I am in this business to give a real estate safety edge to people. Informed people make safe commitments to do what is evidently wise for them. Infused with certainty, real estate choices are easy, financially probable, and emotionally healthy. No person should ever be manipulated into making a commitment to own, sell, or rent real estate, pay property taxes, or be denied refinancing based on unverifiable data. I'm a rigorous ally for peole who live with roofs over their heads.
Bubble? What bubble? Best time to buy. Best time to sell. Affordability index. Absorption rate. American Dream. Homeowners are more involved in community than renters. Appreciation. Investment. Cliches. The manipulation to move people to buy, sell, don't rent, is constant and dangerous to the well being of Americans; it's stressful. Consequences of real estate decisions made under stress include lack of commitment, resentment, bitterness, and fear to name a few emotional stressors. Loss of money, bankruptcy, and foreclosure are likely when unprepared people are stressed into commitments they can't keep. Divorce, failing health, and even death spawn from high stress related to loss of control. Prisoners and hostages have much in commone with people who are hostage to commitments they can't keep. They hurt from the consequences of loss of freedom.
Freedom is the gift of knowledge and insight. The tools available to the public to rise above the barage of assertions based in opinions are incredible. Multiple dozens of practicle aps and web sites are easy to use and relatively reliable for people to know what appraisers and assessors know. Access to homes for sale right next to data on homes recently sold are at your finger tips. There is no reason the widow or widower should be assessed 120% of their verifiable fair market value while the new owner next door is assessed at 100% or less of their homes value. Never again should a person who wants to refinance be denied because an appraisal showed their home is worth slightly less than what's required for approval. Every decision that works against a property owner can be disputed...having the evidence is your power to appeal.
No renter should ever be stung into owning because they have been pushed to do what they know isn't best for them. The financial part of the equation is simple in the hands of experts. The personal part of the formula can be resolved with patience and reflection on values.
There are reasonable prices to pay or accept for home buyers and owners. Reasonably accurate data exists to determine what is probable. Freedom from clinging to what's possible, but not probable, will allow people to move forward with health, wealth, and peace of mind.
I'm committed and free to do right by the customer.
Thursday, March 8, 2012
Monday, February 27, 2012
Sentiment Trumps Interest Rates
The experts do the reporting and I'm sharing their work. The data supports the evidence---regardless of the interest rates or home prices, how people feel about the present and the future have a lot to do with committing to spending commitments.
The Middleton Zip code sales data provided by HouseHunt.com shows the average price dropping last summer as consumer sentiment declined. It takes more buyers to move the average price up above the median. As buyers moved to the sideline, regardless of cheap money and glut of houses to choose from, the average price dipped. Then as the confidence improved, people came back and the averages went up.
Thursday, February 23, 2012
Part of The Solution.
Peter Zarov, attorney with Homestead Title, presents an excellent Distressed Sale seminar in three hours. Saw it today. His manual is valuable. Peter is part of of the solution. Education reduces uncertainty and paves the way for consumers to get offers accepted and closed.
The high rate accepted offers failing to close is related a lack of understanding. Educating the service provider and the service receiver is part of the economic recovery solution.
The high rate accepted offers failing to close is related a lack of understanding. Educating the service provider and the service receiver is part of the economic recovery solution.
Thursday, February 16, 2012
Time to Buy or Sell Depends on You...not factors you can't control, such as interest rates and prices
About 1.63 million search results show up on Google for "Best time to buy a home". That is exactly the number of times real estate leaders have said, "Now is the best time EVER to buy a house" ....each year for the past 10 years. Really, it's not much of a stretch; we Realtors have never seen an economy that wasn't "the right time" to buy and sell real estate. We've taken optimism to a new level.
I don't have all of the answers, but I do have some questions: If "now is the time to buy", because rates are low and prices have dipped, how can can it also be the time to sell? Especially if "real estate prices are coming back", it can't possibly be time to sell. The time to sell must be coming, but how can it be today?
If I tell people to buy now because this economy is the perfect storm of low rates, lower prices, and high inventory, what should I tell the people who miss the boat when rates rise? I've seen people who missed a boat and they're kind of bummed.
Maybe another way to look at opportunity is to take factors we don't control out of the equation. Things like prices and interest rates have a way of going up, down, sideways, regardless of what I do. What I can control to some reasonable extent is my savings, my employment, my credit score, my debt, and my knowledge about housing options and housing costs. If I focus on saving $40,000, boosting my credit score over 700, and eliminating my debt, I will have 20% to put down on a $200,000 purchase, I'll qualify for the best interest rate available, and I'll still be able to save for home upgrades and improvements that keep my home's value from dropping too far south in the next economic dip. When we jump to own because we want an interest rate and what looks like a low price we over extend, waste money on worthless expenses like primary mortgage insurance, and end up with houses that own us.
Responsible people in the real estate and lending fields may turn some business away because they know it makes a difference to be part of the economic solution. America does not need more unqualified home owners. America will benefit from a more aware real estate consumer whether they are renting or owning. A wise renter saving and building their credit score and financial position will be a powerful home owner...when they are ready.
Home owners who wait to sell when prices go up will be wise to take action on modernizing their homes today. The fixtures that were in style in 1997 can be replaced today along with the flooring, and bathroom fixtures. Who knows when or if home prices will move north? But if you are waiting for the day when your home is worth more than you owe, you might as well live in a better looking environment today.
I don't have all of the answers, but I do have some questions: If "now is the time to buy", because rates are low and prices have dipped, how can can it also be the time to sell? Especially if "real estate prices are coming back", it can't possibly be time to sell. The time to sell must be coming, but how can it be today?
If I tell people to buy now because this economy is the perfect storm of low rates, lower prices, and high inventory, what should I tell the people who miss the boat when rates rise? I've seen people who missed a boat and they're kind of bummed.
Maybe another way to look at opportunity is to take factors we don't control out of the equation. Things like prices and interest rates have a way of going up, down, sideways, regardless of what I do. What I can control to some reasonable extent is my savings, my employment, my credit score, my debt, and my knowledge about housing options and housing costs. If I focus on saving $40,000, boosting my credit score over 700, and eliminating my debt, I will have 20% to put down on a $200,000 purchase, I'll qualify for the best interest rate available, and I'll still be able to save for home upgrades and improvements that keep my home's value from dropping too far south in the next economic dip. When we jump to own because we want an interest rate and what looks like a low price we over extend, waste money on worthless expenses like primary mortgage insurance, and end up with houses that own us.
Responsible people in the real estate and lending fields may turn some business away because they know it makes a difference to be part of the economic solution. America does not need more unqualified home owners. America will benefit from a more aware real estate consumer whether they are renting or owning. A wise renter saving and building their credit score and financial position will be a powerful home owner...when they are ready.
Home owners who wait to sell when prices go up will be wise to take action on modernizing their homes today. The fixtures that were in style in 1997 can be replaced today along with the flooring, and bathroom fixtures. Who knows when or if home prices will move north? But if you are waiting for the day when your home is worth more than you owe, you might as well live in a better looking environment today.
Monday, February 13, 2012
Life Beyond Equity
Knowing what matters and preparing accordingly will change your experience from frustration to exhilaration. Recent trips into neighborhoods with buyers I found owners who bought at the peak of the market (at prices $300,000 +) selling today for 15% less. Out of a pool of nine comparable homes from Middleton to Verona we found four with fresh accepted offers. None were short sales or bank owned properties. Each has a home owner who priced wisely.
Buyers who are pre-approved and have taken time to study the market, and focus on owning a home as opposed to an investment, are coming through the experience satisfied. Sellers who focus on the big picture are equally satisfied. There is life beyond equity.
A buyer's market exists where seller's expectations do not align with reality. Within a buyer's market, one seller can change the tide to their favor by paying attention to condition and price. (Location is locked when you bought so look to price and condition to change the impact of location.) Get the price right as supported by evidence and pull the house into tip top shape and you're going to create some excitement. We are seeing seller's markets pop up all over. These markets are small and fleeting.
Buyers who are pre-approved and have taken time to study the market, and focus on owning a home as opposed to an investment, are coming through the experience satisfied. Sellers who focus on the big picture are equally satisfied. There is life beyond equity.
A buyer's market exists where seller's expectations do not align with reality. Within a buyer's market, one seller can change the tide to their favor by paying attention to condition and price. (Location is locked when you bought so look to price and condition to change the impact of location.) Get the price right as supported by evidence and pull the house into tip top shape and you're going to create some excitement. We are seeing seller's markets pop up all over. These markets are small and fleeting.
Saturday, January 28, 2012
Real Estate Today. Eliminate Peril, Enhance the Experience, Move the Recovery.
Of course we know how that story goes; the threat is declared over too soon and more people suffer disaster. The town folks make a few bucks off of the tourists, but then the tourists leave but now they are not going to be so easily persuaded to come back. Fool me once, shame on me, fool me twice....I don't trust you.
The government first time homebuyer tax incentive is real estate's version of opening the beaches too soon. Many of those buyers churned our commission checks, closing fees, and mortgage origination fees to keep some businesses open, but the buyer may have had their legs chewed off by buying and overpaying in the only competitive market of the time---below $250,000. The little equity they had in the transaction (3% down) vanished as soon as the buyers left the scene. The serious business of recovery began only last year.
If a Realtor has any value in the recovery, it's in the area of eliminating unreasonable risk for the consumer of our services. With a year of untampered markets behind us, the buying and selling journey has a solid base of sales. Those sales are what underwriting needs to establish values on which to approve financing applications. Appraisers have sales to use to evaluate value in the manner required by the underwriters. Realtors have data to use to inform their buying and selling clients on what might be reasonable price. Owners can make decisions to place their homes on the market or sit out knowing what is probable instead of hopeful.
Now that the underwriting process is on more solid ground, it is imperative that no government interference with incentives muddy the water. The bankers, realtors, appraisers in the proces know what to expect. We know where the pitfalls are (unsubstantiated prices, unapproved buyers, defects in the homes, underwater mortgages). We can navigate. The waters are not treacherous. Jaws may have gone out to sea. The more consumer sentiment moves to feel safe, the more people will come back to the process of buying and selling, and moving on with their lives. Mess with their serenity and we'll be watching a sequel... and we know the sequels suck.
Wednesday, January 11, 2012
Dane Northwest Middleton Schools Sales 2011
One area that gets an abundance of attention from relocating families is the NW corridor of Dane County, Middleton Schools. Because this area is outside of the Beltline, we should include Blackhawk Neighborhood in the discussion.
A review of sales of 19 homes for $600,000 and above over the last twelve months might reveal a trend to pay attention to in 2012. I've written about assessments in previous blog posts and hopefully I've been clear that I don't want to put too much weight on assessments when doing market analysis. Just the same, there is no way of avoiding assessment numbers when the buying side of the market is looking to the assessment number to argue for their offer positions. We can't look the other way and say it doesn't matter when it does matter to somebody in the discussion. With that disclaimer out of the way, let's review 2011.
It was early spring and I started to hear "Your price is too high. Homes are selling for a lot less than assessment." It wasn't just bargain shopping buyers saying that, seasoned Buyer Agent Realtors were telling me I was wrong too. If I was going to enter this debate I decided to do some homework. A review of multiple neighborhoods around Dane County showed that there were pockets where the price to assessment ratio was upside down, but overall the sales prices where still far more than the majority ahead of the assessments. But the damage was done. The buyer sentiment was set. And the mode of operation was: See assessment first, then price. If price is greater than assessment, look no further, conclude price is wrong.
My 19 sale group of homes shows this:
Sale price as a % of Assessment: 100.43%
Sale price as a % of First Asking Price: 91.54%
Sale price as a % of Last Asking Price: 94.01%
Days on the market average: 138 days
Of the nineteen sales, 7 were in the Town of Middleton. Six of those 7 homes sold for less than the assessed value. The City of Madison (Blackhawk) recorded ten of the sales and every one of those homes sold for over the assessed value.
I read this data as a suggestion that owners will attract the attention of buyers when their price meets the buyer's expectation, and the buyers might expect the price to line up close to the assessment in the Town of Middleton. In Blackhawk, buyers who expect to be able to buy homes below assessed value may have no success arguing their case.
There are sixteen homes on the market today in the same area. Only 5 are priced below assessment, and the average price to assessment is 105.35%. The average price reduction already has been greater than 6.5%. Maybe those owners started with aggressive expectations. The average time on the market for these homes is 249 days. Eight months is a long time to be patient. I wonder if we might be seeing a number of these owners make price adjustments in February. The cumulative effect would be significant to owners who set their prices based on asking prices.
A review of sales of 19 homes for $600,000 and above over the last twelve months might reveal a trend to pay attention to in 2012. I've written about assessments in previous blog posts and hopefully I've been clear that I don't want to put too much weight on assessments when doing market analysis. Just the same, there is no way of avoiding assessment numbers when the buying side of the market is looking to the assessment number to argue for their offer positions. We can't look the other way and say it doesn't matter when it does matter to somebody in the discussion. With that disclaimer out of the way, let's review 2011.
It was early spring and I started to hear "Your price is too high. Homes are selling for a lot less than assessment." It wasn't just bargain shopping buyers saying that, seasoned Buyer Agent Realtors were telling me I was wrong too. If I was going to enter this debate I decided to do some homework. A review of multiple neighborhoods around Dane County showed that there were pockets where the price to assessment ratio was upside down, but overall the sales prices where still far more than the majority ahead of the assessments. But the damage was done. The buyer sentiment was set. And the mode of operation was: See assessment first, then price. If price is greater than assessment, look no further, conclude price is wrong.
My 19 sale group of homes shows this:
Sale price as a % of Assessment: 100.43%
Sale price as a % of First Asking Price: 91.54%
Sale price as a % of Last Asking Price: 94.01%
Days on the market average: 138 days
Of the nineteen sales, 7 were in the Town of Middleton. Six of those 7 homes sold for less than the assessed value. The City of Madison (Blackhawk) recorded ten of the sales and every one of those homes sold for over the assessed value.
I read this data as a suggestion that owners will attract the attention of buyers when their price meets the buyer's expectation, and the buyers might expect the price to line up close to the assessment in the Town of Middleton. In Blackhawk, buyers who expect to be able to buy homes below assessed value may have no success arguing their case.
There are sixteen homes on the market today in the same area. Only 5 are priced below assessment, and the average price to assessment is 105.35%. The average price reduction already has been greater than 6.5%. Maybe those owners started with aggressive expectations. The average time on the market for these homes is 249 days. Eight months is a long time to be patient. I wonder if we might be seeing a number of these owners make price adjustments in February. The cumulative effect would be significant to owners who set their prices based on asking prices.
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