This morning several brokers and I previewed some of the newest offerings of homes just listed for sale. It was surprising, in a way.
With some Buyers beginning to make serious enquiries about properties as well as getting a firm picture of their financial health and abilities, now should be the time for Sellers and their agents to put their best foot forward.
What was visible today were homes still being over-priced and / or homes not even close to being ready for market.
With inventories of housing of every description being plentiful, Sellers must price their home on current values - not on wishful thinking. If not, Buyers are more than willing to wait until the right home comes along at the right price.
January 13, 2009
December 30, 2008
Real Estate Predictions 2009
We made it. We’ve reached the end of 2008 a bit bruised, but still intact.
By sorting out my desk, files and piles of stuff, I’ve decided to get ready – mentally at least - for 2009. In doing this end of year clearing, the famous turban once owned by the one and only, “Carnac the Magnificent”, was discovered folded neatly amongst my collection of Richard Nixon face masks, Screaming Mirrors and Perot for President campaign buttons. Carnac’s turban remains the one, reliably useful object. Let’s give it a try to see what may be in store for 2009:
- Mortgage money will continue to be freed up by more banks and brokers as pressure mounts from both Congress and the public.
- Interest rates, currently around 5.3%, will remain historically low – at least until April.
- Home prices will probably continue to decline through June or so, but less dramatically than the previous 12 months. There may be some areas of the country, mostly in the South, that will continue to see steeper declines, especially for condos. When home prices eventually go flat they will remain so for quite some time - until housing inventories lessen. Bargain hunters and savvy Buyers will be out in force by early March.
- Multiple-family homes will again be popular as owner-occupied options and investments. See my earlier Blogs about this type of housing.
- Smaller, more affordable homes will attract Buyers, both first timers and down-sizers.
- Homes close to amenities will out-sell their more rural counterparts. City and town governments will be open to reasonable re-zoning proposals to lessen the need to drive for even basic commodities. “Neighborhood” will be the new buzz word. Buyers will want to get the scoop on specific areas more than just looking for the features of a specific home. Location, location will mean more than acreage or square footage.
- Families will again expect children to share bedrooms – fewer “en-suites” for junior.
For my part, I intend to continue helping my clients by keeping my eyes and ears open for trends and home values, by adding extra services and in… helping them to get home.
Not to worry – Happy 2009!
December 12, 2008
Certified Value…the real deal
Several days ago Jonathan Miller of The Matrix blog (see the Other Blogs I Follow link) wrote an article regarding the oft-quoted real estate mantra, “Now’s a good time to buy”. Miller was correct, of course, in stating that when is a good time to buy is very subjective, depending upon the personal circumstances of the Buyer. Whether the market was going up or down was irrelevant, says Miller. But, what if something could be done in marketing a home that did – even if just a bit – make it a “better time to buy”?
Enter the Transition Team of Coldwell Banker’s Fairfield, Connecticut office. We have been charged with developing marketing ideas that deal especially with this current economy and into the future. There are few parameters for our working group; each team member already knows that the days of gimmickry are long gone.
At our most recent meeting, two principle reasons for Buyers holding back from making offers to buy were identified. First, Buyers have serious concerns about their immediate financial future and are awaiting some reassurances from their employers. Second, Buyers expect the market to continue to go down and are unsure about the real current and near-term value of homes. The longer - term value of a home does not appear to be as great a concern to most Buyers as much as affordability (read optimism). It’s the present and near-future real value that worries them. After all, nobody wants to pay too much for anything, especially now.
Regarding the first concern of Buyers, they should wait. Buyers need to know what their financial picture will look like and then make an appropriate decision. For the second concern, the concept of Certified Value was proposed.
Once a Buyer makes an offer on a property, the banks will send in an appraiser to certify the property’s real value. With many banks making Scrooge look like a philanthropist, that appraisal will be dead-on. Banks absolutely do not want to be holding a mortgage for an overvalued property. So, why not cut to the chase and certify the value of a property by having an independent appraiser perform an appraisal prior to marketing. Then, take it one step further – factor in market direction. This Certified Value program will likely be in place by early January 2009, once some of the details have been finalized.
I’ve been using this concept of identifying a property’s true value for my clients for the past 15 years. But, by bringing in an independent appraiser and factoring in market direction, both Buyers and Sellers can be assured of the true, certified value of a home. Both parties deserve nothing less than the real deal.
Enter the Transition Team of Coldwell Banker’s Fairfield, Connecticut office. We have been charged with developing marketing ideas that deal especially with this current economy and into the future. There are few parameters for our working group; each team member already knows that the days of gimmickry are long gone.
At our most recent meeting, two principle reasons for Buyers holding back from making offers to buy were identified. First, Buyers have serious concerns about their immediate financial future and are awaiting some reassurances from their employers. Second, Buyers expect the market to continue to go down and are unsure about the real current and near-term value of homes. The longer - term value of a home does not appear to be as great a concern to most Buyers as much as affordability (read optimism). It’s the present and near-future real value that worries them. After all, nobody wants to pay too much for anything, especially now.
Regarding the first concern of Buyers, they should wait. Buyers need to know what their financial picture will look like and then make an appropriate decision. For the second concern, the concept of Certified Value was proposed.
Once a Buyer makes an offer on a property, the banks will send in an appraiser to certify the property’s real value. With many banks making Scrooge look like a philanthropist, that appraisal will be dead-on. Banks absolutely do not want to be holding a mortgage for an overvalued property. So, why not cut to the chase and certify the value of a property by having an independent appraiser perform an appraisal prior to marketing. Then, take it one step further – factor in market direction. This Certified Value program will likely be in place by early January 2009, once some of the details have been finalized.
I’ve been using this concept of identifying a property’s true value for my clients for the past 15 years. But, by bringing in an independent appraiser and factoring in market direction, both Buyers and Sellers can be assured of the true, certified value of a home. Both parties deserve nothing less than the real deal.
December 11, 2008
Investment Properties
Investment properties, or more precisely, multi-family units had been the albatross of many real estate firms and banks. And it's no wonder. With the Ponzi-schemes rampant during the later 1990's until about fall of 2005, serious investors liquidated or stayed away from that segment of the market. They knew something was afoot and for many, having survived the downturn of the 1980's, they sensed the impending bursting bubble. That banks refused to act on all the warning signs remains a question to be answered.
These last several months have seen an interesting development. Too early to yet call it a trend or turnaround, nonetheless, multi-family units are again selling. And, many of the buyers seem to be following what I've referred to these past 15 or so years as "Uncle Pete's Rule of 10". Simply put, multiply the yearly income of a property by 10 and that is the upper limit of what an investor should pay. Slice and dice the formula any way you want, Uncle Pete was right. The lower the multiple the better but paying over 10 times yearly income and a Buyer went from being an investor to a speculator: "Say, high-roller, baby". A lot of would-be investors came back from the "real estate casino" of speculative buying with just enough pocket change to make a call to a bankruptcy attorney.
But, there are signs that enough Buyers are again seriously looking at multi-family homes as sound investments to take notice. Some, looking to be owner-occupants may pay a bit more than the 10 times ratio to live in an area they find more desirable. The rest, however, seem to realize that Uncle Pete was right.
These last several months have seen an interesting development. Too early to yet call it a trend or turnaround, nonetheless, multi-family units are again selling. And, many of the buyers seem to be following what I've referred to these past 15 or so years as "Uncle Pete's Rule of 10". Simply put, multiply the yearly income of a property by 10 and that is the upper limit of what an investor should pay. Slice and dice the formula any way you want, Uncle Pete was right. The lower the multiple the better but paying over 10 times yearly income and a Buyer went from being an investor to a speculator: "Say, high-roller, baby". A lot of would-be investors came back from the "real estate casino" of speculative buying with just enough pocket change to make a call to a bankruptcy attorney.
But, there are signs that enough Buyers are again seriously looking at multi-family homes as sound investments to take notice. Some, looking to be owner-occupants may pay a bit more than the 10 times ratio to live in an area they find more desirable. The rest, however, seem to realize that Uncle Pete was right.
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