23June2009
Posted by Scott under: Real Estate Tips.
After 2 to 3 years of a dysfunctionaly real estate market, it is difficut to dispense pearls of wisdom to the community. But I recently wrote a marketing piece that contained the “5 Truths of the 2009 Real Estate Market”.
1. Buyers want to buy…only…at the right price. With rates in the low 5’s and prices down 30% or more, buyer do want to buy.
2. Sellers can sell…only..if they are motivated. Buyers are too knowledgeable about price, and appraisers are downright scared at appraising anything above “market price” to allow sellers to dictate higher prices right now. But if a seller is motiviated, and has equity, they can sell.
3. Lenders are lending…but only…to qualified buyers. There is financing out there for loan that are less than $729,000, but everything will be documented and there is no such thing as stated income.
4. The market has hit bottom…but right now…at the bottom. It is a simple math equation for investors and first time buyers: it is cheaper to buy a starter home that it is to rent one or it is better to buy an investment property and let the tenant make the payments. In Placentia a single family home in a good area, priced anywhere near $400,000 will last as long as a nark at a biker party.
5. Choose a real estate expert…because..it is not easy out there. Selling, and more importantly, closing homes right now is not for the faint of heart or light in experience. It takes an expert to create a smooth transaction.
19May2009
Posted by Scott under: Uncategorized.
Once the catch phrase of Gomer Pyle, it will be the mandate for the marketing at our company and for me personally. I feel that the market has hit bottom (at the bottom, $450,000 to $600,000) and we real estate agents are confident that buyers will buy, if the price is right. That was not true 2 years ago. There was no mortgage financing, and no one where the bottom was and how long it would take to get there. Well, 25% lower in prices and rates that are now 4.5% to 5% and buyers have decided that now is the time to buy. Our marketing the past 2 years has been understated and reserved. It was about trying to answer our clients real estate questions, provide useful information and keep our name out there. After reading “Pow”..the Power of Surprise Marketing, I believe the time is now to surprise our clients with our marketin and take a more aggressive stand on this new, more dependable market. Expect the unexpected. No more boring calendars or business cards. No more pedestrian newsletters. You will notice a distinct change in our marketing as we communicate to the marketplace that they will be pleasantly surprised by the real estate market.
5May2009
Posted by Scott under: Placentia Insider; Uncategorized.
I have been telling my agents that the market is currently “compressing”. At the peak of the market, in Placentia, the least expensive home in a ‘good’ neighborhood was $500,000 and the most expensive home was close to $1 million. Now, the least expensive detached home is $400,000 and the most expensive is $650,000. This is similar to the late nineties. I sold my home on Dixon (2,200 square feet built in 1994 with great decor and a new pool) for $290,000 and bought my last home for $375,000 (3,000 square feet, 3 car garage with an oversized lot and pool). This current market is duplicating that tight range. Right now, the bottom end of the market has stabilized because it is a simple math equation for buyers at this price (cheaper to buy than it is to rent), but the top end (over $800,000) will continue down in the county as financing is difficult to obtain. Here is the point: buyers want to buy right now, but they want to pay the right (read: low) price. In addition, lender recently implemented a clearinghouse system for ordering appraisals whereby an independent, often out-of-area appraiser is used. I recently sold a home and the appraisal came in 10% below the sales price and the appraiser refuse to make adjustments. This will further compress the market and squeeze out sellers who are not realistic about their pricing.
29April2009
Posted by Scott under: Real Estate Tips.
There was an article in the OC Register today about the effort “to expand housing aid”. The much touted “Hope for Homeowners” program, which was to rescue over 400,000 troubled homeowners from their unaffordable mortgages and swap them for conventional 30 year fixed mortgages has not been the unqualified success hoped for. How unqualified? Of the 400,000 targeted homeowners who were targeted for the program, only 1 (one) has completed the program. That is a .0002% success rate. And how much money was spent marketing, preparing, and staffing this program? Hundreds of thousands of tax payer dollars…at least. The lesson here? Don’t expect the government to correct this problem or come materially to the rescue of homeowners. Homeowner, heal thyself.
14April2009
Posted by Scott under: Placentia Insider.
I received a call from the owner of the property at Alta Vista and Rose, where we have the Pumpkin Patch Party every year, and he confirmed that he won’t be breaking ground on the new development until after the new year. So…it will be another Pumpkin Patch, perhaps the last, at this location. It will be on Saturday, October 17th. Preferred Clients will be allowed in early and I expect this to be the biggest Party of them all. We look forward to giving away pumpkins and supporting the community again.
14April2009
Posted by Scott under: Real Estate Tips.
I have been on a number of listing appointments this past month, and a common question is, “When will prices be where they were at the peak?” Well, once I provide the answer, many of these clients have to decide whether to wave the white flag of real estate appreciation. Prices have dropped 30% from the peak in 2007 and 15% since 2008. No one expects prices to stabilize until 2010 at the earliest (once foreclosures subside) and probably into 2011. It will take 3 to 4 years at 3% appreciation per year (or 2015) to reach the 2008 prices and another 10 years for the entire market to reach the old peak (condos are trailing). So, it won’t be until 2025 that we reach 2006-7 prices, or 18 years. Many people don’t have the luxury, or desire to wait that long and if they have equity, are opting to sell sooner than later. This is my opinion, but these facts are sobering, but liberating. Clients won’t be waiting 3 to 5 years for something that simply won’t be occuring.
25March2009
Posted by Scott under: Placentia Insider.
I am organizing a community garage sale for 70+ families in Placentia and was surprised (and not happily so) that homeowners in Placentia can only have 4 sales per year and at specific times. I understand some folks abuse the privilege of garage sales and make them a weekly bazaar on their front lawns, but the abuse of the few should not be a tyranny on the many. Since the sales are allowed only on the first full weekend in March June, September and November and I want to have one in May…I must get every homeowner to fill out an exception. The first full weekend in June is graduation week for many, and March is already past, so to comply, I must wait until September or get 70+ families to fill out forms. My solution? Since the second reading is not until April 7 and the ordnance cannot be in effect for 30 days after, we will have it on May 2 and sidestep this gestapo like rule. Perhaps it is time to go to a city council meeting and voice my opinion at the podium…something I have never done.
16March2009
Posted by Scott under: Real Estate Tips; Uncategorized.
Just got back from Phoenix (and no, my arms are not tired). My folks live in a quaint town just north of Phoenix and things in the real estate world are not rosy (not dissimilar from our market). But in Phoenix rents have dropped in step with home values. A nice house will lease for $1,000. At least in our market, rents have remained strong and at the median price, it is cheaper to buy than it is to rent. Not there. Prices have dropped even lower from the peak (50%+) to keep up with these rents. When I crossed the state line, I kissed the ground and was thankful we have avoided this situation.
10March2009
Posted by Scott under: Uncategorized.
I just got back from San Antonio and visited the world famous Riverwalk. It is truth in advertising: it is a small, mostly man made river, that you can walk by. I took a tour and one of the facts relayed by the tour guide was an impressive building built in 1927 or so. It has a very gothic look, perhaps 20 stories high. The developer paid $2 million to build it and a few short years later, during the depression it was sold on the court room steps to the high bidder, the City of San Antonio, for $127,000. That is a 94% drop. Now no one believes this current economic downturn will match that one, but when folks say, wow, prices are down 30%, there is no way they can drop further, think of this building in San Antonio.
27February2009
Posted by Scott under: Book Reviews.
Great book on the culture of social networking and success stories of a few early adopters. The title of the book comes from the fact that if there were 25 people in the room who each had 25 contacts, there were in fact 33 million possible contacts. I didn’t do the math, but will trust the author. The book is an excellent primer on the culture of this manner of doing business where credibility, sharing and openness is treasured and rewarded.