Poconos Real Estate Blog

Bought! Arrowhead Lakes Vacation Investment Property With Instant Income

A family from Lansdale closed on their new vacation home on Friday - a lovely little contemporary, fully
furnished & equipped, and only a block from the Minisink Pool and Tennis Complex. The house is in great condition, is very clean and boasts three generous bedrooms, two full bathrooms and the obligatory Pocono screened porch. We were able to negotiate a very fair price for the home at 8 Moshannon Drive, $162,000.

These folks contacted me late last year as a result of them reading the Poconos Real Estate Blog, and we have worked to find them just the right place. We began by looking at several different communities within reasonable distance from the Northeast Extension of the Turnpike, as that is the route they take to the Poconos. We visited Towamensing Trails, Indian Mountain Lakes, Locust Lake Village and other amenity-rich communities. After evaluating their options they settled on Arrowhead Lakes because of the fact that it is a gated community, and because it has three pools. This appealed to them because they figured the pools would be less crowded.

The greatest thing about this buy for them is, in my opinion anyway, that the property came with a tenant for the summer, so there is instant cash flow of a few thousand dollars! According to the listing agent, the previous owner had rented the property so often that after awhile he had to purchase ANOTHER property in order to have something available for his own personal use once in a while. Lucky for my Lansdale buyers, the seller decided now was the time to liquidate an asset!

Arrowhead does quite a brisk business in the short-term, vacation rental department. My source tells me that this past Saturday, which as the last Saturday in June officially kicks off 'the season', there were 86 groups checking in to their rented homes in the community. The community is becoming very well known to summer tourists from the Philadelphia and New York areas as an affordable alternative to destinations reached by air.

To begin your search for the perfect second home or vacation investment property in Arrowhead Lakes or in other communities in the Poconos, email me at info@lisasanderson.com, or call me at 888.794.5589 x103.

Who Says Social Media Doesn't Pay?

Check out the snazzy new t-shirt that came in the mail today!

It's from THE Jeff Turner, founder of Real Estate Shows.   I started following Jeff around on Twitter on the recommendation of a mutual friend, went on to friend him on Facebook and have been in awe of his photography skills ever since (you really have to check out this pic). He has a lot of diverse interests which make him a real interesting guy to stalk er I mean, know. And now I find he also designs t-shirts.

Sarah told me he was a genius and I am beginning to believe her.

Thanks, Jeff, for making my day!!

Just the Facts, M'am : Market Statistics for Monroe County, Poconos, PA

There are a lot of opinions out there about the real estate market and most of them, unfortunately, are based on the national news stories which do not nearly illustrate local intricacies. I am not here to paint a rosy picture where one may not exist, but I am offering some facts for folks to generate their own opinions about our market here in Monroe County.

I will, of course, offer my opinion about these statistics near the end of this article, but all the numbers are factual and not distorted in any way.

To clarify what these numbers represent: I gathered statistics from the Pocono Mountains Association of REALTORS Multiple Listing Service (MLS) on June 3, 2008. The information, while deemed accurate, is not guaranteed, as the MLS system relies upon information being inputted by many different individual users, and does not include statistics for non-MLS sales. The statistics cover single family residential home sales for the time period of January 1 to June 3 of each year specified, only in Monroe County.

Our MLS overlaps over several counties but I felt that the data would be skewed by including them because of the changing dynamic of MLS coverage. More real estate companies are opting to join nearby MLS's in order to expand their marketing reach across regions. So today, for example, there are more listings from Lehigh, Carbon or Pike County than there were a few years ago. To keep it simple, and to make the comparisons fair, I limited the area.

Market Statistics for Monroe County, Poconos

* Info not available

For those of you for whom this basic data is not enough, I encourage you to download the latest Supply and Demand Report which offers more in-depth figures for all of the different municipalities in the County. For each municipality you will find details such as current active listings, under contract listings, year to date closed sales, and list and sale price averages. This info is very useful in determining what the local markets look like - realistically. After all, markets ARE local and even the statistics posted in the above chart will not accurately reflect what is going on in your neighborhood.

So What Does It All Mean?

There is no denying that we are experiencing a slow down. Fewer homes are being sold (although if you add the current Pending Sale inventory of 302 homes to the # of sales this year, things look a lot better), and the higher price ranges are feeling this particularly so. Buyers are bargain hunting and they are buying up the foreclosures and homes that are priced and marketed correctly. I have sold several homes in the past few weeks to savvy buyers who shopped the market and found the houses that are fair buys. They are out there. But there is a lot of inventory out there that is NOT priced and marketed correctly, unfortunately, and of course that is not selling.

What impact does THIS have on our market? The glut of under-marketed and over-priced inventory? I don't know for certain but my guess is that Buyers (and others who choose to focus on the negatives ;) ) see all this excess inventory and make the assumption that they are going to steal a home. This couldn't be further from the truth as I do not see many sellers being desperate enough to accept low-ball offers. I see banks choosing from multiple offers on foreclosure listings, and I hear 'regular sellers' threaten to take their properties off the market and wait until Buyers get off the fence about making a move.

Honestly, I wish they would do just that. The inflated inventory of unrealistic listings is not helping matters any.

Overall, though, we are doing ok: No drastic price decines, a foreclosure rate that is nowhere near that of some other areas of the country, and a market that continues to attract commuters, vacationers and second-home buyers, retirees, and investors.

Slow and steady wins the race!

Further Reading:

The Pennsylvania Association of REALTORS published an article about the PA housing market in it's latest issue of PA REALTOR Magazine.

Getting Back to Nature at the DWG National Recreation Area

The Delaware Water Gap National Recreation Area is a huge expanse of natural beauty just waiting for you to enjoy. Encompassing  40 miles of the Delaware River and its surrounding watershed, as well as 100 miles of hike-able trail including 27 miles of Appalachian Trail, this Pocono treasure is a destination to visit again and again. The Park website is packed with lots of information-I encourage you to check it out and browse around.

I have not been there yet this year, but the recent beautiful weather has me longing to go. I took the photos accompanying this article during a hike last year which we accessed from the New Jersey side at the Kittatinny Point Visitor Center off of I-80.

There are access points for the trails in the Borough of Delaware Water Gap (off of Mountain Road behind the famous jazz club, The Deer Head Inn), and in Dingmans Ferry at the Dingmans Falls Visitor Center. There are also various overlooks and picnicking areas along the river via Route 611, south of DWG, north of Portland.

There are so many things to do at this spot: birding, photography, rock climbing, site seeing, biking, and so much more. Check out the Calendar of Events for programs, lectures and other ways to enhance your appreciation for the natural beauty which is right here in our backyard.

Detailed maps of the various areas of the Park and the River, parking areas, camp sites, historical buildings, boat launch areas, trails, etc., are found here.

There are no entrance fees to get in to the park or trails - imagine that, a FREE attraction in the Poconos! There may be fees for camping and other extras.

Open House in Pocono Lake, Sunday, June 1, 2008 1-3pm

Video: Life in Penn Estates

Minimizing Risk & Reducing Stress While Buying a Foreclosure in the Poconos

Bank foreclosures are old hat for us here in the Poconos. Long before the recent rash of foreclosures experienced across the country, we have had a steady supply. (The reasons for this are a whole 'nother article.) Fortunately for our market here, we have had a steady supply of investors and bargain-hunters coming in to the area, too, so these homes have always sold at a decent pace.

So I do have some experience in helping buyers navigate through the process of buying a foreclosure as an investment or as their home. Furthermore, my first house was a foreclosure sale, so I have first-hand knowledge of the experience from the side of a buyer. To summarize, yes, a root canal is almost as fun as buying a foreclosed home, but once the immediate effects wear off, the reward is usually pain-free.

(As clarification, the term foreclosure in this article refers to bank-owned listings being sold through the MLS - other areas call these REO or Real Estate Owned properties)

Buying a bank foreclosure is not for the faint-hearted. For first-time buyers, the process of buying a home is, under the best of situations, stressful and confusing. But even for those who have some experience with previous home purchases, buying a bank foreclosure can be scary.

You are dealing with properties which are usually in need of repair, have no Seller Disclosure or representation with regard to condition and maintenance history, and have been abandoned. Do not discount this last fact, the idea of abandonment, as there is a subconscious effect from this fact for many of us. Why would someone let this house go? What's wrong with it? What did they know that I don't know? No one wants to feel like they are picking through someone else's trash!

But once a purchaser works through all of these emotions, weighs the market facts and finally comes to the realization that there is a huge opportunity to maximize equity by buying a foreclosed property, good decisions can begin to be made. Once a buyer firms up in their mind what kind of repairs they are willing to undertake and shops for and locates the appropriate property, they can approach a transaction armed with the information they need, minimizing their risks and anticipating & addressing possible stress points along the way.

So, what's the big deal? How is buying a bank foreclosure different from buying a property from a 'regular' seller?

THE DREADED BANK ADDENDUM
The banks have their own rules when it comes to selling property. While they do have to comply with real estate law as it exists in the particular state they are selling in, they have gone through this process hundreds or thousands of times and these experiences have caused them to streamline their process. They have corporate attorneys who analyze the risks the banks expose themselves to by virtue of being a seller in a highly regulated industry, and oftentimes have been involved in lawsuits, justified or not. In response to this, most of these banks have come up with a lengthy list of requirements and policies which they spell out on the dreaded Bank Addendum. This Addendum is <usually> a requirement of any offer they entertain, is non-negotiable, and can seem very one-sided and unfair to a purchaser. But the banks are well versed in CYA, so learn about the requirements and cover your own appropriately! Here are some of the more commonly questioned clauses included in these addenda. A discussion with your real estate attorney about their implications may be in order:

• Per Diem Penalty: A penalty for not closing when you say you will. Sure, the bank will extend the contract for you but will often charge you around $100 per day. Remember, time is money to the bank!
• Inspections: Yes, you can inspect. Usually the addendum states that it is for your information only and that they will not make any repairs. The buyer usually retains the right to cancel the contract if there are problems they aren't able to accept. Many times the purchaser is responsible for dewinterizing the property and turning on the utilities for the inspection, but not always. Also, the bank usually requires a fast turn-around on the inspection, often mandating that it be done in as little as 7 days from the time the bank accepts the offer. This is sometimes tricky for an out-of-town purchaser to pull off, but it is not impossible.
• Title Work: Sometimes the bank will pay for the title work on behalf of the buyer. This can be a big savings for a purchaser and, as long as your attorney reviews the policy, should be welcomed. However, be aware that title issues are not uncommon in foreclosure transactions. If the foreclosure proceeding was done sloppily, it will sometimes create a cloud on the title that can take some time to clear. Sometimes it is a simple fix, but other times, like when a Quiet Title Action is necessary, it can delay a closing for months. In these situations a buyer has the option of waiting or cancelling the sale.

Of course, every bank has their own Addendum and the document can vary in length from one page to eight pages or more. One other little tidbit of info: most banks provide the addendum up front so you can review it before making your offer, but sometimes the bank will provide the addendum as part of the counter-offer. Having an idea of what to expect is especially useful in this scenario.

MAKING AN OFFER
Just like with any other listing, an offer on a bank foreclosure is done in writing and utilizes a full Agreement of Sale (AOS). I use the standard Pennsylvania Association of REALTORS® form which is very thorough yet easy to understand. Of course, the Addenda described above would be attached to this form, and if there are conflicting clauses on the AOS and the Addendum, the Addendum takes precedence, unless State Law requires otherwise. Having an attorney help you navigate these nuances is important.

Normal contingencies like mortgage financing and inspections are acceptable to the banks. However, a sale contingent upon the sale of another property usually is not. They prefer to have the contract as clean and unencumbered as possible, thus reducing the risk of the transaction failing to close.

The bank will want to see a pre-approval letter before accepting an offer contingent on financing. Because pre-approval letters are not always a guarantee that a borrower is qualified, they sometimes require the prospective purchaser to fill out a Buyer's Financial Information form in lieu of or in addition to the pre-approval. This is to satisfy themselves that you are, indeed, a good prospect for the mortgage you are applying for. Again, risk reduction in action.

If you are paying cash for the purchase, or even if you are financing the purchase, expect to be required to provide 'proof of funds.' This can be in the form of a bank statement or a letter from your accountant. The bank needs to know that you have enough money to complete the transaction.

GETTING YOUR OFFER ACCEPTED
Keep in mind that the bank is evaluating your offer based on money, timing and risk so, besides carefully evaluating the price you are willing to pay, think hard about the other terms of your offer. The bank wants the transaction to close as soon as possible in order to minimize their carrying costs, and usually require a closing date within 30 days of acceptance. If you want to sweeten the deal, make it two weeks if at all possible. And keep the contingencies to a minimum. No 'Sale is contingent upon seller having the chimney cleaned' or the like. Simple mortgage contingencies and inspection contingencies are expected.

Of course you need to protect yourself and there may be unusual circumstances that require an odd contingency, but try to keep it as simple and as clean as possible.

Another caveat: While banks do value the cost of time and risk, they also have balance sheets to worry about. So keep in mind that your offer is mostly about the price. Cash offers are, very often, favored over those involving financing, but they don't always translate in to huge reductions in price. Buyers who need to get mortgages will often make their offer a little more desirable by raising the sale price. A few thousand dollars more in their offer translates in to small monthly payments for them, while giving the bank the needed plus signs in their ledgers.

Evaluate your position keeping in mind that it is all dollars and cents to the bank.

THE BANK'S COUNTER-OFFER
It is very likely that, if you like a property enough to make an offer on it, other Buyers do too. Even in the slow-ish market we are experiencing right now, multiple offers are very common on bank-owned homes.

When the bank gets more than one offer in on a property, they will usually counter-offer all of the prospective purchasers with a request for their Highest & Best offers.

This means that your offer was not accepted and that they are giving you an opportunity to revise it if you wish. They are letting you know that they have another (or multiple) offer on the table, but will not disclose the amount or terms of competing bids. They want to get the most for the house that they can so this is often the way they go about it. You do not get to know what the other offers are. At this point your choices are: 1-leave your offer the same 2-change your offer 3-withdraw your offer.

Once you go back to the bank with your highest and best offer, they will make a decision. This decision could include accepting one of the offers, negotiating with one or more of the potential buyers, or rejecting all of them. They are not under any obligation to accept anything, and are free to accept any other offers that come in in the meantime.

KNOW WHAT YOU WANT & GET IT!
Do not think that because the real estate market is a bit slower than normal that you are going to steal a foreclosure listing. Banks are well prepared to compete in this market and know what many sellers do not: that pricing a property well will generate offers quickly, in any market. They are not in business to own real estate and do what it takes to sell quickly and for top dollar, which is to price the listings slightly or drastically under market value to generate lots of interest and competition between buyers. This is why Buyers often find themselves in this 'highest and best' scenario - the banks plan it that way!

Moral of the story? Don't mess around. If you want the house and see the value in it, chances are someone else does too. Ask your agent for advice on the value of the property...as-is and as-fixed...to determine how high you should go. And, although the average foreclosure has sold for 96% of the asking price in 89 days this year**, these situations often generate fairly quick, full-price-or-higher sales. If the property is not worth that to you, fine. But don't lose a property you love because you think you SHOULD be able to negotiate it down.

This is not to say, of course, that every foreclosure listing is one you should fight for, but once you and your agent see a few homes in the neighborhood and analyze comparable sales, you will know good value when you see it. If you have analyzed the market properly, you should feel comfortable making an aggressive offer that will win you the sale.

For expert Buyer Representation in your foreclosure purchase, contact me today via email at info@lisasanderson.com or toll free phone 888.794.5589 !

**Information gathered from the Pocono Mountains Association of REALTORS MLS system on 5/12/08.

Stroudsburg Home w/a Great Yard!

I wrote about this house before.

But I just finished uploading some new pics to the MLS and felt I should elaborate on the pure wonderful-ness of the yard here.

Plenty of mature plantings, flowers, shrubbery and beautiful maple trees for climbing!

A rolling lawn on all sides of the house.

Now that things are greening up, I just had to share!

 

Buying a Penn Estates Home - FAQ #3 Safety, Security & Quality of Life

It may come as a surprise to some of my neighbors that not everyone has the same high opinion of Penn Estates as we do. Let's face it: A quick search of the internet for information about Penn Estates, as well as about life in the Poconos in general, reveals some not-so-flattering accounts of life here. As a matter of fact, I will admit to being a bit distressed at the one-sided information I found when researching what potential buyers might come across when they search certain topics. So, lest everyone out there get the wrong idea about us, let me try to balance the perspective a bit and tell you what I know. As a Mom, as a community volunteer & self-appointed advocate, a homeowner, and as a REALTOR(r), I feel I have to.

Penn Estates is home to over 6,000 people and compares in size to a small town. There are twenty-six miles of roads that serve 1700 properties. We contract with a private security firm to provide us with staff and services to manage the 24/7 safety needs of the community: guest registration & access control, patrols, traffic monitoring, emergency assistance, complaints, etc.

We are served by regional police departments, Stroud and Pocono Mountain, which cover a huge area of our county and are under-funded and under-staffed, just like most police departments that serve high-growth areas of the country. They rely heavily on and cooperate greatly with our private force to serve Penn Estates along with all of the other communities and towns in the areas they serve, and they are excellent in their response to 911 calls and crime investigation.

So my answer to the question "Is the community safe?" is 'Yes.' Is it perfect and crime-free? Of course not. Am I comfortable raising my teenage daughters here? Absolutely.

However, I think a better question is, what is Penn Estates, or any other area one might considering buying a home in, doing to address growth problems related to crime? How are these neighborhoods countering the negative effects of the continued population explosion our area is experiencing? IMHO, this is very important because as growth continues (which it will because it is a great place to live!), crime inevitably will too.

"What are areas doing to prepare themselves for that?" is a question that potential homebuyers should be asking when they research places to live.

Here in Penn Estates, we have been fortunate to have the support, guidance and cooperation of the Stroud Regional Police Department in establishing a model Neighborhood Watch Program, which we hope will be an example that the 'Burgs (the Boroughs of Stroudsburg and East Stroudsburg) and other communities in the Poconos follow. We have already held the training session for the first group of volunteers and look forward to the grand opening of 'watch central' in the Community Center building at the main amenity complex (stay tuned for more info on that).

The areas that acknowledge the inevitability of issues and address potential issues proactively are the areas that will keep crime rates low and continue to grow property values.

Yes, the Poconos has its share of troubles, as would be expected in an area which is expanding so quickly. Undoubtedly, when you search for information on the area in general or particular communities, news articles and reports of specific crimes will come up. Robberies, grafitti, gangs, domestic violence, arson...no doubt you have come across stories about any of these things occurring in different parts of Monroe County...Brodheadsville, Saylorsburg, Bushkill, Effort, downtown Stroudsburg and, yes, Penn Estates have been affected at one time or another.

An unfortunate fact about bad news is, it always makes headlines...don't even get me started on THAT, as I could go on and on about the unbalanced reporting and fact-less accounts that make it to print.

But remember that the good things that happen every single day in neighborhoods and communities across Monroe County don't make headlines. And ask yourself, is paying attention to headlines going to give you a clear picture of what life is like here?

It is difficult to know what information to believe and whose stories are accurate. I know that even my claims will be scrutinized and perhaps even written off as a sales pitch. To be sure, no matter who you ask, they will say that THEIR neighborhood is the best =) Everyone has an opinion and bad news is plentiful, especially in someone ELSE's neighborhood!!

So my advice to you is, do your homework and seek out a balance in sources and in perspectives. Then, make the decisions that are best for you and your family.  Who knows, buying a home in Penn Estates or other areas of the Poconos just might be the best move you ever made!

• For specific questions related to crime in Penn Estates, feel free to email me, contact the Stroud Area Regional Police Department or the Pocono Mountain P.D. For information on State Police and other police departments and private forces in Monroe County, visit the Monroe County Control Center site.
  

• 2007 Crime Rates in the Monroe County Poconos This link has crime rates broken down by type of crime and jurisdiction. Penn Estates is located mostly in Stroud Regional, with a small portion of the community being part of Pocono Township.

Scavello Courts Democrats

State Representative Mario Scavello of the 176th Legislative District is seeking write-in votes from Democrats at the April 22 Primary Election. The purpose, he says, is to allow him to concentrate on his continued efforts in the State House of Representatives, free from the time and expense of a campaign should he have a challenger in the November election.

I, for one, will be writing in his name. His time this year is much better spent addressing all of the big issues in Harrisburg right now...property tax reform, tolls on I-80, etc.

Representative Scavello has been a dedicated advocate for the Poconos in Harrisburg since his election in 2002. He has garnered a reputation there for fighting for what he thinks is right regardless of party lines.

Governor Ed Rendell acknowledged as much during his presentation of his Economic Development Plan during his visit to Stroudsburg earlier this year. I was present for the speech and marvelled at the time the Governor took honoring our Representative for his dedication to his constituency.

Perhaps we should shrug off our party affiliations for this local election and consider Mr. Scavello the leader of the Pocono Party ??

Click here for some comments from other voters.

Writing in a candidate is a fairly simple process. Here is info on how you can write in Mario Scavello's name at the Pennsylvania Primary Election on April 22, 2008.

Who are you supporting? Please share your comments using the form below.

Foreclosure Heat Map For Monroe County

A picture is worth a thousand words.

Below is a screen shot of a map I generated at HotPads.com which illustrates the severity of the 'foreclosure crisis' here in the Poconos. It demonstrates quite clearly the eratic nature of real estate markets, even in our immediate vicinity. Check out the map for the entire country and zoom in on other areas to see how local real estate markets, and foreclosure problems, really are.

The maps are compiled using data from Realtytrac and then color-coded to illustrate foreclosure densities. The cooler the colors, the less foreclosures there are...as the maps changes over to yellows, oranges and reds, the number of repossessed homes is higher.

 

Are you surprised?

Take My Stuff...Please!

Whether you are cleaning out your closets in order to sell your home, downsizing in anticipation of a move to a smaller home, relocating far away and trying to pack lightly, or just simply doing some spring cleaning, you probably have some stuff to ditch. And if your house is anything like mine, clothes make up the bulk of the toss-away items...between growing kids and my growing waistline, the bags are piling up in the garage!

Helping Hands of PA will pick up your donations of clothing and furniture items. There is a minimum donation of four garbage bags of clothing or a big furniture item for them to make the trip, but that's an easy mark to reach. Call them at 570.620.2222 or email thanku4giving@yahoo.com

Here is some more info about this new charitable organization:

Lending a Hand to your neighbors in Monroe County:

HELPING HANDS OF PA

The Local Charity for Local Needs

* * * * * * * * * * * * *

Who Are We?
Helping Hands of PA is a non-profit and non-denominational organization. It is based on a belief in the human spirit of our community, to care about each other, to extend opportunities to those with promise and second chances to those that are willing to earn them.  Our purpose is support of organizations and individuals that provide services to Monroe County that we consider essential to the growth, maintenance and well being of the community as a whole. 

Who Do We Help?
Our focus is on two essential resources; critical volunteer services and youngsters with potential and needs. In addition, we seek to assist those determined to achieve self improvement, rehabilitation and/or self reliance and welcome their participation as contributing members of our local society.

These include, but are not limited to:

*Volunteer Fire/Rescue Companies & Ambulance/Emergency Medical Services

*Children's Causes - Foster Care/ Learning Disabilities/Tutoring/Academic Scholarships/Sponsorships

               *Shelters

How Can We Do It?
In partnership with local businesses, we will perpetuate a cycle of building our community through the participation of the community; receiving items donated at approved locations and resold to generate funds applied to the needs of above named causes. 

All business' and organizations that allow collection bin placement will receive a quarterly report of the amounts collected to-date and the disbursements. In addition, supporters will be promoted by name in our advertising to the community, encouraging patronage and contribution to those businesses and organizations.

Contact: Susan LeBeau, Director, Helping Hands of Faith 570.620.2222 thanku4giving@yahoo.com

Look for their bins in strategic locations across the county - they're PURPLE. If you have a spot to put a bin, give them a call! If you have a bunch of stuff you don't want to lug, give them a call!

Is Now a Good Time to Buy a House in the Poconos?

Some may doubt my answer. It is, after all, given by a real estate agent whose income arguably depends upon her ALWAYS responding with a resounding 'YES!' when asked this question.

However, I have not earned the status of Trusted Agent by so many of my clients and neighbors by giving out self-serving advice. So, even though my answer is, indeed, 'yes,' please keep reading as you just might a) learn something about the real estate market, and/or b) find that even an evil, money-hungry agent can tell it like it is.

Either way, I've achieved my goal :)

So, yes, now is a good time to buy a house in the Poconos. And here is why:

1. Pennsylvania is not one of the 5 states driving the media's hysterical headlines about the housing crisis, the subprime mess or whatever other base topics threatening our confidence in real estate investment anywhere. Simply put, real estate markets are local and national news coverage must be ignored in favor of facts, statistics and anecdotal evidence from your target area. PA has never been and is not currently a volatile market.
2. The big-money investors are still investing here. A drive around Monroe County will reveal an incredible amount of money being spent on development and commercial projects all over the place. This kind of investing does not get done without feasibility studies, projections, etc. So what do they know that you don't know? That this is a desirable area and that the demand-well is not drying up.
3. There are plenty of choices out there. Hey, it is springtime so listing inventory is up. Better still, the 'passive-sellers' (those non-urgent owners who listed while the market was hot and were testing the market) are just about weeded out as contracts expire and these dreamers and their agents come back to reality. So you should now be seeing more homes available at the right prices.
4. Dan Green says, "Stop asking your real estate agent if now is a good time to buy." and offers some advice from the mortgage advisor's point of view that makes a lot of sense and has nothing to do with local real estate market conditions. The changing mortgage lending environment should be enough to encourage prospective home buyers to finally take the plunge...this year, before the pendulum swings completely the other way and mortgages get increasingly trickier to obtain (in other words, lenders' CYA policies become buyers' PIA!).

And if you are still skeptical...scared...worried or whatever, check out this article which explains the psychology of a real estate market and how one should evaluate the one that they are in.

Finally, if you have questions or need some information, just email me...I promise I will respond quickly!

FHA Loan Limits Increased

This is good news for homeowners who are in trouble because of an adjusting ARM or other sub-prime mortgage, and could help them avoid foreclosure.

It is also a boon to many home buyers who now have a larger selection of homes because of the higher loan limits.

FHA is an affordable alternative for those borrowers who do not qualify for regular conventional programs, without exposing them to the risks involved in the creative financing that created the problems we hear so much about these days.

Here in Monroe County, the limit for a single family home is raised to $271,050, well above the average sale price here. In Carbon, Northampton & Lehigh, the limit is $402,500, and in Pike County, $729,750. There are higher loan limits available for multi-unit properties.

These new loan limits expire at the end of 2008 so there is some incentive for owners and potential buyers to complete their transactions this year as the limits could revert to the 'old' limits of $200,160 in Monroe County, $305,666 in Carbon, Northampton & Lehigh, and $362,790 in Pike.

Need a recommendation for a local FHA loan expert? Click here.
For more info on the changes, read the HUD announcement.
For info on FHA loan limits in other areas, search here.

Real Estate Market Predictions for The Year of the Rat 2008

I confess - I do have a more-than-passing interest in feng shui and other ancient Oriental philosophy. Not only does it intrigue me but much of it really just 'feels' right to me...and that is what it's all about, isn't it

So, today being Chinese New Year, I decided to search out some information on what it means to us in real estate. And since I do already have my own gut feelings about what the year will bring, and I have found my inner voice to be an exceptional guide throughout my life, I expected to find some positive news.

And I was rewarded with very auspicious news indeed!

The first article I stumbled across seemed to be waiting for me to read it. It's title, "Year of the Rat bodes ill for markets," gave me great pause, but I read on in spite of my trepidation. What I found out is that the stock market fires will be quelched by the heavy water element of the Rat, but that real estate is fortunate to be one of the earth industries that looks to the Rat for money. As excerpted from the article:

"The rat is a symbol of money to the earth industry ... Strong water element in the year indicates productivity and strong activity in the metal industries," said Mr. Lo, who suggested investors put their money into property, mining and gold.

Raymond Lo is a feng shui master in Hong Kong, and is now one of my favorite people!

Whether you believe in this philosophy or not, you cannot argue that it is not fascinating to consider the possibilities and predictions given to us by the Masters. Additionally, the idea that any bad luck, bad energies or fateful predictions can be minimized or eliminated with 'cures' is one that has to appeal to anyone with a taste for optimism!

Further reading:

Read about your personal animal predictions for the year here
More predictions
Auspicious dates and times calendar

Free Foreclosure Prevention Advice

The Hope Now Alliance is a program which offers free counseling to homeowners in jeopardy of defaulting on their mortgages. Whether the borrower is already behind in payments, is facing problems when the adjustable mortgage rate resets, or is able to stay current once the rate resets, help and advice is available.

The first step is to call the 24/7 hotline at 888.995.HOPE (888.995.4673).

HUD-approved counselors are on hand to gather information on the homeowner's situation and to determine eligibility for various options. The call will take around 45 minutes and the caller can expect the counselor to recommend action steps if the information gathering goes well, or a follow-up call if income and debt information is not readily available.

Recommendations vary based on individual circumstances, but options include refinancing, temporary rate freezes, and loss mitigation strategies such as a short sale or deed in lieu of foreclosure. Most often, the best advice is to be pro-active and not avoid the situation because of fear or anxiety.

When homeowners call they will NOT be judged or even billed for the service...it really is intended as a free resource for troubled borrowers to get the help they need, as it is in everyone's interest to rectify these problems quickly.

My best advice to you is MAKE THE CALL.

Further reading:

Avoiding Foreclosure in PA

FHA Refinancing

Representative Kanjorski's 2/4/08 Announcement Re: Fed Funding For Counseling

Happy Blogiversary To Me!

One year ago today I posted the first article on the Poconos Real Estate Blog (PREB). Who knew that one year later, it would still be one of my most visited articles?

I am quite excited about the response I've received from my readers.  The article ideas and comments and general acceptance of the information have been astounding.

My New Year's Resolution was to write more frequently and consistently and so far I have kept that promise to myself. Additionally, I am pleased to have recruited a total of six Guest Authors to help me expand the topic coverage of PREB and to take the pressure off to produce content on a regular basis. Hopefully the expanded brain-power will prove beneficial to our readers!

I am psyched to have just about 8,000 page views for the year and also about the search engine rankings I've earned, especially on Google. This has happened exactly as Richard Nacht and Paul Chaney said it would in their book Realty Blogging (buy it on Amazon.com!). Not that I didn't believe them but I truly didn't think it could be as easy as 'just do it.' Sure, it's been a lot of work but, boy oh boy, it's been fun!

The next goal for PREB is to remodel the site. While the current set-up is very workable, the ideas and dreams I have for it are beyond what I can realistically do on my own. So it is time to start looking for a new format and help with the technical end of the design. Fortunately I have a secret staff of professional advisers on two of my favorite sites, Pocono Commuter and Facebook.

Thank you all of you for reading and for your continued support! What topics would you to see covered here at the PREB? Feel free to submit your topic ideas or real estate related questions by clicking on the comment button below.

Mortgage Interest Rate Trends

Thank you to Jay Thompson, Facebook friend and fellow real estate blogger, for compiling this chart comparing 30 year fixed mortgage rates for the past 30-odd years and allowing me to share it with my readers. If you visit his site, you will find additional charts detailing home loan rates for 15 year fixed and ARMs.

I think we are all aware that current mortgage rates are, and have been for years, the lowest ever. With the Fed poised to lower rates yet again very soon, one must wonder how long this low cycle will last. If things stay in line with the apparent 6-9 year cycle shown on this chart, not for very long-another couple of years, maybe. But that is just speculation. 

I do wish I could figure out though, why this positive aspect of the real estate market does not get as much play in the media as the negative generalizations we are bombarded with every day? Why are we (they) not encouraging average-Josephina consumer out there to take advantage of the incredibly good home financing rates that are available right now?

Bob Hay, 2008 PAR President

Tonight is the Inaugural Ball for 2008 Pennsylvania Association of REALTORS(r) President (and my Broker), Bob Hay. Since I am unable to be there to share in this moment with him, I thought I'd pay a little homage to him here on my blog.

I have been lucky to work with Bob for the past ten and a half years and I've watched his transition from local Association work here in the Pocono Mountains Association of REALTORS(r) to his treks to PAR for all of the quarterly meetings, expanding his volunteer work to the state level. I've seen him participate in organization after organization in his quest for a better community. From Chamber of Commerce to Industrial Development Authority to several Transportation Organizations, Bob has always seemed to me to have his hand in everything.

I've witnessed a commitment to our area and to our industry that is unmatched.

Thriving on change and enjoying the stimulus of learning new things and applying them to his business and volunteer efforts, Bob has always been on the cutting edge of everything real estate, especially when it comes to technology.  I remember cringing :) every time he came back from a conference or convention because inevitably it meant a new program or new processes to implement. But it was always exciting watching him be excited about all the new things being introduced to our industry.

Bob was one of the first in our area to embrace the internet as the future of our business and forged ahead in making his website one of the best in the Poconos even in the face of nay-saying peers.

I guess the point I'd most like to make here is, we're in good hands. Bob is a real visionary who has no problem in following his instincts, and is an ideal leader for PAR.

Thank you, Bob, for all you do for all of us!

<--- Bob and his wife, Bev, at our Chamber Expo booth a few years ago 'Your guides through the real estate jungle!'

For more info about Bob, check out my daughter's 8th grade research paper.

Think you have good credit? Better think again.

What has previously been thought of as a decent credit score is about to change.  At least from a mortgage application perspective.  I've asked PREB (Poconos Real Estate Blog) Guest Author, Andy Williams, to explain the details.

The days of unethical sales practices by some of the less-reputable mortgage representatives are numbered as the home financing market gets another dose of reality. Practices such as less than full disclosure about the cost of loans through the hiding of fees and rate manipulation have been very common in the past.  Hopefully this most recent change will make this 'sales tactic' much harder to pull off and level the playing field a bit. Consumers should find it easier to compare apples to apples and spot the rotten ones more easily and earlier on in the process.  This way they can direct their business back toward the good guys like Andy where it belongs. - L


From the Desk of:

Andrew Williams

President

Abacus Regional Mortgage

NEW FANNIE MAE LOAN-LEVEL PRICING

All Fannie Mae lenders will be changing to tiered pricing.  Some have already changed and others will follow by the 2nd quarter of 2008.  The tiered pricing effects borrowers with credit scores below 680.  The pricing refers to the points charged by a lender. If a borrower has a score lower than 680, the pricing will be roughly as follows:

< 620         +2.0 points
620-660      +1.75 points
661-679      + .75 points

Remember, 1 point equals 1% of the mortgage amount, so on a $200,000 mortgage for a borrower with a credit score of 650, the loan could cost $3,500 more.

If the borrower doesn't have the money to pay the points, they can opt to pay a higher interest rate to absorb the cost of the points.  The cost of .5 in price equates to roughly .125% in interest rate.  For example, if they score a 619, the 2.0 pt. add-on may be absorbed into the interest rate by adding .5% to the interest rate.  If the going rate is 6.25%, adding .5% would increase the rate to 6.75%.

This may only effect the Fannie Mae lenders, with the local banks still not charging any sort of surcharges for credit scores lower than 680.  We will have to wait and see how this all plays out.

Now more than ever it is important to choose your mortgage broker very carefully.  I am proud to offer proven market expertise and I am dedicated to helping you determine what loan is right for you. Call me for the straight answers. - Andy

Seniors in the Poconos

I think there is a void out here on the internet on information for seniors in the Pocono Mountain Region.  There is a glut of info for seniors in general, but when it comes to locale-specific topics I haven't seen much.  Would seniors find this valuable?  What kind of information would be useful to the over 55 set?  Obviously I would gear my posts to real estate related stuff, but that still leave the subject potential pretty wide open.  I am thinking of things like:  housing choices pre- and post-retirement, issues related to being 'snowbirds', tax issues for seniors, things to do around here, and of course lots of links to useful websites geared toward the mature population. 

I'd love to hear what you readers think would be quality content - please click the 'Comment' link immediately below this article and share your thoughts!

Penn Estates MLS Sales Data 2000 through 2007 - Listings Sold

Information obtained from the Pocono Mountains Association of REALTORS MLS on Jan. 7, 2008

Identity Theft Prevention Tip

FROM THE DESK OF:

Andrew Williams

President

Abacus Regional Mortgage

 

Recently my 82 year old mother became a victim of identity theft.  Someone from Kentucky stole her name and social security number and opened a credit card with Capital One.  The culprit not only received the card, but they charged it to the limit and never made a payment. 

 

All of this was discovered when she inquired into moving into a different apartment.  Upon inquiring into her credit, the landlord informed her of this account with Capital One which had been placed for collections.  This is where the fun begins.

 

Both my mother and I have spent countless hours on the phone  being transferred between departments at Capital One.  From one ignorant or unhelpful representative toe the next, each time resulting in an ultimate transfer direct to their collection agency.  Needless to say,  this has become a very stressful and frustrating situation.  These so-called "Customer Service Representatives" either hung up the phone or refused to transfer our call to a supervisor.  When asked to speak with the fraud department, they asked for the account number of the credit card, and transferred the call right back to the collections agency.

 

Now I know why Capital One has that commercial about vikings pilaging a suburban mall.  After several unsuccessful attempts to reach the appropriate individuals in the fraud department,  I felt like pillaging Capital One's corporate offices myself.  The truth is that Capital One is just as guilty as the person who stole her identity in that they granted this credit without asking for any identification.  This whole situation destroyed my mother's credit in the process.

 

The one thing I learned from all of this is that you can avoid identity fraud.  You need to write to all three credit companies(Equifax, Trans Union, Experian) and ask to add a "Consumer Statement" to your credit report.  This is a statement that tells any potential creditor, who is inquiring into your credit, that you must be notified by telephone before extending credit.  This is a safety net in the event that someone is using your identity.  Each time your credit is inquired this statement will appear on your credit report. 

At least this can avoid any potential future problems.  The next time someone asks you "What's in your wallet?", tell them it's none of their business.

Contact info for the three credit reporting agencies:

• Equifax: 800-685-1111; www.equifax.com
              
• Experian: 888-EXPERIAN (888-397-3742); www.experian.com
              
• Trans Union: 800-916-8800; www.transunion.com

Refinancing a Sub Prime Mortgage

From the Desk of:

Andrew Williams

President

Abacus Regional Mortgage

Many recent homebuyers have been misled into buying their homes using sub prime Option-Arm mortgages.  An Option Arm mortgage is the kind you see advertised on the internet with lower teaser monthly payments.  The buyer has the option of the lowest payment which is artificially low to start.  Ultimately, the monthly payment goes up dramatically at some point throughout the life of the loan, most likely after the 24th month.  Many mortgage brokers led unsuspecting home buyers to believe that they are unable to qualify for a conventional mortgage.  Some may not, but many were able to qualify for FHA  mortgages.  FHA stands for The Federal Housing Authority.  This agency grants buyers the ability to purchase a home with little money down and forgives some past credit problems.  The truth is that most mortgage brokers aren't able to do FHA mortgages due to regulations.  Instead of offering this type of mortgage, or referring them to someone who can, they talked the buyers into using sub prime mortgages.

The mortgages of choice for most were the Option Arms.  These rates start much lower with no required principal payment.  The buyers loved this option since they could have a manageable  payment to start.  These mortgages have a possibility of "negative amortization".  This is a phenomenon where the principal balance owed on the mortgage can actually increase over time resulting in a much higher amount owed.  Many buyers didn't see this as a problem as long as the value of their home grew faster than the increase in the mortgage balance.  Now we can see with a weaker hosuing market that these loans can be a problem for most Option Arm borrowers.  If the home prices go down over the next few years,  these people are in for a real problem.

We need to get as many people as we can to refinance into an FHA or a conventional mortgage within the  next 2 to 3 years before their mortgage rates adjust upward. Most of these loans contain a 2-3 year prepayment penalty made to deter the homeowner from refinancing out of these loans.  Almost all of these Option Arm and other sub prime mortgage rates change and adjust upward after the second year.  This can be a potential problem for the entire housing industry with potentially devastating financing repercussions.  Many of these homes will be foreclosed from the lender.  Current mortgage delinquencies are  already at twice the historic norm.  FHA has instituted and will be implementing a new emergency mortgage bail-out for homeowners with adjustable rate sub prime mortgages.  If the homeowner's mortgage has become late as a result of the higher payment adjustment,  FHA has said that they will refinance the current home.  The stipulations read that the homeowners may not have been late prior to this adjustment.  They will not rescue people who haven't shown the ability to maintain their mortgage current up to the point of rate adjustment.

For many unsuspecting misled home buyer this is a great opportunity for them to get out of their current situation, keep their house and obtain a much lower fixed interest rate.

FHA Saves the Day with Distress Refinances

FHA now allows distressed homeowners to refinance with current late payments on their credit report.  If someone has a full documentation ARM that adjusted recently and is now having trouble keeping up, an FHA refinance might be able to help.  The catch?  Late payments on  your mortgage must have only occurred since your loan adjusted.  Also, there are limits on the amount of the loan you can get depending on the county the property is located in:  Monroe County, PA is $200,160; Pike County, PA is $362,790; Carbon County, PA and Northampton County, PA are $305,666.  Current legislation in Washington proposes raising these loan limits dramatically, so these numbers could possibly change soon.

If you need more info on the FHA refi program, send me an email and I will get you in touch with an FHA-specializing lender.

The Creepy Crawly Debate

Gypsy moths (check this link for lots of info on history, life cycles, the State spraying program, etc).  Most people who live in a wooded area in the Northeastern United States knows how 'inconvenient' <intentional understatement for effect> this pest is.  The munching sounds, the poop, the effect on the trees...aarrgghh, make it stop!  I am probably one of the most squeemish of people when it comes to gross stuff and have declared publicly how 'skeeved out' I was when I found out what that brown stuff was on my car last summer (and I still haven't lived that statement down, let me tell you, people love to hear about your weaknesses :-)  ), so you may be surprised at what I have to say.

I attended the Monroe County Vector Control Gypsy Moth Meeting on August 8, 2007, to hear what I hoped to hear which is what the plan is to eradicate the gypsy moth which is eating all of our oak trees and making our outdoor living spaces unpleasant for part of the season.  The meeting was very poorly attended, considering the emotional responses one hears at the height of caterpillar season, with about 30 people sitting in the big auditorium at Pocono Mountain East High School.  Besides these few members of the public, the meeting was also attended by Tim Murasco from the Bureau of Forestry, Jacquelyn Hakim from Monroe County Vector Control, County Commissioners Nothstein and Asure, and State Representative Scavello.  The bottom line is that the Townships need to apply for the State Program through the County by October 1 and that residents who wish to contact their Township Supervisors to express their wishes in this regard are urged to to so.

Mr. Murasco was the first to speak, stating that 'the Poconos is one of the most defoliated areas in the county - ever!', and that we need to pray for a wet spring to help in any eradication effort...dry conditions are the gypsy moths' friend.  He explained that there are 29 counties in the state that may ask for help with spraying this year and that the State has increased the budget for such efforts to $3M, which could easily be spent in one county in a thorough eradication effort.

However, he also stated that the caterpillars are headed toward a 'natural' thinning out process due to a fungus that is affecting the colony.  Ms. Hakim from Vector Control agrees with this assessment, citing the cycle we saw from 1991-2005 which illustrated the natural ebb and flow of the size and scope of the caterpillar infestation.  She went so far as to say the 'prudent, scientific, unpopular but correct procedure is no spraying' <audible gasp>.  Did I mention that the people who attended the meeting were, for the most part, those who were hit extremely hard this year? I have to give this lady credit...to say this in front of that audience was very brave!

Why should we NOT spray?  1) Evidence of natural pathogens is present, and 2) One spray will not do the job properly and there is not enough money to spray twice.  Because of the severity of infestation and the size of the area needing treatment, we will spend the money to spray (one time) and STILL have a problem.  She feels it is a waste of resources to attempt to spray at all.

Of course, most of the people in the meeting were not happy to hear her assessment of the situation.  Representative Scavello was one who stood up to voice his concern and stated that he would be very disappointed if the County did not take advantage of the State's increase of this budget item because he was the one who convinced the legislature that it needed to be done.

I am writing today to take my position on the side of the scientists at the Bureau of Foresty and County Vector Control.  We need a long term solution to this problem, not a short term wasting of tax dollars just to make ourselves feel better.  Blasting the pests with lethal spray goes a long way emotionally, but is this really the solution for the long run?  As an organic gardener, I must side with the reasoning that eventually our forest will build up its own natural immunity, so to speak, to these pests by adapting the types of food available for them...the oaks that the caterpillars prefer will be replaced by species which aren't so palatable.  Natural predators of the gypsy moth, like certain types of flies, mice and wasps, will increase in numbers to meet the supply of food.  Complete eradication of the species would be nice (since it is not a native species) but I don't believe this is possible.  So, therefore, I must put my money on the idea that nature will balance itself out. But we need to allow it the time to do that.  This is not to say that individual property owners should not take steps to protect their investments, but as a forest management plan, I believe we need to listen to our scientists.

Do you agree or disagree?  Click on the comment button below and tell us why! 

Avoiding Foreclosure in the Poconos (and everywhere!)

I ran across a blog post from a fellow real estate agent blogger, Jay Thompson, which features an excellent real-life illustration of the power of the information I presented in an article back in January.  Both of these pieces point to the same advice about what to do if you get behind in your mortgage payments.  And with all the reports (still) about sub-prime lending and its effect on the number of foreclosures across the country, I feel it is important to keep this information out in front of everyone.  This is why I am re-posting the information today by providing the links above.  If you are one of many facing financial difficulties here in Monroe County, PA, or anywhere else, this information is timely and important.  So please help get the word out to people, send this to your friends and family members who you think might benefit from some sound advice.  As always, your comments are appreciated.