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This year is almost over, and housing industry experts are all making their predictions for 2017. Although not everyone agrees on what next year will look like after President-elect Donald Trump is inaugurated and in the midst of a rapid rise in interest rates, most economists have a positive outlook for next year. …read more

From:: Real Estate Wire

By Susanne Dwyer

The homeownership rate spiraled to its lowest point in 50 years earlier this year, and while it picked up in the third quarter, it remains off its recent peak. The populations bearing out the trend the most, according to a new analysis by the Pew Research Center, are low-income, minority, renter, and young adult households.

For low-income households—a term that assumes three-person households earning an annual income of $44,000 or less—the homeownership rate has fallen from 52.9 percent in 2005 to 41.7 percent today. The rate among middle- and high-income households ($44,000-$132,000 and $132,000 or more, in order), to compare, fell from 73.8 percent in 2004 to 68.3 percent today and 86.6 percent in 2004 to 80.3 percent today, respectively.

The rate of homeownership across minority households, especially black and Hispanic, has fallen, as well—among black households, down from a record-high 49.1 percent in 2004 to 41.3 percent today, and among Hispanic households, down from a record-high 49.7 percent in 2007 to 47.0 percent today.

Low-income and minority homeownership—which, in many instances, are one and the same—have both been adversely impacted by the shrinking subprime mortgage market, which, prior to the crash, had allowed those with lacking credit to own a home. Seventeen percent of mortgages obtained by low-income borrowers in 2004 were subprime; in 2015, that percentage stood at 5 percent. In 2004, 18 percent of mortgages obtained by Hispanic borrowers were subprime; fast-forward a decade to just 8 percent. A considerable 32 percent of mortgages obtained by black borrowers in 2004 were subprime—a percentage now at only 7 percent.

The all-but-absence of subprime lending, however, has had less of an effect on homeownership as it applies to renter households, which are also influencing the decline. Home prices, instead—which have recovered since the recession—are closing off the market to renters, who are struggling to save for a down payment to afford them. Pew’s research shows most renters do not have the financial wherewithal to support even a 3 percent down payment—an idealistic scenario, at that, given the post-recession trend toward higher down payment requirements.

The challenge of saving for a down payment is a major factor for renters—in fact, per Pew, 17 percent of renters would buy a home if the down payment were 20 percent; 58 percent would if the down payment were zero.

Young adult households are also at the forefront of the drop in homeownership; the rate among households headed by those aged 35 or younger has fallen from 43.1 percent in 2004 to 35.2 percent today, and the rate among households aged 35 to 44 has fallen 16 percent over the same period. Measured against households aged 65 and older, in which the rate has dipped only 3 percent, the tendency is clear.

Though Americans recently surveyed by Pew believe homeownership is out of reach for young adults in their 20s and 30s, 81 percent believe—”strongly”—that buying a home is the best long-term investment in the U.S. That perspective, though opposing the homeownership rate, suggests owning a …read more

From:: Finance and Economy

By Susanne Dwyer

The homeownership rate spiraled to its lowest point in 50 years earlier this year, and while it picked up in the third quarter, it remains off its recent peak. The populations bearing out the trend the most, according to a new analysis by the Pew Research Center, are low-income, minority, renter, and young adult households.

For low-income households—a term that assumes three-person households earning an annual income of $44,000 or less—the homeownership rate has fallen from 52.9 percent in 2005 to 41.7 percent today. The rate among middle- and high-income households ($44,000-$132,000 and $132,000 or more, in order), to compare, fell from 73.8 percent in 2004 to 68.3 percent today and 86.6 percent in 2004 to 80.3 percent today, respectively.

The rate of homeownership across minority households, especially black and Hispanic, has fallen, as well—among black households, down from a record-high 49.1 percent in 2004 to 41.3 percent today, and among Hispanic households, down from a record-high 49.7 percent in 2007 to 47.0 percent today.

Low-income and minority homeownership—which, in many instances, are one and the same—have both been adversely impacted by the shrinking subprime mortgage market, which, prior to the crash, had allowed those with lacking credit to own a home. Seventeen percent of mortgages obtained by low-income borrowers in 2004 were subprime; in 2015, that percentage stood at 5 percent. In 2004, 18 percent of mortgages obtained by Hispanic borrowers were subprime; fast-forward a decade to just 8 percent. A considerable 32 percent of mortgages obtained by black borrowers in 2004 were subprime—a percentage now at only 7 percent.

The all-but-absence of subprime lending, however, has had less of an effect on homeownership as it applies to renter households, which are also influencing the decline. Home prices, instead—which have recovered since the recession—are closing off the market to renters, who are struggling to save for a down payment to afford them. Pew’s research shows most renters do not have the financial wherewithal to support even a 3 percent down payment—an idealistic scenario, at that, given the post-recession trend toward higher down payment requirements.

The challenge of saving for a down payment is a major factor for renters—in fact, per Pew, 17 percent of renters would buy a home if the down payment were 20 percent; 58 percent would if the down payment were zero.

Young adult households are also at the forefront of the drop in homeownership; the rate among households headed by those aged 35 or younger has fallen from 43.1 percent in 2004 to 35.2 percent today, and the rate among households aged 35 to 44 has fallen 16 percent over the same period. Measured against households aged 65 and older, in which the rate has dipped only 3 percent, the tendency is clear.

Though Americans recently surveyed by Pew believe homeownership is out of reach for young adults in their 20s and 30s, 81 percent believe—”strongly”—that buying a home is the best long-term investment in the U.S. That perspective, though opposing the homeownership rate, suggests owning a …read more

From:: Real Estate News

By Susanne Dwyer

Innovation is a funny thing. Sometimes it introduces an idea that’s never existed before. More often, though, it’s a creative extension of elements already in use. The genius is in combining the elements in some revolutionary, game-changing way.

When everything comes together, the result makes perfect sense. And that’s what we’re hearing when we tell people about Motto Mortgage: It makes perfect sense.

A Better Way
Motto Mortgage, announced in October, connects a real estate brokerage franchise to a separate mortgage brokerage franchise. Together, the two offer clients a seamless, transparent process of finding a house and securing financing for it. Motto is the only company of its kind in the country.

Motto puts a new twist on a familiar concept. Many large real estate brokerages, especially regional giants, have long enjoyed the benefits of having affiliated mortgage services in close proximity.

Most smaller real estate firms, however, have been unable to tap in, given the regulatory environment of recent years and the departure of major lenders from MSAs and joint ventures. Sheer complexity, along with the necessary investment of time and money, has made the idea unfeasible for most small- and medium-sized firms.

That’s where Motto Mortgage comes in—a CFPB-compliant franchise solution and “mortgage brokerage in a box” system that simplifies the process and pre-addresses concerns of setup, licensing, branding and more. Motto removes the barriers of entry—offering efficiency to brokers and transparency to borrowers.

Experience
Motto has a unique advantage in that its franchisor, Motto Franchising, LLC, is powered by RE/MAX, LLC and leverages the infrastructure that built, services and supports the massive U.S. footprint of over 3,600 RE/MAX offices. The architects of Motto’s organizational structure include RE/MAX Co-Founder Dave Liniger—who first disrupted the real estate industry 40 years ago—myself, and a group of individuals with decades of collective knowledge in the space.

Leading the brand is Motto President Ward Morrison, a longtime RE/MAX officer with a deep, nearly 20-year background in real estate, franchising and lending. Ward, a former mortgage broker himself, says the primary aim at Motto is to serve the best interests of the client—because everything follows from there.

“First and foremost, Motto is good for consumers. They want simplicity, convenience and choice—and Motto delivers all three,” Ward says. “Coordination between the real estate brokerage and the mortgage brokerage creates a much better customer experience, which means far greater potential for repeat business and referrals down the road.”

Value Proposition
Real estate agents at a brokerage connected to a Motto franchise can help their buyers get pre-qualified easily. In turn, Motto loan originators access a wide range of wholesale loan products and present the best options. The buyers benefit and the value proposition grows.

For their part, the franchisees, who in most cases will hold both real estate and mortgage broker licenses, benefit by being able to expand their business, deliver more services and enjoy the competitive edge of an enhanced recruiting message.

Ultimately, the Motto Mortgage concept offers advantages to all parties involved in the process. When that happens, you know you have an innovation that changes the …read more

From:: Real Estate News

By Susanne Dwyer

In the following commentary, Lennox Scott, chairman and CEO of John L. Scott Real Estate, offers his 2017 housing forecast for the Puget Sound market.

What an exciting time in real estate! 2016 was one of the best years ever, and I predict 2017 is going to be just as incredible. Strong job growth, amazing interest rates and a shortage of inventory will continue to fuel home appreciation and sales activity. We expect to see 8 percent price appreciation in the more affordable and mid-price ranges in all market areas. We are heading into the new year virtually sold out of inventory. We’ll see huge price appreciation after the first part of the year, as well as robust sales activity.

Buying or selling a home in 2017 will require strategic planning and research. When will be the best time to sell? How can buyers win a home in such a competitive market? How will the luxury market fare? How long will the hot market last?

Job growth is the No. 1 indicator to a strong housing market, and for the past three years, it’s been “extremely strong.” Looking forward, it is being predicted that job growth will drop slightly to a “very strong” level over the next two years.

Amazing interest rates are still in play. The Federal Reserve is on track to raise interest rates slightly though the end of 2017. The National Association of REALTORS® predicts that by the end of next year, we will see interest rates around 4.6 percent, still in the amazing and historically low range.

Once again, we will start the year out with a severe shortage of inventory in many areas. The market will continue to be competitive, with multiple offer situations being the norm on homes in the more affordable and mid-priced ranges.

The housing market will continue to be challenging for buyers looking for homes in high-demand areas. In order to compete with other qualified buyers, you need to position yourself to the lead the pack. The best strategy you can employ is to be Buyer-Ready, Day-One™—that means either being fully underwritten for a mortgage and/or leveraging your buying power with cash. A great start to the process leads to a great finish.

When is the best time to sell? When the timing is right for you. Selling and buying within the same market timing is okay no matter what time of the year, whether over the winter when the sales activity to new listing ratio is at its highest, or after the first part of the year when you’ll see a boost in price appreciation. Depending on when you buy or sell, you will end up with approximately the same net asset position. Review your individual financial objectives, seasonal advantages, and your timing considerations to find your right time to move.

As you can see, the real estate market will continue to be very complex in 2017. How long will this “frenzy” market last? It depends on the job growth of a local economy, the national economy and …read more

From:: Real Estate News

By Susanne Dwyer

In the following interview, Lee Goldstein, president of InTrust Realty in Raleigh, N.C., discusses conditions in his local market, as well as online lead generation and marketing, including social media.

Region Served: Wake County, N.C.
Number of Agents: 22
Number of Offices: 2
Facebook: InTrust Realty

What challenges did your market face this year, and how did you overcome them?
The challenge we faced this year was low inventory. It’s easy to sell houses—it’s very difficult to find buyers the homes they’re looking for. The way we overcame that was to make sure we were available to get out there and show the client the listing right away.

Where does the most opportunity lie in your market?
The biggest opportunity lies in listings—the more listings you can get, the more buyers you can get on those listings, and the more you can help people either move up or move down.

What strategies have you implemented to reach today’s connected consumer?
One that we use is RISMedia [ACE], but aside from that, we also use a system called Kunversion, which posts all of our listings to social media and generates leads—it’s a lead-generating machine. I also hired a writer this year to write information about the 11 towns and cities in Wake County, as well as the top 100 neighborhoods, to add to our website.

We also generate leads through realtor.com®—we’re one of the top companies that buys leads from them, and they’re, in my opinion, the best leads in the industry. We also started a program to learn how to take better care of our past clients to be able to generate more business through referrals. One of the things we’ll do is an annual review about their personal real estate market—it’s not a sales call; it’s more about keeping up with our past clients, talking with them about having a home for every person in their family, plus one.

How do you use social media to nurture referral and repeat business?
We use social media by pulling information, rather than pushing it. We don’t send a ‘Happy Birthday’ on social media—we’ll call them and wish them one. We’re using Facebook as a tool to data-mine information and help us learn more about our clients.

You recently added RISMedia’s ACE to your social media marketing strategy. What aspects of the system are most appealing to you?
You don’t always have time to post interesting articles about real estate—the cool thing about RISMedia is that everything they post is real estate-related. It’s a great way to get posts on our [Facebook] business page that help our clients learn more about real estate.

What value does ACE hold for your agents?
The same value for our main page ACE would do for all of our real estate agent pages. Most of my agents don’t have time to post to social media—ACE posts for you, and posts relevant information.

For more information, please visit ace.rismedia.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news …read more

From:: Real Estate News