Category Archives: business of real estate

A Perfect Storm for “Move-Up Buyers”?

Wednesday, 30 May 2012 08:00

Written by Lane Bailey

1 Comment

Interest rates are at historic lows… leading to incredible affordability.

Picture of the "Gingerbread House" in Essex, Connecticut, USA (Photo credit: Wikipedia)

Entry level inventories are at historic lows… leading to some price strength at base price levels.

Still some weakness at some “move-up” price levels… leading to great deals on homes at those price levels.

For a while now, many of us in the real estate world have been saying two things. First, until jobs come back and people feel secure, real estate would struggle. Second, the market wouldn’t come back until “move-up” buyers were in a position to make a move.

I don’t know that the majority of consumers are “comfortable” with their job situation, but when they are, the deals will start to dry up. Those that get off the fence early will have the best choice of bargains… and inventories are actually dropping.

Move-up buyers had been somewhat locked into their homes with crappy resale values. They couldn’t afford to move out and be in a position to put anything down on another house. But now that there is a bit of stability in in the entry level, more of those buyers ARE able to sell and move up the market.

If you want to see if you are in a position to trade up, give me a call. Lane Bailey 678-200-5895.

But the News Said…

Wednesday, 23 May 2012 08:00

Written by Lane Bailey

1 Comment

English: Change of the Case-Shiller Home Price Index relative to its peak values in 1989 and 2006. Series starting in 1989 is in blue. Series starting in 2006 is in red. (Photo credit: Wikipedia)

One of the comments I hear the most is “but the news said…”. There are always stories on the news about the NAR (National Association of REALTORS®) market stats, Case-Shiller or others. Most of the statistics are based on national numbers. Case Shiller is a little more local, in that it is based on the local area… if you can call the Atlanta region “local”.

One thing I would note is that the Atlanta region DOES tend to track pretty close to national averages. But being pretty close isn’t the same as being the same. And even if it were, there is a huge difference between the Atlanta Metro area and Gwinnett County… much less Suwanee, or the Morningview subdivision.

And that is the problem…

We can’t listen to the news and have a clear picture of what it means for our house or our neighborhood. It would be the same as looking at the Dow Jones Industrial Average (DJIA) and deciding whether a specific stock was going to go up or down.

But that is exactly what people do… They see a report on the network news and then decide that houses are over-priced, under-priced or whatever. When the real fact is that some market segments are rocking bargains right now… there is too much inventory and not enough buyers. Other segments have scarce inventory and homes are selling as fast as they are listed (if they are priced appropriately). But the national news… or even the local news… can’t be that exact in their reporting.

Unlike a lot of real estate professionals, I don’t begrudge the news for reporting the “big picture” story on the real estate market. We DO need to know what is happening on a national basis. But we also need to remember that there are vast differences between neighborhoods, price ranges, ZIP codes, school areas, etc.

The best bet is to talk with a local agent… I have monthly market reports on 7 cities in Gwinnett County, GA. If this is your area, you can get a much better idea of what is going on around you. If you really want to know what is happening, let me know and we’ll talk about YOUR house.

Prices Up? Prices Down? WTH??(lanebailey.com)
Suwanee, GA, Market Report, April 2012(lanebailey.com)
Case-Shiller Shows Uneven Recovery For U.S. Housing(edshort.wordpress.com)

The “Best” Deal?

Wednesday, 16 May 2012 08:00

Written by Lane Bailey

0 Comments

Buyers and sellers in the Plazuela de los Sapos, Puebla, Mexico (Photo credit: Wikipedia)

It might be one of the most asked questions I get from both Buyers and Sellers…

Is this the “best” deal?

The problem is that there is almost never an answer. It isn’t as simple as a mathematical equation… unless there are variables to include for things like emotion, comfort and other intangibles. The other problem is that just trying to figure out if THIS is the best deal can change the answer to the equation.

People have a tendency to “dig in” when they are pressed. Buyers or Sellers hit a limit to what they want to do, and often they hit that limit harder when the other party is trying to test the limits.

We’ve all heard the story of the boiling frog… If you put him in a pot of boiling water, he jumps out, but if you put him in comfortable water and slowly heat it, he will sit there and boil.

boiling water עברית: מים רותים (Photo credit: Wikipedia)

It works the same with buyers and sellers. If a Buyer sends an offer with a very low price (we’ll leave aside value v pricehere…) to start negotiations, the Seller often digs in and won’t accept an offer that they might have accepted had negotiations started from a more acceptable point. Conversely, if a Seller starts with a list price that is too high, the Buyers may just not submit an offer… or they might pick the property apart and submit a lower offer than they might have otherwise.

Of course the thing to remember is that it certainly ISN’T the best deal if it never happens…

Emotional Traps of Selling Your Home (jcorcoran1.wordpress.com)
Does a seller have to respond to my offer? (findwell.com)
Traditional ‘Rules’ of Home Buying Return (money.usnews.com)

USA Today thinks prices are heading up…

Wednesday, 09 May 2012 09:21

Written by Lane Bailey

0 Comments

And they very may.

map for us unemployment numbers (Photo credit: Wikipedia)

According to the article I ran across this morning, house prices should go up about 4% each year for the next year. I can see that… especially on the entry level of the market. On the upper end of the market, though, it isn’t looking like we’ll see recovery for a little while. Between taxes and other policies that aren’t that friendly towards small business, there isn’t a lot of short term optimism with many of the folks that buy more luxurious homes.

So… my take is this. I see the lower end of the market performing well over the next few years. The higher end of the market more tricky. The middle of the market, as well.

On the entry level, investors are scooping up properties. Prices have stabilized and we will likely see increases regardless of the political or business climate, unless there is a MAJOR reversal. Many of the investors are buying and holding properties as rentals, and there are simply a lot of people out there that have good income but cannot buy because of foreclosures and short sales. That will drive the entry level pricing picture.

selfmade image of U.S. Unemployment rate from 1890-2009 (Photo credit: Wikipedia)

At the middle of the market, there are a few competing stories. Many of the move-up buyers are stuck in their current homes or have been through foreclosures and short sales. But, there are some that will look at snapping up a deal when they feel comfortable about their employment prospects. Right now, that simply isn’t the case. We all hear that the Unemployment Rate is dropping, but what we are NOT seeing is the Employment Rate moving up. The drop in “unemployment” is mostly tied to people giving up looking for work. In fact, the Workforce Participation Rate is at a low point. So, if people in the middle start to feel that the economy is stable, they will buy homes.

On the upper reaches of the market, there are a few different stories as well. Foreclosures and Short Sales are a factor, but not as often as on the lower segments. But, comfort is a major factor. Most of these folks are business owners or senior employees. Taxes and regulations are playing a major role in their decisions. Talk from Washington of major tax increases and more difficult regulation are making them hold off… even when they see a bargain. A more business friendly tone in DC could turn the tide for these buyers.

The big question… Where do YOU think the market is going, and why?

Are We At The Bottom Yet?(lanebailey.com)
Why the housing recovery remains a long way off(cbsnews.com)

Inflation Is Coming (themarlincompany.com)

Listing Inventory is Starting to Rise…

Wednesday, 02 May 2012 08:00

Written by Lane Bailey

0 Comments

at least a little.

I’ll be curious to see the sales statistics for Gwinnett County, but those won’t stabilize for about a week… but looking at the listing inventory, we are having a little more normal direction. Of course, some segments are getting more inventory, others are still shrinking, but on the balance, it is moving toward normalcy.

For the last few months, inventories have been shrinking, especially at the entry level. At the upper end of the market, there have been plenty of homes on the market, but under $200k, not so much. Normally, from January through March or April, we see rising inventories. In March or April, sales start to catch up, fewer people are coming into the market, inventory stabilizes and starts to slide a little going into summer.

Checking the levels on April 30th, levels seem to be starting to stabilize.

If sales continue to strengthen, I expect to see inventory start to decrease again as we move into summer… of course, it might also unleash some of the sellers that have been trying to “wait it out”. They might think this is a good time to wring a little more out fo the sale of their homes.

We’ll just have to wait and see.

I should also mention that sales are reasonably strong, and interest rates are rocking. but the deals are getting snapped up pretty quickly.

Page 7 of 85

Custom Listings

What's YOUR Home Worth?

Browse Listings

Follow Me on Pinterest

Category Archives: business of real estate

A Perfect Storm for “Move-Up Buyers”?

But the News Said…

The “Best” Deal?

Is this the “best” deal?

USA Today thinks prices are heading up…

Listing Inventory is Starting to Rise…

Custom Listings

What's YOUR Home Worth?

Browse Listings

Follow Me on Pinterest

Category Archives: business of real estate

A Perfect Storm for “Move-Up Buyers”?

Share this:

But the News Said…

Related articles

Share this:

The “Best” Deal?

Is this the “best” deal?

Related articles

Share this:

USA Today thinks prices are heading up…

Related articles

Share this:

Listing Inventory is Starting to Rise…

Share this: