this month in real estate june 2010

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Current Real Estate News from Paul W. Drury

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  • 1.Commentary2Released:TheNumbersThatDriveRealEstate3 June7,2010RecentGovernmentAction9TopicsforHomeBuyers,Sellers,andOwners 11 Broughttoyouby: KWResearch

2. Commentary Thehousingsectorcontinuestoshowsignsofrecovery.Togetherthetaxcredit(whichexpiredattheendofApril),themoreupbeatconsumerconfidence,andfavorablemarketconditionsallcontributedtobolsteringAprilssalesactivity withexistinghomesalesincreasingforthesecondstraightmonth.Thereturnofbuyerconfidencewithmuchofthehomepricecorrectionbelievedtobeover,encouragingeconomicdevelopmentsandhistoricallylowmortgagerates,willprovidethesteppingstoneforfurthermarketstabilization.Meanwhile,stagnantjobgrowthandelevatedlevelsofforeclosurecontinuetobecause forconcern.Thegovernmentisnowtakingproactivestepstorestructurethe mortgageindustrywithriskmanagementmeasuresseenbyexpertsasahugecut inredtape thatwouldultimatelybenefitconsumers. KWResearch2 3. HomeSales 4TheNumbersThatHomePrice 5DriveRealEstateInventory6MortgageRates 7Affordability8Broughttoyouby: KWResearch 4. HomeSalesInMillions ExistinghomesalesstrengthenedinAprilto5.77million,up8.7%fromMarchand22.8%fromlastApril.Thisisthetenthconsecutivemonthofyearoveryearincreases.AccordingtoLawrenceYun,NARchiefeconomist,althoughpartoftheuptickwasexpectedfromthetaxcredit,theresalsobeenareturnofbuyerconfidence,forthosewhoremainedonthesidelinelastyear.Thereturnofconfidence isaresultofstabilizedprices,animprovedeconomy,andcontinuedadvantageousinterestrates.InMarch,49%ofsaleswerefromfirsttimebuyers.ImpactofTax SeasonallyAdjustedHomeSales InMillionsCreditDeadline 09April08April0910 LatestDataRelease:May24,2010 Source:NationalAssociationofRealtorsKWResearch4 5. HomePriceInThousands Themedianpriceforanexistinghomewas$173,100inApril,up2.1%fromayearagoand4%fromMarch.Distressedhomes,accountingforathirdoflastmonthssales,continuedskewingpricesdownwardslightlyastheytypicallyarediscounted15%comparedtotypicalhomesales.Overall,pricesthispastyearshowedincreasedstabilityoverthepreviousyear.HomePrice InThousands809IncreasedApril0 Stability 10il09Apr LatestDataRelease:May24,2010 Source:NationalAssociationofRealtorsKWResearch5 6. Inventory NumberofhomesavailableforsaleInMillionsTotalhousinginventoryroseslightlyto4.04millioninMarch,representingslightlylessthananeightandahalfmonthsupplyofsales(ifhomescontinuetosellatthecurrentpaceconsistentlyandnonewhomescomeonthemarket).Comparedtothepreviousyear,therearenow3%morehomesonthemarket.Althoughthisisthefirstriseintwentyconsecutivemonthsofdeclinewhencomparedtothepreviousyear,NARs chiefeconomistbelievesthisincreasecanbeattributedtothe summersellingseasonandthathomepricesarebackontrack. 3%more homesonApril0809 marketApril0910NumberofHomesAvailableforSale InMillions LatestDataRelease:May24,2010 Source:NationalAssociationofRealtors KWResearch6 7. MortgageRates30YearFixed Mortgageratesdippedbackbelow5%thismonthduelargelyinparttotheEuropeandebtcrisis.AsconfidenceinthevalueoftheEuroeroded,more investorschosetheU.S.dollarinstead.Withmoredemandfordollars,thecostofdebt(interestrate)dropped.Thiseventhasalsoshowntheglobalrecoveryisnotfreeandclearofroadblockstocompleterecovery.However,expertsstillanticipaterateswillincreasetobetween6%and6.5%bytheendoftheyear.Astherecoverygainsincreasingtraction,theFederalReservewillneedtoincreaseratestopreventinflation. OneYearAverage 5.05% Average Weekly Mortgage RatesSource:FreddieMacKWResearch7 8. AffordabilityThepercentageofamedianfamilysincomerequiredtomakemortgagepaymentsonamedianpriced PercentageofIncomehomeAffordabilityremainsadvantageous,supportedbysomeofthelowestmortgageratesindecadesaswellaslessexpensivehomeprices. Thehomepricetoincomeratiocontinuestoremainwellbelowthehistoricalaverageof25%.Therationowstandsat14.9%. HistoricalStandard:25% AffordabilityasofAprileveryyear.Calculationsassumea20%downpayment. KWResearch8 Source:NationalAssociationofRealtors 9. Recent FHATurnstoLenderstoGovernmentAction10 MonitorBrokers Broughttoyouby: KWResearch 10. FHATurnstoLenderstoMonitorBrokers AstheFederalHousingAdministration(FHA),the governmentagencythatinsureshomeloans,sawits Insureshomeloans marketsharerisetoaboutonethirdofthemortgage Certifiesand marketlastyear,upfrom2%in2006,thenumberofoverseelenders brokersseekingtoarrangeFHAbackedloanshas mushroomedto9,043attheendof2009from5,759 Lenders justtwoyearsearlier.FHA Theagency,findingitselfinadequatelyequippedto monitoritsbrokers,isshiftingtheresponsibilitytoits lenders.TheFHAexpectsthenewpoliciestoresultinbetterBrokersMakemortgage riskmanagement,andthecutinredtapeshouldUnderwriteloans producebetterratesforconsumers. mortgagesSponsorand Actasmiddlemenoverseebrokers AsofMay20,theFHAnolongercertifiesmortgage betweenlenders brokersortrackstheperformanceofbrokers loans. andborrowers Instead,lendersarenowrequiredtosponsorbrokers andassumeresponsibilityforloanstheyoriginate, includinglossesfromfraudormistakesin underwriting.Inadditiontorevampingbrokerinsight, theagencyalsobeefedupoversightofitslendersby increasingnetworthrequirementsto$1millionfrom $250,000.Thechangeisineffectforoneyearfor existinglenders.BorrowersSource: The Wall Street JournalKWResearch10 11. TopicsforHome Buyers,Sellers,and MythsaboutDistressed Properties Debunked! 12OwnersBroughttoyouby: KWResearch 12. MythsaboutDistressedPropertiesDebunked! Distressedproperties foreclosuresandshortsalesalike representpotentiallygreatvalue forprospectivebuyers.However,commonmisconceptionsaboutthe timeandmoney investmentinvolvedwithbuyingsuchpropertiesmaykeepmanyfrominquiringfurther intothismarket.KWResearchsurveyfindings,takenfrommorethan2,500KW associaterespondentswhohaveworkedwithdistressedproperties,canhelpsteerclear ofconcernsasyoumakeyourwaytohomeownership.3outof5REObuyersand1in every2shortsalebuyersspentless Itsgoingtotakeforevertothanonemonthsearchingfora findoneIwant homebeforewritinganoffer. HowmanyoffersdoIhaveto 7outof10distressedwritebeforeonegetspropertybuyerswrote accepted?10?20? threeorfeweroffers beforeonewasaccepted. IknowIamgettingagooddeal HalfofREObuyersand butwillthecostofrepairseat almostonethirdofshort upthesavings?salebuyersspentless than$5,000inrepairs. Havequestionsorwanttolearnmoreaboutdistressedproperties inyourlocalarea,KWResearch12 justaskyourlocalKellerWilliamsassociate! 13. YourLocalMarketAlthoughitisimportanttostayinformedaboutwhatisgoingon inthe nationaleconomyandhousingmarket,manydifferentfactorsimpactthereal estatemarketinyourownarea.TalktoyourKWassociateforassistanceinterpretingthe conditionsinyourlocalmarket. KWassociatesareequippedwiththeknowledgeandinformationto helpyou navigatethroughthehomebuyingorsellingprocessinthischallenging market. KWResearch13 14. LocalMarketAbsorptionRate KWResearch14 15. NumberofHomesinplayKWResearch15 16. Avg Pricepersqft KWResearch16 17. SoldtoListPriceComparison KWResearch17 18. Avg PriceForSaleVSSold KWResearch18 19. AboutKellerWilliamsRealty Foundedin1983,KellerWilliamsRealty,Inc.,isaninternationalrealestate companywithmorethan77,000associatesand677officesacrosstheUnited States andCanada.Thecompanybeganfranchisingin1991and,afteryearsof phenomenalgrowthandsuccess,becamethethirdlargestU.S.residentialreal estatefirmin2009. Thecompanyhassucceededbytreatingitsassociatesaspartners andsharing itsknowledge,policycontrol,andcompanyprofitsonasystemwidebasis. Byfocusingonhelpingassociatesrealizetheirfullestpotential,KellerWilliams Realtyisknownasanindustryleaderinitsfamilyculture,unmatched education,profitsharingbusinessmodel,phenomenalcoachingprogram,and technologyofferings.www.kw.comKWResearch19 20. 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 Paul'sHomePageKWResearch20 21. Whatwehavetooffersellers Sellersnowhaveaccesstotoolsunimaginablejustafew yearsearlier.KellerWilliamsRealtydoesntspend valuableresourcespromotingitsownname.Insteaditputs resourcesintothebesttoolsandresourcesforeducation andtraining,providingthehighestqualityrealestate professionalsintolocalcommunities. PropertiesputupforsalebyPaularealsolistedinKWLS,a nationalMLS,implementedbyKellerWilliamsthethird largestcompanyintheUS;localMLS;NEOHREX(Northern OhioRealEstateExchange);andonnationalsitessuchas Trulia,Zillow,CyberHomes,andothers. KWResearch21 22. Whatwehavetooffersellers(Contd) OthertoolsbroughttobearbyPaulincludebrandingusing uniquewebaddresseswithavirtualtourthatcanbe emailedorthelinkcanpostedanywhere,toincludeCraigs ListandBackPage.Examplesofpropertiessoldrecently usingthismethodinclude: 947GulfRoadinElyria (soldin28days)http://947gulfroad.com/ 359GayleDriveinSheffieldLake(soldin57days)http://359gayledrive.com/ 327GayleDriveinSheffieldLake (soldin18days)http://327gayledr.com/ 810SandalwoodDriveinElyria (Soldin19days)http://810sandalwooddr.com/ NotPlanningtosellinthenearfuture? Wouldyoustillliketomonitorwhatishappeninginyourneighborhoodorarea? ContactPaulnowforafreeperiodicmarketupdate.Nocost.Noobligation.KWResearch22 23. Propertiescurrentlyforsale Propertiescurrentlyforsale: 37101HuntersTrailinAvon http://37101hunterstrail.com/ 4435PorterRoadinNorthOlmsted http://4435porterroad.com/ 19593WhiteheadRoadinWellington http://19593whiteheadrd.com/ 1GroverCourtinGrafton http://1groverct.com 416Winckles StreetinElyria http://416wincklesst.com 149Woodview DriveinElyria http