This is such encouraging news and what really brought this information to my attention is the fact that I played a part in this data! I had 3 pending sales during the month of July, and it seemed as though if a house had a roof and 4 walls, it was under contract. For those of us who don’t know, a pending sale is when an existing home on the market becomes binding between two parties. Anything can happen during this time regarding funding, appraisals, stipulations, etc. This is also an exciting time because the sellers and buyers are preparing for major transitions in their lives. What I love about this information is that it paints a very clear picture for me. There were a large amount of homes on the market before, this number began to drop significantly and people began to panic. Their worry is that there were no more good deals on the market, so people began to really get it in gear and begin buying homes. There were many people sitting on the fence, meaning they couldn’t decide whether to buy or wait for better deals to come. For some reason, the panic took hold and a huge amount of homes were pending in July and eventually sold in August. The problem now is the shadow inventory and when it will be released. It seems as though all the good deals are gone, but wait until after the first of the year when further foreclosures are released. If you’re still on the fence, there will be good deals, but prices to continue to rise, so watch out.
I have seen many articles related to this issue and all of them provide different answers. What we have to do is step back and truly take a look at the real issue at hand, unemployment. Why are people unemployed? They lack the education, experience, training, etc., in order to find a job they are willing to work. One thing people run into is underemployment, working a job that requires much less skill or experience than you possess. Even though you are employed, you are not receiving the sufficient salary and stimulation at work to feel happy about what you are doing. This takes us back to entrepreneurial training. If you have experience in entrepreneurship, you are much more eager to seek out entrepreneurial endeavors, or to study whether a certain idea would be profitable. You can see where I’m leading. Some say that you either have the entrepreneurial spirit or not. I believe this to a certain extent. With knowledge and experience, you become confident in your ability to run a small business. To become a doctor, you become educated first, then gain experience. The same happens with entrepreneurship, especially with people born into entrepreneurial families. For those who are not as lucky, or unlucky, depending on how you look at it, we can provide an educational backing for them to be able to seek out entrepreneurial interactions. I would love to hear your comments on this idea, so please do not hesitate to leave one.
Today we read an article about Ben Wallach and Alex Bravy, a couple of tech guys from Chicago who essentially created and developed a company during their morning and afternoon commute, from Highland Park, Illinois to Chicago and back. The commute lasted roughly 45 minutes each way by train, therefore creating a more enjoyable riding experience and environment than a car. Their journey began years earlier when they met in high school. A stroke of luck put them on the same commute to Chicago due to their expertise in technology and successful integration into the tech workforce. On their commutes they began discussing different things they eventually wanted to do in the future, which led to the discussion of more complex business ideas. In comes Web2Carz, a car-shopping resource, and the team began building the foundational features around the basics of car shopping such as applying for a loan, finding a vehicle, and contacting sellers. Bravy then began working on the business development aspect of the business by setting up meetings on the morning commute, then executing the meeting during lunch, or on the commute home in order to respect his current employer. On the other hand, Wallach focused on coding, designing, and creating mockups while in transit. As he puts it:
“If you have a laptop and wireless card, the sky is the limit in terms of where you can work from. You can really work from anywhere in the world — trains, planes, automobiles. That’s really the way we went about it, trying to be efficient with our time by utilizing the morning commute, the afternoon commute, and moonlighting beyond that on the weekends and at nights whenever we had time.”
The main question still looms though. How much work can you possibly get done on a commute? Surprisingly a lot, both of them say. The key is finding a comfortable spot where you can trade ideas back and forth clearly and confidently. If you are able to effectively communicate ideas and feelings, then there is no reason you can’t develop a company anywhere that seems reasonably fit.
I was reading this article the other day and it reminded me so much of my own business, so I decided to give my input on the subject. Many entrepreneurs today are hiring family members to help run small businesses. There is a fine line when it comes to hiring family, just as there is when hiring friends. You really have to find a happy medium and essentially have to separate life from work when not at the office. A perfect example of this is my own. My real estate development company is run by myself, my fiancee and my father, who has been a successful businessman for many years. Of course there are trials and tribulations, but the one thing that always keeps us going in the right direction is accountability. We have to watch each others’ backs at all times. When it comes to large sums of money and in-depth contracts, the best person to be sitting next to you is the one who is not afraid to tell you that the deal is crap. Or that you’re spending way too much money on the landscaping, for example. Another important factor when hiring family are wages. Some family members don’t want to be paid at all, while others believe they deserve a bonus every 2 weeks. The ability to negotiate and keep members of the family happy is key, and also realizing that this is a business and sometimes pay rates are low due to externalities such as the market or long stretches without income. The most important aspect of hiring family to me is the ability to be honest with each other and set the boundaries before you even begin working together. Realize when the right time is to discuss business because this can become tiresome after a while. Respect each others feelings at all times and simply, be realistic.
Cary and Leann of CDB Properties
Increasing sales and falling prices have let to mixed reactions regarding the current housing market. Economists warn that these numbers could artificially inflate good sentiment regarding the market as a whole.
What concerns many is the continued drop in prices, last month, the median price of a new home fell 2.5 percent in July from a year earlier to $224,200. This number may seem small, but considering how important real estate is to the economy, the percentage decrease is significant. Another interesting point is the decrease of available inventory on the market fell 0.7 percent to a record low 142,000 in July. If we continue this pace, it would take almost 5 months to sell all the houses on the market.
What is very encouraging is for the first time since 2005, home building is expected to add to the overall economic growth of the economy. This is significant due to the fact that home builders add many jobs and the acquisition of land and materials helps prop up surround areas affected by further development.
To me, the market continues to strengthen, regardless of falling prices. I see sold sign everywhere and the lack of inventory only continues to light a fire beneath the fence sitters. I recommend to continue promoting your listing to the best of your ability and to market you and your listings. Get it sold, because people are buying.
This is a fantastic post I found by GO2MORTGAGEGUY. Many people have no idea what the difference is between Pre-Qualification vs. Pre-Approval. It’s not as simple as one may think, especially when it comes to writing offers. Many asset managers who are dealing with foreclosures require full document pre-approval letters. This makes a big difference. Check out his blog post and let me know what you think.
I was reading an article earlier stating that only 34% of all buyers in July were first-time home buyers. The author of the article seemed surprised by this statistic but I don’t seem to be phased too much. According to the National Association of Realtors, first-time buyers usually account for about 40% of the homes purchased in any given month. Our number seems to be low this month, but we’re actually higher than we were a year ago. With extremely low interest rates and low prices, you would think that many home buyers, even over 50% would be first-timers. This is not the case and I’ll tell you why. Many first-time home buyers have already purchased a home. Remember that $8,000 tax credit for first-time home buyers? Many people bought their first home during this time because that was a deal too good to pass up. Another reason many have yet to purchase is the simple fact of purchasing power. A huge amount of younger people are significantly underemployed. What types of homes can you purchase with a $40,000 per year salary? Not many, and the ones you can afford need heavy repairs. Regardless of low prices and low rates, if you can’t afford a home or worse yet, you can’t qualify for a loan, you will not be purchasing a home as a first-time home buyer. One of the most important factors, I believe it is the single most important, is the ability to come up with a quality down payment. A large down payment can solve many problems and also ease the tension of being a homeowner, but it also comes with its own set of problems. We don’t want to be cash poor but this can occur quickly, especially with the loss of a job. I always recommend putting as much as you can down, but you still need to have a significant reserve fund just in case. Many people will dispute this, especially with low down payment options from FHA insured lenders, but it’s hard to argue with a small mortgage payment.