Posts from — March 2010

Heather Sakers, a sales agent with Coldwell Banker Seaside Realty, has been nominated for Realtor Magazine’s “30 Under 30 promotion.”

Heather has been with Coldwell Banker Seaside Realty for a number of years and has gained a reputation as a honest person who always keeps her clients’ best interests in mind.  Her biography for nomination reads as follows:

“I strive to bring an honest and caring approach to my real estate career. Taking a huge financial loss myself and seeing family and friends lose everything in this market had a big impact on my attitude and what I considered to be important in life. Sales can be all about making money and getting ahead, but I have a sticker on my laptop from Mark 8:36 that says: ‘How do you benefit if you gain the whole world but lose your own soul in the process?’ It reminds me to treat my clients how I would want to be treated and always put others’ best interests first.” Web site: www.coldwellbankerobx.com

We are all very proud of Heather for this nomination and wish her the best of luck.  You can vote for Heather by clicking the link below…feel free to vote as many times as you wish!

http://tinyurl.com/ydyyke9

Heather Sakers - 30 Under 30

Why is now a smart time to buy?

• I.I.I.P.  Inventory, interest rates, incentives and price.  In most markets around the nation, home inventory has increased giving buyers a greater choice.  At the same time, mortgage rates remain at near historic lows and home prices have decreased the last two years which is the first time that has ever happened since World War II.  Prices dropped about 2% in 2007, 9.3% in 2008 and 12.4% in 2009 according to the National Association of Realtors.  This has made home affordability the best since at least 1973 and maybe ever.  Add in the first-time homebuyer incentive to make it a smart time to buy.
• Consumers also have to gain confidence in housing.  Reading headlines is not a great way to gain information.  Real estate professionals need to educate the local community on such issues as inventory, appreciation and time on market and remind everyone that all real estate is local.
• We have to remember that homes are selling when they are well-prepared for sale and priced right.  The reason is because people buy and sell homes for lifestyle reasons.  Births, marriages, new jobs, job transfers, retirement and others are all drivers.  Following the advice of a full-service professional, who knows market conditions and a home’s competition, is critical in readying a home for sale.
• What has happened is that sellers have become much more realistic in setting the price and continue to understand that a home is home, not a winning lottery ticket.
• We also have to see a reduction in foreclosed homes and short sales on the market.  These are a drag on prices and inventory. 

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  • We need to have Main Street American homeowners buying from Main Street American homeowners.  While getting first-time homebuyers back into the market is critical and the extension of the tax credit helps, the nation’s economy also needs the move up buyer back in the market.  That is why the tax credit expansion is so important.

When will the real estate market turn?

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  • I don’t have a crystal ball, but we have some positives.  The first is that the market downturn has brought home affordability levels to the best in many, many years – at least to levels not seen since 1973 and maybe ever.  The unsustainable increases we had in 1995-2005 have leveled off.  Sellers have become much more reasonable in setting prices and as consumers begin to gain more confidence that prices have leveled off they will return to the market.  Inventory drops are the biggest indicator of a turning market.  And I’m encouraged that inventory has dipped to a 7.2 month supply, down 11.1% from a year ago, the lowest level since March 2006.   Total inventory is 3.29 million homes. 

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  • No one has a crystal ball to predict the future, but it is fair to look at the demographics driving the real estate market.  Real estate is positioned well for the future.

                                                              i.      Baby boomers are in their prime real estate buying years and are 78 million strong.

                                                            ii.      The Pew Research Center reports minority homeownership levels still have room for improvement.  The gaps between white and minority households remain significant with homeownership rates for Asians (59.1 percent), African-Americans (47.5 percent) and Latinos (48.9 percent) well below the 74.9 percent among whites.

                                                          iii.      Immigrants are moving to the U.S. by the tune of 1.1-1.5 million a year depending on the source.  These are legal immigrants who add value to our country and society.  They need housing.

                                                          iv.      Echo boomers will likely have similar economic impact in coming years that their baby boomers parents have had through their lives.  Echo boomers are born between 1977 and 1994 and are 73 million strong and according to the Joint Center for Housing Studies at Harvard University, 4 million turn 21 each year. 

                                                            v.      Household formation is also an important statistic.  The Joint Center for Housing Studies at Harvard University projects at least 1.25 million households will be created annually from 2010-2020 and will be led by the echo boomers.

                                                          vi.      People move for lifestyle.  There have been 4 million marriages and a record more than 8 million babies born in the last two years indicating there is demand for housing.  Many of these growing families have not bought a home and are either renting or living with family as they save for a down payment.  We know there is pent up demand.  Look at coldwellbanker.com numbers where we have had 30 million visitors each of the last two years.

Is it tougher for buyers to secure mortgage money?

• Mortgage funding remains available for consumers who meet the classic lending standards – including proof of income and solid credit.
• The reasons that most people purchase a home are overwhelmingly lifestyle-driven – from having a baby or getting married, to moving to a smaller home after retirement.  These types of lifestyle changes occur year-in and year-out, in every kind of market.  So even despite the headlines focused on economic issues, we will continue to see people buy and sell homes

How does the current economic downturn affect the real estate market?

• It’s clear that the housing market will play a critical role in our economic recovery.  While national economic headlines seem gloomy, the residential real estate market shows several positive signs that could be signaling a tipping point.  Home inventory according to the National Association of Realtors is at 7.2 month supply, down 11.1% from a year ago, the lowest level since March 2006.   Total inventory is 3.29 million homes. 
• Because the overwhelming majority of home buying activity for most of 2009 was in distressed homes – foreclosures and short sales – the median price nationally came down.  But as inventory has leveled off, so have prices.  In fact, December saw the median home increase in price to $177,500, up 1.4 percent from a year ago.  For all of 2009, the median price was $173,200, down 11.9 percent from 2008.  This was largely because of the number of distressed homes that sold and they average for 15-20% lower than traditional homes.
• There is a consumer crisis challenge impacting housing.  Job loss – and fear of job loss – is keeping people from engaging in the process even as mortgage rates remain at near historic levels.  The hope is that the extended and expanded tax credit will help bolster the housing market,   allow home prices to stabilize and at the same time infuse some much needed strength into the national economy.
• Today, the large number of homes available for sale provides home buyers with a wide range of choices.  Interest rates remain low.  Affordability has improved in many markets.   This is the smartest time to buy a home in my 35 years in real estate.  While many might understand that, they are being influenced by the economic downturn and their decisions reflect this concern.

How will the extended and expanded homebuyer tax credit impact housing?

• We applaud Congress and President Obama for passing the Worker, Homeownership, and Business Assistance Act of 2009.  The ensuing tax credits for first-time homebuyers, which is an extension of the popular plan that was set to expire on November 30, and move-up buyers is the true definition of stimulus.  According to NAR, approximately $63,000 is put back into the local economy for every home sold.  Economist Mark Zandi of economy.com believes that figure to be about $56,000.
• The first-time tax credit was working, but what housing and our national economy needed was incentive for the move-up buyer.
• The first-time homebuyer’s tax credit remains at $8,000 for most buyers who have not owned a home the previous three years who have a signed sales contract prior to May 1, 2010 and close before July 1, 2010.  The new plan also allows for a higher cap of $125,000 income for singles and $225,000 for married couples. 
• Current homeowners who have lived in their homes for five consecutive years over the previous eight years, can take advantage of a tax credit of up to $6500 for the purchase of their next primary residence of up to $800,000.  Again, the contract must be signed before May 1,2010 and the deal closed before July 1, 2010.

After a downturn in the real estate market that has lasted more than four years, the Outer Banks is showing signs of recovery.  In fact, according to the Outer Banks Association of Realtor’s Multiple Listing statistics, we have experienced three consecutive months of price increases (27% over that period). 

With interest rates still at near historic lows, high pent-up demand for purchasing homes, and a generous tax credit, further recovery is expected. Additionally, demographic trends are currently favoring resort destinations as more families seek lifestyle changes to a slower pace of life, and as baby boomers continue to retire by the millions and move to locales where they can fulfill their dream of living by the water and pursuing their outdoor recreational interests. 

Geography also favors the Outer Banks.  We are within a day’s drive of nearly 40% of the nation’s population.  And, with the construction of the mid-county bridge on the horizon, which will decrease the drive time to the northern Outer Banks by as much as an hour, we should expect demand to increase all the more.

Together with this growing demand, changes in inventory levels (supply) indicate a continued upward pressure on prices in the months and years to come.  Currently, inventory is down 22% from its peak in mid 2007.  Many buyers are recognizing that now is time to act while there is still a good selection of homes and before prices rise any further.

Specifically for Coldwell Banker Seaside Realty (CBSR), there is an expectation of continued success, with a steady gain in market share, and a continuation of their history in outperforming the market.  In 2009, the market was down 5% in volume yet CBSR was up over 5%.

“This success is due mainly to the work ethic, professionalism and market knowledge possessed by our team of Associate Brokers,” according to Sales Manager Pam Smith. “Many of our associates had their best year to date, in fact, 11 of our associates were in the top 100 in the MLS (with five in the top 50)!”

So what is working?  According to Smith, there are a few areas that have contributed to CBSR’s remarkable results and have helped them lead in the marketplace: 

• Power of the brand – Coldwell Banker continues to be the top name in real estate with a 98% brand awareness.  This positive branding is important as it gives buyers, who may not be familiar with the names of local firms, a sense of trust.  It also comes with an expectation for a higher level of service and professionalism.

• Technology has also played an important role in recent successes. Coldwell Banker Seaside Realty has harnessed the power of technology in a number of ways helping them to leverage the internet with tools like the Coldwell Banker YouTube Channel.  Coldwell Banker has even developed their own iPhone apps to make it easy for prospective buyers to find information regarding listings on the fly.

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  • State-of-the-art lead generation systems have also been instrumental with over 314 leads generated for their associates in 2009.

 “We take our partnership with our associates very seriously,” says President of Coldwell Banker Seaside Realty, Gordon Jones.  “This partnership works together with a staunch adherence to the guiding principles of: continual training and development to increase knowledge and enhance skills (we have the only full-time continuing training system on the Outer Banks.); a strong work ethic among our Associates; integrity, or doing what we say we will do; effective marketing both on and off line; and our determination to hire only the best sales professionals.”

So, what’s in store for 2010? According to National Association of Realtors® chief economist Lawrence Yun, we can expect: a 9.9% increase in existing home sales; a 40.2% increase in new home sales; a growing pent-up demand for housing; and, growing consumer confidence.

What is Coldwell Banker Seaside Realty predicting?  Says President Gordon Jones, “We are expecting continued improvement in the market conditions resulting in a 15% increase in both units and volume.” This, together with a solid business and marketing plan is expected to produce continual growth of market share, continued growth and improvement for each associate, and an improved result for our clients “Which after all, is what it is all about.”

Spring is in the air, and from a real estate perspective, spring traditionally means an increase in real estate activity.  Granted, the current economic climate and housing market probably do not qualify as “traditional,” but the increased activity in the Outer Banks real estate market is showing signs of spring fever.  

• According to the Outer Banks Association of Realtors there are currently 2,237 residential properties for sale, as of 3/9, there are 215 properties pending (under contract but not closed).
• Residential sales have doubled from January 2009 to January 2010.
• Pending sales increased by 21% when compared with January 2009.
• 2010 has seen 186 closings, 31% more than at this same point in 2009.
• An 11% decline in total inventory of homes.
• In 2010 the average sold price of a house is up 12.6% from the end of 2009 and 13.5% from October 2009, the last month prices declined.

"True Friends"

With low prices and affordable mortgage rates, there is no question that the current economic conditions have helped to create a tremendous opportunity for real estate investors.  This is especially true on the Outer Banks. 

With low prices and great selection, there has never been a better time to buy that second vacation home.  Investing in a second vacation home could eventually allow you to be able to pay for the home and use it as your permanent residence when you retire. 

“Buying and renting out a second home as a vacation rental property until you’re ready to move in upon retirement can significantly help offset the cost of ownership,” says Brian Sharples, CEO of HomeAway, the world’s leading online vacation rental marketplace. “The income stream, in addition to tax write-offs for maintenance and repairs, make this an attractive strategy for many people nearing retirement.”

According to HomeAway, on average $28,000 of rental income is pulled in from owning a second investment property.  With the  popularity of vacation homes increasing, it is hard to overlook this opportunity.  It is reported that about 87 percent of all travelers that have stayed in a vacation home in the past will stay in one again this year.

HomeAway suggested taking the following steps in preparation for investing in your second vacation home. 

• Consider the location and market potential – Carefully review the markets where you want to retire, and before you buy, consider the areas where consumer demand for vacation rentals is high, but inventory is low.
• Factor in tax write-offs – Talk to an accountant about the tax advantages of owning and renting out a second home. Expenses such as insurance, utilities, home maintenance and depreciation can be deducted, depending on how often you rent out the property and how many weeks you personally stay there each year.
• Advertise to attract renters – When you’re ready to rent out the property, be sure to market the availability of the vacation rental to travelers by listing it on sites like HomeAway.com or VRBO.com, which reach millions of travelers each month. A 12-month listing costs $329 – or less than $28 per month – on HomeAway.com, so the advertising pays for itself with your first booking – and the rest is pure rental income.
• Stay competitive and network with owners – Check out other similar vacation rentals in the area to determine what rates they’re charging travelers, and price your home at a competitive rate to help drive bookings. Also, be sure to talk with other owners to get their tips and advice for maximizing a second home investment.

For more information about owning a second vacation rental home, visit www.coldwellbankerobx.com or email sales@seasiderealty.com