Awesome Point Breeze Development Opportunity!

1342 S Garnet Street – Point Breeze – $135,000

Taxes: $186/2016 Lot Size: 15×72
Sqft: 1,080 Zoning: RSA5

New construction development opportunity in the
fastest-growing neighborhood in Philadelphia!

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jimlogo2 (1)
jonesti@mccannteam.com — 215.440.2052 Direct 
Berkshire Hathaway HomeServices — Fox & Roach Realtors — The McCann Team
530 Walnut Street — Suite 260 — Philadelphia PA 19106 — 215.627.6005 Main

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Is a Housing Bubble Near?

Lou Barnes  of  inman.com discusses his thoughts on the current US mortgage status. He states:

“Take two things for certain. First, there’s never been nor ever will be a housing bubble without a corresponding bubble in mortgage credit.

Second, no matter who may yap about credit being too easy (usually complainers about the federal role in mortgages), stick with the Fed’s quarterly accounting of U.S. financial flows, Z-1.

We just got the 1st Quarter 2016 report — it lags because it’s a huge effort to compile accurately. Buried in it, 125 pages deep, are all of the mortgage accounts.

Total U.S. home loans outstanding grew by $19 billion, 0.19 percent to $10.008 trillion — that’s the first time over $10 trillion since 2011. A growth rate like that…no bubble. Impossible.

The sustained rise in U.S. home prices at a slope of 5 percent to 6 percent is fueled by a lot of cash (thank you, stock market), and concentrated in the healthiest metro areas and probably overstated nationally.

Mortgage equity withdrawal

Since the mortgage bubble blew for good in 2007, mortgage accounting has been odd. Every foreclosure results in subtracting the loan amount from Z-1, as does a write-off anticipating loss (one or the other, not counted twice). We have been making new loans, but a constant subtraction has been underway as well.

Another calculation is mortgage equity withdrawal (MEW): net of home sales and purchases, loan payoffs and new loans, and refinances, is mortgage lending turning home equity into cash and adding it to the economy, or not? By how much?

MEW in this last quarter is still negative about 1 percent. In normal times, as far as records go back (late 1970s) until 2002, MEW added 2 percent to 4 percent to disposable U.S. household income. In the suicidal glory days of the mortgage bubble, 2003-2007, MEW supercharged household income, averaging 8 percent per year!

MEW has been a drag ever since, a net drag on the U.S. economy.

MBSs and HELOCs

Z-1 sub-accounts tell more juicy stories. Total subprime MBSs (mortgage-backed securities) are now down from $2.2 trillion in 2007 to $580 billion (including a couple of hundred billion in good Jumbo MBS), and still writing down $20 billion every 90 days.

The cumulative subprime loss is twelve times the total TARP (Troubled Asset Relief Program) assistance to Fannie and Freddie, long since repaid. Do not believe the propaganda that Fannie and Freddie were the cause of the bubble.

Home equity lines of credit are still falling, now more because of pinched underwriting standards than write-offs. The remaining balance now is $625 billion versus $1.1 trillion at the top. The second mortgages used in 100 percent subprime lending blew a big hole in the top total.

Total loans for apartments are barely $1 trillion, one-tenth of single-family, condos and townhouses. Some have expressed worry about an apartment bubble, and it’s not there either — we have built a lot of them, but annual growth in credit has been about 7 percent.

Commercial real estate loans can be a dangerous, bubbling playground, $2.5 trillion outstanding, but the annual growth rate is only 3.5 percent.

There is no housing bubble out here. Nor real estate bubble, period. Instead, these mortgage growth rates are so low that real estate has not really contributed at all to this overall economic recovery. So there.

Key Takeaways

Total U.S. home loans outstanding grew by $19 billion, 0.19 percent to $10.008 trillion — that’s the first time over $10 trillion since 2011.

With a growth rate like that, a bubble is impossible.”

Jim Onseti-1

Jim Onesti, McCann Team
jonesti@mccannteam.com — 215.440.2052 Direct 
Berkshire Hathaway HomeServices — Fox & Roach Realtors — The McCann Team
530 Walnut Street — Suite 260 — Philadelphia PA 19106 — 215.627.6005 Main

11 Reasons Why For Sale By Owner is a BIG No-No!!

Chris Rediger, from inman.com reports on why trying to list your home for sale on your own, as a For Sale By Owner (FSBO) could wind up being a huge and costly mistake!

1. Scams Happen

Judy (not her real name) in Raleigh, North Carolina, fell in love with a FSBO home. She agreed not to use an agent and paid the homeowner $3,000 in earnest money.

Then the homeowner changed his mind. With no contract signed and no receipt, Judy lost all her earnest money. She trusted the homeowner when she should have trusted an agent.

FSBO scams happen to both buyers and sellers with little recourse besides hiring an attorney.

Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information.

2. Liability is ALL on the Seller

Everyone makes mistakes. A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes. Attorneys can close a real estate transaction, but they don’t carry errors and omissions (E&O) insurance.

So if homeowner Sandy lists “hardwood floors” as a feature and the buyer discovers it’s just a wood veneer, chances are Sandy is going to pay for that mistake.

An agent would have either caught the mistake or covered it with E&O insurance. Let’s face it: this is a litigious society, so what homeowner wants to be a target for lawsuits?

This is a litigious society, so what homeowner wants to be a target for lawsuits?

3. Paperwork is Daunting

The 2015 National Association of Realtors’ Profile of Home Buyers and Sellers showed that understanding paperwork was one of the most difficult tasks for FSBOs.

Depending on the state, there are a variety of legal forms that are needed, including but not limited to a sales contract, property disclosures, occupancy agreements and lead paint records.

Sure, ready-made contracts can be downloaded easily enough. But does an untrained seller understand what all that means? Would the seller know how to customize that one-size-fits-all contract?

Understanding paperwork was one of the most difficult tasks for FSBOs.

4. Sellers Can Get Stuck in a Bad Deal

Like Frank, FSBOs who sign on the dotted line and then realize an error are stuck. They have to pay the buyer (if they’re willing) to get out of or just take the deal.

Let potential clients know you can save them from that headache.

5. FSBO’s Sell for Less

In 2015, FSBOs lost about 16 percent of the sales price with a median selling price of $210,000 (agent-assisted homes sold for $249,000).

Homeowners selling by themselves simply don’t have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property.

If the FSBO seller sold to someone he or she knew, the median dropped to $151,900 (because cousin Sue is doing them a favor and expects a deal).

If the 2015 FSBOs sold to someone they knew, the median dropped from $210,000 to $151,900.

6. FSBO’s Spend More Time on the Market

Unless the seller knows someone who wants to buy the home, FSBOs take longer to sell than homes listed with an agent. For the same reasons, they can’t get the right selling price.

No one is “behind the curtain” running the marketing show. On average, 18 percent of FSBOs were unable to sell within their chosen time frame last year.

On average, 18 percent of FSBOs were unable to sell within their chosen timeframe last year.

7. FSBOs Lack Representation

There’s no one looking out for the homeowners who sell on their own. They have no one to call if they have a problem or a question.

Dave found this out when he sold his Morrison, Colorado, home himself. Studying for his real estate license, Dave felt confident he could handle the contracts. Then the unexpected happened.

When his house was under contract, a state patrol car pursuing a speeding motorist crashed into a downstairs bedroom. Repairs threatened to push back closing, and suddenly, the buyer was asking for a storage unit, the cost of temporary housing and more.

He was lucky enough to have an agent friend who could step in, but a homeowner with no representation could have been out thousands of dollars unnecessarily.

8. Inspections are Problematic

Sellers who don’t know the rules can get stuck with unnecessary and costly repairs. When Sue sold her 10-year-old Highlands Ranch, Colorado, home, after the inspection, the inspector said she needed to change the stairs from the garage to the house because the code had changed.

He listed other code changes, and the buyer began to demand these be done. Surprisingly, the inspector didn’t know that because these items were to code when the house was built, the seller wasn’t responsible for these changes.

9. Marketing is Limited

FSBOs have limited resources to market their home. The 2015 NAR Profile of Home Buyers and Sellers showed 42 percent rely on a yard sign, 32 percent rely on friends and family, and about 15 percent use social media.

Relying on the neighbors and Uncle Bob’s second cousin has its limitations. Even paying for the MLS listing won’t be enough because there’s no incentive for an agent to bring a buyer to a FSBO.

10. Hidden Costs Add Up

The mindset for most FSBOs is saving money. Chances are, these sellers are being nickeled and dimed into a pretty big chunk of change.

They’re paying for a lot of extras: signage, flyers, photography, MLS listing, attorney (required in multiple states for FSBOs), home warranty (optional but hard to sell without one), home inspection, a wood destroying pest inspection, credit report for buyers (if applicable), contracts and the list goes on.

11. Time Costs the Seller Money

The biggest cost to a homeowner is their time. You might hear the argument that it doesn’t take an agent that much time to sell a house. And honestly, given the technology at our disposal, that’s true — to an extent.

But it will take a homeowner a whole lot longer. They don’t have the expertise or the access to the resources agents have. What is their own time worth to them? How much time will the seller spend researching the market and contracts? Is the seller going to leave work to unlock the house each time there’s a showing?

 

 

FSBO’s don’t have the expertise or the access to the resources agents have.
Inman on the 11 reasons for sale by owner is a terrible idea!!

Jim Onseti-1

jimlogo2 (1).pngjonesti@mccannteam.com — 215.440.2052 Direct I License 
Berkshire Hathaway HomeServices –Fox & Roach Realtors — The McCann Team
530 Walnut Street — Suite 260 — Philadelphia PA 19106 — 215.627.6005 Main

Temple University Investment Properties!

Amazing ROI opportunity! Excellent cap rates. Fully renovated triplexes on Temple Campus and 1/2 block from North Broad street mega development sites!!

1

North Broad is appreciating rapidly with several mega improvements underway: Temple football field, Divine Lorraine, and dozens of private sector housing, mixed use and infrastructure improvements!!

2

These large 3 and 4 bedroom units have high rents ($4,500-$5,000 /month) and luxury finishes including granite kitchens with stainless steel appliances, tile and hardwood flooring, central air, and much more!

3

10 YEAR TAX ABATEMENT WAS APPROVED IN 2014- super low taxes add to the excellent investment return! Both 2261 and 2311 Park ave are fantastic buys.

4

Do the math, these deals work and will great mid to long term investments, the city is booming, this neighborhood is on fire, just drive around and take a look!!

Jim Onesti, McCann Team
jonesti@mccannteam.com — 215.440.2052 Direct 
Berkshire Hathaway HomeServices — Fox & Roach Realtors — The McCann Team
530 Walnut Street — Suite 260 — Philadelphia PA 19106 — 215.627.6005 Main

 

15 New Homes coming to Front and Dickinson

I just sold a fantastic lot to one of my Developers at Front and Dickinson Street in The Pennsport section of Center City Philadelphia. Fifteen homes will be built, delivery Spring 2017. Each home will have Garage Parking, 10 year tax abatement, Roof deck and 2500-3200 square feet. There are corner homes available as well. These 4-story homes will have amazing views and top of the line finishes throughout. Contact me for details and to reserve a unit. Jimconstruction-plans-and-hat