REASONS FOR CURRENT MARKET
Everyone knows the lending industry's very risky mortgage loans are to blame for this terrible real estate market we are having...........right? Yes, some lenders did make some very risky loans that have contributed considerably to the situation. Our poor real estate market is the result of far more than those bad loans. It is the total economic situation worldwide. Countries like China, India and Brazil are experiencing a greatly improving economy and now are competing with us for petroleum, food, steel, cement and other commodities. The supply and demand principle steps in and the price of it all goes up and the additional cost of the necessities takes away moneys that were available in recent years to go toward the cost of purchasing and paying for a home and maybe a second residence. This may well be the case with some homeowners making payments on their current home. Everyone is going to have to learn to live with LESS. Smaller homes and more efficient transportation for sure. While we are seeing some strides made in improving our mortgage lending industry, the bigger economic problems are not going away and likely will get worse. We all need to learn to cope and LOOK FORWARD as to how best to improve our real estate industry and our personal self and not LOOK DOWN as to where we are or BEHIND as to where we were.
CURRENT MARKET CONDITIONS
Yes, our real estate market will improve as it did following the late seventies and early eighties downturns. But when, and what will it be like when it is "improved?" While no one can really tell you when and what it will be like, I have some ideas. For one thing, if anyone thinks the selling price of residential properties is going to bounce back to much higher selling prices than we have today, any time soon .......you are wishful thinking. The median price of a resale home in Leon County was in the $225,000 range from two years ago until the first of this year when it dropped to just above the $200,000 range and since then has averaged $205,000. The average price was in the $250,000 range during the same period, likewise dropped after the first of the year to $225,000 and has had some bounce for an average of $241,629 for the past six months. While the selling prices have dropped somewhat, they seems to be holding. We will begin our annual slow period of the year in September and likely will experience a little more drop. In the first of the year there likely will be an increase of buyers purchasing for their residential home needs. However, the secondary housing market likely will remain flat. While a number of sources have indicated a pick-up in the market in 2009, I doubt very seriously we will see a significant selling price increase. We just have too large of an inventory that will hold back much change in the selling price. We currently have 1,885 single family homes listed for sale in Leon County. Since the first of this year 1,026 listings in MLS sold, 147 a month and in the past 12 months 1,729 sold, 144 a month. Therefore, less than 8% of the homes listed for sale will sell each month.
ADVISE TO SELLERS
The first thing sellers need to determine is just how bad you want to sell. In other words just how motivated are you. Are you willing to do what you have to do for your home to be in that 8% that attract a buyer? I see a lot of properties on the current market that the sellers are really kidding themselves if they think a buyer will be interested in making an offer when there are so many other properties that have been priced right and in move-in condition. The primary factors beyond location, which there is nothing you can do about, is price and condition. The price needs to be in line with other comparables recently sold and/or less than the asking price of current competing properties. The property needs to be in top condition with all notable repairs done and be attractive to a buyer. That may include "staging", which is a fancy word for getting rid of a lot of your clutter, maybe some painting and giving the living area a model home look. Your Realtor may assist you with this or help you find a prosessional. Hopefully, you selected a Realtor to assist you based on their track record and knowledge of marketing real estate and not one that's listing it at a price and terms that sounds good to you. Many top and very wise Realtors are walking away from listing opportunities that they know are not likely to sell any time soon at the price and expectations of the seller. The seller that selects an agent that will take the listing at whatever price and terms that sounds good can expect a long relationship without a prospective buyer. VERY important in attracting a buyer is to make sure there is EASY accessibility to the property; otherwise, if they don't see it, there can be no opportunity for interest. Many sellers put-up "road blocks" that prevent the property from being shown. Recommend you go over a printed MLS property listing with your Realtor to get rid of as many of these "road blocks" as possible; and, check to make sure the directions to your home are understandable. And, there is just so much more help that your Realtor can assist you with in marketing your home.
BUYERS TAKE NOTE
There is great opportunity for buyers in the current "Buyers Market". First, the mortgage fixed interest rates are still in the 6-7% range and recent mortgage lending policies and regulations changes can insure you a "safe" loan. It has been said in the past that the interest rates usually go up after a general election.........whether it will be true or not.....we shall see. But, do you want to risk that it is not going to happen? And, there are lots of properties from which to choose. Your Realtor should be able to provide you with the necessary market statistical data to assist you in the purchasing process in making an offer, once you have made your choice. Remember though, Tallahassee is NOT considered a "declining market" as is most of the other parts of Florida. Most sellers are not desperate; however, most realize they may have to make some concessions.
Don Pickett, Realtor, Coldwell Banker Hartung and Noblin, Inc. Tallahassee Real Estate N Data Services, 850-591-4725, donpick@aol.com Search the entire Tallahassee Area Real Estate Market.
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