Volume 85 - Real-time History
The nice thing about writing The Perspective week after week (after week) is that I have accumulated a fair amount of real-time history and can easily access the sales patterns with respect to Piedmont's unique marketplace. Wanting to compare the number of this year's listings, with last year's, I looked no further than my own newsletters (e-letters!) of February 2008 to comparison shop. As I chase these statistics, I realize we are on track for a fairly typical Spring Market!
While concerned observers worry there is too much inventory on the market, it just isn't true. (In Stockton - yes. In Piedmont - No!) Last year, the Multiple Listing Service (MLS) reported 16 homes for sale in Piedmont, with an average list price of $1,928,375 and average days on market (DOM) reported at 46 days. This year, the MLS reports 18 new listings since the beginning of 2009, with an average list price of $1,816,726 and an average DOM of just 14 days! This seems to indicate that aggressively-priced homes quickly find buyers, while homes that are stalling need to adjust the list price downward in order to meet buyer demand!
While it's true that recent bank upheavals, poor economic forecasts decreasing stock values and uncertain employment opportunities are all contributing to current buyer conservatism, the blunt truth is that the bulk of homes that are languishing, are simply overpriced for the market conditions - AS THEY EXIST!
Which isn't to say that there aren't plenty of willing and able buyers about - there are. (They are even showing up in the POURING rain - and that's commitment!)
With mortgage rates at historical all-time lows and a shiny new stimulus package on its way, designed to promote and award home ownership, ALL buyers continue to seek good values, regardless of where they fall on the spectrum. As new buyers move into the marketplace, the market will in turn, experience improved health and better stability, restoring faith and encouraging other buyers to move UP the ladder. As has always been true, first-time buyers drive the marketplace!
Sellers, are you listening? Are you attracting buyers or are you mired in last year's values?
Thank you to those of you who wrote back last week to respond to the Trivia Question "What does QVC stand for?" At least a dozen sharp subscribers got it right away and several other readers correctly identified two of the three initials. The correct answer was (drum roll please . . .) "Quality, Value & Convenience!" And the lucky winners to two FREE tickets to "Shopping the Musical" are: Penny Robb, Alexandra Manoles, Jason Zeledon, Su-san Lichen and John McWilliams. Thanks again for playing and have a great time at the show!
It should come as no surprise that, Quality, Value and Convenience are also three important staples that drive home prices as well. Gone are the days when buyers conveniently "overlooked" flaws - minor or major - in order to remain competitive in the prevailing marketplace.
In today's more conservative marketplace, even cosmetic blemishes such as old carpeting or an anemic paint job can easily derail a prospective sale. Sellers, resist the temptation to save money by foregoing painting, staging and necessary repairs. The extra effort and investment upfront typically results in additional "value added" to the home and often mitigate any problems an empty or tired house might otherwise highlight (such as sloping floors).
Bring a Quality home to market and you WILL get prospective buyers through it.
Selling quickly; however, depends on where you price a property. Whether the home is "picture perfect" or a total "fixer," price the home appropriately if you wish to attract purchase offers in quick time. (Hint: if your home has been on the market longer than 21 days, chances are its's overpriced!)
While Buyers might wish for the "deal," it's hard to deny real value when they see it. Offer Buyers real Value and you are sure to attract and achieve the best result!
As for Convenience, expect homes with coveted locations to attract stronger interest. Being within walking distance of shops, markets, restaurants and public transportation all add to a home's desirability and Convenience and that's added value as well! (For a quick assessment of your home's walkability score, go to www.walkscore.com)
When markets become less certain, Quality, Value and Convenience become more important than ever!
Truth be told, my pragmatic hard-working father was never a hopeless romantic. He was the kind of husband who gave my mother a dishwasher, a vacuum cleaner or a washing machine come the holidays and she - equally sensible - was thrilled to have them.
My mother had grown up in San Marino (the Piedmont of Pasadena) while my father hailed from the pastures of Davis. In her family's eyes, Dad was a bit of a "diamond in the rough" compared to Mom's more gentile upbringing. My mother said she married Dad because "he made her laugh." In spite of her family's strong objections to the pairing, their union stuck. They've weathered 56 years together - sometimes laughing, sometimes crying - but all of it together.
That's about as romantic as it gets.
So when it came time for me to choose a mate, I followed my mother's example and married a man who made me laugh, who engaged my mind and who always believed in me - even when I faltered. Even without romantic gestures on Valentine's Day -that's true love!
With respect to homes, "the diamond in the rough" is the home that's badly in need of TLC (tender loving care). The trick in this or any market, is getting the lump of coal for a discounted price in order to offset the costs of renovations and repairs that are necessary to bring out the "sparkle." That seems basic but it's a tougher challenge than statistics bear out.
Too often, I see hopeful buyers excitedly jump into a bidding war on these "fixer" properties with the expectation that they are achieving a "below market value" when all too often, the opposite result plays out. Unfortunately, the large number of "fixer buyers" often drives the selling price well beyond the asking price, erasing any potential appreciation the home may have had.
Ironically, these homes often math out at much higher prices per square foot than their "fixed" counterparts down the street! Go figure! (Seriously, go figure!)
When buying a "diamond in the rough," carefully do the math and understand your end game. If the goal is to "flip" the house in a short amount of time, be certain you are not overpaying for the project on the front end. If on the other hand, you plan on renovating and staying for many years, then the price you pay in the short term may hardly be relevant.
If that's the case - as with marriage - commit to the long term and carve out the diamond of your dreams . . .
Happy Valentines Day Mom and Dad!
There was a time ( before the introduction of The Multiple Listing Service) when Realtors held the keys to the castle - quite literally. As the gatekeepers for the majority of sale transactions in any given neighborhood, Real Estate Brokers and Realtors controlled and released the appropriate information on an "as need to know" basis.
Today's immediate access to Internet sites such as Zillow, Trulia, Realtor.com and the still closely guarded Multiple Listing Service (MLS) makes every prospective buyer or seller an instant expert - and herein lies the danger: with public records as close as a click, prospective buyers can quickly and easily ascertain tax records, assessed value and purchase price for any given home and begin to form an opinion of value based on information that isn't exactly accurate, specifically relevant or in some cases, even true.
While it's good practice to understand the recent market activity surrounding a listing, the geographical demand and the larger economic picture, the price the current owners paid may or may not be relevant to the resale value in today's marketplace.
So let's begin by analyzing what is, what isn't and what may be relevant to a prospective purchase offer:
Finally, are Real Estate Websites relevant? - Tread carefully! "Zestimates" don't see the improvements an owner has made to a home or the number of offers the property down the street received in a recent sale. They don't personally visit a home so how can they accurately assess value?
More often than not, homes values on Internet sites are merely a matter of averages. Compare that to your personal home-shopping experience where many homes (especially those in competition) are far above average, while some are well below! Get caught up in this kind of faulty information, and you are sure to form opinions that work against a successful outcome.
When crafting an offer, I work to collect, organize and analyze as many facts as possible, but truth be told, decisions by Buyers and Sellers regarding Real Estate often have less to do with stats and more to do with feelings than anything else. While empirical evidence would make my job much easier, at the end of the day, there's a certain amount of leg work, gut instinct, subjective opinion and well-honed intuition that comes into play on every successful transaction.
That's when working with an experienced local Realtor pays off in spades! Find one and be open to his/her experience and you are sure to obtain a set of keys to your very own castle in the near future!
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.