real estate market
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!
2012…what will it bring?
I was recently asked to provide some answers to the following questions for the RISMedia’s Real Estate Magazine…
1. As we wrap up the fourth quarter of 2011, has this year panned out as you expected it to? Were there any major surprises…good or bad?
This year was definitely a little more challenging than expected with all of the financing changes that occurred as far as the tightening of credit, increase in FHA MI, and continued issues with appraisals but overall we still are having a great year. We opened a fourth office and agents are affiliating with us which is great. Each year, I do my Top 10 predictions for the upcoming year and I hit on some, missed on others. The best miss was I had predicted interest rates would be above 6% and as we all know, I couldn’t have been any further off which is good. For the best hit, I predicted we would see new home sales prices come down and as a result we would see more new home sales and we did – at least in Northern Virginia we did. Toll Brother’s had a record year in South Riding, a community next to our Chantilly office, selling 110 houses in their fiscal year which ended in October. The community where our Ashburn office is located, Brambleton sold 354 houses in 2010; the 8th best-selling community in the country has sold over 500 houses YTD.
2. In your opinion, what will be the most significant drivers of business in 2012 and how are you preparing your company to take advantage of them?
In my opinion, there are a few. Investors will continue to play a huge role in our market. Educating agents on how to work with investors, helping them get involved in property management and learn to market themselves to attract more investors and tenants to ensure success in this arena. On the flip side of investors are first time buyers. As rents increase, with the interest rate environment we are currently in, buying may be a better option for many would be tenants. So having a plan of action to help first time buyers is extremely important. Although interest rates have been at record lows, they have not motivated huge numbers of buyers to enter the market but a sharp increase in rates could be devastating to the housing recovery so keeping rates low is critical and educating the public on the true cost of home ownership is critical. In addition, HAMP 2.0, if successful will help keep in their homes longer, this will help stabilize neighborhoods and prevent further foreclosures plus it will aid in increasing consumer confidence. So being a trusted advisor to our past clients, letting them know about this opportunity is important to growing their business as they are a trusted advisor. We also need to lobby RPAC to keep the Mortgage Interest Deduction as well as prevent the implementation of 20% down payment loans so getting our agents involved in RPAC is a focus next year as well.
3. What are your predictions for consumer confidence in 2012? What issues stand to most significantly impact consumer confidence next year and what strategies will you employ to help restore confidence?
If the press continues to pump out negative information on the economy and housing instead of putting a positive spin on what is happening and jobs are not restored, consumer confidence will stay low. It is critical that agents get the word out about their market as each market is local and even hyper local. Consumer confidence will be a key for us to continue to drive sales locally. Our market in Northern Virginia is unlike any other in the country. Our distressed property inventory is only 18% of our market, as such, foreclosures and short sales are not a driving force, our unemployment rate in Northern Virginia is in the 5% range, and we only have a 2.9 month supply of houses. It is our job to get this information out to our clients and consumers to dispel the negative news they hear virtually daily on the housing market. We need to continue to let them consumers know that if their employment is stable, the house is right for them and their family, interest rates are phenomenal and now is the right time to buy. So education is the key. Blogging, videos, email campaigns and direct mail are how we plan to get the word out to the public.
Top Prodcers meet to discuss the market
It is hard to believe it was the second Thursday of the month already…time and summer sure fly by fast! Here is what the Top Producers in real estate had to say this month. If you have questions you would like me to pose to them, please let me know.
Negative news is everywhere. Some websites even post good news one day and negative news the next. How do you handle it and when will it stop? Tell people to look at time frame of ownership – long terms hold will have fluctuations no matter what the investment is – stocks, gold and housing. Show stats of our area being number one in appreciation month over month. We are seeing incremental price increases in lower prices. The news is reporting what is true across the country, we are just jaded because our prices are stable, unemployment is low, and pay rates are low plus they can’t sell houses. Use the bad news to get price reductions. Talk about the “cost” of money today and how great rates are compared with other years.
The government will come to an agreement on the deficit so we don’t lose AAA status, rates will stay low and the dollar won’t devalue. Both sides of the aisle on Capitol Hill will do the right thing and make it happen because if they don’t, we all lose.
Control your closings – select the title company to get information on the lender when agents fail to give you Form 100 – removing financing contingency. The bottom line is too many agents are not familiar with the contract or the process. Agents need to be educated and then educate their buyers.
Interest rates have increased recently, have you seen any effects on the market? Everyone agrees that nothing has really slowed down. The market remains stable.
Where is the market? Contracts have slowed down in Loudoun and Prince William counties, agents are busy listing houses and trying to find where the prices should be on their listings and trying to find buyers. Townhouses are selling well in Western Fairfax County – singles are lingering on the market.
Appraisals are problems for some not for all right. Appraisers are still coming from outside the area to and are appraising properties low – herein lies the issue. We need market specific appraisers every time.
What are you going to do the second half of the year? Some agents are hiring coaches for the second half of the year, focusing on new home construction, and one is bringing in vendors to open houses to provide gift cards to agents who attend. Others are calling their sphere more frequently and generating leads this way.
The discussions today were lively so it is better to attend if you qualify then just by reading the notes. 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!
Our donation dollars at work!
There are times in your life when you feel fortunate and humbled at the same time. Our visit to The National Children’s Hospital in Washington, DC was one of those occasions. We are fortunate that our children are healthy and not undergoing treatments that many of the children at the hospital have to endure. We are fortunate to have experienced the hospital as visitors and not as parents or friends of a patient staying at the hospital. As a result of our contributions to the Children’s Miracle Network we were able to have a VIP tour of the hospital. It is an amazing facility that provides unbelievable care to children for any reason regardless if they have insurance or not.
What immediately struck me was the kindness of the staff from the valet parker to our tour guide Milton to our liaison, Kimberly Lane. They all truly appear to love their job. Next was the color scheme and design features of the floors we visited. The design feature input was made by the families and children who had to have a stay at the hospital. Bright colors, balloons, and vibrantly colored floors and walls highlighted each floor and gave the appearance of no other hospital.
The art room is another aspect that helped bring a new appreciation of what the children who stay at the hospital have to endure make this facility a special one. The children can do art projects to help them escape their current situation and help aid them in their healing process. In addition to the art room are the playrooms they make available to the children so they can seek solace and “get away” from the hospital staff in a fun environment.
The hospital rooms offer as much privacy as possible and are designed with three separate sections – medical, patient and family areas. They are designed to make the stay more comfortable for all involved. There are also separate “family” areas as well as laundry facilities available so parents can remain close to their children while allowing them to get some time out of the hospital room.
The wall of encouragement is what had the biggest impact on me. The wall features photos of former patients that told their story, what impacted them most about their stay at the hospital, what the current patients can do stay positive and lastly, who is their inspiration and why. It was a very moving experience to read how these children coped with their conditions and made their stay a success to help the others become success stories as well.
All in all, it was a great experience and one that I am proud to be a part of by contributing a portion of each sale to CMN and encouraging our agents to do the same. We highly encourage doing all that you can by helping support us in this cause – one visit to the hospital will get you hooked. As discussed at our Quarterly Meeting in December, all of our Chili Cook-off donations will go to support CMN as well. As we expand offices, we will be doing soup cook-offs, barbeque cook-offs and other cooking competitions to support this cause so please let us know your thoughts on how we can make these events even better and well attended. Get it? Got it? Good!
Now, go sell something – so you can make a contribution!
You’ve got to do more to get more!
Sales is a tough job, no doubt about it, especially today in real estate. You hear, read and talk about with others that in the real estate business, it is a numbers game. If you want more results, you have to do more activities, talk with more people, hold more open houses, make more calls, and basically, just do more to get more business. While this is true, it is only partially true.
You need to have quality contacts to truly have an impact on your bottom line. You need to provide value to those you speak with and earn the business or else your bottom line won’t change. You must engage others buy asking about them, their families, their business, etc. and take an interest in them before you talk about you – basic relationship building.
In addition, it is not just enough to say you are in real estate and business is unbelievable, you need to have an “elevator speech” about the services you provide, the information you share, and how you are different than others in the business. If you don’t, why would your business increase? Holding more open houses, knocking on doors, calling more FSBO’s or expired listings won’t get it done – you need to build relationships. You need to add value to those you speak with to earn their trust and in turn, you will get the opportunity to grow your business through referrals.
You need to know what is impacting our business and how that is impacting both buyers and sellers today. Yes, today because the real estate market changes virtually daily. How are property values and why is now a good time to buy and conversely, why it is a good time to sell. How do the low rates effect payments at loan amounts of $250,000, $300,000 or $500,000 and what is the difference if rates go up 1%? What are house values in your neighborhood, your town, and county for all categories of houses – condos, townhouses, and single family homes? How many properties are for sale? What are the month’s supply of houses and what does this mean? Is it a buyer’s or seller’s market? What price ranges are hot, who is buying in those price ranges and why? How is the rental market locally? How are their prices? What is their month’s supply? If you had the answers to these questions, do you believe you would be perceived as an expert by those you encountered and hence, obtain more business?
You have to know the real estate business, the numbers and the trends. Where is the market headed and why? Give your opinion and be able to back it up with facts. Watch videos, read blogs, read newsletters, network with others in our industry and absorb what they are saying and develop your conversation strategy based upon what you have learned to earn more business.
As previously mentioned, you need to increase your activities but you also need to improve the quality of your conversations. You need to become an expert in the business. If you only increase your activities or only gain knowledge and don’t share it with others, you won’t have the same business building results if you do them in concert with each other. Get it? Got it? Good!
Now, go sell something!
Control your destiny or someone else will!
You are in control of yourself, your life and all that you do in it. How do you move past the current situation you are in today? Get educated – learn all you can about your industry or one you want be a part of and become the expert. It doesn’t take much. Read for one hour per day in the field you wish to learn. One hour per day turns into one book per week. One book per week becomes 52 in one year. You tell me if you read 52 books on one subject and can’t become an expert, I will tell you, you are wrong. Most people don’t read one book in a year. Learn what you have read and apply it to the real world situations you encounter.
Those who know and do more than others in any walk of life earn more respect, get more recognition and go further in their careers. And, guess what? They earn more money. If you want to change where you are in life, you need to change your attitude and regain control of your thoughts, desires and where you want to be. As the saying goes, “if it is to be, it is up to me”. So become positive and optimistic. There are so many negative people in the world and there is so much negative press on the television, in newspapers, etc. and they all want company. My advice is to avoid these people. Look at every opportunity as a learning experience and as an opportunity. Not a problem. Become solution oriented and you will get results and become even more optimistic and positive. If you smile more – this too will help you so start with this simple task! Hang around positive forward thinking people and learn how they handle situations and remain optimistic. It is a learned skill – teach it to yourself.
Stop blaming others, the economy, the industry you are in, the government or any other excuse. You determine where you end up in life. There are countless numbers of people whom have come from every walk in life with every opportunity presented to them and it is the ones who take advantage of what is presented and makes the most of the experiences that gains the most from them.
Other people get tired of hearing negative responses to everything said or about everything that happens around them. Take the time to figure it out for yourself. Do something about your current situation. Don’t be a victim and become a success story and share your story with others. Life is a contact sport, become a part of it and direct yourself to where you want to go and reap the rewards.
Again, you control your destiny. Make the most of your time – do what makes you the most productive, consistently and you will get results. Get it? Got it? Good!
Now, go sell something!
What’s up with Gateway? News from our Quarterly Meeting
The Lorton office is progressing quite nicely – we should be officially open the week of the 10th along with the help of the county. Feel free to stop by anytime for a visit as we are getting settled in with the technology, and finishing touches. Hope to see you there soon! Since this time, we have received our Occupancy Permit – great job to Brett for seeing this difficult process all the way to fruition – it was extremely frustrating and tenuous.
We have a great opportunity to potentially sublease some of our space in Chantilly. The landlord has a need for the space coupled with KHov’s desire to give up some space so if you see activity over the next month or so, you will know what is happening. In addition to relinquishing some space, we will be extending our lease for an additional 10 years.
For those of you unfamiliar with the changes at RE/MAX, RE/MAX has changed their name to RE/MAX, LLC. What does this mean to you? It puts our Independent Contract Agreements out of date. In addition, it refers to RSN which is now RE/MAX University, it references Web Roster which is now on Mainstreet and some other minor changes. Therefore, we have a 3 page revised agreement that we need you to sign to bring us into compliance with the headquarter company. Kate will be sending out the agreements for you to sign – please do so at your earliest convenience. Thanks!
The free trip to Vegas is moving along nicely for some – not so much for others! Joe Doman is in the point standings lead as he has participated in the most trainings, charity events, etc. so far. You still have time to catch up as the contest doesn’t end until the end of the year. For more details on how you can get to Vegas on us, please let me know!
Please remember to sign your paperwork on listings and buyer agreements!! As is the case every quarter, we need to discuss paperwork. Please be compliant so we don’t need to have this covered next meeting!
We are putting together bowling teams for RPAC for each of the offices. Please let us know if you can make it out on the 16th of June to Bowl America at Fairfax Circle. We’d love to see you there!
Gary Plaag of Couragio Consulting helped us all tremendously with our presentations thanks to Kathy Worek giving Gary her listing presentation. We were all amused and educated at the same time. For more details on how Gary can help you get better results, call him at 703-858-6162.
Now, go sell something!
Scott's Motivation and Real Estate Market Updates 
