So i chose Real Estate - does that make me a bad person?

How Americans View You

How Americans View You

In Gallup’s latest survey on the honesty and ethics of various professions, real estate agents can find reasons to smile.

JULY 2012 | BY STACEY MONCRIEFF

Are you an honest, ethical person? I don’t know many people who would answer that question in the negative. Yet, we tend to doubt the ethics of others. At least that’s the conclusion I come to when I look at the results of a recent Gallup survey about honesty and ethics. Of 21 professions in the survey, only six were rated "very high or high" by most respondents.

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Although "real estate agent" was not among those top six, there’s good news in the survey: The profession was rated as having very high, high, or average ethical standards by 77 percent of U.S. adults. And the percentage who rated agents’ honesty and ethics as high or very high (20 percent) represents an increase of several percentage points from Gallup measures of the 1990s, when the high/very high number was consistently in the mid-teens. By contrast, look at the results for another profession: During the 1990s, business executives typically scored in the low to mid-20s in the high/very high category. In the latest survey, the number dropped to 18, while 32 percent rated their ethics as low or very low (compared with 22 percent for real estate agents).

Americans' confidence in business executives has been eroded by scandals in the energy, financial services, and telecommunications industries. Yet real estate agents haven’t suffered the same erosion in reputation as a result of the housing crisis. No doubt, people recognize that individual real estate agents didn’t have control over the factors that caused the housing crisis. That explains why they fared better than business executives in the low/very low category. But what’s causing more respondents to rate real estate agents in the high/very high category? Could it be that the industry has made strides in winning the hearts and minds of American consumers?

I recently saw some online comments about how little consumers know or care about the NATIONAL ASSOCIATION OF REALTORS®. That may very well be true, but does it matter? Through positive outreach to consumers and the media via HouseLogic.com, Real Estate Today radio, and more than a decade of national TV advertising, NAR is helping to build stronger ties between REALTORS® and consumers. I say helping because NAR is only part of the picture. Similar work is happening at state and local associations and in individual offices, where agents are winning hearts and minds one client at a time by persevering through very difficult transactions.

Will real estate agents ever break into Gallup’s top tier among doctors, nurses, and clergy? Let’s check back in 2014 when Gallup is scheduled to ask again about real estate agents’ honesty and ethics.

Home Owners Torn on Strategic Default: Right or Wrong?

Home Owners Torn on Strategic Default: Right or Wrong?

DAILY REAL ESTATE NEWS | FRIDAY, JULY 27, 2012

Forty-five percent of Nevada home owners recently surveyed say “there is nothing wrong” with walking away on your mortgage obligations, according to a new report, “Face of Foreclosure,” released by the Nevada Association of REALTORS®. On the other hand, an equal number of home owners say home owners have a “legal and ethical obligation to pay their mortgage if they can.” 

The number of home owners who find “strategic default” socially acceptable is growing in the state, which has consistently had one of the highest foreclosure rates in the country the last few years. In 2011, 23 percent of Nevada home owners who lost their home to foreclosure said they walked away from their mortgage. In 2012, 27 percent of foreclosed home owners say they strategically defaulted on their mortgage. 

Strategic default is when a home owner is financially able to make their mortgage payments but decides to stop, usually because the property is underwater. 

“This year’s report shows it’s more socially acceptable to strategically default on your mortgage,” says Blane Johnson, NVAR’s president. “I hope banks and government leaders will look at this to help them get ahead of these issues.”

For those who decided to walk away from their mortgage, 40 percent said they had been advised by their lender or financial adviser to stop paying their mortgage so that they could qualify for more assistance with their home loan.  

NVAR is calling on lenders to do more to help distressed home owners, such as through refinance and loan modification programs or streamlining the short sale process so that fewer home owners will opt to walk away from their mortgage. 

The survey also found that despite the plague of foreclosures in the state the last few years, most Nevadans still overall favor home ownership. Nearly 80 percent of home owners surveyed who have faced foreclosure say they want to buy a home again one day, according to the report. 

Supplementing the report, NVAR developed a video featuring interviews with local home owners, real estate and mortgage professionals about foreclosures in the state. You can view the report and video at www.FaceOfForeclosure.com.

Source: “Face of Foreclosure Report,” Nevada Association of REALTORS® (2012)

Who Subprime Mortgages Hurt the Most

Who Subprime Mortgages Hurt the Most

DAILY REAL ESTATE NEWS | FRIDAY, JULY 27, 2012

Black Americans disproportionately held subprime mortgages during the housing boom and are now facing foreclosure in large numbers, The Washington Post reports.

While lenders insist they don’t calculate race into deciding who qualifies for a loan and what terms, researchers continue to examine why there is such a stark difference among the races. 

The Federal Reserve is studying how the recession affected credit scores by race. Large gaps exist among the credit scores of black Americans compared to white Americans, which banking groups say helps explain why more blacks were offered subprime mortgages -- which a lower credit score is needed to qualify for -- than white borrowers. The subprime loans helped make home ownership more available to more black Americans with lower credit scores, but the higher interest rates and fees also put them at more risk of default, analysts say.

The disparity among the races with home lending and credit scores is “raising fears among consumer advocates, academics and federal regulators that the credit scores of black Americans have been systematically damaged, haunting their financial futures,” The Washington Post reports. 

In a past study conducted by the Federal Reserve on credit scores by race, the Fed found in 2003 that less than a quarter of blacks had prime credit scores compared to about 65 percent of whites. 

“It’s one more way that credit scoring . . . sort of sets in stone income and wealth disparities between minorities and whites,” Chi Chi Wu, a lawyer with the National Consumer Law Center, told The Washington Post. “The playing field was never level.”

Low credit scores among blacks, bank groups say, is also why blacks were being denied loans at higher rates than whites. 

The wealth of blacks decreased 53 percent during the recession, driven largely by the drop in home prices, according to the Pew Research Center. Home ownership rates among blacks have also dropped, reaching its lowest level in 16 years.

Source: “For Black Americans, Financial Damage From Subprime Implosion is Likely to Last,” The Washington Post (July 8, 2012)

Here comes the next worry for homeowners?

The New york times reported this month on another looming shock to the home market - resetting of the home equity market payments.  Check this link out.

DAILY REAL ESTATE NEWS | MONDAY, JULY 16, 2012

While the housing market is showing signs of picking up across the country, housing experts warn of a new concern for home owners: resetting home equity lines of credit. 

Home equity lines of credit often require low payments in the initial years as home owners only pay the interest on these loans at the onset. But later on, these loans reset with higher payments when home owners have to start paying down the principal. 

About 44 percent of home owners with home equity lines of credit through Wells Fargo have paid only the minimum amount due on these loans, reports The New York Times. 

Many borrowers may soon see their home equity lines of credit reset with higher payments and those higher payments may be too much for some borrowers. 

The Office of the Comptroller of the Currency recently warned of the danger these resetting payments could pose for many home owners across the country. The OCC warned that nearly 60 percent of all home equity line balances would require payments of both principal and interest between 2014 and 2017. 

The report highlights three main threats home equity borrowers face: Rising payments as they begin to pay back the principal and not just the interest on these loans; the risk of rising interest rates (many of these loans have adjustable rates); and refinancing challenges “because collateral values have declined significantly since these loans originated.” 

Many of the home owners have seen their property values decrease since they first took out the home equity loans.

“These are among the riskiest loans in any bank’s portfolio,” The New York Times reports. “As borrowers are pressed to pay principal and interest, write-offs are almost certain to rise.”

Source: “Here Comes the Catch in Home Equity Loans,” The New York Times (July 14, 2012)

Great opportunity for Spartanburg small businesses

I have enjoyed my membership in this organization, and I believe you will as well.  Can't beat the cost and the events are well thought out!  Whether or not you can attend the meeting, see the link to memberships.

MainStreetChamber - Spartanburg

Join us Wednesday, August 1st 8:30 -10:00

New Member OrientationWhere: Plaza on Main                174 E Main St, Spartanburg When: Wednesday, August 1st 8:30am - 10:00am A light breakfast will be provided for you.  This informative meeting will introduce you to MainStreetChamber-Spartanburg and the benefits of your FREE membership.  All memberswho have recently joined the Chamber are encouraged to attend. Bring a guest! This is an exciting opportunity to learn more about the future of the Chamber, how you can get involved and how you can promote your business to other members and the Spartanburg Community. All events are FREE to attend and a great networking opportunity!  Anyone who attends a meeting will have the opportunity to become a VIP Card member and save $10.  New members who invite another small business member can purchase 2 VIP cards for the price of one!   Not a member yet? Join for FREE now or come to the meeting and find out what all of the buzz is about! Click this link to join MainStreetChamber!   Click this link to RSVP!

What is killing the deals in real estate now?

This recent update from Real Estate news highlights the issues that still remain in the housing market, all of which are relevant in our communities in the Upstate.  One of these is around emotion, one is around value and one is around risk, and they are all interrelated.

Because of uncertainty, people have fears in making the decision to sell and accept the hit from the current market pricing.  There is a great set of interest rates out there right now that are more difficult to obtain than ever.  Makes me wonder if there is a reluctance to lock their funds and those of the secondary market in long term loans at these rates.  Finally, those who want to buy up, are still saddled with their current homes who are still on the market.  Those buyers who are out there are seeking deals, so a seller looking to turn equity from one house to another is particularly at risk of the lowball offer being a tough issue.

Wish I knew the answer.  Any thoughts?

3 Top Home Buyer Deal Killers

DAILY REAL ESTATE NEWS | MONDAY, JULY 16, 2012

Recent surveys have shown that more Americans have a thirst for buying real estate, with home affordability at record highs and mortgage rates at record lows. In fact, real estate buyer agents report a 59 percent increase in buyer inquiries this year compared to last year, according to a recent survey conducted by the Real Estate Buyer’s Agent Council.

So what’s preventing some buyers from making it all the way to the closing table? 

REBAC surveyed its buyer agent members to determine the top issues preventing home buyers in their local markets from completing a home purchase. The top three obstacles identified in its 2012 survey are: 

1. Economic insecurity
2. Difficulties in obtaining financing
3. Problems selling current home

The number of home buyers citing difficulties obtaining financing has fallen markedly in the last few years. In 2011, 65 percent of home buyers cited this as a big hurdle to purchasing, and 61 percent cited it in 2010. This year that number has dropped to 49 percent, as economic insecurity overtakes it in having the biggest effect on stalling home sales, according to the survey. 

In 2011, the top three issues cited by buyers were difficulties obtaining financing, problems selling a current home, and holding out for lower prices, according to the survey. 

Source: “Trend-Spotting for Real Estate Agents: Where Do We Stand Today?” RISMedia (July 7, 2012)

Could a Millennial be your home buyer?

The article below paints a positive view of the potential for the Millennial generation to be the next wave of first time home buyers.  The thought is that with low interest rates and access to money, and with home prices at historic lows, they may make the decision to enter the buying market even though they have been putting off marriage, (a good sign of a home buyer) until later.  If you own a home that could be considered entry level, you might want to take a look at your finances and decide if this is a good time to try and list your property.

By Katherine Tarbox, Senior Editor, REALTOR® Magazine

In 1993, the term “Generation Y” first appeared in Ad Age, to describe the age group who was about to embark on their teen years. While generations usually don’t have strict years to confine a group, most put the start of Generation Y — also known as the Millennial Generation, Generation Next, and the Echo Boomers — at the year of 1982 and the end at 2000. This year the first Millennials will begin to turn 30, a sign that this generation is growing up. It’s also a good sign for the housing market.

The Millennials are primarily the offspring of the Baby Boomers (those born from 1946 to 1964) and older Gen Xers. During the ‘50s and ‘60s, the average births per year in the U.S. went from 2.8 to 3.4 million per year and reached 4 million in 1964. While birthing rates dipped in the late ‘60s and ‘70s, in 1982 they began to spike up near that 4 million mark (hence, the nickname “Echo Boomers”), which again created a boom the in population. And this growing population is ready to enter the housing market.

There are some things working against this generation, though. They remain the most underemployed age bracket, with some economists putting their employment-to-population ratio at 45 percent, the lowest it’s been in 60 years. It’s hard to peg the employment rate for this group as many have been forced to take part-time jobs when they are qualified for higher work.

In addition, a study released by the Pew Research Center last month shows that Millennials are waiting a while to take those wedding vows: Just 20 percent of those aged 18 to 29 are married. That’s a crucial driver of home ownership: According to an August 2011 study by the University of Chicago study conducted by Jonas D. M. Fisher and Martin Gervais, single people are more likely to rent.

The positive news: With low interest rates and low prices, this generation is eager to buy, according to a study conducted by the University of Michigan’s Survey of Consumer Attitudes, which polled 6,000 households. First-time buyers are critical to housing, as they allow other sellers to move to the upper ranges of the market. The study also said that the recession has done little to affect Americans’ overall attitude toward buying a home.

Of course, many Millennials are looking to rent. As NAR Chief Economist Lawrence Yunpoints out in his November 2011 column, a stronger rental market will lead to a stronger housing market. As rents increase, more will consider the cost of owning vs. renting, and may tip some to buying. Also as investors enter the market to buy rental units, they are helping to drive prices up, such as in the Miami market, which finally saw prices rise last year. Yun estimates that Miami could see 10 to 12 percent appreciation in 2012, and other markets could follow.

Eventually, though, members of this generation will settle down, and when they do, they’ll need housing. And if the economy continues to improve, 2012 might be the year they start to do just that.