Archive for March, 2008

Housing: Best time to buy in four years

Wednesday, March 5th, 2008

Home values have declined across the country, giving homebuyers the best buys they’ve had since 2004.

NEW YORK (CNNMoney.com) — It may be the best time to buy a house in more than four years.Home prices have dropped so quickly and so far that valuations – the difference between what a home should cost and its actual price – are the lowest they’ve been since 2004, according to a report.

The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.

“Housing valuations are almost back to long-term norms,” said National City’s chief economist, Richard DeKaser. He called current affordability “the best in the past four years.”

But DeKaser cautioned that home prices could fall even further.

“This isn’t to say home price declines are over,” he said. “We could move below historic norms. By the end of 2008, housing markets could be broadly under valued.”

Prices still improvingThere are still 21 housing markets, or 6% of those surveyed, that are severely over valued, including Atlantic City and Madera, Calif. That’s down from 56 overvalued markets at the peak of the housing bubble in 2006.

The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over or under valued.

The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

“Declines are no longer confined to once-frothy markets,” said DeKaser.

The survey covered home valuations during the last three months of 2007, but DeKaser pointed out there’s reason to believe that valuations are even more favorable for buyers today.

Price declines have continued into 2008 and interest rates, although they have inched up lately, have been steady or lower compared to late last year. There have even been wage gains; personal income rose 0.5% in December. Soaring foreclosure rates have added inventory to many housing markets, depressing home prices further.

The biggest gains in affordability occurred in California, Michigan and Florida, which are areas that have also been some of the hardest hit by foreclosures. Those states registered 43 of the 50 biggest price declines.

Bend, Ore. currently tops the overvaluation list. Home prices there were judged to be about 59% higher than their fair-market value. Miami, despite a median home price decline of 5.7% last year, is the most overvalued big city, by 44%.

All the best bargains were found in Louisiana and Texas. Houses in Houma, La. were under valued by 31.2%, according to the report. Dallas was the most undervalued big city, by 30%.

By Les Christie, CNNMoney.com staff writer  

Ice cream to cheer about

Tuesday, March 4th, 2008

Cold Stone Creamery opening Wednesday at Curve Plaza

Steamboat Springs – As he discussed his new Cold Stone Creamery franchise Monday, George Barlow pulled cups of ice cream out of a Subway box and handed them to toddlers.

“You guys say, ‘Thank you, George,’” Assistant Director Michelle Clark told the children at GrandKids Child Care Center as they headed for the table to feast.

Barlow was giving Steamboat Springs its first taste of local Cold Stone ice cream. He and his wife plan to start selling it Wednesday at the Cold Stone Creamery at their Subway sandwich shop in western Steamboat.

“I really believe in this product; it’s an easy sell,” Barlow said. “Everybody loves ice cream.”

Barlow and Liz Brimmer run three Subway franchises: two in Steamboat and one in Craig. The ice cream will be available Wednesday at the store in the Kum & Go building at 2032 Curve Plaza. The other Steamboat store, at 1815 Central Park Drive, will offer the ice cream by summer, Barlow said. The Craig store is set to have the product by next year.

The couple plans to have six Cold Stone stores by the end of next year.

Barlow said he chose Cold Stone Creamery in part because it offers an interactive experience that is similar to Subway’s, where customers go down the line and choose what to put on their sandwiches. At Cold Stone, customers choose the type of ice cream and toppings to have mixed in.

Employees sing for tips, dance and throw ice cream to one another, he said.

The Subway on Central Park Drive held a TCBY, but Barlow, calling TCBY “a dying brand,” said he has let the franchise agreement expire.

With their new ice cream venture, Barlow and Brimmer are focusing on community service. That was what brought Barlow to the GrandKids facility and the Doak Walker Care Center alongside Yampa Valley Medical Center on Monday. He handed out about 50 ice cream cups to children, staff members and older residents.

The couple plans to choose a local organization to help out each month for the first six months.

“We don’t know all the needs of the community; we wish we did,” Barlow said. “We hope people would come to us. Steamboat has never been afraid of doing that.”

He said the store would be willing to donate ice cream products or a portion of sales. For the following six months, the pair plans to shift focus to the Make-A-Wish Foundation, which Cold Stone Creamery supports nationally.

Barlow cited recent bad news as additional motivation for he and Brimmer’s philanthropic efforts.

“Steamboat’s been rocked by a couple really difficult scenarios that have taken place over the past week or 10 days: the people working at the bank, the war hero falling off the building,” Barlow said, referring to Feb. 21 theft charges against two former Alpine Bank tellers and the death Thursday of Iraq veteran Eric O’Hara.

“My idea was to get this product into people’s hands … to share some cheer,” Barlow said.

The folks at GrandKids seemed pretty cheerful with their treats.

“I was impressed,” said Clark, the assistant director, who sampled her first Cold Stone ice cream. “A couple teachers are going over there on Wednesday.”

By Blythe Terrell

http://www.steamboatpilot.com/

Super-Sized Homes Shrinking

Tuesday, March 4th, 2008


 

We’re a nation of super-sized everything — from food to homes — but developers are scaling down in some areas of the country in an effort to make houses more affordable.

“Over the years the size of homes has expanded as the market grew hotter and hotter. But now that the market is going through an adjustment period and costs have ramped up, builders are exploring different ways of reducing costs. One of those is to reduce the size of the homes in terms of overall square footage in different sections of the home,” says Joseph Narkiewicz, executive vice president of the Tampa Bay Builders Association.

According to an article in the St. Petersburg Times, builders are shrinking homes. Some are scaling back from 2,200 square feet to 1,800. They are even building two-bedroom houses that only offer a little more than 1,000 square feet. The down-size allows for homes to be reduced to more feasible prices.

Lest you think the news is all bad, Narkiewicz says this is just a strategic move — not a sign that times are taking a turn for the worst. “The state of the economy is improving somewhat so there is some degree of optimism that we’re looking forward to. In fact, one of our economists in Florida estimates that as we work through 2008, things should get better as the year progresses,” says Narkiewicz.

In fact, Narkiewicz says there will still be super-sized homes for those whose lifestyles demand it and incomes support it. However, for others things may be getting a bit back to normal.

“Some things may have gone to the extreme and I think buyers are now going through a realty check and finding they don’t really need those huge bathrooms like developers were building. They don’t really need all the extra space that developers were building and, to try to mitigate the higher pricing, they’re bringing the square footage down,” says Narkiewicz.

So is this a passing trend that will fade as market conditions improve?

“I don’t believe it’s going to be a passing fad. I think that homes will be down-sized somewhat and that will probably remain there until people decide they want more space. But this is probably going to become a more permanent thing,” says Narkiewicz.

Also on the way out are some amenities, “The large clubhouse with the elaborate swimming pools in certain communities may be gone simply as a cost-saving measure as well as people may not want to have the maintenance costs of those facilities through homeowner’s association dues,” says Narkiewicz. He also says gated communities may be on the decline in certain markets.

He says buyers are also opting for less expensive materials in their homes. “There are some people who may forgo granite countertops in favor of the Formica tops — the less costly countertops — for the initial construction phase. Later on they can always replace them as money becomes more available,” says Narkiewicz.

Another challenge adding to the current real estate conditions is dealing with growth management laws. Narkiewicz says some planners and neighborhood activists oppose land-use plan changes or zoning that would increase population density.

Narkiewicz says, “Sometimes it’s a matter of the numbers game. At two units to the acre, the lot costs X. At four units to the acre the lot might cost half that amount.”

He adds that some of the growth management trends are to establish urban service boundaries. “So that within those boundaries is where all the growth is to occur, which then artificially limits the supply of land that is available for development — and when you limit the supply of something it just bids the price up. When you bid up the price of raw land, obviously, the price of finished lots goes up and therefore the price of the finished homes goes up. So government has a tendency, through its regulatory process, to artificially inflate the cost of housing and these are some of the issues that we’ve been battling throughout the country,” says Narkiewicz.

by Phoebe Chongchua

http://www.realtytimes.com/

Real Estate Outlook: Will Housing Turn Around?

Tuesday, March 4th, 2008

  After what can only be described as the toughest year for American housing markets in decades, the big question is: When does this all begin to turn around?Two of the nation’s most prominent real estate economists weighed in this subject recently and their end of the year forecasts aren’t too far apart from one another.

Dr. David Seiders, chief economist of the National Association of Home Builders, had this to say: Our “housing forecast shows systematic improvements in home sales by the second quarter of 2008, improvement in home starts by the third quarter, maintenance of low levels of manufactured housing shipments throughout 2008, and modest declines in the real value of residential remodeling next year.”

“In this forecast,” Dr. Seiders added, “residential fixed investment continues to contract during the first half of 2008, but posts modest growth in the second half of the year.”

Now here’s the outlook from Dr. Lawrence Yun, chief economist of the National Association of Realtors: “The broad trend over the coming year will be gradual rise in existing home sales, but because sales are exceptionally low for the final months of 2007, total sales for 2008 will only be modestly higher than for 2007.”

Dr. Yun added that the key positive change underway has been that the “unusual mortgage disruptions that peaked in August were finalized in September and October,” and now the trendline in pending home sales is up.

You might think these two economists take notes from each other, but believe me … they have totally independent economic models, and answer to two very different constituencies — new home builders on the one hand, and they definitely had an extremely difficult year in 2007 — and Realtors on the other, who suffered the greatest pains in the once-booming markets where sales and price appreciation went off the charts in 2003 through 2005.

We’ll check back and monitor the accuracy of both forecasts as the new year develops.

But let’s be frank: After such a run of down and bad numbers through most of 2006 and 2007, will it really be a big surprise if housing demand and sales and new construction finally begin showing signs of recovery — even modest recovery — in the year ahead?

We at Realty Times think it’s a very good bet.

by Kenneth R. Harney

http://www.realtytimes.com/

How to Get More Buyers in Today’s Tough Market

Tuesday, March 4th, 2008

I’ve got three words for you when it comes to securing buyers in today’s tough market: Sell Yourself First.

In other words, don’t tell the buyer how many great listings you have and how they’re going to “absolutely love this next neighborhood.” And don’t tell the buyer about all the great deals builders have for “qualified homebuyers.”

Sure, getting a good deal is important, and yes they want to feel comfortable in that neighborhood, but that’s not the main reason people are going to work with you.

Why is that?

Because every Realtor they’ve met is saying the exact same thing.

Everyone is talking about the great rates. Everyone is talking about the super builder specials. And everyone has more listings than they know what to do with.

Instead, why not focus on something you know everyone doesn’t have. Something that is so unique, it only exists with one person in the entire industry.

Know what that is? You guessed it: You.

And not “you” in the traditional sense of how you look or talk (although that is important), but the overall value proposition you bring to the table.

The level of professionalism you bring to bear. The amount of knowledge you possess. And perhaps most important of all, your ability to communicate and problem solve within your buyer’s specific set of circumstances.

Not only will that help you stand out, but it will have buyers gravitate towards you as they realize you’re someone who knows what you’re talking about and can help them navigate this “topsy-turvy” market.

So how do you do that? How exactly do you “sell yourself first” without coming off as too salesy?

Well, here are a couple of ideas to try out.

Always remember the 12 x 12 x 12 Rule. Now if you’ve never heard of the 12 x 12 x 12 Rule, quite simply it states that whenever you meet new people you’re judged by:

  1. The first 12 feet away. Do you look the part?
  2. The first 12 inches away. Do you look as good up close as you did from a far? And,
  3. The first 12 words out of your mouth.

What we’re talking about here is perception vs. reality, and as a New Agent, this should be your Bible when it comes to generating more business.

Why?

Because unless you’re wearing a nametag that says “Sally New Agent,” no one knows your level of experience in the industry. All they know is what you say, and the perception they have when first meeting you.

And if it’s a positive, knowledgeable, “go gett’em” type attitude with them being the focus (as opposed to the commission you stand to make from the sale), then that will go a long way towards securing them as a client.

Become the Knowledgeable Expert. This can be tough sometimes for people to get, since as New Agents our first thought is on how much experience we don’t have in the industry.

And while that is a true statement, I’d submit that becoming the Knowledgeable Expert is something that actually transcends the days or weeks you’ve spent in the business. First though, let’s define our terms.

The Knowledgeable Expert is the type of person who knows a good bit about a particular subject, but isn’t stingy or preachy with the information. A conversation with you on real estate needs to be like talking to your neighbor about the lawn.

“Boy your lawn looks great,” you might say to your neighbor. “What are you using on it?”

“Well, I picked up a bag of Scott’s last month and it’s really doing the trick. I used to go with the cheaper brand, but it just wasn’t working. Anyway, I’ve been using Scott’s for a few weeks now, and it’s got this lawn looking as good as new. And the best part is, it also gets rid of those fire ants.”

“Really?” you ask.

“Yeah. It was $5.99 a bag down the street, and I was good to go. Real easy to put on too,” your neighbor replies.

“Huh.”

(Pause)

“So how do you keep all of those weeds back?”

“Well I ran across a product I’m really impressed with,” your neighbor starts, and off he goes describing something else.

Notice how he provided valuable information without overwhelming you in the process? And if during the middle of the conversation he told you that he was in the lawn care business, you’d probably consider his company the next time your yard needed work.

Why?

Because he obviously knew his stuff, and who wouldn’t want to work with an expert in their field?

Imagine yourself doing the exact same thing when talking to prospective buyers.

I call this person the Knowledgeable Expert, and they’re an absolute pro in their field. They’re the type of individual who knows a thing or two about their industry, and is happy to share it without the “What’s preventing you from making a decision today?” type questions.

Nobody likes that. They’re thinly veiled sales questions, and very few prospects ever respond favorably to them.

However, as the Knowledgeable Expert, you embody just what the name implies: An expert in your field, and you’re able to demonstrate this in a couple of ways.

  1. Staying on top of the latest industry news, and
  2. Asking good questions of the prospects you meet.

You’ll want to first get a handle on where they’re coming from, and why they’re thinking of buying in the first place. Then, relate your knowledge of the industry into something that adds value right away.

So as an example, if they say they want to buy a bigger home because they’re getting ready to start a family, then ask a couple of questions and make the following point:

“You know, I’m not sure how long you’re planning on living in this particular area. But I do know that the Gwinnett County school system is great from K-12, and as a matter of fact was recently voted one of the Top 5 school systems in the state.

“Again, it all depends on what you’re trying to do, but that wouldn’t be a bad start if you’re looking at it in terms of your children’s education.”

You see how easy that was?

You see how if you were a buyer you’d automatically take notice of whoever said that to you?

And that’s what I’m talking about when it comes to selling yourself first. It’s not about rate sheets and specials, but rather expertise and professionalism. It’s how you relate to people and problem solve within their specific set of circumstances.

 by Brian Hilliard

http://www.realtytimes.com/