Taos Home Page Blog

What is Title Insurance?

2010-03-01T22:43:00Z

Fire insurance protects you against loss from fire. Collision insurance guards you against the cost of a damaged car. Theft insurance- well you get the idea. Title insurance protects your title to real estate theat you are about to aquire.

How does a Title Insurance Policy Protect you? If a claim is made against your title as covered by your policy, your Title Insurance Company will: 1. Defend your titile, in court if necessar, at their expense. 2. Bear the cost of settling the claim if it proves to be valid in orer to perfect your title and keep you in possession of your property.

In New Mexico most property transactions happen at a Title Company. The seller(s) of the property you are about to buy will normally provide you with a Title Insurance Policy at the time of closing. Title Companies will search all the records for information on a property before they will issue an insurance policy. This action protects you and the seller of the property.

Taos weekly Real Estate Statistics: Month of February, 2010

2010-03-01T22:38:00Z

14 residential listings sold in February

in the following price ranges:

$100,000 to $200,000 4 homes sold

$200,000 to $300,000 4 homes sold

$300,000 to $400,000 5 homes sold

$500,000 to $600,000 1 home sold

No other homes in any price range sold

Taos Buyers: some information about distressed properties

2010-02-22T16:53:00Z

Many times a buyer will want to seek out distressed properties to really get a bottom price. Buyers need to be carefull here because these types of properties offer several challenges.

With foreclosures, attention must fo to how long the property has been empty, how well it was maintained before and after eviction---as there may be several "hidden" concerns that will cost big dollars down the line to correct.

Short sale properties require comprehensive paperwork and a good deal of patience. Some short sales can take months to close which will adversely affect the buyer's tax credit. The last short sale we did took a full year to close.

Home maintenance part II

2010-02-19T20:35:00Z

Regular Maintenance

1. Clean gutters in spring and fall

2. Check for damaged roofing twice a year

3. Service furnace or boiler yearly

4. Check furnace filters, humidifiers and any eletronic air cleaners monthly

5. Check bathtub and shower caulking

6. Shut off outdoor water faucets in the fall

7. Cut back trees and shrubs from the house walls, and roof.

Taos Investors? Who will step up

2010-02-19T20:32:00Z

Interesting article about who is investing in real estate in our current markets.

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Home » News Articles » Among Buyers, Who Will Step Up?

Among Buyers, Who Will Step Up?

Feb 15, 2010 10:37 AM, By Ben Johnson, special to NREI from OKCREiew

No single buyer group is leading the charge for commercial property in 2010, but REITs look the best poised to make a significant impact, according to a new report from New York-based researcher Real Capital Analytics (RCA).
The dearth of transaction activity that began in 2008 and carried through much of 2009 finally began to ease in the third quarter and looks to continue into 2010. However, buyers are minus a lead dog to guide the way. The biggest bellwether appears to be the public REITs, which have already committed to acquire as much property so far in 2010 as they did for all of 2009. They’ve also raised an enormous amount of dry powder for the job, an estimated $30 billion.

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Across the buying landscape, there does seem to be at least one consistent theme – a frustration at the lack of product. This is most evident when quality assets hit the market. They are quickly bid up by the pool of salivating buyers.
Among buying groups, foreign investors have yet to create a surge in buying activity. Equity funds targeting distressed assets also have raised enough capital to have a serious impact on the market, but their high return expectations are dampening real activity.

According to RCA, prospective investors are increasingly divided between two camps: core and opportunistic, and although they all are looking for bargains, few are finding them.

Core buyers complain that there are few suitable, quality assets on the market and competition for those that are available is steep, pushing pricing to surprisingly strong levels. Opportunistic buyers have been denied the expected tsunami of distressed sales and are now realizing RTC-like returns will be unlikely. Some may have to alter their initial investment strategies or lower their return expectations.

Just 10.8% of all sales in 2009 were associated with distress, but the composition of those buyers differs from non-distressed sales in some meaningful ways, especially within each property type. Overall, players from all sectors, except the public and private REITs, are active in the distressed space. Surprisingly, institutional investors are buying a significantly greater share of distressed sales than of non-distressed, and foreign buyers have been equally active in both arenas. Equity funds have been buying a slightly greater share of distressed than non-distressed properties.

Without decisive moves from REITs, foreign buyers or equity funds, the buyers in the market have largely been private and mostly local. Users, including corporations and governmental and educational entities, have also stepped up to become the second most active buyers of commercial property. As the market recovers, a shift away from private local buyers and users to national and international investors is expected.

Sellers please be aware of what is happening in the Real Estate Market.

2010-02-12T21:24:00Z

The Taos Market is different than many markets, but some general trends are true everywhere. You should price your home to sell in the current market which means your list price must be in a range that lures buyers to your property. There are lots of choices even in our market and buyers are looking for the best buy they can get. The article below is a snapshot of what is happening in most real estate markets in the USA.

Home sales tumble surprise 16.7 percent
December's drop is largest in more than 40 years
The Associated Press
updated 12:39 p.m. ET Jan. 25, 2010

WASHINGTON - Sales of previously occupied homes took their largest drop in more than 40 years last month yet managed to end 2009 with the first annual gain in four years.
Still, prices plunged by more than 12 percent last year — the sharpest fall since the Great Depression. The price drop for 2009 — to a median of $173,500 — showed the housing market remains too weak to help fuel a sustained economic recovery. Total sales for 2009 were nearly 5.2 million, up about 5 percent from 2008.
Last month's worse-than-expected showing underscores concerns that the housing market could weaken further after March 31, when the Federal Reserve is set to end its program to buy mortgage securities to keep home loan rates low. Once that program ends, mortgage rates could rise. Adding to the worries, a newly extended homebuyer tax credit is scheduled to run out at the end of April.
The numbers "clearly indicate that the rebound in housing demand observed so far has been largely supported by government programs," Anna Piretti, senior economist at BNP Paribas, wrote in a research note Monday.
The poor December showing occurred after Congress extended the tax credit, easing pressure on buyers to act quickly. The credit of up to $8,000 for first-time homeowners had been due to expire Nov. 30. But Congress extended the deadline and expanded it with a new $6,500 credit for existing homeowners who move.
December's sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.
The report "places a large question mark over whether the recovery can be sustained when the extended tax credit expires," wrote Paul Dales, U.S. economist with Capital Economics.
The median sales price for December was $178,300, up 1.5 percent from a year earlier and the first yearly gain since August 2007. But some of that increase could be due to a drop-off in purchases from first-time buyers who tend to buy less expensive homes.
Recovery needs healthy housing market
Sales are now up 21 percent from the bottom a year ago. But they're down 25 percent from the peak more than four years ago.
A healthy real estate market is needed to help the economy continue recovering from recession.
Last year, first-time buyers were the main driver of the housing market. But their role is shrinking. They accounted for 43 percent of purchases in December, down from about half in November, the Realtors group said.
The inventory of unsold homes on the market fell about 7 percent to 3.3 million. That's a 7.2 month supply at the current sales pace, close to a healthy level of about six months.
Lawrence Yun, the Realtors' chief economist, cautioned that the recovery will depend on whether the economy starts adding jobs in the second half of the year.
Total sales for 2009 closed out the year at 5.16 million, up about 5 percent from a year earlier. And some real estate agents say they feel encouraged. More buyers are shopping around this month than in a typical January, said Kevin O'Shea, an agent with Homes of Westchester Inc. in White Plains, N.Y.
"There are indications that the economy is coming back, and that makes buyers feel more secure to purchase," he said.
But many analysts project that home prices, which started to rise last summer, will fall again over the winter. That's because foreclosures make up a larger proportion of sales during the winter months, when fewer sellers choose to put their homes on the market.
Despite fears that home prices are starting to fall again, some analysts still say the worst is over.
"We do not believe it is fair to consider this a double dip in the housing market," Michelle Meyer, an economist with Barclays Capital, wrote last week. "The recovery is still under way but hitting some bumps in the road."

Bang for your buck!

2010-02-12T21:19:00Z

If you are thinking of remodeling before you sell your home, read this.

If you want someone to buy your house, sell them the kitchen.

That was an oft-repeated message here recently at the International Builders Show, which is the annual convention of the National Association of Home Builders. The trade show featured literally hundreds of seminars on all aspects of housing, including numerous presentations on how to deck out a kitchen in order to make the whole house a more saleable thing.

The economy and just plain consumer fickleness have conspired to make kitchen "desirability" a moving target -- a slow-moving target, but moving, nonetheless, and consumers need to pay attention, because kitchen design trends translate into dollar signs, they said.

Cash is King in todays real estate market.

2010-02-12T21:11:00Z

Recent studies show that people who are buying foreclosure properties should have cash rather than a promise of a loan in order to take advantage of discounted properties.

The market scuffle is happening primarily over heavily discounted foreclosed homes and other properties typically under $300,000, or even well below $100,000 in some markets. These homes are attractive to investors seeking a good return and first-time buyers looking for an affordable home.

The trend is most pronounced in areas of California, Florida, Arizona, Nevada and elsewhere where home prices have dropped sharply and foreclosures make up a large slice of homes for sales in many metro areas. In Las Vegas and Phoenix, for example, foreclosures accounted for more than half of all home resales in December, according to MDA DataQuick.

Although getting financing for heavily damaged foreclosures can be difficult, there's still a healthy competition. Ultimately, cash is king.

"Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge," said Jed Smith, a researcher for the National Association of Realtors. "The investor may actually pay less, but it's cash, right now."

Home maintenance: some helpful hints

2010-02-12T19:40:00Z

Here are some tips and tasks which came from www.homeinspectorlocator.com. You can vist this link for more in depth information.

One time tasks:

1. locate and mark the shut-offs for the heating, electrical and plumbing systems.

2. Install smoke detectors

3. change the locks on all doors

4. have chimneys inspected and serviced before operating

Check tomorrow's blog for regular maintenance items.

Taos is # 13 in the top 100 places to visit

2010-02-10T17:58:00Z

National Geographic Travelor listed 133 Destinations in the world. Taos, new Mexico cam in number 13. You can find the article at traveler.nationalgeographic.com I must say that I agree with their choice. Taos is fantastic

Luxury Properties: Ideas for a down market

2009-09-04T19:09:00Z

Sellers Offer Overnight Trial Stays
Luxury second-home communities are increasingly offering “try-before-you-buy” weekends to potential customers, including the opportunity to play a round of golf, use the dining facilities and other amenities – plus take a mandatory tour.

St. John Fisher College professor Kyle F. Reinson, a real estate specialist and consultant for residential developers, says these tours work in part because they require a certain level of commitment on the part of both the buyer and the seller. The buyer, he says, often gets a good price because the seller doesn’t want to let him get away.

At Encaterra in Queen Creek, Ariz., four-day, weekend tours that cost the potential buyer $299 for an all-inclusive package, results in 25 percent sales, the club reports.

What is happening with Commercial Properties?

2009-09-04T19:07:00Z

More Losses Predicted for Commercial Market
Ranked among the biggest U.S. commercial real estate lenders by Moody's Investors Service, Capmark Financial Group Inc. recorded a $1.6 billion quarterly loss and hinted at a possible Chapter 11 bankruptcy filing.

The Pennsylvania-based firm's possible failure may signal a new wave of commercial property losses for banks.

Capmark has seen tough times, as the default rate on commercial mortgages held by U.S. banks has more than doubled to the highest level in 15 years.

Sam Chandan, chief economist at Real Estate Econometrics LLC, warns: "We haven't really experienced the full extent of the distress. When you look at community banks and some smaller regional banks, they tend to have a far greater concentration in terms of their exposure to commercial real estate."

First Time Home Buyers Incentive Time Clock

2009-09-04T19:03:00Z

Home Buyer Tax Credit Countdown Begins
The first-time home buyers tax credit ends in 60 days. Is it possible to buy in the next two weeks and still close in time to collect it?

Some professionals say yes. “It still can be done in six weeks," says RE/MAX Town & Country associate Lynn Ayers in West Chester, Pa.

Economist Ken Gillen of Econsult predicts a mad rush to close as the deadline nears.

Bruce Hahn, president of the American Homeowners Grassroots Alliance in Arlington, Va., is pushing for an extension and an expansion of the credit.

Legislation to do that is critical, he says, because the recovery has so far been mostly jobless and people need more time to get their feet on the ground in order to buy.

Current information about getting loans

2009-06-08T21:26:00Z

This article came from Taos Lending Team. Good information I think.

With all the hullabaloo about lower rates and bailout monies given to banks one would think there would be a higher percentage of closed and funded loans. Sadly the banks continue to hold on TIGHT to their money; as we have seen a higher increase in declined loans in the past 6 months than I have ever experienced in my 28 years in this business.

Borrowers are fitting all the tighter requirements but lenders are not relaxing their property requirement. In fact banks are using the stricter Fannie Mae and Freddie Mac guidelines to underwrite a property which doesn’t make any sense; where in the country are there 3 months comps? Taos is seeing areas of declining markets and this is now being reflected on appraisals. I am sure many of you have spoken to our local appraisers who are also getting frustrated with the extra work and the lending industry in general.

Declining markets move appraisals up the corporate chain to desk reviews and requests for secondary appraisals. These cost the borrower more money and there are no guarantees for lender approval after the extra funds have been spent.

I have received concerned and confused calls from many clients who have initiated their own refinances with their existing lenders only to be declined on a property which was approved last year. Some of these properties have been improved upon since the initial loan and have increased values! Why are they being declined? The good Comps are farther away than the required 5 mile radius because of the slow down in the real estate markets.

Using private investors for our really good loans is no longer an option as so many of their portfolios have shrunk. We continue to shop our loans and push hard to get them closed and funded.

As is evident, there is no more give or common sense in the system.

News

As you know the markets have been erratic since the declaration of the GM bankruptcy and Treasuries and Bonds are on the rise. Panic sets in and reactions are as expected around the globe and within our mortgage markets, hence the higher interest rates. Obama’s home affordability stimulus plan is predicated on lower interest rates to help homeowners keep their homes so patience and standing by is in order if you have not already been locked in with a lower interest rate.

Below is a terrific article on Bernanke and the housing markets from Bloomberg.com.

Bernanke Conundrum Threatens Housing on Mortgage Rate (Update3)

June 8 (Bloomberg) -- The biggest price swings in Treasury bonds this year are undermining Federal Reserve Chairman Ben S. Bernanke’s efforts to cap consumer borrowing rates and pull the economy out of the worst recession in five decades.

The yield on the benchmark 10-year Treasury note rose to 3.90 percent last week as volatility in government bonds hit a six-month high, according to Merrill Lynch & Co.’s MOVE Index of options prices. Thirty-year fixed-rate mortgages jumped to 5.45 percent from as low as 4.85 percent in April, according to Bankrate.com in North Palm Beach, Florida. Costs for homebuyers are now higher than in December.

Government bond yields, consumer rates and price swings are increasing as the Fed fails to say if it will extend the $1.75 trillion policy of buying Treasuries and mortgage bonds through so-called quantitative easing, traders say. The daily range of the 10-year Treasury yield has averaged 12 basis points since March 18, when the plan was announced, up from 8.6 basis points since 2002, according to data compiled by Bloomberg.

“Volatility has increased dramatically and it seems to get more each day,” said Thomas Roth, head of U.S. government-bond trading in New York at Dresdner Kleinwort, one of the 16 primary dealers of U.S. government securities that trade with the Fed. “A lot of that has to do with uncertainty about whether the Fed will increase purchases of Treasuries. The market is looking for some change in the Fed’s plan.”

Greenspan’s Conundrum

The rise in borrowing costs in the face of record low interest rates, Fed purchases and a contracting economy is the opposite of the challenge Bernanke’s predecessor, Alan Greenspan, confronted when he led the Fed.

In February 2005, Greenspan said in the text of his testimony to the Senate Banking Committee that a decline in long-term bond yields after six rate increases was a “conundrum.” At the time, he was trying to keep the economy from overheating and sparking inflation. Now, Bernanke may be facing his own.

“The Fed is stuck in a very difficult place,” said Mark MacQueen, a partner at Austin, Texas-based Sage Advisory Services Ltd., which oversees $7.5 billion. “You can’t have it both ways. You can’t say I’m going to stimulate my way out of this problem with trillions of dollars in borrowing and keep rates low by buying through the other. I don’t think that is perceived by anyone as sound policy.”

The yield on the benchmark 3.125 percent 10-year Treasury due May 2019 ended last week at 3.83 percent, up from the low this year of 2.14 percent on Jan. 15, according to BGCantor Market Data. Last week’s 37-basis-point surge equaled the most since the increase of 37 basis points, or 0.37 percentage point, in the period ended July 17, 2003. The yield fell 3 basis points today to 3.8 percent at 8:22 a.m. in New York.

‘Don’t Do Anything’

Bernanke and other Fed officials say the improved economic outlook and rising federal budget deficit are the catalysts for higher borrowing rates, and see no need to increase purchases of bonds. Plus, the Fed has succeeded in shrinking the gap between 10-year Treasury yields and 30-year mortgage rates to 1.77 percentage points from 3.37 percentage points in December.

“To the extent yields are going up because the economic outlook is brighter, the answer would be, don’t do anything,” Federal Reserve Bank of New York President William Dudley said in a transcript of an interview with the Economist last week.

U.S. payrolls fell by 345,000 last month, the least in eight months, the Labor Department said June 5. The economy will likely expand 0.5 percent in the third quarter, according to the median forecast of 63 economists surveyed by Bloomberg.

Wider Deficit

The deficit should reach $1.85 trillion in the fiscal year ending Sept. 30 from last year’s $455 billion, according to the Congressional Budget Office. Goldman Sachs Group Inc., another primary dealer, estimates that the U.S. may borrow a record $3.25 trillion this fiscal year, almost four times the $892 billion in 2008.

While rising, 10-year yields are below the average of 6.49 percent over the past 25 years, and will likely remain below 4 percent through at least the third quarter of 2010, according to the median estimate of 50 economists surveyed by Bloomberg. The Fed’s holdings of Treasuries on behalf of central banks and institutions from China to Norway rose by $68.8 billion, or 3.3 percent, in May, the third most on record, data compiled by Bloomberg show.

Higher rates may deepen the two-year housing slump helped trigger the recession and sideline consumers planning to refinance or buy their first home. The median sale price for a U.S. home dropped in April to $170,000, down 26 percent from a record $230,000 in July 2006, according to the National Association of Realtors.

Refinancing Index

The number of Americans signing contracts to buy previously owned homes climbed 6.7 percent in April, largely on cheaper financing costs, according to the realtors group. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan fell 16 percent to 658.7 in the week ended May 29 as borrowing rates climbed.

“The more rates go up, the more we need home prices to go down to equalize consumers’ payments,” said Donald Rissmiller, chief economist at New York-based Strategas Research Partners. “It’s those payments that have brought about a level of stability” in home sales, he said.

Rising volatility, this exposes investors to bigger potential losses, risks pushing up rates on everything from mortgages to corporate bonds. Norfolk Southern Corp., the fourth-largest U.S. railroad, sold $500 million of 5.9 percent debt on May 27. The coupon was higher than on the $500 million of 5.75 percent notes due in 2016 that the Norfolk, Virginia- based issued in January.

‘The Big Question’

“When the Treasury market is moving around a lot more it becomes more risky to step in,” said James Caron, head of U.S. interest-rate strategy in New York at Morgan Stanley, another primary dealer.

Outside of Dudley’s remarks, the Fed has largely refrained from public statements about bond purchases. Traders find that confusing from Bernanke, a former economics professor at Princeton University who published research on central bank transparency and pushed for greater openness at the Fed.

“The big question is what the Fed does. Do they increase quantitative easing?” Caron said. “Do they buy more Treasuries or mortgages? That is why there is a lot more uncertainty.”

Investors are reining in the average maturity of their Treasury holdings to guard against higher yields. That may increase costs for the government, which intends to extend the average maturity of its debt after committing $12.8 trillion to thaw frozen credit markets and snap the longest economic slump since the 1930s. The Treasury will sell $65 billion in notes and bonds next week.

Shorter Durations

Over the past month, money managers overseeing about $100 billion shortened the durations of their portfolios, according to Stone & McCarthy Research Associates in Skillman, New Jersey.

Duration, a reflection of how long the debt will be outstanding, dropped to 100.9 percent of benchmark indexes in the week ended June 2, the lowest in almost four months and down from 102 percent in the week ended May 5. The ratio was as high as 103.7 percent in the period ended March 10.

Shorter-term Treasuries, whose lower duration means price swings are smaller relative to longer-maturity debt for the same change in yield, have performed better this year with the Fed keeping its target rate for overnight loans between banks at a range of zero to 0.25 percent.

Two-year notes have lost 0.4 percent, including reinvested interest, compared with losses of 11.5 percent on 10-year securities and 27.9 percent for 30-year bonds, according to Merrill Lynch index data.

‘Predictable Ways’

The Fed probably won’t make any adjustments to the size of the Treasury purchase program before its next policy meeting on June 23-24, in part to avoid reinforcing perceptions policy is reacting to swings in yields, according to Jim Bianco, president of Chicago-based Bianco Research LLC.

“The Fed wants to operate in predictable ways,” Bianco said. “They are also trying to not just look arbitrary, which makes people think ‘I can’t ever go to the bathroom because there could be a press release that the Fed changed the buybacks.’ That’s been a real concern: ‘Wow, I just went to the bathroom and lost $2 million dollars.’”

Summary

While we continue to be patient, it doesn’t appear that patience is really getting us any where. Being proactive and creative is how we continue to stay on top of this crazy and unpredictable industry.

Thank you for your time and consideration.

Sincerely,
Elisabeth Guillemin

Home Buying or Investing

2009-05-01T21:43:00Z

National pundits think that the Real Estate Market is near the bottom. It would be a great time to think about buying properties.

Housing Analysts Predict the Bottom Is Near
The bottom of the housing decline is near, predicted analysts and home builders attending the National Association of Home Builders’ semiannual Construction Forecast Conference last week.

Mark Zandi, chief economist of Moody’s Economy.com, facetiously picked a date when home prices would stop falling: Dec. 15, 2009. Other observers weren’t so precise, but they did generally agree that the federal government’s efforts to shore up the market would take effect by the end of 2009 or early in 2010.

Analysts also predicted that consumers will spend less on remodeling. Eric Belsky, executive director at Harvard University’s Joint Center for Housing Studies, predicted that spending on remodeling would fall 12.3 percent by the end of this year compared to last.

Analysts project that the credit crisis will loosen, although people with blemished credit records may continue to have trouble getting mortgage loans.