Is The Real Estate Market Being Hyped?

On the the USAtoday front page today one could get a sense of the outrage: property taxes up as house prices fall…

Despite the downturn, the market value of millions of homes still exceeds their assessed value used for tax purposes. “Some people are irritated to learn the news,” says Jim Todora, a property tax assessor in Sarasota County, Fla. “Their home’s value may have gone down, but their property tax is still going up.” … “People read about how the market has crashed,” says Polk County Assessor Jim Maloney in Des Moines. “But that change doesn’t show up for a long time.” Among the few who may benefit from falling values: people who bought recently at the market peak, only to see prices drop…..

Then we had yesterday: (CBS/AP) Down 8.4%, Most Since January 1989; Consumer Confidence Also Down, Thanks To Gas Prices.
Sales of existing homes plunged in March by the largest amount in nearly two decades, reflecting bad weather and increasing problems in the subprime mortgage market, a real estate trade group reported Tuesday. The National Association of Realtors reported that sales of existing homes fell by 8.4 percent in March, compared to February.
versus:
(MarketWatch) - Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday.

Of course, the good news was inflated and the Wallstreeters rallied when hearing this favorable report, this among a few other things. The problem is that housing represents the pillar of the economy and thus a gauge foreshadowing economic health. Psychology is truly important here. As we’re typing this the Dow was bouncing back and forth over 13,000 … Turn you TV on tonight, you will most likely hear more about this rebound in sales than the current gloomy trends. Do the math by yourself and you will know where the truth lies.


So what do you think?

10 Common Mistakes for the Novice Real Estate Investor

With housing inventories up and prices and mortgage rates down, the market couldn't be better for real estate investors. If you're new to real estate investing, it's easy to get in over your head with just a few false moves. Protect yourself and your investment by learning from the mistakes of others, says financial writer Pat Curry on Bankrate.com. Click the post title to read Curry's informative article.To achieve success as a real estate investor, avoid these 10 common mistakes made by investor newbies, advises Curry:

1. Planning as you go. One of the biggest mistakes investors make is not having a plan before they buy. Buying a house and then figuring out what to do with it is putting the cart before the horse.

2. Decide on an investment strategy, then find a house that fits your strategy.

3. Thinking you'll "get rick quick." Flipping houses for fun and profit appears infinitely easier on TV than it is in real life. You can make a reasonable return on your real estate investment but it takes time, hard work and financial smarts.

4. Playing Lone Ranger. Don't go it alone. The key to success is building the right team of professionals. At the very least, you need a real estate agent, appraiser, home inspector, closing lawyer and lender. You may also need a team of tradesmen to handle remodeling and building maintenance.

5. Paying too much. Mistakes in market analysis can lead investors to pay too much. Incorrectly judging the market is the main reason investors don't make money.

6. Skipping homework. Why do you think your mom sat over you at the kitchen table all those nights so long ago. Homework pays off. Read articles, books and blogs on real estate investing. Join the local chapter of the National Real Estate Investors Association. The more you know, the fewer the mistakes you'll make and the greater your rewards.

7. Ducking due diligence. Do your research before you sign on the dotted line. Make sure you factor in total costs and local market conditions or you could drain your bank account before realizing your goal.

8. Misjudging cash flow. If you plan to buy, hold and rent, don't underestimate the monthly cash flow needed to cover maintenance and management. Management fees typically run 7% to 10% of the monthly rent. You'll also have to pay the mortgage, taxes, insurance, association dues, advertising fees, etc. even during the months your investment property is not leased or rented.

9. Lowering the volume. You can't succeed as a real estate investor by handling one deal at a time. You need sufficient volume to weed out marginal deals and turn a profit.
Painting yourself into a corner. You must have more than one exit strategy. If Plan A isn't working, you already need to have in place Plan B and Plan C to fall back on.

10. Miscalculating estimates. Double the amount of time and money you think it will take to reach your goal and be prepared to spend it. All kinds of things can happen in the course of a real estate investment deal, many of them unexpected, especially if you're new to the game. If you don't wind up spending everything you've budgeted, you'll be ahead of the game. But you don't want to be caught with too little time or money to take the deal to fruition.


I can't stress enough read, read, read and plan, plan, plan.

Making a Checklist When Showing A House For Sale

---------A fresh coat of paint for home, garage, even fences - may be the one improvement that creates the most positive first impression.
---------Lawn trimmed, clear of debris.
----------Gutters sealed and downspouts clean.
----------Tidy front entrance.
----------Door brass polished, worn trim or rusty mail box painted.
----------Storms and screens cleaned.
----------New doormat put out.
----------If possible, keep front curbside free of parked cars.
----------Painting inside walls can pay dividends far beyond the time, effort and expense involved.
----------Tend to "little things" - oil squeaking doors, tighten loose cabinet knobs, take out removable stains, replace damaged floor tiles.
----------All windows, doors and drawers should open and close easily. Fasten loose tread plates, clean soiled carpeting.
----------The kitchen is the one place in the home that buyers look at closely. Tighten leaky faucets, repair faulty wall switches, outlets, light fixtures and any appliances that will "go with the home."
-----------The bathroom gets close scrutiny too. Keep it spotless. Tiles scrubbed and grouted, faucets polished, toiletries and medicines in their chest.
-----------Laundry items in closed hamper.
-----------Cleaned windows and clear, uncluttered closets and basement contribute to a more attractive home.
-----------Clear out accumulated items from closets, cabinets and under counters - also from the garage.
---------Consider holding a garage sale prior to showing your home.

Property Goldmines: Is your area one of them?

Following the lead real estate investment experts like Don Campbell, author of the best seller, Real Estate Investing in Canada, I do a tremendous amount of research into a market before we invest. I look changes in average income, population growth rate, job creation stats and labour market diversity. Digging deeper, I also look for announcements of new infrastructure projects, such as school expansions, hospitals, new industrial and commercial land becoming available, and new transportation projects like roads and rail.

Knowledge on these economic fundamentals goes a long way in building relationships with investors who buy multiple properties.

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