A Very Interesting Program! ULI Charlotte - Disruptive Demographics and the affects on the Real Estate Industry

I had the privilege of attending a great program yesterday in Uptown Charlotte on the changing demographics in the world and their impact on the Real Estate Industry.  The focus was on the impact to the United States as well as he also spent some time on our home state NC.  Dr. Johnson has a great slide presentation with excellent statistics to backup the forecasts.  I especially enjoyed that, because we use statistics so much in our day to day work as well, and do believe the numbers tell you everything.  It was not only very interesting to see how our state, our country, and the world will likely look demographically, in the years ahead.  My question is what will companies and governments do to adjust and/or embrace these changes?  Here's a link to Dr Johnson's presentation online below.

Here's a quick intro from the Urban Land Institute Website:Two powerful and “colorful” demographic forces—the “browning” and “graying” of America—will profoundly re-shape the residential and commercial real estate markets in the years ahead. More specifically, heightened immigration from Latin America and Asia combined with the aging of the native born population (especially the post WW II baby boom generation) will dramatically transform the age, racial and ethnic, and gender composition of the U.S. population, creating a demand of more residential and commercial spaces that reflect the consumer tastes and preferences of rapidly growing ethnic minority groups; new residential, commercial and retail spaces for an aging population; and communities that promote active living and healthy eating by design.

Speaker
James H. Johnson, Jr., PhD
Director, Urban Investment Strategies Center
Kenan Institute of Private Enterprise
The University of North Carolina at Chapel Hill

http://www.bovenderteam.com/documents/Disruptive_Demographics_Dr.James%20Johnson_March_2010.pdf

Assumable FHA Loans - Today, worth much more than you think.

When a lender mentions you have an assumable loan, what do you think?  Who is going to assume my loan?  Why would someone assume my loan?  What exactly does that mean? 

For many years rates have been very great.  Lately, they've been so great, some say we may not see rates like this ever again.  Well, assumable loans don't really mean much until mortgage rates go up or until you have someone looking to assume yours.  And not only do they need to go up, but they need to rise enough to make the rate on the assumable loan attractive.  For the last 10 years, there really hasn't been enough rise in interest rates to cause assumable loans to be desireable.  Well, with every expert in the business expecting rates to rise significantly in the upcoming 12-18 months, this is about to change. 

Today the current rate for a typical FHA mortgage is hovering right around 4.25%--an absolutely incredible rate.  Now imagine if the experts are correct, and rates rise to anywhere around 6-8% which is exactly where they have been in recent years.  That's a 2-4% difference in the rate that the assumable loan was locked in at in 2010, and the rate at which a new borrower would receive if they bought in 2-4 years from now.  Now imagine you're the buyer looking for a home in 3 years (2013).  You have Seller A with a great home at $300k with a typical conventional non-assumable loan.  In this case you would need to get a mortgage to purchase this home like most buyers.  Let's now assume the rate in 2013 for the same FHA mortgage is around 7%, which as most predict, is not unrealistic.  Next, you come across Seller B that has the exact same comparable home, but he's marketing his home as having an assumable FHA mortgage option (Of course, you have to qualify for this loan just like a new loan). Seller B's home was purchased in 2010 at the 4.25% rate.  Now Seller B has a 2.75% interest rate advantage over most other sellers in the market.  That's approximately a $500 difference in the payment.  That's a huge advantage for those buyers who are buying today, at unbelieveable rates, taking advantage of low downpayment options like an FHA loan (that are ASSUMABLE) then decide to sell in upcoming years when rates are expected to be much higher.  That would almost definitely help Seller B make THOUSANDS higher in their sales price, vs Seller A. 

Just another incredible advantage to buying in this great "buyer's market"!  Especially with an assumable loan.  ^ Andy

AT YOUR SERVICE..allow us to be your trusted advisors!

THE ROLE OF A TRUSTED ADVISOR..

Homeownership is a state of pride like no other. What could be better than building equity, deducting taxes and interest, and having a place to call your own?

That said, homeownership can be complex. It’s much more than buying or selling. Many decisions need to be made on an annual basis.

As your trusted real estate advisors, our team is here to help you between purchases, to help you maximize your investment and take the hassles out of homeownership. Here’s how:

RE-insurance – You need an annual insurance “check up” to make sure your coverage is adequate to cover the replacement value of your home and contents. An Allen Tate Insurance agent will make sure you’re getting the best rates and coverage.

REmodel – How do home improvements impact resale value? I can advise which improvements will give you the biggest return on investment (deck) and those that can be a detriment when it’s time to sell (custom kitchen).

REfinance – Interest rates are expected to rise soon. This may be your last opportunity to refinance and lower your rate. An Allen Tate Mortgage consultant can help you weigh the costs of refinancing vs. the benefits.

RE-valuation – A smart homeowner keeps an eye on the market to monitor home values and recent sales in their neighborhood. Ask me how you can receive Market Report, a customized e-mail tool to put the latest market trends directly in your hands.

REpair – Things break. And usually when it’s least convenient. Let me connect you with trusted vendors through Allen Tate Home Services, and you’ll have one less thing to worry about when the A/C is out, or the toilet’s sprung a leak.

RE-assess – When you receive your annual property assessment, what does this mean? Is it fair? What can you do if it’s not what you expected? I can help you understand your assessment and advise how this may affect the resale of your home.

REferrals – Your referral business is my greatest compliment. It would be my pleasure to serve your family, friends and colleagues. Whether they are moving across town, or across the country, I can help them sell their home or find their next home.

Our promise to you, is to always be there for you!  How can we help?

Andy, Debbie, Scott, Brandon, & Debbie

Brainstorming..Here's a new Housing Recovery Idea!

BRAINSTORMING AT WORK HERE! With rumors looming like another tax credit being considered by the administration, I THINK THERE ARE BETTER IDEAS TO CONSIDER FIRST.  We all know the Housing Market drives the economy, so with that in mind, here's a thought.  Over the last 3-4 years as a result of the housing market crash, there have been millions of short sale and foreclosure casualties.  Many of these were homeowners that lost their homes by either jobloss or other circumstances beyond their control.  Otherwise, they had great credit and were responsible citizens.  (IDEA!) Why isn't their a Lender Protection or Insurance Program either Privately owned or Government Sponsored (like FDIC), that would allow these ready, willing, and able buyers to purchase a home sooner.  Such a program (like Private Mortgage Insurance) could be paid by the buyer or seller of the property, so there shouldn't be any cost to taxpayers.  Of course, there would need to be qualifications so those that were true victims are able to get back on their feet and back into the housing market.  This would allow a huge source of buyers to get back into the market (increasing demand), more homes would sell (lowering supply).  Seems like one simple Program like this would bring a huge # of buyers into the market which would have an enormous positive impact on all of us.  PLEASE GIVE US YOUR THOUGHTS!

Will There Be a Double Dip in Real Estate?

I think this is a great article on the expectations by most Real Estate Experts across the country, on whether prices are going to continue to fall. Of course, most articles like this are talking about the nation as a whole, not your local area so consult your real estate professional who specializes in your market. In our local market, I believe this to be true. There will be some level of slide in prices and for the same reasons, supply going up and demanding slowing. There are many who talk about the shadow inventory coming to the market in the form of sellers deciding to sell, increased short sales hitting the market, and banks releasing foreclosures, which focuses on the supply side. The big issue on the demand side is not only has school started which takes away many "family" buyers looking to move up or down before the next school year starts, but we're also moving into Fall/Winter months which even in the best of markets, is historically a much slower season for real estate. Of course, you'll have your relocations that happen year round, but with employment #'s, that is down. You'll also have your investor buyers and those buyers only looking for a great deal, which doesn't help the common seller looking to sell now, who isn't in a distressed situation. A larger percentage of the homes selling, will be the lower priced "deals". They will then become comps, which again will pull down values. HOWEVER, even if this holds true to some level, values are low, interest rates are unbelieveable (I mean truly, they hit 4% yesterday for a 30-year fixed), and the upside of real estate, especially in our area is tremendous. THERE HAS NEVER BEEN A BETTER TIME TO BUY! Read more.. and let us know your thoughts. by Andy and Team Will There Be a Double Dip in Real Estate?