Home Sales vs. Home Prices

The negative statistics about the current state of real estate continue day after day. Instead of any positive ones. Yet, over the past few days, I have been seeing more and more stories about the drops in home sales prices be presented in a positive light.

As much as I have been preaching the need for positive stories dealing with real estate, I also preach that these should be legit stories. Yes, home prices are generally dropping even further in much of the country. However, that doesn't mean it is a positive.

The point is being made that more recent drops in average home prices are not as much due to foreclosures and short sales as they have been over the past couple of years. This is being treated as a positive. I'm not certain that's the case.

That fewer homes seem to be getting foreclosed upon is certainly a positive. But that is not enough to group this fact with others relative to home sales.

Home prices being much lower than 5 years ago is not a positive for a large group of home owners around the country, perhaps the majority.

Even though foreclosures are down now, there are still a ton of homes around the country for sale at foreclosure or short sale prices. Those are in addition to distressed properties practically abandoned by builders and developers. The mere availability of this many properties at lower prices serves only to bring down the value of the homes surrounding it. And that is not a positive for more people than the number who can buy under current market conditions.

Too many home owners are right now stuck paying more than the property is now considered to be worth, and are under water with their mortgage. They cannot sell "for less". If they take a loss and have to write an additional check at the time of sale, there is no money for a down payment and to finance a new purchase. So there is no choice but to wait until or unless the local market returns to the point where they could get a price high enough to justify selling it.

Meanwhile, many who would like to take advantage of the buyers' market out there cannot. The availability of mortgages has gone full spectrum, from having been too easy several years ago to being way too difficult now. And that's for those who can even afford a sufficient down payment.

The same banks which contributed to this crisis are now cutting back instead of getting in there and actually (gulp) helping their customer bases. They are loaning on fewer properties, cutting back or eliminating options such as reverse mortgages, and sitting on defaulted properties they technically own due to foreclosures.

As a result, the banks are really a big factor in keeping home prices down, just as they are in keeping home sales down from where they could be. With no end in sight.

If only the news media would keep all of this in mind when reporting the "positive" news about the current status of real estate.

Listing of the Day - St. Augustine FL

In an effort to improve the impact of the marketing of listings, I randomly choose current listings around the country in a variety of price ranges and comment on their effectiveness. No current clients of mine are used, nor do I know any sellers or buyers or have any additional information about the property.


1323 Powis Rd. St. Augustine FL 4 + 4 $275,000

http://homes.jacksonville.com/realestate?tp=homes2.jacksonville.com&classification=mdRealEstate&temp_type=detail&listing_id=43830433


This advertisement is actually quite interesting. The potential buyer is not told this is really for a Short Sale until the very last part of the description copy, appearing at a point by which they have been well 'sold' on the appeal of this property.

It will be interesting to check the reaction of my clients as well as agents who always read these critiques about the ethics of burying the fact that this is for a Short Sale. From a marketing standpoint, I'm somewhat impressed at how the agent does her job of "selling" the property first. Well, almost first.

The primary photo is an impressive view, showing the scope of the home with the photo taken at the best possible angle to show the large driveway and 3-car attached garage. However, there are no interior photos at all on the spread, and that is a big waste of opportunity. A family (or investor) looking at a 4-bedroom home, especially one that shows as well as this one does from the exterior, is bound to be curious to see how the inside looks. In addition, the side and back exterior photos appear to be taken in different light and make the house look to be in a different color than the front. While I can understand showing a home in relation to a pond or lake, we don't know whether this photo was taken looking from the home for sale, or from across the pond looking toward it. At least two of these photos should have been interior shots.

Although the description copy highlights several prime sales points, the "Realtor fluff" that starts it out should be eliminated and it would make the copy much more effective. The "Look no further" bit explains absolutely nothing about the property.

I like how the description copy (after the first line) provides an excellent balance of interior and exterior selling points. It furthers the point about the need for interior photos to appear within the picture spread and what a tremendous reinforcement opportunity is lost.

Holding off revealing this is a Short Sale until the end could entice investors to pursue it, but might lose a family looking for a home for the immediate future. Personally, I prefer this approach, since it reflects better on the listing agent. Far too many agents listing short sales make it obvious they spent about 10 seconds on the advertisement and make an investor skeptical that the agent is capable of getting a deal done.

GRADE: B-




Note: This commentary is uncompensated and for marketing purposes only and is no reflection on the featured property. Its accuracy is not guaranteed. Neither Dave Kohl nor First In Promotions shall be held responsible for any representations.

At this time, I have openings for more realty agent/office clients to critique current and brand new listings on an hourly basis. No current or past client listings are featured on this blog.Random listings are chosen around the country.

Your comments are most welcome!

Listing of the Day - Aug. 30, 2009

For more than 20 years, I have worked with realty agents and mortgage lenders regarding a variety of marketing and advertising matters, including writing literally thousands of individual property descriptions. In an effort to improve the impact of the marketing of listings, I randomly choose current listings around the country in a variety of price ranges and comment on their effectiveness. No current clients of mine are used, nor do I know any sellers or buyers or have any additional information about the property.

http://www.estately.com/WA/Walla_Walla_County#listings/info/2507588

168 Ransom Rd., Walla Walla WA 3 + 2.25 $180,000

Frankly, the way this listing is presented is a perfect example of the need for this blog and marketing services specific to realty companies such as ours.

The copy begins by pointing out how this 3 bedroom home is authorized for a short sale. (And I’m not even going to address that the web page shows the property has been listed for more than 6 months.) Yet, each exterior photo, including the primary one, shows trees with few leaves and the lawn in poor shape. I first saw this listing in late August, yet the first photo I see from this “motivated seller” appears to be from no later than February.

Within the first paragraph of the description, there is a reference to the “generous views of the blue mountains”. Yet, the featured photo does not have any mountains in the background. Upon looking at all 7 photos shown by clicking through, I didn’t see so much as a single mountain or any such view.

Although I understand the intent of mentioning the “three stall shop”, this could be a limitation rather than an encouragement within this description. The “do it yourself” home owner or family that wants a workspace will be drawn to this. However, those who are not of that mindset finish reading that wondering if they would be paying thousands of dollars for a room or area that would not be of much use. Could this be used for or converted to an office, rec room, storage room, or guest room? Potential buyers want possibilities instead of possible limitations.

Meanwhile, this photo spread does little to nothing to enhance the property, in addition to failing to display any “mountain” views. As much as I preach about using interior photos more often and more prominently, the use of interior photos here backfires because the home is empty.

When looking at photos of an empty home, a potential buyer has no idea how furniture would appear, how much space there really is, or the true size of the room. A 3-bedroom home indicates a family living space and not a series of empty rooms. Showing an empty bedroom with a large window without curtains or any window coverings also poses a security threat. The months old photos of an empty home is the setting for a “squatters scam” in some parts of the country.

Although the description does point out the home’s proximity to Prospect Point School, potential buyers should be told whether this is an elementary or high school. Some families have toddlers while others have children of high school age, but one or both might be missing out on an ideal fit because of the lack of detail.

One other point about this and many listings from smaller or even medium sized towns, especially where properties are on the market for longer periods. This listing has no information about the community, other than the mention of a school. Chances are the buyer of this home will come from out of area. (If not, it would have happened by now.) And chances are this buyer also needs to be “sold” on advantages of moving to Walla Walla.

If this is a “fixer” and would appeal to an investor or builder, then the description should include one or more reasons why they should invest in this community.

There are both higher and lower priced 3 bedroom properties in the area, based on the search column on the right at the time of this review. Yet, potential buyers are not given enough reasons to make this the most attractive property. Again, chances are the buyer will come from out of the area. Why stop at this home?

Listing Grade: D

Note: This commentary is uncompensated and for marketing purposes only and is no reflection on the featured property and is its accuracy is not guaranteed. Neither Dave Kohl nor First In Promotions shall be held responsible for any representations.

At this time, I have openings for more realty agent/office clients to critique current and brand new listings on an hourly basis. No current or past client listings are featured on this blog.Random listings are chosen around the country.

Your comments are most welcome!

Please check back often for more "Listing of the Day" critiques.