Transcript Gary Keller's Vision Speech_Toolkit v1

Lehigh Valley Real Estate
Today
Barb Bottitta
CSR, GRI, ABR, SRS, SRES
1
The Numbers That Drive
U.S. Real Estate
1.
2.
3.
4.
5.
Home Sales
Home Prices
Inventory
Mortgage Rates
Affordability
2
In Q3 2010, all 50 states experienced
a decrease in sales …
WA
MT
OR
ID
VT ME
ND
MN
SD
WI
WY
UT
CA
AZ
CO
NM
PA
IA
NE
NV
IL
KS
OK
TX
OH
IN
WV
KY
MO
VA
NC
TN
AR
SC
MS
AK
MI
AL
Source: National Association of REALTORS®
NJ
DE
MD
Home Sales Direction
(Year-Over-Year Change)
Below 10%
GA
Below 20%
LA
FL
HI
NH
NY
MA
CT
RI
Below 30%
Below 40%
3
In Q4 2010, all states except for
Virginia experienced an increase in sales …
WA
MT
OR
ID
VT ME
ND
MN
SD
WI
WY
UT
CA
AZ
CO
NM
PA
IA
NE
NV
IL
KS
OK
TX
OH
IN
WV
KY
MO
VA
NC
TN
AR
SC
MS
AK
MI
AL
NH
NY
MA
CT
RI
NJ
DE
MD
Home Sales Direction
(Year-Over-Year Change)
Sales Increased
GA
Sales Decreased
LA
FL
HI
Source: National Association of REALTORS®
4
Average Lehigh Valley Sale Price (In $100Ks)
Over the last 2 ½ Years, the average sale price peaked at $211,00 in June
2010, but dropped back to $200K or lower for all of 2011, before it
jumped back over that mark to $206,000 this past June.
250
200
$211K
$200K
$206K
150
100
50
Statistics
from LVAR
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
11-Jan
11-Feb
11-Mar
11-Apr
11-May
11-Jun
11-Jul
11-Aug
11-Sep
11-Oct
11-Nov
11-Dec
12-Jan
12-Feb
12-Mar
12-Apr
12-May
12-Jun
0
Average Sale Price = Total Price of all properties sold, divided by the number of sales
5
Units
Monthly Lehigh Valley Home Sales
1000
900
800
700
2006
2007
2008
2009
2010
2011
2012
600
500
400
300
200
100
0
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
6
Average Lehigh Valley Sales
April 2010 through June 2012
800
700
June 2010
June 2012
# of Homes Sold
600
500
June 2011
400
300
200
100
0
Statistics from LVAR
7
Lehigh Valley Absorption Rates
April 2010 through June 2012
16.0
Months
July 2011
14 Months
14.0
13.9
12.5 12.4
12.0
14.1
13.9 14.0
12.4
11.7
11.5
10.9
11.2
10.7
10.0
9.8
8.7
8.0
8.4
8.4
7.9
6.8
8.2
7.9
7.8
8.2
6.2 Months,
June 2012
6.9
6.8
6.0
6.7
6.2
5.0
4.0
2.0
0.0
Statistics from LVAR
8
Lehigh Valley Absorption Rates by
School District, June 2012
East Penn
4.0
Salisbury
4.5
Parkland
4.7
Bethlehem
4.9
S. Lehigh
5.4
Lehigh…
6.2
Easton
6.5
Northampton
6.5
- Lehigh Valley average
N. Western
8.3
Nazareth
9.5
0
Statistics from LVAR
2
4
6
8
Months of Inventory
10
12
9
Mortgage Rates
(30-Year Fixed)
Mortgage rates averaged 4.69% in 2010, an all-time low
since Freddie Mac started tracking in 1971… and they’ve
just kept going down, setting record lows for 6 consecutive
months.
12%
10.3%
10%
8%
6.0%
6%
5.0%
3.56%
4%
2%
0%
Source: Freddie Mac
'89
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
11
10
Affordability
(In Thousands)
Given the historical rate of home appreciation rates, home prices
are a huge bargain. Are 2010 homes undervalued by18%?
$211K
250
$222K
200
$153K
$173K
150
100
50
0
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Source: National Association of REALTORS®
11
Affordability: Let’s put this in perspective …
Bread
Gas (gal.)
New Car
Existing Home
Mortgage Rate
Monthly Payment
1989
$0.67
$0.97
$15,350
$94,000
10%
$825
2010
$2.49
$2.73
$28,400
$173,000
4.69%
$896
2011
$2.78
$2.84
$30,000
$166,100
4.45%
$837
In 1981, home mortgage payments were 36% of family income.
In 1989 – 24% and in 2011 – 13%
Source: Keller Williams International
12
Barb’s Top 10 Things You Should Know
about Real Estate
10. Distressed Properties: Short Sales and Bank
Foreclosures (REOs) are not for everyone:
Hurdles to overcome:
•
•
•
•
•
•
“As is” property condition
Increased paperwork & complexity
Increased chance for multiple offers
Bank REO process is long & arduous
Buyer probably is not getting a “steal”
Buyer must be “patient”
13
#9 - “Aging in Place”
Did you know?
• Half of older women age 75+ live alone.
• Persons reaching age 65 have an average life
expectancy of an additional 18.1 years.
• The 85+ population is projected to increase from 4.6
million in 2002 to 9.6 million in 2030.
• Median # of years home owners are staying in their
homes has increased from 8 to 10 yrs
14
#8 – Today’s Agent must be “tech savvy”
Info Sources Used in Home Search
2009
90%
87
59
2010
89%
88
57
Open house
Print newspaper advertisement
Home book or magazine
Home builder
Relocation company
46
40
26
18
4
45
36
23
16
3
Television
Billboard
8
6
7
5
Internet
Real estate agent
Yard sign
Every source was used less except one
– the Realtor!
Source: Keller Williams International
15
#7 – Down payments of 5% or less have
not disappeared
•
•
Both first-time and repeat buyers are putting less
than 20% down, even though a down payment of
20% will typically provide the best financing terms.
68% of first-time buyers and 28% of repeat buyers
had a down payment of 5% or less in 2011.
Source: Keller Williams International
16
#6 – Yes, it’s still the economy
• Employment will remain a challenge over
the next few years, which impacts the market
by tempering GDP and holding back demand
for home buying.
•To get back to 6% unemployment, 13.3
million jobs need to be added over the next
3 years. That’s 400,000 jobs/month
Source: Keller Williams International
17
The Four Keys to Housing Recovery
Source: Keller Williams International
18
#5 – Condition is the key for serious buyers
• Homes in better condition sold for an
average of 96% of list price compared to 92%
of list price for homes in poorer condition.
• The most common updates:
•Paint 44%
•Floorings 25%
•Lighting Fixtures 20%
Source: Keller Williams International
19
#4 – Staging is well worth the effort
• Staged Homes sell faster.
• Staged homes get higher offers.
• Staged houses look better in the MLS pictures,
getting more potential buyers to actually come
see the house in the first place.
• Staged houses have an edge over competing
properties, and the staging can often sway the
final decision.
Source: HomeStaging.com
20
#3 – Mortgage Pre-approval is a “must”
• Pre-approval for buyers is the norm in today’s
market – 64% of buyers get pre-approved by
mortgage brokers or banks
Source: Keller Williams International
21
#2 – Price it right the first time!
• For the 48% of sellers who set their listing
price according to their agent’s interpretation
of the market value of their house:
• Sold faster – 56 days compared to 105
• Sold for 6.7% higher list-to-sell ratio
• Experienced fewer price reductions
(4 to 6 weeks between price reductions of
between $5,000 and $15,000
Source: Keller Williams International
22
Barb’s Top 10
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Price it right the first time!
Buyers should be pre-approved.
Staging is well worth it.
Condition is key for Buyers.
Lower unemployment is key to the housing recovery.
Down payments of 5% are still feasible.
Your Realtor should be “tech savvy”.
Aging in Place – the senior market.
Short Sales & Foreclosures.
23
#1 – “The end is in sight” – we have
“hit bottom”
• We have been in a Buyer’s Market for the
last 6 years because: home prices have been
low, Mortgage rates are at an all-time low and
Inventory has been high.
•Prices have stabilized (we’ve had our pricing
correction), it doesn’t seem likely that interest
rates can go any lower & we are reaching an
inventory balance.
Source: Keller Williams International
24
Thank You! – Questions?
Slides & absorption graphs for all LV School Districts
available at www.LVhomeExpert.com/Rotary
[email protected]
610-398-8408
25
First-Time Home Buyers
26
Info Sources Used in Home Search
2009
90%
87
59
2010
89%
88
57
Open house
Print newspaper advertisement
Home book or magazine
Home builder
Relocation company
46
40
26
18
4
45
36
23
16
3
Television
Billboard
8
6
7
5
Internet
Real estate agent
Yard sign
Every source was used less except one – YOU!
27
What Buyers Want Most from Agents
Help determining
how much home
buyer can afford
Determine what
3%
comparable homes were
selling for
6%
Help with paperwork
10%
Help find and
arrange financing Other
2%
3%
Help buyer negotiate
the terms of sale
12%
Help with the price
negotiations
14%
28
Buyer’s View of Home as a
Financial Investment
2005
2009
2010
94%
87%
85%
Better than stocks
*
54
47
About as good as stocks
*
26
30
Not as good as stocks
*
7
9
Not a good financial investment
1
3
4
Don’t know
5
10
11
Good financial investment
2011
29