Posts from — May 2009

Jim Gillespie, CEO of Coldwell Banker Real Estate LLC, appeared on Fox Business News Wednesday.  The Topic of discussion was the current state of the Housing Market and what will happen next.

Enjoy the video:  Coldwell Banker on Fox Business News

Bidding Wars are breaking out as a result of falling homes prices.

In most of the nation, the supply of unsold homes outpaces the demand, and as a result real estate values are falling.  A major trend contributing to this oversupply is the increasing volume of foreclosures on the market.

However, even with oversupply, reduced prices on many foreclosed homes are driving multiple bid situations. Many real estate brokers are reporting that they are receiving multiple offers on their listings.

Tamby Leonard of Santa Ana, California, says that she has been outbid four times since January when trying to buy a home for her family of five.  The more appealing bank-owned homes in her price range tend to be sold quickly to investors that are able to pay cash.

The Federal Finance Agency recently reported that home prices nationwide have risen 0.7% in February from January.  It is predicted that these bidding wars will continue until prices become more stable.

Occupied homes seem to sell better, especially in a very competitive market. Realtors and builders have used staging techniques to help sell homes for a long time, but “staging” is reaching new heights these days.

Builders have developed a new strategy to help sell their new construction in a distressed real estate market.  Johanna Calvin is a 45-year old Los Angeles event coordinator and decorator who has seen business slow. Quality First Home Marketing, a San Diego start-up,  is offering Johanna incentives for giving their townhomes a stylish look that make the home seem like someone is living there.  Usually “Home Staging” companies will charge the homeowner thousands of dollars to decorate the house with furniture, but Johanna actually lives in the townhouses for a greatly discounted rate and also receives a bonus if the house sells quickly.

Vacancy of homes is a factor that can drive the price of real estate down.  By filling the homes, the real estate will in turn gain more value.  Showhomes Management LLC, a franchise operation based in Nashville, has about 350 “resident managers” who occupy these high end homes in order to facilitate sales.  The company has reported that their revenues have increased 88% since last year!

The amount of foreclosures in North Carolina is falling fast. 

Foreclosures fell 14.9 percent in April from the same period last year, according to RealtyTrac Inc.  North Carolina had as many as 3082 foreclosures in April, making 34^th in the nation in foreclosures. 

There were 342,038 foreclosure filings nationwide, which affected one in every 374 US households.  Nevada, Florida, and California posted the top foreclosure rates last months.

Shaun Donovan, the secretary of the US Department of Housing and Urban Development, announced that the FHA will allow borrowers to use the $8000 tax credit as a down payment on their mortgage. 

This was announced in front of several thousand realtors who were gathered on Tuesday a The Real Estate Summit: Advancing the U.S. Economy.  Secretary Donovan said that these changes will help people purchase their home easier.  This implementation will also allow qualified buyers to have the access to funds immediately at closing. 

May 13, 2009

Dear Coldwell Banker® Brokers/Owners:

During the first week in June, I am heading to Washington DC to meet with key members of the House and Senate as well as the media to have a dialogue on the critical issues still facing the real estate industry. As many of you would agree, the $8,000 first time homebuyer tax credit has been a good start and there have been some positive signs in our economy recently. But to fully pull real estate and the economy out of its current state, our government needs to do more. And in order for me to make the strongest impact possible while in Washington, I need your assistance.

During the week prior to my meeting (the four days that follow Memorial Day, May 26-29), all Washington DC representatives are expected to be back in their home offices, and will be working. I am proposing we initiate a “Coldwell Banker Legislative Week” during this time, in which Coldwell Banker brokers nationwide meet with their local representatives and discuss what else needs to be done with the housing market to truly mend the economy.   

So between now and then, I’m asking that you please reach out to your local representative and set up a face to face meeting during these four days. Call their local office and ask for the person who coordinates the representative’s schedule. If you cannot get an appointment with the representative, ask for a meeting with their chief of staff. Also, if you are asked why you want to meet, let them know local real estate affects the national economy and Coldwell Banker would like to present suggestions on how to remedy the real estate market. (As a side note, please put your political beliefs aside regardless of your support for the representative – this is about real estate which affects us all.)

In terms of what you should be communicating in your actual meeting, I will be recording a Webinar by the middle of next week, that will highlight our message points so you’ll know what to say and what questions to ask. We will e-mail you access information for the webinar by early next week, as well as make it available on CB Works once complete.

We have created an email address electedofficial@coldwellbanker.com as a place to gather all feedback – we ask that you send us a brief report to this address highlighting whom you met with and what was discussed. When we distribute details about the webinar, we’ll also include a “fill in the blank” form for reporting back what was discussed that you can just forward to the electedofficial@coldwellbanker.com e-mail address.

If you’re unsure about the contact information for your representatives, there are two websites that you can visit for all necessary info:

• Congress: to find your local representative and make an appointment, please visit:

https://writerep.house.gov/writerep/welcome.shtml

• Senate: this site will take you to individual senator Web pages and their respective contact info:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

I understand there is a short window of opportunity for us to complete this and not all of you will be able to secure an appointment. Even if you can only secure a brief or future appointment or hold a phone conversation, please inform us anyway. Just know that even if you are unable to secure any type of appointment, the message is logged with the representative, so you are still making a difference no matter the outcome. But do whatever you can to make these meetings happen during the Memorial Day week as this is a perfect chance to showcase the national power and influence of the Coldwell Banker brand. 

I look forward to reading all your feedback. If you have any questions in the meantime, feel free to e-mail me and I’ll be happy to respond.

Let’s make the Coldwell Banker voice heard!

Regards,

Are trends beginning to shift in the real estate market?

The prices of homes continue to drop because sellers (and banks) seem to be desperate to sell.  The large reductions in price are having noticeable affects in some markets are beginning creating considerable increases in sales volume. 

These price declines have also helped stabilize several ratios that are used in the housing market: price to rent, affordability, price to income, etc.  Some experts believe that we will continue to notice these trends throughout the year due to the fact that the housing market is flooded with inventory.  Mike Larson, a real estate expert for MoneyandMarkets.com, predicts the sales volume to stabilize within the next year.  With the stabilization of sales volumes, he also predicts that supply will become stable. 

The silver lining is that real estate remains a solid investment and the conditions will only get better with time. 

The US Senate has recently approved a version of the latest foreclosure-prevention plan. 

The bill will protect mortgage companies from lawsuits if they adopt federal loan modification programs.  It has been said that this will help homeowners with a second mortgage to refinance their property. With the implementation of this bill, renters of distressed properties will be given a 90-day grace period before they have to move.  This bill will extend through 2013 and also includes the increase of deposit insurance by the FDIC from $100,000 to $250,000, which has already been put into effect.  The House and the Senate must now reconcile their versions of this bill and present it to the Obama Administration. 

A greater inventory of homes for sale is translating into an increase in multiple offer situations.  This is usually a trend that is seen in a “seller’s market” where demand out paces supply, but this is not the case in today’s market where foreclosures have created a large supply.  Does this trend signify a bottom point for the market?  Have prices reached a point where great homes are too good to pass up? 

Banks are asking low-ball prices to attract competitive bidding on foreclosed properties, and their strategy appears to be working.  Bidding on foreclosed homes has increased in the last few months in many states.  “If a house is in a good neighborhood, is maintained, and is a good value, it’ll get multiple offers,” says Julie Holt, owner of Anclote Title Services out of Tarpon Springs, Florida. 

Statistics show that 1 in 10 homes will attract multiple offers.  This is significantly better that 1 in 30 last fall.  This fierce competition is driven by prices, which are typically lower than previous years.  In California, the price index is down 39% from just a year ago.  “When you begin to see people willing to fight for a property, that’s a good sign, says Beth Peerce, treasurer of the California Association of Realtors.  “We are beginning to see the beginning of the end of a disaster time.”  Areas that have been hit hard by the economic storm are also beginning to see more offers on lower end homes and homes with a great value. 

Real estate is one of our most prized investments, and continued maintenance is an absolute necessity to keep a safe, comfortable environment and to make the most your financial commitment.  Regularly scheduled maintenance may seem like a chore, but in the long run it can save large amounts of wasted time and wasted money. 

Consumer Reports complied a great Top Five list for regular maintenance that each and every real estate owner should strongly consider.

• Check Your Gutters: gutters that are clogged can create separations between the gutters and fascia board, which will eventually lead to roof leaks
• Inspect Your Roof: Cracked and missing shingles are a sign that your roof’s days are numbered.  Cracks around the chimneys, skylights, and roof valleys are also an indicator of leaking
• Look for Bugs: Termites and carpenter ants have the ability to bombard your home in a few short years.  Be sure you are up to date on your pest inspections
• Avoid Mold:  Mold and mildew can cause musty smells and have the potential to make residents ill.  Be sure to keep an eye out for visible mold or mildew
• Don’t Ignore The Cracks:  Foundation cracks that are wider than 3/16 of an inch can be a real issue.  These particular cracks should be examined by a structural engineer.