For Sale By Owner Blues

Would you work on the foundation of your home yourself? Of course not! It takes special skills and know-how to make sure you are not destroying the largest investment you’ve made… your home. Not to mention there are codes and regulations that need to be followed as well.

I once made the mistake of attempting to make t-shirts at home to sell. I mean, how hard could it be? Needless to say I found out the answer to that question the hard way. Certain adhesives only work on certain materials. You have to make sure the temperature is set properly. There were a number of things I just was not prepared to handle. Most of all, the quality was not good enough for me to take money from people for them. In fact, I don’t think I would have given them away. So I ended up hiring a print company after wasting time and money. We all have felt that we could save a little money doing certain things ourselves. But let’s face it, there is a reason professionals get training to do their jobs.

Many home owners attempt to sell their homes on their own in hopes of saving commissions paid out to a REALTOR® only to find out they have bought into a lawsuit. Conversely, the buyers believe the seller is giving them a better price because there are no REALTORS® involved. But buyers need to understand that the seller is “selling” a product and wants the best deal for themselves and the seller needs to understand that buyers will seek to return a product if something is found to be wrong with it. At that time, a lawsuit may be forthcoming…. unless the seller has protected themselves with the proper disclosures showing that the buyer had every opportunity to discover any defects in the house.

Long story short, the job of an agent is not to just help find a buyer or a house, but to make sure the transaction is done legally, goes smoothly, and that all parties are treated fairly. A REALTOR® starts to really earn their commission after the buyer and seller agree on a price. Yes, proper contracts and disclosures are just that serious.

 

Has the Housing Market Bottomed Out?

After the President’s “State of the Union” Address last night, many experts feel that consumer confidence is being restored. This is also due, in part, to an end of year census taken by real estate experts that shows prices have stabilized and the market is showing signs of a slow increase in sales prices. The President also mentioned a strategy to allow “responsible home owners” the opportunity to refinance their homes and avoid foreclosure. Add this information to research that shows that new foreclosure filings are down significantly, and there you have your recipe for consumer confidence.

How this all will play out is still up in the air. After all, there has not been a market like this since the great depression. But, statistically, although numbers are still down from last year this time, some experts say that the rate of decline is at it’s best in over 3 years. And something to get excited about.

I must also add that every market is different, so you should always ask your real estate professional about your area.

 

2010 Through 2011 Homes Sales Statistics

Happy New Year everyone! I certainly hope we improve our market conditions this year. Although we did not see a drastic spiral as some were predicting, it was a decline none the less.

Here are the stats for single family, stick built homes in New Hanover, Brunswick, & Pender counties in 2010 through 2011:

1. The average number of homes sold in 2011 was down 11%. (2010 = 333 & 2011 = 298 homes sold per month) (3996 total for 2010 & 3576 total for 2011)
2. The average number of days these properties stayed on the market before they were sold was up 16% (2010 = 129 days & 2011 = 150 days)
3. And the most important stat: The average sales price of homes sold in 2011 was down only 3%. (2010 = $245,059 & 2011 = $237,750)

What does all of this mean? This means that (of course) fewer people were able to buy homes last year, so a lot of homes stayed on the market longer. These are the areas where you will see the most price reductions and value loss. However, some of these numbers can be misleading. For example: The average sales price was only down by about $8000 this year, but IF mostly $550,000 homes were sold last year and this year we have a mix of $1,000,000 and $70,000 homes sold, the average would be around $535,000. This makes it look like the market hasn’t changed much, but in fact, it means higher income families can afford more expensive homes (eg. $1,000,000) and lower income families have to sell their homes for much less (eg. $70,000).

In other words, there is a large difference between the rich and not so rich. That being said, there are signs of people going back to work and legislation being considered to help investors buy more homes. This COULD stabilize home prices and result in a sales price increase in 2012. Let us hope this is the case.

 

January 2011 – November 2011 Wilmington, NC Market Stats

I REALLY tried to be optimistic about where our Wilmington, NC Real Estate market was headed. But I can’t control the facts. And the fact is that we have been consistently down in ALMOST EVERY category that I track since August. (single family stick built home sales, average days on market, & average sales price in New Hanover, Brunswick, & Pender Counties)

Currently the average sales price is $226,085 and the total number of homes sold (based on my above criteria) is 221 in November. The average days on market is 148 days which is actually at it’s lowest since February this year. So homes are selling faster but only at lower prices. Now, this does not mean if you are currently on the market or thinking about selling your house, that you should give your house away. It just means that property values are set lower and your house needs to be priced right in order to sell.

Who sets the market value? The answer is the people who purchase the homes in your area. When the public (this includes you) buys a home, what they paid for it helps set the value of the homes that are similar to it in that area. Think of it this way, when one gas station lowers the prices of their products, the gas station across the street has to also lower their prices in order to compete.

I hope this information was helpful to you. Contact me if you have questions.

I will have more information on things that affect your area real estate market in future blog posts.

 

Winterize Your Home To Save Money

Did you know that there is only one state in the US where temperatures have never fallen below zero? If you guessed Texas or Florida, you would be wrong. The answer would be the tropical paradise called Hawaii. They recorded a record low of 17 degrees Fahrenheit at the observatory on Mauna Kea, located 13,770 feet above sea level. Snow falls there occasionally.

But since all of us don’t live in a tropical paradise, we have a few fall time chores to do that can save us some real cash when we crank up those thermostats.

Here are a few tips to help you successfully accomplish your money saving goals and maybe save you some time and heartache too.

1) Furnace Inspection

- Call an HVAC professional to inspect your furnace and clean ducts.
- Stock up on furnace filters and change them monthly.
- Consider switching out your thermostat for a programmable thermostat.
- If your home is heated by a hot-water radiator, bleed the valves by opening them slightly and when water appears, close them.
- Remove all flammable material from the area surrounding your furnace.

2) Get the Fireplace Ready

- Cap or screen the top of the chimney to keep out rodents and birds.
- If the chimney hasn’t been cleaned for a while, call a chimney sweep to remove soot and creosote.
- Buy firewood or chop wood. Store it in a dry place away from the exterior of your home.
- Inspect the fireplace damper for proper opening and closing.
- Check the mortar between bricks and tuckpoint, if necessary.

3) Check the Exterior, Doors and Windows

- Inspect exterior for crevice cracks and exposed entry points around pipes; seal them.
- Use weatherstripping around doors to prevent cold air from entering the home and caulk windows.
- Replace cracked glass in windows and, if you end up replacing the entire window, prime and paint exposed wood.
- If your home has a basement, consider protecting its window wells by covering them with plastic shields.
- Switch out summer screens with glass replacements from storage. If you have storm windows, install them.

4) Inspect Roof, Gutters & Downspouts

- If your weather temperature will fall below 32 degrees in the winter, adding extra insulation to the attic will prevent warm air from creeping to your roof and causing ice dams.
- Check flashing to ensure water cannot enter the home.
- Replace worn roof shingles or tiles.
- Clean out the gutters and use a hose to spray water down the downspouts to clear away debris.
- Consider installing leaf guards on the gutters or extensions on the downspouts to direct water away from the home.

5) Service Weather-Specific Equipment

- Drain gas from lawnmowers.
- Service or tune-up snow blowers.
- Replace worn rakes and snow shovels.
- Clean, dry and store summer gardening equipment.
- Sharpen ice choppers and buy bags of ice-melt / sand.

6) Check Foundations

- Rake away all debris and edible vegetation from the foundation.
- Seal up entry points to keep small animals from crawling under the house.
- Tuckpoint or seal foundation cracks. Mice can slip through space as thin as a dime.
- Inspect sill plates for dry rot or pest infestation.
- Secure crawlspace entrances.

7) Install Smoke and Carbon Monoxide Detectors

- Some cities require a smoke detector in every room.
- Buy extra smoke detector batteries and change them when daylight savings ends.
- Install a carbon monoxide detector near your furnace and / or water heater.
- Test smoke and carbon monoxide detectors to make sure they work.
Buy a fire extinguisher or replace an extinguisher older than 10 years.

8 ) Prevent Plumbing Freezes

- Locate your water main in the event you need to shut it off in an emergency.
- Drain all garden hoses.
- Insulate exposed plumbing pipes.
- Drain air conditioner pipes and, if your AC has a water shut-off valve, turn it off.
- If you go on vacation, leave the heat on, set to at least 55 degrees.

9) Prepare Landscaping & Outdoor Surfaces

- Trim trees if branches hang too close to the house or electrical wires.
- Ask a gardener when your trees should be pruned to prevent winter injury.
- Plant spring flower bulbs and lift bulbs that cannot winter over such as dahlias in areas where the ground freezes.
- Seal driveways, brick patios and wood decks.
- Don’t automatically remove dead vegetation from gardens as some provide attractive scenery in an otherwise dreary, snow-drenched yard.
- Move sensitive potted plants indoors or to a sheltered area.

10) Prepare an Emergency Kit

- Buy indoor candles and matches / lighter for use during a power shortage.
- Find the phone numbers for your utility companies and tape them near your phone or inside the phone book.
- Buy a battery back-up to protect your computer and sensitive electronic equipment.
- Store extra bottled water and non-perishable food supplies (including pet food, if you have a pet), blankets and a first-aid kit in a dry and easy-to-access location.
- Prepare an evacuation plan in the event of an emergency.

Some of these tips seem a little extreme, but better safe than sorry. Some geographical areas need a little more preparation.

 

Wilmington NC Real Estate Stats July 2011

Well, as promised in a previous post, the numbers for July are in. As you may recall, from June to July of 2010, the real estate market experienced a 30% drop in sales. For July the drop in sales was only 16% which is a little more than half of the 2010 decline. The average sales price are also better than last year by 2%. While the numbers for 2011 are less than stellar, they are better. This came in the middle of the US debt crisis and the uncertainty of the consequences of the nation’s first ever potential default.

Although we are in a better position than we were this time last year, we should not celebrate yet. This market continues to send us some mixed signals, as evidenced by the increased homes sales and the nearly 10% unemployment rate. Sometimes it just doesn’t make since.

What we will have to watch out for going forward are the affects of the US credit downgrade by the S&P. We have already seen FREDDIE MAC and FANNIE MAE  also get downgraded as a result. All other programs which are dependent on US dollars for funding are expected to suffer the same fate. The one silver lining in all of this is that the interest rates went down when the news was announced. If more jobs are created and consumer confidence stays the same at best, we should maintain higher sales statistics until the new government “super committee” begins stirring the economic pot again.

Click the graph below to open a larger version in a new browser window.

 

 

Credit Awareness Improves

-Good judgment comes from experience, and often experience comes from bad judgment. ~Rita Mae Brown

During the recent “time of plenty” in America, there was a lack of something that few have shared with their children; credit awareness and conscientious spending. But due to the greed of a few, the entire world is being force fed a healthy dose of wealth reconstruction.

To many, home ownership was the only form of wealth they possessed. But because of the housing crisis, tens of thousands have lost their homes and therefore lost their wealth. Now comes the reconstruction and rebuilding process. But this time around, many will have the tools and skills they need to make it count.

This “great recession” has taught our capitalist nation a valuable lesson. Living above our means has been a reoccurring theme and our government led the way. Studies are showing that people are a lot wiser since our error has been exposed. Lets just hope that credit awareness improves even more than it has already.

Here is a great article on the subject.

http://rismedia.com/2011-06-30​/recession-helping-to-raise-aw​areness-of-credit-scores-and-l​eading-to-start-of-good-money-​habits/

 

Wilmington NC Real Estate Stats

The Wilmington NC Real Estate stats have been a little more promising than the rest of the nation as a whole. However, the number of sales for our area in the first 6 months of 2011 are down 8% when compared to the same time last year. The good news is that sales are on the rise this year when they were on the decline last year.

July 2011 will be an important sales month because last July saw a whopping 30% decrease in sales from which we have yet to fully recover. If we continue at our current rate of increased sales, we will see the best real estate market that we have seen in over 2 years.

Click the graph below to open a larger version in a new browser window.

 

Prices remain low due to the size of our current inventory and the threat of more foreclosures. The average sales price is $251,000 which is only down 1% from June 2010. But, when compared to the full 6 months, the average price of single family homes is down 3%.

So, as you can see, Wilmington, NC real estate is still holding it’s own against the national statistics. Here is a video of the national statistics press conference.

http://c.brightcove.com/services/viewer/federated_f8/1465406675

*NOTE: The previous statistics are based on the sales of single-family homes in New Hanover, Brunswick, and Pender Counties only.

 

Understanding Wilmington, NC Short Sale

The key to understanding Wilmington, NC short sales is to ask a REALTOR, not a family member. I have had several clients ask about short sales because they thought it was the best way to get a deal. However, that is not necessarily true.

A short sale is simply a piece of real estate that is being sold “short” of the amount owed to the bank holding the lean and is commonly referred to as being “up side down” in your mortgage. For example, if someone buys a home for $150,000 and then decides to sell it after 1 year for $100,000, they would be selling it “short” because they more than likely still owe around $149,000. So they are selling it for $49,000 less than what they owe on it. It is for that reason that people think they are getting a great deal.

Now, the previous scenario is not always a great deal because the real estate market may have gone down and that same property that was worth $150,000 a year ago, is now only worth $100,000 in the eyes of buyers in the market. Yes, that’s right! The buyers in the “market”, who are looking for a home, set the value of every home for sale. That means; if at least 3 homes in your area are similar to yours, and sells for $100,000, then YOUR home is now worth only around $100,000. It does not matter what you bought it for, people are only willing to pay $100,000 for it and if you want to sell it, that is what you should list it for.

So as you see, the short sale property above is not a deal at all. It is only worth the $100,000 you are paying for it. It will only be a deal, if or when the market increases again and people are willing to pay $150,000 for your home. Then, you will be $50,000 richer.

 

Foreclosure Estimates Double

Can you believe that foreclosure estimates are set to double in 2011? According to Rick Sharga, a senior vice president of RealtyTrac, Inc “2011 is going to be the peak”. They say that 1 in every 45 homes received a foreclosure filing in 2010. That’s a record 2.9 million filings. One million of those filings actually resulted in the loss of the property. RealtyTrac, Inc is estimating that 1.2 million could lose their homes in 2011.

If these numbers prove true, these estimates will completely eclipse earlier reports that only 500,000 homes will be put on the market due to foreclosure.

Click HERE to read the full report.