Mark Jones and Monte Jones Blog

KCM nailed it again!  Check out the blog posted on KCM Tuesday and if you dont agree with this one look at the one posted Wednesday about shotguns and whisky!   Have a great day and enjoy!

Buying a Home? What About Greece? The Election?

Our founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. Enjoy! – The KCM Crew

Kevin Miller of KCM

As I travel across the country speaking with thousands of agents a month, I am always amazed at the first two questions I am usually asked:

What impact will the European economic crisis have on real estate here in the U.S.?

Shouldn’t people wait until after the election to find out who will be the President before buying a home?

Today, I want to tell a story about Kevin Miller who works here at Keeping Current Matters and just signed contracts on the home he and Crystal, his wife, are purchasing. Kevin got married about a year ago and recently found out that he is about to become a father. He’s a great guy who truly loves his bride and wants the best for her and their family. It is for that reason that Kevin and his wife started to look
for a home of their own.

What About Greece?

Kevin and I have discussed the purchase at times and the interesting thing is the European situation never came up – not even once! It isn’t that Kevin is naive to the situation. He probably understands it better than most as he has a degree in International Business and Economics. But, he isn’t buying a house in Greece or Spain. He is buying a home in Babylon, New York – in a wonderful neighborhood with a nice backyard that his future children will play in. Does the world economy impact his purchase? Yes it does. It is one of the major reasons he is getting a 30-year mortgage rate under 4%.

What About the Election?

Again, it never came up. We did talk about the fact that he is buying the home for a fraction of what it would have sold for just a few years ago. We did discuss the great school district. We did talk about how convenient the neighborhood is to the things he and Crystal love. Did we talk about the election? No.

Not that the election won’t have an impact. It was just announced that Congress will postpone its decision on the government’s role in mortgage financing until next Spring (aka until after the election). The new rules, which are anticipated to be more stringent than the current rules, won’t be enacted until after Kevin, Crystal and their child are comfortably living in their dream home financed by a 30-year mortgage at an historically low interest rate. Meanwhile, no one knows what the new mortgage requirements will even be next year.

Is the situation in Europe important? Of course. Is this election one of the most important in our nation’s history? Many believe so. Did either of these situations enter Kevin’s mind while he was deciding to buy a home? No.

He was too busy caring about his wife, his new child and his family’s happiness.

Link to blog posted Tuesday:

http://www.kcmblog.com/2012/06/12/buying-a-home-what-about-greece-what-about-the-election/

To the buyers that have been sitting on the fence waiting for the real estate market to recover guess what?  You missed bottom!  It’s on its way back up!  Supply and demand are beginning to work!  Now its just appraisers and conservative lenders holding the lid on prices.   Check out the absorption report done two seconds ago using data from the mls for single family homes in Salt Lake county.  

Buyer's there are still plenty of opportunities to be taken advantage of but the best agents are getting buyers the best homes.  Just ask a few of our past clients!   The Jones team constantly monitors new listings and makes our clients aware of them.  Sellers’ thinking about moving up NOW is the time!!!  

The Jones team tracks available inventory along the Wasatch front. In fact we regularly   update a spreadsheet that tracks how many homes are active in Salt Lake, Davis and Utah counties. We have found like every other free market supply and demand is what dictates prices and were prices are headed.

In 2009 it was a challenge to send only 200 bank owned homes on our weekly mailer because there was over 400 to choose from. Today there are only 127 active bank owned homes in Salt Lake, Davis and Utah Counties combined!   These are a few other facts you might find interesting:

In the last 30 days in Salt Lake, Davis and Utah Counties 1,718 homes sold!   That is 57 homes sold every day!   The other interesting fact is back in 2009 there was very few homes to be built  on our mls because it was a waste of time to advertise a home that wasn’t there.   Right now today there are 1299 homes under construction or to be built out of the 8,914 available!!!

Single family home Prices edged higher in March. This is the second month of gains in a row, adding to signs the housing market is stabilizing in the country and Utah housing is on the rise.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.1 percent in March on a seasonally adjusted basis, falling shy of economists' forecasts for a gain of 0.2 percent.

On an unadjusted basis, the index was unchanged. Prices in the 20 cities were down 2.6 percent year over year, improving from the 3.5 percent yearly decline seen last month.

Still, the major indexes ended the first quarter at new post-crisis lows, the report said. For the first quarter, prices were down 2 percent, compared to a 3.9 percent decline in the last three months of 2011.

This is another piece of recent evidence that the housing market is making a bumpy revival. The median price for a new home rose 4.9 percent in April, year over year, while sales of existing homes rose 10 percent last month versus April 2011.

In my mind there is no question that housing has bottomed, in terms of home sales, home construction and home prices but the recovery is still going to be very modest or very sluggish with buyers still a little gun shy.

Housing has a long way to go, though. Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of U.S. homeowners with mortgages.

There are still so many unanswered questions in front of us, such as what has happened to attitudes toward home ownership. We know there has been some change to that. Also we don't know what is going to happen with Fannie Mae and Freddie Mac, what is the government's role in mortgage financing going to be? We are not going to be able to settle that until after the election. I would say don’t wait and start looking. Its time to buy!

A very popular real estate blog this morning stated:

29% of all signed real estate contracts never make it to the closing table!

This horrible statistic made me figure Jones and Associates contract failure rate.   After all even the easiest cash transaction comes with hurdles that need to be overcome to get it to the closing table.

Jones and Associates had a contract failure rate of 9%.   This number upset us and we see any failure as an opportunity for improvement.  We are also very proud that our contract failure rate is almost a third of the average failure rate for real estate contracts.

After digging a little deeper we noticed the failed contracts we had were buyers we represented and every buyer received 100% of their earnest money back.     So we dug even deeper and looked at what could we have done to hold those contracts together and what caused them to fail.  

We reviewed each file and concluded every failed contract failed because our agents guided the buyer to do professional home inspections and unforeseen problems were found or our agents made sure our buyers knew exactly what loan terms they would end up with prior to the loan denial deadline and the buyers determined the loans were not what they wanted to move forward with.  

So the question now is: was 9% of failed contracts a failure or 9% cost of doing business to represent your buyer properly?  

My bet is the 9% of buyers we had that canceled contracts are GLAD they had Jones and Associates representing them!

This is a link to the blog I refer to:  http://www.kcmblog.com/2012/05/24/the-top-5-reasons-deals-fall-apart-2/

In April, home buying season begins in earnest for most regions, and last month was no exception: Existing-home sales increased 3.4% in April from March, hitting a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors said. That was 10% higher than in April 2011.

Meanwhile, the median sale price for existing homes increased 3.1% in April from March to $177,400; that was a 10.1% jump from April 2011. Coupled with March's price increase, this marks the first two-month period of back-to-back year-to-year price increases since mid-2010, the NAR says. Earlier this month, the NAR reportedd that 74 of the 146 largest U.S. metropolitan areas showed a price increase from the first quarter of 2011 to the first quarter of this year.

The most encouraging news, however, could come in the breakdown of who's paying for these homes.

First-time buyers accounted for 35% of purchases in April, up from 33% in March and near April 2011's level. All-cash sales decreased to 29% of transactions, from 32% in March. Investors accounted for 20% of sales, nearly the same as in March and in April 2011.

• It's harder for non investors to buy foreclosures

On one hand, in a healthy market, first-time buyers represent 40% to 45% of the market, and typically, a stable month includes 6 million home sales. But April's news as evidence that real buyers — or folks buying homes to live in them, rather than to rent or flip them — are coming back to the market. That is good for many reasons.

A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices. The general downtrend in both listed and shadow inventory has shifted from a buyers market to one that is much more balanced, but in some areas of Utah it has become a sellers market.

The Salt Lake Tribune ran an article yesterday named:

"Ailing Salt Lake metro housing market coming back to life"   

When reading the headline you can almost invision the nearly dead real estate market falling out of a hospital bed!   I think it would have been better to compare our real estate market to an Olympic marathon runner 20 miles into the race and getting ready to sprint!  The article also mentions the average days on market as 122 and that the median home price fell 5% from the same quarter last year. 

The article didn't mention the  highest volume area in Salt Lake County is zip code 84118.   In the 84118 zip code 419 homes sold in the last 200 days alone!  The Median Price in that zip code using solds from the last 200 days is $125,000. (of course that will push averages down)  The article also failed to mention that zip code median days on market is only 61 from list to sold.  That my friend is a smoking hot market not an ailing market coming back to life! 

This is a link to the article:

www.sltrib.com/sltrib/money/53978202-79/market-prices-rates-lake.html.csp

The Jones Team understands our market and we are available to give you clear, concise market data on your area.  Don't look at medians or headlines to determine if now is a good time to buy or sell.    

With news stories reinforcing the fragile state of the global economy, mortgage rates again moved into record low territory last week. Highlighting the challenges facing Europe, financial services firm, J.P. Morgan, announced loses totaling over $2.3 billion dollars on complex bets that were intended to protect the firm from exposure to the European debt crisis. Fed Chair Bernanke also spoke last week, with little new insight into the Fed’s future plans or current view of the economy. This week is an extremely busy week of important economic data points. The CPI, Retail Sales, Industrial Production, LEI and others are due. With mounting evidence that the economy is shifting into a lower gear, any data that confirms that prognosis will apply more downward pressure on mortgage rates. Europe may also play a significant role in any movement in mortgage rates this week. With political challenges mounting, and growing evidence of even slower growth in the European bloc, any additional bad news from across the pond could pressure rates even lower.

With this being said, Utah home sales are still very strong and we anticipate them to continue to be strong with Unemployment percents being so low and with new business’s and families moving to Utah because of the demand it is going to continue to be a sellers market for awhile. As we have always been honest and upfront with our clients again we say "It’s never been a better time to buy a home" Lets go shopping! 

Big Real Estate Brokerages vs. Small Real Estate Brokerages:

Before the internet, cell phones and electronic communication played such a huge role in how Realtors do their jobs it was important to work for or have a big brokerage.   The bigger the brokerage the greater number of agents the greater number of buyers, sellers and people to share your listings with.  In the old days the only way to expose your listings was through word of mouth a sign and maybe some print advertising.  After all, other real estate offices didn’t know about new listings from a different brokerage until the end of the week when the new book of homes was delivered.   In addition you needed big conference rooms and impressive lobbies to meet your clients to sign documents and go through the books of homes available and only the big brokerages had computers, type writers and copy machines.  

All this has changed!   We immediately share every listing with the world!   In fact most of my clients never see my office so there is no reason to have an impressive lobby or conference room.   You can speak to anyone in the world or send video or photos instantly 24/7.   Most cell phones are capable of providing information instantly about anything from almost anywhere!       

Since starting our new brokerage we have heard other reasons why some people think a big brokerage is better and wanted to give a little rebuttal to why we disagree!

Training big brokerages provide:  to this I say why anyone would want to learn from a corporate trainer that probably wasn’t able to make it in the real world when instantly from anywhere I can buy an audio book, read an old fashioned paper book, hire a personal coach, or watch a video from the best person in any field I want to learn about!   I have never heard a corporate trainer as good as, Robert Kiyosaki,  Gary Keller, Jim Rohm, Zig Ziggler, Neopolean Hill or Darren Hardy.  Get with it today you can learn anything about anything and it doesn’t cost a lot of money just time!!!! 

Network with Other Agents:  Seriously, if your business plan is to help your buyer or seller by networking with the people you meet face to face in your office my guess is your buyers and sellers are not very happy and you’re not doing very well!    By 7:00 a.m. this morning we sent over 600 emails to buyers looking for bank owned homes alone!  Apply for the corporate trainer job!    

Office Space to work from:  If you need office space we have it for rent!  Call us!   Professional office space with internet, receptionist and conference room for only $200 a month in Cottonwood Heights.   If this is why you think a big brokerage is better you too should be a corporate trainer!

Free Cards and Signs:   You’re joking right!   If you are a real estate agent that doesn’t understand $100 will buy you a years worth of cards and $40 is what a personalized sign runs you need to do your buyer or sellers a favor and quit and apply for the coaching position at the local big brokerage!

We have worked with fantastic agents from big brokerages and fantastic agents from little brokerages they had one thing in common they were fantastic agents not brokerages!

The best proof I have that there is no advantage to big brokerage is this testimonial from one of our recent past clients:

"Don't get fooled by big name real estate companies when you can go with local representation that knows the market and knows where to market your home to get the highest sales price. Mark and Monte Jones made selling our home a walk in the park. They are great to work with.”

For the first time since the recession began, development and construction of commercial real estate is on the rebound nationally, and Utah is among the leading states.

Utah ranked sixth in the U.S. in 2011 for direct spending across all categories of commercial real estate, the Commercial Real Estate Development Association reported last Tuesday. That's a leap from Utah's 2010 placing — No. 26. Only West Virginia saw a bigger jump, from No. 48 to No. 3.

According to the study, $3.6 billion was spent in the development and construction of office, industrial and retail buildings statewide in 2011, which supported 77,550 jobs.

It's a bunch of things that has changed the trend here in Utah. There are a lot of businesses that have migrated from California because it’s just too expensive to do business there. Multimillion-dollar facilities built by companies like eBay, EMCCorp and Adobe that have chosen to come to the state is evidence that Utah is much more inexpensive when it comes to doing business.

The City Creek development, a $1.5 billion mixed-use project in downtown Salt Lake City that opened in March, also played a major role in commercial growth last year. 

It's predicted the commercial real estate market in the state will continue to be strong.

Texas led the survey with $7.9 billion in spending followed by New York, West Virginia, California and Arizona.

So as we have been telling our clients residential Real Estate always follows Commercial real estate so if you are getting ready to buy now is the time.