Scattered Recovery

Five years ago today, August 29, 2005, hurricane Katrina struck the Gulf Coast. As we have learned Katrina was the one of the worst disasters ever in the United States, and displaced hundreds and thousands of people. At the time I was working property management and recall receiving requests from the government to assist in housing displaced people. We help as many as we could providing affordable housing, but yesterday I learned that most people who left the Gulf Coast didn't return. Our city, like most, absorb them into our communities.

As I watch news programs, documentaries, and read stories on Katrina, I'm reminded that it is a area that is still in recovery. Some area's have come back to life, the french quarter, but other area's have not, the 9th Ward. Government has messed this up from the beginning, but there is plenty of blame to go around. Forgotten in gas prices, oil spills, and Super Bowls is the fact that more still needs to happen to restore part the area.

On this, my daughters 6th birthday, I'm reminded of the hope of youth. However, these reflections also reminds me of I have not done enough to participate in the recovery.

You can follow my thoughts at www.FindTheOneMN.com and take time to look at www.katrina.com and do your own reflections.

Short Sales Losers

Shorts sales, boo boo.

I don't get it, sure someone, somewhere at sometime got a great deal on a short sale, but now everyone thinks they can. Moreover, there are more and more short sales, making them harder to do because of volume. Folks let me say that stats say one in six short sales close, but my stats say 90% of them do not! The leading short sale agent in my office has closed one in the last ten! ONE!

Currently I have buyers making a good offer on a short sale, but the agent is countered our offer $5000 dollars over list price. Now the offer was under list, but told us "that is what the bank will take". If that is the case, why are you listing said property under what the bank will take? Who does that service? Not the seller, because now you have to try to get a price over list. Doesn't service the buyer, because they are asking me "is it false advertising?". Doesn't service the bank, yes they have an offer, but now they are going to lose the deal. Oh and keep the house on the books! Just what the bank wants, more inventory.

Remember this rule in real estate: Your house is only worth what someone will pay for it!

No doubt that this deal will not happen, the agent already said the bank won't except our counter offer, but my buyers and I agree...it is our best and final offer. Sorry seller, they wanted your house..

In this deal, everyone loses. Well off the blog, I have to find them more houses to see..

You can find me on Twitter and Facebook at www.FindTheOneMN.com

The lull before the storm?

Everyone is talking about the decline in the housing market in the month of May. Of course there was going to be a decline, the tax credit FINALLY ended! Folks were not sure what was going to happen with the market, so they took a break. But I have to tell you, business is picking up and I see it getting stronger as the months go on.

I say don't worry about the real estate market too much, it will work it's way back. But any purchase being made today will payoff down the road. 30 year fixed rates are low, all time low, and housing prices are down. Does anyone smell it besides me...Equity!

The new trend in five years, when all these first time buyers start buying their move up house, will be assumable mortgages. Why? Assumable mortgages will be all the rage in five to seven years, because the interest rates will be low on the FHA Loans being used right now. It will be a cheap way for buyers to buy a home, because we can not expect the interest rates to stay low forever!

Look at the present to see the future, and follow the trends. BTW stainless steel is a fading fad, I will tell you why at a later date! Stay tuned.

Has The Clock Ran Out on Fannie Mae??

Washington Law Makers are asking the question, is Fannie Mae too big? It has taken some of the worst losses in real estate lending, and continues to bleed money. The government took over Fannie and Freddie two years ago at the begining of the meltdown in hopes of stopping the bleeding. However, there is too much toxic assets on the books to clean up the balance sheets. So, now what?

Fannie Mae resently posted a $13.1 billion, yes BILLION, dollar loss in the first quarter and is asking for another $8.4 billion more of tax payer money. Now don't get me wrong, I understand that without goverment intervention we would be in full meltdown mode. But where does it end? Why are they not selling off some of this stuff to priviete investors, even if it is at a loss but get it off the books!

I think there is a direct link to not doing Short Sales, because if banks would complete the short sale process there would less issues in the real estate market. However, Short Sales take so long, and what I don't think the bank understands is that the price will drop dramiclly when it becomes a foreclosure. It seem as they don't care. Short Sales can take upto 6-8 months, I have heard longer, to complete. Streamline the short sale process and you would not have the bleeding you have now!

But the time may have come to break up Fannie Mae/Freddie Mac. The government should not be involved forever, but they truly are to big to fail! I say devided them up into fourths to spread the risk out. At least then you can put the worst loans with one company, not so bad with another and so on. Watch the roots of the meltdown at PBS.org/Frontline series. There are four shows, I recomend you watch them in this order: The Warning, Inside the Meltdown, Breaking the Bank, and Close to Home. They are all about an hour long, and just great info on the meltdown.

The time may be right to break up Fannie and Freddie, divide the assets and see if we can save the the tax payer money! If Fannie has a first quart loss of $13.1 billion, what will the second quarter be? With more looming foreclosures, how bad will it be then??

As always go to my website and see what is new, http://www.findtheonemn.com/ and contact me with any questions.

Short Sale Summer and Foreclosure Fall..

The evidence is there, the first wave of Foreclosures came to those with predatory lenders offering adjustable rate loans. This new wave happening now is coupled with job loss. Meaning that we will see more foreclosures in the suburban markets then the Urban markets this summer.

For the most part the core city foreclosures have run there course, but this new wave is all about the middle class worker who lost their jobs in the last year. Some will be those homeowners that will forgo good credit and short sale or foreclose. The main issue for those who choose to short sale or foreclose is because they are underwater with the value of their home. Some may not see the values, equity or a tipping point for two to three years. I say that's OK, wait! If you make it through these tough times, your value will return.

Some folks don't want to wait for that tipping point, because there are conditioned to 5,6,12% year over year equity gains. However, those type of equity gains are gone and we are headed back to a 2 or 3% year over year equity gain in the years to come.

Housing Link's recent report on foreclosures shows the spike in foreclosure reporting, and sheriff sales. Every county is seeing a spike in foreclosures and that trend will continue. The only possible silver lining, that is not really a silver linning, is if the banks can better streamline short sales. Streamlining that process will reduce the foreclosures in the short term, but in the long term the lasting impact of the last two years hurts us all. Is this the bottom of the market? After this wave I think it is bottom market, but what will prices look like when we are there??

Find out what is new on my website http://www.findtheonemn.com/ and view my new listings. Conncet with me on Twitter and Facebook.

End of an era..Somehow it doesn't feel right.

I spend most of my time talking about real estate, because that is what I do for a living.However, there are other things going on around me.

Recently I found out that that Minneapolis Community and Technical College (MCTC) was to stop funding the Men's and Woman's basketball programs. Closing them down. The school president gave the decision power to the student advisory board, they decided that athletics was not how they wanted to spend their student activity fees. I have to tell you that I'm not sure this students should be making budget decisions, but who am I?? In my time at MCTC I was voted President of the Black Student Assocation, and was a member of Student Conceil. BUT I should have never made budget decisions for the College, I didn't know enough of the schools finances.

I played there many years ago, I'm old now, but I love going back three, four times a year and watching them play. That tradition is gone now. Not because Coach Piv retired, but because a schools only positive press came from the basketball programs. The Women's team won the National title a few years back, and made great strides this past season. Men's program, well simplly put, a winner - period!

So, I'm a little sad, but proud of my school for what they have done over the last 19 seasons since I left. I played, started for two seasons, top 20 in the nation in assists at one point, but a small, slow kid from a small school no one heard of - made it big. Well big for me and my basketball career.

One day I'm sure it will come back, but today I'm sad to see it go. Auther "Jay" Pivic, Head Coach, will bounce back, he's a great coach, and I will go support him. however, it won't be the same..