Home Sales Up, Prices Down

Back in September, I wrote about a news story that said home prices had declined for the first time in 11 years. Today, there is another story out: Home sales are up, but prices are down.

The National Association of Realtors has announced that sales are up one half of one percent - the first rise in eight months. However, the median price of a home has dropped 3.5% from last year, a record decline. They also state there is still seven months worth of inventory for sale. (If you look back at the story from September, you'll see back then there was 7.5 months of inventory, which was a record backlog.)

So home sales are up by the tiniest amount, prices have dropped by a record amount, and some people are saying this means the market is stabilizing. Personally, I have to agree with what economist Joel Naroff said in the story: "The housing market is far from the bottom." The story makes no mention of the fact that, not only have housing prices continued their decline from September, but the decline is accelerating.

Once again, real estate investors really need to stick the basics to have success in this market, whether you are rehabbing or renting. Your money is made when you buy, so make sure you get a good deal.

Whitney Houston Faces Foreclosure

From CNN: Whitney Houston's New Jersey mansion is set to be sold at a sheriff's sale on January 4th because she is more than $1 million behind on the mortgage and still owes this year's property taxes.

Now that's an auction I'd like to be at!

DLCV Reverse Split Just Days Away

This press release from Dolce Ventures indicates their 304.44 for 1 reverse split should be completed on or about November 16. This is the arbitrage play I wrote about earlier. If you are making this play, I would start checking your brokerage account daily. Based on my experiences with Schwab, once the split happens, you'll probably see their ticker symbol, DLCV, in your account replaced by a number. About a week or so later, depending on your brokerage, you should see the new ticker symbol in your account. (I don't know what the new symbol will be, but the new company name will be Sino Gas International Holdings, Inc.) Again, if you own less than 15,222 shares, your shares should not be affected by the reverse split. You may want to call your brokerage's reorganization department to make sure they handle this correctly. It helps to have their SEC Schedule 14C filing in front of you when you call so you can refer the person you are talking to to the official document.

Credit Report Corrections

A couple of months ago, I requested our annual free copy of my wife's credit report from Equifax. There was nothing seriously wrong with it, but there were several old accounts that I wanted removed. I filled out the correction forms and sent them back. By law, Equifax has to respond within 30 days. A couple weeks after I sent in the corrections, I got a letter back from Equifax saying the three accounts they listed were verified to be correct and no changes were made to the credit report. The problem was, the three accounts they listed did not belong to my wife! In fact, they did not even show up on her credit report at all!

Someone obviously made a mistake. I decided not to do anything. First of all, dealing with credit agencies is a major pain in the rear. Practically everything has to be in writing and they most likely would want to talk to my wife instead of me, since it was her credit report I was talking about. Second, their letter said nothing in her credit report was changed. Given that, I figured we were pretty safe. I didn't want to open a can of worms over this and since the errors I was trying to correct in her report were very minor to begin with, I decided to just let this one go.

So yesterday I received another letter from Equifax, this time giving me the results of their investigations. They correctly identified the accounts I had requested corrections for and they did in fact remove four accounts from her report and two others they marked as closed. (One of the things I complained about was accounts that were closed were showing as open, but with a zero balance.) They also included a new copy of her credit report and all looks good. Those three accounts they said were hers in their previous letter were not listed. Although their response took longer than the 30 day limit set by law, I'm just happy they got everything sorted out.

Thoughts On HomeVestors

Sorry no posts for so long. Life has been pretty busy lately. We went to California Thursday and spent Friday at Disneyland. It was the first visit for my almost 3 year old daughter and she really enjoyed it. Got back into town on Saturday and spent most of Sunday in the hospital emergency room because my wife's back locked up and she can barely move. She's been home in bed all week and I've been taking care of her and my daughter. Needless to say, I'm pretty busy these days.

I thought it was somewhat ironic to have received a mailing from HomeVestors when we got back from California, given what I do. It was obviously a mass mailing and it was asking if I was interested in a CASH OFFER for my home. The letter says they pay most closing costs (I wonder what they don't pay) and they pay cash and can close quick. Basically, they do what I am doing. However, they are a franchise, which means whoever is running the business has to pay a franchise fee to the parent company and likely an ongoing fee which may be a percentage of their profits. This obviously means they have a lot of overhead. I expect the fee is quite large, given the large amount of advertising they do. I have to wonder if it pays off though. I mean, if they sent me a mailing, they are most likely just mailing to all houses in an area, which isn't very targeted. I would think you'd get much higher response rates if you sent mailings to people in foreclosure or somehow otherwise targeted your audience.

With the costly overhead of being a franchise and the not-so-savvy marketing I see, I can't help but think I can give people a better deal for their house than these guys can.

Shaun's Real Estate Adventures Honored

I am pleased to report that this blog was selected as one of The Top 35 Real Estate Blogs by BiggerPockets.com, a special interest media and publishing company focused on real estate investing. The list was posted at the end of August, so this might be old news to some, but I just found out about it :-) Thanks to BiggerPockets for the honor! Their site has a blog plus lots of other good stuff and I recommend taking the time to see what they've got to offer.