By: Ron Prechtl

It was 1979, I was a High School Senior when I decided to start a career in real estate; within six months of obtaining my real estate license, interest rates on home loans hit 18.5% and I was asked the same question:  Why in the world would you want to get into real estate now?

At that time, agents were leaving the business in droves and many of those that remained saw their sales and income plummet—sound familiar?  As a new agent at that time, I had no expectations of what a “realistic” market should look like, so the dismal market of the early 1980’s became my reality—I learned selling skills and techniques that catapulted me as an 18 year old, top producing agent.  I used the selling skills learned to continue on and become the #2 agent in the world within the Century 21 system.

Looking back, I can now connect the dots, (as Steve Job’s says, dots can never be connected in one’s life looking forward, only looking back), and I now realize that the difficult market I started in gave me the greatest opportunity possible and was the BEST time to start a career in real estate.  The challenging economic environment at that time was the catalyst that I needed to learn how to truly “sell” real estate.  See, most agents that left the business or had dismal incomes at that time, entered the real estate sales business at a “good” time and never learned how to “sell” real estate.  Most agents that enter at a good time treat sales like order taking or akin to working the shoe department or cosmetic counter at Macy’s, where clients come up and seek minimal direction and an order is taken.

When the market is down, the greatest of all opportunities exists—more millionaires will be made and more great salespeople will emerge.  Most jobs will never fully compensate on true value of your service or allow you to reach your full potential, yet real estate sales has no limits to the income that can be earned and the opportunities that await you.  There is no better vehicle as a business for you to become financially independent, than real estate sales.  As an agent, you have a “first hand” look at the best investment opportunities—you have unlimited earning potential with virtually no limitations!

Although I cannot connect the dots for you—looking back on how the dots connected for me, I realize the tremendous opportunity and advantage that I had by starting my real estate sales career in a tough economy with 18.5% interest rates and realizing tremendous success—I would have to ask you:  Why wouldn’t you want to start a career in real estate sales now?

Ron Prechtl is the broker-owner of Century 21 All Moves, he has built the largest Century 21 brokerage in The San Fernando Valley; as an agent, Ron ranked as one of Century 21 International’s top producers.  Ron has continued to invest in real estate in every market and today he council’s investors on building a portfolio of real estate investments.  Ron also owns and operates Prellis Property Management, Prellis Mortgage, Prellis Real Estate School and Prellis Escrow.  Ron can be contacted at: ron@prellis.com or 818-491-0121.  Website: www.Prellis.com

Home prices inched up during the second quarter in the Federal Housing Finance Agency’s house price index, the first increase in three years.  The agency said its second quarter HPI – calculated using information from mortgages acquired by Fannie Mae and Freddie Mac –  rose 0.9% on a seasonally adjusted basis from the prior quarter, yet fell 1.6% from the year ago. Still, prices of other goods and services in the second quarter were 3% higher than the year earlier. This puts the second quarter inflation-adjusted home price about 4.4% higher than last year, according to the FHFA.

The Federal Reserve’s board of governors gave their current economic forecast a label last week: The label is “modest” – and it’s an important word to keep it in mind.  Yes, we’re still in recovery mode, the Fed governors said, but it’s a slow slog, and on any given day the news can sound discouraging.  Yes, the gross domestic product, or GDP, is still growing, and many corporations are sitting on big wads of cash, which is good.  But those same companies are not yet confident enough in the pace of the economic recovery to start hiring again … and that’s not good.  It all adds up, according to the Fed, to a mixed picture of where we are on the long pathway out of the Great Recession.  Given this tepid assessment by the government’s top economists, it’s useful to note that the real estate market racked up positive numbers in three quarterly sales and price reports issued last week.  Start with the National Association of Realtors’ second quarter results. Compared with the second quarter of 2009, this year’s numbers show how far housing has improved year-over year.  In two thirds of the major local markets tracked by the Realtors — that’s 100 out of 155 areas around the country — median prices were higher at the end of the second quarter (June 30th) than they were the same time the year before.

Nationwide the median price of houses was up by one and a half percent. But 14 local markets saw double digit increases, including San Bernadino and San Jose, California and Akron, Ohio.  Home sales were up 17 percent during the second quarter compared with 2009, and overall sales were higher in 47 states plus the District of Columbia.  Two other housing indexes released last week told similar stories: Zillow’s survey found prices up significantly in a number of large California markets, including San Diego, San Francisco and Los Angeles, all of whom had 6 percent or higher gains.  Prices were up elsewhere as well – Boston by 3.4 percent, Oklahoma City 4 percent, Boulder, Colorado 2 percent.  The “IAS 360″ price index released last week focused on quarterly gains rather than annual. From the first quarter of 2010 through the second quarter, average prices rose by 1.1 percent according to IAS, not a big deal, but forward movement nonetheless.

Meanwhile, new applications for mortgages to purchase homes rose again for the fourth straight week in the Mortgage Bankers Association survey, indicating that despite all the stock market jitters and worries about employment, many consumers are still eager to take advantage of record low 30-year home loan rates.

s expect new home sales to total 310,000 units in June, up from May’s record-low 300,000, according to outlook and commentary services firm Econoday.

The Census Bureau is scheduled to release its monthly new home sales data later this morning. The error ratio, however, could swing the new home sales into negative territory, month-on-month, as the possible range is listed between 280,000 to 350,000 home sales.

Months’ supply of new homes on the market surged to 8.5 months in May, from 5.8 months in April, due to the drop in sales, Econoday noted in commentary. But the actual number of new homes on the market was down 1,000 in the month to an adjusted 213,000 — to its lowest level in 40 years, since 1970, the firm said.

Econoday noted that lower interest rates are likely to boost sales for the June data. Employment and income growth, however, also have an impact on the decision to buy housing.

Good news!  President Barack Obama this morning signed HR 5623, the “Homebuyers Assistance and Improvement Act of 2010,” a three-month extension on the closing deadline for first-time home buyers to receive the tax credit.  Potential homeowners with offers currently under contract now have until September 30 to close the deal, instead of the original June 30 deadline.  The tax credit remains at a maximum $8,000.  The Senate approved the bill late Wednesday evening, a day after it passed the House of Representatives.  The bill is worded to retroactively include properties that closed in the last two days.

According to the Internal Revenue Service, besides providing a tax benefit to first-time homebuyers and purchasers who haven’t owned homes in recent years, the law also allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence.

To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.

A new bill that establishes a foreclosure mediation program in California passed committee and will reach the California State Assembly floor this week.  Assembly Bill 1639 was introduced by a trio of members of the assemby — Pedro Nava (Santa Barbra), Ted Lieu (Torrance) and speaker emeritus Karen Bass (Los Angeles). If passed, the bill would establish the Facilitated Mortgage Workout (FMW) program. Through it, lenders are required to meet with borrowers to develop a modification plan before foreclosure. The loan must have originated before Jan. 1, 2009, and the home must be occupied by the borrower as a principal residence. The principal balance on the mortgage cannot exceed $729,750.  The bill passed the Assembly Appropriations Committee last week.

“This legislation sends a strong message to the banking and mortgage industry — that business as usual is not working. We will force the industry to do more to help struggling California families facing foreclosure,” Nava said. “This legislation will require face to face meetings between homeowners and their lenders—so that a mutually acceptable plan can be implemented that keeps families in their home.”

The bill also requires lenders to include information regarding the program with the notice of default. The borrower must return a form to the administrator of the program requesting a mediation within 30 calendar days of receiving the notice of default and must send other information with 15 days of the request. Borrowers must deposit with the administrator of the program 50% of the current mortgage payment each month while he or she participates in the FMW program.

Lenders must meet with the borrower within 14 days of contact with the borrower. The program expires Jan. 1, 2014. According to RealtyTrac, an online foreclosure marketplace, one in 192 homes received a foreclosure filing in April 2010. It’s the fourth highest foreclosure rate in the country.

“This crisis has devastated thousands of California families and communities. We have to take a new approach to help families remain in their homes,” Nava said.