Price Your Property Right

One of the biggest problems that we have in the Grand Strand  market is sellers still expect to get 2006 prices
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​Buyers in general are well informed and have done their homework on the Internet and always ask for market comps. All to often sellers ​say, “Well, my property is special which is why I bought it”. All those wonderful reasons are good points for potential buyers, but every buyer has their own list of dreams and desires and they’re all watching current sales on line.
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​In this market your property must be priced competitively AND it needs to be one or two best values in its market category to get agents' attention and on their show list. It has to be in great condition, because buyers are now looking for every flaw possible and are making objections for the smallest of items. If you're lucky enough to get a contract, there'll be an inspection and everything found will have to fixed, no matter how trivial, if the buyer doesn't insist, their lender will.

The end result for sellers that don’t price to the market is being just behind the selling price range and risking further price declines. If you are a property owner and truly want to sell, ask you listing broker to do a very thorough market analysis and ask what it will take to be the first one or two properties shown in your property's market niche. You might not like the answer, but pricing to market will greatly improve your odds of making a fast sale and time is money too.

Want To Get A Mortgage In 2013?

Ah, remember the good old days, say just a few years ago, when all you had to do to get a mortgage was ask and then fight off the mortgage brokers?  If you haven't applied for a mortgage in the last year or two, get ready now for the new reality: Credit standards are tight and that's an understatement.

Lenders these days are engaging in "defensive underwriting".  While the Federal Housing Administration (FHA) allows borrowers with credit scores under 700 and down payments of just 3.5% to buy homes, that doesn't mean that you can get a loan on these terms.  Lenders are scrutinizing property appraisals, income tax returns and bank statements for any flaw, no matter how small that could be used to force them to buy back a loan.  Did you sell grandfathers pocket watch on ebay and make a one time deposit of a few hundred dollars to your checking account? Be prepared to explain where the money came from, with documents.  If your bank statement says there are seven pages, don't throw away the last three even though they contain nothing but the terms and conditions of your checking account; the lender will want them all and for at least the previous three months.

What to do?  If you're even thinking of applying for a mortgage in the next year or so, start getting ready now.  Pull your credit report from all three credit bureaus and carefully review them.  If they are less than perfect, now is the time ask for corrections and do so by old fashioned letter, not phone calls and emails and keep a copy of everything.  It's usually not a good idea to close credit accounts you don't use, you might even consider using them occasionally. If you carry a balance month to month on your credit cards, get it down to less than 20% of your over all credit line and pay on time. Resist the urge to open new accounts at stores just to get a discount on a purchase; old credit is better than new credit.

Next assemble your last three years of tax returns and look for anything that might raise a question with a lender and gather the documentation now to substantiate the return.  The same with bank accounts, review the last year at least for abnormal deposits, you'll need to explain them.  Unlike credit accounts, closing little used savings and checking accounts might help, certainly you'll have less paper to submit and explain.

The bottom line: if you want to get a mortgage these days, you must be prepared to submit the most trivial financial documents and explain them, your credit report must be as clean as you can make it and be ready to explain any negative information with documentation.  Start now.

Could Rising Demand in 2013 Boost Prices?

It looks like home prices finally hit bottom in 2012, so now what? Buyers increasingly expect home prices to continue to rise in 2013 and many are showing a sense of urgency. If 2013 is the first year since 2006 that prices ended up, we might see the beginning of equilibrium in the housing market.

In most of the nation, every single indicator is giving a thumbs up signal: inventory is falling, affordability is near a record high and household formation is up. Rents are rising in many markets, encouraging renters to buy and in some cases they can buy for a lower monthly outlay than renting. Investor demand for housing is up as they seek better returns for their money.

Rising prices could eventually encourage more sellers to put their homes on the market, fueling demand even further.  Why? Sellers have to live somewhere, often they are up sizing, down sizing or moving for retirement, all of which they put off waiting for higher prices. So many if not most sellers are buyers as well.

What's the catch?  Well, the folks in Washington aren't helping matters. Buyers and sellers want economic stability when they go to the market; "Fiscal Cliffs" with the uncertainty about what Congress might do, if indeed they do anything at all, doesn't help the economy or the housing market.

The Shadow Market in 2013

The real estate market across the county came alive in late 2012 with home sales and housing starts up strongly.  Prices are doing better, too.  But skeptics still point to sizable overhang of properties headed to foreclosure--the so called "shadow" inventory--that they say will erode the market's recent gains.  Maybe.  

While the shadow inventory remains high, it may not choke off the strength we're seeing.  There are several reasons, first the number of homes in foreclosure is shrinking, down from a peak of 4.7 million nationally in 2009 to 3.4 million at  the end of 2012. The discount at which foreclosures sell has narrowed significantly, from around 24% in 2009 to 7% now. Inventories of new homes for sale are tight and the number of listings of previously owned homes is at an eleven year low. 

On the demand side, sales of new homes are up strongly and sales of previously owned homes are likely to follow. Investor buying has slowed in most areas as well. Mortgage rates remain at historic lows for those who can qualify and are likely to stay low for the next several years. Banks have become more adept at handling foreclosures and realize it's not in their interest to dump large numbers of houses on the market.  They do more short sales now, where they allow the home owner to sell for less than the mortgage owned--faster and less costly for the bank.  

It's going to take years for housing is back to normal, but as long the recovery continues, however slowly, the shadow market should have little effect.

Facebook Tips for Real People

Facebook is here to stay, for the moment at least...well, remember My Space?

But while it's here, make the most of it to enrich your life and your community.

Don't shoot for the 5000 friend maximum.  It you can't put a face to the name, you probably should "unfriend" them...don't worry, unless they're very tech savvy they'll never notice and if they do, maybe they're worth knowing and adding back.  

Focus instead on developing around 300 to 500 online friends within your immediate community, your family, your work, your interests and those with whom you, no kidding, want to keep up with. 

Then comment in thoughtful ways after carefully reading and understanding what they post and what's going on in their lives.  Focus on their successes and improving your community, then: Get Involved in the Real World:  Join a civic group, church, adopt a pet, volunteer--anything to start expanding your circle of friends IN PERSON.

Make Facebook a tool, not an occupation.

10 Lessons Learned as Housing Recovers

Headlines abound: The Housing Bust is over… 

Housing has hit bottom and is turning around.  Realtors, homeowners, renters, and all Americans are sighing with collective relief.  If they're correct.

But first we need to pause and consider what we've learned in the last few years:

1  The economy is global.  The mess in Europe has to be resolved for the U S to see a sustained economic recovery and sustained housing recovery.

2 The folks in Washington D.C. must get their act together, work together and begin to resolve the economic issues facing the nation.  Fiscal cliffs, increased government spending and borrowing from China to support that spending do not bolster consumer confidence or boost the economy. 

3 The economy cannot recover without housing. Good News: the stock prices of the major U. S. home builders are up and they are beginning to build again. That puts Americans to work and guess what, if you have a job, that's the first step to buying your  own house.   

4 Homeowners confidence in the economy is directly related the value of their own homes.

5 Everyone needs shelter, but not everyone needs to own their shelter.  The American dream of owning your own home may not be appropriate for everyone.

6 High home ownership rates are important but they must be sustainable.  Owners must be able to afford their homes in the long run.

7 Home prices go UP and go DOWN.  If home prices have bottomed, they're likely to remain stable for some time.  Increases for the foreseeable future are likely to mirror the rate of inflation for most areas, but there'll be exceptions of course.

8 The process of purchasing/financing a home is more complicated now than ever before and will remain so. Sound  mortgage underwriting is critical.  Prospective buyers must be prepared for a detailed application process to get a mortgage. Expect every fact and every document to be verified. 

9 Home equity should not be used for ordinary living expenses.  We're not likely to see the days of taking out equity every few years.  

10 Financial reserves for families, companies, and countries are necessary.

What is important is that we remember what happened as we prepare to write the future.  Most importantly, we should also have a sense of accomplishment that we endured these life lessons.

There are seasons in the weather: spring, summer, fall and winter.  So there are in economic cycles.  It is great to be at the thaw of winter and the budding of spring.

U..S. Home Prices Showing Consistent Gains

Finally, home prices across the country are showing consistent increases most likely due to a decline in foreclosures and the lowest mortgage rates in history.  In fact, some of the cities hardest hit by the real estate bust have seen impressive price increases: Phoenix up nearly 14 percent, Miami up 4.4 percent. 


Even with these gains, prices have a long way to go to recover from their plunge during the housing bust of 2006-2008.  Nationally prices were down 31.6 percent below the April 2006 peak, based on the S&P/CaseShiller index which covers about half of U. S. homes.
 
And keep in mind we're not yet seeing price increases in the Grand Strand market, though we are seeing more sales.  What's holding us back?  Possibly that we have more second homes and investment properties, categories that have more distressed inventory.