Archive for November, 2012

Old folks at home

Grandma’s coming back. It’s a trend to watch: older folks coming to live with their adult kids. Better medical science means people are living longer and better, but maybe not quite well enough to shovel their own snow or mow their own lawns. The high cost of assisted-living facilities can be daunting, and let’s face it — Grandma might prefer to be around her family. (Not to mention that, thanks to global warming, there simply aren’t that many ice floes available.)

The New York Times has a piece on how that trend is affecting home builders, who are building and marketing more homes that include a separate apartment — a mother-in-law apartment or “granny pad.”

Pulte, the largest homebuilder in the country, says that 30 percent of its customers are asking for one. Not always for a grandparent, of course — job-hunting 20-somethings are also moving back.

A typical granny pod -- the MedCottage (Wall Street Journal graphic)And then there’s the granny pod — the MedCottage (which we’ve written about before). It’s a trailer-sized medically equipped apartment that Virginia law allows on residential property.

MedCottages let grandparents — they must be physically or mentally impaired — have a place to call their own that’s a stone’s throw (figuratively, one hopes) from the kids. It can be equipped with various monitoring devices to help make sure granny is safe, but it also gives her a feeling of privacy and self-sufficiency.

A Fairfax county family is the first in the state to have one, and the Washington Post has a great story about them.

Besides dedicated spaces like granny pad and granny pods, a related trend is the multi-use room — a space that can be a playroom for the kids, or easily converted into a bedroom for the grandfolks… or an office for a work-at-home adult.

Will this be a longer-term trend, or is this simply a result of the economy? Considering the state of medical science, I would bet that we’re going to be seeing more ways to keep grandma close by.

Grant deed scam from Secured Document

Hats off to the folks at “Secured Document” for creating one of the best scams I’ve seen in a while.

Beware of the scam.

The company is sending out these official-looking documents, asking for cash (in this case, $83). It looks as if you owe money, but in fact the company is just trying to sell you a “Grant Deed and Property Profile.”

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Click to enlarge it.

It’s well done, for sure, and I bet people will be fooled. It’s got a fancy bar code and “DEED PROCESSING NOTICE” up top, and lots of code numbers and other fluff to make it look official. But it’s not. It’s Secured Document’s way of tricking folks out of $83. (A number that’s large enough to make Secured Document some easy cash, but small enough that many people won’t make too much of a fuss.)

In fact, at the bottom in tiny print it says that you can get your grant deed yourself from the county recorder “for up to $83″ — the phrase up to meaning “less than.”

Here’s the reverse side (again, click to enbiggen):

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Nice job, right? Secured Document’s got a lot of small, legalese text, another bar code, and long property code numbers. Well done… but still a scam.

The last line of the legalese tells you: “This is a solicitation; you are under no obligation to pay the amount stated.”

If you have any questions, call the company at 888-825-9291 — at least it’ll pick up the cost of your call.

Hanover County eliminates proffers

The Hanover County Board of Supervisors voted 4-2 (with one absentee and one abstention) to eliminate cash proffers on new development — at $19,503, it is was the highest in the area.

It hopes to offset the revenue loss with a proposed $10 per-vehicle tax to be implemented next year, which would be reserved for road building and improvement.

Read more from the Times-Dispatch.

Beginning January 1, 2013, principal and supervising brokers will be required to conduct a self-audit at least once during each firm license term (and sole practitioners at least once during each license term) prior to renewal to ensure compliance with Virginia Real Estate Board Regulations. The audit must be recorded on the Firm/Sole Proprietor Audit Form which can be found at the Real Estate Board’s website. (http://www.dpor.virginia.gov/Boards/Real-Estate/)

The Audit Form is a simple checklist to make sure you’re in compliance with Virginia’s laws and regulations governing real estate brokerage. The completed form must be signed by the principal or supervising broker and kept on file at the firm. Also, the responsible broker must certify at renewal of the firm license (or the sole practitioner at license renewal) that the audit has been conducted.

IMPORTANT NOTE: The Audit Form does not have to be submitted to the Real Estate Board but must be available if requested by the Board.

VAR has assembled the following resources on our website to prepare you for this new requirement. Please visit www.VARealtor.com/BrokerAudits to access the following tools:

  • A short video with VAR Legal Counsel Blake Hegeman explaining the audit process;
  • An overview of the new requirement and what to expect;
  • Download links for the broker audit form itself; and
  • Common questions and answers on broker audits.

As Blake always says: Good luck out there!

FHA to require PMI for life of loan

If you have clients thinking about an FHA loan, you should tell them to act quickly. Not only is FHA going to be raising the cost of its required mortgage insurance, it’s also going to require that the insurance be kept for the life of the loan.

Today, once a home’s loan-to-value gets below 78%, mortgage insurance isn’t required; that takes 10 years or so. A homeowner will typically pay several hundred dollars a month for mortgage insurance — a cost that, soon, won’t go away.

When will this happen? FHA hasn’t said, only that it will happen.

The “social media” bandwagon continues its relentless roll. The latest car on that train being recommended for Realtors? Pinterest.

If you know what it is, feel free to skip ahead. If not…

It’s yet another way, they say, to do that magical thing known as “increasing engagement.”

Pinterest is a site that lets you share cool (i.e., pretty, exciting, funny, etc.) images you find on the Web. If you see something you like, you “Pin it” to your Pinterest page. So maybe you love photos of mountains. Every time you see one you like on the Web, you Pin it, until your Pinterest page has lots of great mountain photos.

(You can also set up separate boards to divide your photos — e.g., “Rockies,” “Alps,” “Appalachians,” etc.)

So what? you say. The idea is that you can “follow” people who have Pinned lots of images you like. For example, you might find that Joe Schlobotnik always seems to “Pin” great pictures of pancakes. So you “follow” him, meaning his Pins will show up when you browse Pinterest in your copious free time.

tl;dr“Too long; didn’t read”: Pinterest lets you share interesting images you find online.

So what’s the point supposed to be for Realtors? Well, um…

Idea 1: Share images of your listings — create a Pinterest board for each property, or of each area you work in (e.g., “Homes in South Newton”). So maybe someone looking for something in that area will find and follow you.

Idea 2: Share images of cool things people have done with their homes — great landscaping, a particularly nice kitchen, etc.

Idea 3: Er… that’s all I’ve got.

The point is, I suspect you’ll be hearing a lot about Pinterest soon enough (if you haven’t already). It’s yet another way, they say, to do that magical thing known as “increasing engagement.”

Good luck.

The October 2012 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 October 2012 (7,017) marked a 12% improvement over the same month last year (6,263).  Furthermore…

  • Virginia’s median sales price increased 9% in October 2012
  • Virginia’s total sales volume increased 17% in October 2012
  • Virginia’s average days on market decreased 12% in October 2012

Read more inside the complete October 2012 Virginia Home Sales Report.

One of the best indicators of the improving health of the housing market is the percentage of homes for sale that are distressed.

If there are a lot of them (short sales and REOs/foreclosures), they keep overall prices down — and it indicates that there’s still of lot of mess left to clean up. That was the case through the entire housing collapse.

As we recover, though, the percentage goes down. So we look at those numbers to get a rough, overall picture of the market … and hope to see fewer distressed properties out there.

All that said…

We only have October numbers for MRIS and Hampton Roads, but they do cover a large portion of Virginia.

In MRIS territory, distressed properties accounted for 31.2% of sales in October 2011, but only 20.7% in October 2012. (Short sales dropped from 15.2% of the market to 11.7%; foreclosures dropped from 16% to 9.1%.)

In Hampton Roads we don’t have the detailed breakdown, but distressed sales overall dropped from 33.2% of the market to 28.3%.

So it’s safe to say that foreclosures and short sales are making up less and less of Virginia’s housing market, and that’s one good sign of a solid and ongoing recovery.

Reasons to hope and fear the coming housing market

Four solid pieces of good news about the housing market — today, and looking ahead.

1. The number of homeowners underwater has dropped below 30 percent for the first time in, well, forever. That’s in large part due to rising home prices values, thanks to reduced inventory. In short, it’s a decent barometer of the market’s overall health.

2. Markets are improving [almost] across the board. The S&P/Case-Shiller Index showed that 95 percent of U.S. housing markets showed values improving — up 2.0 percent since last year, overall. The Federal Housing Finance Agency says that its Home Price Index shows a 4.9 percent annual jump, and CoreLogic found it was up 5.0 percent.

3. Looking at its delinquency survey, the Mortgage Bankers Association found that “shadow inventory” — homes in or near foreclosure that have yet to hit the market — was much less of a threat than originally thought. Foreclosure inventory is down, and even less is coming down the pike as delinquency rates continue to drop.

4. Mortgage rates are still at record lows, and the Fed has said it has no plans to raise the prime rate.

The downsides

Yay! Time to cue the rainbows and brass bands, right? Not so fast.

We’re definitely off the bottom, and things are definitely improving. But it would be hard for them not to be, considering how low the market got. Put another way, we’re celebrating the patient being off life support — good news, for sure, but that doesn’t mean he’s healthy or recovered. Just better than he was.

Above we listed “The number of homeowners underwater has dropped below 30 percent” as good news. And it is. But keep in mind that a lot of that doesn’t actually affect all that much. For many people — anyone who doesn’t want to move — being underwater is just something on paper. Heck, I’m technically underwater; my house dipped in value after I bought it last year. So?

Home values are up — also a good thing. But so much demand is being driven by rental investors, it’s hard to say what the long term implications will be. We all know that neighborhoods of owners tend to be worth more. What will happen when the rent/own ratio goes up? Will that drive values down, or keep them from rising as high as they might otherwise?

And then there is the elephant in the room: Student loan debt. It’s crippling the housing industry, and it’s doing it for the long term. Young folks are simply not able to buy homes because they paid so much for their education. If they don’t become first-time buyers, move-up buyers don’t have a market to sell to.

Our nation’s trillion-dollar (that’s $1,000 billion!) student loan debt is a bottleneck, and one with far-reaching implications. Americans owe more for their educations than on their credit cards.

The Education Department reported that defaults on federal student loans has hit 13.4 percent. That’s almost one in seven students who are unable to pay for their educations. How can we expect them to buy a home? (And without an education, how can we expect them to contribute meaningfully to the economy. An uneducated country doesn’t prosper.)

Oh, and standing next to that elephant is its brother, the other elephant: The “fiscal cliff,” when government spending gets sliced across the board — something that disproportionately affects Virginia, with our huge reliance on Federal dollars. If the bucks stop flowing from Washington, expect some significant ripples in both the residential and commercial markets.

(The good news is that, in reality, we’re not going to be cutting our military spending by a significant amount for the long term. There are simply too many people and businesses that rely on those government programs for their survival. But that doesn’t mean it won’t be a bit of rough going while Congress gets its act together.)

Sure, we all want a crystal-clear story to tell: Things are getting better. But reality is messy, and economics messier still. So as the Magic 8-Ball would say, “Reply hazy, try again.”

In the wake of Hurricane Sandy, the Virginia Association of REALTORS® Board of Directors has approved a $10,000 donation to the REALTORS® Relief Foundation to help assist those in areas severely affected by Sandy. Other state and local associations across the country have already contributed more than $750k to the Fund, earmarked for Sandy relief. As a Virginia REALTOR®, you can personally help those members of your REALTOR® family in need. Read on to learn more about the REALTORS® Relief Foundation and how you can donate today.

Below is an excerpt from a message written by NAR’s 2012 President, Moe Viessi:

As REALTORS®, we help build and maintain communities. We aren’t just there when the time comes to buy or sell a home. We are there during periods of need as well. Now—in the wake of Hurricane Sandy—is one of those occasions.

It will take more time to know the full impact of Hurricane Sandy, but the devastation in the mid-Atlantic is widespread. I personally have contacted the state associations in New York, New Jersey, and all the affected areas. At this point, we know that more than 8.2 million homes and businesses lost power in the United States because of Sandy, and there is a significant loss of life attributed to this deadly storm.

For more than 11 years, the REALTORS® Relief Foundation has been dedicated to providing housing-related assistance to victims of disasters. Without a doubt, there are many, many families out there who need our help now. If you can spare even a small amount, now is the time to make that commitment. A little bit can go a long way when we all give.

So please, follow your heart and reach out a helping hand to those in need.

Make a donation today.

The foundation will work with state associations in affected areas to distribute funds as quickly as possible to those in need within the REALTOR® family and within the community at large. Keep in mind that 100 percent of the money you give to the foundation directly benefits disaster victims; NAR covers all the administrative costs of the fund. Every penny you give goes to those in need.