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2011 outlook presentation

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  • 1. Real Estate Outlook:2011
    Sales Meeting
    December 29, 2010
  • 2. Video
    Housing prices likely to fall in 2011
    CNN Money Team
    Optimism Is Fading in U.S. Housing Market
    Featuring Robert Shiller
    Economics Professor at Yale University, and
    co-creator of the S&P/Case-Shiller Index of Property Values
  • 3. Look Back at 2010
    1st time Home Buyer tax credit
    Historic Affordability Levels
    Low Mortgage Rates
    Rising Household Incomes
    Rising Foreclosure Rates
    Concerns over proper foreclosure procedures
    Attack on homeownership
    Low Consumer Confidence
    For Sale by Owner’s Decline to 11% of the market (Down from 13% in 2009)
  • 4. November Foreclosures in Douglas County
    realtytrac.com
  • 5. Home Sales Price Gains
    realtytrac.com
  • 6. www.realtor.org
    www.trulia.com
  • 7. 5 Reasons to Buy a Home in 2011
    Mortgage rates will stay low.
    Tax cuts could help.
    Americans want to be home owners.
    Recent Fannie Mae surveys show that Americans still believe a home is a safe and desirable investment.
    Builders are about to begin building.
    Homes are shrinking and becoming more affordable.
  • 8. Recovery Mode
    Trend will be a rise in home sale activity
    Lawrence Yun with NAR:
    Est 5.2 million existing-home sales in 2011, up from 4.8 million last year (0.09% increase)
    Home prices to rise about 1% this year on a national basis
    Biggest Factors:
    Businesses Spending Money
    Job Growth, Commercial Sales/Leases, etc.
    Concerns: Health Care Reform, Wall Street
    Business cash reserves have grown to the point where corporate leaders have to start deploying their money to get the kinds of returns their investors want to see.
    Consumer Confidence
    Will return with employment, stable home prices
  • 9. Recovery Mode
    Majority of Americans Expect
    housing to recover after 2012
    realtytrac.com
  • 10. Commercial Predictions
  • 11. Residential Predictions
    Prices & Mortgage Rates Stay Low or fall lower
    Loan guidelines tighten up, and down payments may rise.
    Condo’s will become even more difficult to buy
    Most lenders require that no more than 15% of HOA members be 30 days or more behind on their dues
    Conventional (non-FHA) loans require at least 25% of the units be owner-occupied
    Increase in conservative buying
  • 12. Foreclosures
    The driving force behind price declines
    2010:
    About one-third of home sales were Foreclosures
    Average price discount of 26% (RealtyTrac)
    More such sales are on the way, but estimates vary.
  • 13. Low Price Factor
    Interest Rates @ Historically Low Levels
    National Level:
    Median Home Prices down 30%
    (From $239,000 @ peak in 2006, to $172,000 @ end of 2010)
    High Volume of Foreclosures in market
    Yun of NAR expects foreclosed homes to account for 1/3 of sales in 2011
    "My best guess is that this year, people will be buying a lot of the foreclosed properties, but it will still take an additional one-and-a-half years to bring the inventory down to a more normal level."
  • 14. Inventory
    Higher Inventory= Decline in Pricing
    Fate of Fannie and Freddie will be announced in January
    Will there be another home buyer tax credit?
  • 15. Inflation
    Risks of entering a period of Japanese-style deflation
    Expectation for continuing price drops keeps people from spending
    Biggest impact:
    First-time buyers: If interest rates rise along with inflation, home ownership will become increasingly out of reach.
    "Some inflation isn’t a bad thing, but high inflation isn’t optimal," Yun says. "So as long as inflation can be kept in check—and business and consumer confidence restored—look for a slow return to normalcy in the months ahead."
  • 16. 2011: Game Plan
    Another year of Buyers Market
    Work on Expanding your role as buyers agent
    Market more towards buyers and investors
    Keep working with banks on REO’s
    Become affluent in the world of short sales
    Always provide sellers with CMA’s in order to list at right price, or slightly underpriced
    Keep Positive Attitude
  • 17. Real Estate Technology in 2011
    Smart Phone Search:
    Google Goggles
    QR Codes
    Real Estate Based App’s
    Social Media, Blogging and Video Stick Around
  • 18. Good Luck in 2011!