Home Sales Forecast to Grow

Home Sales Forecast to Grow

Flipping Out Flipping Homes

The monetary hunger of millions has driven flipping homes to earn a reputation for being an investment ploy to make fast money through a slew of TV shows. tv show But the weak housing market has sent some of those trying to flip homes to flipping out.

Distressed properties, including foreclosures and short sales can be purchased cheap and with an investment of time and money can be transformed into valuable commodities. However, the collapse of the housing market is changing the rules flipping homes.

In some cases, wannabe flippers are finding that homes are worth less than they anticipated. In areas where home prices have been most depressed flipping homes have flopped as flippers are left holding the keys to their flips and a bloated mortgage. “It’s been pure hell,” said Roger Baylor, 37, a Las Vegas handyman who used to make his living in construction work in home building.


Source (http://www.housingpredictor.com/2011/flipping-out.html)

The Best Places to Buy a Home Right Now

By Nathan Vardi and David Whelan, Forbes.com
May 12, 2011
Though home prices in most areas around the country remain weak, the attractiveness of purchasing a home continues to diminish in the wake of the real estate bust. Fears of price erosion, a weak economy and foreclosure dog markets coast to coast.

But not everywhere. In places like the suburbs of Rochester, N.Y., houses look like a great buy. You can get a relatively new 3,000-square-foot home on a nice quarter of an acre lot in a good school district for between $300,000 and $400,000. "The real estate here is very inexpensive, it's about the same as renting and it actually makes sense for families," says Delores Conway, a real estate economics professor at the University of Rochester. "The houses are solid investments with good school systems that are fairly priced."
In Pictures: Best Places to Buy a HomeIn Pictures: Best Places to Buy a Home

According to recent data put together by real estate website Zillow, Rochester is the best place to buy a home in the United States. One of the reasons Zillow rates Rochester so highly is that its foreclosure rate is a minuscule 0.24%.

In order to figure out the best places to purchase a home in the country, Zillow looked at four statistical measures in 125 metro areas as of the end of February. These factors included affordability, as measured by home price to income ratios; the unemployment picture (both the absolute figure and how it's trending over time); the foreclosure situation; and year-over-year housing price trends.

"The list is populated by markets that did not participate in the housing run up from 2000 to 2006 and therefore their housing recession has been milder," says Stan Humphries, chief economist at Zillow. "These markets are very affordable, where people are typically spending under 2.5 times their income on a house so it's pretty affordable, and they are now spending what they were paying in the 15 years between 1985 and 2000."

The housing recession in places like Pittsburgh was relatively mild, helping to land Pittsburgh second on the list of best places to purchase a home. Like Rochester, Pittsburgh depends on major university employers such as the University of Pittsburgh and Carnegie Mellon. The former Steel City's median home price is an inexpensive $103,900.

The best places to purchase a home in America are mostly in the heartland, reflecting the coastal nature of the housing boom and bust. None of the best places to purchase a home are located on the West Coast in states like California, Oregon and Washington, not to mention Nevada and Arizona.

There are, however, places in the center of the U.S. that figure to be great for home purchases. In Oklahoma, Oklahoma City and Tulsa are both energy belt areas with strong economic fundamentals and housing markets that have been steady for years. And at 4.1% Lincoln, Neb., has the lowest unemployment rate of any metro area in the nation, and it's falling. All three cities made the list.

Here are the nation's five best places to buy a home right now:

5. Tulsa, Okla.

Tulsa is the 5th best place to buy a home now
Photo: Mark Gibson/DanitaDelimont/Newscom

The energy belt is a good place for homeownership as Tulsa residents can attest.
Midpoint price: $105,400
Foreclosure rate: 0.27%
Price appreciation quarter-to-quarter and year-to-year: -4.1% / -9.3%
Unemployment rate: 6.5%
Year-over-year change in unemployment: -1.8%

4. Oklahoma City, Okla.

Oklahoma City is the 4th best place to buy a home now
Photo: John Elk III/Lonely Planet Lonely Planet Images/Newscom

OKC has been booming job-wise, while the rest of the country recovers more slowly from the downturn.
Midpoint price: $109,400
Foreclosure rate: 0.24%
Price appreciation quarter-to-quarter and year-to-year: -3.6% / -3.9%
Unemployment rate: 5.2%
Year-over-year change in unemployment: -1.6%

3. Utica, N.Y.

Utica, NY is the 3rd best place to buy a home now
Photo: Richard Cummins/Alamy

This old industrial hub in upstate New York is still small. But it's been quietly reviving by attracting immigrants from Eastern Europe and Asia while remaining affordable.
Midpoint price: $98,600
Foreclosure rate: 0.08%
Price appreciation quarter-to-quarter and year-to-year: -0.7% / 2.1%
Unemployment rate: 8.6%
Year-over-year change in unemployment: 0.1%

2. Pittsburgh, Pa.

Pittsburgh is the 2nd best place to buy a home now
Photo: Jeremy Edwards/Istockphoto

Where else can you find a typical home that costs just barely six figures, root for championship sports teams, and get hired by a top university or hospital? Pittsburgh, the host of 2009's G-20 conference, has it all. What's more, Western Pennsylvania's nascent natural gas industry should provide growth for years to come.
Midpoint price: $103,900
Foreclosure rate: 0.50%
Price appreciation quarter-to-quarter and year-to-year: -2.2% / -1.5%
Unemployment rate: 7.4%
Year-over-year change in unemployment: -1.5%

1. Rochester, N.Y.

Rochester is the best place to buy a home now
Photo: Andre Jenny Stock Connection Worldwide/Newscom

Known as the historical headquarters of past-their-prime corporate icons like Kodak, Xerox and Bausch & Lomb, Rochester suffered decades of painful contraction before finding its equilibrium. The end result is affordable housing underpinned by strong remaining employers like the University of Rochester.
Midpoint price: $116,000
Foreclosure rate: 0.24%
Price appreciation quarter-to-quarter and year-to-year: -2.0% / -3.9%
Unemployment rate: 7.7%
Year-over-year change in unemployment: -1.0%



Source (http://realestate.yahoo.com/promo/the-best-places-to-buy-a-home-right-now.html)

" Why a Housing Double Dip Could Kill the Recovery "

At a bargain-basement auction of foreclosed homes held on Jan. 29 in a New York City Sheraton hotel, one of the music tracks that played as bidders prepared to pounce on distressed properties was James Brown's "Living in America."
It was either a major planning blunder or a brilliant thematic choice. Either way, the song's lyrics ("everybody's working overtime ...") were a strangely fitting sound track to a new American reality: while corporate profits rise and economic growth returns, the housing market is only getting worse.

The latest figures from the Case-Shiller home-price index, showing a fifth straight month of price decreases — including major drops in cities such as Boston, Washington, Las Vegas and Dallas — have economists worried that we may be headed for a double dip in the housing market this year, which could restrain the economic growth we're finally starting to see. And 2011 was supposed to be the year housing recovered; now, analysts are betting on anything from a 5% to 20% price decline.

A rising number of foreclosures, tied to persistently high unemployment, is smothering housing's rebound. According to the Mortgage Bankers Association, there are already 4.5 million homes in some stage of foreclosure. Some experts believe an additional 1.5 million may be added to the pile this year. With that kind of distressed inventory on the market, it could take four to five years for prices to come back up, according to Capital Economics senior U.S. economist Paul Dales.

What's particularly troubling is that data suggests a good number of those properties belong to lower-income, higher-risk borrowers who had already gotten a break on their mortgage payments via federal programs designed to reduce defaults. November data (the latest available) on these so-called modified loans showed that 45% of them had been canceled, meaning that the borrowers very likely redefaulted, even after the payments had been adjusted.

This is yet another example of the bifurcated nature of America's economic "recovery." The Fed can keep interest rates low to encourage lending, and the government can dole out tax breaks to encourage spending, but as Dales points out, "If you don't have a job, you aren't going to be able to pay your mortgage." Indeed, the biggest factor in mortgage defaults is unemployment — and as we all know by now, the unemployment rate is still unnaturally high for this point in a recovery, especially among vulnerable groups like minorities and those without college degrees.

Unfortunately, the trouble in the mortgage market contributes to the trouble with job creation. "Lower home prices don't help jobs, because they constrain consumer spending," notes Yale economist and housing expert Robert Shiller. Job growth is tied to spending, because without more expected sales, companies won't hire.
But people whose homes are decreasing in value won't spend; it's the wealth effect in reverse. So the poor housing market is holding back everything. Shiller, who just returned from the World Economic Forum in Davos, Switzerland, believes that the world leaders and policymakers who were there "don't really realize the extent of the suffering that's occurring. They are too insulated. But it's a vicious cycle that can make people feel worthless."

Don't get too comfortable if you live in an area that hasn't suffered big price cuts, because the problem could spread in the coming months. The latest numbers indicate that the lower end of the housing market is seeing the sharpest declines. But those declines could well drag down the value of higher-priced properties. Given that U.S. households still keep about a quarter of their wealth in property, the implications for consumer spending are sobering. "More than keeping interest rates low, the best thing that Washington could do for the housing market is to try and create some jobs — quickly," says Dales.

In lieu of that, policymakers might also get more creative about how mortgages are structured. In his 2008 book, The Subprime Solution, Shiller suggested a drastic fix to the current problem — a continuously changing mortgage balance that would be reset periodically based on both home prices and unemployment.
Thus, mortgages would reflect ongoing economic reality, and banks would have to keep lending. Meanwhile, to help banks cope with the risk involved, a market would be created to let them trade home-price futures, rather than splicing and dicing baskets of high-risk mortgages and then passing the risk on to investors. (A small market of this kind already exists at the Chicago Mercantile Exchange.) "We need to be creative.
It's all about democratizing finance and bringing more of the benefits of it to individual consumers," says Shiller. These and other housing-market reform ideas were deemed too radical when the crisis began. As it is now, they might not be radical enough.
(Source: http://www.time.com/time/business/article/0,8599,2045854,00.html)

Top 10 Business Predictions for 2011

Michael Friedenberg, president and CEO of IDG Enterprise, offers up what he thinks will be the top ten trends in the IT community in 2011.
CIO — It’s the time of year for bold and brazen predictions, so I’m jumping on the bandwagon with my forecast of the Top 10 trends, priorities and events of 2011:

10. Social media will keep dominating the business conversation, following the same evolution e-commerce did as it became e-business. Soon we’ll just call it “social business.”

9. The CIO-CMO relationship will change for the better, growing closer and more collaborative. Instead of confrontational relationships, CIOs and CMOs will find common ground around customer engagement.

8. Cloud will move from an overhyped theory to an adopted practice in mainstream business. Private, public or hybrid clouds, when applied to the right business need, will be game-changing in some industries.

7. Mobile moves aggressively into the data and applications arena as enterprises leverage these devices to empower the workforce, speed decision making and grow top-line revenue.

6. Real-time analytics will define and drive the real-time organization. As analytics is layered onto the megatrends of cloud, mobile and social, its capacity to create real-time businesses becomes closer than it appears.

5. Security breaches will hit an all-time high as data keeps getting pushed beyond the enterprise walls.

4. A battle will break out between IT and the lines of business over who really owns the user interface. Who will own that “last mile” to the customer?

3. CIOs will continue evolving beyond an operational focus, spending more time transforming business processes and setting strategy.

2. Vendor consolidations will cause major support issues at your organizations and IT vendors will need to reinforce and extend their commitments to you.

1. CIO turnover will increase if businesses can’t scale. More of your energies will be spent reducing cycle times and helping your organizations increase revenue instead of cutting costs.

So, what did I miss? What are you seeing that I’m not? I welcome your thoughts, as always, and thank you for being a loyal reader of CIO.
Onward to 2011!
(Source: http://always10.blogspot.com/2011/03/top-ten-business-predictions-for-2011.html)