By Andre Jackson
Mention REO to newsroom folks and the old heads might smile and think of the 1970s band REO Speedwagon and their classic rock hit “Roll With the Changes.” That song title aptly fits the 21st-century common usage of REO, which stands for “Real Estate Owned.”
This catchy acronym’s popped up on “for-sale” signs on lawns across the country. The web site www.foreclosure.com defines REO as “When a lender takes ownership of a property as a result of the foreclosure process, the lender then calls the property an REO….”
TV anchors and newspaper headlines now mention foreclosures frequently these days as the housing market craters nationwide. Journalists report that dream homes of all shapes and sizes have been wrested away from former owners.
Watching foreclosures makes for a compelling, relatively easy-to-understand story. The story line’s deceptively simple: homeowner gets behind in payments, mortgage lender gets anxious, the two parties can’t work out a deal and the lender, however reluctantly, proceeds to foreclose on the property. The story often ends on the courthouse steps, where bargain-seekers, speculators and would-be new-wave real estate moguls gather to bid – or not – on properties in various states of repair.
There’s much more to the housing market than just foreclosures. As in much of business journalism, the real story often lies in parsing data from various reports and translating numbers into an accessible story. It’s easier than you might think.
The housing story’s an important one for a number of reasons. For one, it’s been pretty clear for awhile that problems in both residential real estate and in the financial markets that supported housing played a pretty big role in the Great Recession in which we currently find ourselves. Another reason to keep close tabs on housing is because it’s a relevant story for our audiences – one that people can relate to, both from pocketbook and peace of mind perspectives. Many of our readers and viewers have seen firsthand what the “bank-owned” sign on the house down the street has meant to their own property values. Given that “home sweet home” has been the biggest investment for most Americans, the gyrations of housing prices and the overall strength of real estate markets are top-of-mind for millions.
Like many other stories, this one’s best approached from Ground Zero – your local market, with regional and national data playing an important supporting role.
To tackle the housing stories, it pays to keep abreast of what your local real estate professionals are talking about. In most cities of any size, there’s at least one (and often multiple) groups of realtors. They’re often organized by, no surprise here, geographic boundaries. Officers of realty groups are often willing to speak about market conditions and may even share some of their data. As is true of good salespersons, there’s a tendency for realtors to usually see a glass as half-full, instead of half-empty. I’ve been surprised, though, by the candor real estate professionals have shown in their assessments of markets as property prices slammed downward in recent months. When you hear salespeople use terms like “so-so” and “struggling,” then you truly know we’re in unprecedented times.
State-level realtor associations can also lead you to good sources or data concerning residential and commercial real estate.
National groups also have a key place in researching housing stories. The mega-trends driving national markets are often felt, to a greater or lesser degree, in local areas. Therefore, national stats can add useful information and data points to our local stories.
The National Association of Realtors (NAR) is a good place to start. Their site offers up useful housing statistics and other insights from the real estate community. The group’s Web site has a handy chart of data about housing and the overall economy that brings together a lot of relevant information in one place. It’s a good place to run fact-checks as you gather information from various sources.
Private companies like Metrostudy provide assessments of real estate trends for many markets across the U.S. Their primary, most-detailed work is done for paying clients, but a silver-tongued reporter can often glean at least some top-line tidbits that provide valuable information and context for your audience.
The NAR, late during each month, releases the closely watched Existing Home Sales report. When considered along with the new home sales report produced monthly by The U.S. Census Bureau, the pair provides a pretty thorough view of the home-selling environment.
The good folks at the census bureau also produce a report on construction activity that, over time, can give you a good indicator into the health of homebuilders and other construction companies. The detailed reports examine both residential and non-residential construction sectors. That’s useful because more people are now fretting over the health of commercial real estate, given that housing is showing some initial signs of perhaps bottoming out – a first step toward recovery.
What’s selling or being built is important. How to pay for all that brick-and-mortar is another question. How much mortgage financing’s available? Are borrowers even trying to get loans anymore? There are a few places to go to start answering those questions.
The Mortgage Bankers Association issues a weekly report on financing activity. Much of its proprietary info for subscribers only, but the MBA does issue a weekly press release with some helpful data on mortgage activity, interest rates and such. Yahoo! Finance and Bankrate.com are a couple of other places to track mortgage rates.
From homebuilding to mortgage activity, it’s hard to beat solidly reported housing stories for reader utility. After all, we’ve all gotta live somewhere.
Andre Jackson is the Editorial Editor at The Atlanta Journal-Constitution.