Posts Tagged ‘residential home market’
As real estate agents, at the end of the day, we’re in business to make money, and our bottom lines don’t discriminate. Complaints about the market changes over the past few years just make me shake my head. I like to look at change not as an obstacle, but as an opportunity. For agents, one of the biggest changes is the opportunity to make money in rentals.
Here are a few reasons I think every agent should think about taking on a few rental listings:
Big opportunities
While I’m sure it’s not “The Year of the Landlord” everywhere, when sales slow down people still need places to live. And while most agents focus on residential sales, the reality is that there are a ton of renters out there.
Here in Manhattan, our rental market is truly on fire. New York is an exceptionally rental-centric city, where about 70% of available housing is for rent. In February 2012 Citi Habitats’ research reported a vacancy rate of a mere 1.25%. In the same month, the average apartment rented for $3,376, just $18 shy of the market’s peak back in May 2007.
This trend may seem like an anomaly; however, statistics show the rental market is thriving in many markets. A recent Reuters release reported the national apartment vacancy rate is at a 10-year low.
If agents can open their minds to using their market expertise in a different way, they can take advantage of rental activity to help grow and sustain their business.
Simpler, faster transactions
While one “for sale” property can take six months to even a year to close, depending on price and market conditions, good rental agents can expect to close four, five, or even six rental transactions in a single month.
Buying or selling a home is a huge investment decision that requires a lot of paperwork and includes many interested parties; sellers, buyers, lawyers, mortgage brokers, banks, etc. If you add all of the unexpected issues that can arise and endanger a deal, rentals should be an obvious thought.
In rentals things are a lot simpler and faster. Rental deals are less complex and take less time to close because:
- you’re primarily dealing with one party, the renters, clients who likely view their move as temporary;
- most renters want to find a place as fast as possible and view renting as a small, necessary investment; and
- in many markets, landlords require minimal paperwork, just a credit check and income verification in most cases, because their objective is to fill vacancies quickly .
Future owner leads
Another great reason to consider rentals is that almost every buyer was once a renter.
Agents looking to stay in the business more than three years need to remember this. Working with someone on a rental today and letting them know you also help buy and sell property generally builds connections that can benefit you down the road.
As I said, I’m completely biased. Rentals have been good for my business. But I do think one mark of a good agent is their ability to change with market conditions, and change quickly. Diversifying your business model is key to weathering the ebbs and flows. If you cultivate strong skills in both rentals and sales, you will truly be unstoppable – no matter what’s happening in the market.
About the Author:
Caroline Bass is a Senior Vice President and Associate Broker with Citi Habitats in New York City. Recently selected as one of Forbes, “Top 30 under 30 in Real Estate” for 2011, Caroline has closed an estimated $30 million in rental deals since joining the business in 2005 and has worked with some of New York’s most high profile clients including Tim Gunn.
DENVER — Colorado Attorney General John Suthers announced today that Colorado has joined a $25 billion multistate settlement with the five largest national banks, Bank of America, JPMorgan Chase, Wells Fargo, Citi and Ally, who account for 60 percent of the home loan servicing market, to end problematic business practices and to help distressed homeowners. The settlement — the second largest multistate consumer protection settlement — will deliver $204.6 million worth of relief for Colorado homeowners.
Under the terms of the settlement, Colorado, which served on the executive committee that oversaw the settlement negotiations, will receive:
- $73.3 million that will be available to grant principal reductions on loans to make a modification possible. Approximately 40 percent of these funds will also be available to ease the effects of foreclosure, including waiving deficiency balances, enhanced cash-for-keys payments and blight prevention;
- $52.5 million in cash to the state;
- $46.3 million worth of refinancing benefits to underwater borrowers; and,
- $32.49 million in payments to homeowners who lost their homes to foreclosure between January 1, 2008 and December 31, 2011.
Nationally, the banks have agreed to:
- Commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief options, including principal reduction. Given how the settlement is structured, servicers will actually provide up to an estimated $32 billion in direct homeowner relief.
- Commit $3 billion to a mortgage refinancing program for borrowers who are current, but owe more than their home is currently worth.
- Pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
- Provide homeowners with comprehensive new protections through new mortgage loan servicing and foreclosure standards.
- Be overseen by an independent monitor will ensure mortgage servicer compliance.
“This agreement delivers real help to homeowners affected by the banks’ dual tracking and other improper mortgage- and foreclosure-related processes,” Suthers said. “As a result of this settlement, the banks will end a series of problematic processes that put homeowners at a severe disadvantage during the foreclosure process. This settlement will not solve every problem with the housing market, but it goes a long way to helping homeowners in distress now and leveling the playing field for consumers.”
The settlement is the second largest multistate consumer protection enforcement settlement after the 1998 tobacco litigation settlement. This agreement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country and nearly a dozen federal agencies. It holds banks accountable for past mortgage servicing and foreclosure fraud and abuses and provides relief to homeowners. With the backing of a federal court order and the oversight of an independent monitor, the settlement stops future fraud and abuse.
Customers of the five settling banks who lost their homes to foreclosure between January 1, 2008 and December 31, 2011may be eligible for restitution under the settlement. The independent, third-party administrator of the settlement hopes to contact affected victims by the end of the summer. Customers of the five settling banks who are still in their homes but either behind on their payments or underwater should contact the banks directly through dedicated toll-free contact numbers to determine if they are eligible for assistance:
- Bank of America - 1-877-488-7814
- Chase - 1-866-372-6901
- Citi - 1-866-272-4749
- GMAC/Ally - 1-800-766-4622
- Wells Fargo – 1-800-288-3212
The Office of the Attorney General will work with the Governor’s Office and the General Assembly to ensure that the $52.5 million Colorado directly receives under the settlement will be used for purposes including foreclosure prevention, housing-counseling services, additional legal services for distressed homeowners, promotion of loan-modification opportunities and anti-blight efforts.
The settlement changes the way the banks do business. Under the agreement, the banks will be required to stop the use of robo-signing, end the process of dual tracking of loans, provide a single point of contact for consumers as they move through the loan-modification processes, create an online portal for consumers to get information about where they are in the loan-modification process, and abide by a strict set of deadlines for dealing with loan modifications. The settlement also requires that the banks post payments they receive to homeowners’ accounts within two business days of receiving them.
The foreclosure practices of the banks will be subject to strict oversight by an independent monitor who will provide regular reports to the participating states. The banks will be subject to stiff fines if they violate the terms of the agreement.
The settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five servicers. The pact also enables state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.
Consumers interested in learning more about the multistate agreement can visit www.NationalMortgageSettlement.com orwww.coloradoattorneygeneral.gov/mortgagesettlement.
If consumers believe they have been affected by the banks’ problematic processes or have experienced any form of foreclosure fraud, they can file a complaint at www.coloradoattorneygeneral.gov/complaint. To learn more about Colorado’s ongoing fight against mortgage and foreclosure fraud, visit the Office of the Attorney General’s Mortgage Fraud Information Center.
Homeowners facing foreclosure also should contact the Colorado Foreclosure Hotline at 1-877-601-4673 or visitwww.coloradoforeclosurehotline.org. The hotline works with homeowners in or facing foreclosure. Homeowners who call the free hotline can speak with a housing counselor about their options.
After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound. In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline.
Industry analysts and players cite a number of reasons – some traditional (employment), others unique to the post-credit bubble era (foreclosures) Â - for the long-awaited sea change. An analysis of industry and government data also support the forecast.
Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy.
“With the exception of really hard-hit markets, the vast majority is ready to turn around,” adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. “The Washington, D.C., area is not only ripe for recovery, they need to start building units.”
Nevertheless, skeptics overwhelmingly outnumber the optimists, given the false-starts of previous years, the economy’s sub-par performance, a new wave of distressed properties and the capacity for the European debt crisis to spook business, consumers and investors.
“I think it’s premature,” says Richard Smith, CEO of Realogy, the nation’s largest real estate company, whose brands include Century 21, Coldwell Banker and Sotheby’s International. “We see little indications here and there. Transaction volume is improving. Prices are still under pressure. This isn’t going to be one of those spiked robust recoveries.”
Smith is echoing the conventional industry calculus: that price increases follow sales growth amid consistently strengthening demand.
There’s been little conventional, however, about this housing slump, which is one reason it’s had so many false bottoms. Among its many firsts – housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.
The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked;consumer confidence is on the rise ; and job growth is accelerating.
For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.
That thinking may help explain why the iShares Dow Jones US Home Construction Index Fund(NYSE Arca: itb), a broad barometer for the housing market, is up some 38 percent from the stock market’s October bottom, while the S&P 500 is up about 21 percent.
Finally, there’s the intangible fatigue with bad news, and a desire to end the negative feedback loop.
“We believe there is sizable housing demand that could be released into the market,” says Lawrence Yun, chief economist of the National Association of Realtors, NAR.
The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014.
The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012.
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