Recently the website eMarketer reported that, "Online advertising spending will finish the year with a 13.9 percent increase to $25.8 billion, compared with an 8.2 percent decline to $22.8 billion for print newspaper ads." This is a historic threshold we have crossed and it's surprising that there has been so little media hype about it.
All of us in real estate marketing have been touting this for years, much to the angst of our agent populations. Real estate has been a late comer to new media. Marketers are trying to educate their agent clients and by turns the public, into the realities of print vs. web advertising. Searching for properties on the web is easier, simpler, more targeted, and faster.
Sales agents have resisted change in part because of their own lack of familiarity with technology and in part because their clients still want a newspaper ad. People who would never search for a new home themselves in the newspaper demand a newspaper ad. Then you have competing brokers in Chicago spending up a storm in print trying to grab the attention of clients and agents from other companies. Most notably is @properties, which is a bit of a head scratcher given their young, hip techy image. Cultural change is difficult, especially in real estate.
But the writing is on the CRT, print is out and the web is in. Which is not to say that print is dead. Studies show that companies who have a strong web presence benefit from print advertising. The most effective combination are print and online branding ads that drive people to your website.
Thursday, December 30, 2010
Looking Ahead to 2011 in Real Estate
Those of us who work in real estate will probably feel left behind in 2011. The economic news will get increasingly better but we will be experiencing a fairly static housing market. Everything goes in cycles and this downward cycle is turning around to the positive side. But patience is required if you are a realtor.
The Federal Government announced today that first time jobless claims fell below the “magic” 400,000 marker for the first time in two years. One could not choose a better note to end the year on. While corporate profits are fat and the stock market is healthy, until the jobs come back the economy is going to drag along at an anemic growth rate. The good news is that our economy created an average 100,000 jobs per month in 2010. This level of job growth is tepid at best, but it’s a far sight better than 2009 when we were losing about 137,000 jobs per month on average. A healthy economy is expected to generate 300,000 jobs per month. The jobless rate in the Chicago area recently dropped to 8.9%, which is encouraging.
Seventy percent of our economy is powered by the consumer. So it was also great to see record numbers for holiday retail sales this year. The Associated Press reported this week that “The National Retail Federation predicts spending this holiday season, Nov. 1 through Dec. 31, will reach $451.5 billion, up 3.3 percent over last year. That forecast was upgraded earlier this month based on a robust November. That would be the biggest increase since 2006, and the largest total since a record $452.8 billion in 2007.”
Real estate is going to lag for some time because of roughly 1.5 million distressed homes on the market nationally (128,000 in Illinois), 1.2 million in process and 4 million being held by financial institutions waiting to be foreclosed and put on the market. Foreclosures were down sharply in Illinois in December by 23.7%. But this is estimated only because of the “robo-signing” scandal. Look for foreclosures to heat up again in 2011. Repossessions, according to RealtyTrac Inc., have fallen 12% year over year.
Surprisingly, after a drop of 30% in our real estate market since the Obama tax credit program expired, sales of existing homes seem to be stabilizing. Pending home sales were up 3.5% in November, according to NAR. But the Case-Schiller Index came out this week showing that housing is losing steam fast, with prices falling again. In the Chicago area the median home price was basically flat at an increase in 2010 of .3%. With unemployment at 9% and 4.5 million new foreclosures about to hit the market the downward pressure on prices will continue.
We are headed in the right direction with GDP growth, job growth, and consumer spending rebounding. Look for 2011 to be a mirror of 2010 in real estate. Prices are at 10 year lows and financing, though stringent, is also at historic lows. With builders taking 4 years off we have the making of a housing shortage in 2012 and beyond. For when jobs come back and demand for housing picks up, the supply will be low. The stage is set for better times in real estate; we just need the job market to come back.
Tuesday, December 28, 2010
Home price plunge is widespread
By Les Christie, staff writerDecember 28, 2010: 9:34 AM ET
The news in housing is not good:
NEW YORK (CNNMoney.com) -- Home prices took a shockingly steep plunge on a monthly basis, an indication that the housing market could be on the verge of -- if it's not already in -- a double-dip slump, according to an industry report released Tuesday.
Prices in 20 key cities fell 1.3% in October from a month earlier, an annualized decline of 15%, according to the S&P/Case-Shiller index. Prices were down 0.8% from 12 months earlier. Click here for more...
Do you think housing is set for a double dip recession? What does this mean for the economy as a whole?
The news in housing is not good:
NEW YORK (CNNMoney.com) -- Home prices took a shockingly steep plunge on a monthly basis, an indication that the housing market could be on the verge of -- if it's not already in -- a double-dip slump, according to an industry report released Tuesday.
Prices in 20 key cities fell 1.3% in October from a month earlier, an annualized decline of 15%, according to the S&P/Case-Shiller index. Prices were down 0.8% from 12 months earlier. Click here for more...
Do you think housing is set for a double dip recession? What does this mean for the economy as a whole?
Monday, December 27, 2010
The American Dream Lives: Homeownership Remains a Popular Goal
Housing bust? So what? We still want to own
By Les Christie, staff writer
December 16, 2010: 5:19 AM ET
NEW YORK (CNNMoney.com) -- The American Dream is still alive and kicking, including within immigrant and minority communities, according to a survey from mortgage giant Fannie Mae.
The housing crisis hasn't quenched the homeownership thirst, the company found. More than 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.
"The crisis has not put a dent in the desire to own," said Doug Duncan, Fannie's chief economist, "although it may have changed the reasons that people want to own."
The report, the first close analysis Fannie has taken of consumer attitudes about the rent-or-own decision, found that qualitative reasons -- like having the ability to remodel or to send the kids to a better school -- have overtaken financial considerations as the primary motivators for homeownership.
Some misperceptions about financial benefits may help to keep it high.
"People's attitudes don't always line up with empirical facts," said Duncan.
Click here for more...
By Les Christie, staff writer
December 16, 2010: 5:19 AM ET
NEW YORK (CNNMoney.com) -- The American Dream is still alive and kicking, including within immigrant and minority communities, according to a survey from mortgage giant Fannie Mae.
The housing crisis hasn't quenched the homeownership thirst, the company found. More than 51% of people said the bust did not change their willingness to buy a home and an additional 27% said it actually made them more likely to do so.
"The crisis has not put a dent in the desire to own," said Doug Duncan, Fannie's chief economist, "although it may have changed the reasons that people want to own."
The report, the first close analysis Fannie has taken of consumer attitudes about the rent-or-own decision, found that qualitative reasons -- like having the ability to remodel or to send the kids to a better school -- have overtaken financial considerations as the primary motivators for homeownership.
Some misperceptions about financial benefits may help to keep it high.
"People's attitudes don't always line up with empirical facts," said Duncan.
Click here for more...
A New Year's Message From Ron Peltier
Ron Peltier’s Market Update: A 2010 Recap and Looking Ahead to 2011
Increasing Stability without ‘Artificial’ Incentives Indicate that Housing Industry is Stabilizing
Our end-of-year analysis shows that the housing industry came very close to what we anticipated would occur in 2010 – a strong first half fueled by tax credits, and a subsequent slowdown as incentivized buyers were unable, or not confident enough, to delve into the market.
As a result, 2010 will end with slightly fewer total sales than in 2009, a year filled with major incentives. Because the second half of 2010 had none of the government subsidies, it became a litmus test to whether the market was ready to walk on its own. While wobbly, we are pleased that it did make progress. Were it not for the continued challenges impacting the national economy, we believe the second half would have had much more traction.
Positively Impacting Today’s Market
During 2010, the impact of mortgage rates falling to historic lows continued to drive refinance activity above typical levels. As of December 2010, we are seeing interest rates in the 4.5% range on a 30-year conventional loan, up from 4.2%. These generationally low rates provided critical traction to the housing market.
We view the "proof" of traction in the pended sales numbers. In July, as government incentives came to a close, pended sales activity was tracking at 3.8 million total sales for the year -- the lowest pended sales numbers since 2000. The August numbers saw pended sales activity tracking at approximately 4.6 million total sales, an increase post-tax incentive – clearly positive news. HomeServices forecasts that the number of total sales for 2010 will be remain slightly under five million, but dramatically better than where things looked to be in July.
It is this post-incentive growth that demonstrates the beginning of a “normalized” flow from which we can build in 2011.
Distressed Properties
High affordability, in no small part, fueled by the approximately four million residences at some stage of the foreclosure process, has been a key driver in 2010, and might be even more of a factor in 2011.
Home foreclosure opportunities are not coming into the market at the same rate they were earlier in 2010. This has impacted sales, as numerous highly desirable homes with meaningful discounts have yet to reach the market.
We must deal with distressed properties as part of our inventory in order to sell them, even if at highly discounted prices.
We encourage banks to work with homeowners on a settlement package because foreclosures in the pipeline must be resolved before we see appreciation in prices.
2011: A Period of Stabilization
Current trends show that the return to a more active sales environment will be gradual and that adjustments must be made before any real growth can be experienced. A recent survey noted that one in five consumers believe the recovery will take place in 2015. We are slightly more optimistic, but balanced. We believe that the existing home sales market will remain at or near the five million unit level – WITHOUT the artificial stimulation of government subsidies – equating to stability throughout 2011.
We also expect interest rates to stay in the 4%‟s to mid 5%‟s. Affordability will continue at all-time highs, but we need to sell off the remaining distressed inventory before we see any real growth in total sales. We expect slow incremental growth, but not until 2012.
Experts predict that in addition to foreclosures, unemployment remaining in the 9.5% range will significantly impact on our industry. People want to own a home, many have the means -- most do not have the confidence. That’s our challenge.
http://www.koenigstrey.com/
Increasing Stability without ‘Artificial’ Incentives Indicate that Housing Industry is Stabilizing
Our end-of-year analysis shows that the housing industry came very close to what we anticipated would occur in 2010 – a strong first half fueled by tax credits, and a subsequent slowdown as incentivized buyers were unable, or not confident enough, to delve into the market.
As a result, 2010 will end with slightly fewer total sales than in 2009, a year filled with major incentives. Because the second half of 2010 had none of the government subsidies, it became a litmus test to whether the market was ready to walk on its own. While wobbly, we are pleased that it did make progress. Were it not for the continued challenges impacting the national economy, we believe the second half would have had much more traction.
Positively Impacting Today’s Market
During 2010, the impact of mortgage rates falling to historic lows continued to drive refinance activity above typical levels. As of December 2010, we are seeing interest rates in the 4.5% range on a 30-year conventional loan, up from 4.2%. These generationally low rates provided critical traction to the housing market.
We view the "proof" of traction in the pended sales numbers. In July, as government incentives came to a close, pended sales activity was tracking at 3.8 million total sales for the year -- the lowest pended sales numbers since 2000. The August numbers saw pended sales activity tracking at approximately 4.6 million total sales, an increase post-tax incentive – clearly positive news. HomeServices forecasts that the number of total sales for 2010 will be remain slightly under five million, but dramatically better than where things looked to be in July.
It is this post-incentive growth that demonstrates the beginning of a “normalized” flow from which we can build in 2011.
Distressed Properties
High affordability, in no small part, fueled by the approximately four million residences at some stage of the foreclosure process, has been a key driver in 2010, and might be even more of a factor in 2011.
Home foreclosure opportunities are not coming into the market at the same rate they were earlier in 2010. This has impacted sales, as numerous highly desirable homes with meaningful discounts have yet to reach the market.
We must deal with distressed properties as part of our inventory in order to sell them, even if at highly discounted prices.
We encourage banks to work with homeowners on a settlement package because foreclosures in the pipeline must be resolved before we see appreciation in prices.
2011: A Period of Stabilization
Current trends show that the return to a more active sales environment will be gradual and that adjustments must be made before any real growth can be experienced. A recent survey noted that one in five consumers believe the recovery will take place in 2015. We are slightly more optimistic, but balanced. We believe that the existing home sales market will remain at or near the five million unit level – WITHOUT the artificial stimulation of government subsidies – equating to stability throughout 2011.
We also expect interest rates to stay in the 4%‟s to mid 5%‟s. Affordability will continue at all-time highs, but we need to sell off the remaining distressed inventory before we see any real growth in total sales. We expect slow incremental growth, but not until 2012.
Experts predict that in addition to foreclosures, unemployment remaining in the 9.5% range will significantly impact on our industry. People want to own a home, many have the means -- most do not have the confidence. That’s our challenge.
http://www.koenigstrey.com/
Mortgage Rates Headed Upwards 2011?
Mortgage Rates May Have Hit Bottom
By LYNNLEY BROWNING
Published: December 23, 2010
(The New York Times) MORTGAGE rates in 2010 were the lowest in six decades, but a recent and sustained increase may indicate that consumers can expect to pay more in the new year to buy or refinance a home.
After hitting rock bottom in mid-November, fixed rates for 30-year mortgages, the most common type of home loan, have steadily risen.
With this year’s historically low rates, “there is a good chance that we have peaked, give or take a few basis points,” said HSH Associates, an independent publisher of mortgage and consumer loan information, in its most recent trends forecast. (One basis point is 0.01 percent.) According to Christopher J. Mayer, a senior vice dean and a professor of real estate, finance and economics at the Columbia University Business School, “The window of low rates could have left us.”
By Dec. 16, rates for a 30-year fixed loan rose for the fifth consecutive week, to 4.83 percent, up from 4.17 percent on Nov. 11, according to Freddie Mac, the government-controlled buyer of loans. Rates in the Northeast, which are often a tenth of a point or more above the national level, were on average the same as those across the nation. But by Thursday they had nudged downward, to 4.81 percent.
Click here for more...
By LYNNLEY BROWNING
Published: December 23, 2010
(The New York Times) MORTGAGE rates in 2010 were the lowest in six decades, but a recent and sustained increase may indicate that consumers can expect to pay more in the new year to buy or refinance a home.
After hitting rock bottom in mid-November, fixed rates for 30-year mortgages, the most common type of home loan, have steadily risen.
With this year’s historically low rates, “there is a good chance that we have peaked, give or take a few basis points,” said HSH Associates, an independent publisher of mortgage and consumer loan information, in its most recent trends forecast. (One basis point is 0.01 percent.) According to Christopher J. Mayer, a senior vice dean and a professor of real estate, finance and economics at the Columbia University Business School, “The window of low rates could have left us.”
By Dec. 16, rates for a 30-year fixed loan rose for the fifth consecutive week, to 4.83 percent, up from 4.17 percent on Nov. 11, according to Freddie Mac, the government-controlled buyer of loans. Rates in the Northeast, which are often a tenth of a point or more above the national level, were on average the same as those across the nation. But by Thursday they had nudged downward, to 4.81 percent.
Click here for more...
Thursday, December 9, 2010
The Best Offices In Chicago
As any Branch Manager in real estate can tell you, managing an office in this recession is not for the timid. Transactions and revenues are down significantly since the heady days of 2006, sales associates are crabby, sellers are crabby, buyers are crabby and, well you get the idea. It takes someone with very special skills to help sales associates navigate through this terrain. Often times it is impossible to know what lies ahead because the economic conditions are so unique. Recruiting and retaining good agents in this environment is especially challenging.
So what makes a good Branch Manager? Start with a positive mental attitude, add in the ability to persuade and motivate, the ability to show grace under pressure, add in market knowledge and being well connected to real estate colleagues both inside and outside your firm. And having lots of faith that the future will eventually get brighter really helps. In a word, leadership.
For all of these reasons, it is especially gratifying that Koenig & Strey was recognised by Chicago Agent Magazine for having 4 of the best offices in town.
The cover featured Megan Tish of our Schaumberg office. She is a rising star in Koenig & Strey and profitably manages 27 agents in one of our newer offices. Megan knows her market and her agents. She is a great recruiter, so kudos for persuasion and motivation.
Nancy Nagy is Senior Vice President and is the Chicago Regional Manager for Koenig & Strey, and directly oversees 175 sales associates at our Gold Coast office. Nancy has a great sense of humor and lots of style too. She is a savvy businesswoman who happens to manage the number 1 office for market share in Chicago’s affluent Gold Coast. She is a terrific mentor and motivator. She is solution oriented and one of the most positive individuals you will ever meet.
Also featured is Terry Wilkowski and our Schiller office in Elmhurst. HomeServices of America acquired Schiller last April. We were overwhelmed by the enthusiasm shown by the 60 sales associates for the marketing and technology we brought to them. Terry is Koenig & Strey’s Western Regional and is a Senior Vice President. He has been managing sales associates for 16 years and is a real pro. Terry has a direct, no-nonsense management style. He is very bright and he has a great sense of humor. That helps in today’s market.
Richard Murawski has been managing sales associates for 25 years. He manages over 50 full time agents our Northwest side office. He is soft-spoken and relentless. He is a successful recruiter and is a very hands-on manager. He will be there to help with open houses or to give advice. His agents like working with him because he is easygoing, positive and very fair-minded.
Letitia Windham is our newest Branch Manager, managing 120 sales associates at our Lincoln Park office. Letitia was a successful agent who aspired to be a great manager. She has tremendous market knowledge and has walked the walk, so to speak. As she states: “I’ve walked in their shoes, and I’ve done it in the current market. I am well versed in residential sales, new construction, development and commercial property.”
Koenig & Strey is successful because of our sales associates. They make or break a real estate company. Recruiting and retaining those great sales associates is the job of a Branch Manager and we have some of the best.
So what makes a good Branch Manager? Start with a positive mental attitude, add in the ability to persuade and motivate, the ability to show grace under pressure, add in market knowledge and being well connected to real estate colleagues both inside and outside your firm. And having lots of faith that the future will eventually get brighter really helps. In a word, leadership.
The cover featured Megan Tish of our Schaumberg office. She is a rising star in Koenig & Strey and profitably manages 27 agents in one of our newer offices. Megan knows her market and her agents. She is a great recruiter, so kudos for persuasion and motivation.
Nancy Nagy is Senior Vice President and is the Chicago Regional Manager for Koenig & Strey, and directly oversees 175 sales associates at our Gold Coast office. Nancy has a great sense of humor and lots of style too. She is a savvy businesswoman who happens to manage the number 1 office for market share in Chicago’s affluent Gold Coast. She is a terrific mentor and motivator. She is solution oriented and one of the most positive individuals you will ever meet.
Also featured is Terry Wilkowski and our Schiller office in Elmhurst. HomeServices of America acquired Schiller last April. We were overwhelmed by the enthusiasm shown by the 60 sales associates for the marketing and technology we brought to them. Terry is Koenig & Strey’s Western Regional and is a Senior Vice President. He has been managing sales associates for 16 years and is a real pro. Terry has a direct, no-nonsense management style. He is very bright and he has a great sense of humor. That helps in today’s market.
Richard Murawski has been managing sales associates for 25 years. He manages over 50 full time agents our Northwest side office. He is soft-spoken and relentless. He is a successful recruiter and is a very hands-on manager. He will be there to help with open houses or to give advice. His agents like working with him because he is easygoing, positive and very fair-minded.
Letitia Windham is our newest Branch Manager, managing 120 sales associates at our Lincoln Park office. Letitia was a successful agent who aspired to be a great manager. She has tremendous market knowledge and has walked the walk, so to speak. As she states: “I’ve walked in their shoes, and I’ve done it in the current market. I am well versed in residential sales, new construction, development and commercial property.”
Koenig & Strey is successful because of our sales associates. They make or break a real estate company. Recruiting and retaining those great sales associates is the job of a Branch Manager and we have some of the best.
Wednesday, December 8, 2010
A Truly Fabulous Home
Mary Bennett recently secured an exclusive marketing agreement for The Francis J. Dewes home on Wrightwood Avenue in Chicago. This listing stands out from among the many upper-tier listings that Koenig & Strey markets each year as one of the most opulent listings I have ever seen. It is a blend of German Baroque and French architecture constructed of carved bedford limestone with gothic and rococo details. Built for brewing baron Francis Dewes in 1895, the home was designed by architects Adolph Cudell and Arthur Hercz. Mr. Dewes wanted the home to reflect his taste in old world art and culture. The mansion is filled with intricate ornimentation and has been long admired for its artistry inside and out.
The current owners of the home worked with the Botti Studio of Architectural Arts during a six-year restoration project. Everything was cleaned and refinished from the cellar to the dome. The attention to detail is truly astounding with windows, wood carvings, and floor tiles all being cleaned and restored to their original stately design. The home was also renovated to bring it into the 21st century with a remodled kitchen, a new spectacular master suite, and updated wiring for all modern media needs.
This photograph of the grand staircase gives you some idea of what a masterpiece this home truly is. The Dewes mansion will soon be listed at $9.9 million.
The current owners of the home worked with the Botti Studio of Architectural Arts during a six-year restoration project. Everything was cleaned and refinished from the cellar to the dome. The attention to detail is truly astounding with windows, wood carvings, and floor tiles all being cleaned and restored to their original stately design. The home was also renovated to bring it into the 21st century with a remodled kitchen, a new spectacular master suite, and updated wiring for all modern media needs.
Tuesday, December 7, 2010
The Truth Behind Customer Satisfaction
In an independent survey of clients year-to-date, 96% of Koenig & Strey's clients stated that they were either satisfied or very satisfied with the service they recieved. These are not national survey numbers blended from real estate franchises from across the US, like J.D. Powers such as one of our competitors use, but real consumers who actually worked locally in the Chicago area with Koenig & Strey. Over 88% of our clients said that they were "very satisfied" and 9% said that they were "satisfied". The real estate industry average (NAR) by the way is 57% very satisfied and 34% satisfied.
Koenig & Strey is the leader in Chicago when it comes to meeting our clients service expectations. No one else can make this claim. We do this very simply. We hire the best agents and give them outstanding marketing and administrative support. Our agents average 12 years of experience. In the unsettled real estate environment of today, consumers want to work with the best. That would be Koenig & Strey, if you go strictly by the numbers.
Koenig & Strey is the leader in Chicago when it comes to meeting our clients service expectations. No one else can make this claim. We do this very simply. We hire the best agents and give them outstanding marketing and administrative support. Our agents average 12 years of experience. In the unsettled real estate environment of today, consumers want to work with the best. That would be Koenig & Strey, if you go strictly by the numbers.
Koenig & Strey is Back in Deerfield!
Koenig & Strey has just opened a new office in Deerfield. Our newsest manager, Yvonne Sito, will manage both the Deerfield location and Northbrook. As our President and CEO Doug Ayers stated, “Our presence in Deerfield is tremendously important to Koenig & Strey. This new and thoroughly modern office provides a boutique location that enables us to serve Deerfield and the surrounding communities,” said Ayers. “By opening convenient and efficient offices in more places, Koenig & Strey is leading the industry in changing real estate to fit the lifestyle of our clients and our agents.”
Monday, December 6, 2010
Fix The Deficit
Lou Barnes voices some sanity---until markets can regulate themselves we are dependent upon public policy. Showing the bondholders that we are serious about controlling the deficit would allow the Feds more room to stimulate growth. But it's going to hurt. Do our politicians have the courage, or will they just stick to polemics?
Forget the Fed -- fix the budget
With markets unable to stand alone, everything depends on public policy
Inman News
By Lou Barnes, Friday, December 3, 2010.
Forget the Fed -- fix the budget
With markets unable to stand alone, everything depends on public policy
Inman News
By Lou Barnes, Friday, December 3, 2010.
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