Posts Tagged ‘intero real estate’

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Intero Insider: Why Plunging Home Sales Won’t Kill Real Estate

By Gino Blefari | August 31st, 2010 0 Comments

The latest housing news is pretty grim: existing home sales fell 27.2 percent in July from the previous month to 3.3 million, the lowest in more than a decade. We’re definitely seeing the expected drop-off coming off the end of the home buyer tax credit.

Most of us saw this coming. The very point of the home buyer tax credit was to pump life into the market and entice buyers to move off the fence. Take it away and you’re merely peeling back the covers from the real situation, showing that many potential buyers are tepid, scared of losing their jobs, optimistic that prices will come down just a little more, or simply not able to get a loan.

Amid this news, the New York Times featured a story saying that housing is no longer considered a means to build wealth.

But that’s where I need to stop and think.

There’s no getting around the fact that the market is slow and expected to be slow through the end of the year. True.

And there’s no question that flipping houses is not the part-time moneymaking hobby it once was during boom years. Very true.

But to swear off real estate as a means to build wealth is a bit dramatic. It’s true that in most cases, a buyer cannot look at a house solely as a monetary investment. It’s simply not that – it’s more. It’s a roof over your head. It’s the place where your children grow from toddlers to young adults. It’s where you spend your days and nights living your life.

A home is shelter, but it’s also ownership. Last I checked, you can’t really put a price on the kind of pride that comes with homeownership. Ask anyone whether it’s a dream of theirs to own a home and you’ll likely hear a resounding “yes.”

Again, it’s the intangibles of real estate that will keep this market alive.

A home is not a casino slot machine. It’s not a mutual fund. But it is a relatively safe way to spend your monthly housing budget. In the long-term, homes will still return value to their owners – and while it may not be in the form of doubling your returns, it is a true asset, a thing that you own free and clear after the mortgage is paid.

At the end of the loan, it’s still yours, not the landlord’s or the bank’s. Yours.

So even amid a declining market while analysts and pundits decry real estate a non-wealth builder, a dead end, myself and 60 million+ other homeowners disagree. We decided to put our money into our homes and are proud of it. I don’t think that sentiment is going to change overnight.

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Intero Insider: What Lower Demand Means

By Gino Blefari | August 25th, 2010 0 Comments

The data on the street points to lower demand for homes and increased supply throughout the end of the year. This is a recipe for market slowdown, for sure. But the news means different things to different people and entities.

Here is my take:

Home buyers: The best news is first. Buyers have it made right now. Interest rates are now at all-time lows. Not historic or near historic, but all-time lows.

And of course the higher inventory and lower demand in many markets gives the buyer more to choose from and more negotiating power simply because there is less competition from other buyers.

Bottom line for home buyers is that this news is good – excellent, in fact.

Home sellers: Simple math and physics tell us that when one side of a scale is up, the other side is down. Sellers may be on the down side of the equation here, but there is an upside. Fortunately, for the seller, this simple math can never account for the intangibles like an elite neighborhood, amazing schools, or the emotion that often is real estate.

Every sale needs just one buyer – the right one. When this occurs, the seller gets what he or she needs and moves on.

Bottom line for home sellers is that it may be tough, but definitely not impossible. If your location is coveted or your home has a lot of other appeal, there’s no need to fret.

The housing industry: Slowdown for the second half of the year, but not a halt. Be prepared for longer deals and more hurdles. These may be frustrating times, but many successful entrepreneurs are made in times of economic hardship. Be patient, work hard and don’t be afraid to innovate. Now is not the time to retreat.

Bottom line for the industry is that these slow times will weed out the weakest professionals.

Renters: Fewer home buyers can mean more renters so look for much more competition when you’re searching for your next rental. Rents may climb in some markets.

Bottom line for renters is that it may not be the best time to look for a new place. If you are financially and psychologically ready to become a homeowner, you might want to check out your buying options instead.

The economy: A slow housing market is not the greatest news for the economy as a whole. But the underlying factors causing the slow housing market are actually of more concern to the economy right now – slow job growth, massive deficit, deflation risks.

Bottom line is that the housing market will continue to be a topic of discussion in Washington. Look for more programs or program ideas to help tip the scales to faster growth.

To conclude, you see there are winners and losers in the low-demand, high-supply scenario. It’s all in how you see it. Opportunities are there for everyone.

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Intero Insider: Good News for Employed AND Unemployed

By Gino Blefari | August 17th, 2010 0 Comments

In times of economic hardship, most news tends to focus on the bad stuff: unemployment, consumer spending, consumer confidence, slow economic growth. This may be why a recent economic story in The New York Times caught my eye: “For Those With Jobs, a Recession With Benefits.”

The headline says it all – the silver lining. It seems obvious, but for those lucky enough to still be employed, these are great times to be a consumer.

Just look at interest rates for mortgages. If you’re employed and looking to buy a house, you’re part of a group of borrowers who will lock in rates so low even buyers from a few months ago would cry. 4.375% percent (APR 4.579%) on a 30-year fixed!! That is something to brag about. Even an $8,000 home buyer tax credit cannot beat the savings achieved on these borrowing costs.

Further tipping the scales in favor of today’s employed are wages. According to the NYT article, “The typical jobless person has been out of work six months. The typical worker has received a raise.” Since the start of the recession in December 2007, real average hourly pay has risen nearly 5 percent.

This is obviously bad news for those who have been out of work for some time. But again, the bright side: Rising wages are good news for housing. And while the market may not see a huge pop from this right away, higher wages at least provide confidence for those buyers who are in the market today, and those sellers who are hoping for a match.

Remember: Every home sale needs just one qualified buyer. Your pool of buyers starts to increase with every job that is secured.

A lifeboat for unemployed homeowners

But even amid bad times for the jobless, there was some good news out of Washington last week. The Obama Administration is prepping $3 billion in financial assistance to aid homeowners in the states most affected by unemployment.

The assistance program will send $2 billion in aid to state Housing Finance Agencies for programs for borrowers who are struggling to make payments due to job loss. Another $1 billion in aid will come from the U.S. Department of Housing and Urban Development to provide up to 24 months of assistance to homeowners who are at risk of foreclosure.

So you see, it’s not all bad right now. Let’s hope it works!

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Intero Insider: Don’t Miss the Big Opportunity

By Gino Blefari | August 10th, 2010 0 Comments

In this type of market, it’s best to focus on what’s working, what’s favorable, what’s reality. And when preparedness meets opportunity you get success. Whether you’re a buyer, investor, seller or agent trying to make sales, you strive to find the opportunity for success.

Distressed home sales continue to represent this opportunity. Distressed homes – those homes that are in danger of going into foreclosure or are for sale because the homeowners defaulted on their mortgage – were 32 percent of home sales last month, compared with 31 percent in May, according to a recent report from the National Association of Realtors.

What’s happening here and why should we pay attention?

In a word: inventory. Distressed properties more and more are making up a huge chunk of the inventory in many markets around the world (not just here in the U.S.). But wait! Remember that great Warren Buffet quote about when to get interested in an investment? He said:

“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

At first thought, you’d think that something that already represents a third of the market for home sales is past the tipping point. But I don’t believe that. We’ve been doing very well at Intero by studying the market and moving swiftly to seize distressed opportunities. So should you.

Earlier this summer, I spoke about distresses properties at a prestigious real estate conference in Singapore. The distressed market is nothing to run from, folks. In fact, the true real estate lovers saw this coming long ago and stashed cash accordingly.

And sure, for the average consumer, buying a distressed property is going to be a mind-boggling experience (if it even happens in the first place). But all the more reason to study the process and figure out how to make it work if you’re really interested in pursuing this opportunity. When preparation meets opportunity you get success.

You just have to remember another quote from the great Warren Buffet:

“Risk comes from not knowing what you’re doing.”

Which takes us back to that studying process and being prepared.

Where can you learn about the market for distressed properties? We have knowledgeable agents who can help. Many are specializing in this field right now for this very reason. Even so, I’d advise you to do some reading on your own as well. Take the time to choose the right agent and be sure you’re armed financially.

Just because we’re in a “slow” housing market, doesn’t mean you can’t profit in the end.

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Intero Insider: Housing News a Mixed Bag

By Gino Blefari | August 3rd, 2010 0 Comments

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.

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Gen Y Housing Preferences

By Gino Blefari | July 27th, 2010 0 Comments

In reading up on Gen Y – loosely defined as those born between the late ‘70s and late ‘90s – something that struck me as significant was this notion that Gen Y and baby boomers view home buying as starkly different things. A baby boomer would say buying a home is an investment, whereas their younger counterpart would say it’s a lifestyle choice.

I came across an article that dove deeper into the reasoning behind why Gen Y delays home buying compared to boomers. Based on a panel discussion sponsored by the Urban Land Institute, the article mentions that most in Gen Y do not have the resources to buy a home in their 20s. They tend to take breaks from work to travel, which can cost them lost wages and earning potential at this point in their careers.

The article also looks at affordability:

“(T)he average Baby Boomer could afford a home with $48,000 annual income if they bought a home in the early 1980s whereas a Generation Y household would have to bring in $142,000 per year to afford a home today.”

Obviously, all of these things have an impact on the housing market as young, first-time buyers are essential to the move-up market.

What strikes me about this trend of Gen Y delaying home buying is that there’s not a bigger conversation going on. Is it really that Gen Y does not want to buy homes? Or is it that they can’t afford the homes that are available to them? Are they really looking for a different type of ownership than we’re used to?

I think it’s important to engage in this conversation. Statistics show that Gen Y, estimated at 70 million individuals, is even larger than the baby boomer generation. Their habits, preferences and economic situation will have a big impact on real estate.

The current slowdown we’re seeing in real estate is no doubt caused by economic forces – job loss, foreclosures, tightened credit. But in the recovery, there is this other aspect that’s not being discussed as much – this “lifestyle” choice that is a little fuzzier than what we’re used to.

The good news is that lifestyle is exactly what real estate agents are good at understanding. Who better can tell you the little things about a neighborhood or city that don’t get captured in an online listing or for-sale sign? I believe that the more we understand each other, the easier it will be to accommodate Gen Y’s lifestyle choices.

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Intero Real Estate Services, Inc. expands innovative franchise network in California and Nevada

By Teressa Francis | July 26th, 2010 0 Comments

Leading U.S. brokerage announces franchises in Discovery Bay, Brentwood, San Diego and Minden, NV

CUPERTINO, SILICON VALLEY, USA – July 26, 2010 — Intero Real Estate Services <http://interorealestate.com> , a leading U.S. real estate brokerage that has recently expanded its brand globally, as a franchisor, through Intero Franchise Services, Inc. and Intero International Franchise Services, LLC, announced its continued expansion with the conversion of a former Alain Pinel brokerage affiliate in Discovery Bay and Brentwood, CA to the Intero Real Estate brand, and the addition of new franchises in San Diego, CA, and Minden, NV.

More than forty agents will join Intero Discovery Bay and Intero Downtown Brentwood franchise. This office will complement an existing Intero franchise in Brentwood.

“We are pleased to welcome our new franchisees and agents today at a time when our competitors are retrenching,” said Intero Real Estate Services COO Tom Tognoli. “This expansion speaks to our commitment to innovate and thrive in an ever-changing business.”

LeeAnn Hogge, co-owner and manager of what will become the new Intero Discovery Bay and Downtown Brentwood offices, said: “We’re thrilled to become part of the Intero® family, and feel good knowing that we’ll have the technology and expertise needed to win in today’s market.”

Bryan Hogge, co-owner and manager of the future Intero Discovery Bay and Intero Downtown Brentwood offices, added: “We’ve worked hard to build our reputations in this market and the Intero® brand will help us grow and innovate upon that foundation.”

Intero Downtown Brentwood is the second Intero franchise to open in Brentwood, CA, joining the very first Intero franchise at 5541 Lone Tree Way, established in 2005 by owners Denise McGrew and Erin Gonzalez.

Intero also announces two new franchises in San Diego, CA and Minden, NV. Intero El Cajon, will be owned and managed by Sandy Miller, and Intero Minden Nevada, will be owned and managed by Teddy Carlson-Brown.

Discovery Bay/Downtown Brentwood

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Mortgage that Matters: COULD RATES ACTUALLY GO LOWER?

By Rick Soukoulis | July 21st, 2010 0 Comments

The past several months seem to prove that you shouldn’t always trust conventional wisdom. Most recently, conventional wisdom was that in March, the Federal Reserve would have finished buying the $1.25 trillion in mortgage backed securities they were authorized to purchase, and when this heavy buying activity ended, mortgage rates would shoot up in April, May and June.

It was simple economics. If the Fed was in there every day buying up mortgage securities, this heavy buying would drive MBS prices up and rates would go down.

This did work, and the low rates were precisely what the Administration hoped would happen to get the housing market back on its feet.

The 800 pound gorilla was the fear of what would happen when all this buying activity by the Fed ended.

Basic economics would seem to indicate that rates would have gone up and perhaps significantly.

Even worse was what would happen when the Fed started selling these securities. If they were to dump even a few billion a day, the constant selling would drive MBS prices down and mortgage rates up.

Almost everyone predicted this scenario, and many housing economists thought it would be devastating to the housing markets.

But in an economy with so many moving parts, things often turn out differently than expected.

Rates not only didn’t go up, they’ve actually gone down, and this has huge implications.

With rates dropping toward 4.5%, we are seeing a whole new wave of refinancing, and many of these loans being refinanced are in mortgage securities owned by the Fed! As a result, this $1.25 trillion in MBS the Fed owns is gradually being paid off on its own. And the more people re-finance, the more will be paid down.

The implications of this are huge. If the $1.25 trillion pays down through refinance activity to, say, $750 billion, that could open up the Fed to buying another $500 billion to get back to the $1.25 trillion number.

If you think about it, a new round of Fed buying, as they replenish their holdings, could drive rates to a level no one could have ever dreamed of.

As hard as it is to imagine rates being as low as 4.5%, a new round of Fed purchases could drive rates to 4.0% or even lower.

As Yogi Berra once said, “Who’d have ever thunk it?”

Indeed.

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Intero Insider: How’s the Market? Not So Fast

By Gino Blefari | July 20th, 2010 0 Comments

Lately, I’ve been noticing how poorly the housing market is covered by the media. And I don’t mean that the media is to blame for all our problems. What I mean is that real estate markets are varied, complex and much much smaller than you may realize.

Housing is more than a headline. When you listen to reports of national home prices increasing or demand slowing, it’s easy to get lost because they rarely go much deeper than that.

Throw in a mixture of reports – on the same day, even – and it gets all the more confusing. Case in point: last week CoreLogic reported home prices increased for the fourth straight month, while the IMF warned of a possible double-dip recession for housing. Confused?

Let’s not forget reality #1 of real estate: location is everything.

For instance, your national report may be screaming doom and gloom, but your neighbor’s house just sold for $50,000 above asking price. Or your nightly news report may say home prices are up, but meanwhile your neighbors are slashing prices. What’s going on here?

The housing market, like all markets depends on the balance between supply and demand. But in real estate, supply and demand can vary wildly not just by city and state – but by neighborhood and even street. That’s how delicate the market for real estate is and why it is so difficult to talk about at the macro level.

So there’s location to consider. But then there’s also individual circumstance. Sure, it may be a horrible time to sell your house when you read the numbers, but if you are relocating for a once-in-a-lifetime career opportunity, then it’s your time to sell.

Same for buyers. Sure, it may be the best time in the last 15 years to buy a house, but if you’re looking at a potential job loss or have no money for a downpayment, now is not a good time for you.

Think about that the next time you or someone asks, “How’s the market?”

The real question to ask is, “How’s the market in your neighborhood and under your circumstances?”

Real estate is not only local – it’s all relative.

Keep this in mind as we continue to slog through this recovery. Because the horrifying and confusing headlines will not stop anytime soon. Foreclosures are at massive levels, supply is climbing, and interest rates are at historic lows. The mixture of these news bits will make your head spin. Are things getting better? Worse?

The only people who can truly answer those questions are the buyers and sellers who are in your market right now, and the agents who know it inside out.

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Intero Foundation 7th Annual Golf Tournament

By Teressa Francis | July 20th, 2010 0 Comments

Are you ready to play?

The 7th Annual Intero Foundation Golf Tournament sponsored by Bank of America is next Thursday, July 29th from 12:30 p.m. until 6 p.m. at Cinnabar Hills Golf Club in San Jose.

We are still looking for golfers, so sign up today!

Click the registration card image below to view and print. Mail forms to Deitra Catalano c/o Intero Foundation Golf Tournament 10275 N. De Anza Blvd., Cupertino, CA 95014 or fax to 408.516.8133.

Besides golf, the day features a BBQ lunch, dinner and a raffle.

The Intero Foundation’s mission is “to create awareness in the community by demonstrating good corporate citizenship” and to support organizations that focus on assisting children, their education and their personal development.

It’s gonna be a great day, so see you there!

Thanks again Bank of America!

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