The Other Victims in the Foreclosure Crisis: Pets

Animals left in abandoned homes with no food is a scenario that has become more common since the real estate market tanked and triggered soaring foreclosure rates, say real estate agents, mail carriers and animal rescue groups on the front lines of the problem.

These pets have not only been left behind, but are locked in foreclosed and abandoned homes by their owners. 

They suffer a slow death from starvation and dehydration, unless someone finds and rescues them in time. 

“They are the silent and unfortunate victims of this,” said Suzanne Sherer of Re/Max Realty in Cape Coral, Fla. “Most of the time when the Realtor gets involved, it may be too late.”

It was almost too late for the big orange tabby that Carolyn Herman, a mortgage broker, found on the lanai of a foreclosed home.

“When I first peeked in the sliding glass door, I thought the animal was dead. There was nothing but fur with some bones stuffed inside of it,” she said.

Then the cat opened its eyes. “I thought, ‘Oh my God, that animal is still alive,’ ” she said.

Herman, a former cardiac nurse, had an emergency kit with an IV in her car. “I was literally driving from this house to my house with one hand holding the IV needle between his shoulders.” The cat survived and was adopted by a loving home, Herman said.

Collaborative efforts

The American Society for the Prevention of Cruelty to Animals estimated in 2009 up to a million animals would be abandoned at shelters, outdoors and in foreclosed homes. There is no updated estimate or a centralized database tracking the problem, though, said Joan Carlson-Radabaugh, ASPCA community initiative director.

Some real estate agents across the country have banded together to help.

Cheryl Lang, president of Integrated Mortgage Solutions in Houston, formed the nonprofit No Paws Left Behind in 2008. Now a nationwide network, the group has rescued at least 1,000 animals.

“I can certainly help the collateral damage that has been left behind through these borrowers through ignorance,” Lang said.

Denita McCarty, who works at the Lehigh Acres, Fla., post office, steps in when mail carriers report abandoned animals.

There was one Labrador retriever that was so hungry the dog had eaten some of his tail.

“These people -- there are times I just bawl my eyes out. It’s just so sad. You have to stay strong and move on to the next one,” McCarty said.

While there is no excuse for abandoning an animal, rescuers say, area shelters are bursting with animals.

“You have to be realistic,” said Ria Brown, Lee County Domestic Animal Services, of those who know they’re facing foreclosure. “Try to rehome them yourself. If you’re desperate, you need to tell somebody and not move away and leave them inside the home, regardless.”

Animal services will take animals abandoned in homes, but the process is long and full of red tape. Animal control officers have to post warnings, document the evidence of neglect and not trespass on the property unless accompanied by law enforcement. To get into the home and take the animal, they need a search warrant.

Betty Hughes, board member and treasurer of the Animal Refuge Center, a no-kill shelter in North Fort Myers, Fla., said the top three reasons animals are sheltered are foreclosure, job loss and divorce. Rescuers say pet owners, afraid their animals will be euthanized, will leave them in homes with food and water, believing someone will come in a couple of days to find them. But it can be weeks or months before someone enters the home.

Top10 Haunted Homes for Sale

 It’s that time of year—a time that many folks will be heading out to local haunted house attractions, looking to get their share of Halloween scares.

But for those looking for year-round spookiness, here is a compiled list of top 10 haunted houses for sale. That’s right—haunted homes that you can actually buy.

The creator said they arrived at their top ten list by spending many hours with paranormal experts, ghost tour guides and real estate agents across the U.S. to find the spookiest estates on the market.

There is one Ohio haunt on the list—at number nine sits the abandoned mansion once owned by boxer Mike Tyson. The house sits on a lot of more than 60 acres in rural Southington, Ohio. It was previously owned by Tyson, a former county commissioner, and currently imprisoned infomercial mogul Paul Monea. The property, once valued at more than $2 million, now sits vacant, priced at $1.3 million.

Other homes for sale include a haunted horse farm in Kentucky, the “Psycho” murder victim's home in Beverly Hills, an evil clown prefab in Texas, the “Ozzie” California home, a New Orleans haunted bed and breakfast and a Dean Martin ghost in Minnesota—all are for sale.

TOP 10 HAUNTED HOMES

10. Ozzie the Ghost!

Some people believe the Ozzie & Harriet home is haunted, but of course in Hollywood where creativity is the norm, there will always be creative gossip. If we had to pick a ghost, charming Ozzie would be a pretty nice guy to have around.

This traditional 5,813sf home was built in 1916 and was the set for The Adventures of Ozzie and Harriet that ran from 1952 to 1966, the longest running TV show until The Simpsons recently topped it. Located on almost a half acre, the home consists of 5 bedrooms and 4 baths. The house is very private at the end of a cul-de-sac and is gated. The grounds contain a guest house, separate office and pool. The interior has period details throughout and the home is ready to move into as is or can be renovated at the new owners‘ option. If you're extremely lucky, maybe you'll see Ozzie happily puttering around the yard, though we wouldn't suggest you hold your breath. Priced at $4,245,500.

Deal Source: hauntedhouses.com

9. Abandoned Ohio Mansion!

Ghosts might be afraid to go anywhere near Mike Tyson but it looks like something very scary happened at Tyson's former Ohio mansion. The home is complete with a spooky moss covered indoor swimming pool, a massive trashed living room, holes punched through walls, and rusty tiger cages. The boxer lived here for a period in the 1990's and it has sat abandoned ever since. Now on the market, possibly many of the problems have since been resolved, though the agent is clear about the buyer needing to return it to its former “luster“.

On a very private 60 acres of open and wooded land that adjoins a golf course, this almost 10,000sf property in rural Ohio has 5 bedrooms, 7.5 baths and large indoor pool. There is also a separate guard house with another 4-5 additional bedrooms. Grounds have paved walking paths, a basketball court, large decks and . . . large animal cages. We suggest a large Halloween party before renovations begin. No decorating will be involved. Priced at $1,300,000, tiger cages included.

Deal Source: realliving.com

8. $15 Million LA Haunted House!

Sitting vacant for over 16 years unfinished, this house was said to be plagued by alien spacecraft, is said to be sitting on top of an Indian burial ground, was beloved by gangs, addicts and Satanists. The butt of rumors that have become urban legend, the house's history has even become a storyline on a “Law and Order” episode! It is currently for sale at the listed price of $15,200,000. Sitting on 22 acres of the last undeveloped land in LA, the 9,800sf house has 5 bedrooms, 7 bathrooms, a 200 bottle wine cellar, six-car garage, stone floors and a pool with Jacuzzi that has a view over the acreage, the city and the Pacific. From the windows you can see snow-capped mountains and the Hollywood sign. There is a 24/7 armed guard on duty now to keep bad spirits away and to prevent damage. Though unlikely that aliens will land or that spirits will arise from some unproven Indian burial ground, the property will likely entice a developer attracted by the land. Ghostly rumors, however, will likely be around for many years to come.

Deal Source: redfin.com

7. John Brown Hanging Site!

In historic Charles Town, WV, where Abolitionist Brown met his demise in 1859, 30 years later this grand Victorian was built on the site of his hanging. The land on which it sits was owned by one of the men that captured Brown and who later built a home here. Though the house itself has never been considered to be haunted, its location is one of the most historic in the country. The craftsmanship both in the exterior brick work, turret and widow's walk and in the interior millwork sets this house apart, making it the most notable piece of architecture in Charles Town. The 4-story, 7,037sf home has 5 bedrooms, 5 baths Tiffany glass, handmade shutters and exceptional mantels.

Of John Brown, historian David Reynolds contends that “not only was Brown "right" on slavery and other racial issues of his day, but that his conduct--in causing the Civil War to begin in 1861 rather than, say, 1881--potentially saved hundreds of thousands of lives that could have been lost in a war fought in a time of much greater population and more deadly weaponry and, at the same time, might well have spared an entire generation of African-Americans the humiliating experience of human bondage.” Asking $1,200,000.Deal Source: historichometeam.com

6. Evil Clown Haunted House!

This is either the chance to out do your neighbors once and for all, or for a town to become known for having the most spectacular Halloween event for miles around! All you Jaycees and civic organizations - heads up! We've all seen ads to come to the Haunted House everywhere you look around this time of year, but did you ever stop to think from where they actually come? We didn't either, but since it's almost Halloween 2011, we thought we'd do a little digging on all things Halloween and this is what we found!

There are companies that consult, design and build custom Halloween venues, or you can rent, but here's a clever company that makes it possible for you to buy a used haunted house kit! (Or how many ways can you say Prefab?) This entire mobile haunted house comes in a complete package and even offers optional add-ons. This scary package includes Evil Clown Town, Alcatraz Prison and Hot Seat electric chair and so much more! It will put Your Town, USA on the map! For $130,000, you can buy the Frightmare Package through the Texas-based Hauntrepreneurs®, a broker for used Halloween Attractions. The package comes complete with production equipment such as tents, lighting and a sound system, fog machine, effect lights, costumes, emergency lighting and exit signs. It's the perfect Halloween haunting!

Deal Source: hauntrepreneurs.com

5. Psycho Murder Victim's House!

What do you immediately think of when you hear the name “Janet Leigh?” “Psycho”, of course! You picture her in the shower and you picture that dark Victorian horror of a house on top of the hill overlooking the Bates Motel. Right? We all do! Produced by Alfred Hitchcock, it was a well-scripted, well-cast, horror film, with scenes that would terrify even the most avid horror lover. . . the Victorian house in the film was likely the scariest movie house of all time.

Now Janet Leigh's own former home is for sale and far from being a horror. It has understated clean architectural lines, paved car park, privacy, gated entrance and no ghosts anywhere in sight. Styled in Contemporary Transitional, the design is timeless both inside and out. The perfect home for an avid art collector, the floors are ebony and the walls white, offering exceptional display options. The layout is perfect for entertaining as the public rooms spill out to the patios and stunning views over Hollywood and out over the Pacific. At just over half an acre, the 4,432sf home has 4 bedrooms, 4.5 baths, pool and tennis courts. This property will give your mind a new vision when hearing the name “Janet Leigh” and all thoughts of horror will be long forgotten! Asking $3,950,000.

Deal Source: 1625summitridge.com

4. America's Scariest Haunted House!

Not for the faint of heart, this 100-year-old farm house near Olean, NY, is very well known to locals and to all paranormal investigators across the country. Even the History Channel featured it in a special. The house has a history of frightening off its past owners since the 1850's with its 12 or more not-so-friendly ghosts who are frequently seen in their entirety by neighbors, friends, guests, researchers, paranormal investigators and the clergy. In her book, “Echoes of a Haunting”, by one-time resident, Clara M. Miller, she explained the feeling about the house as a build up of pressure under an umbrella that finally releases in the form of activity from these clearly visible spirits. Clara wrote her book from her daily diary and goes into great detail about events that happened there and some she felt might have been related to the house years after moving to Oregon.

Though obviously needing a total renovation, there are many who will be hugely excited about its availability. On 8 acres, the house presently consists of a kitchen, bath, living room, 3 bedrooms and two enclosed porches and a large spring-fed pond. Many seem to think it would make a great research facility for paranormal researchers or equally as an attractive single-family home after renovation. . . . if you have nerves of steel! 100 + year old farm house & stage-coach stop has 12 ghosts. Asking $289,000.

Deal Source: wnyhauntedhouse.com

3. The Dean Martin Ghost of Edina, MN

According to their story, Dean Martin stayed at this Minnesota home in 1970 when he was filming the movie “Airport” and he never left. They believe that "Dino" is just one of a number of spirits that haunt this house, which was built near an old Indian funeral site. The owners report numerous incidents of flying tables and beds, exploding water pipes, invisible people and dogs, pounding noises, images of a bloody face in their mirror, missing objects, ice-cold urine pools and a grotesque, hairless cat with glowing eyes and a human's smile. The spirit activity was noticed to increase when the family was preparing to move. The son seems to feel that the most violent spirit got in due to him and his friends using the Ouija board in the basement, as the violent activity began shortly after that. It is probably no surprise that the home is now vacant and has been on the market since May.

Deal Source: squidoo.com

2. Haunted Horse Farm!

Don't expect to see ghostly horses grazing the fields or be so lucky as to have a ghostly farmhand stacking hay bales. Instead, turn your attention to your digital camera equipment. For some reason, the normally elusive ghosties on this farm love to have their pictures taken! They will pop up in your pastoral shots and in your family videos and have made themselves apparent over 90 times in the last nine years in and around the farm. They show themselves as orbs, darting lights and misty forms when you're trying to capture that perfect sunset or new foal. Having enjoyed writing about her experiences on this property as a paranormal author, the owner is willing to pass this farm on to the next ghost buster to enjoy.

This 5 acre, fully fenced farm consists of 2 barns and a 2002 constructed 3 bedroom, 2 bath house of approximately 1,150sf and is selling furnished. Fields are well-maintained grazing land in the horse country of Lexington, Kentucky. There have been five paranormal investigations in the past two years - all had positive findings. The next chill running up a spine could be yours! Asking $120,000.

Deal Source: sdparanormal.com

1. New Orleans Haunted B&B!

While most going businesses want to keep their ghosts in the closet so as not to frighten off clientele, the Magnolia Mansion has cleverly built its business around multiple ghosts and wish its ghosts would invite their friends! Here the ghosts are friendly with a sense of humor, where ghostly children tease you by moving things around during the night to watch your reaction the next morning. There are reports of a ghostly maid who will tuck you in at night, a child who walks the halls and a bearded man who spends his time downstairs!

Designed by architect James H. Calrow and completed in 1858 from fortunes made from cotton, Magnolia Mansion is one of New Orleans most photographed homes in the Historic Garden District and considered to be one of the most important examples of Antebellum architecture. It was also the headquarters of the American Red Cross during World War II. A raised Greek Revival mansion of approximately 13,369sf, there are 13 bedrooms and 14 full baths that could be changed back into a single-family estate.

A perfect place to hold your “Spooktacular Gatherings” and “Ghostly Galas!“ Asking price is $3.2M.

Wedding Registries for Home Downpayments?

Forget the toasters and champagne flutes: More engaged couples are doing a different type of wedding registry that allows them to collect cash for a down payment on a home, according to a recent article in The Washington Times.

An option for some couples is a nontraditional wedding registry that enables wedding guests to help them gather the cash they need for a down payment on a home. Nontraditional wedding registries also can be used for honeymoon expenses and for charitable donations. Some couples choose to set up more than one wedding registry, including one for traditional gifts and another for down-payment funds.

Dana Ostomel, founder of Deposit a Gift in New York City, has set up approximately 6,500 gift registries since she launched her company in 2009, about 600 of them for customers in the D.C. area. Mrs. Ostomel said about 15 percent of those registries are for down-payment funds and an additional 15 percent are for home-improvement funds to pay for items ranging from a new roof to new furniture.

“Given that 75 percent of today’s engaged couples already live together and are older, very often they are already established with the household basics that you find on a traditional registry,” Mrs. Ostomel said. “What they want is the gift of big-ticket items and longer-term goals, like the gift of homeownership.

“The best gift to get them [to those goals] is cash. The reality is that while it is taboo to ask for cash, it is ultimately the preferred gift. Deposit a Gift leverages the socially accepted platform of the traditional gift registry to allow people to register for what they can’t in a department store.”

In October 1996, a Federal Housing Administration initiative known as the Bridal Registry enabled couples to open an account with a lender in which friends and family could deposit gift funds toward a down payment. That initiative was phased out in 2000, but the FHA still allows gifts accumulated at a wedding to be used for a down payment. Lenders are required to document that the funds are gifts and provide a statement that the funds are not from a participating seller, builder or real estate agent who would benefit from the sales transaction when a home is purchased.

“An FHA loan requires a 3.5 percent down payment, and the entire payment can be made from gift funds,” said Gail Kullman, a senior loan officer with Prime Lending in Alexandria. “On a conventional loan, the borrower can use some gift money as part of the down payment, but 5 percent of the down payment must come from their personal funds rather than a gift.”

According to the 2010 National Association of Realtors Profile of Home Buyers and Sellers, 27 percent of first-time homebuyers used gift money from relatives and friends to make their down payment Fifty-eight percent of homebuyers in 2010 were married couples.

Ms. Kullman said couples who choose to use cash from wedding guests as a down payment must make copies of the checks and verify that the funds are a gift.

“The best way to send funds is to wire them so that it is easier for a lender to see who the donor was,” Ms. Kullman said. “Lenders will also require a gift letter that shows that the donors do not have a financial interest in the purchase of a particular property. There are lots of ways to document that the gifts are from a wedding, such as setting up a separate account and verifying the wedding with a copy of the invitation or the certificate of marriage. A wedding registry would work well, too.”

Ms. Kullman also said that couples who wait a few months after the wedding before making a down payment on a property will not need to provide verification that the funds come from a gift.

“I would recommend talking with a lender before establishing a wedding registry to make sure you meet the requirements of that particular lender,” Ms. Kullman said. “In general, most lenders require two months of bank statements to verify your assets. If you have received the down-payment gifts and they are in your account for three months or longer, then the money is considered yours and won’t require documentation like a gift”

Mrs. Ostomel said that most down-payment registries she sets up generate between $5,000 and $10,000 in gift funds for a home purchase. A 3.5 percent down payment on a $300,000 home is $10,500.

Registrants can personalize their site with photos and lists of things they will need for their home, such as the front door, kitchen cabinets and a deck, so that gift-givers can feel they are choosing a particular item rather than just giving cash. The cash is then accumulated, and the bride and groom can make partial or full withdrawals for any purpose.

At 1-800-Registry, more than 1,700 wedding registries for down-payment funds have been established since the company launched in April, said Amy Fitzgerald, vice president of consumer marketing for 1-800-Registry in Las Vegas.

“Nontraditional registries are growing in popularity,” Ms. Fitzgerald said. “Brides and grooms can create a wedding blog on our site, upload photos and describe what they are looking for in a home or even post photos of a home they have already identified. The wedding guests and anyone else can donate funds directly to the site, and the money is held in an FDIC-insured account until they are ready to withdraw it.”

1-800-Registry is licensed to provide real estate services, including a 1 percent rebate for registrants who purchase a home with one of the company’s builder partners in California, Nevada or Texas. The company will be offering these services in the D.C. area in the future, but no specific date has been set.

Each wedding registry sets different rules for participation, so brides and grooms should be careful to read the fine print and know what fees are involved and how they will access the gift funds. In most cases, the gift funds are available immediately and can be used for other purposes than a home down payment

A nontraditional registry can be created for commitment ceremonies, graduations, baby showers and more. It’s up to the recipients to decide how to use their gift money.

The S&P/Case Shiller Composite Index Flat

Single-family home prices were unchanged in August, pointing to a market that continued to stabilize but has yet to gain traction, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas was flat compared to the month before on a seasonally adjusted basis. A Reuters poll of economists had forecast a gain of 0.1 percent.

On an unadjusted basis, price gains slowed with the index up 0.2 percent compared to a 0.9 percent gain in July.

The annual rate of decline improved, with prices in the 20 cities down 3.8 percent compared to a year over year decline of 4.1 percent the month before. Still, it fell shy of expectations for a decline of 3.5 percent in August.

"The good news is continued improvement in the annual rates of change in home prices," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.

"In spring and summer's seasonally strong period for housing demand, we cautioned that monthly increases in prices had to be paired with improvement in annual rates before anyone could declare that the market might be stabilizing."

Federal Budget 101 ~ What Does It Really Mean!!

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

        U.S. income:................ $2,170,000,000,000

        Federal budget:............$3,820,000,000,000

        New debt:....................$ 1,650,000,000,000

        National debt: ............$14,271,000,000,000

        Recent budget cut: .........$ 38,500,000,000 (about 1 percent of the budget)

 It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

        Total annual income for the Jones family:....... $21,700

        Amount of money the Jones family spent:...... $38,200

        Amount of new debt added to the credit card: $16,500

        Outstanding balance on the credit card: .......$142,710

        Amount cut from the budget: ................................$385

So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending? 

It is a start, although hardly a solution. Now after years of this, the Jones family has $142,710 of debt on a credit card (which is the equivalent of the national debt). 

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress. 

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state. 

To effect budget change, we need to change the job description and give Congress new marching orders. 

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now. 

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.

IS THERE THE POSSIBILITY OF A DOUBLE DIP RECESSION?

Condition of the US Economy Report

It is a mistake to attempt to match daily or weekly changes in the stock market with underlying economic conditions.  This is popular among individuals on Wall Street and in the media, but the two do not necessarily track one another in the short term, especially in today’s environment.  In the long run, improvements in productivity lead to improvements in profits.  This, of course, directly impacts the stock market.  In the short run, however, other issues are at play.  Businesses and consumers continue to be impacted by negative psychological influences.  Now, the Federal government has introduced politics combined with heightened uncertainty into the mix.  This also happened at a time when the stock market was overvalued a bit anyway.  We all know what happens when all of these things come together.

The good news is that the broad-based psychological impacts will diminish over time as economic conditions improve (especially related to more positive employment data being released).  The semi-good news is that the Federal government can reduce the additional uncertainty and risk it recently introduced by actually fixing the imbalance between revenues and expenditures.  The term “semi-good news” is used since the practice of competency does not always occur in Washington D.C.  Get it done Mr. President and members of Congress.

So what are the economic conditions that would lead an economist to believe that all is not as dire as the stock market suggests?  First, this past month’s employment data is much improved over the previous two months. Creating 117,000 new jobs nationally in July is not all that impressive, but it compares to 46,000 new jobs in June and 53,000 new jobs in May.  Bottom line: employment is still growing, albeit very slowly.

As for this past week’s data, it does not appear that all is lost.  Housing starts in July were below June levels as was much noted this past week.  However, these starts were 9.8% above July of 2010.  Industrial production was up 0.9% in July compared to June.  Furthermore, stronger manufacturing output resulted in upward revisions in both the May and June data.  Manufacturing output rose 0.6% in July over the previous month while motor vehicles and parts production increased by 5.2%.  The capacity utilization rate improved to 77.5%, very near the point where companies feel pressure to expand.  If “analysts” across the country can get back on their anti-psychotic pills, maybe we will see some increase in confidence and additional business investment by this winter.

Jobless claims were basically flat given the degree to which the data is regularly revised.  Finally, the Leading Indicators Index rose for yet another month, to a level of 115.8.  However, keep in mind that stock prices are part of this index.  The subtle growth in the other categories in August will very likely be offset by the trauma in the stock market that we are experiencing.  This will give the appearance of major trouble in the index this next month.  But, as has been noted several times now, stock prices (especially today) are not based on quantitative evaluation.

In addition, while consumer sentiment is down in the most recent survey, retail sales are up 8.9% from a year before and have been trending around 8% since last September.  There is a difference between what a person “thinks” about the economy after watching the news and if they actually spent some money that day.  Those that do not have a job right now probably won’t have one for a while.  But, those that are indeed employed are becoming more confident in their situation.  Furthermore, Real GDP growth isn’t impressive but is growing, as are incomes.  In fact, nearly all of the key economic indicators are still growing.  The underlying economic data from this past month really isn’t all that different from the spring.  All signs point to continued economic expansion, but at a slow pace.

There is one qualifier though.  A weak economy can be significantly impacted by economic shocks.  A shock can be a spike in oil prices, turmoil in the Middle East and now Europe , as well as a large government forgetting how to balance its checkbook.  As of today these shocks have not derailed our weak economic recovery.  But, the risk exists, even if small.  Keep in mind that the economy is large and conditions do not change all that rapidly, at least not as rapidly as opinion on Wall Street.

PHOENIX REAL ESTATE MARKET REPORT - JULY 2011

Phoenix Real Estate Market Report Summary

This data includes single family detached homes, patio homes, condos, and townhomes provided by the Arizona Multiple Listing Service. The monthly charts above are based on trailing twelve monthly averages from August 2010 to July 2011 which shows the total activity in the Phoenix Metropolitan real estate market over a twelve month period. The yearly charts above are based on a yearly average for 2005 to 2010 but a trailing twelve month average from August 2010 to July 2011 for the year 2011. Without the trailing twelve month average for the year 2011, the charts would be substantially skewed and would not portray an accurate view of the market on an annual basis.

As you can see from the first chart above, Cromford Market Index, the first time home buyer tax credit created a great deal of demand in the market similar to the real estate boom from 2004 to 2006. When the government withdrew the first time home buyer tax credit on April 30, 2010, the average sold price and number of transactions decreased and the average days on market increased. Currently the residential real estate market is experiences another buying frenzy that is caused without government intervention or relaxed mortgage underwriting standards. Consumers are jumping into the real estate market because market statistics are indicating the market has hit the bottom and investors can purchase homes at rock bottom prices where they can rent the homes out to receive a 10% to 15% or more return on investment. Due to the current oversupply of homes on the market, real estate prices have not increased significantly but once the supply of homes are purchased real estate prices will start to increase at a faster pace (Chart #2 shows supply). Since January 2011, the average sold price has decreased approximately -2.3% (down from last month), the average days on market have decreased approximately -13.5% (down from last month) and the number of transaction has increased approximately +30.7% (up from last month). It should be noted that the month of June experienced 12,190 transaction of which 5,728 transaction were bank owed (up 85.4% since January) and 3,028 transactions were short sales (up 120.2% since January.    

  

The number of Notice of Trustee Sales is currently experiencing a decline due to the declining number of adjustable rate mortgages coming due and from more lending institutions working harder on helping people stay in their homes. The number of foreclosures “notices” entering the market is expected to continue its decline in late 2011 and early 2012 due to the exhaustion of adjustable rate mortgages created between 2003 to 2007. The percentage of third party purchases (other than banks taking back as REO) has increased substantially since the beginning of this year where we are currently at 40% of all purchases are from third parties. The percentage might appear to be a low number but the last time we experience this volume of purchase was back in August 2006. The real estate market has reached a level of equilibrium where demand is equal to supply and all buyers are rushing into the market to take advantage of low prices. Once the supply of residential homes are exhausted and demand continues to rise, real estate prices will begin to rise (depends on the sustained level of demand). Time to buy is NOW!!