Tuesday, July 31, 2012

Dearth Of Homes For Sale Creating Sellers' Market, For A Change

Though many home shoppers who assume they are still in a buyer’s market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory: The supply of houses for sale is down significantly in most areas compared with a year ago. And that is having important side impacts — raising prices and homeowners’ equity stakes, and reducing total sales.

In major metropolitan markets nationwide, the stock of homes listed for purchase is down by sometimes extraordinary amounts — 50 percent or more below year-ago levels in several areas of California, according to industry studies (53 percent in San Diego). In Washington, D.C., and its nearby suburbs, listings are down by 28 percent, reports Redfin, an online realty brokerage. In Los Angeles, available inventory is 49 percent lower than it was last summer. In Seattle, listings are off by 41 percent. According to the National Association of Realtors, total houses listed for sale across the country in June were 24 percent lower than a year earlier. The dearth of listings is often more intense in the lower- to mid-price ranges, less so in the upper brackets.

Peggy James, an agent with Erick & Co. of Exit Choice Realty in Prince William County, Va., says she gets calls “all the time” from buyers asking, “Where are all the new listings? Are you agents bluffing” — holding back? But the reality is that “there just haven’t been many” listings in some high-demand price categories lately, she says.

In Orange, Carlos Herrera, broker-owner of Casa Blanca Realtors, says “it’s really strange right now. We have many buyers but few sellers,” forcing purchasers to bid up prices on what’s available.

Just south of San Francisco, Redfin agent Brad Le says inventory in Silicon Valley is down so drastically — and demand so strong — that the bidding wars are spinning off the charts. “We’re not just talking about 10 or 15” offers, he says, “but sometimes 40 and 50.” Some buyers are inserting escalation clauses into their contracts to keep pace with counter-bids, and waiving financing contingencies, inspections and even agreeing to increase their down payments to counter any differences between the accepted sale price and the appraised value. One modest, 1,700-square-foot house recently was listed at $879,000. It drew more than 50 competing offers and sold to an all-cash buyer for $1,050,000 in less than a month.

Silicon Valley is in its own special economic niche, but declining inventories are nationwide. In its latest survey of 146 large markets,Realtor.com found that 144 had lower supplies of listings last month than a year earlier. Online real estate and mortgage data firm Zillow reports that some of the steepest declines in inventory are in places that got hit the hardest during the bust, and where sizable percentages of owners still are underwater on their mortgages. In Phoenix and Miami, for example, 55 percent and 46 percent of owners respectively have negative equity.

Both cities have seen significant drops in inventory, and both are experiencing strong appreciation in home prices.What’s behind the widespread declines in listings? Analysts say negative equity plays a major role — it discourages people who might otherwise want to sell from doing so. They don’t want to take a big loss, especially in a slowly improving price environment. So they sit tight rather than list. Banks with large stocks of pre-foreclosure and foreclosed properties are doing the same, creating a so-called “shadow inventory” of houses estimated to total 1.5 million units.

Bottom line for anyone looking to list or purchase anytime soon: Though conditions vary by location and price segment, lower supplies of houses available for sale are changing market dynamics — putting sellers in stronger positions than they’ve been in years.

KENNETH HARNEY NATION’S HOUSING

OC Metro Minute - California's economy ranks 9th in the world

Monday, July 30, 2012

CENTURY 21 TV ads airing during Olympics

Franchisor's 'Smarter, Bolder, Faster' campaign featured during Super Bowl

Real estate franchisor Century 21 Real Estate LLC is taking its "Smarter, Bolder, Faster" TV ad campaign to the 2012 Summer Olympics.

The Realogy Corp. subsidiarysays the TV commercials -- part of a high-profile campaignlaunched last year -- will air more than 100 times during NBC Sports Network and MSNBC broadcasts. The Olympics, held in London, kicked off Friday and run through Sunday, Aug. 12.

Century 21 ran a 30-second "Smarter, Bolder, Faster" spot in February during the third quarter of Super Bowl XLVI. The ad featured real estate mogul Donald Trump, NFL Hall of Famer Deion Sanders, and U.S. Olympic speed skater Apolo Ohno.

"Earlier this year we showcased the capabilities of our real estate professionals on the largest single-day sports event in the U.S. with our first-ever Super Bowl commercial," said Bev Thorne, Century 21's chief marketing officer, in a statement. "Now our commercials will air throughout the next two weeks during what we expect will be the most viewed games in television history."

According to TV metrics tracking firm Nielsen, 40.7 million Americans tuned in during prime time to watch Friday's opening ceremonies, a record for the games, the Los Angeles Times reported. The total audience for the event is expected to exceed 200 million.


Century 21 "Smarter. Bolder. Faster." TV spot screen shot courtesy of Century 21.

Century 21 is also an official sponsor of U.S. Soccer, a deal that includes TV spots, field signage, print ads and co-branding.

Earlier this month, Century 21 received a Hermes Creative Award for its mobile gaming advertising campaign. In June, the company announced an Internet radio advertising agreement with Pandora.

Century 21 claims that more than 7,250 independently owned and operated brokerage offices are affiliated with the company in 73 countries and territories.

BY INMAN NEWS, MONDAY, JULY 30, 2012

Thursday, July 26, 2012

KCM Quick Tips

1. Build Your Listing Inventory
As the low hanging fruit are being gobbled up by buyers and investors, there is an appetite being cultivated for homes at every price point. You must diligently prospect for a greater share of the houses coming to market. If you have inventory, you will finish 2012 well and set yourself up for a spectacular 2013!

We recently posted a blog addressing the 4 factors that will guarantee your listing sells. Check it out here.

2. Approach Previous Expired Listings
Last month, we told you to concentrate on the listings that expired on June 30th. However, many other listings have expired, been withdrawn and released over the last 6 months. In many cases, the sellers' motivation for originally putting the house up for sale has not changed. They just couldn't navigate a very volatile housing market at that time.

Now that the market has settled and you have a better handle on the opportunities that exist, make sure you contact those previously expired listings and see if you can help them accomplish their goals.


3. Uptick Your Use of Social Media
If you haven't yet, create a presence on Facebook, at the very least. If you already have a presence, enhance it by completing your profile and following, liking, and linking with everyone you know. Post industry specific news articles, blogs, graphs and charts to establish your page as a valuable resource for great real estate information. Ignoring social media today is equivalent to ignoring the use of Google five years ago!

4. Build Your Databases
You must not repeat the mistakes of the past. Surveys still show that a large number (87%) of people are satisfied with their agent at the time of closing. Yet, only a small number (14%) actually use that agent for their next real estate transaction.

Many real estate professionals close a deal and quickly move on to the next transaction. The truly successful realize their business is one of relationships not transactions. Databases help you maintain and enhance those relationships. If you haven't yet developed a customer relationship management (CRM) system, START ONE TODAY!

5. Invest in Your Profession
The confusion in the current housing market is creating a need for great agents.
Today, you need to:
Know what is happening in real estate
Know why it is happening
Know how to effectively communicate it to clients The last point is most important. You must know the housing market well enough to explain it. As Albert Einstein said:

"If you can't explain it simply, you don't understand it well enough."

What are you doing to enhance your understanding?

Wednesday, July 18, 2012

San Diego Home Prices, Sales Up In June

Momentum from the spring homebuying season carried over to the summer in San Diego County as inventory levels remain lower than normal and distressed sales continue to drop, according to Tuesday's DataQuick report.

June home prices in San Diego County rose 0.1 percent to $335,500 from May and 1.7 percent from a year ago, says the La Jolla-based real estate tracker.

There were a total of 3,756 sales, up 0.2 percent from May and up 9.1 percent year-over-year. June's sales number is the highest it's been since June 2010, the final month shoppers could take advantage of the federal homebuyer's tax credit.

June's number of single-family homes resold on the San Diego-area market, which makes up the bulk of monthly deals, was 2,459, ticking down 1.2 percent from May. Still, last month's tally of single-family resales hovers close to the nearly-seven year high of 2,488 that was recorded in May's DataQuick report.

What's elevating sales and prices in San Diego County and throughout California? A number of things:

Mortgage rates continue to slide to new lows. According to Freddie Mac, the 30-year fixed has been below 4 percent for the past four months, while the 15-year fixed has been below 3 percent for 7 weeks. They're apparently attracting qualified buyers (those who have the income and good credit) out to the market.

Distressed sales keep falling. Short sales and foreclosures resold on the market comprised 42.2 percent of the resale segment in California. That's the lowest it's been since February 2008, when it was 41.4 percent, based on DataQuick figures. This share of the market is declining because more people are averting foreclosure. Foreclosures in San Diego County are at their lowest levels in more than five years. In May, 426 homes were foreclosed upon, down 51 percent from a year ago.

Inventory levels are lower than normal. In June, there were 6,184 active listings in San Diego County, the lowest level in at least three years, according to numbers from the San Diego Association of Realtors. (Note: The trade group has been tracking listing figures long before that, but it began splitting active and contingent listings in June 2009 to get a sense of the number of short sales in progress.) Using the data set that starts in June 2009, active listings in the county peaked at 13,123 in September 2010. We're now about 52 percent below that level.

DataQuick president John Walsh says June's overall numbers for California look encouraging, but holds a wait-and-see attitude.

"With inventory and foreclosure resales dwindling, more housing markets appear to be entering an early recovery phase," said Walsh in Tuesday's report. "But in some cases we consider their status to be fairly precarious. What happens next will hinge largely on the strength of the economy and the decisions lenders make regarding scores of distressed properties that continue to hang over the market."

Written by
Lily Leung

Tuesday, July 17, 2012

Homebuilder Confidence Experiences Largest One-month Gain In A Decade

Homebuilder confidence rose six points in July, its steepest one-month increase in over a decade, according to a new report from theNational Association of Home Builders.

NAHB released the Housing Market Index that it compiled in tandem with Wells Fargo ($34.01 -0.01%) on Tuesday. The report shows the Home Price Index reaching its highest point since March of 2007.

The key housing market index gained six points in July, increasing to 35. This is the largest one-month gain recorded by the index in nearly a decade, and brings the HMI to its highest point since March of 2007.

The index evaluates builders' perception of strength when it comes to single-family home sales in the United States.

The indices measuring current sales conditions and prospective homebuyer traffic rose six points to 37 and 29, respectively, on the index. In addition, the index measuring sales expectations for the next six months rose 11 points to a score of 44.

Any number over 50 suggests the majority of builders view conditions in a particular segment of the market as "good".

"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable."

Fitch Ratings views the report as highly optimistic when it comes to the fate of homebuilders.

The ratings agency believes single-family housing starts will improve by at least 12% while new home sales will rise 10.5%.

"Housing growth should be slightly more robust next year," Fitch said. "Single-family starts should expand 14%, while new home sales advance 12%."

By Kerri Ann Panchuk

Thursday, July 5, 2012

Introducing NikeFuel

Wednesday, July 4, 2012

Family To Get Medals Found At Thrift Store

As an explosion rocked the cruiser USS Astoria during the Battle of Savo Island in 1942, young Elgin Staples from Akron, Ohio, grabbed his inflatable life belt. Then another explosion hit, and the deck beneath him disappeared, sending him into the ocean.

With the help of his belt, he floated that night for four hours. An American destroyer passed by, pulled him out and took him back to the Astoria, disabled but still floating. The ship, however, began to capsize, and Staples found himself back in the water again.

The survivors were rescued and given fresh uniforms, but Staples kept that lifesaving belt.

When he returned home, he showed his mom the belt. What followed literally became a “Ripley’s Believe It Or Not” story. The belt was made at a Firestone plant in Akron, where his mother worked. She noticed a number on the belt that referred to a quality-control inspector at the plant. She was the very inspector who had checked that belt. The story attracted national news.

Move forward to 1965. Staples’ son, Elgin Jr., enlisted as a Marine. He was deployed to Vietnam, where he was killed in action on July 12, 1965, at age 18.

Father and son received Purple Hearts. Those awards, along with their other medals, were arranged into shadow boxes, one for Staples Sr. and one for Staples Jr.

Now move forward to 2011. Century 21 Realtors Linda Ring and Terri Davids were preparing for their booth at this year’s San Diego County Fair. They wanted something to represent all branches of the military, since they create their booth as a welcome home to the troops.

They were shopping at antique and thrift stores in Solana Beach when Davids noticed the two shadow boxes. Both boxes had an engraved nameplate, and they realized that the boxes belonged to a father and son. Feeling as though the boxes did not belong in a thrift store, but not knowing how they left the family’s possession, Ring and Davids bought them and decided they would find the family or give the boxes to a museum. After learning about Elgin Staples Sr. and his incredible tale, they were more determined to find the proper home for the boxes. And, indeed, that’s what will happen today.

Allen Staples will receive the boxes displaying the insignia worn and the service medals earned by his father and older brother.

After Staples Sr. died at age 86 in November 2009, Allen said he received nothing from his father’s estate, and had been unable to reach the executor of the will.

“I have been upset for the last couple of years,” said Allen of San Jose. “I haven’t gotten over it yet.”

The medals have been displayed for six months at Ring’s and Davids’ Chula Vista office and at the fair. The pair searched for the family and talked with fairgoers hoping that someone might know about the boxes. When Paul Curtis saw the medals at the fair on June 21, he knew that he had to help find the family. After a discussion with Ring, he promised to assist.

“That needed to go to some family member if they wanted it, and if they didn’t want it, then it needed to go to a military museum,” Curtis said. “There is a lot of significance to that.”

He said mementos like the boxes don’t belong in thrift stores. “They are not something that was simply purchased with money. They were earned.”

Curtis said it took him around 20 minutes to find contact information for Allen Staples and forwarded it to Ring within a day. “This is huge; It means a lot,” Allen said.

Though he says that he knew his father had a Purple Heart, Allen had no knowledge of the boxes before Ring’s phone call. Allen isn’t sure how the boxes left the family to begin with. He’s just happy to have them back.

Ring said that the Fourth of July will be about him and the shadow boxes. Ring plans to have bagpipes playing “Amazing Grace” and escorting Allen Staples, Curtis and Davids into the fair and to the Century 21 booth on the second row of the Exhibit Hall.

Staples plans to display the boxes in his home. With no family to pass them on to, he will eventually consider donating them to a museum.

He will be in the booth for most of the day today, but insists it’s not about him. “It’s all about my dad and Linda and Terri and Paul. They were the ones who were instrumental in all of this. ... I’m just lucky to have them and have something to remember my father by.”


By Colleen Peters

Tuesday, July 3, 2012

FHA Backs Down On Credit Restrictions

In a policy switch that could be important to thousands of applicants seeking home mortgages with low down payments, the Federal Housing Administration has rescinded tough new credit restrictions that had been scheduled to take effect today.

The policy change would have affected borrowers who have one or more collections or disputed-bill accounts on their national credit bureau files, where the aggregate amounts were $1,000 or greater. Some mortgage industry experts estimate that if the now-rescinded rules had gone into effect, as many as one in three FHA loan applicants would have had difficulty being approved.

Under the withdrawn plan, borrowers with collections or disputed unpaid bills would have been required to “resolve” them before their loan could be closed, either by paying them off in full or by arranging a schedule of repayments.

In effect, if you couldn’t resolve the outstanding credit issue, you might not be able to obtain FHA financing. The rescinded policy would have replaced more-lenient rules allowing loan officers to discuss the accounts with applicants, and determine whether they represented material risks that the borrower might fail to make the mortgage payments.

Disputed bills are commonplace in many consumers’ files, but may not indicate serious credit risk. Rather, they might simply be a disagreement between merchant and customer over price, quality of the product or the terms of the credit arrangement. Open collection accounts are also common but tend to be viewed more ominously by lenders since they often indicate nonpayment over an extended period.

Unpaid creditors frequently charge off unpaid accounts, then sell the files to collection agencies who pursue the customer and report nonpayments to the national credit bureaus — Equifax, Experian and TransUnion.

Critics of the policy complained that it tilted the scales too heavily in favor of creditors and disproportionately harmed FHA’s traditional core borrowers — low- to moderate-income families, first-time buyers and minority groups. Other critics argued that the policy would not help FHA weed out serious credit risks since private lenders already are doing so by imposing their own credit score and other restrictions on applicants, known as “overlays” in the mortgage industry.

Clem Ziroli Jr., president of First Mortgage Corp. in Ontario, noted in an interview that although FHA accepts FICO credit scores as low as 580 — FICO scores run from 300 to 850 with lower numbers portending higher risks of default — many large lenders require 640 scores or higher. Why? Because they are super-cautious in the post-bust marketplace and don’t want to be required by FHA to “buy back” a mortgage that had a marginal FICO score at application, then went to foreclosure.

As it is, FHA’s recent average scores are far higher than historical norms. According to an analysis by Ellie Mae, a company that tracks conventional and FHA loan originations, the average FICO score for an FHA-approved loan to purchase a house in May was 713. Though down slightly from March, when average FICOs for purchases hit 724, according to Ellie Mae, both scores suggest a strong trend toward financing applicants who have relatively fewer issues in their credit files.

This contrasts with the agency’s long-standing tradition of helping “low to moderate wage earners and the underserved” — often minorities — to buy homes, says Ziroli. During much of the last decade, FHA routinely financed borrowers with credit scores in the low to mid-600s.

Deputy Assistant Secretary Charles Coulter says the FHA’s ongoing interest in re-evaluating its credit policies — such as the rescinded collections and disputes rule — is “to find a balanced yet flexible approach to promote access to affordable credit while protecting the mortgage insurance fund.” FHA plans to issue a new rule “soon,” agency sources said, that addresses collection accounts and disputes separately rather than lumping them into a single standard.

Meanwhile, if you plan to apply for an FHA loan and you think you have collections or disputes on file, here’s the good news: You won’t be forced to pay off or resolve the accounts before closing, but you are likely to have your application referred for “manual” underwriting, where a loan officer takes a hard look at the facts and circumstances of your collections or disputed accounts.

This, in turn, will almost certainly slow down your approval. There are exceptions, according to the agency, such as when the disputed account is both less than $500 and more than 24 months old.

But beware lenders’ overlay practices. They may get you turned down even if FHA’s more-generous rules say you are acceptable.

Kenneth Harney Nation's Housing
Kenneth Harney is a columnist for The Washington Post Writers Group.

Monday, July 2, 2012

KCM Quick Tips

1. Realize real estate has changed from a retail to wholesale business.
Retail businesses, such as clothing stores or movie theaters, have their customers come to them. Real estate was like that for the first six months of this year. Buyers came to you excited about great prices and historically low interest rates.

Wholesale businesses create their demand by reaching out to potential customers to sell their inventory. Real estate is now a wholesale business. Demand in the second half will be determined by your ability to reach out to potential buyers and sellers that are ready, willing and able to move now.

As an example, there is a pent-up buying demand among echo boomers who, according to Harvard University, are about to enter the market soon. Don't wait for them to show up at your offices. Find a way to reach out to them and explain the opportunities available in real estate right now.

Put simply - YOU MUST PROSPECT EVERY DAY!

2. Prepare diligently for EVERY appointment.
Most agents prepare well for a listing appointment. They go in with a complete consultation manual ready to show the seller why they should sell now and at the suggested price. They make sure they have all the tools necessary to have a successful meeting.
What about the buyer consultation appointment?
Or the price-break appointment?
Or the negotiation of offer appointment? There are four critical appointments in today's market. Most agents prepare for one of them and 'wing' the other three. You must prepare as thoroughly for the last three as you do for the listing presentation. You must make the most of every opportunity presented from now until the end of the year.

3. Spend the first week of July working expireds.
As we mentioned last month, history has shown that the single day of the year that most listings expire is December 31st. The date that comes in second is June 30th. The number of expiring listings will be staggering. That means opportunity for someone. Hone your listing and pricing skills and approach every expired you can. The inventory of listings you accumulate in the first two weeks of July could catapult you to success for the rest of the year.

To help you build this inventory, download our e-book "Find the Gold in Expired Listings".

4. Gain knowledge and then get to work.
Two quotes from the late business guru, Peter Drucker:

"Knowledge has to be improved, challenged and increased constantly, or it vanishes."

You have to become better at your craft every day. You must continuously improve your skills. You must become an expert at showing your customers what is taking place in the current housing market. They can then make the right choices for themselves and their families.

"Plans are only good intentions unless they immediately degenerate into hard work."

It is not good enough to be a student of real estate. You must act on your knowledge. You must plan where you wish to be and then get busy making your way there. If you could have only one of all the attributes that successful people are known to have, you should chose the ability to work hard. It is the most important and will get you closer to success than any other attribute.

5. Remember that a picture is worth a thousand words.
Whether you are taking a listing, consulting a buyer, doing a price adjustment or presenting an offer-to-purchase, you must be able to effectively communicate your customers' options in the current real estate environment. The use of strong visuals dramatically enhances the chances that the consumer will truly understand the points you are making. Too many agents are satisfied complaining about the fact that their client just 'doesn't get it' even after they've 'told' them what is happening.

You must take the time to visually 'tell a story' on each point you are making. You must hone that story until it makes your point simple to understand. That is what differentiates talking at a person from truly educating them. You need to be great educators in this market.

Keeping Current Matters
July 2012