Realtors Optimistic About Future

 Realtors Persevere, Optimistic About Future

WASHINGTON – May 7, 2010 – With the real estate market improving, three-quarters of Realtors^® are very certain they will remain active in the market for two more years, according to the 2010 National Association of Realtors^® Member Profile. Only 8 percent were uncertain about their future.

The study’s results are representative of the nation’s 1.1 million Realtors, who account for 60 percent of the 1.85 million active real estate licensees in the U.S. The typical NAR member has 10 years experience, and many have increased their training, web presence and use of social media over the past year. More than half use social networking sites, up from 35 percent in 2009.

Analysis of data from the Association of Real Estate License Law Officials shows the number of active real estate licensees in the U.S. fell 7.5 percent last year from 2.0 million in 2008. The number of licensees who are not Realtors was 750,000 in 2009, down 14.8 percent from 880,000 in 2008. At the same time, however, NAR membership fell only 0.7 percent.

NAR President Vicki Cox Golder said these comparisons mark a sharp contrast. “Realtors are much more likely to remain active in the business than real estate agents or brokers who are not NAR members,” she says. “Realtors are helped by the support and benefits they receive from NAR, as well as their local and state Realtor associations. Many members take advantage of down time to improve their skills and training to better serve future clients, but there also are intangible benefits that come from networking and membership in the nation’s largest trade association.

“In addition, many are diversified in their business practices – they don’t put all their eggs in the residential sales basket. While eight in 10 members specialize in residential sales, almost all Realtors also have secondary areas of focus – only 3 percent don’t.”

Twenty-two percent of respondents also offer commercial brokerage, 21 percent are in relocation, 18 percent residential property management, 15 percent counseling and 13 percent land development. Smaller percentages were also in commercial property management, residential appraisal, international, auction and commercial appraisal.

Residential brokerage was cited as a secondary business for 11 percent of respondents who had other primary specialties.

Although home sales rose modestly in 2009, lower values hit the bottom line. The median income of Realtors fell 3 percent to $35,700 last year, which followed a 14 percent decline in 2008. Members licensed as brokers earned a median of $49,100 in 2009, while sales agents earned $26,600.

Realtors in the business for two years or less earned a median of $8,800, while those in the business for 16 years or more earned $52,300. “The longer you’re in the real estate business, the more you make based on growth in referrals and repeat clients from serving their long-term interests,” Golder says. “Real estate is constantly changing, which is why continuing education is so important.”

A median of 20 percent of all NAR members’ business is from referrals from past clients, ranging from 2 percent for newcomers in the business for two years or less, to 23 percent for respondents with at least 16 years of experience.

Paul Bishop, NAR vice president of research, says 24 percent of Realtors in 2010 held at least one out of six certifications in specialized training, up from 16 percent in 2009.

“The fastest growth in training is for members holding the Short Sales and Foreclosures Resource Certification, underscoring the impact of distressed sales on the housing market,” he says. “Although it was just launched at NAR’s Annual Conference and Expo in November 2009, the SFR Certification has already become NAR’s top certification, held by 12 percent of respondents.”

SFR surpasses the e-Pro Certification, which is held by 11 percent of members, offered to help them serve the online needs of their clients.

Thirty-four percent of Realtors hold at least one professional designation, about the same as in 2009, with the most popular being GRI (Graduate Realtor Institute), held by 19 percent of respondents; ABR (Accredited Buyer Representative), 13 percent; CRS (Certified Residential Specialist), 10 percent; and Seniors Real Estate Specialist (SRES), 5 percent. Smaller percentages hold one of 13 other designations, including the recently launched Green Designation, which already is held by 2 percent of the membership.

Only 6 percent of members report real estate is their first career; most bring expertise and experience from other fields. Previous full-time careers include management, business or financial, 19 percent; sales or retail, 15 percent; office or administrative support, 10 percent; and education, 6 percent. Twelve other categories were each 4 percent or less.

Only 11 percent of Realtors work fewer than 20 hours per week, 30 percent work 20 to 39 hours per week, and 60 percent work at least 40 hours per week.

The survey shows the typical NAR member is 54 years old and works 40 hours per week; 57 percent are women. Women account for 51 percent of brokers and 63 percent of sales agents. Four percent of all Realtors are under 30 years old while another 5 percent are 30 to 34 years old; 17 percent are 65 or over.

Seven out of 10 Realtors are compensated through a split commission arrangement, 18 percent receive all of the commission and another 3 percent receive a commission plus a share of profits; 81 percent of members work as independent contractors for their firms. Seventy-three percent receive no fringe benefits; however, 11 percent are covered by errors and omissions insurance. Only 6 percent receive health insurance.

There are two sides to every real estate transaction – one each for the seller and the buyer. Among Realtor sales members, the median number of transaction sides or commercial deals handled in 2009 was seven, equivalent to 3.5 full transactions, unchanged from 2008.

The most important factor limiting potential clients in completing a transaction was difficulty in obtaining a mortgage, cited by 34 percent of respondents.

Residential specialists generally offer buyer agency, with 41 percent offering both buyer and seller agency with disclosed dual agency, and another 11 percent provide exclusive buyer agency; 7 percent offer exclusive seller agency.

Technology plays a critical role in Realtors’ success: 94 percent use e-mail daily or nearly every day, 91 percent use computers, and 56 percent use smart phones with wireless e-mail and Internet capabilities. Less frequently used but important technologies include digital cameras, instant messaging, GPS devices, and PDAs without phone capability.

More than six in 10 NAR members have a personal website, while 89 percent report their firm has a web presence. Seven out of 10 Realtors have a home office.

Fifty-four percent of members are affiliated with an independent, nonfranchised firm; 32 percent are with an independent franchised company, 9 percent with a franchised subsidiary of a national or regional corporation, and 4 percent with a nonfranchised subsidiary of a national or regional corporation. The median-sized firm has 29 licensees with one office.

Respondents have typically been with their firm for five years. Twelve percent of Realtors report their firm was bought by or merged with another during the past year.

The survey shows 14 percent have one personal assistant, while 3 percent have two or more personal assistants. Only 4 percent of members who have been in the business for two years or less have a personal assistant, while 25 percent of those with at least 16 years of experience have at least one personal assistant.

Realtors often invest in real estate and own other homes in addition to their primary residence – 39 percent own at least one investment property and 16 percent own at least one vacation home. In addition, 12 percent own at least one commercial property.

NAR members are active in the political process – 96 percent are registered to vote; 93 percent participated in the last national election and 81 percent voted in the last local election. They are well educated, with 48 percent holding at least a bachelor’s degree.

The 2010 National Association of Realtors Member Profile was based on a survey of 58,022 members that generated 6,830 usable responses, representing an adjusted response rate of 6.7 percent. Income and transaction data are for 2009, while other data represent member characteristics in early 2010.

The study can be ordered by calling (800) 874-6500, or online. The profile is free for NAR members but costs $125 for nonmembers.

© 2010 Florida Realtors®

Steve Geving
Premiere Plus Realty Co
239-573-1400
Steve@nextgenerationrealtygroup.com
www.nextgenerationrealtygroup.com

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Mortgage Rates Drop

Freddie Mac: Mortgage rates sink to 6-week low

McLEAN, Va. – May 7, 2010 – Rates for 30-year fixed mortgages have fallen to their lowest level in six weeks, Freddie Mac said Thursday.

The average rate for 30-year fixed-rate mortgages was 5 percent this week, down from last week when it averaged 5.06 percent. A year ago, 30-year fixed rate mortgages averaged 4.84 percent, Freddie Mac said.

Rates dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended at the end of March, but the Fed left the door open to reviving the program if the economy weakens.

The last time rates for 30-year fixed mortgages averaged less than 5 percent was the week of March 25, when they were 4.99 percent.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often tracking the interest rate paid on long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.36 percent, down from last week when it averaged 4.39 percent.

Rates on five-year, adjustable-rate mortgages averaged 3.97 percent, down from 4 percent a week earlier. Rates on one-year, adjustable-rate mortgages dipped to 4.07 percent from 4.25 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year, 15-year, and 5-year loans, and 0.6 of a point for 1-year loans.

Copyright © 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Steve Geving
Premiere Plus Realty Co
239-573-1400
Steve@nextgenerationrealtygroup.com
www.nextgenerationrealtygroup.com

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Condos are being kick stated by foreign buyers

Foreign buyers kick-start Orlando-area condo sales

ORLANDO, Fla. – May 4, 2010 – Condominiums are now selling faster in Central Florida than they did at the peak of the real estate market four years ago, when renters, retirees and eager urbanites, seized by condo fever, were snapping them up in Metro Orlando at the rate of 20 a day.

In March, buyers closed on 790 condo units in the four-county metro area – 25 percent more than in March 2006, when real estate agents were celebrating a then-astronomical 630 sales.

With the region’s population basically stagnant and unemployment at or near record levels, the question is: Who is buying all of these units?

According to brokers, industry reports and others, foreign buyers are largely behind the surge.

For example, about 80 percent of the sales these days at the Mosaic at Millenia, a south Orlando apartment complex that went condo in 2004, have been to international investors.

“They are paying all cash, and their primary purpose is to get a monthly rented unit that provides cash flow with the expectation of some appreciation,” said Alec String, a broker with Coldwell Banker NRT Development Advisors in Longwood.

Unlike the deals that drove condo speculators during the homebuying frenzy of the mid-2000s, these sales aren’t based on incentives or inflated promises of rental income, String added. And they aren’t paying inflated prices, either: In March 2006, the median price of the condos sold in Metro Orlando that month was $159,600; by March of this year, the median had plummeted 69 percent to $49,700.

The sharp decline in prices since the market’s peak in 2005-06 is part of the reason Florida accounted for almost one-fourth of all U.S. property purchases by international buyers in late 2008 and early 2009, according to a report by the National Association of Realtors. California was second with a 13 percent share of the foreign market.

Nationwide, those foreign buyers paid a median of $247,100 during the period studied, compared with a median of $198,100 for all buyers. About 70 percent of the purchases were single-family homes, 18 percent were multifamily, and the rest were commercial properties.

In Florida, most foreign buyers hail from the United Kingdom, other parts of Europe, and Canada.

James Black, managing partner of a London-based company, Ultimate Holdings, said the British outfit has raised about $50 million to purchase distressed properties in the U.S., starting with properties in the Orlando area.

In February, Ultimate Holdings purchased 122 units in a 240-unit Davenport condominium called the Village at Town Center, paying a combined $5.38 million. The company has improved the units, which start at $54,000 for a one-bedroom model, and says it has 37 buyers under contract. Most of its customers are from the U.K., Canada and Switzerland.

“We’re a group that has invested in both the U.K. and in multiple locations outside the U.K.,” Black said. “We’re fairly experienced in looking for value …and pretty much the best value lay in Florida, and specifically in Orlando. We were very confident that the bottom has passed, and the belief is that the city can recover.”

Black said Ultimate Holdings is also negotiating to buy an apartment complex on Semoran Boulevard near Orlando International Airport, and it is shopping for deals in Miami and Chicago.

A recent survey by the Association of Foreign Investors in Real Estate ranked Orlando 12th among U.S. cities for investment opportunities. The group’s 200 members own more than $842 billion worth of real estate globally, including $304 billion in the U.S.

“They really have expressed some strong interest this year, but they’re having difficulties finding bargains,” said Jim Fetgatter, the group’s chief executive.

The last time members felt as strongly about U.S. real estate was in 2003, Fetgatter said. In the group’s fourth-quarter survey, two-thirds of those who responded plan to increase their U.S. holdings this year compared with 2009.

An influx of foreign investors snapping up the region’s distressed real estate is a two-edged sword, said Bob Daday, founder of the 40-member Oviedo HOA Presidents Association.

“People hoping to sell their condos or town homes – it’s good for them that they can sell,” Daday said. “The flip side is that we have 20 rentals in our community, and the difference in how they are kept – between homeowners and investors – is quite obvious.”

The owner-occupied places, he said, generally have manicured lawns and attractive paint jobs, while the rental units tend to give the appearance that the property’s owner doesn’t care.

Copyright © 2010 The Orlando Sentinel, Fla., Mary Shanklin. Distributed by McClatchy-Tribune Information Services. 

Steve Geving
Premiere Plus Realty Co
239-573-1400
Steve@nextgenerationrealtygroup.com
www.nextgenerationrealtygroup.com

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New Mortgage Relief Plan

 New Mortgage Relief Plan

WASHINGTON – April 19, 2010 – The White House Version 2.0 mortgage-relief plan announced on Friday is a recognition that the moribund housing sector poses a grave threat to the nation’s economic recovery. By the administration’s own admission, however, the effort may save at best only a third of the homes facing foreclosure in coming years.

The new measures, funded through $50 billion already set aside for mortgage relief, seek to provide three-to-six-months of temporary help for newly unemployed homeowners in making mortgage payments.

They also ease the refinancing of mortgages now valued well above the current home price – so-called underwater mortgages – and give incentives to issuers of piggyback mortgages to get out of the way and allow a mortgage modification to happen.

The effort to have banks forgive principal gives greater incentive for homeowners in foreclosure-troubled states such as California, Florida, Arizona and Nevada to stay in their homes rather than hand the keys back to the bank, which would swell the glut of vacant or bank-owned homes on the market – and further depress home prices.

The White House was careful not to raise expectations too high, noting that up to 12 million foreclosures still could occur during the next three years. The new program seeks to help at most 4 million of those homeowners.

One in four homeowners is thought to be underwater, or owe more on a mortgage than the home’s underlying value, according to researcher First American CoreLogic, a number that threatens to swamp refinance efforts.

Friday’s proposals follow a steadily growing drumbeat of criticism about administration efforts to prod lenders and investors in housing securities to modify distressed mortgages aggressively. After a year of effort, fewer than 200,000 permanent modifications have taken place.

“We’re trying to adjust to changing circumstances over time,” Assistant Treasury Secretary Herbert Allison explained during the White House rollout of the upgraded mortgage relief program.

Advocacy groups have criticized the administration’s prior effort as too timid. Elizabeth Warren, a Harvard University professor who heads the special Congressional Oversight Panel that oversees the expenditure of taxpayer bailout money, for months has warned that the Home Affordable Mortgage Program wasn’t even keeping up with the pace of new foreclosure notices.

Lawmakers too have been pressuring the Obama administration to give more aid to unemployed homeowners, especially those with good payment histories.

“While clearly there are some people in trouble on their mortgages who bear some of the responsibility for their plight, this is not true of the unemployed who are fully deserving of this help,” said Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

The new program captured headlines Thursday night when word leaked of help to unemployed homeowners. Once the details came out Friday, however, it delivered less than expected.

Lenders and loan servicers who participate in the government’s program are required to offer temporary relief, but it’ll be help for a limited universe. First, borrowers must seek this help, must be collecting unemployment insurance and must be fewer than 90 days late on their mortgage payments.

That appears to exclude many of the record 6.1 million Americans who have been jobless for 27 weeks or longer.

“It’s the first real step they’ve made on helping the unemployed, but it is not enough,” said Michael Calhoun, the president of the Center for Responsible Lending, an advocacy group based in Durham, N.C.

Citing only “modest steps,” Calhoun said the administration is navigating a political environment where taxpayers are sick of bailouts of any sort.

“The administration has been pretty sensitive to criticism that they’re helping borrowers too much. I think that’s reflected in this modest plan,” he said.

Republicans weren’t shy about labeling the effort another bailout.

Sen. Orrin Hatch, R-Utah, said in a statement that the new efforts were unfair to people “who work hard, pay their bills on time and raise good families. They feel like they are being penalized for being responsible, and that’s not right.”

Some of the most important changes in the reworked Obama plan are technical.

A program to refinance underwater mortgages has been on the books for several years, but had virtually no bank participation. That’s because there were few lenders willing to refinance or reissue such mortgages and risk consequences to their own creditworthiness if these loans went into default because of the sour economy.

The new Obama plan, however, will grant an important exception from such credit hits if a lender extinguishes an old mortgage, forgives principal and places the new loan into a Federal Housing Administration program.

Another barrier to modification has been second mortgages, especially in states where housing prices soared. Issuers of these second mortgages had little incentive to extinguish their claim and help the borrower and issuer of the primary mortgage modify mortgages.

Under the revamped effort, the government will double payments to second-lien holders that agree to extinguish their claims. Before, they got 10 cents on the dollar for doing so; now they’ll get 20 cents on the dollar. It doesn’t sound like much, but if the mortgage goes into foreclosure, they get nothing.

There’s also a danger that Friday’s plan could foster unrealistic expectations.

“Borrowers are calling today from the announcement, and it could be fall before you see some of this executable,” cautioned Faith Schwartz, who runs Hope Now, a trade association that represents lenders and loan servicers. “The good news is there are a few more tools.”

Much of what was announced Friday followed intense discussions with the mortgage finance community. Sean Dobson, the chief executive of Amherst Securities, was part of that discussion, and he praised the administration’s willingness to listen.

“It’s a fatal wound to the economy if they don’t do something about it. … Nothing yet has been done,” Dobson said, suggesting a negative loop where the housing crisis hits the economy, which creates more job losses, which add more homes to the foreclosure rolls. “This is the first step we’ve seen to interrupt that feedback loop.”

© 2010 McClatchy-Tribune Information Services, Kevin G. Hall. Distributed by McClatchy-Tribune News Service.

Steve Geving
Premiere Plus Realty Co
239-573-1400
Steve@nextgenerationrealtygroup.com
www.nextgenerationrealtygroup.com

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Lending Rules Change For Florida Condos

Lending Rules Change For Florida Condos.  I Think This Will Help

 MIAMI (AP) – April 1, 2010 – Freddie Mac is moving to buoy the battered Florida condo market, waiving lending rules that made it harder to buy and sell units in many condo buildings.

Freddie Mac said Wednesday it will back mortgages on units in financially troubled condo developments as long as the seller’s loan is already owned or securitized by the mortgage finance company.

The announcement is a reversal by Freddie Mac, which had been rejecting mortgages for units in condo developments with low occupancy and high delinquency rates for condo association fees.

The change, intended to increase financing availability for Florida condos, is effective April 1. To qualify, the closing date for the new mortgage must be on or before March 31, 2011.

Florida’s once-burgeoning condo market has been hit hard by foreclosures, falling prices and high inventory caused by overbuilding. Condo prices have fallen by half since 2006 in many parts of the state.

Condo associations with a glut of empty units have struggled to collect fees, causing buildings to fall into disrepair and forcing associations to delay improvements.

The condo market woes led Freddie Mac to implement rules governing mortgages in troubled buildings. Units in condo developments where more than 15 percent of owners were delinquent on their association fees could not get Freddie Mac financing. Also, Freddie Mac would not guarantee mortgages in developments unless at least 70 percent of the units were occupied.

The rules were meant to ensure that a building was in good shape and there were enough owners to pay for maintenance and preserve the value of the property.

But those same rules led to complaints from buyers as well as condo associations and developers, who saw them as obstacles to getting empty units sold and occupied.

Developers may now have an easier time selling units.

“Without a doubt, the condo developers that already have Freddie Mac loans in their buildings will be dancing a jig tonight because its the best news they can get,” said Jack McCabe, president of McCabe Research & Consulting, a real estate research firm based in Fort Lauderdale, Fla.

Freddie Mac’s sibling company Fannie Mae announced a separate plan for Florida condos earlier this year.

Fannie Mae is reviewing hundreds of condo projects in the state that currently don’t qualify for its loans. Buildings deemed stable after the review will be given a special approval.

If projects receive special approval, lenders will be allowed to offer mortgages to homebuyers and sell those loans to Fannie Mae, which pools them into bonds and sells them to investors.

Copyright © 2010 The Associated Press, Adrian Sainz, AP real estate writer.

Steve Geving
Premier Plus Realty Co
239-573-1400
Steve@nextgenerationrealtygroup.com
www.nextgenerationrealtygroup.com

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