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Posts Tagged ‘Real Estate News’
Increasing Demand Increases Value of Farmland
Thursday, September 8th, 2011
The value of farmland is on the rise because of an increasing demand.
Although prices vary based on location and size of parcel, high-quality crop land in the Quad-Cities region and western Illinois is selling for about $8,000 to $9,000 an acre, according toDennis Stolk, of Ruhl & Ruhl’s Davenport Farm & Land division.
Mr. Stolk said prices can be found on either side of that spectrum, but spring and summer sales have been in excess of $8,000 and acre, with “several now $9,000 and over.”
That’s up from about $5,000 to $6,000 an acre a couple years ago, he said.
Iowa farmland increased from about $5,100 an acre to about $5,500 from 2006 to 2010, Shane Johnson, Quad City Area Realtor Association CEO, said.
A U.S. Department of Agriculture Land Values Summary released Aug. 4, says the median price of Illinois farmland was $5,700 an acre in 2011, up $1,680 from 2007. The median price for Iowa farmland was $5,600 an acre in 2011, up $2,230 from 2007.
There’s a “much greater demand than there is supply” of available farmland, said Tom Marcus, a Ruhl & Ruhl Realtor in the Maquoketa area who has been selling farmland for more than 35 years.
“We have very few sellers and people waiting in line to buy.”
“Wehave definitely seen a rise in price per acre of farm ground, particularly in our region,” said Craig Wainwright, owner of Wainwright Realty in Port Byron.
Farmers also are “blessed” right now with high commodity prices, so are “willing to pay more for the ground,” hesaid.
“The 2011 increase continues a string of large increases that began in 2004,” University of Illinois agriculture economist and farm management specialist Gary Schnitkey said in a press release.
The last seven-year period in which Illinois land prices increased an equivalent amount was from 1975 to 1981 when farmland jumped from$846 an acre to $2,188 an acre, he said.
Mr. Stolk said the strong market has been fueled by “good, strong farm profits, high commodity prices and low interest rates.”
“To have corn and bean prices pushing $7 and $14 (per bushel) respectively, that’s pretty positive for land values,” saidKevin Urick, president of the Henry County farm bureau and a RE/MAX real estate agent.
Mr. Urick said a speaker at a commodity conference he attended this summer said that if corn prices rise, so will the cost and value of farmland.”I think people are looking at land like gold right now.”
However, you don’t have to remind “farmers too hard that values can drop,” he said, adding that for now, “I would say they’re pretty steady.”
As the price of land rises, so does the cost for farmers who rent fields. According to the University of Illinois release, the average cash rent in Illinois was $183 an acre this year. A USDA Agricultural Land Values and Cash Rents Final Estimates report said it was $132 an acre in 2006.
According to reports on the Iowa State University Extension’s website at www.extension.iastate.edu, the average cash rent in Iowa was $214 an acre this year, up from $137 an acre in 2006.
It’s currently cheaper for farmers to own land than to rent it, Mr. Marcus, the Maquoketa area Realtor said.
For the most part, land buyers right now are other farmers. Mr. Urick said he heard at the commodities conference that roughly 70 percent of farmland buyers are farmers, and the rest are investors contemplating commercial developments.
Mr. Johnson said it’s good to see that the local real estate industry — commercial and residential –”continues to be in very good shape when compared to other economies around the nation.”
The Quad-Cities area continues “to be a good place to invest in,” he said.
“We have good stability even in the midst of a very difficult economy.”
Article Originally Published by Argus-Dispatch
Short Sales: Has Their Time Finally Arrived?
Thursday, September 1st, 2011
Last week, RealtyTrac released its Q2 2011 U.S. Foreclosure Sales Report. The report confirmed what we are hearing in the marketplace – banks are beginning to look more favorably on short sales as option to foreclosure.
The report dissected the sales of distressed properties in the second quarter of 2011. Here are several of their findings:
- Sales of homes that were in some stage of foreclosure or bank owned accounted for 31 percent of all U.S. residential sales in the second quarter of 2011, down from nearly 36 percent of all sales in the first quarter.
- A total of 102,407 pre-foreclosure homes (short sales) sold in the second quarter, an increase of 19 percent from the previous quarter.
- A total of 162,680 REO homes (foreclosures) sold in the second quarter, virtually unchanged from the first quarter.
- Short sales on average sold for a discount of 21 percentbelow the average sales price of non-foreclosure homes.
- REOs on average sold at a discount of nearly 40 percent below the average sales price of non-foreclosure homes.
This could be a great sign that banks are finally realizing the advantages of short sales over foreclosures.
Bloomberg.com quoted Rick Sharga, senior vice president of RealtyTrac, in an article covering the report:
“This is a glimmer of hope that lenders are getting more realistic. It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”
Bottom Line
Banks are beginning to do more short sales. It is time for everyone involved to help in this endeavor. Tomorrow, we will have a short sale expert, Christopher Reale, blog on gaining the right mindset to do just that.
More Disclosures on the Way to “Help” the Consumer
Thursday, August 4th, 2011
In their never ending quest to “simplify” the confusion surrounding the borrowing of money, the Fed has released their Final Rule for Risk Based Pricing Notices, as well as Adverse Action Notices. More paper work filled with CYA, legal terminology that winds up baffling people more than giving them any clarity. Let’s take a peek….
Risk Based Pricing Notices are required under the Fair Credit Reporting Act (FCRA), and now, because of provisions in the Dodd-Frank Act, they must include language that relates to credit scores IF those scores were used to determine the interest rate (and resultant APR) given the customer. Also, the language can’t simply be “the lower your credit score, the higher rate you will pay”. That would be too easy. You see…lower credit scores have statistically proven to have higher defaults (more risk), so charging those clients more makes sense. But in the world we live in, the government wants to inundate the customer with mumbo jumbo, and insists on a form that gives the following information:
- The credit score used in making the credit decision;
- The range of possible credit scores under the model used to generate the credit score;
- All of the key factors that adversely affected the credit score. Note that the risk-based pricing notice generally may not list more than four key factors. However, if one of the key factors is the number of inquiries made with respect to the consumer report, up to five key factors may be used.
- The date on which the credit score was created; and
- The name of the consumer reporting agency or other person that provided the credit score.
Further, if there is more than one borrower, each receives their own, personalized disclosure.
Adverse Action Notices are basically Rejection Letters. They used to say things like “your file was turned down because your credit/income/assets/appraisal does not fit the guidelines under which we approve borrowers”. Now, when credit scores are a reason for denial the language is slightly more confusing but essentially the same 5 things stated above for Risk Based Pricing. But, the really good news is that they added up to 5 different, new forms to tell the consumer where they can inquire about the score in their “consumer report” (the new term that replaces the old “credit report”).
Who gets paid for this stuff? More paper work, more muddied explanations, all to protect the consumer? Or to protect the jobs of the bureaucrats and law makers? Am I alone in thinking that often the efforts to protect wind up frustrating instead? Simply stated, if your credit is bad because you made late payments, you can be turned down or your may be approved and be forced to pay a higher rate. Now, if your credit score is bad because of errors in the credit report, you should be directed on how to fix it. But that’s a topic for a different day.
Sometimes through all the confusion things can seem blurry and out of site but the end result is always worth the while, and Ruhl&Ruhl wants to help get you there! Keep checking RuhlHomes.com for the most up to date information on the housing market and to start your home search.
Provided by: KCM Blog
5 Real Estate Headlines You’ll See in the Next Six Months
Thursday, July 14th, 2011
Making predictions can be the ‘kiss-of-death’ for a blog. Even if we get four out of five correct (80%), there are those in the industry who will kill us on the one we got wrong. We believe strongly that when making a real estate decision for you and your family you must look forward and take into consideration how the housing market may change.
For this reason, we are willing to take on the possible wrath of our counterparts by sticking out our necks and predicting these will be the major real estate news stories from now until the end of the year.
Interest Rates Rise
Many, including us, have been surprised that rates have not risen already. However, the next several months are going to see three distinct changes that will propel rates upward.
- As the government starts to leave the mortgage market, private industry will step in. Private industry demands a higher rate of return on their investments. Mortgages will be no different. Studies have shown that 30 year mortgage rates could increase by 1 to 3% over the current rate.
- In many higher priced markets, rolling back Conforming Loan Limits means that rates for the mortgages on these properties will resort back to the rates on private jumbo loans. The FHFA informed us that last year, the difference between mortgage rates for jumbo loans and jumbo-conforming mortgages has varied between about ½ and ¾ of a percentage point.
- As the economy gets better (and we believe it will), the pressure to keep rates low to stimulate growth will abate.
Some Loan Requirements Tighten but More Can Now Get a Loan
Lending institutions have already started to introduce stricter mortgage guidelines. Whether the Quality Residential Mortgage (QRM) requirements are instituted as originally proposed or eased somewhat, there is no doubt that guidelines will continue to tighten as we work through the year. However, we believe the private sector will again start introducing alternative mortgage financing but at a greater expense to the consumer. You WILL be able to get a mortgage. It will just cost you more.
Housing Sales Increase
Contracted sales have shown consistent improvement over the last six months and we feel this will continue and actually begin gaining even greater momentum. We believe there is a ‘pent-up’ buying demand caused by the volatility of the market over the last several years. When interest rates start to move upward and alternative financing becomes more available, these buyers will start to jump off the fence. We believe there will be a major upswing in sales over the next six months.
Distressed Properties Increase Markedly
More people are paying their mortgage on time and that is great news for housing in the long term. However, the numbers of distressed properties currently in the foreclosure process is still very swollen. These properties will begin coming to the market in the second half of the year as short sales and foreclosures. The numbers will be staggering in some areas.
Prices Continue to Soften in Most Markets
The current housing inventory for sale and the distressed properties about to come on the market will vastly outnumber the increased supply of purchasers we will see over the next six months. There will be more houses for sale then there will be buyers purchasing them. That oversupply will continue to put downward pressure on prices through the rest of this year and into 2012.
Ruhl&Ruhl has now stepped out and spoke up on what we think consumers will see in the housing market in the next six months. What headlines do you predict?
For more information on the housing market please visit RuhlHomes.com.
Provided by: KCM Blog
11 Cities Where Homes Sell the Fastest – Iowa City, IA Made the List!
Friday, April 29th, 2011
According to data provided by Realtor.com, Iowa City, Iowa is one of the 11 cities that homes are selling the fastest! With a very high median sales price and average days on the market a mere 66 this may be the right time, if you were thinking about selling your home.
California boasted the highest number of cities where homes tended to spend the shortest amount of time on the market last month.
In these 11 cities, the median for days on the market was 160 in March, which is a positive increase of 40 percent from March of 2010.
Here is a list of the cities with the fewest median days on the market from March:
Oakland, Calif.
Median days on the market: 50
Median list price: $319,000
San Francisco
Median days on the market: 63
Median list price: $639,000
Denver
Median days on the market: 66
Median list price: $259,900
Iowa City, Iowa
Median days on the market: 66
Median list price: $187,500
Los Angeles-Long Beach, Calif.
Median days on the market: 70
Median list price: $345,000
Stockton-Lodi, Calif.
Median days on the market: 70
Median list price: $175,000
Bakersfield, Calif.
Median days on the market: 70
Median list price: $141,500
San Jose, Calif.
Median days on the market: 71
Median list price: $470,000
Anchorage, Alaska
Median days on the market: 71
Median list price: $279,975
Fresno, Calif.
Median days on the market: 71
Median list price: $170,000
Tulsa, Okla.
Median days on the market: 71
Median list price: $147,900
Please contact Ruhl&Ruhl REALTORS today if you are interested in buying or selling a home, or visit RuhlHomes.com.
Some information and statistics provided by Realtor.com
Foreclosures: Bringing Clarity to the Confusion
Wednesday, April 27th, 2011
Headlines created by the numerous foreclosure reports often contradict each other. One headline announces foreclosures are rising while the next talks about the decrease in foreclosure numbers. This has led to tremendous confusion regarding the issue. Let’s bring some clarity to the data. There are five individual stages of the foreclosure process that are reported:
1.) 90+ Day Delinquencies
Once a homeowner falls three months behind on their payments, most financial institutions count them in their foreclosure numbers. Why? Less than 2% of those who fall that far behind ever catch up in their payments. The other 98% will end up as a distressed property (foreclosure or short sale). Homeowners in this category don’t always receive a foreclosure notice immediately. In some cases, homeowners who have not paid their mortgage in 12 months have not yet received a notice of foreclosure.
2.) Homes in the foreclosure process
These homes have received a formal notice which officially starts the foreclosure process. In different states, because of court procedures, it takes varying time frames to complete this process.
3.) Homes repossessed by the bank
These homes have finished the foreclosure process and are now owned by the bank. These homes are known as REOs (Real Estate Owned).
4.) REOs placed on the market
These are the REOs that banks bring to market. Many come to market quickly. Others must be refurbished before being put up for sale.
5.) REOs Sold
Obviously, these are the REOs that actually sell.
This seems very straight forward. Why is there so much confusion?
Here’s an example. Just a few weeks ago the major daily newspaper on Long Island, NY had a headline that announced delinquencies were up to over 10% of all homes. One-in-ten homes on Long Island were 90+ days delinquent. That was a major increase from the year before. Exactly seven days later, the same newspaper headlined a story that foreclosures on Long Island were down dramatically. That seems a contradiction. Though both headlines were accurate, they led to confusion.
Let’s dig a little deeper into the data. Yes, the percentage of homes being foreclosed on has decreased. Why? The court systems in NY are now taking almost a year to process a foreclosure. There are not less homes eligible for foreclosure. They are just caught in a slow moving pipeline. Likewise, there are not a growing number of delinquencies. These homes are just not working their way through the process. The delinquency numbers would be much lower if there wasn’t a logjam in the court systems.
Bottom Line
To truly understand the distressed property situation in your market and what impact it may have on prices, contact your Ruhl&Ruhl local real estate professional. They should be able to simply and effectively explain with the use of strong visuals (charts & graphs) what is happening in your area and how it impacts you.
Please visit RuhlHomes.com for more information.
Some information and statistics provided by: KCM Blog
