Some Year-End Thoughts

I was reminded yesterday by a Realtor in Westport, Washington, that I should update my blog more frequently. Each month, I provide a review of residential activity in the Florence market area and express a variety of thoughts and opinions. Going forward, I will include this information in my blog.

Speaking of blogs, I read a post by Alan May, a broker in Evanston, IL, who compiled a list of the seven reasons your house won't sell. With kudo's to Alan, here are his ideas and my additional thoughts:

1. Poor Photos. If your house has been on the market for awhile, check our your favorite real estate search engine, find your house, and look at the photos. This is where most buyers get their first impression of you home. Dirty dishes in the sink, a too dark photo resulting from a failed flash, a pile of dirty clothes in the laundry room, and my all time favorite, a photo of the garage door opener! Guess the listing agent was trying to fill up all 16 photo slots on their MLS site. There is a good reason those high-end real estate magazines use professional photographers! If any of these problems appear in your photos, have your agent reshoot them.

2. Overpriced. This seems obvious. Look at your home from your buyers perspective. In this market, pricing can cure a variety of condition ills. But don't forget, this is marketing afterall. If a prospective buyer, or their Realtor, feels your house is overpriced, it will probably not be shown. Period. If your Realtor recommends a price reduction, take it! Only you can fix this one.

3. Shows Badly. Nothing is more stressful than feeling you have to live in a model home. We all lead busy lives, and sometimes the lawn does not get mowed, leaves don't get raked, weeds don't get pulled - at this is just the outside! This is a no excuses item. Buyers have a difficult time getting over this one. If the outside looks unkept, chances are good they will not want to see the inside, and drive on by.

4. The local MLS is not enough. Listing agents should market your home through all of the best real estate web sites including Realtor.com, Zillow, Trulia, Craigs List, Yahoo, Front Door, Homes and Land, and many more. Ask your Realtor if they pay to upgrade their listings on these sites.

5. Stale Listing. A few years ago, 90 days on the market was a long time. In Florence, we have listings 3-4 years old. I would say that 9-12 months old is a stale listing. Every market is different. Ask you Realtor, or her competitor, what you can do to sell your house.

6. Won't Appraise. This is not as obvious as it seems, especially if your home is unique. We have a solid cedar log home listed at a very good value, in my opinion. Very few comparables with this type of construction exist in our area. An appraiser or underwriter may have challenges today, which is not unreasonable. If your 3 bedroom, 2 bath tract house is under contract for $225,000 and the market value based on good comparable sales is $200,000, everybody missed the mark. Don't blame the appraiser or the bank on this one. Demand your Realtor give you sold comps when considering any offer. Stay a step ahead of the appraiser.

7. Unavailable to Show. This is really unfortunate. Our market has a large number of vacant homes which can be shown without appointments. These often get shown first to an impatient buyer. 1-3 hours notice for appointments is reasonable. It allows the seller to take care of Item 3 above, turn on the lights, and the heat. At least the beds can be made, dishes washed, toys picked up, etc. Selling an investment property with a 24 hour notice requirement to the tenant also looses buyers. Buyers agents need to coach their clients and give these properties a chance to be viewed.

Buyers, take advantage of the large selection of homes on the market today, lower prices, and the best interest rates in generations. Don't let this opportunity get away.

Sellers, do whatever it takes to become a buyer. See above.

If you did not catch 60 Minutes on February 28th, let me just say the advice I gave in my previous blog must have caught on. There is now a national movement encouraging people to leave their large banks and support their local community banks with their loan and deposit business. I banking, bigger is definately not better for the individual consumer. True, if you are a multi-national corporation or a Fortune 500 company, Bank of America and its' cronies are just the thing. For the rest of us, local is what its all about. Kind of like real estate. Location is everything.

Florence is holding up pretty well against the wave of foreclosures. Out of 408 active residential listings, just 17 (4.2%) are bank owned. Unfortunately, many of those foreclosures were lost by young families unable to survive in our local economy. Some have rented, others have moved to communities with greater job oportunities. In my profession, the American dream of home ownership and becoming invested the community is a good thing. Even the beautiful Oregon coast is not exempt from the cycles of the larger economy. New construction, and the jobs it provides, has suffered greatly. I look forward to to day demand for new housing returns to Florence, and those young families who left come back.

Nations Largest Banks

The largest commercial banks in the US were kneeling before the alter of Congress not long ago, begging for the largest tax payor bailout in the history of the world. Many of those same institutions are now paying huge executive bonuses. The top 5 are, Bank of America, JP Morgan/Chase, Wachovia, Wells Fargo, and Citibank. US Bank is a close 6th. As a real estate broker in the small community of Florence, Oregon, there isn't much I can do. As citizens, we can make an impact and send a strong message to these characters. My recommendation is this. If you are a depositor of one of these institutions, go to your local branch and immediately close your account. Take your funds in a cashiers check and immediately open a new account at your local community bank. These folks are the ones who live in your communities. Their kids go to school with your kids. When there is a local fundraiser, they will be there, always, to help. You will find them serving on the boards of your local Rotary, Kiwanis, and Lions Clubs. They serve on school boards, PTA's, city council's, planning commissions, and when there is a need, they will be there. By the way, they are the ones making loans to local businesses to create jobs and keep inventory like food and clothing on the shelves. These community bankers are the real hero's of our communities, along with the police officers, firefighters, EMT's, nurses, and teachers.

Being a smart real estate buyer and seller

I am sometimes cursed having been born under the sign of Libra. Always trying to maintain a sense of balance. My last post was written from the heart-this post is from the head. I was never good at math in school, but managed to meet the minimum requirements for a liberal arts education. Finance on the other hand was not so much about numbers, but about process, flow, and relationships. Our current national financial crisis is the direct result of the misunderstanding of debt and equity by investors, regulators and legislators. The world of derivitives blurs the characteristics of equity and debt. As a debt investor, the best I can obtain is the return of my principal and a few dollars in interest. As an owner of an asset, my investment return is from production of income and hopefully, appreciation over time. This is like buying stock in a company that pays dividends, and you hope the value is higher when you want to sell.

How does residential real estate relate to this. We buy our homes as a place to live. The pleasure we receive, and the memories we make, are like interest and dividends. They bring joy while we are here, and are a significant part of the return on our investment. When it is time to sell, we may or may not make a profit, depending on our timing. Historically, residential real estate has been a good investment over time. The market has always been cyclical. Here in Oregon, the cycles from the 1970's forward have been far apart, and values have not been as volotile as in much of California, Florida, and Texas. Florence real estate had plugged along for over a decade, until 2003-04. A shortage of buildable land created by government interference in the market, along with a spike in demand following the city being named the most desireable retirement spot in America, caused values to sykrocket in 2005-06. After the bubble burst, there was no soft landing here. Values fell over 30% and demand slowed significantly. Buyers cautiously waited for the bottom, and this, in my opinion, is where we are now. Everything that was good about Florence in the 1990's and first half of the current decade is even better today. Sellers who need to move on are finally realizing this is a soft market, and discounts are becomming the norm. The door is wide open for buyers to come to Florence and enjoy our coastal paradise.

More thoughts on real estate

Well, here we are again. It has been about six weeks since my first post. Not much action so far. Although I have been a realtor for just six years, I feel I have a lifetime of experience around construction, beginning with scavenging scrap piles around construction sites at age 7-8. Back in the early 1960's, there was a bit of a building boom in Del Monte Forrest, along with the construction of the Shore Course at Monterey Penninsula Country Club. Building materials and methods of the time created quite a bit of wasted plywood and dimentional lumber, and builders were always pleased to see neighborhood kids show an interest in building things like forts, rafts, and even space ships. I learned to use a hammer and saw to create things powered mostly by my imagination. During high school and college, I developed an interest in architecture and photography. I have been fortunate to have been a homeowner most of my adult life. Mucking around in the yard has been a consumng past time, always trying to make my built environment a little bit better. In 1973, I visited my sister for three weeks in Washington DC. My first experience with 150+ year old houses which don't exist on the West coast. It gave life to the Ethan Alan catalog of the time. After flirting with modern design, we have rediscovered Pottery Barn, taking us back to the 1st half of the 20th century. We feel good in places which takes us back to what for most of us, was a happy childhood. I have enjoyed reading the works of Tracy Kidder, Lewis Mumford, and other authors who tell us the story of home and why we feel good there.

When working with clients, I try to bring a sense of who they are, and what makes them happy to the home buying process. I am often frustrated working with the client looking for the "best deal". A successful buyer, to me, is one who finds the place that touches them inside, makes them feel secure and alive, full of love and energy. Home is where we are renewed. We heal from the injuries we receive from the outside world. We can be ourselves. I can't sing, dance, or make music very well, and rarely do those things in the spotlight. In my house, I do all of those things with bliss.