“Most of the stress people experience comes from inappropriately managed commitments they make or accept.” – David Allen: Nightingale – Conant author & productivity consultant

HOUSE PRICES: WHERE THEY WILL BE IN THE SPRING

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

They don’t want to be inconvenienced during the holiday season.
They believe that they will see more potential buyers and as a result will get a higher price.
In the northern part of the country, they might not want people walking through the snow and then into their house.
All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

Zillow believes we will not see a bottom in prices until the first quarter of 2012.
Standard & Poors thinks prices will drop %5 in the next few months.
JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

WHY DO YOU WANT TO BUY A HOME?

If you are in the market to buy a home of your own, you need to ask yourself one question: WHY?

It seems like a simple enough question yet it is not. Experts are predicting that, in many markets, prices will continue to soften. That has caused many buyers to stay on the fence of indecision hoping to buy at the optimum time. If the reason you are buying is to do a quick “flip” of the property to make money, waiting most definitely makes sense.

What if the reason you are moving isn’t about finances however. Does it still make sense to delay? That depends on why you are buying. What if your purchase is more about improving the quality of life for you and your family? Or moving into a school district where your child’s talents will be maximized? Or being closer to friends and family? There is a cost to delaying any of these decisions.

We realize everyone wants to make a sound financial decision no matter the actual reason for moving. Delaying in a hope to “time” the market might not make sense however. Forbes.com addressed this issue in an article by John E. Girouard last week:

“Trying to time the housing bottom is as much folly as trying to time stocks or any other investment vehicle. In fact, it’s greater folly because if housing prices do fall further, it’s likely to be because mortgage rates are rising, which would mean that over the long term that slightly lower price you may have paid could end up costing more in carrying costs than you saved.”

He went on to say:

“My answer to those who ask whether now’s the time to buy a house is that the American Dream is and always was alive and well. It has nothing to do with the direction of housing prices but everything to do with your financial situation, income stability, ability to shoulder the costs, and if the home you have your eye on is your version of the American Dream…a home you love that you hope to live in for an extended period.”

Bottom Line

Don’t make buying a home solely a financial decision. Is the real reason you want your own home more important than money? Only you know the answer.

BEST DAY TO LIST REAL ESTATE FOR SALE: FRIDAY

Sellers should list their home on a Friday for the best chance of selling it, according to Seattle-based brokerage Redfin.

Redfin analyzed data for 1.2 million listings in 16 markets nationwide over the past 21 months. The brokerage found that of all listed homes in those 16 markets, those listed on a Friday were 12 percent more likely to sell within 90 days, and homes listed on a Thursday or Friday sold, on average, for slightly closer to list price: 94.4 percent compared with 93.9 percent when homes are listed on a Sunday or Monday. Put another way, that’s a $1,000 difference on a $200,000 home.

Homes listed on a Friday were also 18.8 percent more likely to be toured by Redfin customers. Homes listed on a Sunday or Monday were the least likely to be toured.

“Our theory is that since homebuyers tend to tour homes on the weekends (Saturday and Sunday have 2.5 times more tours per day than weekdays), homes listed on Fridays are the freshest in buyers’ minds when they’re making their weekend plans. It also seems likely that many homebuyers sort their weekend ‘must see’ lists by date listed, going to see the freshest homes first so they have the best chance of getting in on a potential good deal before other buyers,” the brokerage said in a blog post about the findings.

“These factors put homes listed on Friday in front of more touring buyers on the weekend (which our touring data bears out). More tours leads to more offers, and more offers leads to a better price and a better chance of selling.”

In one respect, Sunday beat out any other day of the week: Homes listed on Sunday attracted slightly more online page views than the average on Redfin.com.

While the vast majority of homes are listed on weekdays, no one weekday was especially popular, with between 17 percent and 19 percent of homes listed on any given weekday. About 19 percent of homes were listed on a Friday during the time period studied, Redfin reported.

US HOMEBUILDERS LESS PESSIMISTIC IN OCTOBER

U.S. homebuilders are less pessimistic about the struggling housing market, but not enough to signal a recovery any time soon.

The National Association of Home Builders said Tuesday that its index of builder sentiment this month rose from 14 to 18.

Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom. The index has been below 20 for all but one month during the past two years.

Last year, the number of people who bought new homes fell to its lowest level dating back nearly a half-century. Sales this year haven’t fared much better.

Builders are struggling to compete with foreclosures, which have made the price of previously occupied homes more competitive. Many buyers are having difficulty obtaining loans or meeting higher down payment requirements. Low appraisals are scuttling some deals after contracts have been signed. Some buyers want to upgrade to a new house but are holding off because they can’t sell their home.

David Crowe, the builders group’s chief economist, said some builders are shifting their assessment from “poor” to “fair,” but few are changing their views from “fair” to “good.”

The trade group has identified several pockets of strength. Home construction, prices and employment have been improving in those areas.

The two biggest cities cited – New Orleans and Pittsburgh – were suffering through economic downturns during the housing boom. New Orleans is rebuilding after Hurricane Katrina in 2005; Pittsburgh has evolved from a city dependent on the steel industry to a diverse economy with jobs in health care, education and technology.

Smaller metro areas where energy and agriculture are the primary economic drivers have also shown improvement, the trade group said. Of 23 “improving” metro areas highlighted by builders, seven are located in Texas alone.

While new homes make up a small portion of sales, they have an outsize impact on the economy. The builders’ trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.

Separate gauges of current single-family home sales and foot traffic of prospective buyers increased four and three points each, to 18 and 14, respectively. A survey of sales expectations over the next six months rose seven points, to 24.

An index of builders’ outlook in the West rose nine points, to 21. The Midwest and South rose 4 points, to 15 and 19, respectively. The Northeast was unchanged at 15.

WHEN WILL REO SALES FINALLY REACH THE PEAK?

Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.

Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.

However, with the surge, “we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” the analysts said.

The increase in foreclosures is expected to mostly change from private banks’ portfolios — which nearly half are from now — to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.

To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.

But some analysts are skeptical that a surge in foreclosures will come without an intervention from the government.

“Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?” Scott Sambucci, chief analyst at Altos Research, told HousingWire.

HOW TO GO FROM 0-30 LISTINGS IN 30 DAYS

In this session successful agent and coach Hoss Pratt shares how he went from 0 – 30 listings in 30 days using a marketing arsenal that targets FSBO’s and expired listings. He’ll share with you how you can set up your daily plan for maximum effectiveness, his powerful 89 point marketing plan you can make your own, and proven scripts and dialogues you can use to get the listing every time.

You’ll leave this session with a copy of his perfect day plan, his 89 point marketing plan, and his performance guarantee that you can make your own.

GOV’T OFFICIALS URGE BANKS TO HELP ‘UNDERWATER’ BORROWERS

A new plan by state and federal officials could help more “underwater” borrowers qualify for refinancing assistance. The plan is being pushed by state and federal officials as part of ongoing settlement talks with banks over alleged foreclosure abuses.

“The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments,” The Wall Street Journal reports.

Many borrowers have been unable to refinance because they don’t have enough equity in their homes to qualify.

About 75 percent of all borrowers who are underwater — those who owe more on their home than it is currently worth — have “above market” mortgage rates, according to CoreLogic. Refinancing could reduce their mortgage rates by at least one percentage point, resulting in a big savings to the nearly 8 million underwater home owners, according to CoreLogic.

The ongoing settlement talks are among federal officials and the five largest lenders, Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. Any settlement reached in the talks would apply only to mortgages owned by banks, not by investors in mortgage-backed securities.

LENDERS ARE MAKING MORE LOANS

While the growth has been modest, banks are starting to make more loans again, The New York Times reports. Yet, the lending does tend to favor the strongest corporate and consumer borrowers, the article notes.

With more stringent underwriting criteria the last few years, many borrowers have expressed concern over the increasing trouble in qualifying for a loan today.

But “the narrative that banks aren’t lending is incorrect,” Timothy J. Sloan, Wells Fargo’s chief financial officer, told The New York Times. “Lending is strong, and based on what we’re seeing,” it will “continue to grow.”

Citigroup, for example, recently announced loan growth in the third quarter compared to a year ago in nearly all of its businesses.

The growth in loans is likely due to record-low interest rates and more borrowers seeking cash on their credit lines, experts say.

However, home lending still remains down. Mortgage and home equity loans have dropped more than 6.2 percent since peaking in late 2007 and early 2008, according to Federal Reserve data.

“I don’t think the lending window is open near enough to what you need to see to get the economy growing, businesses expanding, and to bring the unemployment rate down,” Bernard Baumohl, the chief global economist at the Economic Outlook Group, told The New York Times.