Why is the Real Estate market still down? Where are the Buyers? – ask the lenders.

October 14, 2011

Interest rates are at 40 – year lows  (AGAIN!) Prices are way down. There are many properties available. Real Estate is actually ON SALE! 20% OFF .

So why are the numbers so dismal and the real estate markets still slumping, to say the least

30-year mortgage rates fall below 4% for first time – Oct. 6, 2011.

One answer lies in the lenders rules for approving loans. Right now and for the past several quarters, we have had the best affordability conditions in decades for buying a home. But still existing home sales and new home sales are way down from the levels in 2005. According the NAR reserach, existing home sales dropped 3.5% in July of 2011 and pending home sales dropped by 1.3 percent.

 Lenders strict underwriting requirements are placing a huge drag on the real estate market. The average person does not have the credit score or the cash reserves required to buy. with the rates as low as they are, the lenders requirements must adjust to jump start the market. Lenders should also ease up on the credit scores required for certain loans. There has to be a happy medium between the lenders and the average person wanting to enjoy home ownership.

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Real Estate- The Foundation of the American Economy : What’s in Store?

January 11, 2010

The slide began on 2007.  Prices were  rising, inventories were low and interest rates were low. The market was hot and real estate was the primary wealth building tool for Americans. But the slide was already beginning. A closer look at transaction reports would have made industry experts realize that there had already started a fundamental change in the markets. Most consumers and most real estate experts did not see the changes until it was too late. I’m sure there were signs but I didn’t see them. Credit has dried up and problems in the real estate industry still dominate the headlines.

Now , as we head into 2010, if real estate is to remain the foundation of the American economy, what needs to be done and who needs to do it?

The first thing is to get the blame out-of-the-way. We always need to place blame before we can move on.

There is plenty of blame to go around as to why the collapse occurred at all. Lenders, consumers, appraisers and the business cycle have all been blamed. And don’t forget the media, which loves to make everything seem worse than it is.  Its time to forget about who to blame and start paying attention to moving forward. 2010 is shaping up to be the year that the real estate industry  must  get back on course, for the good of our national economy.

Moving forward, the most widely publicised and brightest star in the real estate industry is, of course, the First Time Buyer Tax Credit, which we all know has been extended and expanded ( see previous blogs ).  Along with the tax credit providing an  unbelievable lift to the markets, I think consumer confidence needs to come back and it slowly will. There is ALWAYS a need for housing. There ALWAYS will be a need for housing.  Consumer confidence will return  and I think there are many signs that it already has begun to bounce back. The tax credit helps, but the simple fact that homeownership has been a part of the American Dream is what always helps to bring real estate back. This has all happened before and will again!

The benefits of homeownership are so great in this country that eventually the consumers will push the market back to where it should be.  One of the criticisms of our government, in regard to the collapse, was that they have made it too easy to buy a home.  But the reality of the situation, as every Econ 101 student knows, is that markets are cyclical. There will always be ups and downs. How high and for how long, and how low and for how long are the only variables.

Consumer confidence will return, if it has not already. On top of that, the government needs to continue to get credit flowing again and help existing homeowners keep their homes. There are many programs in place to help do this. Banks seem to be working with homeowners, through modifications and repayment plans, to help them keep their homes for the most part.

There is no denying that homeownership has many benefits and has a positive effect our national economy. I believe the people in position to help us through this understand this and are doing the right things. The market will always have its ups and downs. The severity of the business cycle, in either direction, is what we must control and prepare for.

Our economy and the world economy will benefit from getting the real estate industry back on track in 2010. I believe that the support and programs being initiated by the industry and the government will make this happen, and 2010 will be the year that noticable improvements in the real estate market are realized by the consumer.

Cal Williams

www.CalWilliams.com


Mechanicsburg Realtor completes Technololgy Real Estate Training

January 4, 2010

 

For Immediate Release 

 Jan 2, 2010 As more and more consumers begin their search for real estate-related information on the Internet, it is critical that real estate professionals stay on top of the latest technology for the benefit of consumers and real estate practitioners alike. The e-PROÒ Technology Certification Program fills that need.

Realizing the importance of technology training, the National Association of REALTORS® (NAR) created a comprehensive Technology Certification course in 2000. And now that course, e-PROÒ, has been completely updated to include information on Social Media and Web 2.0 aspects that is, and will continue, to change the real estate business.

“The real estate industry has undergone a fundamental change over the past five years,” Calvin W Williams said. “Today, more than 85% of all buyers and sellers begin their search online. As an e-PROÒ certified agent, I have knowledge and tools needed to provide my clients with the information they need and the customer service they demand. It’s both hi-tech and hi-touch.”

The all new e-PROÒ certification course — the only technology certification program offered by NAR — is designed to prepare real estate professionals to make the most of Internet technology and to identify, evaluate, and implement new Internet business models. The elite group of course graduates represents only four percent of all REALTORSÒ in the country including Cal Williams of Straub and Associates Real EstateGroup.

The PROÒ certification course is an educational program unlike any other professional certification or designation course available, comprehensive and interactive. It is specifically designed to provide real estate professionals with the technology tools needed to assist consumers in the purchase or sale of a home.

The exclusive e-PROÒ certification course is presented entirely online and certifies real estate agents and brokers as Internet professionals. The course is designed to help REALTORSÒ stay at the leading edge of technology and identify, evaluate and implement new Internet business models.

Once completed, the e-PRO certified real estate professional joins the ranks of a special community of highly skilled and continuously trained professionals who provide high quality and innovative online-based real estate services.  Consumers can identify the e-PRO through the exclusive e-PRO  Internet Professional logo.

Both the content and the delivery platform were created by the San Diego-based technology company InternetCrusade®. Graduates use the skills they’ve acquired to provide clients information on properties for sale, local communities, and the local real estate market.

For more information, e-mail Cal Williams at cwilliams@homefindergroup.net or call 717-612-9901


November Homesale Numbers reported

December 29, 2009

Statistics recently released from the NAR  show existing homesales numbers up again. The article below is reprinted from www.cnnmoney.com.

NEW YORK (CNNMoney.com) — After surging 10% in October, sales of existing homes jumped again in November, growing 7.4% compared with October to an annualized rate of 6.54 million units, according to the National Association of Realtors.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit,” said NAR’s chief economist, Lawrence Yun

November was originally going to be the last month in which sales to first-time homebuyers would qualify for a federal tax credit of up to $8,000. However, that deadline was extended through June.

In addition, the tax credit was expanded to cover people who already own a home. They can qualify for a $6,500 tax credit if purchase a new house before the end of June. That should encourage “trade-up” buyers.

The strength of sales in November surprised the industry. A panel of experts compiled by Briefing.com had forecast month-over-month sales growth of just 2.5% to 6.25 million from 6.1 million a month earlier.

The sales total was also a huge improvement over a year ago. Sales rose 45.7% over the paltry annualized rate of 4.49 million units during November 2008.

The contribution made by first-time buyers is evident in a separate survey NAR conducted of its members. They estimate that 51% of sales in November were by newcomers to the market, up a point from 50% in October. Normally, first timers account for about 40% of sales.

Also propelling sales higher were rock-bottom interest rates. The average for a 30-year, fixed-rate loan during the month was just 4.88%, down from 4.95% in October and 6.09% a year ago.

With rates that much lower, homebuyers can save more than $150 a month on a $200,000 mortgage.

The industry expects home sales to slacken December, partially because of the tax credit’s originally scheduled demise. That caused some buyers to push up their closing, stealing sales from December.

However, sales will not fall off a cliff, though, according to Walter Molony, a NAR spokesman. “The psychology seems to be turning around,” he said. “Potential buyers, who had been staying on the fence, now believe we’re at or near the market bottom.”

One X-factor, however, is the vast numbers of homes that may come to market over the next few months. There is a large “shadow inventory” — homes owned by banks and mortgage companies — that have not yet been put up for sale. It could be as many as 1.7 million units, according to First American CoreLogic.

In addition, another spate of foreclosures could be hitting the market as a number of option-ARM mortgages are set to default.

All that may drive prices down, according to Shari Olefson, author of “Foreclosure Nation: Mortgaging the American Dream.” And the impact of these renewed price declines could again alter the market psychology.

“People think that prices have bottomed,” she said. “I don’t think they have. People will see price declines and that will discourage them from buying.”

Mike Larson, a real estate analyst with Weiss Research has preached all through the bust that price declines are what will “fix” the housing crisis.

“We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income,” he said. “That has now happened and you’re seeing buyers come out of the woodwork as a result.”

Still, they will have to come out in large numbers to offset the inventory overhang in some of the worst markets, according to Olefson. In the Florida condo market, for example, there is a 35-to-40 month supply of units at the current rates of sale, she said.

Prices still almost certainly have further to fall. To top of page


First Time Homebuyer Tax Credit – End of Year Review

December 20, 2009

The holidays are here and with them comes the end of the year. At the risk of putting a damper on the season to be jolly,  i thought now might be a good time to review the first time homebuyer tax credit. It has been a huge newsmaker this year and many people may be confused about the details.

Here is an excerpt from an article by the NAR ( National Association of Realtors .) This article is found on their website at  Realtor.org.

Who Qualifies for the Extended Credit?

  • First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
  • Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

  1. The price of the home.
  2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you  purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

More info available at www.CalWilliams.com


Real Estate Questions Answered- ” How do I buy a foreclosure property? “

December 13, 2009

Today, everyone wants a foreclosure. “Where can I get a list of foreclosures? ” , ” How do I go about buying a foreclosure?”, “Will I get a STEAL on a foreclosure?”

These are some of the most asked questions in today’s economy and real estate market.

There are a ton of websites that advertise lists of foreclosed homes. Most of them require a fee to view the details of the properties. Most of these sites have outdated information, bad information and are usually a rip off. All the same information is available through your local real estate agent….FOR FREE!

I have seen several sites that claim they have properties before they hit the market. Wow, sounds great to someone looking to get a good deal on a property. The truth of the matter is what they have is a list of properties that MAY go into foreclosure or may not. If they do go into foreclosure they will eventually end up on the market, listed with a local Real Estate Agent. DO NOT PAY for lists of these properties. Find yourself a good agent that has his/her finger on the pulse of the market, knows the area and is searching the market daily for new listings. Make friends with this agent. There is no need to throw your money away when every property that goes into foreclosure ends up listed, which your agent will know about immediately and get you in to see it and make an offer, if so desired.

The process of buying one of these foreclosed properties is another blog in itself. Needless to say you need a good Realtor®  AND a good real estate attorney on your team. Your Realtor® will know how to get all your paperwork prepared and then an attorney usually helps the Realtor® negotiate with whatever bank owns the foreclosure. Usually the bank has taken over the property and does not want to own property. A good Realtor and attorney can help the bank understand this and at least get the offer considered.

Whether or not you get a great deal is another matter. Despite what most people think, just because it’s a foreclosed property that does not mean it’s a steal, or that its being sold below market value. There are several reasons properties go to foreclosure. The most common one being the owners cannot keep up with the mortgage payments and the banks exercise their right to take back the property through a foreclosure action. It depends on the current market conditions, along with several other factors, whether or not you get a “steal”. A majority of the time the property will be sold for the market value. The banks are not giving properties away, but they can be shown what the market value is. Thats where your Realtor®  comes in. He/She can prove to the banks what similar properties are selling for, thus making it more likely that your offer will be accepted.

Do not expect to low ball an offer, with no supporting documentation to the bank and get properties for less than market value just because they are ‘foreclosed’.  If you are serious about buying property, foreclosed or not, go about it the proper way. Thats not to say you cannot get a great deal. You can. But it’s not easy, and it’s not the norm. There are many good deal out there that are not foreclosures. You just have to find them.

In order to cut through all the bull, get straight, honest answers, anyone interested in foreclosed properties needs to consult a Realtor® or real estate professional. It doesn’t matter whether you are looking for an investment property or a primary residence, consult a Realtor®. It’s the smart thing to do.

Cal Williams

Straub and Associates Real Estate

Camp Hill, PA

www.CalWilliams.com


With the Internet , Why Do I need A Realtor® or Real Estate Agent at all?

December 7, 2009

In this day and age of information overload and the internet, the need for a good Realtor® or real estate agent can be diminished in many people’s minds.  With so much available on the internet, some people may think they do not need a Realtor®. The average person now has access to almost every listing in their market, thanks to sites like Zillow, Trulia and Realtor.com. Furthermore, the amount of information available on these sites is remarkable and can make the services of Realtor seem unnecessary. That is very short-sighted thinking and can cause a person much financial hardship and stress.

It is true that most people are using the internet to do their own research on properties for sale, on the buying side. They may even be using the internet to help them figure out what their home is worth, on the selling side but this is only the tip of the iceberg when it comes to a real estate transaction.

Like a good attorney, doctor or financial advisor, a good Realtor® can be worth his or her weight in gold.  Realtors® do not get the credit they deserve and should be included when discussing necessary professional services. One reason for this is the qualifications for attaining Realtor status are not nearly as stringent as other professionals. Unfortunately this can lead some people astray. I believe this whole perception is changing and a good Realtor® will earn his commission several times over.

Whether you are have purchased several homes or its your first, obtain the services of a Realtor®. The services provided by a trained professional will save you money in the long run. Despite what you may think you have learned from the internet or late night television, a real estate professional is still invaluable to the transaction. Here is just a small list of the services needed in a typical transaction:

  • Needs analysis, focusing to save time and money
  • Financing- Most Realtors are trained in the details of financing or at least have the proper resources to consult
  • Market information not available oon the internet- taxes, schools, etc.
  • Up to the minute sales numbers and market availability- even with todays technology many of the websites have outdated and inaccurate information.
  • Negotiation-where money can be lost or made

This list could go on and on. Let’s not forget the mountain of paperwork that needs to be properly reviewed and processed to get you to the settlement table. Getting to the settlement table is what it really is all about. If you are serious about buying or selling your home, then your ultimate goal is to get to the settlement table. And the smartest wasy to get to the settlement table is by obtaining the services of a professional Realtor®.

Even in a buyers market, such as most markets are today, a Realtor® should be hired. Yes, hired. The consumer hires the Realtor®. As I have mentioned in previous blogs, hire a good one, because they can save you a lot of time, money and headaches. One of the most unknown facts in this whole business is that the buyers do not pay for having a real estate professional represesnt them and use all their knowledge and training to get  them the best deal possible! The Realtors commission is paid by the sellers in most transactions!!

Look at it this way. The savvy buyer will do a lot of research on  the internet. Both on properties and on which Realtor to hire. Then he or she will hire a professional Realtor, take full advantage of all the agents training,experience and knowledge. They will find a property, make an offer, get all the paperwork properly processed. Have their inspections, close the deal and go to the settlement table. The buyer will have had no headaches, got a good deal, most importantly got the property he wanted, on the terms he wanted and then the SELLER PAYS THE REALTOR!!

Cal Williams, Realtor®, ABR

www.CalWilliams.com

717-919-1614


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