New price in West LA

That's Lake Ann for those of you who don't know Northwest Michigan lingo.

Who: Motivated sellers who just improved their price to $118,000

What: World’s neatest 3 BR bi-level, with fully finished basement and detached garage.

Where: 6226 Reynolds Road (just South of 610/Almira Road), close to state land and lake access.

When: New price NOW- bring your buyers TODAY.

Why: Because you’re tired of seeing worn out, beat up bank owned homes.

How: Click here to check out the listing, then call me office to schedule a showing, or if you’d prefer email/text/tweet/facebook/smoke signals/mental telepathy- I’ll try to make it easy on you!

Take advantage of market micro trends

I handle REO (foreclosure) listings for several banks, including Bank of America and local banks, and the number of new listings incoming have dropped off dramatically recently. In conversation with others who handle these properties, and with local banks, this dip was often echoed. It’s likely that a foreclosure moratorium in place over the winter has delayed some properties coming onto the market.

A little background research revealed that the number of bank owned listings as a percentage of all new listings did indeed peak last winter, and has since dropped dramatically. While this has occurred, demand for good values in real estate have not abated- I’ve got a list of ready buyers, actively seeking good values (OK, some are waiting for a great value). Driven by value, bank owned properties have cleared from the market at a rapid pace.

Here’s a chart of the ratio of bank owned to total new listings since last August

I don’t expect the rate of new foreclosure listings to remain on a downward trend- there is a fair amount of consensus that we’ll see a new round of foreclosures coming on the market this fall, and some indications that these are trending toward mid-range homes , and some higher end homes, as opposed to the past tendency toward the very low end of the market.

What this information reveals for buyers is that when they’ve identified a good value, quick action and a solid offer are in order. Prices have adjusted, and affordability is high.

What it means for sellers is that you likely have a roughly 60 day window of opportunity to sell with far less competition from distressed sale pricing on bank owned listings. This is your opportunity to price your home right, have it clean, staged and “turn key” ready and to make it as appealing as possible to purchasers.

Reinforcing this opportunity are low mortgage rates and, most importantly, the $8000 home buyer tax credit, which is scheduled to expire in November, and is driving buyers into the market.

Cars vs. Cribs: How the Tax Credits stack up

The passing of the $4500 "Cash for Clunkers" tax credit out of the House got me thinking. First, let's not fool ourselves into thinking that this is serious efficiency legislation- yes, it puts an incentive on deciding upon a fuel efficient vehicle, and that's certainly more palatable than forcing higher efficiencies and limiting consumer choice. But this is about getting auto sales moving more than anything. And as an old car guy (I grew up around my father's Chrysler dealership) I cringe when I hear that the "clunkers" traded in would be "recycled"- it's a certainty that some very serviceable vehicles are going to be taken out of circulation. That means they won't be available for resale to those who can't afford a new car.


Let's compare this incentive to the $8000 first time buyer tax credit, shall we?


Average new-car transaction price has dropped to $27,941, according to The Wall Street Journal. This means that the credit given is 16% of the average price- a pretty healthy incentive, and no restriction on who can buy, other than you have to move up in efficiency.


Compare this with the 2008 US Median Sale Price of $198,100 (per this NAR report) and the $8000 First Time Buyer Tax Credit, and we're looking at an incentive of 4%. Still very nice, thank you, but think what a bump in the tax credit, to say $15,000 could do. Especially if it were paired with revisions making the credit applicable to all buyers of primary residences!


Danielle Hale, a research economist with the National Association of REALTORS(R) put together this analysis that shows each home sale at the median generating $63,101 in economic impact. That's an enormous number, and one that drives activity in all sectors of the economy.


My opinion: The current home buyer tax credit is a good thing, but it would be a much more significant force in helping clear inventory and stabilize values with the changes noted above.

Spring has Sprung!

It's been a darn good week here in Benzie County.  The sun finally found its way back to our little corner of the world and warmed things up some.  Most of the golf courses are now open (I even got out to play once!) and most of the snow is gone.  I've also heard that the steelhead fishing is great- Betty from Vacation Trailer Park on the Betsie River tipped me off this when I saw her at the Benzie Chamber Expo on Tuesday, and I noticed a similar report when I discovered a link to Honor Motel's Blog on Twitter.  I also saw that the folks from Honor Motel did a nice job of pointing out the good values in Benzie County lakefront real estate.

Since the fishing is good, it's nice to have a couple of listings on the river, and I've noticed a spike in inquiries on both the Homestead Resort on the River which I have listed for sale, and on my listing for a secluded retreat on the Betsie River which just got a healthy price reduction.

Speaking of price reductions, I was really pleased to have secured price adjustments on five of my listings this week.  While it seems that real estate activity has ratcheted up another notch, most of the activity is still being driven by value/price.  More on those values in an UnReal Deals post soon.

Thanks to lots of hard work, I've stayed pretty busy all year, but it's at another level now, and I'm hearing that others are seeing the same trend.  One agent I spoke with put deals together for 8 customers in the past two weeks, and I have two properties that received multiple offers this week.  In other words, we had two buyers battling for one property.  It's all good news, and combined with a downward trend in the number of new listings being placed on the market, we're working toward a healthier inventory level.  Great mortgage rates and the $8000 first time buyer tax credit are helping out some too.  It's a shame that the tax credit is limited to folks who haven't owned a home in the past three years though.

Tomorrow I'm off to Cadillac to give a presentation for the Paul Bunyan Board of REALTORS about the use of Social Networking by REALTORS, then back to the office for a 3:30 closing before heading back south to Kentwood, hauling the props for my oldest son's Odyssey of the Mind Competition.

If anyone hears any reports on Steelhead, smelt, or morel mushrooms, please post a comment.  General information is find, no specifics necessary.  I don't expect anyone to give up their favorite spot!

Is that Irony? It's at least funny.

Over the weekend I received notice of a new comment on a post I made a while back, titled "Twitter and Pickup Lines".  This post was inspired by someone who started pitching me on a home based business before we'd even exchanged pleasantries.  Basically, it says... don't blindly pitch- that's not what SM is about.

So here's the comment:

jeromine said...

Hi nice Blog.Mona Vie Juice products featuring an exclusive acai berry juice blend Home Based Business opportunity.

I hope this was an automated comment.  If not, the person certainly did not read the post.

Thanks for the laugh, jeromine!

Fannie's new rule matters more to the market than it does to brokers

I noticed the new ruling by Fannie regarding "negotiating" commissions, and have to say I'm hopeful that it is a sign of positive direction.

The long and short of it is Fannie has instructed their servicers that they may not negotiate a commission below 6% in conjunction with a short sale (existing commission agreements below that level are acceptable.)  I know many agents have been burned in working short sales, when after weeks or months of hard work, their commission gets axed for the sake of the deal.

 

This ruling demonstrates that Fannie recognizes the importance of getting short sales closed, both to their customers and the overall health of the market.  It also recognizes the importance of Real Estate professionals in bringing these deals to fruition.

 

The link below provides more information about these new instructions.  

http://www.mirealtors.com/content/030309.htm#pp

I'm hopeful that in taking a leadership position on this topic, Fannie will encourage other mortgage holders to follow suit.  

It's a small step, and certainly pales in comparison with the issue of the time it takes to respond to short sale requests and get the sale done.  The market should drive a correction there, as one would hope that banks will, sooner or later, realize that by dropping the ball on short sales they are losing massive amounts of money.

In the process of foreclosure, home values most frequently drop dramatically.  With no homeowner in place, it just becomes a house, with no history, no sign of life, and no pride of ownership.  Foreclosures have one thing and one thing only to compete on- price.  The increased significance of foreclosure sales drag the balance of the local market downward with them, and while increased affordability is great, the trend becomes cyclical.  Surrounding homeowners now have increased difficulty getting their homes to appraise for re-financing, or have to fight for a short sale themselves when it comes time to sell.

What's the issue with banks approving short sales?  One can only assume it is either systemic lack of resources, corporate structures that don't allow for dispersed decision making, or just sheer ignorance, coupled with arrogance.

Verdict is in. NAR "gets it"

A long long time ago (like October,) the National Association of REALTORS announced their plans to hire a Social Media Manager.  The job posting was quickly noticed by a broad range of REALTORS who were actively engaged in SM already, and Twitter and Blogs were abuzz.

Lots of talk on the blogs was skeptical, some cynical, some hopeful.  There was some chatter about it at the NAR Convention in Orlando (including some late night pontification between Aaron Wheeler of Oakville Properties and myself.)  To be quite honest, I gave consideration to applying for the position myself.  What stopped me?  Well, the way I saw it, this position could be one of two things:

A menial, mid-level position that paid a ho-hum wage, got carted out for shows, toed the company line and generally didn't have room for a big personality (OK, maybe that should read ego) like mine.  Not my cup o' tea

OR NAR would go for 

A "Player," well established in SM, networking and tech, with established ties to the "Twitterati" and top voices in the RE Blogsphere.  Someone who had already set up shop at the intersection of technology, networking, and real estate.  I'm not that guy either- I get it, but I haven't innovated, I don't blog regularly enough, haven't learned all the cutting edge tools in webcasting (like RealEstateZebra Daniel Rothamel), developed a kick ass resource/online shrine to my community (like Ines Hegedus-Garcia did with Miamism) or mastered the direct transcranial uplink (like Real Estate Shows Pres Jeff Turner.)

Well the cat's out of the bag, and NAR did it right.  They hired a Ninja, to use Todd Carpenter's own term.

Now I've never met Todd.  I've been following him on Twitter for quite a while, and feel like I know him a little, which is to say I know his reputation amongst people I respect, I know he doesn't take himself too seriously, he works out regularly (sadist) and has great taste in music (thanks blip.fm)

This hire and my reaction to it illustrates the importance and value of Social Media/Social Networking for businesspeople.  I don't know Todd in real life, but I still feel like I know him.  I feel confident he can do the job, and do it very well.  I think the people who hired him are smart, and I look forward to meeting him in person and doing "business" with him.

Isn't that what any of business person would want their future customers to feel about them?