Housing Starts Rise in July

U.S. housing starts in July rose 1.7 percent to a seasonally adjusted annual rate of 546,000 units, the Commerce Department reported Tuesday.

This is lower than analysts had predicted and down 7 percent compared to July of last year. Starts of new single-family homes declined by 4.2 percent to 432,000, while starts of large apartment units rose 32.6 percent to 114,000.

New building permits fell 3.1 percent to an annual rate of 565,000 units, the lowest level since May 2009.

ROOF RATS, SCORPIONS, COYTOES……OH MY!!!!!!

When buyers ask about these intruders, I tell them they are the exception and not the rule. I have lived in the beautiful East Valley of Phoenix Arizona and sold real estate for many years. I have never seen a coyote, seen 1 roof rat (I think) and never even saw a scorpion until I had lived here for 15 years. Sellers have to disclose whether they have any type of critter problems, and it is a rare occurrence. How to keep Wylie Coyote and friends away? Remember, they are trying to avoid us, but we should do certain things to not attract the little buggers.

Eliminate any food source.

Keep trees trimmed and thinned out.

Eliminate their hiding places

Keep lids on garbage cans

No pet food outside, also pick up pet mess

Eliminate any setting water

Pick your citrus as soon as it’s ripe.

I live and specialize in real estate in South Tempe and the Kyrene School District. My neighborhood was doing a community citrus fruit drive to get the ripe fruit off the trees and donate the picked fruit to the area food banks. This would get the fruit off the trees before it attracts the roof rats and would feed the hungry. Talk about turning lemons into lemonade!

Was Chicken Little a news reporter?

Most of us probably remember the childhood fable about Chicken Little. Chicken Little is walking one day and gets hit in the head with an acorn. Immediately, she assumes that the sky is falling and sets out to tell the King. On the way, she meets other animals who decide to go with her. Depending on the version, Chicken Little and her friends meet the King or get eaten.

The story has a few different endings, some not so happy. Each version and ending of the story have different interpretations. However, the main theme seems to indicate that a small issue can be misinterpreted to be something far worse.

That same acorn in the news has a way of manifesting to a headline story and causing fear and indecision. Many of us have been the victim of this hysteria. We become frozen with indecision, watching and waiting; and all because of the news.

I have seen buyers miss out on the perfect home, investors lose out on a great opportunity and sellers miss the market altogether.


Sometimes we can't avoid the acorn, but we can decide how to handle the news. Try looking at the complete picture and make it a priority to stay current with the news. FDR said it best, "The only limit to our realization of tomorrow will be our doubts of today. Let us move forward with strong and active faith."

Let's face it --- if we let every acorn that hits us in the head decide our fate, then the sky is falling.

Wow! Mortgage Rates Continue to Drop .

Falling rates on U.S. government securities helped push mortgage rates down to the lowest level so far this year.

What does this mean to the average buyer? Well, it comes down to this. If you can afford the down payment and you have decent credit, it may be a lot cheaper to buy a home than to rent. Add the tax benefits and the peace of mind of owning, and it's a win-win scenario.

Let's face it; the rates and home values can only hold so long. Eventually, both will go up, it's only a matter of time.

If there's every been a great time to buy - it's now.

A picture is worth a thousand words -- maybe...

I love the internet and all the information that I derive from it. Where else can you sit down on a computer and get most of your data you need for a particle neighborhood or home.

We can look up demographics, crime stats and what our neighbors home sold for. We can even get a satellite view of the home or area we like.

With this information, we can make informed decisions, speed the process of searching for that perfect property and decide what we see and what we don't see.

What happens when we place all of our decisions on this data? What if the information is wrong, incomplete or obsolete?

Case in point. A client of mine seemed to find the perfect home, until the aerial view revealed an empty lot directly behind the property. The vacant area was large, over grown with vegetation and random dumping was evident.

You guessed it -- cancel the showing and let's keep looking.

Several weeks later we discovered that the empty lot was built into a beautiful park. Unfortunately, the home was now under contract.

What happened with the vacant lot? It seems the aerial photo was five years old and depicted the area before the park was built.

As for my client, we found them a home and learned a good lesson. A picture is worth one word; verify.

You say tomato, I say tomato...

A recent email from a client.

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Hi Chris,

I'm thinking of buying a rental property, but I'm confused as to what's the difference between rental property and investment property.

Thanks,

Jeff M.

---

Jeff,

I've heard both terms used interchangeably for the same thing. Although, each term may have slightly different characteristics, in the end it should produce income.

It's real estate that currently produces income or income at a future date. It may be a condo that you rent out or raw land that you may sell later for a profit.

I personally prefer the term Income Property. This term reminds me that my goal is to find and to have income producing real estate.

Listing Tip #15: Making your home appear larger.

Recently, I had a listing appointment with a prospective home seller. As we sat down in their over filled and over decorated living room, my eyes and attention began to focus on my surroundings. Looking around I noticed 70's vintage wall coverings, eclectic oddities and room decorations that spanned three decades of decorating fads.

Interesting, would this happen to prospective buyers when they toured this home? Like me, they would instantly become lost in a sea of eye distracting clutter.

An overcrowded, clutter packed home can give the illusion of being small and confined. Add the distractions and the buyer is already feeling this home is too small for their needs.

Sell it, pack it or throw it away. De-clutter each room and put away non-essentials items. If you're not going be using it right away, put it away. Family pictures, personal items and extra furniture should be packed away.

This strategy includes closets and bathrooms. Make the closets and bathrooms look functional, clean and neat. Do the same with sheds, patio areas and garages.

Your goal is to let buyers feel like your home is open, bright and spacious.

To be or not to be...

Recently, I had a client tell me he's waiting to purchase a home, thinking home values will continue to drop. He's not alone. Many buyers are fence sitting waiting to see what happens. What's the problem with this mind set? First, no one really knows what's going to happen. Yes, most likely we will have higher end real estate still decline, and yes we do have the all mysterious "Shadow Inventory."

Is this enough for us to play the wait and see game? Rates are at an all time low and waiting could force you to take a higher rate. A 1% rate change may wipe out any gains you might make waiting for the perfect time to buy. The big questions is; in your particular price range, how much more will home prices drop and is it worth waiting?

Shadow Inventroy

Home values in Phoenix metro may fall again because of 'shadow inventory'

"Buy when there's blood in the streets, even if the blood is your own."
Baron Rothschild

Why I believe what I believe

Today the percentage of buyers from out of state or buyers who intend to rent their property is 35.4%, slightly higher but very similar to the 33.6% reported in 2005. The volume numbers of course are much lower, 8657 monthly sales today compared to 17,016 in March 2005. So now the question, if I thought investors and out of state buyers were a concern in 2005, why wouldn’t slightly higher percentages be a similar concern in 2010? There are some big differences, let me get started.

The volume of investors is half of what it was in 2005. Home prices are 50% below their 2006 peak. The investor today is looking at income and cost models in addition to comparable sales when determining values, both supply and demand are charted and referenced. The evaluation models used today are far more sophisticated as is the data being plugged into these models. The home builders are practically out of play or at the very least sitting patiently on the sidelines; in 2004, 2005 and 2006 we had 100,000 new homes built.

Today, more buyers are coming from the Midwest and Snow Belt as opposed to California, purchasing from a totally different perspective as to the value of a home and what a house should cost, and, they’re buying with cash. 58.4% of all investors and out of state buyers are playing with their own money, real money.

Buyers who buy with cash have 100% equity, and 100% equity means options. Cash buyers don’t get foreclosed and can wait longer for the market to recover. Current inventories of rental houses are available in limited supply. We’re seeing a game of “musical houses”, homeowners are leaving their foreclosed home and renting a similar home with lower monthly payments, but still affording rental income sufficient to provide a suitable rate of return for the investor.

One final caveat for the cash buyer when he does choose to sell, they will not have to rely on conventional financing; they will have the option of a seller carry back or agreement for sale.