13,918 Houses Sold Yesterday!

There are many naysayers declaring that the housing market is still challenged. Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream.

We just want to let these naysayers know three things: 13,918 houses sold yesterday, 13,918 will sell today and 13,918 will sell tomorrow. 13,918!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 15.2% over the year before. According to the report, annualized sales now stand at 5.08 million. Divide that number by 365 (days in a year) and we can see that, on average, almost 14,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may not see those numbers again for a long time (and that is probably a good thing). But to say that the current real estate market is challenged is totally inaccurate. We have about 14,000 pieces of evidence to prove that.
seen as part of the American Dream.

We just want to let these naysayers know three things: 13,918 houses sold yesterday, 13,918 will sell today and 13,918 will sell tomorrow. 13,918!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 15.2% over the year before. According to the report, annualized sales now stand at 5.08 million. Divide that number by 365 (days in a year) and we can see that, on average, almost 14,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may not see those numbers again for a long time (and that is probably a good thing). But to say that the current real estate market is challenged is totally inaccurate. We have about 14,000 pieces of evidence to prove that.

Thank you to the KCM crew for this blog.

Buying a Home? Don’t Let Fear Get in Your Way

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The Founder of “Keeping Current Matters”, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. Enjoy!

Last week, I was talking to a young couple I know that was about to close on their first home. They were riding the wild rollercoaster of current mortgage rate swings and were not happy about the mortgage process overall. Yet, when the conversation shifted to finally living in a home that they own, their disposition changed dramatically.

A smile came across their faces as they talked about decorating their son’s bedroom and how much he will enjoy the backyard. They talked about inviting friends over for dinner and their family over for the holidays. The more they talked, the more excited they became.

I asked them if many of their friends were also buying. I was shocked to find out that they weren’t. Why not? Their friends believed that homeownership was financially unobtainable right now. Many wanted to own but didn’t think they could afford the monthly mortgage payment. They decided to rent instead.

I said that, with interest rates and prices where they are today, owning a home might not be any more expensive than renting one. The couple agreed but said their friends were afraid; afraid they might not qualify for a loan, afraid to handle negotiations with a seller, afraid of the home buying process itself.

Wow!

People should not make decisions out of fear! I’m not saying that every young person should own a home. I am saying that anyone that is qualified and wants to buy should not be afraid of the process. I realize the process may seem daunting but realize over 10,000 homes sell every day in this country. Sit down and discuss your goals with professionals from both the real estate and mortgage industries. Get the facts. Make an informed decision. Don’t let the fear of the unknown prevent you from living the life of your dreams.

Thank you to the KCM Crew & Steve Harney for this post.

Institutional Investors:Their Impact on the Housing Market

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The real estate conversation in many corners has been dominated by the potential impact that ‘institutional investors’ may have had and will continue to have on the housing market. Institutional investor is a term used to define organizations which pool large sums of money and invest those sums in securities, real property and other investment assets.

These large institutional investors are buying residential properties throughout the United States. The New York Times recently reported that the Blackstone Group, the largest investor in single-family rentals in America, has recently bought 26,000 homes and that Colony Capital owns 10,000. There are other such firms also adding to their portfolio. In a recent Seeking Alpha article, Chris Martenson revealed that JPMorgan has initiated a fund to buy up to 5,000 homes and that Morgan Stanley has raised money to buy up to 10,000 homes.

Some are concerned that renters and absentee landlords may not properly maintain these properties. Others wonder what would happen to prices if these large scale buyers became large scale sellers.

What Could Be the Impact?

We must first realize that the number of homes being purchased by this type of investor, even if 100,000, pales in comparison to the 5 million homes projected to sell this year. Also, these investors are concentrating in the hardest hit areas where they can find the best investment opportunities. In an article last week, DSNews revealed:

“Institutional purchase activity has been especially notable in seven metros areas—Atlanta, Los Angeles, Las Vegas, Miami, New York, Phoenix, and Tampa.”

The article explained that the impact of this type of purchase would be stronger in these particular markets.

“In these markets, the impact of their exit will be more strongly felt.”

What About Going Forward?

With both prices and interest rates rising, many of these institutional investors may already be winding down their purchases. Bloomberg, in a recent article, quoted Hedge fund manager Bruce Rose, chief executive officer of Carrington Holding Co. LLC a fund that has managed over 25,000 rental homes:

“We just don’t see the returns there that are adequate to incentivize us to continue to invest. There’s a lot of — bluntly — stupid money that jumped into the trade without any infrastructure, without any real capabilities and a kind of build-it-as-you-go mentality that we think is somewhat irresponsible.”

The article also revealed that Och-Ziff Capital Management Group LLC , a $31 billion hedge fund managed by Daniel Och, has stopped putting money into rental homes.

The reason these firms are beginning to back away is that they are not seeing the returns they had hoped for. Bloomberg reports that Colony American Homes Inc. has found tenants for only 51% of the 9,931 homes it bought. American Residential Properties Inc. and Silver Bay Realty Trust Inc., two additional investors, both reported losses in the quarter ending March 31.

CONCLUSION

The impact of the institutional investor has yet to be fully determined. However, based on their limited purchasers as compared to all sales and their current uneasiness to continue with these purchases, the overall effect will probably be limited to a few markets that originally saw the greatest interest from these investors.

Selling a House? 5 Reasons You Should Do It Now

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Many are talking about why now is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

1.) Demand Is High

Homes are selling at the fastest pace since November 2009 when the market spiked in response to the home buyer tax credit. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that monthly sales increased 9.7% over the same month last year. Total sales have been above year-ago levels for 22 consecutive months. There are buyers out there right now (buyer traffic is 31 percent stronger than a year ago) and they are serious about purchasing.

2.) Supply Is Beginning to Increase

Total housing inventory last month rose 11.9% to 2.16 million homes for sale. This represents a 5.2-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as more sellers escape the shackles of negative equity. Selling now while demand is high and before supply increases may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 3.98% which represents a jump of more than ½ point since the beginning of the year. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst at Bankrate.com said:

“Rates are unlikely to keep going up so quickly and should remain below 5%.”

Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

When To Buy a House? RIGHT NOW!

traffic lightsAfter witnessing the housing bubble ‘pop’ just a few years ago, many would be buyers may be hesitant to pull the trigger. Today, we want to explain that the greatest risk a buyer can take right now is actually waiting to buy a home.

We realize that every purchaser wants to be able to get the best deal. They want a great price and the lowest mortgage interest rate possible because those to items together will determine the monthly cost their family will pay. Let’s look at each one:

Are home prices rising?

Just last week, the Case Shiller Pricing Index was released. The index revealed that U.S. home prices increased by 10.2% over the last twelve months. Last month, the Home Price Expectation Survey was released predicting that home values would increase by at least an additional 3.5% for each of the next five years.

If you were waiting for the absolute bottom of the home price declines, you already missed it.

Are interest rates rising?

According to Freddie Mac’s Weekly Primary Mortgage Market Survey, the 30 year mortgage rate shot up to 3.81% last week – the highest level in over a year. This is an increase of a half of a percentage point in the last six months. And the Mortgage Bankers Association, Fannie Mae and the National Association of Realtors all predict that rates will continue rise over the next eighteen months.

Conclusion

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

5 Tips to Fit Social Media into Your Busy Workday

Using social media to market your business shouldn’t take up most of your workday, but you do need to carve out some time for it.

Unfortunately, there are plenty of reasons why people don’t bother doing that. They tell themselves things like: I’m too busy with important work, I can’t see any value in it, I don’t know what to post, I can’t figure out the tools, I think social media is just for kids.

But deep down inside, most business people know they really should spend more time with social media. Here are 5 tips to help you find the time to fit social media into your busy schedule.

1. Understand the importance of social media to your business. 
With all the professional and personal demands on you, there’s only one way to find the time to blog, tweet, share, and comment: you make the time for social media because you know it’s important. The truth is, as a business person, you need to do more online than just consume content or share what others have created. You also need to be a content creator, because that ultimately will build your business.

2. Take a good hard look at how you spend your day.
A recent survey revealed that we business people spend more than one fourth of our day (28%) dealing with emails. We’re in meetings for 19% of the day and we think half of them are a total waste of time. Another 25% of the day is taken up with meaningless distractions. A second study reported that executives spend up to 33% of the day in meetings. What all this tells us is that finding the time for social media is just a matter of making it a priority over unimportant emails, non-productive meetings, and a list of activities that are just daily distractions.

3. Make a commitment to spend a small amount of time on social media every day.
Consider this your daily social business investment. Spread out your activities. Tweet daily, but perhaps post to your blog just once a week. Share links and comment on other sites as the opportunities arise, but limit these pursuits to ten or fifteen minutes a day. Amazingly, this small daily commitment soon adds up. In a year, you’ve tweeted hundreds of times, written dozens of blog posts, connected with a good group of people, and discovered lots of things you didn’t think you’d be learning about.

4. Be guided by your strongest interests.
Blog, tweet, share, and comment on the things you care about most (of course, keep it work-related and avoid politics and religion). It takes far less time to write about and share the things you really know about and appreciate. It also attracts an audience of like-minded people. They in turn can provide stimulating questions, ideas, and points of view that will inspire fresh thoughts from you. You wind up creating an idea factory that keeps generating more terrific share-worthy content with a lot less time and effort.

5. Focus on helping others.
The idea of “pay it forward,” give-to-get (G2G), “karma” if you like, works well in the social world. Share the ideas and work of people you regard highly and they’ll take a look at what you’re doing. Helping others doesn’t take a lot of effort, but over time, people will start to see you as another authority.

If you follow these tips, you can become an active social media contributor without spending a ton of your life online. Why not get started now. Here’s to your success in social media as you keep putting together your best year ever…. Enjoy a great month!

Myths: The Earth Is Flat and Newspapers Sell Houses

With the housing market beginning to heat up, we are afraid some sellers may consider trying to sell their house as a For Sale By Owner (FSBO). This week we will be posting on the reasons that we believe trying to sell on your own may be a mistake. – KCM Crew

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It is amazing how masses of people can believe something that is absolutely untrue. The greatest example of this is that at one time the vast majority of people believed the world to be flat. Today, we want to debunk another commonly held belief – that newspapers sell houses. Somehow this notion gained believability even though the facts consistently prove it to not be true.

When you are selling your house, you should know what methods perspective purchasers use to find the home of their dreams. That would enable you to develop the best marketing strategy to attract a buyer.

Google recently teamed with the National Association of Realtors (NAR) on a new report, The Digital House Hunt: Consumer and Market Trends in Real Estate.

Let’s look at the actual search habits of today’s buyers revealed by the report:

  • § 90% of buyers now begin their search for a home online
  • § Real estate related searches on Google.com have grown 253% over the past 4 years

Of the 90% who use the internet, they gain information from these sources (with percentages):

  • § The internet – 100%
  • § A real estate agent – 89%
  • § A yard sign – 53%
  • § An open house – 46%
  • § Print newspaper – 28%

If you want to develop a great marketing strategy giving your house maximum exposure, forget newspapers. Less than 30% of buyers will ever see your home. Instead, look toward the internet and a real estate agent.

Where on the internet should you advertise your home?

The buyer is attracted to the type of sites that have the greatest number of listings. These sites are normally generated by the real estate industry. You should make sure your home is on as many of these sites as possible. That will give you the best chance of attracting your buyer.

Bottom Line

Print media never was a great way to market a house for sale and its effectiveness is diminishing each year. Meet with a local real estate professional and put together an internet marketing strategy worthy of your home.