Buffett predicts downturn will end in 2011

NEW YORK – March 2, 2010 – Billionaire investor Warren Buffett predicted that the real estate market downturn would end by 2011 as the housing inventory declines.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote in his annual letter to the shareholders of Berkshire Hathaway, where he is chairman and CEO. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means.”

He also pinpointed what he sees as the cause of the downturn. “People thought it was good news a few years back when housing starts – the supply side of the picture – were running about 2 million annually,” wrote Buffett, “But household formations – the demand side – only amounted to about 1.2 million.”

Source: Bloomberg News, Andrew Frye (03/01/2010)


Read the fine print in a short sale

TAMPA, Fla. – Feb. 23, 2010 – With so many distressed homeowners owing more than their homes are worth, short sales have become lifelines. These types of sales make up more than half of the homes on the market in the Tampa Bay area. Generally, this means the mortgage lender has agreed to allow the home to sell for market value. The lender writes off the rest of the debt, and the homeowner walks away. But is it really this simple?
Lenders are increasingly adding language to the approval package, reserving the right to pursue the deficiency later – that is, the difference between what you owed on the house and what it sold for. For most buyers, this has not been the case – so far. They’ve sold their home as a short sale, moved on, and haven’t had any problems. But other lenders require the seller to agree upfront to pay back a set amount. [Added by Chris Greenwood 2/24/2010-The Mortgage debt Relief Act of 2008, No 1. Allows that the borrower will not be charged for the difference between what was owed on the property and what it sold for, this means if you receive a 1099 from your lender make sure the amount of income reported is in the right category or contact the lender and have them put it back per The Mortgage Debt Relief Act through 2011, this only applies if this was your primary residence. Prior to the closing ask them to be specific about deficiency judgement and still try to negotiate it away.] (Contact Chris for more information 954-290-5467)



Housing bargains abound, but try closing the deal quickly, property under $150,000 is starting bidding wars.

TAMPA, Fla. – Feb. 18, 2010 – Matt and Brenda Wehrly can’t wait to move out of their cramped apartment and into their first home. The couple, expecting their second child, plan to close on a three-bedroom home in Gibsonton this month. The house sold in late 2005 for $222,800, and the Wehrlys are ecstatic about their contract to snatch it up for $97,000. Sweetening the pot even more, the couple will be eligible for an $8,000 federal tax credit. “We wanted to buy something that would allow us to live on one income,” said Brenda Wehrly, who plans to eventually stay at home with her children. “We wouldn’t have been able to do that a few years ago.” Tampa Bay sales prices have plummeted more than 40 percent since the peak of the housing boom in 2006. That, coupled with federal tax incentives, is motivating buyers like the Wehrlys to get off the fence and purchase a home. This, real estate professionals say, has given a needed boost to Tampa Bay’s struggling housing market. (Contact Chris for full article, 954-290-5467)