Local Real Estate and our Economic Recovery

Are we having an economic recovery? How about a recovery in Residential Real Estate?

The great debate among economists and TV commentators is what kind of recovery it will be. Typically recoveries look like a “V” when Gross Domestic Product (GDP) is tracked. Because of the high unemployment rate, many are saying we will not have a “V” recovery, but more of a slow and gradual rise. But don’t be fooled. Indicators for employment can be the last thing to pick up. It is considered a lagging indicator because employers do not start hiring until they are secure that they have growing demand for their product and a growing cash flow to pay for additional employees.

Let’s look at the evidence: Consumer spending is growing. This has a multiplier effect throughout the economy as each sale creates sales throughout the supply chain. Business investment is rising, at a whopping 18% annual rate. So the people who currently have jobs, just like the business owner, start to feel more secure and start to take more risk (buying things).

New unemployment claims are falling which reinforces what I have written above. So we are having a recovery, how about a recovery in real estate? Let’s go back to the 93-94% of the people in the DC Metro area that have jobs (the unemployment rate here is under 7%). If they do not own a house, they are prospects to be in the market to buy a house under today’s favorable conditions, low prices and low interest rates. If they own a house that was bought before 2005 or they made a large down payment when they bought, they are candidates to sell their house and buy a larger one. The people who are not in the market to buy are those who bought from 2005 through 2007. But normally people who have only owned their home for only three to five years are not selling anyway. The average is about seven years.

Steve Murray of Real Trends has consistently reported that about 5% of the population moves each year. During the boom that number swelled way above the 5% norm. So as the economic recovery continues, it will spillover into the Real Estate market here in the DC Metro area. Already those who had the courage to buy since December 2008, when prices bottomed, have been rewarded with increased equity both from mortgage principle pay down as well as some price appreciation.

So are we having a Real Estate recovery? The evidence says we have already started or are about to start. So buckle up your seat belt and get ready for the ride!

Commentary provided by David Hess, Executive Vice President.

The Champ has been Dethroned. Pay Attention.

Something seismic occurred in the on-line space last week. The tremors reverberate still. It has nothing to do with Real Estate. It has everything to do with Real Estate.

Facebook became the most visited place on the Internet last week.

Joel Burslem of 1000 Watt posted about this very topic last week, and the San Jose Mercury News reported on it. According to Hitwise, Facebook edged out Google as the Internet’s most visited site by the slimmest of margins – 7.07% of all traffic to Facebook vs. 7.03% of all traffic to Google. But this is big. Real Big. People no longer go to the web just to search. They actually go to the web MORE to discuss things. To collaborate. To share experiences. On Facebook.

Let’s all sit up straight now and pay attention. Please.

90 some odd percent of consumers begin their Real Estate experience on-line. Buyers and Sellers alike. And now they aren’t going just to Google to gather information, or your Real Estate website. They are communicating on Facebook. Searching for information, sharing stories, getting the skinny on who to use and who not to use for their Real Estate experience. We have to be there. Real Estate. Brokers and Agents alike. We all have to be there, active and engaged in an intelligent conversation.

But wait. Hold on.

Before we rush like lemmings racing towards a treacherous Social Media precipice, let’s think. Effective use of Social Media, and Facebook specifically, is an art, not a Real Estate right. There are good ways to do it, and some not so good ways to do it. Your Facebook page should not consist of an explosion of listings, and sales pitches, and price reductions and post after post after post after post of the benefits of the tax credit and why you should buy now. Too many are.

Start a conversation. Craft a message. Carefully consider every post before you post it. Engage in a conversation, and stay away from the sales pitch. Reach out to your constituency and engage them. Solicit feedback. Create a community. Have your Facebook page be a Social Media extension of your Brand.

We have to do it. Companies, and specifically Google, see that Social Media is affecting the very fiber of our everyday lives (see Google’s Buzz offering). Let’s recognize this as an opportunity and engage Facebook and Social Media effectively. If you don’t yet have a strategy to do so, and do so effectively, get one, and do it RIGHT.

Remember, this is HUGE. Google has been dethroned. I never thought I would see it, the Internet’s 800 lb. Gorilla knocked from his lofty perch. If even for only a week, the shift from linear search to conversation is undeniable. Make sure that your voice gets heard.

-Amit

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In ______ we Trust.

How great would it be if that ________ was “Real Estate Professional?”

I had the opportunity to attend a cinemeeting event hosted by Wells Fargo Home Mortgagethis past Thursday titled “Meeting the Market Challenges of 2010.” The content and information presented at this cinemeeting was mind-blowing. There was commentary and discussion about Short Sales and the Short Sale process, there was discussion of the REO “Shadow Inventory,” there was discussion and commentary about today’s Real Estate consumer. And then there was one topic of discussion that stood out head and shoulders above the rest.

TRUST.

Jeremy Conaway of Recon Intelligence Services waxed poetic about this very issue. And how important it is. And how in 2010, the Real Estate industry is near an all-time low with regards to this very thing. The very thing that is the most important fundamental building block of our business.

TRUST.

There is so much weight that is carried by this one little word. Five letters that can make or break any business or organization. Any sustainable business model has to built upon this foundation. There are a lot of ways that we can regain consumer trust. We can listen. We can counsel. We can give sound advice. We can understand personal situations and the specific wants and needs of our individual clients. We can partner with our clients to assist in a collaborative manner. We can utilize technology, data and real time market stats and information that we as Real Estate professionals have exclusive access to in order to provide accurate information to our clients to better enable them to make informed decisions. (Yes, believe it or not, on-line valuation sites really are not that accurate).

Jeremy was optimistic. He mentioned his son’s dreams of home ownership. His son’s dreams of building a better future for himself. He mentioned that people are once again buying homes for the right reasons, not as a way to make a quick buck. He mentioned that Real Estate as an industry would lead the charge to economic recovery – at a sustainable pace.

I think I agree with Jeremy. I think that I too, am optimistic. I think that perhaps Jeremy addressed the most pressing challenge of 2010 – TRUST.

I think that with what I see every day in this industry, given time, we will win back that trust.

I think that given time, that _______ will be filled with “Real Estate Professional.”

-Amit

Find your home. Plan your Life. www.averyhess.com

What will the iPad mean for Real Estate in the DC Metro?

Last week, Apple announced its entry into the tablet race with its touch-device, the iPad. Besides having a questionable name, I am unsure about how effective of a tool this will be for Real Estate agents, and more specifically, Real Estate agents in the DC Metro area.

I admit it – when it was first announced, I was ecstatic at the possibilities. Paperless transactions. The ability to map out a route for tours, research the MLS for your clients, answer emails, write offers and submit contracts – all from one small device!

WOW.

And then I researched it. And came away unimpressed.

Don’t get me wrong, the iPad is a wonderful device, and has a lot of great uses for folks who want to do one thing, easily. But for Real Estate, I don’t think it is a good match, and here’s why:

1. No support of Flash. And all of us here in the DC Metro require flash to upload our listings and data into Keystone.
2. Does not multitask. No explanation needed here – have you ever met a good Real Estate agent who isn’t the master of multi-tasking? What if you need to access the MLS, send an email, and take notes for your client simultaneously? Impossible with the iPad.
3. No camera. Again, how can any portable device be created in this day and age without a built-in camera? Big drawback again for Real Estate. Has a killer photo app pre-loaded, but how do you get the photos on the device? How do you take pictures of your listings with the device?
4. No HDMI output. Not a big deal, but still would have been nice.
5. No USB slots. BIG drawback – with no camera, how do you get photos loaded onto the device? Connect to a printer? Keyboard?
6. Closed app interface.The iPad will only run apps from the iTunes store. How do you write contracts, integrate docusign? Impossible unless these companies create an app for these things.

With a slew of similar devices slated to be released in the coming months, the iPad is NOT a must-buy for Real Estate professionals. Hang tight as other similar devices are released by Microsoft…

…and others in the coming months. These devices will almost certainly have the outputs and functionality needed for a powerhouse Real Estate workhorse.

Search for Homes in the DC Metro: www.averyhess.com

Community Video: Fredericksburg, VA

Located to the south of Washington, DC, Fredericksburg has everything from acres of land and suburban neighborhoods to a historic downtown area. Learn more about Fredericksburg, Virginia and how it offers big city amenities while keeping its small town feel.

Avery-Hess Community Video: Fredericksburg, VA from David Tra on Vimeo.

Search for homes in Fredericksburg, and all of the DC Metro: www.averyhess.com

Fredericksburg, VA Market Report – 1/14/10

There are currently 107 homes for sale in the City of Fredericksburg. There are more than a handful available in the historic district, which provides a really good opportunity to move downtown. There are also new construction opportunites and many other resales that are in wonderful locations for great prices.

The following is a summary of the market conditions in Fredericksburg, Virginia:

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Median sales prices have actually increased in the City of Fredericksburg by 59% from November of ‘08 to November of ‘09.  However, prices have gone down $47,800 from the second quarter of ‘09 to the third quarter of ‘09, which is quite a decrease.  The amount of listings has also gone down 15.3% from this same time last year.  While prices have gone down, a decrease in inventory will help to slow the decrease in prices.  The average days on market (DOM) have also decreased by 32.9%, meaning houses are moving faster now.

The City of Fredericksburg still has the lowest percentage of sales price to list price in the entire Fredericksburg area.  Spotsylvania, Stafford and Caroline Counties’ percentages have improved dramatically this year, while Fredericksburg’s only increased 2.4%.

With the history, location and uniqueness of Fredericksburg, it has always been and always will be a wonderful place to live.

Market data and commentary by Amy Cherry Taylor, Business Manager and Realtor at Avery-Hess, Realtors.

Search for homes in Fredericksburg, and the rest of the DC Metro: www.averyhess.com