Thursday, September 2, 2010

Seizing Historic Opportunities!

"It's the best affordable housing program we've had in the history of this country", Karl Case, a Wellesley College economics professor was quoted in an article written by Gita Sitaramiah in the St Paul Pioneer Press Sept 1, 2010.

What Karl was referring to was the oversupply of housing on the market, coupled with current historic interest rates that are hovering around 4.5%. This has indeed created a perfect storm for buyers in this market. In todays' housing market, buyers have an unbelievable opportunity to capitalize on something we have not seen in the history of this nation!

So - why aren't we seeing more activity from buyers? The current economic state is probably the best answer to that question. Buyers are feeling a little uncertain about the unemployment indicators and the general economic strength of our country. For those buyers willing to move forward tho', the opportunities abound.

We are actually seeing an uptick in home-buying from our more economic-savy clients, who realize the key to good investment is to buy when the market (housing and interest rates) is low! They recognize that with less competition for their offers, they are in postion to negotiate with sellers for unbelievable deals, and coupled with the low interest rates, they will be able to expand their purchasing power!

Timing is Everything! Buyers that step out into the market now will be seizing rare opportunities!

Friday, July 16, 2010

The startling news contained in a recent AP report that about 1.7 million homeowners (one in 78 US homes) received a foreclosure-related warning between January and June of this year has reinfoced what many of us have believed for some time - that the foreclosure and short sale market will be with us for the foreseeable future.

While the foreclosure and short sale statistics for new listings in June of 2010 for our Twin Cities area reflect that there has been a slight reduction compared to June of 2009, it's likely that this is due more to the bank's managing the flow of their distressed properties. The expectation is that this market will be with us at least for a couple more years - that is assuming the economy does not worsen. Most people believe there is a "shadow inventory" of distressed properties waiting to hit the market.

The data for June of 2010 does hold some interesting statistics for Short Sale properties. Pending Sales and Closed Sales for Short Sale properties for June 2010 both increased which may mean that the parties involved (sellers, banks, agents) are improving their systems and knowledge to get short sales closed.

Due to the economic times we are currently experiencing, it is highly likely that someone you know or someone you are related to will be faced with the possibility of losing their home. It is at this particular stressful juncture that people should be turning to professionals to help them navigate through the options and difficult choices they have ahead of them.

We have recently partnered with a group that will help insure success for our short sale clients. This group consists of attorneys, closers and title professionals, who can assist us in providing our clients confidential and professional service.

If you know of anyone who may find further information on this subject helpful, please have them contact us for a free confidential analysis.

Friday, June 11, 2010

Is There Any Good News In Real Estate?

The short answer to this is YES!

We're being bombarded daily thru national and local news services with negative real estate related stories. They range from features about the continued in-flux of foreclosures, to fraud cases, and not forgetting the current declining market.

So - lets put some perspective on this and also focus on some of the good news in this industry! This is not to gloss over the issues we are currently facing, but as someone who has been in the real estate business for 23 years, I have seen other times that have also been challenging (remember the double digit interest rates!?).

Our local market is quite a bit different than the overall national market. Quite often these news stories tend to focus on the national market - which is in worse shape than our local market, (mainly due to the local economic conditions). So, while predictions are that some national markets will see a further decline in values of 6-8%, our local market is actually faring much better. In fact when comparing April 2009 to April 2010 for Ramsey County alone, we see that both the sales volume and number of home sales have increased

Buyers have never had it better!! There is still an oversupply of homes on the market which means that sellers are being much more competitive in their pricing. We are also experiencing interest rates which have dipped down to 30 year lows! Interest rates will significantly affect the amount of home a buyer can purchase because it goes to the amount of monthly payment a buyer can qualify for. The other good news is that there are still programs out there that will allow down payment assistance to qualified buyers!

Sellers can still navigate thru this market with an experienced agent. Getting your home ready and pricing it right can still bring a quick offer. Just recently we had multiple offers on a property in Shoreview that ended up selling for over list price!

The key to success in this market is to have an experienced agent who can help guide you thru the constantly changing landscape!

Tuesday, March 2, 2010

Staging Works!

We have actually been using staging techniques since 2005, as we've recognized that the two things that dramatically affect the saleability of a home are - price and condition! In fact we feel so strongly about this that we include a staging consultation by our accredited staff member as part of the service we provide our sellers.

Staging is not about decorating - but instead is about showcasing the selling features of the home. These can be the overall space of the home, updates like granite counters and hardwood floors, as well as architectural details such as vaulted ceilings or dramatic windows!

To showcase these selling features, it is important to remove distractions for buyers. Too many collectibles, accessories with a lot of color and detail, and family photos will draw buyers' eyes and attention away from what we want them to focus on. Sometimes eliminating or repositioning furniture will help to showcase the size of a room.

If sellers are expecting to receive "top dollar" for their home, they will not want to present a home that telegraphs a lot of "work" to the potential buyer. Most buyers do not want to purchase a home which will require hours removing wallpaper, repainting and replacing outdated light fixtures. If they do make an offer on such a home, they typically "tick down" the price of the home to compensate for such work. Paint is one of the cheapest ways to update a home - and new light fixtures and hardware will also assist in moving an 1980's house into the 2000's!

With most buyers beginning their search on the internet, it is really imperative to have sharp, clear and well taken photos of property. Rooms with too many accessories, overfilled with furniture, or with very dated decor will not reflect well in photos, and may deter buyers from wanting to see the home in person. A well staged home will definately reflect nicely in the brochures and photos online!

With the many HGTV "staging" shows on cable TV, we find that many of our sellers are already knowledgable about some aspects of staging - and most agree that once they have gone thru the process they are glad to have done so. Many of our sellers like to think of it as "early packing for a quick sale"!

Tuesday, February 23, 2010

Short Sales On The Rise

An often misunderstood transaction in today's real estate market is the "Short Sale". A short sale is when a lender or lenders agree to accept less than the amount currently owed by the homeowner.

If owners purchased their homes at the height of the market, or refinanced recently, they may now find that they owe more on their home than what its current market value is. The coupling of the current economic crisis and the drop in home values over the past couple of years is causing this increase in short sales and foreclosures.

Often a short sale will cost the lender less than a foreclosure, so it can be a good way for lenders to minimize their risks. For current owners, a short sale may not hurt their credit history as much as a foreclosure, and thus allows them to get back on their feet a little quicker.

To qualify for a short sale, the current owner will need to demonstrate financial hardship. Most qualify on the basis of employment issues (IE: they have lost their jobs, had reduced hours, or were required to relocate to another state for employment). However there can be circumstances where health dictates that a person must move out of their home (IE: unable to use stairs). Owners are surprised to learn that they can qualify for a short sale, and still keep their payments current.

Because unemployment continues to hover at high rates, the expectation is that short sales will continue to rise. Recognizing this, the federal government has designed programs for homeowners facing this process. On April 5, 2010, the US government will implement the Home Affordable Foreclosure Alternatives Program. This will help simplify and streamline the use of short sales and deeds-in-lieu of foreclosures.

It is important that buyers and sellers use Realtors with experience to assist them in navigating the challenges of short sales. We did our first short sale in 2005, so we have witnessed first hand the many changes that the short sale process has undergone. An experienced realtor will help prepare clients for the short sale process and guide them thru this difficult period.

Tuesday, February 16, 2010

How Buyers Search For Homes

Things have sure changed in this industry since I began 22 years ago! One of the biggest changes we have seen in our industry is how buyers search for homes. In 1999, only 37 per cent of buyers actually used the internet in their search. Today, 90 per cent of buyers are searching for their homes on line!

These internet sites have undergone their own transformations! Evolving features now can include multiple photos, downloadable brochures, video tours, neighborhood information and mapping.

Because most home buyers begin their search in this manner, the presentation of a listed home on the internet is very key to driving traffic to your property. There should be numerous photos highlighting the features of your home. The photos should be of good quality with good lighting and the rooms should be staged to focus on the selling features of your home!

Tuesday, February 9, 2010

Home Buyer Credit Deadline Approaching

There is much speculation on whether or not Congress will extend the current Home Buyer Credit. What we do know for certain is that to obtain the $8,000 First Time Home Buyer Credit or to be eligible for the Move-Up Home Buyer Credit, clients will need to be under contract by April 30th, and closed by June 30th.

Last fall, Congress did extend the Home Buyer Credits - but as of today we have no firm indications that Congress will repeat the extensions. For clients to capitalize on the current Home-Buyer credits, they will want to begin the preapproval process with their lender as soon as possible. It is also important to remember that it takes time to find and negotiate on a home; and once this is completed clients will need to allow about 4 weeks for the underwriting and closing process to be completed.

It's not too soon to begin this process! General real estate indications are reflecting some improvement in the real estate market - see my link "The Skinny" for more on this!

Tuesday, February 2, 2010

Move Up Buyers Are Stepping Up!

With the recent extension to the homebuyer credits expanding to move-up buyers, we are seeing more of these savy buyers entering into the housing market in recent months. We have the "perfect storm" of ideal circumstances for the move-up buyers - especially those with homes that are marketable to first time home buyers! Interest rates are still at historic lows, and when coupled with the increased inventory of homes on the market and the tax credits, our move-up buyers have been scoring some great deals on their move-up homes!

The most recent 3 of our move up buyers received offers on their existing homes within 10 days of listing with us, which enabled them to make some very competitive offers on their new homes! We anticipate we will see more people taking advantage of the current market, low interest rates, and tax credits to get into the home of their dreams!