Chicago Relocation
 

Should Uncle Sam Do More?

September 25, 2012

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John D’Ambrogio

Our friends at Yahoo! recently release a study entitled “Home Horizons 20120″ in which they asked Americans their thoughts on government and the housing market.  The interviews were conducted with 1500 “current or aspiring homeowners” which is kind of a clever way to say 1500 adults.  Even if it’s not the so-called American Dream I’m sure no one would turn down a (non-upside down) home.  But I digress.  And earlier than usual….

Actually, I’m surprised that only half (51%) wanted more government intervention to rescue at-risk homeowners.  27%  disagreed and 22% weren’t too interested one way or another.  The main request, from those interested, were more government low cost loans.

Not surprisingly, the republicans got taken to task more than the democrats in terms of who respondents thought would have a more negative effect on the real estate market (39% and 32% respectively).  Not surprising given the image of who supports limited government v. “big” government.

The more I read Yahoo’s article the more confused I get – I quote “The study also finds that four out of five adults believe that the 2012 presidential election will have either a small or large influence on the housing market.”  Did the other 300 respondents say “medium?”

The article also states that NAR is in favor of government intervention, according to an unidentified spokesperson.

As our readers know, the government has already put two major initiatives into place – HARP and HAFA (respectively, the Home Affordable Refinance Program and Home Affordable Foreclosure Avoidance Programs).  The Federal Finance Housing Agency reports it has “completed nearly 2 million foreclosure prevention actions” and “nearly 1.7 million … have allowed borrowers to retain homeownership.”  With 4 million foreclosure sales in recent years, and estimates of another 8 million at risk – that is not bad, but it certainly doesn’t mitigate the problem (or the causes!).

In summary, they don’t seem to see 2012 as a turnaround year.  I, however, tend to be a bit jaded by these surveys.  If you asked a hungry person if they were hungry, they’d probably say they were hungry…

 

Straight form the Source: Chicagoland Agents

September 20, 2012

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John D’Ambrogio

In 2011 the average Chicagoland real estate agent made more than in 2010, dealt with less REO deals, and was more satisfied and open to brokerage associations and services.   Chicago Agent Magazine survey results painted a clear picture of the situation out in the trenches of Chicagoland real estate.

Over half the agents surveyed said their total income in 2011 (about $95,000) was more than 2010 (about $70,000).  That average income rolled in at only 15% below the pre-recession average.  Additionally traditional commission splits (80-20%) are up 33.4% from 22.8%. And 79% of agents said that that’s just fine.  They are happy with the services included with their split.

Bulk REO deals might be on the downturn for Chicago agents.  91% of agents were involved with less than 20 REO deals in 2011 and only 2% reported dealing with over 100 REO sales.  Rentals might be dwindling as well.  73% of agents said rentals were less than a quarter of their business for the entire year.

As usual Chicago agents are working hard improving their personal business.  88% took courses specifically to improve their business.  Overall agents spent more on marketing – on average 5.8% of their income.  More time was also spent on the Internet promoting their business on their website and/or blog.  76% of agents now have a business page on the Internet.

Agents who responded to this survey worked in real estate on average 11 years, have spent just over their career in real estate and have spent an average of five years with their current company.  Finally 81% believe it should be more difficult to become licensed.

Some comments from Baird & Warner Intern Elizabeth McGrath

 

 

Worth its Weight in Silver?

September 19, 2012

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John D’Ambrogio

Here are some comments from Baird & Warner’s own Tom Gill.

Annalyn Censky wrote an interesting article for CNN in July. Below are some excerpts and our thoughts.

If someone were to ask you what an Olympic gold medal was made of, you would most likely consider this a silly question, as I did. It’s obviously gold, right?

Nope. Turns out the gold medals being used in this year’s game is a mere 1.34% gold. The rest of the medal is 93% silver and about 6% copper. Silver medals are produced from 93% silver and 7% copper, while bronze medals are mostly made of copper. In fact, the last time the gold medal was entirely made of gold was 1912.

You might also think that these precious metals used to create the Olympic prize are worth a fortune, right?

Hopefully you’re doing better in this little quiz than I was, because I went 0 for 2. The gold medal raw materials would be worth about $650, the silver being priced at $335, and the copper medal being worth a whopping $5 dollars in raw material.

That’s not to say that Olympic medals are worth that much. In my opinion, it’s the highest athletic achievement one can earn in the world of sports; Proof that you are undisputedly the absolute best in the world at your forte.

Olympic medals have also been sold at outstanding prices. Mark Wells’ 1980 Gold medal from the “Miracle on Ice” hockey team was auctioned off for $310,700. Anthony Ervin who received a gold medal for swimming in 2000, sold his for $17,000 to raise money to aid the 2004 tsunami victims.

Regardless of what the precious metal value says, Olympic medals are at least in my opinion, priceless. Unless of course you sell it.

 

Core Logic – “Over Two-Thirds of Above-Average LTV Loans Have Above-Market Interest Rates”

September 12, 2012

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John D’Ambrogio

Wow.  What a telling statement about the market, how we got here, and where we are today.  2/3 of above average LTV loans have above-market interest rates?  This stat recently released by the folks at Core Logic.

The report also states that almost 11 million (over 22%) of all U.S. mortgages were in a negative equity position today (the report was compiled in late November 2011).  The number was down just a hair from Q2′s stats.  Why is this such an important issue?   Mark Fleming, CoreLogic’s chief economist explains - “Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness. The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

This is an even more touchy situation for the relocation industry.  If you extrapolate that over one out of five homeowner transferees is “underwater” – who pays the difference?  Do they decline the move?  Do they get the offer rescinded?  It’s even more touchy for accounting and consulting firms, who build up their value by having many many partners in their firm.  Ironically, sometimes the only way to a partner track is to take a transfer to another market.

However, when you’re underwater, there may be no way to do that except by participating in a short sale or other method that will affect your credit report.  That’s where the irony comes in – the move (to keep on partner track) will result in you not being able to become a partner based on your new credit score.

The trickle down/trickle UP effects of this market are far, far far reaching.

corelogic graph

 

2012 survey regarding international relocation, their current and predicted workforce, and trends in international relocation

September 5, 2012

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John D’Ambrogio

During the National Relocation Conference in San Antonio, Worldwide ERC surveyed ninety-three HR and mobility professionals about their workforce, hiring prospects, assistance and willingness to relocate. Similarly, Brookfield Relocation Services released their 2011 survey reports which elaborate the international relocation trends over the past 12 months.  Each help pain the picture for Global Relocation trends of the past year and highlight what the future might bring.

2012 Worldwide ERC Corporate Benchmarking Survey Results

Of those surveyed, approximately 50% said that over the past 12 months the size of their company’s workforce, both in the United States and globally, has increased.

39% thought their employees would be less than willing to relocate if given the opportunity; only 22% said they believed their employees would be willing to move.

Reasons for not relocating were family concerns, compensation, employee career aspirations, partner’s career and quality of life at the new location.

Brookfield Global Relocation Services Global Relocation Trends: 2011 Survey Report

This year the number of married transferees was slightly higher at 68%.  80% of spouses or partners accompanied their significant other on the move. However, children appeared to deter relocation.  The number of international assignees who moved with children was at a record-tying all time low at 47%.

The 2011 top relocation destination was the United States with (20%), followed by a tied China and Great Britain (14% each). China appeared again this time at the top of two lists as the most challenging location for assignees as well as most challenging location for administrators. India and Russia also made both lists.

74% of companies provide cross-cultural preparation for their transferees.  25% of companies make training mandatory. However 89% of  assignees rated the sessions as good or great.

 

Assistance such as cross-cultural preparation, pre-decision assistance, and learning which locations can be difficult to adjust to all help make a smoother transfer for the assignee. The economy is still scaring people, thus their hesitance to relocate, but these efforts to make sure the employee understands and feels thoroughly prepared can help put transfers at ease.

 

Some comments from Baird & Warner Intern Elizabeth McGrath