5 Offers on a $550,000 foreclosure in Brentwood, $499k Short Sale Sold, and deals to be had…

There is good reason for responsible concern in housing today with shaky unemployment / economy numbers, shadow inventories from the banks, and homes taking longer to sell for less – but the on the ground activity is still more active than the popular buzz.

People are taking advantage of the market, even with these freezing temperatures:

This Brentwood foreclosure is listed for $550,000 (just over the median home value in Brentwood Tennessee) and has five offers in less than a week. It likely sold, and ready to have its new homeowners within 30 days. Below is the market data for this STEAL…

Another short sale in Brentwood is about to make a lucky homeowner (of a near custom quality residence in the Woodlands at Copperstone) very happy. Almost perfect condition, with beautiful old growth trees in the backyard.

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The deals are out there, but the market is moving quickly below the water line. If you really want a steal – be ready to act NOW. Cash is king, prepared and experienced lending can be almost as good.

Are you ready and prepared to take advantage of this market before all the spring competition?

Kevin Pellatiro
Hoping to help you take advantage of the market – when you are ready.
(615)714-7918 kpellatiro@realtracs.com http://signswemustobserve.blogspot.com/

Nashville: 2,700 NEW Jobs Created?

Nashville may see 2,700 new jobs and see Market Center Management Company update one of our most visible downtown intersections - at Commerce and Broadway - with the Nashville Medical Trade Center. There are still two huge contingencies 1) pre-lease the space and 2) Metro Council approving $585 million Downtown Convention Center project… but Nashville and the Ryman Auditorium are ready for the new neighbors – and like anyone right now; we want the influx of new jobs.

Rendings of the exterior of the proposed Nashville Medical Trade Center. Market Center Management Company announced today the location for its $250 million Nashville Medical Trade Center project: the site of the current Nashville Convention Center at 601 Commerce Street in downtown Nashville. The medical center will feature permanent manufacturer showrooms, temporary exhibition space, and conference facilities within a 2 million square foot complex. (Courtesy Market Center Management Company)

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Kevin Pellatiro
Hoping to help you take advantage of the market – when you are ready.
(615) 714-7918 kpellatiro@realtracs.com

Bank Error in Your Favor

Okay, not an actual bank error (perhaps that depends on our political persuasions, grin), but it feels about that good for Rob and Linda. They woke up to the news that they are suddenly going to receive $6,500 on their new home purchase (later this month). Not bad when you are expanding your living space - and who doesn’t want all the help we can get when talking on the expense of a move?

How come? What is the NEW tax credit about? Check with your tax guys and gals to confirm… 1) If you are a first time homebuyer, you are still going to receive the $8,000 tax credit through April 2010. 2) The new addition: If you have lived in your own home for five consecutive years over the last eight years – you are getting $6,500 if you are under contract before April 30th 2010 (just under 6 months from today). 3) If you are a builder, you can get back some of taxes you paid over the last five years.

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Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit


Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If
President Obama has signed the bill by the time I go to settlement; will I qualify for the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phase-out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on
November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

National Association of REALTORS® Government Affairs Division

$7,290 by April 30th – Move Up Buyers, 1st Time Home Buyers

Well, it looks like we are going to see a $7,290 version of the tax credit through April 30th of next year (contract date, close by the end of June 2010). NOT JUST FOR FIRST TIME HOMBUYERS, but also for move up buyers (who plan to stay 5 years, make under $125,000 individuals / $250,000 households).

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Hoping to help you take advantage of the market – when you are ready.

Kevin Pellatiro
(615)714-7918 kpellatiro@realtracs.com http://signswemustobserve.blogspot.com/

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Home Buyer Tax Credit to be Extended and Eligibility Expanded
by CalculatedRisk on 10/27/2009 06:03:00 PM

…and why don't agents like to get calls from buyers directly? Can a low offer be considered 'offensive'?

1) Guy is a home buyer from Sacramento who asks “I have a problem and I admit it... I call agents directly and why don't agents like to get call from buyers directly?”

THIS IS A GOOD THING. You should feel comfortable to call on any home you choose, whenever you choose - with or without an agent representing you. If you know your agent is responsive, informative, and helps you value properties for your specific needs – by all means, let us call too. I have agents tell me unpublished information on nearly every listing I call on. Still, if you want to know more… call and ask. My homeowners would love to know that you are interested, and would love the chance for me to tell you more about the home they are trying to sell. And if you are looking for an agent, tell them. If you are not, tell them that too :-)

2) Christelle in San Diego, California asked about closing costs for REO and Foreclosed properties. If the home is already at a price that is getting multiple offers, should I ask for closing costs?

If you are making an offer on a bank owned property that is going to have a bunch of people bidding on it – you might want to make yourself seem like the *easiest person in the world* to deal with. For instance:
‘Sale of Home Contingency’ to a bank might sound just like ‘your in-laws are coming to stay with you for the weekend.’
‘Closing costs,’ especially over a certain amount, might sound just like ‘you best friends annoying husband is ALSO joining you gals for drinks after work.’
‘Cash’ or a well written offer that involves a loan, might sounds like those magical words (at least to those of us addicted to the game, grin) ‘go play golf.’

Now we are having a little fun with this, but you really want to have a strategy when formulating your offer. The details can help you, or unknowingly hurt you. Just be sure to ask a lot of questions about how each detail works to your advantage – or against you. Just this month my clients in north Nashville were told about how much easier their offer was to accept; this wasn’t due to more money, it was less than anticipated actually, but it was us being more intentional with our details than the next guy. Give yourself the best chance that you can.

3) Jeremy asks “Can a low offer be considered 'offensive'?
This almost entirely based on the absorption rate (whether anybody involved knows it or not). Good market or bad, we all want to know if the house is going to sell. As home buyers, we want to know what we can reasonably offer and still get a deal; protect our investment. As home sellers, we want the most money that anyone would pay; getting the best return on our investment. How can we predict that though? Well, we can take an educated guess based on the number of home available divided by the number of homes selling each month (general area, surrounding community, specific trends for your home). It’s basically your gut feel - something to turn up to HIGH when home shopping or home selling – but with very real data.

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Hoping to help you take advantage of the market – when you are ready.

Kevin Pellatiro
(615)714-7918 kpellatiro@realtracs.com http://signswemustobserve.blogspot.com/

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((These are the top three questions this week as asked by real people from all over the country involved in the housing market and posting over at Trulia.com: http://www.truliablog.com/2008/04/28/trulia-voices-top-10-questions-of-the-week-8/))

Mortgage Rates below 5%

In hopes of saving you a little money each month, I wanted you to know that mortgage rates are below five percent in many cases.

National Averages Overnight: 5.16% for 30 year fixed / 4.56% 15 year fixed

A local bank that I checked with today shows even better (zero origination fee, zero discount points): 15 year fixed at 4.25% / 20 year fixed at 4.75% / 30 year fixed at 4.875%

If you currently have an interest rate around 6% or even higher, now might be the time to call your loan officer. If you are not sure of your rate, call me and I’ll help you check your previous closing file to make sure you are getting the best deal possible.

This article suggest that “Not too long from now, it's going to be harder to refinance.”

Need a recommendation for a lender you can trust here locally?

kevin pellatiro (615)714-7918 kpellatiro@realtracs.com http://signswemustobserve.blogspot.com/

Numbers Recovering :-)

Below is today’s look at our national real estate market from Calculated Risk. Keep an eye on his “Distressing Gap” …the difference between how many resale homes are sold, and how many new homes are sold. The national market can’t tell yet -because there are more foreclosures coming to test it - but we appear to be in actual, living recovery. Really.

Not yet above the waterline, but actually moving on the right direct; the proverbial bottom. See the direction of the graphs in the article below. The numbers for 2009 actually show this year is about normal for existing home turnover, but that inventory is still too high nationwide – with more shadow inventory to come.

The real question that the data can't predict:
Do you feel that values will hold in your new neighborhood?

Would you like to run the specific numbers together and find out what the numbers show?











http://www.calculatedriskblog.com/2009/09/existing-home-turnover-ratio-and.html

Wait a minute: A comment on House Prices

Below is a re-post I thought we may need to keep in mind as we see housing numbers climb for sunshine during these glorious summer months. Nashville and our surrounding markets, as a whole, are doing fairly well - very well in some cases - but we are better than most in 2009 (nationally). As you and those you know plan how to take advantage of this market, remember to gather as much information as possible. Then use it... article below from Bill McBride, Calculated Risk (Hat tip: "A comment on House Prices" by CalculatedRisk on 8/25/2009 09:39:00 PM)

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I've seen story after story today suggesting the bottom is in for house prices.

This isn't like 2005 when it was almost certain that prices would fall, and fall sharply. Now we are much closer to the bottom than to the top in prices (for some metrics, see House Prices: Real Prices, Price-to-Rent, and Price-to-Income)

In some areas prices have probably already hit bottom - like some non-bubble areas, and some bubble areas with significant foreclosure activity.

But I think many areas, especially the mid-to-high priced bubble areas, there will be further price declines. I'm not as certain as I was in 2005, but I think these price declines will drag down the Case-Shiller indexes - and I don't think the price bottom is in.

I do not have a crystal ball, but

...It seems there are many more foreclosures coming. Some of this depends on the success of the modification programs, but the Q2 MBA delinquency report shows a growing number of homeowners in the problem pipeline.

And the Fitch report yesterday suggests few of these delinquent homeowners will cure.That seems to mean rising foreclosures, and more distressed inventory. The MBA Chief Economist Jay Brinkmann thinks foreclosures will peak at the end of 2010.

Historically prices bottom about the same time as foreclosure activity peaks. Maybe it will be different this time - maybe the modification programs will significantly reduce foreclosures - maybe prices will bottom before foreclosures peak ... but I'll go with the normal pattern.

And on the demand side, there has been a surge in first-time homebuyer activity. There was significant pent up demand from potential first-time buyers who were priced out of the market in 2004-2006, and then were afraid to buy as prices fell. But demand from these buyers will probably wane later this year, even if another tax credit is enacted.

Just like the "cash-for-clunkers" demand declined after the initial burst.

For mid-to-high priced homes, there are few move-up buyers (or so it would seem since so many low end homes were distress sales). Right now the months-of-supply in many of these areas is well into double figures, suggesting further price declines.

And on unemployment: most forecasts are for unemployment to rise into next year some time. Historically house prices do not bottom until after unemployment peaks. That seems especially likely now since so many homeowners are underwater. Once again I'll go with the normal pattern.

Also looking back at previous housing busts (like I did earlier today looking at the early '90s) there are usually some months during the bust with increasing prices. So no one should expect every month to be negative during the bust ... especially are prices get closer to the bottom.

I could be wrong - this isn't as certain as in 2005 - but I don't think house prices have bottomed. If I'm proven wrong, I'll be the first to admit it.

Best to all.

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Are we getting there? The Economic Upside of 2009

We could be in market recovery.

Doug Short - of dshort.com, Motley Fool contributor - and Steve Cassaday - President and CEO of Cassaday & Company - have chosen to share an interesting conversation with the rest of us… They are not doing so as someone trying to sell us, and so saying good things (it a great time to buy, sign here), but by established market trends and experience (see these figures, the sun will come out tomorrow).

And when these two talk, it might be a good idea for us to listen. Doug Short has been charting financial data for over 25 years. He tried convincing us to ‘store up’ for this mess back in 2007. Steve Cassaday is one of the best Financial Advisors in the country – not back when, but right now.

These guys talking RECOVERY is something to hope for heading into winter. Honest considerations that our markets are showings real signs of life, of resilience. Could we look back on these times as the initial growth period?

For the record, previous upswings far outpace the downturns.

In their example for our consideration, the four worst market drops in history are lined up at their deepest, darkest lows (current S&P low of March 9th 2009 used):

Here's to a better tomorrow, today.

128 days left. 18 weeks.

Typically, you want to allow 60 days to find the right home -- 30 to 45 more days to go through the inspection and loan process. Roughly, only 38 days remaining before a 90 day process might put the $8,000.00 stimulus check (set to expire November 30th) at risk for you first time home buyers.

Its going to be a log jam at the end of November. Builders, lenders, and title companies are going to be bursting at the seams to meet the deadline. Avoid the strain and stress of standing in that line -- start looking online and getting inside your favorite properties sooner rather than later.
Here is a convenient search site to save your top ten list. Drive by those favorites today, and start narrowing in on your preferred neighborhoods. Do you need help discovering which areas might be best for you? Send an e-mail with your questions, start asking your friends about their commutes to work/play, and get in your car (grin)! Driving to the houses you like online can really show you the difference between which neighborhoods you like, and which you can strike from your list right away.

Most importantly, try and write down the answer to your crucial search question: What am I looking for in my next home?

1.

2.

3.

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Nashville: Most affordable and stable market in the country?

From Thomas Wood, business writer at Nashville Post: Among large metro areas, Nashville has one of the most stable housing markets in the country. That’s the word from PMI Mortgage Insurance Co., which has just put out its latest quarterly Economic and Real Estate Trends Report.

The report goes on to explain national woes "Florida, California, Nevada and Arizona continue to have the highest risk scores - 36 of the most risky MSAs are located in these four states - but an increased risk of lower future prices is now spreading across all regions of the nation, due to the significant increases in unemployment and foreclosure rates."

Report available here.

Another affordable neighborhood selling well?

'Move up buyers' is a term that real estate markets treasure. One first time homebuyer’s purchase domino’s all the way up to the sale of that 'house on the hill.' In the case of our national real estate market, this endangered species is feared to be dead or dieing due to all of the foreclosure, short-sale and REO sales. Essentially, after the bank sells you a home, they are not going out and buying another - so the ‘circle of life’ housing market stalls. perhaps cancelling what would have been five to six more home sales. Stifling demand, crushing values.

Enter our earlier post about the Blackman area of Murfreesboro (thirty minutes southeast of Nashville, Tennessee). Under five months of inventory. Stabilizing. Selling.

Anomaly? Nope.

Hendersonville’s own Walton Ferry Elementary is showing more than just ‘signs of life’ - its selling too. Pretty well in fact. About 35 houses are available in this lake community near Sander's Ferry, but 31 have already sold in 2009, with eight more under contract or pending sale. Again, we see a desirable community performing well in the midst of a tough market.
Dozens of families were able to move up to the houses they wanted, and many were able to do so quickly in this north of Nashville gem.

Will the results of this activity find its way into the rest of the market? What does it look like for all of Nashville?

Seller’s market in 2009?

We may need to keep an eye on the Blackman area in Murfreesboro - its selling well. Not the same market that we are seeing often enough, but follow the numbers….

The area as a whole only shows 4.68 months of inventory. Six months is considered a balanced market; more on the shelf is a buyer's market, less to choose from is a seller's market. At four months/eight months, we'll see prices affected up or down (respectively). So 4.68 months of available homes means that the Blackman area is stabilizing.. wait... actually improving - selling.

To give you some examples of the homes to choose from, here are the available homes in the area between $180,000 and $250,000 (market data).

This might be another example of how certain areas (read: desirable locations), perform in the best of times or in the worst of times. Located between Murfreesboro and Franklin, just west of I-24, and along Highway 96 (close to Interstate 840) - convenience is king. Just ask the investors and small business owners behind The Avenue, the newest major shopping area in Middle Tennessee.

Murfreesboro’s median home price ($154,600) is 14% below the national median price ($180,100), and its selling well. Plenty of short sales, foreclosures, and REOs - don’t get me wrong - but if we see the entry level markets around Nashville stabilizing (or even improving), does this mean we can start to try and track “the bottom” in our market as a whole?

Yeah, think so (grin).

Is your neighborhood selling this well? Why or why not?

Realistically, for higher end homes (greater than $800,000) what have sales been like In Franklin in 2009?

This is another recent conversation (public forum online) that might hopefully help you protect your money...

Q: Realistically, for higher end homes (greater than $800,000) what have sales been like In Franklin in 2009?

A: Not good. 18 months of inventory, and prices falling until that number reaches a balance. In LaurelBrooke, for instance (one of the very best neighborhoods our region has to offer), that means a drop of over 20% in average price since 2007 (median sales price too). Good time to be on the buy side, but its a rough market to make a successfully sale within - unless you analyze what is selling.

Would you like to discuss how recent sales might protect your investment? For instance, what is the 'constant' in the handful of homes sold this year in LaurelBrooke?

Economic Perspective and the Four Bad Bears

The S&P 500 is 40% below the October 2007 high but 38.8% above the March 9th low. Are we in a new bull market, or is this a bear market rally?

Take a look at Doug Short’s fascinating take on what history might tell us about the current state of affairs.

Come get your $8,000 stimulus money in Nashville right NOW. Like, today.

This just came out today - so we'll have to see exactly how the details will work - but this might mean that you would see the $8,000 First-Time Home Buyer Tax Credit as a benefit immediately. In other words, at the closing table you could pay any closing costs (and maybe part of your down payment) with a "free" $8,000.

Not bad for Uncle Sam, eh?

Wow. Now this might be really be a good time to buy RIGHT...

Are Nashville area home values down 7% or up 5%? Yes.

In looking at the ‘average sale price’ for Franklin home values over the last five years, you’ll find the headline above to be right on the money. For example, these figures from our popular Fieldstone Farms neighborhood at Hillsboro Road in the Grassland Middle School zone:
Average Sales Price in…
2005 $217,292 - 193 homes sold
2006 $332,455 - 171 homes sold
2007 $325,343 - 158 homes sold
2008 $313,238 - 122 homes sold
2009* $291,184*- 31* homes contracted or having sold so far (*a LOT to happen in the next 3-4 months)

Down 7% so far this year, which should improve in the next 60 days, 12 homes are getting ready to close and showings are picking up now; you should see momentum over the coming summer months. In terms of your money, if you purchased in ‘05 or before (~80% of the neighborhood) you’ve edged up a slow five percent in that time (condo averages in Franklin have been hit by 11% so far this winter, but show a 14% gain since 2005). The market is actually moving better now than this past winter.

As it stands today, there are 6.3 months of homes available in Fieldstone Farms. That represents (roughly) the same amount of buyers and sellers, so the values look likely to stay steady or slightly better this summer. Hopefully this information protects you as a homeowner, or as a homebuyer, and you can adjust your strategies according to what is actually happening. A much better method than traditional ‘gut feel’ or hearsay.

Would you like to discuss this, and more dollar-specific strategies, for your home - or - in the neighborhoods you are looking to buy?