Bradenton Florida Real Estate News

Wednesday, May 31, 2006

Consumer Confidence Affecting the Real Estate Market

This was just released...

Consumer confidence among Floridians in May did not budge from its April level of 86, the likely result of a downturn in the housing market and continued high fuel prices, University of Florida economists report.

“Confidence remains low as gas prices remain near historical highs with no sign that they will retreat any time soon,” says Chris McCarty, director of the survey research center at UF’s Bureau of Economic and Business Research. “We are also seeing an anticipated softening in the real estate market, particularly among those using Florida real estate as an investment.”

Existing home sales are down and inventories are up, McCarty says. New home sales are sluggish considering the incentives builders must offer to lure buyers.

Source: Florida Association of Realtors

Tuesday, May 30, 2006

Rents Rising At Highest Rate in 6 Years

If you're a renter trying to save for a down payment, or you're just trying to move out of your parents' home, it'll likely get harder this year. Rents are rising faster than they have in six years.

Apartment rents are expected to increase 5.3 percent this year -- about double last year's increase -- the National Association of Realtors® says. That's the highest jump since 2000, when the Internet boom created lots of jobs for young adults out of college. In April, rising rents were largely to blame for a sharp jump in consumer inflation.

"This is going to be the highest rental increase year since 2000, and it's going to be a broad-based increase in rents, not just limited to a few markets," said Hessam Nadji, who manages research for Marcus & Millichap, a real estate firm in northern California.

"Renters are already facing higher energy prices and relatively moderate wage growth," Nadji says. "This is going to really squeeze a lot of households."

No one needs to tell Rosa Shephard. The $1,600 rent she pays for a two-bedroom apartment in Laguna Beach, Calif., will rise by $100 a month this Friday. It's a 6.3 percent increase, and Shephard's salary as an administrative assistant isn't rising as much, so she's trying to find a cheaper place to live.

"I'm trying to find a one-bedroom for $1,200," says Shephard, 53. "It just doesn't exist."

There are four driving forces:

• Job growth. U.S. businesses have generated 4 million new jobs in the past two years. New hires typically look for rental property.

• Rising home prices. From 1980 to 2000, the median price of a home was 12 times higher than the annual average rent. By this spring, it was 21 times higher, Nadji said. The median-priced home now costs $223,000, making the American dream a fantasy for more renters, whose competition for apartments then drives up rents. There's little relief in sight in such areas as Phoenix and South Florida, where home prices soared more than 30 percent in the first quarter of this year over the same quarter last year.

• Condo conversions. When the housing market was at its blazing peak, many investors who owned apartment buildings kicked out tenants and sold the units as condos. One out of three apartment buildings sold last year were converted into condos for sale. That took 191,400 apartments off the market, according to the NAR. In addition, the number of new apartment buildings under construction is down this year.

• Hurricane Katrina. About half the 100,000 displaced families in the New Orleans area haven't returned. Most of them were renters, says Lawrence Yun, an NAR economist, and "that's putting additional pressure on rental units throughout the country."

Source: Planet Realtor

Saturday, May 27, 2006

Other Sellers Are Disappointed Too

Another article in the Herald-Tribune:

A year-and-a-half ago, Tad Amore and Miriam Cortes, who live together and are planning to marry, did what everybody tells young couples to do -- they bought a home.

The problem now is that they want to sell.

Meanwhile, the red hot real estate market of 2003-05 has turned into the stone cold market of 2006.

They've had the place listed since February, on the Multiple Listing Service, the realty bible, the whole time."

Every week or two we will drop the price down, which usually drums up a few new showings. We were close to having somebody making an offer on it a couple of weeks ago, but the boyfriend's father didn't like it. They moved on.

"They started at $230,000, and their price last week was $212,000.

Continue reading at http://tinyurl.com/syjeo

Buyers Waiting For Prices to Slide Even More

Today's local paper contains this story by Michael Pollick....

Tara Fizer knows first-hand how fickle the real estate market has become.

She and her husband now own two new houses in Sarasota. It is one more than they want.

When they were moving to the area from Orlando in mid-2004, they signed up for two homes being built near University Parkway -- one in Sarasota County, the other in Manatee. The idea was to decide later which one to keep, and sell the other for a sweet profit in a fast-climbing market.

"This could have been a killing," Tara Fizer said of the 4-bedroom, 21/2 plus loft house in Manatee that they are now attempting to sell for $389,000. "We could have pocketed a lot of money."

Instead, they have the home priced at $7,000 less than the builder's base price in the same subdivision.

"We know the market is pretty slow right now, so somebody can get a pretty good deal from us right now. We did a lot of upgrades."

Like many other sellers, the Fizers have come to realize what every real estate agent in Southwest Florida now knows: After three glory years, capped by a period in which homes were being bid on like an eBay auction, the resid:ential market has entered a no-mans' land in which sellers listings are stacking up at prices higher than buyers want to pay.

(Continue reading at
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060527/BUSINESS/605270378
Here is Premier Team's advice:

1. If you are getting ready to put your home on the market, price it well below your nearest competition. You want the next buyer to be yours.

2. If you are already on the market and haven't lowered your price in the last two weeks, it's time to do so. Lower it every two weeks or you will quickly be the highest price in the neighborhood. (Every 4 days 10% of the homes in our MLS lower their price)

3. When you receive an offer rejoice! Very few sellers are receiving offers. Don't think about countering for a few thousand dollars. Anything within 5% of your asking price should be accepted as quickly as possible.

This advice is given to help you accomplish your goal. If you are not motivated to sell at today's market value, consider taking your home off the market. Of course, we don't know where prices will be 6 months from now. We have seen sales fall and prices slide for the last 9 months, don't think that simply "waiting" will make the market any better.

Friday, May 26, 2006

Bradenton Home Sales Drop 44%

Today's local paper carried the following headline and story

Home sales drop 44 percent since '05

"Last year, Bradenton made headlines as it led the nation in rising home costs while sales remained strong. But numbers released by the Florida Association of Realtors on Thursday showed a change in the tide.

"Sales of existing single-family homes in April fell 44 percent from what they were last year, and the rise in home costs slowed to just 2 percent.

More at http://www.bradenton.com/mld/bradenton/business/14669215.htm

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Thursday, May 25, 2006

What's the Difference Between Appraised and Market Value?

Here's a question posed to Ilyce Glink of Inman News

Q: I tried to sell a house for the appraised price and was unable to sell at that price. I understand that property will not sell when it is priced too high but the offers I received were $5,000 to $8,000 less than the appraisal.

I was under the impression that if I advertised the property for the appraised price, it would move quickly. I told one real estate agent when she made me an offer from a client that I was going to have the house appraised again and that I would provide the appraised price to the potential buyer so he could adjust his bid.

The agent didn't go for that at all. Can you give me some suggestions as to what I did wrong? When I couldn't sell the house, I finally rented it.

A: I think you made a few basic mistakes. First, the appraised value is not necessarily the same thing as the market value.

The appraised value of the home is what an appraiser thinks the home is worth based on the sales of other similar homes in the area. The market value is what someone will actually pay for the house.

In your case, either because of the condition or location of the home, the market is telling you that your home isn't worth what the appraiser thinks it should be worth--it's worth $5,000 to $8,000 less.

Getting a new appraisal doesn't change what someone will pay for the home. You'd be better off buying some cans of white paint and repainting the interior of the property. Then, you might get more money for it.

Renting the house is fine. Eventually, prices will rise in your neighborhood and you'll get your price, but not today. And only you can decide if waiting for prices to rise in order to get the extra $5,000 to $8,000 is worthwhile.
--------------------

An acquaintance of mine put his house on the market 7 months ago and told me, "I know my price is right. I'm prepared to wait for a buyer to pay it." Now, after several price reductions he is still waiting.

What is his house worth? It is worth exactly what someone is willing to pay and not a dollar more. That's market value.

Wednesday, May 24, 2006

How Often Should A Seller Drop Their Price?

Today's summary of activity in our Multiple Listing Service for the last 24 hours:

  • 90 New Listings
  • 100 Price Reductions
  • 20 New Pending Sales
  • 29 Closings
  • 20 Expired Listings
  • 35 Withdrawn Listings

This morning three of my listing clients reduced their price. One is now offering a bonus to the selling agent and a credit toward buyer's closing costs. Another is offering a free home warranty to the buyer.

Once a month my partner and I meet with a "Master Mind" group of other top producing agents in the Florida Market. These agents are from various companies and work in markets like Tampa, Orlando, Port Charlotte, Naples, Miami, and we, of course, are in Bradenton - Sarasota.

The consensus was that in a falling market, like this, sellers should start out with an agressively competitive price. Other wise, a price reduction later will just be playing catch up. If the listing has no showings, the market is not supporting the price. If the listing has only a trickle of showings, it's over priced. If you have 10-12 showings and still no offer, you must drop your price.

A price change every 2 weeks was the consensus of this Master Mind group. Waiting longer than that may cost the Seller more in the long run.

Canceling A Contract Incurs Costs for Buyers

When the house deal falls through
The price of bowing out of a home purchase can be high.

By Les Christie, CNNMoney.com staff writer
May 22, 2006:

NEW YORK (CNNMoney.com) - Everyone knows buying a home is expensive these days. But not buying a house can run into a few bucks as well.

A lot of niggling little expenses and fees that home buyers encounter on the path to closing still must be paid even if the deal falls through. And those expenses can add up to shockingly high amounts.

"How high depends on where the buyers and sellers are in the negotiating process," says Bob Moulton, a mortgage broker with Americana Mortgage Group on Long Island. "Many of the expenses can't be transferred to another purchase."

When buyers bid on homes, the offers they make come with the understanding that contingencies written into the contracts will be satisfied. A house must pass an inspection, for example, or a buyer's financing package must come through. If those don't happen, the deal dies.
Between the time the offer is accepted, however, and the point when the deal falls apart, many actions may have taken place and they have to be paid for.

Fees you don't get back

Inspection fees: One of the prime reasons home sales break down is that inspections turn up unforeseen problems. The foundation might be badly cracked or the roof needs replacement. Usually, a seller will try to accommodate a buyer in order to get the house sold, but sometimes the problems can't be negotiated away.

The inspector's fee, though, which can run anywhere from about $250 for a small job to $1,000 or more for a big one, doesn't go away either and it's strictly the responsibility of the buyer.

Title search: All lenders require that a property's ownership is not in dispute and that it be free and clear of encumbrances. That means someone has to examine legal documents and records to make sure no one else can claim to own it and that there are no mortgage or mechanic's liens on it.

Generally speaking, title searches are undertaken by title insurers and they often absorb the search cost if a home purchase is canceled, according to Jim Maher, executive vice president of the American Land Title Association. There can, however, be cancellation fees that the buyer has to pay. Whether these fees apply and how high they can run varies from state to state.

Survey: In some cases buyers, or their lenders, may want the land surveyed before closing, according to Curt Sumner, executive director of the American Congress on Surveying and Mapping, the industry's trade association. Surveys can find encroachments on the property or other problems that buyers may want to know about before they take possession.

"The property survey is often ordered by somebody else in the chain, the buyer's attorney, the lender, but it's the buyer who gets the bill," says Sumner.

If any discrepancies that arise cannot be corrected or the deal falls apart for other reasons, the surveyor must still be paid. That can amount to somewhere in the neighborhood of $500 to $1,500, or more for really big jobs.

Attorney fees: Many real estate attorneys work on a flat rate and sometimes those fees can be applied to another home purchase, provided it is made within a designated time period, say a year. Other attorneys charge an hourly rate, which means any labor spent on a deal that fails still has to be paid for by the buyer. That can easily run into the hundreds of dollars and if there is any hassle about terminating the contract, the fees can quickly hit four-figure territory.

Appraisal fee: Many lenders insist an independent property appraisal be done before they approve the final loan, according to Moulton. It may be to protect the lender but it's the buyer who pays for it, perhaps $300 or so.

Financing costs: Application fees can usually be applied to another purchase but the delay can, in the current rising rate environment, cost buyers dearly, in added interest on their mortgages.

Moulton says, "Buyers locked into a low rate can buy an extension. It costs about a half percent of the amount of the loan for an extra 30 days."

That translates into $1,000 for a $200,000 mortgage, an expensive solution. And, that means the buyer has to find another property quickly, before the extension runs out or get stuck with a more expensive loan. Since the first week of January, 2006, the average interest on a 30-year, fixed-rate mortgage has risen from 6.21 to 6.60 percent, according to Freddie Mac. That difference would add about $51 a month to a mortgage payment, a total of more than $18,000 over the loan's lifetime.

Document preparation fees: Mortgage lenders and title companies charge these to put together all the papers they need to go forward with the loan. They may not add up to too much but, on top of all the other expenses, well, who needs it?

Bottom line
Add it all up and the expense of canceling a home purchase can easily add up to several thousand dollars - and it's not even tax-deductible.

There's no real solution to the costs associated with backing out of a deal. Making an offer on a home sends a big piece of machinery into motion and puts many different people to work. They have to be paid.

But buyers should calculate whether the costs of fixing whatever is wrong with the property (if it is fixable) adds up to a lot more money than it costs to back out of the deal - before they make the decision to walk away.

Tuesday, May 23, 2006

Are Mortgage Rates a Big Deal?

Economists and some home section columnists make a big deal about mortgage interest rates. Some are fascinated by every little blip that makes rates jump and wobble.

Mortgage rates are hugely important for some families, especially first time owners, when even a small increase can shove that dream beyond their reach.

But for most Americans, though, the impact isn't so dire or direct. Doug Duncan, chief economist for the Mortgage Bankers Association, added context while recently attending a real estate writers' conference in Charlotte:

  • 34% of American homeowners owe no debt. They own their homes free and clear.
  • Between 48-50% have fixed-rate mortgages. They're not hammered by rising rates, either.
  • Do the math, and you'll see that 82-84% of owners are insulated from the direct impact of rising mortgage interest rates.

In the final tally, Duncan said, "Only 7-10% of people are sensitive to interest rates.

Duncan expects appreciation on homes to average 6-7% nationally, down a bit from recent highs.

Source: Planet Realtor 5/8/06

Monday, May 22, 2006

Buyers Control Today's Market

Bradenton - Sarasota, Florida home-sellers aren't the only ones having a tough time. I just read this article today...

Today's tough housing market is pitting neighbor against neighbor in the selling wars."We're not grumpy with them," said Ken Koch, whose Cape Coral home is for sale and sandwiched between two neighbors homes for sale."Although I don't know if they're grumpy with us."

Ken and Wilaiwan Koch have had their home on the market for five weeks and already lowered the price $10,000. Their neighbors to the right, Rachel and Brett Bonham, have dropped their price from $345,000 to $269,900 since November. Their neighbor to their left, Peter Hadden, reduced his home from $344,500 to $309,900."It's frustrating," Ken Koch said. "People have money, but they are waiting for the prices to go down. It's frustrating for all of us."

But getting angry at a neighbor for lowering their price isn't fair, said John McWilliams, Realtor for Coldwell Banker."You can't control the market," McWilliams said. "It sounds good to say, 'Let's all stick together,' but buyers are more sophisticated and shop and compare." .....

More here: http://tinyurl.com/p6sud

Do It Yourself Home Staging Tips

by Mark Nash

The buzzword today with residential real estate agents is staging. Staging a home can change a homes atmosphere that appeals to homebuyers and which may bring a higher price and accelerate market time. By adding small decorative touches, rearranging or deleting furniture or creating vignettes a home can look like a professional stager was hired. Mark Nash author of 1001 Tips for Buying and Selling a Home has seen the best and worst in home staging as a real estate broker in Chicago and he shares some do's and don'ts for home sellers that want to try to stage their home.

Do's

  • Pick-up recent home decorating magazines. If you're not up to speed on current decorating trends it will help familiarize yourself with how interior design is being marketed. Tab pages with low-cost ideas that which will make your home say today.

  • Invite a friend or real estate agent over. A second or third pair of eyes will help you accent the best and edit the worst in your home. Be prepared for some constructive criticism. You want to hear it before you put your home on market, not as feedback from prospective buyers. Go room-by-room with a worksheet so you can take notes. Depending on how much time you have available for an update or a makeover, you will need to prioritize and figure out what will give you the biggest return. Do this at least two months before you put your house on market.

  • Stage a home office if you don't have one. They're not a trend; they're required for homebuyers in 2006. Many homebuyers today work from home part or full-time or want a space where they can organize their life and park a computer. Find an extra bedroom, walk-in closet or an unused corner and convert into a home office. Make sure there is a convenient electric, telephone and cable supply.

  • Focus on living spaces. These areas are where the majority of homebuyers will spend their time. Place a side table and a floor lamp next to a comfortable chair as a reading corner. Float sofas and coffee tables away from walls for a designer look. Use area rugs to anchor furniture groupings on bare tile and wood floors. Living spaces must have matching table lamps. Streamline family photos and place green plants in room. Fireplaces should always be operable and on in season. Place groupings of candles and clear glass bowls filled with natural potpourri on side and coffee tables. Substantial wicker baskets can organize magazines, remote controls and toys. Limit knick-knacks to make room for staging materials.

  • Give attention to Kitchens. Put away in a handy drawer all dish towels and rags. Reduce recipe boxes, barrels of cooking utensils, excess-cooking machines, and cookbooks by two-thirds to open up counter spaces. For a quick update put new hardware on cabinets. Find an out-of-the-way place for a portable dishwasher. Clean off everything on the refrigerator door. Omit throw rugs scattered around the kitchen. Clean off windowsills to open up exterior views. Organize cabinets with clear containers. If you can't see the back wall of a cabinet, buyers will think you don't have enough storage space. Ditto closets. Budget to keep a variety of fresh fruit in a glass bowl on the counter. Edit family bulletin boards. Remove old curtains and install new wood blinds on windows.

  • Spend time on sleeping and bathing spaces. Often over looked in the frenzy to get a home on market, these spaces can make or break a home. Buy a set that consists of a matching bed skirt, bed spread, pillow covers and blinds to match. Buy a new shower curtain and separate liner. Wash the liner often if mold develops. Add complete sets of towels that coordinate with your new shower curtain. Clear all cosmetics off vanity. If you have an over-the-toilet cabinet consider removing and place a piece of artwork in its place. Remember to keep items in the "too much information" category, out of view. If you have a king-size bed in a small room, you'll pay to have buyers over come this negative, so get rid of it now. Clear off dresser and nightstands of excess. Make sure the bedroom receives the maximum natural light. Install closet organizers in closets. Eliminate wall and door hooks for clothes. People might look under your bed, no surprises please.

  • Remember first impressions in entries. A simple consol table with mirror over makes a nice entranceway. Make sure this space is well lit day or night. Place adhesive under rugs so buyers don't trip or slide.


Don'ts


  • Use inexpensive silk flowers. Nothing distracts buyers more that silk flowers that are past their time, inappropriate for the season or thrown together. Throw them out, now.
    Forget to upgrade Fido's bowl. I've experienced more unhealthy pet food bowls, watering stations and litter boxes than I care to remember. We know you love your pet, but prove it to homebuyers.

  • Overlook window coverings. Buyers today think less is more in window fashion. They want the most light and the least embellishment on windows. And no layered treatments with sheer panels please.

  • Use low wattage light bulbs. Dark, dim rooms are unappealing to homebuyers. They want to see what they might buy. Replace bulbs with manufacture recommended wattages and especially the burned out ones. The newer low-energy bulbs don't cast home or people in flattering light.
    Think that everyone loves wallpaper. No two people have the same taste in this instant decorator finishes. If it's more than three years old, take it down and paint in a neutral color. And wallpaper boarders are out.

  • Paint with commitment colors. If you've determined that you need to paint, stay away from bold or as I call them commitment colors. Commitment colors are those buyers either love or hate. It can be difficult for buyers to overlay their style on them. As one client said to me "I don't live in a magazine."

  • Think cleaning is a part of staging. Cleaning is what you do before staging. Everything should shimmer and shine. Don't forget the windows.

Friday, May 19, 2006

Housing Outlook

Confirming what home buyers suspected and real estate sales figures have indicated for months, Federal Reserve Chairman Ben S. Bernanke said yesterday that the U.S. housing market was showing clear signs of cooling off.

Bernanke said the slowdown is "moderate" and "orderly" and pointed to the overall strength of the economy.

"We're seeing slowing in sales, slowing in starts. There also seem to be signs that prices are not rising as quickly as they have been for the past few years," Bernanke said in response to questions after a speech in Chicago, Bloomberg News reported.

His comments came as Freddie Mac announced that the average rate on a 30-year, fixed mortgage hit 6.6 percent this week, the highest in almost four years. Rising long-term rates have contributed to the housing industry's slowdown. The Commerce Department this week said construction of new homes fell 7.4 percent in April, to an annualized pace of 1.85 million homes. It was the third straight monthly decline.

Thursday, May 18, 2006

Builder Gives $30,000 Discount! You won't believe it!

I had a shocking conversation with a good friend this week. He was getting ready to close on a brand new condo in the Bradenton, Florida area. It was a new construction unit in a nice upscale community. His contract price was $250,000. The builder took $30,000 off the contract price just before closing!

Surprisingly he hadn't even asked for the discount or suggested that he might not close.

It seems that some buyers are walking away from big deposits and not closing. Builders are giving BIG discounts and offering BIG incentives to attract buyers. All of this offers tremendous competition to the resale market.

Good news! I sold a listing today!

Tuesday, May 16, 2006

Bradenton - Sarasota Homes Sales Down 44%

Two of our local papers carried stories today about the decline of home sales in the Sarasota - Bradenton market.

The Herald link:
http://tinyurl.com/fx39b
The Herald Tribune Link:
http://tinyurl.com/gktjz

"Sales of existing single-family homes dropped 44 percent during the quarter in the Sarasota-Bradenton market, while those sales dropped 22 percent in the Charlotte County-North Port market.The decrease in the Sarasota-Bradenton market -- from 3,210 homes to 1,800 in the most recent quarter -- was the largest in terms of a percentage in the state."

Our real estate team is having good success this year having sold 25+ homes already. Our listing clients who agree to price their homes competitively are selling. We are also finding Buyers through our agressive marketing.

Monday, May 15, 2006

Florida Home Sales Down; Prices Up

In first quarter 2006, Florida's housing sector followed the national trend, demonstrating signs of a market adjusting to rising mortgage rates, higher inventory levels, and a better balance between buyers and sellers.

Sales of single-family existing homes totaled 45,864 statewide during the three-month period, a decrease of 20 percent compared to the same quarter a year ago. The statewide existing-home median sales price rose 20 percent to reach $248,000.

Source: Florida Association of Realtors

Saturday, May 13, 2006

Bradenton Florida Market Conditions Report - April

We have just completed our Market Conditions Report for Manatee County (Bradenton, Florida) showing the statistics for the month of April.

Here's the summary for Single Family Homes:
*Number of active listings up 508 percent over last year, up 3 percent over last month.
*Sales are down 38 percent from last year and down 12.5 percent from last month.
*The median sales price is 16 percent below 6 months ago and .3 percent below last year.*
The median sales price is down 22 percent from the high of 2005.
*We currently have a 7.1 month's supply of homes on the market.

Here's the summary for the Condos:
*Number of active listings up 559 percent over last year, up 2.5 percent over last month.
*Sales are down 51 percent from last year, and 30.5 percent from last month.
*The median sales price is down 30 percent below 6 months ago and 3.1 percent below last year.
*The median sales price is down 29 percent from the high of 2005.
*We currently have an 8.1 month's supply of condos on the market.

We generate this report from information gathered from the Multiple Listing Service of the Manatee Association of Realtors. The information is deemed reliable but not guaranteed.

Sarasota Market Still Stagnant

Harold Bubil of the Sarasota Tribune writes...

"April numbers have just been released, and for the Sarasota housing market, they are not good. They show that after a bit of a recovery in March, real estate sales retreated in April."

Continue reading here:
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060513/COLUMNIST10/605130636

Friday, May 12, 2006

Higher Mortgage Rates Slowing Home Sales

Rates on 30-year mortgages edged down this week, the first decline after six straight increases, according to a nationwide survey.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year fixed-rate mortgages averaged 6.58 percent, down from 6.59 percent last week, which had been the highest level in nearly four years.

It marked the first drop in 30-year rates after six consecutive weekly increases. Analysts attributed the decline to last week's unemployment report, which showed payrolls grew by just 138,000 in April.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, also fell this week, dropping to 6.17 percent, from 6.22 percent last week.

One-year adjustable rate mortgages dipped to 5.62 percent this week, down from 5.67percent last week.

Rates on five-year, hybrid adjustable-rate mortgages averaged 6.22 percent this week, up slightly from 6.21 percent last week.

A year ago, 30-year mortgages averaged 5.77 percent, 15-year mortgages stood at 5.33 percent, one-year ARMs were at 4.23 percent and five-year ARMs averaged 5.21 percent.

Higher mortgage rates are slowing home sales this year after five consecutive years in which sales of both new and existing homes set records.

Thursday, May 11, 2006

Real Estate the Dead Zone? Good Grief CNN!

You can always depend on CNN to paint the gloomiest picture! Now they have real estate in their sites and keep pounding the drum about the "bubble."

If you can stand the negativity here's a link to a recent article predicting doom and gloom for real estate... http://tinyurl.com/mahbe


I have said before that if you listen to the pundits you'd think the real estate market was collapsing and it was the end of the world. On the other hand, some Realtor associations would have you believe that everything is just hunky-dory.

In our Bradenton, Florida market sales are down 38% percent from last year and the median sales price is down 22 percent from the high of 2005. Those are significant numbers, but behind that is the fact that during the last 5 years our home prices have gone up 145 percent. So, even if you give up 22 percent today, that's still a hefty profit.

Who is going to be hurt? Speculators who gambled on making a big profit by flipping a newly constructed home.

Wednesday, May 10, 2006

Buying Strategy in a Buyer's Market

Homebuyers are getting the big breaks in an increasing number of U.S. markets, says Tom Early, president of the National Association of Exclusive Buyers Agents. But even as the market shifts to favor buyers, to get the best deal, buyers should take the right approach.

Some advice from Early:
• Tell your buyers to stifle the guilt. Remind them, if the shoe were on the other foot, the seller would show no mercy.
• Be patient. In slow-moving markets, it is sometimes a good bet to simply wait until a seller sees the light and drops his price.
• When a seller drops the price, it may be a signal that he is facing a deadline and will negotiate still more.
• Take advantage of a buyer’s right to a home inspection. The buyer may find an issue that can be used to his advantage in gaining concessions.
• Insults don’t work. Wounding the sellers’ pride in their home is never a good tactic.
• Also, making a ridiculously below-market bid may shock the owners into refusing to talk anymore.

Source: The Miami Herald, Ellen James Martin

Tuesday, May 09, 2006

Good Landscaping Adds Value

Homeowners looking to increase their home’s value don’t have to look much further than their own front year. Recent research from Michigan State University finds that attractive landscaping adds 5 percent to 11 percent to a home’s base value.

In the 2005 study, 1,323 volunteer participants in seven states viewed photographs of 16 landscaped residences. The landscapes were constructed using varying levels of three landscaping components: plant material, plant size and design sophistication.

Participants preferred the homes with more sophisticated designs that incorporated large leafy, evergreen and colored plants, while homes with landscapes featuring smaller plants and minimalist designs were viewed as less valuable. Design sophistication was the most important attribute in all seven states tested, accounting for 40 percent to 45 percent of the value added to the home, followed by plant size and plant sophistication.

Saturday, May 06, 2006

Home and Condo Sales Slide

Today's local paper, The Herald, carried this story...

"Condo and home sales fell almost 50 percent in April compared to April 2005, leaving many wondering if the local market will bounce back to recent torrid levels.

"Numbers released by the Manatee County Property Appraiser's Office showed a decrease in activity that puts the number of sales back to the level they were in 2001. Real estate agents are hoping reprieve is around the corner in the usually busy month of June."

...Continue reading the full story here:
http://www.bradenton.com/mld/bradenton/14513963.htm

Friday, May 05, 2006

When is the market going to pick up?

I just received this email question:
Is the market going to pick up over the summer? I was just on your website and wanted to know if you think the market will get busier with buyers, it seems like there are no buyers out there. Also, how long do you think it will take for it to become a sellers market again? Thanks for the info.

Reply:
In March, sales actually picked up compared to the previous 4 months. Therefore, I was hoping that April's numbers would be better. However, April's numbers are quite disappointing.

Will Spring and Summer bring out the buyers as usual? That's the big question. So far, it's not the case.

When will we return to a seller's market? I'm just hoping that things at least become balanced in the near future. It make take another 12 months before the market stabilizes.

I am happy to report that we are having good success with selling our listings. We are able to help our clients select the right price while providing massive marketing exposure.

If you have a real estate need with which we can help, please give me a call. - Dan

Good Advice for Real Estate Investors

Some property investors are like fishermen--some share their secrets while others do not.

And, while many of the most popular rules to get a run-down home ready for sale are common--including fresh paint, new carpet and interior cleaning--it's interesting to hear what absolutely works for small-time players with a proven track record.

Neal Hargrove, 39, spent 15 years as a professional wrestler with the World Wrestling Federation. He made a very good living in the ring as Reno Riggins and plowed most of his financial rewards into residential real estate. He now owns 16 residential properties--some he will turn over for a quick profit while keeping others he will retain for a retirement nest egg.

"I was always the guy on the mat getting pinned," Hargrove said. "I was known in the industry as a 'star maker' because my job was making a star out of guys like Andre the Giant and Hulk Hogan. Of course I got hit in the head a lot, and may not be the sharpest knife in the drawer, but I still know how to make a buck buying property."

Hargrove and other small-time property investors belong to a blossoming club. According to the National Association of Realtors, more than 15 million people own rental property in the United States, and that number is growing. Additional property purchases (other than the primary residence), mostly for investment purposes, accounted for more than one-third of all single-family home sales in the country last year.

Hargrove's bread-and-butter acquisitions are single-family homes in blue-collar neighborhoods. While specific areas can dictate some buy-sell circumstances, here are his Top 5 tips and suggestions:


Stick with single-family homes. Multi-unit buildings are the targets of investors who often do not want to pay retail. Single-family homes have a greater pool of buyers and "you can put a little lipstick on them and take them to the dance."


  • Steer clear of one-bedroom homes. Typically, the demand for them is considerably less than other homes and room additions can be too expensive to pencil out into a profit.

  • Go for base hits, not home runs. There are too many savvy investors now in the home-buying game. See if you can invest $10,000 in improvements to net $25,000 in profits.

  • Get in and get out. Hargrove has a four-person crew that averages 21 days on rehabilitation.

  • Go over-the-top on curb appeal. If it's ugly from the street, potential buyers won't even spend their time to come in the front door.


The reasons for becoming a landlord are many, but the challenge of managing the property is what keeps most would-be investors out of the market. Whether it is the result of an inheritance, the desire to hold on to a first home, or portfolio diversification, most small-time landlords face the challenge of managing investments with such antiquated systems as the shoebox full of receipts, hand-written ledgers, intricate folder systems and homemade spreadsheets.


Hargrove likes to keep things simple but he has a definite need to be organized. While he "flips" some of his purchases for a quick profit, he also keeps many as long-term rentals. He uses a computer software program that handles not only costs for labor and materials but also his monthly rents and maintenance fees that he can easily print out at taxtime. He chose Quicken's Rental Property Manager because he felt he could learn the program quickly.


"There's a lot of good computer programs but I had used some basic Quicken stuff and didn't to spend a lot of time reading manuals," Hargrove said. "I need to spend my time fixing up properties and making deals--making money and not trying to figure out how to operate software."


What would be his suggestions to other investors who may want to consider real estate as a part-time project?


"Forget about the home runs," Hargrove said. "Focus on hitting doubles and singles."

Wednesday, May 03, 2006

Generation Y Homebuyers

Generation Y homebuyers are fearless shoppers changing the way moderately-priced homes are sold, say observers of this tech-savvy group. "They already have their minds made up before they get in the car," says Justin Juarez, broker-owner of Metro Brokers Liberty Home Group in Denver. The 65.3 million members of Generation Y -- people born between 1979 and 1994 -- are always looking for the best deal, says Angela Burdick, owner of Angela Burdick Real Estate. "Location is very important to this group. They like light rail and public transportation and walking where they want to be. They value their recreational time, and they don't want to be home mowing lawns."

Gen-Y also doesn't shy away from spaces as small as 500 square feet. "They're really into organization and multifunction of furniture,"

Burdick observes. "You see a lot of Murphy beds, and they like multifunctional rooms."

Strong Economy May Save Housing Market

Just when things looked awful for the real estate market: higher mortgage rates, high rates of foreclosures, oversupply, time on the market longer and a liquidity crunch -- something happened: a ROARING economy evidenced by 5 percent growth rates, strong consumer confidence and job growth. Rates are central to a thriving housing market, but nothing tops job growth. When people are employed, they buy houses.

Tuesday, May 02, 2006

How To Deal With Difficult Buyers

Here's an article I read today...

Last year, a Piedmont, Calif., home seller agreed to sell his home to a buyer for what he thought was a reasonable price. In fact, the price he accepted was lower than he felt was fair market value for the home.

The seller agreed to the price because the buyer had carefully reviewed the seller's disclosures and reports on the property. The buyer's agent insisted that the price was "as-is" with regard to the defects that had already been disclosed in the seller's documentation on the property.

However, when the buyer removed his inspection contingency, he requested a drastic price concession based on the findings of his inspectors. Not only did he ask for money off the price to compensate for defects that had previously been unknown, he also wanted a concession for the items that he had already agreed to accept as is.

The seller responded with an emphatic no. It wasn't just that he felt the new price was ludicrous. More importantly, he thought that the buyer had negotiated in bad faith. The seller happily put his house back on the market and sold it for a much higher price to another buyer within a couple of weeks after the first deal fell apart.

HOME SELLER TIP: Some times the best way to deal with an unreasonable buyer is to simply say no. This is often easier to do at the offer stage than after you are already in contract with the buyer.

Recently, buyers tried to renegotiate the purchase price after inspections revealed that the property needed more work than they'd originally anticipated. The sellers again had accepted a price that was considerably lower than they had been anticipating. They were reluctant to negotiate further.

The buyers did not remove their inspection contingency on time. They wouldn't budge from their position; they wanted a significant price concession in exchange for removing the inspection contingency. The negotiation was at a stalemate.

Finally, the sellers made use of a provision in their purchase contract that was designed for situations where either the buyers or sellers don't meet their contractual obligations, like removing a contingency on time.

They issued a 24-hour notice to the buyers to remove their inspection contingency; otherwise the sellers would cancel the contract. At just this time, another buyer appeared on the scene, ready to make an offer. The first buyers removed their inspection contingency within the 24 hours and went through with the sale.

Sometimes it's not easy to determine which party to the contract is behaving unreasonably. Sellers typically put more value on their home than others might. With a changing market, the gap between seller's expectations and what buyers will be willing to pay could widen.

So, before giving a buyer an ultimatum, carefully consider the pros and cons of the transaction. Is the buyer financially able and willing to close the sale in a time frame that works with your schedule? Can you easily replace this buyer with another one? Or will you need to play the waiting game? If so, and the market softens for your home, you could be stuck selling for less at a later date.

There is a lot of emotion involved in selling a home. Even though you might not approve of a buyer's tactic, don't let this interfere with closing a sale that ultimately works to your advantage.
On the other hand, there are insincere buyers who would be better off buying someone else's house, not yours. If buyers start missing one deadline after another, this could be a sign that the transaction might not make it to closing.

THE CLOSING: Don't waste precious time holding out hope for a buyer that may never perform.

Dian Hymer is author of, "House Hunting, The Take-Along Workbook for Home Buyers," and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.