Hello everybody! My name is Heather Bernier and I am an agent for The Cowan Group. I am recently married, and my husband and I have decided to make Tallahassee our home! We are very excited about living here! We have been here for almost 3 years while my husband attends graduate school. While he has been in school, we have rented a darling little condo in a NE neighborhood, but now that school is wrapping up, we are faced with one of the most important decisions of our lives…do we continue to rent, or do we buy our first home?
Seems to be an easy enough decision right? Why would anyone continue to rent? Why not buy, and build some equity? I have to be honest, the market is a little scary right now, but we aren’t going to be ready to buy until August of ’08. Some market predictions are forecasting some recovery by then, so hopefully my first-time home buying process will be smooth and easy.
I am going to take Cathie’s advice. My husband and I are going to go and talk to a lender and see what we will qualify for. That way, as I am showing houses and doing market research, I will know the limitations I have to my own search parameters. I can start to shop for homes in areas that I like and not have to wonder if I can or can’t afford the home I am interested in! That is a prospect I am very excited about. It will be like window shopping for homes! Look...but, don’t buy…yet. As a realtor, I love to help folks find their perfect home. I am so excited that I will also be looking for a place to start my own family!
I will be sure to keep you apprised of my progress. I will be glad to share with you my experiences as a Realtor/new wife/house hunter. It should prove to be a valuable learning experience and hopefully, a fun one too!
Monday, November 26, 2007
Tuesday, October 16, 2007
Six Cures for the Real Estate Market Blues
I love real estate. Buying, selling, and brokering properties are my passions. I loved real estate even when the interest rate on a home loan was what I now pay on my credit card.
Recently I have been researching the current housing market for a report. And, I can’t help but laugh a little to myself on the dire predictions that infer that the whole notion of real estate as an investment is flawed.
Yes, I think we are in a downturn, and will continue to be in a downturn and then plateau for another year, maybe two. But real estate is a great investment. Always was, and still is. If you are letting the news media make you feel that the value of real estate in your life is diminished – do not take it!
The present economic condition is a culmination of many factors, and greed in the real estate market was just one of many. But real estate will endure.
Think about your home, what it has meant in your life, or what part of the dream for your family it has played. The family home will continue to be important to us forever.
So if you have been getting blue about the Chicken Little news, try one of my cures below. There is something for everyone!
1) Call a Realtor and get a list of interesting properties. Enlist your sweetheart, take a Sunday drive and look at what is for sale. Drive by homes, lots, and commercial properties. Actually seeing some of the inventory will give you more confidence in the market. Real estate is not like stocks; you can reach out and touch it. It has real value.
2) Think about and appreciate the money you and your family have made and/or the equity you have built in real estate. Building equity in real estate is a way of life for our country, and will continue to be a major source of wealth for many Americans.
3) The people who had faith in and invested in stocks when there has been a major stock market downturn were rewarded. It will be the same with real estate. Think of the possibilities. Call a Realtor; ask them about their recommendations for long term investing. Pricing on lots is very favorable right now. If you are a business owner but rent the real estate, think about securing your future by owning your business location. . Buy now and you will be rewarded in the future.
4) Consider refinancing your variable rate mortgage for a fixed rate mortgage while the rates are favorable. Like Realtors, Mortgage Brokers have time to give you personalized attention right now, as opposed to the not too distant past when we all barely had time to return calls.
5) If you have thought about building your perfect home, build now. There are great rates, and builders who have the time to pamper you.
6) If you are a renter, don’t let news reports about the mortgage industry deter you. Go and talk to a mortgage lender. If you don’t qualify today, get advice about what you can do to qualify in the future. What debts should you pay first? What percentage of the credit limit on credit cards can you use without a negative impact on your credit rating? How much cash you will need to purchase? These are all questions to ask. Making a plan is the first step in getting you on the road to home ownership and to turning dreams into reality.
My recommendation is to take advantage of the current market and to have confidence in the long term value of real estate. The value is in building wealth over the long term and the value is in enhanced lifestyle. Owning a home or owning the perfect place for your business is the American dream that still has great value.
Tuesday, October 9, 2007
Looking Forward
Many different elements will come into play regarding the recovery, and how long it takes. Like improving your physical health, improving the health of the economy and of the real estate industry takes many different improvements in many areas. We need to address the mortgage and home building industry practices and the many pending foreclosures, re-assess interest rate manipulation, and consider ideas to assist and reward our hard working teachers, government employees, and service sector workers with assistance to purchase a home.
In addition the overall economy needs help; our huge national debt, and huge financial and emotional commitment to the mid-east conflicts must be addressed. We must make the bleeding stop. No matter any one's politics, if you view the country's financial and emotional abilities the way you view your households assets and capabilities, you know there is a limit.
There is promise in the idea of closing the gap on the affordability index, and I am not alone."A previously robust housing market has produced an increase in the supply of available housing," Crist said. "However, the cost of these homes is still beyond the reach of many Floridians. Crist said his proposal would provide 3,000 new home-buyers with $10,000 in down payment and closing cost assistance and loans at one-quarter point lower than market rates. "We must re-stimulate Florida's housing market and help Floridians achieve home ownership."
Regarding the past as it pertains to the future - we need to learn our lesson of easy money, greed, and of things that are too good to be true. Early on in the housing downturn, experts were referring to a "market adjustment". We are having more of an awakening and a reckoning. The interest rates were propped up artificially for too long, and the greed was rampant, even embraced and admired. No longer. I think we need more than "get real" pricing; we need "get real" attitudes. Real estate for most is a long term investment, always has been and always will. Flipping properties at low interest rates is not healthy for the economy when it is the hobby in vogue.
What can individuals do? It is to the benefit of the entire community that sellers, buyers, and real estate professionals work to reduce the inventory - whether it is by taking your property off the market, or by taking advantage of today's prices and purchasing a property for long term appreciation (no more flips!), or by the Realtor and seller getting real and putting the real selling price on real estate. If you are thinking of selling and can wait, then do.
The market in Tallahassee "chugs along" and will continue to do so. Real Estate is a good investment - if you have money to invest do. If you are buying a new home you will be looking at value. North Florida is a great place to invest - it is relatively undiscovered even today.
After we weather the "market adjustment" we need to be cautious and responsible in our real estate endeavors. Forward thinking industry movers and shakers will be looking at what will sell in the future: Affordable and smart homes, not just affordable to buy but to maintain, will be in demand. And as an overlap on affordable to maintain; green homes and green communities will be what the future embraces - that cost less to maintain in money, and less stress on the environment and community.
Let's "get real" for tough times ahead, and for a market that adjusts in many ways. Le's get a vision of the future real estate industry as healthy and fair and good for the community, and make it happen.
In addition the overall economy needs help; our huge national debt, and huge financial and emotional commitment to the mid-east conflicts must be addressed. We must make the bleeding stop. No matter any one's politics, if you view the country's financial and emotional abilities the way you view your households assets and capabilities, you know there is a limit.
There is promise in the idea of closing the gap on the affordability index, and I am not alone."A previously robust housing market has produced an increase in the supply of available housing," Crist said. "However, the cost of these homes is still beyond the reach of many Floridians. Crist said his proposal would provide 3,000 new home-buyers with $10,000 in down payment and closing cost assistance and loans at one-quarter point lower than market rates. "We must re-stimulate Florida's housing market and help Floridians achieve home ownership."
Regarding the past as it pertains to the future - we need to learn our lesson of easy money, greed, and of things that are too good to be true. Early on in the housing downturn, experts were referring to a "market adjustment". We are having more of an awakening and a reckoning. The interest rates were propped up artificially for too long, and the greed was rampant, even embraced and admired. No longer. I think we need more than "get real" pricing; we need "get real" attitudes. Real estate for most is a long term investment, always has been and always will. Flipping properties at low interest rates is not healthy for the economy when it is the hobby in vogue.
What can individuals do? It is to the benefit of the entire community that sellers, buyers, and real estate professionals work to reduce the inventory - whether it is by taking your property off the market, or by taking advantage of today's prices and purchasing a property for long term appreciation (no more flips!), or by the Realtor and seller getting real and putting the real selling price on real estate. If you are thinking of selling and can wait, then do.
The market in Tallahassee "chugs along" and will continue to do so. Real Estate is a good investment - if you have money to invest do. If you are buying a new home you will be looking at value. North Florida is a great place to invest - it is relatively undiscovered even today.
After we weather the "market adjustment" we need to be cautious and responsible in our real estate endeavors. Forward thinking industry movers and shakers will be looking at what will sell in the future: Affordable and smart homes, not just affordable to buy but to maintain, will be in demand. And as an overlap on affordable to maintain; green homes and green communities will be what the future embraces - that cost less to maintain in money, and less stress on the environment and community.
Let's "get real" for tough times ahead, and for a market that adjusts in many ways. Le's get a vision of the future real estate industry as healthy and fair and good for the community, and make it happen.
Here are my recommendations for your real estate future
- If you can afford to keep your real estate, do. For the time being, the properties on the market should only be the "must sells".
- If you do put a property on the market, over-pricing hurts you and others in the market place. You are glutting the market with a property you are not ready to sell - or else you would have priced it accordingly. (If a prospective client wants to "put a property out there to see what happens" I will not list it - This is interpreted by real estate professionals as meaning, "I want to put it on the market for too high a price in case there is a fool out there". Sorry folks, the fools buying expensive real estate have bought it - they are now having trouble making the payments!
- If you do put your property on the market, make it competitive in appearance and functionality to the best of your ability - clean, paint and make the yard look immaculate, but do not renovate the kitchen - price it accordingly for an outdated kitchen - but make that kitchen spotless! Have your inspections, and have everything in good working order.
- Lower the price every 6 weeks or more - as the pricing in the nation falls, and the pricing in Tallahassee falls, then so should your pricing.
- If you are buying property, then treat the seller's fairly. Do not give them hope that you are interested in a property when you are not. Do not make insulting offers. If you are looking for investment property, remember that the affordability index is still showing a gap increasing between pricing and what a whole segment of our community can afford. I would recommend looking at residential properties under $250,000, and development property that can be developed for work force housing. Now and during the coming year are when buyers are in the drivers seat - but do your research, and rely on an experienced Realtor. And again, remember that there are still folks out there who were not able to buy. This is a market that may become empowered as our leaders continue to recognize this and pave the way for affordable housing and work force housing. If we can work on helping hard working folks who have not been able to buy a home we can begin to take some of the lower priced inventory off the market - it is a win-win idea.
Next: a look forward...
The Tallahassee Area Housing and Real Estate Market
The local market is seeing a decline, and many local buyers now are bargain hunters or folks relocating to Tallahassee, who have compelling reasons to purchase. We are fortunate to have an local economy in Tallahassee that benefits from State Government, and 2 universities and the community college as major employers. Yes, we are affected, but we have the stability of the local economy to soften the blow.
On August 23rd the Tallahassee Democrat quoted John Adams, president of Enterprise Florida at the Tallahassee-Leon County Economic Development Council board of directors' annual meeting: "The sky is not falling. We have got a real soft housing market. This is statewide. This is not a Florida phenomenon," Adams said, adding it is happening in markets around the South and across the country. However, Florida's economy is "still very robust," he said."
According to the Tallahassee Board of Realtors Multiple Listing Service (MLS) there are currently 3461 singe family detached homes on the market in the Greater Tallahassee area, which includes Leon, Wakulla, Gadsden and Jefferson Counties. That is a big inventory. And the chart below (from the MLS) shows we have some issues - Please bear in mind that the 2007 figures are as of Sept 16, 2007, so are not a complete year.
Here are some problems - note that the 2007 percent expired column is high - I think that more would sell if pricing were at what I call the "get real price". I bet that many of the expired properties were over-priced. The asking price should not reflect what you think you could have made off the property 2 years ago - it is the price that would cause a buyer to commit today. The percent sold is low, and we have too much inventory!
The sales price ratio to list price is dropping - why - because we are not keeping up with pricing. The low percents sold, the high number of expired listings, and the decreasing sales price to list price ratio, and the increasing days on the market tells me we still have not adjusted pricing sufficiently If prices are dropping nationwide and locally, then the pricing on your property needs to be ahead of the curve to get sold. Standard and Poor's Corporation pricing index shows a drop of 3.2% compared to last year. The median sales price nationally, according to the NAR is $228,900, down 0.6% from a year ago. Days on the market is higher than 2000 for Tallahassee. Remember your economics class, supply and demand? If your house is priced above the recent sales in your neighborhood, there won't be a demand. If it is priced below, well, you might just create demand!
The Greater Tallahassee area (Leon, Wakulla, Jefferson, and Gadsden) will see approximately 6000 new residents per year. According to the Florida Housing Data Clearinghouse population projections the area will continue to grow with 31,1169 more permanent residents from 2005 to 2010. We will see more people new to Tallahassee and Florida, attracted to the strong economic base, our industry and employers, and the great schools and great neighborhoods. We will also see more people coming to the area to find their final home, many from south and central Florida. They want the big city amenities like health care, shopping and the arts, and the small town feel. The Tallahassee area will always be a great investment.
On August 23rd the Tallahassee Democrat quoted John Adams, president of Enterprise Florida at the Tallahassee-Leon County Economic Development Council board of directors' annual meeting: "The sky is not falling. We have got a real soft housing market. This is statewide. This is not a Florida phenomenon," Adams said, adding it is happening in markets around the South and across the country. However, Florida's economy is "still very robust," he said."
According to the Tallahassee Board of Realtors Multiple Listing Service (MLS) there are currently 3461 singe family detached homes on the market in the Greater Tallahassee area, which includes Leon, Wakulla, Gadsden and Jefferson Counties. That is a big inventory. And the chart below (from the MLS) shows we have some issues - Please bear in mind that the 2007 figures are as of Sept 16, 2007, so are not a complete year.
| Total Listed | Num Sold | Pct Sold | Avg List Price Sold | Avg Sale Price Sold | Sale Price/List Price Ratio | Avg List Price Unsold | Pct Expired | Avg Days on the Market Sold |
2000 | 4,822 | 2,974 | 61.68% | $141,341 | $137,849 | 97.53% | $182,468 | 9.42% | 95 |
2001 | 5,049 | 3,399 | 67.32% | $150,771 | $147,160 | 97.61% | $191,491 | 8.97% | 91 |
2002 | 5,160 | 3,442 | 66.71% | $157,836 | $155,071 | 98.25% | $213,147 | 7.85% | 77 |
2003 | 5,180 | 3,993 | 77.08% | $181,572 | $175,808 | 96.83% | $246,045 | 5.42% | 64 |
2004 | 5,540 | 4,181 | 75.47% | $196,619 | $194,579 | 98.96% | $257,867 | 4.04% | 55 |
2005 | 6,907 | 4,572 | 66.19% | $226,928 | $223,971 | 98.70% | $310,162 | 3.84% | 50 |
2006 | 8,030 | 4,390 | 54.67% | $245,804 | $240,958 | 98.03% | $315,328 | 8.72% | 68 |
2007 | 5,928 | 2,467 | 41.62% | $247,715 | $240,196 | 96.96% | $290,322 | 12.28% | 96 |
The sales price ratio to list price is dropping - why - because we are not keeping up with pricing. The low percents sold, the high number of expired listings, and the decreasing sales price to list price ratio, and the increasing days on the market tells me we still have not adjusted pricing sufficiently If prices are dropping nationwide and locally, then the pricing on your property needs to be ahead of the curve to get sold. Standard and Poor's Corporation pricing index shows a drop of 3.2% compared to last year. The median sales price nationally, according to the NAR is $228,900, down 0.6% from a year ago. Days on the market is higher than 2000 for Tallahassee. Remember your economics class, supply and demand? If your house is priced above the recent sales in your neighborhood, there won't be a demand. If it is priced below, well, you might just create demand!
The Greater Tallahassee area (Leon, Wakulla, Jefferson, and Gadsden) will see approximately 6000 new residents per year. According to the Florida Housing Data Clearinghouse population projections the area will continue to grow with 31,1169 more permanent residents from 2005 to 2010. We will see more people new to Tallahassee and Florida, attracted to the strong economic base, our industry and employers, and the great schools and great neighborhoods. We will also see more people coming to the area to find their final home, many from south and central Florida. They want the big city amenities like health care, shopping and the arts, and the small town feel. The Tallahassee area will always be a great investment.
Place | 2000 | 2005 | 2010 | 2015 | 2020 | 2025 |
Leon County | 196784 | 217275 | 241492 | 264200 | 285199 | 303699 |
Jefferson County | 12701 | 13085 | 13798 | 14402 | 15004 | 15595 |
Wakulla County | 22084 | 25485 | 29898 | 33900 | 37798 | 41398 |
Gadsden County | 43054 | 44775 | 46601 | 48308 | 50011 | 51498 |
274623 | 300620 | 331789 | 360810 | 388012 | 41219 |
Next: My recommendations for your real estate future...
The National Housing and Real Estate Market
The National Association of Realtors (NAR) posted an article on their web-site entitled "Pending Home Sales Index Falls Largely on Mortgage Tightening." This article discusses the index of pending sales; a pending sale is under contract but not closed.
It says that index showed that contracts signed in July fell 12.2%, and are 16.1% lower than July 2006. NAR's Walter Malony starts out his article by saying that "Pending home sales, a forward-looking indicator, shows existing -homes sales are likely to decline in coming months as mortgage disruptions work their way through the housing market, according to the National Association of Realtors." Perhaps mortgage disruptions aren't the only important factor at work here, NAR's site also shows that in July housing affordability fell (-1.24%) from the previous month. Our prices are still artificially high, and have priced a segment of the population back to renting. In addition, I think even people not involved in the real estate industry are aware that the market is in decline, and will likely continue to decline. Many are holding off any real estate purchases if they can until they see what happens to prices.
Moving on to an interesting August statistic, according to the NAR site, the consumer confidence index dropped 6.9 points in August. Face it, our economy responds to all of us collectively - and this drop is telling us we do not feel things are going to get better immediately. I find this to be a troubling indicator. Although NAR tells us that the economy is adding jobs, and "keeps chugging away".
My friend Jim Green at Raymond James and Associates has forwarded their Housing Quarterly for the 2nd quarter 2007 to me. I read every word and was alarmed at some of what they said, but also admired that they are willing to stick their necks out with their opinions. Keep in mind that they represent clients in their stock purchases and Real Estate Investment Trusts, not their individual real estate transactions. They did a brilliant statistical analysis using NAR's data, with the US Census data, and some of their own. They compare the housing crunch of the years of 1986 to 1991, and compared those statistics to the July 2005 peak to present. If you believe what they infer, we will not recover for about another 3 years. The previous 1986 to 1991 cycle ended with an ultimate decline in new home sales of -55%, and currently we have declined from the 2005 peak to 32% nationwide. Again, infer that it will fall to the -55% or more. We are falling at a more rapid pace than the 1986-1991 period.
Next: a look at the Tallahassee housing and real estate market...
It says that index showed that contracts signed in July fell 12.2%, and are 16.1% lower than July 2006. NAR's Walter Malony starts out his article by saying that "Pending home sales, a forward-looking indicator, shows existing -homes sales are likely to decline in coming months as mortgage disruptions work their way through the housing market, according to the National Association of Realtors." Perhaps mortgage disruptions aren't the only important factor at work here, NAR's site also shows that in July housing affordability fell (-1.24%) from the previous month. Our prices are still artificially high, and have priced a segment of the population back to renting. In addition, I think even people not involved in the real estate industry are aware that the market is in decline, and will likely continue to decline. Many are holding off any real estate purchases if they can until they see what happens to prices.
Moving on to an interesting August statistic, according to the NAR site, the consumer confidence index dropped 6.9 points in August. Face it, our economy responds to all of us collectively - and this drop is telling us we do not feel things are going to get better immediately. I find this to be a troubling indicator. Although NAR tells us that the economy is adding jobs, and "keeps chugging away".
My friend Jim Green at Raymond James and Associates has forwarded their Housing Quarterly for the 2nd quarter 2007 to me. I read every word and was alarmed at some of what they said, but also admired that they are willing to stick their necks out with their opinions. Keep in mind that they represent clients in their stock purchases and Real Estate Investment Trusts, not their individual real estate transactions. They did a brilliant statistical analysis using NAR's data, with the US Census data, and some of their own. They compare the housing crunch of the years of 1986 to 1991, and compared those statistics to the July 2005 peak to present. If you believe what they infer, we will not recover for about another 3 years. The previous 1986 to 1991 cycle ended with an ultimate decline in new home sales of -55%, and currently we have declined from the 2005 peak to 32% nationwide. Again, infer that it will fall to the -55% or more. We are falling at a more rapid pace than the 1986-1991 period.
Next: a look at the Tallahassee housing and real estate market...
Opinions and Observations from a Broker
New opinions from many fronts make predictions that are hard for a real estate broker to hear. So I have evaluated some interesting statistics and forecasts for the national housing market, and the local Tallahassee area real estate market as well.
There is no doubt about it, we are headed for continued issues in the real estate industry. But collectively and individually, our actions while in the real estate arena will effect our local Tallahassee Market, and the National Housing Market.
As an industry professional, I can make a difference by not sugar-coating the truth; about the market, about the value of your home or property in today's (and tomorrow's) market, the cost of preparing your home or property for sale or the time it will take sell. How can you make a difference? Let's look a little further at what the "experts" are saying, and then we will discuss the ways that you can make a difference.
Over the next few days lets look at some of the hard facts and expert opinions, form our own opinions, and plan our real estate future accordingly. We can begin with the national real estate market, then the local market, my recommendations for your real estate future, and then we can look forward to a better real estate future. My apologies in advance for the statistical overload - I try hard, but really I am a number nerd.
Tomorrow: a look at the national housing and real estate market...
There is no doubt about it, we are headed for continued issues in the real estate industry. But collectively and individually, our actions while in the real estate arena will effect our local Tallahassee Market, and the National Housing Market.
As an industry professional, I can make a difference by not sugar-coating the truth; about the market, about the value of your home or property in today's (and tomorrow's) market, the cost of preparing your home or property for sale or the time it will take sell. How can you make a difference? Let's look a little further at what the "experts" are saying, and then we will discuss the ways that you can make a difference.
Over the next few days lets look at some of the hard facts and expert opinions, form our own opinions, and plan our real estate future accordingly. We can begin with the national real estate market, then the local market, my recommendations for your real estate future, and then we can look forward to a better real estate future. My apologies in advance for the statistical overload - I try hard, but really I am a number nerd.
Tomorrow: a look at the national housing and real estate market...
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