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This Month in Real Estate August 2011


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The August 2011 Real Estate newsletter published for North Central Ohio. National US Real Estate News provided by Keller Williams Realty with regional news, information, and market statistics provided by Paul W. Drury of Greater Cleveland West.

This Month in Real Estate, August 2011, as published by Paul W. Drury is a compilation of news, analysis, and information for the National Real Estate markets and provided by Keller Williams Realty International and the regional North Central Ohio news and stats provided by Paul W. Drury, of Greater Cleveland West, A Keller Williams Realty Franchise.

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This Month in Real Estate August 2011

  1. 1. Commentary 2 Released: The Numbers That Drive Real Estate 3 August 2011 Recent Government Action 8 Topics for Home Buyers, Sellers, and Owners 10Brought to you by:KW Research
  2. 2. CommentaryThe U.S. housing market has shown increased stability in home sales during 2011 comparedto the previous year. Home prices are up 18% since their low in February. Signs of recoveryremain mixed in the economy—employment and GDP came in less than expected while thestrong points were in consumer confidence and new home starts.The debt ceiling has been raised without any drastic changes to occur immediately. Althoughthis prevents a sudden shock to a weakening recovery, over the next year and a half, expertsanticipate considerable changes in how the government spends and collects money. Theuncertainty of what is to come and how it will impact various industries will likely cause some toplay on the safe side. The good news is that the government remains solvent and will be ableto pay its bills without major disruptions.Economic improvement typically spurs rising interest rates in order to rein in inflation. Althoughinflation has been a source of recent concern, the Fed appears confident it will remain in checkfor the near term. Meanwhile, buyers continue to benefit from historically favorable buyingconditions, and sellers are encouraged by increased market stability. KW Research 2
  3. 3. Home Sales 4 The Numbers That Home Price 5 Drive Real Estate Supply of Inventory Mortgage Rates 6 7Brought to you by:KW Research
  4. 4. Home Sales In MillionsHome sales in June were down 8.8% compared to the same month last year when the impactof the tax credit was at its peak. Compared to the previous month, however, sales heldrelatively steady at 0.8% below May’s numbers. NAR Chief Economist Lawrence Yun cites anunusually high number of contract cancellations the month before as an explanation for theslight easing of sales in June. The inability to meet the new bank financing requirementswill remain a constant barrier for a long time to come due to all of the new bankingregulations and the tightening of credit. Tax Gradual Recovery Without Tax Credit Credit Expired -’10 June ’09 Ju ne ’1 0- ’1 1Latest Data Release: July 20, 2011Source: National Association of Realtors KW Research 4
  5. 5. Home Price In ThousandsFor the first time in a year, home prices are up year-over-year and month-over-month. Thismarks only the fourth time that prices have increased since June 2006. Home pricesrebounded 8.9% in June with median home prices rising to $184,300. This is 0.8% above theyear-ago level. Median home prices remain close to 2003–2004 levels. The combination of lowprices and historically low interest rates means that home affordability is extremely favorable. June ’10-’1 1 June ’09 -’10Latest Data Release: July 20, 2011Source: National Association of Realtors KW Research 5
  6. 6. Supply of Inventory In Months The supply of homes measured in months on the market at their current pace was up during June compared to May. This is keeping with inventory levels typically rise during the summer months. Month’s supply remained 24% below the peak of 12.5 months in July 2010 and 14% above April of 2010 when the home buyer tax credit was in full swing. Tax Credit Expired 1 ’1 0- ’1 ne June ’09-’10 JuLatest Data Release: July 20, 2011Source: National Association of Realtors KW Research 6
  7. 7. Mortgage Rates 30-Year Fixed Mortgage rates remain at record lows after steadily declining in May, primarily due to uncertainty in the global and domestic economies. While these incredible rates represent a significant savings for home buyers, experts note that for the benefits to fully be realized, lending conditions must loosen to enable more buyers to take advantage of them. As overall economic activity gets back on track, rates will likely rise to keep inflation in check. In other words, the window of opportunity for buyers to lock in these historically low interest rates may not remain open much longer. Type Rate 30-Year Fixed 4.39% 15-Year Fixed 3.54% 5/1 ARM 3.18% Historical Average 8.90%Source: Freddie Mac; June 23, 2011 KW Research 7
  8. 8. Recent Government ActionBrought to you by:KW Research
  9. 9. Debt-Ceiling DealAfter a drawn-out debate between the House and the Senate, Democrats andRepublicans; Congress and the President reached a deal on August 2, 2011, to raise thedebt ceiling. Because of the decision and the additional borrowed funds, the UnitedStates is safe from defaulting on its debt and will be able to pay its bills. The dealincludes the following: – Immediately cuts spending by $917 billion and raises the debt ceiling by $400 billion. It will raise the ceiling by another $500 billion in February, providing funds through early 2013. – Creates a joint committee of twelve members from the House and Senate that will make recommendations for $1.5 trillion in deficit reduction measures, and if the plan is rejected by Congress, several automatic spending cuts will take effect. – Requires Congress to vote on adding a balanced budget amendment to the constitution, which would mandate that future spending cannot exceed revenues. If it passes, the debt ceiling can be raised by $1.5 trillion. If not, then it can only be raised by $1.2 trillion.Sources: The Associated Press,, The Economist, Politico KW Research 9
  10. 10. Debt-Ceiling Deal (Cont’d)Lack of concrete details about how the deficit will be reduced sets the stage for continued political debate in the coming months and years. And with the U.S. securities AAA rating being downgraded, the credit agencies will watch carefully to ensure Congress takes action to steer the country in a financially solvent direction. Downgrades would result in higher interest rates, making it more expensive for consumers and the government to borrow money.Bottom line: Crisis averted—it’s business as usual for now, but this is not the last to be heard regarding U.S. deficit and debt levels. Some reports indicate that this may change the game in Congress from “spend, spend, spend” to “cut, cut, cut.” KW Research 10
  11. 11. National Stats – Economic Forecast KW Research 11
  12. 12. National Stats – Mortgage Loan Applcations KW Research 12
  13. 13. National Stats – 10 Year Treasury Notes KW Research 13
  14. 14. National Stats – Unemployment Insurance KW Research 14
  15. 15. National Stats – Retail Sales & Food Service KW Research 15
  16. 16. National Stats – Real Employment Output KW Research 16
  17. 17. Topics for Home Buyers, Sellers, and OwnersBrought to you by:KW Research
  18. 18. Energy Saving TipsSummertime is fun time! It’s also the peak season for electricity use, particularly with this exceptionally steamy summer. To avoid energy bill shock and enjoy an energy- efficient summer, follow these tips:1. Have your central air conditioning checked annually by a professional HVAC technician to ensure it is functioning at its best capacity.2. Replace the air filters every three months to keep dust out of the ducts, especially if you’ve had renovations done in your home.3. Keep the vents clear of carpets, drapery, and furniture, and close the vents in rooms that you don’t use often. KW Research 18
  19. 19. Energy Saving Tips (Cont’d)4. Install a programmable thermostat. This will allow you to turn the temperature up during the day when nobody is home and at night when the temperature goes down. Each degree saves 3-4% in energy costs.5. Use ceiling or room fans as they can do a good job of cooling your house while using a lot less energy than central air units.6. Top up the insulation in the attic and seal air leaks around windows and doors. This will help save energy in both summer and winter.7. Get rid of old inefficient appliances. Consider Energy Star ratings when looking for new appliances. KW Research 19
  20. 20. Your Local MarketAlthough it is important to stay informed about what is going on in thenational economy and housing market, many different factors impact theyour real estate market.Talk to Paul W. Drury for assistance interpreting the conditions in the NorthCentral Ohio Regional market. The following graphs are general and coversome of the broader market area he serves. For detailed information aboutyour own neighborhood, call him or send him an email today.KW associates are equipped with the knowledge and information to helpyou navigate the home-buying or selling process in this challengingmarket. KW Research 20
  21. 21. Your Local Real Estate Market KW Research 21
  22. 22. Local Market Absorption Rate KW Research 22
  23. 23. Number of Homes “in play” KW Research 23
  24. 24. Avg Price per sq ft KW Research 24
  25. 25. Sold to List Price Comparison KW Research 25
  26. 26. Avg Price For Sale VS Sold KW Research 26
  27. 27. Investors & Shoppers – Foreclosure Watch NORTH CENTRAL OHIO REAL ESTATE OPPORTUNITIES!Investors• 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?• Find your next opportunity in our updated foreclosed homes list  (• The link is also available on• Want to know what is happening in your marketplace?• Looking to watch a particular city or neighborhood? Check out our Foreclosure  Map (• Send Paul an email today and request free market and location updates at• Call Paul directly at 440‐385‐5650.• No cost. No commitments. No obligations. No fuss. No drama. No kidding. KW Research 27
  28. 28. About Keller Williams RealtyFounded in 1983, Keller Williams Realty is an international real estate companywith more than 80,000 associates and 686 offices across the United States andCanada. The company began franchising in 1991 and, after years of phenomenalgrowth and success, became the second-largest U.S. residential real estate firmin 2010.Keller Williams Realty has succeeded by treating its associates as partners andsharing its knowledge, policy control, and company profits on a systemwide basis.By focusing on helping associates realize their fullest potential, Keller WilliamsRealty is known as an industry leader for its family culture, unmatched education,profit-sharing business model, phenomenal coaching programs, and technologyofferings. KW Research 28
  29. 29. 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• Pauls Home Page ‐ KW Research 29
  30. 30. 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, now the  2nd largest company in the US; local MLS; NEOHREX  (Northern Ohio Real Estate Exchange); and on national  sites such as Trulia, Zillow, CyberHomes, and others.• Free Real Estate Informational Webinars available by  logging onto this link… KW Research 30
  31. 31. 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.   – –• 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 31
  32. 32. Properties currently for sale• Premium residential properties currently for sale: – 13951 Diagonal Road in Lagrange – – 230 Ohio Street in Elyria –  – 19593 Whitehead Road in Wellington ‐ – See for a complete• Would you like to see one of these homes? Click on the link for a  visual tour.• Check out our YouTube Channel at• 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 32
  33. 33. 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.• Free Real Estate Informational Webinars available by  logging onto this link…• If you wish to conduct your own Multiple Listing Home  Searches, you may do so using this link KW Research 33
  34. 34. What we have to offer buyers (Cont’d)• Buyers can access Paul’s website 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.  Greater Cleveland West now sells more properties than  any other office in the entire regional MLS.• 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. You can also see  profiles set up on national websites such as Trulia  providing for greater access to search tools.• Everything we have we also post with scores of discounts  and product and service links on KW Research 34
  35. 35. Follow Paul’s Real Estate updates online…Home Web Page On Twitter• • ‐ Zillow On FaceBook• • ‐ Trulia On LinkedIn• • the Real Estate Global  Free Real Estate Webinars Network •• Drury Special Discounts LinksOn YouTube •• KW Research 35
  36. 36. Social Networking on Facebook• Facebook – “North Central Ohio Real Estate Consulting, News, and Stats” • Consulting-News-and-Stats/164210080283714• Facebook – “North Central Ohio Real Estate Investments” • Investments/145904528811383• Facebook – “Community Information, News, and Savings for Ohio” • and-Savings-for-Ohio/100692843343793 KW Research 36
  37. 37. Social Networking on Twitter• @PaulWDrury “North Central Ohio Real Estate Consulting” • “”• @CommunityOhio • “ ” KW Research 37
  38. 38. Paul’s special vendor deals of the month… Now advertising properties, features, and discounts on • • Featuring outstanding deals from the following vendors• • Franklin Covey Supplies• GoDaddy Domain Sale • Intuit Quickbooks• ESET Internet Security  • Executive Book  Software Summaries• NewEgg Electronics  • RubberMaid Products Superstore • Build my Move Moving • E‐fax Electronic Fax  Services Service • eBatts discount battery • TomTom GPS Poducts services• DocuSign Electronic  • Bulb America Light Bulb  Document Service Supplier • Magazine Mall KW Research 38
  39. 39. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed bylocal and national media, local real estate agents, and other expert sources. You should not treat any opinionexpressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particularstrategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsiblefor the accuracy or completeness of information, and provides said information without warranties of any kind. Allinformation presented herein is intended and should be used for educational purposes only. Nothing herein should beconstrued as investment advice. You should always conduct your own research and due diligence and obtainprofessional advice before making any investment decision. All investments involve some degree of risk. KellerWilliams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in ThisMonth in Real Estate. KW Research 39