Richard Cernava's Blog

Experts Optimistic on Housing Recovery After Foreclosures Reach Five-year Low

Richard Cernava (AnyPresentations.com) — Wed, 17 Oct 2012 16:02:59 -0700

Given the economic malaise that has descended over the country in the past five years, many people have failed to notice that the real estate market is starting to show surprising signs of strength, which could indicate that housing prices, after having fallen more than 30% nationwide in the aftermath of the real estate collapse in 2006, may have finally reached a bottom.

The latest piece of good news has come from a report by RealtyTrac, an internet company that specializes in the foreclosure market. According to their most recent numbers, year-over-year foreclosure filings fell by 16% in September, reaching their lowest levels since 2007. In addition, given that year-over-year foreclosure filings have declined for 24 consecutive months, there is little reason to believe that this trend will not continue in the immediate future.

The glut of foreclosed homes on the market has been a major contributor to declining housing prices in recent years. The Federal Reserve Bank of New York has reported that more than three million homes have gone through the foreclosure process since the financial crisis began; these homes are often sold by banks, which are desperate to unload them in order to raise liquid capital, at distressed prices, creating a reinforcing cycle of declining prices that puts even more homeowners underwater on their mortgages. Inevitably, this process leads to yet another round of heart-wrenching foreclosure filings.

Fortunately, it appears that this depressive cycle may finally be coming to an end. Although it is certainly too soon to announce the arrival of a full-fledged recovery in the housing market, the latest foreclosure news has increased optimism among real estate professionals that prices may start to rebound in the coming years. According to a quarterly survey by HomeGain, an online company that provides real estate valuations for homeowners, four-fifths of professionals within the industry and nearly two-thirds of those who own a home expect housing prices to increase in the next 24 months.

In fact, the Standard & Poor's Case-Shiller index, the most widely used measure in evaluating nationwide housing prices, indicates that prices may already be rising. In July, the most recent month in which results are available, housing prices registered an annual gain of 1.2%, a relatively modest, yet psychologically important, improvement. This is welcome news for homeowners, who have experienced painful declines in housing prices for several consecutive years. At the same time, people who are looking to buy homes can still benefit from historically low interest rates, which are still below 3.5% for a fixed-rate 30-year mortgage.

The real estate market recovery may still be in its nascent stages, but the combination of declining foreclosures, increased optimism and low interest rates could very well establish the foundations of a long-awaited rebound in nationwide housing prices.

Effective Real Estate Listings

Richard Cernava (AnyPresentations.com) — Tue, 10 Apr 2012 11:25:41 -0700

Your listing is often the first introduction people get to the property you're representing. Make that first impression count with these tips to help increase the effectiveness of your listings.

Include Pictures

Photos help make property information more tangible in prospects’ minds. If your ad is limited to one picture, select the image that gives the best overall impression (not necessarily the front elevation shot). Online listings can typically showcase several rooms and views of a property. Include slide shows or 360° views if your website allows.

Targeted Language

Use descriptive language that accurately reflects the property. The term “cozy bungalow” may lure prospects out to see a listing, but when they later discover it’s nothing more than a stripped-down studio apartment, that only serves to strip down the agent’s credibility and any hope for future business with these clients (and their referrals). Describe properties in their best light, but accurately. Clients will most entrust an agent who talks straight.

The listing is an overview, not a place to lay out every single detail about a property. Do mention major issues, but be careful about inserting language that unduly causes apprehension in potential buyers. “As is” might refer to a very minor problem, but the reader might infer "catastrophe" and cease reading the rest of the ad. Give the basics, boast about great features, and include major concerns, but avoid nebulous language that could be misinterpreted, either for better or worse.

The Price is Right

Under pricing a property may indeed court more interest, but it might actually cause valid buyers to give pause and question why a seemingly good property is priced so low. Too deep of a bargain may spur misperceptions that a property is in distress, dissuading potential clients before they ever see the property. Set the price commensurate with the property’s value.

Make the Ad Visually Appealing

Use whatever ad space you have wisely to capture the attention of the reader, providing sufficient information while avoiding clutter. An overabundance of copy and graphics, or a good balance of copy and graphics that’s arranged in displeasing manner, may kill off interest in even the finest property, simply because people won’t bother to read the ad. When designing your listing, approach your ad as you would your Open House: fill it only with relevant content and sufficient images, and leave out the distracting excess. Keep the visual appeal of the ad clean, streamlined and welcoming.

An effective real estate listing shines with accurate, well-rounded information presented in a pleasing manner, prompting readers to pick up the phone and call about that great listing of yours.

Five Reasons to Buy a Home Now

Richard Cernava (AnyPresentations.com) — Mon, 09 Apr 2012 12:02:07 -0700

We all want to be wise investors, but our brains get in the way. Behavioral scientists tell us we are hard-wired to assume the future will be like the past. These tendencies can cause us to miss bargains in real estate. Here are five reasons why buying a house now is a good investment:

1. It's becoming more expensive to rent than to own.
Yes, renting is convenient, but living in a rental also comes with restrictions on what renters can do with their living space—a simple task like painting requires permission from the property owners. Low interest rates and reasonable home prices make owning look more favorable than renting, especially when rent costs are rising!

2. The population of the United States is still growing.
We are the only major industrialized nation that isn't suffering negative population growth. All those households have to go somewhere, and many families are already doubled up.

3. Building has been almost nonexistent for several years.
Ultimately, it comes down to supply and demand. There are still lots of foreclosures to work through, but the absolute supply of houses is declining.

4. Investors are removing inventory.
As investors generate positive cash flow by buying bargain properties, more become landlords, reducing the available supply.

5. Homes can't be replaced for their current prices.
When building finally starts, builders will be forced to charge more than existing homes fetch. The cost of lumber, copper, and petroleum-based products has risen, taking building costs with them. That will make existing homes a bargain.

In the history of this country, there has never been a down economy that hasn't recovered. This one will too, and those who take advantage of record-low interest rates will do well.

Unfortunately, people don't want to buy at a good time; they want to buy at the best time. Few realize it's impossible to pinpoint that time until it's past.

It's certainly a better time to buy than before the real estate bubble. No one can say exactly how things will come out, but those who can afford to hold their property at least five years should do extremely well.