Archive for October, 2012

Election Day reminder

In case you weren’t aware, Election Day is coming up in less than a week. Besides the presidential contest, we’re choosing a U.S. senator, congressmen and -women, and a host of local officials.

There are (or should be) lots of issues to consider when you make your choices: political, economic, social, and so on. And there are groups you can turn to for perspective on each one.

But if real estate is what’s important to you, please check out our endorsements on RealtorsChoose.com. We don’t rate the candidates on anything else (as we noted, there are plenty of places that do that already), but when it comes to Virginia’s real estate market, that’s the place to go for perspective.

Of course, you may not agree our picks when it comes to those other issues, and that’s A-OK. We know there are plenty of important things to think about. As a Realtor association, though, we hope you’ll consider the candidates’ impact on the housing market, and we hope you’ll look to RealtorsChoose.com for that information.

Virginia home sales up 6% year-over-year

The Third Quarter Virginia Home Sales Report has been released and yet again, most state-wide indicators show an improved housing market in the Commonwealth.

As shown above, the pace of home sales in the 3rd Quarter of 2012 (24,331) marked a 6% improvement over the same quarter last year (22,995).  Furthermore….

  • Virginia’s median sales price increased 5.5% in 2012-Q3
  • Virginia’s total sales volume increased 9.8% in 2012-Q3.
  • Virginia’s average days on market decreased 12% in 2012-Q3.

Read more inside the complete 3rd Quarter Virginia Home Sales Report.

 

 

James Madison University is getting Zipcars — cars you can rent by the day or by the hour. Need to get someplace? Pull out your phone, find the nearest Zipcar, and rent it.

So what? That’s nice for students, but what does it have to do with real estate? More than you might realize.

Search on the phrase “Generation Rent.” Young people aren’t rushing to buy the things their parents did — cars, houses, even bicycles. They’re choosing the flexibility and mobility of renting instead, and the arrival of Zipcars at JMU is just another example.

This trend is mostly by necessity, somewhat by choice. And it’s entirely worth keeping an eye on.

The necessity: A trillion bucks worth of student debt. About 59 percent of Virginia college graduates have significant debt — an average of $24,717. Here’s a sampling:

  • Liberty Univ: $36,014 average debt on graduation
  • Randolph-Macon College: $32,694
  • Roanoke College: $34,645
  • UVa: $20,951
  • Virginia Tech: $24,320
  • VCU: $27,179

It’s called “crushing debt” for a reason; it’s hard to get your sea legs when you start out 20 or 30 grand in the hole. Considering the dearth of good-paying jobs for recent grads, they’re looking at putting a significant portion of their income toward paying for school. Buying a house? Ha! Result: Rental vacancies are at their lowest level in a decade, says NAR.

Writes Kirsten Salyer for Bloomberg:

Why shouldn’t we be cautious? Young adults are facing an unemployment rate that’s been above 8 percent since 2009. The median first-job salary has gone down $3,000 since 2007, from $30,000 to $27,000.

Commitment phobia isn’t a fad. For most, it’s an economic reality. Renting isn’t a choice when you can’t afford to buy, or qualify for a loan, or count on being in the same job for more than a few months.

It’s a huge issue, and it’s only getting larger as college costs rise. (Contrast most European countries where post-secondary education is free — they consider it an investment.) As people borrow more and more for school, that’s years’ worth of house payments that are being put off. And you can tout the economic value of home ownership all you want; it doesn’t mean much when you can’t get a loan.

But young folks — Millennials or Generation Rent, whichever you want to call them — are also passing up on buying things in general. There are a lot of reasons for that.

For one, renting is easier, especially when your credit has a big, red “student loan” on it.

Sociologist Katherine Newman told NPR, for example:

“I’m hoping that the Millennial Generation doesn’t set its sights on homeownership as a benchmark of economic stability, because it’s going to be out of reach for so many of them that it will just be a recipe for frustration.

For two, this is a generation that is used to things changing every year. Think about the mindset of a person who is willing to wait in line for hours for a gadget simply because it has a larger screen or a slightly faster chip than the one they already own. Now (at least if you’re over 40) think about how many times your family got a new phone or television when you were growing up.

We used to talk about “planned obsolescence” — manufacturers designing things that broke and needed replacement regularly. Nowadays they don’t have to. Just announce a new version of something and wait for voluntary obsolescence to take hold.

(Consider reports of the death of the desktop/laptop computer in the face of tablets and smartphones. People aren’t buying new ones, so the demand must be slipping, right? We’re so used to constantly replacing gadgets that it hasn’t occurred to anyone that maybe computer sales are slipping not because people don’t need or want PCs anymore, but because people don’t need a new one.)

The point is, change is a way of life for the younger set. No more working at the same factory for 50 years and retiring with a pension; a new job every couple of years is becoming the norm. No more settling down in one spot for the rest of their lives; it won’t be long before “the house I grew up in” is an anachronism.

For three, values have changed. Once upon a time, the car you owned was important — it made a statement about who you were. Bigger, faster, newer, louder… your car defined you in America. Not so much anymore. Young folks are more and more thinking of a car as a utility. Sure they’d love something newer/faster/slicker, but it’s not that important. If they define themselves by any property, it’s their consumer electronics — what phone/tablet/notebook they own.

Hence, Zipcars.

The other value that have changed is that of the suburb. Young folks prefer something more urban — places within walking (or even biking) distance. The idea of having to drive everywhere is much less appealing and much less social. And in case you hadn’t noticed, social is important these days.

Urban living is less expensive, too, and more environmentally friendly, other things Millennials care about. The dream has changed.

Can we predict how things will change? Will the rental trend continue or will Generation Rent eventually become Generation Finally Settled Down? Can’t say. But what we can say is that right now home ownership is out of the question for many of the people who used to fuel the market. And that’s going to have ripple effects up the line — how severe and for how long is anyone’s guess.

We're rooting for Trudy in more ways than oneRealtor Trudy Harsh — who we urged you to support in her bid to become a winner of Realtor magazine’s 2012 Good Neighbor Award — has won. She was named one of the five winners (out of a pool of hundreds of Realtors from across the country), and will receive a $10,000 grant for her charity and a $2,000 Lowe’s gift card.

Her charity? The Brain Foundation, which provides property management and in-home mental-illness care for people with brain damage or mental illness — people who often can’t find a place to live and be cared for.

Trudy’s daughter, Laura, developed a brain tumor when she was eight years old, and Trudy spent 30 years caring for her. That’s when she learned first-hand how difficult it is for people with brain injuries to find a place where they can live independently.

She founded the Brain Foundation, which today owns six houses that each offer home, care, and independent living to people suffering from schizophrenia, bi-polar disorder, or chronic depression. Three more are in the works.

And now the Brain Foundation will have $10,000 more to work with.

Congratulations, Trudy!

A shocking report from RealtyTrac found that, in most of the country, housing markets are in worse shape now than they were before the housing market collapse.

In other news, doctors have confirmed that Timmy McGillicuddy of Richmond is in worse shape now than before he broke his leg last month.

NAR member offer: Borrow e-books, get free client info

Yeah, it took me a moment to make sure I read that correctly. NAR’s got an offer for members: If you borrow any of NAR’s e-books from its 3,000+ book library by the end of October, you can also get the Realtor Foundations Product Bundle –material to give your clients such as “Why Rent When You Can Buy” and “What Everyone Should Know About Equal Opportunity in Housing.”

Borrow a book (free) and get some good client-facing material (free).

And the books you can borrow — they’re in standard Epub and PDF as well as Kindle formats — are actually good. They include work-related things like…

And a lot more. All you need is your NRDS number.

So basically, NAR is paying you to try out its digital library. Why not give it a shot? Go to mvp.REALTOR.org for the details.

And don’t forget to grab and print as many copies as you want of VAR’s über-popular “Your Realtor’s Role,” (at VARealtor.com/realtorsrole) which explains to clients exactly what you’re there to do for them.

Mary Dykstra sworn in as VAR 2013 president

http://www.varealtor.com/sites/default/files/images/Mary_Dykstra_preferred_head.pngMary Victoria Dykstra of MKB, Realtors in Roanoke was inaugurated as VAR’s 2013 president at the Real Show in Virginia Beach. She served as vice-president in 2011, and she succeeds Trish Szego of Fairfax at the post.

Mary has been an active member of the Roanoke Valley Association of Realtors, serving as its president in 2005; in 2008 she was named RVAR’s Realtor of the Year. She currently serves on RVAR’s Grievance and Public Relations committees.

Mary has chaired several Virginia Association of Realtors committees, and has been a member of the Board of Directors since 2006. At the national level, she is a member of NAR’s Board of Directors and 2012 chair of its communications committee.

Mary serves her local community as a member of Roanoke’s Architectural Review Board, and as a Court Appointed Special Advocate for Abused and Neglected Children. She lives in Roanoke with her husband and two children.

Monday morning Realtor humor

Via Cul de Sac:

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(Click to enbiggenify.)

CoStar: Commercial real estate prices "leap forward"

image The August Commercial Repeat Sale Indices from CoStar found that the two broadest measures of commercial-property pricing both “posted significant gains” in August over the year before. It’s a sign, the company says, of a broad recovery of the commercial market.

The value-weighted index (which is a better measure of large-property sales) was up 11.4% over 2011 — hitting the highest mark in more than three years.

The equal-weighted index (a better measure of smaller transactions) was up 7.6% — the biggest gain in six years.

Click here to read the full release from CoStar, chock full of data, charts, graphs, and the like.

Housing-related industries’ stock booming

We’ve said over and over how the housing industry powers so much of the economy — everyone from lawyers to plumbers to architects to landscapers benefits from a healthy housing market.

http://www.realestateconsulting.com/images/newsletter/USBMI-201210.jpgThe good folks at John Burns Real Estate Consulting took that idea and used it to see what the stock market thinks of the real estate market. Because anyone can say that housing is recovering, but a better barometer is where they’re putting their money.

They looked at year-to-year changes in the stock price of companies in various industries tied to housing: Wallboard manufacturers (up 176%), home builders (up 162%), lumber (up 46%), architects (up 54%), and a bunch more. For comparison, the S&P 500 is up about 20% from last year.

What they found was encapsulated in the headline: “From Dirt to Drywall, the Stock Market Clearly Believes in a Housing Recovery.” If it’s an industry tied to housing, chances are it’s beating the market.

[M]ore than 140 companies and roughly 30 sectors are directly benefiting from the turnaround in housing. Stock market investors are clearly betting on a bright future for residential real estate, turning their attention to ancillary companies that will benefit from the trickle down nature of a true recovery.