Carol Royse Lifestyle Team

5 Real Estate Markets to Watch in 2012

carolroyselifestyleteam — Tue, 27 Dec 2011 13:10:15 +0000

Ah, the end of the year. Time to look back, contemplate on the high points and lessons learned over the year, and start to look forward to the next one.

And when it comes to looking forward in the real estate realm, it’s most interesting to wonder: where will the market be bright in the coming year?

I posed precisely this question to one of the smartest real estate prognosticators I know, Trulia’s Chief Economist, Jed Kolko. His answer was concise and provocative: “Smart cities are hot.”

I asked him to elaborate, and what he said was so interesting I thought I’d let you all in on the conversation that ensued. Here are 5 real estate markets that Jed says you should definitely keep your eye on in 2012.

“In 2012, the local housing markets that will enjoy rising prices, new construction or both, are those that start the year with stronger job growth and fewer empty homes holding back the market. Based on these factors, along with other leading indicators, here are my top five cities to watch:

1. and 2. Austin, TX, and Houston, TX. The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio.

3. San Jose, CA. Wasn’t California at the center of the foreclosure crisis? Didn’t prices there fall more than everywhere else in the country? Yup. But there’s no such thing as the California housing market: California is almost as diverse as the U.S. Even though prices plummeted and foreclosures skyrocketed in inland California, the coast is another world. San Jose’s perennially tight housing market makes it faster to bounce back. The San Jose market –which includes most of Silicon Valley – has rapid job growth and the lowest vacancy rate in the country.

4. Suburbs of Boston, MA. This Cambridge-Newton-Framingham market just west of Boston has a strong jobs engine and, like most of New England, missed the worst of the housing bubble. Honorable mention goes to Worcester, one step further west, and Boston’s northern suburbs around Peabody. These areas all benefit from offering more bang for the buck than crowded, expensive Boston: this is because most people looking to move are searching in more suburban or smaller areas than where they live now.

5. Rochester, NY. That’s my hometown, and knowing what’s happened to Kodak and other pillars of the local economy, I was surprised when Rochester scored on the top 5 list. (I applied the same formula to all cities and did not have my thumb on the scale.) Prices – which fell little during the boom – are stable, and the economy has weathered blow after blow and is expanding.

What do these markets have in common? Three – Austin, San Jose, and the area west of Boston – are technology centers. In those three metros, as well as in Rochester, a center of high-skill manufacturing industries, education levels are well above the national average. As the recovery proceeds, smart cities are leading the way. During the housing boom, the go-go cities tended to be lower-skill, lower-education metros. But in 2012, smart is hot: it’ll be the revenge of the nerds.”

Distressed Homeowner Leads

carolroyselifestyleteam — Thu, 22 Dec 2011 18:10:22 +0000

Have you fallen behind on your mortgage payments, and don’t know what to do? Watch this brief video, and find out what a Short Sale is, and why it may be the solution you have been searching for.

Then contact me at [480.776.5231/carolroyseteam@aol.com] for a FREE consultation to find out if a Short Sale is right for you.

Top 5 Indicators that Will Give Americans Confidence About the Housing Market

carolroyselifestyleteam — Fri, 16 Dec 2011 12:47:55 +0000

With the U.S. economy still struggling, over half of Americans (54 percent) aren’t sure the President can stabilize the housing market over the next year, according to Trulia’s latest consumer survey on American attitudes on housing policy.Harris Interactive conducted this online survey on Trulia’s behalf and asked more than 2,000 Americans what signals will give them confidence that the housing market is getting back on track.Jed Kolko, Trulia’s Chief Economist, says, “Americans won’t believe our economy is improving until they see real proof.” Luckily for agents, the proof that consumers are looking for lies in key data points that agents can present to clients to help give them the confidence to buy:

1. Fewer defaults and foreclosures

“Fewer defaults and foreclosures” tops the list as a key factor indicating recovery, suggesting that consumers will be more confident in the market’s recovery if they believe that their neighborhood as a whole is doing better.

“As long as there are foreclosed homes and lingering for-sale signs in neighborhoods across the country, people are faced with constant, everyday reminders that the housing market is still struggling,” says Kolko. For real estate professionals, showing potential clients and customers local statistics on decreases in defaults can be a major tool in building the confidence consumers need to make a market move.

2. More home sales

The survey data showed home sales matter the most next to defaults and foreclosures. With 38 percent of the votes, this data indicates that statistics showing increased home sales can be a major tool to get consumers to believe in the market’s recovery.

Soon, communicating local home sales data is about to become even more important because of a lingeringNational Association of Realtors’ revision to 2005-2011 national home sales data which will likely show national numbers have been to high due to inflation.

For agents who have local areas where sales have increased, data driven presentations can motivate clients who may be straddling the fence on the decision to purchase.

3. Fewer vacant homes

While empty homes mean opportunity, they are a downer when it comes to consumer confidence. ”Neighborhood vacancies are like second-hand smoke, hurting everyone around them,” says Kolko.

Survey data showed, with 32 percent of the responses, declines in vacancies are top confidence builders for consumers.

For agents, this means the value of placing a “sold” sign is not only a great moment for the buyer, but for the neighborhood as a whole. To track vacancies by states, check the U.S. Census Bureau’s quarterly release on home vacancies, which breaks down the information by both state and Metropolitan Statistical Areas.

4. Lower Mortgage Rates

The survey data says “lower mortgage rates” are another of the top five confidence builders and received 25 percent of votes. That means it’s important, not only to offer clients updates on the day-to-day changes in rates, but also to show the bigger picture.

When it comes down to visual representations of today’s market opportunity, mortgage rate changes over the past 30 years is probably one of the most dramatic graphs an agent can present to a client. To make your own graph of mortgage rates and see the dramatic change, visit Bankrate.com’s Graph Rate Trends Page.

5. Higher Homeownership Rates

Lastly, the survey showed nothing sells ownership like ownership. Higher Homeownership Rates received 23% of the votes when it came to building confidence among consumers.

This indicates that seeing reminders of sales activity in their area and ownership benefits are keys to motivate clients to make a move.

How Agents Can Use the data: Get Local

National stats like these matter for showing macro-level trends that offer agents strategic marketing direction, but there’s nothing like local data.

Kolko says, “Housing will remain a local game and every market will have it’s own trends in 2012.”

The truth is the stats may or may not encourage prospective owners to purchase, but keeping an eye on these indicators is good business for agents who are serious about about educating their clients on market changes.

5 Things To Do NOW If You Want to Buy A Home In 2012

carolroyselifestyleteam — Fri, 16 Dec 2011 12:31:53 +0000

At this point in December, it can start to feel like the New Year – along with all our hopes, dreams, wishes and expectations for it – are barreling down on us. Personally, I’m a rabid

Resolution-setter, and I have a pretty strong track record of making New Year’s changes actually happen – and stick. But what I know after years of using the New Year as a great excuse to set and meet some goals is that it’s very, very helpful to get a head start, ramping-up to new habits, behaviors and target goals achievements starting in December.

If you’re one of the millions who has an eye on 2012 as the year in which you’ll buy a home (first or not), here are five things you can do now to put yourself on the right path:

1. Check your credit. Take my word for it: there is no bad surprise worse than a bad credit surprise. Okay, maybe there is one thing worse – a credit surprise you receive while you’re in the midst of trying to buy a home!

Recent studies have revealed that a record high number of real estate transactions are falling out of escrow, and that credit “issues” are a leading cause of these dead deals. Your best chance at catching and correcting score-lowering errors and other derogatory items before they destroy your personal American Dream is to start checking and correcting while you still have time on your side.

2. Do your research. The more rapidly the real estate market changes, the more it behooves smart buyers to study up before they jump in. And now’s the time – you can start doing online and in-person research into topics ranging from:

· Target states, cities and neighborhoods. Whether you’re relocating or simply trying to narrow down the local districts to focus on during your 2012 house hunt, December is a great time to start your online research into decision-driving factors like tax rates, school districts, neighborhood character and even prices in various areas. Resident ratings and reviews sites like Trulia and NabeWise can help you make the neighborhood-lifestyle match.

Once you narrow things down and start speaking to local agents, ask them to brief you on the local market dynamics, including how long homes typically stay on the market and whether they generally go for more or less than the asking price, so you can be smart about how you search. (And yes, Virginia, there are areas where homes sell for more than asking, even as we speak!)

· Real estate and mortgage pros. If you don’t already have your pros picked out, now is the time to get on the horn or drop an email or Facebook message to your circle of contacts, asking them for a referral to a broker or agent they love. Follow up by: checking whether these pros are active in answering questions on Trulia Voices, searching for their name and seeing what sort of feedback on them you can cull from the web, then giving them a ring and launching a conversation about whether you and they might be a good partnership.

· Short sales and REOs. Distressed property sales are not for the unwary. If you want to target upside down or foreclosed homes, or are planning to house hunt in an area where many of the listings are described as short sales or foreclosures, get educated about what you can expect from a distressed property purchase transaction before you get your heart set on a short sale.

· What you get for the money. Online house hunting is a powerful tool – especially when it’s cold and wet! But there comes a point in your house hunt where you’ve got to just get out into the actual physical homes you’re seeing online in order to get a strong, accurate sense of what home features, aesthetics and location characteristics correlate with what price points.

· Mortgage musts. You can read a bunch of articles about mortgages and get yourself pretty far down the path toward qualifying for a home loan, but you can only get a personalized action plan for a smooth road ‘home’ by talking with a local mortgage broker and having them assess your basic financials. They might say you need to move funds around, pay a bill down or off or produce some sort of documentation from your employer. And the time to start all that is now.

3. Fluff up your cash cushion. So, you’ve saved up your 3.5 percent down payment. Perhaps you saved a little extra for closing costs. Or maybe you’re even one of those uber-aggressive 20-percent-down-ers. No matter how much you’ve saved, you’ll find that you could use more once you activate your home buying action plan. Mark my words – after closing, you’ll crave extra cash to do some repairs, upgrade a couple of things, buy appliances or even just to hold onto in order to minimize your anxiety about depleting your savings!

So, if homebuying is on your personal 2012 action plan, don’t go hog wild on holiday gifts. Instead, wait until next year and give yourself the gift of a home.

4. Shed some stuff. Sell it. Donate it. Give it to relatives who’ve always coveted it. Just get rid of it. If you do it before year’s end, you can kill three birds with one stone: (a) getting some cold hard cash to go toward your savings, (b) getting some tax receipts so you can deduct the value of your donations in January, (c) minimizing money spent on holiday gifts for loved ones and these two bonus birds – clearing the mental clutter that physical clutter creates and prepping for your move in advance.

5. Sit very, very still. Sometimes, the best way to further our goals is to stop tripping ourselves up. In that vein, commit right now to refrain from making any major financial moves until you buy your home. Don’t quit your job to start that personal chef business (yet), don’t pull a bunch of cash out of your savings account (without getting clearance form your mortgage pro first), and don’t start buying cars and boats on credit – even if you do love the idea of putting the red bow on the car you give your wife, like in the commercials.

I assure you, the bow you’ll be able to put on that house or condo will be much bigger, redder and more tax-advantaged!

Three Economic Factors Every Agent Should Track

carolroyselifestyleteam — Mon, 12 Dec 2011 13:44:47 +0000

Most agents are well versed in the local information and news that affect their neighborhoods. But, the national stats and over-simplified headlines make it hard to keep up with what’s really happening in the big picture.

Here are a few key indicators and some expert advice on what they mean for today’s markets from Trulia’s Chief Economist Jed Kolko.

Unemployment among 25-34 year-olds & future housing demand

Many life changes happen for young adults between the ages 25 and 34 that affect housing. From developing careers to making decisions about marriage and households, Jed Kolko, Trulia’s Chief Economist says, “A key measure for housing demand and homeownership is the unemployment rate for this group and the share of this age group that is employed.“

In a recent post on Trulia’s Insights Blog, Kolko offered a great example of how Unemployment for this age group has affected home sales:

“During and after the recession, household formation dropped for this age group, and more of them than ever are living with parents or other adults rather than renting or owning their own place. These folks will wait to form their own households and consider homeownership only when their job prospects improve.”

Local construction activity & spending

You don’t have to be an economist to understand the impact of shifts in housing supply and demand. The more supply of a certain item exists, then each individual item is less valuable to buyers. For example, if there is only one Nintendo Wii left on the shelves, people would be willing to pay more to have it versus if there were hundreds available. That’s why Kolko says it’s important to watch your local construction trends:

“New construction activity is a good cue to what’s going to happen in your local market: more new construction today will mean more inventory for buyers or renters — and more competition among sellers or landlords — in the near future.”

Those effects clearly relate to prices, but construction starts don’t just mean increased inventory but they also have a spending effect. Kolko says, “New construction puts more money in the hands of workers – and their incomes will kick-start spending that will boost demand for housing.”

Vacancy rates and price changes

Most agents know, vacancy rates mean housing supply. Smart agents know these vacancies affect home prices. But, by how much?

Kolko says, “The effect of vacancies on nearby home prices is strong: one academic study estimates that a vacant home can lower the price of nearby homes within 500 feet by as little as 0.7% and as much as 10% — depending on whether the vacant home is a foreclosure or just neglected.”

When you see the housing statistics, whether national or local, remember that the story and the effects are often deeper than simple numbers.

Skipping 2 house payments

carolroyselifestyleteam — Mon, 05 Dec 2011 13:16:17 +0000

Skipping a house payment is actually used occasionally as a marketing strategy for refinancing. It is especially nice around the holidays when extra cash is always needed. It is pretty common knowledge that a payment is not necessary the month following a new mortgage closing, but there is actually a way to skip 2 payments. If the refinance is closed by the 15th of January, for example, a homeowner can roll their January payment into the loan by just letting the accumulated interest due for December be added to the payoff. Since the first payment on the new note is due in March, they skip the February payment. Voila! 2 payments skipped.

Buyers can also use a similar strategy to time their transaction and minimize the amount of cash needed at closing. If a buyer closes on the loan before the 10th day of the month, we can actually pretend (from the pro-rated interest aspect at least) that it closed at the end of the previous month. The mortgage company actually gives the buyer an interest credit from the 1st to whenever the loan closes. This is usually allowed for up to 10 days.

This option reduces the amount of cash needed to close the transaction, but it accelerates when that first payment is due. This will put the note’s first payment date as the 1st of the following month, effectively making the first payment due in 20 days or so. If a buyer is strapped for cash and can make that first payment in a few weeks after another paycheck, closing before the 10th of the month is the cheapest time of the month to close a purchase transaction.

On the flip side….If the buyers have the extra money for the pro-rated interest and the closing is scheduled for the first part of the month, I recommend that they pay the interest to finish out the month. Then their house payment is put off until the 1st of the month following the next month – 50-60 days away! Paying a few hundred dollars in interest is a cheap way to put their FULL PITI payment off another month.

4 Ways to Help Buyer Clients Get Off the Fence

carolroyselifestyleteam — Mon, 05 Dec 2011 13:12:46 +0000

Successfully helping buyers understand the benefits of ownership and time their purchase correctly hinges, not only on an agent’s reassuring tone, but the information he or she offers buyers. Today buyer agents are just as much counselors/educators as they are sales people.

Check out the following 4 ways (along with a few resources) you can use to empower buyers to make the right decision and take advantage of today’s market.

Give them the Facts

Facts and numbers are an agent’s best resource when it comes to buyer counseling.

Jay Garrett , Agent at RE/MAX Champions, Freehold, NJ says “Very often the amount [buyers would] pay for rent is more than forecasted depreciation [for homes].” It’s important that agent point out these facts.

Garret says, “Recent comps, a “cost of waiting” analysis for first time buyers, and news articles” can be helpful as well.

Recent data shows that in many areas buying outweighs renting by large margins. To show consumers how your area shapes up, check out Trulia’s Quarterly Rent vs. Buy Interactive Index or the U.S. Census Burea’s American Community Survey Brief.

2) Explain the Tax Advantages and Fiscal Benefits

“The financial and tax benefits of owning a home vs. renting are very clear,” according to the National Association of Realtors Field Guide to the Social Benefits of Homeownership.

Real estate taxes, mortgage interest, and certain home improvements can all mean significant savings (and potential refunds) for homeowners. Agents can help their potential clients understand these benefits.

To get up to speed on the basics, check out NAR’s Guide or check out this free quick guide from the American Institute of CPA’s on the Tax Advantages of Home Ownership.

3) Show them Interest Rate History

To help her clients take advantage of today’s opportunities, – Melissa Kellerman, Agent at RE/Max Properties, Inc. Colorado Springs, CO says, “I talk to [buyers] about the record low mortgage rates”.

To make your own custom snapshots of long term interest rates, check out the interactive Historical Treasury Ratepublished by the U.S. Treasury.

4) Ask the Real Question

Serious buyers make serious moves. “It all boils down to their motivation,” says Arnold Celis, III, Agent at Celis Properties under Casa Grande Realty

“One of the best questions I learned is ‘If I find you a perfect house within the next 2 to 3 days is there anything that would stop you from buying it?’” he says.

Arnold’s question is an important one for agents to consider. Understanding the level and reasoning behind a potential buyer’s motivation can be valuable in helping clients make the best real estate decision.

At the end of the day, the decision to make the leap into home ownerships rests in the client’s hands. A smart agent’s job is to make sure prospective owners have the right information to make their assessment and understand the unique opportunities today’s markets presents.

Overpriced? Get Out Of Your Own Way With These 5 Tips

carolroyselifestyleteam — Fri, 02 Dec 2011 12:51:20 +0000

Selling Your Home Starts With The Right Listing Price. These Are Our Tips To Get There.

Today’s home sellers have it hard: home values have dropped, the market is flooded with competition and even if a buyer makes an offer, deals are falling through more than ever. On top of that, sellers face the age-old problem of having two conflicting goals: they want to sell their home fast, but also want (and need) to squeeze every possible dollar out of the sale. While it’s tempting to price your place on the high side, overpricing your home can actually deter buyers, cause your home to lag on the market and even expose you to the risk of being perceived as desperate, resulting in lowball offers. Here are 5 tips to overcome the temptation to overprice your home, all of which can help maximize your chance of a sale.

My Listings

carolroyselifestyleteam — Tue, 29 Nov 2011 14:02:29 +0000

My Listings.

Why Most People Fail To Find the Right Agent

carolroyselifestyleteam — Tue, 29 Nov 2011 13:43:26 +0000

The right agent can be found if you do the proper research and know the right questions to ask. Majority of people are not satisfied with their agent by the end of the transaction – Avoid this by knowing what to look for in a successful agent and what to ask them to identify their depth of knowledge. Are you sure that friend or referral is going to meet your needs? Read this report to find out!