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2010 market forecast: The long recovery continues

By Gino Blefari | November 24th, 2009 0 Comments

After three years of pain, the housing market appears to at last be on the mend.

The California Association of Realtors is projecting a median price increase of 3.3% in 2010. This would have looked anemic just a few years ago, but comes as welcome news to homeowners who have watched their finances – and, in many cases, their lives – turned upside down by collapsing values.

The National Association of Realtors predicts the number of home sales to increase by 13.6% percent in 2010 – fueled, in part, by a rosy forecast for interest rates, which the association sees remaining low through 2010.

At Intero, our view of the Northern California market is not much different. We expect to see continued vitality in the first-time homebuyer market, which accounts for nearly half of all volume. The expansion and extension of the homebuyer tax credit combined with an extremely favorable interest rate environment will see to that.

Vital signs improve in the move-up market

But the key to any housing recovery over my more than three decades in this business has been the “move-up market.” Until those who sell to all those first time buyers in turn move up, the market remains tepid. In 2009, we saw few signs of improvement here due to the huge number of bank owned properties. These properties are not owned by people who move up – they are owned by institutions purging bad assets. You see the problem.

While we do not see this changing dramatically in 2010, we do expect the move-up market (and, in time, the luxury market) to show signs of life for three reasons:

  1. The expansion of the home buyer tax credit beyond first-timers
  2. The middle and upper segments of the market offer prices that are still dramatically lower then their 2005 highs (as opposed to the entry-level market, where prices have already risen from their bottom and multiple-offer scenarios are now commonplace)
  3. The relative strength of the tech sector in Northern California will continue to increase as the economy recovers, fueling demand in the upper strata of the market

Are happy days here again?

Surely, things are looking better heading into 2010 than they have in a long time. While the twin specters of unemployment and foreclosure will continue to exact a toll, it will be less severe. We are moving to a normal market.

But here is my caveat: Normal is not what we experienced in the 2001-2005 bubble. Do not expect credit to become as easy to obtain as it was (and may some of the more “creative” loan products from those days rest in peace!) and do not expect home values to snowball at reality-defying rates.

Those days are gone, at least for now.

But if you want to find a place to live at a reasonable price, if you seek to sell into a market with a strengthening level of demand, and if you believe in the undeniable value of real estate as a long-term investment … well, 2010 may just be your year.

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Tax Credit

By Intero Real Estate | September 17th, 2009 0 Comments

National Association of Realtors® urging tax credit extension

The National Association of Realtors® is urging Congress to extend the homebuyer tax credit through next year and make it available to more homeowners. The credit is set to expire Nov. 30th.

More than 1.2 million new home buyers have taken advantage of the $8,000 first-time tax credit, NAR says, and it estimates that 350,000 of them would not have bought a home if the tax credit had not been in place. 

"We have all seen how the credit has been a spur to bring homebuyers in the housing market," said NAR President Charles McMillan.

McMillan said the credit needs to be available for more time "to sustain the progress that’s been made so we can continue to see our markets fully recover. Uncertainty about the future of the credit will dampen consumer demand."  

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Energy Efficiency

By Intero Real Estate | June 12th, 2009 0 Comments

Trade groups support ideas behind Green Resources for Energy Efficient Neighborhoods Act

Two industry trade groups are offering praise for the goals of legislation that would provide incentives for energy efficiency upgrades.

The legislation is sponsored by Rep. Ed Perlmutter, D-Colorado. Perlmutter says his legislation provides for incentives to lenders and financial institutions so they can offer lower interest loans and other benefits for consumers who build, buy or remodel their homes or businesses to improve their energy efficiency. The legislation is called the Green Resources for Energy Efficient Neighborhoods Act, or the GREEN Act.

The bill was heard in the House Financial Services Subcomittee on Housing and Community Opportunity this week.

National Association of Home Builders President Jerry Howard says: “The scope of the GREEN Act and the new programs that it creates is ambitious, but the intent is thoughtful and NAHB hopes that the resources will ultimately be available to develop the programs into effective tools to promote sustainable principals,” he said.

From the National Association of Realtors®, David Wluka, a member of NAR’s Global Climate Change Presidential Advisory Group, offered this: "We know that many of today’s consumers want homes and communities that are sensitive to the larger environment, and we are pleased that the GREEN Act would offer resources and incentives to homeowners to help them improve the energy efficiency of their homes."

The groups are critical, however, of “The American Clean Energy and Security Act” by Rep. Henry Waxman, D-California. The Energy and Commerce Committee already has approved this bill.

You can read more about Perlmutter’s bill here and about Waxman’s bill here.

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NAR CERTIFICATIONS

By Intero Real Estate | June 4th, 2009 0 Comments

Changes are made to Resort and Second-Home Property Specialist Certification

The National Association of Realtors has made changes to how members can obtain the Resort and Second-Home Property Specialist (RSPS) Certification.

The program was set up to help serve the second-home and resort real estate market. Applicants who want the certification need to complete NAR’s Resort and Second-Home Markets course online or in a classroom, plus two elective courses.

The changes announced recently no longer require that applicants complete the RLI Tax Deferred (1031) Exchange course. If you already have completed the course, it can be used toward elective credit.

“REALTORS® who earn their RSPS certification not only gain the education and training necessary to serve their resort and second-home clients better, but they join a network dedicated to providing resources and tools to help them in the process,” said Carol Kairis, managing director of NAR’s Resort Group.

Kairis says that NAR offers several benefits for RSPS certified agents, such as customizable marketing material and access to networking events at NAR’s annual Resort Symposium.

For more information, click here. 

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Business Building

By Intero Real Estate | May 31st, 2009 0 Comments

Realtor Emeritus sounds off on making it through tough times

Realtor Magazine has featured another Realtor® Emeritus, L. Harrell Pendleton, who gives his two-cents on surviving the business during tough economic times.

Pendleton, who worked in real estate for five decades, says that when times got tough, his office provided loans to buyers who couldn’t qualify for the mortgages they needed. “This was common in the 1970s,” he told the magazine. “Without us, a lot of people with small-town jobs would not have had the opportunity to own a house.”

For those struggling in the real estate business today, Pendleton said “it’s important to do as many different kinds of things as you can with your business.” Besides selling, Pendleton said he did development and construction, appraisals and helped out with auctions.

He says he often bought homes at low prices and held on to them until he could sell them to the right person.

“People are afraid of their own judgments, and they shouldn’t be,” Pendleton told the magazine. 

Click here to see the full story. 

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Social Media

By Intero Real Estate | May 31st, 2009 0 Comments

Author offers advice on social media sites

Kelle Sparta, author of The Consultative Real Estate Agent: Building Relationships that Create Loyal Clients, Get More Referrals and Increase Your Sales, shares some tips at Realtor Magazine on how to get your clients to give you a boast on social media sites.

Here are a few from her list:

  • When customers express their appreciation for your help, ask them to share that experience and then explain how they can give you good online rating and referrals.
  • If customers show an interest in giving you a referral, ask them to post their comments on Twitter or Facebook. 
  • Ask clients to post a good review on the major real estate practitioner review sites, such as Homethinking.com or realestateratingz.com. You can send the client an e-mail with links to the site or, if possible, even set up the account for the person so all he or she has to do is fill in the review.

You can find all of Kelle Sparta’s tips here.

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Business Building

By Intero Real Estate | April 23rd, 2009 0 Comments

NAR Immediate Past President offers ideas for building your business

Dick Gaylord, the 2009 Immediate Past President of the National Association of Realtors, offers seven tips for boosting business. You can hear them on a new video.

The video is worth watching, but here are few of the highlights:

  • Get out there, Gaylord urges. Consumers need to know that you are in business, actively representing clients, he says. “There are a lot of buyers and sellers out there but if your name isn’t front and center, you’re not going to get any business,” Gaylord said.
  • Foolproof financing. Talk with clients about their financing options and encourage them to get-approved, he urged. “In the current credit environment, it pays for realtors to help perspective homebuyers find a financing backstop. This is just in case there is a problem at closing,” Gaylord said.
  • Get referrals. The 2007 NAR Profile of Homebuyers and Sellers showed that 43 percent of buyers and 41 percent of sellers found their sales associate through a referral from a friend or relative, Gaylord says. The easiest way to build relationships with past clients, he says, is to stay in touch with them after closing.

You can watch the full video and hear all of seven tips here.

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Open Houses

By Intero Real Estate | April 10th, 2009 0 Comments

Levin offers ideas to make open houses more effective

Looking for ideas on how to make open houses more effective?

Rich Levin, a national real estate speaker and sales coach, provides some in this month’s issue of REALTOR Magazine.

One tip: Make sure you tell customers everything you need to say during the open house, rather than plan on calling them afterward.

“You’re much more likely to make a stronger impression face-to-face than during a phone call at a later time,” Levin writes. 

Of course, if you don’t have time to talk to everyone who walks through the house, you may want to call those people who may need additional information, Levin says.

Another rule: Lock the doors during an open house. Besides serving as a safety precaution, this ensures that you greet everyone who walks in the door. When you welcome visitors, Levin says, thank them for coming and hand them information about the property you are showing. Get their contact information and explain that more information is available somewhere else in the house, such as the dining room table.

Levin also suggests being selective about your open houses.

“Typically, open houses that garner the most traffic are newer listings, reasonably priced and easy to access from main roads,” he wrote.

For the complete list of Levin’s tips, click here. Levin runs Rich Levin’s Success Corps Inc. 

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Industry Advice

By Intero Real Estate | February 26th, 2009 0 Comments

REALTOR® Emeritus offers advice for making it through a market downturn

Geary Jones, a REALTOR® Emeritus with 50 years of experience in real estate, knows a thing or two about market downturns.

In 1966, the worst year for him, interest rates jumped from 4.75 percent to 7.5 percent within months and he made $3,000 for the whole year.

“It wasn’t easy. People had just stopped buying. I don’t know if that downturn was as severe as things are today, but it was hard for families,” Jones said in a interview with REALTOR® Magazine.

For his part, Jones said just kept working and talking to as many people as he could, and he encouraged his salespeople to be optimistic and prepared.

As for those in the real estate industry who are struggling today, he urges them not to complain or to be discouraged. And, he encourages them to keep searching for clients.

“Peaks and valleys are part of the real estate world. That’s easy to say, I realize,” Jones told the magazine. 

Read the full Q & A from Realtor® Magazine here.  

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Economic Rescue

By Intero Real Estate | December 11th, 2008 0 Comments

NAR presses Congress on housing stimulus package

The National Association of REALTORS® this week sent Congress a letter urging it to pass a housing stimulus package to help stabilize the housing market.

“As home values continue to decrease in many markets and job losses escalate, homeowners needing to refinance their mortgage or sell their home are left with few options and are sometimes forced to walk away from their mortgage responsibilities,” NAR President Charles McMillan said.

NAR says a federal mortgage interest buy-down program is needed. The program, NAR says, should come from the Treasury Department’s Troubled Asset Relief Program. McMillan says that the buy-down program would offer an incentive for people to buy homes and that would reduce the number of houses on the market. That would make home values more stable, ease foreclosure pressure and increase home sales activity, McMillan says.

NAR also has pushed the federal government to make sure that safe and affordable mortgages are available for homeowners. And, it has advocated that a $7,500 tax credit for first-time homebuyers be extended to all homebuyers. 

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