Read this and just nod your head.

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity. via the NY Times

Translated: Buyers are not stupid.

They will not overpay for such a big purpose unless they feel that they are making a long term decision that they can re-coup. We need realistic prices for a realistic market to emerge devoid of government intervention and manipulation.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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Sex Sells is an adage that has been around for a long time.

We also know that being attractive in real estate is never been a hindrance for an agent.

However for an agency to build their marketing campaign around how sexy their agents are does not make sense for a number of reasons. First, even though people tend to like to be around attractive people, when buying and selling a house competency should be the driving factor.

Secondly, the process of real estate sales includes a great deal of alone time in the car or homes with the buyer and the agents. If my marketing campaign was based upon how hot my agents are there is a good chance that a wacko will come out of the woodwork eventually.

You know the wacko who will attack an agent. It is one of the bigger fears in the industry and by promoting the agents based upon the concept sex sells, it will attract those looking for sex?

This marketing tactic, even in slow times, just does not make a great deal of sense to me.

What do you think of this Charlotte, North Carolina agency using sexy agents as a key marketing technique?

Nick Peters used to run a regular real estate firm catering to the rich. Then the economy tanked, and it became a lot harder to sell those kinds of houses.

So Peters decided he and his agents, including his wife, should project success by taking special care with their appearance. They began dressing in expensive, provocative clothes.

And he says clients automatically started acting differently.

“They reacted to us very differently. The guys started calling the women. The women, just me,” Peters says.

But they also stopped calling his less attractive employees. So Peters says he got rid of them.

“People want to work with other people that they’re in all honesty attracted to,” Peters says, shrugging. via WBTV

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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Click to enlarge

Lenders issued $1.04 trillion in home-purchase loans to Southern California homebuyers in the past decade, continuing to dole out the cash even after the housing crash began and homebuying began to die down, a research report shows.

Citing figures from MDA DataQuick, the Pomona-based Real Estate Research Council of Southern California reported that lenders issued an average of $100 billion in home-purchase loans a year since 2000, with lending hitting a peak of nearly $170 billion in 2005.

Loans petered out since then, falling to $56 billion in 2009.

In addition, the research council report shows:

• Nearly 57% of home-purchase loans since 2000 — $575 billion — were issued at the height of the housing boom from 2003 through 2006.
• Home prices soared during that period, rising nearly 78%. But those price increases ended up getting wiped out. The current median price of a SoCal home is equal to March 2003 levels, according to DataQuick.
• Meanwhile, home sales started falling in October 2005. Yet lenders continued to dole out another $236 billion over the next two years — more than a fifth of the decade total.
• Loans fell abruptly in 2008 and 2009 — following the August 2007 credit crunch — to less than $60 billion a year.
• SoCal purchase-money mortgages rebounded in the first half of 2010, increasing 14.5%. This year so far, $28.4 billion in home-purchase loans have been issued regionwide.
• Orange County homebuyers received the largest share of that increase. Home-purchase loans here increased by 28.1%, the largest gain among the seven SoCal counties.
• Los Angeles County had the second-highest gain (22.7%), followed by San Diego County (15.6%). Home-purchase loans declined in both Riverside and San Bernardino counties this year so far.

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Latest from this blog:

SoCal mortgages surpass $1 trillion this decade is a post from: Mortgage Insider

Q. I currently have a 20-year loan with 12 1/2 years remaining, owing $77,000. on a single-family home in Brea worth around $375,000. The existing interest rate at $6.35%. I have no other debt and excellent credit. I am thinking of refinancing at 4% interest but extending the loan to 15 years. This will drop my monthly principle and interest to $569.56, saving me around $180 a month. What do you think?

A. The problem is that you owe so little that it is tough to justify a refinance other than convenience. You only owe $35,000 in interest for the next 12.5 years. If you do a refinance, the total interest due would drop to about $25,000 saving you $10,000. From that you would have to deduct costs, which would eat up perhaps half the savings. But it is still positive.  If $180 is important to you based upon your current financial condition, then you can certainly justify it. But it is not one of those “home run” transactions because you owe so little.

Congratulations for building up the equity so that you actually have a choice.

Q. I refinanced last year, February 2009, with a 15-year loan at 4.25%. My house worth approximately $750,000, and my outstanding balance is $251,000. Would it be worth it to me to refinance? I’d like to reduce my monthly payments, which are currently $2,224 a month and take some cash out. I have excellent credit. I am 60 years old. Any advice would be sincerely appreciated.

A. There is some but not a lot of savings in just refinancing today because you have a pretty darn good loan now. That doesn’t mean there isn’t some “comfort value” in lowering your payment about $400 per month. That depends on your budget.  If lowering your payment by $400 makes you more comfortable, do it.  The other factor is how much cash you want and what it’s for.  If you want to do a remodel or pay off credit cards, then this is a pretty darn good time to raise cheap money.

That’s it. If you want Johnson to answer a question, email it to Maurine Pool at mpool@ocregister.com. Include your name or nickname and the city you live in.

Hard to justify re-fi when you owe very little is a post from: Mortgage Insider

Every week, homes throughout Orange County are scheduled for foreclosure auctions. The owners can be millions of dollars in debt, or owe just a few thousand.

Auctions are frequently postponed. But homes in foreclosure or put on the market as short sales to try to avoid repossession often affect more than the homeowners involved. At the very least, they can have an impact on nearby home sales.

All of these homes and addresses have been listed in the public notices, as required by law.

Auction dates can be checked through trustee sale and phone numbers. Some auctions could be canceled. Also, some homes may be listed on the MLS.

For homes, click on city:
.

• Aliso Viejo
• Anaheim
• Dana Point
• Huntington Beach
• Irvine
• Ladera Ranch
• Laguna Beach
• Laguna Hills
• Laguna Niguel
• Laguna Woods
• Lake Forest
• Mission Viejo
• Orange
• Placentia
• Rancho Santa Margarita
• Tustin
• Yorba Linda

Read more:

How foreclosure auctions work

Trustee, trustor … what’s the difference? Click here for foreclosure terms and definitions

Top tips for buying investment properties

Note: There are foreclosures in other Orange County cities but so far we haven’t had enough available writers to regularly compile foreclosure information from them. We hope to add more in the future.

For a map with a partial list of other real estate listings around Orange County, click here

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Latest from this blog:

Homes facing foreclosure in 17 cities is a post from: Mortgage Insider

Click to enlarge

Rates began to inch downwards in June, falling 0.37 of a percentage point in 11 weeks in which the 30-year average either set or met a record low.

Three of the four loan types tracked by Freddie Mac fell to record lows. This week’s rates are:

• Thirty-year fixed-rate mortgage: 4.32% with 0.7 of a point paid up front. That’s the lowest rate in records dating back to 1971.
• Fifteen-year fixed-rate mortgage: 3.83% with 0.6 of a point paid up front. Again, a record. It’s the lowest rate in data going back to 1991.
• Five-year adjustable rate mortgage (ARM): 3.54% with 0.6 of a point paid up front. This was the lowest in records dating back to 2005.
• One-year ARM: 3.50% with 0.7 of a point paid up front. This is down from last week’s rate, but not a record. The low in records dating back to 1984 was 3.36%, with 0.6 of a point, set in the week ending on March 25, 2004.

These rates are for borrowers paying points up front, or a percentage of the total loan amount. The rates are higher for borrowers who don’t pay points and lower for those paying higher points.

The Associated Press reports:

“Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

“The housing market has been struggling since the April 30 expiration of popular home buyer tax credits. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.

11 weeks of lows

Week	Date	Rate
1	06/24	4.69%
2	07/01	4.58%
3	07/08	4.57%
4	07/15	4.57%
5	07/22	4.56%
6	07/29	4.54%
7	08/05	4.49%
8	08/12	4.44%
9	08/19	4.42%
10	08/26	4.36%
11	09/02	4.32%

“Home sales have tumbled in recent months and home prices are expected to trek downward again due to a glut of homes for sale and mounting foreclosures.

“The lowest mortgage rates in decades, however, may finally be making an impact on home sales. The National Association of Realtors said on Thursday its Pending Home Sales Index for July rose 5.2 percent.”

“Rates have been falling since spring as investors have shifted money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.

“The low rates have fueled a wave of refinancing by borrowers. Refinancing is at its highest level since May 2009 and makes up almost 83 percent of all new loans, its highest share since January 2009.

“People seeking lower rates helped boost mortgage applications by 2.7 percent last week, the Mortgage Bankers Association announced Wednesday.

“However, the low rates haven’t been enough to lift the struggling housing market. Home sales are at the lowest level in more than a decade. Potential buyers are holding off purchases, worried about jobs and the economy. Some are having trouble meeting tighter lending standards.”

Reuters reports:

“Rock-bottom rates offer a glimmer of hope for a housing market that has failed to find footing in the aftermath of the expiration of popular home buyer tax credits. …

“Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

“The housing market has been struggling since the April 30 expiration of popular home buyer tax credits. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.

“Home sales have tumbled in recent months and home prices are expected to trek downward again due to a glut of homes for sale and mounting foreclosures.

“The lowest mortgage rates in decades, however, may finally be making an impact on home sales. The National Association of Realtors said on Thursday its Pending Home Sales Index for July rose 5.2 percent.”

.

More about mortgages

Mortgage rates at record low for 11th week is a post from: Mortgage Insider

What do you call cutting out part of the marketplace to support a special interest. If it was done in the private sector the government would be screaming cats and dogs and investigators will be running rampant.

But when the Federal Government cuts a deal to remove the private sector from the market they call it progress… You have to be kidding me!

The Obama administration said Wednesday local officials could benefit from acquiring these properties and renovating them or using the land for redevelopment projects. Congress has provided $7 billion to buy the homes, but these groups are struggling to spend the federal money because they are often outbid by speculators who are snapping up foreclosures.
“The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back,” said Sarah Greenberg, senior manager for community stabilization at NeighborWorks America, a nonprofit housing group.
The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators. The neighborhood organizations will have up to 48 hours to evaluate them. via MSNBC

Essentially what we are witnessing is the collusion between government and the big banks, again. First the government takes our tax money and gives to to the banks in the form of a bailout. Then, they take more of our money and then allocates it to “special interest groups” to buy the foreclosures.

But the evil private sector is still bidding up the property values so the special interest groups are  unable to buy the properties. Could it possibly be that they have value beyond what those who feel entitled to your money are willing to pay? Instead of partaking in the marketplace we have collusion happening.

So who gets screwed in the deal?

• Investors – Instead of buying the properties and returning capital to all parties, they are being pushed out of the marketplace.
• Contractors – They will not have the opportunity to fix up these homes. Remember Cash for  Clunkers? Because of it used car prices are much higher and inventory is down. Everyone loses in both situations.
• Renters  – Now  inventory is removed from the marketplace and either is destroyed or is under nominal government control.
• Bank Stockholders – Remember them? They have take a loss on the properties intially through foreclosure and now will be forced by the government to sell the homes at a discount to those favored by the govermnet.

There is a collusion going on between Big Government, Big Labor, and Big Business folks. That is why main street and the small business community is so worried. All regulation and government intervention is aimed at helping this triumpherant at the expense of the entrerpeneur. If you want to learn more about this, read Michael Barone’s article here.  

This is not good for America.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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A new survey just released shows that 3 out of every 4 American’s have been affected by the recession.

The report, prepared by Rutgers professors Carl Van Horn and Cliff Zukin, find that 73% of Americans have either been unemployed themselves (14%) or saw an immediate family member (12%), another member of their family (30%) or a close friend (17%) lose a job. via the Huffington Post

Sobering news for sure, but since this is a real estate blog the question that comes to my mind is this;

What is the best way to model my real estate business to handle today’s clients?

We can all be optimists and expect things to turn around next quarter, but when our future clients are feeling this pessimistic that does not make a whole lot of sense. And let’s be honest, there will still be millions of homes sold in the coming year. But to be a great real estate salesperson these days you need more than a business card and a smile.

Here are a couple bits of advice that I have to offer.

1. Be Honest and Realistic – Let’s face it, between the advertising by the NAR and other agents, there is a great deal of scepticism amongst the general public over optimistic pronouncements by real estate agents. Most people put real estate agents in the same level of trust as used car dealers and Congressman.

However, coming to a client with an honest and accurate portrayal of the market will get you good clients. Maybe not as many clients as someone else will be eager to blow smoke up their tailpipe, but  the ones you will get will trust you and work with you. And when the deal is done they will not feel used. In fact, this is the best way to get recommendations.

2. Understand Where The Seller is Coming From – Most people in this market are going to have a very good reason why they are selling. The days of moving to lock in equity are gone for now for most people. Typically there is a life changing event that is causing the move and it is not always because of the fear of losing the house. If the seller is moving to a new market for their job, research the market where they are moving too, it may have also taken a hit with their housing prices and you can explain why selling the home for less than they expected quickly is a much smarter move in the long term.

3. Be Empathetic – If your seller is a short seller or trying to get out of the home because they are unemployed, show empathy. Leave your sympathy at the door as it is a wasted emotion. Being empathetic means you understand the pain the seller is going through but you also are part of the team and will work to alleviate the suffering.

Folks, 5 years ago your typical clients were optimistic and eager. Now they are more likely to be scared and paranoid. To be a great agent you need to spend the time to understand the client, provide amazing service and communications, and be a trusted source of honesty.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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Back in 2008 as property values were plummeting one thing was going up. Your property taxes. Local governments were on a spending binge on the tax money that had been pouring in as property values continued to rise.

Property taxes were the Golden Goose for local politicians and they could not believe that the goose was dying.

According to census data recently released, in fiscal year 2008 (July 2007–June 2008) property taxes rose 4.2 percent as home values fell 16 percent.

For those of us in the real estate business, this was a jarring disconnect. So many families were watching their equity in their home

s disappear or go upside down, yet the politicians were looking to fill their bloated pocketbooks even more without a clue on how it was affecting the population. Florida, Indiana, and New Mexico had the nerve increased their property taxes over 10 percent in the year.

Here is a list from the census bureau of the top 10 states that raised their taxes the most in fiscal year 2008.

Top 10 States With the Largest Property Tax Increases in 2008

Rank    State           Increase        Per Capita Tax

1       Florida         11.7%           $1,649
2       Indiana         11.6%           $1,089
3       New Mexico      10.2%           $568
4       Hawaii          9.7%            $977
5       Nevada          9.2%            $1,241
6       Alabama         9.1%            $495
7       West Virginia   8.7%            $683
8       Oklahoma        8.4%            $582
9       Minnesota       7.6%            $1,273
10      California      7.6%            $1,449

via the Tax Foundation

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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Fannie Mae is taking a dim view of mortgage borrowers who try to scam the system by taking out new loans while their mortgage is being processed. Typically banks will check your debt to income ration in the beginning of the application process.

Some borrowers took that as a green light to add debt right after they qualified for the new loan. Now banks will be expected to monitor for new debt or take out a 2^nd credit report just before the mortgage closes.

It is a smart move for both lenders and borrowers alike to have this check in place. Banks know what kind of debt limits families can live with, and what debt limits get them in trouble. The limits are a protective layer for all involved. To circumvent them will give the homebuyer a short term gain, however the long term pain will be felt for a long time to come.

So I applaud Fannie Mae for this move. It is an example of smart lending and good for all parties.

Although Fannie made no reference to specific services in its recent clarification letter to lenders, some commercially available programs claim to be able to monitor mortgage borrowers’ credit activities on a 24/7 basis, flagging such things as inquiries, new credit accounts and previous accounts that did not show up on the credit report that was pulled at the time of initial application.

One of those services is marketed by national credit bureau Equifax and dubbed “Undisclosed Debt Monitoring.” Aimed at what Equifax calls “the quiet period” between application and closing — often one month to three months — the system is “always on,” the company says in marketing pitches to mortgage lenders.

Thanks for reading this post. If you would like to see more articles like this, please come visit The Real Estate Bloggers. where it was originally published.

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