By There has been no shortage of things to talk about in real estate this year. From foreclosures to the home buyer tax credit, a lot has happened, which I’ve offered thoughts and commentary on. Here are the year’s top stories, with links back to the weekly Intero Insider.
Home Buyer Tax Credit: We started the year with a sizeable tax credit that served as a nice incentive to home buyers and helped to prop up sales. As expected, the tax credit ended with a lot of folks shouting “doom” for the housing business. And there was a lull indeed, but we’re not dead. Check out my perspectives on:
Life After the Home Buyer Tax Credit
Rock Bottom Interest Rates: One of the biggest stories of the year no doubt has been interest rates. Just when we thought they would start to rise in late spring/early summer, they slid and slid again, setting the stage for some of the best home-buying conditions buyers have seen in well over a decade. Take a look back at the silver lining in the dark cloud of 2010:
Out of the Ashes Rises the Phoenix…or at least, a Parakeet
Year of the Foreclosure: If there’s one word the news media would use to describe real estate in 2010, it would have to be foreclosure. Now, you can look at the situation of millions of folks losing their homes as dire (and it is – for them). Or you can look at it as an opportunity, which it has been for many buyers, investors and real estate agents. Check out my take on foreclosures:
Don’t Miss the Big Opportunity
It’s Carpe Diem for Investors
Foreclosure Gate: How could we not mention perhaps the biggest story of the year, Foreclosure Gate? This is when we all became familiar with the term “robo-signing” and watched as three major lenders ceased foreclosure proceedings while an investigation from state Attorneys General commenced. Read my early take on why the developments were worth paying attention to:
Foreclosure ‘Scandal’ a Big Deal
Foreclosure Gate’s Impact on Our Recovery
The Real ‘Value’ of a Home: One of the biggest stories this year has been in citing all the studies and research that attempts calculate the dollar amount of lost home value in 2010. I have a much different take on what “value” means for homeowners and shared it here:
Home ‘Value’ Still Misunderstood
Congress Eyes Mortgage-Interest Deduction: In its pursuit to improve the deficit, Congress started eyeing the mortgage-interest deduction again. A committee took a look and started the discussion of making cuts to the deduction, which is widely viewed as a great benefit of homeownership. Congress left it alone for now, but I expect to hear a bit more about this next year. I dove into the issue and discussed why this would be a bad move:
Cut the Mortgage-Interest Deduction Now? Say It Isn’t So
Finally, if you missed my 2011 outlook for housing, check it out here:
2011: Slow Growth Will End the Decline
It’s been a tough year all around and I’m proud to say that Intero Real Estate Services ended it on top. We’ve grown while others have shrunk, and we’ve continued to innovate and put efforts into working with only the top people in the business. I have no doubts that we’ll do even better in 2011!
Archive for December, 2010
The Intero Insider: Top Real Estate Stories of 2010
Housing Predictions – Americans vs. “Experts”
By 
In perusing the vast swath of RE articles on Alltop, I am always amused/perplexed/stupefied by the contradicting reports on housing predictions. Here’s two examples — which one do you side with?
“Experts Say Housing Recovery is Still Years Away”
versus
“58% of Americans Expect Housing Market to Recover After 2012″
Good heavens! Who’s right here? American consumers, or self-anointed “experts”????
Here’s what’s interesting: both articles quote the exact same survey data obtained by Harris Interactive.
Yet why the disparity? Easy — one writer is a glass half-empty person; the other is a glass half-full guy.
Ms. Glass Half-Empty (MSNBC article) pulls primarily the negative datapoints to support her dour headline. Dour, attention-getting, headline….Prime example: she writes, “Roughly 1 in 5 consumers said they expect it to be 2015 before there is a recovery in housing.” One in five?! One in five?! I guess what I have a hard time believing, is, does a minority opinion constitute the over-arching truth? Or does it just make a good headline?
And what about Mr. Glass Half-Full? Yes, he admits uncertainty in the market, but also points out “Fifty-eight percent believe recovery will happen after 2012.” I don’t know about you, but methinks 58% is a majority, last time I checked my math textbook anyway.
Who really knows what’s going to happen in the future, anyway, right? One thing for sure — much like the mortuary business (people will never stop dying), there will always be a need for places for people to live in (there’ll always be people “living.”)
The Intero Insider: A Homeowner’s Only Regret
I often speak with homeowners who’ve lived in their homes for 20, 30, 40 or even over 50 years and I always like to ask, “If you had the chance to go back in time and buy more houses, would you?”
Their answer – always immediate and with ironclad certainty – YES!
This to me speaks volumes about the enduring value of homeownership. It’s much more meaningful than the consumer sentiment surveys you see each month gauging consumer confidence in housing. If the nation’s veteran homeowners can still stand in their front lawns and unequivocally say they made the right decision and whose only remorse is not buying more property, then I’d say that’s the kind of consumer confidence other assets may only dream about.
Don’t be fooled by the sad stories of foreclosures or the owners who decided to walk away because they were underwater. These stories have nothing to do with the value we put on homeownership. These stories are often about people who were unlucky or got caught up in mortgages they couldn’t really afford, who lost their jobs or who were unprepared for a financial emergency.
Even through all of this, homeownership is still valued in this country. Do you think that homeowners who walk from their mortgages will never buy a house again? You’re dead wrong.
Do you think that marriages and babies and promotions will no longer lead to home purchases? You’re dead wrong. How do I know this? Because our veteran homeowners can look back through boom-and-bust cycles and still say with certainty that they made the right decision. Because even as the nightly news blasts stories about “plummeting” home values, our agents’ phones are ringing from customers eager to buy.
Housing is certainly an important market to our economy. But homes time and again prove that they are not simply commodities to be traded on Wall Street like stocks and bonds. They are not items on financial spreadsheets. They are homes – places where we create memories, live our lives, build our futures.
When we finally emerge from this lull and look back on the recovery years for answers, I have a feeling that more of us will say, “I wish I would’ve bought more houses before that market took off.” We won’t regret all the years spent building wealth in our homes.
Intero Real Estate Services appoints Kevin Garty to Vice President of Relocation and Corporate Services
By Top producer and award winning expert in the corporate relocation industry partners with Intero to offer a relocation platform
Real Estate and Relocation veteran Kevin Garty teams with Intero Real Estate Services to manage and expand the company’s strategic relationships with relocation companies. Mr. Garty will work directly with established corporations as well as emerging startup companies to assist in their relocation and real estate needs.
Over the course of his 25 year career involving real estate and relocation, Garty has earned a reputation for excellence. A native New Zealander, Garty began his career in the mid 1980’s by creating the very first relocation network in New Zealand and Australia as a direct response to the lack of specialized assistance available to relocating transferees to the region. After relocating to the Bay Area in 1992, Garty was called upon by Bob Moles to put his industry expertise to work by developing the relocation channel for Contempo Realty. After the company was sold, Garty went on to establish and build the relocation division for Cashin Company into one of the bay area’s most respected providers of relocation and real estate services.
“We are really excited to have Kevin on our team because he has impeccable credentials and vast knowledge on how real estate and relocation works and his ability to expand the Intero® platform to include relocation services worldwide will be a huge benefit for Intero,” said Bob Moles, Chairman of Intero Real Estate Services.
With a high commitment to service, Garty’s Relocation Departments have won numerous awards over the years, consistently being recognized for superior service and unparalleled expertise within the industry. Garty has been responsible for over 4,000 transferee home purchases and home sales during the course of his professional career.
Gino Blefari, President and CEO of Intero Real Estate Services said about Kevin, “Our success has been built around finding the right people to lead us, and Mr. Garty has the vision, experience, expertise and relationships that we need to be successful in the corporate relocation industry.”
In addition to having served on the broker advisory boards for many major U.S. relocation companies, Garty has been a speaker at ERC and BAPRM conferences and is frequently called on by Fortune 500 companies to advise them on various real estate and relocation issues.
“I am really honored to be joining the Intero family and to be introducing this innovative brand to the corporate relocation channel,” says Garty. “I am joining some of the finest real estate minds in the industry today, along with a team that has deep roots within the relocation industry. It is a thrill to team back up with individuals who have a thorough understanding of what it takes to achieve a successful transfer, and to be part of an organization that has a real commitment to developing solutions that will assist clients in overcoming many of the challenges facing the relocation industry today. Intero has an innovative platform and a worldwide brand and I am confident that my team and I will be able to deliver a unique and remarkable experience to all that we assist.”
Intero Insider: Home ‘Value’ Still Misunderstood
There are some things in life you just can’t put a dollar value on.
One of the biggest real estate news stories in 2010 has been the watchful eye over home values. Zillow last week said that U.S. homes are expected to lose more than $1.7 trillion in value this year – more than the estimated $1 trillion loss in 2009.
But what does that really mean? Value is more than price and price only really matters when you need to sell.
From a purely mathematical standpoint, reading a statement like the one above from Zillow’s estimates makes it sound as if housing is not only a bad investment, it’s a financial sinkhole. But people are still buying homes everyday. Why?
Well, because as I said already – value is about more than price and you can’t put a dollar value on everything. You can’t put a dollar value on the time spent in your home – the years of memories and change, watching your kids grow up, celebrating milestones around the dinner table. You can’t put a price tag on the sigh of relief you get from kicking up your feet at home after a long business trip away.
I do still believe that homes are a solid financial investment – but that’s beside the point here. The point is that it’s really much more difficult to gauge the value of homes than other goods.
It’s dangerous to make these kinds of sweeping statements about lost home value. If we’re talking about actual cash lost due to selling at a lower price, that’s one thing. But to gauge value based on current market conditions when not every owner is in the market to sell is a bit misleading. It oversimplifies with math a situation that has too many other factors.
For example, say we’re talking about an older couple that bought their home for $100,000 in 1985. By 2005, their home’s perceived value had reached $450,000. By 2010, that value had again changed to $325,000 based on current conditions. Did this couple lose money? No. Did they lose value? Well, you’d have to ask them but I’m sure the answer would be no.
As we near the time when everyone will be looking at the year in review, it’s important that we not lose sight of the real meaning of “value” in real estate. As homeowners, we can’t obsess about the reports that say our houses may be worth less this year. If you’re not looking to sell, then only you can dictate the true value of your home.
Intero Insider: Mortgage Interest Deduction Safe – For Now
As you may recall, a Congressional committee tasked with coming up with ways to fix the deficit recently proposed significant cuts to the mortgage-interest deduction in order to free up revenue that could help tamp down the deficit. (See my post on this here.)
The good news is that President Obama’s commission has rejected the proposal. But it’s likely not a dead issue.
Most home buyers and homeowners view the mortgage-interest deduction as a big incentive for owning a home. Each year, homeowners are able to deduct their mortgage interest from their income tax bill. It is the largest single subsidy for housing in the U.S., and is projected to reduce tax revenue by $131 billion in 2012.
Thankfully, the real estate industry took a stand to let the administration know that a move like this could have major consequences on an already sluggish market. Taking away a major incentive like the deduction likely would’ve dragged down demand and we’re still just too fragile for a move like that. The National Association of Realtors said these proposed changes would’ve pushed home prices down another 15 percent.
Some of the members of Congress who voted on the proposal seemed to indicate that further study would be happening so don’t be surprised if this issue comes up again next year. Our nation faces serious fiscal problems and $131 billion in lost tax revenue is a hard fact to ignore.
What can we do about this? As Realtors, we can let our state and national associations know where we stand on the issue. As homeowners, we can write our Congressmen and Congresswomen to let them know where we stand and how a move like this would impact our families’ financial situations. We can let them know about our perception of the deduction as a big incentive for owning versus renting – especially in our high-cost areas of California.
The tax wars have only just begun. The government will be examining ways to help taxpayers – many of whom are jobless or are dealing with decreased earnings – while also trying to fix its own massive budget woes. It’s not an easy situation. But let’s not forget the powerful force that housing is in the overall economic landscape. Let’s be sure to stay on top of this and let our representatives know how changes will impact our own bottom line.
The Intero Insider
A weekly e-newsletter with fresh market data and candid insights from Intero CEO Gino Blefari
