Real Estate Information

In all the recovery of the housing market, there are clear trends developing within the houses that have sold versus the homes that have not. The National Association of Home Builders (NAHB) conducted a large study to pinpoint on how having a recession followed by a recovery has influenced the lifestyle preferences of home buyers. The survey found the top three items sought for in a home are: energy star appliances, energy efficient laundry rooms, and double sink, French doors, full house technology luxury items. In contrast, buyers do not want: elevators, golf course homes, and laminate countertops.

The housing market as a whole is moving to the periphery of the city centers with only 8% looking to buy within the core of a city which is a return to pre-recession movement. During the height of the recession, urban lifestyles boomed to save in gas prices, transit time, and the living out of town expenses.

The return to the rural/suburb shift of buyer movement means we will be soon seeing a rise in current urban renters looking to buy. Stats show 60% of single-family renters plan to buy within the next five years! “demand for single-family homes, the fastest growing rental category, will be more stable than multi-family demand,” according to the survey findings.

Buyers want energy efficiency and buyers want to buy at an increasing rate beyond what the real estate market has seen in years past. This will be one heck of a year!

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What Home Buyers Want  Buyers Want Cozy, Connected Kitchens Opinion Research Corporation Half of all Renters Spend 30% or More Income on Housing

Nearly 75% of homes sold between Oct 2012 and December 2012 were to families earning a median income of $65,000 at a median price of $188,000.

"It is noteworthy that affordability remains historically high thanks to favorable mortgage rates even as national home price indexes show some rise in values," says NAHB Chief Economist David Crowe. 

The exterior limits of this trend are found in Utah, with 94% of home sales in the affordable range, and San Fran, California with only 28% of home sales in this same category.

Source: National Association of Home Builders

 ATHOMEINBOZEMAN
 

• Responsive Website(s): Having the contact information for not only the real estate office as a whole, but for each agent (with a bio on what they are a specialist in) is necessary for buyers, but it is just as important for selling agents. Finding the information to schedule a showing, provide feedback, and contact for interest. This may seem like a no brainer, but finding the contact information for agents is surprisingly difficult at times. In addition, having continuity throughout the office as to what to do when a call comes in for a listing maintains the professional, high priority and maximum attention to each potential lead that comes in. 

• Traceable Traffic:  Knowing about the marketing tendencies of each listing individually is a key indicator of how to gage a ‘good listing.’ Knowing when the listing receives market rejection, a spike in views, and even plateaus are all valuable measurements to appropriately adjust the marketing strategies for a listing. Not all sites provide agents with this information let alone allow clients to see these trends.

• Local Market Trends: Finally, taking the trends of the individual listings and being able to expand that understand to what it means within the market at a whole is a deeply detailed-focus analytic process that takes years within the Gallatin Valley Real Estate market to be able to understand and iterate to clients. The juxtaposition of giving credence to individual listings and understanding them in the market at large is what will really set an agent apart.

 The name short sales is becoming much more accurate to the shortening frequency short sales are entering the market. Freddie Mac initiated Standard Short Sale program on November 1st. Since then, the short sale process has become easier and more transparent.

"We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent," as a result of the changes, writes Tracy Mooney, Freddie Mac’s EVP in a recent blog post.

Here is a list of changes that took effect:

• Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days. 
• Mortgage servicers are required to acknowledge they received the short sale application within three days of submission. Servicers must provide weekly status updates if they end up needing more time to review the application past the initial 30-day period.
• Mortgage servicers have authority now to approve short sales when qualifying financial hardships for home owners who are past due or current on their mortgage payments. 
• Mortgage servicers are also now able to approve short sales without seeking a separate review by the mortgage insurance company.
• Following a short sale, home owners may be able to qualify for up to $3,000 in relocation assistance. 

Source: “The Shorter Short Sale: Long on Borrower Benefits,” Freddie Mac Executive Perspectives Blog (Jan. 22, 2013)

 ATHOMEINBOZEMAN
 

The Year in Review:

Year to Year Outlook for the Gallatin Valley (Big Sky, Bozeman, Belgrade, Three Forks and Manhattan)

Stats for Improved Properties:

* Data is for period Jan 1 – Dec 31 – includes all improved categories except for mobile/manufactured.

Summary of Data for Improved Properties:

• Bozeman is a shining star without a doubt up 222 units over 2011 with days on market down almost 20 days and median price rising by $10,000.00 plus.
• Belgrade also picked up some steam up 8 units and median price up by $10,000.00  - this trend has continued into the new year
• Big Sky is still stabilizing – units sold are down but median price improved by $20,000.00 and days on market shrinking
• Manhattan is stable in units sold and $27,000.00 increase in median price
• Three Forks has also gained ground after stagnating  – units up by 13 – but median price is down and days on market up

Stats for Vacant Land:

* Data is for period Jan 1 – Dec 31  – includes all land categories.

Summary of Data for Vacant Land:

• More of the same for Bozeman in land with net increase of 234 units year to year
• Belgrade is down about 5 lots
• Big Sky is more positive than negative – up 20 lots – median is down but I see this as positive – sellers are getting more realistic about their land values and deals are closing successfully.
• Manhattan improved in lot sales – prices are down
• Three Forks is a negative trend  BUT both lot and house sales are now trending up in the first quarter of 2013 as Three Forks is being seen by many first time buyers as an affordable alternative.  I am bullish on Three Forks for 2013!  Our office, alone, will be representing developers in three large sub-divisions – activity is brisk!

Overall, the Gallatin Valley is seeing great growth with Bozeman being the shining star and booming.  I am fairly confident that this report at the end of 2013 will likely see all indicators turning to positive.

Predictions are vague estimations of what people who study a specific area think may happen. Looking back retro-actively at the predictions made is sometimes an event of true comedy. For several years now experts who have studied trends, analyzed data, and put their own intuition into predictions have said the housing market will reach its bottom. Instead, what has happened is a great recovery in 2012 and rising, record breaking numbers to kick of 2013. After their predictions being so wrong for 2012, what are these same experts saying about 2013?

Home prices are estimated to rise this year with the median forecast of a 3% gain. Joel Naroff, president of Naroff Economic Advisors, is so optimistic to say that he predicts a 7.2% gain and that prices could rise 39% above the current market value by 2017.

What do all these predictions mean to people who are looking to buy/sell. The reality is that although I will always encourage clients to read the news and stay up-to-date on the national economy, real estate is a hyper-local venture. Talk to a Realtor and see what the stats are in your area and get a feel for the reality behind the predictions.

Decreasing rates of foreclosures is a positive trend for home owners at large, but shifting trends result in a shifting reaction within the real estate market. The first result from the decreasing inventory was a beneficial growth in home prices across the board. The tighter inventory of a post REO flooded market has nearly run its course in controlling the market economists predict. In fact, CoreLogic goes so far as to say that home prices are stabilized enough to be back ‘on track’ in a way it has not been since 2006.

The stats are as follows:

• Foreclosures have fallen 20% from a year ago.
• From January to November of 2012, REOs dropped from 19.6%-11.5%.

Delinquencies are becoming rarer as banks opt for short sales/mortgage  modifications over foreclosures. One big national trend within this larger narrative is that of the stark difference between judicial and non-judicial states. The only difference, judicial states must have their foreclosures go through the state’s court extending the timeline for a home to foreclose. Non-judicial states have clear their foreclosure pipeline whereas the judicial states are still trucking along. 

“The foreclosure crisis has shifted east, to the judicial states, where the pipeline is slow,” says Khater. “The big driver in 2012 in prices increases [sic] was the decline in REOs, but I think the big move-down has already happened. The driving prices in 2013 will be the tighter inventory.”

Source: “Inventory Takes Center Stage as Foreclosures Fade,” The Wall Street Journal (Jan. 4, 2012)

How the appraisal system works:

When a lender needs to call upon an appraiser, he/she submits their request to the AMC, Appraisal Management Company. The AMC then finds an appraiser for the job. So what does this system allow to happen within the real estate market? The appraiser assigned is not picked by merit, accuracy, work ability, or anything like that. They are simply the next in line. As Realtor’s we can get mad and fight our way through the system of business we belong to, but we cannot let our clients see this. Instead, know that when it comes to appraisals, there are many factors that are out of your hands. Focus on what you can take care of and do that to the best of your abilities.

Here are some tips to give your client:

• Clean Up: Overgrown landscaping, soiled carpet, and other bigger-than-day-to-day messes may damage the appraisal. Keep the pets out of the way of the appraiser, trim your trees, and showcase the home you have!
• Up-Date: Sketching a plan of the house with sqft helps the appraiser get a feel of the space and if on that paper you attach a list of all the updating you have done on the home, even the little things count. Re-sealed a bathtub…ect
• Comps: Have some comps on hand. Being aware of nearby comparables allows you to know about where the appraisal should end up.
• $500 Rule: Appraisers work in $500 increments so if there is a repair from more than that amount; it will count against the property. MORE

More: http://www.carimcgee.com/real-estate-appraisal-system-broken/618/