I have registered my own domain and will now be blogging from my new site:
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Site Moving!
August 6, 2009The American Dream Vanishes Every 13 Seconds
June 19, 2009Check out this ticker from the Center for Responsible Lending.
There have already been over 1 million foreclosures in 2009. A new one is added to the ticker every 13 seconds.
$104 BILLION!
June 19, 2009The U.S. will try and raise a record $104 billion next week with new treasury offerings.
Read the article here.
Our government is going to try and borrow a total of $2 trillion this year. It will be interesting to see how the bond investors react to the unending supply of new debt.
These investors are demanding a 4% yield today. Next week it may be HIGHER.
Fear of Inflation Easing
June 17, 2009Bloomberg reports that the mortgage-bond yield has dropped five days in a row.
June 17 (Bloomberg) — Yields on Fannie Mae and Freddie Mac mortgage securities declined for a fifth day, tracking a drop in rates on benchmark U.S. Treasuries and suggesting further declines in borrowing costs for new home loans.
Fears of inflation may be declining leading to the fall in long term borrowing costs:
Treasuries and so-called agency mortgage bonds rallied after a government report showed the cost of living rose less than forecast in May. The mortgage-bond yields are down from 5.07 percent on June 10, the highest level since the Federal Reserve announced plans to buy home-loan bonds in November.
There were some stats on the CPI as well:
The consumer price index increased 0.1 percent in May after no change a month earlier, capping the biggest 12-month decline since 1950, the Labor Department said today in Washington. Economists forecast consumer prices rose 0.3 percent, according to the median of 75 projections in a Bloomberg News survey.
Read the full article here.
The decreasing rates mean more cashflow for the investors Brewer Caldwell works with on a daily basis. We are buying homes at the Maricopa County Courthouse every day for prices not seen since the nineties.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Household Equity Lowest Since 1952
June 13, 2009You must read this article from Tim Cavanaugh with Reason.com.
Our national average for equity in single family homes is 20.4%.
There is no room for refinancing home mortgages on the large scale we saw in the past. That is unless prices appreciate quickly.
Make sure to read the commentary on social engineering detailing the costs and benefits of encouraging more home ownership.
Here are some more charts illustrating home equity as a percentage of GDP.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Craigslist Destroys Newspaper Profits
June 13, 2009There is a great chart up at Silicon Insider today.
The chart shows revenues for Craigslist vs. MSM Newspapers. It shows free advertising offered by Craigslist has helped lead to the decline in classifieds revenue for newspapers.
I know from my own experience that my brokerage used to spend thousands of dollars each month on local newspaper ads. We now spend much less using paid websites and also utilize the free advertising offered on Craigslist.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Junk Fees
June 13, 2009Inman News started a 3 part series on “junk fees” charged by brokerages. Their plan is to lay out the “legal, ethical and competitive issues involved in charging such fees.”
My brokerage charges a $195 lease administration fee to each tenant at the beginning of their lease. My research of other property management companies in town reveals that similar fees are charged or the companies make a portion of the security deposit non-refundable. Another common name for these junk fees is a cleaning deposit. There were some management companies out there that did not have any such fees and of course investors without management companies do not have the extra fees.
I dislike having to charge the fees because it makes my job of renting homes harder but the decision is out of my hands. I am an employee and my broker wants the fees collected.
It will be interesting to see how the case in question pans out and the implications of any ruling on Phoenix real estate business.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
$15,000 Tax Credit
June 11, 2009Check out this article from Joe Weisenthal.
Apparently Johnny Isaacson and Christopher Dodd are proposing to increase the housing credit to $15,000.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Shiller Says Recovery May Be A Long Road
June 11, 2009A New York Times op-ed from Robert Schiller reminds us all of the history of house price decreases.
He warns that the downward pressure on prices could continue for years.
Imagine a young couple now renting an apartment. A few years ago, they were toying with the idea of buying a house, but seeing unemployment all around them and the turmoil in the housing market, they have changed their thinking: they have decided to remain renters. They may not revisit that decision for some years. It is settled in their minds for now.
On the other hand, an elderly couple who during the boom were holding out against selling their home and moving to a continuing-care retirement community have decided that it’s finally the time to do so. It may take them a year or two to sort through a lifetime of belongings and prepare for the move, but they may never revisit their decision again.
As a result, we will have a seller and no buyer, and there will be that much less demand relative to supply — and one more reason that prices may continue to fall, or stagnate, in 2010 or 2011.
He cites history as a perfect example of his thesis:
Even if there is a quick end to the recession, the housing market’s poor performance may linger. After the last home price boom, which ended about the time of the 1990-91 recession, home prices did not start moving upward, even incrementally, until 1997.
Robert Shiller is chief economist for MacroMarkets LLC and is also a Yale professor of finance and economics.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Citi on Camelback Sold
June 5, 2009Some condo investors got a great deal today. The Arizona Republic reports that Orion Residential LLC paid $70,000 for each of the remaining 178 condos in the Citi on Camelback Development. Some of the original condo owners bought their units for as much as $300,000. The $1 billion investment group said it is looking at additional deals in the valley as well. This might look painful but it is the only way we can get back to equilibrium with supply and demand.
I would not be surprised if a lot of the units bought for $300,000 end up back with the banks. New foreclosures will lower the average price even further.
Brewer Caldwell manages properties in this complex and we are having trouble finding a renter for the $970 price tag. View the listing here. We dropped the price to $750.
Read the article here.
Travis J. Bohling
Brewer Caldwell Property Management
480-212-7041 (Direct Line)
480-212-7042 (Fax)
Travisb@brewercaldwell.com
Valley Sprawl 