Monday, January 28, 2013

When The Photos Hurt The Cause......

A picture is worth 1,000 words. Everywhere except in real estate advertising, where many of the photos seem to do more harm than good. This needs to change in order to generate home sales which are not due to foreclosures or short sales.

Today, I decided to randomly look at a pair of advertisements for homes in big cities priced at $259,900. One such home is in Houston, and the other in Minneapolis where two agents with two separate companies each have the responsibility to advertise for a buyer of a quarter-million dollar home.

This Houston home, which is advertised online via the Houston Chronicle, has a primary photo which is clearly reduced in size compared with the space allowed, as well as making it smaller than other properties in the same area. (Already one strike against this ad!)

The little bit of copy about this home says it is “free standing”, yet the (reduced) photo shows the home as practically right up against a similar looking home next door. It appears that had the photo been taken from the right side of the home instead of the left, it would have shown the corner in the background and actually LOOKED as though it really is “free standing”. In other words, the photo destroys part of the copy instead of reinforcing it.

In addition, the copy tells of “additional flex/gameroom space”, yet fails to provide any information about the size of this room or area. Thus, a potential buyer has no idea whether or not a home theater, pool table, etc. might even fit in this space. A look through the interior photos provided either did not show this “space” or showed it as a functional area instead of “additional” space as promoted via the copy.

Then, the “fenced back deck patio” stated in the copy does appear within the photo spread. However, the photo shows two uncomfortable looking chairs up against a wall next to the A/C unit. That description only would have left a lot more to the imagination. The photo hurt the cause big time.

To sum up, these photos say “nice compact space in the big city” while the description says “spacious”. Anyone looking for a home priced at over $250,000 has enough intelligence to notice the conflicting information. And then move on to explore other homes available in the same price range.

Next, it was on to the frigid north to check for the same priced home in Minneapolis. The first advertisement I found, via the Minneapolis Star Tribune, for a home there priced at $259,900, was, according to the web site “Updated on Dec. 11”. It was January 25th when I found this ad.

Granted, that “updated” information being on the page was probably not the fault of the advertiser, but that doesn’t make it any more acceptable. But there’s more about this ad which is the fault of the advertiser. It’s the height of winter in the Twin Cities. Yet, the primary (and only) photo of this home shows bright sunshine, leaves on the trees and bushes, and green grass. In January in Minneapolis?

Before reading any of the copy, the readers of this prominently placed ad already know this home has been on the market for months and no one has bought.

I thought I’d give the advertising copy a chance anyway. And then the second sentence starts with “Built in 1946…….”. Let me get this straight. Out of all of the selling points of this home, the best the advertising agent could muster up is that this home is more than 66 years old? No matter how old this photo is, there’s nothing in it to have you think this home was worth more than $250,000 many years ago either.

Remaining copy points out a “finished basement”, “patio”, “corner lot”, and a “view of downtown”. Yet, the outdated photo provides zero proof that ANY of these selling points exist.

This is not to say the home is not worth that price or close to it. But it is to say that the right photo would have made a huge difference. Why not use an interior photo to show that finished basement? Or, use an exterior photo from a clear day showing the view of downtown?

Instead, the advertiser uses an outdated photo and highlights the age of the home within its ‘first impression’ time.

Neither of these two homes are labeled as foreclosures or short sales. Nor are they rehabs. Investors and flippers are not likely to look at these homes. Actual potential buyers (who would live there) are. If and when the photos and the copy match up, there might be some activity on these.

(The links to these ads:)

Thursday, January 24, 2013

Will There Be Buyers At Higher Home Prices?

We're getting more proof that as foreclosures go, so goes the real estate market. The number of foreclosed upon residences has taken a drop around the nation over the past few months. Fewer properties are offered up for short sale. Presto! These factors have combined to reduce the inventory of available homes in the majority of areas.

The investors who were able to take advantage of the low prices and wait for the market to turn can now begin to list and expect to begin profiting. Less inventory means that home prices can increase, and that's what is happening.

Even in the Sarasota FL area, there are fresh signs of progress, and that has been one of the nation's most depressed real estate markets in recent years. Even Sarasota County had no problem allowing about 400 trees to be (legally, as far as we know) removed in order for construction to begin next week on a 24 acre development, "Pacifico". What makes this even more significant is that the builder had actually purchased the 77-acre site back in 2005. Wisely, they waited before constructing, or it likely would have been a financial disaster. Now, they have the confidence to build. The Sarasota Association of Realtors reported the most property sales (for 2012) since, you guessed it, 2005.

Before you think this is because of people from the north relocating to Florida and looking for a ripe area, look again. This trend is popping up in several less likely locations.

In Wisconsin, the WI Association of Realtors just reported a 21% jump in closed sales for 2012, compared with 2011. The Indianapolis IN Association of Realtors reported that its 13 county metro showed a larger sales increase than the remainder of the state of Indiana did. Obviously, people are not moving to or within these areas because of the weather and/or retirement conditions. Snohomish County in Washington showed its biggest sales increase since 2007.

Of course, I'm always the first to point out that most buyers are not buying because of recent statistics. Now, many of these sales (everywhere) are a result of people getting great prices on foreclosures and short sales. Prices had been driven so low that too many people are over-reacting to the increases in median home prices.

While these latest statistics are encouraging to some, it's really too early to tell. We don't know what percentage of these recent buyers are looking to flip their properties and now will stop buying more because there are not as many "steals" out there.

We're still a long long way from the days of offers before the For Sale sign goes up. The "serious" sellers will still need to do a lot more to market and distinguish their properties. Hopefully that area (advertising & marketing) will improve, too. It's time!