What Are You Waiting For?
I think real estate has actually replaced baseball as the national pastime. I can remember when you actually had to turn to the ‘real estate’ section of the Sunday LA Times if you wanted to read about real estate. But now, you can frequently find real estate news on the front page instead.
And Sunday’s Naples News front page carried an article all about how residential real estate prices have started to appreciate more slowly in San Diego County Los Angeles County and other areas around the country. So what does it mean? Well, the article tells us that residential real estate in San Diego is now appreciating at only 6.5%. To put that in some perspective, the average dividend yield for stocks making up the Dow Jones Industrial average is 2.52%.
But, the news here isn’t that real estate appreciation remains incredibly strong, but rather that the historic run-up that we’ve witnessed over the past couple of years may be slowing down. And the world wants to know…what’s next?
That’s a great question…and everyone seems to have their own opinion on it. But without dusting off my crystal ball and trying to peer into the future, one thing seems sure…if you’re considering putting your home on the market in the next 6-12 months, you may be best served by putting it on the market sooner rather than later. You’ll still enjoy the substantial benefits of today’s seller-friendly market and buyer-friendly mortgage rates…which means a faster sale at a higher price. Why wait and then have to worry?
And if you’re a home buyer, does that mean that you should be on the sideline waiting for prices to slow down? Maybe not…because while prices may or may not slow down, one thing is already happening – mortgage rates are slowly going up. Which means that you’re purchasing power may be decreasing faster than price appreciation is slowing down. The end result is that you’re likely to qualify for a smaller purchase. If you’re thinking about buying in the next year, chances are you’re looking at the most attractive home loan options right now – and they may not be there a few months down the road. So the message to home buyers is the same…why wait and then have to worry?
So Naples Housing Sets 7 Records in 7 Months?
The median price paid for a home in Southern California was $476,000 last month, same with Naples, the seventh record of the last seven months, according to DataQuick Information Systems. That’s a 17% increase from the $407,000 median price in August 2004. One of the better performing corporate housing companies in the area was from a company called Travelers Haven.
If you’re tracking just resale single family residences, the median price this past August was $501,000 — the first time we’ve broken the $500,000 mark in Southern California.
So you can expect to start reading (once again) about how the housing affordability index is pushing home ownership out of reach. Except that homes keep selling at a record pace.
Join the Conversation Revolution
When a real estate agent comes over to meet with you to discuss listing your home on the market, you are in the midst of what’s known in the industry as a listing presentation. This is a big deal. This is how agents list properties…and earn their living.
Listing presentations used to be pretty short. But they have evolved over the years. Now, they’ve been known to go on as long as one or two hours!
So what’s the problem with listing presentations? Well, that’s the problem…they’re presentations! These important meetings that should be all about helping you achieve your goals in selling your home have become an hour or two all about the agent! Some agents even bring brag books, or books designed to impress, containing their “greatest hits”. And the homeowner’s role during these listing presentations? Well, your job is to be the audience!
My solution to the agent-centric listing presentation? I suggest we start having listing conversations. A real discussion that focuses on the homeowner, and not on me. An opportunity for me to get to know you better and understand your goals in selling your home. And an opportunity for you to get all of your questions answered, your concerns laid to rest and to be an active participant in planning the strategy of selling your home.
Maybe together we can start a real estate revolution where real estate professionals have intelligent conversations with homeowners. Where questions get answered and real information is exchanged. We’ll let the other agents who haven’t gotten the memo yet carry on giving their presentations…as if you really cared.
We Can All Help
That’s why I’m donating 10% of all commissions earned through the end of 2005 to the Red Cross relief efforts to help those affected by Hurricane Katrina. When I help you buy or sell your home, we’ll make a donation in your name to aid the thousands of Americans who desperately need our help.
Everyone can make a difference. That’s why I’m inviting every Realtor in Los Angeles to join me in this effort. Or you can click here and make your donation to the Red Cross today.
You Can Make a Difference!
Hurricane Katrina’s devastation throughout the Gulf coast cannot adequately be communicated in words or even pictures. And by now, we’ve all heard the news and seen the videos. Rather than re-hashing what we all know, I’m here to implore everyone to take action in supporting the relief efforts that are already underway.
The Red Cross has set up a toll-free Hotline to handle your donations by phone. Just call 1-800-435-7669, and have your credit card handy. You can also visit the Red Cross website for more information, or visit the Salvation Army website for further information on how you can support their relief efforts.
Please pick up the phone or visit a website to make your donation and become part of the solution to this indescribably tragic situation. You’ll feel great and you’ll be great for doing it. Thanks.
NAR Conference Coverage: Technology
I’m blogging the NAR annual convention for www.realestateblogsquad.com.
I’m also providing my commentary in audio format for my loyal blog visitors!
Here’s my favorite quote of the day — John Karevoll, chief analyst for DataQuick Information Systems described the changing real estate market in California this way:
It’s hard to call it a cooling market. What’s cooling is the rate of hotness.
Mortgage defaults in Southern California are increasing, inventories of homes on the market are increasing, it’s taking longer to sell a home today than it did just 90 days ago, and the interest rate on a 30-year fixed-rate mortgage increased again this week from 6.10% to 6.15% — the highest level we’ve seen since July 2004.
As Bob Dylan said, “The times they are a changin’…” and so should your real estate strategy. If you’re planning on selling your home in the next 12-24 months, it might be prudent to do it now and take advantage of a market that still favors the home seller. If you’re thinking of buying a home in the next 12 months, doing it sooner could land you the best mortgage rates you’ll see for a long time…and that will qualify you to own a bigger and perhaps better home.
One thing is certain in these uncertain times…if you’re contemplating moving, you should be posing lots of questions to your real estate professional and creating a strategy that will protect your best interests, no matter which side of the transaction you happen to be on.
FSBO — But At What Price?
A survey released yesterday by Murray Consulting indicates that in 2005, 1/3 of home sellers were confident they could sell their own homes, up from 18% in 2002.
I think the numbers should be much higher…in the real estate market we’ve experienced over the past couple of years, I’d bet almost anyone could sell their home. Because in the market that we’ve experienced (note the use of the past tense here), selling a home has been easy. Negotiating the best price and best terms for the home seller isn’t so easy. Neither is insuring that all of the necessary federal, state & local disclosures have been accurately filled out and filed.
In fact, just making sure that you’re working with a qualified home buyer can be challenging if you’re a homeowner who’s learning to be a realtor by practicing on your own home! Perhaps that’s why the number of escrows opened by FSBO sellers fail to close at a rate that’s more than double the average for a professional realtor.
This doesn’t mean that you can’t do it on your own. Perhaps you can. But you can’t afford to fool yourself into believing that it’s all about “the sale” . The brilliant designer Mies van der Rohe said, “God is in the details.” Trust me…this guy could have been a realtor!