Entries from August 2006 ↓

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

The Top 10 longest commutes to work in the United States. If you are living in one of these places, you are giving up 5 hours a week minimum to be in the car going to work. And to be even more cruel, think that this is the average. How many people work from home and do not commute to lower this number.

1. Vineland, N.J. 39.6
2. New York 34.2
3. Washington, D.C. 33.4
4. Poughkeepsie, N.Y. 32.2
5. Atlanta 31.1
6. Riverside, Calif. 31.1
7. Chicago 31.0
8. Winchester, Va. 29.7
9. Stockton, Calif. 29.4
10. Vallejo-Fairfield, Calif. 29.2

via WTOV9.com

The migration of real estate advertising has started in earnest from the print media to the internet. Newspaper classified advertising is down and will continue to migrate south as it is one of the least effective forms of advertising today.

“Real estate agents and real estate advertising are undergoing a very significant transition period, which is certainly not a surprise,” observed Peter Zollman, founding principal of Classified Intelligence, publisher of the Real Estate Advertising 2006 report. “And when it comes out the other end,” he continued, “online will be a substantial winner and daily newspaper print is going to be a significant loser.”

According to the study’s findings, 19 percent of the 100 real estate agents surveyed online this June spent less than 20 percent of their total ad budgets on newspaper print ads, and 17 percent steered clear of print paper ads altogether. Although many said their overall ad spend will increase this year, money isn’t simply shifting directly to the Web. Sixty-one percent of respondents did not buy into online newspapers at all.
“Local newspaper Web sites, which in many cases have done a very good job of developing online tools, are not viewed very highly by the real estate agents,” opined Zollman. via ClickZ Network.

And the main reason is search. Try looking for a home in the classified section of your Sunday paper. It is brutal. Try looking through the Saturday insert for a home in a specific neighborhood though the ads that the real estate agents take out. Almost impossible.

Now do the same search online. Realtor.com and Yahoo Real Estate can target the homes by zip code and price and sometimes even subdivision. 3 minutes of work versus 1 hour going through the newspaper. And that is why newsprint real estate advertising will die. It is too inefficient and to expensive to justify.

Of course, it will not die right away. The reason? Home sellers. They see the barometer of marketing their home as an ad the real estate agent can show them that ran in the paper. And the problem with this is that the real estate agent KNOWS they just threw away their own money for something that is useless.

If I was selling our home today, I would tell the real estate agent to create a website for the home. Have them invest in search engine optimization to get the site higher in the search engines and market it like heck on the internet. That is where the buyers are.

Homebuilders stocks have been battered the last 6 month with many being down 25–50 percent. When the internet bubble occurred, insiders were selling their shares as quickly as they could. With the homebuilder executives the sales have not occurred. With the exception of one sale that was planned in advance by the Ryland Group CEO, there has been no insider trading of the stocks by any building company executive.

That leads me to the assumption that the downturn is not projected to be as deep and long as expected, or that the industry has a collective head in the sand mentality.

Jonathan Moreland, director of research at InsiderInsights.com, a service that tracks insider stock activity, said the lack of sales could be a sign that the executives believe the downturn will be relatively short-lived.
“Everyone likes to compare the homebuilding to the Internet bubble,” said Moreland. “But this is unlike that bubble, where in 2001 and 2002, I was seeing continued massive insider selling at a lot of these Internet companies, even when their stocks were 40, 50, even 60 percent off their highs.”
Still Moreland said it’s too soon to say that homebuilder executives have confidence that their stocks, and the home-building market, have bottomed out.
“You’re not going to get me to call a bottom or read an insider’s mind,” he said. “This definitely tells me insiders are relative more bullish than a lot of investors in these stocks. But that being said, we’re not seeing any buying. If they really wanted to show the faith, they could be buying shares.” via CNN Money

Affordable Homes, a real estate investment company that was one of the largest real estate ponzi schemes, is being forced to sell all 340 of their homes in a massive auction at the Meadowlands Arena. The estimated 3 day auction will start on September 29th, 2006.

The SEC alleges that Affordable Homes and its founder, Wayne Puff, bilked over 400 investors out of 40 million dollars as he payed off the original investors with new investors money. He was promising 15 to 20 percent returns.

Three hundred forty properties will go on the auction block next month in what could be the largest real estate auction in New Jersey history, organizers say.

The trustee overseeing the liquidation of bankrupt NJ Affordable Homes will begin the three-day auction at the Meadowlands Convention Center in Secaucus on Sept. 29.
 
The company’s portfolio includes single-family and multifamily homes and a handful of retail and commercial properties, said Jeff Hubbard, an executive managing director at Sheldon Good & Co., which is conducting the auction in a joint venture with DJM Realty. Also, vacant lots are available, including some with approvals for subdivisions. via NorthJersey.com

When we first got word that Peter Cooper and Stuyvesant Town were being considered for sale by Met Life, the asking price was 3 billion and Met Life was not sure that they could get that price. Peter Cooper and Stuy Town have a high percentage of rent controlled units so getting top dollar was considered out of the question.

But it looks like there is much more demand than originally thought and now these landmark middle class communities owned by Met Life may now reach the 5 billion dollar mark. If I was living at Peter Cooper or Stuyvesant Town and had a  rent controlled apartment, I would be very nervous. It looks like between Met Life and the new owners, everything possible will be done to get rid of all the rent control tenants that have the slightest violation to their lease before a possible sale.

Behind the scenes, the sale has already drawn interest from dozens of prospective buyers, including New York’s top real estate families, pension funds, international investment banks and investors from Dubai, according to real estate executives, even though the marketing book will not be released to bidders until next week.
The deal is likely to lead to profound changes for many of the 25,000 residents of the two complexes, where two-thirds of the apartments have regulated rents at roughly half the market rate. Any new owner paying the equivalent of $450,000 per apartment is going to be eager to create a money-making luxury enclave, real estate executives say.
The sale would only add to the seismic cultural shifts already under way in New York City and especially in Manhattan, where soaring housing costs have made the borough increasingly inhospitable to working-class and middle-class residents. It would be another challenge to Mayor Michael R. Bloomberg’s effort to stabilize and expand the number of affordable apartments in the city.

via FT.com

The housing market in Massachusetts  has been a little different than the rest of the country as the high cost of living and taxation has created the  environment where many people  were taking extraordinary amounts of cash out of their  homes. We wrote this last year on  the subject.

If this is the case, we are looking at a potential bloodbath in Massachusetts as there will be panic selling when the income is not there that had previously come from equity. I have downplayed many of the bubble bloggers who are looking for a bloodbath, but if there is panic selling due to income concerns, they may be correct.

Now a report from ForclosureMass.com shows that this analysis was fairly on target. Foreclosures have doubled, and the cycle is really just beginning. Add this to an environment that has many mortgage lenders doing everything not to foreclose on houses, the market may be much weaker than we have seen.

Highlights of the ForeclosuresMass.com August Market Analysis Report, which examines data through the month of July 2006, include:
1,348 foreclosures were started in July 2006. On average, nearly 70 foreclosures were filed every business day in July.
– July 2006 had 55.66% more foreclosures than July 2005 (866)
– July 2006 had 120.62% more foreclosures than July 2004 (611)
When comparing the 12-month period from August 1, 2004 to July 31, 2005 with August 1, 2005 to July 31, 2006:
– Foreclosures increased statewide 43.48% (14,552 v. 10,142)
– Counties with the largest increases were Barnstable with a 71.53% increase (693 v. 404), Bristol (64.33%, 1,382 v. 841) and Suffolk (57.82%, 1,534 v. 972)
via Foreclosure Mass

The real estate portal on Yahoo has a new cleaner look today. And that is not the whole enchilada as the real power in the make over is under the hood. It is recieving a boost in the information that it is offering customer in partnering with Prudential Real Estate and most importantly Zillow to supply a depth of data that Realtor.com is not prepared to compete with.

Here is my question. If realtor.com does not innovate and continues to lose market share, and home searches continue to migrate to the web, at what point do the realtors get restless with the conditions that realtor.com puts on them and flee the site?

Much of the new content at Yahoo Real Estate is being provided by property research start-up Zillow Inc. of Seattle and Prudential Real Estate.

Sunnyvale-based Yahoo’s (NASDAQ:YHOO) real estate site has dropped from the 5th most visited of its kind to No. 9 in the past year, according to Hitwise. Zillow’s site is ranked No. 5, while the official site of the National Association of Realtors has hung on to its top spot, despite its market share slipping from 12 percent to 10 percent.

via the Silicon Valley/San Jose Business Journal:.

Southern Florida is feeling it now, soon many other regions are going to be  having to face another dangerous entity. The local governments and their taxing authorities. An honest person would think that in  the  face of 60 percent appreciation in real estate values, taxes would correspondingly go down as a portion of the property assessment. But then that would be an  honest person.

But the reality is that the politician will try to suck every penny out of the community and into their coffers. They will start building roads, developing parks (named after  themselves, of course), and hiring every cousin and friend they can. Because in politics money is power.

So for all of you who live  in these regions, if you do not get organized quickly, your friendly government official is going to start spending like a madman. And if appraisals go down, you will have your taxes raised to cover the infrastructure they have built.

Only the county, Cooper City, Parkland and Hillsboro Beach plan to limit increases in their tax collections to less than 10 percent. The rest are seeking more to pay for everything from extra police officers to higher pension costs.

The newspaper analysis found that Broward’s unprecedented, five-year real estate boom will have pumped an extra $1.4 billion into local government accounts after this year’s increases.

The taxable value of Broward property shot up 60 percent since 2001, not counting new construction. That means local governments could have cut tax rates by double-digit percentages each year and still collected as much as they did before the boom. via the South Florida Sun-Sentinel.

As more and more homeowners are facing financial pressure on their homes, the use of tax liens to acquire distressed properties is going to increase. Typically, when a property owner is late on paying real property taxes, the local taxing authority will issue a a tax lien on that person’s property.

If you live in certain  states, the tax lien can be purchased and then sold. It also will serve as the first  lien on the property.

The sale of tax liens for back taxes is becoming common and will continue to be a way to acquire property relatively cheaply.

It looks like we are nearing a tipping point in real estate as the media and now polling companies are trying to capture the falling real estate  market. Typically, when the market attracts this  much attention, it is nearing its bottom,  and then stabilizes.

The one thing about the housing industry is that it is a consumable product. People typically do not own homes that are not used. So as housing demand catches back up to supply, and with the exiting of the speculators and flippers, builders are  already slowing down construction, the market will regain its equilibrium.

Even more importantly, 7 in 10 investors believe conditions in the residential real estate market nationwide are getting worse, not better — up from 63% in June.

via the Gallup Poll.