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Archive | February, 2012

Warren Buffett: It's Time to Buy Real Estate




Warren Buffett appeared live on CNBC's Squawk Box this week. During the interview, he was asked about the current real estate market and whether he felt now was the time to buy. His response was rather emphatic and has been used as a headline in hundreds of articles since the interview:

"If I had a way of buying a couple hundred thousand single-family homes I would load up on them."

However, throughout the interview, he addressed the market from a few angles. Here is what he said:

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Is It the Price of Your Home or the Price of Your Happiness?




Our founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. – The KCM Crew

I recently gave a presentation about the current real estate market to a group of home sellers in a city in the Northeast. That night, I explained to them that home values in their area were about to be negatively impacted by a surge of distressed properties entering their region over the next year. As I have often found to be the case, the homeowners were very receptive; many felt that they now had the information they needed to make a good decision with regard to pricing their home to sell in this market.

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House Prices: Window of Opportunity Beginning to Close




There have been conflicting opinions as to where housing prices are headed. We want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in most parts of the country in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices throughout the rest of the year.

Why renewed downward pressure?

Any item’s price is determined by ‘supply and demand’. In many parts of the country, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties (foreclosures and short sales) will be coming to market this year. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was reached two weeks ago.

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Foreclosures in Process by State




Methodology as per CoreLogic: The foreclosure inventory represents the number and ratio of homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan ... The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are therefore excluded from the analysis.

For further information, go to www.corelogic.com

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Is There a 3.8% House Sales Tax in the Health Care Bill?




The presidential election has renewed the debate about the Administration’s Health Care Bill. We are again getting many questions about a possible 3.8% tax on home sales that some claim is in the bill. To answer these questions, we have decided to re-run a blog post we did last year. – The KCM Crew

We have received many questions about a possible 3.8% tax which will be put on home sales beginning in 2013. We want to do our best to clarify this situation for everyone. We are not accountants and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

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