Are We Creeping Toward a Real Estate Housing Bubble?
•Download as PPTX, PDF•
0 likes•23 views
The North Pointe Office of Berkshire Hathaway HomeServices Homesale Realty's bi-monthly Zoom office meeting covering the following topics: 1. A redesigned Realtors Property Resource (RPR), 2. Reducing liability when buyer uses a sight unseen clause in offer, and 3. Are we creeping toward a real estate housing bubble?
Recommended
More Related Content
Similar to Are We Creeping Toward a Real Estate Housing Bubble?
Similar to Are We Creeping Toward a Real Estate Housing Bubble? (20)
Recently uploaded
Recently uploaded (20)
Are We Creeping Toward a Real Estate Housing Bubble?
- 1. 1 Are We Creeping Toward a Real Estate Housing Bubble?
- 2. Dan Ranck NMLS #140989 James Ream NMLS #1598468 James White Sarah Tompos
- 3. 3
- 4. 4
- 5. 5 Session #4 Date: Monday, April 12 Time: 9:30-10:45 AM MUST REGISTER TO RECEIVE LINK Link provided for handouts Recording available on TEAMHOMESALE
- 6. 6 • REORGANIZED • REDESIGNED • REFRESHED https://youtu.be/MXCMv_kdZqM
- 7. 7 What is RPR? • 100% Owned by REALTORS® o Created by NAR o Provide data to meet demands of clients • Exclusively for REALTORS® o No third party or public access o Branded to users • No Cost Member Benefit o Serves Residential, Commercial, Appraisers, Associations and MLS’s
- 8. 8 Highlights of Changes • Cleaner Look and Feel o More white space o Bigger fonts and images • Search All Properties from One Spot o Residential or commercial • User-centric Homepage o Shortcuts to tools and features o Customizable ‘My Market’ area • Upgraded Map Capabilities o Easier, faster and more intuitive
- 9. 9 Accessing RPR: www.NARRPR.com Must have your NRDS# to register
- 10. 10 Reducing Liability When Buyer Uses a Sight Unseen Clause in Offer
- 11. 11 Advise the Buyer of All Known Material Defects • Listing Agent - Seller Property Disclosure (SPD) must be accurately and fully completed • Buyer Agent - Should review SPD with their client • Follow-up and document any questions arising after thorough review
- 12. 12 Avoid Misrepresentation in Listing Photos or Virtual Tours • Resist removing anything of material substance • Don’t overly enhance photos or tours • Standard of Practice 12-10 requires REALTORS® to present a true picture to the public
- 13. 13 Watch Out for Red Flags • Carefully view property during virtual showing to identify observable defects • Point out to Buyer and put them in writing after showing • Follow-up with Listing Broker when Buyer wants more info
- 14. 14 Avoid Assuming Buyer’s Duties • Ask Buyer to write down anything they’re concerned about • Observe and report objectively • Don’t make decisions for the Buyer or assume something “Isn’t a big deal”
- 15. 15 Protect Yourself . . . and Your Clients in Writing • Ensure AOS includes appropriate due diligence periods and contingencies • NEVER suggest that they be waived • Use appropriate disclosures and acknowledgements
- 17. 17 Sight Unseen Addendum to AOS The Buyer(s) of this property are choosing to submit and negotiate terms of an agreement without actually seeing the property. This agreement is contingent upon Buyer viewing the property in person within ___________ (___) days of Seller and Buyer coming to terms with a fully executed Agreement of Sale. If Buyer does not remove this clause in writing after viewing property, this agreement will become null and void and all deposit money will be returned to the Buyer. It is further agreed, that all time frames for inspections and mortgage application and approval listed in this agreement will start on the day that Buyer removes this clause from the agreement.
- 18. 18 Are We Creeping Toward a Real Estate Housing Bubble?
- 19. 19 1. Mortgage Standards Today Are More Stringent • Recently released their latest Housing Credit Availability Index (HCAI) • Measures percentage of owner- occupied home loans that are likely to default The HCAI Index today is < 5% (lowest it’s been since the introduction of the index)
- 20. 20 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 Default Risk in the Mortgage Market (1999-2020) Reasonable Lending Standard Source: Urban Institute Product Risk Borrower Risk
- 21. 21 2. Prices Aren’t Soaring Out of Control . . . Yet • Normal price appreciation is +/- 3.8% • In the four years prior to the crash, home price appreciation averaged double digits We would need to have 3 more years of double digit price appreciation
- 22. 22 8.5% 8.7% 12.5% 11.4% 6.4% 4.8% 4.7% 9.2% 2002 2003 2004 2005 2017 2018 2019 2020 Source: Core Logic & Black Knight Annual Home Price Appreciation Four Year Average: 10.28% Four Year Average: 6.28%
- 23. 23 3. Homes Are in Short Supply NOW • Normal real estate market is about six months of inventory • We have a shortage of homes today versus an overabundance The supply of homes is 180° different than during the market crash
- 24. 24 Months’ Inventory of Existing Single-family Homes for Sale 10.0 7.5 5.0 2.5 -0- 2004 2005 2006 2007 2017 2018 2019 2020 3.9 5.0 6.4 9.6 4.0 3.7 3.0 2.1 Source: NAR
- 25. 25 4. New Construction’s Key Role • New construction of single-family homes has always been a key indicator • Are we above or below the average annual # of units completed? The country has had 13 straight years of completed units below the 50 yr. average
- 26. 26 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Average Annual Units Completed Single-Family Housing Units Completed Four consecutive years of record-setting number of units Thirteen consecutive years below 50-year average Source: United States Census Bureau
- 27. 27 5. Despite a Rise in Prices – Houses Are Still Affordable • Affordability formula has three components: price, wages and rates • Price is only one of the components The average homeowner uses less of their monthly income towards a mortgage payment then 15 years ago
- 28. 28 Percent of Median Income Needed to Purchase the Median-Priced Home 1985-2000 2006 2021 21.2% 25.4% 14.9% Source: NAR
- 29. 29 6. Homes Are No Longer Being Used As an ATM • Equity in homes continues to build-up • Homeowners are not cashing out the equity that is gradually building up in their homes 50% of homes in the country have at least 50% equity
- 30. 30 Total Home Equity Cashed Out (through Refinance in Billions) Year Dollars 2005 $263B 2006 $321B 2007 $240B Total $824B Year Dollars 2018 $87B 2019 $108B 2020 $153B Total $348B Source: Freddie Mac • Negative Equity -> • Foreclosures/Short Sales -> • Discounted Values -> Prices Tumbled Average home equity today $190,000
- 31. 31 The turbulent waters of 2006-07 should not return anytime soon
- 32. 32 “Pressure is something you feel when you don’t know what the hell you’re doing.” - Peyton Manning
- 33. Presenter Contact Info 33 Tom Blefko Associate Broker REALTOR® Director of Operations North Pointe Office Berkshire Hathaway HomeServices Homesale Realty Office: (717) 560-9100 Cell: (717) 587-6600 Email: tblefko@homesale.com