I came across a survey of homeowners that I think is very enlightening for many reasons. This Zillow real estate survey (a real estate aggregator and internet portal) asks homeowners what they think of their home value and what its value will be in the future. They also ask what the homeowner thinks about their home in relation to others in the market.

Perhaps the greatest thing about the Zillow real estate survey is that we can look at past and current surveys to see the trend of homeowner “consumer confidence” as it is measured using the home as the standard. Not surprisingly, homeowners are much more aware of the depreciation that has occurred in the past two years than they were just last year. But what do they think of their home value versus that of their neighbors?

But My Home Has New Carpet

The following real estate graphic is from the Zillow real estate survey and it shows the difference between homeowner perception and reality of the value of their homes.  According to Zillow, 74% of the homes in the South decreased in value, yet only 49% of the homeowners thought their home lost value. While this might seem like a large void, last August Zillow measured 69% of the homes losing value and yet only 28% of the homeowners thought their home lost value. This means that more homeowners must be understanding the current market conditions.

But We Put A New Roof On The Home Three Years Ago

This next graphic from the Zillow Homeowner Confidence Survey shows something that we see all the time. Generally speaking, most homeowners think their home is “special enough” that it will do better than the market. When asked about the outlook for their own home over the next 6 months (versus the outlook for the local housing market), homeowners expected their own home to do better.

But Our Landscaping Is Mature

This final graphic shows that in the South, many people who live in areas where home values have dropped (like Tallahassee) still believe that their home will out perform the market.

We Love Our Homes In America

One thing that the Zillow real estate survey has reminded me is that we do love our homes in America. Pride of home ownership is evident when  we continually hear that “my home hasn’t lost value like everybody else’s!” This is one of the great things about being a Tallahassee REALTOR® is that even during hard times, we are selling a product that most people love to own.

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Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

Have you ever seen something that is so extreme that you think to yourself that you are truly witnessing something remarkable? No, I don’t mean have you seen UFOs flying over the back of your home or Big Foot running through the neighborhood, rather I’m talking about certain market conditions that defy all historic norms and trends.

Below is a real estate graph depicting the 365 day trend of daily home sales in Tallahassee going back to 1991. What this means is that each point on the graph represents one full year of sales (divided by 365 days) to generate a non-seasonal daily average.

Daily Home Sales In Tallahassee Continue To Decline

What this graph shows is that just since December, our daily sales rate has dropped 25%! Ouch. But what if we look at a longer-term view of this same information. What if we graph daily sales all the way back to 1991?

Daily Home Sales In Tallahassee At 20 Year Low

This long-term view shows that we appear to be just making up for the boom period, and fortunately it also looks like we’ve taken a pretty big bite out of the over-sold market. Time will tell, but the end of the year is looking better and better.

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Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

If you read the most recent Tallahassee Real Estate Newsletter, then you will know a little about the supply of homes that we know exists that are not currently on the market. This “shadow inventory” is the growing number of homes that were once on the market and failed to sell, or are the homes that we know are currently distressed properties but are yet to hit the market as short sales or foreclosures.

One way that we can monitor the shadow inventory is to track home mortgage loan defaults and delinquencies, and thanks to Tallahassee Real Estate Blog Reader “Doug,” we have a site that will give us some of this surprising information.

Doug writes:

Great Charts, appreciate the effort you put into them.   I think the market is a little more dire myself. I found an interesting web site (Federal Reserve Bank of New York, dynamic map) Its mainly a state by state comparison , but it really is disturbing when you compare Alt A and Sub Prime loans in Florida to other states. With  Alt-A loans in Florida the number of loans late in the past 12 months were 49.5% (worst in the nation) the share of foreclosures is 22.7% (worst in the nation).  With sub-prime the number of Florida loans late in the past 12 months is 72.2% (worst in the nation) and the share of foreclosure  is 27.6% (worst in the nation).  These are very disturbing figures. I know it is more indicative of central and south Florida, but there is reason to believe that this caries over statewide. These figures are as of April this year. They can be viewed at  the New York Fed Web Site. I think there are a lot of people out there barely hanging on and with resets coming, it could get worse.  Price your houses to sell……..!

I want to thank Doug for the great link, as it appears to be a great source of information that can help us better understand the shadow inventory and its expected growth.

Shadow Inventory Grows With Distressed Properties

The information about nonprime mortgage conditions in Leon County is very interesting to me. The following table is a summary that I created from the information on loan performance data:

If these numbers are correct, the we can conclude the following about distressed homes in Tallahassee:

• There are 5,000 homes in Tallahassee that have nonprime mortgages
• There are 1,250 nonprime mortgage foreclosures in Tallahassee
• Banks hold (REO) 210 Tallahassee homes in inventory from nonprime mortgages
• Nonprime mortgaged properties will add 2,000 – 3,000 homes to the shadow inventory
  

Shadow Inventory Also Includes Homes That Failed To Sell

The problem with getting too focused on the data from above is that it only represents the Tallahassee distressed properties that have Subprime and Alt-A loans. There are plenty of other homes in a similar situation that have conventional loans and homes that did not sell during a recent marketing period but are not yet back on the market. These homesellers are just waiting for the market to improve.

Tallahassee Shadow Inventory Of Homes Is Substantial

If we look at home sales trends in Tallahassee over the past 20 years, we would expect Tallahassee to have about 5,000 home sales this year were it not for market cycles. The information provided about nonprime mortgage loans, plus our knowledge of the homes that have recently failed to sell in the Tallahassee real estate market leads me to believe our shadow inventory of homes exceeds 1 normal year of supply. At today’s current rate of sales, that is over 2 years supply of homes!

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

The year is half-way over and we’ve been tracking the market activity on a near-daily basis over at The Market Bulletin. With the summer buying season well on the way, the market is starting to see activity from buyers who are taking advantage of the First Time Homebuyer Tax Credit. We know this because are seeing sales increase in the price ranges most often purchased by First Time Homebuyers.

Unfortunately, the rest of the market is not seeing a whole lot of vitality. Homes that are aggressively positioned in the market are doing quite well (we have one home that had 6 offers on it last week and we negotiated a contract at a price higher than what the seller was asking), but for the most part, the rest are stagnant.

Today is real estate graph day … with 7 updated graphs of the Tallahassee real estate market.

81% Of Homes On The Market Fail To Sell

When we measure the number of homes that failed to sell over the past year and divide that into the number of new home listings, we get a ratio of 81%. That is the highest that we have ever measured the “failure rate” for home sales in Tallahassee. This number does not specifically measure the failure rate, but it is a relative measurement that shows it is getting tougher, not easier, to sell a home in Tallahassee.

Home Buyer Activity Still Cooling

Perhaps the most important factor in rejuvenating this tired real estate market is daily buyer activity. We are anxiously looking forward to the day when this trend turns upward.

Long Term Home Sales Success Trend Sliding

The success rate for home sales in Tallahassee is measured as the number of homes that sold in a period of time, versus the number of homes listed during that same time period. The real estate graph below measures the success rate of home sales in Tallahassee over several time periods. We can see the effect of seasonality on the shorter terms, but the long term trend still is holding at about 35%. One could argue that roughly 1 in 3 homes put on the market over the past year actually sold.

Are you wondering why the success rate and the failure rate, when added together, are greater than 100%? This is simply because fewer homes are coming on the market than are going off the market, thus the total departures are greater than the total of the new listings.

Short Term Home Inventory Trend Still Good

Home inventory levels continue to fall. This is a good thing. The Tallahassee housing market still has over 14 months of supply, so reducing the number of homes on the market will help hold values. This graph shows that the 30 day trend (short term) is still showing fewer and fewer homes on the market in Tallahassee.

Home Inventory Levels Continue To Fall

All of the home inventory change trends in Tallahassee are good. We are seeing everything from short-term trends all the way up to the 1 year trend showing reduced inventory. Currently, the one year trend for home inventories is at a drop of 3 homes per day!

1,096 Fewer Homes On The Market Than Last Year

This is the best news coming out of the Tallahassee real estate market. There are 1,096 fewer homes on the market today versus this day last year! We need to continue to see this number drop until we are able to achieve six months of inventory of homes for sale in Tallahassee.

One Year Trend In Tallahassee Housing Shows Lower Activity Levels

The following graph is perhaps the best singular view of the Tallahassee housing market that we provide. It shows daily new listings are still dropping, daily new failures are still flat, daily new sales and daily new pendings (new contracts) continue to decline.

You can check the status of these great Tallahassee real estate barometers any time at The Market Bulletin. We update our charts and graphs there several times per week. Additionally, you can subscribe to the Tallahassee Real Estate Newsletter (click graphic below) to receive updates emailed to your inbox on a monthly basis.

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

I recently came across a question by a reader who was wondering “who pays the closing costs in a real estate transaction.” This question, or a form of it, is answered by real estate professionals on each and every transaction that occurs.

First of all, closing costs are the fees, costs, and taxes (over and above the price of the property) that occur when real estate is transferred from one party to another. The conveyance of real estate is initiated and directly by a contract for sale and purchase, and closing costs should be specifically identified in this document. So how do you know who pays what?

Real Estate Closing Costs Are Identified In The Sales Contract

The short answer to the question of who pays for closing costs is really quite simple. Whomever the contract identifies as the party who must pay the fee is the party who must pay the fee! The contract between the buyer and the seller in real estate is purely negotiable on each and every point, therefore there exists no reason why a seller cannot pay discount points on the buyer’s loan nor a reason why a buyer cannot pay the taxes on the transfer of the deed.

Local Custom Typically Rules The Allocation of Closing Costs In Home Sales

In the State of Florida, we have an interesting phenomenon among REALTORS® that seems to be North / South separator. In North Florida, it is typical and customary that the Buyer pay for title insurance in the real estate transaction. The opposite is true in Central and South Florida, where I have heard many a REALTOR® say that “the law requires the Seller to pay for title insurance!!!”

You can imagine then, when a South Floridian decides to sell their home in South Florida (paying for title insurance in the transaction) in order to move to North Florida (and then pay title insurance again on the new home). This has angered more than just one transferee. But the fact is, this is a negotiable point, both in South Florida as well as in North Florida.

Just because something is customary in an area does not mean that a creative solution cannot be implemented. In the example of title insurance, this is something that the lender requires (and every buyer should obtain title insurance) in order to safeguard its investment in the property. There is no law that requires home sellers to pay for an insurance policy for a buyer.

Contract Experts Can Save You Money In A Real Estate Transaction

The moral of this who story is that you should work with a real estate professional who is an expert in understanding people and understanding the use of the contract as a piece of the negotiation strategy. Anybody that tells you Party A has to pay for Closing Cost “X” is not an expert in using the contract to save you money. Remember, ‘typical and customary” ways to handle things are fine for many occasions, but sometimes shaking it up and being creative are the way to go.

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.