January - February 2015 Vol. 02 | Issue 9
IN THIS ISSUE: Keith Murray, President and CEO of PVC Murcor and VRM Mortgage Services | Detroit Housing and Infrastructure | HOA Foreclosures and Effects on Real Estate Mortgage
We proudly welcome ZipRealty™ and its innovative technology platform to our family of real estate brands!
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CONTENTS: Mission and Vision of the PIN Magazine .............................................(page 4)
FEATURED VIP AGENT Detroit Housing and Infrastructure........................................................(page 6)
the PIN magazine
by Darren Johnson
RESEARCH AND REPORTS Analyzing Oklahoma Markets..............................................................(page 8)
THE POWER IS NOW INC. Vol. 02 | Issue 9 Eric Lawrence Frazier, MBA President and CEO Office: (800) 401-8994 Ext. 703 Direct: (714) 361-2105 Eric.Frazier@ThePowerIsNow.com www.thepowerisnow.com www.blogtalkradio.com/thepowerisnow
EDITORIAL TEAM
Current Housing Trends in Idaho.........................................................(page 10)
FINANCIAL Gross Domestic Product and Corporate Profit Report for Third Quarter 2014.................................................................................(page 12) Real Estate Market Trends: Property Purchase by Foreigners Continue to Set the Trend ...................................................................(page 14) The Possibility of Another Financial Crisis...........................................(page 16)
REAL ESTATE RESOURCE Building a Clientele in Florida..............................................................(page 20)
REAL ESTATE
Eric Lawrence Frazier MBA Editor in Chief (800) 401-8994 Ext. 703
Real Estate Sales Training in Louisiana...............................................(page 22)
Diane Ting General Manager (800) 401-8994 ext. 707 diane.ting@thepowerisnow.com
The Economic Impact of Foreclosures in Riverside..........................(page 34)
Dori Pinkerton Managing Editor (800) 401-8994 ext. 707 dori.pinkerton@thepowerisnow.com
The Nevada Real Estate Market..........................................................(page 50)
Goldy Ponce Arratia Graphic Artist and Design Manager (800) 401-8994 ext. 711 goldy.ponce@thepowerisnow.com
Using Renewable Energy Resources..................................................(page 52)
October 2014 Purchase Applications................................................(page 27) How to Buy and Sell Foreclosed Homes in Wiscosin........................(page 32) by Eric Lawrence Frazier MBA
Real Estate in Oregon...........................................................................(page 44) Buying in the Chicago Metro Area.....................................................(page 47)
THE CEO CENTERFOLD Keith Murray..........................................................................................(page 40)
COMMUNITY Great Deals in The Rockies..................................................................(page 54)
BUSINESS The Falling Unemployment Rate.........................................................(page 56)
CONTRIBUTORS Darren Johnson, Eric Lawrence Frazier, The Power is Now Research Team
Jobless Claims for October 2014........................................................(page 58) HOA Foreclosures and Effects on First Mortgages............................(page 60)
TECHNOLOGY Technology Used in Real Estate .........................................................(page 62) How Social Media Has Changed the Face of Buying and Selling Mentality.................................................(page 66) Real Estate Technology in Iowa..........................................................(page 68) Software Real Estate Agents Can Use ...............................................(page 71)
Mission and Vision of the power is now MAGazine Mission
Vision
The Power Is Now e-Magazine is a national real estate and lifestyle magazine that aims to bring together consumers and the real estate, banking, insurance and investment professionals who serve them. Through smart, fun, and timely editorial content, mixed with compelling photographs and quality advertising, TPIN e-Magazine is a surefire way to stay current on all things real estate.
The Power Is Now Online and e-Magazine will be the premier Real Estate Magazine serving consumers, real estate and business professionals nationwide in all metropolitan markets. The Power Is Now Online and e-Magazine will be viewed as the most effective medium for real estate and business professionals to get exposure to consumers and to share their knowledge and information that will empower them to take action.
Each issue will feature a blend of articles from business and industry professional leaders, on topics ranging from residential and commercial real estate to default services, REO and short sales, finance, banking, insurance, dining, fashion, home design, travel, health/fitness, Book/ Movie reviews and more. The Power Is Now eMagazine will be a free subscription magazine available on www.thepowerisnow.com. The Online version will be a paid subscription with more content, video, radio interviews and commentary from news makers and the writers. Cover and Feature story profiles: The cover of each issue will feature the CEO Centerfold. This person will always be an extraordinary business professional who is an exceptional leader in real estate, banking, politics or another other related industries. The Online and e-Magazine will have many sections under the Power Is Now theme: Real Estate Sales, Real Estate Resources, Real Estate Agent Spotlight, Real Estate Headline News, Technology in Real Estate, Real Estate Politics, Real Estate Social media, Real Estate Research & Reports, Business of Real Estate, Real Estate Green & Energy, Real Estate Economics, Real Estate Coaching and the Publishers Note. This is a real estate magazine. The writers are industry professionals who are practitioners in their field of expertise. We will bring experts in the industry to share their knowledge and experience in their field of expertise. They will provide advice, and information that will enable consumers to navigate through the challenges and opportunities that exist in real estate. and opportunities of life.
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CEO & Publisher Eric Lawrence Frazier, MBA 3739 6th Street, Riverside, CA 921506 Ph: (800) 401-8994 ext. 703
SALES National Sales Manager: Christina Kimble National Relationship Manager: Success Money
EDITORIAL Editor in Chief: Eric Lawrence Frazier MBA General Manager: Diane Ting Managing Editor: Doreen Pinkerton
HEADQUATERS The Power Is Now Inc. 3739 6th Street Riverside, CA 92506 Ph: (800) 401-8994 Fax: (800) 401-8994 Email: info@thepowerisnow.com www.thepowerisnow.com www.thepowerisnow.com/onlinemagazine www.thepowerisnow.com/ezine
ONLINE Web Designer: Abhinav Raj DESIGN Art Director & Design Manager: Goldy Ponce Graphic Artist: Mario Lujan ADMINISTRATIVE Administrative Assistant: Rachel Bacol
PUBLICATION AND SERVICES The PIN Magazine The Power Is Now Radio The Power Is Now Publications The Power Is Now Radio Guide The Power Is Now VIP Agent Program The Power IS Now Power Consulting/Coaching The Power Is Now Association Management The Power Is Now Event Management
STATEMENT OF COPYRIGHT: The PIN Magazine™ is owned and published electronically by The Power Is Now Inc. Copyright 2013-2015 The Power Is Now Inc. All rights reserved. “The PIN Magazine and distinctive logo are trademarks owned by The Power Is Now Inc. “ThePINMagazine.com” is a trademark of The Power Is Now Inc. “Magazine.thepowerisnow.com “ is a trademark of The Power Is Now Inc. “Thepowerisnow.com” is a trademark of The Power Is Now Inc. “The Power Is Now Event Management” is a trademark of The Power Is Now Inc. “The Power Is Now Radio” is a trademark of The Power Is Now Inc. “The Power Is Now Publications” is a trademark of The Power Is Now Inc. “The Power Is Now Radio Guide” is a trademark of The Power Is Now Inc. “The Power Is Now VIP Agent Program” is a trademark of The Power Is Now Inc. “The Power IS Now Power Consulting/Coaching” is a trademark of The Power Is Now Inc. “The Power Is Now Association Management” is a trademark of The Power Is Now Inc. No part of this electronic magazine or website may be reproduced without the written consent of The Power Is Now Inc. Requests for permission should be directed to: info@thepowerisnow.com
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FEATURED VIP AGENT
HOUSING AND INFRASTRUCTURE By Darren Johnson Detroit is a great place to live and work. There is growing urban energy, an inflow of new residents, and many new renovation projects. One of the attractions of living in Detroit now is the affordability factor. With many dynamic neighborhoods like Corktown, Eastern Market, Midtown and New Center, there is a neighborhood to fit every conceivable lifestyle. Incentives for professionals to live in the Midtown area make it even more affordable to own, rent, or improve a property. The Downtown Detroit Partnership, a privatepublic partnership, develops and supports new initiatives and programs to create a clean, vibrant, safe, and economically strong downtown Detroit community. All of this makes Detroit a great place to live and work. Historically, Detroiters have fought to stay in Detroit and they have overcome many obstacles because of their love for this city. When the automotive industry began to expand nearly a century ago, it created phenomenal growth for Detroit. This growth made Detroit the fourth largest city in the country. The city population peaked at 1.85 million in the 1950s when people were moving into the city to work for Ford, General Motors, and Chrysler. The automotive industry became the primary industry for Detroit, and at the same time made Detroit financially vulnerable due to its lack of economic and job diversity. The economic downturn in Detroit impacted the auto industry resulting in the city declaring bankruptcy in 2013. In the aftermath of declaring bankruptcy and having their reorganizational plan approved in November
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of 2014, the city of Detroit continues to struggle and wage war against blighted neighborhoods and an aging infrastructure. Despite Detroit’s problems, new jobs are being created every day. Detroit is transforming its one industry economic base into a diversified economy with many new jobs in a variety of industries including the services sector, advertising, hydrogen fuel cells, and non-petroleum power generation technologies. Detroit is also among one of the top five financial centers in the U.S. and it has become a magnet for bike manufacturers. During the last several years, at least seven bicycle manufacturers have made Detroit their home. Other growing business sectors include health care and life sciences, music, film, and entertainment. This developing diversity is supported with tax incentives to attract new businesses back to Detroit and the plan is working. Detroit’s future is looking brighter thanks to efforts to secure a more stable economic base that no longer relies solely on the auto industry although auto manufacturing and auto parts manufacturing remain a large part of Detroit’s economic base. As part of the city’s bankruptcy restructuring plan, DTE Energy will take over the municipal power grid and implement a four-year $200 million dollar modernization program to rebuild the power generation infrastructure that along with the rest of the city’s infrastructure has been neglected for decades. As Detroit works towards exiting bankruptcy, stabilizing the city housing market is a priority. The steep declines in Detroit’s employment and
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FEATURED VIP AGENT
population, the high poverty rate, and the national housing crisis have created large areas of blight with only empty homes, and vacant lots. 28% of owner-occupied homes in Detroit have mortgages with negative equity. A pilot program by Fannie Mae and Freddie Mac to keep families in their homes through deeper loan modifications is a step towards stabilizing the housing market. Two more bills that have strong support from the Detroit mayor would allow county treasurers to reduce or eliminate the penalties and heavy interest rates for those that owe back taxes as a way to help keep people in their properties. The hope is that these programs will bring relief to some of the lowest income neighborhoods where blight is the worst. There is optimism in the housing market. Investors and young people are buying up abandoned properties in auctions and working towards gentrifying neighborhoods; however, it is a struggle because many neighborhoods have no local services. One has to go outside the neighborhood to shop for essentials like food because businesses have moved out of these dismal neighborhoods. Detroiters will continue to fight to stabilize the housing market and reincarnate their neighborhoods, but there are no delusions that it will be easy.
The last year has shown that progress is slow and there are still too many people losing their homes. Detroit is doing many things that can to help its city residents hold on to their properties and to revitalize city neighborhoods, but more can be done. The story of Detroit is still be written and I
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am confident in the resilience of the people of Detroit. We will overcome the current challenges, and the chapters to be written about Detroit will be pages about the victories and success. Failure has never been an option.•
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RESEARCH AND REPORTS
Analyzing OKLAHOMA MARKETS The state of Oklahoma is found in the south central United States. Currently, Oklahoma boasts of having an estimated population of just about 1.34 million which represents a 1.6% increase since the year 2010. During the same time period, the state of Oklahoma registered a net in-migration of a about 13,000 which can be translated to 62% of the total population growth. On November 16, 1907, the state of Oklahoma became the 46th state to join the union. The state of Oklahoma is known for producing agricultural products, oil, and natural gas as its main economic activity. The state has come a long way. As of the year 2007, Oklahoma was ranked among the fastest growing economies in the nation, courtesy of both of its outstanding per capita income growth and gross domestic product growth. As the 20th largest state in the U.S., Oklahoma covers an area of about 69,898 square miles. A look at the economy of Oklahoma Oklahoma has a strong economy when compared to the other 49 states of the U.S. Most of its economic prowess is derived from a wide range of sectors including: the aviation, transportation, food processing and the energy sector. The state is ranked third among the top producers of natural gas in the United States, and ranked 27th as the best agricultural state. In 2010, the gross domestic product was at $147.5 billion which represented a 10.6% increase from $131.9 billion in 2006. During the year 2010, the gross domestic product per capita was at $35,480. According to a report complied by HUD’s
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Economic and Market Analysis Division, the number of nonfarm payrolls in the region has increased dramatically. At the end of March 2014, the number of nonfarm payrolls had totalled to 610,900 jobs which represents a 2.3% increase from last year. It is projected that in the next 3 years, the number of nonfarm employees is expected to increase at an average of 2.1% on an annual basis. The stats of the different markets in Oklahoma To gain an understanding of the Oklahoma market, we’ll examine two different markets: the labor market and the housing market. a) An analysis of the housing market area There are three major employers existing in the Housing Marketing Area (HMA) including: the state government of Oklahoma, the Tinker AFB, and OU. They have a 12% combined account of the entire nonfarm payroll jobs. As of April 2014, the sales vacancy rate was estimated to be at 1.5% which represented a 2.2% decline from April 2010. As far as the rental housing market is concerned, conditions are soft but improving within the HMA. As of April 2014, the rate of the rental vacancy was estimated to be at 7.3% representing a 10.4% decline from April 2010. It is forecasted that the demand for new market-rate rental units will be at 8,225.
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RESEARCH AND REPORTS
a) An analysis of the housing market area In Oklahoma, the Oklahoma Employment Security Commission (OESC) is the body that is responsible for providing the Labor Market Information (LMI). LMI is very important because it touches in all areas and it affects everyone. There is no economic decision that can be made without LMI. According to the labor market statistics, by the end of October 2014, the unemployment rate had dropped to 4.5% while the payroll employment had increased by 3,600 jobs.
Understanding both the housing and the labor market is very crucial to a state. The data that is collected can be used in a broader picture by the nation to come up with statistical figures about the state of affairs of the nation. The markets can be used to determine the economic status of a state and once combined with figures from the other states, it can be used to reflect the economic welfare of a nation.•
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RESEARCH AND REPORTS
Current Housing Trends
in Idaho Boise metro market settles back into normal trends after the boom and bust from its peak in 2007.
The past years saw the local housing markets in Idaho drop from its peak in 2007. The Boise metro market received the hardest blow in the housing crisis of Idaho. Most foreclosures were concentrated in Canyon and Ada counties. The housing boom in Idaho was mainly focused on its two chief metropolitan areasCoeur d’Alene and Boise. John Starr, of the global real estate company Colliers International, has seen Idaho through good and bad times. He states that when he thinks about the early 2000s, he recalls watching land prices grow in demand and house lots diminish. The census data reported that the state’s population increased by over 28% from 1990 to 2000, and further more by 20% from 2000 to 2010. Starr said that this resulted due to the large part growth at Micron technology and the growth in turn facilitated Idaho’s housing boom.Boise’s housing market began to hit rock bottom in the year 2009, according to theMetrostudy, Housing and Data Information Company.
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The steady recovery of Idaho’s housing market
Even though it seemed like Idaho’s real estate wasn’t going recover from the hit, the most recent updates indicate that Idaho’s housing market is making tremendous improvement, and is settling back to normal trends. The November 2014 update shows that Boise areas housing markets have been restored into normal trends. For Idaho, this includes the least number of distress sales, single digit growth rates, and seasonal swings in buyer and seller activity. The local markets are moving in the right direction, slowly building up since 2010, after plunging from its peak in 2007. There are more homes for sale in Boise metro. This year, increasing home prices have paved the way for some initially inverted inventory in both counties. Considerably more homes have been listed; however, they’re nowhere close previous levels or what many would refer to as normal. The local home prices continued to elevate in both Canyon and Ada counties during the third quarter as recorded in October this year. With the low rates and mild weather, the fourth quarter looks more promising. The average
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RESEARCH AND REPORTS
existing home price for Ada County increased by only 1.36% from the past quarter, which is in no way close to the impressive 8.3% leap recorded in the second quarter. Still, it is a positive and sustainable rate. Ada County home prices have upped 5.3% year over year. Canyon County’s average grew by 4%, an almost similar increase to the previous quarter. After setting ground during the first quarter, Canyon County home prices are currently 4.5% up year over year. Ada County has seen in the last two years the strongest home sales since the year 2007, which is a great indication of an improving economy. The steep decline after the spring rush for the second year in a row may be due to the restricted lending standards and low inventory, together with a few affordability issues and mid-year sticker shock inhabiting the sales. The next month’s sales are the best future indicators of demand. Inventory/pending = supply, for example 1,000 homes selling at 100 monthly amounts to a 10 month supply. The constrained housing supply in Boise
Metro is easing up, and the buyer-seller activity gradually returning to the normal seasonal patterns. The most current trends indicate that it will take another one to two years to reach the five to six month supply range, with regularizing of prices. In the year 2014, there are more homes for sale and lesser pending under contract. Nonetheless, the sales are somewhat behind 2013 because the short sales are nearly gone and an increased percentage of deals have closed so far this year. It is predicted that this year will likely finish a little stronger compared to last year, due to the last slight increase in pending. Foreclosures and short sales have receded almost tonormal levels and builders are growing in numbers again. Currently, there are 1,858 resale and new homes in Boise on Trulia, including 48 open houses, and 319 homes in auction, preforeclosure or bank-owned stages of the foreclosure process. The median listing home price for sale in Boise was $270,419 for the ending week of November 19. This indicates a decline of 2.5%, or $6,807, compared to the previous week.•
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FINANCIAL
Gross Domestic
Product and Corporate Profit Report for
The Bureau of Economic Analysis reports corporate profits quarterly. This report provides summary information about the income of corporations listed on the national income and product accounts. The summary information includes reports on several different measures of profit that includes: • Economic or the operating profits derived from current production; includes inventory valuation and capital consumption adjustments for differences in depreciation allowances for accounting and income tax reasons • Book profits or the operating profits
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minus any inventory valuation or capital consumption adjustments • Net profits or the profits after taxes This report provides important insights for investors and for economic performance because when corporate profits are strong, capital spending increases. Generally, when corporate profits are strong and healthy, it indicates a favorable environment for investors. Investors watch the corporate profit reports as an indicator of corporate activity, stability, and liquidity. They also look for potential signs of inflationary pressures, which can occur when investment spending increases.
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FINANCIAL
In the November 25 BEA report, corporate profits with inventory valuation adjustment and capital consumption adjustment grew by $43.8 billion during the third quarter. The value of the production of goods and services in the U.S.grew at an annualized rate of 3.9% according to the second estimate by the Bureau of Economic Analysis. This figure represents a decrease from the second quarter rate of 4.6. During the third quarter personal consumption spending and non-residential fixed investments increased more than estimated. Private inventory investments decreased, but less than estimated in the October report. Exports increased less than previously estimate while imports decreased. PCE, nonresidential fixed investments, federal government spending, exports, residential fixed investment, and state and local government spending all contributed positively to the increase in real GDP. The price index for gross domestic product purchases measures how much people pay for products. This index gained 1.4% during the third quarter, a slow down the 2% increase observed during the second quarter. The gross national product or the total value of all the goods and services produced by labor and property supplied
by U.S. residents went up 3.8% during the third quarter. Gross domestic income is a measurement of the value of goods and services in the U.S. in terms of the costs incurred to produce the goods or service and the income earned on that production. This index saw a gain of 4.5% during the third quarter over the 4% figure reported for the second quarter. Domestic financial corporation profits increased by $20. 3 billion in the third quarter which was a decrease from second quarter performance of $33.3 billion. Profits for domestic nonfinancial corporations rose $22.5 billion as compared to an increase of $134.3 billion in the second quarter. During the third quarter, taxes dropped $4.8 billion on corporate income. This is astark contrast to a second quarter increase of $45.7 billion. The after tax profitsgrew by $48.6 billion. Dividends decreased $3.9 billion during the third quarter while undistributed profits rose $52.5 billion. Net cash flow or the amount of internal funds available to corporations for investment increased a mere $25.1 billion this third quarter as opposed to a second quarter increase of $133.4 billion.
rather than the previously estimated annualized rate of 4.7%. This improvement reflected increased spending on new equipment. Overall, Pennsylvania corporations appear to have performed well, most reporting increases in corporate profits for the third quarter. Pennsylvania corporations like Royal Bank America are following the general corporate profits being seen across the nation. Steady increases in earnings, net income, interest margins, and declines in expenses are fundamental to helping Pennsylvania businesses create sustainable growth and continual improvements in financial results. Despite a generally shrinking workforce, employment is improving and salaries continue to increase, which in turn bolsters Pennsylvania consumer confidence and spending. This helps Pennsylvania stay in step with national corporate earnings trends. Hopes remain high for a solid fourth quarter performance based on increases in retail sales for the holiday season.•
Pretax corporate earnings climbed 2.1% and were up 0.4% from the same period last year. There was more good news on business investment. Business investments increased at an annualized rate of 6.2%,
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FINANCIAL
REAL ESTATE MARKET TRENDS: Florida, Texas, Arizona, and California account for 55% of the total number of reported real estate purchases by foreign buyers. The industry’s adage states that all real estate is local, however, the current real estate report released by the National Association of Realtors (NAR) indicates that a notable amount of home purchases are made by people residing outside the U.S. The total international sale estimates for the period April 2013 – March 2014 were $92.2 billion, an increment from $68.2 billion from the previous corresponding period. About 60% of the reported international transactions in 2014 were entirely cash, compared to 1/3 of domestic purchases.
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This is according to NAR 2014 Profile of International Home Buying Activity. Steve Brown, NAR President and coowner of Iron-gate, Inc. Realtors in Dayton, Ohio reported in a statement that the reason why foreign buyers are attracted to U.S. real estate is what they acknowledge as economic stability, irresistible process, and astounding investment opportunity for their future. The top five cities with the most number of searches online by international buyers are New York City, Las Vegas, Orlando, Los Angeles, and Miami, according to Realtor. com. International buyers originate from all parts of the world. The United Kingdom, China, India,
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Mexico, and Canada accounted for 54% of foreign sales as stated in NAR’s report. Canada retains the largest share of purchases with a drop from 23% in the year 2013 to 19% in the year 2014. Nonetheless, China grasped the forefront in dollar volume buying approximately $22 billion with a median sale cost of $590,826. The report finds that European buyers are usually attracted to states with warmer climates while Indian buyers gravitate towards states that have large information technology companies such as North Carolina, New York, and California. In the year 2013, New York and London were the top performing
FINANCIAL
Property Purchase by Foreigners Continue to Set the Trend luxury markets as stated in the most current International Real Estate Report by Christie. The extension in the luxury sector has been steered on three fronts by millennials, foreign investors, and locals, with most buyers focusing on cities. Affordable home prices, suitable exchange rates, and expanding wealth abroad continue to spearhead international buyers to the U.S. to purchase homes and conduct real estate investments. Approximately 28% of Realtors are reported to be working with international clients this year. International sales are usually handled by specialists. Only 4% of those reported to have international clients had 11 or more international transactions in 12 months. Approximately 54% of those reported to have international clients recorded that their international transactions accounted for 1% 10% which is a decline from 2013, but still at par with last year’s levels. In comparison to domestic buyers, international buyers are more likely to make all-cash purchases. A major problem for international clients is mortgage financing due to lack of a Social Security number, lack of a U.S.-based credit history, challenges in documenting financial profiles, and mortgage requirements that vary from those usually received from domestic residents by financial institutions. International buyers who prefer to work with a Realtor have a significant advantage. This is in part because Realtors who have concluded the Certified International Property Specialist classification have acquired specialized training
and are well equipped to aid clients with the distinctive challenges of being an international buyer. Designees of CIPS comprehend the difficulties buyers are faced with when buying property in the U.S. and have the expertise and experience to aid them helm the multiplex, overwhelming and time-consuming world of international real estate. Realtor.com being NAR’s official property website enhances exposure of U.S. properties to the global market, which may have greatly contributed to the increased numbers of international buyers in the U.S. In addition, it has aided Realtors expand their business globally. NAR’s ‘The Voice for Real Estate’ is the largest trade association in America, representing 1 million members included in all areas of commercial and residential real estate industries.
References http://millionairecorner.com/Content_Free/Realestate-market-trends.aspx http://www.realtor.org/news-releases/2014/07/ international-home-buyers-continue-to-invest-inprofitable-us-market-realtors-report https://www.linkedin.com/today/post/ article/20140710134238-29153009-real-estatemarket-trends-international-home-buyers-cashing-inon-u-s-market http://www.luxurydaily.com/canada-china-driveforeign-investment-in-us-real-estate-report/
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FINANCIAL
The Possibility of Another Financial Crisis
The New York company that foresaw the 1929 stock market crash is now predicting there is a 65% probability of a worldwide recession by the end of next year. The Jerome Levy Forecasting Center told clients in an October 23 monthly forecasting report that the most recent global news suggests we are moving toward a 2015 economic downturn. Why is Levy worried? He says the US and many other advanced economies still have excesses on their balance sheets that expose them to a renewed financial crisis. He goes on to state that there is limited room for policy makers to reverse any slump, and low inflation risks are tipping into deflation in many parts of the world. Even though the US is maintaining, Levy worries that with the gross domestic product at 13%, US exports will represent the largest share ever. American companies are getting historically large proportions of their earnings from abroad, and households have a ratio of stocks to disposable income that is higher than
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any point other than the turn of the century. That makes the US more vulnerable to any type of bear market. Although the Levy forecasting Center has been on target with most of their forecasts, there have been some mistakes. In September of 2010, Levy told Bloomberg Television that he saw a 60% chance of another US recession, but instead the US economy gained strength. The International Monetary Fund also holds concern about a period of prolonged ultralow interest rates and feels that it poses a threat for a new financial crisis by providing an environment that encourages excessive risktaking on global markets. The IMF says that more than six years of borrowing costs near zero has bolstered speculation rather than a pick-up in investment, as the feds had hoped. Risks to economic stability no longer center on traditional banks, but on the shadow banking system, in which hedge funds, money market funds, and investment banks do not take public deposits.
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FINALCIAL
Traditional banks are much safer now thanks to new international banking regulations requiring additional capital, however, these traditional banks are not strong enough to support economic recovery. A concern is that the increasing market and liquidity risks tied to the shadow banking system could compromise global financial stability if they are not addressed. Although the stability report states low interest rates are “critical� to support the economy because they encourage consumers to spend, loose monetary policies have led to highyield, risky assets. This urges investors to take on bigger bets. There is significant concern over this because many of the high-risk investments are taking place in emerging markets and that leaves them vulnerable to increasing US interest rates. The IMF focused on the trade-off that happens between the positive economic benefits of low interest rates and the process of creating money known as quantitative easing and financial stability risks. Although the report acknowledges that the UK and the US among a few other countries are seeing more economic benefits, it also warned against market and liquidity risks. According to Arturo Bris, a professor of finance at IMD Competitiveness Center, there are eight possible reasons why we could see
another financial crisis. He cites a potential stock market bubble due to excess liquidity and a lack of investment alternatives. The gap between stock prices and corporate earnings is now larger than it was in any previous pre-crisis period such as 2000 and 2007. If markets return to their normal earnings levels, the average stock market around the world would fall by about 30%. Other areas of concern are geopolitical repercussions, long-term battles against income inequality, geopolitical events that can trigger a world financial crisis, and a new real estate bubble developing in the US, the UAE and Switzerland. Fundamentally, there is reason for concern over another financial crisis. Globally, everyone needs to take to heart the lessons of the last financial crisis and focus on ways to increase economic growth. Throwing paper money at the problem only makes it worse and makes another financial crisis inevitable. Focusing on social entitlements and taxation lie at the core of truly stimulating the economy.•
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EDITOR
FROM
THE
Dear esteemed readers, On behalf of The Power Is Now Team, Happy New Year! I am excited about 2015 and the wonderful opportunities that are on the horizon for everyone. I am thankful to be on this side of life and to have another opportunity to purpose my goals and dreams, as well as helping others achieve theirs. Thank you for reading the magazine and sharing it with your friends, family, and co-workers. We appreciate your support.
2014 was a year of milestones for The Power Is Now Inc. On August 20, 2014, The Power Is Now Inc. celebrated 5 years as a multimedia company. We have grown tremendously over the last 5 years and now have many divisions. The Power Is Now Radio is our flagship division and program, and as of December 19, 2014, approximately 920,314 listeners have listened to our Podcast. Our database of real estate agents is over 1.25 million nationwide and September 1, 2014 is the anniversary date of The Power Is Now Magazine, celebrating one year as a division, and November 1, 2013 was the anniversary of our first issue of the magazine. I am very proud of The PIN magazine and the great work that The Power Is Now team does every issue to publish it. Thank you team. You are amazing. The magazine is truly a team effort from my new editorial manager to all the writers, graphic artist and my administrative staff. We work together and we all work very hard. I am indebted to each member of the team for their commitment to the company and their pursuit of excellence in everything they do. Most of all, I want to thank one team member that is very special to me because she has been with the company the longest and is the senior member of the team. I know as employers we should probably not have favorites, but she is also my favorite employee. Her name is Goldy Ponce and she is our print and design manager for the Power Is Now. She is solely responsible for the layout, design and images in every single article of the magazine and publications for the company and she has never let me down. She has literally designed all of
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2015 the publications, flyers, and media kits, with the only exception being the Radio Guide. Goldy is a talented and phenomenal person and I do not know where the magazine would be without her. This year I am introducing our only employee recognition award for the company called the Employee of the Year and the Employee of the Year is Goldy Ponce. I want to congratulate Goldy as our first employee of the year for 2014. Goldy will receive a bonus for her outstanding performance for 2014 and for her unwavering commitment to excellence in all that she does. Congratulations Godly. If you would to correspond with Goldy and congratulate her, please do so at goldy.ponce@ thepowerisnow.com. I know that she would love to hear from you. On a personal note, December 19, 2014 my wife and I celebrated 33 years of marriage. There are no words to truly convey how I feel about my wife. She is my rock, my soulmate, and my life. I am not sure if I could live without her. She is the reason I get up in the morning, the reason I work and strive and try to be the person I can be, and someone she can be proud of. Marriage is not easy and if you are not committed to unconditional love and forgiveness – I believe the marriage is destined to fail.Why? Because imperfections and flaws are the bookend of every marriage, especially for mine, and love covers a multitude of sins. I am the bookends of flaws and imperfections and she is the perfect middle. I love my wife and spiritual covenant of marriage. God bless us to see 100 years together in holy matrimony. The first issue of The PIN Magazine for 2015 is focused on the upswing of many real estate markets across the country. The economy is on its way to stability, gasoline prices are steadily falling, and the housing markets are rapidly improving in inventory creating a buyer’s market. Where there is still some concern over the possibility of a financial crisis, the outlook is optimistic as 2015 will bring many first-time homebuyers into homeownership achieving the American dream. I hope that the articles are beneficial and provide relevant information as to what is happening in your area, as well as areas in other parts of the United States. Finally, I am very proud to feature VRM’s Keith Murray on the cover of the first issue for 2015. With over 32 years in real estate analysis, Mr. Murray is the esteemed leader, founder, and CEO of VRM Mortgage Services and PCV Murcor. I appreciate his valuable time that he has shared with The Power Is Now. I am honored to feature Keith on the first issue of 2015. Thank you Mr. Murray, for being an inspiration to us all!
Eric Lawrence Frazier, MBA.
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REAL ESTATE RESOURCE
BUILDING A CLIENTELE IN FLORIDA Launching your own practice is among the greatest professional challenges one can ever partake in and probably among the most rewarding. Riffed with long hours of hard work, it is a chance to start a business and offer real value to clients. Primarily, you need to identify opportunities in your local market in Florida, entice and keep profitable clients, and address various details, ranging from the furnishing of the office to purchasing insurance. There are many opportunities out there as well as good clients that bigger firms are not interested in. With a shortage of accountants, very few people go out on their own. Launching your own practice requires more than just expertise in that particular field. This comes as a shocker to some emerging entrepreneurs who think that in order to make it, all that is needed is the technical aspect in that field. However, those who’ve gone out on their own can attest that this is not necessarily true after learning the hard way.
REAL ESTATE RESOURCE
HAVING A PLAN
For any small business, the first thing you need to do is research your local market in order to evaluate the opportunities, decide on which services to offer, and select the legal form your business will undertake. It is also important to look for and furnish an office, buy the required insurance for protection against unforeseen liabilities, and allure clients. It is crucial to check with the local governments and professional associations such as AICPA and state societies on which requirements apply to you and your firm. Some personal financial advisory services may require you to register with state security departments or the SEC, while other attestation services may require you to enroll in AICPA. Specializing in a specific market section or industry, although not necessary, can aid you in garnering more clients and keeping them for the long haul. This will help separate you from your competitors, as you become a useful sector in the industry. Location is also crucial to launching your own business. Although most people prefer working from home, which offers them flexibility with no office rental payments to cover, those with dedicated office spaces tend to do better. This is because the clients will take your business more seriously and the location also offers a walk-in business atmosphere. The decision of whether you wish to be a sole proprietorship, C corporarion, partnership, S corporation or any other form of liability entity has grave legal and tax guidelines. It is a good idea to seek out a professional lawyer to decide and draft the required paperwork. Owning your own business requires purchasing your own insurance, which can be very pricey. You’ll need to have health care coverage, professional liability insurance, and umbrella policy among others. Some practitioners substitute liability insurance for an errors and omissions policy. In addition, you will also need disability insurance to provide income in case
you fall ill and business interruption insurance in the event of a disaster that prevents you from running your business. The most current technology is required in your home or office, including a computer, telephone, a copier, printer and good tax software. The good thing is that the cost of technology continues to recede with time; therefore, you are likely to spend more on hardware than software. The most challenging task of all when starting a new business is generating a client roster. If you are unable to allure and retain good clients, the outlook is not favorable. Getting referrals from your friends and family, and rubbing elbows at Rotary Club or Chamber of Commerce meetings may take some time. There are other marketing techniques such as Internet marketing, telemarketing, and direct mail which you can employ to your business. You can also hire consultants to advertise for you if you have no experience in marketing or the know-how on the best marketing strategies for your business. Marketing can be very costly, but less expensive than failure. If going it alone appeals to you, there are vast opportunities out there to explore, the only limitation being your imagination and drive. All that is required is learning how to sell your services. In business, nothing compares to experience. In the midst of taxes, insurance, and permit licenses, don’t get so overwhelmed that you forget the one sole mantra of business. You want to provide outstanding services to your clientele. If they appreciate your services, they will most likely remain a client for years to come.•
References http://www.journalofaccountancy.com/Issues/2006/ Apr/StartYourOwnPractice.htm
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REAL ESTATE
Real Estate Sales Training
P
urchasing an investment property or home is among the most significant and complex financial events in every individual’s life. For this reason, most people tend to rely on sales agents or real estate brokers to assist them in purchasing and selling real estate. Real estate sales associates help clients to sell rent or buy properties. This kind of profession demands a lot of research, knowledge of zoning and taxation laws, and interpersonal communication. Some real estate sales agents and brokers act as intercessors between buyers and sellers when negotiating property prices and values. Usually, more than half the number of these professionals work as independent salespeople and are able to plan their own work hours. In order to succeed in this field, one must work irregular and long hours in order to meet the scheduling needs of their clients and provide them competitive services in comparison to other associates. There are some stipulated requirements to becoming a salesperson that include being at least 18 years of
january/february 2015 issue
LOUISIANA
age, possessing a high school diploma and a Louisiana state license. Also prior to licensing, one is required to attend and pass state approved courses. Due to the competitive hiring environment, the employer may prefer an applicant who has earned a degree or attended college. The degree field should be real estate, finance, business or any other related field. Personality traits of a salesperson or broker are just as significant as their academic background. The various key skills to becoming a real estate salesperson are time management, written and verbal communication skills, problem-solving skills and the ability to work independently (without supervision) and negotiation skills. Of course in this day and age one needs to be computer literate and conversant with photo editing and data software. Real estate sales require a lot of flexibility as well. This business requires candidates with a pleasant personality that are honest with a clean-cut tidy appearance. This helps to encourage and motivate clients; an agent or salesperson needs to appear trustworthy, tactful, mature
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and enthusiastic to their clients. Being a competitive field, there is little room for ‘ordinary’ representatives. A salesperson needs to be well assembled, detail-oriented and have the ability to easily recall names and faces as well as business specifics.
THE TRAINING SEGMENT Real estate sales training involves pre-licensing, licensing and post-licensing training in order to qualify as a sales person. The pre-licensing classes are available in real estate offices, community colleges, real estate organizations, or independent real estate schools. In some instances, the courses are available online. Even though the lengths vary, these courses ideally cover marketing, state license and real estate laws, finance, advertising and basic real estate principles. The state sets the minimum hourly education requirements which must be met by the participants in class. After pre-licensing training, one can then advance to applying for their state’s licensing examination. Applicants need to provide proof of education and pay
REAL ESTATE
the required fees. The examination usually covers topics like closing statements, real estate calculations, agency relationships and marketing regulations. In addition to the required educational courses, an applicant also needs to pass a criminal background check. If you want to renew your real estate sales license in Louisiana one must partake in continuing education for license renewal. Real estate selling and purchase continues to become more legally complicated day by day. This may be a result of real estate agencies stuffing vacant positions with college graduates. Nowadays, a majority number of salespersons and brokers have at least university or college training and very soon this is going to be the minimum requirement as opposed to high school certification. The important college courses are those that are focused on economics, real estate, law, finance, English, statistics marketing, accounting and business administration. In most cases, real estate salespersons commence their careers in their own communities. This is an advantage because the person has the knowledge of local neighborhoods and key areas of interest. A new salesperson starting-up in this
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field can obtain practical knowledge and understanding under the guidance of a more experienced salesperson. This way, they can learn valuable methods to acquiring and locating lists of obtainable properties, and also pinpointing various financial resources. Several firms also offer formal training programs for both beginners and experienced agent employees. However, the program offered differs depending on the type of firm; larger firms tend to offer more expensive programs compared to smaller firms. Presently, nearly tens of thousands of colleges, junior colleges and universities offer real estate courses. Some even provide a bachelor’s degree or associate degree in real estate while others offer several more advanced degrees in a similar study field. NAR (National Association of Realtors) covers several local real estate associations that offer sponsorship for various courses which deal with the basic fundamental and legal aspects relevant to the real estate field. NAR also offers advanced courses in management, mortgage financing, and property development among other subjects. Commission rates can increase through various improvements brought about by agents. Sales agents that
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become more methodical in their business dealings and increase their productivity or transaction numbers during a specified period of time will experience an increase of their earnings. More experienced real estate sales agents working in big firms can progress to general manager or sales manager and those who have acquired their broker’s license can proceed towards opening their own administrative centers and offices. Others may choose to become real estate appraisers but only those who’ve undergone training in estimating property value. Those who are experienced with maintenance and operating requirements for rental properties can possibly progress to becoming property managers. Having comprehensive knowledge of property values and the business setting of a specific work area can help experienced real estate brokers and agents to venture into real estate mortgage financing or investment counseling.• References http://www.careeroverview.com/ real-estate-sales-agent-careers. html http://education-portal.com/ articles/How_to_Become_a_Real_ Estate_Sales_Associate.html
Speed, Accuracy and the LRES Way.
For bulletproof Valuation and REO Services, call on the LRES Team.
From Los Angeles to New York, LRES people leap in where others fear to tread. Behind their mild-mannered appearance beats the heart of a superhero—one that can solve even the most formidable valuation and asset management challenges with superhuman speed and accuracy. For an unassailable real estate services partner you can count on nationwide, contact one of the superheroes from the LRES Team: 800.531.5737 or email sales@LRES.com.
765 The City Drive South ∆ Suite 300 ∆ Orange, CA 92868 800.531.LRES (5737) ∆ www.LRES.com
As you Venture out into the World of Real Estate
We can help you put the pieces together and Navigate you into Home Ownership
Making Clients for Life 3739 6th Street, Riverside, CA 92501 Office: (951) 686-5261 Fax: (951) 686-5264 www.fraziergroup realty.com
Frazier Group Realty is the right place. Our Navigators are available to give you personalized service and answer any questions you may have. You can call, email or visit us and we will be there ready to help you every step of the way. Whether you are a first time home buyer or an experienced real estate investor, here at Frazier Group Realty you gain useful information about how to choose the "right" property, and everything involved in making an informed decision in today's real estate market.
REAL ESTATE
October 2014 PURCHASE Applications D
espite quickly falling interest rates over the past several weeks, the mortgage application rate or purchase index fell 5.0 percent from the previous week for the second straight decline. The falling interest rates did provide a lift to the refinancing index that rose 23.0 percent during the week of October 17th. Yet despite the fact that mortgage rates have decreased almost 30 basis points over the last month and 10 basis points during the latest month there is a decided lack of activity in the purchase index. This lack of activity translates into a lack of demand and traffic in the housing sector. 1 On a seasonally adjusted basis from the previous week
the measure of mortgage loan application volume went up 11.6% according to the Market Composite Index. The purchase index was down 9% compared with the same week a year earlier spurring concern about the economy. “Continuing concerns about weak economic growth in Europe and a few US economic indicators that came in below expectations caused a flight to quality into US treasuries last week, leading sharp drops in interest rates. The average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history” according to Mike Fratantoni, MBA Chief Economist. Refinancing applications
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represented 65% of the total number of purchase applications. Adjustable rate mortgage applications also increased to a total of 9.4% of the total applications representing the highest level since June of 2008. FHA purchase applications fell to 8.3% from 9.5% the previous week and the VA share of purchase applications increased to 9.6% up from the previous week’s level of 8.8%. USDA applications fell to 0.8% during this week.
Mortgage Rates
30-year fixed-rate mortgages for conforming loan balances of $417,000 or less went down to 4.10% while points, including origination fee, increased from 0.17 to 0.21 for 80% LTV loans.
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REAL ESTATE
For 30-year jumbo fixed mortgages rates decreased to 4.03% for 80% LTV Loans and points, including origination fee, rose from 0.10 to 0.20. FHA backed 80% LTV loans saw an average contract interest rate decrease to 3.81% with a decrease in points from 0.08 to 0.07 including the origination fee. The 15-year fixed mortgage average contract rate decreased from 3.41% to 3.28% with a decrease in points to 0.22 from 0.28 including origination fees on 80% LTV loans. For 5/1ARMs the average contract interest rate also decreased to 2.94% from 3.05%. Points decreased along with the interest rate from 0.38 including origination fee to 0.37 for 80% LTV loans. 2 The drop in interest rates coupled with increases in the number and the amount of money being requested in refinancing applications indicates that it is the wealthiest homeowners that are receiving the greatest benefits from interest rate drops. Even though the sales of existing homes increased by 2 percent in September over August, the National Association of realtors reminds us that sales are weaker than a year ago when there were
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more distressed homes on the market. Mortgage rates do not represent the greatest barrier to new home purchases. Rates are still low, even when they exceed 4%. The real problem lies with the availability of credit. Banks have been required to tighten credit requirements with higher credit scores, strict limitations on debt and full documentation because of the mortgage debacle that has left millions of homeowners upside down on their mortgages and millions of others with short sales or foreclosures. Banks are protecting themselves against default. Even so, there are positive signs in the mortgage industry. People who previous short sold homes are receiving new mortgages and according to Mel Watt, director of the Federal Housing Finance Agency “We have started to move mortgage finance back to a responsible state of normalcy-one that encourages responsible lending to creditworthy borrowers while maintaining safety and soundness of the enterprises.� The problem is that the loosening of credit that federal regulators are promising has yet
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REAL ESTATE
to reach the consumer. 3 Another pressure on the real estate market and a reason there are fewer new home loan applications is a continuing inventory problem in many parts of the country. With fewer distressed properties available and many homeowners still underwater on mortgages there is a decided lack of available existing housing units for sale. Of those units that are available, the high demand is continuing to force up prices making it harder for some buyers to meet credit requirements. The demand for singlefamily homes is continuing to push new home construction higher but the confidence of U.S. home-builders took a dive in October due to rising prices to cover higher costs to acquire land and labor. Builders are still optimistic but all three components of the National Association of Home Builders/Wells Fargo Housing Market Index fell. This included current sales conditions, future sales and the traffic of prospective buyers. No doubt much attention will be focused on the
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mortgage application numbers for the coming weeks especially as lending reforms begin to loosen up credit in the hopes of boosting new home mortgage applications and sales. General sentiment among realtors based on all economic reports is that the housing sector will probably remain wobbly for some time to come. The issues of credit availability, inventory levels and mortgage rates make the market uncertain. Great mortgage rates are not translating into gains in actual sales at this point. Most of the activity remains focused on refinancing. What the next weeks bring will further clarify the direction of new home sales through the end of the year. The MBA purchase application survey includes 7 5 percent of U.S. retail residential mortgage applications and is an important indicator for singlefamily home sales and new home construction as well as economic momentum.•
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REAL ESTATE
HOW TO BUY AND SELL FORECLOSED HOMES IN
WISCONSIN
Selling or buying a foreclosed home in Wisconsin can be both stressful and complicated depending on the situation. It is always best to engage the services or an experienced foreclosure real estate professional or real estate lawyer to protect your interests.
The Foreclosure Process In Wisconsin
The only way a mortgage lender can foreclose on a home is if the property owner defaults under the mortgage contract. That means the property owner fails to make payments. Most lenders provide a 10 to 15 day grace period to make the monthly payment. After that the lender will charge a late fee. After 30 days the lender generally considers the property owner to be in default and begins efforts to receive payment.
Default Notice
When a lender is unable to collect payment, a notice of default is sent to the property owner. Most lenders wait for three months or three missed payments before they issue a notice of default, but this can occur after 30 days depending on the lender.
Complaint
Foreclosures are judicial in Wisconsin, which means that lenders must go to the courts to foreclose on a home. In Wisconsin, the lender or mortgage servicer files a summons and a
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complaint in court. They usually file lis pendens as well. This documentis filed with the county recorder of deeds and describes the details of foreclosure. If the lender is seeking a deficiency judgment against the homeowner, this is a right to collect any money.
Answer
When a property owner receives a foreclosure complaint, they must file a formal answer in court. This is the property owner’s opportunity to address each accusation in the complaint, including any denials, any defense against the foreclosure or any claims against the lender.
The Judgment for Foreclosure The lender is required to wait
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REAL ESTATE
for 20 days from the filing of a lis pendens before they receive a judgment of foreclosure. There are three ways a lender can obtain a foreclosure judgment: Default judgment: Granted when the property owner fails to answer a complaint within 20 days Summary judgment: Granted when the judge finds the foreclosure should proceed after the property owner has answered the complaint within 20 days Judgment after trial: Granted when the case goes to trial and the lender wins
Right to Redemption
The right of redemption allows the property owner to reclaim their property from foreclosure or a tax sale by paying off the amount owed on the home plus costs and fees of the lender. The periods vary depending on the situation, and the redemption period begins with the entry of a judgment. For abandoned property, the owner has five weeks to reclaim the property; for un-abandoned property, the owner has six months. Partial redemptions can also occur if a property is divided into parcels.
Sheriff’s Sale
After the lender receives a judgment, it has to publish a notice of sale before the property can be sold. The lender must wait a certain of period time depending on the situation prior to publishing the notice of sale. Sale of the property can take place after
the notice has been published for three weeks and the redemption period expires.
Sale Confirmation
Once the property is sold, a confirmation of sale hearing is held. The court makes sure there was no misconduct and confirms the property sale is valid. The borrower receives a minimum of five days’ notice prior to the hearing date. If you are thinking about purchasing a foreclosure property most professionals suggest purchasing during the pre-foreclosure period. Generally, the cost of the home will be les than when it is owned and sold by the lender. There is also greater competition once the property is publicized and put up for auction.
When Purchasing A Foreclosed Property
Foreclosure properties are sold as is; many may require extensive repairs You may not be able to view an auction property It is often difficult to evict the former home owner and many do not leave voluntarily Costs are higher when you purchase at an auction; a short sale may be more ideal Always work with an experienced foreclosure expert who is well-versed in Wisconsin foreclosure laws and guidelines Purchasing an REO (bank owned property) is faster than tryingto close on a short sale. You receive no disclosure of defects Be aware of any IRS liens on the property, as the IRS can come in and redeem the property apart from the lender Whether you are planning to sell or buy a foreclosure property, the best advice you can follow is to work with an experienced foreclosure agent and not try to do it yourself. Costly errors are easily avoidable with the help of a professional.•
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REAL ESTATE
The Economic Impact of
FORECLOSURES IN RIVERSIDE By Eric Lawrence Frazier MBA The United State was at the epicenter of the mortgage crisis that saw the reduction of homeownership in the U.S. drop from 69% in 2006 to 63% in 2013. This is also the period that saw the introduction of ‘’subprime lending’’ and ‘’predatory practices’’ by some of the major banks in the U.S. These lending institutions employed questionable and fraudulent lending practices and many real estate agents and loan consultant were accomplices to the schemes of advising borrowers to purchase homes with loans they could not understand or afford. I too was an unwitting participant believing that option ARM loans where the best things since slice bread, and a victim having an ARM loan on my own home and
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seeing the rate increase and a witness to many others taking the program having worked as a Branch Manager of a Washington Mutual Home Loan Center in Orange County and managing the loan consultants that originated these loans. This was regrettably a low period in my life. California was one of the hardest hit states in the nation following the collapse of major Wall Street firms in the financial and banking sector. This period between 2008 and 2011 became known as the Great Financial Crises because it truly was the greatest crisis that US had ever seen since the Great Depression. I will never forget this period in my life just like my grandparents will never forget the Great
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Depression. I remember where I was at work; sitting at my desk when the news of the markets freezing came from my staff and operations came to a halt. The news about AIG collapsing threw the market and the world in a panic and some of the largest Investment banking firms on Wall Street firm’s ceased operations and many large banks closed down or were taken over by the FDIC. I was a branch manager for WaMu during that time when I received a phone call from a fellow employee telling me that we were shutting down and all the lending division employees were losing their jobs. I lost my job but was lucky enough to land the same position at Wells Fargo Home Mortgage a week later. Unfortunately many of
REAL ESTATE
peers lost their jobs and their homes and many are still trying to recover from the lost. The city and county of Riverside became national news because of the enormity of the impact the mortgage crisis had on Riverside. Riverside became the foreclosure capital in the state and in the nation because it had experience rapid growth in populations from 2000 to 2010. Imagine a population of 1.56 million increasing to 2.1 million in 10 years. Today we stand at 2.24 million. Add new housing construction and we are off to the races. The economic boom was alive and well in Riverside because housing was already affordable and was made even more affordable by adjustable rate mortgages and subprime mortgages that were just illusions of affordability. This mirage of affordability drew people to Riverside and increased demand for housing which lead to over building and unsustainable increases in home prices. It also led to an abundance of construction jobs that just about dominated all jobs in Riverside at 47% . It seems everyone had a job in construction or a job related to construction in Riverside, notwithstanding the jobs that were created in other industries as result of the demand for services to supply to these new neighborhoods and families. As the new home owners’ mortgage payments started to increase and their illusion of affordability
disappeared the housing market began to crash almost as quickly as it boomed. Homeowners stopped making payments and many walked away from their homes completely. This tragic opera didn’t stop. That was just the prelude. Property values begin to fall rapidly and all the new construction stopped completely with many builders pulling out, or going out of business and leaving uncompleted projects. Construction jobs and nonconstruction jobs that came into existence only because of the construction boom and population growth were gone. These homes were soon worth less than the mortgage son them because it was all pie in the sky speculation and greed. According to the reports released on June 18th, by Alliance of Californians for Community Empowerment (ACCE) and the Home Defenders League (HDL), it revealed that about 2 million homes have been foreclosed on statewide ever since 2008. The report also revealed that about 39% of California homeowners are underwater. Rose Gudiel a Los Angeles resident reckons that,’’ This is a crisis which has reached epidemic proportions. Our communities have been gutted, our local and state governments have lost millions in revenue and, from falling home values to cuts in education and local services, no one has been spared from the impact of the housing
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crisis.’’ In short, the mortgage foreclosure crisis has played a huge part in causing the city’s tax revenue to drop, triggered an increase in the crime rate and an increase in the number of homelessness and vacant or abandoned property. As the property values dropped property tax revenue dropped and when you stop paying your mortgage you also stop paying property taxes. This leads to cutting back or stopping city services and cuts in social services. The city of Detroit Michigan couldn’t afford to even keep the street light on. Now it didn’t get that bad in Riverside but the County of Riverside has received the highest foreclosure rate of any of the major metropolitan area in the nation. Since 2008, the report reveals that they were over 222,920 homes -1 in every 4.5 households - that have been in foreclosure. With the decline in property values homeowners are expected to incur losses of up to $57.5 billion in terms of their home values and between the years 2008 and 2012, losses from property tax revenue was estimated at $351 million. It is and was greed on Wall Street and to be truthful also greed on Main Street that led to the financial upheaval which resulted of millions of families in America losing their homes. The Irony is that the very people who caused the problem are benefiting from the pain and suffering in
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REAL ESTATE
communities that these Walls Street firms are now buying and have been buying since shortly after the beginning of the crisis. Literally Wall Street firms have been buying blocks of houses in neighborhoods of Riverside and across the nation in the hardest hit states and counties. Today, the impact of Wall Street firms buying properties in Riverside has resulted in increased home prices. The competition with cash buyers and Wall Street firms made it impossible for first time home buyers to complete and they were locked out of the opportunity when prices were lower and rates were at their all time low. This trend of a tight and competitive market has changed from limited supply of homes available for sale and unsustainable property values to increased supply, decreasing property values and an increased crime in many areas in Riverside. With so many cash buyers in the market driving prices up with competitive bidding the market is now over-valued and declining. Thank you Wall Street for rallying the market it has been really exciting. Now go home. The politically correct description of the current market is that the market is correcting. Realtors and economist call it a Market Correction. They say that on Wall Street when the stock market is crashing also. I say it too when I am around my economist and realtor friends. The market is correcting alright. It is “correctly declining” to
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where it should be based on the medium incomes of the families that live in Riverside. That is the truth. When will it stop correcting? Prices will stop correcting and stabilize when market price equals the Annual median Income for Riverside times a multiple of 3 to 4. The product of that equation equals the sustainable market price for homes in Riverside; and anywhere else in the US; in my humble opinion. Some believe that the multiple can be as high as 8 times the median household income but is foolish speculation that is not supported by all the previous market corrections. All prices come back to the acceptable and sustainable mean correlation between income and price. A multiple of 8 would be ok if you want to exist, work and live solely for
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the house you are buying and the payment you are trying to make. Forget about spending money on anything else. Listen folks. Read this next line out loud so everybody hears you reading. Do not listen to your mortgage banker! They are not going to live your life or pay your bills. You are! Your house payment should not be more than 25% of your NET take home pay. That is right I said net income. I am not talking about your gross pay but your net income after taxes. If you can do this your house will exists for you and you will not have to exist for your house. You can live. If you can’t rent a house or apartment that meets the requirement. I know people who have 70% to 80% of their income going to a house payment I mean to the bank.
REAL ESTATE
Unfortunately they have no saving, no emergency fund and no discretionary income and most likely will get behind and lose their home when something happens. And something will happen. Something always happens and we all know this. It is crazy and it not sustainable to live that way. This is what you get when you are buying at a net debt to income ratio of 25%. I digressed for a moment. Let me get back on track. This is a completely different discussion that I would love to get back to another time. As I was saying, a sustainable market price equals the annual median Income for Riverside Households times a multiple of 3 to 4 max. The product of that equation equals the sustainable market price for homes in Riverside; and anywhere else in the US in my opinion. Everything else is an illusion of appreciation that will last. I’ll tell you what the sustainable market price should be for Riverside at the end of this article. Wall Street firms like Blackstone bought thousands of homes and converted entire neighborhood of people who were homeowners into renters. They then package those rental properties into rental backed securities with the intent of delivering the income from the rentals to the bond investors. Is Blackstone now in the property management business? No. Do they expect for everyone to pay their rent on time or at all when problems occur with the
property? No. They are not in the property management business. When the next economic down turn occurs and the rents stops coming in their exit strategy will be to dump all of the properties back on the market at fire sale prices. Main Street Investors are waiting like Hyenas stalking wounded prey for inventory to peak and begin the downward slide. Blackstone and other large players will try to sell off gradually because it only hurts them if they dump it all on the market at once. So they will release it gradually until they see rapid market deterioration and get pressure from the bond holders to sell it all now. This is already happening. Inventory is up and we haven’t really seen anything yet. When the market finishes correcting itself again, and rents continue to increase tenants will stop paying rent, the payments to the bonds investors will stop and defaults on bonds will occur. This is similar to a mini subprime crisis all over again with instead of the homeowners defaulting on mortgage payments the renters are defaulting on rent. The rental properties will be dumped back on the market in an effort to recover the losses and consequently bring property values down. Just like the mortgage crisis. Rapid increases in the housing supply will always put downward pressure on home prices. Price reductions are already happening by savvy sellers who are market conscious
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and know they need to get the best price they can now and get out and the savvy real estate agents that represent them. Walls Street firms understand what is happening and they are changing their long term hold strategy to a sell now strategy. In the months ahead none of this will be speculation. It will be reality. Foreclosure effects on population and employment rates In 2000, prior to the crisis, the Riverside Metropolitan Statistical Area which includes San Bernardino and Ontario had been experiencing a population growth of about 30%. From April 2010, population had grown from 970,100 to more that 4.2 million. The 70% increase was attributed to new residents who were moving into the area. Between the years 2000 and 2007, Riverside had a strong employment rate which also played a huge role in the 3.4% increase in population. However, with the foreclosure crisis, things changed drastically. The housing crisis weakened the local economy and slowed down the population growth to a staggering annual low of about 1.6%. With the crisis in full effect, the Riverside’s area employment declined throughout the third quarter of 2009 and not much has really changed since then.
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REAL ESTATE
Between the third quarter of 2009 and the first quarter of 2011, Riverside, Ontario and San Bernardino only experienced a population growth of 1% that only saw about 1.1 million people being employed in the MSA. However, the payrolls remained 164,800 jobs below pre-recession levels. Between May 2010 and May 2011, the average unemployment rate was at 14.2% which also was the same the year before. In April of 2006 unemployment rate was at its lowest in Riverside at 4.5%. 39,500 unemployed workers, 839,500 employed workers and 879,000 in the workforce. Today Riverside is at an unemployment rate of 8.0% with 79,600 unemployed which is double 2006, but 887,200 employed and a labor force 966,800. Although the employment rate is higher Riverside is clearly on its way back. With 887,200 employed and 966,800 in the total work force these numbers represent a new historical high for Riverside. But look at what is happening to the real estate market. Will the current and future housing market be our Achilles hill and set us back again? That is the million dollar
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question that I can’t answer with a high degree of confidence but many real estate market indicators have me very concerned about future appreciation of home values in Riverside. We all have reason to be concerned. Ever since the foreclosure crisis, the home sale market has remained soft in Riverside. Between the year 2008 and 2009, the number of existing home sales in the area rose to 57% which was attributed the sale of distressed homes. In the year 2010, the sale of local existing homes reduced. The trend continued and by the end of the first four months of 2011 the decline was registered at 18%. According to CoreLogic, during the same period, there was also a reduction of about 45% in the sale of new homes. With a high proportion of distressed homes for sale, all Riverside homes for sale represented a depressed market and represented a great investor/ buyer opportunity and a lost opportunity for first time homebuyers because of their inability to complete with cash investors. CoreLogic revealed that the sales house price index indicates that the home prices in Riverside rose faster and fell further when compared to the national numbers. Riversides history validates that it is
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susceptible to extremes highs and terrible lows like no other market in the nation. Since May 2009, the housing market has shown some signs of stabilizing but we are at risk for all the aforementioned reasons and we must continue to monitor the market and economy very closely. Today the average income per capita in Riverside is $29,927 dollars with a population of 2.29 million. If we compare Riverside income per capita to Orange County’s $50,440 with a population of 3.1 million, about a million more people and Los Angeles County’s income per capita of $42,564 with a population of 10.0 million. We can see why Riverside is so vulnerable. The income per capita measures the financial health of a population by measuring the quantity of consumption by the members of that population. $29,927 is a reflection of the standard of living, the disposable income, and the quality of life of the community. Our per capita clearly indicates that we simply do not have the income capacity to deal with the economic swings and market fluctuations that our sisters counties populations might have and it most likely the reason for the extreme highs and terrible lows in the real estate market and the overall Riverside economy. The Median Household Income from 2009 to 2013 was 56,529 for Riverside County compared to Orange County of $75,422 and Los Angeles
REAL ESTATE
County $55,909. What these numbers reflects is what true difference in home prices between all three counties should be. The home prices should correlate with the median household income of the populations. When there isn’t the right correlation it is highly probably that there will be a market correction. The median price home for Riverside County is $231,000 per the most recent census which means the price income ratio for Riverside is 4 based on median income per house and the median value of homes in Riverside. So homes priced at $231k are marketable and the value is sustainable as long as the increase in home value is commensurate with increase in median income. For Los Angeles County $420,200 is the media value of homes which means the price income ratio of 7.5%. This is not sustainable and a market correction is inevitable. For Orange County the median value of property is $519,600 which means the price to median income ratio is 10.30. This is also not sustainable and a market correction is inevitable. Investor activity has affected all three counties and will ultimately leave many people
holding the bag with property worth less than the mortgage that buyers will obtain to buy them or current owners who have refinance and pull out all of their post boom equity just before the bust shows up. The boom came and is now gone. The bust is on its way and in some places has made an announcement that I am here and you are not going anywhere. Numerous efforts have been made to try and improve the situation in Riverside. The partnership between the local entities, the state and the federal government as a whole has played a huge role in reducing the number of mortgage at risk of foreclosure. But unfortunately no one can stop the invisible hand of market forces at work. There are economic consequences to all the decision we make. The government cannot save us from ourselves nor control all market forces that are at work. There are buyers and sellers in every market and the market is no one’s friend. Market is like gravity. It just exits and you have to deal with it. As soon as the market presents opportunity it is good news for some and devastation for others and the opportunity
can change overnight and Winners are now loser and the loser are now winners. This is not an egalitarian society where everyone is suppose to gets a fair shot at life’s opportunities. It is Darwinian at its foundation. Demand and supply, price volatility and the rate of consumption are forever changing. Members of this community or outside out community with means of production or cash to buy or sell are welcome and they are going to capitalize on the opportunities that the market gives them. Individuals without the means to participate will suffer or be denied access all together. Darwinian economics is real. Foreclosures are on the rise and property values are on the decline. We live in a capitalist society wrapped tightly in Laissez-faire economics founded on a Darwinian philosophy of only the strongest survive and the weak fall by the wayside because we embrace freedom and the unlimited opportunities that exist in this county to build wealth and to achieve the American Dream. Please don’t write me.•
References • • • • •
http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/ http://portal.hud.gov/hudportal/documents/huddoc?id=HUD-405RivSC.pdf http://www.calorganize.org/node/1061 http://ucrtoday.ucr.edu/8453 http://webcache.googleusercontent.com/search?q=cache:kHv2jP7XeAAJ:usatoday30.usatoday.com/ news/nation/2008-03-11-foreclosures_N.htm&client=firefox-a&hs=k48&hl=en&strip=0 • http://www.socialjusticejournal.org/wp-content/uploads/2014/09/133_01_Intro.pdf
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THE CEO CENTERFOLD
KEITH Murray
Keith Murray, President and CEO of PVC Murcor and VRM Mortgage Services, is a real estate industry veteran with over 33 years of experience in real estate consultation, valuation, and analysis. He also holds a California Real Estate Broker license, which is just the beginning of his commitment to education and the mastery of all aspects of the real estate field. Keith Murray graduated from California University, Northridge with a Bachelor of Science degree in business administration, with an emphasis in finance. Other notable achievements and certifications include: the MAI designation of the Appraisal Institute, the IFAS designation of the National Association of Independent Fee Appraisers, and the ASA designation of the American Society of Appraisers. These designations represent the highest standard of achievement and excellence in the appraisal field. In a radio interview with Keith in 2012, he told me about an event that transpired on a Friday—while he was working as a bank teller— that led to his decision start his own appraisal company. Keith was 22 years old and behind the counter helping customers when armed
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robbers walked in the bank, pointed a gun in his face, and asked for cash. When the terrifying ordeal was over, Murray quit his job the following Monday and started an appraisal firm which today is known as PCV Murcor. Founded in 1981, PVC Murcor—providing the highest quality valuations and consulting services—became one of the largest real estate appraisal management firms in Southern California, and eventually laid the foundation for the creation of VRM Mortgage Services to become a nationwide firm dedicated towards providing a wide range of real estate services across the United States. As the founder of VRM Mortgage Services in 2006, Mr. Murray developed his company to be one of the best providers of nationwide mortgage-related services. The company offers solutions directed toward helping lenders, servicers, government agencies, and investors to become more compliant and self-sufficient. In addition, VRM helps with improving origination and servicing returns, and aids in decreasing loss severity. The company also offers help in reducing operational and reputational risks.
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THE CEO CENTERFOLD
VRM ACCOMPLISHMENTS
As the president and CEO of VRM, Keith Murray has seen his company blossom over the years. Since 2007, the mortgage service company has been able to list, manage, and sell over 500,000 assets. The company has become much more than just the largest mortgage REO outsourcer company in the industry. Under Murray’s management, the company has dedicated itself to offering solutions to some of the industry’s toughest challenges, post-financial crisis. VRM’s commitment to borrower outreach and pre-foreclosure retention solutions is setting new standards for the industry. VRM’s property preservation, disposition, eviction, and rental management services are recognized as leading default service operations among its peers. Through its training division, VRM University, the company also provides cutting edge sales, compliance, professional development and best practices training for real estate professionals online and at national real estate conferences throughout the country. In 2014, VRM Mortgage Services and PCV Murcor were honored with being rated in the top 500 African-American owned businesses and the top 500 diversity owned businesses in America by one of the nation’s leading multicultural social media sites - DiversityBusiness.com. Mr. Murray was one of the entrepreneurs honored for their commitment to diversity. This prestigious award recognizes and honors specific individuals who have established themselves as world-class entrepreneurs who stop at nothing to change the lives of people and push the economy forward.
MURRAY’S ACHIEVEMENTS
Mr. Murray has been able to use his knowledge and skills to analyze and supervise the analysis and valuation of different types of real estate in California. His vast knowledge of real estate industry has allowed him to work extensively and successfully with government and quasi-governmental agencies including: Freddie Mac and Fannie Mae, RTC, the Veterans Administration, and HUD. He has also contributed to the private sector and has shared his experience with a number of financial institutions, pension funds, insurance companies, and asset managers. As the CEO of The Power Is Now and host of The Power Is Now Radio, I have had the privilege to meet and interview many important people in the real estate industry. I can count on one hand the number of people who have made a lifetime impression on me, and Keith Murray is one of those people. Mr. Murray is an inspiration to me, and has inspired thousands of people along his meteoric rise to the top of his profession, and has inspired thousands at conferences where he has spoken. He is the epitome of success in business and in life. His commitment to his business success is secondary only to his unapologetic confession of his faith in Christ, and his commitment to his wife and family. Mr. Murray understands the importance of God, family and business and has achieved the proverbial balance life that so many of us have been unable to do. I am humbled by his unmoving standards and his soft spoken nature. I am inspired by the talent he attracts to his organization and how he is revered among his employees as a strong leader. Lastly, I am in awe of what he has built in PVC Murcor and VRM. I believe Mr. Murray is just getting started.
Eric Lawrence Frazier, CEO The Power Is Now Inc.•
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REAL ESTATE
REAL ESTATE IN OREGON HOME PRICES UP IN REDMOND BUT DOWN IN BEND According to the figures released by Bratton Appraisal Group on Tuesday, October 14, 2014, the average price of a single-family home in Bend declined by 13% from August to September, after a steady climb in the previous 2 months. Realtors ascribe this price fall to the seasonal slowdown. In Redmond however, in accordance with The Bratton Report, the average price of a singlefamily home increased nearly 4%. According to the report, the sales of single-family homes declined by about 15% in September to 190 compared to August sales in Bend. Lynnea Miller, principal broker at Bend Premier Real Estate, reported that the drop in average home prices is likely to happen this time of the year. Homeowners who were unable to sell their properties before school started may have lowered their asking price or withdrawn them from the market. However, Miller states that the market is still resilient in general. The average price in Redmond grew to $218,000, nearly $8,000 higher than that in August and $38,000 higher than the average price last year September. Last month, the number of single family homes sold in Redmond declined by about 6% to 80.
SOLID RETURNS FOR INVESTORS IN OREGON The returns for investors were still quite striking, even though fewer homes were overturned in the third quarter this year compared to a similar period last year. As stated in RealtyTrac’s Q3 2014 U.S. Home Flipping Report, the median purchase of homes in Oregon was $264,000 during the quarter. The median price when those homes were flipped and sold again within a year of being purchased was $344, 200. Flips in Oregon in the third quarter consisted of 3.7% of home sales. About 26,947 single family homes were flipped in the third quarter in the year 2014, constituting 4% of the entire U.S. single-family home sales nationally. This was a decline from 5.6% in the third quarter 2013 to the least level since 2009’s second quarter. In the release, Daren Blomquist, vice-president at RealtyTrac, stated that the flipping got back to its historic standard of 4% in the third quarter as home price valuing cooled in several hot flipping markets all over the country. In the meantime, the top-ranking median profits per flip in the quarter reveal that flippers are still filling a major vocation in a maturing housing market with historically least amount of new homes being constructed. The metro regions that experienced enormous increases in flipping this quarter were Boston, Missouri, Kansas City, Kentucky, and Louisville. Flippers in Virginia, Richmond, Detroit, Pittsburgh, and Baltimore received the greatest returns.
References http://www.bizjournals.com/portland/blog/2014/11/oregons-population-continues-to-hit-new-heights. html?iana=ind_rre http://www.bizjournals.com/portland/blog/real-estate-daily/2014/11/flippings-off-in-oregon-but-returns-forinvestors.html?iana=ind_rre
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REAL ESTATE
INCREASED POPULATIONS IN OREGON Amidst the flipping, Oregon’s population continues to skyrocket, news that comes as no surprise to many. In a preliminary report released by Portland State University’s Population Research Center, 2014 population estimates for Oregon indicate that Oregon’s population grew from 3,919025 in the year 2013 to 3,962,565 in the year 2014. That is a firm 1.1% increase leap. Most of the increment relates to net migration, which constitutes 74% of the total increase. Risa Proehl, the Center’s program manager, stated that the net migration in Oregon increased with the improvement in economy, which is a common phenomenon. Portland increased by 9,390 residents last year while Salem, Eugene, Corvallis, Bend and Beaverton each increased by 1,000 people and above. Multnomah and Washington counties increased with over 9,000 people.
HOME SELLERS SELLING TIPS A survey conducted with 500 real estate agents determined the key tips every home seller should know about. Every tip was then ranked depending on the responses of the survey and the top eight were viewed to be the most important by 80% of the agents surveyed. The first most important tip was to price your home realistically from the get-go. The reason for this was because the greatest number of showings usually take place in the first couple of weeks, therefore it is important not to side-line those potential buyers with impractically high prices. Also, it is always important to maintain a home in a decluttered, clean, and tidy state. This is because anyone can walk through the doors at any time. These are just a few tips for home sellers that have worked well for professional agents. However, the population numbers and the numbers of constructions coming up determine the real picture. During the third quarter of the year, home prices usually decline. The home sales are usually slow this time of the season, but are likely to pick up in March.•
http://www.bendbulletin.com/business/realestate/ http://www.bendbulletin.com/business/realestate/2496399-151/home-prices-down-in-bend-up-inredmond?entryType=0 http://allthingsrealestatepdx.com/home-selling-tips-every-seller-should-know/
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e h t n i Buying
a e r A Metro
C
hicago is without a doubt among the top U.S. real estate markets. This can be attributed to the increased millennial population and re-urbanization trends being experienced in the city’s downtown area. A recent finding revealed that a good number of innovative businesses, such asGogo Inc. and Motorola Mobility are relocating to downtown from the suburbs. The ultimate effect brought about by this move it that these businesses are bringing with them suburbanites who are looking for a shorter commute. The finding also revealed that an estimated 21,000 millennials are expected to have settled in the metro area of the city by 2019.
The downtown market in the city is proving to be a hub for home sellers. This is in part to the apartment rental market slowing down, and a majority of the residents are looking to buy real estate property as opposed to renting. In 2012 and 2013, the city of Chicago experienceda large sales increase in sales volume of about 27% within the metro area. The housing price is expected to continue with this upward trend, courtesy of the rising demand of housing and the few areas available for new construction.
Chicago Metro Home Prices and Values
According to Zillow statistics, the home value reflected that the Chicago metro area
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REAL ESTATE
has gone up by 6.4% over the last year. It is predicted that the trend will continue to rise with an expected increase of about 1.7% within the next year. Within the metro area, the median sale price is estimated to be at $219,900.In addition to this, the median price of homes that were sold was at $224, 500. As we speak, the median home value in the Chicago metro area is $188,400. The median list price per square foot in the metro area is at $133. These figures are even higher than those reflected by other Illinois areas, which have an average of $120. Insofar as the rent is concerned, the median rent price is $1,631, which is even higher than Illinois which is at $1,600. The mortgage delinquency rate in the city of Chicago is at 7.9%, which is higher than the nation’s average at 6.9%. Mortgage delinquency can be defined as the initial steps that are involved in a foreclosure process. It refers to when a homeowner is unable to make mortgage payments. Ever since 2007, the U.S. has experienced a sudden fall of more than 20% in the home values. Currently, the majority of homeowners are operating underwater in as far as their mortgages are concerned. What this really means is that majority of the homeowners in the U.S. owe more than what their homes is really worth. As we speak, 27.1% of homeowners within the Chicago metro area are underwater. These figures are even higher that those seen in Illinois which is at 24.7%.
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Whether to buy or rent?
The decision about whether to buy or rent real estate property is one that most homeowners are faced with. Today, the nationwide stats reveal that the gap between the cost of renting real estate property and that of buying the same has been greatly reduced, courtesy of rising home prices and interest rates. In 2013, Trulia released a report which revealed that it was 44% cheaper to buy a house on average across the U.S. than renting one. According to its latest findings, thepercentage rate had reduced by 2% meaning that it 38% cheaper to buy than to rent. Ever since the post-financial crisis, the interest rates have become attractive even as the inventory and the lending standards continue to improve. With all of these lucrative offers available, buying is not yet the right choice for everyone. There are many factors that need to be considered before deciding whether to buy or to rent. Insofar as real estate property is concerned, the most important feature that triggers people to make a purchase or decide to rent tends to rely on location and amenities. The metro area has many amenities included. The best things in life are enjoyed within the city limits. The most expensive home in the Chicago market can currently go for as high as $32 million for a penthouse condo, but a buyer can still find property that is perfect for any price range.•
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REAL ESTATE
The
NEVADA
Real Estate Market
T
here were great great expectations for the Nevada home market back in the beginning of the year, but 2014 home sales for Nevada have been flat. Sales now face the normal seasonal home sale slowdowns expected during the fourth quarter of the year with holidays and winter weather. According to Dennis Smith, President of Home Builders research, the Nevada market should prepare itself for six to eight months of flat results. What is to blame for the flat new home sales performance in Nevada? Several factors appear to be affecting the Nevada new home sales figures for the year. First, consumer demand has fallen short of 2014-2015 estimates. The lack of demand is tied to the fact that incomes in Las Vegas are still 25 percent below their highest peak in 2006. The per capita median
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income for 2013 was just under $39,000. High on the list of factors affecting new home sales performance include a slower permitting process, increasing competition from resales, new federal mortgage-lending guidelines, and an increase in resales. The mapping and permitting process for new home construction in Clark County used to take six to seven months, but now it is taking 10 to 11 months. Although other permitting agencies in Las Vegas, Henderson and North Las Vegas are not having the same delays, Clark County’s problem has a broad effect on the Nevada market because it accounts for 50 to 60 percent of local permits that are pulled. Another issue is the lack of affordable new housing units. The new houses being built are bigger, pricier homes rather than designed for first-time or
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averagehomebuyers. Only 7.8% of local new homes had a price tag under $200,000 in September, down from 18.3 percent for September a year ago. New-home prices are rising and in some areas are hitting a median price of $299.601 as of September. The price difference between new and existing homes is expansive and many new homebuyers are being priced out of the market. This is in part due to the changes to federal lending rules that have increased waiting times for buyers to receive a new mortgage, and slashes in homeowner loans. Add to that the rigid credit score and down payment requirements, and it easy to see why so many new homebuyers can no longer afford newly constructed homes. The Greater Las Vegas Association of Realtors reported that the median
REAL ESTATE
price of a single-family home sold through the MLS dropped in October to $199.900 slipping from a September median price of $202,500. The decline was expected. President Heidi Kasama explains: “It’s not surprising to see home prices start to dip as the weather cools off, and we head into the holidays. Local home prices have been stabilizing for months, and homes are taking longer to sell.” Historically, home prices reached a peak in 2006 with a median home price of $315,000 and hit a low in 2012 at $118,000. During 2012 and 2013, the market regained 24%. Based on the current rate of sales, the market has a four-month supply of homes that is double the inventory that was available a year ago, but still less than the six month inventory industry experts consider as providing a balanced market. According to Zillow, the median home price for Nevada is currently $191,700 with property
values having increased 12.7% during the past year and predictions of continued increases of 5.2% during 2015. Current listing prices average $218,000 the median sales prices of homes that sold is $200,000. Foreclosures will continue to be a factor affecting home values over the next several years. Nevada has a foreclosure rate of 7.3 per 10,000 homes and this is more than the national average of 4.5. The amount of delinquent mortgages in Nevada is 11.4% and like many other areas, many Nevada homeowners are underwater on their mortgages. There are mixed messages in the Nevada real estate figures, but it is clear that the market will continue to slow throughout December into the early months of 2015. Builders would do well to find ways to build homes more affordably or to build smaller homes to help keep costs down.•
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COMMUNITY
Using Renewable
energy
Resources The world relies heavily on fossil fuels to generate energy, but the tide is changing. Higher energy costs, the damage that fossil fuels cause to the environment and the decreasing supply of fossil fuels are all converging. According to British Petroleum and Royal Dutch Shell, one-third of the world’s energy needs to be obtained from renewable resources by 2050. The majority of renewable energy is derived directly or indirectly from the sun. The sun’s energy can be used directly for heating and lighting, for generating electricity for heating water, and for providing solar cooling. The heat of the sun is also responsible for driving winds. Most people consider wind a separate category of renewable energy, but the two are inextricably connected. We use wind turbines to capture the power of the wind. The wind turbines produce electrical power. More and more wind farms are being built that have hundreds of individual wind turbines that generate electricity to feed into the grid. Wind energy can also be used for off-grid locations where it is difficult to bring in
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electrical transmission and distribution lines. The sun causes water to evaporate. When the water vapor is transformed into rain or snow, it flows downhill into rivers and steams. This provides the third type of renewable energyhydroelectric power. Water is used to turn turbines that capture the energy of the flowing water to generate electricity. There are other types of renewable energy. Bioenergy or a plant’s organic matter can be used to produce electricity, fuels, and chemicals. Geothermal energy uses the earth’s internal heat to generate electricity, and to heat and cool. Even the ocean provides us with renewable energy sources including the energy contained in the tides and in waves. With the sun’s help to warm the surface of the oceans, more than the ocean depths the temperature difference itself can be used as an energy source.
Why Is It Important To Use Renewable Energy? Using renewable energy is important for the benefits it provides. Population growth and
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COMMUNITY
human activities are causing excessive carbon dioxide to build up in the atmosphere and those emissions trap heat that drives up the planet’s temperature. The higher temperatures are causing global warming as well as significant and potentially harmful impacts not only on the environment but on our health and the climate. The generation of electricity alone is responsible for one-third of all U.S. global warming emissions. This is because 25% of all U.S. electrical generation is produced using coal-fired power plants. Gas-fired power plants account for another 6%. Renewable energy is much cleaner than using fossil fuels to generate electricity. This means they have a much lower impact on the
environment than fossil fuels or non-renewable resources. The benefits of using renewable energy extend farther than simply using the energy source itself. According to data collected by the International Panel on Climate Change, there are additional benefits to using renewable energy associated with the overall life-cycle of renewable energy technology. This includes the installation, maintenance, operation, dismantling, and decommissioning of equipment. With renewable energy technology,lifetime global warming emissions are minimal. Increasing the use of renewable energy allows the replacement of carbonintensive energy sources that can significantly reduce U.S. and worldwide global warming emissions. Using renewable energy sources also benefits public health by reducing water and air pollutants emitted by coal and natural gas plants that have been directly linked to breathing problems, neurological damage, heat attacks, and cancer. Also, renewable energy will not run out. Unlike fossil fuels, the sun, wind, internal temperature of the earth, and our oceans will not be depleted like fossil fuels. It is estimated that there are 1.3 trillion barrels confirmedoil reserves left in the world’s major oil fields. At present rates of consumption, the supply will run out in 40 years. By 2040 the world’s population is expected to double, so our consumption
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will double as well because more of the world will be industrialized. Another often-overlooked benefit of renewable energy is safety. As fossil fuels become harder to find, it becomes more dangerous to harvest them. With the development of better technologies, renewable energy is becoming easier and safer to harness and control. Another benefit of renewable energy are the jobs generated by investments in renewable energy technology. The dollars you pay are invested locally, statewide, and across the U.S. to create jobs that power local economies as well as the national economy.
Conclusion
Using renewable energy sources like solar, hydro, geothermal, and biomass are an important step in helping countries become energy independent and healing our environment. Furthermore, the development of renewable energy technologies is providing the fastest growing segment of jobs not only in the U.S. but globally. To make a real difference in the world, you can begin by using renewable energy sources to power your car, heat your home, and supply your energy. More jobs will be created and the country can be more energy independent. You will personally benefit from safer, healthier electrical generation, lower energy costs and a healthier environment.•
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COMMUNITY
GREAT DEALS IN THE ROCKIES
The Rocky Mountains are located in the state of Colorado which is the eighth largest state in the U.S. According to the data from the United States Census Bureau released in July 2013, Colorado has an estimated population of 5,268,367 which represented a 4.76% increase since the year 2010.
The Rocky Mountains
Otherwise known as the Rockies, the Rocky Mountains are a major mountain range found in western North America. The Rockies are known to stretch to more than 3,000 miles from British Colombia to New Mexico. Formed about 80 million years ago, the Rocky Mountains are a major tourist attraction destination. The Rockies are known to have about 53 peaks that are 14,000 feet high in terms of elevation.
The Rockies as a major tourist attraction
The Rocky Mountains provide a major source of tourist attraction both to the locals and the international tourists. Every year, over a million tourists flock into the Rocky Mountains to enjoy the scenic views and make the most of the countless
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COMMUNITY
recreational opportunities. The mountains provide individuals with great site where they can hike, can hike, camp or even participate in mountain sports. With this kind of attraction, there are a lot of facilities put in place to accommodate the ever growing demand of tourists. With ski resorts such as the Fernie Alpine Resort, Kicking Horse Mountain Resort, and Kimberley Alpine Resort you can be guaranteed of having a fulfilling experience.
Rocky Mountains National Park
Located in the Front Range of the Rocky Mountains, the national park which was established on January 26, 1915 provides tourists with an added incentive to visit the north central region of the state of Colorado. Major attractions in the area include: astounding mountain views, mountain lakes, varied climate, and a wide range of wildlife among others. The park is governed by the National Park Service and received about 3,176,941 visitors in the year 2011. The park can be accessed using three roads: the State Highway 7, the U.S. Highway 34 and 36.
The real estate trends in the Rocky Mountains
According to Rocky Mountain Real Estate, the housing starts doubled and home prices rose during 2013. The prices were to continue rising even in 2014. From a survey conducted by the Urban Land Institute’s Center for Capital Markets and Real Estate, it revealed that in the
long run, there will be a rise in housing prices from the year 2012 through 2020. It is expected that there will be a cumulative growth of about 42% during the same time period. There are a number of real estate projects that are currently underway in the region. One of them is the construction of the main street. As of the November 28, 2014, the Proform Concrete Services had completed the pouring of concrete for the 2014 project area. This is even as work continues to be done at the 49th Avenue intersection on the planter boxes on the bulb-outs and the top soil filling on the planters.
Amazing deals in the Rockies
Anyone looking to find great deals in the region needs to be willing to go the extra mile and do their research well. You can research online or contact agencies to get all the relevant information about the available deals. Local real estate agencies such as Salida Colorado Real Estate, Heart of the Rockies Real Estate, and Key to the Rockies offer special deals on home sales and rentals. Make the most of your experiences and have a lifetime experience with your family as you enjoy the great deals. The Rockies are waiting for you, whether you are planning a vacation or a move.•
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BUSINESS
The F alling Unemployment Rate
The U.S. economy managed to create 214,000 jobs during October 2014, helping the national unemployment rate to creep down to its lowest level in six years. The national unemployment rate stands at 5.8% after a decline of 0.8% since the beginning of the year. The number of longterm unemployed, or those without a job for 27 weeks or longer, remained mostly unchanged at 2.9 million. This group represents 32% of all unemployed persons. The number of long-term unemployed has decreased by 1.1 million over the previous 12 months. The employmentpopulation ration increased to 59.2percent in October, but the civilian labor force participation rate saw only minimal change to 62.8 percent in October from 62.7 in September’s report. This number has remained predominantly flat since April.
january/february 2015 issue
October saw the average workweek for all employees on private nonfarm payrolls move up by 0.1hour to 34.6 hours and the average hourly earnings rose by 3 cents to $24.57 in October.
New Jersey
According to estimates made by the United States Bureau of Labor and Employment, New Jersey employment increased in October but revised September estimates showed a much larger increase in employment than was originally reported. October employment figures reveal that nonfarm wage and salary employment was down by 4,500 jobs to a seasonally adjusted figure of 3,951,700. The Bureau of Labor Statistics uses a monthly survey of employers to determine this figure. The revised figures for September show a gain of 3,000 nonfarm jobs instead of a gain of 600 nonfarm jobs as
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previously reported. October Bureau estimates from the employer survey show declines in private employment of 2,400 jobs and public sector employment of 2,100 jobs. Also, there were 21,200 more New Jersey residents employed in October than there were in September. This jump in employment is the fourth highest increase in the state’s history. New Jersey private sector employment has increased by 146,000 jobs since its lowest point in February of 2010. Four of the nine major private industry sectors reported gains while five sectors recorded losses. Gains were recorded for education and health services, financial activities, trade, transportation, utilities and leisure and hospitality while industries that recorded losses included construction, professional and business services, other services, information and manufacturing.
BUSINESS
New Jersey is lagging behind other states when it comes to job creation and increasing employment. The October report puts the New Jersey unemployment rate at 6.6%, which represents an increase of 0.1%. Unfortunately, New York and New Jersey were two of only five states that saw increases in their unemployment rates. Nevada reported the largest job loss with a decline of 7,300 jobs. Jersey City is continuing to see improvements in their unemployment rates. In August, it had the lowest unemployment rate of any large city in New Jersey. The current city administration under Jersey City Mayor Steve Fulop has focused on growing job opportunities, expanding job training, and providing expanded access to employers for all residents. They have also been able to convince several firms to relocate to Jersey City
including JP Morgan Chase, RBC, Forbes, Imperial Bag, Nautica and Ahold, as well as the construction of several new hotels creating hundreds of new jobs. The Regent Atlantic New Jersey Wealth Index (RANJWI) is a proprietary index developed to measure the health of the wealth in New Jersey. The index is based on four components: employment, home values, personal income, and stock performance. The index’s value for the second quarter of 2014 is 42, indicating that the environment in the state has been close to average for creating wealth. The financial crisis and associated recession from 2007-2009 resulted in record lows for the RANWI index because dropping home prices, a weak stock market, a high unemployment, and slow income growth adversely affected the New Jersey environment for wealth
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creation. The recovery to 42 from 17 in 2012 predicts a potential turnaround in New Jersey fortunes. The trends so far this year indicate a balanced mix of growth. In the 12 months that ended on June 30, personal income grew by 3.1%, faster than the overall inflation rate of 2.1%. New Jersey had been lagging behind the nation in employment over the course of the recovery, but not in this last quarter. New Jersey registered one of the largest drops in the unemployment rate during the past 12 months, falling to 6.5% statewide. Home prices are also trending upwards gaining about 2.6% in New Jersey. This significant gain boosts wealth statewide. Although employment news is mixed, the combined reports indicate slow but steady progress and a generally positive outlook as we head into 2015. •
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BUSINESS
JOBLESS CLAIMS For October 2014 For the sixth straight week U.S. new jobless claims for October remained below 300,000 indicating that the labor market was weathering concerns over the slowing global economy. The current jobless trends remain positive although initial jobless claims rose during the week of October 18 by 17,000 brining the total claims to 283,000. The 4-week average reached a 14-year low at 281,000 down 3,000 from September. When comparing the numbers against the sameSeptember survey period employment reports show little change. The most recent week rose 2,000 from the September 13 week, for a small rise, while the 4-week average rose slightly higher by 1,250.The unemployment rate for insured workers remained steady at 1.8 percent. 1 There is some evidence that weaker growth in China and Europe is affecting the manufacturing sector. Data released on Thursday showed factory activity dropped to a three month low at the beginning of the month although the manufacturing sector continued to move
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forward at an encouraging pace. The Labor department reported that for the week ending October 18, state unemployment claims rose 17,000 for a seasonally adjusted rate of 283.000. This came after three straight weeks of dipping numbers. A more accurate measure of labor market trends is the four week moving average of claims because it smooth’s out the week-to-week volatility. This index also dropped to its lowest level since May 2000. The new claims four-week average fell 18,750 during September and October survey times. This data suggest another month of reasonably strong employment growth and new job creation. Another promising sign could be found in the number of people continuing to receive benefits after an initial week of help dropped by 38,000 to 2.35 million for the week that ended October 11. This number was the lowest recorded since December of 2000 signaling that the jobless rate could continue to fall even more. The rate fell below 6% in September. This was the first drop to the 6% level since July
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of 2008. 2 The good news according to Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York is “There is no sign in these very timely data of weaker global growth or turmoil in the markets causing U.S. growth to falter.” Data obtained from Markits U.S. manufacturing purchasing managers index dropped to 56.2 during October from a September reading of 57.5. If an index reading is above 50 it indicates economic activity is expanding. New export sales slowed quite sharply as well as new order growth despite job growth remaining relatively strong. It appears that the weakening economic growth in key global markets including Europe and China and other emerging markets is affecting export performance according to Chris Williamson, chief economist at Markit in London. The slowing growth in Europe and China has also caused some upheaval on global financial markets over the past several weeks. U.S. activity, on the other hand, continues to expand at a solid rate with third quarter growth expected to reach or exceed an annual pace of 3 percent in spite of increased global health concerns. 3 Looking at different labor groups initial claims by former Federal civilian employees
BUSINESS
totaled 2,012 for the week ending October 11, which is an increase of 473 over the previous week. Newly discharged veterans filed 2,385 initial claims, a drop of 206 over the week before. Insured unemployment rates for the week ending October 4 were highest in Puerto Rico (3.2), Alaska (2.8), New Jersey (2.7), Virgin Islands (2.7), California (2.3), Connecticut (2.3), Nevada (2.2), Massachusetts (2.1), Pennsylvania (2.1), and Rhode Island. The largest increases in initial claims for the week ending October 11 were in Pennsylvania where new claims rose by 4,013 and Michigan which showed an increase in first time claims of 3,210. Other states with increases in first time jobless claims include Texas, Washington and Maryland. States that showed the greatest decreases in first time jobless claims included Iowa (-1,229), Florida (-781), New
York (-600), Oregon (-407), and Ohio (-394). No state triggered “on” for the Extended Benefits program for the week ending October 4. 4 The sharp declines in initial unemployment claims for early October are thought to be somewhat skewed by the Columbus Day holiday that closed down government offices around the country. Even so, the four-week average report that takes into account holiday volatility still showed a drop of 3,000 indicating job creation is still healthy and doing well overall. There is little question that most companies are continuing to operate lean, mean companies. After the many rounds of job cuts during and following the recession of 2007-2009 companies are finally beginning to add jobs but they are still being extremely careful about who gets hired. The market seems unaffected by the rise in jobless claims because it is still
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low under 300,000 because they up from a very low level. Based on the numbers there is not a lot of job cutting or firing going on. Analysts say that the growth outlook remains stable for the economy at around 3 percent. New Jersey and Pennsylvania are continuing their campaigns to create new jobs and get folks back into the labor market with their special job portals, incentives and job fairs. Though still lagging behind other states they have been seeing some positive signs such as increases in job postings and placements. All in all the October jobs report contains nothing alarming in terms of the U.S. economy or the U.S. labor market. Everything appears to be relatively stable even with the slight increase in jobless claims. This report in conjunction with other leading economic indicators reinforces the outlook for continued economic growth.•
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BUSINESS
HOA Foreclosures and Effects on First Mortgages
H
istorically, there has always been tension between lenders and condominium and homeowner associations when problems arise with delinquent association fees or assessment charges. Most HOA Covenants, Conditions and Restrictions permit an association to foreclose on a property if it has a lien on a homeowner’s property. In a recent ruling by the District of Columbia Court of Appeals, there is renewed focus and concern about the position of HOA liens concerning both position and payment issues as they relate to a lender’s mortgage lien. The new ruling can have significant impacts on both mortgage lenders and homeowner associations.
BACKGROUND INFORMATION HOA, First and Second Mortgages
HOA Liens are often recorded against a property after a first mortgage. When this occurs, the HOA lien is “junior” in priority to the mortgage.In the case of a foreclosure, the first mortgage lien remains on the property after the HOA forecloses. When the property goes up for auction, the HOA or another purchaser buys the property subject to the first mortgage lien. Even when the HOA lien is recorded prior to the first mortgage, most Covenants, Conditions and Restrictions contain a clause that makes the HOA lien subordinate to any first mortgage. Generally, this makes it easier
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BUSINESS
for people considering the purchase of a unit in HOA community to get financing because most lenders require their mortgage to be in the senior lien position. Any second mortgage on a HOA Property is
eliminated by the foreclosure of the senior HOA lien. In the event that the second mortgage was recorded before the HOA Lien, it would stay on the property after any HOA foreclosure just like a first mortgage lien.
Super Liens
Roughly 20 states give HOA liens a special status known as a “super lien” under very specific situations. The conditions vary by state. For example, Colorado law gives HOAs a super lien with priority over a first mortgage when a homeowner becomes six months delinquent on assessments. When a HOA forecloses a super lien, it eliminates the first mortgage along with all other junior liens on the property. Because a super lien can eliminate a first mortgage, most mortgage lenders want to maintain their
first position. If they are able to do so, they will pay off the super lien amount so that the property does not end up in foreclosure.
Recent Changes
The recent Court of Appeals ruling in the Chase Plaza Condominium Association vs. Chase Bank, N.A. made on August 28, 2014 determined that an association’s statutory “super-priority lien” for unpaid assessments took the senior position, not just for payment priority, but also over the lender’s mortgage lien. The issue in the Chase case concerns the aftereffects of the association when it forecloses its assessment lien. The question then arises, is the association’s lien only a priority of payment, or a true priority lien, whicheliminates the lender’s mortgage lien? The Court of Appeals disagreed with the trial court and held that the foreclosure of the association’s assessment lien took senior position for both payment and as a priority lien extinguishing the first mortgage or deed of trust on the property. The Uniform Laws Commission has recently amended Section 3-116 of UCIOA to resolve the ambiguity around super lien status, recognizing that the most recent decision is causing a lot of anxiety for lenders and associations alike.
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Outcome
The Chase decision has significant effects for both lenders and associations. This decision giving HOA Liens true priority means they will have a much more powerful tool to use to collect delinquent assessments. For lenders, the decision will complicate how banks can enforce current loans. This also may mean making more modifications to underwriting requirements and loan document escrow provisions for HOA properties. Another possible effect is that there will be new secondary mortgage requirements for condominium documents to require waivers, notices, and opportunities for lenders to satisfy the HOA Lien in order to protect their collateral.
Conclusion
In light of the recent mortgage meltdown, this is not welcome news for mortgage lenders or homeowners. If a HOA foreclosure sale price is unreasonably low, lenders will be left with an enormous unsecured debt and a homeowner will be left with a huge deficiency judgment to the lender. This could all ultimately result in less available financing for HOA properties on the market because the ruling makes it risky for mortgage lenders to take on these types of property without a good way to protect their collateral.•
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TECHNOLOGY
Technology
Used in Real Estate Technology has been able to transform the entire real estate industry over the last 10 to20 years. The fact that the industry demands the provision of all inclusive services and requires the coverage of numerous territories makes the industry dependant of technology. This has made the real estate industry one of the most tech-savvy industries in the world. With a dependency on technology, it is easy to understand why both real estate buyers and sellers are always looking to familiarize themselves with the latest technologies in the industry. The ultimate effect has been for real estate companies to continue to build better and more efficient real estate technology. Technology such as the Internet, social media, and the use of mobile phones have had the greatest impact in the real estate industry. Kathy Connelly, the senior vice president of corporate services for Prudential Georgia Realty, acknowledged this by saying, “The Internet has reshaped how real estate is delivered to the consumer and how we as consumers manage our daily
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lives. The next iteration of use of online technology will be in mobile access and utilization of mobile devices. It may be as impactful as the Internet itself.’’ We’ll try to look at these and other top technologies that are currently being used by both real estate buyers and sellers.
a) Online retailing
Online retailing had the biggest effect on the industry resulting to a reduced demand for space, according
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to Alan Billingsley, head of research at RREEF Real Estate in San Francisco. The effect is expected to continue. Research once conducted by RREEF once revealed that online purchases contribute about 5% of all sales. The Internet has played a huge part in helping both the buyers and the sellers meet one another. Through this advanced technology, elaborate delivery systems have been established. The same concept has been adapted in the real estate
TECHNOLOGY
industry where property sellers can just post their ad via the Internet and allow the buyers to sample them. It has also been revealed that 88% of all the home buyers begin their property search through the internet before seeking assistance from a realtor. This does not mean that Realtors are being ignored 87% of buyers have been identified to rely on the knowledge and expertise of the experts.
c) Google Earth
b) Smartphones and tablets
This is also a very popular software that is being used today in the real estate market. The proprietary tool allows the brokers to keep private information as confidential as possible and only allows them to share the same when it is necessary. The standout feature about the application is that it gives the user instant access to the contacts and also gives them a history about the details of the last time they communicated.
The introduction of smartphones has had a huge impact on the hotel industry. Today, most hotels are getting into the habit of installing iPads in rooms so that their customers can get real time news. In addition to this, customers get to look at the room service menus, get full control of the air conditioning and do so much more. With smartphones, individuals get to gain access to different apps which are available either freely or at a substantial cost. The apps allow the user to book rooms, do some quick price comparison and even locate hotels.
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Today, Google Earth has become a very popular real estate device amongst professionals. According to Brenda Dohring Hicks, the technology works in such a way that it allows the user to pull up a certain locations that they have been talking about on the phone. The property identified is then vividly seen on Google Earth.
d) Customer relationship management software
e) Social media
Did you know that online advertising is 20 times more likely to sell a house than regular ads posted in newspapers? Statistics show
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that online ads accounted for about 40% of the all the homes sold as compared to 2% through newspaper ads. In as far as marketing is concerned; social media has had such a great impact on how real estate is marketed, acquired or even how customers are retained. Today, social sites such as Facebook, Twitter, YouTube and LinkedIn have continued to provide real estate property buyers and sellers with information. In addition to this, we also have rating sites such as Yelp and TripAdvisor that have played a huge role in impacting the real estate market. If these tools can be used effectively in the real estate market, chances are that it would benefit the realtors, buyers and even the sellers. The secret lies with knowing about their existence and how to use them effectively to your advantage.•
TECHNOLOGY
How Social Media Has Changed
THE FACE OF BUYING AND SELLING MENTALITY
The likes of Facebook and Twitter
Likely the next frontier in the digital space, social media holds a great opportunity for brokers and agents to interact with their target markets. The CENTURY 21 System sustains a strong existence in standard sharing and social sites such as Twitter, YouTube, and Facebook, among others. The world as we know it is in the midpoint of change. The new social media tools have redesigned social activism. With the likes of Twitter and Facebook, the customary relationship between popular will and political authority has been inverted, making it simpler for the helpless to coordinate, collaborate, and give their january/february 2015 issue
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concerns voice.
The impact of social media for salespeople
Imagine if you were the CEO of a mid-sized company fielding calls from important vendors. Frustrated at their pushiness, you take some questions to your Twitter account. Soon after, someone else in the business sees your tweet and helps you figure out solutions to help deal with pushy vendors and clients. This is just one way that social media can prove successful in business. Social media is regarded as a substantial communication tool and communication is always the key to selling. In other words, using social media to sell automatically increases your profits.
TECHNOLOGY
Social selling, which is selling via social channels, is the closest thing to having a poster on a billboard. Social media such as Twitter, Facebook, LinkedIn, YouTube, and others provides information that is almost unattainable via conventional means. Presently, leads are so much more than a business card from an event, call from a friend, or a chance meeting on a bus or flight. It is like the phrase, “Go where your clients are.” It applies in real life because your prospects and clients use social media, as well as their employees, fans, and detractors. This babble is information the best and most enlightened sales professionals are using to acquire qualified leads and increase revenue. Salespeople are currently using social selling to be where their clients are. Social media has indeed changed buying and selling for years. Today, buyers spend a huge part of their time researching and going through the purchase process before they attract
vendors. Most of the buyer’s journey is supported by social media. Social selling enables sales people to captivate buyers much earlier in their expedition. Hungry, driven salespeople have traditionally relied on the cold calling approach. However, according to upto-date findings, a study by InsideView indicates that more than 90% of CEOs never respond to cold calls or emails. The cold calling return is drastically declining now. Buyers are now more receptive to social media messages regarding relevant topics started by the buyer or sales person. Also, the indication of leads has changed as well; if a potential client complains of being frustrated, they will most likely engage with a salesperson who replies to their frustration as opposed to a cold call pitching their products or services. Clients, on the other hand, are also changing the way they purchase goods. They tend to engage vendors much later in the cycle of
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sales and they have access to more information than they did before. The client conversations, frustrations, thoughts, and concerns have become increasingly more public and unconcealed. Customers get to express their concerns, frustrations, and thoughts publicly, all these changing how sales are conducted and how quota is met. In order to take part in this environment and have access to this information, it means that salespeople need to adopt social selling. This means that they should have a social media account or participate in a group on sites such as Facebook, LinkedIn, and Twitter. Additionally, a blog such as Tumblr may be helpful.•
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TECHNOLOGY
Real Estate Technology
in iowa Investors spend money on real estate technology
Although it may come as a surprise to many, the real estate industry is among the most technology-savvy industry in existence in today’s world. The need to cover various territories and the importunity to cater for all inclusive services has led the real estate professional to be almost contingent on the technologies at their disposal. This contingency has forced several real estate professionals to leap on new technologies and to quickly become familiar with the many ways to maximize their time and grow their businesses. The resulting product of this course has been a strong demand for technology companies to push
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the envelope to grow faster, more effective, and more efficient real estate marketing technologies by the real estate industry. This year, investments in real estate technology are on an upward trend in the emergence of a few billion dollar exits. Venture investors seem more eager than ever to get it on the market following Zillow’s possession of Trulia in July for $3.5 billion, and in September, News Corp’s purchase of Realtor. com-parent Move Inc. for $950 million. This put up almost $300 million in more than 30 venture deals for real estate technology start-ups in the previous quarter. Steve Schlafman, RRE Ventures, says that
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real estate is a very attractive industry to build technology in because it drives a large part of the economy. RRE has supported start-ups such as a 3D visualization platform and Floored that enables potential homebuyers to scout virtual spaces online. The increased numbers of investments mirror a new demand for technology-driven solutions in the market, as brokers and real estate owners are assimilating technology on a more universal level. According to the Gartner Research, worldwide sales of CRM (Client Relationship Management) software increased by 13.4% in the year 2013 to more than $20 billion sales. 41% of the sales originated from SaaS (Software as a Service) provider. IT services, media and communications are the leading three verticals. Trulia One is a SaaS offering mobile first. It offers the users the ability to import contacts from their present platforms such as Yahoo, Google or through an imported CSV file. Regardless of where they
TECHNOLOGY
originate from, the possibility of importing leads is available to any originating source and all the leads are filteredvia a push alert. The users can designate a heat map level of hot and cold leads. Trulia One is formulated to merge lead management, marketing, and contact into one interface. A Trulia One Elite package contains and ‘Elite’ profile ‘badge on the Trulia agent profile, premium upgrades to the email and print marketing center campaigns, an ‘ad free’ feature listing a success coaching platform and a personalized MLS website with consumer analytics.
Real estate professionals New marketing technology in Iowa The real estate industry’s technology has evolved fast over the previous 10 to 20 years. Remember the times when pagers were ‘high-tech’? Realtors back then might have had one to enable them to be more accessible than several real estate professionals maybe
intended. Such types of technology altered the way people thought of and worked with Realtors. Nowadays, real estate agents are more easily accessible which offers them less time in a day to concentrate on important issues regarding their business.The new marketing technologies makes the work of a real estate agent more about involving lead generation, and less about how many business one is able to pass out in a day. The real estate technology market in the recent years has been swarmed with ‘location-based’ applications to assist buyers find properties in their area. They all work pretty much the same with very minor variations; you start an application on your phone device, use the GPS of your phone to establish your location, and have the application recover locationbased real estate data. There are some
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technologies that allow the user or prospective real estate buyer to receive data automatically on their phones without having to initiate an application for acquiring real estate data. Such technologies allow the users the option to receive alerts on specific types of properties on their phone so that when they are near those properties, they cross a ‘geo-fence’ that cues an automatic notification sent to their phone or device. From what we can see, the real estate marketing will continue to evolve and revamp to a stage where almost every step of the marketing process becomes automated, thereby enabling a Realtor to literally begin and end an effective marketing campaign within minutes via their computer or phone. We may be far from achieving this presently, but with the addition of new technologies, it won’t be long before homes start to market themselves.•
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TECHNOLOGY
Software Real Estate Agents Can Use
Real estate agents differ from real estate brokers in that the brokers are licensed and given the responsibility of managing their own individual businesses. With agents, this does not apply. Real estate agents in most cases work under brokers and combine their expertise to assist the clients sell and buy their homes. In the recent past, these jobs have grown in popularity and according to the Bureau of Labour Statistics, they project an 11.1% job growth in the sector by the end of 2022. The real estate industry is a very demanding sector. For these kinds of industries to succeed, they require a huge technology investment. Technology has played a huge role in transforming the industry and affecting how business is carried. Today, more that 50% of high income earning realtors invest more than $2,500 of their earnings each year in technology. There is some specific real estate software
specifically designed to meet the needs of a real estate agent. Designed to assist them in all aspects of the industry, this software is necessary and useful. This piece will look at some of the most common software used by real estate agents.
a) CRM Software The line of work of real estate agents always demands them to obtain leads and contacts from their clients. This is a good way a real estate agent can use to enhance their marketing efforts. Reliable and efficient CMR software will do a lot more for you than just act as a database for keeping names and other contact information. It is available in different types including: Contactually, Boss, Insightly, IXACT Contact and PlanPlus Online. Here is a list of some of the functions performed by a modern CRM software system:
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TECHNOLOGY
• The tool is intuitive – the software is quick and efficient, and allows you to easily navigate. • You can make the most of the cloud – effective CRM software allows you to store files, photos, and even your sales documents online. • Is easily accessible –CRM tools are easily available for iOS, Android, and Windows devices. • Ability of automating your marketing and sales tasks – with this application, you will no longer have to manually send emails or publish other marketing collaterals.
b) Base The Base is a sales tracking software that is perfectly designed for real estate agents. This application allows you to be both proactive and productive as it has the ability of effectively managing a number of customers and projects at the same time. The software can track a customer’s activities and avail them on a dashboard. For the dashboard, you can look at the specific details you want. This tool is equipped with that ability of allowing the user to prioritize workloads, set reminders, or even share information with other team members. Used properly, this software is likely to improve sales and customer relationships.
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c) WinREO The software is a creation of WinREO and is designed as an effective tool that helps the user to manage both traditional and REO real estate transactions. The web-based tool automatically assigns tasks to your team so that you can assign yourself other important things. It also comes with a new dashboard that allows you to monitor all that is going on. The only downside to this software is the expansive learning curve, including setup time.
d) iRealty iRealty was created by WorksForWeb. The software has been designed as an SEO-friendly PHP classified software having multi-language abilities. The dream script software comes equipped with advanced features including: ability to make money, multi-language support, and editable source code.
e) PCHomes by Estates IT PCHomes is available as both desktop and cloud software. It performs as a fully integrated letting, property management, and sales software that is very popular with real estate agents. The software is easy to operate and has excellent customer support. Each of the aforementioned software is designed with a specific functionality. Your personal choices will heavily depend on what you need for your business.•
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Real Estate Agent VIP Benefit Program™
Aka: VIP Agent Program TM
A G E N T S AARON ZAPATA
JUSTIN POTIER
http://aaronzapata.com
http://www.boardwalkluxuryhomes.com/
Aaron@aaronzapata.com (562)903-0088x112
justin@boardwalkreo.com (562)424-0333 (562) 480-0684
(714)904-7877 Zapata Realty, Inc P.O box 624
(562) 513-1006 3948 Atlantic Avenue,
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Long Beach, CA 90807
KIBY PEARSON
JONATHAN ANOZIE
www.pearsonrealtygroup.com
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(310)216-9077
(773)325-2800 x 101
(310)678-8138
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Chicago, Illinois 60642, United States
LYNETTA CORNELIUS
JONATHAN BURGESS
lynettacornelius@earthlink.net
http://www.code3realty.com/
(925)759-8606
jonburg@code3realty.com
(714)904-7877
(916)455-5225 Ext. 6
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San Ramon, CA 94583
11801 Pierce St. Ste. 200 Riverside, CA 92505
IVERY SUMMERS
BOB IRISH
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ivery.sells@verizon.net
bobirishrealtor@gmail.com (951)343-3606
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3410 La Sierra Ave. F-519 Riverside, CA 92503
Los Angeles, CA 90045-3944 , USA
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A G E N T S NANCY BRAUN
AMEER J. ELAHEE
nancy@showcaserealty.net
www.101WaysHome.com
704-997-3794
www.GreatMonroviaHomes.com
1430 S. Mint Street, Suite 106
ajelahee@msn.com
Charlotte, NC 28203
909-944-4757 626-625-0099
HELEN MOAVENI
MARGUERITE CRESPILLO
REO / Shortsale Director
916-580-0808
Paragon Saol Realty Group
714-904-7877
oc.realtist.wc@gmail.com
535 Menlo Dr., Ste. A
helenmov@gmail.com
Rocklin, CA 95765
ocrealtistwc@gmail.com 818-789-5986
KENNEDY AKINLOSOTU
DIANNE LANGSTON
Real Estate Broker
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Nations Realty kennedy@nationsrealtyllc.com akinlosotu4@gmail.com 206-423-9999
reo2448@gmail.com, dianne@diannelangston.com 707-580-1585
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MICKELIN BURNES-BROWNE
ANITA JONES-CAYENNE
MICKELIN@soldbymickelin.com 408-272-7645
President, CAREB carebpresident@gmail.com 209-952-8861
408-569-0978
510-681-4147
408-273-6470
California Association Real Estate Brokers
2894 Mabury Court
Broker/Owner, Embarcadero Investment
San Jose, CA 95133
REO Specialist 6777 Embarcadero Dr., Suite 1 Stockton, CA 95219
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A G E N T S REGGIE WOODGETT
ARNOLD VER
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www.housevaluemax.com
RWOODGETT@realtracs.com (614) 400-4173
homes@housevaluemax.com reoteam247@yahoo.com 626-905-0919
(615) 562-1766
626-810-7620 1221 S. Hacienda Bl. Hacienda Heights, CA 91745 17843 Colima Road, Rowland Heighs, CA 91748
RAUL VILLACIS http://www.argct.com/
ZORITHA THOMPSON
raul@argct.com
http://aaronzapata.com
(203) 964-3000
zorithasellsreo@gmail.com
(203)249-1248
916-870-4765
482 Summer Street,
714-904-7877
Stamford, CT 06901
8211 Bruceville Rd. Suite 145, Sacramento, CA 95822
JILL RAND www.JLMPropertiesInc.com
ANGELICA SUAREZ
Jill.Rand@JLMPropertiesInc.com
http://www.angelicasuarez.com/
661-510-2112
ANGELICA@angelicasuarez.com
661-284-7544
310) 802-2444
27201 Tourney Road, Suite 200E
(310) 261-7700
Valencia, CA 91355
RE/MAX Estate Properties 23740 Hawthorne Blvd Torrance, CA 90505
WAYNE WYATT wayne@wyattrealtygroup.com
GLENDA BRASS, MBA
909-945-0679
www.ExitWithDignity.com
323-445-6993
glendabrass@glendabrass.com
909-945-0600
(310) 590-1235
8250 White Oak Ave. No.102
714-904-7877
Rancho Cucamonga, CA 91730
(310) 590-1320
The PIN MAGAZINE | 77
www.thepowerisnow.com
A G E N T S TED BRASS
SERINA LOWDEN
Broker/Owner DRE # 00615106
Realtor, Serina Lowden Real Estate
Ted Brass Real Estate Solutions
serina@serinalowden.com
www.tedbrass.com
916-405-5739
tedbrass@tedbrass.com
9250 Laguna springs dr #100. Elk Grove.
310路590路1235 ext. 102 111 S. Oak St., Inglewood, CA 90301
BRIANA FRAZIER
RUBY FRAZIER
Broker, The Frazier Group Realty
Broker/Owner
brokerbree@fraziergrouprealty.com
The Frazier Group Realty
951-809-9077
downtownnavigator@gmail.com
13602 Cedar Creek Court La Mirada,
(951) 686-5261
CA 90638
ALISHA CHEN
PATRICIA DE SANTOS
Realtor, Presidential Real Estate
Owner Trainer, Real Estate Education
2013 President of Asian Real Estate
Services
Association of America-Orange
patricia@MY-REES.com
County
realestatepatty@gmail.com
www.alishachenhomes.com
(909) 450-9944
alisha.chen@cs-rei.com
R.E.E.S.
(949) 981-8520
2910 Inland Empire Blvd., Suite 107 Ontario, California 91764
january/february 2015 issue
The PIN MAGAZINE | 78