Reprinted from Forbes magazine. Bailout. Credit crunch. Foreclosure. Despite these words permeating the headlines and airwaves, there are companies out there moving forward - even in real estate. Keller Williams(R) Realty Inc., the fourth largest real estate company in North America, announced today that it outpaced the market in 2008, while remaining free of debt, and gave back more than $30 million in profits to its agents.
"Our strategy is no secret. We faithfully follow the sound financial model of leading with revenue - the same model our market centers follow," said Mark Willis, CEO of Keller Williams Realty Inc. "As we watch companies throughout the country take on billions of dollars of debt, we are proud to say that our company has not one dollar of financing debt and we remain strong and financially sound. It is our joy to be able to give back to our agents during these times."
Despite pervasive downward trends in the real estate industry, Keller Williams Realty continues to outperform the industry. For the first 11 months of 2008, existing home sales for the United States fell 17 percent when compared to the same period the year before. By comparison, Keller Williams Realty is poised to outdo those numbers by 10 percentage points, and in addition, the company experienced a much smaller contraction in its agent base compared to the National Association of REALTORS(R), who saw a 10 percent decline in membership.
"Keller Williams was founded 25 years ago during one of the toughest markets on record - when interest rates were higher than 18 percent. We continue to urge our agents to zero in on lead generation and reducing expenses so they can thrive during this market," said Mary Tennant, president and COO of Keller Williams Realty Inc. "We admire our agents' spirit, tenacity, and dedication to their businesses. They just keep powering forward."
Throughout 2008 Keller Williams Realty launched new products and services specifically to boost its agents' businesses, including two new books: Your First Home: The Proven Path to Home Ownership for first-time home buyers, and SHIFT: How Top Real Estate Agents Tackle Tough Times. Both books are written by Gary Keller, co-founder and chairman of the board of Keller Williams Realty, who also authored national best sellers The Millionaire Real Estate Agent and The Millionaire Real Estate Investor.
About Keller Williams Realty Inc.:
Founded in 1983, Keller Williams Realty Inc. is the fourth-largest real estate franchise operation in North America, with more than 690 offices and 70,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. For more information, visit Keller Williams Realty online at (www.kw.com).
SOURCE: Keller Williams Realty Inc. Keller Williams Realty Inc. Amber Presley, 512-327-3070 amber.presley@kw.com
Saturday, January 31, 2009
Thursday, January 29, 2009
Homebuyers Get a Bonus in the Stimulus Bill
First time buyers could receive a $7,500 tax credit if they purchase soon.
By Les Christie, CNNMoney.com staff writer
Last Updated: January 29, 2009: 5:18 PM ET
NEW YORK (CNNMoney.com) -- If you're thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that's now before Congress.
Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.
Technically, the stimulus bill is actually changing the terms of the $7,500 tax credit that was issued as a part of the Housing Recovery Act, which Congress passed last summer. That legislation required that the tax credit be repaid over 15 years, making it more of a no-interest loan. Not surprisingly, the measure had little impact on the market. The stimulus bill now under consideration would make that tax credit a true credit that doesn't need to be repaid.
Many in the housing industry believe this credit could do a lot to jump start the moribund housing market.
"Our economists have studied the effect [of the credit] and they say there could be a 10% increase in home sales if it's implemented," said Mary Trupo, a spokeswoman for the National Association of Realtors. "It gives people who are sitting on the fence or who have inadequate funds for closing costs an incentive to act now."
A 10% increase would yield an extra half million sales this year.
Who qualifies
To be eligible, buyers cannot have owned a home for the past three years, and the new home has to be used as a primary residence. The credit phases out as income rises above $75,000 for singles and $150,000 for couples, and disappears entirely at $95,000 and $170,000, respectively.
Applying for it is easy, or at least as easy as doing your income taxes. Just claim it on your return. That's it. No other forms or papers have to be filed.
Both the Senate and the House versions of the new act remove the requirement that buyers repay the credit. The Senate bill applies retroactively to any purchase completed between January 1, 2009 and the end of August. The House version is also retroactive to the start of the year, and expires at the end of June. As long as buyers don't sell for at least 36 months, they keep the money.
And the credit is refundable, meaning that it can be claimed even if the amount of the credit earned exceeds the buyer's tax liability. So even if your total tax bill comes to just $5,000, you can still qualify for a full $7,500 refund.
The housing industry has been pushing this idea for many months, arguing that first-time homebuyers are the key to boosting home sales. First time buyers who purchase from existing homeowners free those sellers to trade up to bigger, better houses.
Buyers beware
But the credit has its drawbacks, according to Bob Williams, a spokesman for the Tax Policy Center, which gave it a mediocre C+ grade in its Tax Stimulus Report Card.
Williams argues that the credit is poorly targeted because it goes to every first-time buyer, not just the ones who wouldn't buy without it. So, it merely provides a windfall for many people who would have purchased anyway. (See correction, below).
And in the end, a $7,500 tax credit, regardless of the details, does nothing to address the issue that's holding most buyers back - the suspicion that prices are going to keep falling.
"As long as people are uncertain about what markets are going to do, this won't help much," said Williams. "It's not enough to change that."
The industry would like to make the tax credit stronger by making it available to all homebuyers, not just first-timers. And it's pushing to have the credit last through the end of the year, at least.
"By the time it's implemented," said Trupo, "there could be very few months left to act."
An earlier version of this story incorrectly stated that the tax credit for a home purchased in 2009 could only be taken off of 2009 taxes. However, homebuyers can choose to take the credit for 2008, according to the IRS. Even if they buy a home after they've filed their 2008 taxes, they can file an amended return.
By Les Christie, CNNMoney.com staff writer
Last Updated: January 29, 2009: 5:18 PM ET
NEW YORK (CNNMoney.com) -- If you're thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that's now before Congress.
Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.
Technically, the stimulus bill is actually changing the terms of the $7,500 tax credit that was issued as a part of the Housing Recovery Act, which Congress passed last summer. That legislation required that the tax credit be repaid over 15 years, making it more of a no-interest loan. Not surprisingly, the measure had little impact on the market. The stimulus bill now under consideration would make that tax credit a true credit that doesn't need to be repaid.
Many in the housing industry believe this credit could do a lot to jump start the moribund housing market.
"Our economists have studied the effect [of the credit] and they say there could be a 10% increase in home sales if it's implemented," said Mary Trupo, a spokeswoman for the National Association of Realtors. "It gives people who are sitting on the fence or who have inadequate funds for closing costs an incentive to act now."
A 10% increase would yield an extra half million sales this year.
Who qualifies
To be eligible, buyers cannot have owned a home for the past three years, and the new home has to be used as a primary residence. The credit phases out as income rises above $75,000 for singles and $150,000 for couples, and disappears entirely at $95,000 and $170,000, respectively.
Applying for it is easy, or at least as easy as doing your income taxes. Just claim it on your return. That's it. No other forms or papers have to be filed.
Both the Senate and the House versions of the new act remove the requirement that buyers repay the credit. The Senate bill applies retroactively to any purchase completed between January 1, 2009 and the end of August. The House version is also retroactive to the start of the year, and expires at the end of June. As long as buyers don't sell for at least 36 months, they keep the money.
And the credit is refundable, meaning that it can be claimed even if the amount of the credit earned exceeds the buyer's tax liability. So even if your total tax bill comes to just $5,000, you can still qualify for a full $7,500 refund.
The housing industry has been pushing this idea for many months, arguing that first-time homebuyers are the key to boosting home sales. First time buyers who purchase from existing homeowners free those sellers to trade up to bigger, better houses.
Buyers beware
But the credit has its drawbacks, according to Bob Williams, a spokesman for the Tax Policy Center, which gave it a mediocre C+ grade in its Tax Stimulus Report Card.
Williams argues that the credit is poorly targeted because it goes to every first-time buyer, not just the ones who wouldn't buy without it. So, it merely provides a windfall for many people who would have purchased anyway. (See correction, below).
And in the end, a $7,500 tax credit, regardless of the details, does nothing to address the issue that's holding most buyers back - the suspicion that prices are going to keep falling.
"As long as people are uncertain about what markets are going to do, this won't help much," said Williams. "It's not enough to change that."
The industry would like to make the tax credit stronger by making it available to all homebuyers, not just first-timers. And it's pushing to have the credit last through the end of the year, at least.
"By the time it's implemented," said Trupo, "there could be very few months left to act."
An earlier version of this story incorrectly stated that the tax credit for a home purchased in 2009 could only be taken off of 2009 taxes. However, homebuyers can choose to take the credit for 2008, according to the IRS. Even if they buy a home after they've filed their 2008 taxes, they can file an amended return.
Sunday, January 25, 2009
Updated Fast Facts
Calif. median home price - November 08: $285,680(Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 1/15/09 30-yr. fixed: 4.96% Fees/points: 0.7% 15-yr. fixed: 4.65% Fees/points: 0.7% 1-yr. adjustable: 4.89% Fees/points: 0.5% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 1/15/09 30-yr. fixed: 4.96% Fees/points: 0.7% 15-yr. fixed: 4.65% Fees/points: 0.7% 1-yr. adjustable: 4.89% Fees/points: 0.5% (Source: Freddie Mac)
Sunday, January 18, 2009
California Association of Realtors Update
This week’s C.A.R. Mortgage Update contains information about loan limits, paying down a mortgage, mortgage rates, refinancing, home loan applications, and foreclosure suspensions.
Will loan limits rise? Congressional leaders from both parties have been lobbying President-elect Obama to increase the limits of conforming loans – mortgages eligible to be purchased by Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac – in high cost areas from $625,500 to $729,750 as part of an economic stimulus package. Qualified borrowers with conforming loans receive the best interest rates, because many in the financial industry believe conforming loans carry less risk.
Last year, as part of the federal government’s economic stimulus package, the conforming loan limit was temporarily increased to $729,750 in high-cost areas. Beginning Jan. 1, 2009, the conforming loan limit was lowered to its original level of $625,500 for high-cost areas.
In California, the new conforming loan limits for metropolitan areas range from $474,950 in the Sacramento-Arden-Arcade-Roseville metropolitan area, covering El Dorado, Placer, Sacramento, and Yolo counties to $625,500 in the Los Angeles-Long Beach-Santa Ana metropolitan area.
To read the full story, please click here:
http://www.nytimes.com/2009/01/11/realestate/11mort.html?_r=1
Paying down mortgage faster can make sense – sometimes Homeowners who find themselves with extra cash may be considering paying down their mortgage. While this can help some people in certain situations, like seniors close to retirement age or those with adjustablerate
mortgages, it may not be the best choice for all homeowners. Paying down the mortgage more quickly can save homeowners a significant amount in interest in the long run. However, some financial experts advise clients, especially those with fixed-rate loans at favorable interest rates, to use extra money to pay down high-interest debt and build up an emergency fund.
To read the full story, please click here:
http://www.washingtonpost.com/wp-/content/article/2009/01/10/AR2009011000173.html
Mortgage rate relief might not last long
The Federal Reserve’s announcement that it’s purchasing up to $500 billion of securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae, has contributed to a reduction in mortgage rates to record lows. However, some mortgage experts warn that the low rates may not last long and could actually rise as early as this summer. According to Celia Chen, senior director of housing economics at Moody’s Economy.com, in the second half of this year, the Federal Reserve’s program will have run its course and other issues will move to the
forefront, which could push mortgage rates higher.
To read the full story, please click here:
http://www.reuters.com/article/ousiv/idUSTRE5077SJ20090108
Will loan limits rise? Congressional leaders from both parties have been lobbying President-elect Obama to increase the limits of conforming loans – mortgages eligible to be purchased by Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac – in high cost areas from $625,500 to $729,750 as part of an economic stimulus package. Qualified borrowers with conforming loans receive the best interest rates, because many in the financial industry believe conforming loans carry less risk.
Last year, as part of the federal government’s economic stimulus package, the conforming loan limit was temporarily increased to $729,750 in high-cost areas. Beginning Jan. 1, 2009, the conforming loan limit was lowered to its original level of $625,500 for high-cost areas.
In California, the new conforming loan limits for metropolitan areas range from $474,950 in the Sacramento-Arden-Arcade-Roseville metropolitan area, covering El Dorado, Placer, Sacramento, and Yolo counties to $625,500 in the Los Angeles-Long Beach-Santa Ana metropolitan area.
To read the full story, please click here:
http://www.nytimes.com/2009/01/11/realestate/11mort.html?_r=1
Paying down mortgage faster can make sense – sometimes Homeowners who find themselves with extra cash may be considering paying down their mortgage. While this can help some people in certain situations, like seniors close to retirement age or those with adjustablerate
mortgages, it may not be the best choice for all homeowners. Paying down the mortgage more quickly can save homeowners a significant amount in interest in the long run. However, some financial experts advise clients, especially those with fixed-rate loans at favorable interest rates, to use extra money to pay down high-interest debt and build up an emergency fund.
To read the full story, please click here:
http://www.washingtonpost.com/wp-/content/article/2009/01/10/AR2009011000173.html
Mortgage rate relief might not last long
The Federal Reserve’s announcement that it’s purchasing up to $500 billion of securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae, has contributed to a reduction in mortgage rates to record lows. However, some mortgage experts warn that the low rates may not last long and could actually rise as early as this summer. According to Celia Chen, senior director of housing economics at Moody’s Economy.com, in the second half of this year, the Federal Reserve’s program will have run its course and other issues will move to the
forefront, which could push mortgage rates higher.
To read the full story, please click here:
http://www.reuters.com/article/ousiv/idUSTRE5077SJ20090108
Friday, January 2, 2009
Fast Real Estate Facts
Calif. median home price - November 08: $285,680(Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 12/24/08 30-yr. fixed: 5.14% Fees/points: 0.8% 15-yr. fixed: 4.91% Fees/points: 0.7% 1-yr. adjustable: 4.95% Fees/points: 0.6% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 12/24/08 30-yr. fixed: 5.14% Fees/points: 0.8% 15-yr. fixed: 4.91% Fees/points: 0.7% 1-yr. adjustable: 4.95% Fees/points: 0.6% (Source: Freddie Mac)
Thursday, January 1, 2009
Mortgage Rates Fall to New Low
By Maryann Haggerty
Washington Post Staff Writer Wednesday, December 24, 2008; 11:22 AM
Mortgage rates continued tumbling, as Freddie Mac reported today that interest on 30-year loans averaged 5.14 percent this week, the lowest point since it began tracking in 1971.
That was down from 5.19 percent last week, itself a new low point. A year ago, rates stood at 6.17 percent. Rates have fallen for the past eight weeks as evidence of the economy's problems has accumulated.
At 5.14 percent, the monthly principal and interest payment on a $200,000 loan is $1,091. That's $130 a month less than the same loan would have cost at last year's rates.
The low rates have been a bright spot amid a torrent of downbeat economic and housing news. Homeowners have rushed to refinance their loans to cut costs or switch from adjustable-rate mortgages to fixed-rate loans. Last week, mortgage applications jumped to the highest level in five years, according to a report from the Mortgage Bankers Association.
More than 80 percent of those were applications were for refinancing, but the association also measured an 11 percent increase in applications for home purchase loans. The 30-year mortgage rates as stated in Freddie Mac's survey include 0.8 points. A point is an upfront financing charge equal to 1 percent of the mortgage.
Freddie Mac also reported that 15-year fixed-rate mortgages averaged 4.91 percent with an average 0.7 point, down from last week when it averaged 4.92 percent. That's the lowest since April 2004.
Washington Post Staff Writer Wednesday, December 24, 2008; 11:22 AM
Mortgage rates continued tumbling, as Freddie Mac reported today that interest on 30-year loans averaged 5.14 percent this week, the lowest point since it began tracking in 1971.
That was down from 5.19 percent last week, itself a new low point. A year ago, rates stood at 6.17 percent. Rates have fallen for the past eight weeks as evidence of the economy's problems has accumulated.
At 5.14 percent, the monthly principal and interest payment on a $200,000 loan is $1,091. That's $130 a month less than the same loan would have cost at last year's rates.
The low rates have been a bright spot amid a torrent of downbeat economic and housing news. Homeowners have rushed to refinance their loans to cut costs or switch from adjustable-rate mortgages to fixed-rate loans. Last week, mortgage applications jumped to the highest level in five years, according to a report from the Mortgage Bankers Association.
More than 80 percent of those were applications were for refinancing, but the association also measured an 11 percent increase in applications for home purchase loans. The 30-year mortgage rates as stated in Freddie Mac's survey include 0.8 points. A point is an upfront financing charge equal to 1 percent of the mortgage.
Freddie Mac also reported that 15-year fixed-rate mortgages averaged 4.91 percent with an average 0.7 point, down from last week when it averaged 4.92 percent. That's the lowest since April 2004.
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