2010 January | Bull City Real Estate

Archive for January, 2010

Frank Calls For the End of Fannie and Freddie

Saturday, January 30th, 2010

Last week the Wall Street Journal reported that Rep. Barney Frank [D-MA], the chariman of the House Financial Services Committee, called for the elimination of Fannie Mae and Freddie Mac. To quote Rep. Frank

“The remedy here is…as I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.”

No details were given about what would replace them, but given Frank’s political DNA, I’d bet much more towards direct government control than a smaller privatized company.

Currently, Fannie and Freddie combined own or guarantee about half of the $11 Trillion in outstanding home mortgages. By controlling such a large percentage of mortgage assets, they essentially control the mortgage industry. The market [or more accurately, the lack of a market] for jumbo loans is a prime example of this. Having that completely replaced with a government agency would, essentially, nationalize the mortgage industry.

This might be good in the short term, as it would make the mortgage markets more predictable and stable. In the long run, however, government control is a mistake — it would give the government almost total control over what gets built, who can buy it, and where citizens can live. Putting something this integral to the lives of Americans in the hands of politicians only invites a repeat of the tragedy that got us here in the first place.

Tags: mortgage news

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Economics in Seven Minutes

Tuesday, January 26th, 2010

In my blog reading today, I came across this great video. If you have ever wondered why the economy works the way it does [in real estate, stocks or whatever], watch this. I promise it will be worth the 7 minutes.

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Goal Setting for 2010

Saturday, January 9th, 2010

By now you have seen many post on many blogs about New Year’s resolutions. I’ve never been a fan of resolutions — part of the point of making resolutions seems to be breaking them in mid-February. Instead, I have a list of goals I want to achieve during 2010. Here are some of them that apply to either the website or my real estate career;

Be more active on the blog: If you look at the archives list, you’ll see that I posted about two articles a week during 2009. That is nowhere near enough. In 2010, I’d like to get that up to posting about every other day. I won’t be able to do that from the starting line [although I'm doing pretty well in January so far], but by the end of the year, I’d like to be making about 15 posts per month.
Improve my Facebook Page: I finally got with the 21st Century and built a Facebook page. I now have a main page, plus a page for my current listing. In 2010 I want to continue to develop those.
Learn to use Twitter: I admit it — I didn’t get Twitter. I couldn’t figure out why people would care what I had for breakfast. slowly I’m starting to see that Twitter can be much more than that. In 2010 I want to be better at using Twitter to communicate with people.
Start a Networking Group: I’ve been reading Trust Agents over the holidays, and it talks about the value of building a group of people from different professions who meet regularly to share ideas and connections. That’s not the first time I’ve read about the idea, and it’s something I want to work on this year. If you think you might be interested, email me.

Four goals . . . that should keep me busy for most of the year, right?

Tags: admin

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Come To My Open House This Sunday!

Thursday, January 7th, 2010

I wanted to take a moment to invite all my readers to my Open house this Sunday at 1824 Birmingham Avenue. This beautiful home was built by master builder George Birmingham as his personal residence in 1939. It’s 1,600 square feet and four bedrooms make it a great starter home with plenty of space. The half-acre lot gives you plenty of space around you too! Plus it’s minutes from Northgate Mall, I-85 and just about anywhere in Durham you want to go.

We’ll be holding the Open House on Sunday, January 10 from 3PM until 5PM. I hope to see you there!

Tags: buyers, open house, starter homes

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Bring Out Your Christmas Trees! Bring Out Your Christmas Trees!

Sunday, January 3rd, 2010

One of the things common to almost every American household is that we need to get rid of a Christmas tree right about now. If you live in Durham, here are the instructions for tree pickup straight from the city.

“The Department of Solid Waste Management will collect Christmas trees from all Solid Waste customers from January 4-29, 2010. Trees should be placed at the curb by 7 a.m. on residents’ normal household garbage collection day. Residents are asked to leave the tree at the curb for one week before contacting Durham One Call at (919) 560-1200 to report a missed tree collection.

Trees taller than six feet should be cut in half. Residents should also remove all decorations, including tinsel, lights, garland, and ornaments, as well as stands, nails, and other hardware. Residents are also asked to not place trees in bags.

Christmas trees may also be dropped off at the City’s Waste Disposal & Recycling Center at 2115 E. Club Blvd., Monday through Friday, 7:30 a.m. to 4 p.m., and Saturday, 7:30 a.m. to 12 p.m., at no charge until January 29. Trees delivered after that date will be subject to the usual disposal fees.”

[photo credit zin1223 and Creative Commons]

Tags: Durham

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GMAC Receives a Second Bailout

Saturday, January 2nd, 2010

Last Wednesday GMAC Financial Services, citing losses in its mortgage division, received another infusion of cash — $3.8 Billion this time — from the Federal government. This means that GMAC has received a total of $16.3 Billion from American taxpayers. In exchange for this aid, the Feds now own 56.3% of GMAC. No matter what your political leanings, this is a huge amount of money and an unprecedented amount of government control.

Here is the interesting question: DiTech Mortgages, one of GMAC’s subsidiaries, is one of the nation’s largest mortgage lenders. Given that Fannie Mae and Freddie Mac are both now owned by the Feds, and now have unlimited capital to buy mortgages, will mortgages from DiTech receive preferential treatment? After all, this level of vertical integration is the goal of many private corporations. If the Feds could somehow pick up a national real estate firm, they could pretty much control the transaction from start to finish.

What do you think? Is this level of government control what is needed to revive the mortgage market?

[photo credit: Creative Commons and Shiny Things]

Tags: Fannie Mae, Freddie Mac, mortgage news

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Durham Home Sales Report for December

Friday, January 1st, 2010

Last month I predicted the market would sag in December due to both the normal market decline and the surge of people trying to close prior to the old tax credit deadline [on November 30]. The numbers are in, so let’s see how well my crystal ball worked.

For all of Durham County there were 1,774 homes listed for sale as the ball dropped – almost the same as at Thanksgiving. 179 sales closed in December meaning that it would take 9.9 months of Decembers to work through the current housing inventory. This is a big, if expected, step backward from last November’s 7.8 months of inventory.

For the 27713 zip code there were 286 homes listed at the end of December – a 12% decline. Only 36 homes sold during December leaving the
adsorption rate at 7.9 months. Again, this is a drop from November’s rate of 5.0 months. Apparently fewer people than NAR predicted fit a new home under their Christmas trees.

Here’s a look at the communities we’re tracking. If you would like to see data from your community, please let us know in the comments.

	Total Available Listings	Total Closed Sales	Adsorption Rate	Avg Sale Price
Woodcroft	39	4	9.8 [+7.1]	$184,100 97% of list price
Hope Valley Farms	33	8	4.1 [unc]	$196,063 97% of list price
Woodlake	4	0	∞	N/A
Parkwood	8	5	1.6 [-0.6]	$127,900 96% of list price
Chancellors Ridge	8	1	8.0 [+4.7]	$210,156 100% of list price
Wynterfield	13	0	∞	N/A
Grandale	7	3	2.3	$381,483 97% of list price
Southampton	1	3	0.3	$300,288 98% of list price
Colvard Farms	12	0	∞	N/A

The communities above account for almost two-thirds of the total sales in the 27713 area code. This isn’t too surprising — when sales are down they tend to group around the larger, more “solid” subdivisions such as Hope Valley Farms, Woodcroft, and Parkwood. When sales improve you start seeing other places — Penrith, Villages of Cornwallis, Colvard Farms and the like.

What does the crystal ball say for January? I expect sales to still be depressed for January, as the cold tends to keep potential buyers indoors: not quite as down as December, but close. I believe the numbers will start to turn in [late] February as the combination of warmer weather and the imminent end of the home-buyers tax credit will spur people back into the marketplace.

[Data for this post was pulled from the Triangle Multiple Listing Service on January 1 at about 9:00 AM -- I might have been the only person awake . . . . ]

Tags: housing stats

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