The Real Estate Industry: Positive Angles

What are real estate professionals saying to homebuyers and sellers about current market conditions? This week's positive topics are: Mortgage Applications & Rates, NAR's Consumer Web Site, International Buyers, Good News from the following markets: Florida, Baltimore, Dallas and Dothan, AL.
The successful brokers and sales associates are talking about the strengths that exist in the market — not the negative media hype. Below are positive angles that appeared recently in the media and underscore why it is a good time to buy real estate.Recent Quotes about the Positive Signs in the Real Estate Market:
Mortgage Applications Up & Rates Down
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Jan. 11 surged 28.4% to 906.4, its highest since the week ended April 2, 2004. “When consumers see an opportunity, no matter how pessimistic they might be, they take it. It will improve the underlying state of the industry and the longer rates stay down, the more people will take advantage of the opportunity, so that is a good thing.”-- Douglas Duncan, chief economist at the Mortgage Bankers Association, “Tumbling Rates Boost Mortgage Demand to Four-Year High,” USA Today, Jan. 16, 2008. Mortgage rates have dropped to their lowest levels since the summer of 2005, as more people become convinced that the economy is in a housing-led slowdown. The benchmark 30-year fixed-rate mortgage fell to 5.75 percent, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 6.26 percent; four weeks ago, it was 6.21 percent. The benchmark 30-year rate hasn't been lower than this sinceJuly 6, 2005, when it was 5.7 percent.-- “Mortgage Rates Fall to mid-2005 Level,” by Holden Lewis, Bankrate.com, Jan. 16, 2008.
NAR Launches Consumer Web Site
The National Association of Realtors is doing something atypical -- directly reaching out to consumers with little-known facts about housing. NAR's new website – http://www.housingmarketfacts.com/ -- is designed to give homebuyers and sellers information that illustrates the value of real estate as a long-term investment.
For the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year, and home values nearly double every 10 years.
Home prices typically beat inflation by one or two percentage points.
Housing sales in 2007 are expected to be the fifth-best on record.
-- “Realty Viewpoint: NAR Battles Bad Press With Housing Facts For Consumers,” by Blanche Evans, Realty Times, Jan. 17, 2008.
International Buyers Looking for Bargains in the U.S. Housing Market
While the growth of international activity in the U.S. market has been well-documented, the recent National Association of Realtors study provided the first specific data that the phenomenon goes far beyond bargain-hunting Brits buying Florida condos. According to the data, Arizona and its desert golf courses accounted for 6 percent of international sales, compared with only 4 percent in New York, followed closely by Colorado with 3 percent. While 33 percent of the buyers were from Europe, 24 percent came from Asia and 16 percent were from Latin America. “Prices are going to become more attractive, both because of the dollar and falling housing prices.”-- Pat Newport, an economist with Global Insight, “International Buyers Head for the Texas Coast,” by Kevin Brass, The New York Times (registration required), Jan. 10, 2008.
Regional Update:Good News from Several Markets Around the Nation
Florida:
“Basic fundamentals driving Florida's real estate market, which are historically low interest rates, stabilizing prices and reductions in inventory, indicate a positive environment for a recovery.”
“Today, more customers are interested in purchasing a home as a long-term investment, as real estate continues to be an outstanding long-term wealth generator. According to the Florida Association of Realtors, the statewide median sales price for single-family homes has increased by 52.5 percent over the past five years, as of November 2007.”
“While real estate is a commodity, it cannot be traded like a stock.I think overzealous investors and speculators found that out the hard way, and now, we are returning to a more traditional market.”
“The number of foreclosed properties may have increased significantly throughout the state, the total is less than 5 percent of all residential properties.”
-- Clark W. Toole III, president and CEO of Sarasota-based Coldwell Banker Residential Real Estate, “To Top Broker, Florida has Strong Real Estate Future,” Herald Tribune, Jan. 14, 2008.
Baltimore:An address in a trendy neighborhood will no longer guarantee a fast sale, experts say. Rather, fast sellers in a slow market have several common denominators: They're priced better than comparable listings, they show like model homes and they have a full force of marketing, such as enticing Internet photos, behind them. “You can't speculate on your price right now. You need to price it aggressively from the beginning or you're going to sit on the market.”-- Janice Mattson, a Baltimore County listing agent, “A Few Houses Still Sell in Days,” by Lorraine Mirabella, Baltimore Sun, Jan. 16, 2008.
Dallas:A new comparison of major U.S. housing markets shows that the Dallas area still has one of the lowest average sales times in the country. Additionally, Dallas was one of only two cities – along with Phoenix – that had an increase in the median price of homes listed for sale.-- “Report: Dallas has 2nd Shortest Home Sales Time,” by Steve Brown, Dallas Morning-News, Jan. 10, 2008. Dothan, AL:Many of the same factors that dampened the national housing market in 2007 are affecting Dothan, although the Dothan market is typically insulated from the wild swings in other areas of the country. Massive increases and decreases in home values tend to happen when buyers snap up homes in places where they expect demand to be the highest, such as the beach or trendy places like Las Vegas. “There’s not a lot of speculation going on in this market.”-- Charles Woodall, managing broker at Century 21 Key Realty, “Realtor Says Dothan in a Buyer's Market,” by Lance Griffin, Dothan Eagle,Jan. 10, 2008.

Jose R. Cordova
Broker/Owner
CENTURY21 Casa Real Latino
973-546-8888
"Building a team oriented organization with accountable agents and staff.."
Take a few minutes to evaluate your Real Estate Potential. http://c21crl.agenttype.com/
View my blogs at: http://www.c21casareallatino.blogspot.com/

"Where the Truth about Today’s Market Really Lies"

RISMEDIA, Jan. 3, 2008 - The latest news on the real estate front was either calmly reassuring or deeply alarming, depending on your point of view. The lead paragraph on the National Association of Realtors’ Nov. 21 release reported that home sales prices actually rose in most metropolitan markets. The Associated Press lead, however, emphasized the negative statistic that the number of home sales had fallen in 46 states during the third quarter. Both were correct.The contrasting reports of NAR and the AP, gleaned from the same press release, reflect a fundamental divide between the real estate industry and the news business. Reporters and editors think the industry is out to spin the numbers to put a smiley face on a grim situation. Their function, as they see it, is to present the facts without such spin.Spin Doctors or Objective Observers?But which facts matter? By choosing one important set of data over another, the AP story painted a different, gloomier picture in the public mind, and that, industry critics say, can have dire consequences for the market and the economy in general."The biggest problem today is out-of-context reporting", says NAR spokesman Walter Molony. "We have no issues with essential reporting of negative data. But when the media goes out of its way to find the most negative things to say about a statistical report, they’re creating fear that actually impacts the market."Ken Noblet, AP Business editor, says his reporters often have to dig deep in press releases to find the news. They naturally have a marketing intent in their news releases; that’s what they’re for," he says. "Ours is to find the news and report it fairly. We routinely find it somewhere other than in the first paragraph."The difference between their casting and ours is they have an interest in casting it as a good or healthy market; we don’t have interest in casting either way. That doesn’t mean we don’t ever get things wrong, but not with these stories."Still, Molony says, "The most frequent complaint from [NAR] members is the constant drumbeat of negative coverage is causing buyers to back out of transactions." He says "the market is underperforming because of fear created by these negative headlines."Says Noblet: "Everybody who’s involved in a market knows psychology is an element. Our stories about the stock market dropping 300 points probably didn’t help market psychology. But were we supposed to find some positive spin on those days? That’s somebody else’s job."Adds Maryann Haggerty, real estate editor of The Washington Post: "There is no such thing as positive or negative news. My job is not to prop up the market and their business, but to do the best possible job reporting what’s going on and how it affects the readers."It’s All About PerspectiveOn the other hand, Haggerty acknowledges, "what’s going on depends on where you stand and how you look at it." It is almost as if the media and the industry are on different planets. "It’s like ‘the press lost the war in Vietnam,’" says George Harmon, a business journalism professor at Northwestern University. "We all know people don’t get their information only from traditional media. You can drive down the street and see the ‘Reduced’ signs. If I never saw a newspaper, I’d think something’s going on. It’s convenient to blame the press, but the facts are the facts."In this tough environment, what can brokers do to counter what they consider negative coverage and convince consumers that now’s a good time to buy?Ron Peltier, president of Minneapolis-based Homes Services of America, recommends promoting the "key pennants" people have long adhered to, "that housing is a good value, a good investment, a necessary shelter, a place to call home, and has significant tax advantages."Says Tom Kunz, President and CEO of CENTURY 21: "Collectively, the news media, the real estate industry, and the mortgage industry need to work together to educate ourselves and the consumer. I think there’s an opportunity [to buy] right now I’d hate to see most consumers miss without at least investigating the possibilities."Kunz said it’s up to CENTURY 21 as a franchisor to "educate our brokers, managers and agents as to some of the opportunities in the marketplace." Kunz is less critical of the media than others in the industry, saying, "You guys are just reporting the facts. I don’t blame you."Fighting BackThe NAR, however, remains harshly critical of the media. "Sure, the media has their duty to report the news," says Lawrence Yun, the association’s chief economist. "But I sense at times that some in the media are playing a game as opposed to just coming out with some newsworthy information beneficial to the consumer." The NAR is not taking things lying down."To counter recent negative housing reports in the media," NAR said, it has mounted a public awareness campaign, helping local Realtor associations "explain the real facts behind the real estate market in their area." The campaign includes print ads, with local versions tailored to selected markets. Radio and television ads assert, "Interest rates are at historic lows, home choices have increased, and prices are favorable. Every market’s different."This sentiment reflects what brokers are also saying: Real estate markets, like weather reports, are necessarily local, so don’t be scared by national media reports."We’re not going to be able to dramatically change the manner in which the national media present information," says Peltier. "But we can at the local level. You continue to provide editors and reporters with the information that tells the whole story." In the Twin Cities, he notes, local newspapers have done "a reasonably good job" of covering "our market."Media critics see the more dramatic story leads as motivated not by facts but by a desire to sell the product, whether print or otherwise. In newspapers, however, there is traditionally a wall of separation between business and editorial decisions. There is, however, competition for what editors call the "prime real estate" of front page display. To attain such a coveted position, leads are sometimes sharpened, with nuance and context lost or downplayed."Clearly, the media has a profound ability to influence the market place, and I think they tend to be fueled by sensationalism, not the mundane," says Peltier. "So we need to be cognizant and informed and able to communicate in every market that the message the media is delivering in many cases is an isolated or relatively myopic perspective. Where the media says prices are plummeting, that catches peoples’ attention, but they’re not plummeting everywhere."Ken Harney, a syndicated housing columnist and president of the National Association of Real Estate Editors, agrees with some of the criticism. "Every market is different. Local media ought to put some effort into what’s happening in the local market, definitely." Harney recently wrote a column about what he termed "oases," markets, such as San Francisco, where sales are down but prices are up. "There are just certain markets that need to be reported separately."But Because AP stories are so widely distributed, they have enormous impact. Local news outlets, for budgetary or other reasons, may limit their coverage to what they get from the wire service. For the real estate industry these days, that’s bad news.The Effect on Consumers"The printed word has a dramatic way of influencing people’s perspectives," says Peltier, citing a Nov. 28 report on Bloomberg.com that existing home sales fell "to the lowest level in at least eight years as loan restrictions and the prospect of further price declines deters buyers.""You keep reading that, if you’re an intelligent buyer, that will cause you to sit on the sidelines," Peltier says. "If they said sales were slower than expected but the industry is still on track to the sixth best year ever, that’s a way of not glossing over the slowdown but comparing it to the last six or seven years of a tremendously overheated marketplace."Critics tend to lump "the media" together, but the term has also come to include opinionated talking heads on cable and broadcast television. Stock guru Jim Cramer set off alarms when he advised viewers of NBC’s Today Show Sept. 26, "Don’t you dare buy now, don’t you dare buy a home now, you’ll lose money."CENTURY 21’s Kunz reacted strongly. "I almost wanted to rip the TV off the wall," he says. "What Cramer said was totally inaccurate and against what he preaches on his investment show, to buy low and sell high. I thought my wife was going to have to give me a tranquilizer.I was going nuts. This was one time, you know, let’s give the marketplace an even break here."However, Cramer accompanied the widely quoted warning with other statements, such as, "It is not freefall. There are still regions in the country where [the housing price is] only slightly down." He also predicted that lower interest rates are in store and, a year from now, "we’ll be in much better shape" "I can’t be as negative as a year ago."An ongoing tension between Wall Street and the real estate industry may be reflected in some of the coverage and commentary, Harney says, as both the stock market and housing compete for the same investor dollars. "I think the Realtors have been a bit sunnier on interpreting their numbers over past year than, say, Wall Street is," says Harney. "Part of this is the glass half full or half empty syndrome."There is, conversely, the issue of how the press and the industry treated housing during the boom years, when some markets were flat.Says Northwestern’s Harmon: "Nobody complained about stories that said the housing market is great."It may all be a matter of emphasis. "I don’t have any specifics," acknowledged Kunz. "But sometimes when I see something about foreclosure, they always tend to spotlight some guy who lost his shirt. There’s no question that I feel bad for these folks, but at the end of the day that’s not the majority of what’s going on here."Adds Peltier, "There’s a lot of anxiety in the marketplace. Over the next 12 months, a lot of that will be put to rest and we’ll see the beginning of new, more positive appreciation of housing. We hope the media will reflect that."RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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Jose R. Cordova
Broker/Owner
CENTURY21 Casa Real Latino
973-546-8888
"Building a team oriented organization with accountable agents and staff.."
Take a few minutes to evaluate your Real Estate Potential. http://c21crl.agenttype.com/

WHAT’S NEW IN 2008!

As we embark upon the New Year, I feel that it is appropriate for me to communicate a few fundamental observations and recommendations to my Real Estate Colleagues. The past 12 months have offered a full complement of challenges for our industry. Slowing home sales, increased inventories, the sub-prime mortgage mess and a negative media certainly top that list. The end result has been rather interesting to say the least. All of the economic drivers that would support a robust real estate market are in place — powerful demographics, historically low interest rates, low unemployment and wage growth. Yet we still see well-qualified buyers sitting on the sidelines thinking that now is not the "right" time to be in the market, when in reality it is the perfect time for a long-term investment in real estate. Last year there were about 5.8 million homes sold across the United States. How many of these homes did you sell? We all know that it is difficult to predict changing consumer attitudes. A wise person once said that "hoping for the best" is not a good business strategy. Reality-based planning, with a special emphasis on what you can control, should be the order of the day. Today, more than ever, you need to focus on the basics and not be satisfied (or comfortable) with a plan that solely relies on a market upturn as the key to continued success.We at Century 21 Casa Real Latino choose NOT to participate in a negative market. Instead, we choose to help people buy and sell real estate! We choose to offer exceptional service! We choose to counsel and advise our clients to make the right decisions in pricing, staging and being competitive in today’s market.

Century21 Casa Real Latino is committed to the future, where leadership is not talking about “Doom and Gloom”, but rather market share growth, productivity improvement and serving clients needs.

The 2008 Real Estate norms are completely different than the ones used in 2007 and years prior. Do not run your business by default, run it by design.




Jose R. Cordova
Broker/Owner
CENTURY21 Casa Real Latino
973-546-8888
"Building a team oriented organization with accountable agents and staff.."
Take a few minutes to evaluate your Real Estate Potential. http://c21crl.agenttype.com/