July 2014
M T W T F S S
« Jun    
 123456
78910111213
14151617181920
21222324252627
28293031  

Cashwoe Categories

Jason M. Ruedy, The Home Loan Arranger, Analyzes the Baby Boomer Generation's Impact on the Housing Market

Thumbnail

Jason. M Ruedy

Denver, Colorado (PRWEB) June 24, 2014

Mortgage lender,Jason M. Ruedy, also known as The Home Loan Arranger, is keenly aware that many members of the “Baby Boomer” generation (individuals born between 1946 and 1964) are presently selling their existing homes – which have significant equity – and purchasing replacement homes with cash.

Many Baby Boomers purchased real estate for the first time in the early 1980s, when the median price for homes was significantly lower than it is in 2014. Now that a large percentage of these individuals have paid their original mortgages in full, and home values have gone up significantly over the course of 30 years, they are selling their existing homes for huge profits and purchasing retirement homes with the cash earned from selling.

An article published on Bloomberg.com on June 2, 2014 entitled, “Cash Deals for Homes Reach Record with Boomers Retiring” prompted Mr. Jason Ruedy to start a discussion on the same matter. Although The Home Loan Arranger understands that the Baby Boomer generation does not want the responsibility of making monthly mortgage payments, he also believes that Baby Boomers are vying for different types of real estate than individuals in younger generations.

“Home sellers often prefer to sell their homes to individuals offering to buy the properties in cash instead of with mortgages. So in a bidding war, the cash buyer is often the one who wins. I’m hoping that prospective home buyers will not read the article published on Bloomberg.com and get discouraged. I believe that Baby Boomers are looking to purchase very different types of properties than younger people – especially people in their 20s and 30s, and new families with young children.”

“The Bloomberg.com article discusses the fact that a large percentage of Baby Boomers are looking for real estate in rural communities or areas that cater to older adults. So, younger individuals or families looking to purchase homes with mortgages are not necessarily going to be competing with cash-in-hand Baby Boomers.” – Jason M. Ruedy, The Home Loan Arranger

In Mr. Ruedy’s opinion, the Baby Boomer generation wants the peace of mind that goes along with owning a home outright. However, those that need a mortgage in order to purchase a home should work with a reputable mortgage lender to make the home buying process as quick and easy as possible.

About The Home Loan Arranger:

Mr. Jason M. Ruedy, also known as The Home Loan Arranger, has 20+ years of experience in the mortgage business. His company was built around the crucial principles of hard work, discipline, and determination. The Home Loan Arranger evaluates client applications quickly and efficiently and structures loans with the best possible terms. Mr. Ruedy is successful in achieving loan closings for clients while meeting their highest expectations. Jason M. Ruedy is ranked #2 in the state of Colorado by Scotsman Guide, which is the top leading resource for mortgage originators.

For media inquiries, please contact Mr. Jason M. Ruedy, “The Home Loan Arranger”:

The Home Loan Arranger

512 Cook St #100

Denver, CO USA

Phone: (303) 862-4742

Toll Free: (877) 938-7501

http://www.thehomeloanarranger.com/


Smartland Suggests Unique Financing Options for Current and Potential Real Estate Investors

Thumbnail

Smartland Suggests Unique Financing Options for Current and Potential Real Estate Investors

Although the number of cash purchases have been at an all-time high, the number of investors who are opting to finance real estate investments across the nation have been on the uprise. Investors can take advantage of consolidation programs with low interest rates and impressive loan-to-value ratios on any Smartland property.

The benefits associated with today’s financing options are certainly worth considering.

Highland Heights, OH (PRWEB) June 04, 2014

As home prices across the nation continue to rise, the number of investors looking to finance residential real estate investments are increasing concurrently. In response to this growing trend, Smartland has explored the best possible financing options to facilitate the needs of its current and potential real estate investors. All-cash offers will continue to take the cake in a competitive housing market, however, the benefits associated with today’s financing options are certainly worth considering.

LLC Blanket Loan

Up to 75% LTV for Properties Owned at Least 12 Months (50% for Foreign Nationals)
Less than 12 Months Calculated at 90% Cost
Single Family Rentals
Non-Recourse
Minimum Credit Score 680 FICO
Emphasizes Cash Flow Not Tax Return
Refinance With or Without Cash

Best Investment Loan Program

Up to 75% LTV
30 Year Loan Amortization at 8-9%
Loans From $100,000
Non-Recourse
Loan Amount Based on Sales Price or Appraised Value
Minimum Credit Score 650 FICO
Single Family Rentals and Multi-Family Homes

A blanket loan is a unique financing alternative that is available to Smartland’s real estate investors, designed to consolidate the mortgages of multiple residential properties into one lump sum loan to be held under an LLC. Blanket loans may also be used to take the equity out of investment properties that were originally cash purchases. Smartland investors who own single family homes, duplexes, and small (1-4 unit) apartment buildings may take advantage of this non-recourse loan to obtain a lower interest rate and gain eligibility for Fannie Mae and Freddie Mac loans. These loans may then be used in future real estate investment purchases. Qualifying terms will vary by lending institution but generally require a combined loan amount of $500,000 and 5 doors, excluding any commercial properties.

Investors shouldn’t shy away from residential real estate purchases just because an all-cash offer is out of reach. Although the number of all-cash home purchases have been at an all-time high, the number of investors who are opting to finance real estate investments across the nation have been on the uprise. With a sizeable down payment, investors can take advantage of consolidation programs with low interest rates and impressive loan-to-value ratios on any Smartland property.

Another attractive financing option that is available to investors is a best investment loan program that is available for single family rentals and multi-family homes. This program offers qualifying Smartland investors a 30 year loan amortization with up to 75% loan-to-value (LTV). Office spaces and mixed-use buildings are also eligible for this loan with a 5% reduction in LTV. This is a non-recourse loan that will protect the borrower’s other assets and only requires the repayment from profits made on the investment property for which the loan was acquired. Individual loan amounts are based on the lower of the sales price or appraised value of the home to be purchased, starting at $100,000 at a rate of 8-9%.


Home Loan Down Payment Strategies Discussed At LoanLove.com

Home Loan Down Payment Strategies Discussed At LoanLove.com

A new guide to home loan down payment assistance helps borrowers find the best ways to finance their homes.

San Diego, CA (PRWEB) May 28, 2014

LoanLove.com is a borrower advice website dedicated to helping home buyers to find loans that they will love. One of the first things that those seeking to buy a home will have to contend with is gathering enough cash to put down a down payment on their home, unless of course they were able to qualify for a no or low-down payment loan program, such as the VA provides for example. While getting off scot-free when it comes to down payment on a home is a possibility for some home buyers, the fact is most home buyers will need to look into what home loan down payment strategies are available to them, in order to be able to afford their house without suffering too much financially in other ways. A new article from Loan Love takes a look at some home buyer down payment assistance strategies that can help home buyers find their best options.

The new guide, titled “Home Loan Down Payment Assistance (Know Your Options)” explains that coming up with the money for a down payment can be one of the most challenging parts of buying a home. However, before potential home buyers jump at any chance to get their hands on that money, the Loan Love guide suggests that they ask these four questions: “1. Are you able to verify beyond any doubt that the source of your down payment is legal and not a scam? 2. Has your bank lender or mortgage broker confirmed that your potential source is an approved one, according to the rules of your particular loan program? 3. Have you reviewed your plan with a certified public accountant to determine impacts on your taxes and/or retirement account, as applicable? 4. Are you prepared to keep a detailed paper trail of any transactions for both your lender and for tax purposes?”

Loan Love then suggests that those who are seeking home loan down payment assistance try one or more of the following low risk options:

“Investigate state and local housing incentives.
Ask friends and family.
Maximize your savings.
Liquidate unnecessary assets.
Sell any stock options.
Sell off other investments.
Cash in a life insurance policy.
Check with your employer.”

Some other options that home buyers can check into if the above suggestions do not yield results are also discussed. These home loan down payment assistance options do carry a bit more risk, or are more heavily taxable etc. but they can be good options for those who are prepared to take on the responsibility. For those who are, Loan Love suggests to:

“Ask your lender.
Negotiate with your seller.
Bank with your seller.
Tap your IRA.
Borrow from your 401(k).
Time a job change.”

For a fuller explanation on the bullet points listed here, read the full home loan down payment assistance guide at LoanLove.com.


All-cash deals change the game in US real estate

Thumbnail

Traditionally about a quarter of US home sales, cash purchases have soared to about 40 per cent nationwide.

Wealthy people, foreigners and retirees are transforming markets across the United States with all-cash deals. Photo / Thinkstock

A growing number of home buyers in the US are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 per cent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics.

“The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Maryland, said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, DC, for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Florida. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit.

The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Virginia. Two weeks ago, Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Read also:
Foreclosure sale may set record for exclusive Hamptons
$100m homes smash price records

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 per cent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“Since the supply of distressed properties has thinned out, we expected the all-cash sales would be falling, but that’s not the case,” said Lawrence Yun, chief economist of the National Association of Realtors, which recently released a survey showing the share of investors has dropped from 24 per cent in 2012 to 19 per cent last year and the first quarter of this year. “It implies that there’s plenty of cash sloshing around.”

Yun says seniors who have a lot of equity in their homes are probably helping sustain the all-cash market. CoreLogic data show that the share of cash sales remains high among non-distressed properties, which are not popular among investors.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

Fran Kormann, a real estate agent who specialises in selling homes at the Potomac Green senior community in Ashburn, Virginia, said every transaction she has handled recently has been a cash deal, perhaps because she is working with an older demographic than usual, buyers who are 65 or older and have accumulated more savings than clients in their 50s.

“I thought the all-cash deals would have stopped because the prices went up to $600,000, but they didn’t,” said Kormann, an agent with Keller Williams Realty. “I just sold a property to a lady in Boston who is coming here to be near her family. She’s paying all cash, and she’s keeping the home in Boston and renting it out.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

Since the start-up she joined went public in the mid-1990s, Pearce said she has never taken out a mortgage to finance a home, including a place in Hawaii where she spends part of the year.

Her real estate agent, Kirk Russell of John L. Scott Real Estate, said it’s rare that buyers have all the cash they need on hand. Instead, they leverage their assets to buy second homes for themselves or starter homes for their children, who may not have the credit scores or down payment needed to qualify for a loan.

“If you don’t have to get a loan, then don’t get one,” Pearce said. “But this must be incredibly hard for most buyers.”

- Washington [...]

Nationwide, all-cash deals change the game in real estate

A growing number of home buyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“Since the supply of distressed properties has thinned out, we expected the all-cash sales would be falling, but that’s not the case,” said Lawrence Yun, chief economist of the National Association of Realtors, which recently released a survey showing the share of investors has dropped from 24 percent in 2012 to 19 percent last year and the first quarter of this year. “It implies that there’s plenty of cash sloshing around.”

Yun says seniors who have a lot of equity in their homes are probably helping sustain the all-cash market. CoreLogic data show that the share of cash sales remains high among non-distressed properties, which are not popular among investors.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

Fran Kormann, a real estate agent who specializes in selling homes at the Potomac Green senior community in Ashburn, Va., said every transaction she has handled recently has been a cash deal, perhaps because she is working with an older demographic than usual, buyers who are 65 or older and have accumulated more savings than clients in their 50s.

“I thought the all-cash deals would have stopped because the prices went up to $600,000, but they didn’t,” said Kormann, an agent with Keller Williams Realty. “I just sold a property to a lady in Boston who is coming here to be near her family. She’s paying all cash, and she’s keeping the home in Boston and renting it out.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

Since the start-up she joined went public in the mid-1990s, Pearce said she has never taken out a mortgage to finance a home, including a place in Hawaii where she spends part of the year.

Her real estate agent, Kirk Russell of John L. Scott Real Estate, said it’s rare that buyers have all the cash they need on hand. Instead, they leverage their assets to buy second homes for themselves or starter homes for their children, who may not have the credit scores or down payment needed to qualify for a loan.

“If you don’t have to get a loan, then don’t get one,” Pearce said. “But this must be incredibly hard for most [...]

Cash deals transform housing market

A growing number of homebuyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Ms. Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Mr. Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Mr. Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Mr. Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Ms. Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

“If you don’t have to get a loan, then don’t get one,” Ms. Pearce said. “But this must be incredibly hard for most buyers.”


Cash Sales Still Make Up Large Portion Of Homes Sold

Thumbnail

Cash Sales Still Make Up Large Portion Of Homes Sold

Peoples Home Equity shares news from a recent Corelogic report regarding cash sales.

One positive view is that cash sales for resold homes are 17% which is nearly what they used to be before 2008

Chicago, IL (PRWEB) May 13, 2014

As home sales data gets announced it’s important for prospective customers to know how much the market is split between financing and cash transactions. Peoples Home Equity found out on Tuesday May 13th from a Corelogic article that cash sales “made up 40.2 percent of total home sales in February 2014.” However, the number is declining which is positive for home buyers and constructive for the housing market.

Cash transactions peaked in January 2011 at 46.2% emphasizes how much the market still has to improve since cash transactions remain high at 40.2% as of February 2014. The good news is that cash sales among new construction and resold homes are declining to levels they were 10 years ago. The percentage of cash sales for resold homes in 2004 was roughly 28% whereas now it is 40.2% down from above 46.2% in 2011. One positive view is that cash sales for resold homes are 17% which is nearly what they used to be before 2008, this bodes well for the resold home market. Unfortunately, for REO sales cash transactions dominate at 58.5%

Looking at individual states, Florida had the highest percentage of cash sales at 59.8% while Alabama (55.3%) and West Virginia (52%) followed close behind. When looking at metropolitan areas, “Detroit-Livonia-Dearborn, Mich. had the highest share of cash sales at 68.1 percent, followed by Cape Coral-Fort Myers, Fla. (64.5 percent), West Palm Beach-Boca Raton-Delray Beach, Fla. (64.3 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (63.8 percent) and Miami-Miami Beach-Kendall, Fla. (62.8 percent).” Peoples Home Equity found this information useful and hopes it readers may find some value in data. Peoples Home Equity has lending branches located in Michigan, if interested in securing a lower rate mortgage in the area, consider speaking with a Peoples Home Equity loan officer today at: 262-563-4026


Traditional Home Sales and Cash Sales Increase: Twin Cities Sellers Enjoy Their Advantages

Thumbnail

Twin Cities Cash Home Sales Increase

There is still strong demand from other cash buyers—including individual investors, second-home buyers and even owner-occupant buyers—to fill the vacuum of demand left by institutional investors. – Daren Blomquist, VP at RealtyTrac

Minneapolis, Twin Cities Minnesota (PRWEB) May 13, 2014

Twin Cities traditional home sales are up 1.4 percent, according to yesterday’s report from the Minneapolis Area Association of Realtors (MAAR). With higher home prices and eager buyers waiting on the sidelines, more Minneapolis sellers find all-cash home sales soaring or are going the traditional route, signaling that Minneapolis sellers can enjoy a number of other advantages, too.

“We see home buyers who pull out their saving to pay in cash for a needed competitive advantage in a market where inventory is low and too many buyers are competing for the same listing,” says Jenna Thuening, owner of Home Destination. “Many sellers favor the certainty of a cash homebuyer over one that is dependent on a lending institution. Sellers who may want to avoid possible closing complications may even offer cash buyers a discount.”

In a post titled Traditional Sales Dominating the Housing Market, the MAAR talks about the Twin Cities housing market adjustments. “Distressed inventory has made up the majority of the lower price ranges, and that market is evaporating,” commented Mike Hoffman, MAAR President-Elect. “We can anticipate more negotiations and transactions with people rather than banks.”

Key housing data in the recent RealtyTrac Investor and Cash Home Sales report:

Average home sale prices for all-cash buyers in Q1 of 2014 was $207,668 nationally, coming in 13% lower than the average estimated real market value of the purchased homes, which was $237,900.
Over one half of all-cash home purchases in March came from buyers who post a separate mailing address than the property address. Some housing analysts would surmise that most often indicates either a second-home buyer or investor.
The percentage of homes bought in all-cash transactions climbed to 42.7% in the first quarter of 2014, up from 37.8% in the prior quarter and 19.1% in the first quarter of 2013.
Home buyers that closed on a minimum of 10 properties in one calendar year comprised just 11% of the all-cash purchases and only 5.6% of all home purchases in the quarter.

According to the Minneapolis Area Association of Realtors, institutional buyers made up much of 2013′s investor owned home sales. March’s housing numbers report that lender-owned home sales plunged nearly 40 percent in the Twin Cities. As a result of the ongoing shift in the types of homes being sold, and their financing, the median sales price for the metro continued upward 8.0 percent to $197,000. Creating 26 consecutive months of year-over-year price gains, foreclosures and short sales combine to comprise just 11.4 percent of all new listings. April 2013 saw their share nearly double at 22.4 percent.

“Observation would indicate that house flippers in the Twin Cities were often able to turn home purchases quickly into a profit or for gaining rental income. The excellent investment opportunities for rentals created competition with the prospective owner-occupant buyer. As fewer distressed properties are for sale, we are seeing diminishing activity in investor-owned homes,” adds Thuening.

“We see even traditional buyers coming to the bidding table with cash offers. When a seller is presented with multiple offers where most terms are equal, many opt for the quick closing date and surety of the cash offer versus entrusting a successful sale to a buyer that needs financing to do the same.”

Cash deals have traditionally gone hand-in-hand with investor activity. That seems to be changing as individuals with cash they can reach don’t want to go through the stringent mortgage application process. Joe Adamaitis, president of the Gulf Coast Mortgage Bankers Association, told the Institute for Economic Competitiveness, “We have had countless people come in to get a loan, and two weeks in, they throw up their hands and say, ‘You people are nuts.’ Every party is under the gun – so it makes sense to pay the cash if you have it.”

Home Destination offers an extensive library of home buyer and seller resources and is a Twin Cities residential real estate consultant serving the metro over 15 years. Dedicated to giving individuals the best opportunity to make solid real estate decision, call 612-396-7832 for Jenna Thuening’s guidance.


Cash U.S. Home Purchases Surging as Rates Rise: Mortgages

Greg Leffel, an investor in Columbus, Ohio, said he relishes cash deals as much as he dislikes home loans. He has spent $150,000 buying and renovating 10 foreclosed houses in the past two years and turned them into rentals.

“Lending is so tight, and even if you do get a loan you’d have to jump through a bunch of hoops first,” Leffel, 44, said. “I like buying with cash, because then I can control my investments.”

Investors like Leffel helped spur all-cash home purchases to a record 43 percent of U.S. deals in the first quarter, more than double the share a year ago, according to data firm RealtyTrac Inc. Cash is keeping residential sales trudging along while mortgage lending plummets, hurt by rising interest rates and stiff credit requirements. Americans seeking a loan to purchase their first dwelling are increasingly shut out.

“The cash buyers today mean that all is not well in the housing market,” said Clifford Rossi, finance professor at the University of Maryland’s Robert H. Smith School of Business. “First-time home buyers should make up 40 percent and we’re not seeing it because of mortgage rules.”

U.S. lenders are cutting jobs as business contracts. They made $226 billion in mortgages in the first quarter, a 17-year low, according to the Mortgage Bankers Association in Washington.

Small Investors

Smaller investors, who deploy cash for homes to rent, flip, or vacation in, are finding better deals now that institutions have pared buying foreclosures, said RealtyTrac Vice President Daren Blomquist. Cash sales are rising from coast to coast, comprising more than half of all purchases in many metropolitan areas in the first quarter.

In the Miami area, 67.1 percent of sales were cash deals; New York posted 57 percent; Detroit recorded 53.5 percent; Atlanta had 53.2 percent, and Las Vegas posted 52.2 percent, according to Irvine, California-based RealtyTrac.

In Manhattan, buyers are using cash for trophy apartments and to gain an advantage over borrowers who must depend on loans to finance a purchase. Pej Barlavi, owner of brokerage Barlavi Realty LLC in Manhattan, said three of his five current clients buying homes prevailed with all-cash offers.

Barlavi said two of them are hedge fund managers who used year-end bonuses to buy the properties: a $2.2 million two-bedroom apartment in Midtown, selling for $150,000 above the asking price; and $1.5 million for a one-bedroom in Tribeca. His client in the second transaction was “nudged higher by a foreign buyer” before being chosen by the seller, Barlavi said.

Foreign Buyers

“In Manhattan, you have foreign buyers coming in and using properties as a second, third, fourth or fifth home and hedging risks in their home countries,” said Chris Mayer, a real estate professor at Columbia University Business School in New York.

Private-equity firms, hedge funds and other institutional investors have spent more than $20 billion to buy as many as 200,000 rental homes in the last two years. They snapped up properties after prices fell as much as 35 percent from the 2006 peak and rental demand rose from the almost 5 million owners who went through foreclosure since 2008.

New York-based Blackstone Group LP (BX), the biggest U.S. single-family home landlord, cut purchases by 70 percent from last year’s peak and is now concentrating on just five markets, Jonathan Gray, global head of real estate, said in a March interview. Blackstone has invested $8.5 billion since April 2012 to amass almost 44,000 rentals in 14 cities.

Strict Credit

American Homes 4 Rent (AMH) and Colony American Homes, the second- and third-ranked U.S. home landlords, have also cut acquisitions as the rebound in prices requires them to raise capital or improve operations.

“As institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers, including individual investors, second-home buyers and even owner-occupant buyers,” RealtyTrac’s Blomquist said.

Banks’ stricter credit standards following the housing crash, in combination with rising mortgage rates, have put the brakes on lending. More than 40 percent of borrowers had FICO scores above 760 in 2013 compared with about 25 percent in 2001, according to Goldman Sachs Group Inc. analysts in a Feb. 20 report. The 4.22 percent average rate for a 30-year fixed mortgage on May 6 rose from 3.53 percent a year ago, following the Federal Reserve’s announced plan to taper its bond buying, according to Bankrate.com.

Wells Fargo (WFC)

“The increase in all-cash purchases is partly because rates are higher than they were a year ago, so it’s made buying with a mortgage more expensive on top of home price increases,” said Jed Kolko, chief economist at real-estate information service Trulia Inc. in San Francisco.

At Wells Fargo & Co., the biggest U.S. mortgage provider, home-loan originations plunged to $36 billion in the first quarter after surpassing $100 billion for seven straight quarters ending in June 2013, according to the San Francisco-based bank. Second-ranked JPMorgan Chase & Co.’s $17 billion total in the first quarter fell below the trough in originations made during the housing crash.

First-time buyers in particular are struggling to get home loans. They comprised 30 percent of total existing-home sales in March compared with an average of 35 percent since October 2008, according to the National Association of Realtors.

Without these buyers, existing-home sales are declining. They fell 7.5 percent in March to a seasonally adjusted annual rate of 4.59 million compared with a year earlier, according to NAR. The sales volume in March remained the lowest since July 2012, according to the trade group.

“With fewer first-time buyers, you end up with more all-cash buyers and less trading up in home activity,” said Columbia’s Mayer. “To get that ecosystem working, you need to have first-time homebuyers so the trade-up purchasers can buy bigger homes.”

To contact the reporters on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net; Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editors responsible for this story: Vincent Bielski at vbielski@bloomberg.net; Kara Wetzel at kwetzel@bloomberg.net Rob Urban [...]

All Cash U.S. Home Purchases Surge With Rising Rates

Greg Leffel, an investor in Columbus, Ohio, said he relishes cash deals as much as he dislikes home loans. He has spent $150,000 buying and renovating 10 foreclosed houses in the past two years and turned them into rentals.

“Lending is so tight, and even if you do get a loan you’d have to jump through a bunch of hoops first,” Leffel, 44, said. “I like buying with cash, because then I can control my investments.”

More from Bloomberg.com: Son Makes $58 Billion on Alibaba With Buffett-Type Return

Investors like Leffel helped spur all-cash home purchases to a record 43 percent of U.S. deals in the first quarter, more than double the share a year ago, according to data firm RealtyTrac Inc. Cash is keeping residential sales trudging along while mortgage lending plummets, hurt by rising interest rates and stiff credit requirements. Americans seeking a loan to purchase their first dwelling are increasingly shut out.

“The cash buyers today mean that all is not well in the housing market,” said Clifford Rossi, finance professor at the University of Maryland’s Robert H. Smith School of Business. “First-time home buyers should make up 40 percent and we’re not seeing it because of mortgage rules.”

More from Bloomberg.com: Yellen Says ‘High Degree’ of Accommodation Still Needed

U.S. lenders are cutting jobs as business contracts. They made $226 billion in mortgages in the first quarter, a 17-year low, according to the Mortgage Bankers Association in Washington.

Small Investors

Smaller investors, who deploy cash for homes to rent, flip, or vacation in, are finding better deals now that institutions have pared buying foreclosures, said RealtyTrac Vice President Daren Blomquist. Cash sales are rising from coast to coast, comprising more than half of all purchases in many metropolitan areas in the first quarter.

More from Bloomberg.com: Horror in Odessa as Fire Shatters Jewel of Czarist Russia

In the Miami area, 67.1 percent of sales were cash deals; New York posted 57 percent; Detroit recorded 53.5 percent; Atlanta had 53.2 percent, and Las Vegas posted 52.2 percent, according to Irvine, California-based RealtyTrac.

In Manhattan, buyers are using cash for trophy apartments and to gain an advantage over borrowers who must depend on loans to finance a purchase. Pej Barlavi, owner of brokerage Barlavi Realty LLC in Manhattan, said three of his five current clients buying homes prevailed with all-cash offers.

Barlavi said two of them are hedge fund managers who used year-end bonuses to buy the properties: a $2.2 million two-bedroom apartment in Midtown, selling for $150,000 above the asking price; and $1.5 million for a one-bedroom in Tribeca. His client in the second transaction was “nudged higher by a foreign buyer” before being chosen by the seller, Barlavi said.

Foreign Buyers

“In Manhattan, you have foreign buyers coming in and using properties as a second, third, fourth or fifth home and hedging risks in their home countries,” said Chris Mayer, a real estate professor at Columbia University Business School in New York.

Private-equity firms, hedge funds and other institutional investors have spent more than $20 billion to buy as many as 200,000 rental homes in the last two years. They snapped up properties after prices fell as much as 35 percent from the 2006 peak and rental demand rose from the almost 5 million owners who went through foreclosure since 2008.

New York-based Blackstone Group LP, the biggest U.S. single-family home landlord, cut purchases by 70 percent from last year’s peak and is now concentrating on just five markets, Jonathan Gray, global head of real estate, said in a March interview. Blackstone has invested $8.5 billion since April 2012 to amass almost 44,000 rentals in 14 cities.

Strict Credit

American Homes 4 Rent and Colony American Homes, the second- and third-ranked U.S. home landlords, have also cut acquisitions as the rebound in prices requires them to raise capital or improve operations.

“As institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers, including individual investors, second-home buyers and even owner-occupant buyers,” RealtyTrac’s Blomquist said.

Banks’ stricter credit standards following the housing crash, in combination with rising mortgage rates, have put the brakes on lending. More than 40 percent of borrowers had FICO scores above 760 in 2013 compared with about 25 percent in 2001, according to Goldman Sachs Group Inc. analysts in a Feb. 20 report. The 4.22 percent average rate for a 30-year fixed mortgage on May 6 rose from 3.53 percent a year ago, following the Federal Reserve’s announced plan to taper its bond buying, according to Bankrate.com.

Wells Fargo

“The increase in all-cash purchases is partly because rates are higher than they were a year ago, so it’s made buying with a mortgage more expensive on top of home price increases,” said Jed Kolko, chief economist at real-estate information service Trulia Inc. in San Francisco.

At Wells Fargo & Co., the biggest U.S. mortgage provider, home-loan originations plunged to $36 billion in the first quarter after surpassing $100 billion for seven straight quarters ending in June 2013, according to the San Francisco-based bank. Second-ranked JPMorgan Chase & Co.’s $17 billion total in the first quarter fell below the trough in originations made during the housing crash.

First-time buyers in particular are struggling to get home loans. They comprised 30 percent of total existing-home sales in March compared with an average of 35 percent since October 2008, according to the National Association of Realtors.

Without these buyers, existing-home sales are declining. They fell 7.5 percent in March to a seasonally adjusted annual rate of 4.59 million compared with a year earlier, according to NAR. The sales volume in March remained the lowest since July 2012, according to the trade group.

“With fewer first-time buyers, you end up with more all-cash buyers and less trading up in home activity,” said Columbia’s Mayer. “To get that ecosystem working, you need to have first-time homebuyers so the trade-up purchasers can buy bigger homes.”

To contact the reporters on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net; Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editors responsible for this story: Vincent Bielski at vbielski@bloomberg.net; Kara Wetzel at kwetzel@bloomberg.net Rob Urban

More from Bloomberg.com

Hyundai’s New $51,500 Genesis Sedan Looms Larger in BMW’s MirrorVenezuela to Ration Electricity After Colombia Cuts GasWoman With Printer Shows the Digital Ease of Bogus CashFinancials [...]