Crowded foreclosure

Rick Lancaster (Long & Foster Real Estate) — Sat, 26 Apr 2008 08:43:04 -0500

I wanted to share a recent experience that I think demonstrates some of our current problems with this market. The other day I was showing a bank-owned townhouse selling for $239,900 in a very nice newer subdivision in Frederick. There are 10 similar homes in this development that are on the market for $270,000- $300,000 there. (Whoops, I almost said "selling for $270,000-$300,000". Nothing's selling.) A year ago, they were selling in the mid-$300,000s.

Something happened that hasn't in quite a while. There were actually two other Realtors showing the same property to two other families at the same time! Remember the good old days? It was, needless to say, a little crowded. Three realtors, three families with children in tow.

Unfortunately, the townhouse was in pretty poor condition. It needed carpet and paint throughout, holes repaired, vanity doors replaced, railing repaired. etc. It seems that people not paying their mortgage tend not to maintain their homes very well. A small investment in new carpet and a few days fixing up would turn this home into a real gem. Unfortunately, none of the buyers could see past it's present state. Mine said he didn't even want to think about the work involved. No one has made an offer on this home and it still sits and sits and sits. Sad and neglected.

All these foreclosures are adding to an already huge inventory, 14 months in my local market. Buyers have to look at them in hopes of getting a good deal and are then disappointed in the condition of these houses. But they have to work through them and eliminate them before they will consider paying market price for a home in good condition. Our buyers have become spoiled and accustomed to home builders and Realtors showing them houses in pristine condition with no extra work or investment required.

As Realtors, we need to explain this situation to our customers and clients, buyers and sellers alike. Until the market corrects itself, we need to manage their expectations and expect to show a lot more houses.

Rick

Welcome to Rick's Blog

Rick Lancaster (Long & Foster Real Estate) — Sat, 18 Aug 2007 12:38:33 -0500

Hello. Welcome to my blog. Just getting started here and am really looking forward to this.

I want this to be an open discussion and forum of all matters real estate, especially related to Frederick Maryland and the surrounding area, personal finance, current events or any other topic of interest. Please feel free to express your thoughts on any topic or question, local or national. What you say on Rick's Blog (I need a better name) stays on Rick's Blog. (gee that was original).

With the recent almost meltdown in the subprime lending market, I'm sure that's on everyone's mind. It has certainly affected us in Real Estate and it's not over yet. The Fed pulled a quick one yesterday and lowered their discount rate on Fed loands to banks to 5.75% from 6.25%. The Dow finished the day up 233 points at 13,079. Thank you, Mr Bernanke. I thank you and my portfolio thanks you. I'll admit it was pretty thrilling watching the market open and surge 300 points after the Fed decision which hit the wires at 8:30 AM. After 2 weeks of bad news and dropping indexes it was quite relief.

That's all for now. Please check out my links while you're here. I welcome your comments.

Rick