Bob Posner

I’m not sure if people want to hear how horrible things are for me or if they want to hear that I am now working as a night watchman at the mall, but I tell them the truth. I am having a pretty good year. Much better than last year in fact. Now, I am not going to win the realtor of the year award in the Dayton area but things are going just fine. Yes, things have changed. Loans are harder to get approved, there is less activity in the marketplace, and houses take longer to sell, but my phone is still ringing. People are buying and people are selling. The news would indicate that real estate is dead, done, no pulse. This is just not the case. We do nor live in an area where housing prices are dropping 30%. The Dayton area is experiencing some depreciation in home values but that just means there are some bargains out there. You get a little less when you sell but you make it up when you buy. The sky isn’t falling.

The Dayton Area Board of Realtors just released housing numbers for the first quarter of 2008. The number of homes sold were down 14.61%. Surprisingly, new listings were down 3.3%. I would have expected that number to be higher.

The good news, not great news is that the average home prices in the area have declined only 4.15% in the first quarter. In many places around the country housing prices have dropped dramatically. Homes in Las Vegas were down 23%, San Francisco down 17% and Los Angeles down 20% in February alone. Robert Shiller, a Yale economist, said earlier this month that home prices could fall 30 percent from their peak in many large metro areas. These cities had huge appreciation rates for many years.

Dayton has generally experienced a modest 2-4 % annual appreciation rate on homes in the area. I think home prices for the year will drift down due to pressure from the economy, media hype and foreclosures. I just don’t think average price declines will be anywhere near the depreciation other areas of the country are experiencing. I expect it to be in the single digits if that.

Currently, the market is very active and many buyers are pulling the trigger and purchasing houses.

I occasionally wake up in the middle of the night and when I do I watch TV for an hour or two, sometimes three. I’m a sucker for infomercials. That is how I found P90X. I was sceptical at first but I am a believer now. I was going to a local gym, Neo-limits, on a regular basis but I needed a push. Wow, if you want to get in great shape you may want to try this program.  I must warn you it is tough. I have been on it for 5 weeks now. I have lost 7 pounds and I am feeling good. It mixes strength training, aerobics, yoga, karate, core training and some other things on a day to day basis so you really cover a lot of ground. My lower back feels better than it has in years and I feel more fit. The program lasts for 90 days so I look forward to the next 2 months or so. Some people do it over and over again. It also comes with a diet program to follow and you can go online and communicate with thousands of other people with questions. I like it and recommend it and I am not a young kid. Let me know if you are doing P90X or if you have questions.

First impressions are so important when you put your home on the market for sale. With so many houses on the market I advise all my clients to make the most out of each and every showing. I recommend the following four basic guidelines to follow.

1)   Make the house shine. Everything must be spotless including the floors, walls, drapes and windows.

2)   Eliminate odors. Bad odors can kill a showing faster than anything else. Burn candles, bring in flowers and display any kind of fragrant materials.

3)   Remove clutter. My general rule is remove clutter until it hurts and than remove some more. Remove knickknacks, excess furniture and only keep out the essential furnishings and focus the attention on the best features of the room.

4)   It is OK to use color.  Fresh paint makes a huge difference.  Have fresh flowers especially in the warm weather months. Upgrade the landscaping to improve the curb appeal.

By following these steeps sellers can do a lot to maximize their market opportunities and increase the perceived value in the minds of perspective buyers.

The national media has been forecasting the future market conditions of residential real estate from many different points of view. While their prognostication is always gloom and doom (much more interesting than positive news) it must be asserted that it makes no sense to forecast weather on a national basis than it does to forecast real estate on a national basis.What happens in naples, Florida has little to do with what happens in the real  estate market in the Miami Valley. The local market has been a stable structure for many years and all indications are that this condition will continue.  There are many buyers out looking at homes every day. Yes, there is more inventory of houses on the market currently but a home that is priced correctly will sell.

I did a search of the number of houses  and condos in the Dayton area that have sold or are sale pending since January 1 of 2008. So far as of Valentines, day February 24th,  the number is 1037 homes. That is a big number. Every day the media is reporting bad news about real estate around the country but the market here is bustling. If you ask any local agent worth their salt, they will tell you that market activity is growing just like it does every year at this time. Houses are going on the market and there are a plethora of buyers out kicking the tires and writing offers. There are buyers out looking for good quality homes at fair prices.

The big difference I have experienced is there are a lot more bank owned properties on the market. So what, my buyers have more opportunities  if they are patient.  Bank owned are a little more competitive, and sometimes involve multiple bids but to the right buyers they can be very beneficial.

There are strategies that can help you sell your home-for a fair price during these slower times.

BEST MOVES FOR SELLERS

You might have to be very aggressive in the current environment, because the  local real estate market has an oversupply of homes for sale. Here’s how …

Don’t start with a high price. Asking price is the single most important reason that a property does not sell. In this buyer’s market, it is a mistake to set a high price and assume that you can lower it later, if necessary, in negotiations. Area real estate agents pay the most attention to listings when they first appear on the market. These days, they may not even bother to show your home to buyers if it is overpriced.

If you start out too high, by the time you do lower your price, real estate agents will have newer listings to show buyers. The buyers who do see your home will view your price cut as a sign of desperation and bid low.

The correct price to ask for your home in this market is toward the low end of the range of prices being asked on comparable homes currently for sale in the neighborhood.

Pricing your home as a slight bargain ensures that as many potential buyers as possible will walk through your door. This is crucial at times like these when home sellers outnumber buyers.

Recheck the asking price of comparable listings every two to four weeks if your home has not sold. When you do a price reduction, make it large enough so that the new price is very competitive with comparable homes or is even a “best buy.”

Important: The amounts your neighbors sold their homes for a year or two ago should not even enter your thinking when you set your asking price. It was a very different market then, and those prices are irrelevant today.

Helpful: If your home is not attracting many showings, the price is probably the problem. If it is attracting showings but not offers, the home itself is most likely to blame.

 Fix it up first. “Fixer-uppers” tend to be ignored in slower real estate markets because buyers can find good deals without breaking out their tools. If your home is in need of substantial repairs, it is best to get the work done before placing it on today’s market

 Pay attention to curb appeal.  Home buyers have so many options that if a property doesn’t look attractive from the street, they will drive past it without even stopping.

What to do: Spend a weekend beautifying the front of your home. Replace damaged window screens…

tidy up the lawn and landscaping … pressure-wash the sidewalk … add mulch around trees and in flower beds. If necessary, have the home’s exterior repainted, particularly the front door and trim … and upgrade outdoor lighting fixtures, doorknobs and your doorbell switch or knocker. These small details can evoke an emotional reaction in a home shopper that can lead to a sale.

Freshen up inside. A fresh coat of paint and new carpet or refinished wood floors can make a big difference. It also pays to hire a professional cleaning service to remove years of grime from your kitchen and bathrooms.  Smell matters, too. It is extremely difficult to sell homes that reek of cigarette smoke or pet and cooking odors. Perfuming the house with scented candles or potpourri doesn’t fool anyone

Offer incentives to buyers and brokers. Many home sellers are “bribing” buyers with cash, cars and flat-screen TVs. Most effective incentives …

Help with closing costs. Cash-poor buyers might have trouble paying upfront mortgage expenses. Offer to pay a portion of these costs, and buyers have a reason to choose your home.

Important: If you offer a sales incentive, disclose this in your sales contract with the buyer. If the incentive is not mentioned in the contract and the buyer later defaults on the loan, the lender could claim that you and the buyer engaged in fraud by manipulating the sale price of the home to include an asset that the lender could not foreclose upon.

  Don’t overnegotiate. If a potential buyer’s first offer is reasonable, consider accepting it, rather than making a higher counteroffer. Buyers have so many homes to choose from today that they sometimes move on to other properties, rather than make second offers when sellers don’t accept their initial bids. If you do not need to sell quickly or your home is garnering lots of showings, counter-but if you need to sell fast and the initial offer is reasonable, do not risk losing the sale over a relatively  small amount of money.

The local Dayton area real estate market was effected by national trends with a downturn in sales activity in 2007, but not to the extent that many area markets  around the country experienced. This applies especially in the area of local home values.The average sales price for a single family home in the area for 2007 showed less than  1% depreciation from the average sale price for a single family home in 2006. $134,763 compared to $136,008.The total number of single family home sold in 2007 was less than 10% fewer than the number of single family homes sold in 2006.  2007 was the forth best year ever in terms of overall sales activity in the Dayton area market.

This shows remarkable stability in the greater Dayton area.  Many areas around the country are experiencing double digit declines in both home values and homes sold. If you are thinking about selling your current home and buying a new one, you may get a little less for your house, but you will be able to purchase a property for less.

Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. In the last few years, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short−term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage−backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds. 

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage−backed securities. 

Unfortunately, selling mortgage−backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage−backed securities which cause mortgage rates to drop.

The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuously monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate.