Archive for June, 2013

From the Dulles association: Calling all Realtor singers

From Jeanette Newton, CEO of the Dulles Area Association of Realtors:

The installation for 2014 VAR President Brad Boland will be on October 3 at the Real Show in Virginia Beach.

We would like to sing two patriotic songs at this event, and we want them to be sung by Virginia Realtors. (The songs will probably be “The Star Spangled Banner” and “God Bless America,” which everyone knows.)

Those that want to sing will be asked to attend one practice session (during the convention). We’re also looking for an accompanist.

If you know of any Virginia Realtor singers who would like to participate, please get all their contact information to Jeanette Newton at jnewton@dullesarea.com

Thanks!

Warner et al introduce bill to replace Fannie and Freddie

A coupla weeks ago, we told you that Virginia senator Mark Warner — along with his colleague Bob Corker — was going to introduce a bill to essentially liquidate Fannie Mae and Freddie Mac. The two have now formally introduced the bill, which also has the backing of six other members of the Senate Banking Committee. (The tally is four Democrats and four Republicans, in case that matters to you.)

We applaud the efforts of senators Corker and Warner, as well as senators Hagan, Heitkamp, Heller, Johanns, Moran, and Tester for taking the first step to begin a substantive discussion of housing finance reform.

We believe that the framework outlined in the "Housing Finance Reform and Taxpayer Protection Act" contains the necessary building blocks for establishing a new housing finance system for today and tomorrow.

Inventory news, good and bad

Good news: May inventory is up 16.9 percent for the year, which is a good, solid number. (See the explanation below.)

Bad news: Inventory is still 14.3 percent lower than last May nationwide.

Inventory typically follows a cycle, increasing through the first half of the year and decreasing through the second half. So by July it might be 15 percent above what it began the year with. By December it might be right back where it started.

In 2011 and 2012, inventory didn’t increase much through June, and then it decreased significantly through the end of those years — by December 2012, for example, inventory was more than 20 percent below what it started the year with.

That meant we started 2013 from a much lower point than the year before; luckily it’s been moving up at closer to a normal rate… whatever that is.

Calculated Risk has a chart that makes it clear:

(We’ll have Virginia-specific numbers in a few days.)

Connect to clients with… hang gliding?

Powell goes hang gliding

Instead of sending yet another refrigerator magnet, why not take your clients hang gliding?

That’s exactly the kind of thing some Realtors are doing as a way to bond with their clients in a way that’s memorable. Extremely memorable.

Check out the New York Times story, "Here’s the Apartment; Now Let’s Go Hang Gliding."

[F]or those who make a living in this frantic field, one of the greatest challenges is distinguishing themselves from a large and aggressive pack. Some agents and brokers say the most effective way to do this is by skipping the usual client lunches and meetings over drinks, and instead finding unusual ways of spending time together.

Besides extreme sports, there are some other "unusual ways of spending time together":

Beth Benalloul, a Corcoran Group broker and former personal trainer, has often “hyperventilated” with clients in exercise classes.

Michael Mansfield of Citi Habitats has gone kayaking in the Hudson River, and Michael Rubin of CORE has tried turkey hunting. Ann Cutbill Lenane of Douglas Elliman arranges a giant scavenger hunt every other year.

So next time you’re about to send someone a tin of peanuts or a calendar, why not consider something … different?

Sheila Johnson wins $100 in our survey

Sheila took home a cool $100Congrats to Sheila Bacon Johnson of Massanutten who scored herself the third and final $100 American Express gift card just for taking our 2013 member survey.

Sheila helped us know what we’re doing wrong, what we’re doing right, and what she’s looking for from her association. For spending five minutes doing that, she walks away with 100 bucks — that’s $1,200 an hour!

Thanks to Sheila and all the others who took our survey. We’ll be sharing the results as soon as we compile and ponder them.

"Unsustainable" price rises won’t be sustained

Home prices can’t keep rising this quickly forever. That’s what Realtor magazine is reporting that CNBC is reporting that NAR has said. (I know, right?)

Here’s the deal: In May, NAR reported that home prices were up 15.4 percent from the year before. And that marked six months of those kind of double-digit price jumps. Said NAR’s chief economist Lawrence Yun, "[I]t cannot continue."

Which, of course, makes perfect sense, and (hopefully) no one is expecting it to continue. Prices are shooting up for several reasons, none of which will apply forever.

1. It’s a natural correction. Prices skyrocketed, then plummeted when the bubble burst. Bargain hunters jumped in and fueled demand, and that pushes prices up.

2. More higher-priced homes are selling; fewer lower-priced ones are. That’s skewing the average and median price.

3. The glut of distressed homes — short sales, foreclosures, and REOs — is drying up.

4. The distressed homes that are on the market aren’t selling at a steep discount, thanks to a general lack of inventory.

All these things add up to higher prices, and all these things are a legacy of the bubble and crash. In other words, the recovery is simply playing out.

Prices will rise, but soon they’ll level off — probably at a point a bit above the historical average. Then more sellers will jump into the market, inventory will increase, and prices will drop… and then we’ll see headlines about falling home values, accompanied by much hand-wringing.

So yes, double-digit price gains can’t be sustained forever. And they won’t be.

Homeowner tip of the day

If a home has bedbugs, setting it on fire is not considered to be an effective means of removing them.

Realtors reading about a CoreLogic story were quick to call shenanigans, making for an amusing read.

See, HousingWire reported about a CoreLogic roundtable on mortgage fraud. It wrote:

In a round table discussion on mortgage fraud, Matthias Blume, senior director of analytics for CoreLogic, discussed a circumstance where a distressed homeowner poured cat urine on the rug so potential buyers are less inclined to make an offer.

Desperate times call for desperate measures. The home was being short-sold and the homeowners were not happy.

Realtor magazine reported the story as well… and Realtors were quick to point out an obvious flaw. How does one collect enough cat urine to "pour" on carpets? One Jim McCormack posted my favorite comment:

Yes, I am sure that many short sales fail because of cat urine intentionally poured on the carpets by the financially distressed homeowner because they have nothing better to do. My wife and I have 2 cats. Getting a small urine sample for the vet is absolute nightmare so I am guessing that "milking" a cat for several cups of urine ain’t happening.

That’s not to say that unhappy homeowners aren’t sabotaging short sales — just that someone might be stretching things a wee bit.

Mortgage rates drop slightly

Mortgage rates plummeted last week… er, sorry. I mean "mortgage rates dropped slightly last week." Either way, average mortgage rates in the country were down a bit — the first drop in six weeks.

30-year fixed went from 3.98 percent to 3.93 percent (with 0.8 point; I’m still trying to find out how typical 0.8 point is.)

15-year fixed went from 3.10 percent to 3.04 percent (with an average 0.7 point).

Why bother sharing this? We haven’t talked about mortgage rates in a while, is all. They’re still amazingly low, but have been inching up.

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Consumer confidence rising

FannieMae reported that “American’s confidence in their ability to buy and sell their home climbed sharply in May, “according to their Monthly National Housing Survey.  The large boost in pace of residential sales from April to May, according to the Virginia Home Sales Report, suggests that Virginians are equally confident.  The latest Virginia unemployment rate is 5.2%, much lower than the US rate which was at 7.6% last month.  In fact, the Virginia rate is among the 10 lowest in the nation and the lowest in the Mid-Atlantic and Southeastern regions.  Low unemployment isn’t the only reason to be confident.  The median sales price continued to increase, but not unusually quickly.  We continued to see a strong increase in volume of real estate transferred.  Finally, homes are selling fast in many regions.  In May, Virginia saw the lowest days on market since 2006.  FannieMae says that increased consumer confidence could foreshadow a gradual increase in housing supply.  As we hinted last month, Virginia is ready for additional inventory too.

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Analysis and commentary by Mel Jones, Research Associate & Ted Koebel, Senior Research Associate, of the Virginia Center for Housing Research at Virginia Tech. 

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