Download - This Month in Real Estate March 2011

Commentary 2

h b h i lReleased:

The Numbers That Drive Real Estate 3

Recent Government Action 10

Topics for Home Buyers Sellers and Owners 13

March 4, 2011

Topics for Home Buyers, Sellers, and Owners 13

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CommentaryGradual progress in the housing market continues at a steady pace without government support. The market has shown remarkable improvement from the initial drop after the expiration of the home buyer tax credit this past July. Although higher‐than‐normal distressed sales skew the overall picture of home prices downward, inventory continues to shrink and sales continue to rise. The rock‐bottom interest rates of 2010 are likely to trend upward. As economists anticipate rates at or above 6% by the end of 2012 buyers are moving off the sidelines and into the marketend of 2012, buyers are moving off the sidelines and into the market.

A good sign for long‐term market stability is that the median down payment on conventional mortgages has risen to 22%, up from 4% in 2006 and slightly above the 20% standard in the 1990s. g g %, p % g y %This may keep buyers looking in slightly lower price ranges, but it is a good sign of future sustainability for homeowners and banks alike. There are still ample opportunities for those who would like down payments below 20%, including some conventional mortgages and those backed by the Federal H i Ad i i t ti V t Aff i d th D t t f A i lt ’ R l D l tHousing Administration, Veterans Affairs, and the Department of Agriculture’s Rural Development loans.

As the economy improves stimulus efforts by the government and the Federal Reserve Board willAs the economy improves, stimulus efforts by the government and the Federal Reserve Board will gradually wind down, which typically means rising interest rates. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers are encouraged by increased market stability.

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Home Sales 4

Home Price 5The Numbers That Inventory 6

Mortgage Rates 8Drive Real EstateAffordability 9

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Home SalesIn MillionsIn Millions

The increasing trend in existing home sales activity continued through January, and for the first time rose above year‐ago levels when the home buyer tax credit was in effect. This marks the sixth y g ymonthly increase since July when the tax credit expired, and indicates a recovery that’s gaining a firmer footing without government support.

Second Tax

Credit Expired

Extended and Expanded Home Buyer Tax CreditRenewed November 7, 2009

Must have had contract signed by April 30, 2010M h l b J 30 2010

Gradual Recovery WithoutTax Credit

ExpiredMust have close by June 30, 2010

January ’10‐’11


KW Research 4Latest Data Release: February 23, 2011Source: National Association of Realtors

Home PriceIn ThousandsIn Thousands

Home prices softened in January with median home prices decreasing slightly to $158,800 ‐ 3.7% below the year‐ago level Contributing to this is a larger share of distressed homes sales whichbelow the year‐ago level. Contributing to this is a larger share of distressed homes sales, which accounted for 37% of sales in January compared to 30%‐35% throughout much of 2010. Prices and mortgage rates remain favorable for buyers.



Inventory ‐In Millions

Number of homes available for sale

In Millions

Housing inventory continues to contract. There are now 3.38 million homes on the market, down 5 1% from December and only 3% above year‐ago levels More and more buyers are taking5.1% from December and only 3% above year‐ago levels. More and more buyers are taking advantage of today’s exceptional affordability conditions. Expected improvements in lending standards and job growth will create great opportunities for buyers and investors.




Supply of InventoryIn MonthsIn Months

The uptick in home sales and a shrinking inventory pared down the month’s supply to 7.6 months, a decrease of 7 3% from December and 1% from year‐ago levels This is the lowest level in morea decrease of 7.3% from December and 1% from year‐ago levels. This is the lowest level in more than a year and marks the first time since July that the month’s supply is below where it was the previous year. Months of inventory has declined steadily (64%) from its peak of 12.5 months in July and is now back to pre‐tax credit expiration levels. The supply of inventory is not far from a seller’s market, which is less than 6 month’s supply.


January ’ 10‐’11


Mortgage Rates30‐Year Fixed

Mortgage rates jumped above 5% for the first time since April 2009 in January. While rates dipped back to just below 5%, they are expected to continue an upward trend throughout the year. As

30 Year Fixed

j %, y p p g yoverall economic recovery remains on track, rates will likely rise to keep inflation in check. Buyers wanting to capture the savings in monthly payments that a historically low interest rate affords are expected to take advantage of excellent buying conditions.

KW Research 8Source: Freddie Mac

Affordability ‐Percentage of Income

The percentage of a median family’s income required to make mortgage payments on a median‐priced home

Percentage of Income

Housing affordability hit a new record in January. The relationship between mortgage rates, home prices, and family income is the most favorable on record for buying. The home price‐to‐income ratio continues to remain well below the historical standard. Stabilizing home prices and rising interest rates are expected to reverse the recent affordability trend.

KW Research 9Affordability as of January every year. Calculations assume a 20% down payment.Source: National Association of Realtors

Recent FHA to Increase Insurance Premiums 11

Government ActionFHA to Increase Insurance Premiums 11

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FHA to Increase Insurance PremiumsThe Federal Housing Administration (FHA) will be increasing mortgage insurance premiums that its borrowers pay each year by 0.25% starting April 18, 2011.p p y y y g p ,

Loans backed by the FHA currently account for more than one‐third of all new loans, up from only 2% in 2006. The FHA has taken several steps to strengthen its financial standing since September 2009, when it indicated that reserves would fall below the 2% minimum. Measures taken in January 2010 include raising the upfront insurance2% minimum. Measures taken in January 2010 include raising the upfront insurance fees by 0.5%, capping seller contributions to buyers closing costs at 3%, down from 6%, and requiring a higher down payment for those with poor credit.

As the FHA remains a great option among first time home buyers, those with smaller down payments and those with spotty credit its strength and continued viability ofdown payments, and those with spotty credit, its strength and continued viability of FHA is key to the housing market. Upcoming changes to FHA insurance premiums also mean that buyers who are out looking and who intend to use FHA financing will want

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to finalize their deal and close before April 18.

Sources: The Wall Street Journal, Bloomberg, Forbes

Topics for Home Buyers, p y ,Sellers, and Owners

Preparing to Sell 13

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Preparing to SellPreparing your home for sale in a buyer’s market can seem daunting, but these five tips will help you get the best price in the least amount of time.

1. Organizing and cleaning is crucial when prepping a home for sale. Potential home buyers have a more positive reaction to homes that are clutter‐free and give them the feeling that the home is “move‐in ready”move in ready.

2. Presale home inspection can inform you of any trouble areas within your home that can stand out to potential buyers. An inspection can also help you make any repairs necessary before future open houses.

3. Determine replacement estimates before listing your home, even if you are not planning on making the replacements yourself This information can help buyers to make informed decisionsmaking the replacements yourself. This information can help buyers to make informed decisions.

4. Have your warranties ready – especially for all those home appliances that will stay within the home after the sale.

5. Curb appeal is a crucial factor because it determines first impressions. A negative first impression can cloud their entire opinion about the home.

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Your Local Market

Alth h it i i t t t t i f d b t h t i i i th ti lAlthough it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your own area.

Talk to Paul W. Drury for assistance interpreting the conditions in your local market. The following graphs are general and covers most of the broad market area he serves. For detailed information about your own neighborhood, call him or send him an email today.

KW associates are equipped with the knowledge and information to help youKW associates are equipped with the knowledge and information to help you navigate the home‐buying or selling process in this challenging market.

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Your Local MarketYour Local Market

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Local Market Absorption Rate

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Number of Homes “in play”

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Avg Price per sq ft

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Sold to List Price Comparison

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Avg Price For Sale VS Soldg

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About Keller Williams Realty

Founded in 1983, Keller Williams Realty, Inc., is an international real estate company with more than 80 000 associates and 686 offices across the Unitedcompany with more than 80,000 associates and 686 offices across the United States and Canada. The company began franchising in 1991 and, after years of phenomenal growth and success, became the third‐largest U.S. residential real estate firm in 2009estate firm in 2009. The company has succeeded by treating its associates as partners and sharing its knowledge, policy control, and company profits on a systemwide basis. By focusing on helping associates realize their fullest potential, Keller Williams Realty is known as an industry leader for its family culture, unmatched education profit‐sharing business model phenomenal coaching programseducation, profit sharing business model, phenomenal coaching programs, and technology offerings.

www.kw.com

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About Paul W. Druryy

• Originally licensed as an agent in Ohio in 1986, Paul began with Lehman Johnson Real Estate in Elyria He acquired his Real EstateLehman Johnson Real Estate in Elyria. He acquired his Real Estate Brokerage License in 1992 and became an Associate broker with West Shore Realty. In 1995 he moved his brokerage license to Continental Realty Investment where he began to focus on additional work withRealty Investment where he began to focus on additional work with commercial and investment real estate. During these years he also performed professional appraisals with The Appraisal House.

• In 2001 he began Drury Realty Consulting and worked as an independent Real Estate Consultant and worked on his own until 2009 when he joined Keller Williams Realty Greater ClevelandWest “Beingwhen he joined Keller Williams Realty, Greater Cleveland West. Being a part of the Keller family provides me with tools and serves unachievable strictly on my own, provides me with the tools and networking of a huge national network while still enabling me to worknetworking of a huge national network, while still enabling me to work, act, and function as the manager of my own business. It’s the best of both worlds.” – Paul

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• Paul's Home Page

What we have to offer sellers

• Sellers now have access to tools unimaginable just a few years earlier Keller Williams Realty doesn’t spend valuableyears earlier. Keller Williams Realty doesn t spend valuable resources promoting its own name. Instead it puts resources into the best tools and resources for education and training, providing the highest quality real estate professionals into local communities.

• Properties put up for sale by Paul are also listed in KWLS a• Properties put up for sale by Paul are also listed in KWLS, a national MLS, implemented by Keller Williams, now the 2nd largest company in the US; local MLS; NEOHREX (Northern Ohio Real Estate Exchange); and on national sites such as Trulia, Zillow, CyberHomes, and others.

• Free Real Estate Informational Webinars available by• Free Real Estate Informational Webinars available by logging onto this link… http://budurl.com/druryvideos

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What we have to offer sellers ( Cont’d)

• Other tools brought to bear by Paul include b di i i b dd ithbranding using unique web addresses with a virtual tour that can be emailed or the link can posted anywhere to include Craig’s List and Backposted anywhere, to include Craig s List and Back Page. – http://www.listingpromoterohio.com/MyListings.aspx?pid=23771p // gp / y g p p– http://www.communityohio.com/realestate.php

• Not Planning to sell in the near future? – Would you still like to monitor what is happening in your neighborhood or area?your neighborhood or area?

– Contact Paul now for a free periodic market update. No cost. No obligation.

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cost. No obligation.

Properties currently for saleope t es cu e t y o sa e

• Properties currently for sale:– 3307 Sandy Lane in Avon – http://3307SandyLn.com– 19593 Whitehead Road in Wellington ‐ http://19593whiteheadrd.com/

13951 Diagonal Road in Lagrange htt //13951Di lRd– 13951 Diagonal Road in Lagrange – http://13951DiagonalRd.com– 1 Grover Court in Grafton – http://1groverct.com

• Would you like to see one of these homes? Click on the link yfor a visual tour.

• Check out our YouTube Channel at h // b / / dhttp://www.youtube.com/user/Mrpdrury

• Would you like your home or property promoted like th ?these?– Contact Paul for a free, no obligation, consultation today at 440‐385‐5650

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at 440 385 5650.

What we have to offer buyersy

• Buyers of Real Estate also have access to tools i i bl j t f b f Si K ll Williunimaginable just a few years before. Since Keller Williams

doesn’t spend its money promoting its own name, it puts its resources into providing the best tools and resources toits resources into providing the best tools and resources to its systems, education, and training, thus providing the most professional real estate team members back into the communities.

• Free Real Estate Informational Webinars available by logging onto this link… http://budurl.com/druryvideos

• If you wish to conduct your own Multiple Listing Home Searches, you may do so using this link…. http://bit.ly/aDE5XP

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What we have to offer buyers (Cont’d)

• Buyers can access Paul’s website at www.druryrealty.comand conduct their own searches as well as create their ownand conduct their own searches as well as create their own search profiles for searching for properties anywhere in Ohio. If relocating out of Ohio, Keller Williams offers one of the finest relocation referral networks in the nation. Greater Cleveland West now sells more properties than any other office in the entire regional MLSother office in the entire regional MLS.

• Paul’s website is easy to manage and he can set up search profiles for you so you get notified at about 8:30 am of anyprofiles for you so you get notified at about 8:30 am of any new properties that come available. He also has profiles set up on national websites such as Trulia providing for greater access to search tools. www.communityohio.com

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Investors & Shoppers – Foreclosure Watchpp

• Are you shopping for the deal of a century for your h ?new home?

• Are you in the market to buy a home at a steep d d d f d “fl ”discount and try and fix it up and “flip it”?

• Are you looking for a home for someone else?• Want to know what is happening in your marketplace?• Send Paul an email today and request free market y qupdates at [email protected]

• Call Paul directly at 440‐385‐5650.y• No cost. No commitments. No obligations. No fuss. No kidding.

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g

Follow Paul’s Real Estate updates online…p

Home Web Page On Twitter• www.druryrealty.com

On Zillow

• ‐ www.twitter.com/PaulWDrury

On FaceBook• www.zillow.com/profile/PaulWDrury

On Trulia

On FaceBook• ‐ www.facebook.com/paul.w.drury

On LinkedInOn Trulia• www.trulia.com/profile/paulwdrury

O th R l E t t Gl b l

On LinkedIn• www.linkedin.com/in/paulwdrury

Free Real EstateOn the Real Estate Global Network

• www.realestateglobalnetwork.com/profile/PaulWDrury

Free Real Estate Webinars

• http://budurl.com/druryvideosry

On YouTube• wwwyoutube com/user/MrPDrury

Special Deal Links• http://bit.ly/ffvZOr

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• www.youtube.com/user/MrPDrury http://bit.ly/ffvZOr

Paul’s special vendor deals of the month…p

Now advertising properties, features, and discounts on• http://www.communityohio.comhttp://www.communityohio.com• Featuring outstanding deals from the following vendors

• Amazon.com • Franklin Covey Supplies• GoDaddy Domain Sale• ESET Internet Security Software

• Intuit Quickbooks• Executive Book SummariesSoftware

• NewEgg Electronics Superstore

Summaries• RubberMaid Products• Build my Move Moving p

• E‐fax Electronic Fax Service

• TomTom GPS Poducts

y gServices

• eBatts discount battery services• TomTom GPS Poducts

• DocuSign Electronic Document Service

services• Bulb America Light Bulb Supplier

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• Magazine Mall

The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents, and other expert sources. You should not treat any opinion expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve somedegree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on informationdegree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.

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Download - This Month in Real Estate March 2011

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