An inside look at the residential real estate market in Southeast Texas including: the hottest neighborhoods, proven home selling strategies, home buying and negotiating tactics, median prices by neighborhood, average days homes are on the market, and professional advice on how to get the best deal when buying or selling a home.

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October 2009

Three Note Worthy Housing Headlines From The National News

Pumpkin patchEach day my inbox is filled with real estate news headlines from multiple national news sources.  Some days a few catch my attention.  Here's three that will give you some thing to think about this Halloween weekend.

Let's call story number one, "Nationally, Home Prices Hit Bottom in January."

NEW HOME SALES FALL, PRICES RISE
WASHINGTON (Associated Press) – Nationwide, sales of new homes fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from August to September, according to the Commerce Department.
Last month’s decline was the first since March and was off 7.8 percent from a year ago. However, the market has improved 22 percent from its bottom in January.
The median sales price of new homes, $204,800, was down 9.1 percent from September 2008, but up 2.5 percent from August’s $199,900.
Sales declined nearly 11 percent in the West and 10 percent in the South while they remained unchanged in the Northeast and increased 35 percent in the Midwest.

Let's call story number two, "Get Rid Of The Home Valuation Code of Conduct"

Daily Real Estate News  |  October 30, 2009  |   Share

House Committee Weighs Scrapping HVCC
The appraisal system imposed by Fannie Mae and Freddie Mac last May is under attack by the House Financial Services Committee and could be on its way out.

The “Home Valuation Code of Conduct” could be terminated by the proposed new Consumer Financial Protection Agency under a bipartisan amendment approved by the House committee.

The amendment would require the new agency’s director to replace the code with a set of rules developed through regular administrative procedures and pubic comment periods used by all federal agencies. The valuation code was the product of a settlement among New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, and the Federal Housing Finance Agency.

Critics say the code created more problems than it solved and has encouraged lenders to use inexperienced appraisers who don’t know the areas where they are doing the work, which is resulting in lowball valuations as well as higher fees.

The legislation under which this code would be scrapped is likely to pass the full House, but may have a tough road in the Senate.

Source: The Washington Post Writers Group, Kenneth Harney (10/30/2009)

Let's call story number three, "Expand and Extend the Home Buyer Tax Credit"

Senators OK homebuyer tax extension  click link for the full story. 

All three of these national headlines promise good things to come for the national housing market.  Good news for the nation, means good news for Southeast Texas housing too.   Happy Halloween.

 

 


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Home Buyer Negotations: How Much Do Sellers Really Come Off their Asking Price?

Other than "How is the Southeast Texas real estate market?", the question I hear the most is, "How much is the seller willing to come off their asking price?".  Home buyers are always eager to know the magic number.  The reality of it is that often there is no magic number.  The motivation of the seller often determines how much they are willing to come off their asking price.  Some sellers won't come down much at all but others with a motivation to sell often do come down on price. 

That said, we can look at sales by area over the past ninety days and look for trends. The data analyzed is from the Beaumont MLS.  245 homes sold within the past ninety days priced from $100,000-$200,000 which is the most active market segment at the present time. Cool chart inserted below: 

Percent_dom_area

It may seem obvious but the shorter length of time a home is on the market the less likely the seller is to come down on price.  Areas shown above with the lowest average days on the market also have the highest % sold price to asking price.  As days on market go up sellers usually become more negotiable.

Look at the two areas with the longest average days on the market for the past ninety days.  Beaumont North 5 and Pinewood both average over 185 days on the market and less than 90% of the asking price for the final sold price. 

Five things you need to know about Southeast Texas home sales ($100,000-$200,000) that closed in the past three months:

  • The average days on the market was 110.
  • FHA loans have been used than any other type of financing.
  • Lumberton and Beaumont are the areas with the most sales, followed by Silsbee, Vidor, and Orange County.
  • The median price was $136,000.
  • Over 20% of home sellers sold for the full asking price or more. (Not including closing cost contributions)
  • On average sellers throughout Southeast Texas sold their homes for 94% of their asking price.

So next time someone asks you how much to offer for a home you know to tell them there's no magic number but 94% of the asking price is a pretty good guess at how much the seller will be willing to come down.  If you want more strategies on how to make the best offer call me.
 

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Southeast Texas Home Buyer Tax Credit Extension In Works

Taxes

The first time home buyer tax credit which has been responsible for as many as 50% of the home sales that have occurred this year is set to expire on November 30th.  Right now the Senate is working on an extension.  There are a few changes in the proposed legislation. 

Fresh from the Daily Real Estate New headlines, here's the latest:

Daily Real Estate News  |  October 28, 2009  |   Share

Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.

Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)

The exciting part of the extension is the step-up provision.  We may start to see some better activity in the mid and upper price ranges once the ink is dry on the new legislation.

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So, Really How is the Southeast Texas Housing Market?

This week the Beaumont Enterprise ran a feature article that said homes in Southeast Texas will gain more value than homes in any other market in 2010. 

We love press like that!  Confidence affects the housing market.  When people are confident about their jobs, the economy, the housing market, they buy stuff.  That includes houses. 

But the truth of the matter is our market has strong segments and it has weak segments.  Today, here's a inside look at the weaker segment. Homes priced above $300,000.

$300,000 plus

By the numbers homes above $300,000:

Fannett has 10 homes for sale.  1 closed in the past ninety days.

Lumberton has 26 for sale. 5 closed in the past ninety days.

Orange Co. has 10 for sale. 2 closed in the past ninety days.

You get the picture.  If you are buying a upper end home you will have a good selection to choose from.  If you are selling one, there is an excess of inventory available in most areas right now. 

Here's three other things to know about the residential housing market segment of homes $300,000 and above:

  1. There are 203 active listings in the Beaumont MLS.  33 closed since Aug. 1, 2009
  2. On average they spent 86 days on the market which is not that long.  The best of the bunch still sell pretty fast.
  3. The fastest selling area was Beaumont W6 (don't know where that is? call me).  Those homes averaged less than 30 days on the market.

So, really how is the Southeast Texas housing market?  Now, you know a little more about the true picture in the upper segment.  Next week, a look at the hottest price range $100,000-$200,000. 


 

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Oh How House Hunting Has Changed

When my mother first started selling homes for Coldwell Banker, back when I was in middle school, before computers, cell phones, and the world wide web, the local MLS used to print books with all the listings.  They were like big telephone books with all the properties that were for sale.  As soon as a book was published it was out of date.  Homes went under contract every day just like they do now.  But the local MLS couldn't publish a new book every day so the information source went out of date almost the day it arrived.

By the time I started selling homes for clients, laptops and cell phones were tricks of the trade.  The local MLS boards had all gone to computerized data bases of the properties that were for sale through the multiple listing service.  Remember the old DOS data bases.  Ugh.  Yes, I do too and they were not user friendly.  Today, oh how house hunting has changed.

Coldwell Banker is committed to being the leader in technology in the real estate business.  One of the research studies done by the company shows how home buyers look for homes today.  Take a look.

Sources for home search 
  

  • Over 80% of home buyers use the internet to find their next home.
  • Over 80% of home buyers use a real estate agent to help them with the transaction.
  • Yard signs are still a big factor in how home buyers find their next home.
  • All other print media sources are a lot less important than they were a few years ago.

If you know home buyers are using the internet more than ever to find their next home then don't you think you should sell your home with the company that gives their client's homes more internet exposure than anyone else. 

Have you seen:

Coldwell Banker's YouTube Channel On Location

Coldwell Banker on facebook

Coldwell Banker's Seller Resources Website

And you have to see the new Coldwell Banker iphone app.  Its really sweet. 


Now before you sell your home ask yourself this, if most buyers these days start their home search on the internet don't you want to list with a company that will put your home in more places on the internet that any other company?  Yes, you do.  Oh, how house hunting has changed.

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Within 15 Seconds Buyer Has Opinion of Your Home

Front door 3 The first impression is critical when it comes to selling your home.  You've probably heard the old saying, "You can never change your first impression".  But did you know that within fifteen seconds a buyer has developed a lasting opinion of your home that could ultimately be the difference between putting up a sold sign or waiting on another buyer.

Here's eight tips you need to know before you put your home on the market.

  1. Buyers need to "feel at home", neutral colors, subtle background music, and a clean, new smell help set the stage.
  2. Curb appeal can not be underestimated.  Landscape, trim shrubs, fertilize your lawn.  The yard is making an impression before a buyer even gets to your front door.
  3. The doorway is a focal point.  Repaint, apply new hardware, install a new front light, and/or replace house numbers.  You'll be amazed at what small details can do to help you sell faster.
  4. Appeal to a buyers sense of light.  People react more positive to bright light than dark space.
  5. Appeal to a buyers sense of smell.  The smell of cleanliness can have a huge impact.  Lemon oil creates a lasting clean smell.  Fresh flowers can do the same.  Baking cookies or bread is a real attention getter.
  6. Your kitchen is probably the most important room in the home.  If it needs updating you might want to get a few estimates.  The money you spend could mean a faster sale and higher sales price.
  7. Small details have a big impact.  Any repair work left undone that the buyer sees will have him/her deducting value off your asking price. 
  8. Know the neighborhood and understand the competition.  In order to sell your home in the shortest possible time for the highest price obtainable you need to consult with a local expert about the current market. 

Pay attention to these eight tips.  The end result can dramatically increase the saleability of your home.  Need some other home selling tips?  Call me. 

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Selling Your Southeast Texas Home? Stop, Look, Read

September residential home sales data has just been released by the Beaumont MLS.  Its on its way to The Real Estate Center at Texas A&M. 

If you are currently selling your home or planning to put your home on the market soon then here's five things you need to know.

Sept months supply

  1. In all but three price categories we have an excess supply of inventory on the market.  (Six months supply is considered ideal for buyers and sellers)
  2. In the higher price ranges, homes priced above $300,000, there is over a year supply of homes currently for sale.
  3. Over $400,000 there is close to a 4 year supply at the current sales pace.
  4. The majority of the home sales in September were in the $120,000-$150,000 price range.
  5. Average sales price for September was $150,495.

Sept sales by $

Here's how it looks on a graph. 

Buyers in almost every price category have a good number of homes to choose from.  If you are trying to sell a home you need to know what your competition is doing.

Every home seller should know these three things about the competition:

  1. How many homes in your neighborhood comparable to yours have sold in the past ninety days?
  2. How many homes in your neighborhood comparable to yours are currently on the market?
  3. What incentives (seller paid closing costs) have successful home sellers paid to get their home sold in the past ninety days?

If you are selling your home and you don't know these three things ask your real estate agent.  If you are planning to sell your home and want to know these things then contact me. You can reach me by blog, by phone, by text or email. 


 

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Economists Predict Housing Recovery in 2010

Cows in storm

Rainy days and Mondays get a lot of us feeling down, so here's a story that may lift your spirits. 

From the Associated Press, Happy Tuesday.

Daily Real Estate News  |  October 13, 2009  |   Share

Economists Predict Housing Recovery
Economic forecasters predict that 2010 will be the first year since 2005 for housing to contribute to the growth of the U.S. economy, according to a survey released by the National Association for Business Economics.

Home prices are expected to rise 2 percent next year, but forecasters don’t believe the increase in prices will discourage homebuyers.

More than 80 percent of economists surveyed by the NABE think the recession is over and recovery has begun, but they expect the expansion to be slow because unemployment persists.

Source: Associated Press, Mae Anderson (10/12/2009)
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Four Amendments On Nov. 3rd Ballot That Affect Homeowners

Reason to voteIn less than thirty days, the voters of Texas will have an opportunity to express their desire on the way the state handles the taxation of residential property. 

You have a voice.  The question is will you use it.  The Texas Association of Realtors is spreading the word about four amendments on the upcoming ballot that will directly affect all homeowners in the state. 

The recommendations made by The Texas Association of Realtors are to

 Vote yes for Proposition 2, 3, 5, and 11. 

If you are like me and want to learn about what you are voting for read this article,  Important Issues For Texas Homeowners

Most of these propositions will help bring continuity across the entire state in the way appraisals are handled.  It will be good for all Texas property owners to know that the way their county handles property value and taxation is the same as every other county in Texas.  One of the biggest reasons why continuity is important: State funding for public schools is based on the taxable property in each school district. 

November 3, 2009, mark the date.  Make time.  Vote! 

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Southeast Texas Home Sales Summer of 2009

In real estate the summer is the selling season.  Year after year more homes change owners in the summer months than any other time of the year.  Maybe its the kids out of school, changing schools, starting a new school factor.  Maybe its the days are longer.  Or maybe its just become a known behavior but most of us move in the summer. 

Homes sales this summer can be compared to the weather.  Certain parts of the market were unusually hot (first time buyer homes) and other than parts of the market (luxury homes) could be called uneventful.  Southeast Texan's were spared a hurricane in 2009 but we weren't spared from the increased unemployment rate and overall economic slow down that hit the rest of the country this summer. 

Want to see how summer home sales in 2009 compared to the past three years?  You're in luck.  I have a graph for that.

Q3 home sales 4 yr
In case you didn't know it 2007 was the busiest year for home sales in Southeast Texas.  There was more residential sales activity in 2007 than any other year.  2008 home sales in the third quarter decreased some 25% from the record.  Keep in mind September of 2008 was a statistical anomaly thanks to Hurricane Ike.  Only 83 homes closed last September.  

So how is 2009 stacking up?

  • July had about 10% fewer sales than July of 2008
  • August was virtually unchanged from 2008.
  • September had almost double the number of closings but keep the Ike factor in mind.

Its a little hard to say what is the "new normal" for Southeast Texas third quarter home sales.  In a healthy strong economy one could reasonably expect over 600 closings during the busiest selling season of the year.  2010 will tell us a lot about the market.  If the third quarter numbers are back up over 600 then we can write off 2008 and 2009 as a slowdown due to the economy and tighter financial markets.  If 2010 home sales stay below 600 in the third quarter we may have to look at 2006 and 2007 as unusual boom years in the real estate market. 

Anyone what to wager a guess as to what the third quarter of 2010 will bring?  As for me, I'm going to go with a stronger economy and more home sales.  If you are looking to invest while prices are low you might not find a much better time than the fourth quarter of 2009.  As for now, so long summer of 2009. 

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