Faces of the Industry
Q1. Where do you think the housing market is headed in 2013?
The housing market in the coastal areas of S. California shot out of the gates quickly in 2012 and has only accelerated with the low inventory of homes and an abundance of well qualified buyers. 2013 most likely will continue through the year with a limited supply of homes on the market and lots of buyers. The number of listings in the South Bay are down considerably (approximately 40%) from 2012, which was down considerably from 2011. There doesn’t seem to be any factor out there that will change this.
Q2. What sort of opportunities do you see with the low mortgage rates?
The low mortgage rates provide several opportunities – the most obvious is being able to qualify for a larger loan which means the bigger home or the more desirable location. For the homeowner, with all- time low interest rates, they can refi their mortgage to lower their monthly payment. One item I’ve noticed with clients and friends that have lowered their payments, they feel much better about the overall economy and have a more positive outlook.
Q3. Do you believe the rates will stay low? Are you seeing people rushing to buy?
I believe rates will stay low through 2013 but who knows after that. Buyers should take advantage of the low rates now and not wait. The economy seems to be improving at a quicker pace than most economists thought and rates won’t stay down for ever.
Q4. What kind of properties do you think we’ll see the most growth in 2013? (single family homes, income properties, etc)
The properties that are showing the most growth are – not surprisingly- the homes in the best locations. Beach cities, such as, Manhattan, Hermosa and Redondo Beach have seen great appreciation in the past year. Specifically, within these areas, the most desirable locations have appreciated the most. Also, investors are looking for the best return on their money and have been purchasing apartment buildings with large down payments and in many cases all cash. As a result, these apartment buildings are in great demand and appreciating quickly.
Q5. What has changed in the last few years in your relationship with lenders?
There are fewer lenders now and the larger Banks (B of A and Wells Fargo) have gained a greater share of the market. The mortgage bankers still provide a greater variety of loan programs for the borrowers.
Q6. How have you adjusted to the volatile housing market? Where do you turn to for help?
The largest adjustment that I’ve made in this volatile market is high level networking with agents at South Bay Brokers and peers within the business to find homes prior to hitting the market. I can no longer wait to see the new listings on the MLS. I need to find them for my clients beforehand. With inventory so low, it’s difficult to find the right home, so it is necessary to work longer and talk to as many people as possible.
Q7. What is one change that you believe needs to be made to the CA real estate industry in 2013?
The change that is needed most regards lenders and qualifying ratios for self- employed people.
It has been very difficult for self- employed to qualify for loans even when they have very large down payments. The lenders are making FHA loans with 3.5% down payments but are denying loans of 50% Loan to Value because the borrower’s tax returns don’t show sufficient debt –to- income ratio. Which loan is riskier to you?
Q8. What else would you like our readers to know?
Now is the opportune to time to buy a home because it is a strong market for both buyers and sellers. It’s a good time for the “step up” buyer – you can buy the larger home and know that if your current home is priced correctly, you can sell quickly. For the seller, there are well qualified buyers that can purchase and close quickly.
To contact Howard:
South Bay Brokers
1640 S. PCH
Redondo Beach, CA. 90277
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By DANA MATTIOLI WSJ
The housing market’s long decline has left once-thriving real-estate professionals scrambling for supplemental income or changing professions.
Realtors, agents, brokers and builders rely on sales and commissions for most of their income. And their incomes plunged as sales of existing homes fell 13.3% to 4.9 million last year from 7.1 million in 2005, the most recent peak. The National Association of Realtors says median income for Realtors and brokers fell to $36,700 last year from a high of $49,300 in 2004. The group’s membership fell to 1.14 million in September from 1.35 million in September 2006.
Walter Molony, NAR spokesman, says Realtors traditionally dabbled in appraisals, commercial real-estate insurance and title insurance to carry them through slow months. But this downturn has been unusually long, and many of those related fields are suffering along with home sales, forcing many agents to consider other options.
Until recently Jill Galloway, 49, worked solely as a Realtor with Hilton & Hyland in Beverly Hills, Calif. Since 2002, Ms. Galloway has specialized in residential real estate in the affluent Hancock Park and Hollywood Hills areas. Last winter, she realized that real-estate sales wouldn’t be enough to support herself and two children, ages 16 and 11. Ms. Galloway didn’t sell a home from January through July. “It became crushingly apparent that I couldn’t pretend anymore that all of my clients were sitting on the fence,” she says.
Her only income came from sporadic leasing deals, forcing her to dip repeatedly into retirement savings. She estimates her earnings this year will fall at least 60% from the $200,000 to $250,000 she earns in a typical year.
In July, Ms. Galloway and a friend opened a women’s store in downtown Los Angeles, selling samples and overruns given to them by showrooms; when an item sells, the women pay the showroom and keep the mark-up. They don’t pay rent because the landlord, with other vacant shops in the area, just wants the store occupied.
“It’s not a major income stream, but I do see some cash flow and a way to cross-promote” her real-estate business, she says. She says any face time with new people can turn into a prospective business deal.
Ms. Galloway is also exploring a frozen-yogurt franchise with her brother in New Orleans, but says she still considers herself primarily a Realtor. “I’m a real-estate agent 24 hours a day, everywhere I go, there’s always the opportunity for me to find a client or property,” she says.
Recruiters say real-estate workers typically have transferable skills. Those with backgrounds in acquisition or development might consider renewable-energy fields such as wind or solar, says Deb Barbanel, managing director and co-lead of real estate in the Americas for executive-recruiters Russell Reynolds Associates. People with financial skills, such as mortgage brokers, and loan originators, are flocking to the FDIC and other government agencies, she says. Ms. Barbanel says real-estate veterans can get a leg up in the job search by mining their extensive contacts. “They build strong relationships and can take those skill sets into other areas where relationships are tantamount to success like sales and marketing,” she says.
Via Inman News
By Andrea V. Brambila
In 1973, Harold Crye “wandered” into real estate fresh out of the U.S. Army and discovered he had a passion for the business. He worked for a real estate brokerage for four years before co-founding his own company with Dick Leike in 1977. He was 31.
“I felt like there could be a better way. I felt like the agents were being treated like employees at the last place and I felt they could be given more freedom as independent contractors,” Crye said.
“I thought we could set up a company that was a little more agent-friendly, give them more tools they needed, a more fun place to work, more camaraderie. Just a better environment.”
Today, Crye-Leike, Realtors has 3,200 agents and 113 offices in nine states: Tennessee, Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Louisiana and Oklahoma. The company continues to grow: last month, it expanded into the Knoxville, Tenn., market.
Crye-Leike is the sixth largest brokerage in the country by closed transaction sides, according to the latest Real Trends rankings. The company is a member of the Leading Real Estate Companies of the World.
Faces of the Industry: Aaron Wood
Top Industry Pro Survives FATCO Downsizing: A First-Hand Account
Aaron Wood, a former long-term employee at First American Title (FATCO), lost his job when FATCO decided to eliminate his job and the entire office. We caught up with Aaron recently and asked him to share the story of how an exemplary employee could wake-up one day and find jobs had been sent to another country!
Q. What was your job at FATCO?
I was the Account Executive for the San Bernardino and Highland Territory.
Q. Describe what happened to the jobs in your office?
Due to the slow down in the housing market and the movement of the workload to other offices and overseas the office staff was significantly downsized and outsourced with most of the jobs sent to places like India.
Q. How much notice did FATCO give you?
None. I received a phone call to come into the office for a meeting. Nothing out of the ordinary. It was when I pulled in and saw the head of HR’s car in the parking lot that I knew something was up. She was only there to let people go.
Q. Did FATCO give you any job placement assistance?
I was given the website for the Employment Development Department (EDD).
Q. When did you find out the entire office jobs were being outsourced to India?
We knew First American was using Indian employees for many years. It was first sold to us as a way to make our job easier.
First, a lot of the title people left, then customer service. In my opinion, our turn around times slowed. Instead of doing your profile in real time, as customer service talked to you on the phone, it went to someone keying it into the system, with the information then being sent to India, research done there, then emailed back. It not only took the personal touch out of everything, but customers (agents and brokers) definitely noticed the delays.
Q. How did that make you feel?
From a business standpoint, I understand that time is money. Employees are expensive. At some point, when do you lose your integrity and what you stand for? That line seems to have become blurred for many companies.
Q. How many jobs do you think were sent overseas?
I would not even know where to start counting. Besides FATCO, I had someone in my office interviewing for a job last week who came from Fidelity. She lost her job due to outsourcing as well.
Q. You managed to stay in the industry, but many people haven’t. To what do you attribute your success?
I enjoyed the industry and wanted to stay with it. I started at the bottom – assisting a successful agent – to find out what they are doing to survive. I then applied that to my own business and worked my way up from there. I am now with Keller Williams Redlands Market Center in Highland, CA as a Team Leader helping others do the same and I could not be happier.
Q. How different is your job now?
The contacts I made have helped me out more than anything. In the end it is all about being able to proudly talk about yourself and what you stand for. Instead of selling why to use me for title or other services, now it is why you should use me and my agents as your knowledgeable and accessible Realtor.
Q. Is there anything else you would you like our readers to know?
I always remember the line, “Opportunity doesn’t knock; it honks the horn as it drives by”. If you are not ready and watching for it you won’t even know it was there.
My past clients have been my biggest supporters. Everyone I talk to is an opportunity somehow. I keep one heck of a client database to make sure I do not miss a thing, and I always keep an ear open for what is happening. That way I can position my agents and my office to seize the opportunity, and be able to shift with the market.