when it comes to getting your renovation dollars back at resale.

1) Home Office Remodel Nationally, homeowners spent an average of $28,888 and can expect to recoup about 45.8 percent of this at resale.

Already have one? See if you can convert it back in a bedroom or den, or

just call it something else (i.e. den, study) when you sell. 2) Backup Power Generator On average, homeowners spend $14,718 on

a heavy duty backup generator and installation, but can only expect to recoup 48.5% of this at resale. Still want a generator? Choosing a less

expensive model or installation can make a big difference. 3) Sunroom Addition The average sunroom addition costs $75,224, while

homeowners only recouped about 48.6% of this at resale.

4) Luxury Master Bedroom Suite Addition For a very high end suite addition, it costs on average $232,062 (wow!). Yet, sellers can only expect to recover 52.7% of this. Youre probably better off looking for a

house with one already built in. 5) Bathroom Addition The average bathroom addition cost $21,695 (this

can grow quickly), but only returns about 53% of that on resale. Look to reconfigure other space into a bathroom, rather than adding one.

6) Luxury Garage Addition For a top of the line 2car garage, it can cost

around $90,000, but youll only recover 53.6% of this at resale.

Reader Question: My bank just approved a short sale but wouldnt approve a modification. Why?

Banks use a series of complex modelsand formulas to help them decide whatto do with a home. Typically, thisinvolves calculating the Net PresentValue to determine what strategy (i.e.

short sale, loan modification or someother strategy) will help minimize itsloss.

These banks are driven by profit andwill typically do what they think is inthe best interest of its owners orshareholders, not the homeowner.

Further, in order to do a modification,the bank wants to make sure you canafford the modification. This includes

several financial stress tests for theborrower including making sure thenew loan payment is around 30% orless of the borrowers income.

If the bank doesnt think you can makethe modified payments, they wontgrant a modification.

Seller Question: Should I sell my rental condo with the tenants in it or should I vacate it?

This is a common question and doesnt have one set answer. This typically depends on you and the tenants. First, can you

afford to financially carry the condo if you arent being paid rent? Second, are there value increasing repairs you wanted todo before selling? If these are big repairs or upgrades, the tenants will likely need to vacate anyway. Finally, howcooperative are the tenants? If they stay, you will need them to allow a lockbox, be flexible with showings, and keep theplace clean. Some people offer their tenants incentives if they cooperate during the sales process.

Id also consider what a likely buyer would use the condo for would they want to live in it or is it a heavy investormarket?

The information in this newsletter is not meant as legal, financial, or any other type of recommendation. Please consult a qualified professional to discuss the details of your individual situation.

Realty Funny A young broker was worried when a new real estate office, just like his own, opened up right next door to his and put

up a huge sign which read 'BEST AGENTS IN TOWN.'

It got worse when another competitor opened up on the other side of his office, announcing its arrival with an even larger sign, which read BEST DEALS IN TOWN.'

The broker panicked, but soon came up with an idea. He put an even bigger sign over his own real estate office. It

read: 'MAIN ENTRANCE.'