What is the “new normal”?

Besides being one of the top producing REALTORS in Boone County I am fortunate to travel the country speaking and teaching agents everywhere. I was asked into this realm of real estate because of my success with utilizing technology in marketing and because of the exhaustive research I do in crunching the local housing numbers each month. I believe if one wants to either not repeat (or repeat) the past you must know and understand it fully. As I travel across the US agents complain to me that they cannot wait for the market to rebound and come back to the conditions of 2005 and 2006. Through my research and in building relationships with many analytical minds I am convinced there is no “rebound” to the marketplace in our near future. The conditions of 2005 and 2006 were artificially created by greed and corruption in the overall housing industry. We are all responsible and I am not one to point fingers.

Because of this realization I have adopted the phrase that this is “The New Normal”. What I mean by this is that what you currently see is here to stay for at least 5 years and probably longer. We have reset to the “normal” housing numbers of about 10 years ago on back through history. In fact, if you exclude the years of 2005 and 2006 and compare our current numbers to the remainder of history we are actually in a pretty stable and consistent marketplace. Unfortunately most cannot get the boom years of 2005 and 2006 out of our minds and therefore compare everything back to then. My plea to everyone is to forget it, learn from it, and never repeat it. There is a current lack of consumer confidence surround the housing marketplace that will take years, if not decades to recover from.

I tell you this because I owe it to you as an expert in the housing arena to inform you of the truth whether it is ugly or good. I need you to be able to make an educated decision as you move forward with buying or selling a home here or elsewhere. I also want you to be realistic with your expectations in the current marketplace and well into the future. One basic fact remains! Owning and investing in real estate of any facet is still the smartest thing one can do for long-term wealth building. Just chose wisely and seek out a true expert within the industry!

Take care,
Sean

Today I learned that I have reached/surpassed a goal in my real estate business that I set this time last year during my annual business planning. It was a very lofty objective but one I felt attainable even in this down marketplace. It proves to me that “my market is unique to me” and that I do have full control of my wins and my losses. It also proves that when you are told “NO” don’t always listen… In fact some of the principles I implemented I learned from a book titled Go For No so this accomplishment is monumental for me!

It does not come without sacrifice… I truly am working longer hours and more creatively today to earn the same dollar of years past. But at the same time I have gotten back to the core basics of our industry. Most know me for my aggressive marketing techniques and technology background; and although these do help, they are not anywhere close to identifying who I am and why I choose to succeed when others are packing their bags. Follow-through to the 13th hours sums it up.

I just got back late last night from attending the National Association of REALTORS Annual Convention in Anaheim. My trip there was last minute and I only had one goal to achieve while there; bring back a few very specific ideas to put into place for 2012. Of all the sessions, classes, meetings and networking opportunities I attended I found what I was looking for in a place and at I time I wasn’t expecting! I am excited and fortunate and cannot wait to dig deeper into these very basic principles that helped some of the largest corporations in America go levels and level above their goals in economies where most are just surviving.

Here’s to setting goals… not just achieving them… but blowing them out of the water! -Sean

The months of Inventory of Single Family Homes in Columbia jumped up to 10.59 months. The past 5 months have hovered around 6 to 8 months of Inventory which in comparison is considered a realtively good market. The main factor in this increase in the Absorbsion Rate is due to about 100 fewer homes being sold in September compared to the previous 3 months.

The good news is that September 2011 sales were up almost 25 homes compared to September 2010. In addition to this we are seeing historically low interest rates. In the past 10 days I have locked buyers at 3.75% on 30 year fixed loans and 3.0% on 15 year fixed loans! These rates will prevent some buyers from entering the market place allowing them to refinance and stay put but at the same time put other buyers into the market place that otherwise wouldn’t be there. Below are some visual graphs going back 2 years that clearly spell out the conditions. -Sean

I just returned home after a week in our nations capitol.   I attended my first National Association of REALTORS MidYear Conference in Washington DC.   The week flew by at the blink of an eye.   It began and ended with memories I will cherish forever!   I arrived early on Monday to complete my final session of the National Association of REALTORS Leadership Academy and ate a 2 foot long pizza slice on my birthday!

Going to national meetings provides a smalltown guy like me “perspective”.   It gets me out of my box and comfort zone, and exposes me to the realities and threats both against me as a consumer and upon my trade.   The elephant in the room all week at MidYear was the proprosed dues increase to members of The National Association of REALTORS of $40 to fund a Political Survival “war chest”.   My position on the matter was simple; YES! In fact let’s make it $100 (even if it means a significant drop in membership)…   We would be leaner, meaner and cleaner… and come out on the other end far stronger!  

Here is the “offical” scoop on the matter: -Sean

Breaking News: REALTOR Party Political Survival

Initiative Approved by NAR Board of Directors

Statement by Ron Phipps, 2011 NAR President, on the passing of the REALTOR ® Party Political Survival Initiative:

œEarlier today, the NAR Board of Directors voted in favor of the REALTOR ® Party Political Survival Initiative and agreed to fund it through a dedicated dues increase of $40 per member, beginning in 2012. The initiative will allow NAR to provide millions of dollars in additional support to state and local boards, which are facing a cadre of policy proposals that would restrict private property rights and drain home owners™ pocketbooks.

œAs the only organization speaking on behalf of America™s home owners, NAR must remain strong and influential at all levels of government. During the past week, we have heard from dozens of industry and government leaders about the broad challenges facing our markets and the growing desire on the part of federal, state and local governments to implement policies that would hurt home owners and the economy. In passing this initiative, REALTORS ® send a clear message that we are ready and willing to protect the home owners and communities we serve.

œOn behalf of the entire organization, we thank the directors for their feedback and guidance, as we refined this initiative, and we are grateful to all REALTORS ® who engage in an informed debate prior to this vote.”

Find out more about the Political Survival Initiative and what it means for you and your state in our Resources and Documents clearinghouse.
Unanswered questions about the initiative? Read our FAQs. You can still submit questions or ask for further information.
Learn more about the REALTOR ^® Party
Watch the video: Politics Is Your Business. Learn the importance of getting involved politically and why you should “vote, act and invest” as a member of the REALTOR ^® Party.

Big news has hit Columbia, MO again!   Today MFA Oil announced the creation of MFA Oil Biomass LLC in partnership with Alottera Energy.   Here is the news directly from MFA Oil… very exicting for sure.   Make sure and check  out the full press release and additional info links  below.  -Sean

MFA Oil has expanded its energy services into the emerging biomass renewable energy market through a partnership  with  Aloterra Energy, a biofuels company headquartered in Ohio.   The goal of MFA Oil Biomass  is to  create  a vertically integrated renewable energy supply chain by combining  MFA Oil’s  knowledge of the energy markets with the farming knowledge of its members.

After researching numerous energy crops, MFA Oil found Miscanthus giganteus to be the strongest on several fronts.  Miscanthus giganteus is a C4 warm season perennial grass that is non-invasive, drought and pest resistant, and needs less fertilizer than food crops, which means less run-off into water systems.  In addition, it is capable of growing well on barren land without the aid of heavy fertilization and is extremely efficient in sequestering carbon from the air. Miscanthus giganteus has been used as a source of heat and electricity in Europe for well over ten years. It also has been converted into biofuel products such as ethanol and, compared to other ethanol inputs, produces more overall mass.        

The MFA Oil Biomass plan is intertwined with the  USDA™s Biomass Crop Assistance Program (BCAP), which is similar to other conservation programs and key to getting farmers to look at energy crops. BCAP will pay farmers up to 75% of planting costs and offers to pay an annual rent payment while they wait for their crops to mature. Once the crops mature, farmers will be able to get two years of matching payments for their tonnage, up to $45 per ton beyond what the farmers sell it for.  The only exclusion is land that is currently in the Conservation Reserve Program (CRP).

FACT SHEET:  Miscanthus giganteus
FACT SHEET: Biomass Crop Assitance Program (BCAP)
PRESS RELEASE: MFA Oil Partners with Aloterra Energy to Form MFA Oil Biomass

One of my resolutions for 2011 is true 100% cloud computing…   Truthfully I have (and just about everyone else)  been doing this for years.   For those of you who do not understand what “Cloud Computing” is, it is very simple.   It just means you are going to the internet for software and file access with little to no data being stored on your computers hard drive.   So in theory any internet based email program is a form of  cloud computing.

In its earlier stages data was stored on servers and linked to multiple computers on the “Intranet”.   Then along came DYI server applications and remote login programs like GotoMyPC and LogMeIn.   For the cheapskate simply emailing yourself files seems to be a popular method of distributing files but is a hassle and means lots of duplication.    With all that I have read in the past few months I am predicting Cloud Computing to be the next big thing and I have may reasons to believe why!

Several months ago Google came out with a beta program called the Crome Notebook.   In preparation for its launch Google  is sending thousands of Internet based laptops out to beta testers across the US.   These cool little netbooks run on the new Crome Operating System, have zero boot up time and cost a few hundred dollars to buy once they hit the real marketplace.   Gone are the days when one spends thousands of dollars on a high-end laptop…

In preparation for the future of cloud computing many robust software platforms are becoming cloud based.   One of the largest and best (and free I might add)  productivity tools out there is Google Docs.   Both Microsoft and Apple are quickly trying to catch up to this popular form of computing.   Microsoft is coming out with Office 365 and Mac has MobileMe and iWork.   But what does one do until these yet to be perfected applications take precidence for the end user?

I have spent much of the holidays working on my business plan for 2011 and in looking for today’s perfect cloud computing application I chose Dropbox.   I have known of Dropbox for a while but really hadn’t really looked  into what it can do for Cloud Computing.   Recently Dropbox  has done several updates and built variations for the iPad, Android and most other mobile devices.   Once installed on your laptops and desktop PC’s you can copy files that you need to access on the go into an Internet folder.   The software syncs seamlessly on each device and is opened as if  it is on the device.   No longer do you have to email yourself a file, remotely log into a distant computer, or mess with the hassle of maintaining a small server and intranet!

If I can give one great piece of advice on starting out 2011 in “The Cloud” get yourself set up on Dropbox!   In fact by using this link you will get and extra 250mb of free storage space, and you can get 250mb more each time you refer a friend!   This is called  Viral Marketing  and it too is the way of the future… but that’s a whole other blog post.   Oh, and did I mention the first 2gig is totally free up to 8gig.   After that it is only $100 year for a whopping 50gig of storage!

Hot off the press… As the year is coming to an end many government programs and incentives are scheduled to come to a hault.   Homeowners in the Columbia, MO  took  advantage of these over the past year.   These incentives are a win win for everyone.   In fact I can’t see who loses at all… The end result is homes that are leaner, meaner and improved for the current and future owners!

Here’s the latest scoop compliments of The Tax Incentives Assistance Project (TIAP)           http://www.energytaxincentives.org/         -Sean

The Tax Incentives Assistance Project (TIAP), sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field, is designed to give consumers and businesses information they need to make use of the federal income tax incentives for energy efficient products and technologies passed by Congress as part of the Energy Policy Act of 2005 and subsequently amended several times.

Update as of 12/16/10 “ Congress About to Extend And Modify Energy Efficiency Tax Incentives for Appliances, New Homes and Retrofits to Existing Homes

Today, or shortly thereafter, Congress is likely to complete action on tax legislation that modifies and extends three energy efficiency tax incentives, as a part of a much larger tax package. These tax incentives will continue to help raise the market share of efficient appliances, HVAC and insulation products, and new homes.

The legislation extends the new homes tax credit to cover 2010 and 2011 “ this $2000 credit goes to the home builders and is for homes that use no more than half the energy of homes that just meet the 2003 national model energy code. The credit expired at the end of 2009 but the new bill extends this to cover new homes that are built in 2010 and 2011.

The bill also extends and updates manufacturer appliance tax credits for 2011 “ the credit, which goes to manufacturers directly, is extended for one year, and the following criteria now apply:

• Dishwashers “
  • $25   – models using no more than 307 kilowatt hours/year and 5.0 gallons of water/cycle (this is the ENERGY STAR level effective July 1, 2011)
  • $50 – models using no more than 295 kilowatt hours/year and 4.25 gallons of water/cycle
  • $75 – models using no more than 280 kWh kilowatt hours/year and 4 gallons of water/cycle
• Clothes Washers “
  • $175 “ top-loading models that meet/exceed 2.2 MEF, and does not exceed 4.5 WCF
  • $225 “ top-loading models that meet/exceed 2.4 MEF, and does not exceed 4.2 WCF, or front-loading models that meet/exceed 2.8 MEF and do not exceed a 3.5 WCF
• Refrigerators “
  • $150 “ models that use 30% less energy relative to federal standard
  • $200 “ models that use 35% less energy relative to federal standard

The legislation extends the 25C heating and cooling equipment and building envelope tax incentives for another year but at reduced levels. The new bill extends eligibility to the end of 2011, but reduces the incentive to the original 10% up to $500.   Included are provisions which:

• limit window incentives to $200;
• limit oil and gas furnace and boiler incentives to $150, plus an additional $50 for efficient furnace fans;
• limit water heater and wood heating system incentives to $300;
• loosen the qualification for window incentives (ENERGY STAR windows now qualify);
• and tighten the specifications for oil furnaces and boilers and gas boilers to 95% efficiency, up from the 90% efficiency in current law.

Congress is likely to consider further extensions of these incentives into 2012 and beyond next year, and TIAP will provide updates as they become available.   The existing homes incentives are likely to receive a major overhaul, and there are also likely to be discussions about improving incentives for energy-efficiency investments in commercial buildings, incentives which under current law continue until the end of 2013.

While Congress extended most of the expiring federal energy efficiency tax incentives, they did not extend the incentive for hybrid trucks and buses.

IRS Forms

• Residential Energy Efficient Property: Form 5695
• New Homes: Form 8908
• Vehicle Incentives: Form 8910
• Commercial Solar Incentives: Form 3468 (Investment Credit)Note: The links above go to the IRS web site. TIAP makes every effort to keep these links up to date. IRS often does not publish new versions of forms until the beginning of the following tax year.

Additional Resources

TIAP Flyers for Residential and Commercial Incentives – Add your organization’s logo and distribute at your next event to spread the word about energy efficiency incentives.

Some additional information on tax incentives can be found HERE!

Extension Service Home Energy Community of Practice Webinar – Presentation by Jen Amann, ACEEE (4/10/2009)

Overview of Federal Energy Efficiency Tax Incentives passed as part of the American Recovery and Reinvestment Tax Act of 2009
*Updated matrix of energy efficiency incentives

RESNET has completed a survey of rating providers regarding the number of homes that their raters certified for the federal tax credit (2007 only). 23,702 homes were certified by RESNET during 2007, which is triple the number of homes certified in 2006. For more information, click here.

NREL Energy Savings Modeling and Inspection Guidelines for Commercial Building Federal Tax Deductions (1.9 MB PDF)

Early next week I leave for a 10 day trip to New Orleans!   It is really 3 trips in one for me.   I will spend the first several days attending the second retreat with the National Association of REALTORS ® Leadership Academy.   Four Days at NARdiGras  and a fishing trip at the end to finish it all off!   I have been attending the NAR Annual Conventions since my first year in the business.   I come back each year with tons of ideas to implement into my business to stay cutting edge and at the forefront of the home buyer and seller!   Here is my take on how to get the most out of this years NARdiGras whether you attend in person or from your laptop or mobile device!

First I must say NAR has pulled out all the stops this year in creating a convention that is truly interactive for the attendee.   Start by visiting www.REALTOR.org/Conference to see the overview of what’s in store.   Next head over to http://www.NarConferenceLive.com/  and register whether you will be in NOLA or not.   During the convention this is where minute by minute updates will be posted and live streaming of conference sessions will be held!   If you are a social media junkie make sure and like the facebook page at http://www.facebook.com/narannual  and follow the event on Twitter at http://twitter.com/#!/narannual.   For all with smart-phones this years mobile app is much improved and full of useful features.   It will keep you on schedule and let you know what’s going on near your location.   You can download it at http://nardigras.boopsie.com/.

2011 is the year to take market share for the successful REALTOR ®.   It’s the time to get rid of everything in your business that is not working and to leverage everything that is!   Now is the time to in way reinvent yourself.   For those who have survived in  or even grown their business during the past 3 years now is the time to reap the rewards of being stronger, wiser and more efficient than ever.   2011 will be the year when new strategies implemented will prove worthwhile and thinking outside the box will get you through the transactions at hand.   Mix and mingle with REALTORS ® from across the world using the links above whether you plan to go to NARdiGras or not! -Sean