Month: December 2011

My Top 10 Predictions for 2012

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Credit unions in real estate – if the merger between Pen Fed and Prudential Caruthers is successful – and only time will tell – more credit unions will look to enter the market.  If the merger muddles along as it is now, other credit unions will remain on the sidelines.  This one will be interesting to watch as NAR and RPAC spent so much time and money keeping banks out of the business.

The Presidential election – Nearly 1/3 of voters say how the candidates view housing will impact how they vote.  The foreclosure crisis and 11 million people with negative equity are what concern so many Americans.  Next to unemployment, the stance they take on housing will drive the election.  Therefore, agents will need to get busy listing and selling houses the first half of the year as I see people going back to the sidelines after July to see who wins and what policy they will put in place for housing.

Interest rates – if they go higher, they will crush the fragile housing market which the Federal Reserve will not allow.  Unlike last year’s prediction where I predicted rates to get to 6% and was wrong, this year I believe they will stay in the 4 – 5% range but closer to 4% than 5%.  This is what will keep some people in the home buying mode.

New home sales locally will continue to rise.  The shortage of resale properties available, the fact that 20% of our market is distressed and buyers are tired of the short sale process will continue to drive buyers to new homes.  Price will continue to also play a role in the new home market.  Builders will have to stay within reason and not price themselves out of the market.

Land values in our area will continue to rise.  Fueled by lack of inventory and new home sales, land values will continue to increase.  We are seeing new signs popping up on vacant land already.

Existing home Sales forecast will stay flat.  Unemployment, the election, strict lending guidelines and the fallout from foreclosures will keep people at bay from jumping into home purchases.

Lending guidelines will stay strict and may get even stricter.  As such, it will make our job as Realtors even more challenging.  Both buyers and sellers need to choose a professional and only work with local lenders – not internet lenders.

Foreclosures in NOVA versus rest of USA – we will continue to see low levels of foreclosures in NOVA for the first 6 months of the year, at least.  Notice of trustee sales are down in the papers, short sales make up less than 14% of our market and as such, foreclosures won’t be as prevalent.  The rest of the country needs to be leery as unemployment and dropping values continue to put pressure on home owners and foreclosures will follow as a result.

Investor market and rents – as the inventory of houses shrink throughout Northern Virginia, people remaining leery of the housing market, and lending guidelines continue to tighten – our rental market will continue to be strong and rents will increase.  The good ole supply and demand theory of economics.  This will in turn bring more investors into the market.

Now you have my Top Ten Predictions for the real estate market in Northern Virginia.  Let’s meet up again this time next year and see how I did!  Get it?  Got it?  Good!

Now, go sell something!

 

 

 

Got a plan?

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As you start to think about business planning this year I put together a few thoughts for you to review before our session begins.  Imagine starting a business – which you all have done by becoming independent contractors  – with only a vague idea of what kind of product or service you would sell or provide to clients.  You meet with potential investors and you say, we may sell IPad skins in Europe or set up a mobile dog washing service in the Mid-West, and let’s just see what happens.  How would they respond?  Not very favorably is my thought, how about you?  You should never start a business without a clearly defined business plan, set of goals, a plan of action to accomplish the goals, and numbers for you to track to keep you on target to get you where you need to go.  This is our objective today.  Help you assemble the framework to get you down the right road to the success you desire.

As we work through today, think about the following questions:

  • What are your goals as a Realtor?   Is it money?  Is it the number of satisfied clients you want to have by the end of the year?  Is it starting a team to get you more balance in life?  Whatever the goals are yours but they must be written out, reviewed and then acted upon.
  • Do you have what it takes to reach the goals you have set for yourself?  Do you have the knowledge, expertise, sphere of influence, time and/or desire?  Think hard before you write them – just don’t write something down because it looks good or you think it could happen.  Be realistic.
  • How will your goals be achieved?  What is your plan of action?  How will your day be structured to achieve these goals?  Are you in the right frame of mind to make it happen?  Your attitude is extremely important in this endeavor.  As Zig Ziglar says, stinkin’ thinkin’ doesn’t work.
  • Are you willing to be held accountable to tracking your KPI’s (Key Performance Indicators)?  Will you participate in Jason’s monthly review classes?  Will you meet with me one on one to review your progress?
  • Are you willing to put together a Gap Analysis being honest about where you are today, where you want to be next year this same time and what it will take to get you there?  As you do this, don’t compare yourself to others, compare yourself to you and who you are. 
  • Are you willing to make adjustments to make your goals a reality?  As we all know, the market changes, financing changes, regulations change – will you adjust your original plan to adapt?  Be open to constructive criticism about your plan?  And, be open to change?
  • As you go through today, think strategically.  Stephen Covey says, you must begin with the end in mind.  Write down you goals, then work backwards to make it happen.  Think of the people, tasks, time, and the number of communications it will take to make your goal a reality.  Then put it on paper to solidify it in your mind.

Are you ready to be all you can be and stop making excuses?  Then let’s get started!

Now, if you aren’t ready, perhaps you should consider a different career or continue to do the same things you have always done and continue to get the same results.  Get it?  Got it?  Good!

Now, go sell something!

Market, market, market!

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How’s the market – this is a question so many people want to know the answer to on a regular basis. My answer is, it depends.

Are you a buyer? If so, the answer is definitely yes. Interest rates remain at historically low levels, prices are stable in most areas and increasing in others. If houses are on the market now, the sellers are serious and you can negotiate a good deal. The monthly expense of renting is equivalent to owning in many cases, if not higher. In addition, each payment made for the home owner goes towards the loan balance giving the owner equity over time adding to the owner’s personal wealth. Renting only goes to making landlords wealthy. Other reasons to buy include pride in ownership, sense of community, stability and the ability to improve the property without permission from a landlord – just to name a few.

If you are a seller, what is the price range of your property and where is it located? Every market is different and each property should be looked at individually. There are pockets throughout Northern Virginia where prices are escalating but further out, it isn’t the case. In Centreville as an example, the average sales price of detached homes has dropped every month since July. In South Riding, houses priced between $550,000-650,000 have not had a sale in nearly 70 days. This is not the case closer in towards Vienna, Falls Church and Arlington. Houses are selling quickly and for top dollar. However, in these areas higher priced condos – especially one bedroom units are staying on the market much longer.

In all of these markets, houses and town houses that have compelling prices, not necessarily the ones that are priced right or priced at market values, are the ones that are attracting multiple offers. For houses to sell quickly in today’s market, price is the leading indicator followed by staging, condition and location. Luckily, our distressed property inventory remains low relative to the rest of the country. We are not seeing the influx of foreclosed properties which definitely affects values.

Our unemployment rate is one of the lowest in the country in Northern Virginia – 4.9%, our wages are amongst the highest in the country and consumer confidence is higher here than elsewhere so we are anticipating a strong 2012 in the housing market.

As you can see, it is not a simple question to answer. Each person’s situation is different and therefore you should ask a Gateway professional for detailed information specifically about you. If someone answers, “unbelievable” or “great” be wary. Get it? Got it? Good!