This Month in Real Estate July 2011

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A monthly National Real Estate Newsletter by Keller Williams Realty with North Central Ohio Regional news added by Paul W. Drury for July 2011.

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  • 1. Commentary 2 Released: The Numbers That Drive Real Estate 3 July 2011 Recent Government Action 9 Topics for Home Buyers, Sellers, and Owners 11Broughttoyouby:KWResearch
  • 2. CommentaryThe U.S. housing market has shown increased stability in home sales during 2011 compared to theprevious year. The trend has been an upward one since the expiration of the tax credit last summer.Home prices have softened, particularly earlier this year, due to a higher-than-normal number ofdistressed sales. However, both the percentage of distressed sales and the amount of time theyspend on the market has decreased in recent months, a positive sign for the market moving forward.In fact, prices have steadily followed a positive monthly trend since February. Mortgage defaults havealso declined lately.While interest rates continue to break new record lows, the number of buyers who are able takeadvantage of these savings is restricted by tougher underwriting standards for mortgages. 40% of thebanks surveyed by the Office of the Comptroller of the Currency tightened lending standards formortgages within the past year. In his second press conference, Federal Reserve Chairman BenBernanke stated that a quicker foreclosure process and additional home price stabilization are key toboosting confidence in the market and bolstering a more robust recovery in the housing sector.As the economy improves, stimulus efforts by the government and the Fed will most likely continue towind down, which typically spurs rising interest rates to keep inflation in check. Although inflation hasbeen the source of recent concern, the Fed appears confident it will remain in check for the nearterm. Meanwhile, buyers continue to benefit from historically favorable buying conditions, and sellersare encouraged by increased market stability. KWResearch2
  • 3. Home Sales 4 The Numbers That Home Price 5 Supply of Inventory 6 Drive Real Estate Mortgage Rates 7 Affordability 8Broughttoyouby:KWResearch
  • 4. Home Sales In MillionsHome sales in May were down 15.3% compared to the same time last year when the impact ofthe tax credit was at its peak. Compared to the previous month, sales were down 3.8%. NARChief Economist Lawrence Yun states that the slower pace of sales is consistent with theslower pace of overall economic activity and that falling gas prices will help to moderate theimpact of a sluggish economy. Although he continues to cite unnecessarily tight credit forlimiting buying activity, the pace of sales in the second part of the year is expected to bestronger. Extended and Tax Gradual Recovery Without Tax Credit Expanded Credit Home Buyer Expired Tax Credit Ma y 10- 11 May 09-10Latest Data Release: June 21, 2011Source: National Association of Realtors KWResearch4
  • 5. Home Price In ThousandsHome prices rebounded 3.4% in May with median home prices rising to $166,500. This is4.6% below the year-ago level and continues to keep the median price close to 20022003 levels. Just under 1 in 3 homes sold during May were distressed properties, whichtypically sell at a 10%20% discount. This is down 6 percentage points from April and isexactly the same as a year ago. Investors represented 19% of sales, and first-time buyersaccounted for 35% of May sales compared to 14% and 46% respectively a year ago at thepeak of the tax credit. Home prices and mortgage rates remain favorable for buyers headinginto the summer selling season. 1 1 0- 1 ay M May 09-10Latest Data Release: June 21, 2011Source: National Association of Realtors KWResearch5
  • 6. Supply of Inventory In Months The supply of homes measured in months on the market at their current pace was up during May compared to April. Inventory levels remained 26% below the peak of 12.5 months in July 2010 and 12% above April of 2010 when the tax credit was in full swing.May 09-10May 10-11Latest Data Release: June 21, 2011Source: National Association of Realtors KWResearch6
  • 7. Mortgage Rates 30-Year Fixed Rates are at a record low after steadily declining throughout May, primarily due to uncertainty in the global and domestic economies. While these incredible rates represent a significant savings for home buyers, experts note that for the benefits to fully be realized, lending conditions must loosen so more buyers can take advantage of them. As overall economic activity gets back on track, rates will likely rise to keep inflation in check. In other words, the window of opportunity for buyers to lock in these historically low interest rates may not remain open much longer. Type Rate 30-Year Fixed 4.50% 15-Year Fixed 3.69% 5/1 ARM 3.25% Historical Average 8.90%Source: Freddie Mac; June 23, 2011 KWResearch7
  • 8. Affordability - Thepercentageofamedianfamilysincomerequired tomakemortgagepaymentsonamedianpriced Percentage of Income homeHousing affordability continued at record levels in May. The relationship betweenmortgage 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 recentaffordability trend. *However with high unemployment continuing, and food, energy, andhealthcare costs all taking up significantly higher portions of household incomes, theaffordability index may be altered for a many years to come.*Affordability as of May every year. Calculations assume a 20% down payment. KWResearch8Source: National Association of Realtors
  • 9. Recent Government ActionBroughttoyouby:KWResearch
  • 10. Fed Discontinues Bond Purchase ProgramThe Federal Reserve Board has announced the end of its $600 billion bond-buyingprogram. Also known as quantitative easing, the goal of this program was to bolstereconomic activity and lending.When banks are concerned about the ability of businesses and consumers to repay loans,they tend to buy treasury securities, which are guaranteed by the federal government. TheFeds bond-buying program decreased the yield on treasuries, making them less appealingfor banks and making lending to consumers and businesses more appealing. On the otherhand, the program created more money and lowered the value of the U.S. dollar. Inmoderation this can be a good thing for incentivizing exports and boosting economicactivities even though the impact tends to increase inflation. In November 2010, when theprogram was announced, there was concern about deflationary pressures. Since then,inflation has returned but remains within acceptable levels.The Fed is expected to keep interest rates at the current historical lows and economicactivity is expected to pick up steam in the second half of the year.Sources: LATimes.com, WSJ.com KWResearch10
  • 11. Topics for Home Buyers, Sellers, and OwnersBroughttoyouby:KWResearch
  • 12. Tips for Selling Your House 1. Price it right. Studies show that when homes are priced to sell, they not only sell faster, they ultimately command a higher price than homes that sit on the market and get perceived as stale. 2. Consider a presale inspection. This will help you to know what items need to be fixed before your home goes on the market. Repairs and concessions made during the negotiation process can end up costing sellers more. KW Research reveals that in 2010, 89% of move-up and 82% of first-time buyers purchased a home in good to excellent condition. 75% of sellers started making repairs 18 weeks before listing. 3. Higher may not always be better. While a higher offer can be tempting, be sure to consider the whole offer. An offer without contingencies, conditions, and with a higher down payment may be a more solid deal. KWResearch12
  • 13. Your Local MarketAlthough it is important to stay informed about what is going on in thenational economy and housing market, many different factors impact theyour real estate market.Talk to Paul W. Drury for assistance interpreting the conditions in the NorthCentral Ohio Regional market. The following graphs are general and coversome of the broader market area he serves. For detailed information aboutyour own neighborhood, call him or send him an email today.KW associates are equipped with the knowledge and information to helpyou navigate the home-buying or selling process in this challengingmarket. KWResearch13
  • 14. YourLocalMarket KWResearch14
  • 15. Local Market Absorption Rate KWResearch15
  • 16. Number of Homes in play KWResearch16
  • 17. Avg Price per sq ft KWResearch17
  • 18. Sold to List Price Comparison KWResearch18
  • 19. Avg Price For Sale VS Sold KWResearch19
  • 20. Investors&Shoppers ForeclosureWatch NORTHCENTRALOHIOREALESTATEOPPORTUNITIES!Investors Areyoushoppingforthedealofacenturyforyournewhome? Areyouinthemarkettobuyahomeatasteepdiscountandtryandfixitupand flipit? Areyoulookingforahomeforsomeoneelse? Findyournextopportunityinourupdatedforeclosedhomeslist (http://bit.ly/mTNKVv) Thelinkisalsoavailableonhttp://www.communityohio.com/realestate.phpShoppers Wanttoknowwhatishappeninginyourmarketplace? Lookingtowatchaparticularcityorneighborhood?CheckoutourForeclosure Map (http://bit.ly/mhQW9x). SendPaulanemailtodayandrequestfreemarketandlocationupdatesat paul@druryrealty.com CallPauldirectlyat4403855650. Nocost.Nocommitments.Noobligations.Nofuss.Nodrama.Nokidding. KWResearch20
  • 21. About Keller Williams RealtyFounded in 1983, Keller Williams Realty is an international real estate companywith more than 80,000 associates and 686 offices across the United States andCanada. The company began franchising in 1991 and, after years of phenomenalgrowth and success, became the second-largest U.S. residential real estate firmin 2010.Keller Williams Realty has succeeded by treating its associates as partners andsharing its knowledge, policy control, and company profits on a systemwide basis.By focusing on helping associates realize their fullest potential, Keller WilliamsRealty is known as an industry leader for its family culture, unmatched education,profit-sharing business model, phenomenal coaching programs, and technologyofferings. www.kw.com KWResearch21
  • 22. AboutPaulW.Drury OriginallylicensedasanagentinOhioin1986,Paulbeganwith LehmanJohnsonRealEstateinElyria.HeacquiredhisRealEstate BrokerageLicensein1992andbecameanAssociatebrokerwithWest ShoreRealty.In1995hemovedhisbrokeragelicensetoContinental RealtyInvestmentwherehebegantofocusonadditionalworkwith commercialandinvestmentrealestate.Duringtheseyearshealso performedprofessionalappraisalswithTheAppraisalHouse. In2001hebeganDruryRealtyConsultingandworkedasan independentRealEstateConsultantandworkedonhisownuntil2009 whenhejoinedKellerWilliamsRealty,GreaterClevelandWest.Being apartoftheKellerfamilyprovidesmewithtoolsandserves unachievablestrictlyonmyown,providesmewiththetoolsand networkingofahugenationalnetwork,whilestillenablingmeto work,act,andfunctionasthemanagerofmyownbusiness.Itsthe bestofbothworlds. Paul PaulsHomePage http://www.druryrealty.com KWResearch22
  • 23. Whatwehavetooffersellers Sellersnowhaveaccesstotoolsunimaginablejustafew yearsearlier.KellerWilliamsRealtydoesntspend valuableresourcespromotingitsownname.Insteaditputs resourcesintothebesttoolsandresourcesforeducation andtraining,providingthehighestqualityrealestate professionalsintolocalcommunities. PropertiesputupforsalebyPaularealsolistedinKWLS,a nationalMLS,implementedbyKellerWilliams,nowthe 2ndlargestcompanyintheUS;localMLS;NEOHREX (NorthernOhioRealEstateExchange);andonnational sitessuchasTrulia,Zillow,CyberHomes,andothers. FreeRealEstateInformationalWebinarsavailableby loggingontothislink http://budurl.com/druryvideos KWResearch23
  • 24. Whatwehavetooffersellers(Contd) OthertoolsbroughttobearbyPaulinclude brandingusinguniquewebaddresseswitha virtualtourthatcanbeemailedorthelinkcan postedanywhere,toincludeCraigsListandBack Page. http://www.listingpromoterohio.com/MyListings.aspx?pid=23771 http://www.communityohio.com/realestate.php NotPlanningtosellinthenearfuture? Wouldyoustillliketomonitorwhatishappeningin yourneighborhoodorarea? ContactPaulnowforafreeperiodicmarketupdate.No cost.Noobligation. KWResearch24
  • 25. Propertiescurrentlyforsale Premiumresidentialpropertiescurrentlyforsale: 13951DiagonalRoadinLagrange http://13951DiagonalRd.com 230OhioStreetinElyria http://230OhioSt.com 19593WhiteheadRoadinWellington http://19593whiteheadrd.com/ Seehttp://www.communityohio.com/realestate.php foracomplete Wouldyouliketoseeoneofthesehomes?Clickonthelinkfora visualtour. http://www.listingpromoterohio.com/MyListings.aspx?pid=23771 CheckoutourYouTubeChannelat http://www.youtube.com/user/Mrpdrury Wouldyoulikeyourhomeorpropertypromotedlikethese? ContactPaulforafree,noobligation,consultationtodayat440 3855650. KWResearch25
  • 26. Whatwehavetoofferbuyers BuyersofRealEstatealsohaveaccesstotools unimaginablejustafewyearsbefore.SinceKellerWilliams doesntspenditsmoneypromotingitsownname,itputs itsresourcesintoprovidingthebesttoolsandresourcesto itssystems,education,andtraining,thusprovidingthe mostprofessionalrealestateteammembersbackintothe communities. FreeRealEstateInformationalWebinarsavailableby loggingontothislink http://budurl.com/druryvideos IfyouwishtoconductyourownMultipleListingHome Searches,youmaydosousingthislinkhttp://bit.ly/eWXimO. KWResearch26
  • 27. Whatwehavetoofferbuyers(Contd) BuyerscanaccessPaulswebsitewww.drury.kwrealty.com andconducttheirownsearchesaswellascreatetheirown searchprofilesforsearchingforpropertiesanywherein Ohio.IfrelocatingoutofOhio,KellerWilliamsoffersoneof thefinestrelocationreferralnetworksinthenation. GreaterClevelandWestnowsellsmorepropertiesthan anyotherofficeintheentireregionalMLS. Paulswebsiteiseasytomanageandhecansetupsearch profilesforyousoyougetnotifiedatabout8:30amofany newpropertiesthatcomeavailable.Youcanalsosee profilessetuponnationalwebsitessuchasTrulia providingforgreateraccesstosearchtools. Everythingwehavewealsopostwithscoresofdiscounts andproductandservicelinkson www.communityohio.com KWResearch27
  • 28. FollowPaulsRealEstateupdatesonlineHomeWebPage OnTwitter www.druryrealty.com www.twitter.com/PaulWDruryOnZillow OnFaceBook www.zillow.com/profile/PaulWDrury www.facebook.com/paul.w.druryOnTrulia OnLinkedIn www.trulia.com/profile/paulwdrury www.linkedin.com/in/paulwdruryOntheRealEstateGlobal FreeRealEstateWebinars Network http://budurl.com/druryvideos www.realestateglobalnetwork.com/profile/PaulW Drury SpecialDiscountsLinksOnYouTube http://bit.ly/ffvZOr www.youtube.com/user/MrPDrury KWResearch28
  • 29. Social Networking on Facebook Facebook North Central Ohio Real Estate Consulting, News, and Stats https://www.facebook.com/pages/North-Central-Ohio-Real-Estate- Consulting-News-and-Stats/164210080283714 Facebook North Central Ohio Real Estate Investments https://www.facebook.com/pages/North-Central-Ohio-Real-Estate- Investments/145904528811383 Facebook Community Information, News, and Savings for Ohio https://www.facebook.com/pages/Community-Information-News- and-Savings-for-Ohio/100692843343793 KWResearch29
  • 30. Social Networking on Twitter @PaulWDrury North Central Ohio Real Estate Consulting http://www.twitter.com/PaulWDrury @CommunityOhio http://twitter.com/CommunityOhio KWResearch30
  • 31. Paulsspecialvendordealsofthemonth Nowadvertisingproperties,features,anddiscountson http://www.communityohio.com Featuringoutstandingdealsfromthefollowingvendors Amazon.com FranklinCoveySupplies GoDaddy DomainSale IntuitQuickbooks ESETInternetSecurity ExecutiveBook Software Summaries NewEgg Electronics RubberMaid Products Superstore BuildmyMoveMoving EfaxElectronicFax Services Service eBatts discountbattery TomTom GPSPoducts services DocuSign Electronic BulbAmericaLightBulb DocumentService Supplier MagazineMall KWResearch31
  • 32. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed bylocal and national media, local real estate agents, and other expert sources. You should not treat any opinionexpressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particularstrategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsiblefor the accuracy or completeness of information, and provides said information without warranties of any kind. Allinformation presented herein is intended and should be used for educational purposes only. Nothing herein should beconstrued as investment advice. You should always conduct your own research and due diligence and obtainprofessional advice before making any investment decision. All investments involve some degree of risk. KellerWilliams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in ThisMonth in Real Estate. KWResearch32