Image Courtesy of creativecommons.org
I’m in the Airport
Tomorrow is the meeting of the Professional Standards Interpretations and Procedures subcommittee in Chicago. I arrived at Philadelphia International for my 11:30 flight only to find that it had been cancelled (due to bad weather in Jacksonville) and I was rescheduled for a flight three hours later. Being one of those people who always needs to be doing something, and being the proud owner of a new MacBook, I opened a Wifi connection looked at the news and saw the headline … “Fannie, Freddie Takeover Appears Near”. Obviously my delayed flight isn’t the worst thing happening today.
In an article written by Alan Zibbel of the Associated Press, the Federal government is predicted to take over Fannie Mae and Freddie Mac as soon as this weekend to protect the secondary mortgage market by taking over the operations of two GSE’s. The article went on to mention that in a meeting between Fed Chairman Ben Bernanke , Treasury Secretary Henry Paulson and the chief regulator of the companies’ James Lockhart, Lockhart was informed that the companies were going to be placed in a conservatorship by the government. Stocks on both companies have reportedly fallen in the 20% range yesterday, but that’s somewhat moot since the government plan will render the stock essentially worthless.
I’m not surprised
I’m not surprised that the government is willing to step in and bail out Fannie Mae and Freddie Mac , since they are the players in the secondary mortgage market, and it is inconceivable that the government would allow them to fail. What does surprise is that the government seems to be stepping in before the need to do so has actually occurred.
Obviously the players on the federal level have much more information then a real estate broker from Philadelphia, and I’m sure that their intervention was well considered, and probably a reaction to the 3.1 Billion dollars in losses Fannie and Freddie posted in the 2nd quarter of this year. But both companies claim to have the assets needed to stay in business and haven’t asked for the “help” being offered.Of course that may be because of the impact on the value of their stock, but that’s just speculation.
What Does it Mean?
As a salesperson I was always told never to ask a question I don’t have an answer for, but I think I just did that. I’m not sure that we in the trenches will be effected by this, since the tightening of credit in the country is already a fact. Could be that this is when we all remember that “it’s always darkest before the dawn”. Sure hope dawn gets here soon…
Maybe (though this is a scary thought) the government will do a better job of running the companies as a government entity.The cynic in me says that would be a first, but I would love to know in the comments if a private sector company ever benefited by being converted to a government agency. Maybe this will be that time. I hope so – Fannie and Freddie have been important to the housing market as long as I’ve been in business, and I think we still need them.But there’s always FHA as a great fall back for buyers.
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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