The weekly sales report is nearing its year end, and we have some good news coming out of the slow holiday week. Remember, the weekly sales report details the number of weekly sales along with where those sales took place and for how much they sold.
For the week of November 28th through December 4th, there were 38 residential sales in Leon County. That figure represents a big jump from last week and an increase in sales of over 30% from the weekly numbers we've been seeing throughout the 4th quarter. I hope to see these numbers continue to pick up. This year we've been selling about 40 properties per week on average, and we'll need to match that average in 2011 to keep the market from sliding any further.
Of the 38 sales, only 5 were sold under $100,000. A surprising 16 properties sold over $200,000 with 8 of those 16 selling over $300,000. Though the higher end market (in Tallahassee, that's basically over $250,000) has been slow for some time, it seems that the affluent buyers are seeing real value now and deciding to purchase.
This week, an incredible 63% of the sales (24) took place in the Northeast; 7 properties sold in the Northwest along with 7 in the Southeast, but no houses sold in the Southwest last week.
The average and median sales prices for the week were up big with the average price topping $200,000 for the first time in recent memory at $204,812 and the median price coming in at $174,250. Let's hope this keeps up!
Saturday, December 11, 2010
Thursday, December 2, 2010
Weekly Sales (11/21 - 11/27/10)
Welcome to the after Thanksgiving version of the weekly sales report. As always, this report will detail the total number of sales during the past week along with the prices and locations of those sales. Like most of us during Thanksgiving week, sales were sluggish.
For the week of November 21th through the 27th, there were a mere 18 residential sales in Leon County. That number is almost half of the prior week's sales (35), but most of that can be attributed to a week with only three working days. Averaged over a full week, we were extrapolated to have 30 sales and that would be consistent with our 4th Quarter weekly average in the mid-20s.
Of the 18 sales, almost half of those (8) sold under $100,000. Investment activity continues and there are a lot of good investment deals out there. Call me for advice and perspective on buying investment property (850-251-6643). 6 of the 18 sales were over $200,000 with only one of those being over $300,000.
Sales in the Northeast were not as strong last week as in weeks prior. 8 of the 18 sales last week were in the Northeast. Six sales took place in the Northwest; four properties sold in the Southeast; zero homes sold in the Southwest.
MY ADVICE: If you can afford it (and now-a-days, almost every can), I recommend buying in the Northeast. If you want to buy in the NW, SE, or SW, I would encourage you to wait another few months as prices continue to decline. Sell in these quadrants as fast as you can. Again, look to buy in the Northeast.
The average and median sales prices took a nosedive this week. Average price was $144,361 while the median price was very modest $138,500. Now is a great time to buy!
For the week of November 21th through the 27th, there were a mere 18 residential sales in Leon County. That number is almost half of the prior week's sales (35), but most of that can be attributed to a week with only three working days. Averaged over a full week, we were extrapolated to have 30 sales and that would be consistent with our 4th Quarter weekly average in the mid-20s.
Of the 18 sales, almost half of those (8) sold under $100,000. Investment activity continues and there are a lot of good investment deals out there. Call me for advice and perspective on buying investment property (850-251-6643). 6 of the 18 sales were over $200,000 with only one of those being over $300,000.
Sales in the Northeast were not as strong last week as in weeks prior. 8 of the 18 sales last week were in the Northeast. Six sales took place in the Northwest; four properties sold in the Southeast; zero homes sold in the Southwest.
MY ADVICE: If you can afford it (and now-a-days, almost every can), I recommend buying in the Northeast. If you want to buy in the NW, SE, or SW, I would encourage you to wait another few months as prices continue to decline. Sell in these quadrants as fast as you can. Again, look to buy in the Northeast.
The average and median sales prices took a nosedive this week. Average price was $144,361 while the median price was very modest $138,500. Now is a great time to buy!
Saturday, November 27, 2010
Should You Stop Paying?
In a previous blog, I cited a statistic that almost 1/3 of all foreclosures are "strategic defaults", that is, situations where a homeowner has the means to continue paying on his mortgage but decides to default instead because of a negative equity position.
In that blog, I said that Americans need to buckle down and honor the promises to repay that we made when we purchased our homes. To read an interesting counter-argument to mine, click HERE.
In that blog, I said that Americans need to buckle down and honor the promises to repay that we made when we purchased our homes. To read an interesting counter-argument to mine, click HERE.
Friday, November 26, 2010
Weekly Sales (11/14 - 11/20/10)
Here is the second Thanksgiving helping of the weekly sales report. As always, this report will detail the total number of sales during the past week along with the prices and locations of those sales.
For the week of November 14th through the 20th, there were 35 residential sales in Leon County. This is a slight uptick from previous week (actually a 25% increase) but not a marked departure from our established pattern of sales in the mid-20s per week.
Of the 35 sales, over 25% of those (9) sold under $100,000. One of these purchases was a property that I bought personally for $13,500. I have reported on increased investor activity for several weeks, and I have put "my money where my mouth is". There are a lot of good investment deals out there. Call me for advice and perspective on buying investment property (850-251-6643). 12 of the 35 sales were over $200,000 with 7 of those 12 being over $300,000.
Sales in the Northeast were even stronger this week than in weeks prior. 60% (21) of the 35 sales last week were in the Northeast. Seven sales took place in the Northwest; three properties sold in the Southeast; four homes sold in the Southwest.
MY ADVICE: With increased sales percentage in the Northeast there is continued downward pressure on prices in the other three quadrants. If you want to buy in the NW, SE, or SW, I would encourage you to wait another few months as prices continue to decline. Sell in these quadrants as fast as you can. Look to buy in the Northeast.
The average sales price this week was $187,517 and the median sales price was $167,765 (slightly higher than the yearly average). Median sold price per square foot was $113.56. Expect that number to be significantly lower in future weeks.
For the week of November 14th through the 20th, there were 35 residential sales in Leon County. This is a slight uptick from previous week (actually a 25% increase) but not a marked departure from our established pattern of sales in the mid-20s per week.
Of the 35 sales, over 25% of those (9) sold under $100,000. One of these purchases was a property that I bought personally for $13,500. I have reported on increased investor activity for several weeks, and I have put "my money where my mouth is". There are a lot of good investment deals out there. Call me for advice and perspective on buying investment property (850-251-6643). 12 of the 35 sales were over $200,000 with 7 of those 12 being over $300,000.
Sales in the Northeast were even stronger this week than in weeks prior. 60% (21) of the 35 sales last week were in the Northeast. Seven sales took place in the Northwest; three properties sold in the Southeast; four homes sold in the Southwest.
MY ADVICE: With increased sales percentage in the Northeast there is continued downward pressure on prices in the other three quadrants. If you want to buy in the NW, SE, or SW, I would encourage you to wait another few months as prices continue to decline. Sell in these quadrants as fast as you can. Look to buy in the Northeast.
The average sales price this week was $187,517 and the median sales price was $167,765 (slightly higher than the yearly average). Median sold price per square foot was $113.56. Expect that number to be significantly lower in future weeks.
Thursday, November 25, 2010
Weekly Sales (11/7 - 11/13/10)
Happy Thanksgiving to Everyone! Today I'm sure that everyone is getting extra helpings of food, so we'll get a double dose of real estate sales as well. I am going to post last week's figures and this week's figures today.
There were 28 residential sales in Leon County the week of the 7th through the 13th. This figure is in line with our previous few week's of activity and is consistent with the time of year.
Of the 28 sales, 6 of those were under $100,000. This is evidence of investor activity continuing and the increased affordability that has allowed more and more lower income buyers to purchase a home. Adding more buyers increases demand and that is good for the market. 11 sales were over $200,000 and 4 of those 11 were over $300,000.
Almost half (13) of the 28 sales were in the Northeast. Nine sales took place in the Northwest. There were only two sales in the Southeast while there were four sales in the Southwest.
MY ADVICE: UNCHANGED - If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($193,687) and median price ($160,000) were similar to last week and stand above the yearly figures of $190,180 and $162,500, respectively.
There were 28 residential sales in Leon County the week of the 7th through the 13th. This figure is in line with our previous few week's of activity and is consistent with the time of year.
Of the 28 sales, 6 of those were under $100,000. This is evidence of investor activity continuing and the increased affordability that has allowed more and more lower income buyers to purchase a home. Adding more buyers increases demand and that is good for the market. 11 sales were over $200,000 and 4 of those 11 were over $300,000.
Almost half (13) of the 28 sales were in the Northeast. Nine sales took place in the Northwest. There were only two sales in the Southeast while there were four sales in the Southwest.
MY ADVICE: UNCHANGED - If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($193,687) and median price ($160,000) were similar to last week and stand above the yearly figures of $190,180 and $162,500, respectively.
Thursday, November 11, 2010
Weekly Sales (10/31 - 11/6/10)
A new month, Daylight Saving Time, and now the 9th installment of our weekly sales report. Amid all the change, I'm still reporting on the total number of sales, the location of those sales, and the price ranges of those sales. Be sure to read through the entire blog, as I've started including a "My Advice" section at the bottom. Thanks for reading!
During the week of October 31st through November 6th, twenty-two (22) homes sold in Leon County. That figure represents roughly a 60% drop from the number of sales from last week but returns to the pattern of weekly sales in the mid-20s. I still think that, despite last week's aberration, we will see weekly sales hover in the twenties through next Spring.
Of the 22 sales, twenty-two percent (5 houses) were under $100,000; this is a sign of investor activity increasing. Seven of the 22 sales were over $200,000 and 3 of the 7 sold for more than $300,000. The median sales price per square foot this week was $84.91 (almost a $17 per square foot drop from last week - a sign of volatility in the market).
By quadrant, 12 sales (54%) were in the Northeast, 5 were in the Northwest, 4 were in the Southeast, and just one property sold in the Southwest. The northern half of town is still seeing the majority of sales, and the Northeast continues to dominate the market.
MY ADVICE: UNCHANGED - If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($191,328) and median price ($169,950) were similar to last week and stand above the yearly figures of $190,180 and $162,500, respectively.
During the week of October 31st through November 6th, twenty-two (22) homes sold in Leon County. That figure represents roughly a 60% drop from the number of sales from last week but returns to the pattern of weekly sales in the mid-20s. I still think that, despite last week's aberration, we will see weekly sales hover in the twenties through next Spring.
Of the 22 sales, twenty-two percent (5 houses) were under $100,000; this is a sign of investor activity increasing. Seven of the 22 sales were over $200,000 and 3 of the 7 sold for more than $300,000. The median sales price per square foot this week was $84.91 (almost a $17 per square foot drop from last week - a sign of volatility in the market).
By quadrant, 12 sales (54%) were in the Northeast, 5 were in the Northwest, 4 were in the Southeast, and just one property sold in the Southwest. The northern half of town is still seeing the majority of sales, and the Northeast continues to dominate the market.
MY ADVICE: UNCHANGED - If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($191,328) and median price ($169,950) were similar to last week and stand above the yearly figures of $190,180 and $162,500, respectively.
Wednesday, November 10, 2010
Depression-Era Depreciation Nears
Nearly one-quarter, or 23.2 percent of U.S. homeowners with a mortgage, were underwater on the loan in the third quarter, meaning they owe more on the home than it is worth, according to figures released Wednesday by the real estate data provider Zillow.
The third-quarter underwater number rose from 22.5% in the second quarter and is the highest it’s been since Zillow began tracking negative equity in 2009. The subtle hints of stabilization in home values that started emerging earlier in the year began to wane last quarter.
Zillow’s home value index recorded a 4.3 percent year-over-year decline in Q3 and was down 1.2 percent from the second quarter. The Seattle-based company says its index reading has fallen for 17 consecutive quarters now. The company’s market data shows the median home value nationwide has dropped to $179,900.
With home values nationally 25% below their June 2006 peak, the current housing downturn is approaching Great Depression-era declines, when home values fell 25.9 percent in five years (between 1929 and 1933).
Source: DSNews
The third-quarter underwater number rose from 22.5% in the second quarter and is the highest it’s been since Zillow began tracking negative equity in 2009. The subtle hints of stabilization in home values that started emerging earlier in the year began to wane last quarter.
Zillow’s home value index recorded a 4.3 percent year-over-year decline in Q3 and was down 1.2 percent from the second quarter. The Seattle-based company says its index reading has fallen for 17 consecutive quarters now. The company’s market data shows the median home value nationwide has dropped to $179,900.
With home values nationally 25% below their June 2006 peak, the current housing downturn is approaching Great Depression-era declines, when home values fell 25.9 percent in five years (between 1929 and 1933).
Source: DSNews
Friday, November 5, 2010
Weekly Sales (10/24 - 10/30/10)
As we reach a milestone in the weekly sales report (now 2 months strong), the market is reaching milestones of its own, and they are not good. Inventory and prices are both going in the wrong direction (both locally and nationally) and the foreclosure scandal is muddying the water of recovery.
Thankfully, amid all the bad news, the week of October 24th through October 30th held some positive news. Last week's sales more than doubled from the week prior (25) to an astonishing 54. That figure breaks a string of three consecutive weeks with weekly sales in the mid-20s. I guess that folks must have been really anxious to have trick-or-treaters to their new homes!
Of the 54 sales, twenty-two percent (12) were under $100,000; this is a sign of investor activity increasing. Twenty-four of those 54 sales were over $200,000 and 38% (9 of the 24) sold for more than $300,000. The median sales price per square foot this week was $101.63 (more than a $4 per square foot increase from last week).
By quadrant, 29 sales (54%) were in the Northeast, 15 were in the Northwest, 6 were in the Southeast, and 4 properties sold in the Southwest. The northern half of town is still seeing the majority of sales, and the Northeast continues to see around half of the total sales in Leon County (958 of 1966 year-to-date).
MY ADVICE: If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($193,525) and median price ($172,000) were both up significantly and stood above the yearly figures of $190,180 and $162,500, respectively.
Thankfully, amid all the bad news, the week of October 24th through October 30th held some positive news. Last week's sales more than doubled from the week prior (25) to an astonishing 54. That figure breaks a string of three consecutive weeks with weekly sales in the mid-20s. I guess that folks must have been really anxious to have trick-or-treaters to their new homes!
Of the 54 sales, twenty-two percent (12) were under $100,000; this is a sign of investor activity increasing. Twenty-four of those 54 sales were over $200,000 and 38% (9 of the 24) sold for more than $300,000. The median sales price per square foot this week was $101.63 (more than a $4 per square foot increase from last week).
By quadrant, 29 sales (54%) were in the Northeast, 15 were in the Northwest, 6 were in the Southeast, and 4 properties sold in the Southwest. The northern half of town is still seeing the majority of sales, and the Northeast continues to see around half of the total sales in Leon County (958 of 1966 year-to-date).
MY ADVICE: If you are looking to buy, then buy in the Northeast or in an established Northwest subdivision. If you are looking to sell, make sure that your home is in pristine condition and priced below the median price per square foot in your neighborhood.
This week's average ($193,525) and median price ($172,000) were both up significantly and stood above the yearly figures of $190,180 and $162,500, respectively.
Monday, November 1, 2010
Hurry Up and Sell... I'm Serious!
For those of you who have been keeping up with my blog over the last two weeks, you will recall that I have written three articles regarding the decline in housing prices and the need to sell your home quickly (if you really need and/or want to sell).
For support of my rantings I have provided you with various market statistics and articles from other well respected real estate experts. I am adding to that list of support today.
Analysts at the research firm Capital Economics stated on Friday that the "double-dip" which many have feared is already underway in the real estate market. And waiting things out won't help any. Paul Dales, the U.S. economist at CE, says that prices won't regain their previous highs (from 2006) for another decade.
Carrie Bay from DSNews reports that the Capital Economics House Price Model suggests that by the end of next year, prices will have fallen back by just over 5 percent, taking them to a new cycle low.
She goes on to report that the company’s analysts predict housing demand will remain “unusually weak” for at least the next three years. At the same time, supply is set to stay “unusually high.”
Relative to today’s demand, Capital Economics says there are currently about 1.5 million too many homes up for sale. And a steady flow of foreclosures will mean that excess supply will continue to grow. “The economy will not be able to support a decent housing recovery,” the company’s analysts wrote. “Income growth will stay muted, unemployment will stay high, and the threat of deflation will rise.”
So if you need to sell, HURRY UP AND CALL ME! (850) 251-6643.
For support of my rantings I have provided you with various market statistics and articles from other well respected real estate experts. I am adding to that list of support today.
Analysts at the research firm Capital Economics stated on Friday that the "double-dip" which many have feared is already underway in the real estate market. And waiting things out won't help any. Paul Dales, the U.S. economist at CE, says that prices won't regain their previous highs (from 2006) for another decade.
Carrie Bay from DSNews reports that the Capital Economics House Price Model suggests that by the end of next year, prices will have fallen back by just over 5 percent, taking them to a new cycle low.
She goes on to report that the company’s analysts predict housing demand will remain “unusually weak” for at least the next three years. At the same time, supply is set to stay “unusually high.”
Relative to today’s demand, Capital Economics says there are currently about 1.5 million too many homes up for sale. And a steady flow of foreclosures will mean that excess supply will continue to grow. “The economy will not be able to support a decent housing recovery,” the company’s analysts wrote. “Income growth will stay muted, unemployment will stay high, and the threat of deflation will rise.”
So if you need to sell, HURRY UP AND CALL ME! (850) 251-6643.
Friday, October 29, 2010
5 Traits of Today's Buyer
Are you a buyer in today's market? If so, then a Builder by American Lives survey says that this is you:
• They are young. Most are under 45. Half said they had annual household incomes of $75,000 or less. Two-thirds are married.
• They are frugal. They consistently told surveyors they were eager to live a simple lifestyle.
• They worry about their financial future. About 70% said the economy is “not so good” with 27% saying it was getting worse, 27% saying it was getting better and two-thirds saying it would get better in a year. Some 55% said they were concerned that they might lose their jobs.
• They see themselves as energy efficient but not necessarily “green.” About 32% said they’d pay extra for energy-efficient features but only 16% said they’d pay extra for recycled or renewable construction materials.
• Neighborhood is important. Ninety-five percent said they thought the community was as important as the home itself. Seventy-nine percent wanted the most square footage they could afford, but 69% said they’d consider a smaller home in the right neighborhood. (Source: Inman News)
I'd love to hear your feedback. Tell me if you agree or disagree and what other things are important to you!
• They are young. Most are under 45. Half said they had annual household incomes of $75,000 or less. Two-thirds are married.
• They are frugal. They consistently told surveyors they were eager to live a simple lifestyle.
• They worry about their financial future. About 70% said the economy is “not so good” with 27% saying it was getting worse, 27% saying it was getting better and two-thirds saying it would get better in a year. Some 55% said they were concerned that they might lose their jobs.
• They see themselves as energy efficient but not necessarily “green.” About 32% said they’d pay extra for energy-efficient features but only 16% said they’d pay extra for recycled or renewable construction materials.
• Neighborhood is important. Ninety-five percent said they thought the community was as important as the home itself. Seventy-nine percent wanted the most square footage they could afford, but 69% said they’d consider a smaller home in the right neighborhood. (Source: Inman News)
I'd love to hear your feedback. Tell me if you agree or disagree and what other things are important to you!
Thursday, October 28, 2010
Weekly Sales (10/17 - 10/23/10)
My dear followers! I'm sorry that I haven't posted a new blog since Monday. I've been a bit under the weather (and the weather isn't helping!), but I am bringing you the weekly sales report right on schedule. Remember, this report (now in its 7th week) will detail the total number of sales in Leon County along with the price range and location of those sales. Here goes...
For the week of October 17th through October 23rd, there were 25 residential sales in Leon County (down 3 from last week). This is now the third consecutive week of sales in the mid-20s. Remember that I have predicted that sales per week will hover in the mid-20 range for the rest of the year.
Of the 25 sales, 4 were under $100,000. Nine of those were over $200,000 with only 1 of the 9 being over $300,000. The median sales price per square foot this week was $97.45 (about 30 cents lower than last week). I predict that this statistic will continue to fall also, probably for at least another year.
By quadrant, a whopping 17 sales (68%) were in the Northeast, 3 were in the Northwest, 3 were in the Southeast, and 2 properties sold in the Southwest. My old slogan "flight to quality" may now be an understatement. It would be safe to say that buyers are flocking to the Northeast in droves!
MY ADVICE: If you have a house to sell that isn't in the Northeast, then drop your price FAST.
This week's average price ($176,963) was up and the median price ($150,000) stayed the same.
For the week of October 17th through October 23rd, there were 25 residential sales in Leon County (down 3 from last week). This is now the third consecutive week of sales in the mid-20s. Remember that I have predicted that sales per week will hover in the mid-20 range for the rest of the year.
Of the 25 sales, 4 were under $100,000. Nine of those were over $200,000 with only 1 of the 9 being over $300,000. The median sales price per square foot this week was $97.45 (about 30 cents lower than last week). I predict that this statistic will continue to fall also, probably for at least another year.
By quadrant, a whopping 17 sales (68%) were in the Northeast, 3 were in the Northwest, 3 were in the Southeast, and 2 properties sold in the Southwest. My old slogan "flight to quality" may now be an understatement. It would be safe to say that buyers are flocking to the Northeast in droves!
MY ADVICE: If you have a house to sell that isn't in the Northeast, then drop your price FAST.
This week's average price ($176,963) was up and the median price ($150,000) stayed the same.
Monday, October 25, 2010
A "Hurry Up and Sell" Corollary
This corollary might give you a coronary... seriously.
To further bolster support for the information which I have been giving you about the dire state of the housing market, please read Joe Manausa's weekly market update HERE. The graph which he provides detailing sales over the past 20 years is pasted below.
Remember, this data comes on the heels of the Clear Capital report that US home prices dropped 5.9% in just two months. I cautioned you readers about the fact that such a decline in home prices was not just a national, but also a local, phenomenon. You can see evidence of it in Joe's report also (this is a sales graph, not a price graph, but it shows weakened demand which translates into lower prices, as I have previously stated).
Stay tuned for more market data. As always, I'll release the weekly sales report on Thursday.
To further bolster support for the information which I have been giving you about the dire state of the housing market, please read Joe Manausa's weekly market update HERE. The graph which he provides detailing sales over the past 20 years is pasted below.
Remember, this data comes on the heels of the Clear Capital report that US home prices dropped 5.9% in just two months. I cautioned you readers about the fact that such a decline in home prices was not just a national, but also a local, phenomenon. You can see evidence of it in Joe's report also (this is a sales graph, not a price graph, but it shows weakened demand which translates into lower prices, as I have previously stated).
Stay tuned for more market data. As always, I'll release the weekly sales report on Thursday.
Friday, October 22, 2010
Hurry Up and Sell... Really!
Based on my bit.ly reporting (a wonderful URL shortening website which also tracks clicks on its links), 11 of you read my recent blog entitled "Hurry Up and Sell!". Thank you.
I'm hoping that you found it helpful. I'm also hoping that you read it for more than just the reference to "Don't be a Menace to South Central", but I guess I should take the Apostle Paul's stance that so long as you heard the message, I will be glad (Philippians 1:15-18). But most of all, I hope that you believed what you read.
Prices are taking (not just about to take, we're really in the middle of this) a dramatic free fall. Still don't believe me? Too much "Chicken Little" for you? Then read the following DSNews article detailing exactly what I have been talking about HERE.
Now you may protest, "But Jason, real estate is local! We aren't experiencing that in Tallahassee!" And that would be a good answer because real estate is local. But friend, I tell you truth, we are experiencing it in Tallahassee.
If you NEED to sell your home for reasons of job loss, job transfer, divorce, or some other significant life event, PLEASE call me now! I'm here to help (850-251-6643). Remember, too, that the flip side to this coin is that it's a GREAT time to buy!
I'm hoping that you found it helpful. I'm also hoping that you read it for more than just the reference to "Don't be a Menace to South Central", but I guess I should take the Apostle Paul's stance that so long as you heard the message, I will be glad (Philippians 1:15-18). But most of all, I hope that you believed what you read.
Prices are taking (not just about to take, we're really in the middle of this) a dramatic free fall. Still don't believe me? Too much "Chicken Little" for you? Then read the following DSNews article detailing exactly what I have been talking about HERE.
Now you may protest, "But Jason, real estate is local! We aren't experiencing that in Tallahassee!" And that would be a good answer because real estate is local. But friend, I tell you truth, we are experiencing it in Tallahassee.
If you NEED to sell your home for reasons of job loss, job transfer, divorce, or some other significant life event, PLEASE call me now! I'm here to help (850-251-6643). Remember, too, that the flip side to this coin is that it's a GREAT time to buy!
Thursday, October 21, 2010
Weekly Sales (10/10 - 10/16/10)
Like our previous five reports, this sixth sales report will detail the total number of residential sales in Leon County along with the price ranges of those sales, where those sales took place, and a few explanatory notes.
For the week of October 10th through October 16th, there were 28 residential sales in Leon County. This is the first time in our report history that there have been back-to-back weeks of similar sales numbers. This week's figure is consistent with my prediction that sales would hover in the mid-20s each week for the remainder of the year.
Of the 28 sales, 6 sales were under $100,000. Nine of those were over $200,000 with 3 of those 9 being over $300,000. The median sales price per square foot this week was $97.77 (about a dollar per square foot lower than last week). Expect this statistic to continue to fall for the rest of the year.
By quadrant, 15 sales were in the Northeast, 4 were in the Northwest, 4 were in the Southeast, and 5 properties sold in the Southwest. This week marks the first time in our report that the SW outperformed the NW and SE. Expect to see more properties selling in the Southwest part of town as investors scoop up properties at bargain basement prices.
This week's average ($167,460) and median ($150,000) sale prices varied more this week than they usually do, though the spread narrowed from last's week figures. Expect to see the average and median sales prices continue to plummet over the next 3-4 months.
For the week of October 10th through October 16th, there were 28 residential sales in Leon County. This is the first time in our report history that there have been back-to-back weeks of similar sales numbers. This week's figure is consistent with my prediction that sales would hover in the mid-20s each week for the remainder of the year.
Of the 28 sales, 6 sales were under $100,000. Nine of those were over $200,000 with 3 of those 9 being over $300,000. The median sales price per square foot this week was $97.77 (about a dollar per square foot lower than last week). Expect this statistic to continue to fall for the rest of the year.
By quadrant, 15 sales were in the Northeast, 4 were in the Northwest, 4 were in the Southeast, and 5 properties sold in the Southwest. This week marks the first time in our report that the SW outperformed the NW and SE. Expect to see more properties selling in the Southwest part of town as investors scoop up properties at bargain basement prices.
This week's average ($167,460) and median ($150,000) sale prices varied more this week than they usually do, though the spread narrowed from last's week figures. Expect to see the average and median sales prices continue to plummet over the next 3-4 months.
Tuesday, October 19, 2010
Hurry Up and Sell!
If you spent part or all of your adolescence growing up in the '90s, then you'll probably remember a scene from the movie "Don't be a Menace to South Central while Drinking your Juice in the Hood" where a pair of Chinese grocery store owners repeatedly tell two African-American brothers (I mean siblings) to "hurry up and buy!" (if you missed this cultural icon - I'm being facetious, although the movie was pretty hilarious - click HERE).
While that mantra may have permeated our recent real estate boom from 2002-2006, the slogan of today's market has radically changed. If you are thinking about selling your home, then you should "hurry up and sell!"
Since the market peak in the Spring of 2006, median property values have fallen by 15% in Leon County as a whole (-1% in 2007, flat in 2008, -9% in 2009, and -5% YTD so far). Some neighborhoods have fared better, some worse (much worse).
This year's numbers were buoyed significantly by the 1st time homebuyer tax credit, and the market decline is now accelerating. Property values are going to continue to fall so long as foreclosures and short sales continue to be a significant factor in the market (foreclosures and short sales once accounted for only 2% of sales in Leon County... that figure now stands at 25% and growing) and unemployment remains high.
And the median sales price doesn't tell the whole story. Remember, that statistic is subject to changes in market demographics (and there have certainly been changes in market demographics). The best way to track appreciation or depreciation is to look at repeat sales of individual properties. In these cases, the depreciation story is significant and scary. I'll use two of my current listings as cases in point --
1. 1117 Wisteria Drive: SOLD in January of 2006 for $550,000. Now under contract for $295,000 (and in need of significant repair that was overlooked in the 2006 sale).
2. 1827 Ivan Drive: SOLD in July of 2005 for $175,000. Now listed (after about $11,000 in improvements including a new 15 SEER HVAC system) for $148,000 with very little interest.
Waiting until next year to sell will not help. We have at least two years of foreclosures to work through, and we probably won't see appreciation for quite a while after that (Joe Manausa thinks we've got 7-10 years of falling and then stagnant prices).
So if you or someone you know is thinking about selling, call me ASAP: 850-251-6643.
While that mantra may have permeated our recent real estate boom from 2002-2006, the slogan of today's market has radically changed. If you are thinking about selling your home, then you should "hurry up and sell!"
Since the market peak in the Spring of 2006, median property values have fallen by 15% in Leon County as a whole (-1% in 2007, flat in 2008, -9% in 2009, and -5% YTD so far). Some neighborhoods have fared better, some worse (much worse).
This year's numbers were buoyed significantly by the 1st time homebuyer tax credit, and the market decline is now accelerating. Property values are going to continue to fall so long as foreclosures and short sales continue to be a significant factor in the market (foreclosures and short sales once accounted for only 2% of sales in Leon County... that figure now stands at 25% and growing) and unemployment remains high.
And the median sales price doesn't tell the whole story. Remember, that statistic is subject to changes in market demographics (and there have certainly been changes in market demographics). The best way to track appreciation or depreciation is to look at repeat sales of individual properties. In these cases, the depreciation story is significant and scary. I'll use two of my current listings as cases in point --
1. 1117 Wisteria Drive: SOLD in January of 2006 for $550,000. Now under contract for $295,000 (and in need of significant repair that was overlooked in the 2006 sale).
2. 1827 Ivan Drive: SOLD in July of 2005 for $175,000. Now listed (after about $11,000 in improvements including a new 15 SEER HVAC system) for $148,000 with very little interest.
Waiting until next year to sell will not help. We have at least two years of foreclosures to work through, and we probably won't see appreciation for quite a while after that (Joe Manausa thinks we've got 7-10 years of falling and then stagnant prices).
So if you or someone you know is thinking about selling, call me ASAP: 850-251-6643.
Saturday, October 16, 2010
Homeownership is Affordable.... Today!
Housing affordability is a combination of prices and interest rates. There are several scenarios that can play out as those two metrics change. They are:
1. Prices rise, interest rates rise = affordability falls (homes less affordable)
2. Prices rise, interest rates fall = affordability outcome uncertain
3. Prices fall, interest rates rise = affordability outcome uncertain
4. Prices fall, interest rates fall = affordability increases (homes more affordable)
I have bolded #4 because it is the situation in which we find ourselves. And really, it is a historically unprecedented situation.
During the last real estate bust in the late '80s, prices fell sharply but interest rates were near historic highs (18%+). During our most recent real estate boom, even though interest rates were relatively low historically (6-8%), prices rose dramatically and made homeownership impossible for many people.
However, prices and interest rates are now at a level where homeownership is a wonderful investment - both long term (because prices will go back up) and short term (because owning is now cheaper than renting). NAR chief economist Lawrence Yun said recently that homeownership is more affordable than it has been in a generation.
And in their 2nd quarter report, Republic Mortgage Insurance Company said:
"Home prices are low relative to equivalent rents in Tallahassee. Currently, monthly mortgage payments (principal + interest) based on the average priced property are 30.2% less than comparable rents in this area. Historically average monthly payments (principal + interest) are 19.3% more than comparable rents in Tallahassee."
So if you are interested in buying a new home (or building wealth in real estate by acquiring rental property), give me a call! 850-251-6643.
Friday, October 15, 2010
A Voice of Common Sense
If you have been following my other blog (and you should, it is meant to be a resource for you!) at www.tallahasseeforeclosures.blogspot.com, then you will be up-to-date on the recent news regarding several large banks halting their foreclosure proceedings.
In short, GMAC and JPMorgan Chase were the first to issue foreclosure moratoriums, joined shortly thereafter by Bank of America, and then Litton Loan Servicing and PNC Financial followed suit last week.
The revelations about bank employees not properly executing foreclosure documents has caused an outcry amongst the public and politicians alike. Several politicians (Nancy Pelosi, et al) and consumer advocate groups have called for a nationwide moratorium on all foreclosures. However, to do so would cause tremendous upheaval in the real estate market and disrupt a very tenuous recovery (some places, like Tallahassee, have fared better than others, but still have more REO inventory to work through and won't see recovery until we do, so delaying foreclosures is just delaying recovery).
Edward J. DeMarco (acting director of FHFA) says, “Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise [Fannie Mae and Freddie Mac] loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties.”
To read more of Mr. Demarco's comments, click HERE.
The bottom line is that people are being foreclosed upon because they have not paid their mortgages. While we want to encourage banks and all corporate citizens and be responsible and law-abiding, we need to allow them to recoup their investments, liquidate their REO inventory, and get the housing market back to where foreclosures are an exception, not the rule.
In short, GMAC and JPMorgan Chase were the first to issue foreclosure moratoriums, joined shortly thereafter by Bank of America, and then Litton Loan Servicing and PNC Financial followed suit last week.
The revelations about bank employees not properly executing foreclosure documents has caused an outcry amongst the public and politicians alike. Several politicians (Nancy Pelosi, et al) and consumer advocate groups have called for a nationwide moratorium on all foreclosures. However, to do so would cause tremendous upheaval in the real estate market and disrupt a very tenuous recovery (some places, like Tallahassee, have fared better than others, but still have more REO inventory to work through and won't see recovery until we do, so delaying foreclosures is just delaying recovery).
Edward J. DeMarco (acting director of FHFA) says, “Delays in foreclosures add cost and other burdens for communities, investors, and taxpayers. For Enterprise [Fannie Mae and Freddie Mac] loans, delay means that taxpayers must continue to support the Enterprises’ financing of mortgages without the benefit of payment and neighborhoods are left with more vacant properties.”
To read more of Mr. Demarco's comments, click HERE.
The bottom line is that people are being foreclosed upon because they have not paid their mortgages. While we want to encourage banks and all corporate citizens and be responsible and law-abiding, we need to allow them to recoup their investments, liquidate their REO inventory, and get the housing market back to where foreclosures are an exception, not the rule.
Thursday, October 14, 2010
Weekly Sales (10/3 - 10/9/10)
Wow! Here we are entering our second month of posting weekly sales stats. Welcome to the 5th installment of the weekly sales report. Each sales report will detail the total number of sales, the prices ranges of those sales, where those sales took place, and a few explanatory notes.
For the week of October 3rd through October 9th, there were 25 residential sales in Leon County. That figure falls by over half from last week's astonishing 53 sales to almost match the sales figures from two weeks ago (24).
I mentioned last week that the surge in sales to 53 in a week was hard to explain, and it is not surprising to see the figure fall back into the 20s. So far we have had 25, 39, 24, 53, and 25 sales for the last five weekly totals. There looks to be something of a trend being established. As we've talked about before, I expect to see weekly sales hover in the mid-20s per week for most of the rest of the year.
Of the 25 sales, 10 of those were over $200,000 with 4 of those 10 being over $300,000. Four properties sold for less than $100,000. The median sales price per square foot this week was $98.61. This is a stat which I may start mentioning more often.
By quadrant, 15 sales were in the Northeast, 5 were in the Northwest, 4 were in the Southeast, and just one property was sold in the Southwest. For repeat readers, you will notice the sales in the Northeast quadrant continuing to dominate local activity.
This week's average ($189,105) and median ($128,000) sale prices were drastically different for the first time since we've tracked these figures. That difference shows an overweight on inexpensive homes as lower income buyers are able to afford homes for the first time in almost a decade.
For the week of October 3rd through October 9th, there were 25 residential sales in Leon County. That figure falls by over half from last week's astonishing 53 sales to almost match the sales figures from two weeks ago (24).
I mentioned last week that the surge in sales to 53 in a week was hard to explain, and it is not surprising to see the figure fall back into the 20s. So far we have had 25, 39, 24, 53, and 25 sales for the last five weekly totals. There looks to be something of a trend being established. As we've talked about before, I expect to see weekly sales hover in the mid-20s per week for most of the rest of the year.
Of the 25 sales, 10 of those were over $200,000 with 4 of those 10 being over $300,000. Four properties sold for less than $100,000. The median sales price per square foot this week was $98.61. This is a stat which I may start mentioning more often.
By quadrant, 15 sales were in the Northeast, 5 were in the Northwest, 4 were in the Southeast, and just one property was sold in the Southwest. For repeat readers, you will notice the sales in the Northeast quadrant continuing to dominate local activity.
This week's average ($189,105) and median ($128,000) sale prices were drastically different for the first time since we've tracked these figures. That difference shows an overweight on inexpensive homes as lower income buyers are able to afford homes for the first time in almost a decade.
Wednesday, October 13, 2010
Top 10 Reasons to Own a Home
Since I couldn't have said it better myself, please read the following Wall Street Journal article about why it is a good idea to own a home HERE.
My only caveats would be that:
1. Owning is a long term proposition. If you don't plan on staying in your home for at least 5 years (better 7-10), then you shouldn't buy unless the property has good income producing potential (e.g. a house in a neighborhood that could rent well, or a duplex or triplex).
2. North Florida has not suffered from overbuilding as much as Central and South Florida have. The Tallahassee area of the Panhandle, thankfully, has been largely insulated from the downturn because of our stable job market and a general conservatism about growth and expansion.
My only caveats would be that:
1. Owning is a long term proposition. If you don't plan on staying in your home for at least 5 years (better 7-10), then you shouldn't buy unless the property has good income producing potential (e.g. a house in a neighborhood that could rent well, or a duplex or triplex).
2. North Florida has not suffered from overbuilding as much as Central and South Florida have. The Tallahassee area of the Panhandle, thankfully, has been largely insulated from the downturn because of our stable job market and a general conservatism about growth and expansion.
Monday, October 11, 2010
Real Estate Booms and Busts
All of us remember the recent real estate boom that lasted from 2002-2006, even though it has been largely overshadowed by our recent bust.
But do you remember the real estate bust of the late 1980s? If so, good for you. And do you remember the booms of the 1820s, 1880s, 1920s, and 1950s? What about the bust of 1926?
In recent history, booms and busts have followed roughly 20 year cycles. Our current bust has been no different. The good news is that people still need places to live, so real estate is an enduring commodity. There will always be demand (whether for renting or owning). However, at the moment, the supply far outweighs the demand and that will continue to put downward pressure on prices. But real estate will recover. It always has. It may take more time now than it used to, but it will recover.
To read more about real estate booms and busts, check out page 8 of the September issue of the Tallahassee Board of Realtors' magazine HERE.
But do you remember the real estate bust of the late 1980s? If so, good for you. And do you remember the booms of the 1820s, 1880s, 1920s, and 1950s? What about the bust of 1926?
In recent history, booms and busts have followed roughly 20 year cycles. Our current bust has been no different. The good news is that people still need places to live, so real estate is an enduring commodity. There will always be demand (whether for renting or owning). However, at the moment, the supply far outweighs the demand and that will continue to put downward pressure on prices. But real estate will recover. It always has. It may take more time now than it used to, but it will recover.
To read more about real estate booms and busts, check out page 8 of the September issue of the Tallahassee Board of Realtors' magazine HERE.
Thursday, October 7, 2010
Weekly Sales (9/26 - 10/2/10)
Welcome to the 4th installment of our weekly sales report. Remember, the sales report will detail the total number of sales, the prices ranges of those sales, where those sales took place, and a few explanatory notes.
For the week of September 26th through October 2nd, there were a remarkable 53 residential sales in Leon County. That figure is more than double the sales from last week (24), and roughly 33% higher than two weeks ago (39).
This dramatic increase is hard to explain. It is a figure we would expect to see during the Summer months. Weekly sales obviously fluctuate quite a bit, but this week's figure is higher than our average weekly sales figure (~ 46), an unusual occurrence during the Fall and Winter months.
Of the 53 sales, 16 of those were over $200,000 with 7 of those 16 being over $300,000. 13 properties sold for less than $100,000 with 5 of those sales closing at or below $50,000.
It is interesting to note that this market is bucking the bell curve trend, that is, we are seeing a more even distribution amongst price ranges than we ordinarily would. Typically, there would be a high concentration of sales between $100-200,000 with very few sales above or below that. Now, there is more even spread of purchases of the high highs and low lows.
By quadrant, 25 sales were in the Northeast, 11 were in the Northwest, 12 were in the Southeast, and 5 properties were sold in the Southwest. As we have seen in the past, Southwood continues to dominate sales in the Southeast (7 this week). The Northeast is still seeing the highest percentage of sales which is great news for anyone with a property to sell there.
This week's average ($170,972) and median ($162,000) sale prices were both relatively close to the yearly marks of $181,857 and $159,900, respectively.
For the week of September 26th through October 2nd, there were a remarkable 53 residential sales in Leon County. That figure is more than double the sales from last week (24), and roughly 33% higher than two weeks ago (39).
This dramatic increase is hard to explain. It is a figure we would expect to see during the Summer months. Weekly sales obviously fluctuate quite a bit, but this week's figure is higher than our average weekly sales figure (~ 46), an unusual occurrence during the Fall and Winter months.
Of the 53 sales, 16 of those were over $200,000 with 7 of those 16 being over $300,000. 13 properties sold for less than $100,000 with 5 of those sales closing at or below $50,000.
It is interesting to note that this market is bucking the bell curve trend, that is, we are seeing a more even distribution amongst price ranges than we ordinarily would. Typically, there would be a high concentration of sales between $100-200,000 with very few sales above or below that. Now, there is more even spread of purchases of the high highs and low lows.
By quadrant, 25 sales were in the Northeast, 11 were in the Northwest, 12 were in the Southeast, and 5 properties were sold in the Southwest. As we have seen in the past, Southwood continues to dominate sales in the Southeast (7 this week). The Northeast is still seeing the highest percentage of sales which is great news for anyone with a property to sell there.
This week's average ($170,972) and median ($162,000) sale prices were both relatively close to the yearly marks of $181,857 and $159,900, respectively.
Wednesday, October 6, 2010
Two Great New Listings!
3334 sq ft
4 bedrooms
2.5 baths
2 car garage
0.65 acres
Oak hardwood floors
Remodeled kitchen/baths
New roof with contract!
$365,000
2659 sq ft
4 or 5 bedrooms
3 full baths
2 car carport
1.00 acres
HUGE kitchen
Ample living spaces
In-law suite (1 bdr/1 bth)
$225,000
Monday, October 4, 2010
Wakulla Bank Closed
Due to its extremely high percentage (14%+) of non-performing assets, Wakulla Bank was closed on October 1st, 2010, by the Florida Office of Financial Regulation. The FDIC was named receiver.
Centennial Bank (Conway, AR) is assuming Wakulla Bank. Former Wakulla Bank locations will reopen as Centennial Bank locations. You can learn more about Centennial Bank at www.my100bank.com.
To see the FDIC press release, go HERE.
If you are a Wakulla Bank customer, you may want to read A Borrower's Guide to an FDIC Insured Bank Failure.
Centennial Bank (Conway, AR) is assuming Wakulla Bank. Former Wakulla Bank locations will reopen as Centennial Bank locations. You can learn more about Centennial Bank at www.my100bank.com.
To see the FDIC press release, go HERE.
If you are a Wakulla Bank customer, you may want to read A Borrower's Guide to an FDIC Insured Bank Failure.
Saturday, October 2, 2010
Halting Foreclosures... A good thing?
In the past week, three major US banks (JPMorgan Chase, GMAC, and now BoA) have announced that they will stop their foreclosure activity in order to examine their procedures.
Recent testimony by bank officials has brought to light what some are calling "robo-signers" - the practice of signing legal documents without abiding by specific laws that govern them, like having personal knowledge that the information is accurate or having the documents notarized.
One BoA official testified in a Massachusetts bankruptcy case that she signed between 7-8,000 foreclosure documents per month and "typically" did not read them. Assuming 23 working days to a month, that averages out to signing 326 documents per day, or roughly 40 per hour.
That becomes a full time job in and of itself, apart from carrying out the other duties that are required of a corporate Vice President (the position which most often signs these documents). One can readily see how having personal knowledge that such a large volume of information is correct becomes impossible.
To make matters worse, two large Florida law firms have recently been accused of falsifying foreclosure documents. And the most recent issue of the Florida Bar News found that over 20% of foreclosure cases in Manatee and Sarasota counties had some type of procedural or paperwork problem. We can only assume that other counties are similar.
So, what do you think, is halting foreclosures a good thing? I'd love to hear your thoughts... tune in next week for mine.
Recent testimony by bank officials has brought to light what some are calling "robo-signers" - the practice of signing legal documents without abiding by specific laws that govern them, like having personal knowledge that the information is accurate or having the documents notarized.
One BoA official testified in a Massachusetts bankruptcy case that she signed between 7-8,000 foreclosure documents per month and "typically" did not read them. Assuming 23 working days to a month, that averages out to signing 326 documents per day, or roughly 40 per hour.
That becomes a full time job in and of itself, apart from carrying out the other duties that are required of a corporate Vice President (the position which most often signs these documents). One can readily see how having personal knowledge that such a large volume of information is correct becomes impossible.
To make matters worse, two large Florida law firms have recently been accused of falsifying foreclosure documents. And the most recent issue of the Florida Bar News found that over 20% of foreclosure cases in Manatee and Sarasota counties had some type of procedural or paperwork problem. We can only assume that other counties are similar.
So, what do you think, is halting foreclosures a good thing? I'd love to hear your thoughts... tune in next week for mine.
Thursday, September 30, 2010
Weekly Sales (9/19 - 9/25/10)
Welcome to the 3nd installment of our weekly sales report. Remember, I am using the same format for each report which details the total number of sales, the prices ranges of those sales, where those sales took place, and a few explanatory notes.
For the week of September 19th through September 25th, there were 24 residential sales in Leon County. That figure is 40% lower than last week (39 sales), but basically the same number as two weeks ago (25 sales). I think that we will continue to see weekly sales hover in the mid 20s throughout the remainder of the year (holiday weeks being an exception).
Of the 24 sales, 8 of those were over $200,000 with 3 of those 8 being over $300,000. With the expiration of the 1st time homebuyer tax credit, we should expect to see a higher percentage of sales taking place in these higher ranges (simply because there are fewer 1st timers buying less expensive properties).
As a result, it would not be surprising to see average and median prices increase. However, that is far from a signal of recovery unless it is sustained over time and coupled with increased sales volume (3200-3500 sales is probably a sustainable, healthy norm for the future, but it may take a few years to get there).
By quadrant, 10 sales were in the Northeast, 7 were in the Northwest, 7 were in the Southeast, and no property was sold in the Southwest this week. The "flight to quality" discussed in an earlier blog continues as the NE remains the dominant sector. In fact, over 50% of the homes sold in Tallahassee this year have been in that quadrant.
This week's average ($177,674) and median ($176,000) sale prices were both relatively close to the yearly marks of $182,387 and $159,500, respectively.
For the week of September 19th through September 25th, there were 24 residential sales in Leon County. That figure is 40% lower than last week (39 sales), but basically the same number as two weeks ago (25 sales). I think that we will continue to see weekly sales hover in the mid 20s throughout the remainder of the year (holiday weeks being an exception).
Of the 24 sales, 8 of those were over $200,000 with 3 of those 8 being over $300,000. With the expiration of the 1st time homebuyer tax credit, we should expect to see a higher percentage of sales taking place in these higher ranges (simply because there are fewer 1st timers buying less expensive properties).
As a result, it would not be surprising to see average and median prices increase. However, that is far from a signal of recovery unless it is sustained over time and coupled with increased sales volume (3200-3500 sales is probably a sustainable, healthy norm for the future, but it may take a few years to get there).
By quadrant, 10 sales were in the Northeast, 7 were in the Northwest, 7 were in the Southeast, and no property was sold in the Southwest this week. The "flight to quality" discussed in an earlier blog continues as the NE remains the dominant sector. In fact, over 50% of the homes sold in Tallahassee this year have been in that quadrant.
This week's average ($177,674) and median ($176,000) sale prices were both relatively close to the yearly marks of $182,387 and $159,500, respectively.
Wednesday, September 29, 2010
Shadow Inventory
Just ahead of the weekly sales report tomorrow, I want to disseminate this article with respect to the national foreclosure inventory: S&P Report.
Locally, some other experts are predicting that there are 5000 distressed properties that need to work their way through the market. If you remember our yearly sales figures, then you'll recall that it would take over two years to sell that inventory alone. On top of that, there is still the matter of all the other non-distressed sales on the market (currently about 2300, and rising).
None of this new information bodes well for the Tallahassee housing market over the next 3-4 years. However, if you are in the market for a house long term (7-10 years), then buying now while rates are still low is a phenomenal, once-in-a-lifetime opportunity. Call me!
Locally, some other experts are predicting that there are 5000 distressed properties that need to work their way through the market. If you remember our yearly sales figures, then you'll recall that it would take over two years to sell that inventory alone. On top of that, there is still the matter of all the other non-distressed sales on the market (currently about 2300, and rising).
None of this new information bodes well for the Tallahassee housing market over the next 3-4 years. However, if you are in the market for a house long term (7-10 years), then buying now while rates are still low is a phenomenal, once-in-a-lifetime opportunity. Call me!
Saturday, September 25, 2010
Distressed Properties #2
What percentage of the current Tallahassee real estate market do you think is made up of short sales and foreclosures? 10%? 20%? 50%?
Presently, there are 2702 active residential listings in the MLS for sale in Tallahassee. Of those, 178 (6.6%) are foreclosures and 418 (15.5%) are prospective short sales. So, in total, just over 1 in 5 (22.1%) of all the homes for sale in Leon County are "distressed" sales.
While that number may seem high, it represents only 1 in every 140 households that is affected by a short sale or foreclosure. And that is good news for our community.
Presently, there are 2702 active residential listings in the MLS for sale in Tallahassee. Of those, 178 (6.6%) are foreclosures and 418 (15.5%) are prospective short sales. So, in total, just over 1 in 5 (22.1%) of all the homes for sale in Leon County are "distressed" sales.
While that number may seem high, it represents only 1 in every 140 households that is affected by a short sale or foreclosure. And that is good news for our community.
Friday, September 24, 2010
Distressed Properties
When we talked about "distressed properties" it is possible to apply the term two ways.
First, and most often, "distressed" refers to the condition of the property. That is, the physical condition of the structure(s). A "distressed" property is typically considered to be a dilapidated property, or at least one that requires a significant amount of rehabilitation. Often, distressed properties do not qualify for "conventional" forms of financing.
I put conventional in quotes there because I am using conventional to mean "usual and ordinary, commonplace" rather the the strict definition of a conventional loan -- which would be a non-government loan program, typically with 20% down. FHA, VA, USDA (aka RD), and conventional loans would all fall under the "conventional" heading as herein defined. Owner financing, private money, or "hard" money loans would fall outside the scope of "conventional" loans.
Second, "distressed" can be used to refer to the situation of the property owner. Therefore, it is also common to hear short sales and foreclosures referred to as "distressed" sales. A foreclosure or short sale could possibly fall under both meanings of "distressed" if the property is in poor condition. In this second meaning, short sales are called distressed because the homeowner is (usually) experiencing some financial hardship (or distress) which is necessitating the short sale.
In a foreclosure, the institution who owned the mortgage and foreclosed in order to take ownership of the property is an "unwilling" owner (because a bank/mortgage holder would much rather collect interest than be a property owner and it has taken back the property as a last resort). Needing to sell the asset (house) in order to return to normal business operations (lending money) puts the owner of a foreclosure in a "distressed" position.
Finally, remember that there are exceptions to most rules. It is possible for a homeowner to consummate a short sale without ever having missed or been late on a mortgage payment. In this case, the homeowner may simply be "underwater" (owing more than the property is worth) and desire to be rid of that negative equity position. In that case, a short sale would not be a precursor to foreclosure, as is often the case.
Questions?
First, and most often, "distressed" refers to the condition of the property. That is, the physical condition of the structure(s). A "distressed" property is typically considered to be a dilapidated property, or at least one that requires a significant amount of rehabilitation. Often, distressed properties do not qualify for "conventional" forms of financing.
I put conventional in quotes there because I am using conventional to mean "usual and ordinary, commonplace" rather the the strict definition of a conventional loan -- which would be a non-government loan program, typically with 20% down. FHA, VA, USDA (aka RD), and conventional loans would all fall under the "conventional" heading as herein defined. Owner financing, private money, or "hard" money loans would fall outside the scope of "conventional" loans.
Second, "distressed" can be used to refer to the situation of the property owner. Therefore, it is also common to hear short sales and foreclosures referred to as "distressed" sales. A foreclosure or short sale could possibly fall under both meanings of "distressed" if the property is in poor condition. In this second meaning, short sales are called distressed because the homeowner is (usually) experiencing some financial hardship (or distress) which is necessitating the short sale.
In a foreclosure, the institution who owned the mortgage and foreclosed in order to take ownership of the property is an "unwilling" owner (because a bank/mortgage holder would much rather collect interest than be a property owner and it has taken back the property as a last resort). Needing to sell the asset (house) in order to return to normal business operations (lending money) puts the owner of a foreclosure in a "distressed" position.
Finally, remember that there are exceptions to most rules. It is possible for a homeowner to consummate a short sale without ever having missed or been late on a mortgage payment. In this case, the homeowner may simply be "underwater" (owing more than the property is worth) and desire to be rid of that negative equity position. In that case, a short sale would not be a precursor to foreclosure, as is often the case.
Questions?
Thursday, September 23, 2010
Weekly Sales (9/12 - 9/18/10)
Here is the 2nd installment of our weekly sales report. For ease of use, I am going to use the same format for each report which will detail the total number of sales, the prices ranges of those sales, where those sales took place, and a few explanatory notes.
For the week of September 12th through September 18th, there were 39 residential sales in Leon County. Year-to-date, there have been an average of 45.5 sales per week, so 39 sales is as close to the average as we would expect to be at this time of year.
Of the 39 sales, 17 of those were over $200,000 with 10 of those 17 being over $300,000. Those figures are once again encouraging. 7 sales were under $100,000.
By quadrant, 16 sales were in the Northeast, 15 were in the Northwest, 7 were in the Southeast, and 1 was in the Southwest. The increase in the number of sales in the NW relative to other quadrants is good considering the slowdown in that area over the past several months. Hopefully, that trend will continue.
This week's average ($220,027) and median ($198,755) sale prices were both well above the yearly figures of $182,387 and $159,500, respectively.
For the week of September 12th through September 18th, there were 39 residential sales in Leon County. Year-to-date, there have been an average of 45.5 sales per week, so 39 sales is as close to the average as we would expect to be at this time of year.
Of the 39 sales, 17 of those were over $200,000 with 10 of those 17 being over $300,000. Those figures are once again encouraging. 7 sales were under $100,000.
By quadrant, 16 sales were in the Northeast, 15 were in the Northwest, 7 were in the Southeast, and 1 was in the Southwest. The increase in the number of sales in the NW relative to other quadrants is good considering the slowdown in that area over the past several months. Hopefully, that trend will continue.
This week's average ($220,027) and median ($198,755) sale prices were both well above the yearly figures of $182,387 and $159,500, respectively.
Tuesday, September 21, 2010
Moral Component of Recovery
I have a confession...
I bought my house at the peak of the market. And not just in the peak year (2006 in Tallahassee), but in the peak month of the peak year (May). So, like approximately 15 million other Americans (according to Moody's Economy.com), I am "underwater" on my house (meaning I owe more on it than the house is worth).
So what do you think that I should do?
According to a recent Pew Research study, 36% of Americans would say that it is alright for me to "strategically default" on my loan, that is to say, to purposefully stop making my mortgage payments even though I am able to afford them, and walk away from my house.
If that trend is troubling to you, it should be. A continued rise in strategic defaults would mean a whole new wave of foreclosures entering the market over the next 2-3 years. More foreclosures would put increased downward pressure on home prices and keep us stuck in the negative feedback cycle in which we presently find ourselves.
If we are to have any hope of a real estate recovery in the near term, then Americans must make the decision to honor their promise to repay the money that they borrowed for their home (or vacation property, or car, or boat, or whatever). This is absolutely essential. If honesty and integrity disappear from our society and economy, then there is no hope for the future of our nation.
"Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Let no debt remain outstanding except to love each other" (Romans 13:7-8).
I bought my house at the peak of the market. And not just in the peak year (2006 in Tallahassee), but in the peak month of the peak year (May). So, like approximately 15 million other Americans (according to Moody's Economy.com), I am "underwater" on my house (meaning I owe more on it than the house is worth).
So what do you think that I should do?
According to a recent Pew Research study, 36% of Americans would say that it is alright for me to "strategically default" on my loan, that is to say, to purposefully stop making my mortgage payments even though I am able to afford them, and walk away from my house.
If that trend is troubling to you, it should be. A continued rise in strategic defaults would mean a whole new wave of foreclosures entering the market over the next 2-3 years. More foreclosures would put increased downward pressure on home prices and keep us stuck in the negative feedback cycle in which we presently find ourselves.
If we are to have any hope of a real estate recovery in the near term, then Americans must make the decision to honor their promise to repay the money that they borrowed for their home (or vacation property, or car, or boat, or whatever). This is absolutely essential. If honesty and integrity disappear from our society and economy, then there is no hope for the future of our nation.
"Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Let no debt remain outstanding except to love each other" (Romans 13:7-8).
Thursday, September 16, 2010
Weekly Sales (9/5 - 9/11/10)
This is our first weekly sales report. As I mentioned in an earlier blog, these reports (with notes) will always reference data for the week prior because sales are typically reported in the MLS one to two days after they actually occur.
For the week of September 5th through September 11th, there were 25 residential sales in Leon County. Year-to-date, there have been an average of 46.2 sales per week, so 25 sales represents a significant slowdown (some of which we would expect given the seasonal nature of real estate sales).
Of the 25 sales, 10 of those were over $200,000 with 5 of those 10 being over $300,000. Those figures are encouraging for homes in the upper price ranges.
By quadrant, 11 sales were in the Northeast, 4 were in the Northwest, 8 were in the Southeast, and 2 were in the Southwest. I believe that we will continue to see the highest percentage of sales occurring in the Northeast as buyers continue a "flight to quality" (the Northeast has, generally, the best schools and nicest neighborhoods). Not surprisingly, 5 of the 8 sales in the Southeast have been in Southwood.
While this week's average sale price ($213,700) is well above the yearly average ($182,070), the median sale price ($159,990) is right in line with this year's figure ($159,000).
Check back in next week as we continue to monitor our weekly progress.
For the week of September 5th through September 11th, there were 25 residential sales in Leon County. Year-to-date, there have been an average of 46.2 sales per week, so 25 sales represents a significant slowdown (some of which we would expect given the seasonal nature of real estate sales).
Of the 25 sales, 10 of those were over $200,000 with 5 of those 10 being over $300,000. Those figures are encouraging for homes in the upper price ranges.
By quadrant, 11 sales were in the Northeast, 4 were in the Northwest, 8 were in the Southeast, and 2 were in the Southwest. I believe that we will continue to see the highest percentage of sales occurring in the Northeast as buyers continue a "flight to quality" (the Northeast has, generally, the best schools and nicest neighborhoods). Not surprisingly, 5 of the 8 sales in the Southeast have been in Southwood.
While this week's average sale price ($213,700) is well above the yearly average ($182,070), the median sale price ($159,990) is right in line with this year's figure ($159,000).
Check back in next week as we continue to monitor our weekly progress.
Tuesday, September 14, 2010
Suggestions for Market Improvement
This post is the last in a series of three detailing the current state of the real estate market in Leon County. Please refer to the posts from 9/11 and 9/13 for background information.
I mentioned yesterday that I would give some suggestions on how to improve the state of the market. You will recall that I advocated an approach which targets both supply and demand. While I am thinking of Tallahassee in particular, these suggestions will work for any market struggling with oversupply.
My suggestions (most of which have already been offered in some form or another) are as follows:
1. Create another round of tax credits which are scaled back over time as the market improves (e.g. $4000 until the end of 2010, then $3000 from 1/11 to 6/11, then $2000 from 7/11 to 12/11, and so forth).
2. Create tax deductions which are scaled over time to provide a long lasting effect for purchasers while minimizing the up front cost to the federal government.
3. Open up tax credits and/or deductions to investors. This has a multiplicative effect because most investors are able to purchase more than one property, whereas a homeowner is by definition limited to one property (the one he occupies as his primary residence).
4. Provide funds to purchase and demolish the least expensive and most dilapidated homes in the market. This has an immediate impact on supply because it removes the property from the housing stock permanently, and therefore truly reduces inventory (whereas an investor might purchase and remodel the property and then place it back into the marketplace for rent or sale, thus having no effect on reducing the inventory).
5. Provide subsidies to builders to remodel dilapidated homes instead of building new ones. This has the effect of reducing inventory because builders are moved from the new construction market to the renovation market where they are rehabilitating the existing housing stock (good in its own right) instead of adding to it (which, in effect, reduces inventory, or at least prevents the inventory from growing).
There are other ideas for improving our local and national real estate markets, so if you'd like to discourse more on the topic, please comment on this post or email me at jasonpicht@gmail.com.
I mentioned yesterday that I would give some suggestions on how to improve the state of the market. You will recall that I advocated an approach which targets both supply and demand. While I am thinking of Tallahassee in particular, these suggestions will work for any market struggling with oversupply.
My suggestions (most of which have already been offered in some form or another) are as follows:
1. Create another round of tax credits which are scaled back over time as the market improves (e.g. $4000 until the end of 2010, then $3000 from 1/11 to 6/11, then $2000 from 7/11 to 12/11, and so forth).
2. Create tax deductions which are scaled over time to provide a long lasting effect for purchasers while minimizing the up front cost to the federal government.
3. Open up tax credits and/or deductions to investors. This has a multiplicative effect because most investors are able to purchase more than one property, whereas a homeowner is by definition limited to one property (the one he occupies as his primary residence).
4. Provide funds to purchase and demolish the least expensive and most dilapidated homes in the market. This has an immediate impact on supply because it removes the property from the housing stock permanently, and therefore truly reduces inventory (whereas an investor might purchase and remodel the property and then place it back into the marketplace for rent or sale, thus having no effect on reducing the inventory).
5. Provide subsidies to builders to remodel dilapidated homes instead of building new ones. This has the effect of reducing inventory because builders are moved from the new construction market to the renovation market where they are rehabilitating the existing housing stock (good in its own right) instead of adding to it (which, in effect, reduces inventory, or at least prevents the inventory from growing).
There are other ideas for improving our local and national real estate markets, so if you'd like to discourse more on the topic, please comment on this post or email me at jasonpicht@gmail.com.
Monday, September 13, 2010
Analysis of Historical Sales Data
This blog is a continuation of my post from Saturday, September 11th. Please refer to that post for the historical sales numbers over the last decade.
At the end of Saturday's post, I mentioned that we appear to be selling a historically normal number of residential units based on sales figures from the 1990s. However, the counterpoint to the encouraging bit of news is that the Leon County population has increased 18% since the mid-1990s when we were also selling around 2400 residential units per year.
Therefore, if the sales rate did not grow, but merely kept pace with the population growth, we would expect to see closer to 2800 units sold per year. The fact that we are below the population adjusted sales figure makes sense when the current supply and demand situation is taken into account. At present, Leon County has 12.5 months of inventory which is more than double the supply in a balanced market (6 months).
NOTE: Months inventory is the number of months that it would take to sell all of the homes on the market at the current sales pace, assuming no new homes were listed for sale. For example, if 1000 homes were on the market for sale, and the sales pace was 100 sales per month, then there would be 10 months of inventory (1000/100 = 10).
With 15 new homes coming on the market for sale each day, and only 7 homes being sold each day, the market is going in the wrong direction. As in any other market, excess supply puts downward pressure on prices. If we want to see price stabilization in our local housing market, then we need to balance supply and demand. We can do that in one of two ways, either 1) Increase demand or 2) Decrease supply. It is the opinion of this author that we must have a plan that targets both supply and demand in order to be effective in balancing the market.
Check back in tomorrow for some ideas on how to fix the problem.
At the end of Saturday's post, I mentioned that we appear to be selling a historically normal number of residential units based on sales figures from the 1990s. However, the counterpoint to the encouraging bit of news is that the Leon County population has increased 18% since the mid-1990s when we were also selling around 2400 residential units per year.
Therefore, if the sales rate did not grow, but merely kept pace with the population growth, we would expect to see closer to 2800 units sold per year. The fact that we are below the population adjusted sales figure makes sense when the current supply and demand situation is taken into account. At present, Leon County has 12.5 months of inventory which is more than double the supply in a balanced market (6 months).
NOTE: Months inventory is the number of months that it would take to sell all of the homes on the market at the current sales pace, assuming no new homes were listed for sale. For example, if 1000 homes were on the market for sale, and the sales pace was 100 sales per month, then there would be 10 months of inventory (1000/100 = 10).
With 15 new homes coming on the market for sale each day, and only 7 homes being sold each day, the market is going in the wrong direction. As in any other market, excess supply puts downward pressure on prices. If we want to see price stabilization in our local housing market, then we need to balance supply and demand. We can do that in one of two ways, either 1) Increase demand or 2) Decrease supply. It is the opinion of this author that we must have a plan that targets both supply and demand in order to be effective in balancing the market.
Check back in tomorrow for some ideas on how to fix the problem.
Saturday, September 11, 2010
Historical Overview of Sales
I will begin posting weekly sales data next week. Since sales are usually reported in the MLS a day or two after they occur, the weekly transaction report that I post will always refer to the week prior (and be labeled accordingly).
Before we begin looking at weekly numbers, let's get some perspective on where we are historically. Over the last 10 years, sales of residential properties (houses, townhomes, condos, and mobile homes) have been as follows:
2000 - 3298 (63.4/wk)
2001 - 3720 (71.5/wk)
2002 - 3805 (73.2/wk)
2003 - 4383 (84.3/wk)
2004 - 4834 (92.9/wk)
2005 - 5580 (107.3/wk)
2006 - 5196 (99.9/wk)
2007 - 4298 (82.7/wk)
2008 - 2579 (49.6/wk)
2009 - 2456 (47.2/wk)
2010 - 1662 (YTD, or 2401 annualized, 46.2/wk)
Even though the last three year's numbers seem remarkably low, my research through the Florida Association of Realtors and conversations with older agents in town confirm that we are at a historically normal number of sales. That is to say, we are selling about the same number of homes today that we have sold under previously normal market conditions (i.e. balanced supply and demand). However, our current supply and demand picture is not balanced. What does that mean for Tallahassee housing?
Check back on Monday for an analysis of our local supply and demand, and recommendations for fixing the problem.
Before we begin looking at weekly numbers, let's get some perspective on where we are historically. Over the last 10 years, sales of residential properties (houses, townhomes, condos, and mobile homes) have been as follows:
2000 - 3298 (63.4/wk)
2001 - 3720 (71.5/wk)
2002 - 3805 (73.2/wk)
2003 - 4383 (84.3/wk)
2004 - 4834 (92.9/wk)
2005 - 5580 (107.3/wk)
2006 - 5196 (99.9/wk)
2007 - 4298 (82.7/wk)
2008 - 2579 (49.6/wk)
2009 - 2456 (47.2/wk)
2010 - 1662 (YTD, or 2401 annualized, 46.2/wk)
Even though the last three year's numbers seem remarkably low, my research through the Florida Association of Realtors and conversations with older agents in town confirm that we are at a historically normal number of sales. That is to say, we are selling about the same number of homes today that we have sold under previously normal market conditions (i.e. balanced supply and demand). However, our current supply and demand picture is not balanced. What does that mean for Tallahassee housing?
Check back on Monday for an analysis of our local supply and demand, and recommendations for fixing the problem.
Wednesday, September 8, 2010
Hello
Hello Blog World:
In the coming weeks, you'll find the following information about the Tallahassee area and local real estate market updated regularly:
1. Weekly market update -- interpretation of economic data
2. Weekly transaction report -- # of homes sold each week
3. Restaurant of the week -- chronicling some Tallahassee faves
4. Business of the week -- bio on quality locally owned businesses
5. Local hot spots -- venues worth visiting
6. Where in the world is...? -- 1st person to guess the photo location wins a prize
7. Breaking news -- reports that affect the real estate landscape
If you have any other information which you would like to know about, please let me know!
In the coming weeks, you'll find the following information about the Tallahassee area and local real estate market updated regularly:
1. Weekly market update -- interpretation of economic data
2. Weekly transaction report -- # of homes sold each week
3. Restaurant of the week -- chronicling some Tallahassee faves
4. Business of the week -- bio on quality locally owned businesses
5. Local hot spots -- venues worth visiting
6. Where in the world is...? -- 1st person to guess the photo location wins a prize
7. Breaking news -- reports that affect the real estate landscape
If you have any other information which you would like to know about, please let me know!
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