Everybody Calm Down. Armageddon Is NOT Upon Us!

The new housing numbers have definitely been a major news story over the last 48 hours. The Dow dropped over 100 points on the announcement of July’s existing sales numbers. The cries of a double-dip sound like the screams of Chicken Little: ‘The sky is falling! The sky is falling!’ Pundits are claiming real estate will never be looked at the same again. We asked Steve Harney to comment on what the report actual means to the housing recovery. As always, he was more than willing to share his insights. – The KCM Crew

I want to start by saying that Armageddon is not upon us. Was NAR’s Existing Home Sales Report tough to read? Yes. Were there any surprises in the report? Just one: the fact that prices have remained stable. And that was good news.

All the panic and gut-wrenching revolves around two numbers:

The lack of sales in July
The months’ supply of inventory now available
Neither number was a surprise to anyone truly following the real estate market. Right here in this blog, the KCM Crew has been claiming for the last nine months that sales in 2010 will be approximately what they were in 2009. The tax credit moved many purchases forward as buyers wanted to be in contract before the April 30 deadline. That push forward of demand created a false sense of hope that a major market comeback was taking place in the spring. It also created this current vacuum of demand during the summer.

Just as we should have realized that the great market of the spring could not be sustained, we must now realize that plummeting sales numbers will not continue. It may take one or two months for the impact of the tax credit to fully dissipate. After that, we will see a more normal buyer demand throughout the fall and winter. We must not forget that people decide to move every day. Prices are great, interest rates are at historic lows and the assortment of properties for sale is fabulous. Buyers will buy!!

In regard to the months’ supply of homes for sale, we must remember one basic principle: prices will come down if demand is constant and inventory increases. Houses will sell over the next twelve months, approximately 5 million of them. There may be more than double that amount trying to sell however. Which ones will sell? Those that are priced correctly for the current market. Your price must be compelling in order to make your home attractive to today’s buyers who have a tremendous selection of homes from which to choose.

As the year moves forward, it is my belief that months’ inventory will remain in double digit numbers. That means that prices will continue to soften.

What does this mean to you?
You definitely will be able to sell your home and move on with your life. If that’s the goal, you will do better financially if you do it sooner rather than later.

And there’s more- Rancho Del Lago

There are more 55+ Active Adult Communities than just the Robson collection. Rancho Del Lago is located south east of Tucson (technically in Vail, AZ) and it is worth a look. It’s a small community of under 600 homes, but it has a smaller community flavor that may appeal to some who don’t like the large 4500 plus planned unit developments.

So where did all of the money go?

With $1 Trillion given to banks to lend the questions is why are they not lending? We know why. They can invest someone else’s money elsewhere and make more money with less risk. The money has not been used for the purposes intended by Congress. I am an anti-regulation guy but this would be a grand opportunity for the tax payers to get their money back with interest by taxing the profits on those funds at the rate of 95% if the profits were made by an investment that was not directly related to a home mortgage or refinance of a home mortgage.  Click the Trulia posting for the rest of the discussion on this topic.

Solar Energy Equipment Leasing

Eco Energies calls out the industry -and rightly so- with their article found at  http://www.echoenergies.com/energy-independence/truth-about-solar-leasing/?gclid=CPnc9MDP_aICFQ5IagodyFX4Zg .  In addition to cost there are a number of issues that become problematic when you don’t own your equipment.  For instance, when equipment is “affixed” to a structure it is assumed to be a part of the structure unless specifically excluded as part of a purchase contract.  Let’s say the owner wants to sell the home just a few years into the lease?  Does the equipment and the lease convey with the sale?  Is the new owner required to perform as a party to a contract executed by the previous owner?  There are issues of title, insurance, underwriting and lending that are not easily digested nor understood.  In many cases the lease agreement has been reported to be 22 pages and causes the homeowner to surrender certain property rights they may not be aware of.

My advice?  Before you sign a lease for solar equipment that will be attached to your home contact an attorney to have the agreement reviewed.  Ask specifically what rights may be impacted if you enter into the agreement. 

The Arizona Association of Realtors is examining this phenomonon closely because of how it may negatively impact homeowners in future years.

Open Houses Work!

A lot of work goes into preparation for an open house but it is all worth it.  Positioning a home to be at its peak condition increases exposure and with that the potential for sale.  Many times I’ve heard homeowners lament, “This place has never been this clean.”  And of course they get to enjoy the “freshening” of their home while it is for sale.  We have become a very visual, hands on society.  The traffic that an open house brings through a property provides important exposure and excitement.  Holding a home open also provides an opportunity for prospective buyers and people who know prospective buyers to see first-hand what photographs can’t show, spatial relationship.

Finding open houses can be a challenge in some communities.  Most jurisdictions do not allow open house signs to be placed in the public right-of-way.  They often overlook the minor infraction because it poses little threat to the security and safety of a community.  Oro Valley Arizona is taking a proactive stand on the matter, much to their credit.  By establishing a licensing program for right-of-way advertising, specifically aimed at temporary real estate signage Oro Valley is working with the community to find balance. 

Each community is a bit different but all homeowners should enjoy the benefit of a high standard of care when it comes to selling their home.  Knowledgeable professionals and homeowners prefer the Sign Ordinance language, “No sign shall directly impede pedestrian, bicycle or motor vehicle traffic when placed in the public right-of-way.  Signs may be placed between curb and sidewalk where space is available.  Signs may not be placed on any paved surface.”  This language provides a thoughtful, reasonable solution to signs placed everywhere along a road side.  After all, a temporary open house sign with home buyer traffic is a much better “brand” for a community than foreclosure and short sale signs.

Certification is a great thing!

I’m excited to announce that I have it!  My GRI designation, a credential to be proud of.

Realtors who take their craft seriously are always looking at how they can improve their performance.  The most long-lasting is to work on improving the consumer experience.  While getting a GRI certification is not the be all and end all of real estate skill enhancement, it is an important contributor to the improvement of skills.  When seeking the help of a Realtor to buy or sell a property be sure to ask what the individual has done to stand out in the crowd.  Education is only part of skill building.  Application -when one uses what they have learned- is every bit as important.  As the saying goes, “Good help can be hard to find”, especially when there is so much help out there.  Ask your help what have you done lately to invest in yourself.

Growing a Family @ 55?

More and more parents are helping their kids as the economy challenges the way we live out our daily lives.  AS our children move back to their childhood home for a shelter until they get back on their feet many of us find ourselves “re-engineering” our downsized homes to help out.  In my latest Your Home and Lifestyle I have a few ideas you may be interested in.  Check out this YH&L Article.