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Keeping Current MattersKeeping Current Matters
KCMKCM on the go!on the go!
Return on InvestmentReturn on Investment(January 1, 2000 – February 1, 2011)
MSN Money.com, Case Shiller
Pending Home SalesPending Home Sales
NAR 12/2010
Without Outside Intervention
Listing AppointmentListing Appointment
Buyer AppointmentBuyer Appointment
Price CorrectionPrice Correction
Presentation of OfferPresentation of Offer
The Sale is Their Trust in Us!!The Sale is Their Trust in Us!!
Needs
Answers
Resources
We DO NOT Sell Real Estate.
We SELL Our Ability to Be a Trusted Advisor!
Needs Answers Resources
Purchase a Home
Best Price
Time
Least Hassles
Relocation
Their NeedsTheir Needs
National Housing SurveyNational Housing Survey
Fannie Mae 11/2010
Major Reason for Buying %
Having a good place to raise children and provide a good education 80Having a physical structure where you and your family feel safe 79It allows you to have more space for your family 75It gives you control over what you do with your living space 69
Needs Answers Resources
Purchase Available Listings
Best Price Negotiation
Time Access to Financing
Least Hassles Control
Relocation Knowledge
Generic AnswersGeneric Answers
… with the heart of a teacher
““If you can’t explain it If you can’t explain it simplysimply, you , you don’t understand it well enough.”don’t understand it well enough.”
Is this really the right Is this really the right time to buy real estate?time to buy real estate?
Today, we must USE VISUALS to succeed!
People People don’tdon’t believe believe what what youyou tell them. tell them.
They They alwaysalways believe believe what what theythey tell themselves. tell themselves.
Source: Westcourt Funds
OptimismOptimism
ExcitementExcitement
EuphoriaEuphoria
DenialDenial
FearFear
PanicPanic
DespondencyDespondency DepressionDepression
HopeHope
OptimismOptimism
Source: Westcourt Funds
OptimismOptimism
ExcitementExcitement
EuphoriaEuphoria
DenialDenial
FearFear
PanicPanic
DespondencyDespondency DepressionDepression
HopeHope
OptimismOptimism
Point of maximum risk in investment
Point of maximum opportunity
Return on InvestmentReturn on Investment(January 1, 2000 – February 1, 2011)
MSN Money.com, Case Shiller
“With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit:
Housing had a superb decade.”
Forbes.com 12/06/2010
Forbes.comForbes.com
58% average gains per square foot
Macro Market Home Price Expectations Survey 12/2010
Home Price Expectation SurveyHome Price Expectation Survey
Cost vs. PriceCost vs. Price
Mortgage Rates Mortgage Rates –– 30 year fixed30 year fixed
Federal Reserve
5.1 5.4 5.4
Impact of Rates on PaymentImpact of Rates on Payment
“If prices come down another 10% but interest rates increase by 1 percentage point, that would mean the same monthly payment today versus waiting.”
Source: Wall Street Journal
Wall Street JournalWall Street Journal
Difference in monthly payments
Price is the same, it just costs lessPrice is the same, it just costs less
DateLoan
AmountInterest
Rate
MonthlyPayment
(P&I)
2004 $250,000 6.29 $1,545.80
Today $250,000 5.00 $1,342.05
$203.75Difference in mortgage payments
The move-up buyerThe move-up buyer
Source: KeepingCurrentMatters.com
Current Home Move-up Home
2006 Price $150,000 $250,000
Current Price (-20%) $120,000 $200,000
Loss/Savings $30,000 $50,000
Net Gain for move-up buyer $20,000
Plus savings on current interest rate
Decision Comparison
The move-up buyerThe move-up buyer
Source: KeepingCurrentMatters.com
Current Home Move-up Home
Current Price $120,000 $200,000
Future Price (+20%) $144,000 $240,000
Future Gain for owner $24,000 $40,000
Future difference for move-up buyer
$16,000
Current Gain for move-up buyer $20,000
Total Gain + $36,000Plus savings on current interest rate
Decision Comparison
The move-up buyer
Source: KeepingCurrentMatters.com
Current Home Move-up Home
2006 Price $400,000 $600,000
Current Price (-20%) $320,000 $480,000
Loss/Savings $80,000 $120,000
Net Gain for move-up buyer $40,000
Plus savings on current interest rate
Decision Comparison
The move-up buyer
Source: KeepingCurrentMatters.com
Current Home Move-up Home
Current Price $320,000 $480,000
Future Price (+20%) $384,000 $576,000
Future Gain for owner $64,000 $96,000
Future difference for move-up buyer
$32,000
Current Gain for move-up buyer $40,000
Total Gain + $72,000Plus savings on current interest rate
Decision Comparison
The Wall Street JournalThe Wall Street Journal
Wall Street Journal 1/26/2011W
"With home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents…
the best low-risk buying opportunity
out there today."
A Dream House After AllA Dream House After All
Karl Case Karl Case of Case Shiller of Case Shiller
“For people with a realistic version of the American Dream, buying a house now can make a lot of sense.”
New York Times 9/1/2010
I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and
say, ‘You know, I‘m glad I listened to Donald Trump.’
- January 2011
Donald TrumpDonald Trump
“If you don’t own a home, buy one.
If you own one home, buy another one.
If you own two homes, buy a third.
And, lend your relatives the money to
buy a home.”
John PaulsonJohn Paulson
Gallup Poll:
67% Say Time to Buy is Now67% Say Time to Buy is Now
Gallup 1/17/2011
“Overall, there is good reason for most Americans to think now is a good time to buy a house. Interest rates remain near historic lows. Home prices are down sharply, providing many incredible buys.”
Needs Answers Resources
Purchase Available Listings KCM
Best Price Negotiation
Time Access to Financing
Least Hassles Control
Relocation Knowledge
Your ResourcesYour Resources
631.787.6200
www.KCMblog.com
www.steveharney.com
Flying solo, Flying solo, but never alone!but never alone!
Keeping Current MattersKeeping Current Matters
