Is the Housing Crisis Over?

A lot of experts have been wrong when guessing when the housing crisis will end. Even Warren Buffet in his letter to shareholders admits that he was wrong when he expected it to end in 2011. Click on the title for another article which says the crisis will end in 2012. For the sake of the economy lets hope they are right. And if they are, it is a great time to be in the market. It is also a great time to be working with established, knowledgeable realtors from the Landmark Group who can help guide you in these challenging times.

What is a Good Economy for a Real Estate Investor?

Recently I was reading through Dave Paladino's blog and I came across a post that really caught my eye. It correlated with everything I've been reading about what a great buyer's market we are in and how the able-bodied should seriously consider investing in some form of real estate.

Dave wrote this post on Sept. 20, 2009, which is eerie because it sounds as if he's describing the Omaha we know today. A good economy for real estate investors, he suggested, looks different than a good economy for the rest of the business world:

1. High interest rate environment. Landlords compete with house payments, so the higher rates our competitors charge, the more we can also charge in rents.
2. Tight lending standards. If it is hard for people to borrow money, they are more likely to rent.
3. Less new construction of apartments. All business is supply and demand. The lower the supply, no matter how small, the less competition you have.
4. Big employment growth/low unemployment. [This wasn't in his original posting, but just to put Omaha's standing in this area into perspective, our unemployment rate is 4.7% and the U.S. average is 9.1%. Although our job growth, according to Sperling's Best Place is .09% - not very high.]
5. Net population increase. The more people looking to rent, the better. [According to the Greater Omaha Economic Development Partnership, Omaha has grown 12.8% in the last ten years and a 5.5% growth is projected for the next five years.]
6. High foreclosure rate. People have to live somewhere. It's not as if the demand for housing goes away.
7. Families living separately. This one is hard to measure, but it is really good for our business. Say a family has five adult children and they all live at home. It is definitely better for property owners if all these people live in separate units.

Nebraska 34, Ohio State 27

Attribution: Bobak Ha'Eri - Wikipedia

As some of you know I am a huge Nebraska football fan. I attended the Ohio State game with my 12 yr old son, Alex.We both were very confident that Nebraska would win. Well, as the game unfolded it was Ohio St. that was running right through our defense.We could not contain their pass either as they took a 20-6 lead going in at halftime. Fans booed the Huskers as they made their way to the locker oom.

As the second half started, Nebraska went three and out and Ohio State took their opening drive in for another touchdown to make it 27-6. Nebraska stalls again and Ohio St has the ball back. At this point I thought we were dead. Nothing was going right and I turned to Alex and told him "this is going to be a blowout just like Wisconsin."

Then all the sudden Ohio State fumbles.Nebraska's ball and I am about to witness something I have never seen in my 35 years of attending Nebraska football games. They score in two plays and then stop Ohio State cold, and then they score again with a long pass. Now it's 27-20 and the crowd is really loud. We hold them again and drive down and score another touchdown to tie the game 27-27. Nebraska then intercepts an Ohio State pass and proceeds to score its fourth consecutive touchdown to win 34-27! And they recorded the largest comeback win in the history of Nebraska football!

Why am I telling you this? Well we can all take something from this and that is never ever give up and always stay persistent. Nebraska needed a spark and got it with that fumble which then resulted in avalanche of touchdowns to seal the win. So when things are not going your way, when you feel like quiting just think about the cool damp Saturday evening in Lincoln, Ne. when our beloved Cornhuskers decided not to pack it in but to keep fighting, even when the score was 27-6.

It's Not All Bad News

Good economic news can be a little sparse right now and selling your home in today’s market can be intimidating if you are not working with a REALTOR® who has experience and market knowledge. Many homeowners are scared they will be selling their home for a discount in today’s market, and if you listen to the national news, this will only feed the hysteria.

Don’t base your decisions on what you read in the paper and hear on T.V. because not all markets are the same. The first step would be to request a comparative market analysis from a REALTOR® to determine if it’s the right time to sell or not.

Keep in mind, if you are selling your house for possibly less than your purchase price, you may be able to more-than offset this by your next purchase. Many homeowners are taking advantage of this with low interest rates to move up to their dream home!

Houses And Apartment Vacancies

U.S. Vacancies Rise

US apartment & Houses vacancies are at the highest level in 20 years. This may be good news for renters as they have a better selection to choose from and many property management firms are offering incentives such as paying the first month’s rent Or offering zero deposit. Landlords and property managers however need to be concerned that it may take much longer to rent their properties.

Here are a few tips to help you avoid vacancies:

1. Ask existing tenants a few months early if they plan to stay for the next year.
2. Get your tenants to sign a lease as soon as possible.
3. Collect a security deposit.
4. Advertise your vacancy several months before it is available.
5. Use every resource possible to advertise your vacancy.
6. Offer incentives to get tenants to sign a lease quickly.
7. Make your rental stand out from the millions of others with special features.

Manage your rental properties effectively and you can avoid vacancies and loss of valuable rental income.

Make The Right Move Omaha

"Success is not final, failure is not fatal;
It is the courage to continue that counts."

- Winston Churchill

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In the Omaha/Metro area, a new campaign is being launched called Make the Right Move Omaha. This campaign "will be honest and forthright in terms of presenting the current situation and it is designed to educate and provide confidence in the local market to spur home buying and selling."

According to this campaign, every eight out of 10 Americans believe this is a great time to buy but remain hesitant to actually do so. The Omaha Area Board of Realtors conducted a survey last winter about Omaha's economy and housing market. Of all the homeowners and renters questioned, 90% said interest rates are low, 80% agreed there are a plethora of homes in the market to choose from and 70% believed that homes are more affordable than ever before.

Despite their positive beliefs about the market, Omahans are still not buying. Either they fear losing their job and not being able to afford their home or they don't want to hassle with financing. They also think their current home won't produce the value they believe it should. Which is why the MLS Board of Directors came up with this campaign - they want "to educate potential home buyers and sellers in the metro as to the economic conditions locally and to spur a renewed interest in buying or selling a home."

But back to the Winston Churchill quote above - nobody can promise that you purchasing or selling a home will result how you hope. Similar to the 38,000 homeowners surveyed who said they had thought of buying/selling in the last two years, you have to take a chance. Like Churchill said, the courage to move forward is what counts in the end. The courage to put your house on the market to accomplish your dream of moving to Bali. The courage to buy the new home you've had your eyes on - it may be a leap of faith but it could also be the best decision you've ever made.

No one but you can decide if buying or selling is the right move, but at least Make the Right Move Omaha can help educate you in an honest way about this complicated process. Omaha is a lucky city to have such great resources.

--- Check out their website to take the next step in the process: http://www.maketherightmoveomaha.com/

Real Estate Sales

While the last year or two have been incredibly interesting in sales. The horizon looks very optimistic. I have been seeing more and more articles lately with positive indicators (See Linked Article). We still have a an uphill battle to work through the foreclosures but the affordability index has not been this low in 50 years as it relates to owner occupants.

On the investment side, the rental market is very strong and the list price for these homes is artificially depressed by the foreclosure properties the appraiser is using as comparables. A recent example happened two weeks ago, when I took an appraiser to 13 properties being foreclosed on by a local bank. The average appraised value came in around $18,000 to $21,000. These houses will need some TLC and will rent from the high $400's to high $600's. As you might expect, Landmark Group agents are exceedingly well versed and can help you safely navigate the Real Estate landscape.