As we continue with the no normal, new normal or whereever we land once we are out of these economic doldrums, it will take leadership - more even than technical skills and management - to succeed. So here are a few leadership tips I have used with mid-level and senior executives:
Maintain a positive demeanor, even during heavy squalls. Move with confidence and authority; the attitude and morale of your colleagues will be favorably influenced.
Establish clear priorities, complemented by clarity in direction you give to people. Avoid vagueness and generality; change is hard enough on folks.
Emphasize short-term objectives when a few solid wins will elevate morale. Ask people to stretch but make goals achievable, then shoot off fireworks when they are surpassed.
Go looking for bad news; get resistance to change out in the open. Make it easy for people to let you know about what requires attention. Don't be the last to know!
Pay close attention to transitions - people, clients, systems, economic. Careful monitoring (but not micro-management) may be needed to keep everyone on track.
Re-recruit your best people. Uncertainty brought about by change often makes them receptive to outside enticements.
Encourage risk-taking and initiative. Make it clear that you will tolerate mistakes as long as there is thoughtful effort, and action-orientation toward improvement.
Protect your service quality, and reaffirm your supplier partnerships. Stay close to customers (someone else wants their business!). Client satisfaction is your top priority even as change might be occurring internally.
A leader's job is to make others succeed, and to feel that their contribution means something.
Happy New Year, and here's to a prosperous 2012!
Saturday, December 31, 2011
Monday, December 5, 2011
Antietam
By September 1862, the Union position was grave. Lee had manhandled Union armies, Maryland's support for Lincoln's cause was cooling and Great Britain was threatening to recongnize the Confederacy - perhaps even use the powerful British navy to break the Union blockade of the South. Lincoln needed a victory badly.
Knowing the stakes were high, and that another victory might tip the balance heavily in favor of the Confederacy, Lee decided to invade Maryland. He crossed the Potomac and camped near Frederick. There he issued orders to divide his force and gave instructions to his commanders to concentrate near Sharpsburg, along the Antietam creek. McClellan, in command again, kept his much larger army between Lee and Washington, and moved slowly west toward the rebels.
Then a stroke of luck - a Union officer found Lee's orders in a field near Frederick wrapped around cigars. A rebel officer had carelessly dropped them while in camp. McClellan now had the key to defeating Lee, since the orders revealed that the rebel forces were divided, and gave details on the routes to be taken by each of the Confederate corps.
Lee's army was arrayed along the Antietam Creek east of Sharpsburg MD and McClellan moved into position to attack. Lee urgently called all of his forces to oppose the Union army. On the morning of September 17, 1862, the 75th anniversiary of the Constitution, the battle opened. The two armies battered each other all day, with the rebels falling back then holding all along the line. By day's end, the positions were nearly the same as morning, except for the carnage.
Antietam is the bloodiest day in American history. More than 23,000 casualties were suffered by both armies, more than the US on D-Day. Both sides had suffered equally, but McClellan still had large fresh forces to attack, and Lincoln urged him to destroy Lee's army. Next morning, the attack Lee expected never came, McClellan being an inordinately cautious field commander. Lee escaped across the Potomac.
Lincoln had a victory at last against Lee, and decided to issue the Emancipation Proclamation. The British backed away from supporting the Confederacy. And Maryland confirmed Union support.
Yet, by failing to destroy Lee's battered army the next day, McClellan missed a chance to end the war, and avoid the killing of another 400,000 Americans in the next 30 months of war.
Knowing the stakes were high, and that another victory might tip the balance heavily in favor of the Confederacy, Lee decided to invade Maryland. He crossed the Potomac and camped near Frederick. There he issued orders to divide his force and gave instructions to his commanders to concentrate near Sharpsburg, along the Antietam creek. McClellan, in command again, kept his much larger army between Lee and Washington, and moved slowly west toward the rebels.
Then a stroke of luck - a Union officer found Lee's orders in a field near Frederick wrapped around cigars. A rebel officer had carelessly dropped them while in camp. McClellan now had the key to defeating Lee, since the orders revealed that the rebel forces were divided, and gave details on the routes to be taken by each of the Confederate corps.
Lee's army was arrayed along the Antietam Creek east of Sharpsburg MD and McClellan moved into position to attack. Lee urgently called all of his forces to oppose the Union army. On the morning of September 17, 1862, the 75th anniversiary of the Constitution, the battle opened. The two armies battered each other all day, with the rebels falling back then holding all along the line. By day's end, the positions were nearly the same as morning, except for the carnage.
Antietam is the bloodiest day in American history. More than 23,000 casualties were suffered by both armies, more than the US on D-Day. Both sides had suffered equally, but McClellan still had large fresh forces to attack, and Lincoln urged him to destroy Lee's army. Next morning, the attack Lee expected never came, McClellan being an inordinately cautious field commander. Lee escaped across the Potomac.
Lincoln had a victory at last against Lee, and decided to issue the Emancipation Proclamation. The British backed away from supporting the Confederacy. And Maryland confirmed Union support.
Yet, by failing to destroy Lee's battered army the next day, McClellan missed a chance to end the war, and avoid the killing of another 400,000 Americans in the next 30 months of war.
Monday, November 28, 2011
Informal Survey
Over the holidays, I had a chance to talk with 6 senior executives, most in social settings, about their relocation and recruiting challenges. While they each had concerns particular to their industry, all agreed on at least three issues about how relocation service providers can improve.
First, there is simply not enough data and analysis supporting home sale management. All of these execs depend greatly on industry and market data in their businesses. Further, the analysis of this information is the key element to applying it to useful - tactical and strategic purposes. They feel that, in spite of the wealth of data, and the gravity of the real estate situation, relo companies simply do not provide clear insights that are shared - communicated in a clear and convincing manner - with client companies. Transferees constantly worry out loud about both departure and destination market value and time on market issues.
Second, while the relo industry has done a good job of adopting ISO certifications and Six Sigma practices, they all say this is merely a minimum expectation on the part of client senior executives. They see little evidence of creative, value-added processes that expand beyond these qualifiers. After all, as one said, "these have been around a long time and apply to all industries. I would like to see something innovative that is specific to relocation".
Third, as everyone knows, international relocations are ever more common and expected to increase. These senior execs do not see strong language ability, or a real understanding by US personnel of the important details of international culture and destinations, or any attempt to provide support on political risk. After all, doing business in China means doing business in a communist country with no freedom of the press or individual freedoms. Also, the upheaval in the Middle East should elicit action by relocation providers on risk and programs to manage it.
Please comment on any of these items, and share what you are doing, or support you need, to meet these stated needs.
I hope you all enjoyed your Thanksgiving holiday.
First, there is simply not enough data and analysis supporting home sale management. All of these execs depend greatly on industry and market data in their businesses. Further, the analysis of this information is the key element to applying it to useful - tactical and strategic purposes. They feel that, in spite of the wealth of data, and the gravity of the real estate situation, relo companies simply do not provide clear insights that are shared - communicated in a clear and convincing manner - with client companies. Transferees constantly worry out loud about both departure and destination market value and time on market issues.
Second, while the relo industry has done a good job of adopting ISO certifications and Six Sigma practices, they all say this is merely a minimum expectation on the part of client senior executives. They see little evidence of creative, value-added processes that expand beyond these qualifiers. After all, as one said, "these have been around a long time and apply to all industries. I would like to see something innovative that is specific to relocation".
Third, as everyone knows, international relocations are ever more common and expected to increase. These senior execs do not see strong language ability, or a real understanding by US personnel of the important details of international culture and destinations, or any attempt to provide support on political risk. After all, doing business in China means doing business in a communist country with no freedom of the press or individual freedoms. Also, the upheaval in the Middle East should elicit action by relocation providers on risk and programs to manage it.
Please comment on any of these items, and share what you are doing, or support you need, to meet these stated needs.
I hope you all enjoyed your Thanksgiving holiday.
Friday, November 11, 2011
Civil War - Union Success and Failures
In the West - states along the Mississippi - Grant had early successes against the Confederates. At Shiloh, after nearly being pushed into defeat, he rallied the Union and defeated the army of Albert Sidney Johnston, who died from battle wounds. As Johnston was considered the best general officer in the South, this was a serious blow to the Confederacy.
Grant demonstrated at Shiloh, and earlier at Forts Donelson and Henry, that he was effective - a winner that Lincoln would later turn to for leadership. However, in the East, things went from bad to worse for the Union, and Washington was under threat almost constantly.
General McClellan executed a grand strategy to assault Richmond from the southeast with a huge Union force. The enormous logistical operation was achieved by summer, 1862, and McClellan began moving toward Richmond. Union soldiers were so close that they could hear the bells of Richmond's St. John's Church (site of Patrick Henry's "give me liberty or give me death" speech).
Robert E Lee assumed command of the Confederate forces and launched a series of bold attacks that drove the Union forces back to their fortified James River position in less than a week. McClellan was outgeneraled and showed that his caution was a serious liability - and Lincoln removed him from command. Lee, on the other hand, surprised Union and Confederate leaders with his skill and audacity. His manhandling of a much larger Union force was a preview of his illustrious career as a field commander.
Lee followed up with another whipping of a Union force at Manassas in August (so-called "Second Manassas") and it looked like Lee was unbeatable. The next move was an invasion of Maryland in September, setting the stage for a crucial turning point of the war. At Antietam, America experienced the bloodiest day in its history, and in its wake Lincoln would decide to free the slaves.
Grant demonstrated at Shiloh, and earlier at Forts Donelson and Henry, that he was effective - a winner that Lincoln would later turn to for leadership. However, in the East, things went from bad to worse for the Union, and Washington was under threat almost constantly.
General McClellan executed a grand strategy to assault Richmond from the southeast with a huge Union force. The enormous logistical operation was achieved by summer, 1862, and McClellan began moving toward Richmond. Union soldiers were so close that they could hear the bells of Richmond's St. John's Church (site of Patrick Henry's "give me liberty or give me death" speech).
Robert E Lee assumed command of the Confederate forces and launched a series of bold attacks that drove the Union forces back to their fortified James River position in less than a week. McClellan was outgeneraled and showed that his caution was a serious liability - and Lincoln removed him from command. Lee, on the other hand, surprised Union and Confederate leaders with his skill and audacity. His manhandling of a much larger Union force was a preview of his illustrious career as a field commander.
Lee followed up with another whipping of a Union force at Manassas in August (so-called "Second Manassas") and it looked like Lee was unbeatable. The next move was an invasion of Maryland in September, setting the stage for a crucial turning point of the war. At Antietam, America experienced the bloodiest day in its history, and in its wake Lincoln would decide to free the slaves.
Wednesday, November 2, 2011
Property Management
Realtors often handle property management for lenders, relocation companies and asset management companies. According to an expert in real estate law, there are several cautions that should be addressed.
First, whenever an inspection - the routine monthly exterior inspection, not the GHI - reveals damage or an issue with the property, the realtor faces a disclosure requirement if they are also listing the property.
Two, is the realtor that does an inspection, or looks at a report, qualified to say the foundation is sound, for example? If the realtor arranges for repairs, are they also indemnifying the repairs? This is particularly important when handling these tasks for lenders on REO properties.
Third, the E&O policy which relators carry often excludes coverage for anything relating to property management; thus, realtors should be sure they do not need a separate policy to cover property management activities.
Fourth, are the fees that realtors charge competitive with the field service company alternative? They are often higher, but there may be sufficient compensating factors for the higher cost.
Relocation folks: remember to get a CLUE report before you or your client takes a property into inventory.
First, whenever an inspection - the routine monthly exterior inspection, not the GHI - reveals damage or an issue with the property, the realtor faces a disclosure requirement if they are also listing the property.
Two, is the realtor that does an inspection, or looks at a report, qualified to say the foundation is sound, for example? If the realtor arranges for repairs, are they also indemnifying the repairs? This is particularly important when handling these tasks for lenders on REO properties.
Third, the E&O policy which relators carry often excludes coverage for anything relating to property management; thus, realtors should be sure they do not need a separate policy to cover property management activities.
Fourth, are the fees that realtors charge competitive with the field service company alternative? They are often higher, but there may be sufficient compensating factors for the higher cost.
Relocation folks: remember to get a CLUE report before you or your client takes a property into inventory.
Tuesday, September 27, 2011
National Flood Insurance program needs support!!!
The National Flood Insurance Program is set to expire soon and must be reauthorized by Congress. Call, write, email your Congressman and insist that this essential program not fall prey to the political wrangling. The recent threat to FEMA funding makes me more than a little nervous that we'll be without NFIP.
If you aren't already doing so, have a contigency plan to deal with at least a pause. Recall that we had a bump earlier this year regarding Missouri River coverage. It was fixed retroacitvely.
If you aren't already doing so, have a contigency plan to deal with at least a pause. Recall that we had a bump earlier this year regarding Missouri River coverage. It was fixed retroacitvely.
Saturday, September 24, 2011
Home Values still sluggish gains
For the fourth straight month, home values nationally inched up, this time by 0.8%. The twelve month downward trend appears to have been reversed, based on new home purchases and refinances in Spring and Summer. That's good news as we are still 18% below the April 2007 peak, and right now values are at about where they were in March 2004.
A survey of 111 economists and real estate sources predicts a 1.1% average home value gain in each of the next 3 years - not only an average but a general consensus for slow recovery. Since historically, regional downturns have taken 3-4 years to ascend to prior levels, we are indeed making history in this market.
FHFA published its second quarter report of 308 real estate markets. Of the top 20 performers in Q2, most were smaller metropolitan areas. However, Pittsburgh, Buffalo, Honolulu and San Antonio made the top 20 list. Among the bottom 20 were (still) 13 in AZ, NV and Florida.
Our financial policy makers must find this report very sobering as refinances won't work if value isn't there to support a new loan. Unless, of course, the banks are allowed to split the asset into a secured portion (supported by current home value) and an unsecured asset represented by the amount owed that is in excess of the home value.
Stay tuned....
A survey of 111 economists and real estate sources predicts a 1.1% average home value gain in each of the next 3 years - not only an average but a general consensus for slow recovery. Since historically, regional downturns have taken 3-4 years to ascend to prior levels, we are indeed making history in this market.
FHFA published its second quarter report of 308 real estate markets. Of the top 20 performers in Q2, most were smaller metropolitan areas. However, Pittsburgh, Buffalo, Honolulu and San Antonio made the top 20 list. Among the bottom 20 were (still) 13 in AZ, NV and Florida.
Our financial policy makers must find this report very sobering as refinances won't work if value isn't there to support a new loan. Unless, of course, the banks are allowed to split the asset into a secured portion (supported by current home value) and an unsecured asset represented by the amount owed that is in excess of the home value.
Stay tuned....
Monday, September 5, 2011
A Survey of Risk Types
We deal with risk issues all of the time, even if we don't think of them with that label. Here are some worth noting:
- Insurable Risks: property, liability, flood, title
- Property Management: taking care of a vacant home in a northern climate,
- Computers: data security, etc
- Political Risk: relocating to a country with some political instability
- Economic/market/interest rate: outside forces affect your customers, capital and cash
- Loss on Sale: for both the homeowner and the employer post-buyout
- Maritime Risk: the inherent risk of sailing the Seven Seas and briny Oceans
- Credit Risk: Can your invoices be paid in timely fashion?
- Regulatory: especially in the home lending arena, but also taxation issues abound
- Betty Grable Risk: legs, throwing arms, etc (OK, probably not a relocation issue per se)
- Legal: are your contracts, SLAs, addenda documented, tracked and enforcable?
Each requires attention, at the outset and ongoing. Quantify them where you can and apply at least an ounce of prevention and planning to minimize or avoid.
Which have I missed?
- Insurable Risks: property, liability, flood, title
- Property Management: taking care of a vacant home in a northern climate,
- Computers: data security, etc
- Political Risk: relocating to a country with some political instability
- Economic/market/interest rate: outside forces affect your customers, capital and cash
- Loss on Sale: for both the homeowner and the employer post-buyout
- Maritime Risk: the inherent risk of sailing the Seven Seas and briny Oceans
- Credit Risk: Can your invoices be paid in timely fashion?
- Regulatory: especially in the home lending arena, but also taxation issues abound
- Betty Grable Risk: legs, throwing arms, etc (OK, probably not a relocation issue per se)
- Legal: are your contracts, SLAs, addenda documented, tracked and enforcable?
Each requires attention, at the outset and ongoing. Quantify them where you can and apply at least an ounce of prevention and planning to minimize or avoid.
Which have I missed?
Friday, August 26, 2011
Civil War - How Did the Foes Match Up?
So, by August 1861 people sensed the war would not be short, and in would be bloody. There was still hope for a quick solution, but a string of victories for the South emboldened the Confederacy, and firmed up Lincoln's resolve. So how did the sides compare?
From all appearances, the North held a tremendous advantage: more than 3 times the number of available fighting men, 70% of railroads, over 90% of iron & coal production, and three quarters of the nations wealth. The South produced by far the greatest export - cotton - but that was cut off by the Union naval blockade.
Yet, the South had important strengths. They needed only to win a defensive war fighting for their homes. Cotton was crucial to British and French industry; thus, the diplomatic pressure could favor the Confederacy. But most important, in a war of unprecedented scale and complexity, the South had superior military leadership. Stonewall Jackson routinely outfought larger Union forces. And, Robert E Lee would go down in history as one of the great field commanders.
This would be a new kind of war with extensive use of railroads, the telegraph, the machine gun and ironclad warships. And, no one was prepared for the casualties. By war's end there were over 600,000 dead and 2 million wounded. Fully one third of adult southern men died or were wounded from 1861 to 1865. But in that August 150 years ago, no one could foresee such a tragic outcome.
From all appearances, the North held a tremendous advantage: more than 3 times the number of available fighting men, 70% of railroads, over 90% of iron & coal production, and three quarters of the nations wealth. The South produced by far the greatest export - cotton - but that was cut off by the Union naval blockade.
Yet, the South had important strengths. They needed only to win a defensive war fighting for their homes. Cotton was crucial to British and French industry; thus, the diplomatic pressure could favor the Confederacy. But most important, in a war of unprecedented scale and complexity, the South had superior military leadership. Stonewall Jackson routinely outfought larger Union forces. And, Robert E Lee would go down in history as one of the great field commanders.
This would be a new kind of war with extensive use of railroads, the telegraph, the machine gun and ironclad warships. And, no one was prepared for the casualties. By war's end there were over 600,000 dead and 2 million wounded. Fully one third of adult southern men died or were wounded from 1861 to 1865. But in that August 150 years ago, no one could foresee such a tragic outcome.
Saturday, August 13, 2011
Home Sale Data - A different view
One of the money center banks recently presented an interesting view on home values. They looked at every state and compared home value trends with and without the influence of distressed sales. The result shows that 14 states have experienced appreciation - in one case as high as 8% - with distressed home sales factored out. And the large overhang of 90+ past due and in-process-foreclosures continues to exert gravitational pull on certain key markets.
Our view is that even statewide data is of limited use to folks - realtors, counselors, appraisers - dealing with home value challenges. The various sources of data must be applied to both the property and market complexity issues. We conclude this shows that deeper analysis - perhaps even down to the 10 block zone - can give much better insight to those handling home sales.
Thursday, July 21, 2011
Peer Group Data
The banking industry has for decades collected data on various operations and financial ratios. It is relatively easy for a banker to compare his/her performance against peer banking companies. What is your operating ratio, expense load versus peers? Average loss on sale of a foreclosed home? Cost to deliver a specific service. That sort of thing.
Our ERC folks do a fine job of surveying the industry. But I cannot locate a resource to which all companies have contributed refined data used to develop objective comparative measures. Numbers are surely available but when I inquire within the industry, not much is available. One industry veteran referenced an excellent report from (I think) 2009 from ERC that was a one shot deal.
If such a report (a la the banker's Sheshunoff reports) exists, please direct me to it via a Comment. If not, let's work together to develop one. After all, our clients operate in highly competitive markets where this sort of resource, and the discipline that comes with it, is essential.
Monday, July 11, 2011
Overhang
There are now 4.1 million homes either 90+ days past due or in foreclosure. Add to that homes already owned by lenders, and we have a serious overhang issue.
The good news is that the rate of new problem loans has declined in the past year by half.
What steps are relocation managment companies, clients and vendors taking to deal with the impact of this issue? Process, use of data, home marketing, policy development all require attention in light of unprecendented, and lingering, affects of our housing challenges.
Use "Comments" if you want more information, and the source of the data.
The good news is that the rate of new problem loans has declined in the past year by half.
What steps are relocation managment companies, clients and vendors taking to deal with the impact of this issue? Process, use of data, home marketing, policy development all require attention in light of unprecendented, and lingering, affects of our housing challenges.
Use "Comments" if you want more information, and the source of the data.
Friday, July 8, 2011
150th Anniversary
Yes, this year is the 150th anniversary of the Civil War. It began in April, 1861 and ended in April 1865, after over 600,000 had died. (Adjusting for population, the same rate today would result in 6 million dead). Periodically, I will post historical items about the war, and share websites that offer perspective. Also, books - one historian has said more has been written about the Civil War than any event in US History. No wonder.
We are approaching the date of the First Battle of Bull Run (aka First Manassas) - July 21 1861, In this first great encounter of armies, Union and Confederate soldiers met not far from Washington DC. Ladies and gentlemen in their Sunday best packed picnic lunches and drove out the "watch the show". Nearly everyone in the north assumed the war would be short. Maybe even only one battle and those Rebs would come to their senses.
Instead, the spectators witnessed the reality of modern war, and a terrible defeat of Union forces. Nearly 5,000 casualties suffered, and a disorderly Union retreat, horrified and terrified the residents. They hurried back to DC in a panic, entangling with Union soldiers eager for escape routes. Only one year later, at Antietam nearly 5X the casualties would be suffered in 12 hours in a Union victory (just barely). The war would go on for another 31 months.
I recommend Ken Burns' The Civil War series, which will undoubtedly be shown on PBS stations near you, wherever you live, over the next year.
We are approaching the date of the First Battle of Bull Run (aka First Manassas) - July 21 1861, In this first great encounter of armies, Union and Confederate soldiers met not far from Washington DC. Ladies and gentlemen in their Sunday best packed picnic lunches and drove out the "watch the show". Nearly everyone in the north assumed the war would be short. Maybe even only one battle and those Rebs would come to their senses.
Instead, the spectators witnessed the reality of modern war, and a terrible defeat of Union forces. Nearly 5,000 casualties suffered, and a disorderly Union retreat, horrified and terrified the residents. They hurried back to DC in a panic, entangling with Union soldiers eager for escape routes. Only one year later, at Antietam nearly 5X the casualties would be suffered in 12 hours in a Union victory (just barely). The war would go on for another 31 months.
I recommend Ken Burns' The Civil War series, which will undoubtedly be shown on PBS stations near you, wherever you live, over the next year.
Wednesday, July 6, 2011
Reduction in Max Loan Guarantees Coming Soon
The federal government will reduce the size of loans eligible for government backing effective October 1.
As an emergency measure three years ago, Congress raised to as high as $729,750 the maximum loan amount that Fannie Mae, Freddie Mac and federal agencies could guarantee. Now those limits are set to decline in hundreds of counties across the U.S. as the government attempts to reduce its footprint in the mortgage market.
The new limits will vary by location, but will drop to $625,500 in top-tier markets such as New York, Los Angeles and Washington, D.C.
Contact us via "Comment" if you would like a list of reductions by major market.
As an emergency measure three years ago, Congress raised to as high as $729,750 the maximum loan amount that Fannie Mae, Freddie Mac and federal agencies could guarantee. Now those limits are set to decline in hundreds of counties across the U.S. as the government attempts to reduce its footprint in the mortgage market.
The new limits will vary by location, but will drop to $625,500 in top-tier markets such as New York, Los Angeles and Washington, D.C.
Contact us via "Comment" if you would like a list of reductions by major market.
Monday, July 4, 2011
FEMA and the Missouri River
FEMA issued a ruling in mid June that was effective retrospectively to June 1, 2011. The ruling appears to remove flood coverage under the National Flood Insurance Program (NFIP) for any home in the Missouri River basin.
You should check to see what sort of home inventory you currently own and/or manage in the affected areas, as you may be operating without flood coverage. Also, relocation companies should search their in-process home sale assignments for homes covered by the FEMA ruling.
Best not to be surprised by a coverage problem after a home has been acquired, or affected by a purchaser to whom disclosure is required.
(Did you know that the Mississippi-Missouri river system is the third ranking system on earth?)
Wednesday, June 29, 2011
Home Price Data Sources
I'm often asked my views on the real estate market. I have recently helped clients find and analyze several sources of data for presentations, interviews and RFPs. My impression is, even three years into the real estate downtown, many need help with understanding the high profile reports. So here are some comments on two.
Case/Shiller's home price trend is freqently cited to assess trends in home values. The index was developed by two very smart guys, one of whom predicted the real estate crash at least 3 years ahead of time. Case/Shiller tracks and reports on 20 cities to assess national trends - when reported (as today) the press surely takes notice, especially if it's a downer.
FHFA, fomerly known as OFHEO (I'm sure that helps!) reports its home price index (HPI) quarterly, and monthly in abbreviated form. The HPI reports changes in home values for the most recent quarter, year and 5 years. Instead of 20 cities, FHFA reports on 379 areas - called metropolitan statistical areas (MSAs). The data used to develop the HPI comes from 35 million Fannie Mae and Freddie Mac loans made.
While FHFA does not report trends on jumbo loans (homes above $700K), it does provide a much broader geographic reach than Case/Shiller. Further it ranks the top 20 and bottom 20 performing markets, and provides many good graphs and maps illustrating trends by region, by state, and other factors. FHFA is free.
Both are valuable, as are reports from LPS, DataPoint, Altos and others. One challenge for folks is "what do I do with all this information?" (that's where we come in at Hayden Moore)
Case/Shiller's home price trend is freqently cited to assess trends in home values. The index was developed by two very smart guys, one of whom predicted the real estate crash at least 3 years ahead of time. Case/Shiller tracks and reports on 20 cities to assess national trends - when reported (as today) the press surely takes notice, especially if it's a downer.
FHFA, fomerly known as OFHEO (I'm sure that helps!) reports its home price index (HPI) quarterly, and monthly in abbreviated form. The HPI reports changes in home values for the most recent quarter, year and 5 years. Instead of 20 cities, FHFA reports on 379 areas - called metropolitan statistical areas (MSAs). The data used to develop the HPI comes from 35 million Fannie Mae and Freddie Mac loans made.
While FHFA does not report trends on jumbo loans (homes above $700K), it does provide a much broader geographic reach than Case/Shiller. Further it ranks the top 20 and bottom 20 performing markets, and provides many good graphs and maps illustrating trends by region, by state, and other factors. FHFA is free.
Both are valuable, as are reports from LPS, DataPoint, Altos and others. One challenge for folks is "what do I do with all this information?" (that's where we come in at Hayden Moore)
Sunday, June 26, 2011
History For The Day
The Roman Consul Cicero said those who do not learn History remain forever children. He was offering advice to prospective public servants of the Roman republic. With a far less grand entrance, I will periodically offer entries on our past that I hope you find interesting.
Our founders struggled through the summer of 1787 to create our Constitution. The delegates held meetings in secret presided over by George Washington. Hamilton and Madison played key roles. So did Ben Franklin. Jefferson and Adams were in Europe and did not participate except by (long delayed) letters.
When the new Constitution was published in September, there was an outcry from those who favored a weak national government and strong state governments. They saw the new structure as dangerous to state influence, launching a debate that has simmered ever since. Within ten days of publication, opposing anonymous essays began appearing in the newspaper. Hamilton, Madison and John Jay began writing responses over the pen name "Publius". These essays not only parried the critics, they provided a document to which we still refer for insight on the structure of our government. The collected essays became known as "The Federalist Papers".
The so-called Anti-Federalists and Publius debated in the newspapers for nine months, mostly in an effort to persuade New York State to ratify the Constitution. It didn't help that Gov. George Clinton, writing as Cato in opposition, was sharply opposed. One of the main objections of Clinton, Patrick Henry and others was the lack of a Bill of Rights.
In the end, the Constitution was ratified by 12 of 13 states, some by only a few votes. Several states - Virginia, New York, Massachusetts, New Hampshire - ratified but insisted that a Bill of Rights (which they went to great pains to list) must be added during the first Congress. James Madison drew up the first ten amendments that became our Bill of Rights.
Reading the exchange between the Federalists and Anti-Federalists, I was struck by the principled and disciplined arguements presented. Their guides were those in the past who succeeded, those who failed. They knew this was serious business: they were not merely conducting a philosophy seminar, they were making a nation.
Thursday, June 23, 2011
Complexity Matters
Every assignment is different. Every home is sited on its own unique parcel of real estate, in a singular market and affected by perhaps profound local influences. The complexity of a home sale assignment should have an impact on how you manage it - even how you organize your operation.
Be careful not to assume a counselor with 2 years experience can handle equally well low and high complexity home sale assignments. If you develop a complexity estimate, or score, it will help you apply the right resources when they matter.
Let's say, for example, a low complexity score is 20 and a high score is 70. Size, price, competition, market factors, trend of the market (using data like FHFA), amenities, location all contribute to developing the score. Take into consideration how much market inventory at the price range is on the market (12 months today is not uncommon).
So for your property scoring 70: Assign a counselor with skills and experience that match. Consider assigning a risk manager type to tag-team with the counselor. Select realtors with demonstrated ability to move high complexity properties within time goals, and at good sale price results - based on metrics. Create appraiser lists using only those who are accurate at the higher complex properties - overall variance as a measure may not be good enough.
Pre-decision tools can help make the assessment even before home sale begins. But this is not a place, or market in which to eyeball it. Develop a quantitative tool that informs all involved, and that will also be an aid in transferee and client discussions.
On every completed assignment, conduct a review of the transaction. Use it to inform your operations process, and to develop policy recommendations.
More soon...
Be careful not to assume a counselor with 2 years experience can handle equally well low and high complexity home sale assignments. If you develop a complexity estimate, or score, it will help you apply the right resources when they matter.
Let's say, for example, a low complexity score is 20 and a high score is 70. Size, price, competition, market factors, trend of the market (using data like FHFA), amenities, location all contribute to developing the score. Take into consideration how much market inventory at the price range is on the market (12 months today is not uncommon).
So for your property scoring 70: Assign a counselor with skills and experience that match. Consider assigning a risk manager type to tag-team with the counselor. Select realtors with demonstrated ability to move high complexity properties within time goals, and at good sale price results - based on metrics. Create appraiser lists using only those who are accurate at the higher complex properties - overall variance as a measure may not be good enough.
Pre-decision tools can help make the assessment even before home sale begins. But this is not a place, or market in which to eyeball it. Develop a quantitative tool that informs all involved, and that will also be an aid in transferee and client discussions.
On every completed assignment, conduct a review of the transaction. Use it to inform your operations process, and to develop policy recommendations.
More soon...
What you can expect
Welcome to our blog site. We'll be sharing with you insights on how to manage the various aspects of risk in the relocation industry. What we develop as part of our consulting, and what we learn about effective practices in the industry will be posted for your information. We encourage you to visit frequently and comment any time you like.
Our intent is to look at home sale issues initially. Risk management is, in our view, many faceted and creates a broad spectrum to consider and discuss. We see process, property complexity, market data, operations, performance measurement, realtor and appraiser selection, and risk transfer as worthy of attention.
Inevitably, we together will venture beyond home sale issues, and will consider products and services that can enhance service delivery and expense management. Your comments will surely help to set our direction.
Next time we intend to discuss the various sources of home price/value market data and describe some of the distinctions between - for example - the Case/Shiller Index and the FHFA Home Price Index. We'll also share our views on how assignment complexity affects the way relocation home sale is managed.
Thanks again, and we look forward to hearing from you.
Our intent is to look at home sale issues initially. Risk management is, in our view, many faceted and creates a broad spectrum to consider and discuss. We see process, property complexity, market data, operations, performance measurement, realtor and appraiser selection, and risk transfer as worthy of attention.
Inevitably, we together will venture beyond home sale issues, and will consider products and services that can enhance service delivery and expense management. Your comments will surely help to set our direction.
Next time we intend to discuss the various sources of home price/value market data and describe some of the distinctions between - for example - the Case/Shiller Index and the FHFA Home Price Index. We'll also share our views on how assignment complexity affects the way relocation home sale is managed.
Thanks again, and we look forward to hearing from you.
Subscribe to:
Comments (Atom)