Scott MacDonald counts down his 2013 Top 10 Predictions for Northern Virginia Real Estate PREDICTION #4 Resale Residential Housing Values & Appraisal Issues projection for 2013.
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NOVA Real Estate 2012 -All that Glitter & Shines
Happy Holidays!
What a year it has been in real estate. Sales were better than expected, mortgage rates went lower than expected and inventory levels have dropped substantially. As a result, most of the year I felt like a broken record stating how low inventory levels were in our area, how low interest rates were and what a great time it was to be a seller as a result of these elements. Also, I often commented on how prices had stabilized and were even increasing which made it an optimal time to buy coupled with the low interest rates. This month will be no different except that inventory is even lower and rates have come down even more. Crazy but true.
The question is – what will happen next. I am about to unveil my Top Ten Predictions for 2013 so you will have to wait and find out. It is an annual video and blog that I have been doing over the last several years. As is the case with most prognosticators, I am right sometimes and way off on others, I get razzed and complimented. We start with the year in review and how I did with my predictions then go into the next year. I am looking forward to your reviews and comments.
In the meantime, be safe, relax, spend time with the family and enjoy your holidays. If you ever need anything or have any questions, feel free to reach out to me. (703)652-5777
All the best –
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.
The Market is Hot, Hot, Hot!
The spring market is in full swing. This past weekend I was with an agent and they had 3 contracts on 3 different listings that went on the market the previous Thursday. One of them had multiple offers. In addition, we put a house back on the market last week that was on the market previously for about five months with no activity and got a contract on it over the weekend. So there are a lot of buyers out their looking, inventory levels seemed to have increased, but only slightly, interest rates remain low, days on market and months’ supply continue to stay relatively low as well. So if you are looking to sell, now is a great time. The trees are in bloom and the market is hot just like the weather! Let us know what we can do for you this Spring!
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!
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.
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!
Do they really like you?
Likability is one of the critical areas for success in sales and in life. As the saying goes, people do business with those that they know, like and trust. So the question becomes, how do you get people to like you?
The first step is to become approachable – smile, make eye contact, extend a handshake first and introduce yourself first.
Listen more than you speak – people love the sound of their voice and to voice their opinions. Listen, don’t interrupt and be respectful of others opinions.
Much like the sound of their voice, they love to hear their name. Use their name – it not only will make them happy but it will reinforce and help you remember who they are when you see them later. Remember and acknowledge dates that are important to them – birthdays, anniversaries, and birthdates of their children are just a few!
Deliver on what you promise and be true to your word. Your reputation takes years to build and you do it one day at a time one interaction at a time. Remember, each encounter is extremely important to the other person you are meeting with – make it count for them!
Become solution oriented for others. Help them solve what issues they are encountering and it will endear them to you.
Be humble – don’t brag, put down or show a huge ego. Let your actions speak for you not your words.
Respect others and be empathetic. Don’t talk down to people or ignore their needs or wants. You don’t always have to agree but take the time to understand where they are coming from in with their point of view.
Be happy, positive and upbeat. Optimism goes a long way to having people like you. Negativity, snapping at people, complaining and putting others down is ways to drive people away from you.
Act professionally in your appearance, your demeanor, your actions and remember to be polite – it will go a long way to adding to your likability.
Be honest and show integrity. When people lie, exaggerate or stretch the truth, people will see through this over time and you will lose credibility and in turn, it will hurt your likability factor.
Be inspirational, motivational and last but not least have a great sense of humor. Be able to laugh and do it often. People like to be around people who are fun.
These are just a few thoughts to help you get further in life faster. Get it? Got it? Good!
Now, go sell something!
Scott's Motivation and Real Estate Market Updates 