By This Intero Insider – Video Series brings you Dominic Nicoli, one of our top real estate agents at Intero Real Estate Services from the Los Altos office. He speaks candidly with Intero COO Tom Tognoli and shares his insight and projections on today’s real estate market from luxury real estate to foreclosures – where we have been, where we are now, and where we are headed.
Posts Tagged ‘home prices’
Short Sales Pressure Home Prices
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.
Intero Insider: Housing News a Mixed Bag
By The best way to sum up housing market news right now is: the data show things are improving, but remain at not-so-great levels. Sorry to break it to you this way, but at least there are some positives.
Let’s dig in:
- New home sales were up 23.6 percent in June, according to Census Bureau statistics. And while this was a great increase from May, the rate was 16.7 percent below the level in June 2009.
- Also, home prices rose in May, according to the latest S&P/Case-Shiller 10-city and 20-city home prices indexes. Prices in the 10-city index increased 1.2 percent and prices in the 20-city index increased 1.3 percent. Compared with a year earlier, the 10-city index rose 5.4 percent and the 20-city reading increased 4.6 percent.
- Existing home sales slowed 5.1 percent in June from May, according to figures reported by the National Association of Realtors. It was the second month of decline for existing sales, which many say was partly due to the expiration of the housing tax credit (contracts had to be in place by April 30 to qualify). But the June sales figures were up 9.8 percent from June 2009. NAR also said the inventories were up and prices were stable.
Now, the fun part: what does all this mean?
Well, first let’s not overlook the fact that there are indeed sales happening. So even if you’re of the “sky is falling” mind, you can’t deny that people are still buying and selling homes.
Second, we all pretty much knew that home sales would dip in the months after the tax credit expired. While the tax credit may not have created transactions out of thin air, it certainly put a fire under a great number of buyers to move quickly. Now the market doesn’t have those buyers who, under normal circumstances, may have bought in the summer instead of the spring.
Third, the fact that prices held steady and showed some increase is a good sign.
The reality here is that the housing market moves on. Life events will continue to drive transactions. Sure, times are tough for home sellers and those of us who work in this industry. But we at Intero actually see these times as a great opportunity to succeed. There are some great deals out there for today’s buyers and investors. Borrowing conditions are fantastic for those who qualify.
These are times when innovation really does stand out and make a difference.
The Intero Insider: All politics (and real estate) is local
Former Speaker of the House Tip O’Neill stated, famously, that “All politics is local.” The same could be said for real estate.
This is true for many reasons, but for my purposes today, I’m going to focus on just one of them.
Home values.
For my money, there’s nothing that compares to a local expert. Someone who knows the markets in which he or she works. Local agents know the neighborhoods in which they do business in a way that a big box company simply can’t. They know that home prices don’t vary simply from state to state, nor from city to city. They know that home prices are specific to neighborhood and that making sweeping generalizations about the real estate market in a given area might get you in the right ballpark, but they’ll rarely hit a home run.
I’ll give you an example.
Earlier this morning, while I was getting ready for the day ahead, I was watching a popular morning news program. On it, a nationally-recognized real estate figure was encouraging first-time homebuyers to use online tools like Zillow and Trulia to decide what a fair price for a home in a given area might be.
Now, I’m not going to knock Zillow and Trulia. Each of these tools is in business because it’s brought something new and innovative to the real estate table. But the fact remains that the information they make available for home values is very often wrong. Dead wrong. Sometimes, its values are dramatically below actual market price, sometimes they are far above.
These services simply cannot provide the perspective that (A) a human being and (B) someone who’s intimately familiar with an area can.
When you work with a real estate professional, work with someone who understands the subtle nuances of the neighborhoods in their market area. Work with someone who knows that homes on the side of the street with water views are going to cost more than those on the side of the street with no view (for the record, Zillow can’t tell the difference).
Work with someone who’s going to know which price constitutes a great deal for his or her clients.
At Intero, we pride ourselves on being this type of company. We take pride in being a hometown company whose agents live, work, and play in our market area. We take pride in knowing that our real estate professionals understand the market data that really matters, and we take pride in knowing that our agents know the tiny details that will make the biggest difference to you.
Intero Insider: Reality Check!
Each time a glimmer of positive news about the real estate market shows its face, economists, real estate professionals, and politicians alike begin to shout, “We’re on our way back up! Nothing but blue skies ahead!”
While I remain hopeful, I think assertions like this are foolhardy and irresponsible.
Anyone who lives in the State of California, or who’s considered moving here, knows that the real estate market for the past several years has been pretty grim. As quickly as California’s home values increased through 2005, they have since fallen considerably due to the economic downturn, and foreclosures have run rampant.
Recently, some improvements have been noted. In the last S&P/Case-Shiller home price index, for example, home prices in California were shown to have strong gains. In Los Angeles, prices rose 1.8% in January. There were gains in San Diego of 0.9% and in San Francisco, the gain was 0.6%.
This is terrific news, make no mistake, but I suggest that a more cautious view be taken.
Here’s why.
Historically, spring home sales (and the spring market doesn’t wait til March to begin, I assure you) are the strongest of any throughout the year. Weather improves, making it more pleasant to look at homes, and people want to be able to buy a new home, so that they can move at the end of the school year, or what-have-you.
This year, we also have the Homebuyer’s Tax Credit driving more buyers into the marketplace. Add to this the fact that mortgage rates are still at rock-bottom levels, which have been made possible, in large part due to the Federal Government’s sizable activity in mortgage-backed securities, and the market for buyers is very, very attractive.
Here’s where things get sticky.
The tax credit is set to expire in just a couple of weeks. The pressure to buy before it expires will be gone. Strike one. The Federal government is about to remove itself from the mortgage-backed securities game. Mortgage rates are going to rise. Strike two. There’s wide speculation that foreclosures are going to get worse before they get better (unfortunately). Strike three.
At Intero, we choose to stay level-headed. We choose to stay in the game that’s currently being played, not the one that may or may not come in the near future. We are hopeful that things will improve, but until they do, you need agents who are dealing with reality. You need agents who will tell you like it is. Agents who know the markets in which they work and live. Intero are those agents.
Intero Insider: It’s Not Yet Cured, But Real Estate’s Foundation Is Solidifying
Good news this week from mortgage giant Freddie Mac could be a positive sign for the real estate industry, and for the US Economy as a whole.
Let’s examine what they said.
In their Primary Mortgage Market Survey, Freddie Mac reports that rates for a 30-year fixed rate mortgage remain historically low (well over a full percentage point better than at this time last year). The news was much the same for both 15-year fixed-rate mortgages, as well as 1 and 5-year ARMs.
What does this mean, exactly?
Well, these low mortgage rates help to maintain affordability in the housing market, which is great news for buyers, sellers and Realtors alike. They can also, very likely, be credited to some degree with four consecutive months of rising home sales for both existing and new homes.
And with many showering accolades on The Federal Reserve Bank and their handling of mortgage rates, it doesn’t seem likely that they’ll be increasing much anytime soon.
Even still, it’s important for consumers to be vigilant with regard to choosing mortgage products and to weigh their options very, very carefully. There is far more to look at than just the annual percentage rate. Borrowers should ask themselves — or their lender — if it’s better for them to look at a lower rate, or to pay points. What will the implications be if (and when) they choose to refinance? When it comes to paying points, would it make more impact in their lives for them to take their liquid capital and invest in something else?
Bottom line: It’s critical borrowers examine their options closely and use a lender with whom they have trust and with whom they’re comfortable.
Other things for buyers to be aware of are that, nationally, home prices rose for the second month in a row. This is terrific news for the economy, but could signal that home prices might not decline much further. Also, any first-time homebuyers looking to take advantage of the Homebuyer Tax Credit need to remember that it only applies to homes purchased before December 1, 2009.
Point blank: if you’re in the market to buy a home, it would seem that now really is the time to do it.
The real estate markets have a long way to go before their foundations can, once again, be considered firm and strong, and the base for our nation’s economy. But we’re getting closer each and every day.
The Intero Insider
A weekly e-newsletter with fresh market data and candid insights from Intero CEO Gino Blefari
