Warren Buffett: It’s Time to Buy Real Estate !

Warren Buffett appeared live on CNBC’s Squawk Box this week. During the interview, he was asked about the current real estate market and whether he felt now was the time to buy. His response was rather emphatic and has been used as a headline in hundreds of articles since the interview:

“If I had a way of buying a couple hundred thousand single-family homes I would load up on them.”

However, throughout the interview, he addressed the market from a few angles. Here is what he said:

Why invest in real estate now?

“It’s a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.”

Is buying your own home better than investing in stocks right now?

“If I knew where I was going to want to live the next five or 10 years I would buy a home and I’d finance it with a 30-year mortgage… It’s a terrific deal.”

Should we buy multiple houses?

“If I was an investor that was a handy type and I could buy a couple of them at distressed prices and find renters, I think it’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make now.”

Over the last couple of months, there have been more and more financial analysts coming to the same conclusion: It’s time to buy real estate.

House Prices: Window of Opportunity Beginning to Close

HAPPY LEAP DAY!

The Folks at KCM Blog make a persuasive case below, and I believe if any thing here in Ada County we likely even have a smaller window of opportunity. I do not believe banks held back as many foreclosures in our area due to Idaho being a statutory foreclosure state.

There have been conflicting opinions as to where housing prices are headed. We want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in most parts of the country in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices throughout the rest of the year.

Why renewed downward pressure?

Any item’s price is determined by ‘supply and demand’. In many parts of the country, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties (foreclosures and short sales) will be coming to market this year. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was reached two weeks ago.

What Impact Will the Agreement Have on Foreclosures?

Brandon Moore, chief executive of RealtyTrac, explains:

“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”

How Many Foreclosures Could We Be Talking About?

Mark Vitner, a senior economist at Wells Fargo Securities tells us:

“The settlement helps the housing market in the long run because it allows banks to proceed withmillions of foreclosures that have been stalled.”

What will this mean to home prices?

As this inventory comes to market, it will impact prices in two ways:

1. It will bring to market discounted competition for buyers


2. It will impact the appraisal values of all homes in the area

Which States Will Be Impacted the Most?

The states that have the largest backlog of properties currently in the foreclosure process will be the states that will see the greatest price depreciation.

Bottom Line

There is a window of opportunity currently which sellers should take advantage of. Waiting until later this year will not guarantee a higher sales price. If anything, in many regions of the country, it probably guarantees the exact opposite.

 

Idaho Housing Offering Some GREAT Programs!

The Idaho Housing and Finance Association is offering some really good loan opportunities to purchase a house, and not just for 1st time home buyers. Combined with our extraordinary low rates and low home prices, they provide even more reason to BUY NOW! With no mortgage insurance your payments will be even lower.

Tomorrow I will share some more insight on BUYING NOW.

Give me a call now to get started, I partner with some outstanding loan officers.

February Take My Breath Away Winners

As I travel about the valley I take photos of those homes that are so brightly painted that they make you look at them. I share them occasionally here, usually as monthly winners. If you have any you would like to include, send them my way and we will see if they have what it takes to become a monthly winner. And by the way, as you look at these houses you need to have the Top Gun Theme going through your head, at least I do. (You know, "take my breath away...") In fact I had to go to You Tube and have it playing while I am uploading!

Located on N 28th St in Boise, just down from a cute little house that I closed today.



This home, I believe is located out in the country in either North Caldwell or perhaps the Middleton area.

Where does Idaho rank in Number of Foreclosures?

We do not look too bad in comparision to the rest of the country, I believe we are in a better position than we have been in  the past. We could be Florida or Nevada!



 

InfoGraphic

Methodology as per CoreLogic: The foreclosure inventory represents the number and ratio of homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan … The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are therefore excluded from the analysis.

 

Idaho Home Sellers and How the Serenity Prayer Applies To Selling a Home

You may believe that selling your home is impossible in today’s market. You may feel powerless to the process. What could YOU possibly do to turn this housing market around? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to guarantee that your house will sell even in the current market.

How you ask? Let’s look at the simplicity of the famous Serenity Prayer and apply it to selling a home in today’s real estate market.

“Grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main reasons that the housing prices have softened:

1. the current economy


2. the inventory of distressed properties (foreclosures and short sales)

As an individual homeowner there is no way for you to impact either of those two situations. The best think-tanks in the country are struggling to discover solutions.

Have the courage to change the things you can

There is not a vacuum of buyers in the market. There is a vacuum of homes a buyer in today’s market will purchase. Let us explain: could you sell your home today for $1? … $1,000 … $10,000? Of course you could. There are plenty of buyers in the market for a home they consider priced correctly. You have to decide what the correct price is for your home if you truly want to sell. If you want your house sold, you must list it at a price a buyer will pay for it. Not a buyer from 2006 but today’s buyer who has plenty of homes from which to choose.

It will take courage to sit with a real estate professional and honestly decipher the true value of your home. If you want to sell, you must have that courage.

The wisdom to know the difference

We all realize that the economic situation will take some time to correct. If we want to wait for prices to return to 2006 levels, we will probably have to wait for 5-7 years.

Look at the reason you decided to sell in the first place and decide whether the extra money you would get from the sale is worth that wait. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

 

Memories of Grandpa and Grandma-now rubble.

In reading the paper a couple days ago I noticed this article about tearing down an old building in Caldwell to make way for future use by Canyon County. I have a very personal connection to that structure, my only memories of my Grandmother are of going to that building, which was then a apartment house owned by my Grandfather, entering through the back door via the kitchen and being greeted by my grandmother offering me a piece of candy.



This current picture certainly indicates the place had seen better days. My grandmother passed away over 50 years ago. My grandfather had purchased the apartment house and moved after he sold the farm. The apartment they occupied had a kitchen, bathroom and living room that doubled as their bedroom with a Murphy Bed on the wall.