By Brian Summerfield, Online Editor, REALTOR® Magazine
Is the traditional model of homeownership in need of an overhaul? Is it even worth defending? Five years ago, these questions might have seemed absurd, but today, several commentators are posing them — and often coming down in favor of extensive and expansive changes to the system.
For instance, the latest issue of Time magazine has a cover story controversially titled, “The Case Against Homeownership.” (An abbreviated version of the article is available online.) Author Barbara Kiviat begins the piece with the statement, “Homeownership has let us down,” and subsequently describes what she considers to be the “dark side” of this institution.
I’ve seen similar arguments come out in recent weeks, but I’ll pick on Kiviat’s because it’s timely, it’s high-profile, and it condenses most of the criticisms that opponents of the status quo of homeownership have made recently into a single body of work. Here are the broad strokes of her case: Continue reading »
By Katherine Tarbox, Senior Editor, REALTOR® Magazine
One of my favorite stories from last year was about Fran Hoover, ABR, GRI, with RE/MAX Masters in South Lake, Texas. For the past 15 years, Hoover has selected one client in dire financial need to work pro bono for every year.
When the market is as tough as it is now, it’s hard to imagine that anyone can afford to forgo a commission check and give up much of their valuable time. But since that article came out, I heard from many practitioners about how they also have done this or were hoping they could help in the future. Continue reading »
By Robert Freedman, senior editor, REALTOR® Magazine
One of the remarkable things about home sales today is the strength we’re seeing in the national median price. For July it was $182,600, up almost a percentage point from a year ago. That’s about what inflation is right now, according to the Consumer Price Index. When you consider the slowdown in sales volume now that the home buyer tax credit is ended, the resiliency in pricing is a bright spot.
NAR Chief Economist Lawrence Yun at his monthly press conference in Washington yesterday attributed that resiliency to the equilibrium of prices to household income (including mortgage-payment to income) and the drop in new-home construction.
In his analysis, homes are priced at a level that matches closely with households’ ability to pay. Thats’ a reasonable place for prices to be right now, all things considered, and he thinks any big swings up or down are unlikely in the next few months, even if home sales continue to struggle and inventories stay high.
Of course, if inventories stay high well into the fourth quarter, then home prices could once again come under pressure.
So, prices are aligned with the economy and interest rates remain historically low (4.42 percent on average). What’s missing is consumer confidence, and that appears to be dependant in part on evidence that jobs are growing.
Watch Yun’s press conference in the player above.
You can provide ongoing value to home owners in your blog, Web site, or e-newsletter by educating them on the benefit of an annual checkup — for homeowners insurance, that is.
Help home owners save money and protect their most important investment with tips on conducting an annual insurance checkup from the August “Audit Your Insurance” article package now at the REALTOR® Content Resource. Start with these two: Continue reading »
It’s not too late to help Good Neighbor Award winner Greg Adamson and his Utah-based Heart 2 Home Foundation win $30,000 in the APX Gives Back Facebook contest. The contestants are charities from around the country; anyone can register with APX Gives Back and vote for their favorite contestant/cause once a day. The contest has been going on for weeks, but there’s still time to cast four votes between now and midnight Saturday. One grand prize winner will get $100,000, and five regional runners-up, those receiving the most votes from each region after the overall winner, will be awarded $30,000 each.
I spoke with Greg yesterday, and although Heart 2 Home is several thousand votes behind the first-place organization, it’s in contention for a runner-up prize with more than 17,000 votes. But the voting is close, and if Heart 2 Home loses that spot, it gets no money. Why not help Greg win the $30,000? Heart 2 Home was founded to remodel and rebuild houses for very needy households, but it’s currently trying to fund an even bigger project—rebuilding a community center in inner-city Salt Lake City. The center serves refugees from Sudan, Nepal, and many other troubled areas. Greg says there are 117 languages spoken there.
You can learn more about APX Gives Back by reading my last blog post on this topic. Or just visit the APX Gives Facebook page. The charities in contention are divided by region; you’ll find Heart 2 Home in the Mountain region. Voting is literally done with the click of a button. Consider making this quick Internet stop for the next four days on behalf of a great cause. Cast today’s vote. Thank you!
By Robert Freedman, senior editor, REALTOR® Magazine
As I write this, U.S. Treasury Secretary Timothy Geithner is in Washington at the Treasury building discussing with a group of academics and business leaders what the home mortgage finance system should look like after the federal government decides what to do with Fannie Mae and Freddie Mac. The discussion is a first step in the federal government’s congressionally mandated release of a GSE overhaul plan by January 2011.
After about an hour’s discussion, the dominant thread is about retaining FHA to ensure finance availability for lower- and moderate-income households and re-shaping Fannie and Freddie into something that backstops losses after private insurers take their lumps.
At least for the near term, most of the participants seem to agree, some form of government backstopping of the mortgage market is necessary, but it won’t be under the terms that we’ve grown familiar with. Rather, the guarantee would be absolutely explicit, not implicit like we saw with Fannie and Freddie, and, in the view of some, would take the form of a limited, maybe even catastrophic-type, backstopping in which the private sector takes first-risk position.
The government-backed secondary market companies would adjust underwriting and terms to provide counter-cyclical restraints (tightening standards as appreciation rises too far from historical norms) and ensure without question that they would have the reserves to meet their commitments to investors should loans go bad. In a pure market, that would mean costs would rise far too high for most borrowers to afford financing, but with the government’s support, costs would be brought down to a level appropriate for the great middle of the market. FHA would be retained to play its role making safe, affordable financing available to lower- and moderate-income borrowers.
By Robert Freedman, senior editor, REALTOR® Magazine
The agency that oversees Fannie Mae and Freddie Mac could strike a considerable blow against the growing use of private transfer fees. If it does, the move would put the agency in alignment with NAR, which, along with other industry groups, says the fees are a stealthy way for third parties to milk real estate transactions for money without necessarily adding anything of value.
If you’re not familiar with them, the fees are encumbrances on titles imposed by developers that typically require a payment to the developer any time the property is bought or sold subsequent to the initial transaction. The fees are similar to encumbrances placed on properties by public sector agencies or nonprofit organizations to provide for a public use. A good example is a conservation easement in which an encumbrance is placed on the title of a property to restrict future development.
In the case of private transfer fees, though, a case for any kind of public good isn’t necessarily made. A developer might say the fee income will go into neighborhood improvement, but in some cases no such claim is made. Instead, the fee is simply a way to create an income stream to the developer long after the property is initially sold.
Wall Street is reportedly getting in on the act, with financial gurus devising ways to create securities for sale to investors that are collateralized by the fees.
NAR has been offering assistance to state associations of REALTORS® for battling the fees and has been seeing considerable success. About a dozen and a half states now either ban outright or restrict the fees in some manner, up from practically zero when the effort was launched last year.
Now, with the Federal Housing Finance Agency (FHFA) publicly questioning the fees and considering taking steps to stop Fannie Mae and Freddie Mac from accepting mortgages on properties whose title is encumbered by the fees, the move to get them stopped is gaining even more momentum.
You can read FHFA’s concerns in a notice it just published. What’s interesting about the notice is the agency lays out in clear terms the many reasons why it thinks the fees are a net detriment to homeowners, the economy, and the real estate industry.
You can learn about NAR’s efforts to help state associations of REALTORS® in the video below, released earlier this year. NAR has also joined with others in a coalition to fight the fees.
People have different views about the value of private transfer fees. At this point, FHFA is saying the fees appear to be something that do more harm than good. We’ll see what the agency ultimately does.
By Melissa Dittmann Tracey, Contributing Editor, REALTOR® Magazine
Good customer service supposedly starts with the old saying that the customer is always right. However, the suddenly infamous JetBlue flight attendant Steven Slater thought a customer was wrong, and he decided to tell her that. His telling-off session has captured headlines across the U.S., thanks to a video of the incident that’s gone viral.
You’ve probably heard the story by now: Slater became so outraged at a customer that he cursed to her on the airplane’s public address system and then grabbed a beer from the galley and did a so-long by using the plane’s exit slide to slide off into the sunset … well, sort of.
He now faces charges of criminal mischief, trespassing, and reckless endangerment, which could land him in jail. But his “I’ve-had-enough” attitude — complete with the dramatic exit — has turned him into an Internet sensation.
Moreover, he’s gained widespread support, with a Free Steven Slater movement starting up on Facebook. Apparently, a lot of people can relate to his frustration.