Norada Real Estate Investments

The US Appetite for Debt

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So far, I’ve never heard the same commotion in the market and the media unlike earlier this year when the US economy earned an embarrassing downgrade.

Perhaps, with all the Thanksgiving Holiday frenzy and the Black Friday storm that took place, almost everyone doesn’t care a whit about the surging US debt and is just looking forward to inflate personal spending. Well, that isn’t the case in Washington though. Democrats and Republicans are currently at a stalemate as to the best way to reduce the US debt, which now tops the $15 trillion mark from its $5.6 trillion level in 2000 according to usdebtclock.org.

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Freddie Mac Needs 15 Years to Unload All REO Inventory

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Sales of Freddie Mac REO homes took a dip in 3Q11 compared to the first two quarters of the year as nonperforming loans surged consistently over the previous quarter.

The number of repossessed homes plunged to 25,300, falling by 13.5% quarter-on-quarter (q-o-q) or approximately 30,000 units in 3Q11. REO sales also stumbled from 31,600 in 1Q11, the highest number recorded in the government sponsored enterprise’s (GSE) history.

In 3Q11, Freddie Mac thrust back 24,300 homes into its current inventory while disposing 25,300 REO properties at the same time. At the end of the quarter, the mortgage capital provider has already accumulated 60,000 REO properties on its books, down by 25 percent year-on-year (y-o-y) as a result of newly completed foreclosures.

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Top 6 Reasons Mortgage Applications are Rejected

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Half of refinance applications are abandoned or rejected, as are 30 percent of purchase mortgage applications, according to the Mortgage Bankers Association. All told, the Federal Financial Institutions Examination Council (FFIEC) says that well over 2 million mortgage applications were rejected last year.

Want to avoid falling into that number? It's tough — especially in light of the fact that mortgage lenders have become increasingly restrictive in terms of their lending guidelines since the housing market crash.

Here, as a cautionary tale and primer on what to expect, are the top six reasons mortgage lenders reject applications.

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What Can Foreign Investors Teach Us About Our Own Country?

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You’ve seen the headlines. The combination of lower prices, increased rents and a weak dollar are drawing investor capital from all around the globe and funneling it into American housing.  According to NAR, foreign investment is US real estate has increased by 20% in the 12 months ending march 2011, totaling $82 billion in just one year. What’s missing in most of these stories is why.

Why are overseas real estate investors, who are standing thousands of miles away with little if any personal experience in US real estate, pouncing on this opportunity? Low prices and great exchange rates don’t explain it. If you hear of a stock that has plummeted, would you buy it based on that fact alone? Or would you want to understand the fundamentals of the company behind the stock. What do they produce? Who are their customers? Why should you believe this investment will pay off, as opposed to seeing the new low price as an accurate reflection of the value of the company? In other words, if it’s a piece of junk, you wouldn’t care how cheap it is.

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Year-End Checklist for Rental Real Estate

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Real estate is one of my absolute favorite areas in the tax law because there is so much flexibility in how to do things to legally maximize the tax benefits available.

Real estate is also one of the most complex areas of the tax law. This makes it easy to overlook important steps, which can lead to missing out on tremendous tax savings.

I recommend reviewing your tax strategy throughout the year, particularly as it relates to real estate. This makes it much easier to make adjustments timely, minimize oversights and reduce stress at the end of the year and tax return time.

With the end of the year approaching quickly, it is an ideal time to implement a year round strategy to review your tax strategy as it relates to your real estate.

Start with my year-end checklist for rental real estate and adapt it to use throughout the year.

Here are a few items from the checklist my team and I use:

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2012 Housing Market Forecast

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The question most real estate investors often ask is, “Where do I invest now?”

As always, there are local housing markets around the country where homes are affordable, the underlying economy is strong, and appreciation is imminent.  These are markets you should consider for your next long-term real estate investment.

Norada Real Estate Investments tracks the economic conditions and real estate trends of nearly 400 markets across the country.  Because of the dynamic nature of real estate market conditions, we continually monitor and rank the top markets to make it easier for you, as an investor, to concentrate on the areas that will give you the greatest opportunity for success.

While you might be inclined to look for bargains in areas that have seen the largest price corrections in the past, watch out – there is no guarantee that home prices in areas of high speculation will ever rebound to boom levels.

Unlike the stock market, local real estate markets usually move in slow, predictable cycles. Appreciation is not luck or magic. It correlates closely with economic development and population growth in a local market.

If you missed out on Phoenix, Vegas and Florida (or if you rode those waves and know what it's about), download the current issue of our free report.

Download your free copy of the 2012 Housing Market Forecast Today!

Real Estate Resurgence Could Mark Early Months of 2012

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In the third quarter of 2011, nationwide statistics from the real estate market have revealed numerous indicators that multiple markets may hit a resurgence in the early months of 2012. Home building projects have increased, as well as mortgage applications with rates lowering.

States across middle America have proved to be retaining the strongest numbers as areas such as Texas and Oklahoma cities have continued to stay afloat with job creation. Not all markets are hitting a full rebound; instead they are achieving small improvements in different categories that have an influence over the total market.

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Book Review: Eat That Frog! by Brian Tracy

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Time management is an issue for many on both a personal and professional level. Author Brian Tracy makes it clear that the important piece of time management and prioritizing is not completing every task (because you never will!) but rather finding the most challenging tasks and getting those done first.

The title of the book comes from an old Mark Twain quote, saying that if the first thing you do is eat a frog, you will do nothing worse the rest of the day. Tracy likens the frog in this quote to the main priority that must be completed each day. And if there are two equally-important tasks, eat the uglier frog, or complete the task that seems most daunting or difficult first.

Once “the frog” has been eaten, the rest of the day will run much smoother.

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The New Real Estate Boom

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Home prices and sales may be flat, but the rental industry is booming. The percentage of renters is on the rise, the number of households is increasing, and more Americans are downsizing, all of which point in a single direction: rents are on the rise.

At the peak of the housing boom, home ownership in America reached an all-time high at 69.2%. Today that number has plummeted to fewer than 67%, which may not sound like a huge drop, but that represents roughly 3 million households that were owner-occupied and are now tenant-occupied.

The high foreclosure rate has accelerated the transition toward leasing, but there are a myriad of other trends coalescing to boost demand for rental housing.

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USA Investment Property – A Great Choice For Investors

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USA investment property is becoming very popular these days, and many foreign investors, especially from the UK, Australia and Europe, would prefer purchasing properties in this country.

There are several economic reasons that are responsible for the US property market to work well, where investors can make large profits from relatively small investments. It is important therefore to comprehend the crucial elements that contribute to the unparalleled opportunities which are available now, as the country is fast becoming one of the top property investment locations.

Economy – Even with the economy still in recession, the USA remains the largest national economy in the world that is complemented by its huge land mass and population. The country has an appraised GDP of more than $14 trillion with a relatively low cost of living, and an advanced market with contemporary infrastructure consisting of large finance and private sectors.

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Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

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