Things never to say to a client

Things never to say to a client. Image courtesy of imagerymajestic / FreeDigitalPhotos.net

Real estate agents should never tell clients that they only check their messages, emails, and phones during business hours. Rather, they should inform clients of the best times to reach them and indicate that they will respond within a certain amount of hours.

Additionally, clients should never have to hear that an agent does not have a mobile website with new listings, neighborhood information, and buyer and seller resources. Agents also should avoid telling clients they do not hold open houses, instead emphasizing all the other different strategies that they will employ to market the home.

Finally, instead of saying they will get the clients a particular house, agents should stress the need to put in an offer right away and that they will do everything they can to help them land the property.

Source: “4 Things Agents Should Never Say,” RISMedia (July 29, 2014) & realtor.org

Where’s the Nation’s Safest Metro? Hint: There’s No Kids

Where’s the Nation’s Safest Metro? Hint: There’s No Kids. Image courtesy of sritangphoto / FreeDigitalPhotos.net

The fastest-growing metropolitan area in the United States has 110,000 residents, 42 golf courses, and more golf carts than New York has taxis.

The Villages, Fla., whose population is largely made up of retirees over 55, is a retirement community that has sold more than 50,000 new homes since 1986, generating $9.9 billion in revenue. Home prices range from about $150,000 to $1 million.

The privately owned community has rules that determine everything from how long children can visit for to how many pet fish residents can keep, and developer H. Gary Morse also owns the local newspaper, radio station, and TV channel.

Resident Jerry Conkle, who has lived in the community for two decades, calls the development “an adult Disney World” and says that everything he needs is a golf-cart ride away and he can’t imagine living anywhere else. “There’s hardly any crime,” he says. “I don’t know any place that’s safer than here.”

Source: “Fastest-Growing Metro Area in U.S. Has No Crime or Kids,” Bloomberg.com (June 27, 2014)

Home Sales Take Unexpected Turn

Home Sales Take Unexpected Turn. Image courtesy of nuttakit / FreeDigitalPhotos.net

Following three consecutive months of gains, pending home sales slipped 1.1 percent in June, the National Association of REALTORS® reports.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, was at 102.7 in June, down 7.3 percent from year-ago levels. Any reading above 100 on the index is considered an average level of contract activity.

The housing market is stabilizing but still facing several headwinds that are impeding full sales potential, says Lawrence Yun, NAR’s chief economist.

“Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he says. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a high number of potential buyers from fully taking advantage of lower interest rates.”

Yun expects a slight uptick in sales during the second half of the year.

“The good news is that price appreciation has decreased to its slowest pace since March 2012 behind much-needed increases in inventory,” Yun notes. “With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and make smart decisions on whether or not it makes sense to buy or continue renting.”

Across the country, pending home sales were mixed in June. They dropped by 2.9 percent (3.2 percent below year-ago levels) in the Northeast and by 2.4 percent (4.3 percent below year ago levels) in the South. On the other hand, pending home sales were up by 1.1 percent in the Midwest (but 5.5 percent below year-ago levels) and by 0.2 percent in the West (but 16.7 percent below year-ago levels), NAR reports.

Source: National Association of REALTORS®

Increase in FHA Fees are Sinking Deals

Increase in FHA Fees are Sinking Deals. Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

The Federal Housing Administration’s rate increases in mortgage insurance have caused buyers to walk away and transactions to fall through, according to the National Association of REALTORS®’ second Survey of Mortgage Originators, which includes questions to lenders about the impact of changes to the FHA program. In recent years, FHA has increased its premium structure as a way to make up for the 2 percent capital reserve ratio it’s required to keep but lost when many loans went sour during the housing crisis.

The rise in FHA fees is also pricing some buyers out of the market. Lenders surveyed by NAR report that 5.7 percent of originations were lost because of the increase in FHA fees. That would correlate to about 200,000 to 250,000 home sales lost, according to NAR estimates.

What’s more, 68.4 percent of mortgage originators indicated that they had clients who chose not to buy or who put off buying indefinitely due to the increase in FHA mortgage insurance rates. However, originators say a large percentage of clients who sought FHA funding were able to explore other low down payment government programs, through agencies such as Veterans’ Affairs and the rural housing service. Only about 42 percent of originators said they were able to shift their client from FHA funding to conventional financing with private mortgage insurance, according to the survey.

In a letter to FHA Commissioner Carol Galante in the spring, NAR President Steve Brown wrote that FHA fees are increasingly sidelining buyers, with the fees now making up nearly 25 percent of a monthly mortgage payment. On a $150,000 loan at 4.5 percent interest, he noted that the mortgage interest is 13 percent higher today than it was in 2008. Also, he estimated that in 2013, between 125,000 to 375,000 potential buyers were priced out of the market because of FHA’s high insurance premiums and mortgage insurance requirements.

“Higher fees at the FHA have had an impact on affordability,” writes Ken Fears, NAR director of regional economics and housing finance, at NAR’s Economists’ Outlook blog. “While some buyers were able to shift to other more affordable programs, many consumers were shut out of the market for ownership.”

Source: “Lenders Note Impact of Higher FHA Fees,” National Association of REALTORS®’ Economists’ Outlook Blog (July 25, 2014)

Get Home Buyers Moving?

Get Home Buyers Moving? Image courtesy of Ambro / FreeDigitalPhotos.net

What’s finally getting some home buyers off the sidelines? A recent poll of more than 1,000 prospective home buyers conducted by Discover Home Loans asked what changed to finally move them into the home buying process.

Here were their top 10 most common responses:

• “I needed a bigger home”: 25%
• “I want to live in a better neighborhood”: 24%
• “My family circumstances changed so that I really needed a new home”: 22%
• “I achieved enough financial stability to make it possible”: 22%
• The homes for sale on the market became more affordable: 20%
• “I improved my credit sore to qualify for a better mortgage”: 20%
• Mortgage rates and lending options became more affordable: 18%
• “I achieved enough savings for a down payment”: 17%
• More homes became available for sale on the market: 16%
• “Mortgage rates started rising, so I wanted to catch them while they were still low”: 13%

Source: Discover

Fastest-Moving Real Estate Markets

Fastest-Moving Real Estate Markets. Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Austin is hot, and we’re not talking temperature. The Austin, Texas, metro area has the fastest moving real estate market in the U.S., according to ZipRealty’s second quarter report, with properties spending a median of 10 days on the market.

ZipRealty analyzed housing market trends in 23 metro areas across the U.S., and found the median days on market in these metros remained relatively steady at 29 days, compared to 27 days during the second quarter last year.

The fastest-moving markets as of June 30, 2014 were:

1. Austin, Texas: 10 days
2. (Tie) Washington, D.C., and Northern Virginia: 14 days
3. (Tie) Dallas, Portland, Ore., and Denver: 15 days
4. (Tie) Houston and Seattle: 17 days
5. (Tie) Sacramento, Calif., and Boston: 19 days

The metro areas with the largest median sales price increase since last year: 

1. Sacramento, Calif.: $267,000, 15% year-over-year increase
2. Austin, Texas: $266,000, 14% year-over-year increase
3. Las Vegas: $182,000, 12% year-over-year increase
4. Houston: $215,000, 12% year-over-year increase
5. Orlando, Fla.: $154,000, 11% increase year-over-year increase

Source: “ZipRealty Names the Fastest-Moving Housing Markets at Mid-Year,” ZipRealty (July 24, 2014)