Confidence is on the rise according to Fannie Mae

Despite continued uncertainty surrounding the fiscal cliff, Americans are showing increased confidence in the housing market and the direction of the economy. According to results from Fannie Mae’s November 2012 National Housing Survey, such improvement bodes especially well for continued strengthening in the housing sector, which in turn should lead to overall economic growth.

According to the survey, the share of respondents who say now is a good time to sell a home jumped 5 percentage points in November to 23 percent – the highest level since the survey began in June 2010. The percentage of respondents who expect mortgage rates to go up increased by 4 percentage points to 41 percent. Those expecting home prices to go down within the next year also rose by 4 percentage points to 14 percent over last month, a rebound from the survey’s record low in the prior month, while the share who believe home prices will go up in the next 12 months edged up to 37 percent, tying the survey high. Of note, 51 percent of respondents now say it would be easy to get a mortgage, marking the highest rate since the survey’s inception.

These survey statistics support the trends that real estate brokers around the country are beginning to witness: an increasing lack of inventory, rising home values, and home buyers – who have been waiting five years or more – finally ready to purchase their first home or move-up home.

Positive housing indicators are connected to a generally improving outlook regarding the nation’s overall economic picture. When asked about the economy, those who say it is on the wrong track dipped 6 percentage points since October and a total of 25 percentage points in the past year.

Other noteworthy results from the Fannie Mae survey include:

  • 48 percent of those surveyed say home rental prices will go up in the next 12 months, a slight decrease from last month.
  • 51 percent of respondents now say it would be easy to get a mortgage.
  • 21 percent of respondents say their household income is significantly higher than it was 12 months ago.
  • Household expenses remained stable over the past month, with 56 percent responding that their household expenses stayed the same compared to 12 months ago.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and home-ownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.

Great minds, great information…

Between Freddie and Fannie there are still 218,000 foreclosures set to come on the market.  As reported in Creative Real Estate Daily, in terms of Fannie, just as we were so surprised and pleased that Freddie Mac had actually turned a profit in the first quarter of this year (see the article, “Did I Miss the Freddie Mac Bake Sale?” posted last week), Fannie Mae comes out with its first quarter numbers. The GSE had a loss to the tune of $8.7 billion in the 2011 first quarter! It’s enough to make you want to do a Donald Trump on the agency—you’re fired!

Fannie Mae says this was mainly because of declining home prices in that quarter. Really? Would that be the only reason?

With needing to draw additional funds to cover these losses, Fannie Mae’s draw on the government piggy bank (since the government seized control of Fannie in late 2008) has now reached nearly $100 billion.

Fannie Mae’s first quarter production numbers look like this:

  • 51,043 loan modifications
  • 78,000 single-family loan workouts  (including  60,000+ home retention solutions)
  • 17,120 short sales and deeds-in-lieu of foreclosure
  • 53,549 REO properties gained through foreclosure  (up nearly 8,000 from the 2010 first quarter)
  • Total single-family REO inventory (as of Mar. 31, 2011): 153,224 with a value of $14.1 billion.

Dave Liniger mentioned at the Catalyst Conference that Bank of America is holding 700,000 properties that are 90 days late – not sure what other banks are holding.

The big question is – how many are here locally?  How will it affect our market?  How will it affect our prices?

RealtyTrac has released the results of its statistical study on which U.S. cities are the best places to buy foreclosures in 2011. It started with the 100 most highly populated metropolitan areas, and then used a 10-category criteria of things like unemployment rates, foreclosure activity, and sales prices to narrow the field. The result is the 10 best cities to buy and invest in foreclosures this year:

  1. Akron, OH
  2. Rochester, NY
  3. Buffalo, NY
  4. Cleveland, OH
  5. Portland, ME
  6. Milwaukee, WI
  7. San Jose, CA
  8. Memphis, TN
  9. San Diego, CA
  10. Durham, NC

Guess what, we aren’t in here which is good for us!  Thanks for the update Creative Real Estate Daily!

Microsoft bought Skype for $8.5B – Wow! EBay Inc. bought Skype in 2005 for around $3.1 billion but took a $1.4 billion charge for the transaction in 2007 after it failed to produce.  Regardless, jump on board Skype – 107 million users Skyped 207 billion minutes.  Also, when communicating with people 55% of communication is physiological, 38% is tonality and 7% is words.  Emails and texts can get misconstrued, get in front of your clients or get them on Skype – it’s free!

State attorneys general are holding meetings with the nation's largest mortgage servicers this week to negotiate a settlement agreement for the robo-signing issues that surfaced last fall.  Speculation on the combined fine amount ranges from $5 billion to $20 billion.  The services include Bank of America and Wells Fargo among other banks.  Stay tuned for more details.

Mark Zuckerman of Facebook looks to have purchased a $7,000,000 home in California.  Not too shabby for a 26 year old!

Online real estate brokerage Redfin has removed 42 agents from its partner referral program due to mixed customer reviews, the company announced in a blog post Friday.  Redfin also axed eight partner agents for creating fake customer reviews – integrity counts.  We just have to get them to not rebate back to buyers off the HUD!!

Home Alone house is on the market for $2.4 million!  Great house, great neighborhood, bratty kid not included!

Mortgage rates are at this year’s lows, purchase mortgage loans are up and I know Leslie Wish will tell us all about it and MARS has reared its head again and I know Sadaf Saberi and Ryan Koppel will cover this topic for us as well.

You now have great information to help you with your business and to talk with clients about to show you are the expert.  Get it?  Got it?  Good!

Now, go sell something!

 

My Top 10 Predictions for 2011 are finally here!

Images 
As we approach the end of the year, it is time to reflect upon what we experienced, what is happening now and where things may take us next year to allow us to adjust our plans and to make the most of our opportunities ahead of us!

This past year was once again riddle by media speculation on housing and its demise on a national level while our market was virtually ignored – even by local media outlets – on how resilient we are relative to the rest of the country.  We will see this again this upcoming year as negative news always sells.  Keeping this in mind, areas of concern that will be reported by the media are interest rates, pricing, foreclosures and short sales.  We have seen a decrease in inventory as the holiday season is upon us but houses continue to sell nonetheless.  The driving forces include interest rates which remain at generational lows and prices that are beginning to rebound in many areas encouraging fence sitters to jump off and become home owners.

So, what is my forecast for 2011?  Let’s take a look!

  • Short sales will remain difficult as banks continue change the rules under which they operate.  Until there is a systematic, streamlined process buyers and sellers will remain in peril when dealing with short sales.  Recent issues have been with banks countering contracts to ridiculous values and countering with unrealistic settlement dates of just a few days after making our clients wait over 15 months for an approval.  The banks need to hire people familiar with the home buying process or train the ones they have to understand how real estate sales are processed in order to facilitate more successful sales.  The problem is, this won’t happen in 2011.
  • Rates hit record lows the second week of November and have increased every week since with the announcement of QE2.  However, the central bank voted to keep the target range for its benchmark federal funds rate at 0 to 0.25 percent, and reiterated its commitment to purchase an additional $600 billion in long-term Treasury securities by June 2011. This announcement should help keep interest rates below 5.5% for 2011.
  • New home sales will rebound locally as builders have weathered the storm.  Additionally, we will see more local builders enjoy success as new companies are formed or have been formed recently and they can fill the new home niche better than the national builders with their knowledge, skill and flexibility as they have lower overhead.  Competitive pricing, up to date floor plans and desirable locations will contribute to all builders’ success in 2011.
  • Many agents, loan officers and title agents will drop out of the business as the business becomes more specialized with short sales, foreclosures and continuous changes in financing. The consumer will demand professionalism from their agent.  The new agent pool will be younger and will not only embrace technology but will use it to their advantage over “experienced” agents.
  • More agents will gravitate to utilizing video as the consumer prefers video over text and pictures.  Those who adopt early will enjoy more success than those who do not embrace this medium of communication – much like the implementation of various social media tools.  Video is the new trend in real estate in 2011 and beyond and is here to stay.
  • We will see a moderate increase in prices in 2011.  Some areas will see greater gains and some will see moderate declines as each market/neighborhood has its unique benefits and challenges.  The saying has gone from “all real estate is local” to “real estate is hyperlocal” – use a professional.
  • The banks, Freddie Mac and Fannie Mae will slowly release foreclosures onto the market to protect their values and the market values in neighborhoods.  Foreclosures will remain a constant force in the news in 2011.
  • The economy is recovering slowly but at a rate that has been insufficient to bring down unemployment nationally.  Locally we are at 4.8% and we should remain low compared to the rest of the country.  The DC area boasts the lowest unemployment relative to the 15 major markets around the country and this trend will continue through 2011.  This trend will help sustain our real estate market as houses are where the jobs go at night.
  • The market and consumer will demand more professional agents with the ability to provide the right tools and technology to make their transactions smoother and efficient.  Agents who attend trainings, earn designations, and continue their education will see their incomes soar above the agents who continue to conduct their business as usual.
  • Companies that provide up to date educational opportunities, hire the best of the best, invest in technology, services and support plus trim their expenses by making tough choices will thrive in 2011 and beyond.  Companies that are top heavy, unable to consolidate or provide tools necessary for success will fail and close providing opportunities for well balanced companies.  As a result, more closures in the real estate industry will continue in 2011.

As you can see, the New Year will offer challenges and opportunities.  Recognize how you can take advantage of what is presented to you and make 2011 your best year ever!  Get it?  Got it?  Good!

Now, go sell something!

It’s the most wonderful time of the year…

For glogl 
 
Well, well, well what do we have in store for the real estate market now through the end of the year in Northern Virginia?  I believe we are in for a surprise this year.  We are going to finish the year stronger than many expect.

Typically, this is a slower time of year but we haven’t seen as big a slowdown as we normally do during the holidays.  The trends show us houses are coming off the market rapidly both through sales and being withdrawn from the market due to it being “that time of year”.  But interest rates are at all time lows and buyers are out in full force!  In speaking with other professionals – the ones who have been working hard the last few months networking, giving great advice along the way about our market and are communicating with their clients are reaping big rewards.  We have one agent, Becky Green, who sold 3 houses this past week – a holiday week no less.   Toll Brothers Amberlea in South Riding had 25 visitors on Saturday and we wrote a contract early Sunday morning but I am sure they saw similar activity later in the day – 2 visitors were in the model when we left.  An agent in our office wrote a contract on a town house in Herndon and there were 3 others competing for the same house.  So much for the slow down around the holidays!

So, where are these buyers coming from?  Many are relocation buyers coming into the area and others are relocation buyers from the spring who decided to rent.  They wanted to get familiar with the market, our area and wanted to wait and see what was going to happen with the economy and housing sector and now, their leases are ending and they are ready to buy.

In a recent Fannie Mae survey, the following information was revealed by the participants:

  • People trust homeownership as an investment over buying stocks (66% to 16%). The stock market has seen its’ tremendous fluctuations and people have no control over which direction the stock will fluctuate.  In contrast, upgrading the home adds value and paying down your mortgage increases the equity in the homes plus the many other advantages of home ownership.  In addition, they also trust owning a home over investing in a 401k, buying an insurance annuity or investing in a mutual fund. People find investing in a home safer than any other investment except putting their money into a savings account.
  • 96% of homeowners feel that homeownership has been a positive experience – what’s not to like?  Stability, pride in ownership, sense of community and many other factors contribute to this positive experience.   17% of renters think renting has been a positive experience which means 83% feel it is negative or neutral. This is a huge disparity which reflects now is a good time to buy!

Additional findings in the report that we need to make note of in the report include:

  • 62% of renters have long-term ownership aspirations – we just mentioned this above in the buyer pool in the market today.  Many more will enter the market as their leases come to an end – stay tuned.
  • Americans continue to expect home rental prices to rise more than home prices over the next year. Americans believe that it is more likely that home rental prices will go up rather than go down by a ratio of almost 4 to 1.  Right now, we have a 1.7 month supply of rentals and we see rental rates increasing on a year over year basis in our property management group.
  • An overwhelming majority of mortgage borrowers remain satisfied with their loans and 3 in 4 Americans are confident they would receive the necessary information to choose the right loan.  The teaser rate products, no income no asset loans, and balloon products are out of the market along with many others that created our housing crisis that we are climbing out of today.
  • Non-financial considerations, such as accessing good education and safety, continue to trump financial reasons for owning a home. With the top three reasons (education, safety, and more space) all increasing in percentages since the last report.  People realize how important “home” and one that is theirs is in life.
  • Since the time of purchase, 59% of mortgage borrowers have seen their home value increase.  In many markets, prices have stabilized or increased throughout Northern Virginia.  It is time to get into the market before the price escalations begin to soar.
  • In conclusion, the Fannie Mae survey showed that homeownership is still considered by the vast majority as a good investment (66%) and a positive experience (96%) and, most importantly to those sitting on the fence, 68% think it is a good time for people to buy a home – and you should!

Based upon the information above, it is critical, now more than ever to reach out to a true real estate professional and get the facts on the market and don’t rely on the national media for your real estate information.  Who knows, Santa may bring you a nice surprise for Christmas!  Get it?  Got it?  Good!

Now, go buy something!

Don’t be spooked by the media!

It must be Halloween because all of the scary news out there is about real estate.  All over the place you see, read or hear about foreclosures, double dip declines in pricing, the widespread number of delinquencies that will result in defaults and even more declining house values.  It is all so scary – unless – you know the truth!

 

Here is what the media sent out this week:

 

S&P Case-Shiller Index Records Widespread Declines in Home Prices  Home prices across the country slipped in August, according to data release by Standard & Poor’s Tuesday.  Home process decreased in 15 of the survey’s 20 metropolitan statistical areas on a month-to-month basis. Guess what happens when you read further?   Only Chicago, Detroit, Las Vegas, New York and Washington D.C. posted what S&P called “marginal improvements” in home prices over July.  Hey, at this point I will take “marginal improvements” over declines any day.  As we have been reporting – our prices are stable in most areas, increasing in many others and showing modest declines in just a few locations.  Here is what could have been their headline:

S&P/Case-Shiller 10-city composite remains up 2.6 percent from August 2009 levels.  In addition, the 20-city composite is 1.7 percent above a year earlier. Have no FEAR – it’s not that bad.  But why speak about the good news when you can haunt people with bad news?  Here’s what they continue to say “We still fear that the continued weak demand and high supply will push process gradually lower over the next 12-18 months” said Paul Dales, U.S. economist for research firm. “The current unfavorable balance between demand and supply is certainly consistent with a sustained fall back in prices” which means if houses don’t sell prices will fall – basic economics.  Here’s what I say, “If interest rates remain low, prices remain stable and consumer confidence comes back into the housing market – prices will increase further”.  The National Association of Realtors just announced that 8 out of 10 people believe now is a good time to buy.  If they believe it is, why aren’t they?  It is because of negativity of the national media and how it is portrayed to the consumer.

So, no matter whom you believe or where the housing market is going there are opportunities for success

  • Interest rates are better then phenomenal
  • Prices are stable in most of our making  it attractive to buy whether for owner, occupants or investors
  • Speaking of investors – the rental market is strong and prices will comeback which is what long term investors are looking for when buying real estate.
  • The housing market will rebound and both prices and rates will increase so we have a limited timeframe in which to take advantage of this opportunity.

Fannie Mae just announced that they are going to be looking into the foreclosure practices of many of the lenders they service which means that the release of their properties onto the market will be delayed and so will settlements.  The question is – for how long.  We will have to wait and see as well as note how many properties will be affected.  Stay tuned for more details about Fannie Mae.

Oh! One more good piece of news came across the wire…New home sales are also up 6.6% – good news is here and will hopefully continue to come.

Think long term, plan long term and educate long term and you will be successful long term.   Get it?  Got it?  Good!