Housing is going to lead the recovery. Not so fast, some experts say

Provided By: NBC NEWS.COM

Housing is going to propel the economic recovery, or so many experts have said. Some of them are warning, however, that the enthusiasm should be curbed despite all the upbeat data recently.

Robert Shiller, Karl Case and David Blitzer -- leading experts in the housing market -- believe several headwinds will keep a lid on housing gains, such as a low level of new home starts, an unexpectedly slow migration of so-called shadow inventory onto the market, and difficulty for buyers to secure financing.

"You've got a lot of breathless commentary in the media," Yale University economist Shiller said. He later added, "All this talk that we're in this great recovery—we probably are in the short run, the longer run doesn't look so terrific to me."

Those who keep close track of the ins and outs of the housing market know the names of Case and Shiller for the monthly home price index they release along with Standard & Poor's. Their most recent report showed a 9.3 percent price gain.

Blitzer is managing director of S&P's Index Committee and helps analyze the data as it comes through.

They spoke this week at a roundtable discussion with select media regarding their views of the housing market. Many Wall Street economists have cited the industry as the linchpin for economic recovery expectations.

Their reason? Indicators such as existing home sales, which have hit a three-year high and are up 9.7 percent over the past year.

And on Thursday, the Commerce Department showed sales of new homes rose in April to the second highest level since the summer of 2008 while the median price for a new home hit a record high. New home sales rose to a seasonally adjusted annual rate of 454,000 in April, up 2.3 percent from March and just below January's 458,000. Both January and April had the fastest sales rates since July 2008.

The median price of a home sold in April was $271,600, the highest level on government records going back to 1993. The April price was 8.3 percent higher than in March and 13.1 percent higher than a year ago, the figures showed.

Thousands of borrowers to get mortgage payments reduced

Provided By:money CNN

Starting this week, hundreds of thousands of struggling borrowers could be in for a pleasant surprise: a quick and easy way to get their mortgage payments back on track -- and save considerable money.

Through a new effort called the Streamlined Modification Initiative, borrowers withmortgages backed by Fannie Mae and Freddie Mac who are at least 90 days behind on payments will start receiving offers from lenders to lower their mortgage payments.

The Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, won't say how many delinquent homeowners will receive the modifications, but the Mortgage Bankers Association reported in May that about 1.1 million borrowers are behind on their loans by three payments or more. Not all of those mortgage holders have Fannie or Freddie loans, however.

 

Related: How smart are you about mortgages?

FHFA claims to have helped 2.7 million borrowers keep their homes through its other foreclosure prevention efforts, such as the Home Affordable Modification Program which was launched in March, 2009.

Unlike those previous efforts, however, the Streamlined Modification Initiative won't require borrowers to file any financial paperwork. Instead, they just need to make the new payments for a trial period of three months and then the modification becomes permanent.

 

Home recovery spurs renovation boom

FHFA said the extensive paperwork and procedures that other foreclosure prevention initiatives require has been a major obstacle in getting people the help they need. Paperwork gets lost, borrowers are asked to provide documents over and over again, and evaluating a borrower's eligibility can be time consuming.

"This is a no-brainer and should have been done years ago," said David Berenbaum, who coordinates fair housing and fair lending compliance initiatives for the National Community Reinvestment Coalition, a non-profit focused on fighting foreclosures.

Related: 5 best markets to buy a home

Lenders will lower a borrower's monthly payments by either extending the term of the loan -- usually from 30 to 40 years -- and reducing the interest rate. The new program falls short of reducing the principal on the loan, a move FHFA acting director Edward DeMarco hasconsistently blocked.

Nevertheless, the changes could mean big savings for anyone with a high-rate loan who was unable to refinance to the historically low rates of the past couple of years.

Modifying a 30-year, $200,000 loan with a 5.5% rate to a 40-year term with a 4% rate will reduce the monthly payment to $835 from $1,135 -- a $300 difference.

Related: Bad at math? You're more likely to lose your home

The loans must be at least 12 months old, borrowers can't be more than 24 months behind on payments and their principal balances must be 80% or more of the value of their homes. The new program is scheduled to last through December 2015. 

 

 

 

How to Shift Your Business to Listings

Provided By blog.kw.com

The past five years have been all about the buyer. In response to that demand, both new and veteran agents made the most of the moment, setting up thriving buyer teams as well as processes and systems.

Today agents face a new opportunity: another overnight shift; this time in favor of sellers. For agents like Craig Reger and Josh Anderson moving from a busy buyer-based business to capitalize on the hot seller market meant letting go, restructuring their team and adapting to new market conditions.

Lesson 1: If you start with buyers, the first step toward successfully launching into listings is to hire talent to run the show for you.

In the early days of his business, Reger, who is an associate with the Sunset Corridor (Ore.) market center, faced an all-too-common challenge: the business had gotten too big for one person. He was spending six to eight hours on the road with buyers each day and then returning to the office to handle paperwork and prospecting. “I love when my buyers find the property they want, but I knew there was a better way to spend my time than showing 19, 20, even 50 homes day in a day out.”

When he announced that he would be hiring a showing assistant, his administrative assistant willingly stepped up. Over the next year, the business exploded and the duo went from servicing 25 buyers to an average of 50 to 60 buyers. Two years later, Reger promoted his showing assistant to lead buyer agent, which immediately opened him up to  launch the seller side of his real estate business.

Lesson 2: Get comfortable prospecting, get creative with your marketing and most of all, work your database.

Anderson – an associate with the Nashville/Green Hills (Tenn.) market center – hired his first buyer agent in February 2011 (after an AHA moment at Mega Camp in Austin, Texas); to help him maintain the 100 buyer transactions he was averaging each year. He later rounded out the team with a showing assistant so that he could focus on his listing strategy: work the database, get on the phone and leverage successful marketing.

“We communicated with our database in a consistent and systematic way, making sure to take good notes on each person’s unique situation to determine where they are in the buying or selling cycle and who they know who might need our help,” Anderson explains.

Anderson’s second method for generating leads is less complicated, though it’s possibly the most powerful tool in his tool belt. “You probably won’t be surprised to know that I’m on the phone from 8:30 to 11:30 a.m. making cold calls. It’s making a huge difference. “Calling and saying ‘Do you know anybody who wants to buy or sell?’ is the biggest thing that agents don’t do. You have to get on the phone and ask for the business.”

Of all the methods Anderson and his team are employing to generate listing leads, the most unique is how he is using his buyer side as a marketing tool. Within a couple of weeks of a buyer’s closing, his team holds a housewarming party in honor of their new home. This does two things. First, it allows the buyers to show off the home to friends, while Anderson and his team meet prospective clients and learn about the buyer’s immediate circle of contacts. Secondly, each person who RSVPs to attend the closing is put into their database to receive a follow-up contact from the team. Throughout the year, Anderson also hosts parties and sports outings, which are usually sponsored by vendors. So far, the listing side of Anderson’s team is doing well. In fact, he’s even hired a listing specialist to meet the team’s goal of 300 transactions and $75 million in revenue.

Six Reasons Seller Listings Will Make You More Money

Provided By blog.kw.com

While leads are vital to your sales business, seller listings are critical to your ability to build it to its highest level with the lowest costs and highest net. Top producing real estate agents grasp the incredible advantages of making obtaining and marketing seller listings their primary-lead generation focus and they do so almost exclusively. Here are six reasons why you should concentrate your energy on the high-return, high-leverage business of listings.

1. Seller listings mean marketing opportunities.

- You get to put a sign in the front yard (and maybe directional signage as well).
- You get to market the listings through direct mail and email.
- You have more control over your time.

2. Sellers don’t always have the do-it-right-now urgency that buyers demand, so you should be able to control your scheduling.

3. Seller listings maximize your per-hour compensation. It usually takes a lot less time to obtain and market a listing prior to its selling than it takes to show for and sell to a buyer.

4. Volume, volume, volume. A highly focused, highly leveraged real estate agent can work 15 to 25 seller listings per month. And keep it up. The same agent would be hard-pressed to work seven or eight buyers per month and continue to do so over a long period of time.

A highly focused, highly leveraged real estate agent can work 15 to 25 seller listings per month. And keep it up. The same agent would be hard-pressed to work seven or eight buyers per month and continue to do so over a long period of time.

5. With seller listings you are on the frontend of pricing, which translates to an intimate knowledge of the market.

6. Properly marketed seller listings bring you more business. Because of the multiple marketing opportunities that are part of the listings process, on average, one well-marketed listing will generate one serious buyer who buys. So, if you focus on obtaining and marketing seller listings, you should be able to get all the buyers you need. It’s the real estate industry’s version of the “twofer.”

Here We Go: Building Booming and Home Prices Rising

Provided By: Realty Times

In the first quarter of 2013 our economy grew by 2.5 percent. While some were disappointed with that figure because it fell short of the consensus estimate of 3.0 percent, it's still a sign of better times, according to Corelogic.com.


The company recently released "The MarketPulse" which highlighted the following: economic recovery is benefitting from residential investment, "census division of price declines in the housing collapse varied dramatically by depth and duration, and the census divisions with the largest declines have the fastest current recoveries."

There are four census divisions in the United States. These geographical regions contain two or three census divisions for a total of nine. How these areas were impacted and how they are recovering depends on various factors such as the development of new housing.
Build it and they will come. The new housing industry is growing stronger and helping boost the Gross Domestic Product (GDP). Homebuyers seeking new homes are encouraging this growth.
At the lowest point, new home sales dropped to 273,000 annualized sales in February 2011, marking the lowest sales rate in almost 50 years. The highest peak reached 1.4 million annualized sales in July 2005 and today it's increasing 19 percent from a year ago, according to the U.S. Census Bureau data from March 2013.

Meanwhile, residential home prices are continuing to rise. However, the increase in home prices isn't uniform across the country. Instead, the recovery is geographically confined to areas that are "either recovering from the boom-bust cycle, or exhibiting strong economic fundamentals and strengthening demographic demand," according to Corelogic.

The increase in housing prices is also happening in areas where building is booming.
New housing competes with foreclosures and short sales. These latter two groups are now experiencing a decline, making new housing a good solution for some buyers.

Mortgages categorized as seriously delinquent (90 days or more past due) peaked nationally at 3.7 million in January 2010. The figure has recently dropped by 33 percent to 1.2 million.
Corelogic reported that there were 55,000 completed foreclosures through March 2013, which is a decrease of 16 percent compared with the number of the same period last year.

Meanwhile, the summer sizzle season is arriving soon and analysts expect another possible increase in sales and prices which could encourage more sellers to list their homes for sale
If you're interested in buying, here are a few tips. Act now. Start putting your finances in order so you know what you can actually afford to purchase. Delaying this could mean the loss of your favorite home to a better prepared borrower.
Meet with experts to get the best information and advice about the real estate market you're interested in. While real estate information is available on line from anywhere in the world, prices vary greatly depending on the local market. Your best bet is to find an expert in the area you're interested in to assist you with your questions and guide you through your search.

Remember that many sellers are still in a recovery mode. They may just now be adjusting to no longer having their home mortgage "under water". So, when you find a home you're interested in, act quickly to engage negotiation about the final sales price.

Also, keep in mind that the housing inventory is likely to increase as housing prices continue to rise. However, many experts predict the shortage of existing homes for sale is likely to remain a problem throughout the rest of 2013.

God Made a Realtor

Provided By Brian Weast & Associates

8 smart moves for buying a foreclosure

Provided By: interest.com

The days of scooping up foreclosed homes at a discount of 20% or more appear to be coming to an end across much of the United Sates.

That’s good news overall, because it's a sign the U.S. housing market finally is getting back on its feet after five terrible years. More demand is boosting prices.
But it also means would-be buyers need to be careful they’re making a smart choice if they bid on a repossessed home.

A recent study by Zillow, the real estate website, found that when equivalent home listings are compared, the discount for foreclosed homes has fallen to about 7%.

"With for-sale inventory tight in most markets right now … and demand slowly increasing, it wouldn't be surprising to see the foreclosure discount decrease even more," Stan Humphries, Zillow’s chief economist, says in a release.

That’s a big change.

Nearly 13 million foreclosures have been filed since the housing market collapsed in 2007, according to the website RealtyTrac. Initially, the glut of foreclosures meant they could often be had significantly below market value.

No more. If you’re shopping foreclosed homes in most places today, you’ll probably have to pay closer to regular market price. That puts a premium on doing the job properly.