I get frustrated when I hear investors say that sellers are not willing to discount their properties or sell at a loss. The best I can do to convince them they are wrong is to share experiences of other investors that are having great success finding such deals. That is until now because I have some research proof done by zillow.com proving that many houses sell at a loss by homeowners that are under water.

According to Zillow.com, over the past year a staggering 30% of homes sold were sold at a loss. That is good news for investors that are looking for deals. This is not to say homeowners are offering their homes at a loss or want to sell their homes at a loss but do if the right offer is presented.

(This is a subtle hint that you need to be in the market looking for these deals and most importantly need to be placing offers).

Report: One-Third of Homes Sold Under Water

Nearly one-third of homes that sold in the last year went for less than what was owed on them, according to a report released Wednesday by Zillow.com.

The real estate website calculated that homes values fell 9.7 percent compared to a year ago in 163 metropolitan areas. Compared to the market peak in 2006, home values have fallen 12.8 percent. Home prices have declined for seven straight quarters, according to the report.

Over the past year, 30.2 percent of homes sold were sold for a loss. In 17 markets – 14 of them in California – more than half of homes sold in the past year were sold for a loss, the report said.

Source: Zillow.com (11/12/08)

Posted by Carter Brown

Investors MUST be aggressive in prospecting for deals. Do not limit yourself or get lazy in where you are looking for opportunities. There are many places to look for deals and I wanted to highlight one that is often overlooked or not pursued by real estate investors.

About 64 percent of home owners with expired listings end up listing with another brokerage within 30 days, according to a Hofstra University study.

“Buyers are frustrated and angry that their home didn’t sell, and they’re looking for someone to blame,â€? Joe Meyer, GRI, of Joe Meyer Presentation, Lake Grove, N.Y. , told a rollicking crowd earlier this week at the 2008 REALTOR® Conference & Expo in Orlando.

This 64% of home owners are looking to get their properties sold and most of them have had a long drawn-out frustrating experience with a realtor and want a quick hassle-free sale of their home. As the quote says, most just re-list with another realtor and probably have the same frustrating experience. This is where a creative investor (that means you) comes in offering a simple quick closing on their home.

You can easily get an expired-listing list from your realtor. Just ask them and start contacting the home owners with your solutions.

Posted by Carter Brown

Real estate investors are always looking for the markets that are poised for growth and price appreciation. A well-know housing market research Company has identified 10 markets where they see continued, steady, dependable growth.

Top 10 Most Promising Housing Markets

Housing Predictor, which provides housing forecasts in 250 markets, has identified 10 markets where the regional economies are healthy and have strong potential for increasing prosperity.

These housing markets have bucked the national trend in 2008 and avoided the subprime crisis, the consultancy says.

Whatever the future holds for the housing market as a whole, Housing Predictor forecasts that these cities will continue to see steady, dependable growth.

Top cities and the percentage sales prices have increased so far in 2008.

• Biloxi, Miss., 4.9 percent
• Salem, Ore., 4.7 percent
• Bismarck, N.D., 4.6 percent
• Spokane, Wash., 4.4 percent
• Yakima, Wash., 4.1 percent
• Austin, Texas, 4.0 percent
• Grand Junction, Colo., 4.0 percent
• Fargo, N.D., 4.0 percent
• Mobile, Ala., 3.9 percent
• Albuquerque, N.M., 3.5 percent

Source: Housing Predictor (11/15/08)

Posted by Carter Brown

Prosper Weekly Real Estate Podcast 11-24-08

This article points out that the apartment sector of the economy is still in balance and does not have problems with oversupply. This continues to reinforce the notion that apartments are one of the safest investments in the U.S. today.

Apartments are the Only Housing Sector That Is Not Oversupplied, Affirms Witten
Published: October 24, 2008

By Keat Foong, Executive Editor, Multi Housing News

Washington, D.C.—The apartment market remains healthy although rental demand is slowing, said Ron Witten, president of Witten Advisors LLC, speaking this week at the National Association of Home Builders’ (NAHB) Fall Construction Forecast Conference.

Witten said that apartment occupancy level has decreased by only half a point in the past 12 months, and is now at 95 percent on a national basis. Rent growth continues, but it has declined from 4 to 5 percent at its peak in 2006-07 to 2.3 percent in the second quarter this year.

“Fundamentals are still quite good in the multifamily rental sector,� said Witten.

However, he said that rental demand is “definitely� declining. Witten said the “real threat� to apartments comes from the single-family “shadow� rental market. However, he added that in early-2008 there was a significant trailing off in rental single family move-ins due to renters’ avoidance of living in remote locations because of high gas prices.

Witten forecasts that job losses will continue through 2009 before modestly recovering in 2010, and he said there will be a “strong� 2011.

Witten said there are about 100,000 units of empty apartments, which is not a big overhang given the base of about 20 million-plus apartment properties. He said no significant progress will be made in reducing the inventory as long as there are job losses through the end of 2009.

“This is the only housing sector that is not oversupplied,� he said. 2009 he said will see the end of job losses, and by the end of 2010, any excess inventory will be “behind us.�

David Seiders, chief economist of NAHB, said at the forecast that there has been a strong increase in multifamily rental production in the past year. However, he said the NAHB forecasts this increase was “overdone� and expects a decline in apartment starts, which will continue for about a year before stabilizing.

This article deals with recent negotiations and decisions by the International Code Council regarding changes to the 2009 International Building Codes. Many of the proposed changes to apartment buiding codes which would have added significantly to apartment building costs were opposed and defeated by representatives of the building industry.

Multi-Housing Groups Defeat Code Proposals That Would Have Negatively Impacted Apartments

Published: November 05, 2008

By Erika Schnitzer, Associate Editor, Multi-Housing News

Washington, D.C.—The International Code Council (ICC) has completed its 2009 edition of the international building codes. The codes will be published early next year.

The National Association of Home Builders (NAHB), the National Multi Housing Council (NMHC) and the National Apartment Association (NAA) had lobbied against some of the proposed changes, and were successful in defeating most of them.

NAHB said its Construction, Codes and Standards department worked to identify from a list of about 2,220 suggested changes the ones to which the group would object. Staff members presented their proposals at hearings and refuted proposed changes that it said would make housing unnecessarily more expensive.

NMHC noted that the biggest effect that the codes will have on the multifamily industry will come in the form of energy-related issues. The new code will require 50 percent of permanently installed interior light fixtures—in both common areas and residential units—to be fitted with compact fluorescent light bulbs (CFLs). However, Ron Nickson, vice president of building codes, NMHC, explains that many members have gone through their properties’ common areas to change out the lighting and found it to be very cost-effective.

In addition, windows’ U-values will be adjusted in zones 1-4. Again, Nickson is not concerned because he says, “I’m not convinced it will be a big cost for apartment developers because the U-values and solar heat gain coefficients limit what can be produced in the market, and competition will drive the cost down.�

For code changes to low-rise apartments—the property type that reportedly receives the most number of proposed code changes each year—the groups defeated every code change covering 11 broad issues directed at low-rise apartments. The proposals included, among other things, removing sprinkler design options, increasing fire ratings, lowering allowable building height limits and the number of permitted stories, and reducing allowable building areas.

Nickson says that he keeps track of the monetary impact changes such as these would potentially have on the industry. Had the proposals been passed, he estimates that the impact would have been approximately $1.2 billion per year in construction cost for apartments.

While some changes will be made to high-rise buildings, including the addition of stairwells, the groups were able to convince the ICC members to exempt apartments from some of the requirements, because of the difference in occupancy load between residential and office buildings.

Despite the groups’ many successes, Larry Brown, director of codes and standards, NAHB, explains one proposal they were unable to defeat. The new code will try to “expand fair housing units in all existing buildings when converted to residential, which poses a problem because you can’t always comply.”

In many cases, Brown explains, this is not feasible due to the existing construction. Additionally, it could potentially hinder or even dissuade downtown revitalization efforts. Brown adds that NAHB will be making recommendations for the code to be amended after it is adopted.

The article below discusses prices in apartments in recent months and compares them
to prices for single family home prices in the same time frame.

While Single Family Prices Make Biggest Drop in S&P Index’s History, Apartment
Prices Show Signs of Flattening

Published: October 28, 2008

By Anuradha Kher, Online News Editor, Multi-Housing News

New York–Even though the apartment sector had the highest returns over the past 12
months among all commercial real estate types at +0.4 percent, prices remained
flat, according to Standard & Poor’s July results for the S&P/GRA Commercial Real
Estate Indices. Nationally, commercial real estate prices for July 2008 too were
level versus July 2007.

The National composite reported an annual price change that was flat, compared to
July of 2007. This is down from the +1.5 percent reported in June’s data. It is
also well below this cycle’s peak of +14.7 percent, reported in August of 2006, and
is the lowest growth rate in the near 15-year history of the index.

The index for apartments in July 2008 was 142.52 down -0.9 percent in the June-July
period, down 1 percent in the May-June period and with a 0.4 percent year-on-year
change.

Meanwhile, single-family home prices in 20 cities fell 16.6 percent in August
compared with a year ago—the biggest annual drop in the history of the Case-Shiller
Home Price Index.

“The downturn in residential real estate prices continued, with very few bright
spots in the data,” says David M. Blitzer, chairman of the Index Committee at
Standard & Poor’s.

Based on the latest report on condo prices for the second quarter of 2008 released
by the National Association of Realtors (NAR), metro area condominium and
cooperative prices – covering changes in 54 metro areas – showed the national
median existing-condo price was $220,000 in the second quarter, down three percent
from $226,900 in the second quarter of 2007. Seventeen metros showed annual
increases in the median condo price and 37 areas had price declines.

The strongest condo price increases were in the Syracuse, N.Y., area, where the
second quarter price of $144,900 rose 17.8 percent from a year earlier, followed by
the New Orleans-Metairie-Kenner area of Louisiana, at $192,100, up 15.9 percent,
and the Houston-Baytown-Sugar Land area of Texas, where the median condo price of
$141,100 rose 9.9 percent from the second quarter of 2007. Areas where condo prices
declined mirrored the pattern seen with single-family homes.

Metro area median existing-condo prices in the second quarter ranged from $107,500
in the Wichita, Kan., area to $523,500 in the San Francisco-Oakland-Fremont area.
The second most expensive condo market reported was Honolulu at $330,000, followed
by Los Angeles-Long Beach-Santa Ana at $327,800.

Other affordable condo markets include Greensboro-High Point, N.C., at $109,600 in
the second quarter, and the Indianapolis area at $113,500.

Prosper Weekly Podcast 11-17-08