After years of hearing how home prices are plummeting and foreclosures are mounting, consumers want to feel hopeful about the housing market — but maybe they’re being too optimistic.
In a presentation to the National Association of Real Estate Editors in Austin, Texas, last week, Stan Humphries, Zillow.com’s chief economist, pointed to four myths he said consumers are latching on to as they try to make sense of recent housing statistics.
The four myths:
1.The housing recession is over. It’s not, Humphries said. He estimates the bottom in home prices won’t come until the third quarter, at least from a national perspective. Doug Duncan, chief economist at Fannie Mae and also a speaker at the conference, agreed with that estimation. Note: Realtytrac’s Rick Sharga disagrees…he is estimating that we are well over a year away from any sort of ‘bottoming’ in home values.
2.After markets hit bottom, prices will rebound to boom levels. Not going to happen, at least for a while, Humphries said. “Once we hit bottom, the bottom is going to be a long and flat affair across the markets,” he said. “What we’re going to see once we hit bottom is the second phase of the housing recession… that second phase is one of being flat.” Note: Excellent point that agents need to understand. Once home value depreciation finally levels off..we will experience years of flat or no home value appreciation. Realtors, STOP saying that homes are a great ‘investment’. Speaking in strictly financial terms, homes are NOT a great investment.
3.The worst of the foreclosure mess is behind us. More wishful thinking, according to Humphries. He estimates foreclosures will peak later this year, then remain elevated for a while. Rick Sharga, senior vice president of RealtyTrac, an online marketplace for foreclosure properties, said he doesn’t envision foreclosure activity stabilizing until late 2011.
4.The tax credits saved the housing market. With or without a tax credit, those who bought would have done so anyway, Humphries said. “The biggest impact [in home sales] we believe were low prices… low interest rates and the unsung factor here is the ramped up lending by the Federal Housing Administration.”
I want to acknowledge Realty Trac and Zillow for their contributions.
I have just finished passing all of the requirements to become a CDPE (Certified Distressed Property Expert).I am very excited about this, as it will allow me to make a real difference in the lives of so many homeowners.
When faced with a financial hardship, many families reach the point where they can no longer afford their mortgage payments and have fallen behind or are just a payment or two away from falling behind in their payments. This is a very scary place to be. While this situation is an economic one, it is even more an emotional one. We see responses from out there from out and out panic to people who feel completely helpless to those who pretend it isn’t happening. People in this situation are under incredible stress as they see their whole world crashing down around them. Most people just don’t know what to do. They’ve seen ads for help (usually requiring some sort of payment), they’ve heard nightmare stories about short sales and many have tried one of the loan modification programs available and have not qualified. This is not a process to undertake without aligning ones self with an expert.
Most agents want very much to help, but wanting to help and having the educational background to do so are a world apart. You need a CDPE, (an agent or broker who has the knowledge, the insider track, has intimate knowledge of the data required by the lenders and knows how to accelerate your file when time issues arise). You wouldn’t think of having a friend who loves numbers do your taxes or a non-surgeon perform heart surgery. You need a professional who understands the process and can walk you through it. You need a CDPE. A one-hour, no-obligation free consultation is yours for the asking.
Not all sellers will qualify. There is a qualification questionnaire that will help us determine, if we can be of help. Call us today. 949-682-5416. Time is not your friend, but we are.
5 reasons why electronic lockboxes make sense in today’s market:
1. An electronic lockbox system provides an essential part of the marketing strategy to gain feedback and generate showings into offers.
2. Secure controlled access management of property keys. Agents no longer have to worry about who has access to listing keys. Electronic lockboxes strictly limit access to other agents or approved visitors who have gotten a lockbox key/card from the local Association or Board of Realtors. The keys/cards require a code or PIN be entered by the owner in order to access the lockbox.
3. It’s no longer necessary to drive around town to real estate offices picking up and dropping off keys to properties. That time can be better invested gaining more “face time” with clients–or potential clients. With easy access to the keys, you don’t have to arrange time to pick up the keys, or wait for the listing agent to be available to let you into the property. Fewer showings will occur while waiting for the availability of the keys. Having the keys readily accessible at the property saves time for all involved parties.
4. Showing notifications and automated feedback for each property access. The great thing about electronic lockboxes is that they have the ability to record and hold data and every single access is recorded. Not only that, but some systems allow for notifications to be sent to notify the listing agent of an access to their lockbox. Add in the ability of some systems to automatically send an email asking for feedback, and you have a very powerful system working for you.
5. Detailed access reporting. In today’s market, sellers are becoming more intimately involved with the selling process of their home. In addition to having the ability to record entries, electronic lockbox systems also allow for detailed access reporting to clients. You can now give a client data showing how often their house is being shown.
Thanks to our friends at Ris Media for great information.
Ris Media had an interesting article that is an interesting perspective on Family reunions. Family reunions are taking on a new meaning in the real estate market. According to a recent survey, 37% of sales professionals surveyed noted an increase in home buyers looking to purchase homes to accommodate more than one generation of their family. In addition, many sales agents believe that economic conditions may cause greater demand for multi-generational homes in their market during the next year.
Financial drivers as the No. 1 reason why home buyers or sellers are moving into a house with other generations of their family (39%). Twenty-nine percent said that health care issues are the primary reason, and 6% cited a strong family bond as the main factor.
While saving money is certainly an incentive for buying a home that accommodates multiple generations, the benefits go beyond just financial reasons. With two or three generations living under one roof, families often experience more flexible schedules, quality time with one another and can better juggle childcare and eldercare.
It is important to determine how comfortable the family members are about sharing bathrooms, office space or common areas. These topics are incredibly important in finding the right kind of home to fit the family.
Helpful Hints:
-Sellers with “mother in-law suites” or additional spaces that could accommodate a family interested in a multi-generational living arrangement should highlight this aspect of the home. Whether it’s a garage apartment or refurbished basement, this separate space can help one home stand apart from the others on its block.
-Buyers must be clear about their exact needs. Some families may just want an extra bedroom or two for family members, while others require areas with a separate kitchen, entrance, handicap accessibility or even a larger garage for additional cars. Desired location may also be influenced by proximity to local hospitals, senior centers or other important activities to family members.
-Extended families purchasing a home together should consider signing a written contract outlining everything from finances to chores and childcare. Each family should assess their situation individually and find a plan that works best for them.
Buyers, rushing to beat the tax-credit deadline, may set off a flurry of April deals. One more reason prospective buyers and sellers may be tempted to move quickly: the looming expiration of valuable tax credits that have been dangled by Uncle Sam to spur sales. Homeowners who move can get up to $6,500, first-time buyers as much as $8,000, as long as they have a joint income of less than $245,000 (or $145,000 for singles). But there isn’t much time left to act because buyers must be under contract on the new home by April 30 and close by June 30 to qualify for the credit. Look for transactions to pick up as the deadline nears. When the credit for first-time buyers was originally set to expire last November, sales surged in the three months before the cutoff. Experts expect a similar pattern this final month before the tax breaks expire.
1. The upfront mortgage insurance premium (UFMIP) will increase to 2.25 % up from 1.75% and FHA will continue to allow the financing of the UFMIP.
2. Borrowers with a credit score below 580 will be required to have at least 10% down payment. Borrowers with credit scores over 580 will remain at 3.5%. FHA will seek legislative authority to increase the annual premium which is now capped at .55 percent. If FHA can increase the annual premium, it may be able to reduce the up-front premium.
3. Seller concessions will be reduced to 3% from 6%.
FHA will make the following lender enforcement changes:
1. FHA will implement credit watch terminations at lender underwriting.
2. A public reporting of a lender’s performance using a scorecard system will be implemented.
3. FHA will implement, using notices and comments, indemnification against lenders. Indemnification will be expanded beyond fraud and misrepresentation.
4. FHA will seek legislative authority to enforce indemnifications against direct endorsed (DE) lenders.
5. FHA will seek legislative authority to sanction lenders nationwide based on performance of local branch.
The FHA is an integral part in continued recovery of the real estate industry and the overall economy. The National Association of Realtors will continue to work with FHA, the current administration and the Congress to ensure the FHA can fulfill its mission while providing for the safety and soundness of the insurance fund. It will be important to balance risk management while creating homeownership opportunities across the US.
How is the market?? Are you a buyer, a seller, an investor or a renter? It is different for each of you.
As a buyer, you are probably wondering, if you should be buying now? Ask yourself the following question. Are the interest rates “true rates” or are they “incentive” rates? It is my opinion they are “incentive” rates to get buyers to purchase. Where are rates headed? There is only one way they are headed and that is higher. When will this happen? Probably the first quarter of 2010. Why will they head higher? There are a couple of reasons. One is the bond market and the other is the weak dollar. What does that mean for you, as a buyer. It means you should probably seriously consider buying at this time.
As a seller, how is the market? Today’s news is that home sales and home prices are rising. How can it be that home sales and home prices are rising when there are so many short-sales? That is exactly why they are rising. Buyers are perceiving short-sales as great values. This is generating multiple offers and the properties are selling for over the listed price as buyers clamor for a “deal.” This is setting new and higher price points, so sellers, knowing that the interest rates are going to rise and a certain percentage of your buyer audience will disappear, it is my opinion you should be realistic about your price and sell. After all, you can go out and find yourself one of those wonderful deals, as a buyer, before they are all gone.
As an investor, you are having a heyday. When have you seen properties in higher end markets cash flow? You just can’t spend your money fast enough. Good for you! Cash is king and, if you have cash……..invest and invest.
What about renters?? Normally in times when foreclosures increase, rental prices increase. As more people need to rent homes the law of supply and demand ususally creates higher rental prices. Well, that is not what I am seeing in the marketplace at this time. In fact, I am seeing a decrease in rents. Landlords, if you have a good tenant, keep that tenant. You may not be able to replace that tenant with a like-paying one. So, how is the market?? It is different for each of you, depending on how you classify yourself.
Sellers-the amount of buyer traffic right now through homes is the most I have seen in 23 years. The buyers are determining that now is the right time to buy. When you look at the combination of rock-bottom prices and historically low interest rates, the buyers are recognizing this opportunity is short-lived. Food for thought for both buyers and sellers, Do you think the interest rates we are now enjoying are true rates or incentive rates? They are incentive rates to encourage the purchase of homes. The prediction is Mortgage rates will rise in the first quarter of 2010, because of the weak dollar. It is the old saying “you know what you have, but you don’t know what you’ll get.” Keep your home on the market.
Barbara Amstadter
Named 2009 "Realtor of the Year", Barbara Amstadter is a name well recognized in the local community. She served as a co-founder of the "Committee of 4000", representing the owners of 4000 leasehold parcels in a legal fight for "leaseholder" rights. She helped negotiate the final monetary settlement, the largest in US history at the time. Continue reading...
Susi brings extensive backgrounds in escrow and new home sales to the 22 year successful partnership of Barbara and Susi. She is, also, a recipient of the 15 year "Legend" award (bestowed on only 3 agents out of 66,000 worldwide at the time). Susi and Barbara have been ranked in the top 1% of realtors internationally year in and year out. Continue Reading...
