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real estate market
Scott MacDonald TOP 10 Predictions 2013 Prediction #9
Scott MacDonald counts down his 2013 Top 10 Preditions for Northern Virginia Real Estate PREDICTION #9 Interest Rate projection for 2013.
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.
Coast to Coast “Buzz” – Market Rebound!
As we enter the 4thquarter of the year, we continue to see strong sales in real estate, low inventory levels of existing homes on the market and phenomenally low interest rates. I just got back from the RE/MAX California-Hawaii Regional meetings and all the buzz was how the market is on the rebound and how there has never been a better time to buy a home.
It was funny, as I was headed to the airport back home yesterday, the taxi driver overheard my phone conversations. When I was finally off the phone, he asked if I was in real estate. When I confirmed his suspicion, even he commented – unsolicited – that more people should be buying a home today. He had no real estate experience and he couldn’t understand why people were paying more in rent than if they were to buy under the current conditions. He even made the comment that workers at 7-11 could really buy a house today because they could actually qualify for a mortgage -not like wat was happening in the past.
West Coast to East Coast – the “Buzz” is Market Rebound!
We are at historically high affordability rates for home ownership which makes today a great time to be a home owner or investor. From the investor’s side of the equation, there are many people who cannot buy because of past history, some are only relocating temporarily to the area, and some are just plain old gun shy to buy because of the negative housing market over the last 5 years. Therefore, with prices down from the all-time highs but making their way up the ladder, a good renter pool, great financing options for investors – now is the time to get in the game! Home ownership is a long term investment strategy that can pay big dividends later. To learn more about becoming an investor, call us today. We would be happy to speak with you about your financial goals and objectives.
So this is what Deja Vu feels like!
The real estate market reminds me of the Bill Murray movie Ground Hog’s Day because I continue to say very similar things each month. We have very low inventory of houses, fewer than 4,800 in all of Northern Virginia. It has been this low for over 5 weeks and we haven’t seen inventory levels this consistently low since 2005. Interest rates remain at historic lows and it appears as if they are going to stay this low through 2014 unless something unforeseen happens in the economy. Lastly, we continue to see a drastic decrease in distressed property inventory in Northern Virginia and the onslaught of foreclosures will not happen locally. We have just 592 short sales and 290 foreclosures on the market and Notice of Trustee sales are only averaging 2 pages per day. Short sales and Notice of Trustee sales lead to foreclosures and if we don’t have them, we won’t see them.
The one thing that we typically don’t see this time of year is the number of attendees at open houses we are currently seeing. It is more typical than not to hear our agents having 20-40 people attend an open house and receiving multiple contracts as a result. This type of activity is more likely to happen in the spring but warm weather and consumer confidence building has helped spur this activity. As I have said in the past, if sellers properly price their properties, have it in prime condition and have it staged, they are receiving multiple offers because buyers are buying.
What are we reading in the news about the rest of the country and the market that will indirectly affect us? While delinquencies and defaults slowly improve in the housing economy as a whole, FHA’s portfolio has not had the same good fortune. The woes of FHA are creating increased pressure on the agency to reduce risk and increase costs to its borrowers, most of whom are first time buyers. In December, about one of every 10 FHA mortgages or 9.73 percent, were seriously delinquent, or more than 90 days past due. Compare that to all mortgages, whose seriously delinquent rate fell to 7.3% in December from 7.8 a year earlier. For nine straight months, FHA delinquencies have risen while mortgages in general have improved. We will keep an eye on this for you and let you know when the costs increase. On a positive note for those going through short sales and loan modifications, President Obama Proposes Extending Tax Waiver on Mortgage Debt Forgiveness that is due to expire at the end of this year. The Act ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residence do not have to pay taxes on the amount forgiven. In addition to this, some banks are paying people to aid in their short sales. JP Morgan Chase went national with short-sale incentive offers last year, paying up to $35,000 in some cases. Bank of America is testing incentives from $5,000 to $25,000 in Florida to see if they should be expanding to more states. Wells Fargo’s incentive offers range of less than $3,000 to $20,000. Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures. Let us know if you need our assistance with either of these scenarios.
If you have questions about your personal situation, please feel free to call us. We are here to help you with all of your real estate needs.
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.
Scott's Motivation and Real Estate Market Updates 