Burlingame, CA

Ask the Experts: More Than an Agent - Today's Real Estate Advisor

RISMEDIA, November 9, 2009-As a new and different economic environment continues to evolve around us, a unique opportunity exists for real estate agents to take a position of authority and provide guidance which will earn them respect, a strong reputation and long-term career success. Here, Glenn Melton, CEO of Realty Executives Int'l., Inc. discusses what you must be doing to position yourself now and for the future.

Trying to wrap your arms around the myriad of market conditions, government policies and economic trends is a tall order, but well worth the investment. A unique opportunity exists right now for real estate agents to take a position of authority and provide guidance to customers that will earn them respect, a strong reputation and long-term career success. So the question is: What are you doing to position yourself now and for the future?

Stay current, yet know your history. Consumer confidence hinges largely on information dispersed in the news. However, the media, by-and-large, communicates the story of the moment, focusing on micro trends. The biggest increase in sales in the past nine years, the Case-Shiller index increasing after nearly three years of steady decline, home prices finally going up in major cities like Boston, San Francisco and D.C.-what does this mean for the client? It appears that the market is trending toward stabilization, but making informed decisions on future investments requires an understanding of the events that led to the collapse of the housing and credit markets, as well as capitalizing on the resulting dislocations and opportunities for government-subsidized aid.

Know government programs and policies. Today, the government has taken the role of lender of last resort to stem an economic collapse. The Housing and Economic Recovery Act of 2008 has generated a significant increase in first-time home buyers due to its tax credit provision. The success of the newly enacted stimulus package and its focus on job retention is the key to curtailing rising foreclosure rates and stabilizing prices. The Administration has also supported bank stabilization with TARP by injecting capital into banks to free up lending. The Federal Reserve has so far been successful in keeping mortgage rates low so buyers can better absorb the inventory, as well as helping to mitigate the consequences of adjustable rate mortgages for those unable to refinance. All of this and more is going on during the challenging and painful events described in the headlines.

Familiarity with current laws, regulations and available programs is vital to effectively make prudent recommendations. With more understanding, a real estate advisor is better equipped to educate their client and offer superior guidance.

Know your customer. The economy is improving and the pace of decline in the residential real estate market has slowed. We are seeing the average days on the market coming down and the inventory absorption increasing, which are signs that cautious buyers are tiptoeing back into the market from the sidelines. So is now the time to buy and sell? The answer is, of course, it depends. This is a great time for consumers to leverage the pricing and opportunities available in this market, particularly for first-time home buyers, move-up buyers, investors, and second and vacation home buyers. However, understanding the economic realities allows agents to identify who should buy and who should not, who should modify their loan, rent, short sale, sit or hold and so on.

In this dynamic and uncertain environment, it is vital for buyers and sellers to receive insightful counsel to achieve their goals and objectives based on their individual circumstances. This cycle presents a unique window for agents and brokers to be that resource to clients and to define their leadership in what will be the new and different economic environment we are seeing evolve around us.

Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum

RISMEDIA, November 9, 2009-Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®. Existing-home sales-including single-family, townhomes, condominiums and co-ops-jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. "Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," he said. "We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery."

Even with the improvement, Yun said the market is underperforming. "Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet," he said. "We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history."

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.

"The current housing supply is the lowest we've seen in two and a half years," Yun said. "If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.

To reduce or minimize the risk of becoming a victim of identity theft or fraud, there are some basic steps you can take. For starters, just remember the word "SCAM": Be Stingy about giving out your personal information to others unless you have a reason to trust them, regardless of where you are:

At Home

1. Start by adopting a "need to know" approach to your personal data. Your credit card company may need to know your mother's maiden name, so that it can verify your identity when you call to inquire about your account. A person who calls you and says he's from your bank, however, doesn't need to know that information if it's already on file with your bank; the only purpose of such a call is to acquire that information for that person's personal benefit. Also, the more information that you have printed on your personal bank checks - such as your Social Security number or home telephone number - the more personal data you are routinely handing out to people who may not need that information.
2. If someone you don't know calls you on the telephone and offers you the chance to receive a "major" credit card, a prize, or other valuable item, but asks you for personal data - such as your Social Security number, credit card number or expiration date, or mother's maiden name - ask them to send you a written application form.
3. If they refuse to send the application form, tell them you're not interested and hang up.
4. If they will send it, review the application carefully when you receive it and make sure it's going to a company or financial institution that's well-known and reputable. The Better Business Bureau can give you information about businesses that have been the subject of complaints.

On Travel

1. If you're traveling, have your mail held at your local post office, or ask someone you know well and trust - another family member, a friend, or a neighbor - to collect and hold your mail while you're away.
2. If you have to telephone someone while you're traveling, and need to pass on personal financial information to the person you're calling, don't do it at an open telephone booth where passersby can listen in on what you're saying; use a telephone booth where you can close the door, or wait until you're at a less public location to call.

Check your financial information regularly, and look for what should be there and what shouldn't:

What Should Be There?

1. If you have bank or credit card accounts, you should be receiving monthly statements that list transactions for the most recent month or reporting period.
2. If you're not receiving monthly statements for the accounts you know you have, call the financial institution or credit card company immediately and ask about it.
3. If you're told that your statements are being mailed to another address that you haven't authorized, tell the financial institution or credit card representative immediately that you did not authorize the change of address and that someone may be improperly using your accounts. In that situation, you should also ask for copies of all statements and debit or charge transactions that have occurred since the last statement you received. Obtaining those copies will help you to work with the financial institution or credit card company in determining whether some or all of those debit or charge transactions were fraudulent.

What Shouldn't Be There.

1. If someone has gotten your financial data and made unauthorized debits or charges against your financial accounts, checking your monthly statements carefully may be the quickest way for you to find out. Too many of us give those statements, or the enclosed checks or credit transactions, only a quick glance, and don't review them closely to make sure there are no unauthorized withdrawals or charges.
2. If someone has managed to get access to your mail or other personal data, and opened any credit cards in your name or taken any funds from your bank account, contact your financial institution or credit card company immediately to report those transactions and to request further action.

Ask periodically for a copy of your credit report.

Your credit report should list all bank and financial accounts under your name, and will provide other indications of whether someone has wrongfully opened or used any accounts in your name.

Maintain careful records of your banking and financial accounts.

Even though financial institutions are required to maintain copies of your checks, debit transactions, and similar transactions for five years, you should retain your monthly statements and checks for at least one year, if not more. If you need to dispute a particular check or transaction - especially if they purport to bear your signatures -your original records will be more immediately accessible and useful to the institutions that you have contacted.

Even if you take all of these steps, however, it's still possible that you can become a victim of identity theft. Records containing your personal data - credit-card receipts or car-rental agreements, for example - may be found by or shared with someone who decides to use your data for fraudulent purposes.

The long-awaited extension of the tax credit has been approved by both the House and the Senate and currently awaits President Obama's signature (which is not expected to be a problem). There is also an expansion of the credit to include current homeowners (not just first-time buyers)...however, there are several restrictions along with improvements. The income limits have been increased, the maximum sales price has been set at $800,000, etc.

Home Price Reduction Levels Stay Above 25% for Fourth Consecutive Month

Trulia, Inc announced that 25.6% of homes currently on the market in the U.S. as of October 1, 2009 have experienced at least one price cut. More than one in four current listings on Trulia have been reduced in price for the fourth straight month. The total amount slashed from home prices is $28.4 billion, a $967 million increase from June 2009. The average discount for price-reduced homes continues to hold steady at 10% off of the original listing price.

Northeast with Most Homes Reduced; West Sees Biggest Cuts
Five of the 10 states with the highest percentage of homes with price reductions are in the Northeast- Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey. One in three homes in these states has cut their list price at least once.

Seven of the 10 states leading the country with the biggest listing price cuts are in the West, where heavy foreclosures have taken their toll. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, cuts are an average of 13% off the original list price. Of the $28.4 billion slashed nationally, New York, California and Florida account for 35% of the total value of reductions.

Report Findings
For the first time in four months, Jacksonville no longer holds the top spot for highest level of home-price reductions: Memphis replaced Jacksonville with 36% of current listings experiencing at least one round of discounts. Several cities continue to see high levels of cuts on home prices with Indianapolis, Milwaukee, Minneapolis, Portland and Raleigh, all earning a place in the top 10 for the third consecutive month.

"Interest in real estate typically wanes at the end of the year, which means that sellers who didn't aggressively price their homes may find themselves making difficult decisions to reduce their prices or delay the sale until interest piques again in January," said Pete Flint, Trulia co-founder and CEO. "We are seeing the beginning of this trend in the Northeast and Western United States with discounting happening at all price points, and expect it to continue."

Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to October 2009 include:

-Kansas City, MO - 50% increase in price reductions
-Colorado Springs, CO - 32% increase in price reductions
-Louisville, KY - 27% increase in price reductions
-Indianapolis, IN - 27% increase in price reductions
-Portland, OR - 25% increase in price reductions
-Oklahoma City, OK - 24% increase in price reductions
-Memphis, TN - 24% increase in price reductions
-Tulsa, OK - 23% increase in price reductions
-Milwaukee, WI - 22% increase in price reductions
-Arlington, VA - 22% increase in price reductions

Cities showing the highest percentage of declines for listings with price reductions from June 2009 to October 2009 include:

-San Antonio, TX - 37% decrease in price reductions
-Las Vegas, NV - 36% decrease in price reductions
-Oakland, CA - 17% decrease in price reductions
-San Jose, CA - 16% decrease in price reductions
-Los Angeles, CA - 14% decrease in price reductions
-Honolulu, HI - 11% decrease in price reductions
-Long Beach, CA - 11% decrease in price reductions
-Dallas, TX - 11% decrease in price reductions
-Washington, D.C. - 10% decrease in price reductions
-New York, NY - 9% decrease in price reductions

Luxury Market Not Immune
Luxury homes (those listed at $2 million and above) continue to bear the brunt of discounts being offered with an average of 14% being slashed from the original asking price compared to the national average of 10%. Additionally, luxury homes represent less than 2% of all current listings on Trulia, but are responsible for 25% of the $28.4 billion in home price reductions.