Tuesday, May 12, 2015

How NBA Star Kevin Durant Has Helped The Real Estate Market

While it is safe to say that the majority of us don't care what superstar pro athletes do with all of their money, this week's news is an exception to real estate owners and those who depend upon the industry for their income.

Way to go, Kevin Durant. This time, it's not because of his play on the basketball court. The sale of his Miami area multi-million dollar penthouse brings us what is truly the best possible real estate news. This is positive for all of us.

The fact is that Durant's penthouse has been sold for approximately $3,125,000. What makes this so special is that Durant purchased it back in 2011 - for $1,325,000 LESS than what he just sold it for only four years later!

This 3,800 square foot estate was put on the market earlier this year at $3,450,000. In this instance, I can't criticize the seller for accepting $125,000 less than the asking price. Not when the profit comes to more than $1.3 million over four years.

If it were up to me, this should be the lead story in every real estate related news source for the entire week. Here is why.

Stories like this one were commonplace for years. However, in recent times the number of distressed properties sold for lowball prices has destroyed this from happening in the majority of cases.

We need MORE stories such as this one. A seller made a handsome profit on a property purchased and upgraded over a four year period. Shows it actually can be done, even in today's market.

For a change, an agent didn't say "It won't sell for that much. You need to price it below what you paid for it!". Some appraiser didn't bring in comps using short sales of large mansions to make it appear that Durant's property had not increased in value. Yay!

Real estate needs to be made into an investment with promise once again. Those who are sitting there trying to come up with reasons why home ownership has declined over the past five years need to read this column again. If consumers had the legitimate chance to turn a profit within five to ten years (like it used to be) I'm here to tell you home sales would be back up again.

In the spirit of Kevin Durant, it would be a slam dunk.


Friday, May 8, 2015

The Latest In Conflicting Home Sale Research

The barrage of  "half full" vs. "half empty" opinions and statistics regarding the current home sales market continues, while the problem isn't any closer to being fixed.

A new report by Fitch Ratings, which reviews current home prices in markets around the country, shows that home prices in Texas "are 11% overvalued". Specifics include claims that Austin and Houston are "overheated by almost 20%".

In a separate report issued by Arch Mortgage Insurance Company claims that "Texas has a nearly 33% chance of a housing decline", and puts the Dallas/Ft. Worth Metroplex and San Antonio first on its list of cities with "moderate" risk for a softening.

This Arch report adds North Dakota and Oklahoma among its other "moderate risk" states. Because of its direct involvement with home sales around the country, this report has some meaning, adding to the "half empty" scenario.

Both of these reports were the primary elements of a story in the Dallas Morning News earlier this week, which is quite understandable. And that's the rub here.

On the very same online page with this story is the first "other news" story to be linked to. The headline on it reads, "Dallas/Ft. Worth Housing Market Rated Hottest In the Nation by Realtor.com".

According to that story, Texas home sales "rose by more than 4% in the first quarter of 2015". It then goes on to say that the increase comes as the inventory of available properties "dropped to an all-time low" in the latest report from the Texas Association of Realtors.

There you have it. From the same link on a newspaper web site, we see two sources showing doom and gloom, while two others show a most positive spin.

What do I think? I'm sticking with what I consider to be more important facts. Such as this being the month of May, and that I'm still finding photos of available homes for sale in the northeast part of the country with piles of snow in the photos.

While I look at those, others sit and wonder why those homes aren't selling at all, or fetching the prices they once did.