Homebuyers, Homebuyers...Please Come Back!

Hi Everyone,
   It's Friday, and I'm glad to have you back!

   Sometimes it fascinates me to see the ripple effect of the Economy (specifically, Housing and Employment). When Housing and Employment are in turmoil, some crazy things happen, for example...the creation of modern-day Ghost Towns...yes, Ghost Towns.

   According to a recent story on 247wallst.com ("The Eight States Running Out Of Homebuyers") by Douglas A. McIntyre, Michael B. Sauter, and Charles B. Stockdale, "Parts of Oregon, Georgia, and Arizona have become progressively more deserted.". As a matter of fact, they said that the "single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.", and referred to a “buyers’ strike”.

   In order to find the hardest-hit states, 24/7 Wall St. used 6 factors which ranged from vacancy rates, foreclosure rates, unemployment rates, construction figures, population changes and price reductions.

   The Eight States that wound up on their list were Michigan, Nevada, Arizona, California, Illinois, Georgia, Oregon, Florida. Michigan had the worst Population Change (Decrease) from 2005-2010, which would have been substantially impacted by the car industry bankruptcies.

   Some other facts regarding the other states that were analyzed: Nevada had the worst 2010 Foreclosures, the worst Unemployment, and the worst decrease in Building Permits 2006 to 2010. Florida had the 2nd worst vacancy rates. Two states that did not make the list were Colorado (had one of the worst foreclosure rates) and South Carolina (one of the worst vacancy rates), but they stated that the populations in both states have "rebounded enough to make a strong case that their housing markets may recover moderately over time."

   What happens now?

   As we discussed the other day in "Really? They Are Doing THAT To Foreclosures?", this story also mentions that some homes will be "torn down in these pockets of high foreclosures" to drop supply and boost prices. Outside of that spark of hope, they don't feel overly optimistic regarding these areas, since, "jobless rates may never recover" and little chance that the "populations in these areas will ever rebound." Thus...Ghost Towns for now, and who even knows how long.

   Do you live near a newly-deserted region? How does it feel? What are your thoughts from your first-hand observations?

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Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com


TAGS: #GhostTown #vacancyrates #foreclosurerates #unemploymentrates #constructionfigures #populationchanges #Michigan #Nevada #Florida

Big Discounts Equal A Pending Buyer Frenzy?

Hi Folks,

   Welcome back!

   With the housing bust, it makes logical sense that there are bargains to be found out there, of course, however, I read an article that I'd like to share with you that shows just how large the discounts are !

   There was an article on Yahoo Real Estate titled, "Cities With the Biggest Home Discounts", which was compiled using a Home Offer Report that is generated by Trulia (for nonforeclosure properties). The analysis was broken down based on price cuts and organized into 4 metrics: "average number of days on the market before first price reduction, average discount during the price-cut period, probability of a second price cut, and the total percentage of for-sale properties of which prices have been reduced at least once.". Using the breakdown, Forbes ranked 50 cities to determine largest activity in terms of overall price reduction.

   The "biggie" was Phoenix, Arizona, with, "residential prices down nearly 45% since 2006.". When you add in the high foreclosure rates and the large vacancy rates, sellers are certainly in a pickle, which gives homebuyers the upper hand. Overall, Arizona fared the worst, with Phoenix, Mesa, and Tucson all included in the top 10 for largest discounts.The other cities after Phoenix that round out the top 5 with the biggest discounts are Mesa, Minneapolis, Long Beach, and Baltimore.

   One of the factors, how long a home sits on the market at the original sale price before the first price cut, was just 48 days for Phoenix, but 80 days for New York City, which was coined as a "robust" market.

   What does this all mean for us? Well, if you are selling a nonforeclosed home, you need to cut your prices to compete with the distressed properties that are selling for a "15% to 50% discount". Las Vegas, which is referred to as, "the nation's foreclosure capital", made the list at #7.

   If you are selling a home in one of these areas, you have decisions to make. Do you slash and burn your price, do you site on your price and wait, or do you look into a Rent to own agreement? This decision will be based on your position in life; are you sitting on a ton of equity, or do you need to cut and run fast? Can you rent out the home with an option to buy, while covering your mortgage payments monthly as you wait for the market to turn around?

   What are your thoughts and comments on this extremely interesting story?

Have a Great Day, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #realestate #renttoown #Phoenix