Monday, September 26, 2011
Tuesday, September 13, 2011
Spring, Summer, and the Fall. Price Drop.
If hope springs eternal in April, does September bring surrender? Between September 1 and today, the Realtor Association of South Central WI MLS reports there were 1142 properties where the listing expired, and 1129 with prices changed. There are 10,723 single family homes on the market on this MLS. I don't have the numbers from 2005-06, but my sense is that we never saw this volume of price changes and expired listings.
Middleton school district recorded 22 sales above $299,000 from July 1 through August 31. Nothing surprising here, the average sale price to last asking price was 95% and compared to the originial asking price, the average was 93%. Seven percent by itseld seems tolerable, but that translates into an average sale price to original asking price of a dip of $32,552. It's that thirty thousand dollars that's so hard to surrender in the beginning of the marketing period.
DeForest residents are coming to terms with reality. Fourteen owners sold for 97% of thier final asking price and 92% of the original. I see that as an indicator of people accepting they need to make their price concessions substantial.
Fitchburg, Verona Schools registered 15 sales in the July-August period and the owners sold in an average of 103 days. Three months is tolerable and the average original asking price was $312,000. With an average minor adjustment of $2,000.00, the owners sold for a respectable $297,000.
McFarland, a move to and stay to Village, is getting along fine. Looks like expectations were a little high with original asking price of the 8 sales averaging $316,000, but a drop in price to an average below $300,000 grossed owners an average price of $285,625. That's a 10% drop from the first asking price and the fact that the time on the market averaged 131 days shows owners were reluctant to concede $30,000 in McFarland...just like anywhere else.
Other than condition and location, price and concessions are all that's left for owners to give. It's reasonable to expect that the few buyers who come into the market in September will not boost the competition for average houses to even the levels of previous falls. If buyers are reaching out to make offers, it's possible we will see owners reaching down with their prices to extend a hand to the buyers who could be pulled in.
Middleton school district recorded 22 sales above $299,000 from July 1 through August 31. Nothing surprising here, the average sale price to last asking price was 95% and compared to the originial asking price, the average was 93%. Seven percent by itseld seems tolerable, but that translates into an average sale price to original asking price of a dip of $32,552. It's that thirty thousand dollars that's so hard to surrender in the beginning of the marketing period.
DeForest residents are coming to terms with reality. Fourteen owners sold for 97% of thier final asking price and 92% of the original. I see that as an indicator of people accepting they need to make their price concessions substantial.
Fitchburg, Verona Schools registered 15 sales in the July-August period and the owners sold in an average of 103 days. Three months is tolerable and the average original asking price was $312,000. With an average minor adjustment of $2,000.00, the owners sold for a respectable $297,000.
McFarland, a move to and stay to Village, is getting along fine. Looks like expectations were a little high with original asking price of the 8 sales averaging $316,000, but a drop in price to an average below $300,000 grossed owners an average price of $285,625. That's a 10% drop from the first asking price and the fact that the time on the market averaged 131 days shows owners were reluctant to concede $30,000 in McFarland...just like anywhere else.
Other than condition and location, price and concessions are all that's left for owners to give. It's reasonable to expect that the few buyers who come into the market in September will not boost the competition for average houses to even the levels of previous falls. If buyers are reaching out to make offers, it's possible we will see owners reaching down with their prices to extend a hand to the buyers who could be pulled in.
Tuesday, September 6, 2011
Uniform Appraisal Dataset. Give 'em what they want.
Uniform Appraisal Dataset (UAD) is what Fannie Mae/Freddie Mac use to standardize appraisal data. Effective six days ago, some not so minor changes were added to the UAD. A cynical thought comes to mind, but I'll supress it for now because, there might be some help for the process with some of the changes. Let's look at the new rules:
My first impression is that we Realtors are going to want to attach documents to address these UAD changes. The better the information the appraiser has to put into the report, the better information the underwriter has to make their opinion decision. In the past a furnace was just a furnace, and a shower was just a shower. Now they may be the difference between making the value and not.
- Information that is required but not available on the local MLS will have to be gotten from Realtors and lenders who are not involved in the transaction. For example: for compiling comparable property data, the View Factor and Financial Assistance are not on the MLS. Same for Quality of Construction. Expect this to slow the turn around time.
- Finished rooms below grade: This could be favorable. On the new appraisal form, the appraiser will include BEDROOMs. On the previous form, a room in the lower level used as a bedroom was not counted as a bedroom, but as a room.
- Condition of the property will now be rated. A big help for homes that are in significantly great condition compared to the house thats similar in size, amenities, area, but in a sorry state. Of course that sword cuts both ways.
- Quality ratings are new and serve a purpose. Let's face it, some homes in subdivisions built in the the last 10 years are of incredible quality compared to others of greater size. Also, we all know great quality when we see it, but we can't always see it. Just because the brand of sink is well known, doesn't mean the windows don't leak, and the house doesn't suck energy. I'll be interested to see the disputes over this rating.
My first impression is that we Realtors are going to want to attach documents to address these UAD changes. The better the information the appraiser has to put into the report, the better information the underwriter has to make their opinion decision. In the past a furnace was just a furnace, and a shower was just a shower. Now they may be the difference between making the value and not.
Wednesday, July 27, 2011
Wexford Village--A Balanced Market
A balanced market on Madison's West Side is Wexford Village. The neighborhood developed almost 40 years ago and expanded about 20 years ago is showing its ability to remain a highly attractive destination. Sale prices range from $250,000 to $328,000 with out of the ordinary sales on both ends--one at $205,000 and another at $375,000.
The average last asking price for homes sold in Wexford is $302,150. The average sale price of the 8 sold homes is $290,000. The 8 folks who are still looking for buyers are averaging an asking price of $322,048 and that includes two homes at $385,000.
The eight sold this year and eight for sale with homes priced from low $200's to upper $300's looks like a healthy mix of home opportunities.
Tuesday, July 19, 2011
Lake Mendota Drive to 1845 Baker---- 66 feet on Lake Mendota
When we open this modest home to the public on Friday I think we will find there are people who will be interested in considering making an offer. There is nothing that has to be done, but plenty of opportunity to remodel from the minor to the extensive renovation. I'm not seeing this as a "tear down", but more likely a renovation opportunity. The 1800 sq ft foot print is well suited for open space facing the lake, privacy, and spacious bedrooms. A two car garage is already in place.
We arrived at the reasonable price of $575,000 by concluding the cost of getting a lot on Lake Mendota is about $400,000. Our 66 ft wide lot is definitely more appealing than the narrower lots on Middleton Beach Road, and far superior to any lot on Spring Harbor. We estimate the land value to be about $450,000. We gave the house a value of $125,000.
I'll have a summary of the work the owners contracted for to prepare the house for showings. Let me know if you want to be one of the first to visit. We can set up a showing for Friday, Saturday, or Sunday. Open house is Sunday from 1:00 to 3:00.
Tom 332-8331
2666 Norwich St 1, Fitchburg
2666 Norwich St 1, Fitchburg: "$25,000 in improvements since 2010: Renewal by Andersen Doors & Windows. New furnace. New A/C. Tile, vanities, kitchen counters & flooring. Zero Condo fees! Spacious main bedroom with extra closets. Recreation room in lower level has a full bath. Dining Room opens to a deck & fabulous yard with room for garden and play. All appliances, even front loading wash machine & dryer & butcher's block kitchen island included. Quick closing possible."
Staying in the Verona and Fitchburg School District is affordable and easy by owning this Townhouse. Quiet location and close to the Elementary and Middle School Campus.
Staying in the Verona and Fitchburg School District is affordable and easy by owning this Townhouse. Quiet location and close to the Elementary and Middle School Campus.
Thursday, June 23, 2011
Middleton Schools Homes With Acres Selling This Year
A home in the country is well within the reach of Dane County home buyers again. Six years ago developer land grabs pushed the cost of dirt sky high and builder prices were at a premium. The new economy has forced developers to release their grip on land, builders have left the industry, material prices have come down, and building contract prices have adjusted to demand. On top of that, the existing homes built in the last dozen years are coming on the market and their prices are favorable.
Seven homes, priced between $599,900 and a million dollars, in rural Dane County NW, have closed in the Middleton High School district according to the RASCW MLS. Every neighborhood I look at shows just about the same results: Owners are accepting offers in about 50 days after getting the price close to where buyer's appear to be waiting. The patience of the owners is also about the same everywhere. Six, seven, eight months pass before owners make that last necessary price change. Are owners letting go, or just losing their grip?
Maybe the reasons owners start at a price that doesn't get the attention of the buyers are diverse, but the results are consistent: When you count time on the market in terms of months, statistics are showing you may be likely to end up accepting an offer below 90% of your initial asking price. The seven homes closed this year sold at 82% of their initial asking price. 94% of their last price means the owners are down an average of over a $100,000 from their initial price.
OK, these are averages and some locations are just better than others. It's not accurate to say "You home is worth X% of this price because it has been on the market X months." Of course that's silly. Here's my suggestion as to what might make sense: If you started the process of selling 60 days ago, with a price which was supported by recent sales at that time, and you are still on the market, a price change could be in order. How much? It depends. Look at the recent sales...don't hung up on the differences in your home. Agree that the homes are different and try to focus on what people are getting in the price range. If you thought your home was worth $650,000 and other homes between $550,000 and $750,000 are selling for an average of $25,000 less than the last asking price, but $75,000 less than the first, you probably will have more activity by t moving aggressively toward that $75,000 number than you will by creeping nearer the $25,000 drop.
My point is this: The best we can do is price according to sales at a given time. Then the buyers who are out there look at homes and judge them based on their criteria. While we are on the market, other homes are selling. If the new sales are lower than the old sales, and we are not getting an offer, it is reasonable to expect that we will not get an offer at the price we are at and we should move accordingly. The model of pricing I believe in works this way: If we are targeting the right buyer and the right buyer is not making an offer, we have to change the price to appeal to the buyer. If we are targeting the wrong, buyer we can change the marketing. Does that make sense? If not, we should talk. If yes, we should definitely talk.
Seven homes, priced between $599,900 and a million dollars, in rural Dane County NW, have closed in the Middleton High School district according to the RASCW MLS. Every neighborhood I look at shows just about the same results: Owners are accepting offers in about 50 days after getting the price close to where buyer's appear to be waiting. The patience of the owners is also about the same everywhere. Six, seven, eight months pass before owners make that last necessary price change. Are owners letting go, or just losing their grip?
Maybe the reasons owners start at a price that doesn't get the attention of the buyers are diverse, but the results are consistent: When you count time on the market in terms of months, statistics are showing you may be likely to end up accepting an offer below 90% of your initial asking price. The seven homes closed this year sold at 82% of their initial asking price. 94% of their last price means the owners are down an average of over a $100,000 from their initial price.
OK, these are averages and some locations are just better than others. It's not accurate to say "You home is worth X% of this price because it has been on the market X months." Of course that's silly. Here's my suggestion as to what might make sense: If you started the process of selling 60 days ago, with a price which was supported by recent sales at that time, and you are still on the market, a price change could be in order. How much? It depends. Look at the recent sales...don't hung up on the differences in your home. Agree that the homes are different and try to focus on what people are getting in the price range. If you thought your home was worth $650,000 and other homes between $550,000 and $750,000 are selling for an average of $25,000 less than the last asking price, but $75,000 less than the first, you probably will have more activity by t moving aggressively toward that $75,000 number than you will by creeping nearer the $25,000 drop.
My point is this: The best we can do is price according to sales at a given time. Then the buyers who are out there look at homes and judge them based on their criteria. While we are on the market, other homes are selling. If the new sales are lower than the old sales, and we are not getting an offer, it is reasonable to expect that we will not get an offer at the price we are at and we should move accordingly. The model of pricing I believe in works this way: If we are targeting the right buyer and the right buyer is not making an offer, we have to change the price to appeal to the buyer. If we are targeting the wrong, buyer we can change the marketing. Does that make sense? If not, we should talk. If yes, we should definitely talk.
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