Archive for April, 2011

Intero Insider: Cash Rules the Market Right Now

By Gino Blefari | April 27th, 2011 1 Comment

Cash is king in real estate right now. In March, 35% of all existing home sales were from buyers who paid in all cash, according to a report out last week. That’s a new record.

After stumbling in February, existing home sales increased 3.7% in March from the month before (but were down 6.3% from March a year ago), according to data from the National Association of Realtors.

Perhaps even more interesting is that 22% of March sales were to investors – an increase from the previous month and year.

This news is a tad bittersweet. As I’ve noted before, there’s a lot of opportunity out there right now for investors. But, you’ve also got to figure that a portion of these sales to investors presumably will be coming back to market at some point. These homes – likely rehabs or flips – will add more inventory to the market, which could further pressure prices.

The National Association of Realtors’ Chief Economist Lawrence Yun is pretty optimistic about the state of housing right now. With the latest data, he points out that sales have risen in six of the last eight months. But, the national median price is still falling at $159,600 in March (down 5.9% from the same month last year). Distressed homes, which typically are sold at discounts, made up 40% of the market in March, up from 39 percent in February and 35 percent in March 2010.

These numbers are not horrible. They’re far from cartwheel-worthy, but also not bad. What worries me most about the housing market these days are actually the numbers and factors outside of home sales stats:

  • Rising gas prices
  • The national deficit (and prospect of further budget cuts)
  • Proposals to further restrict mortgage lending

These are all things that could trip up a full housing recovery – or continue to prolong it. So, am I optimistic about the state of housing and the state of “all-cash” deals? Well, I think we have an OK market right now at the national level. But I like to remind myself and others that real estate is local and as such, some markets are doing well while others aren’t.

The fact that there are so many cash deals happening right now tells me that investors still have confidence in real estate. And that’s a good thing.

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Gino Blefari Attends Trendsetters Spring Meeting 2011

By Teressa Francis | April 21st, 2011 0 Comments

Intero Real Estate Services CEO participates in Top CEO Group Strategy Meeting

Silicon Valley, CA (April 21, 2011) – Gino Blefari, President and CEO of Intero Real Estate Services recently attended a three-day meeting of the Trendsetters real estate industry CEO strategy group in Virginia Beach, VA. Trendsetters is a network of real estate company owners who share their best ideas and advice with each other, as well as financials and discussion of changes in the business.

Topics for discussion included generating leads/call-lead center, effective recruiting in this market, new core services rule update and restructuring the brokerage.

“The strategy group provides a wonderful opportunity to share ideas, brainstorm, and discuss trends with the heads of other brokerage firms, something I can’t do with the direct competitors in the market,” said Gino Blefari.

The group meets twice yearly with members taking turns hosting the meeting for a peer review of the host company. Members of the group include leaders from brokerage firms all around the U.S. such as: Merle Whitehead of Realty USA, Buffalo (NY); Richard Thurmond of William E. Wood & Associates, Virginia Beach (VA); Chappy Adams of Illustrated Properties Real Estate Inc., Palm Beach Gardens (FL); Lynn Fruth of The Danberry Co., Realtors, Toledo (OH); W. Neal Hanks, Jr. of Beverly-Hanks & Associates, REALTORS, Asheville (NC); Bob Parks of Bob Parks Realty, Nashville (TN); David Boehmig of Atlanta Fine Homes Sotheby’s International Realty, Atlanta (GA); Michael Golden and Thad Wong of @Properties, Chicago (IL); Eric Thompson of The Group, Inc., Fort Collins (CO) and Steve Murray of REAL Trends, Denver (CO) the group’s executive director.

“After three days, I walk away with creative business solutions, a stimulating community of peers, comradery and friendships, and business and life strategies,” concludes Blefari.

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2011 Mortgage Interest Rate Predictions by Rick Soukoulis, Western Bancorp CEO

By Teressa Francis | April 20th, 2011 0 Comments

This Intero Insider – Video Series brings you Rick Soukoulis, CEO of Western Bancorp’s insight and projections on 2011 mortgage rates, the effects of the Japan crisis on our market and the potential after effects of a possible U.S. Government shut down.

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Housing Recovery Confusion – The 3 Things We Know

By Gino Blefari | April 19th, 2011 0 Comments

A lot of news is happening in the world of mortgage finance and the housing economy. The government is trying to figure out how to fix and/or prevent another bubble and collapse in housing finance, while also trying to help boost the housing market – an impossible feat when you think about it. Kind of like running in two opposing directions at once.

Add to that the various market statistic reports showing number of foreclosures, home price movement and sales climate, the numerous commentaries on what works, what doesn’t and the future of housing, and you’ve got one big pile of
uncertainty, couched in a lot of opinion.

Even I get confused after reading several news outlets. Is the housing market recovering or not? Are home prices stabilizing or not? Will new lending requirements help or hurt? What is the real impact of Fannie Mae and Freddie Mac?

A recent Wall Street Journal article suggests price declines may be nearing their end (see “Are Home Price Declines Easing?“), while an article in the Atlantic suggests that home values have several years before recovering (see “How Much Farther Will Home Prices Fall?“). Another Atlantic article looks at whether a new 20% down payment requirement would effectively squash first-time buyers’ home-buying dreams due to the perceived longer period of time it would take to save (“Will 20% Down Require Waiting 14 Years to Buy a Home?“)

It’s all very interesting – and none of it wrong, or right. There still are many things we don’t know about this housing recovery. To counter all the uncertainty, here are three facts we do know that should guide further insight and working solutions:

1. A strong housing market is good for the economy. This is a fact and why we see so many talks, hearings, research papers and proposals coming out of Washington. Any time Congress considers making changes to the housing finance system and the problem of what to do with Fannie Mae and Freddie Mac, there’s going to be a ton of discussion and opposition because a strong, healthy housing market is important in the grand scheme of national finance.

2. Despite a five-year overall decline in home values, Americans are still confident in the investment value of home ownership. A recent Pew Research Center survey found that 81% of adults agree that buying a home is the best long-term investment a person can make. The survey was conducted March 15-29 of this year. You can read the whole thing at PewSocialTrends.org.

3. So far, the government isn’t helping. Nothing the administration has done to date has worked toward a long-term solution. The home buyer tax credits did nothing more than cause a short-lived frenzy and prolong the correction of house prices. We still have no solution to the Fannie Mae/Freddie Mac problem, and no good ideas being championed for helping home buyers get reasonable financing in the private market.

When I sit down to write this post each week, I do a lot of research – surfing through dozens of major real estate news stories to get data and facts on what’s happening in our housing markets. The conflicting headlines make my head spin. But, more importantly, they’ve made me realize how essential it is for real estate professionals to master the data and explain what’s happening to the individual buyer and seller.

People need to hear how it all sits in context with their own decisions. Now more than ever.

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Intero Real Estate Services Agent’s and Employees Contribute Back Through Their Own Intero Foundation

By Teressa Francis | April 14th, 2011 0 Comments

Realtor driven non-profit donates over $170,000 in 2010 to organizations that support children in need

Silicon Valley, California (April 14, 2011) – The Intero Foundation (www.interofoundation.org), a non-profit organization, founded by Intero Real Estate Services founders in 2002 to benefit children in need, announced that it has donated over $170,000 to 22 charities throughout the San Francisco Bay Area in 2010 as part of its mission to positively impact the growth and well being of children in our communities.

The Intero Foundation is funded, promoted and governed by Intero agents – each of whom are vested in the health of the communities in which they work and live. An executive committee, led by Intero President and CEO Gino Blefari, provides strategic guidance. All members of the Intero community – executives, staff and agents – donate their time to further the Foundation’s mission.

John Thompson, Intero’s Executive Vice President explains, “Agents donate a portion of their commission per transaction. As a company, this commitment makes a big statement. Therefore, when you drive by an Intero for sale sign or work with an Intero Realtor, feel good that at risk children in the community will be served and we thank each and every one of you for your support.”

“When Intero Real Estate Services was founded just nine years ago, its founders set out to create a company that was different. That difference would be based on values,” states Founder, President and CEO of Intero, Gino Blefari. “One of those values is Commitment. The Intero Foundation is our vehicle for expressing a meaningful and sustained commitment to our community.”

Intero Foundation President, Sandy Troia adds, “We have become a large organization, but not too large to remember that we are part of something still larger: a community to which we must give in order to receive.”

The Intero Foundation continues to impact the growth and well being of children and youth in the communities we serve. Empowered by Intero agents and employees, the Intero Foundation has given over $1.9 million in grants to nonprofit organizations that support children in need. In 2010 alone, over $170,000 was granted to organizations benefitting children in need.

Assistant League Los Gatos-Saratoga
Dream Power
One Step Closer
Small Steps
Community Solutions
Family Connections
Learning and Loving Education Center
Advocates for Children
Family Supportive Housing, Inc.
Just Read Centers
Stand Up For Kids
Montalvo Arts Center
Theatre Works Silicon Valley
Special Olympics Northern California
Bay Area Women’s Sports Initiative
Rape Trauma Services
Lincoln High Future Vision
Summer Search
Rotary International – The Rotary Foundation
Bill Wilson Center
My New Red Shoes
Breakthrough Silicon Valley

Intero and its agents have always believed in the importance of giving back to communities in which we serve, and 2010 was a perfect example of ‘paying it forward’.

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The Multi-Family Opportunity

By Gino Blefari | April 12th, 2011 1 Comment

A silver lining to today’s dismal housing markets lies right in Newton’s third law of motion. This law states that every action has an equal and opposite reaction, and that’s exactly what’s happening in a lot of real estate markets right now.

The pace of homeownership slows, and the pace of rentals speeds up. There’s Newton’s law at play. But it actually runs even deeper.

As single-family home sales on average continue at a slow pace, alas, some markets are seeing faster growth in multifamily sales. And according to a recent article in Smart Money magazine, these aren’t your run-of-the-mill investor purchases. These are families or individuals who decided the rock-bottom prices of investment real estate are just too hard to pass by.

This is obviously great news for local economies and real estate markets. But it’s also great news for homeownership in general. We’ve seen the value of ownership being picked at by critics and money gurus like Suze Orman over the last few years (see my post, “Why Aspiring Homeowners Will Ignore Money Gurus“). The growth in multifamily activity and interest is a clear sign that Americans still value the notion of being homeowners and of being entrepreneurs.

Here’s why the growth of multifamily makes a lot of sense:

  • Multifamily properties present an opportunity for owners to earn extra income – something the recent recession has reminded us can be key to making it through rough patches of unemployment or economic hardship.
  • Rental markets are on fire. People have to live somewhere and for most Americans, that will mean either renting or owning a home. This is a positive statistic that multifamily investors are paying attention to.

I’m not one to sit here and hand out investment advice or even broad real estate advice. I think it’s all very personal and the answers and direction vary with each situation. Multifamily investing comes with its own set of problems and risks – you have to be a landlord, prices may not rise as quickly as you’d like, the rental market could soften again.

But if you’re in the market for a new home or on the fence or even just starting to think about how you can take advantage of today’s real estate market, check out the multifamily opportunity in your city. You may find some great bargains that you hadn’t previously considered. Then, next time a recession rolls around, you may find yourself with a few more options and a few more income streams.

If you’re interested in learning more about multifamily opportunities near you, ask an Intero agent where to start.

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Short Sales Pressure Home Prices

By Teressa Francis | April 11th, 2011 0 Comments

Short Sales Pressure Home Prices by Diana Olick, CNBC Real Estate Reporter, published on April 7, 2011 on CNBC Realty Check blog stated home prices fell 6.7 percent in February year over year, according to a new report from CoreLogic. That numbers includes distressed sales, that is, sales of foreclosed properties or short sales, where the bank agrees to let the homeowner sell for less than the value of the mortgage. If you take those sales out, however, home prices were basically flat.

Distressed sales, though, still make up more than a third of all home sales, according to the National Association of Realtors, and that number is likely to rise at least in the near future. The banks have slowed the process of foreclosure, and that has reduced the number of bank owned properties hitting the market lately, but it’s a whole different story with short sales.

Robert Cruz, Vice President and Managing Officer of Intero Silver Creek was featured in the article and shares his insight on today’s short sales.

Cruz says, “In the first quarter of this year Intero Real Estate Service’s short sale closings were up at least 60 percent, thanks to the banks and servicers being far more aggressive in pursuing them; not only are they pursuing them, but they are paying for them”

Short sales used to be a long, tedious process with a very low success rate. “Short sales used to be a waste of time,” Cruz remembers. “Now it’s totally changed.”

Read more on this Realty Check blog at CNBC.com

Realty Check takes you from the housing boom to bust and beyond. Led by Diana Olick, the goal of this blog is to bring the real estate market, the rescue plans, the politics and the pontification home to you, with clear concise explanations of the wildly complicated issues in all facets of real estate today and tomorrow.

Diana Olick is an Emmy Award winning journalist, currently serving as CNBC’s real estate correspondent. She also contributes real estate expertise to The Today Show and NBC Nightly News with Brian Williams.

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Intero Insider: Does ‘underwater’ mean drowning?

By Gino Blefari | April 5th, 2011 0 Comments

The term “underwater” has become about as commonplace as “purchase agreement” in real estate lingo. We hear scary statistics like one in four homeowners in the U.S. is underwater with their mortgage. But how scared should we be?

Let’s look at the facts:

At this time last year, the number of underwater homeowners seemed to be declining. Recently, we got word that the trend is reversing. Fourth-quarter data from CoreLogic showed that about 23% of homeowners with a mortgage are underwater, near an all-time high. This equals $750 billion in negative equity.

Another 2.4 million homeowners have less than 5% equity in their homes, according to CoreLogic. If home prices drop again, these homeowners also could end up with negative equity. (Check out more details from the CoreLogic report here.)

Now let’s look at the big picture:

  • Negative equity holds a homeowner prisoner to his home. No one likes the feeling of owing more on an asset than it’s worth. However, contrary to what most people think, owners who’ve experienced a 25% or more decrease in value and who can afford to keep paying their mortgage might be better off staying and waiting for prices to stabilize.
  • Some underwater homeowners in this situation may be able to refinance into a lower interest rate through a government program.
  • Some – not all – of these homeowners may choose to default to get out from under this debt.
  • Most banks would rather do a loan modification or short sale than deal with the costs of a foreclosure.

What do I see happening as a result?

I think we’re going to see a lot more “work outs” and loan modifications from the banks this year – especially if home prices drop.

Sales will likely slow rather than gain momentum because again: Negative equity holds a homeowner prisoner to his home. If a significant portion of the market is staying put, then it will affect sales. But with all the inventory, this could have a positive impact on prices.

The upside:

We’re likely to see a new breed of homeowner who’s looking to put 20% down regardless of what the banks and regulators say. This homeowner has learned a lot from observing the market these past few years and is determined not to repeat these mistakes. This homeowner wants to stay in his home – not be imprisoned by it.

Market stability begins with the homeowner. As we regain a population of buyers that begin their ownership with more financial stability and more equity, we’ll see the benefits play out in the form of an all-around more stable housing market.

When you read past the headline, you see that “underwater” doesn’t necessarily mean drowning.

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