Jason Lopez

There's an old saying that goes something like, "There's lies...damn lies...and statictics!" That pretty much sums up my blog post on real estate market stats....thanks for reading. In actuality there is some measure of truth to real estate stats. The fun starts with where the stats are sourced and how they are broken down.

Many agents use the local Multiple Listing Service (MLS) to source their stats. Not a bad place to get data as it is usually local, current, and detailed. But it's also based on what the agents input in to the system...so it can be, "Garbage in garbage out." In other words, it's only as good as the agent putting it in. Were they detailed? Did they leave important info like if the seller made concessions out? Is the sales price accurate? The market time? Were there price reductions along the way so we know what the list to sale price ratio really is? You know, stuff like that.

The most important aspect to consider is, "Just where are these properties located?" Keep in mind that when you read an article on local real estate, the data is not always local. It may be county or even state-wide information. To get an accurate look at your local market, start by analyzing your specific zip code. Remember, nearly every city has multiple zip codes, so even if you are looking at market data in your city, it may not really reflect your zip code or even your neighborhood. This is where a top-notch REALTOR can come in handy as they know where to pull that exact data. *HINT* It's not always available on Zillow!

Which brings me to my next point. Just because it's on the Internet that doesn't make it true! I know the web is a great place to do research and kick the tires on real estate data. But depending on the source, you could be in for a big surprise. Many web sites are days or even weeks behind. And real estate stats change daily, if not hourly. If I come to talk to you about selling your house and I leave a Market Analysis behind, the minute I walk out that door it could be outdated! Things change quickly and one sale could affect the value of your entire neighborhood. That being said there are some good online resources you can use to get a glimpse of what is happening. I have what I have found to be the best right here on my blog. You can also go here for details on every area in S. California.

Lastly I will let you in on a little secret. One that is the ultimate measuring stick of how well your market is doing. Do what I do everyday as I am driving around my neighborhood. Pay attention to how many "For Sale" signs are posted...and how many of them say, "SOLD"! That is the true measure of what is happening in your neighborhood. If you have very few signs, then not much is happening. If you have lots of signs but none say sold, then your area has not yet corrected. If you see lots of signs that say sold, then things are moving and you should go introduce yourself to your new neighbors. If a move is in your future, ask who their REALTOR was and get that agents perspective on your area.

Let me start by saying the views expressed in this blog are mine alone and in no way reflects the beliefs or opinions of my company or any others. The two quotes I mention below are just two of several I have seen recently that offer a similar opinion on the tax credits and their effect on the real estate market. Let me also say that my view may be skewed a bit as well, due to the fact that much of the work we do is representing first time buyers. This post is a reflection of what I experience daily and what our clients tell us.

In my previous post I pointed out some good news on the real estate front, among them the first time home buyer tax credit extension and expansion. A few recent quotes around this issue include, "I am not applying the recent home-price rebound to the tax credit," said Cameron Findlay, chief economist at LendingTree, in a recent interview. "I don't think the tax credit makes as big an impact as people make it out to be, although it certainly motivates first-time buyers," he said. "If it expires, I don't think it would shake the housing market as much as some have predicted." And in a recent interview, Fox-Pitt Kelton analyst Robert Stevenson said the Senate's proposal for extending the $8,000 tax credit for new homebuyers will have a "limited impact" on home sales. Ok, so what do these analysts attribute to the fact that for 8 consecutive months (according to the National Association of REALTORS) housing sales have spiked? If not the tax credit, then what is it? Look, I know this is not all we need to continue the recovery, but from the perspective of someone on the street these measures absolutely make an impact! Here's what NAR has to say:

Pending home sales rose again, marking eight consecutive monthly gains - the longest streak since measurement began in 2001, according to the National Association of Realtors®. Lawrence Yun, NAR chief economist, said the momentum is understandable. "What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," he said. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery."

We can argue the merits of tax credits all day, but the reality is 40% of first time buyers have said they only bought a home because of the credit! 40%! If that does not say it all then what does? Our recent experience tells me that with the looming deadline of the first time buyer tax credit has caused buyers to stop their search as they now understand they could not beat the deadline. By extending it we will see a spike in activity as these buyers get back in the game and drive volume into 2010. The proposed extension that will include a $6500 credit for move up buyers will also have an impact. By including language that the move up buyer has had to have owned the home for at least 5 years, that effectively limits the number of potential buyers...and sellers...that are upside down. Don't overlook what I said...sellers! This credit will help drive fresh inventory that we desperately need to the market and create not one but two transaction sides. This was a bold move by Congress...and a smart one. I have blogged about this in the past, we have huge need for new inventory. Most homes have multiple offers or are in the long process of getting short sale approval from the banks, so it has limited what buyers can select from. Add in that more cash buyers are flooding the market and it makes it even more difficult for FHA and VA buyers to get offers accepted. This is the reality of the market and varies drastically from what is reported. You want the straight truth? Talk to a busy REALTOR who is out in the trenches all day.

To say it's been a tough few years in real estate would be a huge understatement. However in every market there is opportunity to be found and believe it or not people make money in every real estate market. As an example, real estate brokers that handle foreclosure property are experiencing the best years of their careers. Same with brokers that handle short sales. Now, it's a lot more work and it's tough, but nonetheless they are busy. While thinking about these types of things I started to wonder, "What is the good news in real estate?" Here's what I came up with.

Conforming loan limits extended through 2010. The California Association of REALTORS noted the U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown. "There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California's housing market over the last year," said C.A.R. President James Liptak. "C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent."

C.A.R. calls for extension of federal tax credit. The proposed extension AND expansion of this tax credit includes language that extends the closing deadline for first time buyers from November 30, 2009 to June 30th 2010. A buyer must be under contract by April 30th 2010 and close by June 30, 2010. The new bill also includes a tax credit of up to $6500 for move up buyers that have been in their homes for at least 5 consecutive years over the past 8 years. According to The California Asscociation of REALTORS, nearly 40 percent of first-time buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered. This underscores the significance of the federal tax credit to the housing market's recovery in California.

September sales rise...Median price declines. The California Association of REALTORS reported that September sales were up 2.1 percent to a seasonally adjusted rate of 530,520 units on an annualized basis. The Unsold Inventory Index fell to 4.2 months in September, compared with 6.5 months in September 2008. The index estimates how long it would take to sell off the existing inventory. Fewer listings typically equates to more sales happening faster. The median price of an existing, single-family detached home in California during September 2009 was $296,090, a 7.3 percent decrease from the revised $319,310 median for September 2008, C.A.R. reported. The September 2009 median price rose 1.1 percent compared with August's $292,960 median price.

Economy up, interest rates down. In a recent statement, the Federal Reserve said that financial markets have improved, home sales have increased, household spending seems to be stabilizing and businesses have continued to make progress toward aligning inventory levels with sales. The Fed also said it will keep the benchmark federal funds rate at just zero to 0.25 percent and continue other policies that have helped to support mortgage lending and home sales. "Economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," the Fed said. A recent loan quote on LendingTree.com listed a 30 year fixed FHA loan of $272,500 at an interest rate of 4.88%, an APR of 5.19%, and a monthly payment of $1556. Good news for borrowers looking at historic rates and terms!

Today, RealEstate.com's Town Square opened up to the world. It has been under construction for a while within the virtual walls of our office, but today anyone and everyone can see it. In a nutshell, Town Square is where anyone, from consumers to agents to brokers to industry professionals (really, anyone) can come and talk about all things real estate. Talk about things that aren't specific to real estate but might be related. Or just to come and talk. Most people will come to the site and listen, or to be more accurate, to read. A post or a discussion or blog may cause a reader to have such a strong reaction, they will post an opinion, positive or negative and begin the discussion.

Included in Town Square are blogs, forums, media, and even groups. It's a great way to interact with consumers and other real estate professionals and we invite you to explore and participate. Already there is tons of informagtion, ideas, strategies, and lively discussion going on. This interactive forum allows for open communication and is another great example of how social media is becoming a critical part of our overall marketing and communication strategy. To access Town Square, simply visit www.RealEstate.com and click the Town Square tab. Welcome and enjoy!

After much debate HUD has authorized the use of the $8000 first time buyer tax credit to be used as a downpayment, however there are a few ground rules. To qualify as a first time buyer you must not have owned a primary residence in the past 3 years. First, the credit can NOT be used to cover the 3.5% FHA loan down payment requirement. It can be used toward other closing costs. There are also loan limits of $90,000 for a single perosn and $170,000 if married. Additionally, the credit is claimed using IRS Form 5405.

HUD posted a letter to lenders instructing them on the program and released information via the HUD.gov website yesterday, May 29th. Please visit the following links for the letter to lenders, the press release issued May 29th by HUD, and an overview of $8000 First Time Buyer Tax Credit.

http://www.hud.gov/news/release.cfm?content=pr09-072.cfm

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc

http://www.irs.gov/newsroom/article/0,,id=204671,00.html