Real estate Web site Doorsteps has released an infographic that shows demographic and financial data on first-time home buyers, which includes data from the National Association of REALTORS®’ 2012 Profile of Home Buyers and Sellers. Among the key data points:
- First-time home buyers are more willing to compromise on the house, but not on the neighborhood.
- Most first-time home buyers cut out on luxury items (42 percent) and entertainment (35 percent) to save for a home.
- The average age of the first-time home buyer is 31.
Click on the image below for the full-sized infographic.
In an empty real estate office on Boylston Street, dozens of homemade calzones sit uneaten, and slices of pizza — now spoiled — lay near half-empty juice boxes and soda cans scattered across the floor. This may not be the most iconic image to come out of the Boston Marathon bombings, but it’s a still-life snapshot of the chaos that erupted from a celebration so profoundly American, it has its roots in the Revolutionary War.
Every year on Patriot’s Day, the Charlesgate Realty Group holds an “open house” party for friends, family, and clients to commemorate the holiday and watch the marathon runners as they charge toward the finish line. Every year they gather to observe the triumphant athletes; every year they await those famous calzones.
But this was not every year.
“In the blink of an eye, we had to clear the whole party out,” says P.T. Vineburgh, founding partner of Charlesgate. Vineburgh felt a first then second explosion — the second less than half a block away — and saw a panicked crowd fleeing the street.
Immediately, he knew something wasn’t right. “With two explosions, I thought it was way too coincidental for it to be gas lines,” Vineburgh says. “I told everyone to leave through the back door.”
When the group was outside, all accounted for and safe, Vineburgh noted how brightly the sun was shining, a strange moment of darkness meeting light. “It was pushing 60 degrees and really our first taste of spring,” he says. “And that’s exactly how it should have been; this was supposed to be the quintessential Boston family day.”
Though he’s not even sure when he’ll regain access to his office — located inside the restricted crime scene — Vineburgh is certain the city will revive itself with full vigor, and soon.
“The year the Bruins won the Stanley Cup, there were a million people at the parade,” he says. “You’ll see that times 10 because this isn’t sports; this is real life.”
Other local REALTORS® agree, and association leadership is sending a message of support and strength to the down —but by no means out — community. “We Bostonians, we’re resilient, and I have no doubt we’ll get back out there and do our thing,” says Joe Schutt, YPN chair of the Massachusetts Association of REALTORS®, adding that the concern and help pouring in from across the country has been overwhelming. In an instant, hundred-year-old baseball rivalries vanished, much like a well-hit ball sailing over the Green Monster’s 37-foot wall at Fenway Park.
“When something happens on American soil, our country pulls together,” says Schutt, also broker/owner of Unit Realty Group in Back Bay, Mass. “We may have these rivalries, but in the end, we’re really one America.”
The solidarity is good news for the REALTORS® of Massachusetts, especially with at least one member of MAR seriously wounded, and others still shaken up from the events of the day.
“I thought something was falling from the sky,” says Katie Beth Clark, a REALTOR® in Brookline, Mass., who was standing near the finish line when the bombs went off. “I heard the noise and saw people hitting the ground; I just started bawling.”
And to all those affected in the real estate community, they should know they aren’t alone.
“We’re here to stand behind anyone and everyone,” Schutt says. “We’re prepared to do everything we can.”
But this benevolence and loyalty is nothing new, in fact, it’s symptomatic of the job. “The REALTOR® family is strong,” says Marilyn Jarvis, President of the Certified Residential Specialists’ Massachusetts Chapter. “We may be fierce competitors when sitting across the table from one another, but if something comes up, we rally together like nothing else.”
Jarvis, whose partner of 15 years is an amputee due to health-related reasons, has already set up a fund for those wishing to donate to the bombing victims. It’s a deeply personal effort coming from someone who understands the dire consequences of losing a limb.
“I truly know what some of these people have ahead of them,” Jarvis says. “From the smallest to the biggest of details, their lives will be different, but we’re going to be there to give them our help.”
With calls coming in from around the nation, Jarvis is confident the fledgling program will become a success; and a much needed monetary source for those unaware of the challenges ahead. “You can’t go out to dinner the same way again,” she says. “How do you drive a car? Who will walk your dog? It’s the little, everyday things that will affect them most.”
For these victims — and a city — in need of mending, it seems the restoration has already begun. “Boston is full of strong, prideful people,” Vineburgh says, recalling how “eerily quiet” the town was the night of the bombings. Now as routine, rejuvenation, and the revelry characteristic of Boston returns, residents like Vineburgh look to brighter days ahead. His office may be inaccessible and full of cold calzones, but he’s already planning on another marathon-watching party next year, “without a doubt!”
If there was one major takeaway from the National Crime Prevention Council’s 2013 Mortgage Fraud Virtual Conference, it was this: The mortgage market, while no longer a wicked stepchild of the housing crisis, must still be carefully monitored. Though its tantrum-throwing days may be over, the $1.1 trillion government loan industry has the potential to cause serious economic damage should fraudulent mortgage activity persist unchecked.
“What is old is new again,” says Michael Stolworthy, Director of Fraud Prevention for the U.S. Department of Housing and Urban Development. “We’re starting to see some disturbing trends. The same old type of mortgage cases are coming up.”
False statements on loan applications, inflated appraisals, and loan modification schemes are just some of the ways fraud is reappearing in the mortgage market. And with government loans on the rise—the number of mortgages insured by the Federal Housing Administration has nearly doubled since 2006—the potential for mortgage fraud increases, especially among applicants in shaky financial condition.
“Back during the mortgage boom, people who had taken out second and third mortgages were living the champagne lifestyle on a beer budget,” says Robert Simken, a former real estate practitioner turned police officer in Eustis, Fla. “Now, those same people are living in homes that are underwater and willing to do just about anything to get out of their bind.”
Problems arise when that “anything” includes turning to loan counselors, lenders, and alleged real estate professionals who make promises they never plan to keep. “If an opportunity comes along that seems too good to be true and the little hairs on your neck stick up and say ‘danger,’ don’t just ignore them,” Simken warns.
Through public outreach campaigns and educational seminars, organizations like the National Crime Prevention Council stress the importance of using an accredited real estate professional when contemplating any property transaction. “Half the people haven’t checked the qualifications of the individual helping them buy a home,” says Ann Harkins, CEO and President of NCPC.
Simkens agrees that home owners should seek advice from a noted professional. “You don’t go to the butcher for brain surgery and you don’t go to a brain surgeon for chopped meat,” he says. “It’s important to find an expert and not just someone who shows up and can recite the jargon.” Continue reading »
Major news outlets have been talking about the Obama Administration possibly requesting $943 million from the U.S. Treasury this year to shore up the finances of the Federal Housing Administration. But whether the 80-year-old agency will actually need the cash infusion is far from clear.
The $943 million figure is part of the Administration’s fiscal 2014 budget proposal, but it’s simply a projection based on current conditions. Whether the funds will actually be needed won’t be known until September, six months from now, when the current fiscal year ends.
Today’s headlines about the bailout stem not from the agency’s single-family mortgage portfolio but from its portfolio of reverse mortgage loans, which it calls home equity conversion mortgages (HECM). These are loans that enable seniors to draw a steady stream of monthly income by tapping the equity in their house. FHA backed almost 55,000 reverse mortgage loans in 2012, making it the biggest participant in the market by far.
FHA Commissioner Carole Galante has since taken steps to pare back the agency’s reverse mortgage risk. Among other things, the agency has reduced its insurance exposure by eliminating its standard, fixed-rate reverse mortgage product, reducing the maximum amount of funds available to borrowers.
Agency Has Played Big Economic Role
The agency has really been the unsung hero of the housing market since the downturn hit several years ago, and the pressure on its reserves is the price the federal government has been paying to help keep mortgage funding flowing to first-time buyers and moderate-income households while private lenders have pared back their lending in the conventional market through tightened underwriting standards.
Unlike in the conventional market, during the housing boom FHA never loosened its underwriting standards and its financial position remained strong during the downturn, which made it one of the most stable participants in the mortgage market after the crash.
Its market share grew considerably during that time while it took up much of the slack left by the private market. Part of its growth was also driven by federal policy changes that enabled hard-hit home owners to replace their troubled mortgages with safe FHA financing. As home values plummeted in 2005 and 2006, the FHA mutual mortgage insurance fund, the agency’s main vehicle for backing single-family mortgages, came under pressure. But FHA was still able to retain its reserves for its congressionally required 30 years. (FHA also maintains a congressionally required 2-year surplus reserve account.)
FHA has since taken a number of steps to keep its finances healthy. These include increases in its upfront and monthly premium structures and tightening its enforcement over bad lenders.
The result has been a remarkable run. At a time when the two secondary mortgage market companies Fannie Mae and Freddie Mac were using Treasury funds to keep them operating after the federal government put them in conservatorship, and many of the country’s largest banks were taking assistance under the Troubled Asset Relief Program (TARP), FHA continued to operate under its own reserves.
Of course, even FHA came under pressure when home prices were seeing steep declines, and for a while last year it looked like the agency would need to tap Treasury funds to keep its reserve accounts fully funded, but in the end the improving housing market made that unnecessary as rising home values relieved much of the pressure on its reserves. The agency also received a one-time payment as its share of the National Mortgage Settlement. The National Mortgage Settlement is the 2012 agreement between five of the country’s largest banks and the federal government to address widespread problems found in the way the banks were processing their foreclosures.
The agency still has years of reserves left to meet all of its exposure should its entire portfolio of loans go bad. What it doesn’t have is the full 30-year requirement (plus the 2-percent surplus requirement), which is far beyond what banks and other financial institutions have to keep on reserve.
Lawmakers in the House are even looking at whether it’s time to reconsider the 30-year reserve requirement for the agency. Rep. Michael Capuano (D-Mass.), ranking member of the House Financial Services Subcommittee on Housing and Insurance, has introduced legislation to modify the 30-year reserve requirement. Rep. Maxine Waters (D-Calif.), ranking member on the full House Financial Services Committee, suggested in a recent hearing that it’s time for Congress to look hard at the requirement.
Were the requirement in fact eliminated, much of the pressure on FHA’s reserves would be relieved and the agency would be treated more closely to the way other financial institutions are treated.
Bottom line: The FHA has absorbed a lot of the problems in the housing market over the years and as of today it remains one of the lone housing finance agencies to come through the financial crisis without a bailout.
In the 90-second video above, House Financial Services Committee Ranking Member Rep. Maxine Waters (D-Calif.) asks NAR President Gary Thomas whether it’s time to revisit the 30-year reserve requirement for FHA. The question was posed during an April 10 hearing on the state of FHA. President Thomas was one of the panelists at the hearing, held by the committee’s housing and insurance subcommittee. Thomas said the requirement should be looked at.
The foreclosure crisis is easing but chances remain good that you’ll continue to list and sell foreclosures for a while. If you’ve had tenants in some of the foreclosures you’ve already sold than you’re probably familiar with that 2009 federal law that protects tenants against eviction when the owner loses the property to the lender.
The law is “The Protecting Tenants at Foreclosure Act” and it gives tenants two types of protection, depending on their situation. If they’ve signed a long-term lease agreement with the owner, than they’re entitled to continue renting their home for the duration of that lease agreement. So, if they have nine months to go on their lease when the owner loses the property to foreclosure, than you as the listing agent of that property have to honor that existing lease. That means no eviction or no rent increases (unless a rent increase is part of the existing lease) until the agreement expires.
If they haven’t signed a long-term lease, than they’re entitled to a minimum of three months notice before they have to leave.
There are exceptions to the law and other provisions you have to be aware of, but those are the two basic components.
Learn a little more about the law, and what protections you must accord tenants in these transactions, in this 5-minute video with NAR Regulatory Affairs and the National Law Center on Homelessness and Poverty.
The scenario happened like a perfectly-scripted movie: a Keller Williams team based in Plantation, Fla. decides to play their odds at the lottery. For just $20 each, the 11 co-workers could have the chance to win a $338 million Powerball jackpot. Through a series of group text messages and e-mails, the team organized their efforts and collected $240—or 120 tickets—for the March 22nd Powerball. Everyone at Keller Williams Partner Realty participated, except for Jennifer Maldonado, the newest member of the team. “I just started work,” the administrative assistant told team leader Laurie Finkelstein Reader. “I think I can spend $20 on something else.”
Finkelstein Reader warned Maldonado about the consequences of her choice. “Jen, if you don’t pay we’re going to win,” she said, staring her co-worker straight in the eyes. “Don’t worry,” Jen answered with a slight laugh. “I’ll take the fall for you.” (Yes, we all know where this one is going…)
Cut to Saturday when the Powerball numbers were announced. Finkelstein Reader got back on the group text that night—her husband was too tired to stay up for the results—and inquired about whether or not anyone had checked the winning numbers. “We only got five out of six,” one co-worker replied with the nonchalance of someone unaware that the team had just won $1 million.
They celebrated until dawn—even Finkelstein Reader’s husband jumped out of bed screaming, “I’m not tired anymore!”—and chatted for hours about their good fortune, which would amount to $83,333.33 per person, after taxes. “We all got on the phone and it was just ten of us completely freaking out,” Finkelstein Reader says.
But festivities quickly came to a halt the next morning when the team realized that Maldonado hadn’t participated in the pool. Maldonado, who had been carefully monitoring her spending, was happy for the team but visibly shaken by the news.
“The next thing I did was what would come naturally to anyone on my team: I asked everyone what they thought about including Jen in the earnings,” Finkelstein Reader says. “Of course, they were all on board.”
After receiving unanimous consent, Finkelstein Reader handed over what she describes as “a fat stack of cash” to Maldonado, who was brought to tears by the thoughtful gesture.
And that may have been the end of this story, if not for one little Facebook post about the altruistic act that went viral faster than you can say, “cats singing on YouTube.” Within hours, word spread far and wide about the jackpot-winning team and their decision to include the ill-fated admin. Soon national news programs like Dateline, Inside Edition, The Today Show, and more all clamored for a chance to cover the philanthropic feat.
Even Hollywood has been calling, though the team isn’t willing to answer quite yet, that is unless the right offer comes along. “I would go to California if Ellen asked,” Finkelstein Reader admits. “I tell everybody I just want to dance with her!”
Fame and foxtrots aside, Finkelstein Reader says the money has only cemented the already cooperative atmosphere synonymous with a real estate team. “Before this happened, we were every bit the way you see us now,” she says. “The only thing different is that we won a million dollars.”