Tallahassee Real Estate

Tallahassee,FL:Killearn Lakes Unit 4

Century 21 First Realty — Fri, 20 Nov 2009 05:33:45 -0600

If you have been following the Tallahassee Real Estate Blog over the past few weeks, you know that we have sporadically reviewed some neighborhoods in Tallahassee, and lately have done the first three units in Killearn Lakes Plantation. Today we’ll take a final look at Killearn Lakes, with a review of its 4th unit of homes.

Killearn Lakes Unit 4 is also know as “Grandview” and features homes on lots that range from 1 to 10 acres. As you will see from the following real estate graphs and analysis, home values have held much more stable in this neighborhood than many others in the Tallahassee real estate market.

Average Home Prices In Killearn Lakes Unit 4

The first thing that I noticed when I looked at the existing home sales in Grandview was that the trends were not as seamless as Tallahassee neighborhoods that have more home sales in them. The average price of homes in Killearn Lakes Unit 4 jumps around quite a bit, but look at the average number of homes sold each month (left axis), the number averages below 1 home per month.

Killearn Lakes Unit 4 Home Values Show Slight Decline

Home values in Killearn Lakes Unit 4 (Grandview) are showing a trended decline of 13% since the peak of the market. That is 1/2 of the average decline in Tallahassee home values, so obviously Grandview appears to be doing comparatively well.

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[follow this to see the past 100 home sales in Grandview]

Housing Starts Drop, Confuse Associated Press

Century 21 First Realty — Thu, 19 Nov 2009 07:48:47 -0600

All across America this morning, people will be grabbing their morning paper (online most likely) and reading an article that was circulated through the Associated Press about the new home construction industry. As a matter of fact, the article features a picture of a home being built in Tallahassee (and that is how this feed caught my attention).

Unfortunately, the article is grossly misleading. The authors of this article apparently do not consider “supply and demand” in real estate to be a factor that home builders should consider when deciding what to do.

In the real estate equation, the supply side is filled by:

New home builders building homes
Existing home owners selling their home
Banks and asset managers liquidating their inventory

On the other side of the real estate equation, the demand side, is filled by the growing need for new homes from:

Home buyers
Home renters (this is also where we would see home investors)

Glut Of Homes Force Smart Home Builders To Wait

The fact is, there is a glut of homes on the market that is forcing wise home builders to wait for the real estate market to need more houses. The Associated Press article leads us to believe that this is a “shocking new development.”

Construction of homes unexpectedly plunged last month to its lowest point since April, the Commerce Department said Wednesday. The weak figures show that builders still lack confidence that buyers can soak up the glut of unsold homes already on the market — a supply magnified by a record number of home foreclosures.

The real estate market’s glut of homes is not a big surprise. All a home builder has to do is track the inventory of homes on the market and then make a decision on where the entry point will be for his (or her) construction company.

So, how and when does a home builder choose an entry point to start building? [click to see the real market information that home builders rely upon]

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Any Truth To Tiger Woods Joining CENTURY 21?

Century 21 First Realty — Wed, 18 Nov 2009 07:43:56 -0600

I have heard the rumors, have you? Tiger Woods joins the Tallahassee Real Estate Team At CENTURY 21 First Realty? It’s not enough to hear the rumors, but do we have photographic evidence as well?

Of course, the picture of Tiger Woods could just be the one where he is wearing the victor’s Gold Jacket after winning the Australian Masters golf tournament this past weekend, but who knows….

Speaking of golf tournaments, I was fortunate to play in a charity golf tournament at Golden Eagle on Monday. The tournament was created to support Christmas Connection and our Winning CENTURY 21 team was sponsored by Stan Kupiszewski.

Christmas Connection Serves Basic Needs Of Families

This is the time of year when many great charitable groups are raising money to help people who are down on their luck, or at least less fortunate than many of us right now. Christmas Connection tries to fulfill the wishes and some of the basic needs of hundreds of needy families each holiday season.

Christmas Connection is a non-denominational program organized by Catholic Charities and run primarily through the assistance of volunteers to help the neediest in Leon and surrounding counties. In 2008, recipients of this program (3,148 persons/507 families) were referred by caseworkers from over 40 area agencies. Over 756 volunteers contribued 2,771 hours at the site to meet this goal last Christmas.

How We Can Help The Christmas Connection

Christmas Connection is lucky to have great involvement from the Tallahassee community, and one of its bigger partners is WCTV. I have never been to a Christmas Connection event and not seen Julie Montanero, who gives tirelessly of herself to this great cause.

We can follow Julie’s lead in helping Christmas Connection bring joy to hundreds of Tallahassee families this holiday season.

Some of the different ways that you can help include:

Adopt a Family ~ Fullfill their wish list (Call 850-222-2180)
Donate items for specific people featured on WCTV
Donate Money (send checks payable to Christmas Connection to PO Box 20165 Tallahassee, FL 32316)
Donate New Money or New toys
Donate their “MOST NEEDED” items (food/clothes/heaters/diapers/blankets)
Volunteer at the Christmas Connection Warehouse in December
Help Spread the Word (send a link to this article to everybody on your email lists and ask them to visit the Christmas Connection Web Site)
Spread the news through Twitter by clicking on the Twitter Bird below

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates on real estate in Tallahassee Florida.

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

Know The Stages In This Housing Market Turn

Century 21 First Realty — Tue, 17 Nov 2009 06:56:00 -0600

Many people are wondering just exactly where this crazy real estate market is heading and how to anticipate its next move. Unit sales have dropped and prices are continuing on a downward spiral.

In the past three years, we have seen a very hot sellers’ market change to a very cold buyers’ market, but many people do not realize that there are five distinct stages that we must move through to transition from a buyers’ market back to a sellers’ market.

After posting yesterday’s Tallahassee Housing Report, I received a comment from a colleague who wanted me to cover this very issue, and she wrote:

Hi there, been doing this since 1981 and do have lots of past and present clients really interested in your wonderful information.

What is hard to convey for me is that even though sales are creeping up a bit, prices are not as far as I can tell. Would you cover this ,in comparing sales increases to prices increases? Thank you, Sandy

Five Stages Of A Real Estate Market Transition

As the market started to cool from a sellers’ market to a buyers’ market, one of the residual side effects was an increased inventory of homes for sale. Home builders and developers, who were previously working at a frantic pace to supply the market with enough homes, missed the tell tale signs of the end of the bull market and kept building more homes.

Now that we have this over-supply (glut) of homes, we must move through the five stages of a real estate market transition before we see home values start to appreciate again. These stages include:

1. Real estate inventory levels stop rising and begin to decline.
2. Home values fall at an accelerating rate.
3. Year over year home sales increase.
4. Real estate inventory levels reach market equilibrium (6 months of supply).
5. Home values stop falling and begin rising.

So, taking these by the number, we can vigilantly monitor our market so that we know where we are, and knowing the five stages of a real estate market transition will tell us where we are going!

[click here to see the Five Stages Of A Real Estate Market Transition]

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Graphing Provides Clear Understanding Of Housing Market Moves

Century 21 First Realty — Mon, 16 Nov 2009 07:33:34 -0600

The Tallahassee Housing Market is undergoing a pleasant change right now. Most of the key indicators signal that we might be starting a recovery.

Is it due to the fact that we have spent two years selling roughly 50% of the number of homes that our market history sells? Or is it due to the Home Buyers Tax Credit (both the extension of the First Time Homebuyers Program as well as the extension into a program for all)?

I think it most likely is a combination of both of these. I also think it is wise to keep track of what is occurring, as we know that there still exists several reasons why our market is not going to “return to normal” for quite some time.

Pending Home Sales In Tallahassee Continue To Rise

Maybe the most important trend that we can track from the Tallahassee MLS is the daily movement in the one-year trend of pending home sales. These are homes that are “under contract” between a buyer and seller, but have yet to close. Tracking pending home sales allow us a glimpse of what sales activity should look like in the next 60 days. As you can see from the real estate graph below, pending home sales are rising nicely.

Positive Results In Closed Home Sales

While the Pending Home Sales Report show us what is going to happen, the proof comes from the Closed Home Sales Report. The existing news comes from the following report, and the results show that home sales in Tallahassee are finally on the rise.

{click here for the remaining Tallahassee housing graphs}

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Seven Oaks Home Sales Continue Decline

Century 21 First Realty — Fri, 13 Nov 2009 08:23:28 -0600

Home sales in 7 Oaks (Killearn Lakes Unit 3) continue their steady decline from the height of the boom market several years ago. Consisting of 3 and 4 bedroom, single-family detached homes, Seven Oaks has been a very popular family neighborhood in Killearn Lakes for the past 20 years.

This seems to be a fairly consistent theme as we perform more of our Tallahassee Neighborhood Reports, both average home prices dropping as well as signs of roughly 20% depreciation in home values since the top of the market.

Killearn Lakes Unit 3 Home Sales Decline 71%

More and more, we see the number of homes sold in a Tallahassee Subdivision down well over 60%, and in the case of Seven Oaks, home sales are down 71% since the peak of the market. With less than 2 homes sold each month (current trend), it sure is a far cry from when more than 5 homes per month were selling at the beginning of 2007.

Home Values Decline 21% In Seven Oaks

The level of real estate depreciation in 7 Oaks is consistent with the rest of Killearn Lakes in Tallahassee, but it sure is a problem for those of us who live out there. If somebody purchased a home (or refinanced one) at the height of the market in March of 2007, we might have a long way to go before we can sell it and have any equity in the home.

Right now, home values in Killearn Lakes Unit 3 are similar to how they were valued in the beginning of 2004 (meaning most likely you need to have purchased prior to 2004 to have any equity).

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Recent Home Sales In Killearn Lakes Unit 3

[click to see previous 100 home sales in 7 Oaks]

What Home Owners Should Know About The Cap And Trade Act

Century 21 First Realty — Thu, 12 Nov 2009 06:51:36 -0600

A good friend and client of mine asked me to give him a quick opinion on the American Clean Energy and Security Act of 2009 (Cap and Trade Act) and to gauge its impact on the real estate market in the coming years. No big deal I figured, I’ll just grab a beer and see what this thing is all about …

What I found was disturbing. First of all, that beer needed to be a 12-pack, because the American Clean Energy and Security Act of 2009 is a 1,428 page document written in typical political gobilly gook, with far too many words and noticeably void of any pictures. If you’re really bored, you can download a copy from the sidebar on the Tallahassee Real Estate Blog.

Specifically, here are the words found all over the internet that concerned my friend.

You won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.

Needless to say, this grabbed my attention and I began looking for more information.

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[see why the Cap and Trade Bill will make housing more expensive]

Existing Home Sales In Killearn Lakes (Unit 2) Not Pretty

Century 21 First Realty — Wed, 11 Nov 2009 08:36:08 -0600

Existing home sales in Killearn Lakes (Unit 2) have dropped 72% from the peak of the market. With home prices historically running about 15% below the average home price in Tallahassee, Unit 2 of Killearn Lakes has been a very popular destination for Tallahassee homebuyers.

So why have existing home sales declined in Unit 2 of Killearn Lakes faster than the rest of the market (existing single family detached home sales are down 62% from the peak of the market)?

I suspect that the declining market has created value buyers (for those who were/are buyers) due to the glut of supply in the Tallahassee real estate market. This suggests that some areas have priced their homes more aggressively than homeowners in Killearn Lakes Unit 2, and that most likely is why home sales have slowed here faster than other areas.

Killearn Lakes (Unit 2) Home Values

Home prices continue to fall in Unit 2 of Killearn Lakes. In the real estate graph below, the red field shows that the average home price in Unit 2 of Killearn Lakes has dropped to $164K, while monthly have sales have fallen to a paltry level of just 2 homes per month.

Average Home Values In Killearn Lakes (Unit 2)

The average home price in Killearn Lakes Unit 2 has dropped 17%, but home values have actually depreciated 19%. The real estate graph below shows the average price per square foot trend of a home in Unit 2 of Killearn Lakes has dropped to $116 per square foot, and continues to trend downwards.

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[click for past 100 home sales in Killearn Lakes Unit 2]

Existing Home Sales In Killearn Lakes (Unit 2) Not Pretty

Century 21 First Realty — Wed, 11 Nov 2009 08:33:35 -0600

So why have existing home sales declined in Unit 2 of Killearn Lakes faster than the rest of the market (existing single family detached home sales are down 62% from the peak of the market)?

Killearn Lakes (Unit 2) Home Values

Average Home Values In Killearn Lakes (Unit 2)

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[click for past 100 home sales in Killearn Lakes Unit 2]

After 40 Months, Growth Returns To Housing Market

Century 21 First Realty — Tue, 10 Nov 2009 06:45:48 -0600

Something positive occurred in the Tallahassee real estate market during the month of October. It was long awaited, yet one month prior to my prediction made earlier this year, so I am very excited to report REAL PROOF of a housing market improvement in Tallahassee.

We finally put a halt to a run of year over year declines in home sales! Previously, the Tallahassee housing market experienced a 39 month run, from July 2006 through September 2009, of year over year home sales declines! October records show more home sales this year than October of last year (242 total home sales this year versus 241 home sales last year).

That’s right, we improved by 1 sale during this October versus last October. As paltry as that sounds, it is something the Tallahassee housing market has not experienced since June of 2006! As small as it is, we have just seen an improvement.

Year Over Year Home Sales Gain In Tallahassee

The real estate graph below shows a year-over-year comparison of Tallahassee home sales. Each month is compared with the same month from the year prior, and the percentage gain (or percentage loss) is recorded for each month. All single family detached homes, condominiums, and town houses sold and recorded in Leon County (arms length sales only) were used for this report.

[click here to see color graph of home sales]

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Local Growth Drives Real Estate

Century 21 First Realty — Mon, 09 Nov 2009 09:08:12 -0600

You always hear the expression that real estate is local, and there certainly is a whole lot of truth to that. Certainly, national interest rates and Obama stimulus money have an affect on a local market, but the reality is that local job growth and local population growth have a whole lot more to do with the housing market than outside influencers.

Today, I want to mention two people who are very local to Tallahassee and are starting to make an impact, both in our local market, as well as upon the national market. I am thinking that the work they are doing could have a wonderful affect on our local job growth and population growth.

I have always admired people who could create something from scratch. “Big ideas” people are a dime a dozen, but people who can bring a thought to a tangible reality have always been able to impress me.

Local Inventor Hits National Markets

The first person that I will mention today is a local inventor, Rod Presnell, who has invented a fish-landing net like no other that I have seen. I grew up in Tallahassee, and fishing has been something that I have enjoyed since before I can remember.

My brothers and I used to walk to Lake Ella with worms and bread and fish for bluegills when we were really young. Then, when Mike hit driving age, we would throw the rods and nets in the back seat of his car and throw the canoe (aptly named Mastercharge) on the roof of the car and head for Lake Jackson.

Invariably, all of that fishing equipment would find its way together and a resulting entanglement with the fishing net would result in a 10 minute delay to our fishing trip. If only somebody could have invented a tangle-free net ….

The Bass Lasso was invented by Rod Presnell for this very reason. As a matter of fact, I wouldn’t be surprised if he won the Best New Fishing Product of the Year at the Fishing & Boat Show in Jacksonville this past weekend. Here is a video showing how his invention works.

Remember, Rod is a local Tallahassee guy, so give him some support. Visit a web site that shows different videos about the Bass Lasso as well as tells the story of why and how he invented the net. Please give some written feedback on his site so when the rest of the world finds him, they know that he has great local support!

Local Eating Has Never Been Better

Another local “inventor” created the most unique dining experience that I have ever seen. It combines speedy service (not quite “fast food”) with stir-fry “made to order,” to deliver a great meal for under $10. Bill Poole created One Fresh Stir Fry right here in Tallahassee, and now has three great locations in which you will frequently find me dining.

Why am I so impressed with Billy Poole’s creation? Because I would never in a million years thought of making a fast-food stir-fry restaurant. He not only did it, but he did it with the freshest tasting food I’ve ever had. And why mention this here? ….

Because you are going to see this local guy hit the national markets when his franchise takes hold. All it takes is the first one outside of Tallahassee, and I think this is going to be hot. 1 Fresh Stir Fry has done very well in Tallahassee because of it’s simple operating premise “Because a meal is fast doesn’t mean it has to suck. And … just because a meal is fast doesn’t mean you couldn’t get it made to order the way you like it.“

If you have not tried One Fresh yet (here’s a copy of the menu), I encourage to support this local “inventor.” If you like fresh food, without having to wait a long time to be served, I think you will be impressed with this restaurant. If you think you might like to try your hand at owning a restaurant, I cannot imagine a more exciting and excitable guy to work with than Billy Poole. You can read more about franchise opportunities at One Fresh Stir Fry on his Tallahassee web site.

Stimulate The Tallahassee Economy

All of us can have a positive effect on the Tallahassee real estate market. Choose local when possible (like eating at One Fresh Stir Fry or fishing with The Bass Lasso.) As our economy grows and our population grows, so too shall our local real estate market.

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Congress Tells Homebuyers "We Will Print More Money"

Century 21 First Realty — Fri, 06 Nov 2009 06:32:33 -0600

Congress has extended and expanded the homebuyer tax credit. The modifications will become effective when President Obama signs the bill, which could occur as early as November 6, 2009.

I have received numerous emails and comments from readers who asked for me to report the changes to the First Time Homebuyers Tax Credit when they occurred, and the changes most likely will occur immediately. This post will review the changes and enhancements so you should be able to understand the new housing tax credit. I

The Obama Administration Says Buy A Home

Buy a house and you can take part in the Obama Stimulus plan. The Obama train is printing wheelbarrow loads of money for everybody who wants to buy a home now, not just first timers! So, how does this all work?

The $8,000 homebuyer tax credit for first-time buyers, due to expire November 30, 2009, will be extended through June 30, 2010. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, roughly a $55,000 increase above the level in existing law.

For the first time, the new legislation states that buyers who already own a home are eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

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Download Home Buyer Tax Credit Changes Flyer[Continue To Home Buyer Tax Credit Download]

Tallahassee, FL: Killearn Lakes Unit 1 Home Sales Update

Century 21 First Realty — Thu, 05 Nov 2009 07:01:30 -0600

The Tallahassee Real Estate Blog regularly reviews Tallahassee neighborhoods in order to get a feel for what home values are doing. You can click any one of the links in the right side bar (see pictured on the right) for a list of any blogs when the corresponding neighborhood in Tallahassee is mentioned.

When we last looked in on Killearn Lakes Unit 1, we noted that the home prices were holding fairly steady, though values (when looked at price per square foot) were falling. This told us that people who were buying a home in Killearn Lakes Unit 1 were buying larger homes, making the market look stronger than it appeared in standardized real estate reports.

Killearn Lakes (Unit1) Home Values

Home values continue to fall in Killearn Lakes (Unit 1). The best way to track real estate appreciation (or real estate depreciation) across a single Tallahassee subdivision is to track resale price per square foot data on a one-year trend.

The following real estate graph shows that the average number of homes selling in Killearn Lakes (Unit 1) each month has dropped below 2 per month (from a peak of nearly 5 home sales each month), and the average price per square foot of a home has dropped below $120 per square foot.

Remember, using the average price per square foot is an excellent way to track area home valuations over time, but it by no means is an accurate way to determine a home’s value. Killearn Lakes (Unit 1) features many different types of homes sitting on different types of home sites.

Some homes in Killearn Lakes (Unit 1) are on water front lots, while others are on the interior. Some have additional features such as swimming pools and multi-car garages. An individual home valuation must consider all of the differences, not just heated and cooled square feet.

Average Home Prices In Killearn Lakes (Unit 1)

Many real estate reports feature average home prices in an area. This is good to know if you are considering buying a home in an area such as Killearn Lakes (Unit 1), but it by no means an accurate depiction of true real estate depreciation (or appreciation).

The real estate graph above shows that the average home price in Killearn Lakes (Unit 1) did not start dropping until late in 2008, well more than a year after the rest of the Tallahassee real estate market. What we found in our previous analysis of Killearn Lakes Unit 1 was that buyers were selecting the larger homes when buying in this neighborhood.

This meant average home prices looked to be staying the same, while our average price per square foot report showed that homes in Killearn Lakes (Unit 1) were depreciating at a rate consistent with the rest of the Tallahassee housing market.

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Recent Home Sales In Killearn Lakes (Unit 1)

[click to see list of recent home sales in Killearn Lakes (Unit 1) …]

Home Supplies Dropping - New Report Available For Download

Century 21 First Realty — Wed, 04 Nov 2009 09:47:17 -0600

For those of you who like to carry a one-page summary of the current supply and demand report for Tallahassee housing, you can download this report from the right sidebar of the Tallahassee Real Estate Blog. It looks like the picture on the right and you only need to click the top link. Every month I post the updated report at this location.

Relative Home Supply Dropping!

As we have discussed often in the past, there exists a glut of homes for sale in Tallahassee. The Home Inventory Reports tell us not only how many homes are available (real home supply), but they also show home availability in terms of months of supply (relative home supply).

Both real and relative home supply dropped again during the month of October by just over 1/2 months of supply. Currently, Tallahassee has 13.7 months of supply of homes (more than double a market at equilibrium).

Buyers’ Market Continues In Tallahassee

This tells us that while still a very strong home buyers’ market, we are seeing improvement in the number of homes for sale in Tallahassee. [click for housing supply and demand graph…]

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Tallahassee, FL:Sable Chase Home Sales Report

Century 21 First Realty — Tue, 03 Nov 2009 10:32:27 -0600

Like many people who live in Killearn Lakes Plantation, I’ve discovered a great little neighborhood (56 homes) that joins Killearn Lakes to Bannerman Road. It’s called Sable Chase and it is relatively new, with new home sales that started just five years ago.

Unlike some of the larger subdivisions in Tallahassee for which we report, Sable Chase has fewer than 1 home sold each month, so the trends are not as clear to see. The key to trend reporting is to have enough sales (liquidity) that you can draw clear conclusions from the data. With fewer than 1 sale per month, we see quite a bit of “noise” in the data.

In the real estate graph above, the vertical blue bars show the average number of homes sold in Sable Chase each month, while the red field represents the average price trend. Like most neighborhoods in Tallahassee, Sable Chase home prices have been on a steady decline since the top of the market.

Sable Chase Home Values Dropping

In order to get a feel for the level of depreciation in Sable Chase, we look at the overall average price per square foot of arms-length existing home sales. We can see that the peak of the market enjoyed home values that exceeded $150 per square foot, but recently, prices have trended down to $125 per square foot. This seems consistent with many other areas which have seen similar drops.

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Recent Home Sales In Sable Chase

[click for list of recent Sable Chase Home Sales…]

Real Estate Needs Politicians OUT

Century 21 First Realty — Mon, 02 Nov 2009 07:46:40 -0600

Do you remember when you were growing up and falling down all the time, Mom would put a band aid on your fleshy scrape to keep it from getting infected. That band aid made you feel really good, but it came with a price.

Removing a band aid from a messy wound is not a pleasant experience. There are two schools of thought on how to remove the band aid:

Take your time – Be very slow, gently trying to “peel” it away from the would without damaging new skin or pulling hairs out.
Grip it and rip it – Get hold of a tiny corner, count out loud from 1 to 3, then violently pull the band aid away from the wound in a nano-second.

Both ways cause pain, but most would argue that the latter produces better results (less pain and shorter recovery period).

The Real Estate Market Is In A Scrape

So why does somebody who writes a blog about real estate start a discussion about band aid removal? Great question … and the answer is because it was the best analogy that I could come up with to describe what is going on between our politicians and our wayward real estate market.

If you were paying attention on Friday, you might have heard that Senators reached a compromise to extend the $8,000 first time home buyer tax credit. They also added a $6,500 tax credit for other primary-home purchasers and raised the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, housing-industry sources said.

Under this proposal, home buyers will have until June 30 to go to close on their purchases. But this is not a “done deal,” as the measure still faces votes in the full Senate and the House.

The Treatment For A Broken Real Estate Market Is “More of the Same?”

Albert Einstein’s definition of insanity: “Doing the same thing over and over again and expecting different results.”
Congress’s Solution to our housing market woes: Create unfunded financial incentives to propel the market beyond the extent to which it could perform under normal market conditions.

Hey, WAIT A MINUTE, isn’t this how we got here in the first place. Didn’t we (the government) push to achieve results in home ownership rates by creating loan programs for consumers who historically had a high rate of default? Didn’t this stimulate home-buying to such an elevated level that we produced significantly more homes than we needed?

Then, rather than see the good times come to an end, didn’t the mortgage industry create even crazier loan schemes to keep the good times rolling?

And roll they did.

Congress To Send Housing Market To Detox

[click to view Detox Plan as envisioned by Congress…]

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Tallahassee, FL:Summerbrooke Home Sales Continue Decline

Century 21 First Realty — Fri, 30 Oct 2009 09:22:09 -0500

Tallahassee has quite a few golf courses and most of them have neighborhoods that are built around and through the golf courses. In the northeast quadrant of Tallahassee, you can find the Summerbrooke neighborhood which is also built around a locally developed golf course.

The Tallahassee Real Estate Blog often visits Summerbrooke in order to keep our readers informed of the activity in the housing market. As we have seen (and reported) in the past, Summerbrooke home sales continue to be affected by the market as much as any other neighborhood in Tallahassee.

Summerbrooke Home Sales Stabilizing At 2 Per Month

When we measure the trend of recent home sales in Summerbrooke, we can see the market has plummeted 63% from the peak when more than 6 resale homes per month were selling. It appears as if the Summerbrooke housing market has stabilized at about 2 homes selling monthly.

The average home price in Summerbrooke has dropped 20% since the peak of the market. The red shaded area in the real estate graph above shows how rapidly average home prices rose, and how they have come back about 1/3rd of the way.

Home Values Continue Dropping In Summerbrooke

When we look at the average price per square foot of homes sold in Summerbrooke, we get an overall feel for how well home values have held. Valuations appear to have fallen roughly 16% since the peak of the market in 2006.

[click for recent Summerbrooke Home Sales…]

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Tallahassee, FL: Piney Z Sees More Falling Prices

Century 21 First Realty — Thu, 29 Oct 2009 06:21:59 -0500

Every time I do a Tallahassee neighborhood report featuring Piney-Z, it seems like my comments and email go from positive to negative. I have even been accused of “bashing” the Piney Z Subdivision (as if I hold a grudge against a community???).

Certainly, that is not the case. Piney Z is a very desirable neighborhood located in Northeast Tallahassee, with home prices about 20% above the median for our county. I try to do regularly updates for many of the more active neighborhoods in Tallahassee, and Piney Z falls into this category.

Monthly Resales Stabilizing In Piney Z

This first real estate graph features existing home sales (resales) in Piney Z, with all of the non “arms length” sales removed. It is the clearest reflection of regular market activity in the past. When you look to the base of the graph, you will find that I am not using information from the Tallahassee MLS, rather I am reporting on all of the sales in the Piney Z neighborhood.

What this graph is showing is that unit sales in Piney Z (vertical blue bars) have dropped roughly 70% since the peak of the market, but monthly sales seem to be stabilizing around 3 resales per month since July of 2008.

The bad news is that the average home price in Piney Z [click to continue…]

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Keep checking out the Tallahassee Real Estate Blog every day for updates on real estate in Tallahassee Florida.

Forecast Home Sales With REALTOR.com Report

Century 21 First Realty — Wed, 28 Oct 2009 08:19:51 -0500

I am always looking for ways to discover earlier signs of impending movements in the Tallahassee real estate market. The key to forecasting the future is knowing the “natural order of things” and then looking for the first signs of the first steps in the process.

The best forecasters build models, based upon the end-state that they are seeking, and them work them backwards, always seeking for clues of earliest signs. For example, we could create a simple model like this:

Home Sales In Tallahassee

This shows the hierarchy of what must occur for us to see a turn in the housing market. We are seeking year-over-year increases in home sales. Currently, our housing market activity roughly down 34% from where it “normally” is and over 60% down from the top of the market. The following real estate graph of historical “Daily Buyer Activity” shows we are:

The left scale shows the average number of homes sold in a day in the Tallahassee MLS is currently around 6.0, but it has been as high as 16! We want our forecasting model to tell us what is going to happen next, so looking at the model, our next exam should focus on pending home sales in Tallahassee.

[click to see PENDING SALES REPORT and REALTOR.com Report…]

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Do You Trust REALTOR® Reports?

Century 21 First Realty — Tue, 27 Oct 2009 07:31:07 -0500

Anybody who knows me will tell you that I am an Army Football fan. I played for Army in the 1980s and I attend their annual football team reunion up at the academy each year.

Recently, I had a conversation with a friend who is also a fan, but is (I believe) a little biased when reporting how well a team with a 3-5 record is really doing.

Army played Rutgers this past Thursday night, but I did not watch the game. The next morning I read that we had lost the game, so I called my friend to see how the team had performed.

Our Conversation

Me: So did you watch the game?

Him: Yes! Man we had it right in our hands.

Me: Really?

Him: Yeah, we really looked strong. We took the opening drive and shoved it right down their throat. We ran 11 plays and scored a touchdown. We were dominating.

Me: Oh? What happened after that.

Him: Well, Rutgers ran off 17 straight points and then scored the final 10 points of the game to beat us 27-10.

Now I wouldn’t call his recollection of the game a true, un-biased account. I’m not so sure that Army “had it right in their hands.” I’ve learned over time that if I really want to know how well (or how not-so-well) the Army Team has done, I need to read a few different accounts from the game. Everybody has their own viewpoint, and all come will a bias.

Beware Of False Prophets In Real Estate

So why do I begin a real estate blog with a story about Army Football? Because home sales in Tallahassee are a lot like the Army Football Team. There is a lot of talk and great signs of promise, but so far the record indicates that a recovery has not been made!

Recently, a local publication took a report from the Florida Association of REALTORS® and wrote an article that I think painted a picture that is not truly accurate. Much like my friend reporting on Army Football, the writer spouted a few positive (facts) and then let the reader conclude that the Tallahassee housing market is on the upswing.

Unfortunately, REALTORS® typically only report about 1/2 to 1/3 of all the home sales in a market. I like to know what the REALTOR® reports are saying, but to get a true picture of the Tallahassee real estate market (or any real estate market for that matter), one has to dig deeper.

[click to discover "the rest of the story"…]

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Frustrated Homeowners Seek Alternative Solutions

Century 21 First Realty — Mon, 26 Oct 2009 05:43:13 -0500

Many home owners are stuck with a home that they cannot (or will not) sell in today’s market of falling home prices. They are looking for creative solutions and we have written many articles in the past about creative solutions to today’s real estate problems.

Today’s home selling solution is a bit “out there” because it won’t be for everybody and it is restricted to people who have a fairly healthy stock portfolio. But even if these constraints don’t fit your problem, this will still be a healthy read because the same creative process might help you find a solution to your current housing problem.

Consider A HedgeLoan To Replace Your Mortgage

One of the traps that people [who own a home that they do not want to own] find themselves struggling against is a fixed mortgage amount secured by a falling-value home. The amount of the loan remains relatively unchanged while the value of the collateral is falling. Imagine if they could change the collateral from the home to something with less risk for the homeowner.

Enter the Hedgeloan. This is a loan product that does not require a lien on your home, but rather uses the value of your stock portfolio (or a portion of it) as collateral. What makes it so great is that once in place, if the value of your portfolio falls, you have the option to surrender your portfolio as full satisfaction for the loan. It’s like giving your home back to the bank, without the negative credit ramifications that come with it.

How Does The Hedgeloan Work

A Hedgeloan can be used to borrow money for any reason. I have written this to demonstrate how using a Hedgeloan could help a frustrated homeowner satisfy a home mortgage and give the homeowner more flexibility in handling the disposition of the home. But how does a Hedgeloan work exactly?

Your stocks or other option-able securities remain in your own account and title at the well-known, major, SIPC-member U. S. brokerage/banking firm that the Hedgelender has arranged for your account. All of the normal rights and privileges of a conventional regulated U.S. brokerage account are provided, along with the services of a licensed account adviser. Your loan documents are delivered to you by the Hedgelender, as are your account statements. The loan is put in place when you sign your loan agreement and agree to a common lien on your securities until the loan is paid off.

Imagine If You Hedged Two Years Ago

How many times have you said “If only I had ….” Well, if you had taken out a Hedgeloan two years ago, most likely the value of your portfolio would have dropped far greater than the loan-to-value that you made against it. This would have given you quite a hedge against the drop of the stock market in 2008. For somebody with a million dollar portfolio, this could have meant a savings (less losses) of over $100,000!

Use A Hedgeloan To Replace Your Home Mortgage

By using a Hedgeloan to replace your mortgage, you will no longer have a mortgage lien against your home. This allows for you to be much more creative in the sale of your home. It also makes your home far more sale-able, as many potential buyers cannot purchase a home with conventional bank financing anymore.

Your freedom from a mortgage lien could allow you to provide full or partial owner financing, as well as structure a long or short-term lease purchase for a qualified buyer. The key is flexibility, which is critical for homeowners with expensive homes.

Find Out More About Getting A Hedgeloan

If you think you might be a candidate for a Hedgeloan, here is what I recommend you do:

Visit the Hedgelender web site and read through their extensive Frequently Asked Questions (FAQ) page with answers to common questions.

Talk to an account representative to find any answers not provided in the FAQ.

Apply for a Hedgeloan and see if the terms are as advertised.

I think with proper due-diligence, many high-end homeowners (or people with large stock portfolios) will find an interesting alternative to their current financing situation. The flexibility that a free-and-clear property provides could very well be the difference between selling a home in this market, and having to hold on to it for quite some time.

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Signs Of Stability In Southwood Home Sales

Century 21 First Realty — Fri, 23 Oct 2009 08:29:53 -0500

The newest home sales numbers are showing that Southwood is finally showing signs of stabilization, mostly in the number of homes sold though average home price drops seem to have slowed as well If you are a regular reader of the Tallahassee Real Estate Blog, then you know that we have reported on the Southwood Subdivision in Tallahassee for several years now, and have not been seeing much good at all.

While it is way too early to that a bottom is in sight for Southwood, I would think that it will all depend on new construction levels over the next 12 months. Currently, there are about 9 months of supply of homes for sale in Southwood in the $200K – $300K price range. If builder activity remains low, it should hit a stable level of 6 months of supply sometime early in 2010.

New Home Construction In Southwood

The average price of a new construction home in Southwood over the past 12 months was just under $290,000. Considering the average new home in Southwood was once selling for $413K, this is a drop of over 30%. The new construction has adapted to the market, but this is definitely putting serious pricing pressure on existing home sales in Southwood.

Existing Home Sales In Southwood

Existing home sales (resales) in the Southwood Subdivision seem to be finding the bottom of the market in terms of unit sales. There have been signs recently that unit sales might be thinking about climbing in the near future.

[click to continue and see list of Southwood Home Sales…]

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How We Handle Termites In Tallahassee

Century 21 First Realty — Thu, 22 Oct 2009 07:28:53 -0500

Many people would argue that the Tallahassee Board of REALTORS® Contract for Sale and Purchase is the best document of its type in use in the State of Florida. While many housing markets in Florida use a different contract for the purpose of selling real estate, ours if considered the cream of the crop (at least by us Tallahasseans!).

When looking at the contract used to buy and sell real estate in Tallahassee, one paragraph in particular demonstrates the effectiveness of the form versus all other rivals, and that is the paragraph dedicated to Wood Destroying Organisms (formerly called the “Termite” paragraph).

Sometimes we find that home buyers and home sellers are a little confused about how Wood Destroying Organisms (WDO) are handled when found in a home inspection, so I thought I would write about that and create a handy resource for as long as we continue to use the language in this real estate sales contract.

Two areas of the Tallahassee Board of REALTORS® Contract for Sale and Purchase reference Wood Destroying Organisms, and both need to utilized. The first is paragraph 5, and the next is paragraph 11.

Who Pays For Wood Destroying Organisms Inspection

Paragraph 5 (pictured below) shows who pays for the WDO inspection and how treatments will be handled. Note, this is very important:

Line 59. is used to identify the cost limitation of the inspection. This commits the seller to have the inspection performed, but only to the extent that meets the amount specified in the cost of the inspection. But line 60 is the culprit in most problems that stem from Wood Destroying Organisms.

Both home buyers and home sellers alike need to understand the importance of the contract paragraph pictured above. Each box should be “x’d” like you see, and the blank that I have circled should be left blank! Any amount put in that blank circumvents the super-effectiveness of Clause #11 (discussed below).

Often times, ignorant real estate sales people advise/allow the home seller to “limit their exposure” to wood destroying organism by placing a dollar amount in that blank. This is stupid! Let paragraph 11. handle this.

The home seller needs to understand that any buyer buying the home will expect the home to be clean and free of all infestation, so limiting this amount will rarely, if ever, actually save the seller any money. But I have seen it cause many a home seller to lose the buyer for their home.

Wood Destroying Organisms Inspection

The meat of this issue is handled in paragraph 11. of the Tallahassee Board of REALTORS® Contract for Sale and Purchase. The contract does an excellent job of defining roles and controls, and ultimately saves many a real estate contract from going void.

The first part of the Wood Destroying Organisms paragraph identifies what will be inspected, stating:

[click to see language used in contract…]

A "No Bull" Approach To Real Estate Trends

Century 21 First Realty — Wed, 21 Oct 2009 05:29:37 -0500

If you haven’t taken part in our real estate web site survey, we’d love to get your feedback. To do so, please click on this link to take the survey. It takes about 1 minute and you can help us redesign this site to be more useful.

One reader provided an interesting observation about our graphing and charting techniques here on the Tallahassee Real Estate Web Site. This reader wanted to know why we relied so heavily on real estate one-year trend charts, as opposed to non-trended data graphs.

Specifically, the reader asked

So much of your data focuses on 365-day analysis. Given the dynamics of real estate today, it would be nice to have monthly information as well. I understand seasonality makes it hard to compare between months. But sometimes it’s just nice to know what is actually selling and what isn’t in the current market.

I am envisioning something like your inventory report, showing for the past month the number of condos/THs that sold and the number of single-family detached homes that sold. Sales data by price range and region (e.g. NE, NW, SE, SW) would be helpful too.

By the way, keep up the good work. In my opinion, this is the best RE site covering any metro region…at least the best free one.

This is great feedback and I will get more non-trended reports embedded into future blogs. But I also want to demonstrate the value of these trended results, with a real-world Tallahassee neighborhood report.

Bull Run Subdivision Home Sales Report

In order to demonstrate my perception of the value of the trend report, let’s take a look at arms-length home sales in the Bull Run Subdivision in Tallahassee, Florida. The graph below shows the number of homes sold each month, and the corresponding average prices of the homes sold that month.

The information in this real estate graph shows the recent sales and prices, but do you get a real feel for what is occurring from this? Are sales up in Bull Run? Are sales down in Bull Run? What do you really see? If anything, I see a general downward trend on home prices, with a nice little “spike up” in the past three months. What do you see?

Home Prices Still Dropping In Bull Run Subdivision

This next real estate graph removes the seasonal bumps and jumps in the graph above by annualizing every point in the graph. To me, the results tell a much more focused picture.

When I created these two real estate graphs, I had to look at them several times because I thought I had made a mistake. The first graph of Bull Run home sales seems to show a much more stable picture, while the second graph makes it appear as if Bull Run home prices are still dropping.

The problem with the first graph is that your mind (at least my mind) cannot do the math and factor in weighted averages of unit counts and average prices. For example, looking at the first graph, there were five sales of homes in Bull Run in July 2009 for less than $300,000. There was one sale for more than $300,000 in September of 2009.

On the first graph, it doesn’t really seem to catch your eye, but when we trend it, we realize what is really occurring in the Bull Run Subdivision. The average price trend has dropped 25% ($100,000) since the peak of the market! That message hits me right between the eyes in the trend graph, yet I would not have even noticed it in the first graph.

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Historical Arms Length Home Sales In Bull Run Subdivision

[click to view list of past Bull Run Home Sales…]

Neat Little Trick Using Twitter For Real Estate Sales

Century 21 First Realty — Tue, 20 Oct 2009 11:50:18 -0500

Just a quick blog today, as I have started to add the following to the end of my blog posts.

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So, what does it do? If you are a twitter user, click it to find out! It allows you to tweet this blog post! Each time I post a new blog, I just update the address in the html code so the permalink is for the current blog.

Would you make a few more sales if you increased your traffic to your blog? I have! Add this little guy to your posts and hopefully you'll have the same results.

So, help me out, give it a quick click!