Check out this new Single-family property that I just posted on my Web site. It is at 14107 MESA MOUNTAIN in HOUSTON. This Single-family property has 4 bedrooms and 5 baths. 4 BEDROOMS, 5 BATHS WITH ATTACHED 4 CAR ATTACHED GARAGE. INCREDIBLE HOME WITH 3 LIVING AREAS AND VERY RICH UPGRADES. WOOD, TILE AND CARPET FLOORING, UNSURPASSED CEILING AND CUSTOM WINDOW TREATMENTS, MANY BUILT-INS AND MUCH MORE. MASTER BEDROOM SUITE INCLUDES ADDITIONAL SITTING ROOM AND EXECUTIVE MASTER BATH WITH DUAL SINKS, JACUZZI TUB AND OVERSIZED SHOWER. BACKYARD PARADISE WITH POOL, HOT TUB, OUTDOOR KITCHEN, FIRE PIT AND COVERED PATIO ALL ON HUGE CULDESAC LOT WITH OVER 1/4 ACRE OF LAND.

Check out this new Single-family property that I just posted on my Web site. It is at 67 N. COUNTRY GATE CIRCLE in CONROE. This Single-family property has 3 bedrooms and 3 baths. THE WOODLANDS WINDSOR HILLS PATIO HOME WITH MANY UPGRADES:WROUGHT IRON FENCE, FRENCH DRAINS, SCREENED PATIO, WOOD AND TILE FLOORS DOWNSTAIRS AND UPGRADED CARPET/PAD ON STAIRS AND UPSTAIRS. WASHER DRYER AND REFRIGERATOR ARE NEGOTIABLE. DOWNSTAIRS MASTER SUITE INCLUDES EXECUTIVE STYLE BATH WITH DUAL VANITIES, JETTED TUB AND SEPARATE SHOWER. THIS 1 OWNER PROPERTY IS EXTREMELY CLEAN. NICELY LANDSCAPED FRONT AND BACK.

Check out this new Town-Home property that I just posted on my Web site. It is at 4712 N. CASHEL CIRCLE in HOUSTON. This Town-Home property has 2 bedrooms and 2 baths. WONDERFUL 2 OR 3 BEDROOM TOWNHOME IN CASHEL FOREST. MASTER DOWN AND STUDY/DEN UPSTAIRS. LOTS OF TERRACES AND PRIVATE PATIOS INCLUDING ROOF TERRACE. OPEN LIVING AREA WITH WOOD BURNING FIREPLACE. MASTER HAS BATH WITH 2 CLOSETS AND A HUGE SHOWER. GOOD ROOM SIZES, INSIDE UTILITY. PRIVATE FRONT YARD WITH GATED ACCESS. REFRIGERATOR, WASHER AND DRYER TO STAY IF BUYER WANTS THEM.

Check out this new Single-family property that I just posted on my Web site. It is at 14907 CAROLS WAY in Spring. This Single-family property has 4 bedrooms and 2 baths. 4 BEDROOM, 2.5 BATH 2 STORY ON TREE LINED STREET IN HUNTERS VALLEY. LANDSCAPED FRONT AND BACK YARD WITH NICE DECK IN BACKYARD ACCENTED WITH SMALL WATERFALL. TRADITIONALLY STYLED, TWO LARGE LIVING AREAS AND TWO DINING AREAS. LARGE MASTER SUITE WITH EXECUTIVE BATH. LARGE ISLAND KITCHEN WITH LOTS OF PREPARATION AND STORAGE SPACE. MAIN LIVING AREA HAS WOODBURNING FIREPLACE AND RICH WOOD STYLING. A TREMENDOUS BUYING OPPORTUNITY!.

IT IS AMAZING to me to see how many people let their homes go into foreclosure without even talking to their lender or trying to sell their home. As a representative for Bank of America in Houston and as the agent responsible for selling those homes once they have been foreclosed on, I see it every day. When a property is assigned to me, I am supposed to do a market analysis and tell the Bank what I think the home is worth. Probably 70% of the time, when I go to look and see if the property has been listed for sale in the MLS over the last 12 months, I find it has not. Seriously? How crazy is that? Someone is standing on the threshold of losing a home, messing up their credit for years to come and they aren’t even trying to mitigate the damage or help themselves? Why is that? The best answer I can come up with is that they just don’t know there are options. Hopefully this will point some of those people in the right direction. First and foremost, talk to your lender. I know many people think that maybe they will fly under the radar for awhile, but that isn’t true. I also know that when I talk to some of these people, they say why would you call the person you owe just to tell them you can’t pay them. Those people need to understand that is just the very beginning of the discussion. From there, the lender can explain several options that may be available to them. Loan modification, short sales, loan restructure, forebearance, even deed-in-lieu of foreclosure are just a few of the options available. With new programs coming out all the time, the best bet is to talk to someone who deals with distressed property and/or the lender who can point them in the right direction. As in most cases, the worst thing that can be done is nothing and right now, way too many people are pursuing that course of inaction.<BR>

AS A CDPE (Certified Distressed Property Expert), I have learned there are ways to go about presenting property for short sales or even restructuring. First, there has to be a good reason for the lender to allow this. It simply isn’t good enough to say I want to move to another house and I can’t sell mine for what I owe. The lender is going to have to truly see a situation where they believe they are going to end up owning that property through foreclsoure if they don’t allow a short sale or modification to occur. Job loss or being underemployed, death of a wage earner, incapacity of a wage earner, something of that nature is what the lender needs to see. If someone is just wanting to move and can’t sell their home for enough to cover the loan and closing costs, the lender is just going to say no and tell them to stay put until values come back.

IF YOU ARE IN the Houston area and you are faced with the prospect of foreclosure, do not wait to contact someone. The more time we have to work on this, the better chance there is of achieving the best result possible. Feel free to contact me and I will be happy to see if I can help.

That’s the question on everyone’s mind when it comes to real estate…how long is this going to last? How long has always been the question in real estate, it was just being asked about a different question. Used to be “How long will it take for my house to sell?” Now, it is “How long are we going to be in this mess?” The prudent agent answers both questions the same way…”I’m not sure, my crystal ball is broken”. Who knows when we will pull out of this mess? Well, we do know a few things that might help point us to some kind of educated guess. Some experts say we are in a year of treading water. Last year, a lot of subprime loans adjusted and many homeowners couldn’t deal with those adjustments. This year, not so many are adjusting. Next year, more loans will adjust than adjusted last year and when you add to that a couple other factors, it could be a real tough year in real estate in 2011. Those other factors are unemployment and interest rates. Both will most likely be a good bit higher next year when these adjustments hit than they were last year, creating perhaps the “perfect storm” of circumstances to cause a huge jump in foreclosures once again, just after we started getting a handle on the ones we already have. Let’s take a look at some of the factors that might affect the timing of a recovery for real estate.

HUMAN NATURE: If we go back and take a look at what happened in the 1980s (if you are old enough to remember what it was like back then), we found that not only was it the actual circumstances that kept the market down, it was also the real estate version of the STD. In this case, STD stands for Scared To Death. Even after we turned the corner and things started getting better, the typical, run-of-the-mill, everyday buyer of your home and mine was afraid to pull the trigger on purchasing a home. Many were unemployed, underemployed or were in fear that their job was going to be eliminated. It takes awhile for people to get that comfort level back that they had prior to those things happening. Isn’t that always the way it is? Look at Galveston and the hurricane. After Alicia hit in 1983, it took a couple years before people started rebuilding. But between the years of 1985 and 2008 when Ike hit, the growth was unprecedented. We are seeing it again with Ike. Building back is moving along slowly, even moreso thanks to the economy. Eventually, people will feel like going back out and building and buying again. It just takes a little while.

LENDING PRACTICES: This one may be one the most important. Right now, we are witnessing knee-jerk reactions at their best by the lenders. After the financial market meltdown, lenders didn’t just go back to the basics, they went even further. The losses have come so fast and furious, they are afraid to open up their pocketbooks to anyone, except the most deserving of borrowers (at least in their minds). Until money is freed up and the pool of prospective buyers increases things will remain tough. Think supply and demand. Demand has dropped so much thanks to inability to qualify and real estate STD (see above), the supply side would have to drop almost 50% to get back to how it was in the mid 2000s.

APPRAISALS: Appraisers have been smacked around pretty good too by all this mess we have had. In many instances, the appraiser has been held responsible for the lender’s loss on some of these foreclosures. The lender felt the appraiser misvalued the property and allowed the lender to expose too much money on the property and held the appraiser accountable for that valuation. It doesn’t take too many times of being smacked like that before you start getting a little gun-shy and stop sticking your neck out on valuations. Many of our deals right now (and probably for some time to come), are being shot down when the appraisal comes in. It doesn’t seem to matter that the seller puts a price of $212,000 on their house and the buyer agrees to buy it at $208,500. If the appraiser says $202,000 then that deal is dead, unless the seller drops the price or the vuyer pays the difference in cash. In this market, neither of those things are likely to happen, especially if the seller has no equity anyway.

JOBS: As a newbie in the business in 1983, one of the first things I learned in real estate were the three most important words: location, location, location. Then a few weeks later, I learned the real three most important words in real estate: Watch the jobs. Getting back to human nature, if people don’t or can’t buy, it doesn’t matter what you dangle in front of their face: tax credits, low interest rates, interest-only loans, free toasters, whatever; they won’t buy. Again, supply and demand. To me, we are right on the cusp of buyers and sellers staying put. With unemployment like it is and job prospects like they are, I don’t think we have far to go before the only buyers out there are the investors looking for deals and the only houses selling are those deals. thankfully in Houston, we aren’t there yet. Time on the market has increased a lot, but the prices sellers are getting are not that much lower than they have been. That is a testament to them not being desperate. Start mixing in higher unemployment (which hits us on the supply side and the demand side both) and we could see some market changes here too.

To me, these are just a few of things to be watching as this most fragile of markets starts acting like it wants to improve. If you see me on the street and ask “How long”, maybe I’ll point you to this blog instead of that “crystal ball is broken” answer.

New to the lexicon of real estate is a concept of allowing people to go ahead and sell their homes even though the resulting net proceeds from that sale will not be enough to pay off the existing loan. Known as the “short sale”, sellers all over the country are finding this new option that just didn’t exist a couple years ago.

This is how it works: Let’s say someone owes $225,000 on their home bought in 2007, but they live in an area where values have dropped 10% in the months since their purchase. When they bought, the home was worth $235,000, but now the value is $211,500. Prior to the advent of the short sale, the only options available to this owner are: 1) Stick it out until values come back 2) Bring the difference to the closing table if they sold the home (in this case after closing costs and everything, the seller would be bringing approximately $32,000) or 3) Walk away and let the home go into foreclosure. Enter the short sale where this owner, given the proper amount of hardship exists, can sell the home for the current value of $211,500 and the lender will accept whatever that sale will net (about $192,500) and write off the difference (about $32,500).

Why would the lender do this? Because that loss is better than what the loss would be if that home goes into foreclosure. It saves attorney’s and trustee’s fees, it save holding charges of utilities, maintenance fees, taxes, insurance, yard care, and all the charges they would incur if they took that home back and then turned around and ended up selling it for less than market value anyway. Obviously, this is not an option available to anyone who has had a loss of equity and is currently upside down in their home. Current statistics show approximately 60% of the country is in that boat right now. No, this option is for those individuals who are able to convince the lender that, given their current set of circumstances, their home will end up in foreclosure. Whether it be from loss of a job or loss of pay, medical expenses, storm damage, whatever, these individuals can no longer afford their home. There are other options available to homeowners besides the short sale, like loan modification, forebearance, bankruptcy, etc, but those options don’t always work and so the short sale may be a way out for these individuals.

Since the existing mortgage company is going to be handed a check for less than what is owed them, they have to approve these sales ahead of time. That has become the tough part. Just like back in the 1980s when savings and loans were hit with huge numbers of foreclosures and had no idea how to handle them, the mortgage companies of today are being hit with massive amounts of mortgagors who are trying to request these short sales and they have no standard procedure in place to handle the requests. Working quickly to develop some standardized way of working with these lenders, organizations have developed systems to try and smooth out the process.

It currently takes a mortgage company about 30-45 days to review and either approve or reject these short sale packages, so buyers must be patient while the process goes on. Hopefully as more and more of them get done, that time will improve.

The concept of yin yang describes how opposing forces give rise to each other in nature. So seems to be true in real estate. Out of the chaos of this economic turmoil we are going through, comes the opportunity for new things to occur to help calm the turmoil down. Currently there are people out there who have learned how to walk these people through the process and help explain some of the advantages and pitfalls of these short sales. I have just completed a course and received my CDPE (Certified Distressed Property Expert) designation and can help anyone who is in a situation where their current house payment is more than they can handle. Please note that the designation says “distressed property expert”, but it may be more appropriately called “distressed people expert” because the property itself may be fine, but because of things we mentioned before, the homeowner is finding themselves going under, either slowly or quickly.

If you or anyone you know are in a situation where the house payment you are paying is eating you up, please don’t think that letting the home go back to the lender is your only option. It is not. There is help out there and it is a click or phone call away. If you or someone you know needs more information on this, please feel free to contact me. If you qualify for the program, it costs you nothing. If you’re reading this on my website, just use any of the information on it to contact me. If you are reading this somewhere else, you can call email me at donleonard@comcast.net or call me at 281-893-8400 x192 or on the cell at 713-899-3938.

Who is being helped by this money directly remains to be seen, but assuming it will go to help out the people we were told it was going to help out, how will you and I be affected? We have seen huge injections of cash already into companies designed to keep the lenders lending. As guidelines tighten up to try and undo the damage created by the “fog up a mirror–get a loan” requirement for mortgage loans over the past few years, we see fewer and fewer people qualifying as buyers. Since the number of buyers out there has dwindled so dramatically (nearly 1/3), we need to see a huge drop in inventory (active, available listings) in order to try and save as much equity for homeowners as we can. Of course, we all know equity is the difference between what the home is worth and what we owe on it. If home values drop, our equity drops right along with it, because we know what we owe only drops by making payments.

Many companies are committed to helping homeowners stay in their homes instead of foreclosing on them. That will help reduce the number of listings out there and, in turn, help preserve values somewhat. The question becomes, can we maintain enough demand to keep the prices from falling? It is hard to tell, but we are closer to being able to do that than just about anywhere else in the United States. Job growth will probably be the “X” factor as to whether or not we will lose value and if so, how much. In neighborhoods where many “work-outs” are being done, values may be in jeopardy down the road. If lenders reduce the amount of indebtedness (reduce a $150,000 loan down to $125,000) as opposed to reducing the interest rate, that is a home that can later be sold for less than someone who paid theirs off completely and the owner who received the help earlier can still walk away with the same net as the one who paid it off himself.

This bailout plan will hopefully increase the number of buyers, but chances are it won’t be to pre-meltdown levels. The secondary markets are going to be very skittish when it comes to buying questionable loans from the lenders in the future, and the lenders who originate those loans certainly don’t want to be left holding them and tying up that money to where they can’t loan to anyone else.

So, there are plenty of variables that can play havoc with our housing market and our values over the next 12-18 months. In my opinion, the things to watch here in Houston are:

1) Job growth - We will need a strong pool of buyers to absorb the existing inventory we have out there (approx. 50,000 homes). Not even a strong rental market and Hurricane Ike together have knocked enough homes off the market to change inventory levels by more than about 2.5%. It is going to take a real reduction in inventory before we will start to get out of the woods. Easiest way for that to happen…bring in people with jobs who can and will buy homes.

2) Foreclosure levels - Let’s see if the banks and mortgage lenders will stay true to what they say and do these “workouts” with existing homeowners to keep them in. As a real estate professional, this won’t do anything for my business, but it needs to happen to help keep values as high as we can.

3) Short sales - These are homes being sold for prices that will net less than what is owed. They don’t accept less than what is owed because they want to, they are accepting less than what is owed because that is what the market value of the property is right now. Typically, these sellers can’t make up the difference themselves, so ultimately, the existing lender ends up having to take less than what they are owed. These homes have already lost value and will tend to keep values down in a neighborhood if there are enough of them in a given subdivision.

4) Loss of existing jobs - One of the saving graces for Houston real estate has been that our sellers, so far, have not been so desperate to sell that they have had to reduce their prices significantly to get the home sold quickly. They have been able to hang on and get their price. If we see the loss of existing jobs taking place, many of these sellers will have to cut their prices quickly to get out from under the payment (ala the 1980s).

   Every month, the Houston Association of Realtors puts out a press release giving statistics regarding the number of sales, active listings, days on the market, etc for the Houston area. The last half dozen or so have shown the number of sales dropping an average of about 17% per month when compared to the corresponding month a year ago. Today, we see headlines showing the country is reporting a 15.5% drop in existing-home sales over the same period of time. Sounds like we are in the same boat as everyone else, doesn’t it? Well, the comparison starts and ends with that number of sales, because otherwise, Houston is outperforming the rest of the country. While the rest of the country is reporting significant price drops to go along with the reduced demand, Houston is showing just the opposite. We are actually reporting very slight decreases, stable prices, or in some cases, even slight increases in sales prices.

   How can this happen? We all know real estate is the poster child for supply and demand types of business and as a rule, we know that decreased demand normally leads to a decrease in pricing so sellers can get their homes sold. To even solidify that notion more, the Houston market reports a 2.5 to 3% increase in active listings, making that disparity between supply and demand even greater. We have a couple things going for us that the rest of the country is missing out on: 1) The financial status of many of our sellers. Even though we have many sellers with their homes on the market, it seems relatively few of them are in financial straits. So, even though they may have to wait a little longer to get their price, they seem to be able to hang on long enough to do so. We have an increasing amount of foreclosures, so this may change in the future, but for now, sellers are getting their price. 2) We are not suffering from the so called real estate “bubble” that many parts of the country experienced. In many places that are now being the hardest hit in sales, prices soared to record levels in a very short period of time. These huge increases, of course, had no foundation and therefore, at some time started falling. When that happened, those sellers did see the writing on the wall and started dropping their prices to get their homes sold before it got too bad, hence, the price drops we see there now. Houston has not had the roller coaster ride the rest of the country has had with pricing. Our slow but steady 3-5% per year has put us in the position of being able to maintain pricing and still be have the most reasonable sales prices for homes in the country. It is because of this that Forbes magazine recently named Houston the number 1 city to buy a home in.

    Another thing we have going for us is our pool of buyers. Even though there are fewer of them, they are better qualified than in a lot of the other parts of the country because our prices are lower, many of our buyers are investors with the financial means to pull off the transaction or people who are moving into the city from other parts of the country and they are moving here with jobs. A recent article showed the increase of population in Houston, in terms of percentage and actual numbers is in the top 5 of all cities in the United States with populations over 100,000. That is significant! Just like we have always said…watch the jobs. Where the jobs are is where the best real estate market is and Houston has proved that true again.

Welcome to Donald Leonard’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Cypress. Visit my website at http://DLEONARD.topproducerwebsite.com.