Real Estate Sifter

RISMEDIA, October 30, 2009—(MCT/The Wall Street Journal)-The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers, a boost the housing industry believes will help it pull out of its two-year-old downturn. 

While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House. 

Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.” 

The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market. 

“Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.” 

IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop. 

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. 

(c) 2009, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services. 

For more information, visit www.wsj.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

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RISMEDIA, October 30, 2009—This week’s headlines from the NATIONAL ASSOCIATION OF REALTORS® include: free technology resources from NAR’s Right Tools, Right Now initiative, savings of 55% on the 2010 Entertainment Book through the REALTOR Benefits® Program and existing-home sales show big rebound. 

Right Tools, Right Now – FREE Technology Resources 

The Right Tools, Right Now initiative offers a variety of FREE articles to help you leverage technology to reach out to clients and stand out in a crowded real estate market. Articles include, ‘Master Social Networking for Your Real Estate Business,’ ‘Computing in the Clouds’ and ‘Mr. Internet: Expand Your Reach with Webinars.’ Offers are added monthly, so visit www.REALTOR.org/RightTools often. 

Entertainment® 2010 Books Are the Perfect Holiday Gift 

Don’t miss your opportunity to order Entertainment® 2010 Books at a 55% savings off the retail price! This perfect client gift for holidays, closings and referrals is from REALTOR Benefits® Program partner, Entertainment Publications. Each Entertainment® 2010 book has over $10,000 in discounts your clients can use every day – dining, shopping, groceries, movies and more. Order by November 16 to receive by December 8. Visit www.entertainment.com/nar or call 1-800-672-3053. 

Existing-Home Sales Show Big Rebound 

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to The NATIONAL ASSOCIATION OF REALTORS®. 

For more information, visit www.Realtor.org. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

To read last week’s NAR Pulse, click here.

RISMEDIA, October 30, 2009—There is light at the end of the tunnel, and the American Recovery and Reinvestment Act got the economic engine closer to that light. The economy grew at an annual inflation-adjusted rate of 3.5% in the third quarter of 2009, the Bureau of Economic Analysis recently reported. This is the first time that the economy has expanded after five-quarters of declines, and it is the strongest quarterly growth rate since the third quarter of 2007. 

This is the clearest sign to date that the economic contraction and the recession ended some time this summer. Public policy has had a strong hand in getting the economy back from the brink of disaster and moving the economy into positive territory. Additional public policy attention is needed, however, to get the labor market unclogged, jobs growing, and the unemployment rate falling in the near future, after large-scale policy efforts did the same for financial markets and economic production. 

The consumer is back. Consumption spending increased by 3.4% this quarter, its strongest growth since the first quarter of 2007. This was largely due to a 22.3% jump in spending on consumer durables, such as cars. Car sales jumped 56.4% in the third quarter of 2009 with the help of the additional incentives, known as “Cash for Clunkers.” Consumer spending on a number of other items also increased at a healthy rate. Spending on recreational goods grew by 13.8%, furniture spending by 6.5%, and other goods by a respectable 6.2%. Food spending, a non-durable goods item, rose by 5.0% in the third quarter. 

There are encouraging signs, based on one quarter of data that the housing slump seems to have come to an end. The housing market expanded for the first time in almost four years. Spending on new homes increased by a strong 23.4% in the third quarter, the first increase since the fourth quarter of 2005. This is also the largest gain in more than two decades since the second quarter of 1986. The increase in spending on housing was aided by price declines during the previous years and low interest rates and the momentum in the housing market could thus very well last. 

Much of the momentum in consumer spending came from increased after-tax income in the prior quarters. Families had received tax cuts, additional Social Security benefits, and more unemployment insurance benefits since early spring. They spent some of this money in the third quarter, thus contributing to strong economic growth. The personal saving rate fell to 3.3% in the third quarter of 2009, down from 4.9% in the second quarter, and its lowest level since the second quarter of 2008. 

About the author
Christian E. Weller is Associate Professor, Department of Public Policy and Public Affairs, University of Massachusetts-Boston, and a Senior Fellow at the Center for American Progress. 

For more information, visit www.americanprogress.org. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

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RISMEDIA, October 30, 2009—Staying ahead of your local competition while keeping your name in front of your clients is crucial to staying profitable in any real estate market. As technology continues to advance, it is important for real estate professionals to take advantage of the various mediums through which they can stay in touch with their clients enabling them to stand apart. Here, Joyce Bytoff, owner of Coldwell Banker The Real Estate Group, Inc. in Appleton, Wisconsin discusses what her company is doing to stay ahead of today’s market. 

Joyce Bytoff
Owner
Coldwell Banker The Real Estate Group, Inc.
Appleton, Wisconsin 

Region served: Northern Wisconsin
Years in real estate: Since 1964
Number of offices: 16. We also have a number of satellite offices in various small towns throughout Northern Wisconsin.
Number of agents: 450
Average listing: $137,000
Average time on market: about 90 days
The best way to stay in touch with agents…We have several ways in which we stay in touch with our agents. Our internal, Web-based communication system is updated every three hours and provides our agents with new listings in addition to when a home has been sold or is in the closing stages. In addition, our voicemail system allows me to stay in close communication with my agents and keeps the community feel of the company intact.
Key to staying profitable…Stay in front of the market. We have decreased our print advertising considerably and turned to the Internet and have embraced social marketing so that we are always in front of our clients.
Best strategy for dealing with difficult customers? We have a reputation in our community of always doing the right thing for our customers and this has enabled us to gain over 50% market share within our primary market. Not only do we honor what we say, but we are heavily involved in the community. 

How are you reaching out to first-time home buyers?
The $8,000 Federal Tax Credit has been a huge marketing point for our company. I have TV spots that are shown twice a day within the area that talk about the credit and its advantage for first-time buyers. In addition, we have a countdown to when the tax credit ends within our local newspaper as well as on our website. We are doing everything we can to get the word out to potential buyers about the tax credit and to show that now is the time to buy a home. 

What’s your best strategy to get buyers to see a listed home?
Last year we partnered with the Green Bay Packers and ran a promotion in which we held a drawing and gave away tickets to a game. With a wait list of 78,000 people to buy a ticket, whoever came to our open house had the opportunity to be entered into a drawing to win a ticket. 

How are you keeping consumers in your marketplace educated about the buying opportunities available today?
We work hard to keep our consumers informed and reach out to them through various mediums. Not only do we take advantage of radio, TV, word of mouth and our website, we also include teaser ads in the newspaper. This way, we can grab their attention and then lead them back to our website where they can find additional information about the property as well as our mapping tool, which allows consumers to be able to look at the area surrounding the property. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

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