The Great Real Estate Agent Bust - Business Insider

The Great Real Estate Agent Bust

Calculated Risk | May 22, 2012, 12:09 AM | 14,836 | 41

Way back in 2005, I posted a graph of "the Real Estate Agent Boom". I saw the following article, and decided to update the graph of the number of real estate licensees in California.

Eric Wolff at the NC Times writes: Real estate agents bailing out, except in Southwest Riverside County

Real estate agents are getting out of the profession in California ---- except in Southwest Riverside County, according to the California Department of Real Estate and the Southwest Riverside County Association of Realtors.

A housing crunch left real estate agents faced with selling houses for less than what homeowners owed in mortgages, working with lenders suddenly terrified to give out loans, and otherwise battling headwinds that dramatically reduced their sales.

For many agents, especially those attracted by a housing boom that made the profession seem like easy money, that meant it was time to leave. But in Southwest Riverside County, a few people decided a slow market was just the time to jump in.

Here is a long term graph of the number of real estate licensees in California. The number of agents peaked at the end of 2007 (housing activity peaked in 2005, and prices in 2006).

The number of salesperson's licenses is off 29% from the peak, and has fallen to 2004 levels. But brokers' licenses are only off 7% and has only fallen to early 2007 levels. Even if activity and prices have bottomed, the number of agents will probably continue to decline.

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It is a good thing that the number of Realtors in CA has decreased! Too many people were in it for the easy sales that existed in days of old.....

Home Prices Rise in Half of U.S. Cities as Markets Stabilize - Bloomberg

Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized.

The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains.

Enlarge image Home Prices Rise in Half of U.S. Cities as Markets Stabilize

Home Prices Rise in Half of U.S. Cities as Markets Stabilize

Home Prices Rise in Half of U.S. Cities as Markets Stabilize

Daniel Acker/Bloomberg

A development in Oswego, Illinois.

A development in Oswego, Illinois. Photographer: Daniel Acker/Bloomberg

May 7 (Bloomberg) -- Michelle Meyer, a senior economist at Bank of America Merrill Lynch, talks about the U.S. economy and real estate market. She speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.

“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said in a telephone interview today. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”

The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.

The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania.

Biggest Declines

Kingston, New York, had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by Stamford, Connecticut, with an 18 percent decline; Mobile, Alabama, at 14.7 percent; and Atlanta at 12 percent.

The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier.

Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist.

‘Broad Shortages’

“We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said in the report. “This is good news for many sellers who wish to list now, or for those waiting for prices to improve.”

Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.

Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington- based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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Such good news!

Rates at NEW historic lows

Survey says? Last week’s economic report calendar may have been light, but some important surveys revealed key data to note. Read on for the details...and how home loan rates fared.

As you can see in the chart, the National Association of Realtors (NAR) said that of the 146 Metro cities surveyed, home prices rose in 74 of them in Q1 2012. This is up from 29 cities that saw an increase in home prices in Q4 2011. In addition, the NAR also said that inventories for existing homes fell 22% since this time last year and are down 41% since the peak in mid-2007. While the housing market has a long way to go, this report was a nice step in the right direction.

There was also news from the National Federation of Independent Business, which said that its small business optimism index gained 2% in April as the survey revealed that companies have increased plans for hiring and investing in the future. While companies added new employees at a slower pace in April than in March, the index rose to 94.5 — the highest level since February of 2011. Overall, though, the report showed that our economy is improving but is still fragile. The state of our economy is part of the reason for the improvement in Bonds (and home loan rates, which are tied to Mortgage Bonds) of late.

Another big reason that Bonds and home loan rates have been improving is the fresh round of uncertainty out of Europe. France elected a new president, and this change of the guard represents the ninth EuroZone leader swap since the financial crisis began. Greece is also back in the news and their citizens are not taking to the austerity measures either. The New Democracy government, a pro-bailout party, is having trouble gathering the support to rule the government. This has sparked some safe haven trading into our Bonds, as investors see our Bonds as a safe place for their money.

The bottom line is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Great newsletter that Sean Maley puts out every week!
Lots of good news in this one.

New rules will speed up short sales - Apr. 19, 2012

NEW YORK (CNNMoney) -- The Federal Housing Finance Agency laid out new rules aimed at speeding up the short sale process, a move that could keep many homes from falling into foreclosure.

In a short sale, the bank that holds the mortgage must agree to accept a price for the home that is less than what is owed. Even though short sales are considered a better alternative to foreclosure, banks often take so long to review and approve short sales that the deal falls apart and homes get repossessed.

"Delays in approving short sale requests remain a significant challenge for realtors and consumers and often results in canceled contracts and the property going into foreclosure," said Moe Veissi, president of the National Association of Realtors.

In California, which accounts for a disproportionate number of the nation's short sales, 60% of short sale offers failed to result in a closed sale last year, according to a California Association of Realtors member survey

The organization attributed much of the closing problems to extended lender response times. Some agents said that lenders even foreclosed on the homes before a short sale could close.

To help avoid the trend from continuing, the Federal Housing Finance Agency, which oversees Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FRE), laid out rules that will require lenders to review and respond to short sale requests within 30 days and make a final decision within 60 days. The lender is also required to provide weekly status updates to the borrower if the offer is still under review after 30 days.

The new guidelines, which go into effect on June 1, can prove to be beneficial for all of the parties involved.

For lenders, it could mean saving a distressed property from falling into foreclosure, saving them tens of thousands of dollars in lost property value and costs.

The average foreclosure during the last three months of 2012 sold for $149,686, while short sales averaged $184,221, according to RealtyTrac. And foreclosures also pile up higher expenses with lenders paying for property taxes, heating and maintenance costs.

Home sellers, too, would be better off because they often will take just a one-time hit to their credit score for a short sale rather than the multiple delinquencies associated with a foreclosure.

And buyers get homes in better condition, typically because the sellers have been living there and keeping the homes in good condition.  To top of page


This new rule will hopefully help considerably!

Marin foreclosures are down

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Report signals start of broad-based housing recovery - Yahoo! Real Estate

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Could it be that housing has emerged from its funk?

While some hard-hit markets still lag, overall, a number of key indicators are pointing in that direction and could confirm “the beginning of a broad-based housing recovery,” according to the latest report from Realtor.com. “We’re seeing some hope,” says Steve Berkowitz, the company’s chief executive officer, adding that in general, close-in suburbs are recovering faster than the outlying ones. The report looked at data from March 2012 and compared it with a year earlier.

Signaling the more optimistic outlook, median list prices for resale homes jumped about 5.6% to $189,900 from a year before. (Sales prices of existing homes eased up 0.3% in February to an estimated $156,600 from a year earlier, according to the latest statistics from the National Association of Realtors.)

In the 146 markets Realtor.com surveyed, listing prices were up 1% year over year in 111 metropolitan statistical areas and 5% or more in 70 cities. The biggest listing price increases happened in two places that had been hard-hit by the foreclosure crisis, Phoenix and Miami. The report suggests that because asking prices have risen, these two cities, as well as Boise City, Idaho, and Punta Gorda, Fla., “appear to be in the recovery process.”

Listing prices were flat in 18 markets and fell more than 1% in 17 markets. Only two cities, Chicago and Knoxville, Tenn., experienced a drop of 5% or more. The report says that the shift shows a change in the nation’s housing problems “away from the sand states and into older, more industrialized areas” that have been slammed by the recent recession.

When it comes to days on the market, there’s more good news for sellers. The median time on the market was 89 days in March, roughly a 19.8% decline from the same month a year earlier. It's a remarkable turnaround: In March 2010, the median age of for-sale inventory was up about 26.1% from the year before. Homes sold in fewer than 50 days in Denver; Washington, D.C.; and Iowa City, Iowa, as well as the California cities of Oakland, Fresno, Bakersfield and San Francisco. They took longer than 150 days in rural areas in southern South Carolina as well as Asheville, N.C.; Santa Fe, N.M.; and Myrtle Beach, S.C.

Shrinking supply also has a lot to do with consumers’ more upbeat attitudes, the report noted. Nationwide, inventory levels of resale homes, which include single-family, condos, townhouses and coops, fell about 21.5% from the year before, which the report says is a sign that the market is in a stronger position than it was this time last year. Some of the country’s most distressed markets have seen inventory declines greater than 38%, including Oakland, Bakersfield and Fresno in California and Miami, Fort Lauderdale and Orlando in Florida. Atlanta, Seattle, Phoenix and Portland, Ore., also showed steep declines. Only Philadelphia and Hartford, Conn., showed bump ups in inventory levels, and the increases were slight.

However, the so-called “shadow inventory” of homes that are heading for foreclosure or already reclaimed by lenders remains a wild card that could dampen the recovery’s momentum. Santa Ana, Calif.-based research firm CoreLogic estimates that the shadow inventory is about 1.6 million units, which would take about six months to clear at the current sales rate. But some economists think that estimate is too low. Ed Sullivan, chief economist for the Portland Cement Association, says that bank processing delays are masking the true extent of the shadow inventory and expects that it will take nearly nine months to burn it off. “It will slow things down, but not stop the recovery,” he says.

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The market certainly seems to be recovering here in Marin. However, more listings would help even more!

NAR: 2012 home sales will be strongest in past 5 years | Inman News

NAR: 2012 home sales will be strongest in past 5 years

February pending sales up 9.2% from year ago

By Inman News, Monday, March 26, 2012.

Inman News®

The National Association of Realtors is predicting existing-home sales will jump 7 to 10 percent in 2012 to the highest level in five years, based on an "uneven but higher sales pattern" so far this year.

Pending home sales fell a seasonally adjusted 0.5 percent from January to February, which was up 9.2 percent from the same time a year ago, NAR said today in releasing its latest Pending Home Sales Index.

Last week, NAR reported a similar trend for existing-home sales, which were down 0.9 percent from January to February, but up 8.8 percent from a year ago.

The pending sales data released today provides a glimpse into more recent trends, because it tracks homes that were under contract in February -- deals that will in most cases be finalized within one or two months.

NAR said 31 percent of Realtors experienced contract failures in February, in some cases because buyers' mortgage applications were rejected or because appraisals came in below the negotiated price.

In the Northeast, NAR's index slipped a seasonally adjusted 0.6 percent from January but was up 18.4 percent from a year ago.

Article continues below

The Midwest saw a month-over-month gain of 6.5 percent and a 19 percent gain from a year ago.

Pending home sales fell 3 percent in the South from January to February, but were up 7.8 percent from a year ago.

In the West, the index declined 2.6 percent from January to February and was 1.8 percent below the index rating in February 2011.

In its latest economic forecast, NAR predicts existing-home sales will total 4.65 million in 2012, up 9.1 percent from last year. That forecast assumes that the U.S. economy will grow at a 2.3 percent annual rate and add 2.7 million jobs this year.

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Here in Marin County we are certainly seeing more sales and a healthier real estate market!

Reduce Principal On Mortgage | Bank of America to reduce mortgage principal for some borrowers - Los Angeles Times

If successful, the plan could become a model for other lenders, experts say, and could also help the still-fragile housing market from being walloped by a new wave of foreclosures.

"I think this is a strong signal to the industry about the importance of principal reduction in a loan modification program," said Paul Leonard, California director of the Center for Responsible Lending, an advocacy group.

Bank of America's offer would knock as much as 30% off the principal on about 45,000 adjustable-rate mortgages nationwide. BofA didn't provide a state-by-state breakdown, but spokesman Rick Simon said the largest block would be in California.

The loans were originally issued by Countrywide Financial Corp., the loss-plagued Calabasas lender that Bank of America acquired in 2008. Countrywide was the nation's largest mortgage lender, specializing in subprime and other complex loans such as option ARMs, that went bad and helped fuel the nation's mortgage meltdown.

Bank of America's new program, adopted to settle a lending-abuse suit by the state of Massachusetts, is in addition to an October 2008 settlement with other state attorneys general that was aimed at reducing payments for Countrywide borrowers by more than $8 billion.

Since introducing programs a year ago to stem the tide of foreclosures, President Obama and other administration officials have been pushing banks to modify increasingly more mortgages. But the criteria for benefiting from those programs were difficult, especially in high-cost areas such as California.

Banks have generally sought to keep borrowers in their homes by adjusting the terms of the loan, such as extending the amount of time it takes to pay off the loan or cutting the interest rate. Lenders have resisted cutting the principal amount, which many housing advocates say is needed because of the inflated prices that homes were fetching during the housing boom.

The Bank of America program stands apart by making principal reduction the first step in the program.

The bank is not initially wiping out part of the loan balances, but instead is exercising what is known as forbearance -- setting aside payments of interest on some of the amount owed. It then would allow the borrowers to earn forgiveness gradually on that part of their debt by making regular reduced payments over a five-year period.

The plan is designed to motivate holders of some especially troublesome loans, including option ARMs, or adjustable-rate mortgages for which borrowers had the option of making payments that did not cover the interest costs for five to 10 years.

Many borrowers with option ARMs have been loath to accept modifications because they owed so much more than their homes were worth, said Barbara J. Desoer, president of BofA's home lending operations.

This is a good sign but seems to me it is just a small dent.

As home prices fall further, is it time to buy? – USATODAY.com

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Yes it is time to buy. It is as if we are having a sale, especially here in Marin County where prices seem to be bumping along the bottom. Top economists are also now stating that it is time to buy real estate,

How to Write a Thank-You Note - The Morning News

Question: I have a crushing inability to write proper thank-you notes. Can you offer me some guidelines? –Helen

Answer: I was wondering when you were going to ask that question, and frankly, I’m a little disappointed it took you so long. Somewhere in between your mom making you sit down with your Peanuts® stationery and you shooting off an email, you completely lost touch with the concept of simple thank-you notes. Now that you’re a grown-up, an email just won’t do, and more is expected of you than scratching out ‘Thanks for the present, you rock!’

Grandma might not say anything to you, but trust me: She and her friends are probably at this very moment sighing over how young people today just don’t have manners.

As extra motivation, I will also grudgingly tell you the hidden secret of thank-you notes: They improve the frequency and quality of the gifts you receive. People like being appreciated, and if they feel you actually notice the nice things they do for you, they’re more likely to give an encore performance. Do not, however, use this as a strategy to avoid writing thank-yous to those who regularly give gifts you do not like. Every gift deserves a thank-you. Even the ‘Keep On Truckin’’ blacklight poster your crazy Uncle Alvarez gave you when you moved into the dorms.

I assure you, writing thank-yous is easier than you remember. Get yourself some stationery, plain note cards or a selection of attractive postcards (yes, postcards are perfectly acceptable!), and proper postage. Avoid the pre-inscribed ‘Thank you!’ cards in loopy script, as there are times you’ll want to write notes where that aesthetic feels all wrong. Better to choose paper you like. Stay away from full-size sheets—note cards are best, as your message will be brief, and would look silly swimming around on a page that large. Store all of these items somewhere easily accessible and preferably in plain sight so you won’t hesitate too long or forget too easily. Say, the top drawer of your desk or on a bookshelf at eye level or below.

If you want to know when you get a genuine pass on writing a note, the litmus test is simple: Do I live under the same roof as the giver? If the answer is ‘yes,’ you need not write a thank-you note (although a thank-you Post-It might be a nice touch).

I’m not going to go all Miss Manners on your ass and get into the social intricacies and delicate situations that surround thank-you note writing, as I was taught that a solid thank-you note will transcend all complicated situations—and I have seen no evidence to the contrary.

There is a six-point formula to the proper thank-you: Learn it, know it, memorize it—and it will never fail you.

1. Greet the Giver

Dear Aunt Sally,

That’s the easy part, but you’d be surprised how many people forget it. Dale Carnegie taught us people love to hear their own names and Direct Marketing is sure we also love to read them in ink. That’s right, ink. Blue-black is always the number-one choice, but black will suffice in a pinch. Don’t let a whimsical marker color be the most stunning part of your note: instead let the words sing without the amplification of rainbow hues. Even if your handwriting is poor, you must still hand-write your notes. Do not type them or, worse, use a word processor. No excuses.

2. Express Your Gratitude

Thank you so much for the slippers.

This first paragraph seems like it would be the easiest, but it is actually the most complicated. Beware the just writing trap. You are not ‘just writing to say’ as in I am just writing to say; that’s stating the obvious. If the giver is reading, clearly you have already written. Therefore use the present-perfect tense, which essentially means write as if whatever you say is happening in the moment.

Also—and this is important—never directly mention money. ‘Thank you for the hundred bucks’ could instead be ‘Thank you for your generosity.’ All cash denominations become ‘your generosity’ or ‘your kindness.’ If you feel the giver overspent, the farthest you can go is appreciated: ‘Your generosity is appreciated,’ or ‘It is such an extravagant gift—your kindness is appreciated.’

If you’re writing to thank someone for an intangible (such as them putting you up at their place while you were in town for the weekend), first define what the intangible thing is, and then make the gift sound as attractive as possible. In other words, don’t say: ‘Thanks for letting us crash at your place.’ Instead say: ‘Thank you for your hospitality.’ Don’t worry if it sounds too simple; the point of writing the note is to create a simple expression of a heartfelt sentiment.

3. Discuss Use

It gets very chilly here in the winter, so they will get a lot of use when winter comes.

Say something nice about the item and how you will use it. Let’s say it’s something you actually love and use incessantly—then say so: ‘Ever since I got the slippers I have only taken them off to shower and go to work. I’d wear them to the office if I thought I could get away with it.’

But don’t lie, even though some etiquette books may tell you it’s okay. After all, there’s always a truth that can be extracted. Let’s say you hate the slippers. How to say thanks? Find the one thing about them that’s nice and discuss it—but don’t get carried away. ‘They are such a lovely shade of blue’ works, and is more honest than ‘These slippers make my heart sing like a choir of angels,’ which is overkill. If it was a gesture, like letting you stay at their place, you can follow the lines of ‘It’s so nice to make a personal connection while traveling. I really appreciated my time with your family.’

If the gift was cash, allude to how you will use the money, but do not itemize your planned purchases line by line, instead simply say: ‘It will be a great help when we purchase our new home/toaster/lava lamp/whatever.’

You can get arty here, but not flowery. It’s a fine line. Small, realistic statements like ‘I put the flowers on the kitchen table and they are still looking fresh and beautiful after a week,’ or ‘I don’t know which is more fun, actually using the Cuisinart, or reading recipes and thinking I could do that in the Cuisinart!’ Having fun is alright, so have at it.

4. Mention the Past, Allude to the Future

It was great to see you at my birthday party, and I hope to see you at Dad’s retirement in February.

Why did they give you the gift? What does it mean to your relationship with the giver? Let the giver know how they fit into the fabric of your life. If it’s someone you see infrequently, say whatever you know: ‘Mom tells me you’re doing great at Stanford, and I hope we cross paths soon.’ If it’s someone you’re in regular contact with: ‘I’ll call you soon, but I wanted to take time to say thanks.’ If it’s some errant family member you have little or no contact with, simply go with ‘You are in my thoughts and I hope you are well.’ Nice, right?

5. Grace

Thanks again for your gift.

It’s not overkill to say thanks again. So say it.

6. Regards

Love,
Leslie

Simply wrap it up. Use whatever works for you: Love, Yours Truly, With Love. Then sign your name and you’re done.

What’s Not There

Any news about your life. This isn’t the time to brag about your new job, a hot girlfriend, or number of surgeries. The thank-you is exclusively about thanking somebody for their kindness. While you may want more than anything to show them once and for all you amounted to something, this is not the forum. Save that for your annual Christmas letter.

Now get it in the mail. Even if your friends and relatives aren’t of the note-writing variety, be the one who sets the precedent. Thank-you-note writing is one of the loveliest traditions to have been utterly compromised by the information age. Let’s start a movement to revive a little gracious living.

We should all remember to write thank you notes when people deserve thanking. I'm not talking about an email thank you but an actual pen and paper thank you. I find this extremely important in my business.