Selling Lifestyle Over Greed

The following is an article originally posted with housingtrendsenewsletter.com that  I wrote it in an attempt to illustrate the necessity of selling lifestyle value in today’s real estate marketplace.

It is so easy to get caught in a “greed trap”. Selling rising home prices, or multiple offers to insert a scarcity driver to motivate the buyer.

Here is an attempt to sell lifestyle:

I watched a very special movie last night called Marley and Me. I can only describe it as a journey of a couples life that was joined together with the addition of Marley the Dog.

The story was peppered with plenty of important symbols of one family’s journey played out through children, spouses, career, choices and their three homes. Each home relocation changed over time.

With the first home symbolizing the family’s humble yet scattered focus. Their second home was more contemporary and symbolic of having arrived. While their third home although not nearly as contemporary was stately and representative of their mutual direction and goals.

As such a home represents their lives. During the movie, ownership if not stated was certainly implied. Swims in the pool, surprise parties, football games out on the front yard, as well as destroyed couches by Marley. We viewers always assumed home ownership.

Today we hear about the housing crash. We listen to new home figures like it is the stock market. Of course we did the same thing when the market was overheated. But we do not live in a market. We live in a home.

Its where we share love, we have children and raise good citizens. Walk down the street of any home in America and there is a story. And that story has little to do with home prices going up or down. Instead you would hear about Little League and dance recitals. SAT’s and first dates. Billies Touchdowns and if Aunt Meg is going to bring that pie again for Thanksgiving. Triumph and despair. Love and heartbreak. The home is where the heart is as they say.

It is mom throwing out your favorite pair of jeans, and little Katie picking all the Orange blossoms off the small orchard in the backyard. “It was for a special project”, she says. Or your discovery of the giant man size hole in the backyard, dug out to reach China.

That is home ownership. Not lousy news. Or good news. And these things most likely only happen with ownership. Sure we aren’t interested in paying for something that will not pay us back somehow. But real estate always inches its way up on average. And here is a news flash. Put your money on the fact that in another ten or twenty years we will get another sky is falling economic calamity. We always do.

By that time you could be enjoying your baby going off to College. And the heartbreak of the quiet orderly room that once housed a teenager. Clamoring for memories of your baby who has just flown the nest.

Today you know that with tax breaks and newly created tax incentives now is the best time to buy a home in years. Interest rates and home prices are historically low. Look at your Realtor’s listings of homes for sale.

Those those textual representations and two dimensional pictures are poor representations of lives lived. And now they are willing to give you a turn at that structure that served their family and absorbed their story  for all those years. The good news is that it has never been a better and more affordable time to take them up on that offer than now.

Sell The Story

So that was my attempt at selling lifestyle in front of greed. Futurepace them as NLPers would say. Paint their future portrait. Put all their dreams,hopes, and aspirations into that picture. Instead of selling market timing and put them into a home, not a house.

NAR 2010:”Prices Up,Durable Recovery”

NAR  announced to their national convention that “housing prices will rise in 2010″. Over a cheering crowd, Lawrence  Yun, chief economist for NAR gave several reasons to see 2010 housing with rose colored glasses.

“Things are much better,” Lawrence Yun said to applause at the organization’s annual convention in San Diego, attended by an estimated 20,000 delegates. ..We’re seeing price stabilization on a month-to-month basis..We will be set for a durable economic recovery,” he said. “

Yun cited low interest rates, improved affordability among would-be home buyers and increased sales activity, primarily for starter homes.

Additional reasons for his optimism:

• $8,000 tax credits to first-time buyers
• 16 million renter households making enough money to qualify to buy homes, demand should remain strong next year and restore confidence among all would-be buyers and households in general
• The pool of first-time buyers is 5 million more than in 2000 representing pent-up demand, Yun said.

Yun predicts that if the credit continues to have the same impact on demand in 2010, overall house prices might rise 4 percent next year, after falling 12.9 percent this year

• home resales could increase by 800,000 above this year’s 5 million mark
• while new-home sales could rise as well
• Yun also forecast that Realtor incomes will go up 20 percent next year.

70 Percent Of Execs Think Economy Will Improve In 2010

About 70% of 130 executives polled believe revenue and profitability in the financial services sector will improve in 2010, according to the business climate survey conducted by the audit, tax and advisory firm. However, respondents were split about whether a recovery among financial firms will lead or lag a rebound in the broader U.S. economy.

http://www.wmur.com/money/20455323/detail.html

NAR’s Yun Says :

“With low interest rates, lower home prices, and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” says Lawrence Yun, NAR chief economist. “There have been sustained sales gains in Arizona, Nevada, and Florida, as well as diverse areas such as Maryland, the District of Columbia, and Nebraska. More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota, and Montana.”

Trumark Homes Buys 11 Acres in the OC

Confident that a down economy is the right time to buy land for building new homes, recently launched Trumark Homes – a homebuilding company unencumbered by the legacy issues faced by existing builders – recently purchased 11 acres of land for $4.8 million. Located on the corner of Regency Lane and Osterman Road in Lake Forest, Calif., plans are in process to build 68-72 single-family detached traditional homes with construction scheduled to commence in late 2010.

What Do the Realtors Think?

A new index of Realtor opinion is tracking real estate market sentiment. Created by
Point2 Technologies this index tracks the real estate market opinions of thousands of real estate professionals across the United States. They just recently released their June and July numbers.

The Real Estate Confidence Index for June was 4.7, with respondents taking a measured assessment of current conditions on a seasonal adjusted basis-a median rating of 5 on the ten-point scale. However, respondents showed marked optimism for both short (3-6 months) and long-term (6-12 months) prospects. The July index showed a 16.5 percent increase, rising to 5.5, signaling that real estate professionals are seeing positive movement in a market characterized by contraction for over two years.

This index intrigues me for a couple reasons.

1. it is a great offering by Point2. What a great way to extend their brand.
2. Economic data, although interesting is usually conflicted in producing any ability to describe what is really going on. One reason is that its just reporting numbers and crunching them.

This index is getting feedback from the “ground”. I guess the best anolgy I can think up at this early hour is an appraisal vs a BPO or brokers price opinion. The appraisal is usually based much more on what has happened (number crunching) than what is happening like in a BPO.

Shiller Chills and Get Positive

Standard & Poor’s Case-Shiller Home Price Index shows that prices are actually starting to rise again in some parts of the country. Cities like Boston, Charlotte, Chicago, Cleveland, Dallas, Minneapolis and San Francisco all have home prices on the rise.

“This is the first time in almost three years that we’ve seen price increases,” says Yale University professor Robert Shiller, who helped design the home price index. “So when we see a break in the downward trend that’s definitely encouraging news.”
“Well, I think the worst is probably behind us — the worst pace of decline,” he says. “We were going down at 2 percent a month for a number of months in a row nationally. That was really something. Now home prices relative to rents or construction costs are back at normal levels.”

Many Realtors are seeing multiple offers making some speculate that we have reached a housing bottom.

“Well, I think it very much depends on what city you’re in,” says William Wheaton, a housing economist at MIT. “There are really two types of markets right now.”

Wheaton notes that in states with 50% drops like Arizona, California and Florida that indeed we may be at a bottom.

“If you’re in a market like California, where prices have fallen 50 percent and transactions have picked up and you ask your friendly professor ‘Is this the bottom?’ I would say pretty much so,” Wheaton says.” If you could buy a house [for] 50 percent of what you could a few years ago, I’d say go ahead and buy it.”

Source: NPR

Reasons To Buy a Home in 2009

10 Reasons to buy a home before 2010. 

1. Tax Credit.
2. Price Bottom happened in May/June. In the very low end market there are multiple offers now.
3. There will be less foreclosures in 2010. Loans are getting modified and people are not being foreclosed on.
4. Investors are coming back into the market. They have made the low end sizzle.
5. Mortgage regulations are making it safer to own and less predatory.
6. Once the mortgage is payed off you own it. You will have more money when you retire. 
   Get the rest from From Zillow.

Robust Home Sales Crowding the News

Jump into any newspaper from around the country and you get the great news. This is from todays Google News with the search term Home Sales. I wonder if this will be remembered as the season of regret for the fense sitters, or new beginnings?

Bay Area: Silicon Valley home sales at three-year high

Southern California: Home Sales Increase for 12th Straight Month

Birmingham Alabama: Birmingham area home sales perking up

San Francisco Home Sales Hit Highest in Three Years

Kansas City-area home sales rise from May

US July Homebuilder Confidence Rises to 10-Month High of 17

Idaho:Treasure Valley home sales and prices are up

Portland :Uptick in Portland home sales

Sacramento: New-home sales see biggest growth in two years

Home sales in Brooklyn, Queens rise

New Hampshire : NH home sales rise in June

Canada June Home Sales Rise 8.7%,

Virginia :Home sales in Hampton Roads increase strongly in June

Echo Boomers to Save the Day

Big Boost in Housing Demand Expected from Echo Boomers
From Nation Building News Online recently reported with Harvard University says we are a resurgence in demand once the echo-boom generation gains a footing in the housing market.

Born from 1981-2000, members of the echo-boom generation, Harvard says, will boost annual average household growth to more than 1.25 million during the decade of 2010-2020 - even under the worst of circumstances.

“While the economic crisis has dampened household growth, the sheer size of the echo-boom generation will give a powerful boost to long-run housing demand,” the report says.

 Even under the weaker scenario, in which there would be 2.3 million fewer household formations in 2010-2020, average annual household growth can be expected to be comparable to the growth experienced from 1995-2005 as members of the echo-boom move into the prime household formation and home buying ages of 25 to 44.

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