Real Estate Information

I have always found the end of the year as an exciting time to reflect and, more importantly,  to dream about the upcoming year. Dream is not necessarily a good word to use when we  are setting up goals for the upcoming year because we all know that goals unfulfilled are really dreams. But this time is cathargic...especially the week between Christmas and New Years. I have read alot of real estate prognostications lately. Most are predicting a much stronger market. The rates still remain very low; in fact, I am personally refinancing my mortgage and getting a 3.75% rate. This will reduce my payment by several hundred dollars.

So, be American and contribute to the economy...buy a house in 2012!

The real estate stats for Nov, 2011 were just published. All in all, generally we are seeing pending sales up, median price down, and the lowest amount of homes on the market in 5 years.

Last week we sat down with our insurance agent and went through all of our accounts to insure they were up to date and necessary. Although we spent over an hour to complete, it was time well spent. I was especially concerned about my home owner's insurance. We went through each line item in an effort to determine we would have enough coverage for fire, etc. We also discussed any riders, like jewelry, furs, sewer back up. flood etc. It was painfully detailed but we walked away very satisfied we had covered it all.

Set aside time to insure you are covered!

I love the real estate profession and I have learned alot in the nearly 20 years I have been in the business. I have learned that what you put in something is in direct proportion to what you get out of it. I have learned that when dealing with people, one can never be surprised at the motivation and/or desires. Most people have wonderful dispositions and we have developed friendships over the years, but there are those that are a challenge.

What I really wanted to discuss was the fact that real estate sales is a linear business; that is, if I am not at my job, at the office, in front of buyers and sellers, I do not get paid. I have been longing for other  forms of income that will create passive income.

Keller Williams Realty recognizes this fact and has incorporated in its compensation plan passive income, called profit sharing. It is based on  your contribution towards the company's profit as well as those agents that you recruited to the company. It is actually genius...taking multi-level marketing and adding it in the real estate brokerage business. Although, multi-level marketing has in the past had some negativity, it is a proven business model that is coming into its own, and I might add can be very lucrative...in fact, if I had become network marketer instead of the real estate agent, I probably would be retired now with no where near the stress.

I have found that business that will povide me with residual income, is recession proof, and is based on services that we are already using. It is ideal for real estate professional in that it is services for the home.

I hope I have piqued your curiosity...more to come concerning this business.

Congress just passed the bill to re-instate the previous loan limits that expired in October. This is a monumental achievement that the National Association of Realtors never thought would be done. This is great for our industry and even greater for consumers. Below outlines the limits:

FHA- $560,000 with 3.5% down and sellers can contribute up to 6%

Conventional- $494,500 with 10% down and seller can contribute up to 6%

Conventional- $417,000 with 5% down and seller can contribute up to 3%

Veterans- $500,000 with 0 down and seller can pay all closing costs

This is very encouraging...with rates as low as 3.9% fixed, now couldn't be any better to buy.

Stats were published today by our Multiple List Service that re inforces my belief that we, in the Baltimore Metrolitan area,  are on our way to a real estate seller's market. Again, pending unit sales increased over Oct, 2010 to an amazing 16.32%. Obviously, rates are below 4% which is unprecedented. Additionally, the active listings are the lowest theyhave been in 5 years, down 20.7% from 1 year ago.

Currently, the month supply in the Baltimore area is 8.2 months; a balanced market (equal amount of sellers and buyers) is a 6 month supply. In addition, the market has definitely bottomed with most counties seeing their lowest median price in March and April, 2011. 

Referencing my last blog, you would think that the real estate market would be on fire...that is, ridiculously low interest rates, inventory (active listings) at a 5 year low, and units sales up in the Baltimore Metro area. This is a recipe for a sellers market; why are we not seeing the results? I believe that our friends in Washington, DC, the contrarians, are holding us back with their tendancy to state the contrary of the opposing party. Grow up Congress and do the right thing to get us back to a debt free, vibrant economy.

OK...we all know that this is not a traditional real estate market, but where are we heading? I am not an economist, but I think I have a good grasp on the Baltimore area real estate market. I believe that we are entering a seller's market. Obviously, there is pressure on price, but unit sales have been up over last year for the past few months and the most important factor is that active listings are the lowest in five years in nearly every county in the Baltimore area. So...inventory levels are down and rates are at an all time low. These two factors should drive the buying population to purchasing. The only wild card in this position is unemployment...you can't buy a house if you don't have a job. Hopefully with the current political climate, jobs will be on the rise.

I get asked all the time..."has the real estate market bottomed?" Frankly, I am excited about the outlook for real estate in the next  six months or so. There is a "perfect storm" brewing that will turn the market around. The Baltimore Metro area statistics have just updated and here are some observations substantiating this point:

* Active listings in every county surrounding Baltimore are at the lowest levels in five years

*Interest rates are literally the lowest EVER!

*Unit sales are up anywhere from 4% to 20%, depending on the county

*Median price is less than last year roughly 5%

I believe that median price will turn around as inventory levels shrink and demand increases due to low rates. I am going out on a limb but I beleive that we will be seeing a seller's market soon.