Author Archives: joeglez

More Sales, Less Inventory : Home Prices Headed Higher?

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Existing Home Supply -- Oct 2011 - Oct 2011 The housing market continues to signal that a broad rebound is underway. In October, despite sparse home inventory, the number of properties sold increased 1.4% nationwide.

According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, October Existing Home Sales gained 70,000 units as compared to September, registering 4.97 million existing homes sold overall.

An “existing home” is a home that has been previously occupied and, as compared to prior months, the stock of homes for sale is depleted. 

Just 3.3 million homes were listed for sale last month. This represents a 2 percent drop from September and marks the sparsest home resale inventory of 2011.

The current home supply would last 8.0 months at today’s sales pace — the fastest rate since January 2010. 

The real estate trade group’s report contained other noteworthy statistics, too :

  1. 34 percent of all sales were made to first-time buyers
  2. 29 percent of all sales were made with cash
  3. 28 percent of all sales were for foreclosed homes, or short sales

It also said that one-third of transactions “failed” as a result of homes not appraising for the purchase price; failure to achieve a mortgage approval; and, insurmountable home inspection issues.

This 33% failure rate is huge as compared to September 2011 (18%) and October 2010 (8%). It underscores the importance of getting pre-qualified to purchase, and of selecting a home “in good condition”.

For today’s King of Prussia home buyer, October’s Existing Home Sales may be a “buy signal”. Supplies are falling and sales are increasing. Elementary economics says home prices should begin rising, if they haven’t already.

Remember : The data we’re seeing is already 30 days old. Today’s market may be markedly improved already.

The good news is that mortgage rates remain low. Freddie Mac reports that the average 30-year fixed rate mortgage rate is 4.000% with 0.7 discount points, making homes as affordable as they’ve been in history.

With rising home values, you may end up paying more to purchase your new home, but at least you’ll pay less to finance it.

Maximum FHA Loan Limits Restored To $729,750

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FHA Loan Limits RestoredAfter a brief return to lower, pre-2009 levels, FHA loan limits have been restored. As signed into law last Friday, maximum FHA loan limits are — once again — as high as $729,750.

The move creates additional mortgage financing possibilities in more than 650 U.S. counties, and promises to increase the FHA’s mortgage market share, which has grown from 6% in 2007 to roughly 30% today.

The change in FHA loan limits also marks the first time that FHA loan limits exceed those of conventional mortgage-backers Fannie Mae and Freddie Mac.

Conventional loans remain capped at a maximum of $625,500.

For home buyers in Phoenixville and nationwide, FHA-insured mortgage offer several advantages over comparable conventional loans, the most commonly cited of which is that FHA-insured loans require a down payment of just 3.5 percent.

FHA-insured mortgages carry other advantages, too, however.

First, FHA home loans are not subject to loan-level pricing adjustments (LLPA). This means that, all things equal, buyers and would-be refinancers with credit scores below 740; or, who live in multi-unit homes; or, who have high loan-to-values are not subject to additional loan fees as a conventional mortgage applicant might.

Second, after 6 months of on-time payments, FHA-backed homeowners are eligible for the FHA Streamline Refinance. The FHA Streamline Refinance is among the simplest loan products for which to qualify with no appraisal required. Even if you’re “underwater” on your mortgage, you can still be streamline-eligible.

And, lastly, at least in today’s market, FHA mortgage rates are below those of the conventional market.

The downside of FHA financing, however, is that all FHA mortgages require mortgage insurance and FHA mortgage rates are often higher versus a comparable conventional loan. This means that, although its mortgage rate may be lower, the payment for an FHA home loan may be higher as compared to a Fannie Mae mortgage with similar credit traits.

FHA loans aren’t always optimal, but with higher FHA loan limits, expect the FHA’s market share to increase.

Check your local FHA loan limit at the HUD website.

What’s Ahead For Mortgage Rates This Week : November 21, 2011

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Congressional super-committee deadline influences mortgage ratesMortgage markets went unchanged last week as Wall Street traded on new debt stress within the Eurozone, and stronger-than-expected economic data here at home.

Rates moved very little from Monday to Friday and the storyline’s not expected to change much this week for today’s rate shoppers.

According to Freddie Mac, conforming 30-year fixed rate mortgages remain priced at 4.000% with 0.7 discount points on average, where 1 discount point equals one percent of the loan size. For people who prefer “zero-point” mortgages, expect a mortgage rate above 4.000%.

By contrast, loans with 1 point or more are priced below 4.000 percent.

However, in this holiday-shortened trading week, mortgage volatility should be up, and rates may finally break from the 4.000 benchmark we’ve hovered since November 1.

What’s unclear is whether rates will rise or fall.

For 8 months, we’ve talked of how events in Greece have influenced the U.S. mortgage market and, how each time Greece moved to the precipice of default, the U.S. mortgage bond market improved, causing mortgage rates to fall.

Last week, similar default concerns emerged for Italy and Spain. This applied downward pressure on U.S. mortgage rates, but a strong retail sales report; a better-than-expected New Home Sales data; and soaring homebuilder confidence renewed talk of domestic inflation in 2012 and beyond. 

Inflation erodes the value of the U.S. dollar and leads to higher mortgage rates.

This week, we get a full set of data :

  • Monday : Existing Home Sales
  • Tuesday : FOMC Minutes; GDP; 5-Year Treasury Auction
  • Wednesday : Jobless Claims; Personal Income and Outlays; Consumer Sentiment

In addition, Wednesday marks the deadline for the congressional “super-committee” tasked with finding $1.2 trillion in federal budget savings over the next 10 years. The committee was formed in the wake of August’s downgrade of U.S. federal debt by Standard & Poors.

If Congress fails to meet its goal in time, stock markets should suffer and mortgage rates may fall.

Housing Starts Rising; New Construction Turns The Corner?

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Housing Starts (2009-2011)Another day, another signal that the market for newly-built homes is improving.

Single-Family Housing Starts rose to a seasonally-adjusted, annualized 430,000 units in October — a 4 percent increase from September and the highest reading in 3 months.

A “Housing Start” is a home on which ground has been broken.

The increase in surprised Wall Street analysts, although it shouldn’t have.  

Earlier this week, the National Association of Homebuilders showed that Homebuilder Confidence is at its highest point since May 2010, the effect of better market conditions and more sold units. Rising housing starts amid a lift in builder confidence is to be expected — the two metrics have moved with loose correlation since mid-2000.

However, as with everything in real estate, Single-Family Housing Starts volume varied by location. The nation’s 4 regions posted wide-ranging results :

  • Northeast Region : + 10.0% from September
  • Midwest Region : -4.1% from September
  • South Region : +11.3% from September
  • West Region : -10.2% from September

Buyers of new construction in King of Prussia can infer two key points from last month’s data.

First, with more homes will being built, home supply should rise, thereby softening pressure on rising home prices. This should help keep homes affordable.

However, the second point is that, with builder confidence rising, buyers are less likely to win price concessions and “free upgrades” in negotiations.

The last 6 weeks of 2011 may be your optimal time to buy new construction. Home prices remain affordable and mortgage rates are rock-bottom. In addition, because there are typically fewer active home buyers during the holidays, you’ll be more likely to locate one of the few remaining new construction “deals”.

Talk to your real estate agent about local trends and new construction. 

Homebuilders Getting Optimistic; Higher Home Prices Ahead?

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Housing Market Index 2009-2011Homebuilder confidence continues to rise.

Just two months after falling to a multi-month low, the Housing Market Index surged again in November, climbing another three points to 21. It’s the second straight month that the HMI posted a 3-point gain, catapulting the index to an 18-month.

The Housing Market Index is monthly report from the National Association of Homebuilders. It’s meant to measure confidence among the nation’s homebuilders, scored on a scale of 1-100.

When homebuilder confidence reads 50 or better, it reflects favorable conditions for homebuilders. Readings below 50 reflect unfavorable conditions.

The Housing Market Index has not read north of 50 since April 2006.

As an index, the HMI is actually a composite reading; the result of three separate surveys sent to homebuilders each month. The National Association of Homebuilders asks it members about current single-family home sales volume; projected single-family home sales volume over the next 6 months; and current “foot traffic”.

In November, builder responses were stronger in all 3 categories :

  • Current Single-Family Sales : 20 (+3 from October)
  • Projected Single-Family Sales : 25 (+1 from October)
  • Buyer Foot Traffic : 15 (+1 from October)

And, beyond the headline data, there is an important, noteworthy item in this month’s Housing Market Index.

In November, “Current Single Family Sales” climbed 3 points for the second straight month, and is now at the highest point since May 2010 — the month after last year’s home buyer tax credit expired. And, this increase in sales volume is occurring as new home construction is falling, thereby reducing home inventory nationwide.

That’s an important point for Phoenixville home buyers.

With more new home sales and fewer new home listings, prices are likely to increase into 2012. Especially with home builders predicting higher sales levels over the next 6 months, and seeing higher levels of buyer foot traffic through their properties today.

For now, though, home prices are stable and mortgage rates are low. This creates low-cost homeownership throughout Pennsylvania , and helps new home construction remain affordable.

If you’re in the market for new home construction, the next 60 days may prove to be your best time to get “a deal”.

Real Estate SEO isn’t magic, but thankfully it’s not rocket science either… – Part 2

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Real Estate SEO isn’t magic, but thankfully it’s not rocket science either, its a simple business plan with a simple purpose.


  • Step 1: How To Develop a Solid SEO Strategy

dilbert2    Thankfully, human sacrifice is not yet a requirement to improve your search engine ranking. Although, if Google ever changes its criteria it is best to think about who is on the bottom of the totem pole. Refreshingly, SEO strategy starts with a very easy and basic concept, keywords.

    You begin with a little brainstorming. If you work alone, you may want to enlist the aid of a friend or friends. They don’t have to be Realtors, just people who have had experience buying a home and are internet savvy. Your “Brainstorming Meeting” has one purpose: Gather ideas to create content and research keywords.

    To get started you will need the following tools: A. your brain and that of your team or friends that you enlist; B. Google Keyword Tool (which implies that you need a computer/s); C. Blogging ideas for 3 months.

    Regarding Tool C. Blogging Ideas, it is important to remember that this can be almost anything. It could be questions that people commonly ask you when they are looking for a home, questions that sellers commonly ask, new developments in Real Estate policy in your area, etc. Just think about content that is relevant to your community of buyers and sellers.

    The Meeting Outline (about 1 hour maybe more):

  1. Idea Gathering (20 minutes) – You may order the material however you wish. One suggestion may be to order the ideas according to relevance to your community. Since you are building a 3 month plan, and you want to produce at least 1 good post each week (you could post more often if you can schedule the time, however, it is best to make your initial goals realistic and reachable. You can track results easier and gauge your success in visible increments that will help you stay positive) you will need about 12 good ideas. If you have more, great! Keep them coming, because this is just a plan to get you started, you will need those ideas later.
  2. Google Keyword ToolKeyword Research (20 minutes) – Next to each idea write keywords that belong to that topic. Write as many as you can think of. Once you have finished construct a search string for each idea that your team agrees is realistic (ex.: Home For Sale in Community X). Now comes the part where you collect some data to help you in your execution of these ideas. For this part you will use Google Keyword Tool. There are other tools that you could use, but this one is free and its results are easier to explain. [Click on the picture to see a screenshot with brief explanation]
  3. Compilation and Planning (20 minutes) – Use the data that you gather from Google to construct a blog title for each idea on your list that uses rich keywords, but also reads like an attractive sentence. An example is the title for this article. It has the keywords I want, Real Estate SEO, and it also sounds interesting (at least… I hope it does). Once you have finished, reward each of your friends with a gift card to Starbucks (no greater gift on the planet), and then assign on your calendar a blog title to each week for the next 3 months. Now you are ready to start writing!! Yahoo! (shameful keyword pun – am I trying to hard?)
  • Step 2: Best SEO Practices

    There are many people who have written a great deal about Best SEO Practices, but in my opinion the one person who has nailed down the basic ideas best is Stephen Graham. He is a professional blog trainer and writer and he has written a simple, easy to follow list of things you need to consider each time you blog. The article is called: 4 Steps to Follow for Easy SEO and I highly recommend that you read it before you begin writing. You will notice a very basic principle that guides the logic of what he has written, it is one of the greatest principles by which we can live: Keep It Simple Stupid. I am not calling “you” stupid (it’s more something we need to say to ourselves, but take it easy, I don’t want to you to damage your self esteem), but it is a phrase that we all need to remember when writing. When your content is simple, the search engines will love it and so will your readers. It’s a win-win formula.

  • Step 3: Staying Current & Competitive

    Invest Time In Ongoing Education and TrainingThe easiest part is behind you, now comes the hard part… be consistent. 20th century British author Aldous Huxley once wrote: “Consistency is contrary to nature, contrary to life. The only completely consistent people are dead.” He comments on a harsh, but very true reality, that it is difficult for any of us to be consistent. That said, what you are striving for is clearly not perfection (unless the idea of an early grave is attractive to you, in which case there is a very different article I recommend reading…). Just do your best to stay organized and execute the strategy that you have now created. No, it won’t be easy. It may require the help of someone else to remind you. Be it by means of your smart phone, your spouse or a co-worker set up daily and weekly reminders to stay on track with your schedule. Do research online and locally before you write to make sure that the information that you are presenting is still up-to-date.

    One way to stay current and competitive is to invest your time in ongoing education and training. The more knowledge you possess of your industry and it needs, the natural byproduct you will produce is relevant and intelligent content that is usable and valuable to your readers. If you are interested in what programs might be useful, please feel free to contact me. I could give you a list, but honestly then you would know everything I know. How embarrassing that would be… to have all of the knowledge I possess summed up in just 2 blog articles! No thanks, I will save something for future conversation. May you have success with all your SEO endeavors!

    If you have any questions or comments my preferred contact information is listed below.

Michael Hillanbrand
Joe Gonzalez Team

Marketing & Technology
office – 210-888-9210
mike.techexpert@gmail.com

Government Releases Additional HARP Guidance For Underwater Homeowners

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Making Home Affordabie

Tuesday, Fannie Mae and Freddie Mac unveiled lender instructions for the government’s revamped HARP program, kick-starting a potential refinance frenzy across Pennsylvania and nationwide.

HARP stands for Home Affordable Refinance Program. The updated program is meant to give “underwater homeowners” an opportunity to refinance at today’s low mortgage rates.

In the two-plus years since its launch, HARP’s first iteration helped fewer than 900,000 homeowners. HARP II, by contrast, is expected to reach millions.

Lenders begin taking HARP II loan applications December 1, 2011.

To apply for HARP, applicants must first meet 4 basic criteria :

  1. The existing mortgage must be guaranteed by Fannie Mae or by Freddie Mac
  2. The existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009
  3. The mortgage payment history must be perfect going back 6 months
  4. The mortgage payment history may not include more than one 30-day late payment going back 12 months 

If the above criteria are met, HARP applicants will like what they see.

For HARP applicants, loan-level pricing adjustments are waived in full for loans with terms of 20 years or fewer; and maxed at 0.75 for loans with terms in excess of 20 years.

This will result in dramatically lower mortgages rates for HARP applicants — especially those with credit scores below 740. Some applicants will find HARP mortgage rates lower than for a “traditional” conventional mortgage.

In addition, HARP applicants are exempted from the standard waiting period following a bankruptcy or foreclosure, which is 4 years and 7 years, respectively.

These two items are inclusionary and should help HARP reach a broader U.S. audience.

HARP contains exclusionary policies, too.

  1. The “unlimited LTV” feature only applies to fixed rate loans or 30 years or fewer. ARMs are capped at 105% loan-to-value.
  2. Applicants must be “requalified” if the proposed mortgage payment exceeds the current payment by 20%.
  3. Applicants must benefit from either a lower payment, or a “more stable” product to qualify

And, of course, HARP can only be used once. 

Fannie Mae and Freddie Mac will adopt slight variations of the same HARP guidelines so make sure to check with your loan officer for the complete list of HARP eligibility requirements.

Foreclosure Filings Climbing; 4 States Account For Half Of Nationwide Activity

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Foreclosures per capita October 2011

Foreclosed homes are a hot market throughout Pennsylvania — and supplies are ramping up.

According to foreclosure-tracking firm RealtyTrac, October’s foreclosure filings rose 7 percent to 231,000 filings nationwide.

A “foreclosure filing” is any one of the following foreclosure-related events : A default notice on a home; a scheduled auction for a home; or, a bank repossession of a home. Because of this definition, a single home can account for up to 3 foreclosure filings — one from each category. 

Because of this, we may glean more relevant insight into the foreclosure market by separating RealtyTrac’s foreclosure report into “event types”.

  • Default Notices : Up 10% from September 2011; Down 31% from October 2010.
  • Scheduled Auctions : Up 8% from September 2011; Down 38% from October 2010.
  • Bank Repossessions : Up 4% from September 2011; Down 27% from October 2010.

These breakdowns suggest that, although improved as compared to last year, the foreclosure market is growing. At least, it’s growing in some parts of the country. We can’t forget that — like everything real estate — foreclosures are a local phenomenon. 

In October, just 4 states accounted for more than half of the country’s foreclosure filings. Those four states — California, Florida, Michigan and Illinois — represent just 26% of the U.S. population.

Even on a per household basis, the figures remain disproportionate :

  • Top 10 Foreclosure States : 1 foreclosure per 341 households, on average
  • Bottom 10 Foreclosure States : 1 foreclosure per 7,434 households, on average

The nationwide foreclosure rate was 1 foreclosure per 563 households.

As a Phoenixville home buyer, foreclosures are worth watching. They account for 18% of home resales nationwide and, in some markets, can be bought at steep discounts versus a comparable “non-distressed” home. That is part of their appeal, in fact.

But just because foreclosed properties can be a “deal”, it doesn’t mean you should rush to buy one. Buying a foreclosed home from a bank is different from buying a non-foreclosed home from a “person”. The contracts and negotiation process are different, and foreclosed homes are sometimes sold as-is.

“As-is” means “this home may have defects”.

Therefore, if you plan to buy a foreclosed home, talk with a real estate professional first. You can learn a lot about the housing market online, but with respect to writing an offer on a property, you’ll want an experienced agent on your side.

What’s Ahead For Mortgage Rates This Week : November 14, 2011

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Italy influencing U.S. mortgage ratesAmid a dearth of new U.S. economic data, Eurozone developments led mortgage markets down in last week’s holiday-shortened trading week. Mortgage rates across Pennsylvania worsened slightly, increasing week-over-week for the first time in a month.

Freddie Mac reports the average 30-year fixed rate mortgage at 3.99% with an accompanying 0.7 discount points. Discount points are loan fees, and 1 discount point is equal to 1 percent of your loan size.

Greece has dominated mortgage market headlines since February. As the nation-state aims to reign in its national spending, it has also adopted harsh austerity measures. The combination is meant to prevent future debt defaults, but global investors remain concerned that problems in Greece may spill over into other Eurozone nations.

As those concerns have grown, U.S. mortgage markets have benefited. This is because U.S. mortgage markets are backed by the U.S. government, and investors treat the U.S. mortgage market as “safe” compared to other security-types.

Safe investments are in high demand during uncertain times, often improving in price. This pattern is known as Safe Haven Buying and it’s one reason why mortgage rates tend to fall when the economy is sagging. Mortgage rates move opposite of mortgage bond prices.

This week, U.S. economic data returns, but markets will still be watching the Eurozone. Sunday, Italy changed leadership, in part, to restore market confidence in its ability to get its debt load under control. 

Expect developments in Italy to sway U.S. mortgage rates this week. In addition, rates will respond to a rash of economic data and Fed speakers :

  • Tuesday : Producer Price Index, Retail Sales, 5 Fed speakers
  • Wednesday : Consumer Price Index, Housing Price Index, 2 Fed speakers
  • Thursday : Housing Starts, Jobless Claims, 1 Fed speaker

Mortgage rates remain near all-time lows, with not much room to drop. If you’re shopping for a mortgage rates, therefore, consider locking in. As Greece and Italy show signs of moving forward, expect Safe Haven Buying to recede, and mortgage rates to rise.

Real Estate SEO isn’t magic, but thankfully it’s not rocket science either… – Part 1

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Real Estate SEO isn’t magic, but thankfully it’s not rocket science either,nevertheless, it does involve hard work.
SEO isn't magic There has been so much talk about Search Engine Optimization(SEO), especially amongst bloggers and business professionals. So much so, that the term SEO is now a household name. Sadly, like many things that grow in popularity quickly, misinformation spreads with it. In fact, most people probably forget that it is an acronym. They talk about it as if it is an object or something that you can buy at a store.

Some people have and continue to exploit such ignorance by selling it online as a product or an application.They portray the illusion that, like the “magic beans” from Jack and the Beanstalk, your listing will climb to the top of the search engines overnight! Naturally, they charge an exorbitant fee for this form of SEO which generally consists of using paid advertising and over-aggressive measures that reap immediate results, but often see only short term gains. Sometimes these methods yield results, driving traffic to your blog and getting you higher on the search engines like Google, Yahoo and Bing. However, they could also result in your site being penalized (see Dilbert comic strip for example).Using Fake Links To Boost Your Sight Is Bad For Business

Even the better services, people who actually do the real work of analyzing and augmenting your blog to conform to current standards, still come with a price tag, and it is still temporary. That’s right! Temporary. Why?

Google, Yahoo and Bing are constantly changing their algorithms to improve the end-user experience. The criteria that is considered can be very different depending on the search term itself or even the location from which the search is initiated.


For example:
The criteria considered to render search results for the search string “Condo for Sale” when initiated from McDowell County, West Virginia will be very different from the results for the same search term in Miami, Florida. In West Virgina this very general term may render very usable results to a consumer, whereas in Miami, where the market is more competitive and Condos are more abundant, more specific terms may be necessary for the consumer to find what they are looking for. At times, the search habits of that particular consumer can even affect the results that they see on the screen as opposed to what someone in the same geographic area sees.


Why is this important to know? Because the search engines are designed to help the consumer, not the seller. Google and the other major search engines are thinking about ease-of-use for the average person searching for products, information, etc. It is our responsibility to ensure that our blog, websites and listings are also search-friendly. In other words, that means that you also need to think like your consumer. Is this beginning to sound pretty much like basic marketing principles? That’s because it is.


Your Knowledge – Your SEO
Remember what the "O" stands for The same basic marketing principles that have been needed to sell products for centuries are still necessary today. There are still no real short cuts. You may be thinking, “I thought this was about SEO, not marketing.” Well, effective SEO has everything to do with marketing.

The key to appreciating this is in understanding that the “O” in SEO stands for “Optimization”. Optimization is defined as an act, process or methodology of making something as fully perfect, funtional, or effective as possible. In this context, optimization is applied to make your content more funtional with the search engines. However, in order to do that you have to know what the consumer is looking for, what they are likely to type into the search bar.

Do you really think that some SEO application or hired SEO expert knows your consumers needs better than you do? I sincerely hope that the answer to that question is “No.” YOU are the one who knows best! The knowledge needed to make your content accesible and popular on the search engines is already in your hands! You simply need to develop a strategy appropiate to the task, and remain vigilant in following through with executing that strategy.


Only a very small part of this is process is “techy”, so don’t let it intimidate you. You can do it, and in Part 2 of this article I will explain how.


Michael Hillanbrand
Joe Gonzalez Team
Marketing & Technology
office – 210-888-9210
mike.techexpert@gmail.com

Part 2 of this article will include: A. How to develop a Solid SEO Strategy  B. Best SEO Pratices and C. Staying Current & Competitive
Go to Part 2 Now