agents
And the market goes on and on and on…
It is amazing what a difference our real estate market has experienced this year versus the last few years. Previously we were inundated with short sales, foreclosures, dropping prices and very little confidence in the market.
Today, we are at a low point in the number of short sales and foreclosures on 
the market since I started keeping track of them over two and a half years ago. In October of 2010, we had 1,460 short sales on the market, today we have only 386. Additionally, foreclosures are at a low point as well. In November of 2010, we had 516 foreclosures on the market and today we only have 178. Additionally, prices were falling in the Northern Virginia area. According to RBIntel.com our market prices bottomed out in February of 2009 with an average sales price of $307,225. Today our average sales price is $469,800.
We are still off our highs of 2006-2007, but we are headed in the right direction. All of this information coupled with low interest rates has restored confidence in our market.
Rates? Did I just mention rates? Yes I did and they are ridiculous! Yesterday I heard one of our clients locked in a rate of 3.25% with a lender credit of 2%. We continue to see rates decline which leads to the question of how low can they go before more people act on refinancing or purchasing? Only time will tell.
The last area I would like to touch on is our rental market. The inventory of active rentals remains low and interest in these properties remains high. At this time, many people prefer to rent over buying as they remain skittish about buying or are in a situation such as a recent short sale which prohibits them from being able to purchase. This situation has resulted in rental rates rising making investing a viable option for many people – maybe even you!
If you would like more information on how these numbers affect you whether buying or selling a house, or if you would like to discuss becoming an investor, pick up the phone and give me a call. I would love to speak with you about your situation in more detail.
Are you the 20%?
Have fun and make a difference! That was the premise of the speech I heard today from Doug Smith, compliments of Leslie Wish, McLean Mortgage Group. If you’re not having fun at your job, then why are you doing it? That was his lead into discussing the Paredo Principle and how we, as Realtors, fit into the rule.
The Paredo Principle is the rule of 80/20. Twenty percent of the Realtors are doing 80% of the work. The 20% are defined as professionally persistent and instinctively insistent. We’ve heard it all before, but asked us what was the difference between those that are in the 20%? What are the 20% of Realtors doing that the 80% Realtors aren’t doing? And once you figure out what those tasks are, how can you do more of them to make your days more productive?
Doug has put those differences into his 5 C’s for Success and differentiation from the rest of the pack. These are the things that the 80% lack and the 20% excel at…
1. Confidence: How do you answer the question “how’s the market?” What do you do when you walk into a room of people you don’t know? Confidence is an ability that many of us lack, simply because we are afraid of making mistakes and looking bad. Instead of saying that the market is great and that the numbers are this and that, say “It’s remarkable, I’ve never seen anything like it!”
2. Contacts: The opposite of contact is reluctance. Reluctance can be to pick up the phone and make that call. The more contacts you have in your sphere, the more contracts you will write. So who’s in your contact zone? Business partners, family, friends, transaction partners such as home inspectors, etc. Don’t be afraid to tell your friends and family that they have a friend in real estate. Many agents think they shouldn’t reach out to their friends in case the transaction goes bad and results in losing that friendship. That all goes back to a lack of confidence.
3. Control: Control of your business, your time, your career, your clients. Agents who have a plan, a written plan, have more control over their business. Those that take it a step further by having a plan each day, a to-do list; have even more control over their business. Agents who control or “drive” the conversation when speaking with clients, maintain more control of the transaction and get the job done! Doug spoke about Sales Speak. Here’s an example of Sales Speak presented by those in the 80% and those in the 20%…
80%: Did you think you might want to see a few houses this weekend?
20%: Let’s go see 3 or 4 houses this weekend. What day is better for you, Saturday or Sunday?
Or
80%: So, you like the house? Ok, great, do you think that maybe you might want to make an offer on it?
20%: What do you think? You like it, great. Let’s make an offer.
The difference in the two shows that the 20% agent is steering the client to move forward with the transaction because that’s what they hired the agent for. They didn’t hire the agent to make their own decisions. They hired him/her to help them make the best decision based upon the needs/requirements they expressed to the agent for their new home. Think about that next time you are on the phone with a client. You might just find out that all this time you’ve been using speech associated with the 80% and it might be time for a change.
4. Consistency: Extraordinary people are not truly extraordinary; they just do it with ridiculous consistency! Those who are consistent see more results than those that do things from time to time. Doug mentioned 3 things you can do daily to generate 13-15 sales per year and add 1,440 contacts to your database per year and those are (1) handing out 1 business card a day, (2) use some form of correspondence 2 times per day either through email or snail mail, and (3) make 3 calls per day to anyone…past clients, lender, agent, friend, etc. The more you do things consistently, the more it becomes a habit and you will find yourself doing them instinctively while receiving more business.
5. Courage: Courage hides behind the things we fear the most. Courage is acting in the presence of fear. In cases such as these, we need to change our focus, take responsibility for ourselves and expect more of ourselves. We can do it and should remind ourselves everyday either through affirmations or changing your focus and mindset. It takes courage to do a lot of things, but once you start to do those things the easier they will become.
Doug ended the session with a great quote by Mary Kay-Ash, “Most people truly have no idea what they are capable of. It’s so much more than we think.” This rings true with the 20%. They have the 5 C’s, they have more sales, they know more people, they make more phone calls, and they work more hours than those in the 80%. Implementing the 5 C’s in your life will help you move (if you’re there) in to the 20%. Based upon the number of agents in the United States (965,000) and the projected number of transactions that will take place this year (4,400,000), agents in the 20% will average 18-19 sales this year. Wouldn’t you like to be in that top 20% of all Realtors in the United States? Stick to the 5 C’s and best of luck! Now go sell something!
A great time to buy…now?
It is definitely an interesting time in real estate in Northern Virginia. We have extremely low inventory levels that remain below normal for this time of year. As an example in January of 2008, we averaged 15,500 active listings, in 2009 it was 10,200, in the year of Snowmagedon in 2010 it was 4,800 because people took their houses off the market and agents couldn’t get out and about to list them, in 2011 it was 5,800 and now we are at 4,700. What is interesting to note is the month’s supply of houses in the same time frame – 2008 it was 10.8, 2009 4.0 and since then it has been 2.3 in 2010, 2.8 in 2011 and this year 2.2. What this clearly indicates is there are buyers out in the marketplace looking for homes in the winter months – not just the spring months now. Interest rates remain very low – below 4% for 30 year fixed rates – jobs are being created here so people are moving into the area and rental rates are rising throughout Northern Virginia.
If your family circumstances, job status, or you just have the desire to sell your house and move up to a bigger home, now is a great time to do so. Houses that are priced right, in the right condition and staged properly are attracting offers. One of the biggest parts of this equation is the price – price sells today. Sellers cannot price a little high for negotiations as we have seen that they languish on the market in this situation. Price it competitively and it will sell.
Buyers have a great opportunity today. The housing affordability index is at an all-time high and in many cases house payments are less than rental payments even before considering the tax benefits of home ownership. For buyers looking for the long term benefits of home ownership, there historically has not been a better time. Prices are remaining stable, interest rates are low, and the housing industry is on the rebound meaning we have already hit the bottom and we are on the upswing if you were trying to time the market.
Whatever your situation is, we can help. Please feel free to contact us to discuss your personal needs in more detail and see if now is the right time for you to make a move.
Real estate normal?
What is the new normal in real estate:
Today I am going to share with you a few ideas that are going to help you get on to a successful year in 2012 – you will also hear a few ideas from other agents that they have planned to make this their best year ever as well. The important thing to remember is to only adapt 6 of the strategies. If you try to do too many, you will be overwhelmed and not do any. I recommend starting with 6 things you are not doing today and incorporate them into your business. Once you have mastered 6 add another one in until mastered and then add another and so on. In addition, it is important to set strategies for accomplishing what you set out to do and review them regularly. You are in business for yourself but not by yourself so partner with someone in the room and hold each other accountable – meet before or after training, before or after a real estate exchange – make it easy for you but the big thing is to just do it.
When looking at the strategies you are going to put in place, you need to be clear and specific about what you want to accomplish and write them down. Know what roadblocks and obstacles you will need to overcome to achieve what you want to do and then how you will overcome them. What will you need to do to develop the skills and instill the discipline within yourself to make them happen. You will need deadlines, detailed plans of action – 5 or so for each action item, and have them where you can review them regularly. Lastly, think about and visualize your end result and what it will be like when you have accomplished what you have set out to do.
• Be positive – have the right attitude and eliminate complaining from your life • I like the “theme” of the day – will you do it?
• You are going to have to work more focused and be more intentional
• You are going to have to sell yourself passively and aggressively – explain
• Training is going to be paramount – especially in financing – increase your skills by attending seminars, getting a designation, going to REIX, office trainings, you need to be good at what you do to build referrals
• Video is going to be important – Casey Anthony is doing video diaries – video houses, your listings, neighborhoods, how’s the market, etc.
• Networking is going to be critical – find a group, start a group, join a chamber, Rotary club, coach kids in sports, join a PTA, get involved in a charity, become involved in something
• Learning and interpreting market trends – you have to know your numbers such as inventory levels and types of inventory, prices, DOM, people love to hear this
• Stay on top of values by previewing – especially new homes as they will continue to have an impact on the market – this is a great way to start with video. Video your house of the week, your bargain of the week, or whatever you want to call it.
• Read blogs for more information, see what others are saying about the market. You have to know what your competition is up to and what better way to learn than to read about their thoughts
• Start a blog and of course add video. Write about neighborhoods, your listings, interactions with agents, clients, trends, your services, how’s the market?
• Set your personal business standard and stick to it. Write the personal notes, make the phone calls, stop by and visit your past clients or meet new ones and track your daily conversations.
• Hold open houses on the right houses
• Track your business, determine what gives you the best results and do more of it.
Market, market, market!
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!
Oh what a night…
We had another great real estate exchange last night. There was a lot of banter back and forth about our free trip to Vegas for the RE/MAX Convention in March and who was going to win the trip and how. Great team building and networking as usual before the event.
Topics that were discussed:
- Virginia home sales report published quarterly by VAR and the great information available through this report
- Information on rental rates
- The lobbying effort upcoming in the House on raising the high loan limits back up to pre-October 1st deadlines
- Refinance activity
- Home ownership rates
- Appreciation rates nationally and locally – we are way ahead of the curve year over year but are down month over month, a trend we need to watch
- The Bank of America penalties to Freddie Mac and Fannie Mae and why
- Fannie Mae’s quarterly losses and the combination of losses between Freddie and Fannie and why were bonuses paid
- Foreclosures on the rise nationally but so far, we don’t see it here and the indicators of why we don’t see them yet
- Bechtel is relocating 625 jobs to Reston and they are leasing nearly 200,000 square feet
- 4 ways to reduce your taxes and a reminder we have accountants coming to Chantilly to discuss tax planning for 2012 on November 18th at 10AM
- And lastly, the National Enquirer portion of the show – celebrity purchases and sales plus incomes of the top CEO’s in the Washington Metro Area
- Pat Cunningham updated us on HARP, the Italian debt crisis and what that means to mortgage interest rates and the value of HUD homes.
Enjoy the video but better yet – attend the next one in Ashburn at Clyde’s on the 16th from 1-3PM. Get it? Got it? Good!
Now, go sell something!
Got to love great real estate minds….
Wow, what Platinum Group today. Agents are feisty, fed up and frustrated with lenders. Issues were flying across the conference room fast and furious. The question was asked – How’s the market? Here is what came about – Financing problems are prevalent. Some owner problems by not disclosing full details – not telling agent about businesses, tax situations or other properties owned. But most seem to be lender problems – mainly, not telling the truth. One lender didn’t tell the agent the Visa expired, said application was in all paperwork submitted and nothing was turned in – contract and lender letter said conventional then switched to FHA at appraisal time. Lending guidelines are too strict, lenders are too ambiguous and regulations need to be relaxed to make well qualified, legitimate buyers home owners. We are held accountable to performing at a higher standard and the lenders are not – it is a huge problem! Lenders need to adhere to a business standard – develop one, make them sign it and if the lender doesn’t, don’t use them. They have no skin in the game, no accountability and no repercussions.
Agents have buyers coming out of their ears. Listings are being shown but there doesn’t seem to be any sense of urgency from the buyers. Move up buyers seem to be lurking out in the market as well.
What prices are selling? The lower price points are selling – mid price points are coming down and languishing on the market. Prices are up year over year but are dropping month to month since July. Keep an eye on this trend through the winter. Prepare sellers to price competitively from the beginning or the house may not sell or you will end up chasing the market.
Are foreclosures coming? Agents are not doing BPO’s, short sales are down, and notice of trustee sales in the papers is down so the answer is not now. Asset managers don’t have any idea of what is coming down the road either.
How are short sales progressing? One has been in process 2.5 years – has had 6 contracts and still not approved – it is a Bank of America deal…no surprise. We had one agent had 3 short sales drop out last week. Another one has 10 under contract and they are languishing on the market.
Is the loan limit reduction hurting your business? It has had only a limited effect on the agents in the group. Only one deal has had an impact with 10 agents and multiple transactions in process.
Agent’s years are about the same as last year. Their volume is up but units are down but overall, income will be the same – we will see how the loan limit reduction will affect us next year. How will 2012 be for you? Spring is going to be strong.
All the agents agreed that this was one of the best meetings we have had which is great. The energy was high, there was lots of passion and everyone left with enthusiasm.
Now, go sell something.
Are foreclosures really coming?
The foreclosures are coming, the foreclosures are coming…that’s al
l we see in newsletters, emails and hear about in real estate circles. Well, is this really the case in Northern Virginia? Here is a quick update on foreclosures and short sales in the five largest market areas in Northern Virginia and how we buck the national trend. It will be revealed why I don’t believe our foreclosure problem will be as great or as devasting as the rest of the country.
It is truly amazing how many Americans are behind in their mortgages and for how long they have been behind. The number of people who are delinquent has dropped but it is still at a phenomenal number – 6.373 million – 1.844 million are more than 90 days late. What and how does this mean to our region? Only time will tell but if you look at what, in my opinion are leading indicators, we may be more sheltered than the rest of the country. As I see it, trustee sale notices are one leading indicator as they inform the public when an auction will take place on a property where the home owner is delinquent. Second is short sale activity and as you will see, we have, as a percentage, a very low number of short sales on the market currently and as many of us know in the business, many short sales do not get approved which eventually lead to foreclosures. In addition, if waves of foreclosures were to hit the market, could they be absorbed and as you will see from our month’s supply of houses, we are in pretty good shape. And lastly, distressed property inventory makes up just over 18% of our total inventory but it makes up just over 35% of our total sales which reflects people want a perceived bargain and find distressed properties as their avenue to take advantage of this buying opportunity. So let’s take a look at the numbers.
In Arlington County there are currently 11 foreclosures, 20 short sales and there is a 2.9 month’s supply of homes. I would say that Arlington is safe from an onslaught of foreclosures as the number of distressed properties is minimal and the absorption rate of properties is extremely strong. We need more inventory of all properties in Arlington so bring on the foreclosures.
In the City of Alexandria we have 20 foreclosures, 38 short sales and a 2.9 month supply of homes. Is this market primed for more inventory, of course it is and investors love the location and amenities of Alexandria so absorbing any foreclosure inventory should not be a problem.
Now, let’s look at the Fairfax County, our most populated county in the region. The numbers are 168 foreclosures, 336 short sales and a 2.6 month’s supply of houses. Very low numbers in the overall scheme of things, don’t you agree?
Let’s wrap it up with two of the outer counties, Loudoun County and Prince William County. Loudoun has 60 foreclosures, 139 short sales and a 3.2 month supply of houses. Their month’s supply of houses is creeping a little higher but overall, it is still a seller’s market and properties are moving. Prince William has 106 foreclosures, 237 short sales and a 6.8 month’s supply. Again, all are manageable numbers except for the month’s supply of properties which indicates a buyer’s market but from a National perspective still in better shape.
Let’s review, fewer trustee sale notices + fewer short sales = less foreclosures. Until the trustee sales in Northern Virginia pick up, I don’t believe our market will have to endure a rash of foreclosures but if it does, we can absorb the inventory. The only wild card that I see is what the banks have foreclosed on that they don’t have on the market and/or are letting people live in mortgage payment free that they haven’t evicted yet. Is this number big one or a small one? Only time will tell. You have to know your numbers to paint the picture properly to your clients. Get it? Got it? Good!
Now, go sell something!
It’s going to be a long and busy summer!
As we head into the dog days of summer, I thought you may be interested in reading about the Northern Virginia real estate market as well as some national real estate news as well. Let’s dive right in! The Fox Gate development at the doorsteps of Loudoun County received its’ approval to begin development. Fox Gate is located between Pleasant Valley Road and Tall Cedars Parkway, encompasses 27 acres which will offer 1.2 million square feet of office, retail, hotel and civic space along with 110 residential units.
Apparently Bechtel, the country’s largest contractor – the contractor building the Silver Line – is secretly looking for up to 300,000 square feet in Loudoun County. Obviously, this is a huge home run for the area as Loudoun boasts a 26% vacancy rate on commercial properties and Fairfax County has 16% in the areas where they are searching. Forbes ranks Bechtel as the third largest privately held company with just under $28 Billion in revenue with 52,700 employees – not too shabby! Here is a great opportunity if you know of anyone who works there to do some relocation business.
Also, locally our market is seeing the same market we were in last year as far as numbers are concerned. For the first week of July, active resales were 7,379 this year versus 7,534 last year. We have a 2.3 month’s supply of houses for properties that went under contract the previous 30 days both this year and last. The rental market is virtually the same with a one month supply this year and a 1.2 month supply from last year. I have to say it to remain consistent. If you aren’t working with investors, holding investment seminars or obtaining a designation to help investors, you are missing out on a huge opportunity. We will discuss more reasons why later. Houses that settled the last 30 days have a 2.7 month’s supply of houses – last year it was a 2.5 month’s supply, a difference of 300+/- houses. I think the difference here is short sales and the changes in the bank’s stance in regards to their handling of them. We are seeing the banks counter the prices way above what is realistic based upon market conditions, asking for interest free loans and even the requirement for sellers to bring cash to the table. Agents need to set the expectations for our sellers so they know that these options are serious possibilities and keep these deals together. Obviously the pricing piece can’t be overcome easily but the other two options can be discussed upfront to help keep deals together. Additionally, Chase recently announced that they are not in the short sale business, they are in the foreclosure business so be on top of your Chase owned loans. Distressed properties make up 15.5% of the active inventory this year versus 19.9% this year. Foreclosures are down this year versus last year as the foreclosure process is taking longer and inventory continues to be slow to get on the market. Buyers continue to be price sensitive and are looking for the “perfect” house so continue to encourage proper pricing, staging and even prelisting inspections to get your listings in the best light for potential buyers otherwise, they will sit on the market. Pricing properly is even more important in the outer counties and localities as new home prices are attractive in areas closer to the beltway. Therefore, new home sales continue to post strong numbers as their pricing is competitive today and the buyers get to select how they want their houses to be decorated. Our friends from Van Metre will share their success with us shortly.
There have been several good articles posted recently to help buyers realize now is a good time to buy along with the Housing Secretary Shaun Donavan stating it is unlikely housing prices will drop further and a noted now was a good time to buy. He also mentioned officials must find ways to provide access to home ownership without requiring a 20% down payment. Additionally, Warren Buffet posted his Five Real Estate Tips which include: 1) Housing prices increase in value over time especially as the dollar becomes worth less. 2) Buy low, prices are down due to the housing bubble and appear to be at the bottom and you can never time a market. Also, remember, you make money when you buy – not when you sell. 3) Don’t wait too long to take advantage of low prices – if you wait for the robins, spring will be over. 4) Smart home ownership has 3 elements – fixed rate mortgage, affordable payments and a long term hold. 5) Buying a dream home can be a nightmare – don’t let your eyes be bigger than your wallet – go with the fundamentals previously discussed. And lastly, pending home sales rose strongly in May which was the first time contract activity was up over the previous year since April of 2010 and we all know the reason for that was the expiration of the tax credits. Let’s continue this trend into the second half of the year!
The things to look out for to carry us into the second half of the year are number one, jobs. If jobs don’t get created then consumer confidence will stay low and housing sales will suffer. Number 2 is underwriting guidelines for mortgages cannot get stricter, they need to be relaxed as the pendulum has swung a little too far. In 2009, 23.5% of loans were rejected, in 2010, 26.8% of loans were rejected which is not a good trend. If underwriting continues to become more difficult home sellers and buyers will be hurt and the ones who will benefit will be investors. Investors typically pay cash plus, if buyers can’t get loans, they become renters and the rental market becomes stronger. Remember, you need to be working with investors. Number 3 is distressed property numbers need to remain low which may be difficult. CoreLogic estimates that 10.9 million or 22.7% of home owners with a mortgage are underwater at the end of the first quarter – 2.4 million home owners have less than 5% equity so this puts a total of 27% of the nation’s mortgage holders at risk. The foreclosure process is now taking an average of 400 days which is twice as long as it took in 2007 so distressed properties will be in our market for the foreseeable future. Number 4 is rates need to remain low allowing more buyers to be able to afford homes – Leslie Wish knows all too well how an increase of 1% in rates can knock down the potential number of buyers in the buyer pool. And lastly, number 5 you! You have to be active in the business, speaking with people – not just emailing, blogging, texting and attending trainings – you must physically speak with people on the phone, at networking events, open houses, at the pool, at your kids or grandkids sporting events anywhere you can get belly to belly with people. You need to make it happen by spreading the word about how market is different from what they read in the papers or see on TV. Get busy getting busy!
Now, quickly some fun stuff. Zip Realty is no longer offering buyer rebates. They have closed offices in 12 markets and have shed 700 agents. They will continue to offer sellers a 1% listing credit in the 23 markets they are staying in but after posting losses of $12.9 million in ’09 and $15.5 million in ’10 they are finding it increasingly difficult to remain profitable – duh! In addition to these losses, they will experience even more as their transactions are down 12.2% this year versus last…who could be next?? Perhaps it could be Redfin – we shall see!
Take this information and share it with your clients and demonstrate to them you are the expert in the business. Get it? Got it? Good!
Now, go sell something!
Scott's Motivation and Real Estate Market Updates 