REAL ESTATE

Wakefield Reutlinger Realtors, a Berkshire Hathaway Affiliate

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UPDATE
Louisville
3rd Quarter 2014
Wakefield Reutlinger Realtors
YTD Sales by
Price Range
1/1-6/30
2013
1/1-6/30
2014
% Change
Up to $150,000 3,683 3,637 -1.2%
$150,000-$299,999 2,387 2,245 -5.9%
$300,000-$499,999 670 653 -2.5%
$500,000-$999,999 171 179 +4.7%
$1,000,000 + 17 17 -
Total 6,928 6,731 -2.8%
Year to Date Year to Date Year to Date Year to Date Jan 1 Jan 1 Jan 1 Jan 1- -- -June 30 June 30 June 30 June 30
2012 2012 2012 2012
Jan 1 Jan 1 Jan 1 Jan 1- -- -June 30 June 30 June 30 June 30
2013 2013 2013 2013
Jan 1 Jan 1 Jan 1 Jan 1- -- -June 30 June 30 June 30 June 30
2014 2014 2014 2014
Houses Sold 5963 6928 6731
Avg. Selling Price $167,093 $173,589 $174,663
While sales of previously owned homes rose 2.6% in
June over May to an annualized seasonally adjusted
pace of 5.04 million, the highest pace since October of
2013, sales are still 2.3% below last years pace.
Inventories are at their highest level in over a year and
price gains have slowed to much more welcoming lev-
els in many parts of the country, said Lawrence Yun
of the National Association of Realtors. This
bodes well for rising home sales in the upcoming
months as consumers are provided with more
choices. On the contrary, new home construction
needs to rise by at least 50 percent for a complete
return to a balanced market because supply
shortages - particularly in the West - are still
putting upward pressure on prices.
Yun also noted that stagnant wage growth is
holding back what should be a stronger pace of
sales. Hiring has been a bright spot in the economy
this year, adding an average of 230,000 jobs each
month, he said. However, the lack of wage
increases is leaving a large pool of potential
homebuyers on the sidelines who otherwise would
be taking advantage of low interest rates. Income growth
below price appreciation will hurt affordability.
NAR President Steve Brown said Realtors are
reporting that some prospective buyers who have
above average credit scores but low down payments
are deterred from homeownership by the high
cost of FHA mortgage insurance. Access to
affordable credit continues to hamper young,
Home Sales Continue To Trail Last Year
prospective first-time buyers, added Brown.
NAR recommends that FHA reduce high annual
mortgage insurance premiums for all qual i fi ed
homebuyer s and el i mi nat e t he i nsur ance
r equi r ement for the life of the loan.
In the Greater Louisville Area, June sales jumped
8.7% from May, but were still down 2.8% year
to date from last year, mirroring the national
market. Sales in Jefferson County fared a little
worse, down 5.3% year to date versus last year.
Prices in most areas were basically unchanged
from June 2013, with modest gains in Oldham
and Bullitt County. Inventory is still relatively
tight with 14.5% fewer homes for sale in Jefferson
County, compared to one year ago. A healthy
early summer market continued in June with 5.5%
more homes put under contract versus June 2013.
As we continue to report, the state of housing is
being closely followed by Federal Reserve
policymakers as they weigh how soon and how
fast to begin tightening their easy-money policies,
which have been in place since the financial crisis
started seven years ago.
The housing sectorhas shown little recent progress,
Fed Chair Janet Yellen said in testimony before
Congress last week. While this sector has recovered
notably from its earlier trough, housing activity
leveled off in the wake of last years increase in
mortgage rates, and readings this year have overall,
continued to be disappointing.
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Units Sold January 1 June 30
June Unit Sales of Single Family Residential and Condo
TESTIMONIAL
We absolutely loved working
with Cindy when buying our
first home! She walked us
through everything and made
sure we were comfortable
with the whole process .
I'd recommend her
in a heartbeat.
---- Sarah D.
Page 2
Mortgage rates are near historic
lows, great news for home
owners and buyers. But the
situation could prove to be a
big thorn in the side of the
recovery.
More than 1/3 of homes with
a mortgage have a mortgage
rate below 4%, according to
estimates provided by Core-
Logic, a real estate data provider.
Many homeowners have tak-
en advantage of low rates
recently, fueling a reinance
boom. Some home buyers
were able to snag a record
low of 3.3 % interest in 2012.
As such, many home owners
may be more inclined to stay
put, unwilling to swap out a
low mortgage rate for a new
mortgage that could carry a
higher rate. The number of
homes for sale could continue
to be low and contribute to
slower home sales,
housing analysts note.
"They got the deal of the
century," Glenn Kelman,
CEO of Redin, a real
estate brokerage, told
The Associated Press. "I
don't think in 100 years
anyone will be lending
money at 3.5 percent.
How do you walk away
from a deal like that?"
Indeed, The Associated
Press reports that this
marks a signiicant shift
from the way the housing
market has worked in
the past three decades.
For most of that time,
whenever a home owner decided
to trade up to a better home,
mortgage rates usually were
lower than the last time they
had bought, The Associated
Press reports. That helped
make a new purchase seem
more attractive.
Economists say rate lock-in
is a contributing factor for
why so few homes are for
sale. The housing market has
faced a shortage of homes
since late 2012. For every
$1,000 increase in a home
owners annual mortgage
payment, the likelihood that
the home owner would sell
dropped as much as 16 percent,
according to a 2011 study by
the Federal Reserve Bank of
New York. Source: The Associated
Press (July 11, 2014)
Mortgage bankers are fearful that another real estate bubble is on
the horizon, according to a quarterly survey of 203 bank risk managers
from the United States and Canada conducted by FICO. Fifty-six
percent of respondents said that an unsustainable real estate
bubble is inlating.
The Bubble Debate Continues
"The home loan environment has bifurcated," says Andrew Jen-
nings, chief analytics oficer at FICO and head of FICO Labs. "Six
million home owners in the U.S. are still underwater on their mortgages,
with the average negative equity a whopping 33 percent. Yet with
home prices soaring in many cities, total home owner equity in the U.S. is at its highest level since
late 2007. That doesn't feel like a healthy, sustainable growth situation. No wonder many lenders in
both Canada and the U.S. are concerned about the risk in residential mortgages."
But real estate experts mostly have downplayed housing bubble fears in recent months. In fact, a
new report inds that home prices are still undervalued by 3 percent nationally. Trulias most recent
Bubble Watch report found that at the current pace, home prices are expected to fall in line with
long-term fundamentals - neither over - or undervalued - by the last quarter of 2014 or the irst
quarter of 2015.
Much of the recent house-price appreciation is a result of market correction for the signiicant
undervaluation caused by the price declines in the late aughts, Mark Fleming, chief economist at
housing data provider CoreLogic noted in recent months. There is no need to fear a bubble for at
least a few years to come, if at all.
FICOs survey also asked bankers about the most common concerns they have in the underwriting
process on consumer loans. The most common concerns cited by bankers: high debt-to-income
ratio in approving loans (59 percent); multiple recent applications for credit (13 percent); and
low FICO score (10 percent).
"As consumer conidence picks up and people increase their borrowing, lenders are understandably
concerned about growing indebtedness," says Mike Gordon, FICO's executive vice president of
sales, services and marketing. "For the last two quarters, around 65 percent of our respondents
said they think credit card balances are headed higher. Those are the two highest igures we've
ever seen in this survey. When I talk with bankers, they tell me they're happy to see growing
consumer optimism, but they're wary of a return to reckless borrowing."
Source: REALTOR Magazine Daily News (June 30, 2014)
Home buyers and sellers are not on the same
page when it comes to the state of the housing
market, according to a new Redin survey of 707
of its agents and partner agents across 35 U.S.
markets. Buyers and sellers are taking a more
aggressive stance in the market, with some sellers
overpricing their homes and more buyers refusing
to get in bidding wars, the survey found.
Help Your Clients Better Understand the Market
In May, 40 percent of sellers surveyed by Redin
said that they planned to list their homes above
market value, even though home sales had
dropped by 9 percent since the year before, says
Nela Richardson, Redins chief economist.
Typically, it takes sellers six to nine months to
adjust to a price change, but this latest shift is
longer. Prices have moved down and then up so
much over the past ive years that its even more
dificult for sellers to have a realistic baseline for
what their homes are worth in the current mar-
ket.
Fifty-eight percent of Redin agents say that sellers
are holding unrealistic expectations about the
value of their homes, up from 49 percent in the
previous quarter. Meanwhile, buyers are showing
less willingness to chase after a home, as they
face affordability and inancing hurdles, the
survey found.
Buyers who have been searching for a long time
may still try to win deals with aggressive offers,
Richardson says. However, new buyers in the
market are much less willing to chase an escalating
sale price to compete with multiple bids. The
demand side of real estate is moving from please
take my offer to take it or leave it as you please.
Home buyers willingness to walk away from a
deal thats a bad it is good for them and is
ultimately healthier for the housing market.
So is it a sellers market or a buyers market? It
depends on who you ask. Twenty-four percent of
Redin agents surveyed say that sellers have all the
power, a drop from 35 percent three months ago.
Rising inventories have been beneicial for
buyers who are less willing to participate in a
bidding war, but they are facing other challenges,
such as access to credit and affordability, the
survey inds. The top challenges Redin agents
identiied as growing problems for buyers are:
lack of affordability; qualifying for a mortgage;
saving enough for a down payment; and worries
about the econ-
omy.
Source: Redin
Survey: Buyers, Sellers 'Not on the Same Page'
The Home Market Bifurcated
Why Low Rates
Aren't Always
Good for Housing
Real Est at e Insi der
Page 3
To many Americans, middle-class success
looks like a nice colonial with a lawn, white
picket fence and two cars in the driveway.
Not only was that vision interrupted for
millions during the housing crisis, but it
may be outmoded. When investors parse
economic data to see how close the U.S.
economy is to getting "back to normal," they
must redeine normal.
Take Tuesday's data on housing starts for
May. April starts rose by 13.2% from March
and jumped back above one million on an
annualized, seasonally adjusted basis. Starts
had only surpassed that one-million mark in
November for the irst time since the crisis.
Now, with delayed activity from a harsh
winter less of a factor, starts are seen having
cooled slightly to 1.03 million in May, ac-
cording to a Wall Street Journal survey of
economists.
One million starts is actually a modest level,
even in a data series going back to 1959,
and low on a population-adjusted basis. For
example, rebased to the number of Americans
in 1959, starts averaged 1.185 million through
2002 when the housing bubble began to inlate.
The three-month average now stands at an
adjusted 545,000.
History provides a cracked lens for anyone
trying to gauge how far residential-construction
activity will have to climb to revisit glory
days. Even in the housing-bubble from 2003
through 2006, activity fell slightly short of
the long-run, population-adjusted average.
Yet there is little disagreement home builders
got ahead of demand then. And today there
is less demand than there once was.
In 1960, nearly three-quarters of adults
were married, compared with barely half
today, and people tied the knot six years
younger on average, according to Census
Bureau data. Furthermore, the fertility rate
in 1960 was 80% higher, resulting in more
babies born to a smaller population.
There is less need for self-standing suburban
homes today and more for smaller, cheaper
apartments. April's housing data relect this,
with multifamily starts up nearly 40% from
a year earlier while single-family ones barely
changed. No wonder June conidence igures
from single-family home builders, reported
Monday, remained in pessimistic territory
for a ifth consecutive month.
The American dream just ain't what it used
to be.
By Spencer Jakab
"Springfield" off Blankenbaker Lane, is known as the boyhood
home of the 12th President of the United States, Zachary Taylor.
There is a prior local Taylor home nearby.
Richard Taylor (1744-1829), Zachary's father, was born in Orange
County, Virginia of a prominent family. After graduating from
William and Mary, he served with distinction in the Revolutionary
War. He came to Kentucky (still the three Western Counties of
Virginia) in 1783. By 1785, Richard brought his family to
Louisville from their home "Hare Forest," where months before
Zachary was born.
Richard Taylor was a member of the state constitutional convention,
Collector of the Port of Louisville, a county judge, and on
Louisville's board of trustees. He purchased 200 acres from Isaac
Shelby, the first Governor of Kentucky in 1792, where he
constructed the two story brick hall and parlor, which is the
southern wing of the present house. In 1795, Taylor moved his
family to his newly built "Springfield" across The Brownsboro
The Taylor-Herr House
Road. He sold his home on what
is now Waterford Road to George
Rudy of Pennsylvania.
In 1797, Rudy sold the home and
117 acres to his son-in-law John
Herr. By 1820 John Herr added a
Federal style I-house with central
hall plan forming an "L" shape
with the new portion facing
Brownsboro Road. The new
addition had two 17 foot square
rooms flanking a 12 foot center
hall.
Upon John Herr's death in 1852,
the property passed to his daughter
Ann Arterburn and her husband
Norbourne Arterburn. Willed to
their son Clifton in 1878, it was
then owned shortly by Hancock
Taylor. A.J. Dresel purchased
the property in 1901 and it
remained in the family until his
heirs sold to the developers of
Wexford Place subdivision in
1952. On the National Register
of Historic Homes, the Taylor-
Herr house is still a private
residence proudly owned since
1972.
By Dave Arnett
This Isn't Your Father's American Dream
What are Tiny Houses? The Tiny
House Movement? Tiny Living?
Simply put it is a social movement
where people are downsizing the
space that they live in. The typical
American home is around 2600
square feet, while the typical small or
tiny house is around 100-400 square
feet. Tiny Houses come in all shapes,
sizes and forms but they focus on
smaller
spaces
and simpli-
fied living.
People are
joining this
movement
for many
reasons, but the most popular reasons
are because of environmental
concerns, financial concerns and
seeking more time and freedom.
For most Americans, 1/3 to 1/2 of
their income is dedicated to the roof
over their heads. This translates to
15 years of working over their life
time just to pay for their home.
Is there an alternative? One might
be to live smaller. While tiny houses
may not be for everyone, there are
lessons to be learned and applied to
the way we all live.
What is the Tiny
House Movement?
This is not intended to solicit a currently listed property.
Information is deemed reliable, but not guaranteed.
Interest Rates
Fixed 30 Year 4.125 %
Fixed 15 Year 3.250 %
Fixed FHA 30 Year 3.750 %
Fixed 30 Year Jumbo 4.375 %
*as of Aug. 5, 2014- restrictions apply.
As someone who has been in the residential real
estate market for almost fifty years, I can say Ive
seen many trends. The trend that fascinates me the
most is the one I believe were in today, which is
reminiscent of where we were in 1966 when I went
to work for Paul Semonin.
At that time a family purchased a house as their
home. This concept was universal, whether it was
purchasing a home for the first time, buying a bigger
home as the family expanded or downsizing for re-
tirement.
As inflation took off in the 70s, people saw the value
of their homes accelerate. They made great returns
on their purchases and sales. There was a pause
when the mortgage interest rates went to the upper
teens, but by the mid 80s prices were off to the races again, not to slow
down in any great manner until the housing depression of 2008 2011.
Most of us in the trade are familiar with the political and government poli-
cies in the 90s which required the banks to lend to people who were poor
risks in the name of housing
rights. Homeowners were
using their houses as ATM
machines, cash generators
and commodities, everything
except their homes. Then,
Wall Street securitized these
debts and sold them to un-
suspecting investors which
resulted in the subprime fias-
co. As with all bubbles, it
burst, and the housing mar-
ket collapsed with brutal
quickness and consequenc-
es.
Fast forward to today. The
circle has been closed. Most
people buying houses are
buying homes without the
expectations of investment returns but with the benefits of deducting mort-
gage interest and real estate taxes on their income tax returns. Their mind
set is that they are not buying an investment but are buying their home.
It has been a long road, but it has come full circle.
Full Circle by Ken Reutlinger



While Jim and Ellen serve as independent agents, they also have
formed a strong partnership offering EXPONENTIAL SERVICE to their
clients. With 18 years real estate experience and over 30 years in
home building, remodeling and home inspections, Jim helps every client with what to
look for and what to expect when buying or selling a home. Ellen, with 14 years
full-time real estate experience along with 9 years marketing experience is strong in
the ever-changing marketing arena and excellent in customer service. Through their
partnership, they are able to build strong relationships and provide honest, reliable
advice to their clients.
Call today so they can add you to their list of satisfied real estate clients.
Ellen Bland 807-4924 James Aubrey 744-7922
Ellen Bland Ellen Bland Ellen Bland Ellen Bland, , , , CRS, GRI and CRS, GRI and CRS, GRI and CRS, GRI and James Aubrey James Aubrey James Aubrey James Aubrey, , , , REALTOR REALTOR REALTOR REALTOR