Foreign Investors Flooding US Real Estate Markets

The depressed prices in the real estate market are not only creating a great opportunity for American home buyers, but foreign buyers are flooding the United States real estate market like never before. The reduced value of the dollar has opened up the real estate market to international investors looking for properties to live in while they do business in the States or simply looking to cash in on the amazing value in the housing market. Properties that may have been previously out of reach have become affordable because of the plummeting values of the homes on the market and the available inventory off foreclosure properties to choose from.

Foreign investors may have an edge over some American buyers in the real estate market. In this country the inability of the banking industry to loan money freely has affected the average American’s ability to get a mortgage. The largest shares of foreign investors in American real estate are purchasing properties with cash. Those investors that finance the properties they purchase are doing so with large down payments, many times over 30% of the price of the house, making for easy loan processes and quick closings.
The prices of the homes themselves are a huge draw for foreign investors. Housing prices have dropped so dramatically in the last year or two that it is impossible for investors to turn a blind eye. In many cases investors are looking at the very same homes they had looked at in the previous 12 months and finding the prices tens of thousands, or sometimes even hundreds of thousands of dollars less than they had been just one year ago.
The opportunities for foreign investors in this housing market are immense. Not only is it more affordable for them to purchase part time residences for business dealings in the US, it is the ideal chance to get themselves a vacation home or invest in rental properties or homes to flip for profit. With the dollar at its weakest, the possibilities for building an inventory of American properties is stronger than ever before, and foreign investors are not wasting a minute of the valuable time. Property in the US is being bought up in greater numbers than in decades by citizens of other countries looking to increase their American real estate portfolio.
As the real estate market begins to stabilize, savvy investors realize that now is the time to pick up properties all across the United States. Where people had previously on the fence about making real estate purchases, the anticipated upswing in the market has helped them to decide to jump in. With the light at the end of the recession tunnel beginning to get brighter, investors understand that prices are at the lowest they are going to be because they are on the rise, and home prices on the rise means building equity quickly. Whether the purpose is to visit, stay or to invest, foreign buyers are flooding the United States real estate market. Information obtained from internet source.

House Flipping

I just wanted to let you know that FHA has lifted the hard 90 day rule that would require a seller to be on title for 90 days before the property can re-purchased from a buyer that is getting an FHA loan. This will go into effect February 1, 2010 and last for 1 year. This is huge considering how many properties we have on the market that has been acquired from investors that are flipping their properties for really good deals. There are some important issue that you will want to know if you end up making an offer with a buyer that is going with an FHA loan. So PLEASE come to me for details and we can fill you in as we go. Thanks for all of your support.

REAL ESTATE OUTLOOK 2010

Predicting the future is tricky. At best it’s two parts knowledge and one part luck. If there’s one prediction everyone wants, it’s what markets will be doing in the future.
Are we there yet?— Home prices won't hit bottom until early 2010. Some say it's really just a question of absorbing the supply of vacant properties. Home prices at the national level are expected to fall another 5 to 10 percent before stabilizing.
Tax credit—Exiting home sales rose again in November as first-time buyers rushed to close sales before the original November 30th deadline for the recently extended and expanded tax credit, according to the National Association of Realtors. NAR Chief Economist, Lawrence Yun, says the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”
Mortgage rates—It is predicted that rates will begin inching up to 5.28 in the first quarter of 2010 and hitting 5.50 percent in the following quarter.
Investor activity— By looking farther ahead than next quarter’s earnings, commercial real estate companies can plan strategically to ensure success. The good news is that relatively stable cap rates and strong capital flows should keep prices up, at least for the next couple of years. Some say that for the first time in a long time, real estate is priced right relative to interest rates.
After a quiet year of investment sales, buyers are preparing to forge ahead with acquisitions in 2010. Two thirds of investors (65%) who responded to the 6th Annual Investment Survey plan to boost their investment in commercial real estate over the next 12 months.
It is clear that investors want to pursue new acquisitions. Overall, 72% of respondents indicate that they are currently amassing capital in preparation for buying opportunities.
Economic recovery—One of the few people who saw the US economic crisis coming, International Institute of Management President Med Yones, is now predicting that the economy will begin to recover in 2010.
The IIM is not a fan of expensive stimulus packages. It instead favors job creation through funding for small businesses, “The most cost effective and quickest method to stimulate the U.S. economy is to support job creation through US small businesses and innovation development. U.S. Census Bureau statistics show that 98 percent of all U.S. firms have less than 100 employees. These 27 million small businesses create over 85 percent of all new jobs and employ over 56 percent of all private sector workers. The main focus of development programs should be innovation development, export and employment support. This solution would be a much less burden on the taxpayers; it can be implemented without too much new legislation, and would have a much faster positive impact on the economy.” Information sources: Politicususa.com, Realtors Commercial Alliance, and Realtor.org

Winter weather advances

The rare occurrence of snow is expected to be visible outside the windows of St. George today, and the National Weather Service warns that significant accumulations are expected.

Since Sunday, Washington and Iron counties have been under a winter storm advisory by the National Weather Service that was to remain in effect until 6 a.m. today for the St. George area and noon for the Cedar City area.

Due to hazardous driving conditions, the Utah Depart­ment of Transportation cautions that unnecessary travel should be avoided until the warning is lifted.

Despite the warnings, those with law enforcement and the school district say things ran smoothly Monday and are expected to run smoothly today.

On the highways, Utah Highway Patrol officers from both the St. George and Cedar City areas said things weren't all that bad Monday, but that doesn't mean they're not prepared for the storm, which is expected to continue into today.

UHP Senior Trooper John Gardner said there were much fewer problems than expected Monday in the St. George area, but the snow expected to be on the ground today could create problems.

"We're bracing for it," he said. "But it will probably be business as usual."

If people have to head out on the highways, Gardner said, it's best to drive a lower speeds.

"In snow the contributing factor to accidents is always speed," he said. "We just need to tell people to slow down."

UHP Sgt. Ryan Bauer, who patrols the highways near Cedar City, said there were a few more accidents in that area Monday, but things were still better than expected.

"Most of the afternoon the roads had just been wet," he said. "We'll deal with whatever we're given. We won't close anything unless the storm dictates it."

Officials from the St. George Police Department said the number of accidents was up slightly Monday, something that could have been attributed to poor weather conditions.

"It's not too large of an increase," said Officer James Schafer. "Usually, when we have snow or rain, they do increase É but it's nothing major."

Marshall Topham, assistant superintendent for secondary education with the Washington County School District, had a similar view of the storm. He said as of Monday evening the school district has no plans to alter bus routes or cancel school.

"Right now this storm doesn't look like a storm that's threatening to us," he said. "If it's just a snowy day where the roads aren't slick then we can negotiate that."

Topham added that school district officials planned to wake up at 4 a.m. today to assess the situation, but it's unlikely school will be affected.

"This one isn't too impressive to me," he said. "I don't think this is going to be a big deal."

BY BRIAN AHERN

THANKSGIVING FUN FACTS

Snoopy has appeared as a giant balloon in the Macy's Thanksgiving Day Parade more times than any other character in history. As the Flying Ace, Snoopy made his sixth appearance in the 2006 parade.
According to the U.S. Census Bureau, Minnesota is the top turkey-producing state in America, with a planned production total of 49 million in 2008. Just six states—Minnesota, North Carolina, Arkansas, Virginia, Missouri and Indiana—will probably produce two-thirds of the estimated 271 million birds that will be raised in the U.S. this year.
According to the Guinness Book of World Records, the largest pumpkin pie ever baked weighed 2,020 pounds and measured just over 12 feet long. It was baked on October 8, 2005 by the New Bremen Giant Pumpkin Growers in Ohio, and included 900 pounds of pumpkin, 62 gallons of evaporated milk, 155 dozen eggs, 300 pounds of sugar, 3.5 pounds of salt, 7 pounds of cinnamon, 2 pounds of pumpkin spice and 250 pounds of crust.

Washington County Housing Report Summary

Home sales are up month to month and year over year. Permits remain steady in the range of 40 to 50 per month. Absorption of existing new homes is almost at a stand still as new home sales are barely outpacing new home permits. Lot sales are off slightly over last year’s volume, and off 80% to 90% from the peak in 2005. Homes instead of PUD/condos make up a greater percentage of dwelling sales than a year ago. West St. George, Washington and Hurricane/La Verkin continue to dominate existing dwelling sales. Homes over $300,000 are taking one and one-half to two times longer to sell than homes under $300,000. Foreclosures are at an all-time high in the range of 150+/- and are expected to remain in the 120 range for the remainder of the year. A higher number of homes with filed Notices of Default are foreclosing. Lending has picked up, even though the dollar volume remains low. Foreclosures will drop slightly but still provide a lot of competition to the existing home and new home market. Low interest rates (around 5%) and the extension and expansion of the federal housing tax credit program to include move-ups should assist dwelling sales through the end of the year and into the early months of next year.

Economics 101 Deficiency Judgement and Debt Cancelation

There are many realtors out there that will list a short sale and are not aware of a possible deficiency judgment against the property owner after the home has been sold.
What is a deficiency judgment?
The difference between the mortgage balance and the discounted amount will be the total that the lender may seek a deficiency judgment against the seller who sold their home "short" of what they owed on their mortgage. If granted, this judgment may affect the homeowners and their credit report just as any other judgment. Likewise, the same judgment can be sought after if the homeowner has let their home go back to the bank and the bank sells it at auction for less than what was owed.
What is a 1099 on a short sale?
A 1099 may be given to homeowners as a result of the benefit they've received from the sale of their home. For example, if the bank is owed $100,000 and agrees to accept $75,000 for a short sale, the homeowners actually made $25,000 (the short sale amount). Therefore, the homeowner can receive a 1099 for that amount. It is recommended that your client speak with a local accountant and/or attorney on how a 1099 on a short sale may affect them. Activerain
Home Foreclosure and Debt Cancellation
The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
What is a cancellation of debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purpose, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds may be reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.
IRS.gov