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All Cash Home Sales Trending Down

by Tim Hart

All Cash transactions on existing home sales accounted for 24% of sales in March. That number fell by 33% in comparison to March 2014 numbers. In general, smaller amounts of all cash deals suggest that investors are not as active and that the slack has been picked up by long-term homeowners.

The drop in all cash sales relates to the drop in investor activity. As distressed properties for sale have decreased and home prices have gone up, investors have been seeing thinner profit margins of late. Distressed sales took a 10% share of home sales in March, which was down from 14% in 2014. As an investor, it’s harder to get a screaming home deal when sellers are not backed into a financial corner and forced to sell.

Seventy percent of investor purchases in March were made in all cash.

Having lower all cash sales suggests that distressed property sales may also be going down. Sellers have seen improvement in their financial standing since 2008, but particularly of late. Most sellers’ finances now afford them the ability to sell their home when they want to, not when they have to—creating a more balanced housing market with less crazy deals.


Even as cash deals have gone down, the housing market continues to improve, suggesting that the market’s recovery is due in large part to increased activity among long term homebuyers. More people have been willing to get financing on a home, particularly with current low mortgage rates. Cash sales may be decreasing but their smaller market share may also be from traditional financed sales grabbing a larger share of the market in 2015.

 

Source: http://realtormag.realtor.org/daily-news/2015/05/11/cash-sales-are-weakening

 

Big Sky Tourism is growing and growing quickly according to new numbers assembled by Visit Big Sky, a destination-marketing group in the area. The group compiled numbers based on the city’s total lodging tax collections because they indicate accurately the number of people staying overnight in the town. In general, the lodging tax reflects the ups and downs of the tourism industry pretty accurately.

According to these numbers, the growth rate in Big Sky is nearly 3 times as high as the rate of Montana overall after the first half of 2014. Over the last three years, lodging tax collection totals have increased by double digits. In 2013, tax collections hit 4 times the total of the state and 10 times the National Average. The Big Sky Visitor Center also noted it has seen its international traffic increase, up nearly 20 percent. The visitor center claims that international visitors are expected to spend about seven times more per day than a domestic visitor.

As tourism increases in the area, its hard to see there not being growth in other sectors as well. Big Sky has always been an ideal vacation home rental destination for property owners looking to supplement their income. Now, as tourism continues to increase, a larger market only suggests larger pie slices for all involved.

Source:

http://www.bozemandailychronicle.com/news/economy/article_053ab0a6-4511-11e4-9417-237703baa9ca.html?utm_medium=desktop&utm_source=block_953010&utm_campaign=blox

Investing Options: Tapping into Your Home’s Equity

by Tim Hart

When the housing market is in a full swing recovery like it is today with interest rates still historically low and inventory changing daily, it is a good time to see how you, the ‘happy in your current home and not looking to move,’ can tap into the market through investing.

Usual Methods of Real Estate Investment: These include: financing a new purchase with a mortgage or selling some stocks and bonds, taking money out of your IRA or from your 401(k). These are hit and miss and sometimes turn out to be not-so-smart moves but they seem to be the methods by which most investors fund their second (or third, or fourth…) purchases.

 

An Unusual Proposal: Some investors have begun to start using the equity they have built up in their own home as the launch point for an investment property! Home equity, the difference between what a person owes on their mortgage versus their home’s market value, rises with the strengthening real estate market. The increasing value of your home’s equity can be monetized through a home equity loan (a call-out refinance) allows home owners to use their current home’s value to pay for a second home. This, like the methods above, does has pros and cons to it.

  • Pros: Lenders are more willing to lend on more favorable terms because the home owner has more skin in the game. The costs on borrowing will be lower as well since this form of loan does not involve paying for title searches or the transactional cost of a new mortgage.
  • Cons: Your monthly payments will increase and if you cannot pay, you may lose your primary home to foreclosure. In addition, this is an eggs all in one basket approach—you will be investing in one type of asset.

http://money.cnn.com/2013/08/16/pf/expert/home-equity/index.html

Curb Appeal: Tips for Property Investors

by Tim Hart

Making a home stand out in a market that is evermore ‘template’ based for building homes is not something that can be put off for another day. In order to make your house pop when a potential renter/buyer is looking at it, follow these dramatic tips:

Simple and Sweet: Manicure your lawn. Great lawns require upkeep and that is a fact that people just have to face. Cutting, trimming, weeding, fertilizing, and a little bit of TLC to make the velvety green plain look solid and well cared for. If you do not have the time for it, hire either a professional company or if you are on the fence about the amount you need extra help, neighborhoods have a great summer work fleet of eager young kids looking to make a few bucks.

Beyond lawn care, shrubs, flowers, and bushes are spendy  to purchase so once they are in, trimming them back and keeping them in top-notch condition is only sensible. Here in Montana where spring is gorgeous, summer is short, fall is crisp, and winter is long investing in some winter resistant evergreens will keep a touch of color in snow covered yards.

Source: http://rentallinkonline.com/2010/11/effective-curb-appeal-tips-for-property-investors/

 

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