2009 HOPE FOR THE FUTURE

A client asked me today if I thought waiting a year for the market to return before listing there home was a wise idea, and I just started to laugh. Not because the question was a bad one, or was i laughing in a righteous way, simply because the truth is, "The market is here right now"! What do I mean...  Well having been asked this question a few times before i have had time to ponder the often asked question. What I mean is that no one knows how the real estate market will be in a month, in a year or even five! We can all predict what will happen, just like we predict the outcome of a ball game. We can look at the stats, the historical data and then we can speculate as to what might happen. I often respond to my clients when asked this question "I will get out my crystal ball and give you the answer." Wait just a moment...LOL 

There is some good news and factual data that I am happy to share. Interest rates are still very low (below 6%), inventory is still very high (A lot of homes to choose from), buyers and sellers can now actually fairly negotiate and not one-sided... (striking home inspections or overpaying), as I believe it should be. Short sales and foreclosures are very frequent in the market place, and as a buyer some great deals are there for the picking.  The fact is that housing market, although having a seemingly tough time, will prevail as a strong market. This is my prediction!    

Did you know that the nation is only at around 8% unemployment right now, where as during the great depression (Great Name) unemployment was at a high of 24%. Inflation in the 1970's was at 21% and the Prime rate during the 80's was at 18.87%. In the early 90's the U.S. had 653 failed banks and S & L's, and in the early 2000's the Nasdaq was down 78%. In 2008 the GDP was up 1% at 11.6 Trillion dollars. So don't be scared, continue to be wise and let us take back an optimistic attitude and help government back to working for the people, not the other way around.  We are not on the verge of another great depression as the media and the new administration leads us to believe. Let's leave politics out of the economic growth of our country and let's help free enterprise and capitalism reign again!!! What a great country we live in!!! 

Real Estate Trends for Fall of 2008

Bail Out? or Fail Out? Those of Us in this business of real estate saw this coming with the large number of foreclosures, short sales, and upside down loans over the past three years. What we fail to focus on in this challenged economy is the reason why we are here, and why the greed and politics have played such a huge part in this major fallout, in this less than stellar bailout being passed. 

I don't want to get into political matters with you but i need to make a few observations bout the recent events happening in the economic world here at home.  I will tell you that I am not confident in any administration right now and our voices need to be heard now more than ever. 

Evidence of this is in the appropriately named bailout itself. In order to have this vote be passed the Democrats did not have enough of its majority to pass this bailout on its own and the Republicans and some Democrats were not supporting many parts of the bill due to once again much of the fat in this so called bailout and once again becoming political. The Democrats pointing the finger at the Republicans and George Bush and vice versa with the Republicans. The truth is many Democrats and Republicans were standing up in 2004 defending the strength of Fannie Mae and Freddie Mac and denying any restrictions or scrutiny of any kind was needed. Many of these bogus loans given to under qualified individuals, groups and organizations were being given without restrictions or guidelines and a very flexible underwriting approach. Do you think any of these representatives had a vested interest in any of these rules and regulations not being passed. You bet there were. Many folks made some big bucks at the expense of others short comings. This is so typical of our flawed political system. Yes there is a cookie jar in this bailout, and many of the votes came at the expense of promised funding for each and every state supported by its representative. Is this not the very problem that plagues us and that got us into this mess in the first place? Come on people we need to speak up and start by imposing two things; 1. shorten term limits so the likes of John McCain and Joe Biden are not in office for 30+ years getting complacent with benefits galore. 2. Eliminate the so called power that these representatives do hold that makes them seem above the law and we need to have more of a say in what these representatives do. We the people are supposed to hold the power yet the politicians and special interest groups that both parties are in relations. Although elections, re-elections, funding for campaigns, all becomes a major part of the problem with power and corruption leaks through the cracks and starts to stink like it does now. The big bucks and benefits these candidates are given by government are too generous. What happened to our countries representative servants like in the movie "Mr Smith goes to Washington." We need to speak up now and be not only heard but helped!  

Change is needed!!!! I can guarantee you one thing that the kind of change we need is not going to happen under either of these two administrations as they both promise. Special interests up the yazoo, socialized health care and promised plans come on... Each of these representatives has been on the campaign trail for over two years. Do You think they have been working diligently to protect the people as servants of their so called states during this time? Still paid and with complete benefits while they campaign. Why? That is like me working for a company and I decide to go on a book tour for my own personal book and my company who does not receive any benefits continues to pay me...not fair is it?

Let me be blunt for a moment...Yes the real estate market has had a major climate change, and yes the prices of homes have dropped quite a bit. The good news is most of us are still ahead of the overall boom that occurred over the past 10 years. The other good news is interest rates are still low and although this week may not be the week to buy a house due too understandable fear factor, but it is a very good time to buy.  It is a buyers market. This weeks settlements for me were properties that were purchased for well under list price and both settlements this week had closing cost help given by the sellers. But let me repeat these homes were sold in this market and they were sold to real buyers for reasonable prices!!!! 

One client asked me yesterday if there were any buyers still out there and the answer is yes. The other misconception is that spring is the best time to sell. Let me ask you this question: What are the interest rates going to do in spring? Are the home prices going to drop further? Well, I don't know either. I do know that inventory is usually at it's highest point in the spring, so from a supply and demand perspective it would not be the best time to sell. I want to encourage anyone who is reading this post that homes will sell this year, next year, and the year after. People will always need a place to live therefore there will always be buyers. Restrictions and underwriting is very important and I know there are plenty of solid obtainable loan programs today. One thing that I show people who are looking to move is a time table analysis, which gives you a realistic time table for selling your home in this market from start to finish. I know that we can't know exactly when your home will sell but we can give you a real time guess based on statistics and local market conditions. 

Stay positive about the real estate market, we were spoiled over the past 10 years with the largest increase in a century.  If you are having issues with paying your mortgage or you have questions about your personal real estate during this tough time, I am happy to field your emails and phone calls to help you in any way. Remember to turn your clocks back an hour on November 2, 2008.  

Goodbye Summer...Hello Fall

So the summers coming to an end and the scoop according to the papers and the news is that the real estate market continues to decline... Well here is what I know. The market is down a bit since the beginning of the summer, but homes do continue to sell. Yes the market overall has declined and yes the mortgage industry is hurting right now. The challenge is what does down really mean? The answer is dependent on each individual and their needs to move vs. desire to move. I am not saying it is not OK to move and sell your home in this market. If you are moving to a relatively local spot then the selling price of your home is relative to the price you are going to pay.  According to USA Today poll last month less than 8% of the US population is actively hunting for a home. That is way down from last year where close to 20% of the US population was searching for homes. 

On the news last week, Donald Trump was interviewed about what to do in this real estate market. His overall advise is buy now, buy now..."there is no better time to buy than now. Interest rates are low and the buyer has the leverage." I think he know what he is talking about. 

One last thought to share with you is directly from my business over the past three months. Homes in perfect condition and located in good school districts will sell. Pricing is vitally important and so are the neighborhoods. One story I will share is about a home owner in a neighborhood that my wife and I love near us. We love this one street in a popular neighborhood and the values are between 675,000 and 800,000. We sent a letter out to the home owners with interest in buying on this street with a dozen or so of these homes. We spoke to one family who bought in 2004 for the 760,000 range and now with pricing in the pre-2004 market range they are hoping to get the 950 range for the same home with some updates. The updates include one new bathroom, painting throughout, same kitchen, some landscaping, many little odds and ends, and a great lot. Problem they will face is that the market will not bare what they are hoping to get. The have made us aware they are not distressed sellers and all I can think is this is the mentality of many of the present homeowners. They are not looking at the facts. The fact is this home will not appraise for over 825,000 or I think much less. If they paid 760,000's in 2004 that is approximately where it will sell for maybe closer to 800,000 with a new kitchen and all new baths...

My point is not to be right but to help homeowners see where we are today in terms of real pricing and your position in today's market. I was shocked when the home owner stated that our home is not a fair market comparable to the recent sales in the neighborhood but much more. Four models built in the 70's by the same builder on same street. Theirs is one of the two larger models. Yet it is 200k above the market??? Enough about this home and in all fairness I hope they get $950,000 for their home. 

Buy Now...while rates are still low!!!!

Email any great real estate stories to saubinoe@gmail.com

WHO REALLY KNOWS WHERE THE REAL ESTATE MARKET IS HEADED?

Ok...I read the newspaper articles every week and I am amazed at the amount of attention that is given to where the real estate market is heading. Many writers are focusing on the future or lack there of for the real estate market now. Many folks are freaking at what they are reading and unless you are in the market day in and day out, be cautious what you read and hear. Would you rather speak to a forecaster of the stock market or someone who is in the trenches every day as a broker dealing with the clients and their money? I know my answer! I am here to tell you that the real estate market in the Washington Metropolitan area is always going to be a structurally strong market. Why would I think this you might ask? Great question! Well let me tell you it is simple in my opinion, jobs, jobs and I don't know if I mentioned jobs. Between the Gaithersburg, Maryland Corridor High Tech Industry, the Dulles Corridor High Tech Industry, the Government jobs in DC, MD, and VA, just to mention a few major components to real estate ownership. People are always going to buy and people are always going to sell, primarily due to the transient nature of the area and did I mention the political flavor on our real estate market.

If you look at a home value statistical scale or layout over the past ten to fifteen years, the curve always flattens out rather than dropping down a deep valley.  You get an increase or decrease over a five to seven year period and then a market adjustment for the same period of time, give or take.  When an increase does take place like the one between 1999 and 2006 rarely do we see an adjustment that hits at or below where it was five to seven years ago.What does that tell us?  Simplify you may say, OK! Between 1999 and 2006 we had one of the largest increases in history over home values, as well as some of the lowest interest rates in history. If I may speak in generalities for a moment, as a market today in the metropolitan area of Washington, DC, MD and VA we have decreased in values to about where we were in the early 2003 pricing. So whatever your home was worth in the beginning of 2003 is probably where you are today as far as home value!!!! Yes there are some exceptions to this, but very few! No Pulp, Just the Juice!  

The "Real Juice" on the Montgomery County Real Estate Market

So what is the Washington metropolitan area real estate market really doing? Well all of the news channels and the local news papers seem to have it right on the money! or do they? I rememeber a few years ago reading about the bursting of the real estate bubble in the Washington DC area. Well it never really came did it? I actually read this article a few times from 2002 to 2006. Did the market slow? Yes. Is it continuing to slow? Yes. Has it started to rise from the peak that ended in August of 2006? No and it probably won't in my opinion until around 2013 to 2014 or later. What I have learned from expert statistitions is that these market shifts come in 7 to 8 year periods or spurts. If we see August 2006 as the start of the descend that means we have about 5 to 6 more years. That means all indicators are that we are in a downward mode from the peak of August 2006. As we watch all of the major news stations and papers tell us of this recession we are about to embark on, fear tends to hit most peoples minds! So how is fear affecting people and their real estate decisions? From my perspective and in my real estate world, there are a few fundamental knowns right now:

1. prices have come down significantly in the past year. Some areas more than others so be aware that it is very specific to the area you live in.

2. Interest rates are still extremely low!

3. Home prices are very affordable now as apposed to pre 2006!

4. Buyers have more negotiating room.

5. Loans are now restricted to specific guidelines as they should be!

6. Homes priced well and in the best condition are still selling and usually first!

7. If you baught a home in the last 5 years it is probable that you won't sell your home for the price you paid for your home. Yes "Less" than what you paid!

8. Foreclosures and Short Sales are at an all time high!

9. Homes are sitting on the market alot longer on average! But priced well that number will come down!

10. It is a great time to buy!

The "Juice", without the pulp is that the real estate market is slower but still active and people will always buy and sell homes. Interest rates are low and I believe will stay low for a good while. Traditionally the real estate market in an election year and in the Washington DC area has been fairly strong! Don't believe everything you hear! As my kids say " I want the juice without the junk in it" and that's what you will hear from me! Until Next Time...Stay Positive and Go Make Someones Day! Scot

http://www.power2moveu.com/