this month in real estate for dec 2010
DESCRIPTION
A detailed presentation concerning the National real estate market by Keller Williams Realty and the local North Central Ohio real estate market by Paul W. Drury.TRANSCRIPT
Commentary 2
h b h i lReleased:
The Numbers That Drive Real Estate 3
Recent Government Action 10
Topics for Home Buyers Sellers and Owners 12
December 7, 2010
Topics for Home Buyers, Sellers, and Owners 12
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Commentary
The housing market continues its uneven and gradual recovery without the aid of the tax credit. Experts believe this will be the trend moving forward. Interest rates hit another p grecord low but have started moving back up as the overall economy improves.
Despite a less‐than‐expected employment report, consumers seem to be feeling brighter about the future. While the Consumer Confidence Index about the Present Situation rose only slightly, the Expectation Index showed substantial improvement. As we enter into the holiday gift‐buying season, consumers are expected to be out shopping and b i if f d h hi D i h libuying more gifts for under the tree this year. Department stores with online presence did particularly well, with a 38% increase compared to last year according to industry reports. Overall reports indicate a 13‐24% increase in retail sales from last year. C di t f b t h lf f ll i ti it i th US lConsumer spending accounts for about half of all economic activity in the US; as long as consumers are spending and using debt responsibly, this is a positive indicator for economic growth.
This march back up continues to provide excellent opportunities: an ample selection of homes, affordable prices, and historically low interest rates. Experts anticipate both the economy and the housing market will continue on a path to a complete recovery
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economy and the housing market will continue on a path to a complete recovery.
Sources: Bloomberg.com, nytimes.com, wsj.com
Home Sales 4
Home Price 5The Numbers That Inventory 6
Mortgage Rates 8Drive Real EstateAffordability 9
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Home SalesIn MillionsIn Millions
Home sales dropped slightly in October, compared with the previous month, despite a temporary moratorium on foreclosures, which have recently represented more than one third of sales activity. Sales were up 15% from July when the tax credit expiration caused a drop off in sales The mostSales were up 15% from July when the tax credit expiration caused a drop‐off in sales. The most significant indicator of a market rebound, however, appears to be the October pending sales report. A 10.4% increase in pending sales, which measures homes under contract, signals stronger home sales activity in the coming months as the homes under contract close. y g
First‐Time Home Buyer Tax CreditScheduled to
expire
Extended and Expanded Home Buyer Tax CreditRenewed November 7
Must have contract signed by April 30M l b J 30
Tax Credit Is Expired
Gradual Recovery Without Tax Credit
expire November 30
Must close by June 30
O b ’08 ’09October ’08‐’09
KW Research 4Latest Data Release: November 23, 2010Source: National Association of Realtors
Home PriceIn ThousandsIn Thousands
Home prices have shown considerable stability when compared with the previous several years. October’s median home price declined slightly down less than 1% from the previous month andOctober s median home price declined slightly, down less than 1% from the previous month and year. A recent study shows an increased interest in smaller homes. Smaller homes often mean smaller price tags, depending on location. While the market currently provides many opportunities for buyers, sellers look forward to the general trending upward of home price as the market’s stability without government support grows deeper roots.
KW Research 5Latest Data Release: November 23, 2010Source: National Association of Realtors, relocation.com
Inventory ‐In Millions
Number of homes available for sale
In Millions
There are fewer homes on the market. Total inventory fell to 3.86 million in October from 4 million in September As lending standards continue to loosen and return to historical norms4 million in September. As lending standards continue to loosen and return to historical norms, more people will be able to buy their first home, move up, or invest and take advantage of the abundant opportunities in the current market – including historically low interest rates, highly affordable prices, and an ample but shrinking selection of homes.
KW Research 6Latest Data Release: November 23, 2010Source: National Association of Realtors
Supply of InventoryIn MonthsIn Months
Month’s supply of inventory measures how many months it will take to sell all the homes that are for sale if no new homes come on the market and buyers continue to buy at the same pace orfor sale, if no new homes come on the market and buyers continue to buy at the same pace or rate. The month’s supply of homes on the market fell to 10.5 months. While still at a relatively high level, months of inventory has shrunken substantially since July’s 12.5 months.
KW Research 7Latest Data Release: November 23, 2010Source: National Association of Realtors
Mortgage Rates30‐Year Fixed
Mortgage rates hit another record low of 4.17% on November 11 after which they rose to close to 4.4% for the remainder of the month. Historically low rates have contributed to real savings for
30 Year Fixed
4.4% for the remainder of the month. Historically low rates have contributed to real savings for buyers who will continue to realize those savings for as long as they own the home. As overall economic recovery gains traction, rates must rise to keep inflation in check. Industry economist Lawrence Yun anticipate srates to be between 5.4% and 6% by the end of 2011.
30‐Year Average – 8.90%
1‐Year Average – 4.71%
KW Research 8Source: Freddie Mac
Affordability ‐Percentage of Income
The percentage of a median family’s income required to make mortgage payments on a median‐priced home
Percentage of Income
Housing is at record affordability levels. Prospective home buyers stand to benefit from the lowest mortgage rates in decades, as well as advantageous home prices. The home price‐to‐income ratio continues to remain well below the historical standard. Stabilizing home prices and rising interest rates are anticipated to begin drawing affordability back up toward more normal levels.
Historical Standard: 25%
KW Research 9Affordability as of October every year. Calculations assume a 20% down payment.Source: National Association of Realtors
Recent Conforming Loan Limits Extended 11
Government ActionConforming Loan Limits Extended 11
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Conforming Loan Limits ExtendedIn Most Expensive MarketsIn Most Expensive Markets
Qualifying for a mortgage is often dependent on whether or not that mortgage will be backed by a government sponsored entity (GSE), such as Fannie Mae and Freddie y g p y ( ),Mac. Fannie, Freddie, and the Federal Housing Administration (FHA) account for more than 90% of the mortgage market. There are limits to the size of a mortgage th t GSE ill b k G ll th li it i $417 000 t $729 750 i hi h i dthat GSEs will back. Generally, the limit is $417,000 to $729,750 in high priced markets.
In July 2008 the housing recovery bill raised the limit in high cost areas to aIn July 2008, the housing recovery bill raised the limit in high cost areas to a maximum of $729,750 from $417,000 everywhere. These limits were set to expire at the end of the year and have now been extended through September of 2011.
Banks have already begun increasing loans above the limits, also known as jumbo loans. The extension of conforming loan limits will provide more time for banks to beef up their jumbo lending and give the housing market time to strengthen, supporting a smoother transition to less government support.
KW Research 11Sources: Rutgers, HousingWire.com, wsj.com, National Association of Realtors
Topics for Home Buyers, p y ,Sellers, and Owners
Prime Time yo Buy 12
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Prime Time to BuyHomes Have Never Been More AffordableHomes Have Never Been More Affordable
For most individual home buyers, there are only a few factors that really matter:• Can I afford this home?• Is it a good investment?• Does it meet my family’s needs?
So it’s a bit surprising that the most important housing statistic has gone largely unreported: homes have never been more affordable. Affordability, measured by the median mortgage payment on the current median‐priced home ($171,000) as a percentage of the median household income ($62,141), is lower than it’s been in a generation. The chart below shows affordability at a record level, having significantly improved since the height of the recent housing boom in 2006.significantly improved since the height of the recent housing boom in 2006.
At 14.4% of median income, affordability is
at an all time advantageous level!
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For more reasons why now is the prime time to buy, check out: 7 Reasons Why Now Is a Great Time to Buy a Home!
Sources: National Association of Realtors, Keller Williams Realty 7 Reasons Why Now Is a Great Time to Buy a Home!
Your Local Market
Alth h it i i t t t t i f d b t h t i i i th ti lAlthough 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 own area.
Talk to your KW associate for assistance interpreting theTalk to your KW associate for assistance interpreting the conditions in your local market as described in the following
charts and graphs.g p
KW associates are equipped with the knowledge and information to help youKW associates are equipped with the knowledge and information to help you navigate through the home‐buying or selling process in this challenging market.
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Local Market Absorption RateLocal Market Absorption Rate
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Number of Homes “in play”Number of Homes in play
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Avg Price per sq ftAvg Price per sq ft
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Sold to List Price ComparisonSold to List Price Comparison
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Avg Price For Sale VS SoldAvg Price For Sale VS Sold
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About Keller Williams Realty
Founded in 1983, Keller Williams Realty, Inc. is an international real estate company with more than 80 000 associates and 686 offices across the Unitedcompany with more than 80,000 associates and 686 offices across the United States and Canada. The company began franchising in 1991 and, after years of phenomenal growth and success, became the third‐largest U.S. residential real estate firm in 2009estate firm in 2009. The company has succeeded by treating its associates as partners and sharing its knowledge, policy control, and company profits on a systemwide basis. By 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 andeducation, profit sharing business model, phenomenal coaching program, and technology offerings.
www.kw.com
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About Paul W. Druryy
• Originally licensed as an agent in Ohio in 1986, Paul began with Lehman Johnson Real Estate in Elyria He acquired his Real EstateLehman 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 withRealty 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 ClevelandWest “Beingwhen 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 worknetworking 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
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• Paul's Home Page
What we have to offer sellers
• Sellers now have access to tools unimaginable just a few years earlier Keller Williams Realty doesn’t spend valuableyears 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• 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• Free Real Estate Informational Webinars available by logging onto this link… http://budurl.com/druryvideos
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What we have to offer sellers ( Cont’d)
• Other tools brought to bear by Paul include branding using i b dd ith i t l t th t bunique web addresses with a virtual tour that can be
emailed or the link can posted anywhere, to include Craig’s List and Back Page Recent homes soldList and Back Page. Recent homes sold.– 37101 Hunter’s Trail in Avon – http://37101hunterstrail.com– 2815 West River Road South in Elyria – http://2815WRiverRdS.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 NoContact Paul now for a free periodic market update. No cost. No obligation.
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Properties currently for saleope t es cu e t y o sa e
• Properties currently for sale:330 S d A– 3307 Sandy Lane in Avon – http://3307SandyLn.com
– 19593 Whitehead Road in Wellington ‐ http://19593whiteheadrd.com/
– 13951 Diagonal Road in Lagrange – http://13951DiagonalRd.com– 1 Grover Court in Grafton – http://1groverct.com– 416 Winckles Street in Elyria – http://416wincklesst.com– 149 Woodview Drive in Elyria – http://149woodviewdr.comy p //
• Would you like to see one of these homes? Click on the link for a visual tour.
• Would you like your home or property promoted like• Would you like your home or property promoted like these?– Contact Paul for a free, no obligation, consultation today g yat 440‐385‐5650.
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What we have to offer buyersy
• Buyers of Real Estate also have access to tools i i bl j t f b f Si K ll Williunimaginable 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 toits 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… http://budurl.com/druryvideos
• If you wish to conduct your own Multiple Listing Home Searches, you may do so using this link…. http://bit.ly/aDE5XP
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What we have to offer buyers (Cont’d)
• Buyers can access Paul’s website at www.druryrealty.comd d h i h ll h iand 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 ofOhio. 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• 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 p p pup on national websites such as Trulia providing for greater access to search tools. http://bit.ly/aDE5XP
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p y
Investors & Shoppers – Foreclosure Watchpp
• Are you shopping for the deal of a century for your h ?new home?
• Are you in the market to buy a home at a steep d d d f d “fl ”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 y qupdates at [email protected]
• Call Paul directly at 440‐385‐5650.y• No cost. No commitments. No obligations. No fuss. No kidding.
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g
Follow Paul’s Real Estate updates online…p
Home Web Page On Twitter• www.druryrealty.com
On Zillow
• ‐ www.twitter.com/PaulWDrury
On FaceBookO o• www.zillow.com/profile/PaulWDrury
On Trulia
On FaceBook• ‐ www.facebook.com/paul.w.drury
On LinkedInOn Trulia• www.trulia.com/profile/paulwdrury
O h R l E Gl b l
On LinkedIn• www.linkedin.com/in/paulwdrury
Free Real EstateOn the Real Estate Global Network
• www.realestateglobalnetwork.com/profile/PaulWDrury
Free Real Estate Webinars
• http://budurl.com/druryvideosry
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Paul’s special vendor deals of the month…p
Paul’s Vendor’s Deal’s PagePaul s Vendor s Deal s Page• http://bit.ly/ffvZOr• Featuring deals from the following vendors
• GoDaddy Domain Sale• ESET Internet Security
• Franklin Covey Supplies• Intuit Quickbooksy
Software• E‐fax Electronic Fax Service
• Executive Book Summaries
• Build my Move MovingService• DocuSign Electronic Document Service
• Build my Move Moving Services
• eBatts discount battery i• LifeLock Identity
Protection Serviceservices
• Bulb America Light Bulb Supplier
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pp
The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc. does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used foreducational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve somedegree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on informationdegree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.
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