OCTOBER #1

REAL ESTATE NEWS

FORALLOFYOURREALESTATENEEDS

2011

Pacific Real Estate

Duke Simon

AreShortSalesWorthIt?
Inlate2009,about54%ofallshortsaleswere completedbyfirsttimehomebuyers.Seekinggood pricesandwithlimitedbudgets,manyfirsttime buyerswereattractedtoshortsales.However,in mid2011thispercentagefelljustbelow40%.Its clearthatthesebuyersarelosinginterestand gettingfrustratedbyshortsales. Currentlyshortsalesareplaguedbylotsof paperwork,unresponsivenessfrombanksand servicers(itcansometimestakeweeksormonthsto getanupdate),sloworlowappraisals,difficulties dealingwithmultiplelendersandahighchance thetransactionwillneverevengothrough.Infact, onaverage,itcurrentlytakes17weekstocomplete ashortsale. Yet,shortsalesaccountforabout16%ofallhome purchases.Ataratelikethis,(andwiththe advantagesforbankstodoshortsales)therewill likelycontinuetobemanyshortsaleopportunities. Soisitworthalloftheextraissues?Thatisdefinitely apersonalpreference,butremember,shortsalesdo sellatpricesapproximately27%lowerthannon distressedpropertiesprovidingagreatopportunity topickupahomewellundermarketvalue.Forthat reason,somebuyerswhoareinterestedinshort salesmakeoffersonmultipleshortsalesatonce, increasingthechancesthatonewillgothrough quickly. ReaderQuestion:Howmuchdoesitcosttomaintainahome eachyear? Thiscanvarygreatlydependingonalotoffactors,including locationandage.AccordingtoFreddieMac,averageyearly maintenancecostsarebetween1and3percentofahomesvalue. So,forexample,maintenancecostsfora$500,000wouldbe around$5,000and$15,000peryear.
PicturefromFriedbergPropertiesandAssociates

CantFindAParkingSpot?
Thatwontbeaproblematthishouse.Thesixcar garageabovecomesattachedtoa26,000squarefoot home.Sittingonover3acres,thehomehas26rooms, including7bedrooms(3aremasterbedroomsuites),9 fullbaths,and1halfbath. Theluxuriousamenitiesincludeaputtinggreen,pool withwaterfall,tenniscourt,indoorsquashcourt, gymnasium,andmovietheatre. Owner:rapper/musicianSeanCombs(AKAP.Diddy) Location:Alpine,NJ Price:WhileP.Diddyreportedlyboughtthishousein 2004for$10,000,000,hecurrentlyhasitonthemarket for$13,500,000.

QuickFact:FSBOs(ForSale ByOwners)accountedfor 9%ofallhomesalesin 2010.TheaverageFSBO homesoldfor$140,000 comparedto$199,300for agentassistedhomesales.

MoreHomebuyerPreferences
Lastweek,welookedataJohnBurnsrealestate surveyof10,000potentialhomebuyers.Thesurvey analyzedwhatpeoplewerecurrentlylookingforina home.Severalotheritemsfromthesurveyare noteworthy,aswell: Thereisapreferenceforcasualandcomfortable stylesversusmoreformalstylesinhomedesign. Thisisunderscoredbymoredemandforgreat/ livingroomsinhomesversusmoreformalrooms. Giventhechoicebetweenthesetwooptions, potentialbuyerswantedhomeswhose great/livingroomshadabout50%morespace thantheformalrooms. Thekitchenandfamilyroomrankedasthemost importantroomsinahouse. Moreconsumersthaneveraredemandingmore outdoorlivingspaces. Notonlywasoutdoorspaceimportant,but buyerswantedgoodinteractionwiththe outdoorsandthekitchenandlivingroom.

BestMarketsforanInvestmentProperty?
LocalMarketMonitorrecentlyanalyzed316marketsand rankedthembyestimatedreturnsfrominvestmentson singlefamilyhomerentalproperties.Thetoptencitiesas wellastheaveragehomepriceandrentarelistedbelow. 1LasVegas/$130,000/$922 2Detroit/$97,800/$861 3Warren,Mich./$106,400/$648 4Orlando/$165,200/$980 5Bakersfield,CA/$131,000/$736 6Tampa/$152,700/$832 7Phoenix/$155,600/$834 8FortLauderdale/$200,500/$1,090 9Rochester,NY/$150,500/$825 10Stockton,CA/$157,100/$821 ReaderQuestion:MywifeandIofferedonabankowned homeandtheyarerequiringwetalktotheirlenderisthis allowed? Yes,itis.Banksoftenwanttomakesureyouareactually qualifiedfinanciallytobuythehomebeforetakingfurther steps,suchasacceptingyouroffer.However,youshould notberequiredtousetheirlender. ReaderQuestion:Willthesizeofmygaragebeincludedin thesquarefeetinthelistingofmyhouse? Typically,thesquarefootageshouldincludelivable,interior spaceandshouldmeetseveraltests.Itshouldonly measurespacethatisintendedforhumanoccupancyandis heatedbyaconventional,permanentheatingsystem.Also, thespaceshouldbeconstructedofmaterialsthatare generallyregardedasacceptableforinteriorconstruction. Finally,thespacemustalsobedirectlyaccessiblefrom anotherfinishedroomorarea.Basedonthesecriteria,its veryunlikelythatyourgaragewouldbeincluded.

Theseareimportantpointsforbuyersandsellers.For example,asabuyer,houseswiththesecharacteristics willlikelybeinhigherdemand(andthusmore expensive).Ifyouareaseller,itmaybeworthwhileto focusontheseimportantareastofixupyourhometo maximizeyoursalesproceeds.

RecentHomeBuyingStats:
Averagenumberofweekssearched:12weeks Theaveragehomebuyerspent12weekslooking forahomeandlookedat15homes. Themedianageofafirsttimehomebuyeris30; themedianageofrepeatbuyersis49.

DukeSimon PacificaRealEstate www.pacificrealestate.com DRELicense#123456 Office:(123)4567890 Cell:(123)7894560 duke@pacificrealestate.com

Theinformationinthisnewsletterisnotmeantaslegal,financial,oranyothertypeofadviceorrecommendation.Pleaseconsultaqualifiedprofessionaltodiscuss thedetailsofyourindividualsituation.