March 30, 2007

By Camilla McLaughlin
REALTOR Magazine Online

“A market returning to normal” is the way Global Insight, a privately held global information company, describes the current housing market, based on the most recent U.S. Housing Valuation Analysis.

The Housing Valuation Analysis — a joint effort by Global Insight and National City Corp. — examines the top 317 U.S. real estate markets using data from the Office of Federal Housing Enterprise Oversight. Taking into consideration differences in population density, household incomes, and interest rates, the analysis determines what home prices should be and how much current prices deviate from that norm.

“Nearly all markets posted a decline in the level of overvaluation, which signals that the overall housing market is beginning to trend back to more normal price growth,” says Jeannine Cataldi, senior economist and manager of Global Insights Real Estate Service.

The number of markets identified as overvalued decreased to 57 from 60 metro markets in the fourth quarter of 2006. Texas had the highest concentration of undervalued markets with Dallas and College Station-Bryan tying for lowest in the nation.

Although the greatest incidence of overvaluation remains in pockets along the Atlantic and Pacific coasts, corrections are under way in some markets as prices and appreciation rates decline. Approximately 15 percent of the nation’s single-family housing stock experienced price declines in the fourth quarter.

The report finds that New England no longer appears to be “significantly overvalued,” while Orange County, Calif., Tucson, Ariz., Reno and Carson City, N.V., and Kingston, N.Y., fell below the “threshold denoting extreme overvaluation.” Even though these markets are still considered “significantly overvalued,” the report points out that slowing rates of appreciation reflect “a gradual movement toward historical price trends.”

Nationally, according to OFHEO data, prices advanced by 1.8 percent — metrics the report says are more upbeat than those reported by the Commerce Department, which showed an increase of 1.6 percent in median transaction prices. It's also more than the NATIONAL ASSOCIATION OF REALTORS®, which showed a decrease in median prices of 2.8 percent. "Median transaction prices tend to overstate price strength during buoyant markets and understate price strength during soft markets,” according to the OFHEO.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

How to improve your chances of selling

Wednesday, March 21, 2007

By Ilyce R. Glink
Inman News

I spent some time over the weekend visiting some open houses. While I'm not seriously thinking about moving, I like to see what's going on in my neighborhood.

The thing I've learned recently is how sophisticated sellers in my neighborhood have become. For the most part, each home is a shining example of how to make lemonade with the lemons that exist in your own house. Mostly, the houses looked as if they've been staged into a showpiece that's really appealing.

But one house I visited over the weekend had a classic case of what I call "Open House Don'ts." These are things you don't want to do if you've listed your house for sale:

• DON'T leave dirty clothes all over the bedroom floor, your bed, in the bathtub or even in the laundry room. No one wants to see your dirty underwear, or even your son's sweater draped over a chair. Dirty clothes belong in a hamper. And, don't forget to make your bed.
• DON'T leave dirty dishes in the sink, on the counter or anywhere except in a dishwasher. And even then, you should run the dishwasher so that you have time to empty it before you get out of the way for the showing. No one wants to imagine what you made for dinner last night. Be sure to sweep the house for coffee cups, milk or sippy cups, or other remnants of late-night snacking.
• DON'T leave a filthy house, hoping the buyers will see past the dustballs near the couch -- they won't, and as they run their fingers over your dusty window frame, they'll just wonder what other maintenance projects you've let slip.
• DON'T allow odors from pets, babies or other unappetizing smells (think bathrooms, garbage and smelly cheese in the refrigerator) to permeate your home. If you think your home might smell bad, ask a neighbor to give it a "whiff test." If your house does smell bad, don't try to mask it with a spray. Buy a roll of refrigerated cookie dough and slice and bake some on a piece of tinfoil just before the showing. It'll make your house smell good enough to eat.
• DON'T assume Mother Nature is your friend. Prepare for whatever weather is seasonally appropriate. If it's winter, then be sure your walk is shoveled and salted. If it's wet, be sure to leave out a tray for wet boots. And while we're on the subject …
• DON'T assume that prospective buyers will treat your house as if it were already theirs. If you don't want muddy shoes or boots on your white carpets, create a nice laminated sign that nicely asks everyone to remove their shoes. Then, provide a basket of booties or socks for buyers and agents to slip on as they walk through your home.
• DON'T leave vacant rooms filled with junk, toys or spillover messes from other rooms. If you're lucky enough to have too much space in your house, make sure your empty rooms are pristine.
• DON'T leave personal information such as mail or bills out in the open where anyone can see it. Be sure to lock down your computer and lock up your laptop and any other expensive, easy-to-pocket electronics, like iPods, before your showing.
• DON'T leave money, jewelry or other valuables out in the open or even in typical hiding places, like the top dresser drawer. Invest in a safe or put your valuables in a brown paper bag and hide them somewhere unusual, perhaps in a box at the top of the closet, or in the basement.
• DON'T use boxes and extra furniture to hide problems in your basement or attic. Don't use paint to cover up perennial problems. In other words, fix the leak, don't just paint over it.
• DON'T leave your house in the dark. People want to buy light, bright homes. As you walk through the house for the final check before you clear out for the showing, be sure to turn on all the lights, including closet lights. While you may pay a few bucks more on your electric bill, a dark house simply won't sell.

Contact Ilyce through her Web site, www.thinkglink.com.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

7 questions to ask before signing contract

Friday, March 16, 2007

By Robert J. Bruss
Inman News

Spring is the best time of year to sell your house or condo if you want to receive top dollar. The reason is March, April, May and June are the months when the largest number of prospective home buyers are in the market.

If you want to take advantage of the 2007 peak home sales season, now is the time to get ready. Presuming your residence is cleaned, repaired and painted in preparation for selling it, the next vital step is to interview at least three successful realty agents who sell homes like yours in your vicinity.

Even if you think you might like to try selling your home without a professional realty agent, interview three agents anyway. They won't mind, as they know most "for-sale-by-owner" (called "fizz-bo") home sellers within 30 to 60 days realize how difficult the task is and phone to list with one of the agents already interviewed.

Because of the difficulty selling a home alone, especially in today's "buyer's market" in most communities where there has been a slowdown in sales volume, more than 80 percent of home sales involve a real estate sales agent, according to the National Association of Realtors.

THE SEVEN KEY QUESTIONS TO ASK EACH AGENT BEFORE LISTING YOUR HOME FOR SALE.

To avoid selecting a "bad agent" or a "lazy agent" when interviewing at least three successful local agents, don't hesitate to ask each one lots of questions. It's best to write down your questions before the interview so you don't forget any.

Select the agents to be interviewed by (a) asking friends, relatives and business associates for their recommendations; (b) including agents who have recently sold homes like yours in the vicinity; and (c) visiting nearby weekend open houses to meet agents and inspect competitive homes to see how yours compares.

After inspecting your home, during their listing presentations each agent should anticipate the most important questions smart home sellers ask. Here are the seven key questions each agent should answer:

1. HOW MUCH CAN YOU GET FOR MY HOME? Any agent who doesn't answer this question as part of his/her listing presentation is off to a bad start. Each agent interviewed should give you a written "comparative market analysis," called a CMA.

This CMA form shows recent sales prices of homes like yours in the vicinity, the asking prices of nearby similar homes (your competition), the asking prices of recently expired neighborhood listings (usually overpriced), and each agent's recommended listing price for your residence.

Be sure to keep the three (or more) CMAs to compare them. Check to see if each agent used the same "comparables" to reach their estimate of your home's market value and probable selling price.

Watch out for any agent who estimates a very high sales price without written justification. This is called "buying the listing."

Similarly, beware of any agent who estimates an abnormally low market value, possibly indicating the agent is out of touch with the current market or might be trying to get a quick easy sale.

2. WHAT ARE THE NAMES, ADDRESSES AND PHONE NUMBERS OF YOUR FIVE MOST RECENT HOME SELLERS? HOW MANY DAYS ON THE MARKET DID IT TAKE YOU TO SELL EACH HOME? You need this vital information so you can judge the skill of each interviewed agent.

Before signing a listing contract, smart home sellers phone each agent's previous sellers to ask, "Were you in any way unhappy with your agent and would you list your home for sale again with the same agent?"

3. HOW LONG HAVE YOU BEEN SELLING HOMES IN THIS AREA? DO YOU SELL REAL ESTATE FULL TIME? WHAT PROFESSIONAL COURSES AND DESIGNATIONS HAVE YOU COMPLETED? WHERE DO YOU LIVE? The answers to these questions will help decide if this is the type of agent you want to hire.

However, don't necessarily dismiss a relatively new sales agent who might have more time to devote to your listing compared to an "old pro" agent who has many years of home sales experience but who has become lazy and perhaps might even be semi-retired.

Occasionally, you will find a part-time agent who has excellent seller recommendations and who has connections with many prospective buyers.

For example, I know a schoolteacher who is a part-time realty agent, working with a full-time partner agent. She sells real estate full time during vacations and is very successful.

But, as a general rule, listing with a part-time agent means you will get less than the best service.

4. WHAT IS YOUR MINIMUM LISTING TERM? The best answer is 90 days. That means the listing agent has confidence in his/her ability to get your home sold quickly. If an agent insists on a longer listing, make certain it contains an unconditional cancellation clause so you can cancel without any reason after 90 days. This prevents getting stuck with an ineffective agent.

When an agent says something like, "The average number of days on the market for homes in this area is 123 days," your immediate reply should be, "Well, I will be paying a large sales commission and I don't want to hire just an average agent."

5. WHAT IS YOUR MARKETING PLAN FOR MY HOME? The best agents will anticipate this question by including a written marketing plan as part of their listing presentation.

Each written marketing plan should include at least (a) immediately putting your home listing into the local MLS (multiple listing service); (b) promptly holding a weekday open house tour for all MLS member agents; (c) weekend open houses once or twice a month; (d) newspaper ads at least once each week; (e) Internet promotion at www.Realtor.com and on the agent's personal Web site (some agents include a separate Web site for each listed home); (f) brochures (ask to seek samples of the agent's brochures for past and current listings); and (g) depending on the sales price, advertising in other publications, such as local and national home sales magazines.

6. HOW MANY LISTINGS DO YOU HAVE NOW? WHAT ARE THEIR ADDRESSSES? DO YOU HAVE AN OFFICE ASSISTANT? Related questions include asking (a) what day of the week do you take off; (b) who covers for you when you are gone; (c) how promptly do you return phone calls and e-mails; (d) will I be dealing with you or an assistant; and (d) are you planning any vacations during the next three months?

When an agent has too many listings (called a "numbers agent") he or she might not have adequate time to devote to marketing your listing. For this reason, smart home sellers ask, "What percentage of your listings sell and what is the average number of days on the market?"

If you learn the agent works as a "team" with another agent or two, that is usually a good sign. Having a full- or part-time office assistant to handle details, such as arranging inspections, appraisals and sales closings, should be considered a bonus if the agent has a large number of listings.

7. WHAT SALES COMMISSION DO YOU CHARGE FOR A LISTING LIKE MINE? Although a recent survey by Real Trends reports the average home sales commission is 5.1 percent, home sellers should be aware of the pitfalls of cutting a listing commission if similar local listings carry a higher commission rate.

Sales commissions are negotiable. But suppose nearby homes like yours are listed with a 6 percent sales commission. Reducing the sales listing commission to 5 percent or 4 percent could put your home at a serious disadvantage in the current "buyer's market" when there are more homes for sale than there are qualified buyers in the local market.

While discussing the sales commission, be sure your listing specifies how much will go to the listing agent and how much to the buyer's agent.

For example, if you list your home for sale at a reduced 5 percent commission, be sure the buyer's agent will receive a 3 percent commission (to be competitive with other nearby listings) and the listing agent will receive 2 percent of the commission. In some abnormally slow housing markets, eager sellers offer 7 percent commissions with 4 percent going to the buyer's agent.

Other commission alternatives might include a flat fee, such as $5,000, with a so-called discount broker where the seller does much of the work, such as holding weekend open houses and paying for advertising. The big drawback of highly discounted commissions, even if the listing is in the local MLS, is buyer's agents won't be interested in showing such low-commission listings.

In addition to the sales commission, be sure to ask if the listing agent charges any extra fees to you or the buyer. Some brokerages attempt to charge an extra "transaction" or "administration" fee. Be sure such fees are waived if you sign the listing.

SUMMARY: Spring is the peak sales season for homes. But be sure to interview at least three successful local realty agents to select the best one for your home. Ask lots of questions of each agent to determine which agent will be right for you.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Best time to buy or sell depends on key factors

Monday, March 05, 2007

By Dian Hymer
Inman News

According to the National Association of Realtors (NAR), the housing market could be stabilizing after months of rising inventories, meager home sale activity and soft prices.

The Pending Home Sale Index, which is a leading indicator for the housing market, rose 4.9 percent in December compared to November. This is the largest monthly increase since March 2004 when the index rose 6.9 percent compared to the previous month.

The December pending sale level was still 4.4 percent lower than it was a year ago. However, inventories of homes for sale -- which peaked at an all time high in July of 2006 -- have been shrinking.

The Pending Home Sale Index is based on new sales that have not yet closed. A listing is pending when a purchase contract has been signed by all parties. Closing takes typically 30 to 60 days.

According to NAR, the improvement in the pending sale index was broad based. It increased 8.1 percent in the Northeast, 5.3 percent in the West, 4.3 percent in the South and 3.2 percent in the Midwest.

It's too soon to tell if the recent increase in pending home sale activity is a trend toward stabilization or merely a fluctuation. A lot depends on interest rates and on the health of the overall economy. Another key variable is the unsold housing inventory; that is, the number of unsold listings.

It's typical for the housing inventory to diminish at the end of the year. It often doesn't build significantly again until March or April. The true test of the health of the market won't be clear until later in the year. The next Pending Home Sale Index will be available Tuesday and will be available online at http://www.realtor.org/research/index.html.

NAR reports are useful, but you need to focus on the local scene if you are thinking of buying or selling this year. For example, even though now is not the typical home-buying season, buyers in the San Francisco Bay Area aren't waiting until spring to start house hunting.

Due to the time of year, the inventory of homes for sale in some East Bay neighborhoods is so low that buyers have to compete to buy a home. A common complaint from real estate agents in the area is that there aren't enough listings coming on the market to satisfy the demand.

HOUSE-HUNTING TIP: To find out what's happening to the housing market in an area where you want to buy or sell, talk with local real estate agents. Find out how many listings are on the market in the area? How does this compare with the inventory level of last month, six months ago and a year ago? How long is it typically taking listings to sell? Is the time lengthening or shortening?

Are homes selling with multiple offers? If so, this usually indicates that there are more buyers than sellers in the market. In such a market, listings tend to sell quickly. If prices have been slipping, an inventory shortfall can cause the market to firm up and prices to stabilize.

Another way to find out what's going on in an area is to subscribe to a local newspaper. How fat is the real estate ad section? Are the same home-sale ads running week after week? Or, are listings selling quickly? Are price reductions common or rare?

Other news of interest concerns the local economy. Are new businesses moving into or out of the area? Are employers hiring? Or are they laying people off? A hot job market usually translates into strong home-sale activity due to increased demand.

THE CLOSING: Supply and demand ultimately governs whether the housing market is strong or soft.

Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Tuesday, February 27, 2007

From the Press-Enterprise newspaper

JANUARY REPORT: The rise is the largest in two years as sellers begin adjusting their prices downward.

By MARTIN CRUTSINGER
The Associated Press

WASHINGTON - Sales of existing homes rose in January by the largest amount in two years, raising hopes that the worst of the slump in housing may be coming to an end. Median home prices, however, fell for a sixth-straight month.

The National Association of Realtors reported Tuesday that sales of previously owned homes rose 3 percent last month, the biggest one-month increase since a 3.3 percent increase in January 2005, when housing was headed toward the peak of its five-year boom.

Price Drop

The median price of an existing home sold in January dropped to $210,600, a decline of 3.1 percent from a year ago.

The January decline was the third-biggest drop in history.

Analysts said that the decline in prices was actually an encouraging sign that home sellers are starting to adjust their asking-price down and this should help speed the correction in housing.

"For the last several months I have been hemming and hawing on whether we have reached bottom," said David Lereah, chief economist for the Realtors. He said that the January report was an encouraging sign that the bottom for sales activity was reached in September with sales expected to stabilize this year.

Weather Factor

But he cautioned that the warm weather in December boosted home closing in January, the activity that is tracked in the Realtors report. He said there could be a bit of a payback in coming months.

By region of the country, sales rose the most in the West, up 5.6 percent, followed by gains of 4.8 percent in the Midwest and 2 percent in the South. Sales in the Northeast were unchanged in January compared to December.

In other economic news, the Commerce Department reported that orders to factories for big-ticket manufactured goods plunged 7.8 percent in January, the largest decline since October and more than double what analysts had been expecting.

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula