State of Real Estate: The Good and the Bad, Honestly
Amy March 25th, 2008
This morning, I was up with the birds, hoping that spring will find its way too cold and confused Cincinnati Weather. We need spring here to make our lawns and trees green, so our Real Estate can look beautiful for our promising spring market.
I was reading Real Trends Newsletter online today and thought I would share the whole article with you, along with some points I thought you might find interesting. I also wanted to point out some points that I have been sharing with you all along, since the market became not so easy to work in. As you all know, I am a realist, and a very painfully honest Real Estate Advisor. I like to try to find the positive in every situation, and we still have some reasons to be positive in this market. Let me share with you some thoughts….
This March edition of Real Trends newsletter that is attached suggested that this year, for the first time ever, the number of Realtors and associated Real Estate Professionals (Lenders, Appraisers etc) have declined. Only the Strong Survive! This has proven true in the Cincinnati market as well, as membership in the Cincinnati Area Board of Realtors dropped when our annual fees were due in January.
Interesting as well that 50% of all listings in the country are held by the nation’s top firms, listed in the article. I believe this is a true testament to BRANDING the large companies, and the internet reach of so many large Real Estate Companies. As you may recall, Remax is an international Real Estate Name, in over 60 countries on Earth! Easy exposure for your home in any part of the world. In fact, recent data shows that Remax is only behind Realtor.com and Homegain.com with the largest internet market share in the US, Based on NAR statistics.
Real Estate Auctions have become more widely used in this current market. States that were hit hard with the market value decline like Florida and California, report the use of Auctions to sell real estate up 46% from 2003-2007. Interestingly enough, the foreclosure properties are not successful at auction sales, as they report that banks are not able to take low bids or the types of hits that auctions often result in)
FORECLOSURE UPDATE:
VERY IMPORTANT INFO ON page 5 of this newsletter if you want to invest in a foreclosure! This will be another article on my blog entirely. This section of the newsletter warns of the same issues that I have previously discussed in my articles on Foreclosure and the hidden costs and the slow banks response times. The bottom line on Foreclosures, they are not good if you are looking to buy your first home, to move your family in the home, if you are looking for a good experience with ease when you purchase, or if you need a loan to purchase, if you do not have cash on hand for unforeseen emergencies. Foreclosures are still best for those that have SUPER PATIENCE, do not need to buy, and have cash, mostly investors.
Real Trends compiled a chart of all the major data sources in US Real Estate, which all 8 sources showed a decline in year over year change in the national price index, ranging from -0.3 to -10.9%.
In the markets in the US that are selling homes, they found that those selling are priced BELOW $250,000, and are “cleaned up.” Contributing to my 2008 motto: We are in a PRICE WAR and a BEAUTY CONTEST with home sales in Cincinnati.
Further, in all of the major markets, only 4% of the inventory is on the market for less than 4 months. 95% of inventory is on the market for 4-12+ months, and over half of those 95% are on the market 9-12+ months. The silver lining and positive spin on this data, is that in Cincinnati, we experience the same issues, but certain areas of the city are on the market far less than 9-12+ months! Areas like Hyde Park, Mt. Lookout and Oakley have a high demand, a good portion of housing at or below $250,000 and are experiencing about a 95-97% list to sale ratio in today’s market. In my own business, my average days on market are between 45-25 depending on the part of town, and my overall list to sale is 97%. I know that my experience and success pricing homes for the current market has directly contributed to my rapid sales and high ratios. I contribute this to experience, realistic sellers, and .
I have to agree with a statement that Forbes magazine wrote recently, that was quoted in this Real Trends Newsletter, and I will increase the size and change the font for good measure,
Greed and Impatience are the top 2 factors contributing to our current market conditions today.
Another interesting set of data regarding negative equity in homes in the US. The longer you own your home (5 years being ideal, the longer the better in this market) the more equity you have. The data was collected from 72 million owner occupied homes, suggests that
30% of homes purchased in the last 12 months have negative equity
39% of homes purchased in the last 24 months have negative equity
LESS THAN 2% of homes purchased in the last 5 years have negative equity.
What does this mean to the homeowner? Stay in that house as long as you can, especially if you have a 100% or an FHA loan with little or no down payment. You will need every bit of equity you can get! I hope that my clients recognize that I want to help them sell their homes for a gain, not a loss. The longer you own your home, the more gain we can find you, the shorter, the more likely it is that you will need to make up for the loss at the closing table. The AmyBSells Team can sell a home in any market, we prefer to help you make money, and curb any losses. In the end, we price the house for the market, not the equity position.
THE POSITIVE
The report suggests that there will be more new households created in the next 10 years, than there were in the last 10 years.
Congress has done some good things for the housing market: They increased FHA loan limits, which have helped a number of my clients, they have passed laws to deter some foreclosure increases, which helps area property values not decline, and they are creating a number of Real Estate associated Tax Credits, which encourage buyers to purchase real estate.
CONCLUSION
As a Certified Residential Specialist, selling more than 32 homes a year in a down market, REAL ESTATE IS SELLING. I tell my sellers, if you have to sell, we will get it SOLD for you, but now is not the time to have unrealistic expectations. I did not cause the market conditions, and I cannot cure it, but we must make the best of the situation. There are proven ways that my team has found to position your home for a solid SALE in a realistic time frame. Call us to help you position your home for a successful sale! We have proven results in this challenging market!
- Buyers , Financing , Foreclosures , Housing Market , Lending , Pricing , Value
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