Market Trends

Here We Go Again

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Platinum Club October

Asset managers are checking up on their listers to make sure
properties are being marketed properly. 
If you are listing foreclosure properties – tighten up if you want to
keep your listings!

2nd quarter is when the next “wave” of foreclosures
is to be released – here we go again!

3 month moratorium on foreclosures is more here say yet
properties are going to foreclosure in November.  Apparently, the banks are going to do away
“stages” of appraisals.

Ekko works well with short sales, S5 is OK –nothing above
the others, and Advanced Title gets them done.

Banks have stacks of short sales to work through – Bryan had
4 approved in the last week – 1 in 70 days, 2 in 3 to 4 months and 1 in 6
months.  It seems as if the Asset Manager
makes all of the difference not necessarily the bank. 

Take short sale listings to generate buyer s leads and close
them because chances are your listing
won’t close.  Short sales make the agents look incompetent.

Buyers are indecisive and becoming unrealistic – coming up
with excessive home inspection lists.

Upper bracket prices continue to fall and those buyers are
more cautious.  People are backing out of
remodeling contracts as well – the economy is their excuse of why they aren’t
moving forward.  National news and lack
of details about our market is making them uncomfortable in both scenarios.

Are there more listings coming on the market?  The answer is yes – inventory is low put it
on now.

Builder activity is on the rise.  One builder, Van Metre is up 40% and is
raising their prices – NVR posted a 50%
increase over last year’s sales.

We all believe Tax Credit for first time buyers will be
extended.  As previously discussed each
real estate transaction “touches” 29 different industries and generates $62,000
in capital to the economy.

We also believe that the loan limit will go back to $625,500
and remain there as prices are lower – we all have had fewer sales above the
$700,000 price range.  Also, the
government may want to diminish their exposure and not raise it back up.

Condo associations need to be proactive to get their
properties approved FHA after November 2, 2009 – no one has heard of any
associations taking the lead.  Be sure to
make sure the project is in process of approval prior to finalizing
contacts.  No more spot approvals with
FHA after this date.  Here
are the outlines of the program – lots of questions are still
unanswered.  Will this kill the condo
market?

What does all of this mean? 
Professional Realtors are more valuable and more needed today more than
ever.  Get it?  Got it? 
Good!

Now, go sell something!

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Great Opportunities and Great Information!!

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Quick update on upcoming important company functions:  www.demandsuccesstoday.com
is on October 28 from 9 – 12 – register today, Continuing Education with Champion Title on the new HUD-1 from 2
-4 at the Sully District offices on 0ctober 28th, and short sale training with America’s Home Rescue from 9 -12
in Chantilly.  Also, there is still time
to get in on our Annual Business Planning this weekend.

Due diligence in dealing with our transactions is more
important today than ever before. 
Recently we have had experiences with leased propane tanks, fuels and HOA
docs.  Read, and reread the contract to
know what to say when situations arise. 
Knowledge is power people!!

What do you need to do when dealing with short sales and the
HUD-1’s?  Add 9 months of taxes, and HOA
dues to whatever is past due currently so there are no surprises to the
noteholder when the approved HUD is 6 – 9 months old and the numbers don’t add
up.  Are short sales getting easier?  We don’t think so!

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Jason Smith

Foreclosure inventory is down

Sales are getting easier – when dealing with arms length transactions

Houses are staying on the market a little longer so urgency
isn’t as great

Inventory is stable over the last few months but still way
down from the beginning of the year, month’s supply is consistent, rental
market is tight right now as well.

Appraisals continue to be issues on all fronts.  We have experiences with appraisers who are
inexperienced and bring in numbers way too high or way too low – it continues
to be a crap shoot.

Pat
Cunningham

Condo sales – starting November 2nd – approved
condo rules are going to change.  Spot
approvals are going to more difficult

Rates have inched up about ¼ – ½ point over the last few
weeks – they will continue to rise

Flipping rules may come into play with conventional loans
when they require Private Mortgage Insurance. 
Be careful if you are selling a flip.

Wall Street Journal ad between NAHB and NAR was published
today.  The ad showed that $28 billion to
the economy because of jobs.  An average home
sale generates $62,000 and involves 29 different industries are effected by
each sale.  It is good for continuing
momentum

Homepath financing is for Fannie Mae owned properties and is
offering special financing options. 
Conventional loans, 5% down, no MI, no appraisal, rates are only ¼ to ½
% higher, investors can get in for 15% down and there are no income
requirements plus credit score only needs to be above 660.  Check out www.homepath.com.

No new news on keeping the loan amounts at $729,750 after
December 31st.

Agents shared details on various properties throughout the
area as well as buyers they are working with to try and get them into homes
prior to going on the market.

Our next exchanges will include a commercial agent and
appraiser to keep us up to speed on those aspects of our industry.  Keep learning so you keep earning.  Get it? 
Got it?  Good!

Now, go sell something!

It’s time to invest!

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What was the first thought that came into your mind?  Was it about the stock market?  Or was it about buying investment properties?   Perhaps you thought it was getting others to invest in the previous two areas of opportunities.  Now, what do you believe this statement is about?  What does invest mean?  Dictionary.com says it means :

1.

To put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

 

2.

To use (money), as in accumulating something: to invest large sums in books or education.

 

3.

To use, give, or devote (time, talent, etc.), as for a purpose or to achieve something: He invested a lot of time in growing himself personally and professionally.

 Well, taking this into account, my intention was that it is time to invest in yourself and your business.  The top companies in the world invest in their people – you should invest in you as well!  If companies do it, why don’t you?

The real estate market, the economy and your business are not out of the woods yet.  Yes, some aspects of the economy are stabilizing but we have a long way to go – foreclosure numbers, default rates, and unemployment rates (although reported to have slowed) continue to rise.  Therefore, now is the time to invest in your business.  It has become obvious to me that during times like these, many agents get too involved “in” their business when in fact, if they want their business to soar to the next level, they should get involved working “on” their business – today.  It is time to reflect on what is working and what isn’t – where are trends in our area heading – who are key players in the industry and what are they doing – more importantly, what are you doing?  Are you attending training?  If not, why not.  If you are involved in foreclosures, are you going to conferences out of town to meet new people, strategize and get new accounts?  If not, why not?  If you are doing short sales, are you meeting with experts who are experiencing success in the business locally and nationally to learn more about trends and what they are doing to be successful?  If not, why not?  Are you taking advantage of the free educational opportunities your association is making available to you?  If not, why not?  Are you taking advantage of one on one opportunities with your broker, fellow agents or a coaching program to help get through the market we are in and are going to encounter?  Again, if not, why not?

These examples could go on for some time.  It is my belief that you need to get out of your house, get out from behind your desk and educate yourself or else you will be left behind – doing what you’ve always done and get the results you’ve always gotten will not propel you to success.  Times change, programs change, economies fluctuate and you need to as well if you want to succeed now and in the future. 

It is important not to confuse activity with accomplishment.  Determine what you want to accomplish and what you need to do to achieve what you set out to do.  If you get willowed in the mire of day to day activities, put blinders on to what is happening around you,  get out and network with others, and ask yourself how can you accomplish “big” things in your life.  It is my opinion you need to invest in you today.  Attend trainings, get coaching, attend business planning (it’s not too late), get a designation, attend mastermind sessions, go to real estate information exchanges.  Take the time to get educated – NOW!  Get it?  Got it?  Good!

Now go sell something!

Another GREAT Real Estate Information Exchange last night!

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It was a terrific turnout – we had 25 people attend.  Thanks for all who came out to be educated!  Here is a synopsis of what was discussed.  Hope to see more of you next time!

Scott MacDonald:

Market Update…builders have said activity and contracts have been up. The summer lull is gone and activity is picking up. Great news for us! In talking to other agents, they are saying the same thing. It’s important to tell your sellers that the market is still price sensitive. There is still activity, but it’s important to get the house priced right to get it sold quickly.  We are still seeing multiple contracts. BPO’s are picking up as well.

Leslie Wish – SunTrust:

Rates continue to be great.  Phones are ringing off the hook with buyers wanting to close by the end of the November.  It is better to close prior to Thanksgiving and not wait.

Lenders are skittish on condo loans because of litigation against the condo association – any litigation no matter who is suing whom, no conventional loans – FHA loans will allow “some” litigation.  Lender questionnaire will bring to light lawsuits and delinquencies.

Scott Mayhew – NuStart Credit Restoration:

Pull credit report to see what issues are with the report.  Typical problem takes 90-120 days.  Process starts with letter writing – it is a must.  The letter must state name, address, loan number, discrepancy, timeframe to correct and expectations of resolution.  Only way to dispute discrepancy is to state the loan is not late or not mine – this is the only way to get it removed.  The letter must be signed in blue ink.  Lender has thirty days to respond with exact amount owed and details of delinquencies.  Consumer must write letter – not company.  Proof of accuracy letter must be returned by lender – if not, need to send another letter stating they have violated.  Paying off credit cards end of month doesn’t give you a great credit score.  Inaccurate data CAN be removed from credit report.  If your mortgage is 30 days late, it will show up on your credit score is 100 point deduction, it used to be 40 points.  Credit rating goes from M1 to M9.  M5 is about a 40 point hit.  Tell short sale clients to have bank say paid in full as agreed and not to rate short sale higher than an M3.  Fee to correct is $395 one person $495 for two.

Keith Barrett – Champion Title

New HUD form is coming out January 1st – you have to be prepared if you want to keep clients happy.  Get caught up on all the changes at 4900 StoneCroft Blvd., Chantilly, VA 20151 on October 28 from 2pm to 4pm.

What in the world is going on in Northern VA real estate?

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Well, we are starting to see more activity lately at our listings, more homes are selling than are going on the market reducing our inventory levels, builders are seeing increased activity and sales as well, rates continue to fall, prices are remaining stable, and now is a fantastic time to be in the Northern Virginia real estate market whether buying or selling.  What else could contribute to our market?  We continue to have low levels of unemployment locally compared to the rest of the country – which is a huge positive for us.  As a matter of fact, Virginia was ranked number 1 for an example of how employment has affected their total real estate market.

 

What is on our forefront?  There continues to be the threat of more foreclosures coming on the market but we haven’t seen it here in our area yet.  We have the impending expiration of the First Time Buyer $8,000 Tax Credit or do we?  In speaking with the Former Governor, now Senator, Mark Warner, he indicated he was voting to extend the credit.  Many others in support of this initiative believe this will keep momentum moving in a positive direction with our recovery from the recession as the Housing Market has such a large impact on our national economy.  Interest rates may creep up – but they are so low, they have to increase at some point.  Basically, as stated above, we are fortunate we have the fundamentals to be one of the top real estate markets in the country.

Yesturday’s Economic Summit at GMU

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Michael Fratantoni 

 

-The true unemployment number is up to 13.3% (people who can no longer claim and still don’t have a job) but is report as 9.7% – it will peak midyear next year to a reported 10.2 % similar to the early 80’s

-No pressure on inflation –some deflation happening right now to keep it in check –as an example energy prices are down – a barrel of oil is in the $70’s when a price of $90 to $100 is normal

-Stock market losses $6 trillion slight rebound in Q1 & Q2

– New home sales lowest on record in 50 yrs

-Housing prices nationally are not going to rise until 2011 and won’t stabilize until mid 2010

-The Federal Reserve is largest buyer of MBS 60% currently and they hold $850 billion loans currently they have gone from 0% to 60 % this year and want to go back to 0% by year end.  Will going to 0% add volatility to market?  This is something to watch over the next 6 months when Fed leaves market increase in rates by .25 basis points – Just saw the Fed will buy MBS until March of 2010

-Theme things are looking up slightly but we have huge hole to climb out of

-FHA represented only 2% of loans in previous years.  This year they represent 45%!

-National delinquency survey show 14% of borrowers are 90 day or more late 2.5 million loans

-Prime fixed rate loans 28 million and many of those are reaching seriously delinquency rates – more than 90 days

-Delinquencies & foreclosures are delayed or lag behind employment trends

-Delinquencies – we are up because of jobs being lost

-25% of option arms have been modified or foreclosed on not the problem media has mentioned and continues to mentions as the problem in mortgage market

-Watch bill HR 1728 – Barney Frank

-Allen Jones BOA SS expert is available to us about Short Sales and BOA

Allen.h.jones@bankofamerica.com

Frank Nothaft

-Its going to get worse much worse slower recovery than previous recessions

-After end of 1991 recession unemployment peaked 15 months later

-After end of 2001 recession peaked 19 months later

-Bernanke says we may be out of recession – the question is how long before we peak with unemployment after this recession

-$15-17 billion is the cost to extend tax credit.  The challenge is too many politicians say they didn’t approve of spending gov’t funding to stimulate economy so even though they understood the need to extend they have politically painted themselves into a corner

-Freddie Mac National rebound of prices bottoms out in 2010 and it is 2011 before rebounding

-Lowest interest rate in 50 years

-Prime loans are performing worst since the 30’s – the depression

-Subprime 8 to 10% of loans represent over 35% of foreclosures

-9% of all loans are subprime but they represent 35% of foreclosures

13% of all loans are FHA and they represent 10% of foreclosures

15% of all loans are Prime/Arms and they represent 28% of foreclosures

63% of loans are Prime and Alt-A Arms and represent 27% of foreclosures

-4.2 million seriously delinquent 90 days behind

-To determine if loan is owned by Freddie Mac check out – http://www.makinghomesaffordable.com or http://www.Freddiemac.com

Lawrence Yun

 

No housing bubble it was a credit market bubble

We are overshooting bottom & need stimulus to nudge further back to make our market “normal” again

-From typical NAR survey 3000 responses – HVCC appraisal survey resulted in 30,000 responses1/3 had properties not close due to appraisals

Prices are below fundamental values

All cash purchases are 20 % of market typically low single digits 8 %

Foreclosures will rise because of toxic issues of unemployment & underwater buyers

Full builder recovery not until 2011

Our prices locally are down 20 % were 33 %

Stock market is at 1 year highs

Support tax credit extension  – Wall Street got $700 billion whole economic stimulus $800 billion extending the tax credit will only be $15 billion

NAR is on FB why aren’t you?

See his presentation below!

Stephen Fuller

 

View his updated slides in the link below!

Look for collaboration amongst our peers, share data, share ideas, work together get along 

We in DC are better at looking at bad news!

Dr. Frank Nothaft

Dr. Michael Fratantoni 

Dr. Lawrence Yun 

Dr. Stephen Fuller 

We’ve caught the 500 pound elephant…

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The economy isn’t as bad as we think it is or as the media portrays it to be…especially in our Washington Metro Area.  Dr. Stephen Fuller from GMU’s Center for Regional Analysis spoke to our office today regarding the current economy in our area including unemployment and the state of the housing market…and of course his forecasts for the future.

The future is uncertain. It always has been and as it should be. We can only predict so much. So Dr. Fuller believes that in 2010 and 2011 the housing market in the Washington Metro area is going to be out of control good or in his words it’ll go “gangbutsters”!  That’s pretty optimistic considering the last batch of Alt-A loans (5/1 and 7/1 ARMS) are due to adjust in 2011, but he did say to that end that the majority of those loans have already gone into foreclosure.

Unemployment in our area is down. It’s up around the rest of the nation and according to Dr. Fuller will go up to 10.2 nationally by April of next year before we see it start to come down again.  As of this last month, there is a 3.5 point gap between the national unemployment figure and the figure in our region. He noted that as a country we are losing 200,000 jobs per month and in order to keep employment where it is currently, we would have to accrue 100,000 jobs per month – again, we are losing 200,000 per month.  Employment won’t return to pre-recession numbers until 2014. That’s a heck of a lot of jobs! And half of those job losses are in the retail sector.  Thanks to amazon.com and all of the other internet retailers that offer goods for discounted prices. Store front retailers can’t keep up, end up in bankruptcy and leave buildings and strip malls vacant along with any customer service that might have been associated with it.  Big box retail shopping centers may get rezoned to accommodate housing short fall – stay tuned.

Dr. Fuller did comment on inflation and whether or not it will happen in the near future due to all of the spending our government has been doing lately. Will we have to endure a hard inflation period to “pay it all back”? His answer is not likely.  Unemployment is a major factor affecting our economy, but it’s not enough to put pressure on the economy to spark inflation. He noted that manufacturers are not struggling as hard as they would be during an inflationary period. This is in large part because of all the products you can purchase online. They costs of  not having a physical store, employees, etc. allows for the lower cost product and thus more profit in the long run. Therefore, if they continue to produce the goods, they continue to sell, then inflation shouldn’t occur…but that doesn’t mean another recession won’t occur. Dr. Fuller said another recession is inevitable, but when is the question.

A recession is defined as a period of an economic contraction, sometimes limited in scope or duration or as Wikipedia says it’s when the GDP falls or when we have negative growth. We have experienced this negative growth for the past 18 months and things are finally looking upward.  As is the housing market!

The real estate market in the Washington Metro area is hot and soon to get hotter! At Gateway our sales are up 4% over last year, but our volume is down by 5%, thus showing that prices have come down quite a bit from last year. Dr. Fuller predicted that builders will start building more spec homes about springtime of next year. He commented that we need to have 25,000 new homes (not resales) to accommodate just the new residents in the Northern Virginia area, compared to 1 million nationally. Currently in our Northern Virginia market, inventory is slowing decreasing. This week we see 5,984 active listings on the market…that’s down 56% from this time last year. Just goes to show it’s a great time to sell and with the $8,000 first time home buyer tax credit and low interest rates, it’s also a great time to buy.

Prince William Listing Exchange

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Jason Smith’s comments:

Inventory levels up slightly but everything else is staying steady so the market is going strong!  We are just under a 2 month supply of houses in

Prince William County.  The active inventory has 36% of the market as distressed sales.  Nationally, inventory levels are up 7.6% in July – here we are down – houses continue to sell which is great news for us.  There was a home with 20 contracts on it in Piedmont priced under $350,000.  It is still a very competitive environment for us in the first time buyer price range.  New construction activity is up as well and KB Homes is coming back to our area – stay tuned on where as we haven’t heard yet.

Loan modifications aren’t working with a majority of the lenders – anywhere.  The push to modify from the government hasn’t yielded results from what we’ve heard. 

There are very few FSBO’s on the market as well.  Auction activity only showed 3 houses on the “block” in October – other auctions previously featured 100’s of houses…the tide is changing – inventory is getting absorbed prior to auction.

Scott’s comments:

Career Night, September 24th: Bring an agent and get into a drawing for a designation and your guest agent gets thrown into a separate drawing for a designation at the end of the night. We’d love for you to invite those agents that would be a great fit for our company.

Business planning retreat…Pat Cunningham is one of our wonderful sponsors. Friday starts with golf, spa, cocktail party, and business planning starts on Saturday. It’s going to be a different format this year  with tons of interaction to help jump start your 2010!  The location is easy to get to and it’s a beautiful resort – the Hyatt in Cambridge  be sure to sign up today.

In today’s Market Watch, our monthly market update you will see that there is not much to talk about this month. For the first time in a long time, there is nothing earth shattering. It’s been relatively quiet.  There is nothing new that we need to be concerned about – yet.  There is a lot coming down the pike so stay tuned.  So what’s next?  Is the loan limit going to stay $729,750 or is going to be cut back to revert back to $629,650. Is the first time buyer tax credit going to be extended or will it go away?   When are rates going to go up and how high? When is the government going to dismiss the FED’s advice to continue to purchase mortgage backed securities.   If inventory levels go up by a thousand houses – BOA foreclosures in

Northern Virginia – it’s not going to affect the market too drastically.

Right now we are at May of 2005 inventory levels.  We need more homes to sell!

Pat Cunningham agrees that there is not much has been going on the mortgage front.   Rates are awesome – ARM’s are coming more into favor because of better education and lower start rates.

A year ago I remember the mid September of last year and we were literally in a financial firestorm and one of the things I was thinking then is about the fact that that Fannie & Freddie were going out of the business and lending institution having a hard time making loan and wondering if there will there be a credit freeze.

Let’s fast forward to today, its business as usual. We’ve gotten out of the toughest financial market of our time.  Interest rates are at historic lows.  PMI may require anti-flipping rules to be enforced and will be scrutinized heavily on 91-120 days be on the lookout for changes in this arena.

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All is quiet on the Western Front

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All is the same over the last month or so – same issues with short sales, foreclosures, etc

Agents are being more demanding and asking for shorter timelines – short sales are bringing out the worst in other agents.  Agent’s frustration over short sales are carrying over into other transactions.  Agents have an all gloves off mentality.  Buyers and sellers are also frustrated because of timing of getting deals done, HVCC, TIL, etc. 

Nip unprofessionalism behavior in the bud.  Track all conversations in writing with agents.

First time buyers are antsy – wanting deals to be done so they get the tax credit, get rates locked in, and get closed.

Notice of trustee sales is at an all time high

The highest month of foreclosures were September of ’08 – trustee sales today are 30% higher than that

Market is slowing – sales are down because inventory levels are down

Commercial market is about to tank – financing is gone – only sources are pension funds, insurance money and conduit lenders are the only avenues.  No new construction can be financed either.  Churches and schools are building but back log is diminishing.  Commercial market is in directly opposite of residential market.  Death, divorce and relocation are our salvation as well – people have to move!

Titanium is in control of 31,000 people in our area who are in one form of distress – not foreclosed on by the bank yet.

The attached article was also discussed.

Outlying areas are coming back strong – we are doing better than other counties – including Maryland.

That’s it – go sell something!

Interesting market update

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It is an interesting time in the market right now. For the first time in a long time, there are not a lot of changes in our market to report – it is the same ole story – which is kind of nice.   Over the last several weeks, we have reported shifts which were affecting our industry and we were on top of for our clients and agents alike.  Last month we talked about short sales, foreclosures and those trials and tribulations. Right now everything is flat in terms of news. The inventory levels are down, buyers are still out looking for homes, the hot price ranges remain hot and we are ready to help!

What makes me wonder is, is now the calm before the storm?  As we’ve been speaking about over the last several weeks, many questions have been raised that we cannot answer – yet.  Many of our questions include the short sale process, inventory levels, release of foreclosures by banks, and other concerns over distressed properties still have not been answered.  Additionally, we have impending issues we are dealing with such as the first times tax buyer credit coming to an end on November 30, …will that be extended with all of the billions of dollars being spent by the government?  When will interest rates rise…is looming on our horizon – how soon will that happen? Foreclosures are slowing being released…will they be released all at once and will that have an impact on our values?  How much can the government spend to buy mortgage backed securities against the Federal Reserve’s advice and how will this impact us going forward.  There are a lot of questions that need to be answered and only time will tell what the outcome will be for the housing market.  So, for now, there is nothing turbulent to write or speak about today.  All’s well that ends well I guess will be the theme of this month’s update.  Mortgage rates are great, buyers are buying, houses are selling, and we are still working to make it all happen for our clients.  Let’s hope we get more of the same going forward!