Gary%20Keller's%20Vision%20Speech_Toolkit%20v1

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Lehigh Valley Real Estate Today
Barb Bottitta CSR, GRI, ABR, SRS, SRES
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The Numbers That Drive U.S. Real Estate

1. Home Sales
2. Home Prices
3. Inventory
4. Mortgage Rates
5. Affordability

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In Q3 2010, all 50 states experienced a decrease
in sales
OH
Home Sales Direction (Year-Over-Year Change)
Below 10
Below 20
Below 30
Below 40
Source National Association of REALTORS
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In Q4 2010, all states except for Virginia
experienced an increase in sales
OH
Home Sales Direction (Year-Over-Year Change)
Sales Increased
Sales Decreased
Source National Association of REALTORS
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Average Lehigh Valley Sale Price (In 100Ks)
Over the last 2 ½ Years, the average sale price
peaked at 211,00 in June 2010, but dropped back
to 200K or lower for all of 2011, before it
jumped back over that mark to 206,000 this past
June.
211K
206K
200K
Statistics from LVAR
Average Sale Price Total Price of all
properties sold, divided by the number of sales
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Monthly Lehigh Valley Home Sales
Units
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Average Lehigh Valley SalesApril 2010 through
June 2012
Statistics from LVAR
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Lehigh Valley Absorption Rates April 2010
through June 2012
Months
Statistics from LVAR
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Lehigh Valley Absorption Rates bySchool
District, June 2012
Statistics from LVAR
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Mortgage Rates (30-Year Fixed)
Mortgage rates averaged 4.69 in 2010, an
all-time low since Freddie Mac started tracking
in 1971 and theyve just kept going down,
setting record lows for 6 consecutive months.
10.3
6.0
5.0
3.56
Source Freddie Mac
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Affordability (In Thousands)

• Given the historical rate of home appreciation
  rates, home prices are a huge bargain. Are 2010
  homes undervalued by18?

211K
222K
173K
153K
Historical appreciation rate 4
Source National Association of REALTORS
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Affordability Lets put this in perspective
1989 2010 2011
Bread 0.67 2.49 2.78
Gas (gal.) 0.97 2.73 2.84
New Car 15,350 28,400 30,000
Existing Home 94,000 173,000 166,100
Mortgage Rate 10 4.69 4.45
Monthly Payment 825 896 837
In 1981, home mortgage payments were 36 of
family income. In 1989 24 and in 2011 13
Source Keller Williams International
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Barbs Top 10 Things You Should Know about Real
Estate

• Distressed Properties Short Sales and Bank
  Foreclosures (REOs) are not for everyone
• Hurdles to overcome
• As is property condition
• Increased paperwork complexity
• Increased chance for multiple offers
• Bank REO process is long arduous
• Buyer probably is not getting a steal
• Buyer must be patient

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9 - Aging in Place

• Did you know?
• Half of older women age 75 live alone.
• Persons reaching age 65 have an average life
  expectancy of an additional 18.1 years.
• The 85 population is projected to increase from
  4.6 million in 2002 to 9.6 million in 2030.
• Median of years home owners are staying in
  their homes has increased from 8 to 10 yrs

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8 Todays Agent must be tech savvyInfo
Sources Used in Home Search
2009 2010
Internet 90 89
Real estate agent 87 88
Yard sign 59 57
Open house 46 45
Print newspaper advertisement 40 36
Home book or magazine 26 23
Home builder 18 16
Relocation company 4 3
Television 8 7
Billboard 6 5
Every source was used less except one

the Realtor!
Source Keller Williams International
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7 Down payments of 5 or less have not
disappeared

• Both first-time and repeat buyers are putting
  less than 20 down, even though a down payment of
  20 will typically provide the best financing
  terms.
• 68 of first-time buyers and 28 of repeat buyers
  had a down payment of 5 or less in 2011.

Source Keller Williams International
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6 Yes, its still the economy

• Employment will remain a challenge over the
  next few years, which impacts the market by
  tempering GDP and holding back demand for home
  buying.
• To get back to 6 unemployment, 13.3 million jobs
  need to be added over the next
• 3 years. Thats 400,000 jobs/month

Source Keller Williams International
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The Four Keys to Housing Recovery
Source Keller Williams International

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5 Condition is the key for serious buyers

• Homes in better condition sold for an average
  of 96 of list price compared to 92 of list
  price for homes in poorer condition.
• The most common updates
• Paint 44
• Floorings 25
• Lighting Fixtures 20

Source Keller Williams International
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4 Staging is well worth the effort

• Staged Homes sell faster.
• Staged homes get higher offers.
• Staged houses look better in the MLS pictures,
  getting more potential buyers to actually come
  see the house in the first place.
• Staged houses have an edge over competing
  properties, and the staging can often sway the
  final decision.

Source HomeStaging.com
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3 Mortgage Pre-approval is a must

• Pre-approval for buyers is the norm in todays
  market 64 of buyers get pre-approved by
  mortgage brokers or banks

Source Keller Williams International
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2 Price it right the first time!

• For the 48 of sellers who set their listing
  price according to their agents interpretation
  of the market value of their house
• Sold faster 56 days compared to 105
• Sold for 6.7 higher list-to-sell ratio
• Experienced fewer price reductions
• (4 to 6 weeks between price reductions of
  between 5,000 and 15,000

Source Keller Williams International
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Barbs Top 10

• 1.
• 2. Price it right the first time!
• 3. Buyers should be pre-approved.
• 4. Staging is well worth it.
• 5. Condition is key for Buyers.
• 6. Lower unemployment is key to the housing
  recovery.
• 7. Down payments of 5 are still feasible.
• 8. Your Realtor should be tech savvy.
• Aging in Place the senior market.
• Short Sales Foreclosures.

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1 The end is in sight we have hit
bottom

• We have been in a Buyers Market for the last 6
  years because home prices have been low,
  Mortgage rates are at an all-time low and
  Inventory has been high.
• Prices have stabilized (weve had our pricing
  correction), it doesnt seem likely that interest
  rates can go any lower we are reaching an
  inventory balance.

Source Keller Williams International
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Thank You! Questions? Slides absorption
graphs for all LV School Districts available at
www.LVhomeExpert.com/Rotary Barb_at_LVhomeExpert.com
610-398-8408
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First-Time Home Buyers
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Info Sources Used in Home Search
2009 2010
Internet 90 89
Real estate agent 87 88
Yard sign 59 57
Open house 46 45
Print newspaper advertisement 40 36
Home book or magazine 26 23
Home builder 18 16
Relocation company 4 3
Television 8 7
Billboard 6 5
Every source was used less except one YOU!
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What Buyers Want Most from Agents
Help find and arrange financing 2
Help determining how much home buyer can afford 3
Other 3
Determine what comparable homes were selling
for 6
Help with paperwork 10
Help buyer negotiate the terms of sale 12
Help with the price negotiations 14
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Buyers View of Home as a Financial Investment
2005 2009 2010
Good financial investment 94 87 85
Better than stocks 54 47
About as good as stocks 26 30
Not as good as stocks 7 9
Not a good financial investment 1 3 4
Dont know 5 10 11
2011