Real Estate Information

The Effect of Shadow Inventory for Connecticut

I just participated in a teleseminar by Steve Harney, Keeping Current Matters and he shared some very interesting statistics regarding shadow inventory.  Shadow inventory is the number of homes which are delinquent in their mortgage payments but the banks have held back from the market until now.  They are getting ready to hit the market soon and in states with the greatest inventory, they will have a devastating effect on pricing.  The two states hit the hardest will be New York and New Jersey but Connecticut is a close third, showing 10 to 50 months inventory.

According to these statistics, most states (indicated in green) will soon begin to see an increase in real estate prices and by the end of 2012 should be on the upswing.   

Housing Market Report

Deb and I have just returned from the National Real Estate meetings in Anaheim, CA where we attended a session by Dr. Lawrence Yun, Chief Economist for the National Association of Realtors.

Strange World

Dr. Yun’s Housing Report began with his comment about “A Strange World” -- even though all the Economy indicators are “Great!”, including an improved job market,  home sales have not picked up.  Although banks have huge cash reserves, the cash is not circulating into the economy.  Although the Federal Reserve put forward a monetary stimulus to encourage more lending, they have also made regulations to discourage lending.

Strangeness Continues

Fannie and Freddie are making “internal self-sustaining” profits on new mortgages but they are still reporting net losses because of legacy assets.  He says investors are seeking bargains but complain there are not enough foreclosed properties – on average they are taking more than a year to reach the market. 

National Housing Cost Comparisons Over 30 Years

Defining the “strangeness” is his following chart comparing the price index for various items:

Item                                        1981                2011                % Change

Consumer Price Index             87.2                 226.3               160%

Rent Index                               84.7                 254.3               200%

Food Price Index                     91.6                 229.6               150%

Gasoline Price Index               103.6               308.4               197%

College Tuition Index              75.8                 601.3               693%

Medical Care Index                78.6                 401.4               410%

Monthly Mortgage Pymt.       $598                $698                17%
On a median priced home      (14% rate)       (4% rate)

Wow!  Check out that college tuition column.

For Dr. Yun's complete report, just call or e-mail.  203 803-5695, Bunny@BunnyMostad.com

Bunny and Deb’s Prediction

Despite everything – and remembering that real estate is local – we expect to see the usual Fairfield County increase in sales in the coming Spring market.  Given good condition, proper pricing and great marketing, homes will be selling.  We can help with staging, pricing, marketing and in general, getting ready to maximize the home selling season.

One thing we’re watching carefully is the number of foreclosures/short sales in our area.  As they come on the market, we may experience a further drop in home values so it will be extremely important to price competitively.

 . . . Catherine Mulvehill's entry of Salty Turtle ice cream was the grand winner of Bunny and Deb's ice cream contest.  The ingredients are:  roasted, lightly salted pecans (she uses Stuckey's brand), with a ribbon of chocolate and a ribbon of caramel.

The two runners up were:

  John Kotzageridis with John's Blonde Moment -- chocolate ice cream, blondie brownies, walnuts and fudge.

Greta Gartman with Squad Car Snack -- coffee ice cream and donut pieces.

The top three entries were decided by the owner of Sweet Ashley, Steve Tyminski and his staff.  He said it was difficult to eliminate any because they were all very creative and tasty.  Some were very similar to flavors he had already made, so he eliminated those first.  Others were eliminated because he didn't feel they would hold up well. 

The grand winner was decided by the volume of ice cream sales during the month of August.  Salty Turtle sold eight tubs in comparison to the next runner-up which sold four tubs.  A clear winner. 

In reviewing all the entries, Bunny and Deb would like to mention some of their favorites:

Nancy Brown's entry was Frenzied Chipmonkey -- coffee ice cream with chocolate chips and peanut butter swirled in.  She says she made this concoction for her daughter Molly's birthday ice cream cake (with oreo crust and hot fudge on top) and it was delicious!  Sounds like one you should try.

Justin Giancaspro suggested Justin's Summer Bash -- vanilla ice cream, caramel and Butterfinger mixed together.

Joseph Pedoto entered Caffeine Scream -- hazelnut coffee ice cream with dark chocolate chips and crushed espresso beans.

From Gary Malkin we have Tropical Dream -- vanilla ice cream with pineapple puree and coconut flakes.

Jacqueline Aimee Dall's entry was Hot Chocolate -- chocolate ice cream, swirled marshmallow, chcolate chips.

And Marlene Schaefler had two entries that we loved, Creme Brulee -- french vanilla ice cream with crystallized or carmellized sugar bits and Hawaiian Vacation -- vanilla ice cream with coconut, pineapple chunks and macadamia nuits.

Steve will be making up some of the other entries and we'll announce them here as they become available.  Don't forget to check our blog often.  And to read the Daily Norwalk's on-line coverage go to:  http://bit.ly/IceCreamContest.

We hope you enjoyed the contest as much as we did. 

The Great American Ice Cream contest is well under way.  We're receiving lots of entries and reports of fun and excitement.

What flavors are going to make it to the test kitchen?  Who is going to be the grand winner?

Stay tuned!

What's better than a delicious, home-made ice cream cone on a hot summer day.  Last year Bunny and Deb met Stephen Tyminski, owner of Sweet Ashleys ice cream store.  Home-made ice cream is a rarity these days and Stephen does a great job.

Last year we sent out coupons for a free ice cream cone from Sweet Ashleys.  This year we decided to have some creative fun and help him come up with a few new flavors, so we're running a contest.

Now Bunny and Deb are Realtors, and what does an ice cream flavor contest have to do with real estate?  Not much, I guess.  But it speaks to creativity and community spirit.  And since the entries are starting to roll in, I guess it means we know how to market a product.  And a house is a product.  Okay, we're reaching but we are good at selling houses, too.

So put on your thinking cap and e-mail us your ideas.  Stephen will pick the top three ideas and make them up.  They'll be on sale in his store for the month of August.  The flavor with the most sales wins a Sweet Ashley t-shirt and 4 quarts of their favorite ice cream.

The deadline is July 15, so hurry up and e-mail your creations to Bunny@BunnyMostad.com

We recently listed this immaculate home in Norwalk at a fair market price.  Interestingly, when you list homes at fair market they actually look under-priced because most other homes on the market tend to reach a little higher than fair market. 

We immediately received an offer - but not full price.  We were surprised. Then we received another offer, still not full price.  What's up with that?  Did the buyers not know value?  Did their agents not help them understand the value?Or were they just not going to offer full price no matter what?  Finally, a third offer came in over asking.   Clearly these were buyers who knew what they wanted and recognized the value.  

The media has convinced buyers that they're in control but they've missed the important ingredient -- you need to know market value.  Sometimes it isn't about getting a "steal"; it's about getting the right house at the right price.  Working with a Realtor who is on top of the market and can communicate what buyers need to know is a good start.

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Thinking of selling your home and purchasing another?  The tax credit is not just for first time home buyers.  If you have owned your current home and lived in it for at least 5 consecutive years of the past eight years, you may qualify for the Worker, Homeownership and Business Assistance Act of 2009.  They have established a tax credit of up to $6,500 for qualified move-up/repeat home buyers, purchasing a principal residence after November 6, 2009 and on or before April 30, 2010.

Your new home must be priced below $800,000 and the tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500. 

Income limits are set at $125,000 for single taxpayers or $225,000 for married taxpayers, filing a joint return.

To read an expanded article on this subject go to www.NAHB.org

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I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

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