By Robert Freedman, senior editor, REALTOR® Magazine
You often hear talk within real estate about the shadow inventory that looms over markets. These are the homes that are at risk of going into default or are already owned by the banks and that can come onto the market at any time. They pose a problem because a flood of these properties can put enormous downward pressure on prices as inventories rise far above what can be absorbed by demand. Of course, the properties tend to sell for quite a bit less than other properties, and that’s good for buyers, particularly investors who can scoop up properties in bulk. But the discount inventory isn’t friendly to sellers whose properties have to compete with them.
All this notwithstanding, there really isn’t a hard and fast rule of what properties actually comprise the shadow inventory. This lack of definition is important, because one analyst who reports a big, scary number in the news might be thinking something very different than another analyst who uses very different assumptions. So, whether 7 million properties are looming over markets or something closer to 2.5 million is an important distinction.
By Stacey Moncrieff, editor in chief, REALTOR® Magazine
Want to help a wonderful charity win a $100,000 grant? Utah-based Heart 2 Home Foundation is one of 75 finalists in a Facebook contest being sponsored by APX Gives Back. Through the contest, you cast up to one vote per day for the nonprofit of your choice. The Heart 2 Home Foundation was co-founded by 2009 Good Neighbor Award winner Greg Adamson. Heart 2 Home remodels and rebuilds houses for needy households. The work is expensive (i.e., constant fund-raising is imperative), but the results are awe-inspiring.
The sponsoring organization, APX Gives Back, will donate $100,000 to the eligible charity receiving the overall most votes during the voting period. Voting started June 15 and runs to Aug. 21. Five regional runners-up, those receiving the most votes from each region after the overall winner, will be awarded $30,000 each.
One important note: APX Gives Back is a charitable offshoot of APX Alarm, a company that installs home monitoring systems. When you visit the APX Gives Back Facebook page, you must first click on “Like.” Then, when you click on the button to begin voting, you’ll see a pop-up message that says your profile, photos, and friends will be shared with APX Gives Back. That alarmed me (no pun intended). So I spoke with a company representative, Stuart Dean, who assured me that my info wouldn’t be used to market alarm systems to me and my friends! It’s a Facebook functionality, he explained, that allows APX Gives Back status updates to appear when you vote.
The 75 nonprofits that made the APX final voting are categorized by region. You’ll find Heart 2 Home in the Mountain region, and voting is literally done with the click of a button. Thanks for considering this easy, worthwhile daily task! Cast your first vote!
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
Yesterday, I had the pleasure of talking to Olympic gold medalist Mary Lou Retton, who will be speaking at the REALTORS® Conference & Expo in New Orleans from Nov. 5 to 8. I have no doubt that she will be a very dynamic and memorable speaker.
The passion and the heart that led to her to compete — and take gold — in the 1984 Olympics after surgery, and against doctors’ orders, is still very present.
Most Americans are doing just fine managing their money. But nearly half of all consumers have been 30 or more days late on a payment, according to MyFico.com, and three of 10 have been 60 or more days overdue. Twenty-three percent of all consumers have had a loan or account that was 90-plus days overdue, and nearly 20 percent have had a loan or account closed by the lender due to default.
If buyers you’re working with are among the group with less-than-perfect credit, help them improve it with seven tips from the June “Get Ready to Own” package of articles now available at the REALTOR® Content Resource. Start with these: Continue reading »
By Erica Christoffer, Multimedia Web Producer, REALTOR® Magazine
One of the most memorable cities I visited during my trip to the Gulf Coast last week was Grand Isle, La. The oil is more physically present here than other city in the Gulf that I saw. Here’s an excerpt from my travels on Thursday, June 17…
Grand Isle beach facing southeast.
Not long after my arrival on Grand Isle, I get my first look at the beach—seven miles closed off from swimming, fishing, and sunbathing. Cleanup workers ride their ATVs, seemingly rushing from one clean-up checkpoint to another. Coast Guard and National Guard vehicles are parked near beach entry points. Not a civilian in sight.
A “sandboni,” normally used to smooth out beaches after heavy use (like a Zamboni does for ice rinks) slowly rolls down the beach, skimming oil from the sand. It’s quiet. Then I see something in the water. It’s the fin of a dolphin swimming by. My heart sinks. Somehow I feel guilty.
I meet up with Dustin Cheramie, 30, a local fisherman and home builder from Cut Off, La. Business was good before the oil spill, he says. He started his own fishing company when he was 17, which has grown to include a fleet of three boats and a crew of 15. But since the oil spill, the fishing business has been at a standstill. He and his crew are now working for BP as part of the contract cleanup effort, picking up dirty boom and laying clean boom to soak up more oil. “I’m glad I’m making money, but I’m not making as much as I was fishing,” Cheramie says. Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
Home sales are doing pretty well right now, with sales at an annual pace of almost 5.7 million units, but the question on everyone’s minds is, what happens now that April 30 has come and gone and no more contracts will be eligible for the home buyer tax credit? (That’s the case even if the deadline for closing is extended, which Congress is looking at doing.)
Well, NAR Chief Economist Lawrence Yun thinks existing-home sales will continue doing pretty well for the next month. At a press conference yesterday (June 22), he said he expects sales to be about the same for June as in May. (See the video.)
But come July, sales could drop, because the stimulus effect of the tax credit will be gone and all that will be left to support sales is the economy and households’ confidence in buying. On the plus side, interest rates are expected to stay historically low and prices remain low, with lots of bargains to be had. But the big question continues to be job creation. If we see it, housing will follow. If we don’t, housing could lose the momentum it’s seeing.
Jobs, of course, is something no one can control. Even in a growing economy it’s not a given that businesses will start hiring. As Yun has said on a number of occasions, even if sales are picking up, businesses are unlikely to hire until they feel the pick-up is something that will be sustained over time. That’s because hiring represents an investment not in the present but in the future. Without that expectation of future growth, a strong performance today isn’t enough to justify the expense of hiring.
By Erica Christoffer, Multimedia Web Producer, REALTOR® Magazine
I’ve learned from my visit to the Gulf that each community along the coast is having and will continue to have vastly different experiences dealing with the oil spill.
Some areas, such as Gulfport, Miss., are physically untouched by the oil, but their sandy white beaches stand virtually empty as worried vacationers stay away. Other parts of the Gulf are struggling most with the environmental impact of the spill, such as Grand Isle, La. And still other communities are most concerned about the effect it could have on the local job market.
The city of Houma, La., falls into the last category. This community fared well after Katrina, avoiding the extensive damage that was felt in communities to the east. The city gained 7,000 residents from New Orleans and other neighboring areas. Today, the population is estimated at 120,000.
Houma does not touch the coast, but the majority of its residents depend on the Gulf of Mexico for their livelihood. Oil is not washing up in their backyard, but in a way it is—as I mentioned in my previous post, 60 percent of this region’s economy is tied to deep water drilling. Continue reading »
By Robert Freedman, Senior Editor, REALTOR® Magazine
REALTORS® get involved in so many worthy activities that it would surely be hard for you to take on yet another cause, but after learning about School of the Future I think many of you will find the time to take on one more thing. The results are just too compelling to ignore.
In a sentence, the program gets middle-school students excited about learning in the same way they get excited about sports: as something to do as much and as often as they can.
That might seem too good to be true, but the program does one thing very well: It shows students what it’s like to really use what they know. Think about your own profession as someone who sells real estate. You sell to earn a living but you also take satisfaction in mastering the skills that go into a successful career: prospecting, marketing, persuading, problem-solving, and negotiating, to name just a few. You’re using what you know, and the more you do that, the more satisfying your profession becomes. Continue reading »
By Erica Christoffer, Multimedia Web Producer, REALTOR® Magazine
These boats are helping in the cleanup efforts. That's dirty boom hanging off the ship (yellow material). In this region, it only takes about an hour for boom to be spoiled. The bottom of that ship is coated in oil. The Gulf does smell like gas, but I only on the water.
Houma, La., yesterday, Grand Isle, La., today, Gulfport, Miss., tomorrow.
Here’s what I’ve learned so far on my trip to the Gulf:
Most people living here are opposed to the moratorium on deep water drilling because it would worsen economic impact of the spill. “Do you want to see this country completely dependent on foreign energy sources?” asks Bill Boyd, broker-owner of Town & Country Real Estate in Houma, La. “That would be devastating to the Gulf.”
He says that in the Terrebone and Lafourche parishes of Louisiana, oil contributes to about 60 percent of the economy, followed by fishing at 20-25 percent, and to a lesser extent, agriculture (sugarcane) and medical. Here’s a NYTimes story that outlines how and why deepwater drilling is such a huge economic driver in the Gulf region.
I’ve also found a lot of resentment among locals, especially on Grand Isle, toward BP for what they view as a slow response and cleanup. “I would take 10 Katrinas over this because after a hurricane, it’s done. We can clean up and we can survive. We’re a hands-on community,” says Carolyn Angelette, broker-owner of Century 21 Island Realty in Grand Isle where the beaches are now completely closed.
Angelette is especially concerned about a drop in tourism. “Grand Isle is about the beach, fishing, and fresh seafood. Are we going to get that back? No one knows. Who’s going to come [to Grand Isle] if you can’t fish?” Angelette says. Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
When I was in college at the University of Tennessee, Knoxville, there was a group called the Party of Darkness (PoD) that ran candidates in the student government elections every year … on the platform of dissolving that government. Obviously, the PoD had a certain amount of notoriety among the students and faculty at UT — sorry Texans, there’s only one “UT” as far as I’m concerned — but it got attention beyond Rocky Top when it posted an advertisement to buy the school on eBay during one of the state of Tennessee’s many budget crises.
According to the online ad, online shoppers could have their “very own underfunded, overpopulated university,” which included “over 26,000 disgruntled college students,” “a bell tower with recorded bell sounds,” and “all the orange you can stand.” The bidding started at one cent, but got as high as $15.50. As far as I know, though, ownership of the university never actually changed hands. (Perhaps the winning bidder balked at the shipping costs?) In any event, the PoD had my vote that year.
I thought about this when I heard about Redfin accidentally posting a listing for the White House this week. Contrary to my initial thought, though, it wasn’t the work of politically motivated mischief makers, but rather a technical issue caused by Redfin automatically pulling in listing information from Oodle, which in turn got the White House “listing” from Owners.com, which had that up as a demo, according to CBS News. Redfin representatives were quick to acknowledge the mistake Tuesday, but added that the property would be a “steal” at $10 million. Continue reading »
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