This is a rebound, not a bubble. Lots of people are worrying about a new bubble, but the facts say no:

• Trulia: Why There’s No Home-Price Bubble (WSJ)
• Signs of New Housing Bubble in Several Areas (Fortune)
• From Brooklyn to California, Housing Bubble Threat Grows (Bloomberg)

Housing starts drop in April, but they’ll bounce back. Still, housing supply is limiting the housing recovery:

• Five Takeaways from the Latest Housing Starts Report (WSJ)
• The Persistent Supply-Side Constraints in US Housing (Financial Times)

Up this week: existing home sales and inventory on Wednesday.

Recently, we had the pleasure of sitting down with Michelle Horneff-Cohen, President of Property Management Systems, to learn how you can help protect your clients’ investments and ensure them many happy years as a property owner.

Michelle started her property management career as an on-site residential manager in 1995 and has since worn the hats of consultant, property manager, mediator, expert witness, and petition specialist.  She now owns the award-winning company, Property Management Systems, that will soon celebrate its 15th year of helping owners and tenants navigate Federal, State and local housing laws.

Here are 4 reasons, according to Michelle, your owners need a property manger like you:

1.   Local laws are complicated

Becoming a property owner and leasing a unit opens the door for many legal concerns. A property manager eats, breathes, and lives local ordinance. If they don’t, they aren’t a real PM. For example, rental ordinances in San Francisco Bay Area change the moment you cross the Bay Bridge, this holds true for many major metropolitan areas. Being a property manager is more than collecting rent and bills, and handling repairs – it includes knowing local, state and federal fair housing laws – as the rental housing industry is one of the most regulated. Oftentimes, owners come to us after they have a problem, that they tried to resolve themselves, and discovered that they have done it wrong. This happens a lot with rent control issues.

2.   There are many hassles to the job

It is not a pleasant experience to be woken up at 2am when there is a leak or emergency. Those are just some of the reasons why having a property manager are helpful to making your life easier.

Those are the easy issues, but there can be much bigger problems. For example, the city was repaving some of the main sewer lines in front of one of the buildings I manage. When they were replacing the lines they cut off the access to the building’s sewer line. Eventually there was 4ft. of raw sewage in the boiler room – so we dealt with the city, insurance, Hazmat, and repairs on behalf of our owner. It was more than just handling the angry residents and repairs, we also had a responsibility to clean it to code and ensure that Hazmat was brought in. It is an extreme example, but a pretty clear case where if the owner did not have a PM, they would have had to navigate all of these issues on their own. Our owner was not involved after the initial day; we handled the rest.

3.   We know the territory

As local PMs we know trades people and companies that we have trusted for years. This gives our owners comfort knowing we will get items resolved with reputable, reliable and honest services with good prices. One specific example is with the water bill, we know what the bill should be for buildings based on their size. So if it is too high, we go in and assess for water leaks, etc. and save money before it turns into 1,000s of dollars. When we take over properties, we like to maintain any relationships that the owner has fostered with their vendors – which builds our database as well. Even in those cases we can price things accordingly and ensure that they are paying a fair rate.

4.   We protect the investment of the owner

Because of our knowledge, we are able to budget for plumbing, locksmiths, etc. we also know how to run market comps and price the apartments correctly to maximize the income for the owner. Sometimes the owners completely overprice an apartment and we are able to price accordingly to the market and ensure maximum occupancy as quickly as possible.

Again, we are a highly regulated industry. As such, we need to be trained in all aspects and certified when needed. It is our job to stay updated on classes and laws. For example, today I attended a tax change in regards to parking tax. Professional PMs stay on top of these details enabling us to protect and inform our clients.

Thank you Michelle for the great insight. What do you think? Let us know in the comments below.

Cheap homes plus low mortgage rates have created record-high purchasing power for today’s active buyers.  In fact, the typical mortgage payment lower by 18% as compared to just 3 years ago.

This opportunity isn’t just for the “perfect” buyers with great credit and 20% down.

Buyers in precarious situations, which in years past would have confined them to renting, are benefitting from the re-introduction of popular products.

From the newly employed to those strapped for cash, here are 3 loan programs to share with buyers in high-profit niches to help them see that ownership is well within reach:

1. The Doctor’s Mortgage

Sometimes called the “Physician Mortgage” or the “Physician Loan”, the Doctor Mortgage is meant to help recent medical school graduates get access to mainstream mortgage financing, at today’s lowest rates.

The product serves a market in-need. Medical school graduates often leave school with large loads of student debt and very little reserves in order to make a home down payment. Furthermore, the income of a first-year medical resident is typically below the median household income in a given metropolitan area.

Residency income is temporary, however, and within five years, many physicians earn incomes that are among the highest in the nation, by profession. This is why the Doctor Loan was created. It waives specific loan standards, which may ordinarily cause of physician’s loan application to get turned down.

Doctor loans are available in several varieties, with most allowing:

(1) Debt-to-income (DTI) levels of up to 50%, with no inclusion of student debt;

(2) The ability to use future job income for qualification purposes; and

(3) Credit scores below national averages.

In addition, many Doctor Loan programs allow for 100% financing with no private mortgage insurance (PMI) requirement.

2. The Offer Letter Mortgage for clients moving on or up

The “Offer Letter” mortgage is another specialty loan program with multiple in-the-field aliases. Sometimes, it’s called the Relocation Mortgage. Other times, it’s called the New Job Mortgage. The premise, however, remains the same.

The Offer Letter Mortgage gives buyers the ability to get mortgage-approved while they’re in-between jobs. Buyers relocating in- or out-of-town; and recent college graduates soon to start work can use it.

The program is especially helpful for recent law school graduates and college professors taking jobs in new cities.

If you’re working with buyers in the relocation niche, there are a few important things you should let your buyers know.

Offer Letter Mortgages don’t provide for debt-to-income concessions, but do allow for buyers to use 100% of their expected salaried income as part of the mortgage approval process.

Lenders often require buyers to have a non-contingent job offer from their future employer, and to start their new job within 90 days of closing on the home. In addition, lenders will often want buyers to have sufficient reserves to cover whatever housing payments are due between closing and the first day of work.

The U.S. economy has added more than 5.7 million net new jobs since 2010. The Offer Letter Mortgage program is a great program to mention to buyers who are on the fence because of a pending job change.

3. Mortgages & down payment assistance programs for future repeat clients

Other loan options for today’s on the fence prospects include state- or local-government-sponsored mortgage and down payment assistance program. Not all governments provide access to such programs. Those that do, however, aim to promote local homeownership, providing cash incentives to homebuyers of homes.

In Connecticut, for example, military personnel, members of the police force, and teachers can apply for state-backed mortgages, which offer below-market mortgage rates. Similar programs are available in California, New York, and Illinois.

In other states, governments provide down payment loans and direct housing grants to homebuyers. These programs sometimes allow higher loans sizes in certain areas and aim to help homebuyers reduce their required monthly housing payment.

Qualification standards vary by location and participating governments often publish program standards on their respective websites. Your local lending professional is your best source for finding what’s out there and determining eligibility.

If you’d like to do your own research to use in prospecting, use your favorite search engine and enter “[Your State/Locality] Down Payment Assistance.” You’ll be surprised what you can find.

What high ROI niche do these programs help you cultivate?

The answer is simple: repeat clients. Today’s market opportunities are attracting many first-time buyers. Helping them into their starter home is a great way to earn their trust for future transactions in the years to come.

Today’s mortgage facts really say buy now.

“It’s a great time to buy a home”, so goes the maxim. Right now, it’s a lot more than a mantra. For 18 months mortgage rates have been in the 3s, fueling high home affordability. In addition, today’s homebuyers have these and a bevy of financing options to help them close on a home.

So are we in bubble territory? No. Bubble-phobes can rest easy. Even with recent sharp home price increases, prices are still low relative to fundamentals and are far below bubble levels.

Back to Basics: How to Spot a Bubble

To see a bubble, you first need to know what you’re looking for. A bubble in home prices (or in the price of any asset – like stocks or even tulips) is when prices soar above their fundamental value. Fundamental value is based on supply, demand, and realistic expectations about the future. We all learned in Economics 101 that prices move back toward an equilibrium determined by fundamentals of supply and demand. In a bubble, however, rising prices encourage speculation and fuel further demand – up until when the bubble suddenly bursts and people rush to sell, which causes prices to accelerate downward, sometimes well below their fundamental value. Bubbles are notoriously difficult to predict and hard to confirm until after they’ve burst: it’s impossible to be sure whether price gains are justified by fundamentals until, if and when, a bubble bursts. San Francisco home prices, for instance, are the highest in the country; is that “irrational exuberance” by speculative homebuyers, or are those prices justified by strong job growth, high incomes, great weather, and constraints on the local housing supply?

To answer that question, we assess whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. Incomes determine how much people can pay for housing, and price increases aren’t sustainable if they push prices too high relative to incomes. Rents reflect how much people value housing even if they won’t benefit from price appreciation (as renters don’t, but owners do); the price-to-rent ratio is like the price-earnings (P/E) ratio for stocks. Using data from multiple sources (see footnote), we create several measures of fundamental value and combine them in order to calculate how overvalued or undervalued home prices are relative to fundamentals.

Home Prices are Undervalued 7% Nationally and Regionally in 91 of the 100 Largest Metros

We estimate that national home prices are 7% undervalued in the second quarter of 2013 (2013 Q2). During last decade’s bubble, prices were as high as 39% overvalued in 2006 Q1, then during the bust, fell to 15% undervalued in 2011 Q4. Therefore, even with the recent price increases, home prices nationally remain undervalued relative to fundamentals and much lower than in the last bubble. That’s why today’s price gains are actually still a rebound, not a bubble. This chart shows how far prices are from bubble territory:

At the metro level, prices are below their fundamental value in 91 of the 100 largest metros. Prices are overvalued in the California metros of Orange County (+9%), Los Angeles (+5%), San Jose (+3%), and San Francisco (+2%), and the Texas metros of Austin (7%), San Antonio (5%), and Houston (2%), as well as in Portland (plus Honolulu, which at 0.01% is ever so slightly overvalued). The California metros are far less overvalued than at the height of the bubble – Orange County prices were 71% overvalued in 2006 Q1! Even the Texas metros, which largely avoided last decade’s housing bubble, are less overvalued today than at their peaks during the last bubble.

Prices are most undervalued today in Las Vegas and Detroit, even after their price gains in the past year. Several Florida and Ohio metros are also among the most undervalued. All of these metros were overvalued at the height of the bubble, some less so (Dayton, Akron) than others (Las Vegas, Palm Bay-Melbourne-Titusville).

Other indicators aside from home prices, like mortgage lending and construction activity, confirm that the housing market isn’t forming a new bubble. Mortgage credit remains very tight, especially for people with lower credit scores, and the new “qualified mortgage” rules under Dodd-Frank intend to prevent the recurrence of toxic mortgages that artificially inflated housing demand in the last bubble. Also, construction activity, though rebounding, is still well below normal levels, and the vacancy rate is falling, so there’s no evidence of overbuilding today like we had during the last decade.

Is the Next Bubble Coming Soon?

If prices keep rising as fast as they are today, we’d be back in bubble territory in several years. However, prices are unlikely to keep rising as fast as they are today, for three reasons:

1. Inventory should expand. Tight inventory is boosting prices today as buyers bid up prices on scarce homes; however, as prices continue to rise, more people will sell as they get back above water or decide to cash out, and more new construction will add to inventory.
2. Mortgage rates should rise. Low mortgage rates today increase buying power because borrowers can afford a more expensive house for the same monthly payment. Rates are likely to rise as a result of the strengthening economy, either through market forces or Fed actions, which – along with more inventory – should slow down price gains.
3. Investor interest should fade. Undervalued prices have attracted investors, who have helped push up home prices as they have bought and rented out homes. But as prices rise, investor interest will fade.

Will expanding inventory, rising mortgage rates, and declining investor activity cause home prices to plunge? Slow down, yes, but probably not plunge. Just as these factors should cause home prices to slow down, job growth and increased household formation should support a continued recovery in housing demand.

Is Another Bubble Coming Ever?

Even though we’re not in bubble territory today, another one is coming – someday. The history of American real estate is full of speculation, bubbles, and busts. Trulia’s own survey of consumers shows that most people expect prices to get back to the peak of the previous bubble again in the next 10 years – including people in housing markets where prices had been overvalued most. Furthermore, our rent-versus-buy analysis, which indirectly reveals where people expect prices to rise the most long-term, shows that people expect future prices to rise more if they live in metros where booms and busts were more common in the past. This is another sign that people seem to think prices go up but not down. Will government help to prevent another bubble? Perhaps the new mortgage rules will help – but the more cynical answer is “no.” The most recent bubble was more severe than earlier housing bubbles, and if we didn’t previously learn from the past, then why should we learn from it now? In short: housing bubbles look almost inevitable. Whether you’re buying a home, selling a home, or setting housing policy, remember that the next housing bubble is probably just a matter of time. But, as Trulia’s Bubble Watch shows, that time is not now.

Notes: To get our estimate of over- or undervalued prices, we averaged together several measures of prices relative to fundamentals, including the price-to-income ratio, the price-to-rent ratio (national only), and the deviation of price growth from trend. We compared current values of these measures to the long-term average, excluding the most extreme quarters from the long-term average. We used the Trulia Price Monitor for current price trends as well as the Case-Shiller national index, the Federal Housing Finance Agency (FHFA) national expanded-data index, the FHFA all-transactions price indexes for metros, national and metro per-capita income from the U.S. Bureau of Economic Analysis, and national owner-equivalent rents from the U.S. Bureau of Labor Statistics. Our historical time series goes as far back as the early 1980s, depending on the data source. We tested our approach by seeing how well our over-/under-valuation measure would have predicted metro-level price drops in the housing crash. The correlation between metro-level price over- or-undervaluation in 2006 Q1 and the subsequent metro-level peak-to-trough price decline was -0.83.

Unfortunately, finding and showing luxury is a lot harder with some listings. Here are five ways to show off the luxury of your listings and put today’s serious house hunters in the high-end mindset:

1. Low cost, high impact staging

No ads, e-mails, or other marketing can help a home that doesn’t show well. To maximize your listing’s appeal to luxury-thirsty buyers, do a walkthrough with your seller clients to spot the small fixable culprits that are stealing your listing’s shine factor like

• Beat-up fixtures and accessories
• Distracting themed decor
• Overstressed storage

Conquering these staging problems is simpler than you think. For help solving these, and some of your larger staging issues, check out our helpful handout 10 Hardcore Staging Tips for Serious Sellers.

In addition, consider investing in second- or third-hand furnishings that will make your listing pop.

“In this era of Craigslist, eBay, Freecycle, estate sales and other peer-to-peer online stores and trading sites, there is an abundance of access to used furniture at great prices…” says real estate expert Tara Nicholle-Nelson.

2. Start your shooting with a photo plan

After you’ve tackled your staging issues, the next logical steps are to start photographing and showing the home.

Before you start snapping, come up with a photo agenda/plan that includes these five most-loved listing features:

• Gourmet Kitchens
• Front of House
• Master Bedroom
• Master Bathroom
• Living Room

Chances are, not every listing will have these exact features to show off, but playing up luxury finishes found in the smaller details is a great way to increase your listing’s appeal. For example: Your seller’s kitchen may not be “gourmet,” but focusing on small details, like quality appliances or granite countertops, go a long way toward creating a luxury feel.

3. Light it like a pro (or use one)

An April 2012 Florida Association of Realtors article, offered this helpful advice for do-it-yourself listing photographers, “Write down what stands out and what’s going to catch the eye. Then, start early to catch warm morning light and consider staying late to get shots at dusk.”

If you’re going to enlist the help of a professional photographer, be sure to look for one with a portfolio that includes great architectural shots. One great place to connect with local real estate savvy photographers is Houzz.com. Using Houzz, you can find not only professional photographers from your area, but also get ideas for luxury listing shots.

4. Include the luxury of the location

When your listing lacks the premium polish, be sure to sell and show off the luxury around it.

Marketing expert and author of the best-seller Likeonomics Rohit Bhargava wrote, “When you buy a luxury property, you are not just buying your own property but also entry into a particular neighborhood and even a way of life.”

You can sell the neighborhood in a number of ways, like

• Photos – Connect with the proprietors of the community’s most popular amenities. Ask them for permission to add a few of their photos to your listing pages on Trulia.
• Listing Descriptions – Don’t waste your listing description repeating what buyers and sellers can find elsewhere on your listing pages. Use this space to include mention of points of interest, neighborhood names, and local details that highlight the neighborhood’s values.

5. Get inspired – Check out our Luxe Blog

Lastly, but definitely not least, remember that luxury is a state of mind. Before you can show luxury, you should get to know luxury. One great way to do this is by visit Trulia’s Luxury Real Estate Blog to see how today’s top agents and clients are marketing their homes.

These are our 5 starter ways to add luxury to your listings. What would you add to the list?

Too many brokers and agents leave a lot to be desired when it comes to online reputation and are getting ignored by the tech savvy online consumers that could mean success. Why?

One of these top 5 online reputation don’ts is working against them:

Top 5 online marketing dont’s for today’s market recovery

1. I am number one – or any variation thereof: WHO CARES. It means nothing without context. Sure other agents may know, but are you number one in the county, the city, the state or number one in selling single family ranch homes over 200 acres?Until you give consumers context for your accomplishments, they mean nothing. Offer something concrete, something that will compel the consumer to think you are different. Everyone’s number one in something, change the tune!
2. Reelly bad speeling – Please have others read your ads, profiles, tag lines, etc. If you can’t write a simple tag line, how can you be expected to provide proper care and consideration when dealing with your clients most important decision of their entire lives?
3. High School Graduation Photos – or photos not from the last decade. I mean, I am just saying folks, do you really think your client believes that the suit you have on is from 2013, not 1973? Please, make sure your photo is recent.
4. Because we REALLY care – or other slogans and copy that are irrelevant to buyers and sellers, Use a meaningful copy that has some motivational  oomph and  isn’t chocked full of generic marketing terms and buzzwords. Remember, the goal is to build a real connection with consumers, not oversell them.
5. No transaction history – Sure personal branding is important, but nothing shows your expertise better than the deals you’ve closed. There are two easy ways to show this. One is including  your sales stats from previous years – and think more than just sales, what’s your average DOM and how many families did you help?Second, you should add your sold listings to your profile. Even if you’re a buyers agents, this is a great way to show off that you are a real closer and know the listings in your local market.

On the other side of the coin, here are list (and some examples) of what every agent should be doing to show off their expertise online:

Top 5 online marketing do’s for today’s market recovery

1. Keep it short and sweet – Just because your Facebook status or About Me field can be 63,206 characters, doesn’t mean it should. Use your profile (and your prospects time) wisely.
2. Helped 30 families in Clarkstown find their home in 2012 – Use the personal stats that show off not only quantity of deals, but also your neighborhood smarts.
3. Build a recommendations library – now that you can feature all of your recommendations in one place, you should. Your reviews look stronger when they’re all featured together.
4. Highlight  your recent success – I already said this above. Sold history, add it today.
5. Stop specializing in everything  – One fact about the market recovery is that it means a new wave of real estate professionals isn’t far behind. Carving out a niche real estate market now will have a huge return in the years ahead.

Mortgage lending standards relax a bit for low-risk borrowers:

• Mortgage Lenders Ease Standards for Safest Borrowers (WSJ)
• Mortgage Lending Loosens … But Far From Loose (CNBC)

Is it the right time to tackle the mortgage interest deduction?

• Housing Recovery Opens Window to Fix Homeowner Tax Breaks (Bloomberg)

Should you trust economists?

• What Use are Economists? (Project Syndicate)

We all know that answering a consumer’s question is a great way to win business. Answering them on Trulia Voices helps is even more valuable because you can generate leads from those on the feed and  homebuyers and sellers who will read your thoughts in the days, weeks, months, and even years to come.

Here are two quick tips on how to turn every answer into a prospecting opportunity:

Tip 1 – Be fast and be useful

When you answer questions on Trulia Voices, make sure your answer is actually useful to prospective buyers and sellers.

To do this, think about

• Are there concrete facts that you can provide?

• Are there pros and cons I can point out or clarify?,

• Do I have any even an anecdotes or stories that can make my response more personal and impactful?

Tip 2 – Be sure to include evergreen advice

It’s important to be aware that most home buyers and sellers have similar questions and many times search rather than asking themselves.

Making sure your advice has a little strategy and advice that’s good in any market is a great way to win a prospect now and in the days to come.  Your answer has infinite reach.

Remember, it’s one answer, but thousands of local buyers and sellers may see it. This turns your simple advice into a truly unlimited source of leads.

Visit Trulia Voices in your market now to start showing your knowledge and winning home buyers/sellers who need an agent now and will in the days to come.

Making a victorious offer is more art than science. When your clients learn that the home they want is getting more than one offer, panic, anxiety, and a number of other emotions can set in an endanger the deal.

Download, brand and share this handout to

• head off the stress of multiple offers with valuable insight
• provide practical helpful advice on the offer process
• brand yourself as the local market real estate expert

BONUS! Customize the guide with your brand & contact info

Use this handout to put your seller’s  knowledge to work. Download and share the handout’s survey page to help you hone in on the major selling points of your new potential listing.

How to customize this handout

To customize this download you’ll need Microsoft PowerPoint. Just follow these simple steps.

Step 1: Open the handout file and locate the noted sections you can fill in marked “agents.”

Step 2: Type the desired information into the blocks

Step 3: Save the file

Step 4: Print the file or convert it into a PDF to share electronically

Today’s buyers need to know that “property fit” is
about more than the most obvious factors like price and
simple square footage.

Download, brand and share this handout to

• help homebuyers see you as valuable source for finding the perfect property
• provide practical advice on the search process
• brand yourself as the local market real estate expert

BONUS! Customize the guide with your brand & contact info

Use this handout to put your seller’s  knowledge to work. Download and share the handout’s survey page to help you hone in on the major selling points of your new potential listing.

How to customize this handout

To customize this download you’ll need Microsoft PowerPoint. Just follow these simple steps.

Step 1: Open the handout file and locate the noted sections you can fill in marked “agents.”

Step 2: Type the desired information into the blocks

Step 3: Save the file

Step 4: Print the file or convert it into a PDF to share electronically