NAR’s Yun on Foreclosures

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.

Pending Home Sales Up 8th Straight Month

Resale homes rose for the 8th straight month in September and was up 21.2 % compared to the same month last year.

The National Association of Realtors (NAR) reports that their index rose 6.1 percent from August to September, reaching 110.1.

the way the score works is that  a score of 100 is equal to the average level of sales contract activity in 2001, which was the first year to be examined for the index.

• 2008 was 87.1
• 2007 it was 96.3
• 2006 it was 111.9.

The index is based on a large national sample of home-sale contracts signed during the month of September, and this sample typically represents about 20 percent of all resale transactions, according to NAR.

Florida Home Sales Get Some to Say, “we’re baaaaackkk!”

Sales of existing single-family homes in Florida rose 23 % in the 2nd qtr. 2009 compared to the same period a year earlier. According to the Florida Association of Realtors  (FAR). A total of 43,125 existing homes sold statewide in 2Q 2009; during the same period the year before, a total of 35,008 existing homes sold. It marks the 4th consecutive quarter that Florida has seen higher existing year-to-year home sales, according to FAR.

16 of Florida’s metros areas (MSAs) reported increased sales of existing homes in the second quarter compared to the same three-month-period a year earlier, while 12 MSAs showed gains in condo sales.

Sales of existing condominiums statewide in the second quarter rose 29 % year over year for the third consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

“In spite of the challenges with the economy, most people – 83 percent – still believe that buying a home is a good financial decision, according to a recent survey from the National Association of Realtors  (NAR),” says 2009 FAR President Cynthia Shelton, CCIM, CRE. “Many homebuyers are realizing that this is the time to buy – with a good selection of housing inventory, affordable pricing and low mortgage rates.

Read more: http://rismedia.com/2009-08-13/floridas-existing-home-condo-sales-rise-in-2q-2009/#ixzz0OBRVjAOW

Pending Home Sales Rise Biggest Since 2001

Pending Home Sales Rise 6.7% / Third Straight Month of increase

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7%, to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008, when it was 87.5, the group said. Economists surveyed by Thomson Reuters (TRI) had expected the index would edge up to 85 from a reading of 84.6 in March. It was the biggest monthly jump since October 2001.

Pending home sales activity was greatest in the Northeast, where the index increased 32.6%, to 78.9, in April, 0.8% above a year ago. The only region that showed a decrease was the South, where the index declined 0.2%, to 93.0, 3.5% higher than a year ago. In the Midwest the index rose 9.8%, to 90.4, and is 11.1% above April 2008. In the West the index rose 1.8%, to 94.8, but is 2.9% below a year ago.

NAR’s Lawrence Yun, the group’s chief economist, said buyers are responding to very favorable market conditions, and while the total number of existing-home sales is expected to improve, there will be sharp local variations. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said in a news release.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing-home sales.

Paul Dales, U.S. economist for Capital Economics in Toronto, said i

“The pending home sales index has now improved for three months in a row, adding to the evidence that housing activity is finding a floor,” Dales wrote. Nevertheless, even if existing-home sales were to rise to 5.1 million, they would still be 30% below their peak. Accordingly, even if activity is finding a floor, it is at staggeringly low levels.”

NAR Breaks Down the Bailout Benis

Dear Fellow REALTOR®,

Here’s our take on the Stimulis Bill and Treasury announcements made this week. We look at the Stimulis package AND the Treasury’s package holistically, in compliment with each other – mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution — there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline’ and get capital flowing into housing again.

Sincerely,

Charles McMillan, CIPS, GRI
2009 NAR President

Housing Reasons to Buy Now

If you have ever taken any courses in influence you must know that people buy for emotional reasons and justify with logic.

NAR has provided a site with lots of facts to push your prospects over the logic fence . You just have to provide the emotional triggers. And that can often side with issues closer to home rather than global economical ideas.

From http://housingmarketfacts.com/:

• The mortgage interest deduction
• possible home office deductions
• temporary $7500 credit for qualified home purchase
• homeowners are 28% more likely to improve their homes and 10% more likely to help solve community issues
  (do not construe any of this as tax advice and consult your own expert)

The site covers many more logical reasons.

But we people do things emotionally. I liken NAR to the last Presidential race. NAR is like John McCain. Not much to get excited over. Just factual pontificating. Obama won on emotion.  NAR has got to help its agent members to create the emotional drivers that will get people out writing offers.

I have written before that I think that the industry has always been poor at this as the last market surely was emotionally driven. But it was based on greed. “Buy now or you will lose the house”. That is not selling. That is damned near order taking. I don’t blame anyone for taking the short cuts but that does not fly anymore.

You need emotional drivers and here is a huge piece of it. We do more to avoid pain than gain pleasure.

Identify what is the psychological and or emotional pain that your prospect lives with on a day to day basis and all you have to do is point them to the right house as the band aid. If you think this is harsh then I would maintain that you (and I) have had this used on us and we have bought something because of this in the very recent past.