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It is a buyer’s market right now, which means that there is an abundance of houses available, even for the fussiest consumer. With so many choices, it is a difficult process to narrow down the search, besides looking for a reputable real estate agent, finding a home inspector, learning about open houses in the area and so on. Aside from friends and family in the area you want to live in, where can you turn to for advice? Surprising studies show that social media networking and blogging are the new frontiers for information and insight.Females Blogging As Potential ClientsA survey conducted by Compass Partners LLC, in conjunction with BlogHer, discovered that 36.2 million women read and write in blogs every week. Out of that number, an estimated half believe that blogs are “highly reliable” or “very reliable” sources of information and advice on everything, while 40 percent of bloggers believed their biggest impact on the Internet community was “fostering relationships with like-minded individuals.” This many women talking about various topics, from organic food to beauty products to politics, means that there are also women discussing real estate. Reaching Female Buyers Through BlogsWhat these numbers prove is that not only are women consistently going to the Internet and blogs as a source to gather information from, but also they are using them as constants for news and tips. The advice that a blog gives is considered honest and trustworthy, which means that talking to women about real estate on your blog is a great way to draw them into listings on your site. How To Reach Female Real Estate BuyersSetting up a basic blog is easy and free with certain sites. You can link it to your home page so that anyone looking at your listings will see your blog full of suggestions and guidance about the real estate buying process. It is your blog, so talk about anything, from news in the local community to mortgage rates to the best ways to clean kitchen cabinets.As more people read the information, the more likely the traffic to your site will increase as you gain the trust of blog readers and writers. Attracting female buyers through blogging is just one more way to succeed and gain an edge in the real estate market.

Without a doubt, 2007 was one of the worst real estate years many had seen in quite some time. In fact, many people have begun to compare the current market crash to the crash of the 1980s. While it does not appear that prices will improve this year, there are indications that the market may begin to experience some recovery next year. This could mean an improvement in prices which have appeared to be in free fall for the last few months. One of the reasons that it is anticipated that prices will begin to improve in 2009 is the fact that many experts have anticipated the market will bottom out in 2008. At first glance, this can certainly seem to be frightening news but, it is important to keep in mind that the market really cannot begin to recover until it does bottom out.
In understanding the recovery of the market it is important to look at the factors that resulted in the current real estate market slump. There are actually several factors that led to the current slump. One of the most important factors is the fact that prices in several areas throughout the country doubled between 2000 and 2005. In some cases, those prices even tripled. As a result, there were a record number of people who were unable to afford homes, especially first-time home buyers. As the number of buyers able to purchase real estate began to dwindle, resulting in price and sales declines throughout the country.
As headlines have proclaimed recently, subprime loans also contributed to the recent debacle. During the last few years, a large percentage of the number of loans that were made was issued to buyers with credit scores that were below average. Additionally, a large number of loans were made to buyers with minimal down payments. Approximately two years ago real estate prices stopped rising. At this time, a number of buyers who had snapped up houses in red hot markets suddenly discovered that the balance of their mortgage exceeded their home’s values.
The rate of defaults began to escalate at this point. Before long, foreclosures also began to increase as a direct result. As more and more foreclosures hit the market, the inventory in many markets began to spiral out of control. As more homes hit the market, prices began to drop even more. To make matters even worse, economic growth began to stall and massive layoffs in many areas further fueled defaults and foreclosures.
While it has taken some time, assistance is now being provided to homeowners; which is anticipated will help to stave off the increasing rate of foreclosures. Overall, this is anticipated to help stabilize the rapidly rising inventory of homes for sale throughout the nation.
It is important to keep in mind that while headlines appear to be constantly blasting news about the softening market, there are actually some markets in the country where prices have continued to rise rather than decline. On average, real estate prices nationwide are approximately 5% less than they were last year; however, many of the metro areas in the nation are still experiencing price increases. This is largely due to first-time home buyers who can still afford to purchase properties and retiring homeowners who are selling their home sand then either moving into a retirement community or purchasing smaller properties. These markets include Salt Lake City, Utah; Charlotte, North Carolina; Beaumont, Texas and Bismarck, North Dakota.

As we head into the first month of spring, there is no doubt — real estate activity has increased significantly in many parts of the country. This leaves many to wonder: is this the beginning of the end of the real estate market downturn? The spring market is looming — the big question is, what type of market will it be? 2006 is no longer new news for anyone. We hit a market downturn — after 5 years of hot growth, it was bound to happen. But more important is how long will the downturn last? This factor is vital for anyone thinking of putting their home up for sale in 2007.
This fall, we saw prices drop in many places around the country off of strong values in 2005. This isn’t a fact that homeowners are thrilled about. But it also has to be tempered by the exceptionally strong housing market of the previous 4 or 5 years. In many parts of the country, the depreciation of 2006 only erased a small portion of the equity that had been building.
The market didn’t just affect pre-existing home sales. Builders faced similar difficulties in 2006. Many responded by slashing prices and offering increased incentives to entice buyers. In several cases, builders even chose to cancel planned developments to wait out the market downturn.
This fall, there were two trends that were apparent: 1. homes had to be priced competitively and in top condition to sell and 2. buyers tended to be very choosy and spent time shopping around. This second trend contributed to the longer-than-usual market times of many homes. It wasn’t unusual for well-priced homes to be on the market a long time before selling.
There were several main factors that contributed to the market conditions we all experienced in 2006. Many experts feel that the Federal Reserve (Fed) was too aggressive with interest rate hikes. Often, changes in the interest rates take a while to reverberate throughout the economy. Instead of letting the market react to small interest rate changes, the Fed pursued an aggressive series of hikes.
Also, people are discovering that the media itself was largely responsible for a good deal of buyer uncertainty in 2006. For years, every “pundit” out there had been predicting a market crash and for the past 5 years or so, the market held strong. Then, the Fed started raising the rates and things started to cool. Of course, everyone with a microphone started piling on the idea of a “market bubble”. Unfortunately what happened was “Chicken Little Syndrome” — suddenly everyone thought the sky was falling and the market began its downturn – all while interest rates stayed reasonable and housing prices good.
The result was 2006. The next question is obvious: what’s next? Here’s where we have some good news. The general feeling among the true real estate experts — the REALTORS who are out in the field in your local market day after day working — is that 2007 will be the end of the downturn for many areas of the country. We are already seeing signs of this all over the United States. Here in the Midwest — particularly the Fox Valley area west of Chicago, things have already started to pick up — phones are ringing, buyers are buying and sellers have a very optimistic attitude about the next few months. In fact, many REALTORS are predicting a hotter-than-normal spring in 2007 that should end the downturn, signal a soft landing and return us to balanced growth in our local real estate market.
The biggest factor that should influence the spring market is the current pause (or end) in interest rate hikes. If the Fed holds steady to this policy going into spring, buyers should take it as a sign that the market is leveling out. Combine this with the fact that many buyers most likely held out towards the end of 2006 and we’re looking at a larger-than-normal pool of buyers that should commit to a purchase this spring. Also, consider the fact that we are still sitting on a large inventory of unsold homes, some of which are priced very attractively. Basically we have a convergence of a large pool of eager buyers and a large pool of unsold homes at great prices — the outcome should be a lot of activity this spring. So, how should all of this affect buyers, sellers and homeowners?
If you are a homeowner, 2007 should return us to a steady rate of appreciation. It probably won’t be as great as from 2002-2005, but we should return to a fairly modest, yet sustainable rate of appreciation. Sellers should be particularly interested in a rebound this spring. What was a very difficult and trying 2006 market should turn into a much better time to put a home up for sale. The most important thing for sellers to understand is that the inventory of unsold homes should still be high this spring-but buyers should be buying. This points to several factors: sellers need to make sure their homes stand out of the crowd-both in condition and price. If this is done correctly and your REALTOR works hard at marketing your home, its time on market should be greatly reduced from 2006 levels.
Buyers should see the rebound as a last call of sorts. If you’ve held off buying-for whatever reason, it’s time to commit to a purchase. In fact, buyers should really consider making a purchase in the next month or two in order to gain full advantage of the 2006 market conditions before they level out. Those that wait until summer or fall might miss the current buyer’s market and find more competition and higher prices. Another benefit to buying in the short term is that interest rates are still relatively low and there are some great programs out there for buyers. While we all expect the Fed to hold steady with rates, we don’t expect them to drop anytime soon. So the current rates might represent the lowest they’ll be for the foreseeable future.
2006 will go into the books as one of the most difficult years for real estate in the past decade. Looking forward to 2007, we can expect the market to level out to a sustainable pace. Whatever your real estate plans are in the coming year, it will be important to keep track of current market conditions. If buying or selling is in your near future, it’s important that you seek professional assistance to help you make the decisions that will benefit you the most.

Are the current glut of houses for sale, and the lack of cheap bank financing, scaring away real estate investors? Is now really a horrible time to try and get into the real estate market as an investor and make some money? The answer to both of those questions is a resounding “no.” While it is true that in some areas the real estate market is in a decline, and banks are being very stingy with their loans; now is actually one of the best times you can get into the real estate market and really make some serious money.

Why Invest in a Down Real Estate Market?

One of the biggest questions we are asked these days is if it is smart to try and invest in a down real estate market. In this new market, real estate is starting to become increasingly cheaper in many parts of the country. Thanks to the sub-prime mortgage lending mess, and the downward fluctuation in the market, there are a ton of homes available today and plenty of people looking to wait it out as a tenant in a lease-option-to-purchase home until they can obtain traditional financing once again.

Think about it for a moment. Where are all of the people who are being foreclosed on going to go live? Many of them will become renters and others will opt to rent a lease-option with the hopes that in three to five years they will be able to purchase a home again. This scenario is perfect for a new market real estate investor who is interested in buying some cheap properties through short sales, and then holding them as lease-options.

Is The Real Estate Market Really That Bad Everywhere?

Interestingly enough, if you were only to listen to the California real estate market news you would probably think that the market is horrible and never going to recover. However, in areas such as the Seattle real estate market, property is actually holding its value quite nicely. This should tell you that while some markets require one type of investing; other markets offer you different options all together.

To Invest Now or Not To Invest Now?

The simple answer is that the only limitation on your ability to make money by real estate investment is your own beliefs. In truth, investing in real estate is the same as investing in the stock market; sometimes you buy high and hold, other times you buy low and sell high. However, there is never any reason or excuse why not to invest in real estate – great market or down market.

While Austin has continued to have one of the best real estate markets in the country, we will finish the year with lower sales activity, higher unemployment and real estate inventory levels, lower rents, and a deteriorating economy. Real estate sales are trending down, even with near 50 year low mortgage rates. Rents are following the same pattern.

Consumer confidence is very low. Consumers are holding cash and focusing on their immediate needs. This has impacted every industry. Though credit is harder to obtain, it is not the driving factor for the reduction in consumer spending. It is consumer confidence. Even if car dealerships are offering huge discounts and zero percent interest, consumers are keeping their existing cars and not going into debt for a car they don’t absolutely need.

We are seeing the same trends in the real estate market. Tenants are staying put and renewing their leases; homeowners are delaying home purchases on fear of job loss or price erosion in the real estate market; and it is getting harder to qualify for a mortgage as Fannie Mae changes its guidelines. For example, a borrower now must have a 740 fico score to obtain the best mortgage interest rate, assuming they have the down payment and reserves for a conventional loan.

For the past two years, we have consistently raised rents. This trend continued until the financial crisis hit us this fall. Many homeowners are not able to sell their homes at a desired price point and are forced to lease their homes and become landlords. Inventory of rental homes is at an all time high in Cedar Park/Leander and Round Rock areas.

We are dropping rents on all existing inventory. Properties priced below $1,100 month have weathered the storm better than higher priced rental properties. The most resilient rental homes are those priced below $1,000/month. Homes leasing at or above $1,200/month earlier in the early part of the year are now leasing for 10% less. As rents increase, the pool of qualified tenants decreases. We are also seeing tenants downsize and move to more affordable homes.

We have transitioned from a landlord market to a tenant market. Next year, we will renew most of our leases at the same price point and may drop rents to keep current tenants. I expect to see more rental applicants affected by job losses, financial troubles, and foreclosures as homeowners lose their homes and are forced to rent. I anticipate the days on market will increase as long as our inventory remains at high levels. Owners will need to look harder at applications to avoid long term vacancies.

Though Austin continues to have one of the best economies and real estate markets it the country, our unemployment rate has increased, and our real estate sales market is deteriorating. According to the Austin American Statesman, our unemployment rate was below 4% in early 2008 and 3.5% a year ago. It has now reached 5.0%. This is still below the Texas and national average. However, Austin is not immune from the national economic, mortgage, and financial crisis. November home sales were down 40% in Austin, a level not seen since 1997. Some areas were down almost 60%.

Long term, Austin will continue to have one of the best economies and real estate markets in the country. 2009 will be a year of recovery. Rents and home prices most likely will trend downward, and inventory levels will remain high. If the job market recovers more quickly, we will see the market stabilize. Now is a great time to purchase a home or take advantage of the down market.

If you have a current mortgage on a primary residence with a rate above 5.75%, it may be a great time to refinance your mortgage. Mortgage rates for primary residence are in the 4.75% range. Our office provides sales, leasing, property management, handyman, and mortgage services.

Article written by our Broker, Chris Warren, Smart Source Realty

Looking back now as we approach the end of April, this was an active month for the real estate scene. Here are some of the highlights of the April housing scene – some good, some not so good:

Short Term Interest Rates Exceed Long Term:

Finally for the first time in decades, it is cheaper to lock into a long term mortgage rate. Imagine that – mortgage financing that helps the buyer!

According to the latest results of the Primary Mortgage Market Survey (PMMS) released by Freddie Mac, the 30-year fixed-rate has dropped down to an average of 4.80 percent. Same time last year, the rate was 6.03 percent.

A one-year Treasury-indexed adjustable-rate mortgage (ARMs) averaged at 4.82 percent. Same time last year, the same mortgage was 5.29 percent.

A five-year Treasury-indexed hybrid ARM averaged at 4.85 percent, down from 5.68 percent last year, and the lowest rated since January 2005.

House Prices Rise and Fall

For the months of January and February, house prices rose consecutively. The last time this happened was in April 2007. Then March came along and the median home price declined by 12% from the previous year.

Record Price Cuts:

The famous Bailey Mansion in New York (previously owned by circus owner James Bailey), has dropped in price from $10 million to $6.5 million in less than 6 months.

Washington’s most expensive home listing, Evermay, has dropped its asking price from $49 million to $39 million. This 3.58-acre, 12,000 square foot Georgian Revival estate has been on the market since September.

Probably the largest price reduction for a piece of U.S. real estate, the Greenwich, Conn. mansion formerly owned by the late Leona Helmsley can be had for only $75 million. This is a far cry from the original asking price of $125 million.

Foreclosures See Record Highs:

After seeing foreclosure rates dip in January, they shot up by 44 percent in March, increasing to record high 175,199. Apparently there is still a backlog of unprocessed claims that will be appearing in the next couple of months as lenders scramble to deal with the volume.

Freddie Mac Executive Found Dead:

David B. Kellermann, the acting CEO at Freddie Mac committed suicide, leaving behind his wife and daughter. Sadly, he was only one of the many victims resulting from this global financial crisis.

Jumbo Loans More Plentiful

It appeared jumbo loans had fallen by the wayside, but now lenders are looking at these loans as a new opportunity to make money, and they are definitely making a comeback. Among the many banks offering them, ING has a 30-year fixed rate loan running in the upper 5% range.

The Mortgage Reform Bill

This much awaited bill was introduced in early April in an effort to change the way lenders do business and encourage no frill mortgages with lengthy terms. It’s a shame this bill wasn’t introduced 7 years ago, much of the housing crisis may have been averted.

Incidences of Real Estate Fraud Spikes

Our vulnerable market has created a perfect climate for real estate fraud and other types of scams. Following right on the heels of Bernie Madoff, who was convicted of committing the largest investor fraud by a single person, spring has sprung with a new collection of real estate related “tom foolery”.

In early April twenty-four people in San Diego were charged with racketeering in an elaborate mortgage scheme. In Dallas, the Stanford Financial Group was recently accused of selling certificates of deposit that were never invested, in addition to numerous other fraud allegations. A Twin Cities realtor was recently convicted of mortgage fraud. A Georgia attorney recently pleaded guilty to a $28 million investment fraud scheme.

The seemingly endless flow goes on, touching on every aspect of the real estate and investment industry, from appraisers, to real estate agents, attorneys, investment brokers, mortgage brokers, and bank managers.