Bo Kociuba

Part 1 of 4

All around we are bombarded with the information about "doom and gloom" of our housing market and the financial fiasco of the banking and lending giants. The very first question which comes to my mind - why all of these "news" are suddenly showing up now and with such urgency attached to them? What happened in the meantime? How come we haven't heard anything about it in the previous months?

Being a Realtor I understand the "seasonal fluctuations" in the housing market. Summer months are usually most active and then slower period comes because of holiday season and winter months. And this cycle repeats itself every year. Nothing new...The law of supply and demand takes care of the market's self-balancing, hence, we have either Buyers or Sellers Market. And that also happens every few years. Real estate values go up, up but they cannot go up, up forever. Simply said, what goes up will have to go down. But it doesn't mean that it will stay there, does it?

From 2001 to 2005 property values rose up in unprecedented speed of almost 58%! That is a huge value gain comparing to the historical value of 4% annually. Then what has happened, what triggered this unbelievable gain? Are we really that surprised? Irresponsible lending, "lier loans" known as "no documents" loans where applicants lied on their applications about income, were not required to provide tax returns etc. Then these loans were packaged and re-packaged and sold for profit with help of the "cooking books accountants". Guess where the majority of these loans defaulted? Yes, you guessed it - California, Arizona, and Florida...all of most distressed markets!

What is the point I am trying to make, you ask? Well, it is not our economy at fault! It is reckless borrowing - both on government and individual levels -which are a drag on the economy! It is time to stop "golden parachute" and stop rewarding bad behavior and performance by people who got us into this unbelievable mess! Stock market didn't tank, our 401s are safe and the unemployment rate is very low. We will recover. This is the American way. More and more people are getting involved in the political process and more aware about giving blank checks to our politicians.

But there is a story emerging behind the headlines. "Amidst fears of financial freefall, the real estate market is emerging as a bright spot. Indicators are pointing to an end of the bust; in fact, real estate may be poised for a bounce"- writes Dave Jenks, VP of Research and Development for Keller Williams Realty.

Is Housing Headed for a Turnaround?
Home prices falling back into alignment with historical trends

Source: Keller Williams Realty

The long-term affordability trend of 4 percent appreciation has been recovered after a five-year period of unsustainable growth (2001 to 2005) followed by a three-year market correction (2006 to 2008).

In the part2 I will introduce the Oklahoma real estate market - if and how it is affected by the national news; statistics of Oklahoma City market and is a right time to invest in home ownership or real estate investment...

I would love to hear your comments and questions about this article and real estate in general.

Please send them to: Bo@Okla-OK.com

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This morning, as usual I was drinking my coffee and tried to read a newspaper - the disruption was coming from Josephine, my dog who was not happy at all that I was not paying full attention to her. See, Josey spent last four days in the kennels because I had to "get smarter" at the Keller Williams convention (Mega Camp).

I tried to get back to reality of life and realty with full force by reading the latest news and events in the paper. What caught my attention was a headline above the fold in The Oklahoman. It really sounded GREAT! My eyes glanced over the headline words "home-field advantage", wouldn't you think about the Sooners (football) that they have been rated higher or something like that? However, almost immediately I noticed that I am in the business section, so I started reading a bit closer. "Home-field advantage. Oklahoma ranks No.1 in home-value gains" reads the title on the front page of The Oklahoman. The Sooner State leads the nation in appreciation, first among the 50 states."

Oklahoma's real estate values rose by 4.9% last quarter!

Well, guys I DO NOT WANT to rub it in but this is great news! Not all of the markets are in the slumps. The media negativity and scare is misleading and eventually has to be corrected. That proverbial gloom and doom doesn't apply to the whole nation. I spoke with a lot of colleagues at the convention and they confirmed it. It is hard for the public to understand that they are manipulated. Because of it everyone is cautious. Sellers are not putting their houses on the market because of fear of selling for too low of a price. Buyers are trying to time the market and wait until it hits the bottom. It is a vicious circle... no one wants to loose.

About timing the market ... you cannot predict when it is going to hit the bottom because when you do it is already too late, meaning that the prices and the rates started to climb. We are in the buyers market. As the concept implies it is time to buy! Check my previous post about why you would want to invest in your new house now. Notice there what happens when the house price goes down but the interest rate goes up...very interesting.

Imagine that I am drawing a line with a pencil and asking you to guess when I am going to stop...you say: NOW and I keep going...then you say it again: NOW and I still keep going...do you get the picture? That is a pretty good example of timing the market. No one can predict the future. Nobody has the crystal ball. We can learn from the history and safely assume that market will be shifting from buyers to sellers market every few years; it is dictated by the rule of supply and demand. In this case, as all of us know, there also was another factor added: loans were given to people who were not qualified and didn't have any "stake" in the new house, meaning no down payment. Most of them knew that they were overextended and wouldn't be able to honor their loan obligation.

Selling and buying in today's market is not easy - even in Oklahoma. But consumers who understand the market will recognize the advantages. A good Realtor will also help them get educated and supply them with more local information so they can make their decisions with much more ease and confidence.

All of this comotion shall pass and hopefully very soon!

Read the article in its entirety: "Oklahoma is No.1 in housing game"

Good Thing You're in Oklahoma! It is true that Oklahoma is No.1 recesssion proof city (Source:Forbes magazine). Just look at the numbers which I put together to see yourself how stable the housing market is here. I researched Yukon and Mustang, OK only because these are "my markets". It is clear that stability is obvious.

In my previous article Become a home owner NOW! Don't wait for better rates! I talked about the changes in rates and house prices and how they affect the total monthly payments. There is no advantage in waiting for a better deal. With the rates going up the consumer is actually getting hurt by media speculations.

These are statistics for the last full quarters and "almost full" current quarter. I will post numbers for a full quarter once we get to end of the month.

	YUKON	MUSTANG
Report Period	10-01-2007 to 12-31-2007	10-01-2007 to 12-31-2007
Units Sold	109	176
Average List Price	$149,360	$166,588
Average Sale Price	$145,571	$163.780

Source: MLS Gateway

	YUKON	MUSTANG
Report Period	01-01-2008 to 03-31-2008	01-01-2008 to 03-31-2008
Units Sold	107	183
Average List Price	$153,141	$159,808
Average Sale Price	$146,928	$142,901

Source: MLS Gateway

	YUKON	MUSTANG
Report Period	04-01-2008 to 06-16-2008	04-01-2008 to 06-16-2008
Units Sold	106	186
Average List Price	$147,747	$156,561
Average Sale Price	$146,241	$153,687

Till next time.

Bo Kociuba, Realtor

You have a friend in Real Estate Business. I listen, work, research and DELIVER!

Visit my website: www.BestOklahomaHomes.com

Become a new home owner NOW! Don't wait any longer .... just read and decide for yourself. Lots of buyers or wannabe buyers are waiting on the sidelines for the rates to fall even more. Did they hit bottom yet? Should I wait? Or should I act? People are waiting .... scared, second guessing, afraid to make a mistake of throwing their money away or missing on BIG SAVINGS opportunity on forclosures, bargain houses, better rates etc.

What do you think about rates? Will they fall or will they rise? No one has that proverbial crystal ball to see what the future will bring - neither bankers nor speculators.

This is a fact: the mortgage rates are at the record low and have been for some time. Mass media provide us with grim perspective of real estate market on the daily basis. Urrggghhhh! All of this scare is measured with the same stick, so to speak, and we all know you cannot apply same criteria to the whole nation. Real estate is very local. Economic circumstances, house prices, cost of living etc differs greatly from region to region.

Here in Oklahoma we have a very strong economy and very stable housing market. Just recently Forbes magazine named Oklahoma City America's No.1 Recession Proof city with San Antonio right behind and many other cities. These are prevaling reasons for consumers to mobilize and invest in homeownership now without doubts.

When the market turns, today's bargains will be yesterday's missed opportunities. Any money saved on paying less for a house in a few months time will be offset by higher inerest rates making "playing the waiting game" a waste of time and very little fun.

The table below demonstrates how even as home prices may drop, monthly mortgage payments basically stay the same; due to increased interest rates:

Scenario1:

Prices decrease by 5% and interest rates increase by 0.5%

Scenario2:

Prices decrease by 10% and interest rates increase by 1.0%

Today	Scenario 1	Scenario 2
Home Price $218,900	Home Price: -5% $207,955	Home Price: -10% $197,010
Interest Rates 6.04%	Interest Rates: +0.5% 6.54%	Interest Rates: +1.0% 7.04%
Monthly Payment $1,054	Monthly Payment $1,056	Monthly Payment $1,053

Table: Kadlec, Dan. "Ignore the Headlines!" Time 25 February 2008

I think these two scenarios speak for themselves - you can wait for the possibility that the housing market might drop as much as ten % and interest rate will rise 1% and you have saved a grand total of $1.00 per month or $360.00 of the life of a 30 year loan..

Are you really willing to take this gamble when you could be ENJOYING YOUR NEW HOME NOW!?

Are you ready to become a new home owner? VISIT ME AT www.BestOklahomaHomes.com

It was an absolutely great evening with our friends yesterday!

Just the night before we were told to expect tornadoes, golf ball size hail, severe thunderstorms with destructive winds etc...you get the picture...Being not very fond of such weather, a thought was constantly crossing my mind: will my house survive? will my garden be bombarded to pieces? and so on...With my vivid imagination I saw my place with lots of broken tree limbs, plenty of good ol' Oklahoma mud, floods and me calling all of my friends to cancel "The Party".

All of the "wise" weather gurus were WRONG and thankfully nothing like this happened! The storm with it's "bag of goodies" just passed us by. What a relief! In the end we couldn't ask for a better weather. Perhaps it was a little too muggy but, oh well, this is just a little minor inconvienience.

Lots of friends from Keller Williams came and joined "The Party". We celebrated our biggest profit share month! Our place - Double "B" Estate - is located on the outskirts of Yukon in the pictorescque setting. Log cabin nestled in old pecan orchard and adjoined by pasture for horses. It is so beautiful, comfortable and relaxing that we feel like we vacation every day. Jokes, great conversation, roasted wieners and potatoes were served. Oh, and I shouldn't forget about a few "improved drinks".

Thank you all for your hard work! We enjoyed the time spent together. Let us have more of biggest profit share months - we need to repeat "The Party"....

Love you all,

Bo and Buster