Asking prices of homes listed for sale on real estate portal Trulia.com in January were up from a year ago in 86 of the 100 largest U.S. metros, according to a monthly report released today.
The report, which covers roughly 4.5 million for-sale and for-rent properties listed on Trulia through Jan. 31, showed asking prices up 5.9 percent from a year ago, and growing by a seasonally adjusted 0.9 percent from December to January — the biggest month-over-month gain since March 2012.
In some markets, the strong growth in asking prices doesn’t necessarily indicate that worries are over, said Jed Kolko, Trulia’s chief economist.
“In many local markets today, dramatic price gains can mask serious red flags,”Kolko said in a blog post. “Strong job growth, low vacancy rate, and low foreclosure inventory — not huge price gains — are signs of a healthy housing market.”
Trulia identified San Francisco, San Jose, Seattle, Denver and Salt Lake city as “booming” markets with strong fundamentals.
Read more | Comments (0) | February 5th, 2013
The bursting of the housing bubble plunged the economy into a recession from which it has yet to fully recover. But economists say this could finally be the year that housing lifts us out of the doldrums.
“Homebuilding activity will likely remain the strongest growing component of the economy in 2013,” said Keith Hembre, chief economist of Nuveen Asset Management. “After several years of excess supply, demand and supply conditions are now in much better balance.”
Home sales rebounded to the strongest level in five years in 2012, as home building bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home pricesand a drop in foreclosures have combined to bring buyers back to the market.
The economists surveyed also forecast that there will be just under 1 million housing starts this year — roughly matching the 28% rise in home building in 2012. Moody’s Analytics is forecasting much stronger growth — a 50% rise both this year and next year, which it estimates will create more than 1 million new jobs.
“There’s a lot of pent-up demand for housing, and very little supply,” said Celia Chen, housing economist for Moody’s Analytics. “As demand continues to improve, home builders have nothing to sell. They’ll have to build.” She said that growth in building will mean adding not just construction jobs, but also manufacturing jobs building the appliances and furniture needed in the new homes, which in turn drives overall consumption higher.
And economists say the tight supply and renewed demand for housing should lead to higher home values — about a 3.7% increase according to the survey.
“One of the most significant indirect effects from the housing recovery is the ‘wealth effect’ on consumers due to the recovery in home prices,” said Joseph LaVorgna, chief U.S. economist of Deutsche Bank, who said better home values can affect both consumer psychology on spending as well as their actual finances.
“Even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets,” he said.
But even with the bullish outlook on housing, economists are still forecasting only a modest rise in the overall economy this year. The consensus estimate is for economic growth of about 2.4% in 2013, only a modest improvement from the 2012 growth rate of about 2% they’re forecasting when the final numbers are in.
By far the biggest concern is a standoff on Capitol Hill. About three-quarters of those surveyed picked Congressional gridlock — which could result in a cutback in federal spending – as the biggest problem facing the U.S. economy. Other choices, such as theEuropean sovereign debt crisis, continued high unemployment and increased government regulation, were much less of a concern.
“Washington is now the primary impediment to stronger economic growth,” said Russell Price, senior economist of Ameriprise Financial.
Home values rose nearly 6 percent in 2012, according to year-end data from the real estate Web site Zillow. But such increases aren’t likely to continue.
The increase is the largest annual gain since 2006, near the peak of the housing bubble, and is greater than the typical appreciation seen in healthy markets. Zillow forecasts an increase next year of about 3.3 percent, more in line with typical housing market appreciation. (Historically, annual appreciation averages about 3 percent, according to Zillow’s research.)
Stan Humphries, Zillow’s chief economist, said he expected the housing recovery to continue this year, but at a “more sustainable” pace. Tight inventory in some markets, combined with strong demand and a slowing pace of foreclosures, contributed to the rise in values, he said. As values rise, fewer homeowners are underwater, or owe more than their home is worth, and may be more willing to put their homes on the market. The increase in inventory, in turn, should moderate future price increases.
As home values rose in the fourth quarter, foreclosures slowed, to 5.22 of every 10,000 homes nationwide in December. That was the lowest pace since November 2007, when the rate was 5.18 per 10,000 homes, Zillow said. Sales of foreclosed houses stood at 12 percent of the market, down 4 percent from the end of 2011.
The housing recovery, however, is uneven. Phoenix, for instance, which has had strong investor interest, showed an increase of more than 22 percent year-over-year, a pace reminiscent of the real estate bubble. Cincinnati and Chicago, meanwhile, showed slight declines. Seven of the top 30 metropolitan areas in the study, however, showed an increase in home values of 10 percent or more.
While it’s encouraging to see housing values rise rather than fall, there’s a risk that consumers may get used to such large increases and expect them to continue, Mr. Humphries said. And that’s probably not a good thing. The recent volatility in the housing market makes it easier to think of housing as a shorter-term, speculative investment, he said, rather than as a place to live. “Housing should be thought of as a long-term investment.”
Has the recent rise in home values changed your perspective on housing as an investment?
Read more | Comments (0) | January 24th, 2013
An index measuring home-builder confidence failed to post any gain this month, remaining unchanged after eight consecutive months of increases.
The National Assn. of Home Builders/Wells Fargo Housing Market Index held at 47, which was its highest level since April 2006. Any reading over 50 indicates that more builders view conditions as good rather than poor.
“Conditions in the housing market look much better now than at the beginning of 2012, “Barry Rutenberg, chairman of the association, said in a news release. “An increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year.”
The components of the index, which is derived from a monthly survey, were mixed. The current sales conditions part of the index was unchanged at 51. The part measuring sales expectations in the coming six months fell 1 point to 49. The part of the index measuring traffic at model homes from potential buyers gained one point to reach 37.
Confession: I cyber stalk real estate agents. I watch your Facebook statuses. I read your tweets, likes and shares. And, from time-to-time I even scan your Spotify feeds to figure out what new artists I should check out.
Why? Well, not because agents have the best taste in music (though I have seen some pretty good tracks on your playlists…)
The truth is, over time I’ve found that if you really want to know what’s going on in the real estate market, all you have to do is watch the conversations agents are having.
Recently, my cyber observations have made me feel like we’re in the dead heat of a market turnaround. It seems like agents are feeling better, doing more business, and generally positive about the market prospects in the year ahead.
But, I had to ask: is this anecdotal recovery I’m feeling real? And if so, where are the signs?
Here are six answers I found that support the notion that things are looking up for the real estate industry.
Take a look, share them, blog them, and shoot me a comment in the box below to let me know what signs of change (if any) you’re seeing in your area.
1. Both asking price and rents jumped 5 percent from last year
Trulia’s latest Price and Rent Monitorsshowed a big boost in asking prices across the U.S. – up 5.1 percent year-over-year. This a drastic change from the double digit declines of previous years.
The relevant news for your buyer and seller prospects isn’t just that home prices are climbing, but that renting is getting more expensive as well. The statistics showed rents are up 5.2 percent year-over-year.
If you understand supply and demand, it’s obvious that these two facts point toward more real estate moves happening, and that consumers have gotten over the angst of previous years and shifted into the “recovery mindset.”
To follow along or view past data releases from Trulia, check out the Pro Blog’s Industry Feed where you can find graphics and facts you can share to help boost consumer confidence in your market.
2. Mortgage rules got a renovation.
Predatory lending practices linger near the top of many economists’ blame lists for the most recent market decline. And, after years of fallout from bad mortgages, capable buyers have been, understandably, slow to purchase.
For those buyers who’ve been anxious about the mortgage process and skeptical of the predatory lending, this Thursday brought great news and a sure “go” sign for them to jump into the market.
Thursday the Consumer Financial Protection Bureau released it’s new mortgage guidelines which are “a set of standards that protects consumers from bad loans” according to David Stevens, CEO of the Mortgage Bankers Association.
The new guidelines show that banks and the government are working out their differences to create a safer, more secure environment for homeowner hopefuls. In addition, the new guidelines give those buyers access to mortgage best practices upfront to help them ensure they’re ready for application and ownership from the start.
For a great summary of the new guidelines, check out CNN’s article “New Rules Aim to Make Mortgages Safer”.
3. Delinquency & foreclosures are at record lows.
Declining delinquencies aren’t just fluffed headlines, the numbers support what it seems many agents are feeling.
Delinquencies are down. According to Trulia’s Chief Economist, Jed Kolko, “ In November, 10.63% of mortgages were delinquent or in foreclosure, down a hair from 10.64% in October. The combined delinquency + foreclosure rate is at its lowest level in four years and is 41% back to normal.”
These stats are good news for buyer’s agents whose clients and prospects need a boost of confidence.
4. 93% of Millenials plan to buy.
Last quarter we released Trulia’s American Dream Survey and one of the top facts from our study showed that 93 percent of current millennial renters plan to buy.
This is good news for an industry that’s suffered from years of skittish home shoppers and a lot of talk about home buying no longer being a part of the American Dream.
5. Investors rush in.
Another sign that we’re on the way to a high-paced recovery is that investors are making major moves to capitalize on today’s opportunity.
A recent story from Bloomberg covered how Blackstone Group, the largest U.S. private real estate owners, sped up it’s purchases of homes to try to beat out fast rising prices.
This is a sign for on the fence buyers to start their hunt before the weather heats up and they face more competition than they can handle.
These are some of the national signs that show the recovery is well under way. Comment below and tell us what you’re seeing, reading, and witnessing in your local market.
YouWalkAway.com, a foreclosure agency, conducted a survey of its clients and revealed 78 percent of those who responded said they were walking away from their primary residence. In addition, at least 74 percent of all respondents would be eligible for tax relief through the Mortgage Debt Relief Act of 2007.
The Mortgage Debt Relief Act allows forgiven debt through a short sale, loan modification, or foreclosure to be excluded as taxable income.
The act faced expiration December 31, 2012, but Congressextended the act for another year on January 1.
“This extension hasn’t been well publicized but it is important to homeowners and realtors nationwide. Had this law not been
extended, it could have brought a drastic halt to short sales and had a devastating effect on underwater homeowners,” said Chad Ruyle, YouWalkAway.com co-founder.
In a report, the foreclosure agency explained the one-year extension is not likely to encourage a new wave of mortgage defaults in early 2013.
While it could be argued that extending the act will encourage underwater homeowners to strategically default, YouWalkAway.com does not expect to see new defaults. Strategic default occurs when borrowers decide to stop making payments on a mortgage they can afford.
Rather than seeing new defaults, YouWalkAway.com expects the one-year extension to provide tax forgiveness for just the homeowners currently in the foreclosure process since new defaulters would have only a year to receive tax forgiveness, which is not enough in certain states with lengthy foreclosure timelines that exceed a one-year period.
On average, 85 percent of YouWalkAway.com clients have not made a monthly mortgage payment in 14 months. Thus, the agency concludes, a 12-month extension is not encourage new strategic defaulters.
Instead, the 12-month extension will motivate homeowners to seek options outside of the lengthy foreclosure process and seek alternatives such as a short sale, deed-in-lieu, or a modification, the agency explained.
Your website can be a great tool for building relationships outside of the sales cycle and driving hyper-local content creation can be the foundation for a successful long-term, long tail search engine optimization strategy.
The short-term downside with both of these approaches is they are time consuming and can take years to fully bear their fruits. Time is money and most agents need to drive real results in the days and months that are right around the corner.
As you’re working to make 2013 the most prosperous and efficient year ever, we invite you to take a look at a few web engagement strategies designed to realize more results faster. Use these to target web visitors that are ready to buy, and push that traffic directly to you.
1. Organic traffic from Google search results
Ranking number one for Springfield Real Estate (or whatever city you market in) sure would be a great way to drive a ton of traffic, right? Unfortunately, all of your competitors all agree, which means ranking for general terms has become very difficult. Some real estate professionals have had success in ranking for “long tail” results instead.
To do this, they write about everything in their community – schools, restaurants, events, etc… While this often works, it takes a long time to write all that content, and the people who find it aren’t necessarily interested in buying or selling a house.
To achieve similar success in a lot less time, don’t go quite so “long.” People who are ready to do a transaction are essentially searching for the answers to at least one of three questions:
- How much is my house worth?
- Which houses are for sale?
- How is the local market? (Or, is now a good time to buy or sell?)
Once a week, create content that addresses one of these three questions. Give these stories a title that matches – for instance: “New houses for sale in Lakewood, Colorado” or “What are houses selling for in Alameda, California?” You may even want to drill down to specific neighborhoods.
It will take a few months of consistent writing on these topics to move meaningfully higher in your local home search market, but this is the shortest path to success in the long tail search results game.
2. Mobile ready, single property listing landing pages
This one is fairly straightforward. If you have a for sale sign planted in a yard, make sure the consumer standing in front of it can access information about it on their phone.
To do this, you need
- a URL that’s easy to type,
- a landing page that renders nicely on a smart phone, and
- capture tools that make it easy for the consumer to give you their contact information.
Long & Foster recently announced a program that provides these tools for their agents.
If you aren’t a Long and Foster agent, you can copy and paste you’re the custom Trulia listing URL into Bit.Ly or Goo.gl and make your own custom short web address to connect prospects to a mobile friendly landing page.
It’s a small tactic that’s becoming more and more important as real estate search becomes more mobile.
3. Target your advertising
If you’ve been in real estate for more than six months, you‘ve asked, “What marketing really works?” Well, the answer depends on what you consider “working.” When you’re shopping for real estate ads, make sure you focus your efforts on the zip codes, areas, and avenues that offer you measurable focused result.
You don’t need every lead that ever graced a web page. You also don’t need to promote yourself in every publication in your city or town. You do need leads that are serious buyers and sellers.
The key to shopping for advertising these days is setting your goals and targets before you get into a conversation about tactics. Once you’ve decided on your goals, make sure your sales rep or account manager understands them and can show you how to measure the result before you shell out the cash.
4. Trulia and other web portals
In addition to generating your own traffic, make sure you tap into the traffic from the nation’s largest web portals. If you have listings, make sure your profiles are complete and have the proper email address, phone number and URL for consumers to reach out to you.
Finally, take a look at the products we provide to deliver traffic to you. Remember, time is money. Sometimes it’s more profitable to focus on converting leads into clients than it is to spend all your time generating your own leads.
These four strategies are all great sources of traffic for you website. But once the traffic comes your way, you need to have a strategy for converting that traffic into clients. We’ll tackle that in a few future posts and some of our upcoming trainings.
Read more | Comments (0) | January 4th, 2013
If you’ve worked, used, or talked to anyone who uses social media for business you’ve heard the question “What posts are going to generate business?” Unfortunately, the answer hasn’t always been easy for real estate agents.
Over the past few years, the ebbs and flows of the market, wavering consumer confidence, and some overly negative press have made it so agents and industry blogs were plagued with only hum drum sad news to share.
But 2012 has been the year of change for agents, bloggers, and anyone who’s job involves “talking” real estate online.
Here’s the proof. Here are 4 social shares help you start 2013 off with Facebook updates, tweets, and other shares that show your clients and prospects that this year could be one of their best opportunities to close a real estate deal.
1. The housing market is recovering fast
If you haven’t already seen, Trulia’s Housing Barometer has been tracking the housing market’s recovery each month.
The most recent release shows that the housing market is 50% back to normal and housing prices are up another 6 percent. This is great news for building buyer confidence in your area or convincing skittish sellers that now is a good time to sell.
Read the latest Trulia’s Housing Barometer update on the housing market’s recovery for more details.
2. Foreclosures have a hit a post-crisis low
A late 2011 study showed that foreclosures have a major effect on buyer confidence. Sharing the recent news that foreclosures have a hit a post-crisis low is a great way to build confidence and catch the eyeballs of your next potential clients online.
For the story on foreclosures and other good news for 2013, check out Housing in 2013: What’s In, What’s Out.
3. Housing inventory has dropped for the 9thmonth in a row
The National Association of Realtors reported housing inventory has dropped for the 9th month in a row.
For buyers, that means that now is the time to act before they miss out. For sellers, now is the time start marketing their home as more buyers move off the fence. For you, the agent, now is the time to become the source of good news about the market.
Check out the data on NAR’s website and use it to fuel your own blogs and social sharing.
4. Help for first-time sellers
NAR stats show that one of the biggest market opportunities of 2013 will be first-time sellers. To help you engage these prospects and turn them into clients, we’ve come up with this brandable guide to help you tap this hot niche market.
Download it, add your brand and contact info, and share this on your website or as a printed handout for potential sellers in your area.
Tips for sharing the news
Simply hitting “share” or “tweet” is not enough to build your expertise. Here are a few ways to use housing headlines to boost your expertise locally.
1. Start a local conversation
National headlines and facts can do a great job of garnering attention, but at the end of the day buyers and sellers want to know what’s happening in your market.
Use the national headlines or quotes from some of the shares in this post as an intro for blog post about what’s happening in your market.
2. Share it with your spin
To convince prospects you’re an expert they need to hear from you. When your sharing these facts, stats, and helpful tips make sure you add your own commentary on the news you’re re-sharing.
3. Send it in your follow-up
Your ads, social shares, and any of your other marketing tools are pointless if there’s no substance in your follow-up.
Check out Trulia’s Agent Download Center for helpful handouts to include in your client follow-up. You can download them to use in your e-mail follow-ups or feature them as downloads on your own blog or website to help capture new clients.
True Confession: I set a handful of New Year’s Resolutions every single year. Why? They work for me – I’ve got probably a 75 percent success rate. Some of this is in the science of setting the Resolution the right way in the first place, including the preparation.
Here’s my secret: I always get started in December. I like to use my holiday down-time to plan things out, gather up the resources or do the research I need, figure out what my challenges are likely to be and make a plan to deactivate them, set appointments with any professional I need to get on board to make my goals happen and even get some momentum built up with my new eating program, workout plan, financial goals or career endeavors.
I aim to be like that old Marines commercial – by January 1, I’ve already done more than most Resolution-setters do all year!
And I’d like to help you do the same. Let’s boost the chances that your home buying or selling goals for 2013 will be successful by devoting a little time in December to getting things lined up and in motion. Here is my short list of tasks I would put on my December to-do list if I wanted to buy or sell a home next year:
1. Handle your credit horrors. Maybe you don’t have any credit horrors – kudos to you! But let’s get real, this year will be a year in which many post-foreclosure, post-bankruptcy, post-layoff Americans will find themselves sufficiently recovered, post-recession, to get back into the real estate market and buy a home. If you count yourself among the number of 2013 wanna-be buyers who experienced a financial glitch of any degree during the recession, December is the right time to start pulling your credit reports and doing a damage assessement and control campaign.
- Visit AnnualCreditReport.com (the only website through which you can access your government-mandated free reports) and order your own credit reports from all three reporting bureaus.
- Review them all, line-by-line, checking for errors and discrepancies. It is extremely common for paid-off accounts to still be reporting as delinquent, for foreclosed mortgages to still be listed as open and past-due and for bills that were settled in collection to be reported as behind. Follow the instructions to dispute any such errors you see.
- When you talk with your mortgage broker (see #4), go over the reports with them again, getting a read on precisely when your foreclosure, bankruptcy, delinquencies, gaps in employment or other credit woes will be sufficiently “seasoned” (i.e., long ago) to allow you to qualify for another loan, and get their advice on any action items, like paying a particular debt or set of credit cards down to $X amount will be important for you to complete before you try for a legitimate pre-approval next year.
In fact, this last point applies to everyone – whether or not you think you have any dings on your credit report. It’s essential to get clear on any of the work you’ll need to do to optimize your credit standing now, as the payoffs, disputes and other credit work that can move the needle on your score may take some time.
2. Purge. It’s time. Time to get rid of all that things you know qualify as clutter – all of the stuff you know buyers won’t want to see when they tour your home, and all the stuff that you won’t want to move to your next place. If you donate your junk before the end of the year, you might be able to get a receipt and deduction for the taxes you file in 2013. And tax break or not, getting all that stuff out of your attic, your closets, your shelves and your rooms will clear up loads of mental space and energy, minimize some of the overwhelm latent in the prospect of moving – and might even surface a few things you can sell to boost your down payment savings or your home staging budget.
Clutter clearing gets overwhelming when you simply lack the time, in the face of everyday urgencies, to invest a few hours or days to go deep, pull out all the minutae and memory-laden How better to spend those wintry days between Christmas and New Year’s than to clear out the clutter in your home – and your mind?
3. Plan your prep. If you’re thinking of selling your home in 2013, now is a great time to start organizing your list (or spreadsheet, or Evernote file) of home preparation tasks that need to get done before you put the place on the market. Things like painting, carpeting, landscaping and other preparation tasks can be less taxing and less disruptive to your life if you have plenty of time to collect bids, sock away the cash to cover the costs and arrange projects at your family’s convenience or during off-seasons, when contractors might be wiling to charge a bit less.
Talk with your agent before you put a plan in place; they can help you make good decisions which projects to do (and which to forego), as well as choosing finish materials and colors that will appeal to the broadest segment of buyers – to boot, they often can refer you to the most cost-effective contractors in your area for these sorts of pre-listing projects.
3. Save. More. There’s no such thing as saving too much cash up for your down payment. If you have a home to sell, you have no idea how much you’ll take away from that transaction until it closes. And even if you’re currently renting, having maximum savings set aside allows you maximum flexibility in terms of selecting homes, competing with other buyers, covering closing costs (which can run as high as 3-4% on average for an FHA loan) and even handling post-closing repairs, appliances and property personalization.
4. Collect your gift money. Buyers who get gift money from a relative to apply toward their down payments are often subject to seemingly strange and definitely invasive documentation requirements – the most onerous of which is to produce copies of the gift GIVER’s bank accounts proving the source of the funds. If you know Mom, Dad, Granny or Aunt Bernie is going to chip in some cash toward your down payment in the Spring, consider asking them to go ahead and give it to you now, so you can put it in your own accounts and begin “seasoning” it as yours, which will help you avoid all those documentation demands.
Your benefactor should check with their financial and tax advisors to be sure the gift is structured so as to avoid any tax implications, before they give it.
5. Connect with an agent and a mortgage broker – stat. Don’t wait until the month before you want to buy or sell to ring up your trusty agent and initiate the conversation. Ask around for referrals or find an agent here on Trulia Voices now, get a mortgage broker (or 3) on the phone, and ask them to help brief you long-lead topics like:
- Whether your market is a buyer’s market or seller’s market, and how that translates into what you can and should expect when you plan to buy or sell next year
- Whether there are any area-specific timing issues you should factor in as you map out your timeline
- What – given the specifics of your financials, your savings, any past credit or other issues you have – you should be doing now in terms of paying bills down, settting savings targets, and such
- What changes, if any, you should plan on making to your property before listing it
- What sort of property you can get for your money in the areas you’re targeting as a buyer, and what kind of money you can expect to command for your property in your local market (this, obviously, will change over time – even over the few months or so between now and the time you list your home, but it still helps to have a general ides of the current market values).
6. Go Open House hunting. If you’re selling next year, it’s essential to get a real-life read on what the competition’s like, everything from what sorts of houses in your area are listed at various price points to what your target buyers are going to be seeing on their way into or out of your house. There’s no reality check on your own home’s preparation and staging – its overall readiness for listing – like putting on a buyer’s shoes and taking a tour through similar homes in your area. And there’s no time for this reality check like right now: when Open Houses are still a-plenty, you have more time to attend them, and you still have plenty of time to process your takeaways and incorporate them into your own property preparations.
Open House hunting is also helpful for those who have home buying on their 2013 to-do lists. It’s the only way you can start understanding how to decipher the listings you see online into a reality-based set of expectations about a property. It’s also the best way to get indoctrinated deeply into the realities of what you get on your local market at various price points, and it’s the most impactful strategy for starting the process of negotiating compromises with your co-buyers.
7. Think hard about your deductions, if you’re self-employed. In the wake of the recession, most mortgage guidelines for self-employed borrowers changed, so that your income for purposes of qualifying is assumed to be the average of your last two years’ Adjusted Gross Income, as reported on your federal income tax returns. That means lenders calculate your income after all your business-related and other deductions, not before.
So, yes, this does mean that maximizing your deductions may impact your ability to qualify for a home loan in 2013. But them’s the breaks – better to know this before you file your tax return, in the event it might change something about how you file. Loop your tax advisor, business bookkeeper and mortgage broker into your decision-making process about your 2012 taxes before filing, if you’re self-employed and plan to buy or refinance your home next year.
Read more | Comments (0) | December 21st, 2012