Avoid these common moving blunders by planning and packing early

#1: Moving Without a Plan

Whether you’re trekking across the country or simply shifting across the street, moving is a big job that takes considerable preparation. If you think you can throw everything in boxes and onto a truck at the last minute, you’re bound to overlook important details and make costly mistakes. To alleviate the stress of last-minute planning and packing, stay on schedule with a moving checklist. As early as 60 days before your move, start getting estimates from movers, gathering packing supplies, and making travel arrangements. Be diligent in checking off the tasks on your list; time will be at a premium on the days leading up to your move, so the more you can get done in advance the better.

#2: Hiring the Wrong Moving Company

A quality moving company can save you a lot of the time, stress and muscle strain it takes to tackle a do-it-yourself move. However, not all movers are created equal — hire an undependable company, and you might actually add stress to your move. Fortunately, there are several steps you can take to make sure your movers are legit. Use these tips to choose a reliable moving company:

• Ask your friends and family for recommendations.
• Check out the company’s licenses, credentials and track record. Look for the company’s U.S. Department of Transportation license and their Motor Carrier number on their website. Find out if the company is a member of the American Moving & Storage Association or another industry trade association. Check with the Better Business Bureau for many unresolved complaints about the movers.
• Get in-home estimates from at least three companies. Movers need to see your stuff to give you a truly accurate estimate, so skip estimates over the phone or internet.
• Don’t hire a mover that offers a too-good-to-be-true rate.
• Avoid movers that require large deposits or down payments
  

#3: Not Setting a Budget

It’s easy to get caught up in the costs of selling your home and buying a new one, but don’t overlook the costs associated with moving. Besides the obvious expenses — a moving van or crew, boxes and tape — there are lots of little expenses along the way that can wreak havoc on your wallet if you’re not prepared for them. For example, while you’re calculating the costs of moving your stuff, keep in mind the cost of moving yourself: If you’re traveling a long distance, factor in costs for transportation, lodging and meals on the road.

And don’t forget to save your receipts — they might save you money after your move. If you relocated for a new full-time job at least 50 miles away from your previous home, you can deduct the cost of packing, transporting or storing your household goods from next year’s tax return.

#4: Packing Poorly

Let’s face it: Packing is a pain. But so are the last-minute hassles and possible property damage you’ll face if you don’t take the time to pack your belongings correctly. If you can fit it in your budget, your moving company can save you time and stress by packing your items for you. But if you choose to box up your own belongings, follow these quick tips to pack like a pro:

• Invest in quality packing materials. Boxes designed specifically for moving will help keep your belongings safe and secure.
• Label your boxes. Make unpacking easier by labeling each box with the room it belongs in, plus a short description of its contents.
• Know what not to pack. Movers won’t touch flammable items, perishable foods or plants.
• Pack a moving survival kit. This box should contain toiletries, medications and other necessities and should stay with you — not with the moving truck. You should also transport valuable and irreplaceable items yourself, such as jewelry, family heirlooms and important documents.
• Don’t wait until the last minute. Pack a few boxes a day so you don’t get overwhelmed.

 Don’t miss this amazing opportunity to own your own home the moment is now!

You always hear Realtor s say, “Don’t rent buy” or “Don’t make someone else’s mortgage payment” I am sure you have heard this one too “Buying is cheaper than renting”

Well we can really see how this does ring to be true in Denvers hot rental market. The interest rates are historically low and finally we see evidence of a shift of low housing inventory which makes prices start to increase.

So honestly you really could own your own home cheaper than some of the rents that are now being paid in Denver!

Contact us today and lets see what you can afford and compare the facts and numbers.

You might just be spring cleaning your own home!

This amazing article was posted in the Denver Business Journal  and we felt it was worth the re-post.
by Dennis Huspeni, Reporter

Enjoy the article.

Average apartment rents in metro Denver jumped more than 10 percent in a year, according to a study recently released byTransUnion    LLC.

The Chicago-based provider of credit information and information-management services (www.transunion.com) reported that average rents climbed from $777 in the fourth quarter of 2010 to $857 in the fourth quarter of 2011. Average deposits also went from $340 to $383 in that same time period, according to the report.

“That Denver increase of more than 10 percent is indicative of the economy there,” said Steve Roe, vice president of sales. “People want to live there.”

Those rental rates beat the national average by far, which went from $831 to $820 at a time when “rental vacancy rates were at their lowest levels in 10 years,” the report states.

The data was culled from more than 200,000 applications from property managers using TransUnion rental screening solutions.

“We’ve seen greater demand for apartments over the past year, but it hasn’t exactly translated into significantly higher monthly rental payments for consumers,” Roe said of the national numbers.

The report also points out that property managers “tightened their acceptance criteria for potential applications that are accepted without any conditions, such as a higher deposit amounts,” the report states. “TransUnion’s analysis found that of those property managers that made changes to these measures, their acceptance criteria increased by more than two percentage points.”

“An increase in this criteria would seem to indicate that property managers’ rental volume is sufficient enough that they can afford to be more selective in offering premium terms,” saidMike Mauseth, president of the company’s rental screening solutions department, adding, “Denver has been called out as a fast-recovering rental market.”

Start your search here and lets see if you can really stop paying someone else’s mortgage!

http://thewaltersteamrealestate.com

Denver Mortgage has what they call a “Portfolio” loan, which enables investors to refinance properties, up to ten, into one loan.  This loan enables investors to free up their own cash, refinance out of “hard money” type loans or out of high interest other loans.  The 10 properties is significant, because new rules don’t let investors have more the four government-backed loans.  Since  Denver Mortgage Company lends private, not government money for these loans the four-home limit doesn’t apply…

Here is the video enjoy

http://www.youtube.com/watch?v=Y33Qss2JEKE

Don’t forget to check out our other website for the latest bank owned and fix-up properties. Ask us for a complimentary list.  fixandflipdenver.com

Or if you are interested in the high end of the foreclosure arena we have just the site luxuryforeclosurescolorado.com

http://www.youtube.com/watch?v=MgaS9OafDYM

Give us a call if you need more information or would like a list of these homes in your area! 720-295-8185 Also visit our bank owned website http://www.fixandflipdenver.com

You can watch The Walters Team Fannie Mae HomePath Video here

 If you are looking for a list of the available Fannie Mae available properties in the Denver and Denver metro area give us a call 720-295-8185 or drop us an email and we will compile your own free complimentary customized list. All of our agents are experienced and ready to show you whats available any day of the week!  If you thinking of investing in a rental property or doing a fix and flip, check out our other website     http://www.fixandflipdenver.com  

]]> http://thewaltersteamrealestate.com/thinking-of-buying-a-fannie-mae-homepath-property-there-are-great-benefits-including-closing-costs-ask-the-walters-team-about-it-today/feed/ 0 http://thewaltersteamrealestate.com/great-repost-pricing-mistakes-and-how-to-avoid-them/ http://thewaltersteamrealestate.com/great-repost-pricing-mistakes-and-how-to-avoid-them/#comments Thu, 14 Jul 2011 15:08:37 +0000 The Walters Team http://thewaltersteamrealestate.bluefireblogs.com/?p=272 Read More »]]>  

Once again Front Door.com has something great for us to learn with!

By Shannon Petrie, FrontDoor.com | Published: 4/02/2009

Its interesting that this was posted in 2009 but still holds true today.

If you live in the Denver and Denver Metro area and would like to know what your home would sell for in todays ever changing market feel free to contact us 720-295-8185 or email us. Our market analysis is always no obligation and complimentary!

When selling a home, your pricing strategy can make or break your chances for a quick sale. Listing at the right price can almost guarantee that a buyer will swiftly snatch up your property, while listing at the wrong price can cause your home to sit on the market for months with not so much as a showing.

Unfortunately, pricing is not a simple process, and sellers are prone to make mistakes that waste both time and money. Don’t let this happen to you; instead, make a speedy sale by avoiding these six pricing errors that sellers commonly make.

MISTAKE #1: Forgoing research

Without investigating past sales in the local market, sellers tend to base their prices on hearsay or on the listing price of the house down the street, says Leslie Sellers, president elect of the Appraisal Institute. Knowing the prices of your competition is important, but in many markets, listing prices are not a good indicator of what your home will actually sell for.

“Currently in Knoxville, Tenn., you’ll find that homes typically sell for 7 to 9 percent less than they’re listed for,” Sellers says. “So sellers who list their homes based on other listing prices are already almost 10 percent too high about what they expect to get out of their house.”

TIP: Price your home based on a comparative market analysis, a report prepared by a real estate professional that looks at recent sales of homes in your area that are similar to yours. For a fee, you can also get an estimate of your home’s value with a professional home appraisal.

MISTAKE #2: Hiring the agent who offers the highest list price for your home

If you ask several listing agents how much they think they can get for your house, and one gives you a significantly higher bid than the others, be cautious: the agent may be trying to “buy” your listing by suggesting an unrealistically high asking price. This practice is unethical and costs you time and money, as you’ll most likely have to slash the price after your home sits on the market unnoticed for many months.

TIP: Always interview at least three agents and choose one who can back up the suggested listing price with comparable sales data.

MISTAKE #3: Getting emotionally involved

You’ve likely spent a lot of time, money and energy transforming your house into your home, so it’s natural to be emotionally invested in its sale. Unfortunately, buyers won’t have the same sentimental feelings for your home as you do, so what you think your home is worth shouldn’t be a factor in determining your listing price.

“Buyer and seller emotion is an extremely difficult thing for agents to deal with, because it needs to be a business transaction,” says Jay Thompson, designated broker of Thompson’s Realty in Phoenix, Ariz.

TIP: Stay objective during the pricing process by focusing on statistics generated by the CMA. Don’t be personally offended by lowball offers. Instead, think of them as the starting point of a negotiation that could result in a sale.

MISTAKE #4: Pricing too high from the start

First impressions are crucial when selling your home. “The first 10 days after you implement a listing into the MLS are the most important because that’s when it’s going to generate the most activity,” says Gaye Atherton, sole proprietor of Atherton Appraisals in Knoxville, Tenn.

If your home enters the market overpriced, many buyers will overlook it from the get-go because it will be out of their range. By the time you reduce the price to fair market value, many potential buyers will have already found something else. Other buyers may initially be interested in your new low price, but they’ll also see that your home has been sitting on the market for some time, which could lead them to believe there is something wrong with the home.

TIP: Price your home correctly the first time to gain the attention of serious buyers and sell faster. If getting less money for your home is not an easy thought to bear, think of all the costs associated with homeownership that you’ll have to pay if your home sits on the market for several months at an unrealistic asking price.

MISTAKE #5: Overpricing because you have “time”

Sellers who aren’t in a hurry often decide to test the market by listing their homes at a high price and waiting to see where the market goes. But in most markets where home prices are dropping, waiting it out may actually cause you to lose money.

“It’s key to price properly right away because you have a greater chance of selling if you’re just on the market,” says Wendy Sarasohn, senior vice president of The Corcoran Group in New York. “Everybody wants something that’s brand new, not been shopped around, and not on sale.”

TIP: Sell your home faster and possibly for more money by pricing your home based on current home values

MISTAKE #6: Chasing the market

If you list your home too high to begin with, you may find yourself making incremental price drops but never quite catching up with the market.

For instance, Thompson has had a listing in Phoenix for a year that the sellers insisted on putting on the market for $250,000, despite the fact that comparable homes in the neighborhood were selling for around $225,000. Four months and no showings later, the sellers finally decided to drop the price to $225,000. However, home values had declined significantly in those months, so the reduced price was still four months behind the market. Since then, the sellers have been reducing the price on the home about every three months, but never catching up with their competition.

“When a home has had multiple price reductions, it appears not only to be stale, but that there’s something wrong with it,” Sarasohn says.

TIP: List your home competitively to begin with. If you don’t get any bites, don’t hesitate to lower your price. Work with your agent to reevaluate market conditions and determine the fair market value of your home.

To see more great articles we always reccomend The Front Door Website.  http://www.frontdoor.com

Remember if you are thinking of selling your home, or looking for that new dream home The Walters Team would look forward to an interview and earning your business! We list and sell homes 7 days a week!

We hope these terms make it easier for you when you see them. We in the real estate world often use abbreviations without thinking that the public might not know what they mean.

If you have any questions as always feel free to contact us!

Glossary of Terms:

“Foreclosure (FC) sale”: a sale of a property that occurs while the property is actively in some stage of foreclosure. (Stages include “NOD” for notice of default, “LIS” for lis penden, “NTS” for notice of trustee’s sale, “NFS” for notice (judgment) of foreclosure sale, and “REO” for real estate owned or bank-owned property.) This definition of foreclosure sale includes only sales to third-party buyers or investors not involved in the foreclosure process. It does not include property transfers from the owner in default to the foreclosing bank or lender.

“REO sale”: a sale of a property that occurs while the property is actively bank-owned (REO).

“Preforeclosure sale”: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).

“Pct. of all sales”: total share of foreclosure sales (or preforeclosure sales or REO sales) among all residential sales during the quarter or year.

“Avg. FC sales price”: the average sales price of foreclosure sales (or preforeclosure sales or REO sales) during the quarter or year, excluding sales with no sales price.

“Avg. FC discount”: the percentage difference between the average sales price of foreclosure sales and the average sales price of nonforeclosure sales during the quarter or year. In order to come up with the discount, RealtyTrac takes the sale price and divides it by the number of square feet in the home, to come up with the average price per square foot. Then it parses the numbers by property (those not in foreclosure, those in foreclosure, and those which have already been repossessed by the banks). Comparing the average cost per square foot gives RealtyTrac the discount rates. The company doesn’t take into account the condition of the property or the type of property (i.e. a condo vs. a detached home).

“Avg. REO discount”: the percentage difference between the average sales price of REO sales and the average sales price of nonforeclosure sales during the quarter or year.

“Avg. preforeclosure discount”: the percentage difference between the average sales price of preforeclosure sales and the average sales price of nonforeclosure sales during the quarter or year.

Source: RealtyTrac.

The Moving Process Re posted from HGTV’s Front Door

We thought that this article was worth a posting.  When you are ready to find your next home and move visit us at http://www.thewaltersteamrealestate.com   to start your home search. Enjoy!

Saying goodbye to friends and starting out somewhere new is bound to be stressful, but the moving process doesn’t have to be! FrontDoor’s here to be your personal relocation assistant, with four easy-to-understand moving stages and tips and tricks to help you out along the way

Step 3: Assess your financial situation.

Your mind is ready to move, but what about your pocketbook? Make sure you have the financial resources to make your relocation a reality.

• If you’re considering moving for a job, have you negotiated an adequate relocation package? Talk to friends, relatives or colleagues who live in the area and can give you realistic and up-to-date estimates, particularly if you’ll be moving abroad.
• If you’re currently renting and want to buy your first home, read our First-Time Homebuyer’s Guide to help you get financially ready to buy.
• Current homeowners have a double burden: sell a home and buy a new one. Investigate how much you will net from the sale of your current home before you research how much it will cost to buy your new home. If you discover that the likely sale price of your home won’t afford you the home or lifestyle you envision, you may want to delay your relocation plans.
• If your current home hasn’t sold and you need to move quickly, you may be able to get a “bridge loan” — a short-term loan that can give you cash for a new home.
• If you decide purchase a new home, assess what you have left for moving expenses. Put together a moving budget to find out what type of move you can afford. Strapped for cash? Check out our top 10 ways to cut moving costs

Step 4: Ready to move? Break the news to your family and friends.

Once you’ve decided to relocate, it’s time to let family and friends in the loop.

• If you have children, telling them about moving can be difficult. Here are some tips to make the news go over more smoothly:
  • Tell them about the move early on — you don’t want them to hear the news from a family friend or relative.
  • Pick a private setting, and try to minimize interruptions by turning off cell phones and the television.
  • Focus on the positive aspects of moving, such as meeting new friends or experiencing a new culture
  • Let older children help with moving decisions to ease their fear and anxiety. 
• Moving is difficult for everyone — even the ones staying behind. Tell your friends and family members

We love the HGTV Front Door Website!

We felt this was a great article to repost.

Originally posted by:John Rebchook
Denver Real Estate Examiner

 The Denver-area housing market performed better than 15 of the 20 metropolitan statistical areas tracked in the closely followed S&P/Case-Shiller Home Price Indices released today.

Denver showed the best performance, as far as its ranking, in a year. The last time Denver ranked No. 5 of the 20 cities in the report was in February 2010.

    The report, however showed that the Denver-area housing market, overall, fell by 2.6 percent in February. While that was better than the overall 3.3 percent drop for the 20 cities tracked in the index, it was the steepest year-over-year drop since the 3.1 percent decline in September.

    It also marked the eighth consecutive month that the Denver housing market has shown a year-over-year decline.

     “That is very consistent with what we are seeing the marketplace,” said Jack O’Connor, principal of Prestige Real Estate Services.

        “However, definitely we have a split market in the Denver area,” he added. “Homes priced below $350,000 have appreciated. And homes above $350,000 are stabilized, for the most part, and in some cases are rising, too. At the high-end, every community has its own supply and demand dynamics.”

O’Connor said he doesn’t think the Denver-area housing market will experience a double dip, in which prices will fall below their previous low point during the cycle. Many observers believe nationally, a double dip in home prices is almost a foregone conclusion.

    “I don’t see prices falling anymore,” O’Connor said.

    Lane Hornung, CEO and co-founder of COhomefinder.com and 8z Real Estate, however, said that Case-Shiller shows it is less than 1 percent away from its previous low, set in February 2009.

   However, any double-dip will be a blip, he said.

    The low supply of unsold inventory in the Denver area, at a time when housing demand is picking up for seasonal reasons, means that housing prices will likely rise, he said.

     “The low supply of homes bodes well for home prices,” Hornung said.

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing. 

A home under construction in Austin. The number of new homes in the pipeline nationwide is quite low. 

From his wide-rimmed cowboy hat to his roper boots, Mike Castleman fits moviedom’s image of the lanky Texas rancher. On a recent March evening, Castleman is feeding cattle biscuits to his two pet longhorn steers, Big Buddy and Little Buddy, on his 460-acre Bar Ten Creek Ranch in Dripping Springs, a hamlet outside Austin in the Texas Hill Country. The spread is a medley of meandering streams, craggy cliffs, and centuries-old oaks. But even in this pastoral setting, his mind keeps returning to a subject he knows as well as any expert around: the housing market. “I’m a dirt-road economist who sees what’s happening on the ground, and in 35 years I’ve never seen a shortage of new construction like the one I’m seeing today,” declares Castleman, 70, now offering a biscuit to his miniature donkey Thumper. “The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin’ to rise, not fall.” 

Castleman is in a unique position to know. As the founder and CEO of a company called Metrostudy, he’s spent more than three decades tracking real-time data on the country’s inventory of new homes. Each quarter he dispatches 500 inspectors to literally drive through 45,000 subdivisions from Baltimore to Sacramento. The inspectors examine 5 million finished lots, one at a time, and record whether they contain a house that’s under construction, one that’s finished and for sale, or a home that’s sold. Metrostudy covers 19 states, or around 65% of the U.S. housing market, including all the ones hardest hit by the crash: Florida, California, Arizona, and Nevada. The company’s client list includes virtually every major homebuilder and bank — from Pulte (PHM) and KB Home (KBH) to Bank of America (BAC) and Wells Fargo (WFC). 

The key figures that Metrostudy collects, and that those clients prize, are the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them. Together those figures measure inventory — the key metric in determining whether a market has a surplus or a shortage of new housing. 

Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That’s less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.” 

If all the noise you’re hearing about housing has you totally confused, join the crowd. One day you’ll read that owning a home has never been more affordable. The next day you’ll see news that housing starts have plunged to nearly their lowest level in half a century, as headlines announced in March. After four years of falling prices and surging foreclosures, it’s hard to know what to think. Even Robert Shiller and Karl Case can’t agree. The two economists, who together created the widely followed S&P/Case-Shiller Home Price indices, are right now offering sharply contrasting views of housing’s future. Shiller recently warned that the chances were high for a further double-digit drop in U.S. home prices. But in an interview with Fortune, Case took a far brighter view: “The lack of new home building is a huge help that a lot of people are ignoring,” says Case. “People think I’m crazy to be optimistic, but housing is looking like the little engine that could.” 

To see where real estate is truly headed, it’s critical to keep your eye firmly on the fundamentals that, over time, always determine the course of prices and construction. During the last decade’s historic run-up in prices, Fortune repeatedly warned that things were moving too fast. In a cover story titled “Is the Housing Boom Over?,” this writer’s analysis found that the basic forces that govern the market — the cost of owning vs. renting and the level of new construction — were in bubble territory. Eventually reality set in, and prices plummeted. Our current view focuses on those same fundamentals — only now they’re pointing in the opposite direction. 

So let’s state it simply and forcibly: Housing is back. 

Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction that so amazes Castleman. The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year. 

Drumming up sales 

Of course, home prices are low and home construction is weak for a reason: incredibly low demand. For our scenario to play out, America will need a decent economy, with job creation and consumer confidence continuing to claw their way back to normal. 

One big fear is that today’s tight credit standards will chill the market. But we’re really returning to the standards that prevailed before the craze, and those requirements didn’t stop prices and homebuilding from rising in a good economy. “The credit standards are now at about historical levels, excluding the bubble period,” says Mark Zandi, chief economist for Moody’s Analytics. “We saw prices rising with fundamentals in those periods, and it will happen again.” 

To see why, let’s examine the remarkable shift in home affordability. A new study by Deutsche Bank measures affordability in two ways: first, the share of income Americans are paying to own a home. And second, the cost of owning vs. renting. On the first metric, the analysis finds that homeowners now pay just 9.8% of their income in after-tax mortgage, tax, and insurance payments. That’s down from 17.2% at the bubble’s peak in 2007, and by far the lowest number in the Deutsche Bank database, going back to 1999. The second measure, the cost of owning compared with renting, should also inspire potential buyers. In 28 out of 54 major markets, it’s now cheaper to pay a mortgage and other major costs than to rent the same house. What’s most compelling is that in all of the distressed markets, owning now wins by a wide margin — a stunning reversal from four years ago. It now costs 34% less than renting in Atlanta. In Miami the average rent is now $1,031 a month, vs. the $856 it costs to carry a ranch house or stucco cottage as an owner. (For more, see The top 10 cities for home buyers) 

Not all markets will bounce back equally, of course. Housing resembles the weather: The exact conditions are different in every city. But in general the big U.S. markets fall into two different climate zones right now. We’ll call them the “nondistressed markets” and the “foreclosure markets.” A more detailed look shows why the forecast for both is favorable. 

Nondistressed markets: Ready for launch 

No cities went untouched by the collapse in prices over the past few years. But markets such as Northern Virginia, Indianapolis, Minneapolis, San Diego, the San Francisco suburbs, and virtually all of Texas held up reasonably well. In those areas prices spiked far less than in bubble cities — the foreclosure markets we’ll get to shortly — chiefly because they didn’t get nearly as many speculators who thought they could flip the homes or rent them to snowbirds. 

The nondistressed markets will be able to get prices rising and construction growing far faster than the harder-hit areas for a simple reason: Although some of these markets are still suffering from foreclosures, they don’t need to work through the big overhang haunting a Las Vegas or a Phoenix. The number of new homes for sale or in the pipeline is extraordinarily low in nondistressed markets. San Diego is typical. It has just 921 freestanding homes for sale or under construction, compared with 4,425 in late 2005. The challenge for these cities is to generate enough demand to reduce inventories of existing, or resale, homes. In the entire country the resale supply stands at 3.5 million houses and condos. That’s a fairly high number, since it would take more than eight months to sell those properties; seven months or below is the threshold for a strong market. 

But in the nondistressed cities, the existing home inventory is lower, closer to seven months on average. So a modest increase in demand will translate into strong gains in both prices and new construction. That should happen quickly, because most of those markets — including Silicon Valley, Northern Virginia, and Texas — are now showing good job growth. 

Zandi of Moody’s Analytics expects that prices will rise three to four points faster than inflation for the next few years in virtually all of the nondistressed markets. His view is that prices will increase in line with rents, which are now growing briskly because apartments are in short supply. Those higher rents will encourage buyers to cross the street from an apartment to a home of their own. 

In Northern Virginia, Chris Bratz, an engineer, and his wife, Amy DiElsi, a publicist, are planning to leave their rental apartment and become homeowners for the first time. The main reason? Buying has simply become a far better deal than renting. “The market got completely inflated, then it crashed, so prices are coming back to where they should be,” says Chris. As the couple have watched prices fall, they have also watched the rent on their apartment spiral upward, reaching $2,700 a month. They calculate that they should be able to purchase a townhouse for between $400,000 and $500,000 and pay less per month for a mortgage. 

The nondistressed markets will also lead the way in construction. Zandi predicts that for the nation as a whole, single-family housing “starts” — measured when a builder pours a foundation for a new home — will rise from 470,000 in 2010 to as much as 700,000 this year. A large portion of that activity will happen in nondistressed markets where a tightening supply of resale houses will start making new homes look like a good deal. “Our main competition is from resales,” says Jeff Mezger, CEO of KB Home. “The prices of those homes have stayed so low, because of low demand, that it’s hampered the ability of builders to sell new houses.” 

But many would-be buyers simply prefer a brand-new house. Eventually they’ll move from renters to buyers, and the trend will accelerate now that prices are no longer dropping. In Minneapolis, Yuan Qu and her husband, Xiang Chen, a researcher at the University of Minnesota, just moved from a two-bedroom rental to a new light-blue four-bedroom ranch with a chocolate-colored roof on a spacious corner lot. They paid $400,000, a bargain price compared with a few years ago. The couple, both in their early thirties, moved to Minnesota from China six years ago. “We wanted to buy a house, and we’ve been waiting and waiting and waiting,” says Qu. “The prices went down for so long, we finally thought they couldn’t keep falling.” For Qu the only choice was new construction. “We’re not very handy people,” she admits. 

Foreclosure markets: The outlook is brightening 

A home off the market in Mesa, Ariz. 

The true disaster areas for housing since the bubble burst have been Sunbelt cities such as Las Vegas, Phoenix, and Miami — places that boasted great job and population growth in the mid-2000s, only to suffer a housing crash that swamped them with empty homes and condos and crushed their economies. But people always want to live in those sunny locales, and their job markets are starting to recover, albeit slowly. In foreclosure markets the inventory problem is far greater because it includes not just traditional resale homes but millions of distressed properties. Fortunately those houses are now such a screaming deal that investors, including lots of mom-and-pop buyers, are purchasing them at a rapid pace. To be sure, some foreclosure markets won’t rebound for years because they’re both vastly overbuilt and far from big job centers; a prime example is California’s Inland Empire, a real estate disaster zone 80 miles east of Los Angeles. 

But the outlook is brightening for Phoenix, Las Vegas, Miami, and parts of Northern California. A big positive is the tiny supply of new homes entering the market. Phoenix, for example, has a total of just 8,100 new homes that are either for sale or under construction, down from 53,000 in mid-2006. The big test in these cities is absorbing the steady stream of distressed properties. The foreclosures put downward pressure on the market far out of proportion to their numbers because of markdown pricing. “We had levels of inventory even higher than this in 1990 and 1991,” says MIT economist William Wheaton. “But they were traditional listings, not foreclosures, so they didn’t create the big discounts you get with foreclosures.” 

Wheaton reckons that we’ll see a flow of around 1 million foreclosures a year, at a fairly even pace, from now through 2013. That figure is frequently cited as evidence that the market is doomed for years in most foreclosure markets. Not so. The reason is that the vast bulk of those units, probably over 600,000, according to Gleb Nechayev, an economist with real estate firm CB Richard Ellis (CBG), are being converted to rentals either by investors or their current owners. Those properties are finding plenty of renters, since the rental market is still extremely strong across the country. Remember, the millions who lost their homes to foreclosure still need somewhere to live. 

A typical investor is Alex Barbalat, a Russian immigrant who’s purchased seven homes east of San Francisco in the towns of Bay Point, Antioch, and Pittsburg. His average purchase price is around $100,000 for homes that once sold for between $300,000 and $500,000. But he has no trouble finding renters, since his tenants can commute to jobs in San Francisco on the BART transit system. Barbalat is pocketing rental yields on the prices he paid of around 12%, and he’s in no hurry to sell. “I’m holding them until prices drastically rise,” he says. 

Investment funds are also entering the game. Dotan Y. Melech looks for bargains in Las Vegas for UnitedAMS, a firm he co-founded that manages apartments and other real estate investments. The firm has raised more than $20 million from outside investors to purchase distressed properties. So far, Melech has bought around 300 houses and plans to purchase another 200 this year. He has no trouble renting the houses he buys, since, he estimates, occupancy rates in Las Vegas are touching 95%. The “cap rate,” or return on investment after all expenses, is between 8% and 10% — twice the rate on 10-year Treasuries. Melech rents to people who lost their homes but are reliable renters. “A lot of people can’t be buyers because their credit got hurt,” he says. 

Even with investors jumping in, buying activity in foreclosure markets hasn’t yet increased enough to bring inventories down. It will soon. Zandi thinks prices will fall a couple of percentage points lower in the distressed markets in the short run. “But that will be overshooting,” he says. “It’s like an elastic band. If prices do drop this year, they will need to bounce back because they’ll be far too low compared with rents and replacement cost.” Renters will come off the sidelines to purchase homes in the years ahead, precisely the opposite trend of the past few years. 

Consider the example of Michael Dynda, a retired Air Force avionics technician who now works for a government contractor in Las Vegas. Dynda, 49, is a first-time buyer who put off purchasing for years, in part because prices were falling so rapidly in Las Vegas, with no bottom in sight. But last year the combination of bargain prices and low mortgage rates became too good to resist. He ended up purchasing a 2,300-square-foot stucco home for $240,000, or about half what it would have fetched in 2007. Dynda got a 4.38% home loan, and pays the same amount on his mortgage as on the rent on the house he left to become a homeowner. “The timing was about as good as it could get,” says Dynda. 

Mike Castleman’s company tracks the inventory of new homes in 19 states across the country. He sees supply getting tight. “Home prices are fixin’ to rise,” he says. 

Back on the ranch, Mike Castleman is lounging in his creek-front mansion, built from “a hundred tons of fine central Texas limestone.” As he shows off his collection of custom-made guitars, including one crafted to resemble the skin of a rattlesnake, the homespun housing guru once again returns to his favorite topic. 

Castleman claims that this recovery will look like all the others: It will bring a severe shortage of housing. He invokes the livestock business to explain. “It takes three years between the time a bull mates with a cow and when you get a calf ready for market,” he says. “That’s how it is in housing too. We’ll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved. Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house.” But those folks, says Castleman, will be set on buying a place. “And they’ll want it so bad they’ll bid the prices up!” In other words: Beat the crowd.