T Mi Re April 2010 Us Edition


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This Month in Real Estate, a publication of Keller Williams Realty and Paul W. Drury of the Greater Cleveland West office.

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T Mi Re April 2010 Us Edition

  1. 1. Commentary 2 Released: The Numbers That Drive Real Estate 3 April 9, 2010 Recent Government Action 9 Topics for Home Buyers, Sellers, and Owners 13 Brought to you by: KW Research
  2. 2. Commentary The economic recovery continues to slowly but steadily deepen its roots. Consumer sentiment ticked up in March and it appears businesses are feeling more positive as well. According to a CEO Economic Outlook Survey, America’s top CEOs are expecting an increase in sales, along with increased or stabilized capital spending and employment. Over the past several months, the hot topic of health care reform took much of Congress’s attention. Now, with the bill passed into law, the government is turning its attention to other matters to help bolster the economy including unemployment and financial reform. High unemployment and elevated levels of foreclosures and distressed homeowners continue to be two of the biggest factors in preventing a robust recovery. The government’s attentive attitude toward these obstacles is seen as a positive sign by industry and economic experts. KW Research 2
  3. 3. Home Sales 4 The Numbers That Home Price 5 Inventory 6 Drive Real Estate Mortgage Rates 7 Affordability 8 Brought to you by: KW Research
  4. 4. Home Sales In Millions Existing home sales softened in February. According to Lawrence Yun, NAR chief economist, the widespread winter storms during the month may have masked underlying demand as “buyers couldn’t get out to look at homes in some areas and that should negatively impact near-term contract activity.” February sales of 5.02 million remained 7 percent above the 4.69 million- units last year. Seasonally Adjusted Home Sales Latest Data Release: March 23, 2010 Source: National Association of Realtors KW Research 4
  5. 5. Median Home Price In Thousands The median price for an existing home was $165,100 in February, a 1.8 percent drop from February 2009. Distressed homes, which accounted for 35 percent of sales last month, continued to skew prices downward as they typically were discounted in comparison with non-distressed homes. Latest Data Release: March 23, 2010 Source: National Association of Realtors KW Research 5
  6. 6. Inventory - Number of homes available for sale In Millions Total housing inventory rose 9.5 percent to 3.59 million, representing an 8.6- month supply at the current sales pace. Compared to the previous year, there were 5.5 percent fewer homes on the market. 5.5% Number of Homes Available for Sale - In Millions decline from last year Latest Data Release: March 23, 2010 Source: National Association of Realtors KW Research 6
  7. 7. Mortgage Rates 30-Year Fixed Mortgage rates dipped to 4.99 percent in February from 5.03 percent in January. During the first week of April, rates crossed the 5 percent threshold but still remained near historically low levels. While the full effect of the Federal Reserve mortgage-backed securities purchase program’s expiration at the end of March is yet to be seen, the Fed echoed its accommodating policy to support the economy. 2009 Average 5.04% Average Weekly Mortgage Rates Source: Freddie Mac KW Research 7
  8. 8. The percentage of a median family’s income required Affordability - to make mortgage payments on a median-priced Percentage of Income home Affordability remains at record levels, supported by the lowest mortgage rates in decades, low home prices, and the first-time home buyer tax credit. The home price-to-income ratio continues to remain well below the historical average of 25 percent. The ratio now stands at 14.2 percent. Historical Standard: 25% Well below the historical standard of 25% Affordability as of January every year. Calculations assume a 20% down payment. Source: National Association of Realtors KW Research 8
  9. 9. Recent Mortgage Relief for the Unemployed Helping Underwater Homeowners 10 11 Government Action Bill Encourages Hiring the Unemployed 12 Brought to you by: KW Research
  10. 10. Mortgage Relief for Unemployed Attempting to overhaul its foreclosure prevention program, the Obama administration took noteworthy steps to help the unemployed stay current on their mortgage through tough times. While the trouble in the housing market originally started with loose lending practices, high unemployment and underwater homeowners are now the major factors contributing to foreclosure. The program will now: 1. Require lenders to “slash” payments for the unemployed for 3-6 months. In some cases, payments could be deferred entirely. 2. Cut payments to at least 31 percent of previous income, about the same amount that unemployment insurance pays. 3. Become effective over the next 6 months. 4. Not require new taxpayer funds. The program has only used a small portion of its $75 billion allocation. Source: The Washington Post KW Research 10
  11. 11. Helping Underwater Homeowners Underwater borrowers are one of the major driving forces behind foreclosure. It’s estimated that one in four homeowners owes more than their home is worth. Economists categorize these borrowers as “high risk” because they can’t sell or refinance. The government is taking the following steps to address underwater borrowers: 1. Principal Reduction. Lenders will be asked to reduce the principal loan balance if it is 15 percent or greater than what the home is worth. This will only be available to borrowers who are current on their mortgage payments and they will need to stay current to “earn” the full reduction over three years. 2. FHA Refinancing. The Federal Housing Administration (FHA) offers refinancing alternatives for borrowers who are underwater and offering incentives for lenders who reduce the principal on primary mortgages by at least 10 percent. 3. Second Mortgages. The government will double the incentive amount paid to lenders who help modify second mortgages. Half of all troubled homeowners have second mortgages, which have been an obstacle in providing modifications. 4. Short Sales. Incentives to lenders who help troubled borrowers that don’t qualify for the program, most commonly a short sale, have been increased. Source: The Washington Post KW Research 11
  12. 12. Bill Encourages Hiring Unemployed One of the biggest obstacles to greater stability in the U.S. economy and housing market is the unemployment rate, which continues to hover just shy of double digits at 9.7 percent. The government has plans to address the job market with a series of bills, the first of which aims to boost hiring. Key provisions of the bill are as follows: 1. Incentives to Hire. Employers who hire employees that were unemployed for at least sixty days will get a break on those employees’ 6.2 percent social security tax through the end of 2010. 2. Incentives to Retain. Employers who keep employees for at least a year will get a $1,000 bonus. 3. Cost. The expected cost is $13 billion. 4. Result. Experts anticipate the bill creating 234,000 jobs that would otherwise not happen. Increased hiring, particularly for those who have been out of work for some time, will increase employees’ ability to stay current with housing payments and bills in addition to expanding their spending power, adding stability to the housing market and boosting the economy. Sources: The New York Times, Bloomberg News KW Research 12
  13. 13. Topics for Home Buyers, Sellers, and Energy-Efficiency Tax Tips 14 Owners Brought to you by: KW Research
  14. 14. Energy-Efficiency Tax Tips Three Things You Need to Know About Home Improvements to Help Slash Energy Bills and 2010 Taxes 1. Simple qualifying improvements include increasing insulation or insulating items such as door and windows, roofing, skylights, etc. These qualify for a 30 percent credit on the cost of the item, not installation, up to a maximum credit cap of $1,500. 2. Certain big-ticket items have no maximum credit cap. The credit is still 30 percent of the cost of the item. These items include furnace, air conditioning, tankless water heater, heat pump, geothermal system, solar or wind installation. 3. It’s a tax credit, not a deduction. That means it reduces the actual taxes you owe, not your taxable income. Use IRS Form 5695, and hang onto receipts and product labels. Don’t forget to check your state and local area for additional incentives. For more info on the federal tax credit, check out: EnergyStar.gov and NAHB.org/efficiencytaxcredit. This is general information and is not intended to be tax advice; see a professional for specifics and advice. KW Research 14
  15. 15. Your Local Market Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your area. Talk to your Keller Williams agent for assistance interpreting the conditions in your local market. Keller Williams associates are equipped with all the knowledge and information to help you navigate through the process of buying or selling a home in this challenging market. KW Research 15
  16. 16. Local Market Absorption Rate KW Research 16
  17. 17. Number of Homes “in play” KW Research 17
  18. 18. Avg Price per sq ft KW Research 18
  19. 19. Sold to List Price Comparison KW Research 19
  20. 20. Avg Price For Sale VS Sold KW Research 20
  21. 21. About Keller Williams Realty Founded in 1983, Keller Williams Realty, Inc., is an international real estate company with more than more than 77,000 associates and 677 offices located across the United States and Canada. The company began franchising in 1991, and following years of phenomenal growth and success, became the third-largest U.S. residential real estate firm in 2009. The company has succeeded by treating its associates as partners and shares its knowledge, policy control, and company profits on a system-wide basis. Focusing on helping associates realize their fullest potential, Keller Williams Realty is known as an industry leader in its family culture, unmatched education, profit sharing business model, phenomenal coaching program, and technology offerings. www.kw.com KW Research 21
  22. 22. About Paul W. Drury • Originally licensed as an agent in Ohio in 1986, Paul began with Lehman Johnson Real Estate in Elyria. He acquired his Real Estate Brokerage License in 1992 and became an Associate broker with West Shore Realty. In 1995 he moved his brokerage license to Continental Realty Investment where he began to focus on additional work with commercial and investment real estate. During these years he also performed professional appraisals with The Appraisal House. • In 2001 he began Drury Realty Consulting and worked as an independent Real Estate Consultant and worked on his own until 2009 when he joined Keller Williams Realty, Greater Cleveland West. “Being a part of the Keller family provides me with tools and serves unachievable strictly on my own, provides me with the tools and networking of a huge national network, while still enabling me to work, act, and function as the manager of my own business. It’s the best of both worlds.” – Paul • Paul's Home Page KW Research 22
  23. 23. What we have to offer sellers • Sellers now have access to tools unimaginable just a few years earlier. Keller Williams Realty doesn’t spend valuable resources promoting its own name. Instead it puts resources into the best tools and resources for education and training, providing the highest quality real estate professionals into local communities. • Properties put up for sale by Paul are also listed in KWLS, a national MLS, implemented by Keller Williams the third largest company in the US; local MLS; NEOHREX (Northern Ohio Real Estate Exchange); and on national sites such as Trulia, Zillow, CyberHomes, and others. KW Research 23
  24. 24. What we have to offer sellers ( Cont’d) • Other tools brought to bear by Paul include branding using unique web addresses with a virtual tour that can be emailed or the link can posted anywhere, to include Craig’s List and Back Page. Examples of properties sold recently using this method include: – 947 Gulf Road in Elyria (sold in 28 days) http://947gulfroad.com/ – 359 Gayle Drive in Sheffield Lake (sold in 57 days) http://359gayledrive.com/ – 327 Gayle Drive in Sheffield Lake (sold in 18 days) http://327gayledr.com/ – 810 Sandalwood Drive in Elyria (Sold in 19 days) http://810sandalwooddr.com/ • Not Planning to sell in the near future? – Would you still like to monitor what is happening in your neighborhood or area? – Contact Paul now for a free periodic market update. No cost. No obligation. KW Research 24
  25. 25. Properties currently for sale • Properties currently for sale: – 37101 Hunters Trail in Avon - http://37101hunterstrail.com/ – 4435 Porter Road in North Olmsted - http://4435porterroad.com/ – 19593 Whitehead Road in Wellington - http://19593whiteheadrd.com/ – 1 Grover Court in Grafton – http://1groverct.com – 416 Winckles Street in Elyria – http://416wincklesst.com – 149 Woodview Drive in Elyria – http://149woodviewdr.com • Would you like to see one of these homes? Click on the link for a tour. • Would you like your home or property promoted like these? – Contact Paul for a free, no obligation, consultation today at 440-385-5650. KW Research 25
  26. 26. What we have to offer buyers • Buyers of Real Estate also have access to tools unimaginable just a few years before. Since Keller Williams doesn’t spend its money promoting its own name, it puts its resources into providing the best tools and resources to its systems, education, and training, thus providing the most professional real estate team members back into the communities. • Paul is available most hours of the day directly without having to speak with assistants and he monitors his email regularly. KW Research 26
  27. 27. What we have to offer buyers (Cont’d) • Buyers can access Paul’s website at www.druryrealty.com and conduct their own searches as well as create their own search profiles for searching for properties anywhere in Ohio. If relocating out of Ohio, Keller Williams offers one of the finest relocation referral networks in the nation. While we may not be the biggest firm in Northern Ohio yet, we are in many areas of the national already. • Paul’s website is easy to manage and he can set up search profiles for you so you get notified at about 8:30 am of any new properties that come available. He also has profiles set up on national websites such as Trulia providing for greater access to search tools. KW Research 27
  28. 28. Investors & Shoppers – Foreclosure Watch • Are you shopping for the deal of a century for your new home? • Are you in the market to buy a home at a steep discount and try and fix it up and “flip it”? • Are you looking for a home for someone else? • Want to know what is happening in your marketplace? • Send Paul an email today and request free market updates at paul@druryrealty.com • Call Paul directly at 440-385-5650. • No cost. No commitments. No obligations. No fuss. No kidding. KW Research 28
  29. 29. Follow Paul on line… Home Web Page On Twitter • www.druryrealty.com • - www.twitter.com/PaulWDrury On Zillow On FaceBook • www.zillow.com/profile/PaulWDrury • - www.facebook.com/paul.w.drury On Trulia On LinkedIn • www.linkedin.com/in/paulwdrury • www.trulia.com/profile/paulwdrury On the Real Estate Global Network • www.realestateglobalnetwork.com/profile/PaulWDr ury KW Research 29