I follow statistics every friday morning and I am just stunned as to the lack of activity taking place on the island.  I guess it's true that those markets which were affected last will recover later than others.  What an amazing time to be a buyer on the island in that homes which have excessive market times are taking drastic price reductions.  Unfortunately, we're not seeing a lot of great homes to purchase.  It's fairly simple to find a 40-year old not updated home but how about an updated home, on a great street, at a realistic price?   

Check out my weekly trackings to better understand what I am talking about.  Definitely a buyer's market...

http://www.jayagoado.net/blog/QuarterlyRatios(Area510).pdf

L = # of listings

P = # of pending sales

SR = Sales Ratio

0-45% = Buyers Market

46-55% = Balanced Market

56-100% = Sellers Market

I found the below commentary quite interesting since many homebuyers are sitting on the fence.  Are they sitting on the fence waiting for the "bottom" in interest rates and/or home prices?  Unfortunately, one never knows when the "bottom" is until it has already occurred.  Just like how we found out a few months ago that we've been in a recession for over one year!  Most of these events are not accurately noted until after the fact.  Just thought I would forward since rates AND home prices are ridiculously low right now.  It's actually a "perfect storm" for buyers and who knows how long it will last.   

Commentary: William O'Donnell, U.S. bond strategist at UBS securities hit the proverbial nail-on-the-head when he said, "Investors are reluctant to crank rates much lower -- knowing that behind Door #1 looms the huge beast of new Treasury supply." In a nutshell, he has described perfectly the current status of the mortgage market.

Though it has yet been formally announced, most credit market participants (including mortgage investors) are anticipating the Treasury Department will begin their massive round of borrowing by issuing $86 billion in short-term securities next week. Treasury is expected to follow those fireworks up by announcing plans to issue a record-setting $80 billion in notes and bonds the following week. The "so-what-factor" here is significant.

Uncle Sam can either print money, tax, or create a combination of both revenue generators to pay his obligations. Because he has this unique power Uncle Sam is considered to offer a "riskless" rate of return to global investors. His ability to generate essentially unlimited amounts of capital for debt service also means Uncle Sam has little concern regarding the rate of interest investors' demand. Whatever the required yield - he can pay it.

Much of the capital used to fund the mortgages you create come from investors who have the option to either invest in Treasury obligations or agency-eligible mortgage-backed securities. To successfully attract the capital away from Uncle Sam and into the mortgage market we have to offer investors a higher rate-of-return on their money. From this perspective it almost goes without saying that the endless bill being racked up by Uncle Sam's all-out-effort to restart the country's economic engines will almost certainly continue to mute any sustained effort by mortgage interest rates to move lower. Thank goodness the Fed still has a pocket full of cash earmarked specifically to support the mortgage market. Without their big checkbook - mortgage interest rates would likely be sharply higher than where they stand today.

The year started off in its typical slow fashion but started to pick up toward the end of the month.  I noticed some homes, that were taken off the market for the holiday season, relist and sell at the beginning of the year.  What we are seeing is a great buying opportunity but many buyers are sitting on the fence, unsure if prices are going to drop.  Certain price ranges are still selling relatively well and other price ranges are requiring price reductions.  But, our market certainly is a lot better than most.

January Activity

‘07 total active listings:  74

‘08 total active listings:  119

‘07 median listing price:  $1,797,000

‘08 median listing price:  $1,499,000

‘07 days on market for listings:  130

‘08 days on market for listings:  106

‘07 closed sales:  19

‘08 closed sales:  16

‘07 median sale price:  $1,089,000

‘08 median sale price:  $912,500

‘07 days on market for sold properties:  94

‘08 days on market for sold properties:  86

February has started off strong and I look forward to seeing the statistics come out at the end of the month.  Stay tuned......

Our real estate market on Mercer Island is still moving along quite nicely.  What we have been seeing is anything under $1.M is still selling quickly if it is priced correctly, in a good location, and is in good condition or has good potential.  See below the monthly inventory levels for the different price ranges.  Monthly inventory is calculated by dividing the current pending properties into the current available properties.  Also, anything less than 2 months worth of inventory is considered a "Seller's market" and anything greater than 5 months of inventory is considered a "Buyer's market".

<$1,000,000 = .93 months of inventory

$1,000,000 - $1,500,000 = 4.6 months of inventory

$1,500,000 - $2,000,000 = 6 months of inventory

$2,000,000 - $3,000,000 = 27 months of inventory

$3,000,000 - $5,000,000 = 12 months of inventory

$5,000,000 - $10,000,000 = 6 months of inventory

$10,000,000+ = 4 months of inventory

So, buyers looking for a deal should be looking in the $2,000,000 - $5,000,000 range and Sellers need to either price correctly, stage their home, or prepare yourself for a long marketing period.

Last week I wrote about the importance of an e-newsletter/e-article.  I'd like to now focus on what type of content I include in my newsletter.  If you get a chance, go take a look at my recent newsletter to see what I'm talking about ( http://www.jayagoado.net/newsletter.html ).

I like to start the newsletter off with my personal article.  The first paragraph is where I talk about the market in general, what I am seeing out there, and any personal stories from being in the "trenches".  The second paragraph is where I talk about how I am doing, as far as number of deals, and then go out of my way to thank all of those who have referred business to me.  Even if you haven't converted a referral, you must give kudos because others will then see that you must be doing well to be receiving all of these referrals.

The second section of the newsletter focuses on an article of interest.  I look online to find articles that I feel would interest my database and then clearly give credit to the author.  Somewhere within the second section is a graph regarding local real estate statistics I pull from the MLS.  By the way, all graphics link back to my website. The graph breaks down home and condo sales, looking at median price versus prior year, % change, and days on market.

Lastly, I have my lender of choice provide to me an article outlining the financial markets.

What I have found is that the majority of the people read my personal article and the MLS statistics.  However, that isn't as important as them seeing Jay M. Agoado, John L. Scott Real Estate in their inbox.  Consistency is key and your database will come to expect to see these e-mails on an ongoing basis.  Good luck!

Over the years, many newer agents have approached me on the subject of newsletters because I have been doing them for so many years now.  I always hear how they're going to start sending them out every month and the phone will ring off the hook.  Well, the problem with newsletters for newer agents is that it costs a lot of money to send them out to their sphere or farm.  How do you combat this?  Send out an e-newsletter! 

Originally, I would send newsletters through the snail mail on a bi-monthly basis but realized quickly that it was very time consuming and expensive.  So, I decided to contact everyone in my newsletter database and ask if I could collect their e-mail address for my upcoming e-newsletter.  Not only did I receive their e-mail address, it was an excuse to contact them!  So, now I am only sending a few newsletters via snail mail and hundreds through the Internet.

The key to any newsletter/article campaign is consistency.  I originally sent my newsletter bi-monthly but have now decided to add an interesting article on the off months.  This way, my name is in front of my database every month versus every other month.  "Isn't this overkill" you may ask?  I thought so but I've only had 2 people opt out of hundreds!  Don't assume anything until you've tried it....

An important tool I use, when sending out my newsletter/article, is Constant Contact.  Constant Contact allows you to export your database into their system, set up different groups within your database (i.e. buyers, sellers, investors, immediate buyers, immediate sellers, etc.), schedule mailings, and most importantly track your results.  I can actually see who opens up my newsletters/articles, what time they opened it, if they clicked on a link, etc.  It is an invaluable and inexpensive tool that is a must-have for anyone looking to send out e-newsletters/articles.  By seeing when they open up the newsletter, you can then figure out the best times to be sending them, thus having the best chance of being opened.

Another important tool, for those of you like myself who do not know how to create HTML themselves, is Microsoft Frontpage.  This allows you to create the newsletter/article normally, and then cut/paste the HTML code in the Constant Contact template you have created.  It's a very easy process and the hardest part is making sure that you have the correct properties for your graphics.  With e-newsletters/articles, you must make sure that your graphics are uploaded onto the Internet by way of FTP (maybe another posting???).

If you have your own personal website, I highly recommend having all of your articles stored so that visitors can download them and/or sign up for future mailings.  Constant Contact has code you can place in your site so that visitors can sign up and they automatically put into your database.  You can see how I've done it on my site at:  http://www.jayagoado.net/newsletter.html.

I know that this sort of touches the surface but I hope it helps.  Feel free to comment on your successes/failures since I'm always learning what works and doesn't work with my newsletter/articles

My next posting will focus on the actual content of the newsletter/article.