The Rise of the Investor
Here’s a link to an interesting article about the Phoenix area real estate market. Investors have been flooding in to the market to buy distressed property. From the sounds of it, many are buying, fixing and renting the properties. I know that many here in the Twin Cities are doing the same and some are quickly flipping the properties. (For the indignant housing advocates and activists out there, flipping is not illegal or immoral. These flippers are actually making a very big, positive impact in many cities that have been devastated by the foreclosure crisis – for full disclosure, I am a flipper).
Fannie, Freddie, & FHA REO Properties
Calculated Risk has an excellent chart showing the continual growth in REO (real estate owned) properties at Fannie Mae, Freddie Mac, and the FHA. The foreclosures clearly have not yet peaked. I’ve also heard on the street that the loan modification program is not helping as many people as the government had hoped. It appears that has just merely delayed the inevitable foreclosures.
Walk Away From Your Mortgage – Roger Lowenstein – New York Times
Roger Lowenstein has published an excellent piece in today’s New York Times regarding strategic defaults – other wise known as walking away from your property. The Mortgage Bankers of America of course don’t want you to do that….neither does Wall Street or the Obama Administration. But when Wall Street or businesses make a bad deal, they walk or flush the company. It’s no big deal. It happens all the time.
I am seeing more and more information about strategic default. This could become a REAL problem if this starts to gain more traction. Although that said, in conversations I’ve had with others recently, the government is doing so much to try to manipulate the market from loan modifications to holding interest rates artificially low – that no one really knows what the market should actually look like.
I suspect we’d be out of this mess in a couple of years if they just let the market work. I’m sure there are others who say that if we just let the market work, it would collapse everything else in the economy as housing crashed. I don’t know. I’ll leave that to the smart people to figure out.
Here are a couple of other entries I made on strategic default – here and here.
Case-Shiller Home Price Index – Twin Cities Declines 8.4% Year over Year
The S&P Case-Shiller Home Price Index was just released moments ago for October 2009 home sales data. The Twin Cities is showing a year over year decline of 8.4%. The over all 20 city composite is down 7.3%.
Click here for the press release from S&P.
Case-Shiller Home Price Index Reports Tomorrow
The much anticipated Case-Shiller Home Price Index will be released tomorrow morning. I’m expecting we’ll see surprisingly good news with regard to the improvement in the numbers. Overall home prices will likely still be negative compared to one year ago, but the intensity of the decline should be lessening. I’ll have more on this tomorrow.
Morgan Stanley Strategic Default Commercial Buildings – Billion Dollar Loss to Investor?
There has been much discussion about strategic default….that is people strategically walking away from their homes because they believe it’s in their best financial interest to do so. The banks of course, don’t want you to do that. That said, business does this all the time and even the top Wall Street firms do this as well.
Check out Denninger’s piece at Market-Ticker.
$7.7 Million Development Project Moves Forward in Brooklyn Park, MN
We don’t see this very often these days, but there is some commercial development going on in the Twin Cities. According to this Finance & Commerce story, the Beard Group announced that they are moving ahead with a $7.7 million retail development in part because they have a commitment from HCMC to lease half the space.
Twin Cities Real Estate Market Update – Week of December 14, 2009
From the Minneapolis Area Association of Realtors:
Weekly Market Activity Report
The post-Thanksgiving bump is in effect for the Twin Cities housing market. The week ending December 5 saw pending sales swing upward from the previous week by 152 to settle at 551. This is 7.7 percent less than last year at this time, marking the third week of the last four to post pending sales numbers lower than a year ago. The aftermath of the tax credit’s initial expiration date is combining with the typical holiday slowdown to bring sales down.
Two other important metrics:
Months Supply of Inventory – At 5.7, this is the lowest MSI in more than two years and a full 32.9 percent below last year. This bodes well for sellers in general, but the higher price ranges are still buyer’s markets.
Housing Affordability Index – At 207 and improving, this is welcome news. This means that the average family income in the Twin Cities region is 207 percent of what it takes to qualify to purchase the median priced home.
Click here for the full report.
Wild Meadows, Medina, MN
Okay, this is more than a little self serving, but for anyone who tries to do some business on the internet, it’s always fun to find out that you’re on the first page.
Here’s a Google search for Wild Meadows. My information site is (at least at the time of this search) showing up as the very last entry on page one. My Wild Meadows information site is Wild Meadows Home Info.
If you’d specifically like to stay up on Wild Meadows, then please do sign up for that search. It’s free and there’s no obligation. If you’d like to look for distressed sales and foreclosures in Medina, then sign up for this site at Medina Distress Sales.
Avoid Foreclosure in Minnesota – Know Your Options – www.JohnMurphyHelps.com
Find out more what your options might be if you’re upside down on your mortgage and facing the possibility of foreclosure. Visit my site dedicated to helping homeowners in financial distress – John Murphy Helps.
