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Friday, October 28, 2011

Top 5 USA Distressed Locations For Real Estate Bargains

If you want a great real estate deal, you ought to look in places where distressed sales (short-sales and foreclosures) count for at least half of all the sales in a particular real estate market.

According to the inaugural U.S. Housing and Mortgage Trends report from CoreLogic, these five markets offered the largest percentage of distressed home sales in June, 2011:

Las Vegas, Nevada, where 61 percent of all real estate sales were distressed property
Riverside, California, 59 percent of real estate sales were distressed
Phoenix, Arizona, 53 percent of real estate sales were distressed
Sacramento, California, 51 percent of real estate sales were distressed
Orlando, Florida, 50 percent of real estate sales were distressed

The report explains that distressed sales were at a seven-month low in June, thanks to the end of the home buyer tax credits. However, distressed sales as a share of total real estate sales are expected to rise during the rest of this year. And, that means better deals for home buyers and investors.

What else will help home buyers and investors? According to the press release accompanying the report:

“Negative equity rates will also be a major factor slowing the housing recovery, with nearly one in four homeowners under water and most of those borrowers unable to sell their homes.”

And of course, news that foreclosures have reached a new record for the third time in five months.

There could be as many as 12 million more foreclosures coming down the pipeline over the next few years.

Buyers, get your down payments ready - great real estate deals abound in every market. Read more: http://www.soharworldhomes.com

Thursday, October 27, 2011

Risk = Opportunity

A credit crunch has additionally been described as a capital crunch. There is usually a shortage in equity capital, and this limits lenders’ abilities to make loans, and this is especially true in regions that have been most affected by the subprime mortgage and financial crisis. In a credit crunch, the lenders quit lending, and instead they hoard their capital, as they are afraid of loaning out too much money with the increasing bankruptcies, job losses, and mortgage defaults, as well as additional factors which boost the risks of an individual not being capable of repaying a loan.

Fewer dollars available for mortgages is the impact that this has on the real estate market. There becomes an oversupply of houses on the market, as fewer dollars are available in mortgages. And this in turn means that construction of new homes will be slowed or even stopped altogether because builders cannot sell the homes they have built. This was evident in areas of the nation where bankruptcies and foreclosures exacerbated an already saturated real estate market.

Foreclosures, bankruptcies, and job losses caused individuals to receive poor scores from their credit reports, and this caused even lower credit scores. Low credit scores increase the difficulty of securing credit at all, much less getting good terms on a loan. Further, given the increasing bankruptcies, defaults and foreclosures, banks clamped down on their lending criteria until their standards became excessively restrictive.

Persons who ought to have been able to receive approval for mortgage loans were rejected. As fewer people were able to buy houses, there were even more surplus houses on the market that couldn’t be sold. The excessive number of houses for sale must be resolved for the market to rejuvenate, but several factors, not the least of which is inordinately restrictive mortgage lending policy, are creating a drag on the recovery.

Yet another negative impact on the real estate market has proven to be the corrections in price, as some regions have seen home prices plummet in the amount of 25% or even higher. Because of the drastic drop in home value, some people owed more on their existing mortgage than they could get if the house was sold; this led to some homeowners deciding to go through foreclosure rather than continuing to pay on their mortgage.

Any purchaser having difficulty getting financing is best advised to remain calm and not panic. They ought to keep doing all of the things possible to improve their credit, mend their credit reports, and to boost their overall credit scores. When things loosen up, they will discover that it is simpler to be approved for a mortgage loan, and finally they will be able to buy the house that they desire.

For more information go to www.soharworldhomes.com

Tuesday, October 25, 2011

Money is bleeding at a critical rate in the financial services industry

Money-market funds: A net $69 billion was deposited into these funds, designed to be safe harbors where investors can temporarily park cash and quickly access it when needed. (sounds impressive at first, but it was a giveback from the previous month which saw huge redemptions) That proved a strong draw in August, in contrast with July. In that month, investors withdrew a net $113 billion, due to fears that Congress might fail to reach an agreement to lift the government’s debt ceiling

Bond funds: Investors typically are attracted to bonds when stock prices tumble. That was the case in July, when bond funds attracted $8 billion in net deposits. But last month, investors in taxable bond funds — a category that includes corporate bonds — withdrew a net $9.7 billion. Strategic Insight noted big withdrawals out of floating-rate and high-yield bond funds. Both categories hold bonds that typically earn high rates of return, with greater risk of volatility.

Foreign stock funds: Investors withdrew a net $1.4 billion from funds that buy foreign stocks. Flows into this category have been negative for two months in a row, but remain positive year-to-date, with nearly $44 billion in net deposits.

The drawdown in the past four months has been dramatic, and we now have net withdrawals approaching  $30 billion year to date. It remains ironic that stocks (and mutual funds) are the one thing people don’t want to buy at a lower price.

For those who think much of this money is going into money market funds or term or GIC's, you would be wrong!

There is one thing left that has huge upside, is recession proof, can bring a source of revenue and historically has been stable over the long run...Real Estate. I know, I know what about what has happened in the States, so what, it is a chance for a newed pattern of growth. At least you can live in a house, what are you going to do with gold?

Thursday, October 6, 2011

Apple and Steve Jobs- the story of the man.

From a college dropout to heading an over $350 billion Apple empire, Steve Jobs dramatically transformed the worlds of personal computing, music and mobile phones, ushering in a new digital era.
Jobs, who died at the age of 56 after a seven-year battle with pancreatic cancer, was also the man behind the stupendous success of the computer animation firm Pixar, makers of Toy Story and Finding Nemo.
Though he himself never designed a computer in his life, it was because of him that the Apple products, while largely providing the same services as those from other companies, are perceived to be different.
Born on February 24, 1955 to Joanne Carole Schieble and Abdulfattah Jandali, Steven Paul Jobs was adopted by Paul and Clara Jobs. Jandali was a graduate student from Syria who later became a political science professor.
Paul Jobs, who worked in finance and real estate before moving back to his original trade as machinist, moved his family down the San Francisco Peninsula to Mountain View and then to Los Altos in the 1960s. From an early age, Steve Jobs was interested in electronics. As an eighth grader, after discovering that a crucial part was missing from a frequency counter he was assembling, he telephoned William Hewlett, the co-founder of Hewlett-Packard.
Hewlett spoke with the boy for 20 minutes, prepared a bag of parts for him to pick up and offered him a job as a summer intern, according to The New York Times.
Jobs met Stephan Wozniak, with whom he co-founded Apple in 1976, while attending Homestead High School in neighbouring Cupertino.
After enrolling at Reed College in 1972, Jobs left after one semester, but remained in Portland for another 18 months auditing classes. In a commencement address given at Stanford in 2005, Jobs said he had decided to leave college because it was consuming all of his parents' savings.
Jobs returned to Silicon Valley in 1974 and took a job as a technician at Atari, the video game manufacturer. But, he left after several months and travelled to India with a college friend, Daniel Kottke, who would later become an early Apple employee.
Jobs returned to Atari and along with Wozniak, then working as an engineer at HP, began attending meetings of the Homebrew Computer Club, a hobbyist group that met at the Stanford Linear Accelerator Center in Menlo Park, California in 1975.
Personal computing had been pioneered at research laboratories close to Stanford and was spreading. Wozniak designed the original Apple I computer simply to show it off to his friends at the Homebrew.
It was Jobs who had the inspiration that it could be a commercial product. In early 1976, he and Wozniak, using their own money, began Apple in the Jobs family garage in Los Altos with an initial investment of $1,300 before securing the backing of former Intel executive A C Markkula, who lent them $250,000. Wozniak would be the technical half and Jobs the marketing half of the original Apple I Computer.
Shortly thereafter, they moved the company to a small office in Cupertino. Reacting to Jobs' demise, a Twitter user named Matt Galligan wrote: "R.I.P. Steve Jobs. You touched an ugly world of technology and made it beautiful."
In April 1977, Jobs and Wozniak introduced Apple II at the West Coast Computer Faire in San Francisco, creating a sensation. The company went public in 1981, when its sales touched $600 million from $2 million in 1977.
By 1983, Apple was in the Fortune 500, an achievement for a new firm. In 1981, Jobs joined a small group of Apple engineers pursuing a separate project, a lower-cost system code-named Macintosh, which was introduced in January 1984.
Jobs recruited John Sculley as Apple's chief executive in 1983. Sculley, a former Pepsi-Cola chief executive, helped Jobs introduce a number of new computer models, including an advanced version of the Apple II and later the Lisa and Macintosh desktop computers.
But, the two men became estranged and a power struggle ensued when the Lisa failed commercially and early Macintosh sales proved disappointing, leading to Jobs losing control of the Lisa project.
The Apple board ultimately removed Jobs from his operational role and 1,200 Apple employees were laid off. Jobs then left Apple in 1985.
"I don't wear the right kind of pants to run this company," he told a small gathering of Apple employees before he left, a member of the original Macintosh development team was quoted as saying by NYT.
He was barefoot as he spoke, and wearing blue jeans. In September that year, he announced a new venture NeXT Inc.
He also established a personal philanthropic foundation after leaving Apple but soon decided, instead, to spend much of his fortune $10 million on acquiring Pixar, a struggling graphics supercomputing firm owned by filmmaker George Lucas.
The purchase, though a significant gamble as there was little market then for computer-animated movies, proved profitable when the company, in 1995, along with Walt Disney Pictures, released 'Toy Story', collecting box-office receipts of $362 million.
When Pixar went public in a record-breaking offering, Jobs became a billionaire.
In 2006, the Walt Disney Company agreed to purchase Pixar for $7.4 billion, making Jobs its largest single shareholder, with about 7 per cent of the firm's stock.
Meanwhile, Apple, after unsuccessful efforts to develop next-generation operating systems in 1996 with Gilbert Amelio in command, acquired NeXT for $430 million.
The next year, Jobs returned to Apple as an adviser and became its chief executive again in 2000.
With his rise, Jobs personal life also became more public. He had a number of well-publicised romantic relationships, including one with folk singer Joan Baez before he married Laurene Powell. Jobs and Laurene had three children -- two daughters Eve Jobs and Erin Sienna Jobs and a son, Reed.
Jobs had one more daughter, Lisa Brennan-Jobs, from a relationship with Chrisann Brennan.
Steve Jobs, the legendary Apple co-founder turned his company into one of the most successful technology companies in the world, is dead. He was 56.
In a somber statement on Wednesday, the Apple board of directors said: "We are deeply saddened to announce that Steve Jobs passed away today. Steve's brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve."
Apple announced his death but did not give any specific cause for it.
"His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts," the statement added.
The company said: "Apple has lost a visionary and creative genius, and the world has lost an amazing human being."
Jobs had battled cancer in 2004 and underwent a liver transplant in 2009.
Jobs, 55, submitted his resignation to Apple's board of directors on August 25, 2011 and 'strongly recommended' that the board implement its succession plan and name Tim Cook, 50, as CEO.

Monday, October 3, 2011

First there was Greece, then...

It has come to this. Almost a year and a half after rescuing Greece from default, Europe is staring into the abyss. The bailout has proved insufficient. Greece needs more money, and it can't borrow from private markets where it faces interest rates as high as 25 percent. There is no easy escape!
What's called a "debt crisis" is increasingly a political and social crisis. Already, unemployment is 14.1 percent in Greece, 14.7 percent in Ireland, 11.1 percent in Portugal and 20.7 percent in Spain.
Some causes of Europe's plight are well-known: the harsh recession following the 2008-2009 financial crisis; aging populations coupled with costly welfare states. But there's also another less recognized culprit: the euro, the single currency now used by 17 countries.
Launched in 1999, it aimed to foster economic and political unity. For a while, it seemed to succeed. In the euro's first decade, jobs in countries using the common currency increased by 16 million.
It was a mirage. For starters, the euro fostered a credit bubble that led to booms in housing, borrowing and consumer spending. But one policy didn't fit all: Interest rates suited to Germany and France were too low for "periphery" countries (Greece, Ireland, Portugal and Spain).
Money poured into the periphery countries. There was a huge compression of interest rates. In 1997, rates on 10-year Greek government bonds averaged 9.8 percent compared to 5.7 percent for similar German bonds. By 2003, Greek bonds fetched 4.3 percent, just above the 4.1 percent of German bonds.
"The markets failed. All this would not have occurred if banks in Germany and France had not lent so much," says economist Desmond Lachman of the American Enterprise Institute. "It was like the U.S. housing market." Both American and European banks went overboard in relaxing credit standards.
Few economic statement make my hair stand straight up more than that bit of complete nonsense from Lachman. The markets did not fail. Bureaucrats who dreamed up the Euro failed.
Those bureaucrats devised a currency union with nothing more than suggestions on fiscal controls. Making matters far worse, countries in the Euro-Zone have widely differing political philosophies and policies. That currency union was not brought about by the market. The free market would never have done such a silly thing.
The rationale of The Independent was "It's different this time".
The economic arguments that, on balance, Britain will be better off inside the currency union than outside are persuasive. The discipline of a permanently fixed exchange rate would significantly reduce the risk of a return to high inflation and create greater certainty for companies and investors. There would also be lower transaction costs. There is no doubt that a successful single currency would strengthen Europe's position on the global economic stage.
The opponents of the single currency do not agree. They argue that the experience of the ERM and events since Black Wednesday show that to be locked into a single currency is damaging. Exchange rates, they point out, can act as important "shock absorbers" in times of unexpected crisis. These are powerful arguments. They are most powerful when applied to some EU members - notably Spain, Portugal and Greece - whose less developed economies would make the exigencies of a single currency regime punishing, unpopular and potentially disastrous.
But this is not the condition of Britain today. In 1992 the needs of the British economy were at odds with the priorities of the Bundesbank. They were trying to control inflation, we needed to get out of recession. By contrast, in 1999 six or seven countries will find themselves at the same stage in the cycle, with very similar economic priorities. So things are likely to be different. Points of Failure Predicted In Advance Things were not different were they?
Ironically, in that 1995 article, The Independent pointed out the exact points of failure: Spain, Portugal and Greece.