Realty Q&A. Mobile-home land grab riles new homeowner. Interesting question and answers about mobile home take-overs and reverse mortgages.
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Real Estate Tremors. California mortgage default notices were up in the final quarter of 2005, according to a real estate information firm. Across the state, the number of default notices sent by lenders to borrowers was 14,999, up 19% from the prior quarter and up 15.6% from the fourth quarter of 2004, DataQuick Information Systems said on Thursday. The company attributed the rise in foreclosure activity to slowing appreciation rates, which dropped from a high of 22.8% in the second quarter of 2004 to 14.5% in the last quarter of 2005 and are expected to decline further this year. When home values are going up quickly, increases in equity provide plumper financial cushions for home owners. California mortgage default notices were up in the final quarter of 2005, according to a real estate information firm. Across the state, the number of default notices sent by lenders to borrowers was 14,999, up 19% from the prior quarter and up 15.6% from the fourth quarter of 2004, DataQuick Information Systems said on Thursday. The company attributed the rise in foreclosure activity to slowing appreciation rates, which dropped from a high of 22.8% in the second quarter of 2004 to 14.5% in the last quarter of 2005 and are expected to decline further this year. When home values are going up quickly, increases in equity provide plumper financial cushions for home owners. But the number of default notices sent out in California was dramatically lower than in 1996, when nearly 60,000 were recorded in the first quarter, says DataQuick, which has been tracking defaults since 1992. And, this doesn’t mean that thousands of Californians will be tossed out on the street. The company says that only about 5% of defaulting home owners end up losing their residences to foreclosure. The median sale price for a single-family home in California was $548,430 in December, according to the California Association of Realtors. The median amount owed for default notices recorded in that quarter was $6,862, DataQuick says. The Mortgage Bankers Association will release its fourth-quarter National Delinquency Survey, which tracks late mortgage payments and foreclosures, sometime in March.
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Editorial: The Real-Estate Deceleration. The news media have been featuring stories of the “slow down” in the real estate boom in the USA. Properties are on the market for sale longer, and prices are no longer rising, or rising at a smaller rate of increase. The data indicate that the real estate market, both in construction and in prices, peaked out in 2005. This deceleration does not imply that the real estate bubble will burst in 2006. The bubble metaphor should not be taken too far. The real estate market is not like a soap bubble that suddenly bursts, or like a speculative boom in a commodity, that can suddenly collapse. Real estate typically at first plateaus as prices stop rising. Many owners refuse to sell at lower prices, and so properties remain for sale for a longer time. Construction gradually slows as previous projects get completed but there are fewer housing starts.
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Agents debate value of real estate designations. Are dozens of acronyms available to industry professionals worth the money? That chain of acronyms that follows the names of some real estate professionals stands for something. Depending on whom you ask, this list of industry designations can represent either a costly batch of meaningless alphabet soup or a treasure trove of knowledge. Some real estate professionals question whether the designations are worth the money, while others say the designations have paid off. Some Web sites promoting the designations state that Realtors who earn the them tend to make more money each year than other real estate professionals without the designations. According to a 2005 survey of National Association of Realtors members, about 38 percent -- or 480,000 members -- have at least one professional designation. About 18 percent of members hold a Graduate Realtor Institute (GRI) designation; 11 percent hold an Accredited Buyer Representative (ABR) designation; and 9 percent hold a Certified Residential Specialist (CRS) designation. To receive the designations, real estate professionals typically must complete educational courses and pay a fee. There are also typically annual renewal fees to maintain the designations. The GRI designation -- the most popular among residential real estate professionals -- is administered through state Realtor associations. The curriculum for this designation requires about 90 hours of coursework. In California, the cost per session is $149 and the entire series of courses cost $1,560, according to a Web site description.
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Most California Realtors Quit After First 5 Years. In 2000, the California Association of Realtors selected 100 new Realtors and followed them through the first years of their career. By the fifth year, only 43 percent of the original agents stayed the course. The other 57 percent went searching for greener pastures. The association found that many left the industry because of a lack of support from their brokers, but others left because of the inability to make a decent living. The association's membership is at a record level at more than 161,000 members and rising. A quarter of the current total membership, 42,000, came on board just in 2004 on the heels of one of the state's hottest housing markets. A job selling homes in the Golden State appears to have the potential for a six figure income -- a necessary income level to afford housing in many of the state's markets. With the median price at more than $548,000 in December, according to CAR, a typical 6 percent commission, split two ways comes in at more than $16,400. Even after paying the broker half of that, selling a home a month, 12 homes a year, would provide a gross income of nearly $100,000. Unfortunately, with so many real estate agents with the same idea, competition has become fierce. Productivity among CAR members is the lowest its been since the boom of the mid-1990s, CAR says. Association members average only 8 "transaction sides" per year -- what amounts to only one side or half of eight commissions a year and, with the growth in discount brokerages, that half isn't always what it used to be. And then, of course, there are operating costs, overhead and now a sales decline. In December, 2005 sales were off by 17.6 percent, compared to December, 2004. In addition to the difficulties earning a living as a real estate agent, the study also found:
* Nearly all of those in the study (95 percent) said the value of their membership in their local association and CAR exceeded the costs in the first five years.
* Successful new real estate agents attributed their success to effective training, mentoring, and marketing.
* Agents sought training in transaction process, marketing, and professional skills early in their careers and later, Internet marketing, more advanced technology applications, integrating technology to expand businesses, professional development and niche or specialized marketing.
* As the study progressed, panelists diversified their position by focusing on niche or specialized marketing and integrating technology to expand their business.
* Technology and the Internet were key components to new licensees' business models, including integrating their use of Internet marketing in their business.
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~Tina Jan~
Coldwell Banker Kivett-Teeters
1655 E. Sixth St.
Beaumont, CA 92223
Work: 951-845-5520 Ext. 105
Fax: 951-845-4916
Cell: 909-446-2666
Toll-Free: 1-877-TINAJAN
tina.jan@coldwellbanker.com
www.tinajan.com
Phoenix rising: Life thrives in the desert. Part 1: Growth is a given in Arizona. The population in the Phoenix metro area has exploded over the past decade, with waves of new construction spilling into formerly rural communities. This two-part series examines the cause of this desert bloom and its effect on local real estate markets. Click here to read more.
Southland's Home Sales Cool Further. The median price for the six-county region drops to $469,000, the lowest level since last July. Six months of gains in Southern California's median home price were wiped out in January while sales activity dropped sharply, further signs that the region's once-hot real estate market continues to lose steam. The statistics, released Wednesday by DataQuick Information Systems, a La Jolla-based real estate research firm, suggest that the market is making a "soft landing" of flattening prices and fewer sales after sizzling gains during the six-year boom, analysts said. Many homeowners, who were quick to put their homes up for sale a few months ago in hopes of scoring swift and easy profits, are seeing more price resistance now. Buyers are taking more time to shop around, and are making more-modest offers.