Thursday, June 25, 2009

Catching Up on Real Estate News

It's been busy in our office. To catch you up on some of the recent real estate news:

National Association of Realtors reports sales of existing homes rise in May, giving the market it's first back-to-back months of increased sales since 2005. Can we call it a trend? Time will tell. Read more here: National Association of Realtors May Existing Home Sales

California has 90-day moratorium on foreclosures starting June 15. Do you qualify? Read more here: California Foreclosure Prevention Act

Federal Reserve leaves Fed Funds Rate atatus quo. To read more: Federal Reserve June 24 Press Release

and finally ...

The National Association of Home Builders reports sales of new homes nearly flat in May. Read more here: NAHB May New Home Sales

Wednesday, June 24, 2009

Home Buyers - Time for a Change?

We got an email this week. This email led to the following blog post, sharing something that is a symptom of the real estate market today.

The email was from a prospective home buyer (a couple) who had seen us online, and read reviews of us online, and emailed us stating that they wanted to work with us to buy a home.

At their (email) request, we called this prospective home buyer. In the course of the conversation it was revealed that they had made offers on several properties, only to be "beat out" by other buyers. They were frustrated, upset, confused ... wondering why this was happening. After all, it's a "buyer's market", right?

Seems the buyer was ready for a change - a change in real estate agent.

What happened in our conversation may very well have talked the buyer out of changing agents.

We explained that multiple offers is the norm in the price range and area that the buyer is considering. There's a lot of home buying competition right now. And, the competition is tough! There are many buyers with a lot of cash to use as a down payment (yes, even in today's economy). Buyers are competing on many levels with their offers - offer price, financing terms, plus other terms that differentiate each buyer.

In addition, this prospective home buyer was discouraged that the homes they were making offers on were selling for more than asking price. They were genuinely surprised by this. We explained that many distressed properties (they were looking at foreclosures) are listed at very aggressive prices, thereby encouraging multiple offers and sales prices over the list price.

The bottom line - if you feel the agent is working hard for you, continue working with that agent. We told the buyer that we would appreciate the same loyalty if it were a buyer who was working with us.

We don't know if the buyer will decide to work with us or not. But, we do know that they appreciated our input.

And, that other agent will never know that his/her buyer called us.

Saturday, June 13, 2009

Pending Home Sales Rise

While national home prices have been reported on the decline (reference our May 26, 2009 blog post: Home Prices Continue Decline Nationally"), the National Association of Realtors® (NAR) has recently released data showing that pending home sales are up for the third month in a row.

What's leading this buyer return to the real estate market? The NAR says that "Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit".

To read more: NAR Press Release: Pending Home Sales Up for Three Months in a Row.

The Federal program is "A tax credit of up to $8,000 ... available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009".

To learn more about this Federal program, please read here:
Federal Housing Tax Credit for First Time Home Buyers

Many states have their own "stimulus" program for home buyers.

In California, there is a tax credit for "qualified home buyers" who purchase a "qualified principal residence that has never been occupied". To learn more details about the program, read here: California Tax Credit for New Home Purchase

Wednesday, June 10, 2009

Report on Mortage Application Activity

The Mortgage Bankers Association (MBA) reports that for the week ending June 5, 2009, higher interest rates have put applications for purchases on a steady course while applications for refinances are down.

The MBA numbers indicate that "The refinance share of mortgage activity decreased to 59.4 percent of total applications from 62.4 percent the previous week. This is the lowest the refinance share has been since November 2008."

Not much of a surprise here. Our home buyers are very aware of rising interest rates. Our advice to prospective home buyers: check with your lender to see how the current interest rates will affect how much you can afford to spend on a home purchase.

To read more: Mortgage Bankers Association Press Release 6/10/09

Real Estate Major Factor in Job Change

Observations from the trenches ...

In the "old" real estate market, we would get many inquiries about real estate prices from people considering a job change or transfer into our area, or into the state of California. They wanted to know how much it would cost them to buy or rent a home. Out-of-state people were usually shocked at California prices. Move to California and pay more money for less house. Sometimes pay a lot more money for a lot less house. Many people did not make the move based on the high cost of real estate. Therefore, they did not take the new job offer.

In the "new" real estate market, we are getting many calls from people wanting us to estimate the value of their California property as part of the consideration of a job change or transfer. Now people are not making the move because they are limited by the lower value of their home in today's real estate market. They cannot afford to sell their home and, perhaps, take a loss on their investment. Therefore, they are not taking the new job offer.

It's interesting, isn't it? In either market, real estate is a major factor in the job change decision. And, in either real estate market, it can be the deciding factor.

Saturday, June 06, 2009

The Secret Ingredient in Real Estate Today

Are you buying or selling a home? Then you certainly must know that this is a "new" real estate market. Not the same market as last year. Not the same market as at the beginning of this year, for that matter. This "new" real estate market is ever-changing and evolving. There's no "status quo" here!

The beginning of 2009 started out with a resounding thud - relatively few sales ... few buyers wanting, willing or able to take the step that would commit them to a mortgage payment. The state of the economy meant the state of the real estate market was definitely on hold.

But, with the spring has come a spring thaw in the real estate market. A more positive vibe is out there with home buyers (reference our prior post: Housing Market Opens up in Spring). And, let's face it. If the buyers aren't buying, there is no real estate market.

Which brings us to the subject of today's article. It seems that while there are buyers ready, willing and able to jump into the market, there is a new breed of buyer out there. We've posted about this before - Two Real Estate Markets.

So, what is the secret to surviving and thriving in today's "new" real estate market?
Patience is what it's all about! Easy to say, not so easy to do.

Home buyers need patience to survive the multiple offer process, and steep competition for distressed properties. Buyers may need to write several offers before becoming the successful buyer. Have patience buyers! Your turn will come!

Home sellers need a big dose of patience to survive the competition out there. "Regular" home sellers are competing with the "distressed" sellers, and prices aren't what they used to be. Home sellers are lamenting their home value lost to the economy. Buyers coming through their home, yet no offers.

In our opinion, buyers are being very selective right now. And sellers - this means you will, most likely, have to go through a lot of buyers before the right one appears. And when they do appear, and write an offer, consider it very seriously.

You may be able to use this real estate market to your advantage ... if you take a big dose of patience along with it!

Thursday, June 04, 2009

California Real Estate License Number Mandatory

California Senate Bill No. 1461 is effective as of July 1, 2009 and it has real estate agents scrambling to comply. This Bill amends Section 10140.6 of the Business and Professions Code. As of July 1st, it requires a real estate "...licensee to include his or her license identification number on specified solicitation materials, as defined, and on real property purchase agreements when acting as an agent in those transactions."

We've been putting our license number on the purchase agreements for some time now. The California Association of Realtors® purchase agreement has been updated to include a field for the information. However, completing this information has not been mandatory up to this point.

But, it does mean that to be compliant, we will have to print new business cards and other promotional materials including notepads, etc.

What is covered? The Business and Professions code states:
"A real estate licensee shall also disclose his or her license identification number on all solicitation materials intended to be the first point of contact with consumers and on real property purchase agreements when acting as an agent in those transactions... For purposes of this section, “solicitation materials intended to be the first point of contact with consumers” includes business cards, stationery, advertising fliers, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer, and excludes an advertisement in print or electronic media and “for sale” signs."

Reference: Senate Bill 1461 (note: this is a pdf file)