Housing Slow to Take off in Spring

Good morning Everyone, 

Attached is a great article from this Wednesday’s Wall Street Journal that you need to read and that all sellers need to be aware of. For the following reasons, sellers should not hesitate in this market. The first offer is usually the best offer – get it negotiated! And, if they need a price reduction they should get on it now. Here are some take-aways:

• Spring has not sprung in the National Real Estate Market and for spring it’s sluggish locally.
• In 40 states, buyer traffic is down significantly at Open Houses.
• Fewer Investor buyers has weakened demand and inventory is rebounding.
• Buyers are struggling to adjust to higher prices and higher interest rates.
• Principal and interest payments on median priced homes are up 20% from one year ago.
• Locally, the Fresno MLS reports that approximately 28% of the 2,2005 active listings in March had at least one price reduction.
• As of 4/16/14, the MLS shows that in the last 24 hours, 81 residential properties were listed and 71 price reductions were reported.
• For March, sales were down 11% (year over year).
• Total active listings in March were up 51% from last year (increased from 1,564 to 2,360).

Let’s get our sellers under contract while they still have some market momentum – the tide could be turning.

Something to get your buyers OFF THE FENCE!

A must read for your buyers!

There is a major push to move federally insured mortgage securities into the private sector and have the government play a distant secondary role.  Attached is an article from the Wall Street Journal (3-12-14), that covers the dismantling or at least a wind down of government rescued Fannie Mae and Freddie Mac. What does this mean?

It means higher interest rates for the consumer.  The private sector will want more “skin in the game” from borrowers and higher returns to insure against any potential of losses that the mortgage securities market experienced in the 2007-2009 meltdown.

Regardless of how fast Congress moves this along (from the sounds of the article it could be before the mid-term November elections), the WRITING IS ON THE WALLS!  Interest rates will move up and money could remain tight.  A second area of concern could be in the “jumbo” loan market (for our counties, loans over $417,000), where historically, consumers have had to pay as much as 2% points higher on their loan amount than rates charged on smaller, conforming loans.  This suggests that your UPPER END buyers also need to BUY NOW!

Please use this article as a great “Item of value” to counsel your buyers into making a good decision now.

Good luck!!

Paper-less is really more attractive!

Paper-less is really more attractive!

 It’s been a month since we had the company-wide training on Skyslope and many of you have eagerly jumped on board – early adapters rock!  For any of you who have been dragging your feet, remember, we are going totally paperless with our files beginning July 1, 2014.  That’s right, no more paper files after June.  The benefits of paperless are overwhelming. Also, because the next two offices below us (Guarantee and Realty Concepts) have already made the transition to Skyslope, there should be even more benefits when working with their Associates.

 Here’s some more good news: to help you process in paperless, we have added two more scanners in the Fresno Office (at the Real Tec Stations).  If you have questions on operating these scanners, please see Rebecca or Velma at the MLS Desk or your Manager.

 Let’s move forward!

Go get ‘em!

The only silver bullets you need, you already have...

Good afternoon!

A few of you might be going to the seminar tomorrow and although you’ll miss a great sales meeting, you should be able to pick up a few worthwhile things to implement.  My only advice is to be careful of buying  any “Silver Bullets” (I’ve never known any to exist).  Also, I have usually found that whenever I’m offered a “special price” today for “magic solutions” to my business, that the special price is still being offered next week and that the only magic that really works is work.  And here’s how easy work really is:

1.       Have a solid sphere of influence (friends, past clients, professionals etc.)

2.       Work your sphere consistently to build trust and solid relationships.

3.       The biggest parts of working your sphere is personal notes, calls, and “pop bys”

4.       Preview  (new listings and ones that are likely to expire soon)

5.       Open Houses

6.       Follow up on all leads until you can define them as a now client, a client in the next “x” # of weeks/months, or a client you don’t want.

7.       Introduce yourself to as many new people as you can – cultivate new relationships!

8.       Keep it simple – work is only hard when we overcomplicate it!

Relationships

Here’s a thought:

I was talking to a group of associates this morning to whom I stressed the importance of building strong relationships.  We were talking about business, but it got me thinking of the importance of ALL relationships;  those that you have with clients (past and current), prospects, service providers, and certainly friends and family.  Regardless of the relationship, remember to nourish it, respect it, and tend to it with acts of kindness. 

One of my dear friends lost his mother during the holidays this year and another lost his 4 year old daughter (she battled for her life with several severe medical conditions since birth – of all things, she passed away on her birthday (hard not to type or read that without getting choked up)).  I share this because it’s a BIG reminder of how precious life is and therefore, how important our relationships are – don’t take them for granted!  

On this note, we all lost a fellow Realtor, Dianna Burgess, at the end of this last year (Dec. 28^th).  Dianna had sold real estate in Fresno for about the past 15 years and was a wonderful and kind person.  I knew this, but the feeling was punctuated both in her obituary and in the program from her service (which Connie Wilson shared with me), wherein her family shared that it would be Dianna’s wish, and I quote, “In lieu of flowers please honor Dianna’s spirit of caring by doing an act of kindness to others”.   I have carried this thought around with me for nearly 3 weeks now and have tried my best to act on it.  In doing so, you realize that there should never be any quota for such acts.  At first we might have to do them intentionally, but once we form the habit, maybe we can do them as effortlessly as Dianna and those you know who are just as caring. 

Go do a random act of kindness today.  Make someone’s day just a little better.  Do it for a stranger.  Do it for a friend.  Do it for a client.  “Pay it forward,” but never keep score. 

 

What are you waiting for?  Go!

You're better than that (better than Zillow, Trulia, etc.)

You’ll want to read the attached article on the role that websites like Zillow, Trulia, etc. are playing in our industry. It always helps to use analogies that are easy to understand. In this case, these sites are at best to real estate as Kelly Blue Book is to the auto industry. I say at best, because much more must go into the process of evaluating a home than a car. First the auto sites list every single vehicle feature for you to check, as well as the mileage and condition specifics. Unlike valuing a home, there’s nothing else to consider – not even location, which is one of the biggest determining factors in real estate!

Kelly Blue Book can’t say that the car is worth $10,000 parked on this side of the street but only $8,000 if parked on that side of the street. The side of the street doesn’t matter in pricing a car, but in real estate if my home backs up to a busy street vs my neighbors who is on the quiet side of the cul-de-sac, it makes all the difference! The online house estimate sites are similar to the Kelly Blue Book, however, in that they tell you the car is worth $8,500 to $10,000, but when you go to trade it in, the dealer might only give you $5,000!! The dealer, just like a home buyer, is the market. Bottom line, these sites provide some rough estimates or trends, but you, as a professional, offer the solution for more accurate values and how sellers can best take advantage of the market.

• Though they are fine for spotting trends, these home valuation services only offer rough approximations by computer programs.
• The sites all us
  
  
  e "automated valuation models" or AVMs to aggregate mountains of data for a broad and perhaps inaccurate valuation.
• "While not reliable for determining the precise value of a particular home, the services do a decent job of capturing overall market trends.
• Property valuations by these automated sites often vary from one to another by at least 10%. Couple this with their inaccuracies and they could be off by 15-20% or more.
• The figures are only averages of highs and lows in that area and doesn’t account for all of a home’s specific features, upgrades, conditions, or even exact location.

Good luck!

Patrick

 

Great thought and a good article!

Dear All,

 

Attached is an article from yesterday’s Wall Street Journal that touches on our current real estate market conditions (all of which we covered at the sales meeting yesterday).

I think this is a particularly good article for your apprehensive sellers who are either holding off from listing or are listed but overpriced.  Here’s why it’s good:

1.        It hits on rising interest rates “testing” buyers’ willingness to pay more than they would like.

2.       There has been a slowdown in sales and traffic in August and September .

3.       Rising mortgage rates are making it more difficult for sellers to ask higher prices in markets (Like our Central Valley) that have experienced the most appreciation in the last 12 months (remember, the National average in price appreciation is about 10% year over year and our Central Valley has had appreciation from (20-25%).

4.       The median sales prices in Fresno (but this range/example is fairly consistent from Merced to Hanford) over the last 3 months have been – June $185,000, July $183,500, August $185,000  -  so the question is, with this stutter, have we reached a ceiling in our current market?  If we haven’t, we’re real close!

5.       Our response to the Sellers’ apprehension and desire to time the market perfectly and sell right at the HEIGHTH OF IT ALL needs to be a standard response – one that you can repeat in your sleep:  “M/M seller, it is impossible to know exactly where the top of the market is until we’ve passed it, and are looking back, and then it’s too late; the train has left the station.  You see M/M seller, unfortunately, there is no bell that sounds when the market’s train leaves the station and 9 times out of 10, if not more, the folks that try to time it just right miss the train altogether and are left holding their bags or in this case, left with an unsold property or having to take less than they could’ve gotten”.   It seems as though the market is signaling that the train is about to leave the station – with that said, where do you think we should be priced so as NOT to miss it?

 

Good luck!