Real Real Estate in Connecticut is moving to Connecticut Real Estate Unleashed, a new blog dedicated to not only finding homes for people but to help find homes for some very deserving pets.

Although the new site needs some tweaking and I’m still working on content, now is as good a time as any to ditch the old site and start focusing on the new.  If I’m able to pull it off, you will no longer be able to see this site and will be automatically directed to the new blog.  For now, this is my notice so please note the new address. 

Click on the button below to go directly to CTRealEstateUnleashed.com.  Thanks for reading and hope to see you on the new site!

Yesterday, I started to preview some of the homes on our foreclosure tour scheduled for this Saturday, May 17.

We started from a list of ten properties, narrowed from a larger list.  From the ten homes we’ll preview, we will select about 5 - the ones that could be the most profitable, are in the best condition or are in a great location.

Basically, there will be something for everyone. Here’s what we could be seeing:

• A multi-family that could be an income producer very quickly with minimal work with a lot that might yield an additional home for less than $150,000?
• A starter home in near move-in condition for less than $90,000?
• One of two single families that need work but are in great, single family areas?

Not only will you get to see these properties in person, I’ll analyze the property and its value for you, Kelly Meuser from McCue Mortgage will tell you how to finance the purchase, Pillar to Post will help you determine the condition and Attorney Will Watson will help you avoid legal pitfalls.

Haven’t signed up yet for this tour?  There’s still time. 

Space is limited. Register today at www.mccuemortgage.com/openingdoors.htm or call 1-888-576-2283.

 Read on for more details…

Have you been thinking about investing in real estate, but are not sure where to start?

Or thinking about buying a foreclosure property as your primary residence?

Jump on The Bus…the Real Estate Investment Road Show bus. This FREE seminar on wheels will take you for a tour of several foreclosed properties in New Britain. Hosted by RE/MAX Precision Realty, McCue Mortgage, Atty. Will Watson and Pillar to Post Home Inspections, we’ll tell you what you need to know before you buy. It’s a classroom on wheels!

Now is the time! With a variety of properties to choose from, low mortgage rates, and reduced prices, there is no better time to invest in real estate!
Some of the things you’ll hear about are:
√ The different types of foreclosure investments
√ How to find properties
√ Evaluating properties
√ Financing options
√ How to make an offer on a property in foreclosure

Space is limited. Register today at www.mccuemortgage.com/openingdoors.htm or call 1-888-576-2283.

East Windsor Real Estate Market Report April/May 2008

East WIndsor is experiencing a buyer’s market.  Compared to April 2007, homes are on the market longer and there is approximately 15 months of inventory on the market.

Single Families 

• Median Sales Price: $325,000
• Average Days on Market: 44
• # Sales in April: 7
• Active Listings:  62
• Closed Listings in Last 3 Months:   13
• Months of Inventory:   14 or Buyer’s Market

Condominiums

• Median Sales Price: $228,900
• Average Days on Market: 58
• # Sales in April: 5
• Active Listings:  41
• Closed Listings in Last 3 Months:   8
• Months of Inventory:  15 or Buyer’s Market

Here’s a look at East Windsor’s market for April 2007:

Single Families 

• Median Sales Price: $299,500
• Average Days on Market: 36
• # Sales in April 2007: 6

Condominiums

• Median Sales Price: $236,900
• Average Days on Market: 57
• # Sales in April 2007: 7

Enfield Real Estate Market Report April/May 2008

Although Enfield is in a balanced market, with less than 6 months of inventory on the market, the median price of single families and condominiums has decreased slightly for single families homes and more significantly for condominiums. 

Both single families and condos are spending 37 days on the market, on average.

Single Families 

• Median Sales Price: $195,000
• Average Days on Market: 37
• # Sales in April: 29
• Active Listings:  132
• Closed Listings in Last 3 Months:   83
• Months of Inventory:   5 or Balanced Market

Condominiums

• Median Sales Price: $146,500
• Average Days on Market: 37
• # Sales in April: 7
• Active Listings:  39
• Closed Listings in Last 3 Months:   21
• Months of Inventory:  5 or Balanced Market

Here’s a look at Enfield’s market for April 2007:

Single Families 

• Median Sales Price: $200,000
• Average Days on Market: 37
• # Sales in April 2007: 36

Condominiums

• Median Sales Price: $171,250
• Average Days on Market: 55
• # Sales in April 2007: 12

Hartford County Real Estate Market Statistics

The market in Hartford County picked up a little in April with 1299 Single Family Sales, Vs. 1103 in March.

And in comparison to last year, April 2008 wasn’t a whole lot different. The median sales price stayed at $259,900 and homes that sold in April took an average of 38 days to sell. The only difference was that sales volume was down.

And if you read the Hartford Courant on May 7, my favorite punching bag, you’ll notice that my news differs from theirs. The story, Median Sales Price Falls in Connecticut, states that

Hopes for a strong spring home-buying season in Connecticut received a blow Tuesday with a report that sales in March plummeted and that prices slid for the fourth month in a row and by the most since the mid-1990s.

The report they are reporting covers the entire state so my numbers don’t include any of the other counties in CT. But as you can see from my numbers below, the Median Home Sales Price in Central Connecticut is EXACTLY THE SAME AS LAST YEAR for both March and April.

I’ll be the first to put a link on my blog when the Courant writes a new story, saying that sales picked up in April and that prices have not dropped universally. And note to the Courant - Spring began on March 20 so technically, March’s numbers don’t count as part of the Spring Market. But who cares about accuracy?

Median Sales Price in April 2008 - $259,900
488 Sales
38 Average Days on Market

Median Sales Price in April 2007 - $259,900
576 Sales
38 Average Days on Market

Median Sales Price in March 2008 - $249,900
420 Sales
67 Average Days on Market

Median Sales Price in March 2007 - $249,000
635 Sales
64 Average Days on Market

Sales price is just one method used to analyze the market. Another is the Absorption Rate, or how long it will take to sell all the homes currently on the market based on what’s happened in recent history.

In all of Hartford County, there is 7 months of single family inventory (a little less than the absorption rate of 8 in March of 2008.

Or in the last three months, 1299 homes sold, or about 433 homes per month sold. Currently, there are 3160 homes on the market and assuming that about 433 homes will sell per month, it would take 7 months to sell the current inventory (Or 1299/3=433, then 3160/433=7, the estimated number of months it will take for a home to sell).

Generally, it is considered to be a seller’s market when there is less than 3 months inventory on the market. 3-6 months of inventory is considered normal or balanced, while anything above 6 months is considered to be a buyer’s market.

Somewhere at a truck stop in Pennsylvania, you might find a t-shirt that reads:

“If You Ain’t Been Possum Hissed, You Ain’t Shoopoo.”

I wish I could show you a picture of this shirt but all I found was this photo of a possum.

My memory of this very weird shirt, which I wore for Halloween one year when I went dressed as a “Shotgun Wedding” (I was Paw, dragging my Kin to the altar), reminds me of agents who don’t require their clients be pre-approved before showing them homes or presenting offers.

For three years, I worked only as an exclusive buyer’s agent. Only within the last year have I been on the other side, examining offers and am shocked that all agents don’t get their clients pre-approved BEFORE putting in an offer.  Even more surprising, I get grief back from agents who try to tell me that a pre-qualification is good enough.  Ehhh! Wrong answer.

I’m not going to explain this to agents - if they don’t know, I can’t help them.

If you are a home buyer, you need to get a pre-approval. Here’s why:

• I will advise my seller clients that it is in their best interest for them to go with a buyer who is pre-approved over one who is pre-qualified. Life is not like a box of chocolates when it comes to real estate - you want to know what you’re going to get.(Sorry, Forrest Gump)
• If you and your agent present an offer with only a pre-qualification, I will ask you to do a pre-approval and/or ask a lender I know to review the letter. This will delay acceptance and allow for another buyer to submit an offer.
• A pre-approval gives you, the buyer, a better idea of what you can afford based on more than just your income.  A pre-approval verifies your income and examines your credit. You don’t want to be one of those buyers scrambling a week before closing to find alternative financing.

A pre-approval is more work for a buyer but ultimately, it puts you in a better position.  Don’t you want to be shoopoo?

Have you been thinking about investing in real estate, but are not sure where to start?

Or thinking about buying a foreclosure property as your primary residence?

Jump on The Bus…the Real Estate Investment Road Show bus. This FREE seminar on wheels will take you for a tour of several foreclosed properties in New Britain. Hosted by RE/MAX Precision Realty, McCue Mortgage, Atty. Will Watson and Pillar to Post Home Inspections, we’ll tell you what you need to know before you buy. It’s a classroom on wheels!

Now is the time! With a variety of properties to choose from, low mortgage rates, and reduced prices, there is no better time to invest in real estate!
Some of the things you’ll hear about are:
√ The different types of foreclosure investments
√ How to find properties
√ Evaluating properties
√ Financing options
√ How to make an offer on a property in foreclosure

Space is limited. Register today at www.mccuemortgage.com/openingdoors.htm or call 1-888-576-2283.

Sunny, updated ranch in great area w/wood floors throughout, one car garage, vinyl siding, and large .25 acre lot. For more information on this listing, CLICK HERE.

Directions: Brewer to Mitchell Drive to Mitchell Court.

1. Mortgage Lenders/Brokers Don’t Owe Any Fiduciary Responsibilities to Borrowers

A fiduciary is one who acts legally on behalf and in the best interests of another. Realtors are required ethically and legally to act as fiduciaries for their clients.  Examples of Realtor fiduciary responsibilities are: Disclosure; Reasonable Care; Loyalty and Obedience, just to name a few of them.  Unlike Realtors, mortgage lenders and brokers are under no obligation, legally or professionally to look out for your best interests.  If a lender does not do CHFA loans, he/she is under no obligation to tell you about CHFA, as an example. 

2. Don’t Count on Rate Quotes to Be Accurate

If you’re calling around or surfing the net for the best rates, there are three hazards. First, rates can change throughout the day so unless you are looking at the same time, comparing rates will be inaccurate.  Secondly, lenders may purposely give you a low rate quote knowing that you’re not going to lock in right that minute. Surprise, when you are ready to lock in, the rate has gone up.  Thirdly, you are not locked in until you lock in - so your rate will probably change.  

3. Your Realtor Knows the Best (and the Worst) Lenders

Realtors get to know lenders very well.  We know whether they return calls, whether their staff has a history of closing transactions on time and whether or not they have a reputation for delivering a high level of service.  If your Realtor hasn’t personally worked with a particular lender, he/she has probably heard something about their company.  And if not, you may want to consider talking with another lender and at least compare what the two lenders told you.

4. Pre-approvals Are Not Created Equally

Your lender says you were pre-approved but pre-approved does not mean the same thing at every lender.  Did the lender pull your credit report?  Did you provide the lender with pay stubs, W-2s, bank statements and 401(k) statements?  Does your letter specify the amount, interest rate and date?  Has your lender put your application through Desktop Underwriting?  

5. Your Interest Rate May Not Be Locked

If you’ve obtained a pre-approval from a lender, you may not be locked-in at the rate your pre-approval is valid for.  Locking in a rate generally includes a separate signed agreement with the lender and possibly a payment of some fee.  Without the lock-in, you are taking your chances that interest rates may go up, impacting your ability to qualify for your mortgage.  For more information on locking in rates, go to HSH.com.

My office hosted a luncheon today with Bill McCue of McCue Mortgage.  Mr. McCue, in the mortgage business for longer than I’ve been alive, had a lot to say about the mortgage mess we find ourselves in. 

In case you’ve been in a hole for the last year, the mortgage mess is as follows:  No or low down payment loans almost non-existent, no subprime loans, no stated income loans and increasingly stringent credit and income guidelines coupled with increases in rates of foreclosures/defaults/short sales and housing prices on the decline nationwide.  A big pot of yuck.

If you’ve scratched your head in wonderment then I have some answers, thanks in part to Mr. McCue.  Caveat for you economists out there - this is a simple man’s explanation.  I am only a Realtor, after all

A long time ago, if you wanted to buy a home, you went to your local bank.  You opened up an account (or already had one) and a local loan officer qualified you for a mortgage.  Unless you were borrowing money through FHA or VA, which guaranteed loans in the event you defaulted, banks wanted to ensure you did not default and you had to meet pretty stringent guidelines.

This was back in the days of double digit interest rates, when you needed 20% for a down payment, and your qualification was entirely dependent upon your ability to repay.  Home ownership rates were lower than they are today - 62% in the 1970s and around 64% in the 1980.

In the early 1980s, it became legal for banks to charge higher fees and offer variable and balloon type mortgages, which they offered to subprime borrowers.  However, the market for subprime loans was still a small percentage of the marketplace. 

From a paper by the Federal Reserve Bank of Dallas,

Traditionally, banks made prime mortgages funded with deposits from savers. By the 1980s and 1990s, the need for deposits had eased as mortgage lenders created a new way for funds to flow from savers and investors to prime borrowers through government-sponsored enterprises(GSE).

Fannie Mae and Freddie Mac are the largest GSEs, with Ginnie Mae being smaller. These enterprises guarantee the loans and pool large groups of them into RMBS (residential mortgage backed securities). They’re then sold to investors, who receive a share of the payments on the underlying mortgages. Because the GSEs are federally chartered, investors perceive an implicit government guarantee of them. Fannie Mae and Freddie Mac, however, haven’t packaged many nonprime mortgages into RMBS.

Lacking the same perceived status, nonagency RMBS—those not issued by Fannie Mae, Freddie Mac and Ginnie Mae—faced the hurdle of paying investors extremely large premiums to compensate them for high default risk. These high costs would have pushed nonprime interest rates to levels outside the reach of targeted borrowers.

This is where financial innovations came into play. Some—like collateralized debt obligations (CDOs), a common RMBS derivative—were designed to protect investors in nonagency securities against default losses. Such CDOs divide the streams of income that flow from the underlying mortgages into tranches that absorb default losses according to a preset priority.

Having confidence in the ability of quantitative models to accurately measure nonprime default risk, a brisk market emerged for securities backed by nonprime loans.

From the St Louis Federal Reserve Bank,

In addition to changes in the law, market changes also contributed to the growth and maturation of subprime loans. In 1994, for example, interest rates increased and the volume of originations in the prime market dropped. Mortgage brokers and mortgage companies responded by looking to the subprime market to maintain volume.

The growth through the mid-1990s was funded by issuing mortgage-backed securities (MBS, which are sometimes also referred to as private label or as asset-backed securities [ABS]).

In part because mortgage lenders were not going to hold the mortgages they wrote, credit standards began to loosen. 

Beginning around 2000, several other things began to happen that broadened the impact of subprime mortgages.

• Interest rates were low, caused in part by the dot com bust
• Home prices began to tick upward
• The ranks of lenders and Realtors began to swell with amateurs flooding the business who did not know how (or chose not to) counsel clients on wise financial decisions
• Homes became investments, not a place you can raise your kids (lost money on your Pets.com stock? Don’t worry, you can park your money away safely in real estate!)
• The availability of home equity loans enticed many people to spend their home equity on purchases

And like a snowball rolling down a hill…

• Subprime borrowers are defaulting at a higher rate, causing an increase in foreclosures & short sales on the market, depressing real estate prices
• Prime borrowers are affected by depressed home prices when they have to sell or refinance, causing some to default or do short sales
• Credit is tight, locking out buyers who could buy the excess inventory
• Interest rates are likely to rise because of inflation further depressing real estate prices