Things appear to be looking up in the Denver area according to separate reports just issued. A realty firm issued a report showing that sellers are getting a larger percentage of their listing price this year compared with 2012 and that homes are spending about nine fewer days on the market compared with Summer 2012. MetroList shows an increase of available homes from April of this year to July 15, 2013.
Although neither report included comparisons to prices for these homes to prices prior to 2006, there are some positives with this information. It shows that there is reason to believe the Denver market is on the comeback trail.
However, as I continue to point out, more inventory means that each home for sale has more immediate and local competition. Thus, the need is still strong to properly advertise and promote each home for sale.
Trying this like a potential home buyer, I searched the site linked via the Denver Post (the largest local newspaper) in the $150,000 to $200,000 range for 2-bedroom single family homes in order starting with "lowest price".
I wasn't surprised with my finding, but am certainly disappointed. The very first house on the search (And how many agents would LOVE that placement?) merely served as another example of my point.
It was for a 3-bedroom home in Denver on Lowell Blvd. The primary photo not only showed a lawn in horrible condition (as much dirt as dead looking grass) but it turned out to be of the back yard. The "front view" photo also showed the terrible looking lawn and that there is (or did not appear to be) no garage, driveway, or on-property parking. The next photo showed the rear area with a mass of dirty concrete and a storage shed. Not one of these photos was flattering, to put it mildly.
Upon finally getting to the interior photos, we then see that the home is empty. In several photos, all we see is a dining room set, one chair, and the appliances. One of the photos shows what is either a basement or empty room with what is either concrete or horrible carpeting on there.
Simply put, not one of the photos (with the possible exception of a bathroom shot) adds any appeal to this property.
It took reading the description below to find out that two of the photos are to show the "new furnace", even though none of the photos reflect the "new carpeting" stated. We also then find out that there is a "rear driveway" for parking, even though this is not shown in any of the photos. We are also told that the sewer line "has been replaced".
http://www.zillow.com/homes/for_sale/fsba_lt/denver-co_rb/2-_beds/150000-300000_price/#/homedetails/1900-S-Lowell-Blvd-Denver-CO-80219/13380077_zpid/
Some of the next homes in my search had decent ads for them, but certainly not enough. If I was truly searching from out of area, I would probably have moved on after seeing that first ad, thinking if that was all $150,000 gets me I'd rather go elsewhere.
Just because the market conditions are better, it does not mean that an agent can be that careless about how a listing is advertised.
Tuesday, August 13, 2013
Tuesday, August 6, 2013
Attention To Detail In Marketing
If only the listing agents and sellers would check advertisements carefully before putting them out there. It doesn't help the industry, either.
This ad is for a home up for Short Sale in a Chicago IL suburb. In this case, the "problem" is not with the incredibly short copy that tells little to nothing about the interior.
The problem is in one of the photos, and not from the angle of the picture. There is an interior photo (as of this writing) that clearly shows a date of May 2, 2010 on it. Granted, this could actually be a recent photo and the camera was not set to the proper date. Nonetheless, it gives the appearance of being an old and outdated photo. Someone could think that no one could sell this place for more than three years and be scared into looking elsewhere.
I simply can't believe that an agent would allow this to be published. For that matter, the seller is under a Short Sale and obviously wants to move on with his or her life as well. Why don't those involved double check every advertisement?
To make matters worse, this is how it appears on Realtor.com. It's not some out-of-the-way publication that only the advertisers actually read.
I have no idea how copy such as "Looks like a model" to accompany the potentially outdated photo is acceptable as a sales pitch either, but that's for another column.
Yet, many agents and those in the industry continue to go with prior home sales statistics and other factors as being the primary reason that certain homes don't sell. Look again:
http://www.realtor.com/realestateandhomes-detail/6142-Washington-Ct_Morton-Grove_IL_60053_M87462-85097?row=17
This ad is for a home up for Short Sale in a Chicago IL suburb. In this case, the "problem" is not with the incredibly short copy that tells little to nothing about the interior.
The problem is in one of the photos, and not from the angle of the picture. There is an interior photo (as of this writing) that clearly shows a date of May 2, 2010 on it. Granted, this could actually be a recent photo and the camera was not set to the proper date. Nonetheless, it gives the appearance of being an old and outdated photo. Someone could think that no one could sell this place for more than three years and be scared into looking elsewhere.
I simply can't believe that an agent would allow this to be published. For that matter, the seller is under a Short Sale and obviously wants to move on with his or her life as well. Why don't those involved double check every advertisement?
To make matters worse, this is how it appears on Realtor.com. It's not some out-of-the-way publication that only the advertisers actually read.
I have no idea how copy such as "Looks like a model" to accompany the potentially outdated photo is acceptable as a sales pitch either, but that's for another column.
Yet, many agents and those in the industry continue to go with prior home sales statistics and other factors as being the primary reason that certain homes don't sell. Look again:
http://www.realtor.com/realestateandhomes-detail/6142-Washington-Ct_Morton-Grove_IL_60053_M87462-85097?row=17
Thursday, August 1, 2013
Sales Trends Don't Tell The Story
Two "home sales" stories from this week coming from two different geographic and population density parts of the country bring two different stories. Or do they?
The Northeast Tennessee Association of Realtors went ahead and published statistics which show a decline in local home sales over an 11 county region for June 2013 compared with June 2012, with a sale price decline of more than $9,800. When comparing June 2013 with May 2013 the report showed a 5% decrease in sales.
A few hundred miles northeast, the Philadelphia Office of the Controller issued a report showing an 18.5% increase in area home sales for June 2013 when compared with June 2012. This report went on to list the most "popular" neighborhoods, which were South Philadelphia, Fishtown, and Fairmount.
Same time period, but with results at the opposite end of the spectrum. That tells me these are not "different" stories.
What this means is that it is only a select few neighborhoods and communities that are turning around in terms of sales and pricing.
The latest from Fairfax County (VA) over the same June-to-June period can also be interpreted any one of a number of ways. An agency report claims the number of homes "on the market" throughout the County dropped by more than 15% from June 2012 to June 2013. Yet, the same report shows that the median home price actually increased about 7.5% during that same time.
In this instance, fewer homes on the market is the most likely reason for the price increase. Thus, a possible buyer in that area now has less bargaining power by not being able to show as many lower priced "comps" available in the area. A long-term real estate investor is also less likely to find a bargain to keep until the market returns to past levels.
From a selling standpoint, if hundreds or home owners in Fairfax County now decide to list, it would mean a short-term decrease in the percentage of listings sold, and likely expand the average time that homes are on the market.
Potential buyers and potential sellers have different reasons and motiviations to enter the market. An investor likely sees a sales decrease over the course of a full year as a reason to look elsewhere. A potential "move-in" buyer sees that decline as a reason to come in with lower offers because he/she now knows that it is a tougher sale.
Put all of this together, and what these stories all combine to tell us is that the market is still very much uncertain. That's not how it is supposed to be done.
The Northeast Tennessee Association of Realtors went ahead and published statistics which show a decline in local home sales over an 11 county region for June 2013 compared with June 2012, with a sale price decline of more than $9,800. When comparing June 2013 with May 2013 the report showed a 5% decrease in sales.
A few hundred miles northeast, the Philadelphia Office of the Controller issued a report showing an 18.5% increase in area home sales for June 2013 when compared with June 2012. This report went on to list the most "popular" neighborhoods, which were South Philadelphia, Fishtown, and Fairmount.
Same time period, but with results at the opposite end of the spectrum. That tells me these are not "different" stories.
What this means is that it is only a select few neighborhoods and communities that are turning around in terms of sales and pricing.
The latest from Fairfax County (VA) over the same June-to-June period can also be interpreted any one of a number of ways. An agency report claims the number of homes "on the market" throughout the County dropped by more than 15% from June 2012 to June 2013. Yet, the same report shows that the median home price actually increased about 7.5% during that same time.
In this instance, fewer homes on the market is the most likely reason for the price increase. Thus, a possible buyer in that area now has less bargaining power by not being able to show as many lower priced "comps" available in the area. A long-term real estate investor is also less likely to find a bargain to keep until the market returns to past levels.
From a selling standpoint, if hundreds or home owners in Fairfax County now decide to list, it would mean a short-term decrease in the percentage of listings sold, and likely expand the average time that homes are on the market.
Potential buyers and potential sellers have different reasons and motiviations to enter the market. An investor likely sees a sales decrease over the course of a full year as a reason to look elsewhere. A potential "move-in" buyer sees that decline as a reason to come in with lower offers because he/she now knows that it is a tougher sale.
Put all of this together, and what these stories all combine to tell us is that the market is still very much uncertain. That's not how it is supposed to be done.
Thursday, July 25, 2013
Sellers: Stay One "Strike" Ahead of Commuters
Good marketing of a home (or any property) for sale should include information about the area and relate to a potential buyer. It's too bad that most of what is out there does not.
One example of this is attracting a "commuter" to a home located within close proximity to a commuter train station. Before you attempt to sell, you should know how close your home is to a commuter train station, whether you personally use it or not.
With gas prices continuing to gouge consumers, a few dollars more in the mortgage could actually SAVE money to a commuter who drives a long distance each day. But that potential buyer won't know that if YOU don't point it out to them.
My long-time readers may recall my column a couple years back about Chicago area research showing a higher home price value of homes specifically located near the main commuter train line. On that same point, a similar column was recently published about proximity to the BART (Bay Area Rapid Transit) trains in the San Francisco Bay area, and its impact, especially right now due to the most recent transit strike.
Maxime Rieman of NerdWallet.com has provided us with an overview, which is reprinted with her permission:
Since we have readers from around the country, chances are the majority of you are not impacted by transit strikes such as the Bay Area is going through. The point here is the significance of selling a home with a "location location location" convenient to commuter transportation.
For those that do not live convenient to commuter trains or buses, information such as this means you should be ready to show potential buyers how other advantages and amenities your home provides would outweigh "commuting advantages".
One example of this is attracting a "commuter" to a home located within close proximity to a commuter train station. Before you attempt to sell, you should know how close your home is to a commuter train station, whether you personally use it or not.
With gas prices continuing to gouge consumers, a few dollars more in the mortgage could actually SAVE money to a commuter who drives a long distance each day. But that potential buyer won't know that if YOU don't point it out to them.
My long-time readers may recall my column a couple years back about Chicago area research showing a higher home price value of homes specifically located near the main commuter train line. On that same point, a similar column was recently published about proximity to the BART (Bay Area Rapid Transit) trains in the San Francisco Bay area, and its impact, especially right now due to the most recent transit strike.
Maxime Rieman of NerdWallet.com has provided us with an overview, which is reprinted with her permission:
A 2013 study commissioned by The American Public
Transportation Association concluded that close proximity to a fixed-guideway
transit system, those like BART, correlated with stable property values during
the Great Recession. The study, entitled "The New Real
Estate Mantra: Location Near Public Transportation," also found that while
homes near commuter stations may command higher prices, they also help the
owner save immensely on transportation costs. These factors often add up to a
higher demand for real estate in close proximity to commuter lines.
However, there is a downside to living near public transit and,
according to the Center for Housing Policy, it comes in the form of
"nuisance effects." A particularly loud public transit system, for
example, can negatively impact the value of residential property, as can
pollution from fumes. But nuisance is often, though not always, outweighed by
convenience and mobility; a young person wanting to commute safely to nightlife
may fare better living closer to a light rail station, and put up with the
noise that may come with it, rather than living in a far-removed suburb.
But these factors don't include strikes—and there's a
reason: they're too infrequent and they don't last long enough.
So when would a strike actually affect a local real estate
market? Well, there are a variety of answers, but the most obvious one is if
the strike were to last months on end, if not for years—an unlikely scenario.
More likely, however, is if there is a culture of labor strikes in a given area
with transit—like there is in the San Francisco Bay Area. If such a culture
exists and strikes become an all too common occurrence, the value of real
estate surrounding public transit, both commercial and residential, will likely
taper-off if only by a little bit. Again, this is hypothetical: even in the Bay
Area there hasn't been enough public transit strikes to show a direct effect on
the value of nearby real estate—it may marginally add to the cost of living,
and, depending on the success of the strike, to what you pay into local taxes,
but it won't have as big of an impact as, say, the number of housing units
available.
And the number of housing units available is determined by
demand. The Bay Area doesn't have one of the strongest real estate markets in
the country without reason: there is a high demand by people in and wanting to
be a part of the tech industry, because of the local culture, direct access to
various industries and inherently, the well-paying jobs.
Oakland is a great example of this phenomenon: the city has
one of the worst police forces in the nation (now being directly watched by the
federal government) and a huge crime problem. The city shares BART with San
Francisco, and it has its own public transit system AC Transit, on strike. But
the real estate market is growing. The reason: cheaper real estate compared to
San Francisco and Silicon Valley, direct access to what smaller tech firms need
and a growing industry.
Now all this isn't to say that transit strikes don't have an
impact. They do. The BART strike alone is estimated to cost the local economy
nearly $200 million. But strikes—impermanent and sporadic—have a far smaller
impact on the value of long-running real estate market. Strikes, unless they
signal a large cultural shift, have little impact on the value of homes.
(Maxime Rieman is a writer for NerdWallet, a financial
literacy site that can help you find insurance company and other helpful consumer information.)
Thursday, July 18, 2013
Impact of the Improved Rental Market
Some interesting findings in the just released CoreLogic report regarding rentals across the country. Overall, it COULD be good news for the entire real estate industry. Emphasis on "could". Home owners and realty agents need to make it good news. Here is why.
CoreLogic's "Renter Applicant Risk Index" shows a rise in rental applicant scores in terms of credit and "ability to meet lease obligations" among what it terms "prospective apartment renters" over the past year. In addition, the other significant finding from this report is that applicant incomes were up during the first quarter of 2013 compared with last year. (This report includes single family rentals as well as multi-family housing.)
As positive as this sounds, it seems odd that while the economy struggles and job uncertainty and availability has shown little to no change in most areas that more people are better qualified to rent. We need to explore why that is.
My theory is that too many people are afraid of buying a home in this market and plan to wait it out. Part of this is the fear of losing a job and factors not directly tied in to the real estate market. In addition, the days of merely sitting on a home and having the value increase are long gone. Until or unless they return, a percentage of people will be content to rent.
Many of those who fit into one or both of those categories currently have the funds to make a decent monthly payment, but do not wish to commit long term. Hence, the ability to rent for six months to one year and have the flexibility to buy if conditions improve.
Meanwhile, too many home owners who are not able to get what they need for their homes and thus cannot sell, are not interested in renting their homes as a means to get into another property.
This is why the research report COULD be good news. With so many more and qualified rental candidates out there, why can't more sellers offer a "rent to buy" situation for their home?
It will take the realty agents to come around to this way of thinking, and to this point I'm not seeing it. While it does delay a full commission to the agent, an agent having several "rent to buy" situations is setting up for a nice payday down the road even though much of the "work" will have already been done.
Hopefully instead of waiting for the realty association to publish statistics comparing home sales to past years (which is not a motivation for a potential buyer), they will begin to promote a "rent to buy" scenario as an option to get sellers out of their current property.
The fewer homes for sale there are at a given time, the better the chance that home prices will return to previous levels and again show promise of profit potential over the years.
By not doing so, and with the increase in "quality" rental candidates, chances are many current home owners looking to sell are losing out because qualified "buyers" are renting where they know there are availabilities instead.
That is why these renters statistics COULD be good news. But first, the potential renters need the additional choices that current home owners could give them!
CoreLogic's "Renter Applicant Risk Index" shows a rise in rental applicant scores in terms of credit and "ability to meet lease obligations" among what it terms "prospective apartment renters" over the past year. In addition, the other significant finding from this report is that applicant incomes were up during the first quarter of 2013 compared with last year. (This report includes single family rentals as well as multi-family housing.)
As positive as this sounds, it seems odd that while the economy struggles and job uncertainty and availability has shown little to no change in most areas that more people are better qualified to rent. We need to explore why that is.
My theory is that too many people are afraid of buying a home in this market and plan to wait it out. Part of this is the fear of losing a job and factors not directly tied in to the real estate market. In addition, the days of merely sitting on a home and having the value increase are long gone. Until or unless they return, a percentage of people will be content to rent.
Many of those who fit into one or both of those categories currently have the funds to make a decent monthly payment, but do not wish to commit long term. Hence, the ability to rent for six months to one year and have the flexibility to buy if conditions improve.
Meanwhile, too many home owners who are not able to get what they need for their homes and thus cannot sell, are not interested in renting their homes as a means to get into another property.
This is why the research report COULD be good news. With so many more and qualified rental candidates out there, why can't more sellers offer a "rent to buy" situation for their home?
It will take the realty agents to come around to this way of thinking, and to this point I'm not seeing it. While it does delay a full commission to the agent, an agent having several "rent to buy" situations is setting up for a nice payday down the road even though much of the "work" will have already been done.
Hopefully instead of waiting for the realty association to publish statistics comparing home sales to past years (which is not a motivation for a potential buyer), they will begin to promote a "rent to buy" scenario as an option to get sellers out of their current property.
The fewer homes for sale there are at a given time, the better the chance that home prices will return to previous levels and again show promise of profit potential over the years.
By not doing so, and with the increase in "quality" rental candidates, chances are many current home owners looking to sell are losing out because qualified "buyers" are renting where they know there are availabilities instead.
That is why these renters statistics COULD be good news. But first, the potential renters need the additional choices that current home owners could give them!
Wednesday, July 10, 2013
Getting Your Philly Of A Deal
Residential investors and rehabbers have what looks to be a great opportunity coming up on Tuesday (7/16) in Philadelphia.
The Philadelphia Housing Authority is ready to, for only the third time, allow for as many as 196 vacant homes (or residential lots) to be auctioned off. Winning bidders receive special benefits for handling the rehab work and are being given up to five years to resell.
The PHA has even allowed the auction company handling this to publish a map of each available property and encourage potential bidders to check out the property BEFORE bidding.
For a contractor which specializes in specific forms of rehab, this could literally be a gold mine, with as many as five days to scope out those properties which they could "fix" with the least amount of challenges for them.
Better yet, the Housing Authority has a link to all of the information, as well as providing links to the map of where these properties are:
http://www.pha.phila.gov/pha-news/pha-news/2013/max-spann-to-auction-200-pha-properties.aspx
If I were a home owner in Philly, I'd be checking back to see what nearby plots sold for after this auction, to see if my home could have more to offer, and faster, to a potential buyer for the area. Even if the sale price of a nearby "fixer" is much lower than years, if you can be in the ballpark with what currently exists, this could create a near future sale opportunity for you.
And if I were a realty agent in the area, I'd be on top of property values surrounding these homes to see where the best deals could be. It wouldn't hurt to alert investors who are clients. After all, they would be buying to sell off, and somebody needs to handle that transaction when the time comes.
Hopefully more cities will do this, instead of ignoring eyesore properties and not helping the real estate market at all.
The Philadelphia Housing Authority is ready to, for only the third time, allow for as many as 196 vacant homes (or residential lots) to be auctioned off. Winning bidders receive special benefits for handling the rehab work and are being given up to five years to resell.
The PHA has even allowed the auction company handling this to publish a map of each available property and encourage potential bidders to check out the property BEFORE bidding.
For a contractor which specializes in specific forms of rehab, this could literally be a gold mine, with as many as five days to scope out those properties which they could "fix" with the least amount of challenges for them.
Better yet, the Housing Authority has a link to all of the information, as well as providing links to the map of where these properties are:
http://www.pha.phila.gov/pha-news/pha-news/2013/max-spann-to-auction-200-pha-properties.aspx
If I were a home owner in Philly, I'd be checking back to see what nearby plots sold for after this auction, to see if my home could have more to offer, and faster, to a potential buyer for the area. Even if the sale price of a nearby "fixer" is much lower than years, if you can be in the ballpark with what currently exists, this could create a near future sale opportunity for you.
And if I were a realty agent in the area, I'd be on top of property values surrounding these homes to see where the best deals could be. It wouldn't hurt to alert investors who are clients. After all, they would be buying to sell off, and somebody needs to handle that transaction when the time comes.
Hopefully more cities will do this, instead of ignoring eyesore properties and not helping the real estate market at all.
Tuesday, July 9, 2013
Never Mind Home Sales Statistics - Check Local Business News
I've heard enough about how home sales are "inching" up, considering how many of them dropped by feet or yards within the past five years. There are still too many areas where current home prices continue to represent losses of five or even six figures for those who bought them years ago and still could not sell for a profit or even a break even.
Instead of waiting on home sales statistics to make some people believe the real estate market has rebounded, your time should be spent on checking local business news.
Here is another example, this time from Austin Texas. It seems a local investor partnership has just purchased the Vista Lago Apartments, located in the Lady Bird Lake area. This partnership immediately announced plans to renovate and then re-open the property, which currently contains 102 units.
I'm sure you are wanting to ask me what this information has to do with the local home sale market in Austin, or anywhere else for that matter. And I'm here to tell you it COULD have a lot to do with it.
Since most of you do not live or work in this area, here is why this answer could relate to your situation, whether you are a property owner or a real estate professional.
For the near future, the renovation of a 100+ unit apartment building will mean a lot of construction and contractor projects and jobs. In some cases, people prefer to move close to where jobs are or will be in order to save on commuting and be available as needed.
Upon completion of the renovation, this partnership will either sell the "new" building and get out or they will look to rent or sell the "new" units themselves. Either way, the owner of Vista Lago will be advertising for new residents for this area, and most likely at market value or higher for rentals in this "new" building.
If I was a home owner in that area, I would immediately spring into action. I would do my homework and research what apartment rents currently are for that area, especially the more upscale apartments or units. Once I come up with a number, I would compare it with my current mortgage and monthly costs. Next, compare that number with what your home has to offer, and see if or how it compares to what a new rental unit would fetch.
Keep in mind it might not be a direct comparison. (I'm making up these numbers for the sake of example, so please don't quote me.) Suppose you would expect a 2-bedroom unit to rent for $950 per month, but your 3-bedroom home with a garage and a private pool costs you $1,100 per month on your mortgage and other costs. I would contend you have something to offer.
Using that comparison, you could offer a "rent to buy" of your home, and be able to promote how "for only $150 per month additional, you get an additional full bedroom, additional enclosed parking, and your own pool to use when you want". Add in the "And you won't hear neighbors through the walls, be awakened by upstairs neighbors' footsteps......." and other selling points.
If I was a realty agent in that same area, I'd be doing this comparison with homes currently on the market (in an effort to attract buyers for buyer commissions) as well as for past clients who live in the area and might want to jump on such an opportunity.
There has to have been enough potential for that immediate area to attract an investment partnership into renovating a 102 unit building in order to profit from it. The sooner you can pounce on that potential, especially before the Vista Lago opportunity becomes available, the more chances you have to generate sales because of it.
You could have "rent to buy" options, which Vista Lago may not even be offering. You could have outright sale opportunities, perhaps being able to offer a potential renter the opportunity to buy for the same general amount.
Even if you don't live in Austin or in this area, the idea is there for you. The Vista Lago complex is certainly not the only large apartment complex to be purchased for renovation. The concept is to track down upcoming residential construction and renovation and see what you can provide to potential buyers or renters in comparison.
That would be far more productive than waiting for home sales statistics to inch your way.
Instead of waiting on home sales statistics to make some people believe the real estate market has rebounded, your time should be spent on checking local business news.
Here is another example, this time from Austin Texas. It seems a local investor partnership has just purchased the Vista Lago Apartments, located in the Lady Bird Lake area. This partnership immediately announced plans to renovate and then re-open the property, which currently contains 102 units.
I'm sure you are wanting to ask me what this information has to do with the local home sale market in Austin, or anywhere else for that matter. And I'm here to tell you it COULD have a lot to do with it.
Since most of you do not live or work in this area, here is why this answer could relate to your situation, whether you are a property owner or a real estate professional.
For the near future, the renovation of a 100+ unit apartment building will mean a lot of construction and contractor projects and jobs. In some cases, people prefer to move close to where jobs are or will be in order to save on commuting and be available as needed.
Upon completion of the renovation, this partnership will either sell the "new" building and get out or they will look to rent or sell the "new" units themselves. Either way, the owner of Vista Lago will be advertising for new residents for this area, and most likely at market value or higher for rentals in this "new" building.
If I was a home owner in that area, I would immediately spring into action. I would do my homework and research what apartment rents currently are for that area, especially the more upscale apartments or units. Once I come up with a number, I would compare it with my current mortgage and monthly costs. Next, compare that number with what your home has to offer, and see if or how it compares to what a new rental unit would fetch.
Keep in mind it might not be a direct comparison. (I'm making up these numbers for the sake of example, so please don't quote me.) Suppose you would expect a 2-bedroom unit to rent for $950 per month, but your 3-bedroom home with a garage and a private pool costs you $1,100 per month on your mortgage and other costs. I would contend you have something to offer.
Using that comparison, you could offer a "rent to buy" of your home, and be able to promote how "for only $150 per month additional, you get an additional full bedroom, additional enclosed parking, and your own pool to use when you want". Add in the "And you won't hear neighbors through the walls, be awakened by upstairs neighbors' footsteps......." and other selling points.
If I was a realty agent in that same area, I'd be doing this comparison with homes currently on the market (in an effort to attract buyers for buyer commissions) as well as for past clients who live in the area and might want to jump on such an opportunity.
There has to have been enough potential for that immediate area to attract an investment partnership into renovating a 102 unit building in order to profit from it. The sooner you can pounce on that potential, especially before the Vista Lago opportunity becomes available, the more chances you have to generate sales because of it.
You could have "rent to buy" options, which Vista Lago may not even be offering. You could have outright sale opportunities, perhaps being able to offer a potential renter the opportunity to buy for the same general amount.
Even if you don't live in Austin or in this area, the idea is there for you. The Vista Lago complex is certainly not the only large apartment complex to be purchased for renovation. The concept is to track down upcoming residential construction and renovation and see what you can provide to potential buyers or renters in comparison.
That would be far more productive than waiting for home sales statistics to inch your way.
Monday, June 17, 2013
Don't Question The Information - Help Solve The Problem
The latest research findings, courtesy of CoreLogic, show that as we began the 2nd quarter of 2013, we still had FIVE states showing at least 30% of the mortgaged properties as being in "negative equity". Even though the national average just dropped to slightly below 20%.
Not be be negative here, but the fact that there are still one in five homes with negative equity across the country, while Nevada, Florida, Michigan, Arizona, and Georgia all have more than 30% in that position, remains cause for concern.
To those homeowners, it makes little to no difference that the national average has dropped slightly from last year to this one. At this rate of decrease, it would mean several years before this crippling problem would be behind us. This many people shouldn't have to wait that long.
Yet, here we go again with various realty associations pointing out how wonderful this decline is and how the market is improving.
One example appeared in a Milwaukee Journal article a couple of days ago, in which Greater Milwaukee Association of Realtors President Mike Ruzicka was quoted. The same CoreLogic statistics showed that in the four-county Milwaukee area the percentage of negative-equity homes actually grew during the same time period that both the state and national averages dropped slightly.
Ruzicka was quoted as questioning how this could have happened compared to the report's other findings.
I'm sure that Mr. Ruzicka would not agree with everything I said and did while doing my job over the past few weeks. This is not meant to be a personal attack. Rather, it is an example of what is happening within the real estate community. Too much denial and not enough action.
You see, even if the Milwaukee negative equity situation had actually declined in line with the national average, it doesn't change how about one in five current homeowners continue in negative equity. They can't sell for a profit, or even to break even and walk away. A couple of percentage points does NOT change this situation.
As you know, I constantly complain about how realty associations continue to issue such statistics which really show how much work needs to be done to make the real estate market viable instead of the "improved" trend they try to present.
This type of quote continues to come from realty associations around the country, not just Milwaukee. For some reason, we have literally thousands of realty agents acting as if things are much improved when the reality is they are not.
What we should be reading is about what the realty associations and their member base are actually doing to SOLVE the problem. Make it "our" problem, instead of "your" problem, and we'll all be happy.
Disputing the statistics, when the entity in which he represents puts out its share of negative market statistics doesn't accomplish a thing.
Taking this information head-on and addressing it just might accomplish something.
If I were able to answer for Mr. Ruzicka, here is how I would have handled it:
"Even if the Milwaukee area showed negative equity reduction to below the national average, there are still too many local homeowners that need our help. As soon as we clear up the mess with multiple foreclosures and short sales taking away the fair pricing in the market, you'll see an important increase in equity. That is our priority right now, far above questioning the specifics of that CoreLogic report."
Those faced with negative equity on their houses, Milwaukee and elsewhere, yet making their payments and doing their share as promised, deserve a lot better than being a mere statistic to be commented on.
Tuesday, June 11, 2013
The Real Estate Summer of Standoff
Until or unless something gives,and soon, in the real estate market, it appears that we are headed for a showdown. Who will blink first?
My mid-year evaluation shows far too little incentive for consumers on all sides of the fence. That is a big concern. Let's take a look at where all sides are at as we come up on the end of the first half of 2013:
HOME OWNERS: Still not selling unless they absolutely have to. Most are not taking the bait. They read about the "home prices up 10%" stories, but realize that over the past five years their own home may have dropped more than 33% in value. These incremental price increases still have yet to reach "profit potential".
INVESTORS: In many areas, "the good ones are gone". It appears that the vast majority of the "steals and deals" have been purchased and in some cases flipped already. Now with fewer foreclosures coming onto the market than in recent years, the best deals are getting harder to find. In other cases, the investment groups have maxed out on purchases, and are waiting for the market to improve to the point of being able to flip for a decent profit.
MORTGAGE BROKERS & BANKS: Many are still extremely busy looking to close the loans they started during the rush of low rates during April. Now that mortgage rates, while still great compared with five years ago, are going back up and may stay higher, they will soon face a challenge.
COMBINED: The home owners aren't eagerly selling, the investors are waiting, and the mortgage lenders are faced with higher rates. Thus, the standoff.
How can we spur some action?
Lender Processing Services, in its April Mortgage Monitor report, shows that nearly nine million Americans are currently eligible to refinance. This number is based on potential borrowers with at least a 20% equity in their homes with credit scores above 720 and currently paying at least 4.5%.
Meanwhile, the Mortgage Bankers Association just reported that the Refinance Index declined by nearly 15% for the week ending May 31, 2013, and sits at its lowest level since November 2011.
Why aren't people refinancing? It could be any of three reasons. Marketing. The market. The fees associated.
MARKETING: How many of those nine million realize that they are eligible to refinance? When so much of the real estate related "news" is devoted to the negative statistics, there is no incentive for current home owners to pick up the phone and investigate. Ironically, this is the fault of the banks and mortgage lenders who should be using market research to their advantage. Nine million home owners who could be current customers shouldn't be that hard to find!
THE CURRENT MARKET: It continues to amaze me about the number of renters I talk to who do not receive mailers or information from local mortgage brokers or realty agents about renting to buy or spending on a mortgage instead of rent money. The recent survey released by Fannie Mae's Economic & Strategic Research Group, based on more than 3,000 renters and owners shows that 42% believe they "will not be able to obtain a mortgage within the next five years".
The Survey results also showed that most renters "understand the advantages of home ownership".
FEES ASSOCIATED: In most instances, there are costs to the homeowner that qualifies for a refinance, and they can be sizeable. Of course, these fees are how the banks and brokers generate their income. Some homeowners have a fear of it not even be worthwhile to research a refinance. For example, suppose a homeowner could save $300 per month by reducing to the current mortgage rate from the one they are currently paying. But suppose that refi would cost them $3,000 out of pocket to complete.
To the homeowner, that means (based on that $300 per month for 10 months) it would really be nearly one year before they would see a direct financial benefit. For that matter, they could perhaps use some or all of that $3,000 for an improvement or upgrade on their home in hope of increasing the value down the road.
In other words, before they start, the consumer may not see a direct value in considering a refinance.
The banks and the lenders, as of now, see no reason to have to reduce their fees.
Therefore, here we sit. Until somebody blinks. Hopefully, it won't take the entire summer for that to happen.
My mid-year evaluation shows far too little incentive for consumers on all sides of the fence. That is a big concern. Let's take a look at where all sides are at as we come up on the end of the first half of 2013:
HOME OWNERS: Still not selling unless they absolutely have to. Most are not taking the bait. They read about the "home prices up 10%" stories, but realize that over the past five years their own home may have dropped more than 33% in value. These incremental price increases still have yet to reach "profit potential".
INVESTORS: In many areas, "the good ones are gone". It appears that the vast majority of the "steals and deals" have been purchased and in some cases flipped already. Now with fewer foreclosures coming onto the market than in recent years, the best deals are getting harder to find. In other cases, the investment groups have maxed out on purchases, and are waiting for the market to improve to the point of being able to flip for a decent profit.
MORTGAGE BROKERS & BANKS: Many are still extremely busy looking to close the loans they started during the rush of low rates during April. Now that mortgage rates, while still great compared with five years ago, are going back up and may stay higher, they will soon face a challenge.
COMBINED: The home owners aren't eagerly selling, the investors are waiting, and the mortgage lenders are faced with higher rates. Thus, the standoff.
How can we spur some action?
Lender Processing Services, in its April Mortgage Monitor report, shows that nearly nine million Americans are currently eligible to refinance. This number is based on potential borrowers with at least a 20% equity in their homes with credit scores above 720 and currently paying at least 4.5%.
Meanwhile, the Mortgage Bankers Association just reported that the Refinance Index declined by nearly 15% for the week ending May 31, 2013, and sits at its lowest level since November 2011.
Why aren't people refinancing? It could be any of three reasons. Marketing. The market. The fees associated.
MARKETING: How many of those nine million realize that they are eligible to refinance? When so much of the real estate related "news" is devoted to the negative statistics, there is no incentive for current home owners to pick up the phone and investigate. Ironically, this is the fault of the banks and mortgage lenders who should be using market research to their advantage. Nine million home owners who could be current customers shouldn't be that hard to find!
THE CURRENT MARKET: It continues to amaze me about the number of renters I talk to who do not receive mailers or information from local mortgage brokers or realty agents about renting to buy or spending on a mortgage instead of rent money. The recent survey released by Fannie Mae's Economic & Strategic Research Group, based on more than 3,000 renters and owners shows that 42% believe they "will not be able to obtain a mortgage within the next five years".
The Survey results also showed that most renters "understand the advantages of home ownership".
FEES ASSOCIATED: In most instances, there are costs to the homeowner that qualifies for a refinance, and they can be sizeable. Of course, these fees are how the banks and brokers generate their income. Some homeowners have a fear of it not even be worthwhile to research a refinance. For example, suppose a homeowner could save $300 per month by reducing to the current mortgage rate from the one they are currently paying. But suppose that refi would cost them $3,000 out of pocket to complete.
To the homeowner, that means (based on that $300 per month for 10 months) it would really be nearly one year before they would see a direct financial benefit. For that matter, they could perhaps use some or all of that $3,000 for an improvement or upgrade on their home in hope of increasing the value down the road.
In other words, before they start, the consumer may not see a direct value in considering a refinance.
The banks and the lenders, as of now, see no reason to have to reduce their fees.
Therefore, here we sit. Until somebody blinks. Hopefully, it won't take the entire summer for that to happen.
Tuesday, May 21, 2013
Both The Home And The Ad Have Potential
"Perfect for a large family or a car collector". Not the way a typical ad for a home starts out, but that's a good thing. In fact, this is an all-too-rare positive example of how a property ad should start out.
The above quote is actually the first sentence of the copy. Now you are talking! There is a sentence that makes you want to read more. And when you do read more, you read things like "Covered parking next to house plus 11 car garage".
Remaining copy includes "5 acres of paradise. Horse corral and stables. Basketball court plus putting green. Upper deck patio plus gazebos".
There is nothing in the description copy about the number of bedrooms and bathrooms. And that's fine, even though it took me a moment to find where it says 4 bedrooms 3 baths on the side.
The photo spread in this ad is effective, especially since the primary photo actually matches and compliments the description. Normally, it is not advisable to show a vehicle within a photo, but in this case it actually enhances the photo because it shows how easily several vehicles can fit on the property.
This advertisement rates very well with me for many of the reasons already described. Again, that first sentence does what every real estate ad should do. It makes you want to keep reading. It points out the unique features only. After all, even in the $800,000 price range, not many homes offer parking for more than 11 vehicles, a horse corral, and a basketball court, and so much more.
Strong copy like this makes for a strong advertisement. It helps in a big way that the photos serve to enhance the copy. There is no "Realtor fluff", as I call it. None of the "Must see. This is the house. Won't last long." stuff that wastes valuable ad space.
However, the agent needs to carry this out at least one more step. My problem with this advertisement is that it seems only be on HomeFinder.com. This is not to knock that site, but their property ads, like most other independent real estate advertising portals, are standard in format, which makes it more difficult to make a property stand out and seem more "special" to the potential buyer.
You see, I found this well written ad on HomeFinder.com through the agent's office web site. I saw the primary photo and opening of the description, and clicked on it for more details. Yet, it took me to this HomeFinder.com ad.
With such effective copy and the solid photo spread, there is no excuse for this property not to have its own dedicated web page. The photo spread should be available right away in its entirety instead of having to click through.
The description could be even longer and even more enticing.
If the HomeFinder ad were an additional one in order to get this property on "an additional" site I could understand.
But the agent needs to carry this through. The commission on this property easily justifies being able to provide the treatment this property deserves. Considering that this ad has been up for more than 1 1/2 months, it's not like the agent could tell me he hasn't had time to create an individual ad for it.
You can see it for yourself (as of press time) by searching at 11816 North Loop Dr., Socorro, TX 79927. Hopefully by the time you do, there will indeed be more than one advertisement for it!
The above quote is actually the first sentence of the copy. Now you are talking! There is a sentence that makes you want to read more. And when you do read more, you read things like "Covered parking next to house plus 11 car garage".
Remaining copy includes "5 acres of paradise. Horse corral and stables. Basketball court plus putting green. Upper deck patio plus gazebos".
There is nothing in the description copy about the number of bedrooms and bathrooms. And that's fine, even though it took me a moment to find where it says 4 bedrooms 3 baths on the side.
The photo spread in this ad is effective, especially since the primary photo actually matches and compliments the description. Normally, it is not advisable to show a vehicle within a photo, but in this case it actually enhances the photo because it shows how easily several vehicles can fit on the property.
This advertisement rates very well with me for many of the reasons already described. Again, that first sentence does what every real estate ad should do. It makes you want to keep reading. It points out the unique features only. After all, even in the $800,000 price range, not many homes offer parking for more than 11 vehicles, a horse corral, and a basketball court, and so much more.
Strong copy like this makes for a strong advertisement. It helps in a big way that the photos serve to enhance the copy. There is no "Realtor fluff", as I call it. None of the "Must see. This is the house. Won't last long." stuff that wastes valuable ad space.
However, the agent needs to carry this out at least one more step. My problem with this advertisement is that it seems only be on HomeFinder.com. This is not to knock that site, but their property ads, like most other independent real estate advertising portals, are standard in format, which makes it more difficult to make a property stand out and seem more "special" to the potential buyer.
You see, I found this well written ad on HomeFinder.com through the agent's office web site. I saw the primary photo and opening of the description, and clicked on it for more details. Yet, it took me to this HomeFinder.com ad.
With such effective copy and the solid photo spread, there is no excuse for this property not to have its own dedicated web page. The photo spread should be available right away in its entirety instead of having to click through.
The description could be even longer and even more enticing.
If the HomeFinder ad were an additional one in order to get this property on "an additional" site I could understand.
But the agent needs to carry this through. The commission on this property easily justifies being able to provide the treatment this property deserves. Considering that this ad has been up for more than 1 1/2 months, it's not like the agent could tell me he hasn't had time to create an individual ad for it.
You can see it for yourself (as of press time) by searching at 11816 North Loop Dr., Socorro, TX 79927. Hopefully by the time you do, there will indeed be more than one advertisement for it!
Thursday, May 16, 2013
Update On Foreclosure Process Blog
This morning brings us an important news update from yesterday's blog about the challenge of a "purchased mortgage" foreclosure in Colorado.
The Alabama Supreme Court today upheld a lower court opinion giving MERS (Mortgage Electronic Registration Systems) the ability to "legally assign" mortgages in that state, with this response coming as a result of a challenge similar to the one in Colorado. (Crum vs. LaSalle - in AL)
Upon further investigation, it seems that the Supreme Courts in Nevada, Rhode Island, and Idaho have also recent ruled in favor of MERS in this regard.
Hopefully the Judge in Colorado will follow suit.
The Alabama Supreme Court today upheld a lower court opinion giving MERS (Mortgage Electronic Registration Systems) the ability to "legally assign" mortgages in that state, with this response coming as a result of a challenge similar to the one in Colorado. (Crum vs. LaSalle - in AL)
Upon further investigation, it seems that the Supreme Courts in Nevada, Rhode Island, and Idaho have also recent ruled in favor of MERS in this regard.
Hopefully the Judge in Colorado will follow suit.
Wednesday, May 15, 2013
Where You Can't "Bank" On A Foreclosure.......
A U.S.
District Judge in Colorado is expected to make a ruling this week which could
result in an additional challenge for certain banks to foreclose on homes.
But there is
so much more to this story. As of now, this ruling appears to only impact
Colorado, where the interpretation is that certain foreclosure regulations are
different from other states. Even though the Bank involved also serves many
other states.
The confusion
doesn’t stop there. The home owner who brought it to the point of a Judge’s
ruling may have found a loophole to prevent her home from being foreclosed
upon.
Many of us
know and understand that mortgages are often sold to other banks or investment
groups, causing the home owner of that mortgage to need to make their ongoing
payments to the “new” owner.
In the case
that brought this to light, the home owner challenged the “new” Bank, which
reportedly purchased her mortgage, to prove ownership. According to a Denver
Post report, the service which handles the transfer of mortgage ownership does
not have official documentation of their takeover, and therefore was not able
to show proof of ownership of the mortgage. Yet, this Bank was attempting to
foreclose upon the delinquent home owner.
The Judge has
admitted that Colorado does not require such documentation. The home owner has
not yet involved an attorney, even though the situation has already gotten to
this point.
Of course, as
those who are involved in this matter will recognize, if the home owner in
question could afford the lawyer to fight this, chances are she could be making
her payments and not be considered delinquent.
Even in real
estate, two wrongs don’t make a right.
If you have
been following this blog for a while, you are probably waiting for me to
suggest that realty agents in Colorado make their current home owner clients
aware of this situation. Perhaps, unless the current system in Colorado is
changed, others could challenge the validity of their mortgages. However, I am
not going to do that.
In reality,
it is potential renters who need to be aware of this mess. The local publicity
for this story has likely reached into the wrong hands already. A delinquent
home owner who knows their mortgage was purchased by another entity now has
reason to delay a foreclosure attempt.
During this
delay, there would still be no public record of the bank (or entity) attempting
the foreclosure actually having the ownership right to do so. Thus, the home
owner could simply collect a security deposit and a month’s rent, turn over the
keys, and be moved to another country. An unsuspecting renter could then face
eviction and legal action because they have documentation showing they live at
the property in question.
To me, the
fact that there is a concern for a potential renter about renting a single
family home at a time when it should be a more viable option is just as
important as what becomes of the foreclosure regulations in Colorado.
Here’s hoping
that enough people “move” on this one before it’s too late.
Wednesday, May 8, 2013
Why the Focus Should Be On Renting Homes
Unfortunately, there does not appear to be anything close to a short-term solution to the ongoing real estate crisis, even though there is a major need for one. Perhaps making a large portion of available single family homes and condos available as "Rent To Own" would be the best way to help.
All of this "Home sales are up!" information doesn't help when the increase is due to lower property values which make it difficult for so many others to sell.
The U.S. Census Bureau reports another decline in the percentage of American who own their homes during the first quarter of 2013 when compared with the same period in 2012. This makes the lowest level of Americans who own since 1995. Yet, during the same one-year period, the number of completed forecloses dropped more than 2.5%.
Thus, even with fewer homes in foreclosure, home ownership is down over the same period. Put this together, and it confirms that the reason home sales are "up" is because cash investors continue to swoop up the bargains in hopes of flipping for a future profit. But that doesn't help the current market.
Add to these facts that construction spending was reportedly the largest drop in 2006 during the month of March 2013, which came after a reported increase for February.
My solution to this is to encourage more "Rent To Buy" opportunities. There are plenty of people who cannot get a mortgage, and/or can't afford a huge down payment at the moment. There are plenty of homeowners who want out but, understandably, do not want to take a loss on their home.
The reason that many cities are boasting "less inventory to choose from" is because a large percentage of listed homes are distressed properties. There is little to no incentive for owners to sell since chances are they would not make a profit, let alone break even in most cases.
Yet, if an "owner" can cover the cost of the mortgage and fees, or come close to it, chances are they could use their own funds to rent or buy elsewhere, and perhaps take advantage of an undervalued property available in a location they want to be in.
However, the realty agents I have talked to about this generally are not receptive to this. Therein lies the problem, even though I can understand their hesitation. A "Rent to Buy" deal means the property actually doesn't sell for months or even years. Hence, the agents see this method as putting their commission potential on hold. So they decided they would rather sit on a listing for six months in hopes of getting a sale and a commission sooner rather than later.
What they don't see is the potential to place the "landlord" into another home sooner rather than later, AND setting up for the seller commission down the road when the "Rent to Buy" tenant finally completes the purchase.
Do the math. If fewer people are owning their homes, it has to mean more people are renting. Those realty agents who won't get involved with rentals are missing out on commissions - sooner. That is one short-term solution to this problem.
All of this "Home sales are up!" information doesn't help when the increase is due to lower property values which make it difficult for so many others to sell.
The U.S. Census Bureau reports another decline in the percentage of American who own their homes during the first quarter of 2013 when compared with the same period in 2012. This makes the lowest level of Americans who own since 1995. Yet, during the same one-year period, the number of completed forecloses dropped more than 2.5%.
Thus, even with fewer homes in foreclosure, home ownership is down over the same period. Put this together, and it confirms that the reason home sales are "up" is because cash investors continue to swoop up the bargains in hopes of flipping for a future profit. But that doesn't help the current market.
Add to these facts that construction spending was reportedly the largest drop in 2006 during the month of March 2013, which came after a reported increase for February.
My solution to this is to encourage more "Rent To Buy" opportunities. There are plenty of people who cannot get a mortgage, and/or can't afford a huge down payment at the moment. There are plenty of homeowners who want out but, understandably, do not want to take a loss on their home.
The reason that many cities are boasting "less inventory to choose from" is because a large percentage of listed homes are distressed properties. There is little to no incentive for owners to sell since chances are they would not make a profit, let alone break even in most cases.
Yet, if an "owner" can cover the cost of the mortgage and fees, or come close to it, chances are they could use their own funds to rent or buy elsewhere, and perhaps take advantage of an undervalued property available in a location they want to be in.
However, the realty agents I have talked to about this generally are not receptive to this. Therein lies the problem, even though I can understand their hesitation. A "Rent to Buy" deal means the property actually doesn't sell for months or even years. Hence, the agents see this method as putting their commission potential on hold. So they decided they would rather sit on a listing for six months in hopes of getting a sale and a commission sooner rather than later.
What they don't see is the potential to place the "landlord" into another home sooner rather than later, AND setting up for the seller commission down the road when the "Rent to Buy" tenant finally completes the purchase.
Do the math. If fewer people are owning their homes, it has to mean more people are renting. Those realty agents who won't get involved with rentals are missing out on commissions - sooner. That is one short-term solution to this problem.
Monday, April 29, 2013
Why Home Sellers Should Monitor The Advertising
A truly motivated home seller should not simply "leave it to the agent" to properly promote and advertise their property. Maybe it's my personal 20+ years of examining and creating property ads from coast to coast. But although there are some severe challenges to the real estate market at the moment, a lot of the problem continues because of how poorly many properties are advertised and marketed.
Frankly, a seller should be monitoring all of the advertising and promotion the agent is doing. Too many advertisements for properties are either poorly created to start with, and/or not updated or improved when the situation calls for it.
For example, this afternoon, I decided to do an online search for a 3 bedroom home in the Denver CO area priced between $200,000 and $240,000, using two separate "national" web sites. First, I went onto Homes.com and entered in the search criteria. What came up were results showing that 13 of the first 17 listings I found are "foreclosure" listings. Since I do not live in the Denver area, the "message" conveyed to me is that "This must be a distressed area. I don't want to live where so many homes could be empty or abandoned."
Of course, the number of foreclosures could have some appeal to the large cash-buying investors looking to purchase and flip homes over the next few years. For a potential home buyer looking for a home for him/herself or family, seeing this search did not look promising. Granted, this is not the fault of the agents who create ads for their "legitimate" sellers. My point is that, if I really were looking for a home for my family, I would have been scared off before seriously looking at any of those listings. The agents representing those non-distressed homes should keep that in mind before paying to advertise with a service that allows foreclosed and distressed properties to dominate an area.
However, I then went to Realtor.com, which is the national home (and property) search site updated and maintained through the National Association of Realtors. While it is true I found a large list of properties to fit my criteria, including some short sale listings, I found a few which do nothing except verify my contention that agents and sellers need to monitor their advertisements.
If you want proof, do a Realtor.com search for 20793 E 38Th Pl Denver,CO 80249. You'll see what I mean. (By the way, this listing ad was chosen randomly and I do not know the agent, nor has she ever been a client of mine.)
As of the day of this writing, the home has been listed for more than a month. Yet, there is only one photo, total, available to a potential buyer, whereas the majority of the other homes within the same area and price range offer multiple photos. The one photo in use is an exterior shot, which clearly shows a raw lawn, grass spots growing out from under the paved driveway, and each of the windows open to what look to be empty rooms. To put it another way, the only photo used shows the exterior as being poorly maintained.
Since Realtor.com has a uniform template for the descriptions of the properties, this agent was on equal footing regarding the creation of this listing advertisement. Keep in mind the purpose of this advertisement is to make this listing stand out among the others listed.
Yet, the "Interior Features" portion of the description includes the following:
Garage Door Opener
Smoke Alarm
Refigerator
Fireplace Insert
Cable Available
Isn't it amazing what $200,000 gets you in Denver these days?
Yes, this agent needs to point out that if you buy this home, you will have a refrigerator and a smoke alarm! It doesn't say if that smoke alarm covers all three bedrooms, however.
And then, if you look at the "Exterior Features" portion of this advertisement, you'll see that the property has a "Fence" and a "Spinkler". Then again, if you look at the lone photo available, you can see the fence for yourself. However, you will also be surprised, based on how that lawn looks, that there really is a sprinkler.
Although I don't know for sure, my hunch is that this advertisement has been the same for more than the one month it has been listed. What I do know for sure is that this home, unless the advertising is improved upon, will become another statistic about a home which hasn't sold (or didn't sell).
In this instance, and the many others like them, advertisements such as this one won't help to sell a home in any real estate market. We can't simply blame the agents. I'd like to know how a truly motivated seller would accept an advertisement like this to "best" represent their property.
Frankly, a seller should be monitoring all of the advertising and promotion the agent is doing. Too many advertisements for properties are either poorly created to start with, and/or not updated or improved when the situation calls for it.
For example, this afternoon, I decided to do an online search for a 3 bedroom home in the Denver CO area priced between $200,000 and $240,000, using two separate "national" web sites. First, I went onto Homes.com and entered in the search criteria. What came up were results showing that 13 of the first 17 listings I found are "foreclosure" listings. Since I do not live in the Denver area, the "message" conveyed to me is that "This must be a distressed area. I don't want to live where so many homes could be empty or abandoned."
Of course, the number of foreclosures could have some appeal to the large cash-buying investors looking to purchase and flip homes over the next few years. For a potential home buyer looking for a home for him/herself or family, seeing this search did not look promising. Granted, this is not the fault of the agents who create ads for their "legitimate" sellers. My point is that, if I really were looking for a home for my family, I would have been scared off before seriously looking at any of those listings. The agents representing those non-distressed homes should keep that in mind before paying to advertise with a service that allows foreclosed and distressed properties to dominate an area.
However, I then went to Realtor.com, which is the national home (and property) search site updated and maintained through the National Association of Realtors. While it is true I found a large list of properties to fit my criteria, including some short sale listings, I found a few which do nothing except verify my contention that agents and sellers need to monitor their advertisements.
If you want proof, do a Realtor.com search for 20793 E 38Th Pl Denver,CO 80249. You'll see what I mean. (By the way, this listing ad was chosen randomly and I do not know the agent, nor has she ever been a client of mine.)
As of the day of this writing, the home has been listed for more than a month. Yet, there is only one photo, total, available to a potential buyer, whereas the majority of the other homes within the same area and price range offer multiple photos. The one photo in use is an exterior shot, which clearly shows a raw lawn, grass spots growing out from under the paved driveway, and each of the windows open to what look to be empty rooms. To put it another way, the only photo used shows the exterior as being poorly maintained.
Since Realtor.com has a uniform template for the descriptions of the properties, this agent was on equal footing regarding the creation of this listing advertisement. Keep in mind the purpose of this advertisement is to make this listing stand out among the others listed.
Yet, the "Interior Features" portion of the description includes the following:
Garage Door Opener
Smoke Alarm
Refigerator
Fireplace Insert
Cable Available
Isn't it amazing what $200,000 gets you in Denver these days?
Yes, this agent needs to point out that if you buy this home, you will have a refrigerator and a smoke alarm! It doesn't say if that smoke alarm covers all three bedrooms, however.
And then, if you look at the "Exterior Features" portion of this advertisement, you'll see that the property has a "Fence" and a "Spinkler". Then again, if you look at the lone photo available, you can see the fence for yourself. However, you will also be surprised, based on how that lawn looks, that there really is a sprinkler.
Although I don't know for sure, my hunch is that this advertisement has been the same for more than the one month it has been listed. What I do know for sure is that this home, unless the advertising is improved upon, will become another statistic about a home which hasn't sold (or didn't sell).
In this instance, and the many others like them, advertisements such as this one won't help to sell a home in any real estate market. We can't simply blame the agents. I'd like to know how a truly motivated seller would accept an advertisement like this to "best" represent their property.
Monday, April 22, 2013
How Apartment Renters Could Be Costing Home Owners
Denver
(Colorado) County assessors have completed their property
valuations which are used to help determine property taxes charged
for 2014 and 2015. Colorado’s Property Tax Administrator, JoAnn
Groff, said at a news conference to announce the findings that
“Property owners are still getting the advantages of the downturn
in the economy”.
valuations which are used to help determine property taxes charged
for 2014 and 2015. Colorado’s Property Tax Administrator, JoAnn
Groff, said at a news conference to announce the findings that
“Property owners are still getting the advantages of the downturn
in the economy”.
The latest figures show that residential property valuations for
Colorado were down approximately 2.5% compared with the 2010
study. In Denver County alone, the value of single family homes
(including condos) declined by .9%, although condo values actually
dropped more than 7%.
On the surface, this appears to be good news from home owners
who in many instances will see a slight drop in the amount of property
taxes which will come due. Estimates are that better than 60% will
pay less in Denver County.
However,
this actually should be “better” news than it really is.
The report goes on to state that, based on higher occupancy and an
increase in rents, apartment buildings in the County combined to show
a 22.6% increase in value. The majority of those come from the “high
rise” apartment buildings, which results in big bucks value increases.
The report goes on to state that, based on higher occupancy and an
increase in rents, apartment buildings in the County combined to show
a 22.6% increase in value. The majority of those come from the “high
rise” apartment buildings, which results in big bucks value increases.
What does the increased value of large apartment buildings have to do
with property taxes for a single family home development on the other
side of the County? More than you might think.
The County Assessor considers these high rise apartment buildings
to be “residential property” just the same as one single family home
on a single piece of property. As a result, the 22.6% increase in
apartment building values has served to collectively raise residential
property values in Denver County.
This means that a condo owner, whose property may have lost upwards
of 10% of its value within the past two years (given that the average for
the County is 7%), does not see a 10% decrease in their property taxes
going forward. Instead, that owner may see only a 2.5% decrease,
likely a difference of hundreds (or more) dollars.
Although you cannot take the percentages in the above paragraph
literally, as specific properties are assessed based on several factors,
the point is that the “overall” findings do impact the property taxes
going forward.
What this does show is that owners are being impacted by renters.
I’m sure that many of the owners of those apartment buildings are doing
cartwheels about these findings. The “increased rents” help to increase
the value of their properties, which translates to increased cash flow (if
not profit) for them. Yet, the lost value of single family homes serves to
reduce the amount of property taxes those owners will pay for at least
the next couple of years.
Going forward, it will be interesting to see if the investment groups which
have been focused on picking up bargain foreclosures and short sales
(and driving down the single family home prices) over the past couple of
years would now turn their attention to large apartment buildings instead.
Obviously, this situation in Colorado might be very much different from
what is going on in this regard in your area. If you are not certain, it might
be worth looking into!
If you are a home owner, keep this in mind even if you see a decrease. Be
sure you are aware of any options to appeal your next or next year
property tax assessment.
Friday, April 19, 2013
Is Your Home Where The Jobs Are?
Here is still another instance of why Market Research for real estate agents and companies needs to be more comps and local home sales statistical comparisons.
Earlier this week, an urban research report showed some data which could be of use to realty agents in the suburbs surrounding Kansas City. So far, not one of them, that I know of, has jumped on this yet.
A report from the Brookings Institute shows that over the past six years, Kansas City is going against the national trend and showing more employment moving to its suburban areas instead of downtown or the "core area" of a large city. The percent share of jobs in Kansas City's "core" for the year 2010 was 6% lower than the national average among the 100 large cities studied for this research.
If you are looking to sell a home in a K.C. suburb, or are an agent representing a seller in that area, you should be all over this information. A chart from this report shows that, as of 2010, there were roughly 200,000 more jobs located "10 to 35 miles from the city's core area" than there were "3 to 10 miles from the city's core area".
Where there are jobs, there will be people with reasons to move into the area. Agents looking to sell homes should be aware of where the jobs are, whether a specific large company is hiring, new businesses are opening, and/or commerical buildings are being built. It's not just Kansas City, as every market sees the occasional news story about a business expanding or entering a market, or perhaps moving from downtown to a suburb or vice versa.
Yet, I don't see this research reflected in property listings. An advertisement for a home could just as easily say "Next to XYZ Electronics, Benson School District. 3 bed 2 bath, attached garage, yard". Even that one sentence paints the picture of "Family could live near the job, reduce commute time, send the kids to a decent school, and not have parking issues".
In this instance, that information could be far more important to a potential buyer, who may only look at the advertisement for the property for a few quick seconds. If the ad instead starts with the usual "3 bed 2 bath, new carpet, large kitchen......", someone now working at 'XYZ Electronics' might not even see the most important benefit and continue through the endless list of homes which may or may not reach his/her critieria.
This is how knowing where the jobs are (or are going) is important toward finding the hot button for a potential buyer. It doesn't matter how many or how few homes in that area sold a year ago. The potential buyer needs reasons to consider a specific home today. Those reasons often require some market research. And employment is only one avenue.
Start finding out about employment trends near your home. Follow the business news for information about commercial development, and business relocation.
Why should a potential buyer look at your area instead of downtown? Or look at downtown instead of the suburbs? Unless you give them reasons, your home will be "just another" listing.
Earlier this week, an urban research report showed some data which could be of use to realty agents in the suburbs surrounding Kansas City. So far, not one of them, that I know of, has jumped on this yet.
A report from the Brookings Institute shows that over the past six years, Kansas City is going against the national trend and showing more employment moving to its suburban areas instead of downtown or the "core area" of a large city. The percent share of jobs in Kansas City's "core" for the year 2010 was 6% lower than the national average among the 100 large cities studied for this research.
If you are looking to sell a home in a K.C. suburb, or are an agent representing a seller in that area, you should be all over this information. A chart from this report shows that, as of 2010, there were roughly 200,000 more jobs located "10 to 35 miles from the city's core area" than there were "3 to 10 miles from the city's core area".
Where there are jobs, there will be people with reasons to move into the area. Agents looking to sell homes should be aware of where the jobs are, whether a specific large company is hiring, new businesses are opening, and/or commerical buildings are being built. It's not just Kansas City, as every market sees the occasional news story about a business expanding or entering a market, or perhaps moving from downtown to a suburb or vice versa.
Yet, I don't see this research reflected in property listings. An advertisement for a home could just as easily say "Next to XYZ Electronics, Benson School District. 3 bed 2 bath, attached garage, yard". Even that one sentence paints the picture of "Family could live near the job, reduce commute time, send the kids to a decent school, and not have parking issues".
In this instance, that information could be far more important to a potential buyer, who may only look at the advertisement for the property for a few quick seconds. If the ad instead starts with the usual "3 bed 2 bath, new carpet, large kitchen......", someone now working at 'XYZ Electronics' might not even see the most important benefit and continue through the endless list of homes which may or may not reach his/her critieria.
This is how knowing where the jobs are (or are going) is important toward finding the hot button for a potential buyer. It doesn't matter how many or how few homes in that area sold a year ago. The potential buyer needs reasons to consider a specific home today. Those reasons often require some market research. And employment is only one avenue.
Start finding out about employment trends near your home. Follow the business news for information about commercial development, and business relocation.
Why should a potential buyer look at your area instead of downtown? Or look at downtown instead of the suburbs? Unless you give them reasons, your home will be "just another" listing.
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