Gospel Doctrine Old Testament Lesson 17

http://blogs.wsj.com/developments/2010/03/01/buffett-predicts-housing-problems-behind-us-within-the-year/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20wsj/developments/feed%20(WSJ.com:%20Developments%20Blog)&mod=WSJ_Real%20Estate_BLOGSDEVELOPMENTSFEED

Here’s a perfect Friday Fun blog post on some unique, weird, and wild buildings around the world, featured by Property Center in the Dominican Republic. Enjoy!

Home in Cincinnati, Ohio

 

Spite House

According to local legend in Alameda, California, a man sold a small parcel of land adjacent to his house, thinking it was too small to build on. Unfortunately for him, the buyer turned out to be a carpenter who indeed began building on the site. Perhaps spurred on by the protests of the homeowner, the carpenter finished what would come to be known as the Spite House in 1890. Eventually, the Spite House was bought by the owner of the larger house and a connecting passageway was built between the two homes.

 

Guitar House

Word has it that this home in Fayetteville, Georgia, was created by a country music fan in the 1970s, receiving accolades for its unique design. From the street, it seems like any old ranch-style house. But when you view it from above, it really does look like a guitar, complete with electrical wires strung along the roof to mimic strings. Now, if only there was a giant guitar pick!

 

Here's How:

1. Disassociate Yourself With Your Home.
   • Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.
   • Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.
   • Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
   • Say goodbye to every room.
   • Don't look backwards -- look toward the future.
2. De-Personalize.
   Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."
3. De-Clutter!
   People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.
   • If you don't need it, why not donate it or throw it away?
   • Remove all books from bookcases.
   • Pack up those knickknacks.
   • Clean off everything on kitchen counters.
   • Put essential items used daily in a small box that can be stored in a closet when not in use.
   • Think of this process as a head-start on the packing you will eventually need to do anyway.
4. Rearrange Bedroom Closets and Kitchen Cabinets.
   Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:
   • Alphabetize spice jars.
   • Neatly stack dishes.
   • Turn coffee cup handles facing the same way.
   • Hang shirts together, buttoned and facing the same direction.
   • Line up shoes.
5. Rent a Storage Unit.
   Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying, "What is this room used for?"
6. Remove/Replace Favorite Items.
   If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.
7. Make Minor Repairs.
   
   • Replace cracked floor or counter tiles.
   • Patch holes in walls.
   • Fix leaky faucets.
   • Fix doors that don't close properly and kitchen drawers that jam.
   • Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
     (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
   • Replace burned-out light bulbs.
   • If you've considered replacing a worn bedspread, do so now!
8. Make the House Sparkle!
   
   • Wash windows inside and out.
   • Rent a pressure washer and spray down sidewalks and exterior.
   • Clean out cobwebs.
   • Re-caulk tubs, showers and sinks.
   • Polish chrome faucets and mirrors.
   • Clean out the refrigerator.
   • Vacuum daily.
   • Wax floors.
   • Dust furniture, ceiling fan blades and light fixtures.
   • Bleach dingy grout.
   • Replace worn rugs.
   • Hang up fresh towels.
   • Bathroom towels look great fastened with ribbon and bows.
   • Clean and air out any musty smelling areas. Odors are a no-no.
9. Scrutinize.
   
   • Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
   • Linger in the doorway of every single room and imagine how your house will look to a buyer.
   • Examine carefully how furniture is arranged and move pieces around until it makes sense.
   • Make sure window coverings hang level.
   • Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
   • Does it look like nobody lives in this house? You're almost finished.
10. Check Curb Appeal.
    If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.
    • Keep the sidewalks cleared.
    • Mow the lawn.
    • Paint faded window trim.
    • Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
    • Trim your bushes.
    • Make sure visitors can clearly read your house number.

Real estate agents, home stagers and decorators strongly recommend painting a home in neutral colors to help it sell faster. Why? "Today's buyer doesn't want any work," says home stager Carol Buckalew of Frederick, Md. You don't want buyers to walk into a house and immediately think about the extra costs of repainting because they have a strong reaction to a color, she says.

Neutral colors also help a property look best in photographs online, which is where potential buyers first make the decision to look at a house or condo in person, says Long & Foster real estate agent Deb Gorham.

There are only a few situations in which they'll bend these unwritten rules. Gorham says it's OK to not repaint children's rooms, because it could be upsetting to a child who already is facing a big change when the family moves. Plus, she says, "sometimes you have families moving in, and perhaps those colors even entice the new family."

Another exception is in powder rooms, where home stager Monica Murphy feels it's easier to add personality: "Bathrooms, since they are private rooms and often have the door closed, can have more whimsical colors, like pumpkin, or a deeper green, or a silver gray - colors I would never suggest for a public room like the living room or dining room," she writes in an e-mail.

Here are some recommended colors and the best places to use them:

• Ground Ginger from Behr. Murphy, of Preferred Staging in Loudoun County, Va., likes this pale olive because it "isn't overwhelming."

• Kilim Beige from Sherwin-Williams. Lynn Chevalier, a home stager with Falls Church, Va.-based Staged Right, says this khaki color "makes the house more useful-looking. It covers up flaws nicely, and it has a very crisp look." Chevalier also recommends a near-white shade, Marshmallow from Sherwin-Williams, for the trim.

• Pale Smoke from Benjamin Moore. "The master bedroom is the perfect room to impart color," says Leigh Newport of Staged by Design in Leesburg, Va. This paint "is a soothing pale blue-gray that reflects well in photos," she says.

• Rain from Sherwin-Williams. Lyric Turner, of D.C.-based Red House Staging and Interiors, says this smoky blue is on her bathroom walls. She says the bathroom is one place where she recommends color, because most homes have white bathroom fixtures. "A lot of times people have the white sink and the white bathtub and beige tile, or they might have a beige granite countertop, and to do beige in there is kind of boring," she says.

• Rice Paddy from Duron. Gorham, who is based in Clifton, Va., says, "We like to use it as accent walls, especially (in kitchens) above the sink area." She says this celery-green goes well with the popular granite countertop color uba tuba, which is a shade of green.

• Wickham Gray from Benjamin Moore. Buckalew of Omni Home Staging likes using this solid gray to cover up bright colors. "All the red dining rooms need to be neutralized," she says. "If you don't like red, then you don't like the house."

• Woodmont Cream from Benjamin Moore. Cindy Fortin of Cynthia Anne Interiors in Loudoun County, Va., says this pale neutral color helps rooms look brighter and more airy, even in small spaces lacking natural light. "A lot of times when you have the oak-colored cabinets, it just goes really well with that," she says.

The moratorium was initiated in January to give Obama’s anti-foreclosure program—which is a combination of mortgage modifications and refinancing—a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it’s clear now that the program will fall well-short of its objective.

In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before–nearly perpendicular. Housing prices are not falling, they’re crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high.

These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It’s a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes.

There’s nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?

600,000 “DISAPPEARED HOMES?”

Here’s a excerpt from the SF Gate explaining the mystery:

“Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”

In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as “shadow inventory.” (”Banks aren’t Selling Many Foreclosed Homes” SF Gate)

If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They’d also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 “disappeared” homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.

Here is more on the story from Mr. Mortgage “California Foreclosures About to Soar…Again”

“Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season…Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days….The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium.”

JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:

“Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008.” (Ruth Simon, “The housing crisis is about to take center stage once again” Wall Street Journal)

Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama’s $75 billion mortgage rescue plan is a mere pittance; it won’t reduce the principle on mortgages and it won’t stop the bleeding. Policymakers have decided they’ve done enough and are refusing to help. They don’t see the tsunami looming in front of them plain as day. The housing market is going under.

Wow, when they called today’s real estate market a “shifting market,” they were right on target. It keeps shifting, and shifting, and shifting … Every time we turn on the news there’s a new development that affects our economy and therefore the ability of buyers to “buy” and the sellers to “sell.”

SHIFT, the most recent book by Gary Keller, co-founder and Chairman of Keller Williams Realty Inc., begins with the following paragraph: “The Real Estate Market has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory has reached an all-time high. Buyers have never been more reluctant. Fear is rampant, anxiety is high, and people are getting out of the business left and right. Sounds familiar? Sure it does. The year was 1979!”

Does it make us feel better to know that this has happened before? What did we learn from it in 1979? Fast forward to 1987 and it happened again. Changing tax laws this time had a disastrous affect again. Well guess what? History repeats itself. Now we are faced with this again, in 2009 but this time there are real differences.

In 1979 mortgage interest rates topped 18 percent. Last week buyers were still getting approved at under 6 percent through local lenders. That is a huge difference! Today’s sellers, with the help of their real estate agents, are becoming realistic with today’s pricing, bringing our market back on track.

The real estate business is “cyclical.” An experienced real estate agent and a mortgage broker will understand this and be prepared to give counsel that is in tune with the current market. Remember though, the news you heard last week is “old news,” so stay in touch with your local, trusted real estate agent for updates on this ever changing market.

Real estate remains your single most valuable asset if handled correctly.

Me and my imagination. Actually the “Spider Web Chalet” is a uniquely built structure also known as the The Hang Nga Tree House Hotel, Hang Nga Guesthouse & Art Gallery, and The Crazy House (depending upon who you ask).

Dang Viet Nga, daughter of Truong Chinh, former president of the Socialist Republic of Vietnam designed this hotel so that guests would feel as if they were staying in a really great fantasy world.

The building itself may look like a real tree but it’s actually made out of cement. There are all kinds of unique touches; a spider web hanging over the pond, a giraffe sculpture in the garden, guest rooms that look as if the seven dwarfs decorated them, and not one window in the place is traditionally round or square.

The best place I’ve found on the web to learn more about this “crazy” house is Travelogues.net.

Click here for many amazingly neat pictures of this funky hotel.

A year ago, real estate forecasters were warning that spring 2009 would be the start of a whole new wave of foreclosures. Across the country option adjustable-rate mortgages (ARMs), an especially scary loan type often compared to a ticking time bomb, were set to detonate at an accelerating pace.

But something happened that few could have predicted. Interest rates dropped to historically low levels and the wave of resets could now be delayed until well into 2010. As a result, many borrowers—who have the option of making payments so low that they don’t even cover the interest, which is then added to the original loan balance—now have some breathing room.

Third of Loans Deeply Delinquent

Credit Suisse (CS) estimates (click here to see the chart) that the resets will begin to accelerate next spring, rising from about $4 billion resetting in March 2010 to a peak of $14 billion in September 2011. The current level is about $1 billion. About $500 billion of option ARM loans are outstanding, according to the bank. “Things have gotten pushed out,” says Chandrajit Bhattacharya, director in U.S. Mortgage Strategy for Credit Suisse. “Right now it looks like the big increase is probably going to be somewhere toward the middle of next year.”

Option ARMs typically reset after five years, at which point the monthly bill increases 65% or more. About 37.5% of option ARMs originated in 2005 are still outstanding, 63% of the 2006 vintage are outstanding, and 82% of the 2007 loans remain, according to Barclays Capital (BCS). And about a third of the outstanding loans in these years are deeply delinquent.

In a given month, between 4% and 5% of borrowers who are current on their option ARMs taken out in 2006 and 2007 default in the following month, says Sandeep Bordia, Barclays’ head of residential credit strategy, who also expects resets to be delayed until next year. “These things have been performing horrendously,” Bordia said. “I don’t know how much of it will last into the recast.”

Moving Out of Option ARMs

But real estate analysts were predicting that many option ARMs would reset sooner as loan balances hit specified principal caps, typically 110% to 125% of the original principal. The decline in interest rates means that it would take much longer to hit the principal cap and many borrowers will instead face a reset only at the five-year mark.

The Mortgage Bankers Assn. is also estimating that the lower interest rates will delay the resets. But the group also expects that lenders will help borrowers move out of the option ARM products before they reset. Many of the investors who can’t easily qualify for modifications and the borrowers beyond help have already lost their homes, says Michael Fratantoni, vice-president of single family research and policy development for the Mortgage Bankers Assn.

And the homeowners who are holding option ARMs when the wave of resets hits won’t face as big a shock because interest rates have fallen, adds Fratantoni. “Interest rates have come down to the point where the resets that are going to occur are going to be a bit of a non-event,” he says. “Very few borrowers will experience the recast.” But Nicholas Chavarela, managing attorney for Orange (Calif.)-based America’s Law Group, which represents borrowers negotiating modifications, says banks remain reluctant to reduce principal for underwater borrowers.

Cutting Debt-to-Income Ratios

The Obama Administration’s loan modification plan, which only applies to owner-occupied homes, is a step in the right direction, Chavarela said. But lenders won’t do what’s needed unless they’re forced to, he said.

Under the plan, taxpayers and participating lenders would share the cost of cutting borrowers’ debt-to-income ratio to 31%. Loans terms could be extended to 40 years and interest rates dropped to as low as 2%. But option ARM borrowers would likely have to pay more each month, even with a modification, because they’d suddenly be required to pay both interest and principal. “The Obama plan needs to be built upon,” Chavarela said.

But even if they can refinance many borrowers can’t afford the higher payments. Philip Tirone, president of the Mortgage Equity Group in Los Angeles, said he reached out to borrowers with option ARMs, offering to help them refinance into a fixed-rate mortgage with a low interest rate. “For them, it’s all about the payments,” Tirone said.

Time to Work with Lenders

Keith Gumbinger, vice-president of HSH.com, a publisher of loan information in Pompton Plains, N.J., said the lower interest rates have helped to diminish the option ARM problem. But it remains unclear how many option ARMs are left to reset and how many borrowers will be able to get out of the loans before it’s too late. Moreover, by the time they do reset it is unclear whether the economy will be better off. If home values and unemployment continue to weaken, it will become even harder to refinance. But the delay in resets gives some motivated borrowers time to work with lenders and negotiate a solution.

“I don’t think this is going to be the tsunami that was forecasted a few years ago,” Gumbinger said. “But it’s probably bigger than a ripple in a pond.”

Flipping simply means buying a property and reselling it quickly, as opposed to holding on to a property long term as a rental. Flipping comes in several varieties, most of which are legal and profitable, some of which are not.

Flip Strategy #1: Buy, Fix and Flip

Let’s start with the most common form - the good, old “fix ‘n flip”. This process involves buying a property that needs work, fixing it up, then selling on the “retail” market, that is, to a person who will live in the property. This method is tried and true, and works very well. You can easily make $15 - $50k on one deal, depending on your market and how good you are at finding bargains.

The danger in fix and flips is either paying too much or underestimating repairs. Be very conservative in your fix-up costs and length of time it may take to resell. Also, make sure you include in your analysis the cost of paying a real estate agent to sell the property.

Flip Strategy #2: Buy, Refi & Lease/Option

Rather than sell the fixed up property for all cash, sell for terms. Once you have completed the rehab, refinance the property at its new appraised value. If you did the math correctly, you should have little or no money in the deal. Sell the property on a lease with option to buy. The rent payment from your tenant/buyer should cover your mortgage payment (if not, consider an interest-only or adjustable rate loan that is fixed for 3 years). When your tenant exercises his option to purchase, you reap a larger profit, since you don’t have to pay a broker’s fee. If the tenant exercises his option after 12 months, you benefit from a lower capital gains tax rate.

Flip Strategy #3: Buy & Flip “As Is”

Don’t like to do fix-up work? Consider selling the property “as is” as a light fixer upper. If the local real estate market is hot, you should be able to sell the property in poor condition just a little below market. This is especially the case with houses in “transitioning” neighborhoods. Make sure, of course, that you acquire the property sufficiently cheap enough that you can sell it below market quickly and still profit.

Flip Strategy #4: Wholesale

Strategy #1, the fix and flip, is very popular, which means there are a lot of investors looking for rehabs. You can buy the property cheap and sell it for just a few thousand dollars more to another investor without doing any work. You won’t make nearly as much as the rehabber, but you will realize your profit quickly.

1. Finding one has become easier

You don't need to show up at courthouse auctions or comb through legal filings. These days many banks sell foreclosed homes through real estate agents.

To find listings, look on sites that specialize in foreclosed properties, such as realtytrac.com and foreclosurepoint.com. The local multiple-listing service often has selections as well. (The fact that the home is in foreclosure is not always highlighted in the MLS, but it's often mentioned in the description.)

Finally, some agents specialize in foreclosures, so call your local realtor's office and ask for a referral.

2. It's best to buy from a bank

If you buy a foreclosed home at an auction before the bank repossesses it, you'll have to pay in cash, and you usually cannot inspect the property. You may also later discover that there are liens against it.

When a bank takes back a home, however, it will clear any outstanding liens. Plus, when you buy a bank-owned property, you can inspect it beforehand, and you can finance the purchase with a mortgage. Leave your suitcase full of cash at home.

3. Bring in a contractor before you buy

Many foreclosed homes have been abandoned, some even vandalized, and they often require major repairs. "One mistake a lot of people make is underestimating how much work it needs and the cost," says Rick Sharga of RealtyTrac.

To avoid getting stuck with a surprise bill, ask a contractor to give you an estimate of how much the restoration will cost and how long it will take. Many will do so for free in hopes of winning your business.

4. Bid low

Banks aren't necessarily selling foreclosures at fire-sale prices; some are listed at market value, says Gene Hacker, a broker in Orange County, Calif. So be prepared to haggle. The bigger the inventory of foreclosed homes the bank has and the longer the property has sat, the greater your chances of nabbing a great deal, says Chris Matty of ForeclosurePoint.com.

Set your initial offer about 20% below market price - or more if your area has a lot of foreclosures.

5. Be prepared to wait

While some lenders are getting back to bidders within 36 hours, others are dealing with an enormous backlog that can hold up their response for as long as three months. While you wait, someone can trump you with a higher offer.

To boost your chances at scoring a home you love, have multiple properties in mind, and get your financing pre-approved before you bid. Even if the lender says it has another offer, follow up every week - these deals can often fall through.  

The consensus forecast of industry experts polled by Briefing.com had predicted no increase in the index.

It may still take a while before the market gains enough momentum to firmly state that the downturn has been reversed, according to Lawrence Yun, NAR's chief economist. And, the upturn may have been boosted by the first-time homebuyers tax credit, a temporary measure that will lapse in December.

"We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around," said Yun. "This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment."

The index is understood to be a forward indicator of home sales trends since it measures contracts signed, not completed sales. The up-tick may indicate that home prices have fallen low enough for buyers to get off the fence.

Yun is not calling a bottom yet, however, because the index is still at a relatively low level. Instead, he's looking toward the summer selling season to determine what direction the market will take. Plus, he would like the number of homes on the market to drop to a more normal level of six to seven months of supply.

"If inventory goes down - it's at just under 10 months now - to below eight months, that would mean we're on the way to a sustainable recovery," Yun said.

Anecdotal evidence indicates that trend may be happening. Realtors and other industry insiders are seeing rising open house attendance and multiple bids on some particularly desirable properties. Plus, pricing has become sharper, according to Sherry Chris, the CEO of Better Homes and Gardens Real Estate.

"Overpricing seems to be ending," she said. "Properties are coming onto the market and selling quickly."

And buyers are feeling a little more urgency, she added. In many markets, buyers have not felt any pressure to make an offer. "They said to themselves, 'I don't have to act immediately. It will still be on the market two weeks from now,'" she said.

Today, buyers are more likely to bid because they perceive the market as at or near its bottom. An April Gallup Poll reported that 71% of Americans thought it was a good time to buy a house.

They don't, however, believe there will be price increases soon; three of four buyers think prices will stabilize or even decline in their areas over the next 12 months, according to Gallup.

Pat Newport, a real estate analyst for IHS Global Insight, is putting less emphasis on pending home sales than he once did for his housing market analyses. There has been a disconnect lately, he said, between the number of properties going into contract (pending home sales) and the number that actually close (existing home sales).

He speculates that this is because buyers are making offers and signing contracts but, because of financing problems, many deals are falling through.

The South saw the largest gain of any region, with pending home sales jumping 8.5%. Pending sales are 7.7% higher there compared with a year ago.

The Midwest gained 3.9% from February and 1.7% year-over-year. Northeast sales fell 5.7% and are off 24.1% compared with March 2008. The West dropped 1% for the month but are up 8.2% year-over-year.

Low home prices continued to help to drive sales, although NAR's affordability index actually fell 2.3% from February, when it hit a historic high. This index is based on family income, home prices and mortgage rates.

"Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment," said NAR President Charles McMillan, in a prepared statement. "For buyers who've been on the sidelines and have good jobs, the market has never looked more favorable

NOTICE: This is a re-post from Active Rain, Jeff Corbett authored.

Why did I post this? Simple, we must listen to what the home buying and selling public wants…and we must deliver. Its not about US (Realtors) its about them. There is a MASSIVE disconnect between what Realtors are able to (and choose to) provide and what ‘Consumers’ demand. Here is the bottom line, if we don’t listen…if we don’t change…if we don’t (more or less) SCRAP the current system…someone else will.

Survey-Says….Realtors Suck!

Survey Results-Consumers Hate Us!

The following post is simply one non-conformists opinion, albeit a relatively educated one…Its my hope that my words, cutting as they may come across, cause an epiphany for more than a few…

This entire post is based on The California Association of Realtors 2008 Home Seller Survey (released in July 2008, I just happened upon the PowerPoint presentation a few days ago) but the statistics are just as relevant today, if not more so…Granted this survey is but a snapshot of an industry, yet pictures are worth thousands of words…You can read the entire survey here.  (All statistical references in this post are derived from the aforementioned survey).

Public perception of the real estate professional and the greater industry is amongst the lowest of any on record.  Consumers are looking for an alternative to the ‘traditional’ Agent and they’re defining what this alternative is, yet relatively very few professional are heeding this demand and actually providing a tangible solution.  This Survey demonstrates to me that 90% of Agents are not providing what the consumer wants…and it is ALL ABOUT THE CONSUMER.

Personally I know alot of fantastic real estate professionals.  Genuinely great people, passionate, always striving to better themselves, their clients, the industry they serve and represent…they’re worth every penny they command…they dont suck…I’m just a sucker for a good title (no pun intended).  I could fill this page dropping names like Jay Thompson, Kris Berg, Missy Caulk, Bill Gasset and 30 others nobody has heard of as examples of who I consider to be the vanguard of where this industry should look to as ministers of positive change.  Unfortunately, they’re in the minority and a few good apples don’t ripen the bunch.

Agent Perception:  I can Has Consumer!

Talk to most any real estate professional and they will tout their expertise, knowledge and marketing prowess as the main reason you should retain their services.  Most will maintain that commission rates (should) mean very little to the consumer and they’re worth every penny.

Consumer Reality: You Suck!

According to the respondents:

Number One factor considered when choosing an Agent?  Lowest Commission.

Last reason?  Most knowledgeable. <– If this doesn’t snap you into reality, nothing will.

You’d best start putting your knowledge out there if you hope to attract a client…get a blogsite that rocks, start dropping neighborhood knowledge, get a killer IDX solution…substantiate your value!!  The days of being a prude with your listings and expertise until you had an executed contract are over.

I can find out more than you know.

~70% of respondents polled on ‘Information from The Internet vs Information from Agent’ indicated that the Net provided information that was as useful, ‘different’ or more useful than an Agent.  I can only surmise that ‘different’ means information an agent couldn’t or simply didn’t provide.  In the Age of Information, lack thereof is akin to being useless.

The ~31% that said The Net provided less useful information than an Agent are part of a 50% declining trend over the past 5 years.

You’re still (a) very necessary (evil?).

~95% of respondent sellers still used an agent, which makes perfect sense.  I often state that: While technology won’t replace a good real estate Agent, the Agent that properly utilizes technology will replace Agent that doesn’t.

Consider- 74% of 1st time respondent sellers considered not using an Agent, up 46% from 2007.

You can’t market your way out of a brown paper bag.

Of the reasons given for using an Agent only 7% said it was for ‘Better Marketing Exposure’.  Ummm, isn’t this what an Agent’s core value proposition is supposed to be, to market property?  Consumers clearly do not believe Agents can effectively market their property…yet online and offline marketing is the 1st and 3rd highest reason for choosing an Agent.  This is a huge disconnect and opportunity at the same time.

84% of respondent sellers are searching online and 96% Agents polled use print advertising. Helllllooo!?!  Can you say poor ROI, waste of money?  Newspapers and other print media are going out of business because less and less people read them.  Advertising in these dinosaurs is of almost no value going forward.

Only 57% of agents use multiple photos or a virtual tour as part of an online home listing.  This just blows my mind.  I’d guess that 50% of the 57% that actually use multiple photos look (kinda) like these:

Proper Feng Shui can do wonders for a small space.

Extra long chain for convenient access to light.

Sweet shower curtain stays with home!

Thanks to MLS Trash Can for the pictures.  Descriptions by me.

Seriously, an agent who can’t manage to market a property with quality photographs should have their license suspended on principle alone.

You’re being perpetually judged.

97% of respondents interviewed 3 or more Agents.  50% interviewed 6 or more Agents.  Consumers are getting more and more finicky about who they hire.  Agents better step up how they present themselves.  Better have an impressive resume and a killer suit = a slick engaging blogsite & robust IDX solution.

Here’s a scary thought (depending on who you are):

Consumers are lurking on your blog, stalking your FaceBook page, following your Twitter stream, viewing your Flickr account, reading your answers on Trulia, Zillow & ActiveRain, evaluating your IDX, the quality of your multi-media marketing, processing how you engage comment threads and otherwise perpetually judging you under the cloak of anonymity.

How are you representing yourself in public and when you don’t think anyone is looking?

The silver lining in this post could be that ‘The Bar’ is so low in a consumers eyes, those Agents willing to set aside their perceptions and confront reality are in a great position to capture some huge marketshare.  Take this information and use it to your advantage rather than deny its validity.

Many Agents are out there cleaning up despite this ‘depressing’ market…Find them, reach out to them, study their successes…I find the most successful people in life are more than willing to share their successes and help others get there too.  Reciprocity is still live and well…

The pace of home sales, which hit a record-low in January, jumped in February and was flat in March, the Commerce Department said Friday. At the same time, the inventory of new homes for sale dropped a badly needed 5 percent from February levels.

"We believe that the bottom is at hand and that sales will begin turning in the second half of this year," wrote IHS Global Insight economist Patrick Newport. "As previous recessions show, demand for new homes does not evaporate altogether, even in the hardest of times."

New home sales fell just 0.6 percent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000. February's results were adjusted upward by more than 6 percent.

The report shows the slide in demand for new homes is ending after more than 40 months of decline, wrote David Resler, chief economist with Nomura Securities.

"Sales and starts are at extremely low levels," he wrote in a note to clients. "But, probably having bottomed, they have nowhere to go but up."

That's not yet the case for prices.

The median sales price fell to $201,400, a 12 percent drop from a year earlier. The median price is the midpoint, which means half of the homes sold for more and half for less. Prices are likely to remain weak for months as builders continue to clear out their stock of unsold homes.

Sales varied dramatically around the country. The best performance was in the West, where sales rose more than 15 percent from February. The worst turnout was in the Northeast, where sales sank more than 32 percent. They were unchanged in the South, and down nearly 8 percent in the Midwest.

Since the data measures signed contracts to buy new homes rather than completed sales, they probably got a boost from the new $8,000 tax credit for first-time buyers passed in mid-February. In addition, California offers a $10,000 state tax credit for buyers of new homes, and that's likely boosting sales in that state.

An index of builders' confidence released earlier this month posted its biggest one-month jump in five years as many homebuyers seized on lower prices and incentives and took advantage of lower interest rates and tax credits.

"There are some buyers beginning to come back into he market," David Crowe, the trade association's chief economist said Friday.

Demand for new homes appears to be recovering faster than demand for previously occupied homes. In March, sales of existing homes fell 3 percent to an annual rate of 4.57 million from a downwardly revised pace of 4.71 homes in February, the National Association of Realtors said Thursday.

The answer is critical to understanding the current economic depression.

This is a chart of the S&P/Case-Shiller Home Price Index.

As you can see, it’s plummeted over the last 18 months or so. It shows that U.S. house prices have been spanked hard. And, unfortunately, it shows no sign of bottoming anytime soon.

This makes sense considering the flood of foreclosures hitting the market. In Fort Lauderdale, Florida, homes that were selling for $250,000 during the peak are now going for $70,000 in foreclosure. Repeat this scenario across the country, and you’ll see that home prices still have further to go.

Making matters worse is the 8.1% U.S. unemployment rate and the fact that nobody can find credit to buy a home with. (Less credit means fewer mortgages.)

As the year drags on and foreclosures keep hammering house prices, this trend will continue to drain cash from homebuilders. That means homebuilders such Lennar Corporation (LEN) should continue to see lower share prices as the year wears on.