What is a REALTOR®?

A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS®, and generally a member of the California Association of Realtors (or the state in which they practice in) and a member of their local Association.

The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics and Standards of Practice.

In the real estate industry there are many classifications of people who sell real estate; agents, sales representatives, sales people, sales associates etc. but the term REALTOR® can only be used by those who are members of the Associations above.

Why is it important to hire a Realtor vs. some of the other classifications?  Because only REALTORS®  are upheld to the Code of Ethics and the Standards of Practice.  A REALTOR® must adhere to the Code of Ethics and the Standard of Practice, all other classifications do not.

Why does using a REALTOR® benefit you?  The distinctive REALTOR®  “R” is your guarantee that you are dealing with the elite of the profession, a professional who deserves your trust.  A REALTOR® is expected to maintain a higher level of knowledge of the process of buying and selling real estate.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime.  Transactions today usually exceed $100,000.00.  If you had a income tax problem, would you attempt to deal with it without the help of a CPA?  If you had a $100,000.00 legal issue, would you attempt to deal with it without the help of an attorney?

Considering the small cost and the large risk, it would be foolish to consider a real estate transaction without the professional assistance of a REALTOR®.

By sharonshawflores

Stricter Appraisals on Risky Mortgages

Proposed regulation would apply to “high-risk” mortgages only

Last week, federal regulators proposed rules that would require an actual physical inspection of the property before an appraisal could be submitted. This would prevent appraisals made on the fly purely on a cursory inspection of the home’s exterior and coming in too high.

Regulators ready to crack down on fraudulent home flipping

Although recent consumer consensus seems to be that appraisals are coming in too low and impeding home sales, the new regulation is aimed primarily at preventing fraudulent home flipping. By making higher-rate (“high-risk”) mortgages subject to an additional appraisal, regulators hope to minimize home-flipping cases where the appraisal of the property after improvements is too high and allows the flipper to sell at an unfounded price.

High-risk mortgage defined as 1.5 percentage points or more above average

The proposed regulations would apply only to loans where the interest rate is at least one and half percentage points more than the market average. While the regulations seem restrictive, they in fact apply only to a very small portion of the mortgage market. In 2010, loans meeting this criteria comprised just 3.2% of the mortgages written.

From The Wall Street Journal: Developments and CBS Money Watch.

By sharonshawflores

Momentum Slows as Pending Home Sales Drop

Pending home sales down 1.4%

Month over month, contracts to purchase existing homes declined 1.4%, the second month-over-month drop in three months. The year-over-year trend, however, is in its fourteenth month of consecutive gains — demonstrated by the 80 metropolitan areas that made this month’s “Improving Markets Index,” which is compiled by the National Association of Homebuilders and First American.

Limited listings may be behind the decline

The chief economist of the National Association of Realtors (NAR), Lawrence Yun, commented that “buyer interest remains strong but fewer home listings mean fewer contract signing opportunities.” Single-family homes on the market in June went down 3% from their levels in May and a whopping 24% from June of last year, the biggest year-over-year decrease in more than 30 years. Slow processing of distressed properties along with homeowners unwilling to sell their home when the current value is so much less than what they paid are the primary causes.

Supply and demand pressures helping stabilize the market

As inventories go down, the low home prices and record-breaking low mortgage rates continue to drive demand, which means that many listings — those priced appropriately for the current market condition — are receiving multiple offers, allowing sellers more choice picking a buyer and the terms of the sale.

Via Realty Times and Greenwich Post and NAHB.

By sharonshawflores

Three months of record low rates come to an end

Average rate for 30-year fixed up to 3.55%

The last week in July saw the average rate for a 30-year fixed drop to a historic low of 3.49 percent. Last week, Freddie Mac reported that the average rate had edged up to 3.55 percent — still significantly lower than August a year ago, when the average rate was 4.39 percent.

Year-over-year average rates still significantly lower

For the week ending, Freddie Mac reported these average rates:

  • 30-year fixed-rate mortgages
    • last week: average 3.55 percent
    • prior week: average of 3.49 percent
    • same time last year: 4.39 percent
  • 15-year fixed-rate mortgages
    • last week: average 2.83 percent
    • prior week: average of 2.80 percent
    • same time last year: 3.54 percent
  • 5-year adjustable-rate mortgages
    • last week: average 2.75 percent
    • prior week: average of 2.74 percent
    • same time last year: 3.18 percent
  • 1-year ARMs
    •  last week: average 2.70 percent
    • prior week: average of 2.71 percent
    • same time last year: 3.02 percent

Better than expected job numbers for July help push rates

July saw 163,000 jobs added, which was better than expected than the 100,000 jobs experts had anticipated. The first quarter of 2012 averaged 226,000 jobs per month — a rate that fell off sharply in the second quarter. From April to June, an average of just 75,000 jobs were added each month. Although the national unemployment rate rose from 8.2 percent to 8.3 percent, the job market numbers were enough to spark activity in the stock market and provide a gentle nudge to mortgage rates.

By sharonshawflores

Mortgage Rates Hit Another All Time Low

Freddie Mac reports 30-year fixed average at 3.49%

For the first time, according to records dating back to the 1950s, the average rate for a mortgage has dropped below 3.50%, hitting 3.49% last Thursday. That’s the lowest mortgage rate recorded since long-term mortgages were introduced 60 years ago.

Pending home sales rise for the 14th straight month

Spurred by low mortgages and gradually rising home prices, the National Association of Realtors’ Pending Home Sales Index was at 99.3 in June, nearly nine points more than last June’s 90.7. What differentiates the Pending Home Sale Index from other trend trackers, like the Case-Shiller Index or monthly new home sales data, is that it points to future activity. By tracking home sales newly under contract, the Pending Home Sales Index offers a window into actual home sales a couple of months down the line, — with some degree of reliability. For example, on the average, 80% of open home sale contracts will close within 60 days.

For homeowners, refinancing should be a priority

With mortgage rates lower than they’ve ever been, many industry experts say now is the time to refinance. The economic recovery, though slow and sputtering, appears to be relatively steady compared to the last few years. The marketplace for loans has expanded far beyond local boundaries and homeowners are taking advantage of long-distance lenders offering better rates — and the record low rates speak loudly against homeowners taking an adjustable rate mortgage. Instead, experts advise making the most of the opportunity to lock in these low rates now, before more global economic upheaval turns the tides and the rates once again begin to rise.

By sharonshawflores

Conflicting Signs for Housing Market Recovery

Mortgage rates hit another all time low last week, according to Freddie Mac — the average rate for a 30-year fixed loan sank to 3.56 percent, the lowest recorded rate since long-term mortgages were introduced in the 1950s.

At the same time, the median price for existing home sales rose nearly 8 percent from last June to $189,400 while existing home sales dropped 5.4 percent month to month from May to June this year — although the 4.37 existing homes that sold in June still represents a 4.5 percent increase from June of 2011.

A senior economist at BMO Capital Markets notes that “it is only one month and the rest of the housing indicators have all continued to show improvement.”

Perhaps the most encouraging sign of recovery is the behavior of mortgage bond investors, who are beginning to price bonds as though the housing market is at or close to its bottom. Indeed, Randy Robertson of BlackRock, Inc. said “the market is just starting to assimilate some of the numbers we've seen in terms of stabilization in housing.”

Via The Wall Street Journal, USA Today and CBSNews.

By sharonshawflores

Housing Markets Recovering Coast to Coast

According to he National Association of Home Builders/First American Improving Markets Index (IMI), 32 states and Washington, D.C. rose in July from 80 to 84.

Since April, when the index reached a high of 101 improving markets, more than 20 markets had fallen off — but the latest numbers appear to signify a slow but steady stabilization. Both Phoenix and Tampa, markets that were among the worst hit by the market crash, are again on the list of improving markets — as are Prescott, AZ and Springfield, MA for the first time.

The index, issued monthly, uses a multitude of factors, including home-price appreciation, increases in single-family housing permits and employment growth to analyze a market’s “improvement score.” One of the largest housing markets in the country, Houston, TX, appeared on the index for the first time this month, reflecting good news for that city’s recovery.

The National Association of Realtors (NAR) also sees notable signs of recovery in the housing market — pending home sales in May were on track to match the highest pace in two years, more than 13 percent above the rate recorded in May last year, while the national median home price is on track to go up three percent this year. According to Lawrence Yun, NAR’s chief economist, “ the latest increase in home contract signings marks 13 consecutive months of year-over-year gains… we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”

As NAHB Chief Economist put it, “this is evidence that the housing recovery is slowly but surely taking root, one market at a time.”

For more on the Improving Markets Index, check out these sources:

By sharonshawflores

Foreclosures — Two Steps Forward, One Step Back

Year-over-year looking good

There were 63,000 foreclosures completed this May — down considerably from the 77,000 completed in May of 2011. CoreLogic reports that the number of homes in foreclosure inventory also went down year-over-year in May, from 1.5 million homes last year to 1.4 million homes this year. (via Trulia)

Month-to-month on the rise

From April to May of this year, also according to CoreLogic, there was about a 1.5 percent increase in completed foreclosures from 62,000 in April to 63,000 in May. (via Trulia)

Foreclosure inventory still high

Lender Processing Services recently issued its May Mortgage Monitor report, which stated that 4.12 percent of all active mortgages are in some stage of foreclosure, while another 3.2 percent are delinquent by 90 days or more. The average is a shade misleading, however, as it doesn’t reflect the dramatic difference between foreclosure inventories in states with judicial foreclosure processes and states with non-judicial processing. (via PR NewsWire)

Judicial states hold more than twice the foreclosure inventory

Judicial states are showing an inventory more than two and a half times that of non-judicial states — an average 6.5 percent of inventory in judicial states is in some state of foreclosure compared to an average of 2.46 percent in non-judicial states. In addition, the percentage of that inventory that is more than two years past due has increased about 50 percent in judicial states since 2008, compared to about a 30 percent increase in non-judicial states. (via Lender Processing Services)

Non-judicial state’s delinquency rates dropping fast

On average, the year-over-year change in non-current loans (30 days or more in delinquency or in foreclosure) in non-judicial states has dropped more than 7 percent. The trend in non-current loans in states with judicial foreclosure processing is also downward, albeit far slower, averaging less than 1 percent. (via Lender Processing Services)

By sharonshawflores

Mortgage Rates Down, Sales Up

“evidence is accumulating that the optimists may finally be right.

The housing market is starting to recover. Prices are rising. Sales are increasing. Home builders are clearing lots and raising frames.” ~The New York Times, June 27th, 2012,

Lowest rates in more than 40 years

Last week, mortgage rates hit new all-time lows —  the average rate for a 30-year fixed mortgage was 3.66 percent, while the average for a 15-year sank to 2.94 percent — both the lowest recorded rates since Freddie Mac’s records beginning in 1971.

Last year at this time, the rate for a 30-year fixed mortgage averaged about 4.51 percent, while the average rate for a 15-year fixed mortgage was about 3.22 percent. (via The Washington Post)

Existing home are sales up

The National Association of Realtors (NAR) reports that existing-home sales for May 2012 — completed transactions including single-family homes, townhomes, condominiums and co-ops — are up nearly 10 percent year-over-year. Sales are down slightly — 1.5 percent — from April 2012, something NAR attributes to less inventory.

Listed inventory is down more than 20 percent from this time last year (dropping to 2.49 million homes or a 6.6 month supply), continuing a downward trend from the all-time high of 4.04 million homes listed in July 2007. (via Economic Populist)

Year-over-year prices see smallest decline since 2010

The S&P/Case Shiller index (based on home values in 20 U.S. cities) for April fell 1.9 percent from April of last year — the smallest drop since November 2010.  This continues the shrinking year-over-year drop in home prices — which saw a 3.8 percent drop in January, a 3.5 percent drop in February and a 2.6 percent drop in March.

Even more encouraging, home values in 10 cities in the index were on the rise — with Phoenix at the top of the list with a year-over-year increase of 8.6 percent. (via The Wall Street Journal)

Market continues with stronger signs of recovery than decline

For the fourth year in a row, the housing market looks like it’s climbing out of the depths. Although each of the three years previously have seen the market recovery end with a downward movement, each year real recovery looks more promising. The ratio of housing prices to income is close to where it was prior to the housing bubble. With falling prices combining with an improving economy, the number of potential buyers keeps growing. (via The New York Times)

By sharonshawflores

Will 2012 Spell The End of The Slide?

Economists and Experts Projecting Housing Market Continued Recovery

Supply down, demand and prices up

Year over year, home sales are up — due to a combination of increased investor activity and low mortgage rates — while the available inventory of houses for sale has decreased significantly. Fewer houses available for buyers to choose from has allowed sellers to raise prices. (via The Wall Street Journal)

Recovery is happening regionally

David Crowe, the chief economist at the National Association of Home Builders, feels that there appears to be a steady trend of market recovery, but he is not so sure that there will be a startling rebound within the next 12 months — “the recovery we are seeing is mild and meek and doesn't show up well on national numbers.”

Or, to put it another way, Zillow’s chief economist Stan Humphries likened the creeping improvement to “bacteria attacking a bad virus,” happening zip code by zip code rather than in sweeping changes across large areas. Philadelphia and Detroit are just two examples of areas where recovery is happening and steady, albeit not pervasively. (via Housing Wire)

Beware the bubble

Zillow’s Humphries cautioned that the current fad of investing in single family homes as rental properties may in fact turn out to be the next housing market bubble. Rental rates are continuing to trend up, making home ownership more and more appealing to a wider market. (via Inman)

By sharonshawflores