Time to take a break. We are about to come out of the mid summer slow down with summer vacations competing for the buyers and sellers attention, even real estate agents take summer vacations. In the next 10 days it will be interesting to see if we see a measurable tick up in showings. This last week did jump up but we need 3 weeks in a row to know that the late summer and fall buyer is back in the market. Considering how the last 8 months have been a solid fall buying pattern has become near critical for some sections of our market. Time will tell.
With that said I am going to take a couple of days off myself.
Tuesday, August 14, 2007
Friday, July 27, 2007
Late July update
Lots of changes in the market this month. Sales are holding very well against last year and the overall market is only off about 5% for my primary market and values are off about 12%. More on that next month.
Countrywide's statement the other day was not the surprise to those of us dealing with sellers every day. The fact is the real estate market in much of the US that had very heated markets over the last few years are going to give back much of the gains. My guess is that most markets will strip back excess appreciation to net gains of 5%-7% depending on area on a year to year basis. That of course will leave people that refinanced their homes 2,3,4 and yes 5 times owing more than their homes are worth. It was one thing to re-finance for better terms but the number of people that looked at their homes as piggy banks is astounding that took real cash out of the homes and spent it.
What is import to focus on is the unit sales, other than a major adjustment in expectations of value, homes are selling and will continue to sell. When asked if this is a good time to buy the answer is yes, but only if you feel comfortable that you will be living in the home at least 3 years, otherwise rent for the next year or two. Owning for 3 years or more will make the purchase of the home a justified purchase and the market will have worked itself out by 2010.
Countrywide's statement the other day was not the surprise to those of us dealing with sellers every day. The fact is the real estate market in much of the US that had very heated markets over the last few years are going to give back much of the gains. My guess is that most markets will strip back excess appreciation to net gains of 5%-7% depending on area on a year to year basis. That of course will leave people that refinanced their homes 2,3,4 and yes 5 times owing more than their homes are worth. It was one thing to re-finance for better terms but the number of people that looked at their homes as piggy banks is astounding that took real cash out of the homes and spent it.
What is import to focus on is the unit sales, other than a major adjustment in expectations of value, homes are selling and will continue to sell. When asked if this is a good time to buy the answer is yes, but only if you feel comfortable that you will be living in the home at least 3 years, otherwise rent for the next year or two. Owning for 3 years or more will make the purchase of the home a justified purchase and the market will have worked itself out by 2010.
Friday, July 6, 2007
July the 4th
June finished out in a rush and it has been 7 days a week since the middle of the month. The market has continued to tighten up and as the numbers roll in for the full 6 months the news is what you want to make of it. For us, good but clearly that cannot be said of many people in the market today. Last year at this time the market for the areas of N.W. Reno (Somersett), Caughlin Ranch, S.W. Reno, Arrowcreek/Fieldcreek/ Saddlehorn, Galena, Double Diamond/Damonte, Wingfield Springs and N. Sparks had 796 sales in 2006. In 2007 we had 792 sales. Not bad for a "bad" year. Across the board the average price difference is about 13% down over the year before and we seem to be holding as of the 1st of July in most markets a 18 month to 28 month supply of homes.
An odd thing about the Reno market is our price difference between new homes and re-sales. In many established markets the new home construction will set the base values for the re-sale production home market, but not in Reno. Persistently for the 5 year in a row our re-sale market continues to try and sell for more than the new home market. In our current market that is just driving many buyers into the arms of the production builders. As it is they are virtually "buying" the buyers with some of their discount programs. In the last month I have seen buyer incentive programs of $50,000-$90,000 being offered to new home buyers, plus additional benefits. The re-sale market is not immune to this type of pricing and the drop in values is showing just what is happening but the unsold homes are acting as if nothing has happened. The split between asking price and final selling price is just to great to explain. Obviously the buyers are able to choose only those selling that are pricing for 2007 and avoid the sellers stuck in 2005.
With all of this going on I took 5 days and took a quick trip to Duluth, Minn. We had a grand time, great weather and some good local food (smoked lake trout and smoked whitefish). We flew our plane out for a 2,518 nm odyssey (that is 2,895 standard miles). We overnighted on the way out and visited Rapid City, S.D. and saw Mt. Rushmore, Crazy Horse, Custer State Park, drove the needles road and found a great little restaurant called the "Corn Exchange". To be back at work we decided to come home in one day. One very long day with headwinds on the nose for 9 hours. But we made it home by 2 in the afternoon (4 Duluth time) with one fuel stop and some rest.
What does the rest of year look like, I will answer that question on my next blog.
The first week of July has started out as a record breaker, in the area of heat. Yesterday we tied our record of 108 degrees, but it sure made for a great 4th!
An odd thing about the Reno market is our price difference between new homes and re-sales. In many established markets the new home construction will set the base values for the re-sale production home market, but not in Reno. Persistently for the 5 year in a row our re-sale market continues to try and sell for more than the new home market. In our current market that is just driving many buyers into the arms of the production builders. As it is they are virtually "buying" the buyers with some of their discount programs. In the last month I have seen buyer incentive programs of $50,000-$90,000 being offered to new home buyers, plus additional benefits. The re-sale market is not immune to this type of pricing and the drop in values is showing just what is happening but the unsold homes are acting as if nothing has happened. The split between asking price and final selling price is just to great to explain. Obviously the buyers are able to choose only those selling that are pricing for 2007 and avoid the sellers stuck in 2005.
With all of this going on I took 5 days and took a quick trip to Duluth, Minn. We had a grand time, great weather and some good local food (smoked lake trout and smoked whitefish). We flew our plane out for a 2,518 nm odyssey (that is 2,895 standard miles). We overnighted on the way out and visited Rapid City, S.D. and saw Mt. Rushmore, Crazy Horse, Custer State Park, drove the needles road and found a great little restaurant called the "Corn Exchange". To be back at work we decided to come home in one day. One very long day with headwinds on the nose for 9 hours. But we made it home by 2 in the afternoon (4 Duluth time) with one fuel stop and some rest.
What does the rest of year look like, I will answer that question on my next blog.
The first week of July has started out as a record breaker, in the area of heat. Yesterday we tied our record of 108 degrees, but it sure made for a great 4th!
Monday, June 11, 2007
What makes for a good client broker relationship
Since we returned from our little getaway time has flown and the hours have been long. Over the weekend I received some great praise by several past and present clients but I also got it right between the eyes with 1 client last week and and many "clients" just seem to be to "busy" to ever respond to calls. On Sunday I was with a close friend and he was lamenting how difficult it is to get guest to RSVP for a party. No one seems to be responsible or want to be accountable but as he pointed out he must pay for the caterer, pay for the food and staffing, the room, and all of the costs associated with the event and an accurate count is very important. I both sympathized with him and empathized. For several years the DMG provide a yearly summer party. We went all out to do it right and thank all of our clients and let them know how much we appreciated their business and loyalty. Of course I have used the past tense. In frustration I finally canceled the parties when our RSVP list for people that said they would come topped 50% no shows (about 200 no shows) and people who did not RSVP made up 20% of the guest lists. Planning and costs just became unbearable with the huge swings in attendance.
So to my question. Respect, accountability, and an acknowledgement that a good sales campaign is a group effort. Many clients fail to be held accountable for the simple fact that they control all of the major marketing factors for a home. Yes, that is correct all successful marketing stems from the sellers basic decision on price, conditions and access to the home. Do not believe that, then just raise your price a few hundred thousand dollars and see what the market does, or drop a price by a hundred thousand and watch the buyers come out of the woodwork! When a seller takes an active role and works with the broker, not only is life good but the sales process is always a great experience. To those sellers that set price expectation's unrealistic, refuse to adjust to changes in the market, make demands to the buyers for inconvenient access to their homes, do not provide showing conditions that are less than ideal the process can become a nightmare.
Today we now do something unheard of years ago. When we realize that we have misjudged a seller and the seller expects us to provide miracles while they make life as difficult as they can for us, we graciously give them their listings back. Life is better, profits are up and those sellers that care we can provide so much better care and attention to them that I regret not making this decisions years ago.
So to my question. Respect, accountability, and an acknowledgement that a good sales campaign is a group effort. Many clients fail to be held accountable for the simple fact that they control all of the major marketing factors for a home. Yes, that is correct all successful marketing stems from the sellers basic decision on price, conditions and access to the home. Do not believe that, then just raise your price a few hundred thousand dollars and see what the market does, or drop a price by a hundred thousand and watch the buyers come out of the woodwork! When a seller takes an active role and works with the broker, not only is life good but the sales process is always a great experience. To those sellers that set price expectation's unrealistic, refuse to adjust to changes in the market, make demands to the buyers for inconvenient access to their homes, do not provide showing conditions that are less than ideal the process can become a nightmare.
Today we now do something unheard of years ago. When we realize that we have misjudged a seller and the seller expects us to provide miracles while they make life as difficult as they can for us, we graciously give them their listings back. Life is better, profits are up and those sellers that care we can provide so much better care and attention to them that I regret not making this decisions years ago.
Friday, June 1, 2007
Return from Mexico
Well we are back from Mexico, actually, we got back early in the week but I am just getting time to write now. Being a guest at a wedding in Mexico turned out to be a wonderful experience and my family and myself just had a super time.
We did not know if we would be going up to 72 hours before departure due to the fact that my wife's passport had not arrived after waiting 3 months for it to be returned. We called our Senator for some last minute help and Senators Reids office was just wonderful (Ensigns office turned us down cold) the passport did show up and we made the trip and we will remember this and are very appreciative of the support (or lack there of?). Note: get your passport, you are going to be needing them. My wife's did not expire until August but the new rules say that it must be good for 90 days beyond the return date of the trip.
Great food, terrific weather and one day of superb sightseeing added to a delightful wedding experience. My best to the new bride and groom. We have never stayed at an all inclusive resort before and this property was billed as a "gourmet" experience. Yeah, right, long buffets is what I expected. Was I wrong. Great rooms, 4 different and outstanding restaurants with great innovative food preparations. For foodies it was nice. The staff was great and of course for those that are worried about Mexico you really did not know you were even in another country (that is always a disappointment for me when the soul of the country is removed from the experience, but that is another story).
Oh, and our return flight! I must admit that we do not fly commercial all that much any more. First, work consumes more time than I would like to admit and second for 3/4 of the year we can use our own plane for much of our travel. We have heard much about travel today and we ended up with the full experience. What a mess. US Airways covers what appears to be much of the world but getting there may not be worth it. All flights were late but at least we got to Mexico in one day. Other parties getting to the wedding experienced delays much worse and the grooms parents had the flight from hell, 2.5 days to get to the wedding and they missed their own reception dinner.
The return flight was really fun, before we took off we knew that we had already missed our connection to Reno, and most other passengers also had missed their connections as well. I must say the airline was really prepared with the overnight hotel vouchers, they appeared to be really experienced in handing them out. So a long day in getting back to the US and again up at 4 am to make our new flight and guess what, it was late as well but we did make it back to Reno! In retrospect the flight back in our plane is 2,400 miles (about 650 miles longer due to our going around the gulf). I could of flown this myself, had a nice planned overnight stay and a nice dinner and been home only 5 hours later than the airline delivered me. They travel at 500 knots per hour (about 575 mph) and I fly at only 175 knots (200 miles per hour) and that is crazy!
Well back to work. Our marketing efforts are paying off and I had 5 offers to work on when I stepped back into the real world (sorry, not all 5 came together but 2 have so far). More later.
We did not know if we would be going up to 72 hours before departure due to the fact that my wife's passport had not arrived after waiting 3 months for it to be returned. We called our Senator for some last minute help and Senators Reids office was just wonderful (Ensigns office turned us down cold) the passport did show up and we made the trip and we will remember this and are very appreciative of the support (or lack there of?). Note: get your passport, you are going to be needing them. My wife's did not expire until August but the new rules say that it must be good for 90 days beyond the return date of the trip.
Great food, terrific weather and one day of superb sightseeing added to a delightful wedding experience. My best to the new bride and groom. We have never stayed at an all inclusive resort before and this property was billed as a "gourmet" experience. Yeah, right, long buffets is what I expected. Was I wrong. Great rooms, 4 different and outstanding restaurants with great innovative food preparations. For foodies it was nice. The staff was great and of course for those that are worried about Mexico you really did not know you were even in another country (that is always a disappointment for me when the soul of the country is removed from the experience, but that is another story).
Oh, and our return flight! I must admit that we do not fly commercial all that much any more. First, work consumes more time than I would like to admit and second for 3/4 of the year we can use our own plane for much of our travel. We have heard much about travel today and we ended up with the full experience. What a mess. US Airways covers what appears to be much of the world but getting there may not be worth it. All flights were late but at least we got to Mexico in one day. Other parties getting to the wedding experienced delays much worse and the grooms parents had the flight from hell, 2.5 days to get to the wedding and they missed their own reception dinner.
The return flight was really fun, before we took off we knew that we had already missed our connection to Reno, and most other passengers also had missed their connections as well. I must say the airline was really prepared with the overnight hotel vouchers, they appeared to be really experienced in handing them out. So a long day in getting back to the US and again up at 4 am to make our new flight and guess what, it was late as well but we did make it back to Reno! In retrospect the flight back in our plane is 2,400 miles (about 650 miles longer due to our going around the gulf). I could of flown this myself, had a nice planned overnight stay and a nice dinner and been home only 5 hours later than the airline delivered me. They travel at 500 knots per hour (about 575 mph) and I fly at only 175 knots (200 miles per hour) and that is crazy!
Well back to work. Our marketing efforts are paying off and I had 5 offers to work on when I stepped back into the real world (sorry, not all 5 came together but 2 have so far). More later.
Wednesday, May 23, 2007
Off to Mexico
It is going to be a short week this week as we prepared to leave for a wedding in Mexico. Having never been to a wedding in Mexico this should be fun and my entire family is looking forward to it. Lindsey who lives in Tuscon and Shauna lives in Portland will meet us in Phoenix and then onwards for 4 days of sun and fun and a new experience. Our temperatures have dropped the last couple of days and getting up with the early sun at 5 am but 42 degrees outside has been invigorating so the warmth of Mexico has extra appeal this morning! I have no doubts that summer will be back and I will not be surprised to see high 80's for our return to Reno next week.
Everyone have a nice holiday weekend and I will be back in a week.
David
Everyone have a nice holiday weekend and I will be back in a week.
David
Saturday, May 19, 2007
How to get an offer in todays market
Wow, I just came from a listing appointment and this is a great time to talk about "How to get an offer in today's market".
I am going to keep this blog real simple today:
(1) Get your ego off of the table. (2) No one cares how many wonderful holidays you have celebrated in your home, the buyer has no interest in paying you for your good times. (3) Yes, you have nice neighbors, so do other people. (4) Yes, you certainly have put money into maintaining your home, that is a cost of owning your home, you are supposed to. (5) Yes, your landscaping is beautiful, but is it really $50,000 better than the other homes in the area? (6) Costs to build, your house is not new, if the buyer wants a new home they will buy one. (7) I had my home appraised and the appraiser told we what it was worth, yes but did he guarantee what it will sell for in the next 90 days? Worth and what a home will sell for in a given time frame are two different worlds. If you have a year to sell then put your home on the market in 8 months price correctly (8) My friends all tell me how great the home is and would all love to buy my home, great then ask them to write you a check.
To sell today you must get the ego off of the table and place your home on the market at a price that is realistic for your area. Homes sold in the last 60 days and homes in escrow today are the only true measure of real value. That coupled with the number, or lack thereof of homes sold and the amount of homes for sale will provide the basic building blocks for value. Do not price your home based on other homes in your area, that is unless you are only interested in listing your home and not selling it.
In today's market your home must scream value. That means you must (A) price the home within in the market (no, that does not mean the lowest price), (B) stage the home, (C) maintain your landscaping, (D) make access to your home easy.
If you will balance out these 4 basic points you can expect to see an offer on your home, it is that simple. PRICE, TERMS AND CONDITIONS.
I am going to keep this blog real simple today:
(1) Get your ego off of the table. (2) No one cares how many wonderful holidays you have celebrated in your home, the buyer has no interest in paying you for your good times. (3) Yes, you have nice neighbors, so do other people. (4) Yes, you certainly have put money into maintaining your home, that is a cost of owning your home, you are supposed to. (5) Yes, your landscaping is beautiful, but is it really $50,000 better than the other homes in the area? (6) Costs to build, your house is not new, if the buyer wants a new home they will buy one. (7) I had my home appraised and the appraiser told we what it was worth, yes but did he guarantee what it will sell for in the next 90 days? Worth and what a home will sell for in a given time frame are two different worlds. If you have a year to sell then put your home on the market in 8 months price correctly (8) My friends all tell me how great the home is and would all love to buy my home, great then ask them to write you a check.
To sell today you must get the ego off of the table and place your home on the market at a price that is realistic for your area. Homes sold in the last 60 days and homes in escrow today are the only true measure of real value. That coupled with the number, or lack thereof of homes sold and the amount of homes for sale will provide the basic building blocks for value. Do not price your home based on other homes in your area, that is unless you are only interested in listing your home and not selling it.
In today's market your home must scream value. That means you must (A) price the home within in the market (no, that does not mean the lowest price), (B) stage the home, (C) maintain your landscaping, (D) make access to your home easy.
If you will balance out these 4 basic points you can expect to see an offer on your home, it is that simple. PRICE, TERMS AND CONDITIONS.
Monday, May 14, 2007
Busy, busy weekend. Open house, 50 people came through (it helps when the home is the "featured" home in the news paper and 3 people showed serious interest in the home! 3 buyers called wanting to see homes and wrote 1 offer and received an offer. Sunday being Mothers day was quiet and I enjoyed the morning with my mother, spent some time in the garden and then spent 2 quite hours on the Truckee river.
I was asked a question at the open house about how to tell if an agents marketing is good and effective. The answer is fairly simple and will depend somewhat on the price point that the agent and the seller are talking about and I will give my thoughts on that later this week.
I was asked a question at the open house about how to tell if an agents marketing is good and effective. The answer is fairly simple and will depend somewhat on the price point that the agent and the seller are talking about and I will give my thoughts on that later this week.
Monday, May 7, 2007
Why stage a home to sell?
It has been a busy weekend, managed to get a day off, the sun is out and it is warming up and back to work today. I spent the morning with a seller on the art of staging and they wanted to know why staging is so important. 1st the value of staging is a bit overblown but it is valuable in the right home and done the right way. Simply put staging is the art of creating an atmosphere in a home that allows buyers to see themselves in the home and excite their emotional response to want the house to become their home. What staging is not is redecorating the home to some one else's taste or making a home faddish. Staging is not cheap but by the same token does not need to cost $10,000's of thousands of dollars either. In addition staging does not mean that a home will sell for more money, in fact the real value of staging is to shorten the market time and improve the return to the seller (keep in mind owning your own home for 3-4 extra months with taxes, insurance and mortgage payments adds up fast). But to go into staging to think that the home will sell for more money is probably not the soundest approach. Staging came about for the simple reason that most homeowners did not have the time, money or assistance of a professional as they put their home together over the years. In fact many homeowners drag along old, outdated furniture from new home to new home and added to the daily clutter of all of our lives a home can show less than perfect. A good stager will compensate for these common issues and inject life into a home and create an atmosphere that is more appealing to the buyer and allow the seller to achieve selling the home at "fair market value".
Friday, May 4, 2007
Real estate market May 2007
As I sit down to write a little bit today it has been snowing and we have almost an inch of snow on the ground (melting fast I must say) on May the 4th, welcome to spring in the Sierras! The last 120 days have been quite a ride for us so far this year and I have just completed my e mail newsletter for May. This provides me some reflection on how real estate and Reno for that matter is faring today and how we compare with last year. The facts are in and the market is down but then again anyone watching the news knows that. What the news fails to show is that the buyers are buying and the market has not fallen into a black hole and is not going to either. So far for the year we seem to be down on buyers about 18% over last year and as a whole the market has lost value of about 16% but I expect that number to change as we get in the May and June sales and I think the negative numbers will improve some. This week we have put several homes into escrow and our closing this week include one of the highest values for a home of it's type sold in the last 12 months! What I am seeing is a huge amount of buyer interest in wanting to make a purchase but also being very cautious. Our showing are way up and though our summer buying season is going to be weak I still feel that it will hold its own.
I have to admit that with the weather today the office is pretty quiet so I think that when I am done here that I will leave a little early today and go treat myself and sneak over to Orvis and look at some fly fishing stuff.
I have to admit that with the weather today the office is pretty quiet so I think that when I am done here that I will leave a little early today and go treat myself and sneak over to Orvis and look at some fly fishing stuff.
Wednesday, May 2, 2007
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