Tuesday, December 27, 2011
Saturday, December 24, 2011
Friday, December 23, 2011
Thursday, December 22, 2011
20 Must Have Mobile Devices & Apps
Find more videos like this on Social Media Advocate
Chris Smith, the Tech Savvy Agent, shares the 20 must have mobile devices and apps for 2011.
Friday, December 16, 2011
Site See
Sites you should see for Social Media Solutions~
* Socialnomics
* Mashable Business
* Market Wire
* Technorati
* Real Estate Blackbook
* 4 Realz
* ZingDing
* Sochable
Do you have a site you think is a must for Real Estate Industry insight into Social Media & Business?
Share it here...
What is your favorite platform?
Thursday, November 24, 2011
Wednesday, November 16, 2011
Real Estate Pro's are Social! Are You a Pro?
Having fans improves ad performance! 64% of Facebook Users have become fans of at least one company.
Search engines, blogging & other Internet trends have fundamentally transformed the way people and businesses purchase products & services...
70% of the links search users click on are organic and - not paid!!!
Clear Calls to Action & Target Landing Pages...
To be relevant - you gotta make the change!
Company's that blog - 55% more website visitors.
Cost of leads - 62% less with inbound marketing then traditional outbound marketing...
67% of B2C companies have acquired a customer through Facebook...
57% of businesses acquired a customer through blog...
42% of Companies have acquired a customers through Twitter...
The Average Budget Companies spend on Social Media has almost doubled in just 2 years!
Start making friends, getting followers, by producing serious content for subscribers, because fans buy & share!
Tuesday, October 11, 2011
Sunday, October 9, 2011
Sunday, October 2, 2011
Thursday, September 22, 2011
Friday Finds Real Estate Sites
Real Estate Resource Top 10 Thursday
Zillow ~ Zillow is a home and real estate marketplace dedicated to helping homeowners, buyers, sellers, renters, real estate agents, mortgage professionals, landlords and property managers find and share vital information about homes, real estate and mortgages.
Ooodle ~ Oodle provides consumers with a friendly local marketplace to buy, sell and trade. Oodle Pro, launched earlier this year, enables local property managers, real estate agents and car dealers to join the conversation by adding their identity and reputation on Facebook and Twitter to their local listings.
Google ~ Countless home buyers use Google to browse for real estate information each month. Google offers a full suite of tools for real estate professionals that let you reach prospects in your region at all stages of their home search – while they're looking for properties, checking out locations, and selecting an agent or broker. It's how you reach more sellers, attract more buyers, and sell more homes.
Trulia ~ Whether you are looking for a place to buy or rent, want to know what it's really like to live in a neighborhood or just want to peruse what could be yours—Trulia is there for you.
Yahoo ~ real estate info on Yahoo for all of your real estate needs.
AOL ~ Real estate info on AOL for all of your real estate needs.
Vast ~ Get your listings and your name in front of millions of consumers searching for their next home. Work smarter, not harder using Vast’s vertical search technology to find serious buyers. Choose from multiple options to help grow your business.
Craigslist ~ Post your real estate needs. buy and sell real estate on Craigslist.
City ~ Explore your any City you want across the USA. Find what you are looking for online with City.
Real Town ~ the real estate network: RealTown.com is the Internet portal that features everything that is real estate. RealTown is one of the oldest and most respected communities in the real estate industry, with its development dating back to 1995. See The RealTown Story.
Check back weekly for Friday Finds for new real estate sites we have found for you...
Do you have a favorite real estate resource site? Share with us and we will check it out!
Thursday, September 15, 2011
Wednesday, September 7, 2011
Thursday, September 1, 2011
What ‘The Cloud’ is
What ‘The Cloud’ is
“Cloud” is just a metaphor for the Internet. So cloud computing is basically a
group of third-party, web-based services that you can use to store your
business information and applications so that you can access them from
anywhere via a web browser or downloadable mobile app. The advantage is
that you don’t have to worry if a computer hard-drive is stolen, lost or
damaged or search around for flash-drives that contain your critical
information. The information is readily available over the Internet and can be
retrieved from your smartphone, computer, tablet or practically any technology
device with Internet access.
~ Trulia
“Cloud” is just a metaphor for the Internet. So cloud computing is basically a
group of third-party, web-based services that you can use to store your
business information and applications so that you can access them from
anywhere via a web browser or downloadable mobile app. The advantage is
that you don’t have to worry if a computer hard-drive is stolen, lost or
damaged or search around for flash-drives that contain your critical
information. The information is readily available over the Internet and can be
retrieved from your smartphone, computer, tablet or practically any technology
device with Internet access.
~ Trulia
Wednesday, August 31, 2011
Joe Vera Seminars Latest Class For Real Estate Professionals
WHY YOU NEED THIS CLASS
An Audit disclosed that 75% of mortgage assignments issued to and from JPMorgan Chase, Wells Fargo, and Bank of America, during 2010 in the S. Essex Registry of Deeds in Massachusetts are invalid.
Some states have stopped non-judicial foreclosure.
FHA, Fannie Mae, and Freddie Mac are re-foreclosing loans in Michigan.
A Tsunami of lawsuits is headed your way. These classes provide new essentials for protecting your clients, yourself and your business.
Topics in Level 1 include:
Agent, Owner, and Buyer Duty to Know and Dislcose Mortgage History NOT ON TITLE REPORT
Consequences of Selling a Wrongfully Foreclosed Property through a short sale or as REO
Breaching Fiduciary Responsibilities, Punitve Damages are for the Broker/Agent. E & O Insurance cannot pay. No Discharge in bankruptcy
Securitization Model Explained / Review of Securitization Flow Chart
What is a Pooling Servicing Agreement? Find Investors, Trustees, & Servicers
What is a Mortgage Securitization Audit? How to Obtain One
MERS, Banks, & Crimes
How to get more business, reduce risk, and close transactions.
What to tell the Bank, Escrow, Title, Buyer's Lender & Others?
Fatal Bank Errors That Stop Foreclosure
Friday, August 26, 2011
Free eBook: How to Use Facebook for Business
Free eBook: "How to Use Facebook for Business: An Introductory Guide" for 2011
Learn how to start using Facebook in 2011 to achieve your business goals!
A successfully maintained Facebook presence can help your business:
- Get found by potential customers
- Connect and engage with current customers
- Create a community around your brand
- Promote and expand the reach of your content
- Generate leads!
Monday, July 25, 2011
Texas squatter claims $330,000 house, police can't remove him
Texas squatter claims $330,000 house, police can't remove him
How does this happen in a Country as educated as the United States? We have Laws that have been written to protect the rightful owner of Property in this Country! Right? We have Laws that stipulate how the sale / purchase / refinance of a home, are documented and recorded. This all to ensure the rightful owner is selling real property.
We have Banking Institutions who have not followed the Laws in endorsing & recording "The Note" foreclosing on Homes not legally owned by the bank because of illegal handling. Banks not adhering to the laws stipulating how transfer of ownership be documented & recorded should be held accountable for their actions. The American People are trusting those in Power to enforce all of the Laws designed to protect Our Country, not in part but wholly.
How does a Homeless man know what document to record so that he may have a legal claim to said property! Banks who did not record such documents "legally no claim to said property" they are not the legally documented and recorded owner. All Laws need to be upheld, in full. The chain of title broken by the banks makes the contract null and void by law. This taking place before homeowners broke their contract by not making agreed upon payments. How? Why? is it then that only the homeowners are being held accountable? Facing the consequences?
Is all of this because Americans did not know Banks were not following the Laws? The Banks knew the laws they knew what they were and were not doing, all at they taxpayers expense. Now what is going to be done about it? How loud does "The Peoples Voice" have to get, so that someone in Power does something and the proper parties pay the price for their actions?
How many of Us homeowners are going to watch Homeless people move into vacant homes and live their for FREE? If someone should live in such homes for FREE shouldn't it be those who bought the home,because of the Banks unlawful handling,said contract is null thus homeowner gets home FREE! The billions of dollars pooled by banks without proper endorsement could pay for their unlawful practices(Plenty of Legally Documented cases now). Why should Taxpayers have to carry the burden?
Want to learn more? Know what you can do? Understand the Laws written to protect you in this matter? How to find out if you may have been a victim of Bank Fraud? Find out what you can do? Visit Joe Vera's Seminars and sign up for his next class!
How does this happen in a Country as educated as the United States? We have Laws that have been written to protect the rightful owner of Property in this Country! Right? We have Laws that stipulate how the sale / purchase / refinance of a home, are documented and recorded. This all to ensure the rightful owner is selling real property.
We have Banking Institutions who have not followed the Laws in endorsing & recording "The Note" foreclosing on Homes not legally owned by the bank because of illegal handling. Banks not adhering to the laws stipulating how transfer of ownership be documented & recorded should be held accountable for their actions. The American People are trusting those in Power to enforce all of the Laws designed to protect Our Country, not in part but wholly.
How does a Homeless man know what document to record so that he may have a legal claim to said property! Banks who did not record such documents "legally no claim to said property" they are not the legally documented and recorded owner. All Laws need to be upheld, in full. The chain of title broken by the banks makes the contract null and void by law. This taking place before homeowners broke their contract by not making agreed upon payments. How? Why? is it then that only the homeowners are being held accountable? Facing the consequences?
Is all of this because Americans did not know Banks were not following the Laws? The Banks knew the laws they knew what they were and were not doing, all at they taxpayers expense. Now what is going to be done about it? How loud does "The Peoples Voice" have to get, so that someone in Power does something and the proper parties pay the price for their actions?
How many of Us homeowners are going to watch Homeless people move into vacant homes and live their for FREE? If someone should live in such homes for FREE shouldn't it be those who bought the home,because of the Banks unlawful handling,said contract is null thus homeowner gets home FREE! The billions of dollars pooled by banks without proper endorsement could pay for their unlawful practices(Plenty of Legally Documented cases now). Why should Taxpayers have to carry the burden?
Want to learn more? Know what you can do? Understand the Laws written to protect you in this matter? How to find out if you may have been a victim of Bank Fraud? Find out what you can do? Visit Joe Vera's Seminars and sign up for his next class!
Sunday, July 24, 2011
Sunday, July 17, 2011
Introduce Yourself
#2 Let people know who you are, what you do, who you are looking to network with, and your knowledge "how you can help other members".
Share what you know about REO's
Share what you know about Short Sales
Share what you know about the community you Farming
Share about programs available
Share about "MERS" what you know "what it means for your clients" their homes, buying homes, selling homes
Share about down payments: savings tips, how much is needed, credit needed, etc.
Share properties available, deals available, " idea daily deals" for target neighborhood.
****Share Seminars / Webinars, videos, broadcasts, shows, articles etc....
Share what you know about REO's
Share what you know about Short Sales
Share what you know about the community you Farming
Share about programs available
Share about "MERS" what you know "what it means for your clients" their homes, buying homes, selling homes
Share about down payments: savings tips, how much is needed, credit needed, etc.
Share properties available, deals available, " idea daily deals" for target neighborhood.
****Share Seminars / Webinars, videos, broadcasts, shows, articles etc....
Saturday, July 16, 2011
What the Banks did with Mortgage Loans.wmv
Joe Vera Seminars Educating Real Estate Professionals for years! Want to learn More? Educational Webinars for Homeowners coming soon!!
Update your Profiles on your Social Sites Today! 7/16
1. Complete Social Sites Profile
Does your profile contain all of your business identity information? What you do, what neighborhoods you service, your area of expertise, certificates, awards, affiliations.
This is your online resume, tells other members all about You "your the brand"!!!!
Keep updated ~ be sure to add current listings and properties you have sold " a running list shows you know the area".
Based on Studies ~ A professional picture needs to be added on all sites, professional Bio and personal Bio. Take the time to provide information about yourself, if you expect people to use you for business, refer business, and add you as an associate.
* Remember this is a professional image you are creating your BRAND image "YOU". What others think of you and your Brand!
Does your profile contain all of your business identity information? What you do, what neighborhoods you service, your area of expertise, certificates, awards, affiliations.
This is your online resume, tells other members all about You "your the brand"!!!!
Keep updated ~ be sure to add current listings and properties you have sold " a running list shows you know the area".
Based on Studies ~ A professional picture needs to be added on all sites, professional Bio and personal Bio. Take the time to provide information about yourself, if you expect people to use you for business, refer business, and add you as an associate.
* Remember this is a professional image you are creating your BRAND image "YOU". What others think of you and your Brand!
Friday, July 15, 2011
Bank Fraud! American People not protected from banks by Congress! WHY?
Joe Vera Seminars for Homeowners / Consumers to learn more! Want to know what to do? Where to look? Who to contact? How to protect yourself!
Thursday, July 7, 2011
Tools for your business blog!
The two Must haves for your real Estate Blog! Get them here today and save!!
Blogging for your business made simple with FREE Blog Factory...
Schedule your Blog posts as well as several other top Social Sites I'm certain you are using for your business!
Share with your friends and you can feed content to one another's sites. Become the resource for your community by connecting with other businesses and services your followers are looking for.
Blogging for your business made simple with FREE Blog Factory...
Schedule your Blog posts as well as several other top Social Sites I'm certain you are using for your business!
Share with your friends and you can feed content to one another's sites. Become the resource for your community by connecting with other businesses and services your followers are looking for.
Sunday, July 3, 2011
Saturday, July 2, 2011
Beat Competitors using Internet in your business marketing!
Most originations have cut their marketing budgets, start using IT to capitalize on wider reaching lower cost web-enabled costumer connecting and interacting tools and sites. This allows company / agent to provide greater customer satisfaction, improve products and services. Agents with real time information are better able to meet the needs of clients, they know the latest programs that may benefit their customers, achieving greater rate of success, more homeownership. Learn to do it yourself? Outsource? thats the question... Join Http://www.FreeSocialMediaNetwork.com, a valuable resource for Agents to develop technology knowledge and skills for continued business growth, find classes and Webinars both online and offline. Outsourcing to gain a competitive advantage allows you to do what your good at and the hired professionals to do what they are best at. A partnership created specifically allowing you to stay focused while increasing your business through agility, innovation, and execution.
Share what your doing that is working for you!
Gmail - Inbox (150) - sociallysavvypr@gmail.com
Share what your doing that is working for you!
Gmail - Inbox (150) - sociallysavvypr@gmail.com
Friday, July 1, 2011
Thursday, June 23, 2011
Sunday, April 17, 2011
Tools to create a Networking Superstar in You!
Conversations & comments are the life of social networking! Ever notice that one individual who seems to be the life of the Party? They make the first move and they follow through every time! "SUPERSTAR" You have a connection (lead)! Is your email marketing creating the opportunity for this (lead) to engage with you and discuss what they are looking for? Remember here is where you do twice as much listening as speaking, so you can give them exactly what they are looking for. This email system will help you create an interactive forum " show up to your Party", the discussions and comments you started will help your business increase. It always best when others become your cheerleader! "VIRAL" marketing... So Be sure to make a great first impression.
Can You Have More Sales, Too?
Helping over 90,000 businesses like yours raise profits and build customer relationships using AWeber's opt-in email marketing software for over 10 years.
Can You Have More Sales, Too?
Helping over 90,000 businesses like yours raise profits and build customer relationships using AWeber's opt-in email marketing software for over 10 years.
Thursday, March 10, 2011
Friday, February 18, 2011
6 reasons to write a mission statement for an online community | Blaise Grimes-Viort
6 reasons to write a mission statement for an online community | Blaise Grimes-Viort
6 reasons to craft a strong Mission Statement for your online community
Community Management
0
0digg
6
Have you written a Mission Statement for the community you are responsible for as Community Manager? Imagine someone cruising past your website. Would they know what your community is about by glancing at it? If not, you need to provide your new visitors with an idea of the purpose of your social proposition.
What is a Mission Statement?
A mission statement is an organisation’s way to explain to the public the reason for its existence and what it hopes to achieve.
We’re not talking about the bottom line here; most people would realise making money and expanding influence is a primary motivator.
The mission statement is about providing a call to action that resonates with your target audience and encourages them to take the time to participate and contribute to your vision.
Why have a mission statement?
There are several reasons to take the time to craft a clear mission statement for your online community, which benefit both your efforts in building a vibrant community and to help people understand what they can expect from participating in it.
1. Transparency: By being up front about the purpose of the social space you are creating, you can ensure your members trust your motives and feel comfortable investing their time.
2. Focus: To write a good mission statement, you are going to have to condense your reasons for creating your online community. It will help you understand who you are trying to reach, and narrow your scope which will make success more achievable.
3. Motivation: By defining who the online community is for, the mission statement will encourage engagement by making a compelling argument for participation on the part of your target audience.
4. Leadership: As the Community Manager, it is your responsibility to lead by example and set the tone of the online community. By defining its purpose, you are making a commitment to your potential membership.
5. Unity: People tend to rally round a clear vision. If you don’t step up and state what the community should stand for, you run the risk that there will either be confusion or some members may split off with their own vision running counter to what you are trying to achieve.
6. Protection: Having a strong mission statement will give you something to refer to internally (if you are creating the online community for a business). If your budget comes under attack, you will be able to stand up for your membership with confidence and clear objectives to argue your case.
When you set a vision for your community, you empower yourself in setting a clear goal to aim for, your staff who have a clear understanding of the focus of their communication with customers online, and your membership who can confidently invest their time and energy in building relationships within a comforting framework of engagement.
To approach community building effectively, you need to have a strong sense of where you want to end up. It’s all too easy to simply assume people will be able to see and understand what we are trying to achieve, but for them to believe and promote your vision you must share it clearly.
Do you have a mission statement for your community already, or are you planning one? Do you have an example to share?
6 reasons to craft a strong Mission Statement for your online community
Community Management
0
0digg
6
Have you written a Mission Statement for the community you are responsible for as Community Manager? Imagine someone cruising past your website. Would they know what your community is about by glancing at it? If not, you need to provide your new visitors with an idea of the purpose of your social proposition.
What is a Mission Statement?
A mission statement is an organisation’s way to explain to the public the reason for its existence and what it hopes to achieve.
We’re not talking about the bottom line here; most people would realise making money and expanding influence is a primary motivator.
The mission statement is about providing a call to action that resonates with your target audience and encourages them to take the time to participate and contribute to your vision.
Why have a mission statement?
There are several reasons to take the time to craft a clear mission statement for your online community, which benefit both your efforts in building a vibrant community and to help people understand what they can expect from participating in it.
1. Transparency: By being up front about the purpose of the social space you are creating, you can ensure your members trust your motives and feel comfortable investing their time.
2. Focus: To write a good mission statement, you are going to have to condense your reasons for creating your online community. It will help you understand who you are trying to reach, and narrow your scope which will make success more achievable.
3. Motivation: By defining who the online community is for, the mission statement will encourage engagement by making a compelling argument for participation on the part of your target audience.
4. Leadership: As the Community Manager, it is your responsibility to lead by example and set the tone of the online community. By defining its purpose, you are making a commitment to your potential membership.
5. Unity: People tend to rally round a clear vision. If you don’t step up and state what the community should stand for, you run the risk that there will either be confusion or some members may split off with their own vision running counter to what you are trying to achieve.
6. Protection: Having a strong mission statement will give you something to refer to internally (if you are creating the online community for a business). If your budget comes under attack, you will be able to stand up for your membership with confidence and clear objectives to argue your case.
When you set a vision for your community, you empower yourself in setting a clear goal to aim for, your staff who have a clear understanding of the focus of their communication with customers online, and your membership who can confidently invest their time and energy in building relationships within a comforting framework of engagement.
To approach community building effectively, you need to have a strong sense of where you want to end up. It’s all too easy to simply assume people will be able to see and understand what we are trying to achieve, but for them to believe and promote your vision you must share it clearly.
Do you have a mission statement for your community already, or are you planning one? Do you have an example to share?
Wednesday, February 9, 2011
What the HELL is social media - in 2 minutes
Are you still playing with the idea about using social media in your business? Social Media is a necessary part of business marketing. Connect with your market and be the go to professional for your industry's information to increase your business.
What the HELL is social media explains in 2 minutes using 10 key facts why brands need to take notice of social media. From: timetogetsocial |on YouTube
What the HELL is social media explains in 2 minutes using 10 key facts why brands need to take notice of social media. From: timetogetsocial |on YouTube
Tuesday, January 25, 2011
Tuesday, January 4, 2011
The iron grip of ARMs on California real estate
The iron grip of ARMs on California real estate | first tuesday journal online
This article discusses how the ratio of adjustable rate mortgages (ARMs) to all loans originated in California can be used to determine the health and direction of California’s near-term real estate market.
Data Courtesy of MDA Dataquick, the US Federal Reserve, and Standard and Poor’s
The above charts present two real estate market perspectives on adjustable rate mortgage loan (ARM) volume in California. Both charts track ARM loans as a percentage of all mortgages recorded in California (the blue line), called the arms-to-loans (ATL) ratio. The first chart juxtaposes California’s ATL ratio with the fixed rate mortgage (FRM) rate for the Western Census Region (the green line), while the second chart joins the ATL ratio with the combined monthly tri-city average of low-tier home pricing in San Diego, Los Angeles and San Francisco (the red line).
The ATL ratio is a crucial measure of the relationship between ARMs and FRMs, and can be used to determine probable sales volume and price movements for 12 and 24 months forward (respectively). [For a more detailed look at home pricing in California, see the first tuesday Market Chart, California Tiered Home Pricing.]
ARMs depend on FRM Rates
The availability of purchase-assist money is the single most powerful engine driving price movement in California real estate transactions, as shown by the boom in sales volume and pricing caused by excess funding in the mid-2000s; a phenomenon called the financial accelerator effect. Purchase-assist money is delivered almost exclusively by either ARMs or FRMs (except for the very few buyers who pay cash). [For more information about the financial accelerator, see the May 2010 first tuesday article, Cleaning up after the ruptured housing bubble.]
Because mortgage financing is so dominant in sales transactions, the friction in the movement between the 30-year FRM Rate and the ATL ratio is essential to the understanding of brokers who wish to hazard a prediction of what lies ahead for their real estate market.
Combined in analysis, these two factors – the FRM rate and the ATL ratio – have the power to predict California’s future home sales volume and price movement. Local market conditions, on the other hand, seem to have little influence on sales volume and pricing, since both are controlled by financing trends, which are moved only by the bond market and federal monetary policies. [For a more global review and critique of ARMs, see the March 2010 first tuesday article, The Danger of an ARMs Buildup.]
The FRM-ATL Connection
30-year FRMs are the most basic and essential form of financing for homebuyers in the real estate market. If FRMs are available at comparatively low rates, and the homebuyer is well-informed (and somewhat rational), the homebuyer will almost always choose the FRM over the much riskier ARM loan.
In a normally functioning purchase-assist and refinancing mortgage market, the percentage of ARMs – the ATL ratio – rises and falls only in direct response to changes in FRM rates, in sympathy until friction develops and leads to a deviation in movement between the ATL ratio and FRM rates. Such a deviation is a clear warning of an impending distortion in real estate sales volume and pricing.
As the top chart vividly indicates, observed rises in FRM rates tend to lead to increases in ARM volume, the normal situation. The reasons are intuitive, since ARMs allow borrowers to obtain more funding when the FRM rate increases (sellers refuse to lower their prices in response to FRM rates, so buyers are forced to either lower their standard of living or obtain a higher amount of funding).
For instance, the number of ARMs jumped dramatically when FRM rates were raised in 1988, 1994 and 1999. Prices never moved down, as the ARM supported sellers’ demands by delivering more money than the buyers would otherwise be qualified to borrow.
It is useful to think of ARMs as bridge loans, spanning gaps in the availability of purchase money when FRM rates rise. Any rise in FRM rates immediately reduces the buyer’s purchasing power, since lenders do not permit buyers to make loan payments higher than 31% of their income. Higher interest rates always mean lower principal amounts are available to borrow. [For more on the influence of rates upon the buyer’s ability to get financing, see the first tuesday Market Chart, Buyer Purchasing Power.]
When FRM rates rise, ARMs tend to keep prices from falling. Unfortunately, ARMs originated in excess will quickly cause prices to rise during periods of flat or declining FRM rates. ARM financing permits sellers to raise prices beyond what buyers would otherwise be able to pay. Increased availability of funds from ARMs help stabilize the market in a time of temporarily high FRM rates, but they can just as quickly lead to a home pricing bubble and a potential market crash when the ATL ratio is running contrary to the FRM rate movement as occurred in 1993 and 2002.
In the past, ARMs in healthy markets have generally made up approximately 20% to 40% of the home loan market, while the remainder is made up of FRM loans. If the ATL ratio exceeds 40%, which normally happens when FRM rates rise too high, it is a sign of instability in the financing market, and forebodes potential problems for homeowners and homebuyers in the near future – weaker sales volume and home prices.
Forecasting the future
With FRM rate movements in mind, it is possible to forecast the future of sales volume and sales price trends by comparing FRM rates with movement in the ATL ratio. To do so, take a close look at the correlation from year to year between FRM rates and the ATL ratio on the first chart above.
Ordinarily, the ATL ratio rises and falls in tandem with FRM rates, roughly following it in a stable and nearly parallel relationship. However, this stable relationship can and does sometimes fail when external factors cause the ATL to move contrary the FRM rate. Such external factors may include:
increases in jumbo loan demand;
rapid shifts in demographic demands to buy or sell;
too much or too little construction activity; or
changes in government regulations on homeownership or mortgage financing.
You can develop an understanding of what will be the real estate sales volume for the next 12 months, and sales price movement for a full 24 months by following any failure in ATL/FRM relationship.
To predict home sales volume and pricing in California, the only figures you need are the ATL ratio and the FRM rate for the past 12 months.
In the real estate market, home sales volume tends to rise and fall in a cyclical fashion corresponding to economic recessions (represented above by gray vertical bars on the charts) and booms. Home prices change primarily due to prior changes in sales volume, although the pricing inertia generated by rising sales volume tends to continue for 8 to 12 months after home sales volume reaches its apex (this delayed change in pricing, which is particular to SFR property, is referred to as the sticky pricing phenomenon). [For a more thorough analysis of sticky pricing, see the first tuesday December 2009 article, The Flat Line Recovery: A Side-Effect of Sticky Housing Prices.]
To make an accurate and well-informed prediction of home sales volume and pricing in California, the only figures you need are the ATL ratio and the FRM rate for the past 12 months. When these two figures fail to move in tandem during the prior 12 months, the friction between them is predictive of the extent of the change in sales volume and pricing trends in future months. Which direction the trend will take depends upon whether the two rates become more closely aligned or more distant.
It is unnecessary to look to any information other than the correlation between the ATL ratio and the FRM rate for forecasting the next 12 months of sales volume and 24 months of pricing. All other factors either reflect the ATL and FRM rates, or are directly caused by the fluctuations in those rates. For instance, while the volume of notices of default (NODs) and trustee’s deeds (TDs) may appear to have an influence on price movement at the moment of analysis, in fact NOD/TD volume is merely a manifestation of prior price movements which are dictated by FRM and ATL frictions. [For more information on NODs in the current market, see the first tuesday Market Chart, NODs and Trustee’s Deeds.]
When the ATL ratio parallels the movement of FRM rates, both sales volume and prices will remain fairly constant in the future. This is the definition of a normal market: looking forward, readers can safely predict that neither a measurable boom in pricing nor a recession will take place in the two years following such conditions.
Instead, sales volume will continue much the same as at present for at least 12 months, and prices will remain reasonably steady, adjusting upward at approximately the rate of inflation in the consumer price index (CPI) for a longer period, another 6 to 12 months. [For the most current CPI figures, see the first tuesday Rates Page.]
However, any sustained period (12 months or more) in which the two factors are at odds with one another, as demonstrated by a widening or narrowing of the space between the two lines on the ATL/FRM chart, discloses a hazardous abnormality in the home financing market. Any such abnormality establishes a divergent trend going forward in real estate sales and pricing. Examples of such divergences are elucidated below.
Copyright © 2010 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.
This article discusses how the ratio of adjustable rate mortgages (ARMs) to all loans originated in California can be used to determine the health and direction of California’s near-term real estate market.
Data Courtesy of MDA Dataquick, the US Federal Reserve, and Standard and Poor’s
The above charts present two real estate market perspectives on adjustable rate mortgage loan (ARM) volume in California. Both charts track ARM loans as a percentage of all mortgages recorded in California (the blue line), called the arms-to-loans (ATL) ratio. The first chart juxtaposes California’s ATL ratio with the fixed rate mortgage (FRM) rate for the Western Census Region (the green line), while the second chart joins the ATL ratio with the combined monthly tri-city average of low-tier home pricing in San Diego, Los Angeles and San Francisco (the red line).
The ATL ratio is a crucial measure of the relationship between ARMs and FRMs, and can be used to determine probable sales volume and price movements for 12 and 24 months forward (respectively). [For a more detailed look at home pricing in California, see the first tuesday Market Chart, California Tiered Home Pricing.]
ARMs depend on FRM Rates
The availability of purchase-assist money is the single most powerful engine driving price movement in California real estate transactions, as shown by the boom in sales volume and pricing caused by excess funding in the mid-2000s; a phenomenon called the financial accelerator effect. Purchase-assist money is delivered almost exclusively by either ARMs or FRMs (except for the very few buyers who pay cash). [For more information about the financial accelerator, see the May 2010 first tuesday article, Cleaning up after the ruptured housing bubble.]
Because mortgage financing is so dominant in sales transactions, the friction in the movement between the 30-year FRM Rate and the ATL ratio is essential to the understanding of brokers who wish to hazard a prediction of what lies ahead for their real estate market.
Combined in analysis, these two factors – the FRM rate and the ATL ratio – have the power to predict California’s future home sales volume and price movement. Local market conditions, on the other hand, seem to have little influence on sales volume and pricing, since both are controlled by financing trends, which are moved only by the bond market and federal monetary policies. [For a more global review and critique of ARMs, see the March 2010 first tuesday article, The Danger of an ARMs Buildup.]
The FRM-ATL Connection
30-year FRMs are the most basic and essential form of financing for homebuyers in the real estate market. If FRMs are available at comparatively low rates, and the homebuyer is well-informed (and somewhat rational), the homebuyer will almost always choose the FRM over the much riskier ARM loan.
In a normally functioning purchase-assist and refinancing mortgage market, the percentage of ARMs – the ATL ratio – rises and falls only in direct response to changes in FRM rates, in sympathy until friction develops and leads to a deviation in movement between the ATL ratio and FRM rates. Such a deviation is a clear warning of an impending distortion in real estate sales volume and pricing.
As the top chart vividly indicates, observed rises in FRM rates tend to lead to increases in ARM volume, the normal situation. The reasons are intuitive, since ARMs allow borrowers to obtain more funding when the FRM rate increases (sellers refuse to lower their prices in response to FRM rates, so buyers are forced to either lower their standard of living or obtain a higher amount of funding).
For instance, the number of ARMs jumped dramatically when FRM rates were raised in 1988, 1994 and 1999. Prices never moved down, as the ARM supported sellers’ demands by delivering more money than the buyers would otherwise be qualified to borrow.
It is useful to think of ARMs as bridge loans, spanning gaps in the availability of purchase money when FRM rates rise. Any rise in FRM rates immediately reduces the buyer’s purchasing power, since lenders do not permit buyers to make loan payments higher than 31% of their income. Higher interest rates always mean lower principal amounts are available to borrow. [For more on the influence of rates upon the buyer’s ability to get financing, see the first tuesday Market Chart, Buyer Purchasing Power.]
When FRM rates rise, ARMs tend to keep prices from falling. Unfortunately, ARMs originated in excess will quickly cause prices to rise during periods of flat or declining FRM rates. ARM financing permits sellers to raise prices beyond what buyers would otherwise be able to pay. Increased availability of funds from ARMs help stabilize the market in a time of temporarily high FRM rates, but they can just as quickly lead to a home pricing bubble and a potential market crash when the ATL ratio is running contrary to the FRM rate movement as occurred in 1993 and 2002.
In the past, ARMs in healthy markets have generally made up approximately 20% to 40% of the home loan market, while the remainder is made up of FRM loans. If the ATL ratio exceeds 40%, which normally happens when FRM rates rise too high, it is a sign of instability in the financing market, and forebodes potential problems for homeowners and homebuyers in the near future – weaker sales volume and home prices.
Forecasting the future
With FRM rate movements in mind, it is possible to forecast the future of sales volume and sales price trends by comparing FRM rates with movement in the ATL ratio. To do so, take a close look at the correlation from year to year between FRM rates and the ATL ratio on the first chart above.
Ordinarily, the ATL ratio rises and falls in tandem with FRM rates, roughly following it in a stable and nearly parallel relationship. However, this stable relationship can and does sometimes fail when external factors cause the ATL to move contrary the FRM rate. Such external factors may include:
increases in jumbo loan demand;
rapid shifts in demographic demands to buy or sell;
too much or too little construction activity; or
changes in government regulations on homeownership or mortgage financing.
You can develop an understanding of what will be the real estate sales volume for the next 12 months, and sales price movement for a full 24 months by following any failure in ATL/FRM relationship.
To predict home sales volume and pricing in California, the only figures you need are the ATL ratio and the FRM rate for the past 12 months.
In the real estate market, home sales volume tends to rise and fall in a cyclical fashion corresponding to economic recessions (represented above by gray vertical bars on the charts) and booms. Home prices change primarily due to prior changes in sales volume, although the pricing inertia generated by rising sales volume tends to continue for 8 to 12 months after home sales volume reaches its apex (this delayed change in pricing, which is particular to SFR property, is referred to as the sticky pricing phenomenon). [For a more thorough analysis of sticky pricing, see the first tuesday December 2009 article, The Flat Line Recovery: A Side-Effect of Sticky Housing Prices.]
To make an accurate and well-informed prediction of home sales volume and pricing in California, the only figures you need are the ATL ratio and the FRM rate for the past 12 months. When these two figures fail to move in tandem during the prior 12 months, the friction between them is predictive of the extent of the change in sales volume and pricing trends in future months. Which direction the trend will take depends upon whether the two rates become more closely aligned or more distant.
It is unnecessary to look to any information other than the correlation between the ATL ratio and the FRM rate for forecasting the next 12 months of sales volume and 24 months of pricing. All other factors either reflect the ATL and FRM rates, or are directly caused by the fluctuations in those rates. For instance, while the volume of notices of default (NODs) and trustee’s deeds (TDs) may appear to have an influence on price movement at the moment of analysis, in fact NOD/TD volume is merely a manifestation of prior price movements which are dictated by FRM and ATL frictions. [For more information on NODs in the current market, see the first tuesday Market Chart, NODs and Trustee’s Deeds.]
When the ATL ratio parallels the movement of FRM rates, both sales volume and prices will remain fairly constant in the future. This is the definition of a normal market: looking forward, readers can safely predict that neither a measurable boom in pricing nor a recession will take place in the two years following such conditions.
Instead, sales volume will continue much the same as at present for at least 12 months, and prices will remain reasonably steady, adjusting upward at approximately the rate of inflation in the consumer price index (CPI) for a longer period, another 6 to 12 months. [For the most current CPI figures, see the first tuesday Rates Page.]
However, any sustained period (12 months or more) in which the two factors are at odds with one another, as demonstrated by a widening or narrowing of the space between the two lines on the ATL/FRM chart, discloses a hazardous abnormality in the home financing market. Any such abnormality establishes a divergent trend going forward in real estate sales and pricing. Examples of such divergences are elucidated below.
Copyright © 2010 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.
Subscribe to:
Posts (Atom)