Tag Archives: sothebys

Never Underestimate the Power of a Positive Attitude

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The results of surrounding yourself with individuals who face each day with a positive outlook on life can be truly remarkable.   Anthony Robbins once said, “The quality of your life is largely determined by those you spend your time with.  Choose your friends well.”   I was reminded of this yesterday.  I had the pleasure of spending the morning with my colleagues being inspired by Matthew Ferrara, the real estate industry’s go to expert on using the latest technologies to strategically grow your business.

As I looked around the room and listened to the interactions during Matt’s presentation, it occurred to me how fortunate I am to not only do what I love every day, but to also have the privilege of working with people who continually inspire me.   

Let’s face it…the economy has made the last few years extremely challenging for everyone.  However, as I sat I in that room yesterday, it struck me how the “vibe” was very different from what you get tuning into the mainstream media each day.  Here sat people who decided some time ago that  despite the challenges, they would forge ahead and not give up.  And the results of that attitude are paying off.  Our company opened 2 new offices last year and grew our production by over 40%!  Our #1 agent in our Buckhead office and his team sold over $38m in real estate last year.  The #1 agent in our North Atlanta office, realtor extraordinaire and mom of two young children, sold over $15m.  Another friend and colleague, who entered the real estate business just before the crash, came in as #2 in our office in 2011. 

These are just a few examples of individuals who forge ahead every day with a positive attitude, working hard to serve each client with the highest level of expertise and professionalism.  In this new era of short sales, foreclosures, and bad appraisals, every transaction takes hard work and lots and lots of tenacity.  It’s never easy, but in the end always rewarding.  I am so proud to be a part of a  team that embraces that level of commitment. 

The theme of our recent Sotheby’s International Realty conference was “Singing in the Rain”.  I guess when the sun starts shining again, we’ll have the “Moves Like Jagger”!

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13,780 homes sold yesterday

To all those who have declared the real estate market dead, we want you to know that over 13,780 houses sold yesterday, 13,780 will sell today and 13,780 will sell tomorrow.

 

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 7.7% over the month before and 18.6% over the year before. According to the report, annualized sales now stand at 5.03 million. Divide that number by 365 (days in a year) and we can see that, on average, well over 13,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may never see those numbers again (and that is probably a good thing). But to say that the current real estate market is dead or that houses are not selling is totally inaccurate. We have over 13,000 pieces of evidence to prove that.

For Buyers – The financial opportunity of a lifetime?

We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

  • § Historically low interest rates
  • § The ability to lock in these rates for thirty years

Interest Rates

Because of the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had.

According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.  

A purchaser can still get a 30 year-fixed-rate-mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership. In the administration’s REFORMING AMERICA’S HOUSING FINANCE MARKET: A REPORT TO CONGRESS, they are very strong in voicing their thoughts on this issue:

…our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters, and carefully designed support for market stability and crisis response…

Under our plan, private markets … will be the primary source of mortgage credit and bear the burden for losses.

What are the probable results of this decision?

The Royal Bank of Scotland:

“The (government) currently provides 95% of housing finance in the U.S.; any reductions of their involvement in supporting mortgages mean interest rates will have to go up to induce private lending.”

AnnaMaria Andriotis, writer for Market Watch:

“In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”

The day of a 5% rate seem to be coming to an end.

Locking in a rate for thirty years

We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.

There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year-fixed-rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?

Mark Zandi, Chief Economist of Moody’s Economics.com addressing the administration’s recent report:

“A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”

Bottom Line

The COST of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years!! Both of these opportunities may disappear in the near future. You should take this into consideration if you’re looking to purchase a home.

SOURCE:  KCM Blog