Washington, September 01, 2009
Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.
The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.
Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said. “Other buyers are taking advantage of low home values before prices turn higher.
Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.
The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008. In the Midwest the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago. In the South, pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008. In the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said Congress needs to keep the momentum going. “Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said.
“To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.
NAR’s Housing Affordability Index2 stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.
Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery’.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
1The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
2The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.
The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.
Monthly publication of the index began in 1981 with annual data calculated back to 1970.
Existing-home sales for August will be released September 24; the next Pending Home Sales Index will be on October 1.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.
(From Realtor.org)
Thursday, September 10, 2009
Friday, September 4, 2009
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Tuesday, August 18, 2009
Top 10 Strategies For Choosing the Right Real Estate Agent
Whether you're buying or selling, use these tactics to find a top-notch professional
By Shannon Petrie, FrontDoor.com Published: 7/22/2009
#10: GET TESTIMONIALS AND REFERRALSA good real estate agent will come with a good reputation. Getting recommendations from friends and family is a tried and true method of finding an agent, but you can also turn to the Web for further research.
"A lot of Realtors are blogging, so I would look for blogs in my local area and see who's writing and watch what they post," says Bernice Ross, CEO of RealEstateCoach.com. "See if they're on Facebook and Twitter. Type their name into Google to see what comes up. Do they have a presence online? What's been said about them online? It's kind of a matter of doing your homework ahead of time."
In a competitive industry like real estate, an agent who is respected and admired by his/her peers also says a lot.
#9: CHECK OUT THEIR CREDENTIALSWhile it may be tempting to hire your old friend from college or your cousin who just got his real estate license, you should only hire him if he's truly the best person for the job.
"If you're going to use a Realtor, it's extremely important that you use a qualified one, particularly if you don't have a lot of experience," Hahn says. "I would be very leery of going with someone who's a rookie because the bar to entry in the real estate profession is very low."
Look for a full-time, full-service agent with several years of experience. Find out what professional designations they hold.
"The more advanced education the better," Hahn says. "Not only do they know more, it's a sign of their commitment to their profession."
A well-seasoned agent also has built an extensive network of contacts and can put together a team of professionals who can help with your purchase or sale, including other agents, mortgage brokers, contractors, appraisers, title companies and the like.
#8: FIND THE EXPERTS IN YOUR TARGET NEIGHBORHOODS
If you're shopping for a home, you likely have a rough idea of where you want to buy and where you don't. If you're selling a home, you have to "sell" the neighborhood to potential buyers. A real estate agent who specializes in the area you're buying or selling in and -- ideally -- lives there himself will be able to offer a lot more expertise than an agent from outside the area.
"You want to look for experience in the neighborhood you're looking in and knowledge of that neighborhood," says Bruce Hahn, president of the American Homeowners Grassroots Alliance and the American Homeowners Foundation. "You want to ask them how many sales they've had or purchases in that neighborhood."
Look for someone who not only has knowledge of local sales, which can help you price your home if you're a seller or shape an offer if you're a buyer, but also knows the neighborhood inside and out, including its schools, amenities, zoning laws and other details.
#7: LOOK FOR A SOLID MARKETING STRATEGEYSticking a "For Sale" sign in the front yard and posting an ad on Craigslist won't cut it in this market. You want a real estate agent with a detailed plan for promoting your home for sale. Find out where they plan to market your home, at what frequency, how many open houses they plan to hold and other specific information about their marketing plan.
"What I have done as a seller is incorporate that plan in the listing agreement," Hahn says. "That way if the listing agent drops the ball and doesn't do all he or she promised, I can cancel the listing and I can point to our agreement."
#6: LOOK FOR A TECH-SAVVY REAL ESTATET AGENT
Not only do you want a real estate agent with a solid traditional marketing plan, you also want someone who will promote your home online -- aggressively.
"More than 90 percent of buyers do home searches on the Internet," Hahn says. "You definitely want someone who's knowledgeable about Web marketing."
If you're selling your home, ask potential agents exactly what kind of Web-based marketing they use. You want someone who will get your listing on multiple Web sites and get it noticed with plenty of high-quality photos and video.
#5: AVOID "DUAL AGENCIES"
Many homebuyers think their real estate agent is representing them, but come to find out later that the agent is actually representing the seller in the negotiation of price and terms. Real estate representation is a tricky subject with complex laws that vary from state to state, so homebuyers -- particularly first-time buyers -- should consider hiring an exclusive buyer agent to be sure their interests are being protected.
"By not taking listings, exclusive buyer agents don't have the danger of trying to represent both parties in the transaction," says John Sullivan, president of the National Association of Exclusive Buyer Agents.
Exclusive buyer agents aren't available everywhere, but you can visit naeba.org to find one in your area.
#4: LOOK FOR A LISTING AGENT WHO CAN THINK LIKE A BUYER
Any agent can set a listing price and wait for your home to sell. Some may even claim they can sell your home at a high price, to get your business. But great agents know it's not just about the price, but the buyer's impression of the home. They know what buyers are willing to pay extra for and what updates and repairs will lead to a quick sale.
When Ross sold her home, her agent instructed her to have her home inspected, buy new appliances, tear down the wallpaper and replace her brass chandeliers. The first day her home was listed, it sold for all cash.
"I needed someone who understood what current buyers wanted -- someone who had that level of expertise and could direct me," Ross says.
#3: CHOOSE SOMEONE WHO WILL LISTEN AND UNDERSTAND
Some agents are so intent on making a sale, they ignore your wants and needs and show you houses that clearly aren't right for you. When you're buying a home, choose an agent who will listen to you and advise you, but won't be pushy or patronizing.
"I want someone who's going to sit down with me and ask questions about my lifestyle and what I like to do," Ross says. "They have to take the time to get to know me."
Even if the agent doesn't agree with you, he/she ultimately answers to you. So choose a professional who can voice a contrasting opinion, but won't keep you from seeing a property you want to see.
"I recently wrote an article on short sales and why they're not good for the buyer," Sullivan says. "But as much as I abhor short sales, if a client comes to me and says, 'I want to look at this short sale,' I don't have any problem showing it to them. I just inform them of the process so they know what to expect."
#2: INTERVIEW AT LEAST THREE AGENTS
Once you've narrowed down your search to a handful of agents, schedule individual appointments so you can evaluate them face-to-face.
"You want to interview them as if you're interviewing them for a job, because that's basically what you're doing," Hahn says. "There's a lot of money involved. You take your typical 6 percent commission on a $200,000 house, and the Realtor's going to make $12,000. So you have the right to ask a few questions."
Not sure what to ask? Try these suggestions from Iverson Moore, spokesman for the National Association of Realtors:
--How long have you been in residential real estate sales?
--Is it your full-time job?
--How many homes did you and your real estate brokerage sell last year?
--How many days did it take you to sell the average home? How did that compare to the overall market?
--How close to the initial asking prices of the homes you sold were the final sale prices?
--Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction?
--Can you recommend service providers who can help me obtain a mortgage, make home repairs and help with other things I need done?
--What type of support and supervision does your brokerage office provide to you?
--How will you keep me informed about the progress of my transaction? How frequently?
--Could you please give me the names and phone numbers of your three most recent clients?
#1: TRUST YOUR GUT
You may interview a real estate agent who seems competent and experienced and has a great marketing plan, but if you just don't like or trust him, you shouldn't hire him.
"When you hire a Realtor, you're adopting them into your family, so you have to make sure their personality fits," Ross says. "Do you want this person in your home every day for the next however many months your house is on the market?"
Bottom line: trust your instincts. The agent you choose will represent you and your home to the world, so hire someone you can comfortably entrust with that job.
(From Frontdoor.com)
By Shannon Petrie, FrontDoor.com Published: 7/22/2009
#10: GET TESTIMONIALS AND REFERRALSA good real estate agent will come with a good reputation. Getting recommendations from friends and family is a tried and true method of finding an agent, but you can also turn to the Web for further research.
"A lot of Realtors are blogging, so I would look for blogs in my local area and see who's writing and watch what they post," says Bernice Ross, CEO of RealEstateCoach.com. "See if they're on Facebook and Twitter. Type their name into Google to see what comes up. Do they have a presence online? What's been said about them online? It's kind of a matter of doing your homework ahead of time."
In a competitive industry like real estate, an agent who is respected and admired by his/her peers also says a lot.
#9: CHECK OUT THEIR CREDENTIALSWhile it may be tempting to hire your old friend from college or your cousin who just got his real estate license, you should only hire him if he's truly the best person for the job.
"If you're going to use a Realtor, it's extremely important that you use a qualified one, particularly if you don't have a lot of experience," Hahn says. "I would be very leery of going with someone who's a rookie because the bar to entry in the real estate profession is very low."
Look for a full-time, full-service agent with several years of experience. Find out what professional designations they hold.
"The more advanced education the better," Hahn says. "Not only do they know more, it's a sign of their commitment to their profession."
A well-seasoned agent also has built an extensive network of contacts and can put together a team of professionals who can help with your purchase or sale, including other agents, mortgage brokers, contractors, appraisers, title companies and the like.
#8: FIND THE EXPERTS IN YOUR TARGET NEIGHBORHOODS
If you're shopping for a home, you likely have a rough idea of where you want to buy and where you don't. If you're selling a home, you have to "sell" the neighborhood to potential buyers. A real estate agent who specializes in the area you're buying or selling in and -- ideally -- lives there himself will be able to offer a lot more expertise than an agent from outside the area.
"You want to look for experience in the neighborhood you're looking in and knowledge of that neighborhood," says Bruce Hahn, president of the American Homeowners Grassroots Alliance and the American Homeowners Foundation. "You want to ask them how many sales they've had or purchases in that neighborhood."
Look for someone who not only has knowledge of local sales, which can help you price your home if you're a seller or shape an offer if you're a buyer, but also knows the neighborhood inside and out, including its schools, amenities, zoning laws and other details.
#7: LOOK FOR A SOLID MARKETING STRATEGEYSticking a "For Sale" sign in the front yard and posting an ad on Craigslist won't cut it in this market. You want a real estate agent with a detailed plan for promoting your home for sale. Find out where they plan to market your home, at what frequency, how many open houses they plan to hold and other specific information about their marketing plan.
"What I have done as a seller is incorporate that plan in the listing agreement," Hahn says. "That way if the listing agent drops the ball and doesn't do all he or she promised, I can cancel the listing and I can point to our agreement."
#6: LOOK FOR A TECH-SAVVY REAL ESTATET AGENT
Not only do you want a real estate agent with a solid traditional marketing plan, you also want someone who will promote your home online -- aggressively.
"More than 90 percent of buyers do home searches on the Internet," Hahn says. "You definitely want someone who's knowledgeable about Web marketing."
If you're selling your home, ask potential agents exactly what kind of Web-based marketing they use. You want someone who will get your listing on multiple Web sites and get it noticed with plenty of high-quality photos and video.
#5: AVOID "DUAL AGENCIES"
Many homebuyers think their real estate agent is representing them, but come to find out later that the agent is actually representing the seller in the negotiation of price and terms. Real estate representation is a tricky subject with complex laws that vary from state to state, so homebuyers -- particularly first-time buyers -- should consider hiring an exclusive buyer agent to be sure their interests are being protected.
"By not taking listings, exclusive buyer agents don't have the danger of trying to represent both parties in the transaction," says John Sullivan, president of the National Association of Exclusive Buyer Agents.
Exclusive buyer agents aren't available everywhere, but you can visit naeba.org to find one in your area.
#4: LOOK FOR A LISTING AGENT WHO CAN THINK LIKE A BUYER
Any agent can set a listing price and wait for your home to sell. Some may even claim they can sell your home at a high price, to get your business. But great agents know it's not just about the price, but the buyer's impression of the home. They know what buyers are willing to pay extra for and what updates and repairs will lead to a quick sale.
When Ross sold her home, her agent instructed her to have her home inspected, buy new appliances, tear down the wallpaper and replace her brass chandeliers. The first day her home was listed, it sold for all cash.
"I needed someone who understood what current buyers wanted -- someone who had that level of expertise and could direct me," Ross says.
#3: CHOOSE SOMEONE WHO WILL LISTEN AND UNDERSTAND
Some agents are so intent on making a sale, they ignore your wants and needs and show you houses that clearly aren't right for you. When you're buying a home, choose an agent who will listen to you and advise you, but won't be pushy or patronizing.
"I want someone who's going to sit down with me and ask questions about my lifestyle and what I like to do," Ross says. "They have to take the time to get to know me."
Even if the agent doesn't agree with you, he/she ultimately answers to you. So choose a professional who can voice a contrasting opinion, but won't keep you from seeing a property you want to see.
"I recently wrote an article on short sales and why they're not good for the buyer," Sullivan says. "But as much as I abhor short sales, if a client comes to me and says, 'I want to look at this short sale,' I don't have any problem showing it to them. I just inform them of the process so they know what to expect."
#2: INTERVIEW AT LEAST THREE AGENTS
Once you've narrowed down your search to a handful of agents, schedule individual appointments so you can evaluate them face-to-face.
"You want to interview them as if you're interviewing them for a job, because that's basically what you're doing," Hahn says. "There's a lot of money involved. You take your typical 6 percent commission on a $200,000 house, and the Realtor's going to make $12,000. So you have the right to ask a few questions."
Not sure what to ask? Try these suggestions from Iverson Moore, spokesman for the National Association of Realtors:
--How long have you been in residential real estate sales?
--Is it your full-time job?
--How many homes did you and your real estate brokerage sell last year?
--How many days did it take you to sell the average home? How did that compare to the overall market?
--How close to the initial asking prices of the homes you sold were the final sale prices?
--Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction?
--Can you recommend service providers who can help me obtain a mortgage, make home repairs and help with other things I need done?
--What type of support and supervision does your brokerage office provide to you?
--How will you keep me informed about the progress of my transaction? How frequently?
--Could you please give me the names and phone numbers of your three most recent clients?
#1: TRUST YOUR GUT
You may interview a real estate agent who seems competent and experienced and has a great marketing plan, but if you just don't like or trust him, you shouldn't hire him.
"When you hire a Realtor, you're adopting them into your family, so you have to make sure their personality fits," Ross says. "Do you want this person in your home every day for the next however many months your house is on the market?"
Bottom line: trust your instincts. The agent you choose will represent you and your home to the world, so hire someone you can comfortably entrust with that job.
(From Frontdoor.com)
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