Housing Market Turnaround Takes Time

Posted on May 21, 2013 by admin

The recent housing data released illustrates that a successful housing market depends on a number of factors – most of which take time.

J.D. Crowe, Senior Vice President of Southeast Mortgage

J.D. Crowe, Senior Vice President of Southeast Mortgage

Overall, the industry’s reports have mentioned a housing revival and continued optimism in the market. Single-family home prices increased in 89 percent of U.S. cities in the first quarter – Atlanta included.

As home-buying season shifts into high gear, we’ll see an effect on inventory. Data from Realtor.com states that as of April, homes remained on the market 81 days – a time period 11 percent shorter than this time last year.

The short listing periods led to a nationwide decrease in inventory in 11 of the 146 markets monitored by Realtor.com. The decrease was drastic, with most markets reporting a drop of 20 percent or more in listings. The numbers represent near record lows of homes available.

With existing inventory shrinking, a successful housing market would need to make up the difference in new home construction.

Right now, we are still waiting for new home starts. Home starts on private residences dropped from the March estimate of 1.02 million units in to 853,000 units in April.  The 16.5 percent decline is drastic but not a means to an end.

Home starts were less than expected and a little disappointing as such, but there is much optimism to be had from the spike in permits. Permits in April increased 14.3 percent to 1.02 million – an increase that is 35.8 percent higher than the estimate in April 2012.

“Overall, housing may still be coming out of winter month volatility,” an Econoday analyst stated.  “But permits point to gradual improvement for the housing sector.”

As we’ve mentioned before, the housing industry creates a ripple effect through other industries and strongly influences the economy. The lack of construction right now could be in part due to the need for  the employment rate to go up – and whether or not the growing workforce will move at the same pace of needed construction.

“Historically, the new construction has correlated very close with the job trends,” Martha Ucko of CreditSights stated. “When we are gaining jobs in this country, construction activity has been much better than when we are losing jobs.”

The rampant home-buying season is expected to continue as values increase and rates remain low. The increase in permits indicates that we’ll have to be patient, but construction starts will eventually replenish the low inventory and accommodate the increasing number of homebuyers.

 - J.D. Crowe, Senior Vice President of Southeast Mortgage

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New Internet Scam Hits the Housing Industry

Posted on May 14, 2013 by admin

Internet scams are seeping into the housing industry as housing gains momentum and more buyers begin their search online.

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Zillow, a popular Internet site for users to list and search for properties, recently found itself in a sophisticated listing scam. The perpetrators of the scam were able to maneuver through multiple precautionary measures Zillow takes to prevent scams.

A potential renter went on Zillow and contacted the supposed property owner, the scammer, about a listing. The scammer went into detail about his story, including background about why he was renting, and sent an application for the renter to complete. When the deal was nearly complete, the scammer promised to overnight the keys pending $1,000 being wired to him.

Zillow’s security measures accounted for the verified email address and phone number attached to the listing. What it did not account for was a fake listing altogether.

The scammer had very easily copied another listing on Zillow with an MLS number and with a few small changes to the address and description, created an attractive listing with a verified email address and phone number sure to fool an innocent renter.  Luckily, the renter just happened to see the original listing and connected the dots to the scam.

This scam is problematic for several reasons. First, an innocent renter nearly lost $1,000 to the scammer. Second, the owner of the original listing that was copied for the scam essentially had his or her online identity stolen and if not cleared up, could tarnish credibility for future sales Finally, the Pocono Mountains Association of Realtors that allowed the posting of the MLS listing information could receive undeserved blame.

Since the Zillow scam was reported, the company has stated they plan to increase security measures to avoid other scams like this one that involve multiple innocent parties.

“We take these scams very seriously and we’re always analyzing and exploring new ways to stay ahead of this,” Zillow spokesperson Cynthia Nowak stated.

Buying or selling a home is a large financial decision and should be treated as seriously. Both buyers and sellers should be vigilant of online scams to avoid fraud.

If you are listing a property online, do regular searches for your property to ensure a scammer is not copying the information. As a homebuyer, the best advice for avoiding a scam is to complete your purchase offline with an individual and company you can trust. While an increasing number of homebuyers are starting their searches online, we recommend seeking out licensed professionals to help you finalize your search for a home in order to ensure the process is not only educational and enjoyable, but also safe.

To help you search online safely, Zillow offers a number of tips to help you avoid scams and Internet fraud. Familiarize yourself with the tips and be sure to alert the listing company if you suspect a scam: www.zillow.com/wikipages/Beware-of-Scams-and-Other-Internet-Fraud.

- Kathy Gyselinck, Executive Vice President for Southeast Mortgage

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Happy Employees Lead to Happy Customers

Posted on May 6, 2013 by admin

What’s the secret to building a successful company? Make your employees happy.

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

In the book The Happiness Advantage: Seven Principles of Positive Psychology That Fuel Success and Performance at Work, author Shawn Achor analyzed research on employee happiness over the past decade and found some significant results. Achor found that a happy workforce raises sales by 37 percent, productivity by 31 percent and accuracy on tasks by 19 percent.

Each of these results mirrors what we have seen at Southeast Mortgage with an incredible team of professional individuals. The challenging housing market in recent years  put a number of mortgage companies out of business and tested the morale of employees of those who weathered the  economic storm.

As we’ve mentioned previously, our team remained positive and developed programs and office concepts to enrich our employees’ careers – resulting in a happier workforce.

Our MLO Associate Program allows our mortgage professionals to mentor younger, emerging professionals in the business and see first hand the impact they are making on the future of the industry. We also established our Social Max Centers, a new office concpt that include pool tables, Baggo, , card tables, coffee kiosks, food and drinks – the epitome of happiness for a company filled with professionals whose career sometimes relies on the contacts and networking that happen in social environments.

According to a professional executive coach, Helen Mumford Sole, “Happiness is irrefutable. We know happy employees are the most successful employees, so happiness brings success, and that brings success to our organizations – it’s a win-win all around.”

The MLO Associate Program and new office concept weren’t merely projects to fill time in the down market, they were proactive initiatives to show our employees we are thinking about their needs and committed to their success. It is our belief that work, family and fellowship balance a successful career and we strive to instill that in our employees – whether the market is up or down.

The Southeast Mortgage Closing Team's motto is "Just Close It!"

The Southeast Mortgage Closing Team’s motto is “Just Close It!”

Our team of professionals remained patient while waiting for the housing market to pick up and kept a positive attitude. The positive attitude was contagious and eased the hesitation of new clients in addition to enriching relationships with Realtor partners. We have seen the results and are certain the increasing sales have been dependent on our team’s unfaltering positive attitude.

Each of our teams at our ten office locations are unique in their management and customer approach but all understand the importance of making employees happy in order to make customers happy.

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Home Sales, Interest Rates Pushing Housing Industry to Economic Forefront

Posted on April 29, 2013 by admin

Home sales numbers are in for March and the impressive numbers can be attributed to the unique market conditions holding strong through the housing market’s recovery.

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Sales of new single-family homes were at a seasonally adjusted annual rate of 417,000 – a 1.5 percent increase from the February 2013 rate and 18.5 percent above the March 2012 estimate of 352,000.

In addition to growing sales numbers, the U.S. Department of Housing and Urban Development reported that the median sales price of new homes is increasing. The median sales price of new homes sold in March 2013 was $247,000 and the average sales prices was $279,900. These sales prices combined with the estimate of new homes for sale by the end of March at 153,000, represent a 4.4-month supply if the sales rate holds steady.

And it should. Supply still isn’t increasing fast enough for demand in part because of record low interest rates. Mortgage rates fell for a fourth week and the 15-year average and fixed-mortgage rates are record breaking, according to data from Freddie Mac and Bankrate.

The average rate for a 30-year fixed mortgage was 3.4 percent last week, down from 3.41 percent, and the average 15-year rate dropped from 2.64 percent to 2.61 percent.

The low rates are fueling the demand for housing and, while construction is increasing, it’s not increasing fast enough – pushing up home prices. This push and pull the housing market is creating furthers the industry’s impact on the economy.

“Steady job creation and near-record low mortgage rates are spurring more Americans to buy houses,” The Associated Press wrote. “The rise in demand is helping to raise sales and prices in most markets. Higher prices tend to make homeowners feel wealthier and encourage more spending.”

The demand for housing is already spurring more construction – leading to more jobs – and it can be expected that an increase in home sales will lend to more renovations, home furnishings, etc. – leading to more job creation. Economists have long cited the housing market as a leader in economic recovery, but the juxtaposition of these factors all at once is encouraging.

“With increasing signs of a softer U.S. economy springing up in the spring, we can take comfort in the resilience of the housing recovery,” said Jennifer Lee, senior economist at BMO Capital Markets.

Interest rates cannot remain low forever and the summer months can bring construction increases to catch up with demand. The housing industry will continue to fuel the economic recovery but for buyers, the unique opportunities the market is currently providing may diminish when things return to seasonally normal lev

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Realtors Confidence Index Supports Optimism in Industry

Posted on April 22, 2013 by admin

If you’ve been following housing industry news over the last quarter, you’ve heard about the increase in construction starts, low mortgage rates, increasing home prices and values, and the impact of those combined factors on the economic recovery.

J.D. Crowe, Senior Vice President of Southeast Mortgage

J.D. Crowe, Senior Vice President of Southeast Mortgage

The Realtors Confidence Index produced by the National Association of Realtors further supports the recent surveys and reports of optimism on the housing market’s revival this year.

The Index was sent to about 50,000 Realtors. The 3,627 responses gathered from February 25 to March 1 included expectations about overall market conditions, buyer and seller traffic, price, buyer profiles and other issues affecting real estate.

The survey found that the confidence index for single-family homes increased to 62 percent, with the outlook for the next six months climbing to 69 percent.

According to the survey, Realtors’ confidence stems from strong buyer demand and a tight inventory. As we’ve mentioned previously, this will lead to higher home prices. About 83 percent of survey respondents reported constant to rising prices compared to their average transactions a year ago.

Graph from NAR report.

Graph from NAR report.

The Realtors Confidence Index is important in gauging the future of the market. An independent study found 84 percent of homebuyers would use the same Realtor again – signaling the relational impact working with a Realtor can have.

For a mortgage company, it is good to see Realtors’ confidence steadily increasing as their relationships with homebuyers can have an impact on the financial decision they make. Our team values our industry partnerships with Realtors and the survey serves as a refreshing reminder that our partners are on the same page with us when it comes to the housing market’s future.

The housing industry has been primed for growth for some time, and with confidence indices like these drastically increasing, the industry will have the determination and optimism that is necessary to succeed.

 - J.D. Crowe, Senior Vice President of Southeast Mortgage

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Guiding Grads to Fill the Mortgage Industry Gap

Posted on April 15, 2013 by admin

The housing market is gaining speed and in the coming years the actions and aftermath of poor procedures that led to the housing market bust will be behind us. The question is not what the market will be in the future, it is who will serve the consumers in the housing market?

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

In a previous Thought Leadership post, we mentioned that at the height of the industry, there were more than 3,500 mortgage brokers and lenders in Georgia. That number decreased rapidly to 750 in 2012 – an 80 percent decrease.

The recession closed the doors of many mortgage companies and the industry wasn’t at the top of every college grad’s list to find jobs. The media damaged mortgage lenders’ reputations during the recession and there weren’t companies able to invest time and money into training qualified individuals to take the place of the lenders performing carelessly.

With many out of the industry, everyone left in the industry aging, and nobody else coming in, there will soon be a gap in the number of mortgage professionals needed to serve the reviving market.

Our team at Southeast Mortgage has recognized this as an opportunity to fill that gap with trustworthy, credible, and innovative professionals that will serve the market the best they can to avoid another housing collapse.

Brent, a SEM Senior Loan Originator provides information to a student at recent Georgia Association of Colleges & Employers (GACE) event.

Brent, a SEM Senior Loan Originator provides information to a student at a recent Georgia Association of Colleges & Employers (GACE) event.

The Southeast Mortgage team has been present at career fairs for some time to recruit recent college grads into the industry. Now, we are launching a new program to take our efforts of training a new generation of mortgage professionals a step further.

The first Southeast Mortgage MLO Associate Program will launch at one of our new Social Max Centers in June 2013. The program will include a class of 10 that will go through an eight-week training period to get their mortgage license. Each associate will be paired with a seasoned mortgage professional of the Southeast Mortgage team to guide them along the way.

This mentorship of young, recent college grads ensures our inevitably aging population of trustworthy mortgage professionals can pass along their knowledge to a rising generation.

We’ve mentioned the importance Southeast Mortgage puts on relationships and this program is another illustration of that. No matter how technologically advanced our society becomes, people will always want to deal with people when it comes to making a large financial decision like getting a mortgage.

Our commitment to training recent college grads with our MLO Associate Program isn’t just about creating trustworthy mortgage professionals for us to work with – it’s about contributing to the rebirth of the mortgage industry and ensuring there are professionals to accommodate consumers’ needs.

Interviews for this year’s program are already underway, but if you would like to learn more about the Southeast Mortgage MLO Associate Program or are interested in a career in the mortgage industry, feel free to contact our HR team at HR@SoutheastMortgage.com or call 770-279-0222.

- Kathy Gyselinck,  Executive Vice President for Southeast Mortgage

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New Office Concept Is Enriching Relationships

Posted on April 9, 2013 by admin

During the recession, it became the norm to hear about mortgage companies closing their doors. In previous posts, we’ve mentioned the importance of “waiting for the tide to rise again” in the cyclical nature of the housing industry – but what you do during that wait is equally important.

Cal Haupt, President and CEO of Southeast Mortgage

Cal Haupt, President and CEO of Southeast Mortgage

Southeast Mortgage has always believed in strong relationships with past clients, referral sources, industry partners, the real estate community and mortgage loan originators. Creating and maintaining these relationships takes time and attention, but the rewards they bring are tantamount to a foundation that can sustain a company through an economic recession.

When Southeast Mortgage got a call last year from a source saying a developer in Atlanta was turning over an 8,000-square-foot office space, our team knew it was as an incredible opportunity.

The Alpharetta office space overlooking Georgia 400 had all the accoutrements of the pre-financial crisis excess – large conference rooms filled with furniture. But this office space furniture was not like all of the others. The boardroom table was easily converted into a regulation-size pool table and there was a card table that could be converted to a conference table.

Interested in the size and location of the office as well as the unique accoutrements it included, we elected to move into the space. We enhanced the entertainment aspect of the office and added other items like a satellite television, Baggo set and more card tables. Once renovations were completed, our CRM team hosted a Realtor/Referral Social.

The rapport we saw at that social was amazing. It was not the typical dinner conversation among our team and the real estate community – they were having enriching conversation while enjoying a glass of wine, good music and fun competitive games. This social event illustrated another way to create and sustain strong relationships with industry partners.

Because of the successes seen at the first “Social Max Center” in the Alpharetta, we will open three new offices this year that will mirror the first multi-use design. This month, we will open a Social Max Center to serve Cobb and Perimeter offices and in June we will open a Social Max Center to serve our new Gwinnett office.

Each space will be available for our team, the real estate community and industry partners to host events. We’ll provide casual and professional photography for Realtors that attend or host events as well as offer training and marketing materials.

This concept is about doing everything we can to promote a fun and productive environment in which employees, partners and clients can thrive. We understand that while large offices serve our team well, our team is only as strong as the relationships we have with others in the industry.

The new Social Max Centers weren’t just something we created while waiting for the tide to rise – they are evidence of company growth rooted almost entirely in creating and sustaining relationships.

- Cal Haupt, President and CEO of Southeast Mortgage

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The Tide Is Rising and Metro Atlanta Is Primed for Growth

Posted on April 1, 2013 by admin

With more than 20 years in the housing industry, I’ve seen my share of ups and downs in the market. As I’ve referenced before, a recession is a cyclical event, like the rise and fall of the tides in the Low Country of Georgia. Each time the tide rolls out we know it will roll back in eventually.

Cal Haupt, President and CEO of Southeast Mortgage

Cal Haupt, President and CEO of Southeast Mortgage

The growth Southeast Mortgage has seen is evidence that the tide is finally rolling back in for the housing market. In the coming year, Southeast Mortgage will add as many as 50 full-time employees to accommodate the increase in business volume. We are adding new offices and developing innovative new business concepts – which we will talk more about later.

Our experience in the offices of Southeast Mortgage mirrors the positive news we keep reading about the Atlanta market in general. Once one of the hardest hit cities for the drop in residential real estate values, Atlanta is now firmly on the rebound.

The Case-Shiller home price report showed the Atlanta metro area’s annual gain as among the highest of the 20 metropolitan areas surveyed. Atlanta was one of eight metro markets surveyed in the report that had double-digit annual gains.

Metro Atlanta home prices rose more than 13 percent from January 2012 to January 2013. The gain was gradual but significant, increasing 1 percent from December 2012 to January 2013 – the biggest gain Atlanta has seen since the summer of 2006. Nationally, Atlanta’s annual gain in January was 7.3 percent higher than average.

The Case-Shiller report looks at home resales and does not take into account new home construction. As we’ve previously mentioned, sales of existing homes are increasing because of tightened inventory – which is increasing home prices. For sellers that have been waiting for the right value, the tight inventory is good. Buyers, however, have limited options because of the inventory constraints.

But buyers’ options won’t be limited for long. According to McGraw-Hill Construction, residential contracts for future construction in metro Atlanta rose 48 percent in February and 59 percent year-to-date through February.

“As of January, Atlanta had the fifth strongest new construction permits in the country,” Eugene James, Atlanta regional director for Metrostudy said. “Most builders are saying they can’t build fast enough.”

The gains reported by Case-Shiller coupled with the high number of new construction permits are priming Atlanta for economic growth.

When the tides are low, you keep your boat in the harbor and make repairs. Now that the tides are rolling in, people in the industry need to have their boats ready and even invest in new ones to meet the rising demand of the improving market!

- Cal Haupt, President and CEO of Southeast Mortgage

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The Housing Market is Ready to Bloom

Posted on March 25, 2013 by admin

Spring has sprung and the housing market is ready to bloom. Recent reports on the housing market indicate existing home sales and prices point toward a healthy spring – possibly the healthiest in six years.

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

According to the National Association of Realtors, the raw number of homes for sale is at its lowest since 1999. Meanwhile, steady job growth is contributing to an increase in eligible homebuyers looking to make a move. This push and pull has created a surge in housing demand The New York Times said is catching some by surprise.

“As desirable as the long-awaited improvement may be, the unusually low level of homes for sale is creating widespread problems for buyers and sellers alike, leading to bidding wars and bubble-like price jumps,” the article states.

The housing market’s bloom this spring is based on basic principles of supply and demand. The demand for housing is increasing steadily – especially as rates remain low – but the supply cannot catch up. NAR reports the housing inventory is up 9.6 percent from the same period in 2012, yet down 19.2 percent year-over-year since 2005 for listed inventory.

To accommodate the increase in demand with limited supply, home prices are increasing. Zillow recently reported Atlanta home values are up 4.1 percent year-over-year with the average home value in February being $117,500. Nationally, home prices rose 5.8 percent year-over-year.

“Rising home values will free many more homeowners from negative equity, allowing some of them to list their homes for sale which, in turn, will ease supply constraints,” Zillow Chief Economist Stan Humphries said.

Right now, inventories will remain low – raising prices – because of the sheer volume needed to accommodate the growing number of homebuyers. But as construction catches up making new hires, producing more materials, etc., the housing inventory could be closer to meeting demands by summer.

The push and pull will resume as inventory catches up and the supply and demand curve requires a shift. But for now, rates and prices are low and values are high – making spring the perfect time to stop and smell the opportunities the housing market is offering.

- Kathy Gyselinck,  Executive Vice President for Southeast Mortgage

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The Housing Market in Retrospect

Posted on March 18, 2013 by admin

The National Association of Realtors recently produced a Market Pulse Survey that provides insight on consumers’ needs in retrospect from 2003 to 2011. Looking at consumers’ needs and their accompanying behaviors can be beneficial in understanding future market conditions.

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

Kathy Gyselinck is Executive Vice President for Southeast Mortgage

To produce the report, data was gathered through a telephone survey of 1,000 urban and suburban adults in the top 25 media markets. This data juxtaposed market trends and conditions alongside consumers’ perceptions on topics such as affordability and buying confidence.

While consumers’ perceptions of the market varied dramatically over the nine-year period that overlapped the housing market’s fall and the economic recession that followed, their perceptions are interesting to note.

First, the survey reported consumer concern about affordability eased steadily after the housing peak in 2005 – when 51 percent of respondents indicated that housing affordability was a “very big” or “fairly big” problem. Home prices and mortgage rates continued to decline from 2007 to 2011 and eventually led to a better perception. In 2011, only 38 percent of respondents thought housing affordability was a problem.

These numbers coincided with NAR’s affordable housing index. From 2003 to 2011, NAR’s housing affordability index rose 60 percent.

Screen Shot 2013-03-18 at 3.27.00 PM

Graph taken from report by National Association of Realtors

While housing was becoming more affordable, consumers were becoming less confident. The report states from 2007 to 2011, there was a steady decrease in survey participants who thought buying a home was a good financial decision – decreasing from 80 percent to 73 percent.

The declining prices and genuine uncertainty about the market over that time period contributed to consumers’ questioning of investing in a home; however, consumers did not fail to realize unfavorable market conditions actually provide favorable buying options.

Graph taken from report by National Association Realtors

Graph taken from report by National Association Realtors

When asked during the time period of 2007 to 2011, an overwhelming majority of consumers thought it was a good time to buy. In 2007, 46 percent of consumers agreed it was a good time to buy and then, by 2011, that number rose to 57 percent of consumers in agreement.

It will be interesting to see if consumer perceptions continue to rise now that the housing market has surfaced out of its darker period over the past decade. Home prices and mortgage rates are still low so it is still a good time to buy. This survey indicates consumers separated “a good time to buy” from “a good financial decision” from 2005 to 2011. With the market gaining speed, those two perceptions may cross paths soon.

View The National Association of Realtors’ report for more information on the survey.

- Kathy Gyselinck,  Executive Vice President for Southeast Mortgage

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