“The simple visualization of complex data for things like real estate trends empower the real estate professional to educate their consumer and positions the agent as THE reliable source for this information.�
Matt Dollinger
President and Founder, Gearbox Consulting
Isn’t the market coming to a standstill? I hear things have been very slow so far this year.
EXISTING Home Sales
NAR 8/2014
PENDING Home Sales
NAR 8/2014
Foot Traffic (indicator of future sales) 55
54.8
50 45
43.9
40
46.1
44.5
42.5
35 30 25
26.2
20 15
19.3
10 5 0
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
reator.org
Where will 30-year mortgage rates likely be in 12 months?
Mortgage Rate Projections Analyst
Projected Rate 2015 3Q
Fannie Mae
4.6%
Freddie Mac
4.8%
Mortgage Bankers Assoc
5.2%
National Assoc of Realtors
5.2% 8/2014
Historic Mortgage Rates by Decade Decade 1970s 1980s 1990s 2000s Sept 2014
Average Rate 8.86% 12.7% 8.12% 6.29% 4.10%
Payment $1,589 $2,166 $1,484 $1,237 $966
The average 30-year fixed mortgage rates and the approximate payment for a $200,000 mortgage. Payments are principal & interest only, based on a $200,000 fully amortizing mortgage. All terms are assumed to be 30 years.
Freddie Mac 8/2014
Are home values approaching a new bubble or will prices continue to appreciate?
Prices Back to 2005 1Q Prices
Case Shiller 8/2014
"This reversion to normality that we are finally experiencing is expected to continue across the country and should further alleviate concern over diminishing affordability and the risk of another asset bubble."
Mark Fleming
Chief Economist for CoreLogic
Prices & Time Since The Peak
Source: CoreLogic Market Pulse 8.2014
Home Price Expectation Survey A nationwide panel of over one hundred economists, real estate experts and investment & market strategists.
PROJECTED
Mean Percentage Appreciation
Home Price Expectation Survey 2014 3Q
Cumulative House Appreciation by 2018
27.8% 19.5%
19.4%
11.2% Pre-Bubble Trend
Bulls
All Projections
Bears
Home Price Expectation Survey 2014 3Q
Is it better for a buyer to wait until they save a bigger down payment before they purchase a home?
30 Year Fixed Rate Mortgages Freddie Mac Rates January 2013 – August 2014
Freddie Mac Projected Rates August 2014 – 2015 4Q
1/2013
8/2014 Freddie Mac 8/2014
Date
Mortgage
Interest Rate*
P&I**
Today
$250,000
4.10
1,208.00
Sept 2015
$260,000
4.8
1,364.13
Difference in Monthly Payment
$156.13
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
Monthly
Annually
Over 30 Years
$156.13
$1,873.56
$56,207
Date
Mortgage
Interest Rate*
P&I**
Today
$500,000
4.10
2,415.99
Sept 2015
$520,000
4.8
2,728.26
Difference in Monthly Payment
$312.27
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
Monthly
Annually
Over 30 Years
$312.27
$3,747.24
$112,417
RATE
Buyer’s Purchasing Power 6.00 $
1,199
$
1,169
$
1,139
$
1,109
$
1,079
5.75 $
1,167
$
1,138
$
1,109
$
1,080
$
1,050
5.50 $
1,136
$
1,107
$
1,079
$
1,050
$
1,022
5.25 $
1,104
$
1,077
$
1,049
$
1,022
$
994
5.00 $
1,074
$
1,047
$
1,020
$
993
$
966
4.75 $
1,043
$
1,017
$
991
$
965
$
939
4.50 $
1,013
$
988
$
963
$
937
$
912
$ 200,000
$ 195,000 -2.5%
$ 190,000 -5%
$ 185,000 -7.5%
$ 180,000 -10%
Principal and Interest Payments rounded to the nearest dollar amount.
RATE
Buyer’s Purchasing Power 6.00 $
3,597
$
3,507
$
3,417
$
3,328
$
3,237
5.75 $
3,501
$
3,414
$
3,326
$
3,239
$
3,151
5.50 $
3,407
$
3,322
$
3,236
$
3,151
$
3,066
5.25 $
3,313
$
3,230
$
3,148
$
3,065
$
2,982
5.00 $
3,221
$
3,140
$
3,060
$
2,979
$
2,899
4.75 $
3,130
$
3,052
$
2,973
$
2,895
$
2,817
4.50 $
3,040
$
2,964
$
2,888
$
2,812
$
2,736
$ 600,000
$ 585,000 -2.5%
$ 570,000 -5%
$ 555,000 -7.5%
$ 540,000 -10%
Principal and Interest Payments rounded to the nearest dollar amount.
Why do I need an agent when I can just as easily find the house online myself?
Percentage of Buyers who‌
found their HOME on the Internet NAR 2014
Percentage of Buyers who‌
used an AGENT NAR 2014
“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress.�
Cameron Findlay Chief Economist at Discover Home Loans
Inundated with Information % that feels overwhelmed by the amount of information available on home financing
Discover Financial 2014
“Access to all this information isn’t always a positive force. Sometimes, it can stall a buyer or make them question whether or not they want to be a buyer.”
- Fox Business News
Why can't we list at a higher price? We can always drop the price later if it doesn't sell.
55 50
Foot Traffic during the fall and winter 50
50.6 47.8
45
43.9
40 35 30
27.7
25
26.2
20
19.3 15 10 5 0 September 2013
October 2013
November 2013
December 2013
January 2014
February 2014
March 2014
reator.org
Won't we save a lot of money if we FSBO instead of listing with an agent?
Typical Sold Price* FSBO vs. Agent
$230K $184K
By FSBO
By AGENT
*The ‘typical’ price is actually the average price in the survey. However, studies have shown that people are more likely to FSBO in markets with lower price points.
Percentage of Buyers who‌
found their HOME on the Internet NAR 2014
Percentage of Buyers who‌
used an AGENT NAR 2014
I’m not sure if home ownership is still the American Dream. What do you think?
15 ‘MAJOR’ REASONS TO OWN A HOME as per a survey by the Joint Center for Housing Studies at Harvard University
* the reasons are in no particular order
www.KeepingCurrentMatters.com/trial
Is buying a home still a good investment for my family?
5
Financial Reasons to Buy Reason
Quote from Harvard Report
Housing is the one leveraged investment available
“Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor.”
You're paying for housing whether you own or rent
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”
Owning is usually a form of “forced savings”
“Having to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings.”
There are substantial tax benefits to owning
“Homeowners are able to deduct mortgage interest and property taxes from income.”
Owning is a hedge against inflation
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”
Homeowners Net Worth‌
OVER 30X
greater than renters
Federal Reserve
An American Family’s
Net Worth $174,500
$5,100 Homeowner
Renter Federal Reserve
Best Long Term Investment
Gallup 4/2104
Gallup 4/2104
How do I know which agent I can truly trust to help me and my family?
"Focus on brand marketing, content marketing and other more intelligent means of engaging homebuyers and sellers."
Marc Davison Co-Founder 1000WATT Consulting
BRANDING
STOP with the
Cherry Pie Recipes
Direct
Alexa Silva typically has about a dozen pieces up telling a story. Three years ago she wasn't in real estate.
She will sell 50-60 homes this year.
KCM on the go!
“Two in three people researched prospective agents extensively online prior to working with them.� - Google