Housing Heals From The Bottom Up.

This is a re-blog of a post by Florida Realtor Allison Stewart on ActiveRain discussing research data made available at the NAR Conference.

The market always heals from the bottom up” according to Paul Bishop, National Association of Realtors Vice President of Research. According to the recently released sales numbers 47% of buyers this past year were first time home buyers.  Surpassing the previous high record of first time purchasers set back in 1991

“These buyers are critical to housing and a general economic recovery …they absorb inventory, free existing owners to make a trade and stimulate related goods and services ” said Bishop.  He compared this rise to the last recession in 1991, where the same dynamic played out “first time home buyers started the chain reaction that led the nation out of recession” he said.   Bishop credits tax incentives,record high affordability, and pent up buyer demand to this spike in recent sales.   Economists would also credit the FED with suppressing any immediate rise in interest rates affecting home mortgages while the economy is still so fragile.

BUYER PROFILES ARE ALSO DIFFERENT THAN ONE WOULD EXPECT

The median age of a first time home buyer is 30 indicating that some are younger and some are older. They are planning to live in their homes for at least ten years. The typical cost Nationwide was $156,000 down 7% from last years figure of $165,000. 87% of First time Home Buyers surveyed consider their home to be a good investment.”   Single Family homes sold a higher rate than other forms of housing.  In fact 78% of the home achieved were single family homes

HOW ARE BUYERS PAYING FOR HOMES? 96% Chose a fixed rate mortgage.  (55% used FHA compared to 8% Using VA Programs) 61% of First time buyers used their savings as a down payment. 22% received down payment assistance as a gift from family.      6% received loans for down payments from family 6% tapped into a 401 (k) program

WHAT IS OLD IS NEW AGAIN- SAVING MONEY FOR A DOWN PAYMENT ON A HOME

39% of home buyers have cut back on luxury items, 38% cut back on entertainment and 30% cut back spending on clothing according to the study.

And a staggering 80% of first time home buyers are using the Internet.

HOW HAVE RECENT CHANGES IN REAL ESTATE AFFECTED SALES?

13% Experienced a Purchase Agreement that was canceled, terminated or fell through “This raises the question of how many potential buyers were unsuccessful because of problems with appraisals or loan qualifications. The market would be stronger without these problems” Bishop added.

Only 8% of applicants were rejected for loans (a 92% success rate) 12% of applicants said that financing their first home was more difficult than they expected. 8% of all buyers paid cash.

85% of Successful Home Sellers used a Real Estate Professional. Sellers surveyed want agents to price their homes competitively, find a buyer, market the property and sell within a specific time frame.

THE TAX CREDIT  EXPANSION INTO 2010

The expansion of the tax incentive program will extend to homes placed under purchase agreements by April 30, 2010  and will include home buyers who have owned a home in the past 5 years.

Repeat Buyers  surveyed  had an average age of  48, earning $88,100 and plan to stay in the homes they purchased on average for 12 years.  These buyers typically bought more expensive housing. The median price on a National level was  $224,500

RECORD DECLINE IN FOR SALE BY OWNER PROPERTIES.

In the actual number of homes sold without representation was a record low according the most recent survey only 6%. Declining for the second year in row.

The most difficult tasks reported by owners attempting to sell homes themselves were,; preparing and fixing the home, understanding and performing the paperwork and selling within the planned length of time.

The overwhelming majority of successful sellers used a Real Estate Professional full service brokerage.

St. Cloud Florida  Real Estate Broker/Associate,

Understanding Stock Market Terms Today

Along with revising history to suit our needs, we are remaking the definitions of several commonly used terms:

CEO -Chief Embezzlement Officer.

CFO- Corporate Fraud Officer.

BULL MARKET – A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET – A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING – The art of buying low and selling lower.

P/E RATIO – The percentage of investors wetting their pants as the market keeps crashing.

BROKER – What my broker has made me.

STANDARD & POOR – Your life in a nutshell.

STOCK ANALYST – Idiot who just downgraded your stock.

STOCK SPLIT – When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER – A guy whose phone has been disconnected.

MARKET CORRECTION – The day after you buy stocks.

CASH FLOW- The movement your money makes as it disappears down the toilet.

YAHOO – What you yell after selling it to some poor sucker for $240 per share.

WINDOWS – What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR – Past year investor who’s now locked up in a nuthouse.

PROFIT – An archaic word no longer in use.

Thanks to Mirela Monte of Myrtle Beach, SC for this gem.

And a couple famous (or should be) quotes of the day.

Lord, the money we spend on government, and it’s not one bit better than the government that we got for one-third the money twenty years ago! Will Rogers

Why does a slight tax increase cost you two hundred dollars and a substantial tax cut saves you thirty cents? Peg Bracken

If Thomas Jefferson thought taxation without representation was bad, he should see it with representation! Rush Limbaugh

Looking for Land Use Problems YOU Have.

There are times I’ve been critical of some NAR positions and pronouncements. But when they do it right it’s a thing of beauty. I’m proud to be a Member of the Land Use, Property Rights and Environment Committee. Between national meetings the group usually has a Webinar or 2, as we did today preparatory to our meetings in Washington DC in May.

This Committee deals with a fascinating range of problems related to federal land use legislation. I’ve posted info on some issues like the checkerboard land use issue, water rights, coastal and riparian issues. As you might imagine, in this great land – from sea to shining sea, there is a wide variety of issues. But some consistently emerge at the top of the list, things like water rights, land grants/transfers, the gamut of ‘green’ issues and zoning/domain issues, to name a few.

In DC the committee will hold a Forum on Tuesday, 5/12, in the Omni. It’s an open forum to bring your own state, regional or local concerns to the committee. If you have local concerns, make sure your state/NAR Directors are aware of them. I will also be happy to pass along any comments made to this post.

Water is a pre-eminent issue across the country. From California to Maine, from Texas to Minnesota – water is king. And where there are water issues there are often collateral issues like endangered species, anything green, land use & water rights.

This also morphs into a second major concern right now, that of the checkerboard land use problem. Over the years land trusts have built up to manage these ‘public’ lands. In the absence of strong federal policy, they have pushed their own agenda’s, often to the detriment of adjacent property owners and communities. Stories were shared of these landowners doing land swaps of 100 acres for 600 acres, or swapping land rights but keeping water rights – minor annoyances like that.

Anyway, if you’re going to be in DC in May, stop by the Omni on Tuesday morning at 9. Or, if you don’t want to be up that early, just leave a comment here and I’ll let them know it’s from the ActiveRain Land Use Group.

Gene, the biggest land use issue where I’m from is:


Fixin’ To Get Cooked In The Squat

I was inspired by Len  Harley’s recent post “Get Out Of Bed And Go To Work In The Morning, Even If It’s Just Down The Hall” . In it, Lenn gives us ten ways for Realtors to get back in touch with the basics of our business and how to weather the current housing market. But of the 10 excellent suggestions Lenn makes, they all fall apart if we don’t do the first one – get out of bed and go to work in the morning even if it’s just down the hall.

Real estate isn’t the right job for a lot of people, even though a lot of people seem to think it is. If you’re not a self-starter, if you can’t motivate yourself and monitor your own activity – then this might not be the business for you. Many of us got into the business because it affords us a certain degree of freedom and flexibility. We can set our own hours, if we need time off we take it, if we need more money we make it, if we prefer to wear Hawaiian shirts instead of suits (one of my top motivations) we can.

But all that comes with a price – discipline. If you lack it – you will fail, it’s just that simple. As Lenn notes in her post, be prepared to put in at least the same amount of time you would on a regular job – at least 10 hours a day including travel time. If you work 6 days a week, just look at it like overtime. If you work 7 days a week you’ll soon have more business than you know what to do with – even in this market. Or maybe especially in this market – since so many agents are just laying around the office pissing and moaning about how bad the market is. That’s why my office is so great – if there’s any talking going on it’s me talking to myself and, as they say out on the range – ‘never is heard a discouraging word.’

And I was reminded of a story I heard years ago from that old master motivator himself, Zig Ziglar. Zig would tell the story about growing up in Yazoo City, Mississippi. we lived next door to some rich folks. I know they were rich because they not only had a cook, but the cook had something to cook. In the 1930’s that was a sure sign of wealth. I was there for lunch one day, as I tried to be most every day. On this occasion, the cook brought out a pan of biscuits. Since they were no thicker than a silver dollar, I asked, “Maude, what happened to those biscuits?” She reared back, laughed, and said, “Well, those biscuits squatted to rise, but they just got cooked in the squat.”

If you’ve ever watched scratch biscuits cook, you know the first step is they kinda settle out a little – squat down as it were, before they rise up and get all golden brown delicious. But how many of us get cooked in the squat? How many of us are ‘fixin to’ rise up and do something, knock on some doors, call some past clients, do an open house, and never get past that ‘fixin to’ stage? Or we’re ‘fixin to’ do something when everything is just right. We’re ‘fixin to’ do an open house but it’s a little cloudy today, probably nobody will be out. We’re ‘fixin to’ call some past clients but it’s too early or too close to lunch time or Oprah’s on so the people are probably busy, or out, or or or. We squat down to rise but get cooked in the squat.

You’ve heard the term ‘analysis paralysis’. In my previous life in the corporate world we saw that a lot. People can get too much information these days and mistake the safety of gathering information for real action. We do need to know our local market cold, but we also need to get out and communicate that knowledge to other people. Just knowing it all ourselves doesn’t pay the rent. Knowing everything about our market but doing nothing is no more effective than knowing nothing.

Truth be told, even the guy who knows nothing will do better because at least he’s out there doing something. How mant times have you asked youself “Who on their right mind would do business with that guy”? Yeah, but they’re out there doing business aren’t they? Which is more than the guy sitting at the office computer all day who knows every house for sale in 3 states and has the caffeine buzz to prove it.

Success is not a destination, it’s a journey. It’s the direction in which you are traveling.
Zig Zlglar
Action may not always bring happiness, but there is no happiness without action.
Benjamin Disraeli
You don’t have to be great to get started, but you have to get started to be great.
Somebody Smart

Well, at least that’s my $.02 worth. I could be wrong.

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly,
the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.

Get Out Of Bed And Go To Work In The Morning, Even If OIt’s Just Down The Hall

Any of you on the ActiveRain real estate network are familiar with Lenn Harley. Lenn is a Broker in Maryland & Virginia who runs a very successful business largely out of her computer. Nearly every blog Lenn writes is geared toward making her phone ring whether it’s from a referring agent or from a prospective client. She is an expert on SEO and ways to do more business for less money. I am re-posting this recent blog of hers because many of us today are trying to ‘get back to the basics’ to weather this current housing situation. In case you’ve forgotten some of the basics, Lenn lays them out for you in just a few simple steps.

GET OUT OF BED AND GO TO WORK IN THE MORNING, EVEN IF IT’S JUST DOWN THE HALL.

John MacArthur, a gentleman and a scholar, who uses grace and finesse to inspire agents in the office he manages, inspired me to render a bit of HARD CORE REAL ESTATE ADVICE.

GET BUSY. Do a business plan where you determine your market and your resources and and and work it hard.  If the market changes, be nimble and ready to change focus with the market.

THINK ABOUT YOUR BUSINESS EVERY DAY. Remember that being a real estate salesperson is a full time job and get up in the morning and go to work, even if it’s down the hall.  Put in as much time as you would on a salaried job including travel time, that’s about 10 hours a day at least 5 days a week.

PUT IN SOME OVERTIME. If you work 6 days a week, you’ll sell more real estate and just consider that Real estate agentsovertime pay.  If you work 7 days a week, you’ll soon have more business than you can handle and more money because you’ll be closing more sales with satisfied clients.

NETWORK WITH FRIENDS AND RELATIVES. There is business there, but only if you project a professional and successful persona.

LEARN THE MARKET AND WHAT PRICE RANGES ARE SELLING. Don’t pooh-pooh the small sales these days, one settlement will pay your rent or mortgage payment for a month.

LEARN TO USE YOUR COMPUTER PROGRAMS FOR PROMOTIONAL MATERIALS so you don’t have to buy them from your broker.  Keep your virus protection current.  If your computer is down you not only have computer repair costs, you may also have to rely on office support, which can be time consuming and costly.

BUDGET YOUR MONEY. If you have spousal income until your business is profitable, you are very fortunate indeed.

SAVE WHAT YOU CAN. If you have no other source of income, stay out of the mall.

vehicle

DON’T SCRIMP ON AUTO MAINTENANCE. Automobile trouble will take you right out of business.  Agents need not only a clean and comfortable vehicle, the dang thing must operate safely and reliably.

TAKE CARE OF YOUR HEALTH. Real estate practice is far easier if you can climb those town home steps, walk that country lot, drive all day showing homes and not be tired.  Good diet and regular exercise will pay off in stamina and that will pay off in buyers and sellers knowing that they can count on you.

The above doesn’t sound like fun, does it?  It isn’t meant to.  HARD CORE REAL ESTATE ADVICE means working hard, planning your activities and follow through, day after day after day.

ENJOY THE WORK YOU DO AND YOU’LL BE REWARDED. If you have planned your work schedule, just completing the tasks on your daily list will be rewarding and you’ll realize a successful day.

Success leads to more success.

Murrieta/Temecula – Boomtowns in Waiting.

Forbes.com recently posted an article entitled ‘America’s Post-Subprime Boomtowns’. It calls out the top ten markets in the country that, in some cases have suffered the most as a result of the sub-prime melt-down, but that are poised to come roaring back after the fall. Not surprisingly, California cities are in 7 of the top 10 spots – and right up at the top of the list are Perris in #5 spot, Temecula coming in at #3 and

Murrieta at #1.

“Woodbridge joins Murrieta, Calif., Queen Creek, Ariz., and Port St. Lucie, Fla., on a list of towns that have been ravaged by subprime mortgages and foreclosures but where buyers are returning the market. Using data from RealtyTrac, an Irvine, Calif.-based foreclosure listing firm, we examined every U.S. town with a population under 100,000 to identify places where purchases of foreclosed properties have surged most in the last year to get a sense of the towns in which buyers are investing”

It’s a well done article supported by a slide show summary of each market backed up by stats from RealtyTrac, Bureau of Labor, Foreclosure Radar and others. If there was ever a doubt in  your mind about our status in a year or two, a quick read through this article will let you sleep a littler easier at night.

Rounding out the top 10 for California, Brentwood at #4, Antelope at #6, Hesperia at #8 and Lincoln at #10.  #2 goes to Woodbridge, VA, Queen Creek, AZ comes in at #7 and Port Saint Lucie, FL comes ion at #9.

You can read the article here: America’s Post-Subprime Boomtowns
& check out the slideshow of top 10 here: America’s Top Ten Boometowns

While you check out the article, you might want to check out the companion piece entitled ‘America’s Fastest Dying Cities’. #1 on that hit parade, Bensenville, IL,. Most of these places are located in the rust belt and auto manufacturing and related industries factor heavily in their make-up. After the pounding we’ve taken the past couple years, I’m still happy to be sitting here in Murrieta, CA on a rainy February afternoon instead of up to my cajones in snow in Hamtramck, MI (#8). No offense to Michiganders.

FRAUD – Slam the Door, The Horse Is Gone.

Much like errant weeds after a spring rain, real estate fraud scams continue to pop up and victims continue to volunteer their reputations and their resources. Me, I can’t find a qualified buyer for a bargain priced home. These guys find suckers ready to shell out tens and hundreds of thousands of dollars to invest in housing they’ll never own for returns they’ll never see.

This latest revelation involves a Roseville-based ‘investment’ company called Loomis Wealth Solutions, formerly known as the Advantage Financial Group about one of their employees known as Christopher J. Warren, formerly known as Mark A. Seagraves. Folks, if there’s one thing I’ve learned in my brief sojourn on this planet, if you run into somebody with too many names working for a company with too many names, don’t give them your life savings. While that little rule may have kept me from making millions, it’s also kept me from losing millions.

So the story is about Mr. Seagraves/Warren who has been cooperating with U.S. Attorneys against the owner of the company, Lee Loomis regarding this classic Ponzi. This past week he decided to publish a tell-all seven page account of his mis-deeds on a website (sorry, I can’t find it). The next day he chartered a private jet (for $156,000) and fled to Mexico. The NEXT day, Federal prosecutors decided to formally charge him for his role in the $100 million mortgage fraud scheme. Hmmm. Timing seems a little bass-ackwards there boys.

Anyway, you can read the whole sordid story here:

California fugitive charged in $100M mortgage fraud

By DON THOMPSON – Associated Press | Friday, February 6, 2009 9:59 PM PST

SACRAMENTO —- Federal prosecutors said Friday that they charged a suspect in a $100 million mortgage fraud and investment scheme that spanned five states after he fled the country in a private jet this week.

You can read the a personal account by one of the victims here: Poor Dads Journey to Wealth

More detail about the company and the scheme here: Rip-Off Report – Loomis Wealth Solutions

And the California Dept. of Corporations Cease & Refrain Order here: DOC Cease & Refrain

There’s really only one way to stop this sort of thing from happening and that’s to get out in front of it by being informed. Law enforcement can stop it but, as in this case, 5 years and $100 million too late.

frSubscribe & contribute to the ActiveRain Fraud Group. Share your cautionary tales and successes so others might be informed. Realtors – we’re part of the solution not part of the problem. Make it so.