According to Zillow’s Real Estate Market Report released on Friday, home depreciation leveled out in August. However, while home values fell about 0.3 percent between July and August (similar to the same change measured between June and July), the market has not yet bottomed out, and Stan Humphries, Zillow’s chief economist, stated that “the data clearly illustrates that the bottom in national home values has not yet been hit”[1]. However, not everyone agrees with this prediction. In fact, experts from SmartMoney at the Wall Street Journal believe that the market has already hit bottom and that lending standards, which have been “onerously high since 2008,” may ease up in the coming months as the jumbo mortgage market crawls back to life, lower credit scores enable homeowners to qualify for financing and some down payments creep back down toward five percent[2]. While no one is disputing that it is going to be a long recovery, the experts are all over the spectrum when it comes to when that recovery will start.

Do you think that the housing market has bottomed out?

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[2] http://www.smartmoney.com/personal-finance/real-estate/3-signs-the-mortgage-market-has-hit-bottom/

When someone who can actually lend you money says that something is a good investment and that they are expecting to lend on it, it might pay off to listen. According to Kevin Amolsch, “the founder of the premier lender for real estate investors” in Colorado, “the clock is ticking” on investments that must be made in order to private equity funds to remain in business, and he believes that rental property is the way to go[1]. Amolsch believes that private equity funds are sitting on capital that must be invested in the next one to two years, and that when the cash starts to trickle back into the economy, “we will see an increase in job growth nationally.” He thinks that rental real estate is the next big investment wave. “Hold on to your hats, we might be turning the corner,” he announced yesterday.

Do you think that rental property is attractive right now?

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Using funds from the “Hardest Hit” Program, the Michigan State Housing Development Authority and JP Morgan Chase will work together to implement a program that will “pay unemployed borrower mortgage payments for up to a year of $9,000”[1]. While the embattled lender has currently suspended foreclosures in 23 states to review the affidavits that led to these foreclosures, Michigan is not one of the states in which Chase has suspended all foreclosure processes.

Chase plans to send out application packages and check documents for applicants before sending the packs on to the State Housing Development Authority, and help could come as soon as the following month if the application is approved quickly enough.

Do you think that this is a good use of hardest-hit funding?

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The attorney general of Arizona was awarded a $1.7 million grant yesterday to fight mortgage fraud after Arizona was ranked first as the state most at-risk in the country for mortgage fraud schemes by Interthinx Mortgage Fraud Risk Report[1]. The money will go to the creation of a six-person unit “devoted exclusively to investigating and prosecuting mortgage-related crimes.” The unit will be part of the Criminal Division of the Attorney General’s office and will get to work within 60 days. One of the attorney general’s main targets is the loan modification business. The state has enacted a number of laws to prevent people who modify loans or provide any type of “foreclosure consultation services” from charging upfront fees and loan modification consultants now must obtain a “loan originator license” from the Arizona Department of Financial Institutions.

Do you think that this is a good use of government grant money? Do you believe that these types of measures are effective?

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Looking for cash buyers for huge housing complexes? Look just across the ocean and you may find more than you were ever expecting. As the US housing market continues to founder, more and more foreign investors are moving out of the stock market and into the housing market[1]. What looks like a catastrophe to many in the US (properties in Miami, for example, selling at 50 percent of what they were worth in 2007), looks like the world’s biggest and best real estate fire sale to foreign investors with strong currency and the cash to buy. And they are buying. According to a Condo Vultures, a consulting and brokerage firm in Miami, “80 percent of the sales in downtown Miami are foreign-based.”

This seems to be a positive on multiple levels. Not only are foreign investors moving in on the market to purchase inventory, but the conventional plan – to rent the properties until the market turns around and then sell – indicates a huge vote of confidence for the U.S. housing market. And right now, the market needs all the confidence it can get.

Do you think the presence of foreign investors in the US market in such high volume is a good thing?

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Collier County property appraiser Abe Skinner, who has been working in his appraiser’s office in Naples, Florida since the 1960s, is getting an unusual request this property tax season: people want their property tax assessments reevaluated and boosted[1]. While the evidence is anecdotal since his office does not keep track of the number of people complaining about low assessments, he has definitely noted an increase in people who are hoping to drive their assessments – and with them, their property taxes – up instead of down. In a housing market environment in which one bad local assessment can put an entire neighborhood underwater, people are trying to keep values up any way that they can, speculate Skinner, other local appraisers and even employees of the local county tax office.

The issue with property tax appraisals in particular is a problem in this area of Florida, where the “mass appraisal system” values similar houses in an area identically. Have you encountered this type of problem wherein the owners of properties have possibly artificially inflated the values on their properties basically by paying more in taxes?

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In a small town in Kentucky, the local Cultural Arts Association and the MLS service are teaming up to try and attract real estate investors and business-owners considering trying their hand at owning commercial real estate[1]. The Maysville Commercial Real Estate Open House will feature properties that are for sale as well as for rent. The event is designed to attract people who are curious about the downtown area and is open to any property owner with real estate in that area, whether it is retail, rental or traditional office space. The association will provide music and entertainment, and the city will provide refreshments.

Would you attend this type of event to find investing opportunities? Do you think this strategy will be uniquely effective in a small town or could it be applied to larger metro areas?

Thank you for reading! Your comments and questions are welcomed below.

Self storage is not particularly glamorous. In fact, it is so mundane that for years it was “shunned by the real estate investing elite” according to its own REIT, Public Storage (PSA). Now, however, the tune is changing. While the housing market and the commercial market struggle and stagnate, self storage is more attractive than ever before. In fact, PSA hit a new share high earlier this week of $104.27, leading the Wall Street Journal to speculate that “the self storage sector – along with a few other unglamorous niches – could provide relatively decent returns amid the current market environment”[1].

While you may not be interested in investing in PSA stock, this trend is indicative of a movement by real estate investors toward investing in public storage properties. While most arenas in the real estate market are having trouble, a number of REITs are doing quite well thanks to judicious investing in previously neglected niches like this one. Many investors follow REIT investments and then use them to design their own investing strategies, which could mean that self storage is in for a “bull run” according to some experts.

Do you use REIT investing to guide your real estate investing decisions?

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In Illinois, a timeshare scam has elicited “dozens of complaints” since January, thanks to the implementation of a tried-and-true scam method: the illicit money wire[1]. Individuals pretending to be timeshare resellers contact the owners of the timeshares. Not surprisingly, many of these owners are currently struggling to make the payments on these vacation “deals” and may be a little too eager to make a sale. The “reseller” informs the timeshare owner that they have found a buyer or a renter for the timeshare, then another con artist contacts the owner posing as the buyer and urges the sellers to go through with the sale so that they can take ownership of the “property.”

Of course, this transaction requires a service fee or a security deposit that can, not surprisingly, be sent via a money wire or charged to a credit card. About the time that this transaction clears, the con artists clean out and close the bank account that received the money and then take off, leaving the original timeshare owners still the owners and out a couple hundred to a couple thousand dollars. Some victims have wired as much as $5,000 to these con artists.

Illinois attorney general Lisa Madigan is not only cautioning timeshare owners against this specific scam, but also encouraging them to remember that they should “never assume they will recoup the purchase price of their timeshare, especially if they have owned it for less than five years and the location is not well-known.”

Claiming that their network is the “wave of the future for real estate,” five Canadian real estate companies are working together in a commission-free sales network to challenge their national MLS system[1]. So far, the network has sold more than 85,000 properties and believes it has saved its customers more than $1 billion in commissions. Currently, 12,000 homes are listed through the network, but the vast majority of Canadian homes for sale are still listed on MLS.

Like the United States’ non-commission sales groups, the network charges a flat fee for the service of selling a house. However, while these groups simply compete with more conventional realtors in the United States, in Canada the Canadian “Competition Bureau” believes that the new system could be eliminating competition – at least among member agents – and that this could be detrimental to the network itself as well as to homeowners attempting to sell their houses through the system. Additional complaints include that the flat fee compels sellers to pay for services that they may not want or need.

In the United States, these types of systems are flourishing, particularly in today’s economy when many sellers want to keep as much of the money for their sales as they can. Do you think that these types of home sales programs are good for the real estate market and those people trying to sell their homes, or do you agree with the Canadian Competition Bureau that they place too many regulations on participating agents?

Thank you for reading! Your comments and questions are welcomed below.