Pearce Real Estate

More Good News

noreply@blogger.com (Barbara L. Pearce) — Mon, 23 Jan 2012 23:03:00 +0000

Paul Krugman just wrote in the New York Times that we may be in a "virtuous cycle" instead of a vicious cycle. That is, he sees the economy improving, leading housing statistics to improve, leading to a further improvement in the economy. It's about time, but it's very welcome.

We've always know that FDR was right: The biggest thing we have to fear is fear itself. Once people are afraid that they may lose their jobs, their benefits, or their overtime, they cut back on their expenditures, giving their employers less income and leading to cutbacks. That's where we've been for a few years now.

Krugman makes the point that the Europeans have neglected to deal with the basic problems in their economies, whereas here we did let interest rates go down and we did let our housing bubble deflate. That leaves the US in a position to improve now, and all the signs are there. So that's something to cheer about, and hope that the virtuous cycle continues.

The Tide is Turning

noreply@blogger.com (Barbara L. Pearce) — Tue, 17 Jan 2012 13:48:00 +0000

Probably most of you think that prices in real estate are dropping, with no end in sight. I would certainly think so as well, if I went by what I read in the national press. That's why I found it so interesting to look at our numbers for the region for the last quarter of 2011.

Prices in the New Haven area went up 0.7% for the last quarter of 2011 versus the last quarter of 2010, and the number of sales went up 2.8% for the same period. While that might not seem like much of a jump, it must be compared to the impression people have that prices are falling. It's not apples to apples--it measures the total sales against the total sales, not the same houses being transferred each year--but it's a good indicator that the bottom of the market may well have come and gone. When both prices and units rise, it's not too likely that one of the trends is an aberration. Prices may not jump, and there may be a few hiccups involving taxes and financing, but the fundamentals are there, and we should see some of the rewards this year.

If you are interested in seeing all the statistics yourself, please check our website at http://www.hpearce.com/.

It's Time for a New Year and a New Attitude

noreply@blogger.com (Barbara L. Pearce) — Mon, 09 Jan 2012 21:37:00 +0000

Much of what's been published about recent consumer trends and confidence is very encouraging. Even the real estate news is improving. Car sales went up at the end of 2011, and both online and retail holiday sales were very strong, compared to projections. Can there be any doubt that, in 2012, real estate sales will follow?

So now the question for prospective buyers is: Do you want to be ahead of or behind the curve? Once all the signs for improvement are in place, you know that it's only a matter of time before prices start to rise. You also know that, due to tightening mortgage requirements everywhere, and the hurricane and freak snowstorm locally, there is a lot of pent-up demand waiting to be satisfied. There are also a lot of folks on the sidelines, just holding off until they know that the economy is on the mend.

Given those variables, you can put your oar into the water first, and get the best price, or you can stand still until you see other people starting to move, and then try to beat them. It's your choice, but I think the correct answer is clear!

Happy Holidays from All of Us at Pearce

noreply@blogger.com (Barbara L. Pearce) — Tue, 20 Dec 2011 15:57:00 +0000

It seems fitting to end this year, which has been so difficult for many in the real estate market, whether as client, agent, or vendor, by wishing everyone a happy and healthy 2012, with increased business for all!

Where Retail Goes, Will Real Estate Follow?

noreply@blogger.com (Barbara L. Pearce) — Tue, 13 Dec 2011 16:47:00 +0000

Retailers seem very happy with sales so far this holiday season. Even booksellers, according to today's New York Times, have been seeing big increases. Given the lackluster sales in the past few seasons, this seems to indicate that consumers have loosened their purse strings.

What does that mean for real estate? While the fact that someone will buy a book doesn't necessarily mean that they will buy a house, the fact that someone won't buy a book almost certainly means that they will not make a large purchase like a house. So it's a prerequisite that consumers have to feel more confidence before the real estate market will improve. Hopefully, we're almost there. Given the historic low interest rates, it's hard to believe that we haven't gotten there already. Perhaps the start of a new year will push us over into a seller's market, or at least into a balanced one.

Assessment Woes

noreply@blogger.com (Barbara L. Pearce) — Tue, 06 Dec 2011 15:08:00 +0000

The City of New Haven has just released its new assessment figures, and there is a lot of talk in the media (see particularly the last couple of articles in the New Haven Independent) about tax increases by neighborhood. As I've blogged about before, East Rock is the neighborhood in New Haven that stands out as having held its value over the past years of decline (Spring Glen in Hamden is the other one that really distinguishes itself). Because so many areas in our region, let alone the core city, have gone down in value since the peak of the market, East Rock stands to have higher tax increases in the upcoming revaluation.

While one could look at that from a negative point of view, the real key here is that values have held up in that neighborhood, despite plenty of bad economic news and job loss around the region and the country. Although that may cause taxes for people there to rise, they are not going to be underwater in value, as so many others are. And that's certainly good news.

Seller Concessions

noreply@blogger.com (Barbara L. Pearce) — Tue, 29 Nov 2011 15:12:00 +0000

One of the new realities of the current real estate market is that buyers often ask for concessions, monetary and otherwise, from sellers. It used to be that they asked for things to be included or fixed, based on the inspection. Now, they also may ask for the seller to pay some or all of the closing costs. This is often so that the purchase price is higher, and allows them to qualify for a higher mortgage amount.

We have seen some issues at the closing with these requests. The sellers don't always seem to realize that the purchase price will be the basis for the conveyance tax, the land records, and the commission. It's the amount at the top of the sales contract that governs all those amounts. We, for instance, have other brokers to pay in almost all cases. Sometimes it's a referral, sometimes a co-broke, either inside or outside the company. The commission offered is on the full amount, and we are responsible for it, whether or not the seller made concessions. While I understand why sellers wouldn't always like that, I don't see the difference between a concession made in cash or at closing from a concession made during inspections or even during negotiations. It happens, and it isn't our fault. And we shouldn't have to take the co-broke commission difference out of our pocket.

There are a lot of ways to get upset during the length of a sales transaction. But, please, don't shoot the messenger. We're trying to help.

Thanksgiving

noreply@blogger.com (Barbara L. Pearce) — Wed, 23 Nov 2011 14:07:00 +0000

Despite the woes of the real estate market, there are many things to be grateful for this season, as always. For those of us who are healthy, most people would rate that as enough to be happy, all by itself. For those who have family with them, especially at the holidays, ditto. For those who have enough to eat, a place to live, a job, and friends, that's enough for most of the world.

Could the real estate market be better? Of course. Could transactions be easier? Of course. Would it be nice for us to be a little higher up on the food chain? Undoubtedly. But, every once in a while, and more often for some, we get to feel good, when we help a family, a business, or an individual find the perfect space, especially when they take the time to tell us. And we get calls from loyal clients and friends who think of us for their real estate needs and those of their colleagues and relatives, and that's nice as well. Bottom line: we're in a helping profession, and we're glad to be of assistance.

So Happy Holidays to all of our clients and friends, and may the coming season be full of joy, good cheer, and closings!

Help from the Government?

noreply@blogger.com (Barbara L. Pearce) — Tue, 15 Nov 2011 14:42:00 +0000

President Obama has proposed some new rules that would allow homeowners to refinance in many cases where that has not been possible up until now. The main hurdle has been the appraisal--often, homeowners who have the ability to pay have not been able to take advantage of lower rates, because their homes are "underwater" (worth less than the mortgage, or worth less than the amount that they could refinance for). His proposal would allow homeowners who are current on their mortgages, and have been for the last six months, to refinance without an appraisal (it does say "in most cases", and I'm not sure what that means). His stated goal is to lower people's monthly payments and free up the extra cash to circulate into the economy and improve sales of other goods and services.

I see two problems with this. One is that such homeowners would be allowed to convert their loans, at their option, into 15-year mortgages. Since such a move would raise, rather than lower, their payments, I fail to see where the extra cash goes into anything except a different loan. Secondly, the idea that banks are being told to refinance without qualifying appraisals seems ironic. Isn't that supposedly how we got into this recession in the first place? So, we tell them to make loans that don't meet the criteria that we just tightened? And, if those loans go bad, and we can't blame the banks and their greed, whom do we blame?

It's clearly frustrating for good credit risks to lose out on lower rates because they are paying their mortgages regularly, and I understand that. Somehow, though, the whole program has the ring of having started with some White House staffer complaining about not being able to refi his/her house, and then letting policy people hash out a compromise so that the banks would be happy with the result. It seems to me that we have done that too often already.

It's That Time of Year Again

noreply@blogger.com (Barbara L. Pearce) — Tue, 08 Nov 2011 18:31:00 +0000

Every year at this time, I remind people of my strongly-held belief that the period between Halloween and Thanksgiving is the best time to buy a property. Heating bills have begun. This year, even plowing bills have begun. The holiday season is not quite upon us, but the end of the year is beginning to loom. Anything that is going to get done by December 31st has to be in the works very soon.

Add all of those factors up, and you come to one conclusion: If you want to buy a property this year, act quickly. Make your offer right now, and hurry to close by the end of the year. You are likely to get the lowest price if you buy now, and take winter worries off the hands of the current owners. Owners will be worrying that they might not sell until spring, and they will be at their most receptive.

What are you waiting for? Stop reading, and call your real estate agent immediately!

Why the Rental Market Matters

noreply@blogger.com (Barbara L. Pearce) — Tue, 01 Nov 2011 14:14:00 +0000

We have been reading lately about New Haven's stellar rental market--either the lowest or the second-lowest vacancy rate in the country, depending upon your source. Why is this? And how does it relate to other real estate data?

New Haven's extraordinary occupancy rate for apartments has several causes, some of which are unique to New Haven, and some of which apply across markets nationally. New Haven's own reasons have to do, first of all, with the large number of students residing in the region. Students are almost always renters, and graduate students rarely live in university housing. The second driver in New Haven is the nightlife and culture prevalent here, so that young people (and empty nesters) who work in other places in Connecticut will disproportionately choose to rent in New Haven and commute to their jobs.

Around the country, there are certain trends that are helping rental markets to stay strong. Of course, high foreclosure rates will result in more renters, as the people displaced from their houses won't be able to buy right away. Also, the uncertainty of all job security means that many more workers, executives included, leave their families behind and rent in the new city until they are confident that they will stay at the job. That trend is exacerbated by the difficulty transferees are having in selling their homes in the locations they are leaving; until they do, many must rent. Even those who sell are renting in many instances, since they worry that housing prices have not bottomed out, and that this may not be the best time to buy a new home.

All of these factors have combined in Greater New Haven to make rentals scarce and expensive. It also offers an opportunity for investors to buy property and rent it out, and not just the typical apartment building or multi-family house. Single family homes make good rentals also, particularly when you can buy one for a price that allows you to cover costs with rental income. It can even be a good alternative for those who have houses on the market that are not selling. Many people are looking for homes to lease, not just in the center city, and it's a good time to find tenants. This is especially true if you allow pets! As with all types of real estate markets, there are ways to make money in this one.

On the Campaign Trail

noreply@blogger.com (Barbara L. Pearce) — Mon, 24 Oct 2011 21:07:00 +0000

I was invited this noontime to a lunch for women business owners with Linda McMahon, the U.S. Senate candidate. We had a very nice meal at Cave a Vin, a new wine bar on State Street in New Haven. Ms. McMahon is doing a listening tour of the state to hear what problems women businesses are having in the current economic climate. Several things emerged as themes: the cost of governmental regulation compliance; taxes; health care costs; and, most of all, the sad state of the economy. The last item comes down to jobs, of course, and is most evident in what sector? You guessed it--real estate. It was surprising how much effect real estate has on the business fortunes of firms in other lines of work. Real estate matters to everyone.

It was also clear that many of the businesses represented were not making money at the present time. Some owners were not paying themselves (this was more common than I would ever have guessed). Others were retooling their firms, and their skills, to find new and different ways to attract revenues. Those in retail spoke often about the lack of disposable income among their patrons.

We didn't expect any immediate or easy answers, and we didn't get them. To her credit, Ms. McMahon made no campaign promises, took no pot shots at incumbents, and seemed really to be there to listen and learn. We all learned, and the enduring message we took away was that women needed to be cooperative and help each other succeed. That is something that men should be able to buy into as well!

News from Tulsa

noreply@blogger.com (Barbara L. Pearce) — Wed, 19 Oct 2011 15:38:00 +0000

I just got back yesterday from meeting with The Leadership Council, a group of large independent brokers from around the country. This time we met at Chenowth & Cohen in Tulsa, where growth is high and unemployment is low. Tulsa turns out to be almost in the exact center of the country geographically, both north to south and east to west, so it is home to a lot of company distribution and service centers, as well as energy companies and others. It is just approaching the million mark in population. People are moving from all different parts of the US, and many that I met had come from Texas. Boy, does it seem different from New Haven in those regards!

Tulsa has about two and a half months of housing inventory. Prices are rising, and units are growing. Like us, they have problems with mortgages and closing times, and sales are not easy. However, it's really about jobs. If people have jobs, and employees are moving into the region to work, then it's obviously easier to sell your home and buy another one, because there is a steady supply of buyers being created. In addtion, the West has ranches and open land all around, making it much simpler and cheaper for builders to add new product.

The real estate business has some characteristics in common all over, but there are some differences. They have centralized showing, so agents make one call to arrange all the properties for a buyer to see. They also have lots of listings where contact is through the owner, which seems odd to us. States with title companies owned by real estate companies are more real estate agent driven than lawyer driven. Towns and cities are farther apart, and many agents I met worked an hour or more from home. There seemed to be more concentration--one agent I met with had 159 listings! Advertising has left newspapers in many places, and you don't see the big Sunday ad sections. Everything is done on line, or directly by real estate companies.

Other practices were similar to ours, including the work ethic of agents, the changes brought by technology, and the complications of lending and governmental regulations. It's always refreshing to see both the old and the new, and to step out of the regular daily grind and view it from a distance.

Mortgage Woes

noreply@blogger.com (Barbara L. Pearce) — Mon, 10 Oct 2011 14:59:00 +0000

There has been a lot of talk about how low mortgage rates are today--the lowest in memory--but much less talk about how hard they are to get approved. We have found that buyers may wait for weeks with promises of commitment, only to be told after a long period of time that they are being denied. The annoying part--actually, make that one annoying part--is that the denial is frequently for something that you would have thought that the bank had known all along. This is true of delays as well. We have had closings delayed multiple times, with some delays being for things that should have been settled well in advance.

I suspect that some of the problem lies in confusion at the banks, and probably understaffing. The bigger issue may be that no one has the authority to pull the trigger on anything, so things have to wend their way up a ladder of approvals. Just to be clear, all of the blame does not belong with the banks. Governmental changes in policy have caused all kinds of changes, and sometimes at the last minute. The feds are always trying to protect us against the last problem, so many of the rules seem largely unnecessary. This is one of the situations where we can groan when we hear that "we're from the government, and we're here to help you."

Buyers can contribute to the delays also. Anyone who has gotten a loan in prior years may be amazed at how much information is demanded on today's applications. Some people waste time trying to argue their way out of requirements. Since most are imposed on the banks, as opposed to by the banks, this is a delay not worth taking. The one I hear frequently is this: "I don't need to get a loan. I could pay cash. If they just look at my bank balance, they won't ask for all this paperwork." Not true. Get over it, or go ahead and pay cash.

The statistics from the CT Multiple Listing Service show closing times of around 60 days. That's not so far from the 30 to 45 days of the past, but should be noted, especially as almost 40% of sales are for cash these days, and therefore have no delays. The time frames may get worse as we near the holiday season, so plan ahead to avoid disappointment.

Playing the Odds

noreply@blogger.com (Barbara L. Pearce) — Tue, 04 Oct 2011 15:53:00 +0000

We were doing some research this week, and were startled to discover that, from January 2010 through the present date, only one-third of all listings taken have sold. That means that, for every seller who put his or her home on the market and sold it, two sellers put their homes on and nothing happened. If you add those people who haven't bothered to list their properties due to the poor selling climate, there is a big supply out there.

Since real estate agents work solely on commission, this is obviously a troubling state of affairs. We only get paid one out of every three times we list a home, and listing always used to be the guaranteed way to make money, since the percentage of buyers who look and don't buy is higher than that of sellers who don't sell. The combination is deadly.

It does prove, however, that sellers should be listening to their agents about the price and improvements necessary to attract an offer in today's market. What's the point of cleaning everything up and making plans to move, only to sit there for two years without a sale? If you do want to sell, you need to do more than just sign a listing--you actually need to have a property in the top third of all properties, in order to sell it. That's food for thought.

Day of Caring

noreply@blogger.com (Barbara L. Pearce) — Mon, 26 Sep 2011 15:56:00 +0000

Every year, we close all of our offices for a day and work at non-profits in one or more of the communities we serve. This year, we chose to work at Connecticut Hospice in Branford, which had been battered by winds and tide during Hurricane Irene. Over 50 of us went with rakes, paintbrushes, chain saws, and leaf blowers to clean up debris, repaint furniture, wash windows, and remove wet leaves from the bottom of the swimming pool, as well as to work indoors on materials for Hospice's big annual service for families in late September. We estimate that we worked about 250 man (person) hours, and did the work that contractors had bid large amounts to complete. We astounded the maintenance staff at Hospice, who were skeptical about the work ethic and expertise of a group of volunteers, and we once again proved that we put our muscle where our mouth is.

By the end of the day, eating pizza on the patio and looking out over what we had accomplished, there was a wonderful feeling that comes from honest work and tired bodies, combined with the knowledge that we had made other peoples' lives a little bit better. Thanks to all who participated, most of whom don't get paid and do it out completely out of the kindness of their hearts, and thanks to Hospice, which welcomed us and worked alongside us to meet our goals. It's one of our favorite days of the Pearce year, and one that we will look forward to again next September.

When the Heat Goes On, the Price Comes Down

noreply@blogger.com (Barbara L. Pearce) — Mon, 19 Sep 2011 14:25:00 +0000

As I put on my first long-sleeve shirt of the season to go running this morning, I reflected on what the changing weather means for real estate. Although spring is the traditional listing and buying season, based on the school year schedule, Labor Day brings a bump that lasts until about Thanksgiving. For sellers, the first time that they think about heating a home that's empty, or one that's too big, they also begin to worry about freezing pipes, snowplowing, and all the downsides of winter. We are not unaccustomed to getting calls from sellers, who previously had been saying that they were not in a hurry and didn't have to sell, asking why there have been no offers. At that point, they are often willing to get serious about pricing their property to move quickly. Of course, we remind them that they have a window before winter, which is quickly disappearing.

If you are a buyer, this is when you should be serious also. It can take longer to close during holiday season, so don't take too long to make your offers and sign your contracts. The end of the year is rapidly approaching. Take advantage of this time to buy a great home at a good price with a low mortgage rate!

Lowest Rates in 60 Years!

noreply@blogger.com (Barbara L. Pearce) — Mon, 12 Sep 2011 14:12:00 +0000

Remember this time, folks, because you won't see it again in your lifetime. CHFA rates are at 3.625% for a 30-year fixed rate mortgage. Compare that to when I bought my first home--my state-subsidized first-time homebuyers rate in 1982 was 17.75%! Mortgage rates are the lowest they have been in 60 years.

If you add that to the fact that homes are down 5% in price, with vacation homes down 11% in price, this is a great time to buy. Counterintuitively for many people, the period after a hurricane is an excellent time to buy property on the shoreline. Just as with the spring after a bad winter, people often get spooked and decide that it's time to decamp for a condo or assisted living, and they are willing to be reasonable about their price. If you add that to the discount that waterfront property often goes for in the fall, as well as the general rule that the best time to make an offer is between Halloween and Thanksgiving, everyone should be out scouting right now!

Do you really trust the stock market more than the real estate market?

The calm after the storm

noreply@blogger.com (Barbara L. Pearce) — Tue, 06 Sep 2011 19:05:00 +0000

Well, I'm writing this on the first full day that I've had both power and Internet. It's been a long ten days! We were very lucky, considering that our house was right on the water, to have had no damage, and I would take a little power interruption over damage anytime. However, when the cell towers started fading and my Blackberry stopped working, and I had to think about whether I wanted to do a training run if I couldn't take a shower, and we had our third meal of packaged Indian eggplant curry in a row, we did start dreaming about electricity! There was a lot of damage in our neighborhood, but fortunately no one got hurt. Because the weather was exceptionally beautiful last week, an amazing amount of cleanup got done in a short time. The crew that turned on our power came from Ohio, and others I know welcomed crews from Canada, Kansas, and other far-flung places.

The whole experience reminds us how powerful weather can be. We saw buckled parking lots and patios, smashed garage doors and broken seawalls, all from water at high tide. The wind did far less damage around us than the tide did. Roads washed out and kept us home, reading by flashlight.

The calm after the storm includes closings. Some of the banks are requiring that things set to close get reappraised. I cannot imagine why, as any buyer would check before he/she plunked down money; that would seem to be protection enough. Regulation comes to everything, and, where it doesn't, the opposite of common sense seems to prevail. In the end, we had no closings cancelled after Hurricane Gloria, so let's hope that Tropical Storm Irene proves to be the same.

And let's give a cheer for power!

Some New Statistics

noreply@blogger.com (Barbara L. Pearce) — Fri, 26 Aug 2011 16:47:00 +0000

Just before the beginning of the fall selling season, it's a good idea to review some of the facts we know about the current state of real estate. We know that Guilford, for example, has twice as many homes on the market now as have been sold since the beginning of the year. By definition, that constitutes a buyer's market. We know that pricing high is almost never the way to go, because one of our agents did an analysis of a shoreline agent at another company. This second agent was known for taking listings at high prices, so we looked at what the sales results were, and the answer was striking, but not surprising. The agent who lists high sold properties at an average of 59% of the listing price, while most other agents in the same area sold their listings at over 90% of the listing price.

The final statistic comes from my smart friend in Madison, Wisconsin, whom I've mentioned before, because his market seems to be so much like ours. He studied the phenomenon of "chasing the market down", which I've blogged about previously. He looked at the selling experience of sellers who priced correctly from the start, and compared their results to those of sellers who just wanted to "test the market" or who priced their properties above what agents thought they should be for other reasons. The sellers who priced correctly from the start got 12% more for their properties in half the time.

What else do I need to say?

An Idea to Move the Market

noreply@blogger.com (Barbara L. Pearce) — Mon, 25 Jul 2011 14:44:00 +0000

Much thought and discussion went into the enactment and extension of the first-time homebuyer tax credit, and it clearly impacted the market, both while it was in effect, and after it expired. It moved sales for last year into the first half, and the immediate drop in activity and sales beginning last July proved that it motivated people to buy before it ran out.

Although I have my issues with that credit, both in terms of policy and in practice, there is no question that it made a difference while it was in effect, and that the market responded. It is also clear that the jump start that the government must have hoped that it would give to real estate did not occur, as sales fell off as soon as it was over. In retrospect, I think that the government was right in thinking that we needed that kind of stimulus, and I think we need to try again. After all, cash for clunkers helped the auto industry, the TARP money helped the financial industry, and real estate is still lagging. It is hard to imagine any real recovery taking place without our industry improving.

My problem with the first-time homebuyer credit was that it aimed at exactly the people who would buy in any type of market: those forming households; and renters with no homes to sell. One of the main problems with the current market is that it is stopped up, because sellers who can sell refuse to do so, because they feel that they are losing equity, even though that perceived equity may have been phantom gains.

In order to give an incentive for those who can to sell now, and to buy something else, I propose that the government offer a one-time tax credit for sellers who will lose equity when they sell, on the same terms and up to the same amount as the first-time credit. So, for example, someone who paid $200,000 for her house and now is selling for $180,000 could deduct up to $8000 on her tax bill this year. I believe that the market may now be ready for the jump start that such a program could provide, and that it would help even more than the last incentive, since it would both produce a supply of homes for others to buy, and sales for developers and other sellers when those people buy a new place to live. It's time for bold action, and helping the housing industry would be good for everyone.

What's a Compelling Price?

noreply@blogger.com (Barbara L. Pearce) — Mon, 18 Jul 2011 19:17:00 +0000

I have often been asked lately about pricing properties to sell quickly. Since things aren't selling quickly, and not much is selling at all, it's hard to know whether price is really the issue, and whether lowering it will change the outcome. We worry sometimes that, in advising people to lower their prices and get out and move on, we are helping to reduce prices across the whole market.

That's a hard question to answer. While we clearly have an influence on prices, ultimately we don't make sellers sell or, more importantly, buyers buy. So what we've come up with to explain the phenomenon is the "compelling" price. That may not be the highest price (most likely not), and isn't arrived at by figuring out what the property is worth. It's determined by figuring out the number needed to get other people to move, and move urgently.

Think about that in your own life. If you see a sale notice, you may glance at the prices in a flyer. Sometimes you look at one and decide to wait until the price goes lower, or the season ends, or something along those lines. Every once in a while, however, you look at an offer and just know that, if you don't act soon, you won't get whatever it is. That company has discovered the compelling price. Not necessarily the lowest price--that might raise doubts about quality or value--but a great incentive to buy.

So think about the real estate you know. Is it priced compellingly?

Not the Typical July

noreply@blogger.com (Barbara L. Pearce) — Tue, 12 Jul 2011 15:31:00 +0000

The weather surely signals that it's midsummer, but the slow start to the real estate year means that the dog days of summer have a little more life to them. We are still seeing new listings, new offers, and new sales. Our web hits doubled from May to June. There was a downward blip for the Fourth of July, and then they went up again. People are clearly thinking about buying and selling, even if every contract seems a long and tortuous process.

On that note, I was spending the weekend in Vermont last weekend with a friend from North Carolina. She was trying to close the sale of a commercial building, which she had sold already once and it had fallen through. She was in negotiations with the new buyer on the day before what was supposed to be the closing. Her husband was bemoaning her travails. I told him that MOST commercial contracts seem to fall apart at least once, and that it is, unfortunately, very common for the buyer to come back at the last minute and ask for concessions, often due to financing conditions. Even in residential, we have a number of contracts now that seem to have taken on a life of their own. They go on and on, with delays, threats, changes, grandstanding, and probably tears. I'm telling you this so you won't take it personally if it happens to you! Forewarned is forearmed.

Be Patriotic--Buy Some Real Estate

noreply@blogger.com (Barbara L. Pearce) — Mon, 04 Jul 2011 19:21:00 +0000

Happy Fourth of July! The front page of last Thursday's New York Times showed the results of a poll of Americans regarding their feelings about real estate. Not surprisingly, it indicated that a big majority of those polled believe that owning real estate is still the American dream, and that it would be their choice, even though those same people were more divided as to the safety of such an investment.

It used to be that almost everyone believed that buying a house was the best and safest thing to do with their money. Their faith in the second half of that statement has been shaken by the recent financial crisis, but the first half is undeniably still true. Even those who do not own homes believe in the mortgage deduction's importance, and hope that the primacy of real estate will remain steady.

That's good news for the future of the economy. While we realize that there is still work to be done in convincing people to put down their deposits and buy, it's clear that they wish to be convinced to act. It also seems true that they would be happy to find reasons to do so. When that's the case, it's important to find ways to get people off the fence. Once those who are not absolutely required to sell begin to do so, others will follow. The consumer confidence necessary for that isn't there right now. It's up to government, unfortunately, to find a way to make that so. Jobs have to be created, and the future needs to look a little brighter. But the underpinnings are there. The beliefs remain.

So this Fourth of July, while you are watching the fireworks and soaking up the sun, make plans to get out there soon and buy some real estate. It's the patriotic thing to do!

Still a Divided Market

noreply@blogger.com (Barbara L. Pearce) — Mon, 27 Jun 2011 13:30:00 +0000

The real estate market is more complicated than it would appear from reading the papers. There are things that are selling, and selling quickly. There are other properties that are hanging around, some without even being shown. This has been true for a while now, but it's not what people expect in a so-called "buyer's market" (read "bad real estate market").

In more traditional renditions of a buyer's market, there are not enough buyers, and so they can bid low on properties, and sellers will have to take low offers if they want to sell. It tends to be true across all segments of the market, from starter homes to mansions. In a seller's market, the opposite occurs: People who want to get a property need to move quickly and bid high, or they will lose to other, more motivated buyers.

This market has aspects of both. Many people have listed their properties a long time ago, and those places have been sitting around. They are often overlooked by agents and buyers, as they can be considered as tired, and usually as overpriced. Other places come on, attract attention right away, and sell quickly, sometimes with multiple offers. What's the difference? Sometimes it's location, or staging, or size. Sometimes there's just a buyer who needs what a seller is selling, and needs it right away. More often, however, it's perceived value. The market--that amorphous body of economic value judgment--rates the property as a good value, and that sparks interest.

All of this makes it difficult to price properties. However, the possibility of multiple bids and early interest means that it's hard to underprice in today's market, as buyers will bid the price up to where it can/should be. It's easy, unfortunately, to overprice. Many sellers look at what's on the market at the time, and place their home in the range that they feel it belongs, without distinguishing between the overpriced inventory and the value properties that are getting all the interest. And that's a big mistake. Look at what's sold, and do it with a clear eye. Then listen to your real estate agent, and get your property into the sold column. Then you can become a buyer, and use all that knowledge to get a great value!