Creative thinking continues to put a few ahead of the game in this weeks' real estate market. Instead of soaking in the barrage of negative statistics from the realty associations and industry officials, there are a few people acting and investing on a great idea.
And, no, it is not making lowball offers to try and prevent specific foreclosures. You see, it is not just "complete" houses that are owned (repossessed) by the banks. Unfortunately, many small builders have vanished from the scene. In some cases, this happened while one or more single family homes were still being built and thus not yet sold.
I got curious when I saw that someone bought a 3,000 sq. ft. house in Central Florida for $28,000 cash and may have been the only actual bidder. Upon further investigation, the buyer got himself an unfinished house that was left for dead by a failed builder. In today's market, consumers and investors who can afford to take advantage of the deals out there want something they can turn a profit on without having to spend any more to do so. Yet, in this instance, it translates to missed opportunities.
This buyer/investor estimated that the house needed about $50,000 more worth of work to be completed, and he has the contacts (and the finances) to make that happen. The result is that within a few weeks, he will have a completed and brand new 3,000 sq. ft. house in Florida ready to sell - or rent. And his total cost will likely be under $80,000, with no mortgage.
If over the next few weeks the market doesn't improve to the point of easily being able to find a buyer, he knows the rental market is strong among people who don't have credit worthy of getting a mortgage. Better yet, there will likely be a ton of "rent to buy" candidates out there.
Those who rent to buy make much better tenants, as they are not likely to let necessary household matters slide.
This, after the bank which "took over" this unfinished property was amazed to get rid of something they couldn't sell against the foreclosures ready for immediate occupancy.
What gets me is that this investor/buyer, to the best of my knowledge, is NOT a licensed realty agent.
Now put this together with the usual batch of negative real estate market stories started by the people in the industry. Notice that the realty associations continue to release the "down market" statistics so fast it's hard to keep up:
http://news.yahoo.com/s/ap/20090126/ap_on_bi_ge/home_sales_southern_cities_1
http://news.yahoo.com/s/ap/20090126/ap_on_bi_ge/home_sales_northeastern_cities_1
Now the Chicago market joins the rest:
http://www.suntimes.com/business/currency/1398509,CST-FIN-wallet27.article
Let me get this straight. The realty agents and mortgage lenders complaining about the lack of business (except for mortgage refi's) are sitting around reading the doom statistics, while investors not in the profession are using creative thinking to score a nice profit within the course of the new year.
What's wrong with this picture?
Tuesday, January 27, 2009
Thursday, January 22, 2009
Home sales are down - and the realty associations brag about it??
This week I have probably had more mortgage lenders tell me they are too busy to look at improving their advertising campaign because of the increase in loan activity than in the past two years. By my count, mortgage rates have dropped at least once during 10 of the past 12 weeks, at one point reaching levels not seen in more than 5 years.
Yet, once again, I checked a few sources for home sales news, waiting to see some positive reflecting in the marketplace. But no. More of the same. It's getting worse. Hundreds of thousands of realty agents paying hundreds of dollars in dues and fees again this year. The realty associations make a big deal about spending money on lobbyists and working the marketplace.
What comes up in today's news? Realty associations issuing negative statistics about the local marketplaces. Does today's potential home buyer give a you-know-what about how many homes sold a year ago or five years ago? Yet..........
From Houston:
http://www.chron.com/disp/story.mpl/business/6220879.html
From Kansas City:
http://www.bizjournals.com/kansascity/stories/2009/01/19/daily12.html?ana=from_rss
From Austin:
http://www.bizjournals.com/austin/stories/2009/01/19/daily16.html?ana=from_rss
And just so you don't think it is only the largest markets that constantly do this, here's the report from Raleigh-Durham NC:
http://www.bizjournals.com/triangle/stories/2009/01/19/daily18.html?ana=from_rss
Did you notice how the local realty association is prominently mentioned for issuing these statistics?
I'll tell you what. If I were advertising and/or marketing for a FSBO company, I would be pointing out all of these articles to potential sellers who are looking at doing it themselves vs. hiring a realty agent. If the company's FSBO assisted sales were UP in the past year, I would do a comparison.
I'd like your feedback on this, whether you are a realty professional or an investor.
Yet, once again, I checked a few sources for home sales news, waiting to see some positive reflecting in the marketplace. But no. More of the same. It's getting worse. Hundreds of thousands of realty agents paying hundreds of dollars in dues and fees again this year. The realty associations make a big deal about spending money on lobbyists and working the marketplace.
What comes up in today's news? Realty associations issuing negative statistics about the local marketplaces. Does today's potential home buyer give a you-know-what about how many homes sold a year ago or five years ago? Yet..........
From Houston:
http://www.chron.com/disp/story.mpl/business/6220879.html
From Kansas City:
http://www.bizjournals.com/kansascity/stories/2009/01/19/daily12.html?ana=from_rss
From Austin:
http://www.bizjournals.com/austin/stories/2009/01/19/daily16.html?ana=from_rss
And just so you don't think it is only the largest markets that constantly do this, here's the report from Raleigh-Durham NC:
http://www.bizjournals.com/triangle/stories/2009/01/19/daily18.html?ana=from_rss
Did you notice how the local realty association is prominently mentioned for issuing these statistics?
I'll tell you what. If I were advertising and/or marketing for a FSBO company, I would be pointing out all of these articles to potential sellers who are looking at doing it themselves vs. hiring a realty agent. If the company's FSBO assisted sales were UP in the past year, I would do a comparison.
I'd like your feedback on this, whether you are a realty professional or an investor.
Wednesday, January 21, 2009
Lenders fight the battle, too............
It's not just the realty agents, builders, and developers having to fight the battle against the negative publicity and its additional harm to the marketplace. Sometimes, it is also the mortgage lenders, although they get it from all sides.
http://www.wptv.com/content/financialsurvival/survivingthesqueeze/story/Harder-to-qualify-for-refinancing/li2cdjNQjU-mFMsq_S1pQg.cspx?rss=762
That article would have you think that getting a loan is even more of a challenge. Imagine a consumer faced with the situation described after all that consumer went through to find a property he/she actually could get a deal on.
Yet, too many of the lenders I have talked with this week are more concerned with contacting their database of past and potential clients. If the people they are spending their time and money to contact don't believe in the possibilities, it makes the battle that much more challenging.
http://www.wptv.com/content/financialsurvival/survivingthesqueeze/story/Harder-to-qualify-for-refinancing/li2cdjNQjU-mFMsq_S1pQg.cspx?rss=762
That article would have you think that getting a loan is even more of a challenge. Imagine a consumer faced with the situation described after all that consumer went through to find a property he/she actually could get a deal on.
Yet, too many of the lenders I have talked with this week are more concerned with contacting their database of past and potential clients. If the people they are spending their time and money to contact don't believe in the possibilities, it makes the battle that much more challenging.
Tuesday, January 20, 2009
Who's to blame??
Here is an example of the much needed "positive spin" that should be used to generate some activity on specific homes for sale. A suburban Chicago agent managed to get a P.R. piece (or how it should be classified) in over the weekend giving the neighbors and upscale potential buyers a reason to take note of specific open houses. Even though this is not one of my clients, this is an example of what needs to be done on a larger scale:
http://www.dailyherald.com/story/?id=262942
But then, it's back to the more typical story. The "It's been a bad year" in the real estate market quote. The first words quoted from a realty association official:
http://www.theday.com/re.aspx?re=9594fe69-d6f3-477e-a534-9fc5d3164e2c
Yes - while hundreds of agents are paying dues to this association, its executive is quoted in the local paper about what is NOT selling and "bad year". In the marketing world, we refer to this as needing "damage control".
You can't blame the media. They do sometimes go too far in the positive way, such as the first story about the open houses and giveaways. My feeling is that they don't really go too far with the more common story where an industry spokesperson quotes about lower sales or a bad market. Nobody forced the person to give that quote, whether or not it was the first thing he or she says. It was the first quoted. Considering that a percentage of people only read the first couple of paragraphs vs. the entire article, that was a devastating story to agents in that area.
And, just maybe, you can't blame mortgage rates all of the time, either. I'm still not sure to what extent I agree with the point being made here, but this article does offer some interesting comparisons about home price trends in comparison with the mortgage rates.
http://seekingalpha.com/article/115338-the-mortgage-industry-housing-market-and-inflation?source=email
I would have to say it is a combination of both, depending upon the marketplace and the buyer's situation. An investor is going to look at the price of the property and the deal he/she/they can get at this time. A potential home buyer targeting a specific area and price range is likely to look closer at mortgage rates, realizing a drop of .75 could mean a couple hundred dollars less each month.
Whichever you think it is (between home prices and mortgage rates), the killer is often the collection of fees associated with the transaction, such as title fees and local taxes. These can add to the buyer's out-of-pocket at the worst possible time. Yet, there is little to no publicity about this nor any type of legislation or regulation proposed, to the best of my knowledge.
(And thanks to Ron H. for the tip on that association story.)
http://www.dailyherald.com/story/?id=262942
But then, it's back to the more typical story. The "It's been a bad year" in the real estate market quote. The first words quoted from a realty association official:
http://www.theday.com/re.aspx?re=9594fe69-d6f3-477e-a534-9fc5d3164e2c
Yes - while hundreds of agents are paying dues to this association, its executive is quoted in the local paper about what is NOT selling and "bad year". In the marketing world, we refer to this as needing "damage control".
You can't blame the media. They do sometimes go too far in the positive way, such as the first story about the open houses and giveaways. My feeling is that they don't really go too far with the more common story where an industry spokesperson quotes about lower sales or a bad market. Nobody forced the person to give that quote, whether or not it was the first thing he or she says. It was the first quoted. Considering that a percentage of people only read the first couple of paragraphs vs. the entire article, that was a devastating story to agents in that area.
And, just maybe, you can't blame mortgage rates all of the time, either. I'm still not sure to what extent I agree with the point being made here, but this article does offer some interesting comparisons about home price trends in comparison with the mortgage rates.
http://seekingalpha.com/article/115338-the-mortgage-industry-housing-market-and-inflation?source=email
I would have to say it is a combination of both, depending upon the marketplace and the buyer's situation. An investor is going to look at the price of the property and the deal he/she/they can get at this time. A potential home buyer targeting a specific area and price range is likely to look closer at mortgage rates, realizing a drop of .75 could mean a couple hundred dollars less each month.
Whichever you think it is (between home prices and mortgage rates), the killer is often the collection of fees associated with the transaction, such as title fees and local taxes. These can add to the buyer's out-of-pocket at the worst possible time. Yet, there is little to no publicity about this nor any type of legislation or regulation proposed, to the best of my knowledge.
(And thanks to Ron H. for the tip on that association story.)
Friday, January 16, 2009
Searching for an answer...........
Realty agents and mortgage lenders with a personal web site will find this seemingly unrelated story worthy of note. Obviously, you hope that one way for potential clients to find you is via your web site.
While the importance of being found via internet search is often debated in the real estate community (compared with someone looking for a "used car in Miami" by a search), a story from Hitwise brings up an interesting point.
Hitwise reported yesterday (Jan. 15) that searches for "credit cards" and "credit card" fell 29% and 14%, respectively, during the four weeks leading up to Jan. 10 when compared with the prior year. The story went into percentages and broke the information out even more, which is beyond our scope here. The gist of the story is that it is possible that consumers are changing the way they search for credit card information, by now including a brand name.
For example, there is a rise in the people entering "Bank of America credit card", rather than just "credit card". My feeling is that it gives consumers more confidence in their search results by going with a known brand, as opposed to looking at a search result list filled with "untrusted" and unknown web sites.
You should keep that in mind when it comes to your own web site. I often help clients with the process of adding one or more domain names which "point" to their web site.
I called one of my long time clients in the Chicago area today about this story. She liked my idea about adding a "comparison" mention on a seldom used page on her web site. (Why she still has a seldom used page is for another day - but now it could actually benefit.) If she compares a mortgage program to one from (for example) Bank of America, and her site is already available for the major search engines, then HER site could come up when a consumer searches "bank of america mortgage", per the point of this blog.
Even though business is rebounding for my current (and potential) clients, you need to keep every marketing edge possible to maintain a positive income for 2009. Oh, and this is a good idea for when we are searching for a product in our real life, too. Check for a known and trusted brand or company, and see what happens.
While the importance of being found via internet search is often debated in the real estate community (compared with someone looking for a "used car in Miami" by a search), a story from Hitwise brings up an interesting point.
Hitwise reported yesterday (Jan. 15) that searches for "credit cards" and "credit card" fell 29% and 14%, respectively, during the four weeks leading up to Jan. 10 when compared with the prior year. The story went into percentages and broke the information out even more, which is beyond our scope here. The gist of the story is that it is possible that consumers are changing the way they search for credit card information, by now including a brand name.
For example, there is a rise in the people entering "Bank of America credit card", rather than just "credit card". My feeling is that it gives consumers more confidence in their search results by going with a known brand, as opposed to looking at a search result list filled with "untrusted" and unknown web sites.
You should keep that in mind when it comes to your own web site. I often help clients with the process of adding one or more domain names which "point" to their web site.
I called one of my long time clients in the Chicago area today about this story. She liked my idea about adding a "comparison" mention on a seldom used page on her web site. (Why she still has a seldom used page is for another day - but now it could actually benefit.) If she compares a mortgage program to one from (for example) Bank of America, and her site is already available for the major search engines, then HER site could come up when a consumer searches "bank of america mortgage", per the point of this blog.
Even though business is rebounding for my current (and potential) clients, you need to keep every marketing edge possible to maintain a positive income for 2009. Oh, and this is a good idea for when we are searching for a product in our real life, too. Check for a known and trusted brand or company, and see what happens.
Thursday, January 15, 2009
Bank on this one............
Some banks and S & L's, including large ones, have been closed and/or taken over as a result of faulty and defaulted real estate loans.
In an ironic twist, there is a story making news about a Florida market having to deal with buildings which once housed a prominent local bank going unused, and stuck with tax assessments and other funds owed.
http://www.bradenton.com/business/story/1154871.html
This story has a scary element to it, as well as a funny one.
Personally, I see this as a management issue. Before this particular bank went belly up, maybe the matter of the buildings they owned, taxes, and the real estate obligations of the bank itself should have been dealt with. Now, this has become a blow to the local economy.
There are those who believe, as I do, that the best solution to the real estate crisis would have been for the government to specifically pay off each of the defaulted loans directly, rather than in the form of a bailout.
If local government can't handle the effects of losing a once prominent local bank, then chances are the money handed out via the "bailout" plan will be just as mismanaged by our collective elected officials.
The homeowners or loan owners that defaulted have already suffered the consequences. But if the government has "bought" those loans and owned the properties, the banks that loaned on them would have survived - and undergone immediate policy changes so this wouldn't happen again. And specific people would be responsible for wisely maintaining the continuing existence of these banks and lenders.
Ah, what might have been...........
In an ironic twist, there is a story making news about a Florida market having to deal with buildings which once housed a prominent local bank going unused, and stuck with tax assessments and other funds owed.
http://www.bradenton.com/business/story/1154871.html
This story has a scary element to it, as well as a funny one.
Personally, I see this as a management issue. Before this particular bank went belly up, maybe the matter of the buildings they owned, taxes, and the real estate obligations of the bank itself should have been dealt with. Now, this has become a blow to the local economy.
There are those who believe, as I do, that the best solution to the real estate crisis would have been for the government to specifically pay off each of the defaulted loans directly, rather than in the form of a bailout.
If local government can't handle the effects of losing a once prominent local bank, then chances are the money handed out via the "bailout" plan will be just as mismanaged by our collective elected officials.
The homeowners or loan owners that defaulted have already suffered the consequences. But if the government has "bought" those loans and owned the properties, the banks that loaned on them would have survived - and undergone immediate policy changes so this wouldn't happen again. And specific people would be responsible for wisely maintaining the continuing existence of these banks and lenders.
Ah, what might have been...........
good news or bad news???
Now that mortgage rates have dropped at least once a week for the 11th consecutive week, I am finally seeing reports from around the country of home sales being on the rise. That's a good thing.
Yet, now the media slant is such that they are often pointing out the reasons as being due to foreclosures and that many of the sales are at lower prices than in recent years.
As I have been harping about for months, some of the realty associations continue with the "problem" slant instead of reaching for every positive they can. The approach should be that now that home buying is becoming more affordable to more people and mortgage rates are reduced to near record low levels, this is the best buyer's market in several years. (!!!)
This story from Lansing is typical of what I'm seeing lately, with the "but" home prices are down. Funny, but when they report on Wal-Mart's quarterly profits, I don't see stories about how "the price of the TV sets they sold are less than the 2007 prices" as a concern.
http://www.lansingstatejournal.com/article/20090114/NEWS03/901140352/1004/NEWS03
Detroit, going from "motor city" to "foreclosure capital of the world" offers this story as if the news is a mixed bag:
http://www.freep.com/article/20090114/BUSINESS07/901140347/1002/rss02
My approach would be that even in down times for the automotive industry, houses are being bought up in the Detroit area at a faster pace than the year before.
You see, a few word changes can do a lot for the public's perception. Those of you who are realty and mortgage professionals need to keep that in mind. Those of you who are investors or looking for a home should be doing your research right now in search of the best value out there within your desired parameters.
Yet, now the media slant is such that they are often pointing out the reasons as being due to foreclosures and that many of the sales are at lower prices than in recent years.
As I have been harping about for months, some of the realty associations continue with the "problem" slant instead of reaching for every positive they can. The approach should be that now that home buying is becoming more affordable to more people and mortgage rates are reduced to near record low levels, this is the best buyer's market in several years. (!!!)
This story from Lansing is typical of what I'm seeing lately, with the "but" home prices are down. Funny, but when they report on Wal-Mart's quarterly profits, I don't see stories about how "the price of the TV sets they sold are less than the 2007 prices" as a concern.
http://www.lansingstatejournal.com/article/20090114/NEWS03/901140352/1004/NEWS03
Detroit, going from "motor city" to "foreclosure capital of the world" offers this story as if the news is a mixed bag:
http://www.freep.com/article/20090114/BUSINESS07/901140347/1002/rss02
My approach would be that even in down times for the automotive industry, houses are being bought up in the Detroit area at a faster pace than the year before.
You see, a few word changes can do a lot for the public's perception. Those of you who are realty and mortgage professionals need to keep that in mind. Those of you who are investors or looking for a home should be doing your research right now in search of the best value out there within your desired parameters.
Wednesday, January 7, 2009
see what I mean........
It appears that for some reason a couple of posts did not come through over the past few days, so this is being reposted..........
As positive as we need to be about the current state of the real estate market right now, the new year brings still another example of the industry shooting itself in the foot.
I know I keep harping on this endlessly, but the problem is it hasn't changed. Here we are waiting to find out if (and since this writing they did!!) mortgage rates will drop for the 9th consecutive week, and here is another industry official publicly quoted about the "down" real estate market. If I paid dues to this association, I'd be even more upset:
http://www.bgdailynews.com/articles/2009/01/05/news/news3.txt
These stories should focus on the number of properties sold - not on comparisons to the past. People could be buying properties for the future. In this instance, we don't need to know about the past.
As positive as we need to be about the current state of the real estate market right now, the new year brings still another example of the industry shooting itself in the foot.
I know I keep harping on this endlessly, but the problem is it hasn't changed. Here we are waiting to find out if (and since this writing they did!!) mortgage rates will drop for the 9th consecutive week, and here is another industry official publicly quoted about the "down" real estate market. If I paid dues to this association, I'd be even more upset:
http://www.bgdailynews.com/articles/2009/01/05/news/news3.txt
These stories should focus on the number of properties sold - not on comparisons to the past. People could be buying properties for the future. In this instance, we don't need to know about the past.
no kidding with this award.........
Still another idea. A city or community that earns an award or honor can be the start of a marketing campaign for a local lender and real estate agent.
One example is this story from a major suburban Chicago newspaper:
http://www.dailyherald.com/story/?id=262275
The story features the suburb of Mt. Prospect and how it earned the honor as the "best place to raise kids". The city has implemented its own marketing campaign to promote living there.
My immediate reaction to the story was to contact a couple of potential clients with their office or a branch in that area to be sure they saw the story. Yet, 24 hours later, neither of them have become my clients - yet.
Whichever one responds the fastest could have the "we help kids move to Mt. Prospect" campaign in either or both of the top newspapers covering that region plus their web sites.
In this marketplace, neither can afford to procrastinate. Somebody is going to move on this campaign strategy.
My point here is not to belittle my potential clients. Rather, it is to show how reading the news of the day can and should lead to an immediate marketing campaign. Too many missed opportunities in a marketplace that needs every angle it can get.
Since this is also for consumers, this is something to keep in mind when doing your homework to look for a home or property where geographic criteria is crucial. For example, if you have elementary school children, you have a solid reason to be in or near this community. Look for awards and recognition in categories of importance to you. You could also check with some Chambers of Commerce. They know all the awards in the area for obvious reasons.
And, it's still important to have a positive slant on the local real estate market instead of the daily dose of gloom and doom from the real estate industry itself...........
One example is this story from a major suburban Chicago newspaper:
http://www.dailyherald.com/story/?id=262275
The story features the suburb of Mt. Prospect and how it earned the honor as the "best place to raise kids". The city has implemented its own marketing campaign to promote living there.
My immediate reaction to the story was to contact a couple of potential clients with their office or a branch in that area to be sure they saw the story. Yet, 24 hours later, neither of them have become my clients - yet.
Whichever one responds the fastest could have the "we help kids move to Mt. Prospect" campaign in either or both of the top newspapers covering that region plus their web sites.
In this marketplace, neither can afford to procrastinate. Somebody is going to move on this campaign strategy.
My point here is not to belittle my potential clients. Rather, it is to show how reading the news of the day can and should lead to an immediate marketing campaign. Too many missed opportunities in a marketplace that needs every angle it can get.
Since this is also for consumers, this is something to keep in mind when doing your homework to look for a home or property where geographic criteria is crucial. For example, if you have elementary school children, you have a solid reason to be in or near this community. Look for awards and recognition in categories of importance to you. You could also check with some Chambers of Commerce. They know all the awards in the area for obvious reasons.
And, it's still important to have a positive slant on the local real estate market instead of the daily dose of gloom and doom from the real estate industry itself...........
a cup of coffee and a new business venture........
Let's start out 2009 on some positive notes, in addition to mortgage rates dropping at least once for the 9th consecutive week.
This article, buried in a community newspaper near Milwaukee, is actually inspiring:
http://www.menomoneefallsnow.com/story/index.aspx?id=827860
After I read this, I got a vision of this group making a go of this coffee shop and how 10 years from now they would own and operate a series of these in the region.
This sort of story is how partnerships often start. And in today's market, I'm disappointed this story, and others like it, are not getting any play. If I were a realty agent or lender in that area, I'd be all over this group offering to help them with planning.
And for those in other areas, I'd be looking for a few people with money toward a common cause.
Even if not enough money to purchase, the recent availability of rehab loans in most states (such as the program linked on the right of this blog page) could be a viable alternative to get a group started. It could make the difference if a small group can't afford to buy the real estate which houses the business.
Such a positive story, yet such little play. This should be on the front page instead of the current week's "the real estate market is tanking...." statistics. Something to think about over your next cup of coffee.........
This article, buried in a community newspaper near Milwaukee, is actually inspiring:
http://www.menomoneefallsnow.com/story/index.aspx?id=827860
After I read this, I got a vision of this group making a go of this coffee shop and how 10 years from now they would own and operate a series of these in the region.
This sort of story is how partnerships often start. And in today's market, I'm disappointed this story, and others like it, are not getting any play. If I were a realty agent or lender in that area, I'd be all over this group offering to help them with planning.
And for those in other areas, I'd be looking for a few people with money toward a common cause.
Even if not enough money to purchase, the recent availability of rehab loans in most states (such as the program linked on the right of this blog page) could be a viable alternative to get a group started. It could make the difference if a small group can't afford to buy the real estate which houses the business.
Such a positive story, yet such little play. This should be on the front page instead of the current week's "the real estate market is tanking...." statistics. Something to think about over your next cup of coffee.........
Labels:
milwaukee,
mortgage rates,
re-hab loan,
realty agent
Subscribe to:
Posts (Atom)