Posts Tagged ‘National Association of Realtors’

The Luxury Insider: Do You Really Need a Realtor?

By Alain Pinel | May 2nd, 2012 0 Comments

Every so often, when I feel like a sponge for professional knowledge or when I want to justify the hefty dues I have to pay to NAR -the National Association of Realtors-, I read the “Economists’ Outlook” blog. The other day, one caught my eye. The title and the content were not particularly new or earthshaking but I still read the piece twice. I guess I liked it. You’ll know why when I unveil the title. Here it is: “Home Buyers Use of an Agent in Transaction Has Risen For Past Decade”.  Music to my ears.

As a Realtor, I like being liked. There is nothing like recognition for a job well done. Sure it is self serving but it’s nice to see that home sellers are more aware today than ever before of the value of trusting a Realtor with the sale or the purchase of a home.  You see, even a guy like me needs a pro. I have been around the block a few times, I bought and sold many homes for my own account and personal use, but when my money is concerned, I need an objective expert opinion and someone who can negotiate on my behalf. I need a Realtor.

Buying or selling a home is highly emotional. You don’t want to be emotional and confused when you sign a listing or a purchase contract. It’s your money that we are talking about. It is your home.  It’s where you and your family lived or will soon live. Buying or selling is also a very difficult task, judging by the number of attorneys who specialize in the discipline and make a good living at it.  In the high end, using a pro is not an option: there is too much at stake, too much to win or to lose.  Playing Russian roulette is not a game to play in a real estate transaction.

According to the NAR “2011 Profile of Home Buyers and Sellers”, a record 89% of recent buyers purchased their home through a real estate agent or broker. On one hand, I am pleased to learn that the percentage is moving up; on the other, I honestly wonder who on earth are the 11% of buyers who did not get the message!… Promise me you will never do that again!

In 2001, just a few years back, “only” 69% of the buyers bought through a Realtor.  I guess those who did not learned their lesson quickly because, as we mentioned above, the percentage has gone up ever since, with the strange exception of 2009 when it dropped a few notches to 77% after 81% the year before.  My take on this anomaly is that after a couple of lousy years when properties did not move and values went the other way, some home sellers blamed their agent and decided to go “For sale by owner.”  That lasted only as long as a New England winter (about 6 months…).

Actually, the NAR study suggests that only 4% of the 2011 buyers bought directly from the previous owners (It was 15% in 2001). The other 7% missing bought from a builder or a builder’s agent.  When you look at the trend over the 10 year stretch of time, jumping from 69% to a record of 89%, you’ve got to feel good if you are a Realtor.  At that tempo, if we are not careful, we may get well over 100% in another 10 years!…

It is particularly comforting to note that many crystal ball readers, years ago, were predicting that Realtors would phase out as more and more knowledge about the business, about the inventory of homes, about values, about financing, about contracts…was dispensed online for the Public to read, learn and use. Obviously it did not happen that way; quite the opposite in fact. At a time when buyers and sellers know as much as they do, the more they know, the more they know ….. what they don’t know. That’s why Realtors are more relevant and essential than ever. Thank you.

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Intero Insider: Demand Grows Like a Weed After a Spring Rainstorm

By Gino Blefari | April 25th, 2012 0 Comments

We’re well into the spring home-buying season and the latest numbers for March are out to help us gauge how the 2012 real estate market is faring. The verdict is that we’re settling into a stable pattern of growth as monthly existing home sales have trended above year-ago levels for nine consecutive months.

However, there’s another interesting thing that’s happening. While year-over-year sales volume is up, there was a drop in March from February. The reason? National Association of Realtors Chief Economist Lawrence Yun notes that inventory levels are low, creating a situation in which there aren’t enough homes for sale to satisfy demand from buyers.

Total existing home sales declined 2.6% to a seasonally adjusted annual rate of 4.48 million in March from February, but were 5.2% above the 4.26 million-unit pace in March 2011, according to NAR’s report. Meanwhile, housing inventory declined 1.3% in March to 2.37 million existing homes for sale. Listed inventory is 21.8% below a year ago.

There’s no exact answer to why inventory has dropped so much. But we can infer that the shrinking foreclosure rate is contributing to a lack of properties on the market, as well tepid sellers playing the waiting game. If you don’t have to sell right now and you’re in a slower market or traumatized from the declining state of the last few years, then you’re likely staying put and waiting out the market until there are clear signs of an upswing.

In addition, buying conditions are so stellar in many markets right now  - with extremely attractive interest rates and home prices – that demand is growing like a weed after a spring rain! NAR says that many of its members have reported a definite increase in “foot traffic” to see listings and open houses And we recently covered how some markets are back in bidding-war situations. So the signs are good, folks!

Another solid factor in the spring home-buying season this year is the 2.5% year-over-year increase in median sales price at $168,800. Additionally, distressed homes accounted for a smaller portion of sales in March (29%) than they did in February (34%) and in the same month a year ago (40%) – indicating that the distressed portion of the market is steadily shrinking.

The facts are in and it’s clear the real estate market is no longer a clear punching bag for economic ailments. We’re building momentum that appears to be built on a strong foundation – not just temporary home-buying tax credits and other federal initiatives. Spread the word!

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Intero Insider: What the Housing Affordability Index Really Says about the Market

By Gino Blefari | March 14th, 2012 0 Comments

Perhaps the single best side effect of a slow housing market is the positive impact on affordability. In the most recent affordability report from the National Association of Realtors last week we learned that housing affordability conditions in January reached the highest level since they began tracking it more than 30 years ago.

NAR’s index is based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the average family’s purchasing power. In January, the index was 206 (an index of 100 is defined as the point at which a median-income household has exactly enough income to qualify to purchase a median-priced home).

What does this mean? The obvious conclusion is that now is a great time to buy a home – if you can afford it and qualify for a mortgage, that is.

However, it’s also good to remember the context of this news and that everything’s relative (read: local) in real estate. I say that because many of our Bay Area markets have been seeing price increases, bidding wars and conditions that may make area buyers conclude that it’s really not so easy to be a buyer these days after all. Unless you’re lucky enough to be paying cash, it can still be extremely tough to get a loan that will cover the cost of an average home around here.

Affordability is an important figure, for sure. But I just want to point out that when taken at the national level, there’s not much of a story to tell. Just because housing has been deemed “most affordable” since 1970 doesn’t mean markets have hit bottom in terms of pricing. Some are actually enjoying highs above recent years. And others will continue to struggle for another year or two at least – as long as their foreclosure situations remain serious and job markets weak.

Affordability is important to the health of markets. But affordability itself really comes down to individual financial situations. Can you afford this home right now and going forward? These are the important questions buyers always need to ask – regardless of market conditions.

So if you’re a buyer or seller paying attention to news headlines like this one, remember to always think locally to find the right context. Yes, housing is the most affordable it’s been since the ’70s at the national level. But that means nothing to your city or neighborhood, which may be experiencing an amazing boom compared to years past – or still lagging behind due to other circumstances.

Affordability in real estate is always relative.

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Intero Insider: Stars Are Aligning for Housing Recovery

By Gino Blefari | February 29th, 2012 0 Comments

Pending home sales reached their highest level in January in nearly two years, according to NAR’s report this week, rounding out a handful of positive news for housing markets in the last week or two.

Pending sales trending upward is an interesting trend to watch considering the recent rise in cancelled contracts. I say this because pending sales at least gives us an indicator of buyer sentiment since many of the failed contracts seem to be due to things that are out of buyers’ control like not securing financing needed to purchase the home or the appraisal coming in below the contract price. With a rise in pending sales, we at least know that buyer intent is on the rise and more folks are trying to buy homes.

NAR’s pending home sales index was up 2% to 97 in January from 95 in December, and is 8% higher than January 2011. The January index is the highest since April 2010, when it reached 111.3 as buyers were in a mad dash to take advantage of the home buyer tax credit.

Other positive happenings for housing:

Improving job market: In January, unemployment hit its lowest level in three years, continuing a five-month streak of improvement. Without jobs, people don’t buy or move so this obviously is a good thing.

Home builders are gaining confidence: Home builder sentiment, tracked by the National Association of Home Builders and Wells Fargo, in February reached its highest level in nearly five years. This basically means that home builders are more confident that market conditions are improving to the point that new home sales will be positively impacted.

Housing stocks are up: The stock market is a far-from-perfect indicator, but it at least gives a reading of how investors are feeling. The nation’s home builder companies have seen share prices increase 60% since October, according to an analysis on Time’s website.

In the Bay Area, we have all the amazing economic trickledown activity from major tech company IPOs – recently game developer Zynga and Facebook’s pending IPO in May – to look forward to in housing. In fact, some of our local markets such as San Francisco have already seen the positive housing news that comes along with that.

Overall, 2012 is looking to be a great year for housing compared to the last five or six. The presidential election likely will also ward off any major controversial policies that could negatively impact the market. With all this in mind, I think we’re looking at our big comeback year. It will be particularly good for certain segments of our local markets and marginally improved at the national level. Not a boom by any means, but we’ll take it!

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Intero Insider: Save the Mortgage Interest Deduction!

By Gino Blefari | February 22nd, 2012 0 Comments

President Obama’s budget proposal last week attracted more than a few passionate voices from real estate who oppose elements that would limit itemized tax deductions, including the mortgage interest deduction that enables homeowners to deduct part of their mortgage interest from their overall tax bill.

In short, the budget would reduce the value of itemized deductions to 28% for married couples with incomes over $250,000 and individuals with income over $200,000. The current value of deductions could be as high as 33-35%, depending on the tax bracket the household is in. The reason it’s so vehemently opposed by real estate industry groups like the National Association of Realtors is that it’s a vital component to the housing recovery – and it feels like a penalty being put on responsible homeowners.

One of the perks of owning a home has been the ability to deduct a portion of the money paid in mortgage interest each year from an owner’s tax bill. This is part of the reason ownership makes more financial sense than renting for many families over the long-term.

Now feels like the worst possible timing for a change like this. Removing this benefit that is highly regarded by many would-be homeowners as a perk of owning versus renting likely would have a negative impact on the economic recovery.

Also, as NAR points out in a letter opposing the budget proposal, the nation’s homeowners already pay 80-90% of U.S. federal income taxes. Raising taxes on them now could seriously wear down demand, taking home values with it at a critical time for the overall health of the housing market.

Many might argue that the value of the change on the overall economic state of the nation far outweighs that of the individual homeowners who would be affected. But, the fact is that by eroding home values, the nation is affected in the end anyway. In addition, perception is a highly valuable (or dangerous) thing when it comes to real estate markets. Just the very perception that homeownership may have lost some of its luster in the often-cited tax benefits by new buyers has the potential to do damage.

And we can’t afford to lose any momentum in housing demand.

NAR is fighting against this proposed change, and so am I. Let’s save the mortgage interest tax deduction for the nation’s homeowners and incoming buyers. Now is not a good time for a change like this. Obama may not see it, but the deduction is vital to the stability of the nation’s housing markets.

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Intero Insider: Global house prices trend up

By Gino Blefari | November 3rd, 2010 1 Comment

Real estate is one of the most local businesses around, but it’s interesting to take a look outside at the global market and see what’s happening. What are sales and price trends like in the world’s other top economies?

A recent round-up from The Economist shows that prices are on the rise in most markets across the globe. Only four of the 20 markets tracked by the publisher saw declines in the third quarter from a year ago. And only Ireland’s market worsened.

What does this mean for us?

Well, America’s FHFA index, which excludes houses that are financed with large mortgages, was also down. But The Economist notes that the Case-Shiller national and 10-city indices rose modestly.

Our real estate market in the U.S. is certainly not worsening. And compared to the rest of the world, we’re not doing that badly either.

According to the National Association of Realtors, over $40 billion in U.S. real estate was sold to foreign buyers last year. When you think about that, it suddenly becomes really interesting to see how foreign markets are performing and how various markets can affect purchase decisions for intercontinental buyers.

Global real estate is something I’ve particularly been interested in as I see a wealth of opportunity. Last summer, Intero Real Estate’s Chairman Robert Moles and I had the pleasure of speaking at two prestigious global real estate seminars in Singapore and Hong Kong to talk about this opportunity and share our insights as a company that’s been growing and succeeding through extraordinarily difficult times.

To make sure Intero is ahead of the curve, we just announced a deal in which Intero Real Estate will syndicate all property listings to the iProperty.com network of websites. This means that all listings will now get exposure to buyers across Singapore, Malaysia and Hong Kong.

Global real estate is an important indicator to follow as we look at the state of U.S. housing. Take a look outside the U.S. and you may find our market looks a little different. And if you’re really into seeing global price trends and how various nations compare to others, check out The Economist’s Interactive Global House Price Trends tool.

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Intero Insider: Don’t Miss the Big Opportunity

By Gino Blefari | August 10th, 2010 1 Comment

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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