Federal Reserve Chairman Ben Bernanke Bright Times Ahead

Federal Reserve Chairman Ben Bernanke “Housing in the coming year is going to be a relative bright spot - a helpful driver of national economic growth, rather than the wet blanket it’s been for the past couple of years.”

http://realtytimes.com/rtpages/20091124_realestateoutlook.htm

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.

Home Sales Jump 2nd Month

Home sales surged for the second month in a row in October, climbing to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.

Home sales nationwide are now up nearly 37% from their bottom in January, data Monday showed, though they are still 16% below the peak in autumn 2005. At the current sales pace, there is only a 7-month supply of homes on the market and in some areas there are bidding wars.

The Foreigners are Coming

Wong, president of Optimus U.S. Real Estate Fund, has bought 60 condos at heavy discounts from developers in financial trouble. Wong paid about $62,500 each for 18 Las Vegas condos that once were priced at about $250,000 apiece.

“This could be a once-in-a-generation opportunity for real estate investment,” said Wong, whose Calgary, Alberta-based fund has already invested $5 million cash and will spend millions more in the U.S. Southwest over the next several months.

International investors bought 154,000 homes and condos in the 12-month period ending in May, down nearly 10 percent from 170,000 for the same period a year earlier, the National Association of Realtors reports.

Much of this activity is thought to be because of the weak dollar and low interest rates that are even attracting buyers from all over the world seeking 2nd homes.

So Cal Home Sales Rise

Southern California home sales rose in October. Shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures helped prices stabilize. Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8% from 21,539 in September and also up 2.8% from 21,532 a year earlier, according to MDA DataQuick.

NAR’s Yun on Foreclosures

Record Home Resales in Canada

“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” CREA President Dale Ripplinger said in the statement.

Sales records were set in British Columbia, Ontario and Quebec. Sales rose 5.1 percent to 45,818 units in October on a seasonally adjusted basis,says the Canadian Real Estate Association . The average nationwide price also rose to a record C$341,079 ($326,500), 21 percent higher than a year earlier.

SDAR President Says

Erik A. Weichelt, this year’s president of the San Diego Association of Realtors, of Weichert Realtors-Elite, says that things are looking terrific in San Diego for the real estate market. First time home buyers are able to get into a home than ever. And investors are finding bargains. He says the association has actually increased in membership this year.

http://www.signonsandiego.com/news/2009/nov/16/realtor-says-brokers-are-busy/

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.

First Time Home Buyers Break Records

The number of first-time home buyers rose to 47 percent of all home sales from 41 percent of transactions in last year’s study, and was the highest on record dating back to 1981. The previous high was 44 percent in 1991. “It’s interesting to note the last cyclical peak of first-time home buyers was during the last noteworthy economic downturn, with first-time buyers starting the chain reaction that led the nation out of recession,” Bishop said. Fifty-five percent of entry level buyers reported they financed their purchase with an FHA loan, while another 8 percent used the VA loan program.

61 percent used savings for a down payment while  22 percent received a gift from a friend or relative, typically from their parents. Six percent received a loan from a relative or friend, 6 percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds. Ninety-six percent chose a fixed-rate mortgage.

Next Page »