Window of Opportunity for Turkeys and Real Estate

In a week the spring turkey hunting season begins in Wisconsin. Big flocks of turkeys are still grouped up in fields all over Dane County--but they're not all of the fields. Spring has sprung and the Toms are busy with being Toms, and the first time turkeys, the Jakes, are exploring their options. The excitement will peak in the next few weeks, the run its course by the end of May. Amazing how that bird-animal behavior is mirrored in us humans with respect to real estate. Spring is the window of opportunity, and the window closes when the urgency runs its course.

Like the strutting Tom, time is not on our side if we want to attract the most enthusiastic buyers. The strongest natural elements that drive a person to want to own a home run their course by the end of May and surely by the end of June. Summer in Wisconsin is the four-five weeks of July and running around chasing the sun and fun takes precedence over shelter in our summers.

To get done what we have to do with respect to selling our homes, today is the day we have to take the first step and it might be wise to get going. And, where are we going? There are as many ways to go about the selling process and it makes sense to me that I pick a direction and a method of traveling, and commit to it. Anything else is trial and error, and I'd like to think I've done enough of both to be comfortable with a plan.

Followers of this blog know that I believe:

Price is critical. All homes have a right price and a lot of wrong prices. We are instinctual animals. We know what's right and maybe it's our ability to rationalize that leads us down the trial and error path.

Stage the house. If we prepare our homes for our parent's or friend's visits, we prepare to impress them about ourselves. Staging prepares the house to have the home, not the occupant, appeal to and impress a consumer. Big difference  and very important.

Update and Repair. Buyer's aren't going to go for homes that need updating and repairs--regardless how small. You aren't getting your investment back either. Look at it this way. If you had replaced the green and blue toilet and sinks and carpet when the style changed your home would be up to date, and you would have had the pleasure of being in style to impress the Grandparents. You only missed that opportunity--you still have the expense. Leave it up to the buyer and you won't have a buyer. If you don't believe me, I wish you the best and hope you prove me wrong. But, I'll be here with the same opinion later---the buyers will be gone and your value will be much lower in August, and the work will still need to be done.

Range Price. You can wait for the one buyer who is smart enough to have the income and savings to qualify for the mortgage necessary to buy your home, but not smart enough to know the market or care about the implications of recent sales in your neighborhood. I have met only a few of those people since 1989---none recently. Range pricing won't inspire anyone to be illogical, but it will bring more people to the door and create some competition where none exists. Competition from qualified buyers will push offers to their best terms.

Know What's Happening in Your Neighborhood. Real estate markets are hyper-local. I care what's happening in Timbuktu, but your neighborhood can rise or fall below the Wisconsin trend, and surely differ from the national statistics.

The turkey animals and human animals are going to move and commit this spring. Today is the day to know where they are going and be there ready to impress. Hen and hunter know the key to success has everything to do with going with what works.

Gen X'ers Want Large Lots and Green---Baby Boomers Get the Walkables

RisMedia reports the real estate recovery will be spurred by the Generation X (30-45 year olds) who say they will spend more for Green-Built homes and they prefer large lot subdivisions over "Walkable Neighborhoods". That's good news for us Baby Boomers who are leaving the big lots for sidewalks, bike paths, and neighborhood shops. We've got the houses to sell and won't mind less competition when we buy our next home.

Madison may be an exception to the national report. Our population is noted for being eco-minded and bike/pedestrian friendly. That didn't happen so much by design as it did by demand. Today we see strong demand inside the beltline and interest outside with the interest resulting in sales happening as much as 14% below the price the owners initially expected. Eight sales of large lot homes west of the Beltline this year averaged $428,938 for a sales price. The initial asking price averaged $507,925.

Keep an eye on Westmorland, Sunset Village, Midvale Heights, Middleton Hills, and Dudgeon Monroe to see if demand is steady for walkable neighborhoods at What's Happening in My Neighborhood???

Fitchburg: Seminole Forest

We had a request for a summary of Fitchburg and while I've grouped DeForest sales and McFarland sales, Fitchburg is too big and the market is broad. Fitchburg has to be viewed by neighborhoods. Looking at the 25 sales since January, Seminole Forest had a good group of four so that's the neighborhood I'll cover.

An average first asking price of $400,000 dropped to $389,900 and attracted buyers for average sale price of $378,000. It looks like Seminole Forest owners are ahead of the curve in surrendering to their first price. Their cumulative average time on the market is only a bit over four months. After they make their last price change they have an acceptable offer in about 50 days.

I believe Seminole Forest has long had a better than average attraction. It's one of the few areas that was a wooded area and not a crop field before development. The winding streets and rolling topography, is unique for our market. The proximity to schools and the community pool and tennis courts doesn't hurt. On top of that, the housing stock was built as the country moved out of a hyper-inflation and high interest rate economy. The demand for new construction and quality built homes was high. A variety of builders put their mark on Seminole Forest and the diversity of styles has given the Forest a character that is appealing today. These homes may need some updating, but the location is great so spending some money on the interior is smart.

Let's keep an eye on Seminole Forest. I think it will be a good value this year and demand will be better than average.

McFarland and DeForest---One's Hot

Twelve homes sold in January and February in these two Villages with a combined population of about 16,600. Each had one distressed sale out of their six homes sales. Relatively equal in population and proximity to East Side Madison (DeForest is NE and McFarland is SE), the real estate equality ends there.

In 1990 I was preparing to buy or build our second home. One son was 4 and the other was about to be born. I was a young realtor and to me the communities were a toss up, except the house I could afford in DeForest was on a wooded half acre and almost new. In McFarland, the lot choice to build was marginal--but walking distance to everything. We went with the DeForest School District---because the house was more house and the lot was incredible. (We were actually in the Town of Windsor).

Today, DeForest is considered a hotbed of distressed sales and the number of available properties at tremendous values due to higher supply than demand is causing non-distressed owners to settle for much less than they expected to be fair market value. Owners are closing at 82% of the first asking price and time on the market is a full half of a year. Even when they get the price down close enough to entice an offer, it still takes a solid 2 months and then they close at 95% of asking price.

 In McFarland, owners are getting 91% of their initial asking price and selling in about 71 days. Once they get  the price right they are done in 31---for an average of 99% of the asking price. The demand for well priced homes in McFarland is far greater than in DeForest.

The average sale price in DeForest this year is $175,200... and in McFarland: $212,431.

The research did not include rural townships feeding into the respective school districts.

I like this blog for a quick look at distressed sales around the area.

Rural Dane County Being Visited By Buyers

"They're Baaack" and this time we are all a little more humble. Maybe the fear has subsided and caution is embedded in the minds of home buyers and sellers. Rural Dane County West has at least eight Multiple Listing Recorded recorded sales in the first 60 days of 2011. Possibly enough to show a trend which will influence the heart of our real estate season: the spring.

I looked at the sales of homes priced above $299,900 on at least 1/2 acre. As expected, owners made short work of the selling process once they adjusted their price to a price close enough to reach the holding tight buyers. An average first asking price of $507,925 dropped to $461,038 and then the buyers moved in, closing at an average sale price of $428,938. The 86% sale price to asking price is the big story and the question is "Why are we missing the value price by so far?" Expectations, denial of the relevance of the facts, wishful thinking, misreading the trends? I suppose the answer to why is complicated.

Wherever we look across the Dane County the story is the same, when the price is right, the buyer's bite...(OK, it feels like fishing season today) they, move in and are ready, willing, and able. The right price is probably a tremendous value to the consumer, or at least a value. The velocity of the process is terrific when the price is right. From 236 days on the market to 62 days between last price change and offer, it would feel like 2005 all over again if we could get the price right on day one. Buyers are able, as soon as the Sellers are willing and this year it looks like there is acceptance...so far.

January and February Home Sales in Dane County

Trends may take longer than 60 days to prove they are trends and not aberations. With that being said, if the trend continues, we should see homes that come on the market in March and April priced in line with buyer expectations. I say that because the homes that sold in January and February will set the price points for appraisers who use recent sales as comparables.

Regardless of the neighborhood, research completed by a group of realtors with Restaino & Associates, shows home owners are adjusting prices down after months on the market and closing on offers that are satisfactorily close to their final asking price. The offers they accept come in within weeks, instead of months, when they get to  the right price.

Later this week I will post some charts showing what might be trends. I think this information will be helpful for home owners who look to put their homes on the market in June and July---after the spring rush.

Myths About Interest Rates and One Assumption

The Washington Post has this article on Five Myths about interest rates. I believe there is a sixth myth, but I don't have facts to prove it, so let's call it an assumption. Here it is:

Low interest rates drive demand for home purchases higher. I doubt it. Low rates drive refinance and a person with a refinanced mortgage would be less likely to sell and buy at a relatively low, but higher rate than they have, if rate is the deciding factor. Decling rates also influence consumers to sit on the sidelines and wait. When the low point is missed and the enthusiasm cools, some people step out of the buying line and move to the sidelines again.

If the evidence exists to prove my assumption right or wrong, send it to me and I will post what you have.