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This Month in Real Estate July 2011


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A monthly National Real Estate Newsletter by Keller Williams Realty with North Central Ohio Regional news added by Paul W. Drury for July 2011.

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This Month in Real Estate July 2011

  1. 1. Commentary 2 Released: The Numbers That Drive Real Estate 3 July 2011 Recent Government Action 9 Topics for Home Buyers, Sellers, and Owners 11Brought to you by:KW Research
  2. 2. CommentaryThe U.S. housing market has shown increased stability in home sales during 2011 compared to theprevious year. The trend has been an upward one since the expiration of the tax credit last summer.Home prices have softened, particularly earlier this year, due to a higher-than-normal number ofdistressed sales. However, both the percentage of distressed sales and the amount of time theyspend on the market has decreased in recent months, a positive sign for the market moving forward.In fact, prices have steadily followed a positive monthly trend since February. Mortgage defaults havealso declined lately.While interest rates continue to break new record lows, the number of buyers who are able takeadvantage of these savings is restricted by tougher underwriting standards for mortgages. 40% of thebanks surveyed by the Office of the Comptroller of the Currency tightened lending standards formortgages within the past year. In his second press conference, Federal Reserve Chairman BenBernanke stated that a quicker foreclosure process and additional home price stabilization are key toboosting confidence in the market and bolstering a more robust recovery in the housing sector.As the economy improves, stimulus efforts by the government and the Fed will most likely continue towind down, which typically spurs rising interest rates to keep inflation in check. Although inflation hasbeen the source of recent concern, the Fed appears confident it will remain in check for the nearterm. Meanwhile, buyers continue to benefit from historically favorable buying conditions, and sellersare encouraged by increased market stability. KW Research 2
  3. 3. Home Sales 4 The Numbers That Home Price 5 Supply of Inventory 6 Drive Real Estate Mortgage Rates 7 Affordability 8Brought to you by:KW Research
  4. 4. Home Sales In MillionsHome sales in May were down 15.3% compared to the same time last year when the impact ofthe tax credit was at its peak. Compared to the previous month, sales were down 3.8%. NARChief Economist Lawrence Yun states that the slower pace of sales is consistent with theslower pace of overall economic activity and that falling gas prices will help to moderate theimpact of a sluggish economy. Although he continues to cite unnecessarily tight credit forlimiting buying activity, the pace of sales in the second part of the year is expected to bestronger. Extended and Tax Gradual Recovery Without Tax Credit Expanded Credit Home Buyer Expired Tax Credit Ma y ’10- ’11 May ’09-’10Latest Data Release: June 21, 2011Source: National Association of Realtors KW Research 4
  5. 5. Home Price In ThousandsHome prices rebounded 3.4% in May with median home prices rising to $166,500. This is4.6% below the year-ago level and continues to keep the median price close to 2002–2003 levels. Just under 1 in 3 homes sold during May were distressed properties, whichtypically sell at a 10%–20% discount. This is down 6 percentage points from April and isexactly the same as a year ago. Investors represented 19% of sales, and first-time buyersaccounted for 35% of May sales compared to 14% and 46% respectively a year ago at thepeak of the tax credit. Home prices and mortgage rates remain favorable for buyers headinginto the summer selling season. 1 ’1 0- ’1 ay M May ’09-’10Latest Data Release: June 21, 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 May compared to April. Inventory levels remained 26% below the peak of 12.5 months in July 2010 and 12% above April of 2010 when the tax credit was in full swing.May ’09-’10May ’10-’11Latest Data Release: June 21, 2011Source: National Association of Realtors KW Research 6
  7. 7. Mortgage Rates 30-Year Fixed Rates are at a record low after steadily declining throughout 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 so more buyers can 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 4.50% 15-Year Fixed 3.69% 5/1 ARM 3.25% Historical Average 8.90%Source: Freddie Mac; June 23, 2011 KW Research 7
  8. 8. Affordability - The percentage of a median family’s income required  to make mortgage payments on a median‐priced  Percentage of Income homeHousing affordability continued at record levels in May. The relationship betweenmortgage rates, home prices, and family income is the most favorable on record for buying.The home price-to-income ratio continues to remain well below the historical standard.Stabilizing home prices and rising interest rates are expected to reverse the recentaffordability trend. *However with high unemployment continuing, and food, energy, andhealthcare costs all taking up significantly higher portions of household incomes, theaffordability index may be altered for a many years to come.*Affordability as of May every year. Calculations assume a 20% down payment. KW Research 8Source: National Association of Realtors
  9. 9. Recent Government ActionBrought to you by:KW Research
  10. 10. Fed Discontinues Bond Purchase ProgramThe Federal Reserve Board has announced the end of its $600 billion bond-buyingprogram. Also known as quantitative easing, the goal of this program was to bolstereconomic activity and lending.When banks are concerned about the ability of businesses and consumers to repay loans,they tend to buy treasury securities, which are guaranteed by the federal government. TheFed’s bond-buying program decreased the yield on treasuries, making them less appealingfor banks and making lending to consumers and businesses more appealing. On the otherhand, the program created more money and lowered the value of the U.S. dollar. Inmoderation this can be a good thing for incentivizing exports and boosting economicactivities even though the impact tends to increase inflation. In November 2010, when theprogram was announced, there was concern about deflationary pressures. Since then,inflation has returned but remains within acceptable levels.The Fed is expected to keep interest rates at the current historical lows and economicactivity is expected to pick up steam in the second half of the year.Sources:, KW Research 10
  11. 11. Topics for Home Buyers, Sellers, and OwnersBrought to you by:KW Research
  12. 12. Tips for Selling Your House 1. Price it right. Studies show that when homes are priced to sell, they not only sell faster, they ultimately command a higher price than homes that sit on the market and get perceived as “stale.” 2. Consider a presale inspection. This will help you to know what items need to be fixed before your home goes on the market. Repairs and concessions made during the negotiation process can end up costing sellers more. KW Research reveals that in 2010, 89% of move-up and 82% of first-time buyers purchased a home in good to excellent condition. 75% of sellers started making repairs 1–8 weeks before listing. 3. Higher may not always be better. While a higher offer can be tempting, be sure to consider the whole offer. An offer without contingencies, conditions, and with a higher down payment may be a more solid deal. KW Research 12
  13. 13. 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 13
  14. 14. Your Local Market KW Research 14
  15. 15. Local Market Absorption Rate KW Research 15
  16. 16. Number of Homes “in play” KW Research 16
  17. 17. Avg Price per sq ft KW Research 17
  18. 18. Sold to List Price Comparison KW Research 18
  19. 19. Avg Price For Sale VS Sold KW Research 19
  20. 20. 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 20
  21. 21. 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 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• Pauls 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, 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 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.   – –• 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• 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 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.• 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 26
  27. 27. 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 27
  28. 28. 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 28
  29. 29. 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 29
  30. 30. Social Networking on Twitter• @PaulWDrury “North Central Ohio Real Estate Consulting” • “”• @CommunityOhio • “ ” KW Research 30
  31. 31. 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 31
  32. 32. 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 32