economy


Or, tea leafs, crystal balls, etc. etc.

Reading the economy news is depressing.  I just read the CNN Money report because the headline sounded so promising, “April Housing Sales have Higher than Expected Gains“…who doesn’t like the sound of that?  I got all jazzed because yikes, could the media be shifting tide and ready to share some the more uplifting housing news?

Well, apparently not, because the article was in no way as perky as the headline suggested.  I proceeded to read 3 additional articles…Less Americans Driving (Gee, I wonder why?), Welcome to the Recession (I kid you not…that was the title; that Alan Greenspan is just a regular ray of light) and an article on forecasting the major housing markets through 2009 which in my mind is the Crystal Ball Report (though I admit this was an interesting and realistic read)

And here I was feeling downright optimistic?  But I will not be swayed by CNN which has 24 hours of news programming to fill.  I tell you our market is improving and allow me to share my tried and true signs of determining conditions:

Inquiries, web hits on property have multiplied

Showings on property have increased

Days on market have stabilized and actually gone down year over year

Investors are getting back into the pursuit of real estate (got some calls from old friends I had not heard from in awhile…)

Price reductions are at lesser amounts and there are less of them daily on MLS

Thats my story and I am sticking to it!  The media can say what they will but six months from now they are likely to be reporting todays news.

 

 

These may be troubled economic times.  Houses are not selling at the lightning pace of just a few short years ago, but there are deals to be made if you negotiate.

Everywhere the prospective buyer turns they are being told to beware…do not pay too much.  Buyers got the memo (and then some) on the declining market.

Guess who did not?

Sellers!  Granted, it is a jagged little pill to swallow…but this is not the market for sugar coating.  To those sellers who bought within the last 2 years or (worse yet) refinanced within the same time frame; there is likely not a windfall of equity heading your way.   Please remember on a refi, you cashed out your equity (no one is getting 2 bites at the apple in this market). 

Am I being too harsh, too direct?

I say it is my job to be absolutely straight with you.  This is a market of negotiation and buyers are being told to take their shot.   Buyers of real estate have formidable resources at their disposal via the internet (every real estate sale is a matter of public record!) and they have likely contracted an agent whose job it is to help the buyer determine “fair market value” for a property of their interest.

With respect, I implore you to accept that there really are no uneducated buyers out there.  And, just in case you do not believe me, there is currently a case pending in a California court against a buyers agent alledgedly not educating buyers properly about pricing; they say they paid too much.  If they win, they are certain to be the last uninformed buyers.  GOOGLE it.

Today, as before, it all comes down to price and location!

That is the question…

Are you saving yourself for the bottom of the real estate market?  Do you believe that there is further decline of prices in the works? 

Allow me to share a scenario with you:  (this is a true story!)

The Dayville office has a listing in Danielson, an adorably redone ranch with nice lawn and garage, a terrific little starter property, here are some numbers:

2/1/08                                                                       3/1/08

$194,900 (list price)                                                $189,900 (reduced price)

5.25% (CHFA rate)                                                   5.75% (CHFA rate)

$1335.17 principal/interest payment                     $1359.32 principal/interest payment

I read an interesting article this past week about this very scenario and our “brilliant” (and he will indeed get an even bigger head) CTHM Mortgage guy, Matt Biggins took one of our own listings with a recent price reduction to demonstrate how even a slight rate increase impacts monthly payments to the consumer.  Waiting just one month, even with a lower price does not guarantee a monthly savings.

My point is that when contemplating the Wait and See scenario, do not forget that rates rising is an inflationary inevitability (this according to smarter folks than I) and should be factored into any decision making process.   And as shown above, even getting the house for $5,000 less can cost you money.

The Good News…rates are lower today than they were one year ago.

January is almost over, so let’s predict what the year will bring based on the previous 25 days!

Yep, I am being flip, indeed sarcastic, but sincerely, do you have a crystal ball?  If so, can I borrow it (I want to see some winning numbers)?

I have been in the real estate business for 23 years (eek! It pains me to write  it) and I have truly only seen 2 buyers markets and they both were very short lived so my first prediction for 2008 is: 

Buyers will buy at terrific rates and adjusted to market prices but will be competing against the savvy investor closer to year’s end.

Prediction # 2:

It is still expensive to build so builders will continue to hunker down and the spec building supply will be snapped up by the shrewd buyer.

Prediction # 3:

First time buyers will have the pick of the financing litter and CHFA, FHA and VA will once again be appreciated as pillars of the financing community.

Prediction #4:

The market will be downright perky in late summer and early fall (it is an election year!)

Honestly, I have no idea truly what will happen in 2008 these are just fun guesses on my part.  I do know that financing is available to qualified buyers at terrific rates.  I know that rarely is the market so tilted to buyers…so this is your time and it should be taken advantage of.

And sellers, heads up, shoulders back…next week is all about you and how to put your property in the limelight while inventory is heavy.

Posters help out the weary, share your sage advice on dealing with this type of market. 

And, I would be remiss not to tell you…always utilize the services of a professional realtor.   A professional realtor knows the market like no other and can guide you graciously through any market condition.

The “housing industry” is in decline?  What, we don’t need places to live anymore?

I don’t know about you but I am finding it a bit chilly out there right now…and just love to come home.  For so many reasons (not the least of which is nagging hubby to please fix that drawer and back door handle–it has been weeks!);  my kids love the yard and pool, bike friendly neighborhood and it’s just the most adorable “Father Knows Best” 1953 cape with a cute dog house dormer (santa keeps watch from there over the holidays).

I have been in love with my house for nearly ten years and I think it is a very healthy relationship…I take care of it (or nag my significant other) and it keeps me and my family safe, warm and cozy, it is our personal refuge.

I have had other healthy relationships with real estate.  There was the fixer upper in New London (a lot of work but led us..), to a duplex in Norwich with a cute as a button lawn and cul-de-sac street and tenants who helped with the mortgage and ultimately paid for itself when I found “home”.

I have had dysfunctional housing as well…they usually involved room mates, rentals and youth ( I suspect some of you might know what I mean).

Every agent will tell you, our favorite part of the job is seeing houses.  I rarely fall in love, but I do have crushes.  I was in Essex today and just loved the historic colonials along the Connecticut River on postage stamp lots.  I have mentioned before my awe of the land in the Quiet Corner…there is something very appealing about an antique home on 10 acres of land.  Just last spring, I enjoyed  simultaneous crushes on a 3000 square foot colonial in Pomfret and an 1800 square foot contemporary in Zadora Heights, Danielson…my heart got broken when some lucky buyers snapped them up.  I can only hope these homes went to good owners.

My point, real estate is not just an investment…HOME IS WHERE THE HEART IS!  It is where families, every kind of family, are established,  nurtured and hopefully thrive.  Homeownership is the American Dream because it means we own our own little part of the globe…owning property is most times an emotional attachment.  Over time the investment part the of dream will hold up.

So tell me about the great real estate loves of your life.  Was it that money pit you bought and restored with your own hands?  Did you custom build your dream home?  Have you gardened your home to glorious?

This post was inspired by the Jones family, who reminded me how much we love our homes and how they are a part of our history.

My first blog…how exciting!  (I am thinking this first one may be only “exciting” to me)

As the topic on my mind is Real Estate (always!); I thought this first blog might just talk about some of the yadayadayada that has been written about, thrown around and even presented as news.  And then the pundits proceed to ask the question, Why is the consumer not consuming? (just saw this reported on World News channel 8 by their economy reporter)

Why indeed?  I have wondered myself and discussed (blah, blah, blah)…I understand why sellers of real estate are weary but buyers…What’s up?  Gas prices?  Heating Oil?  Electricity? Groceries?

Yes to all!  I suppose what I want to know, is it the higher cost of living for the necessities of life (gotta stay warm, have to get to work) or is it what we read and see on the news about a stumbling economy that has eroded our consumer confidence?

I am asking because I spent the same amount on the holiday season; probably more, as there was a deep need for an XBox 360 and PSP at my place.  (not over the moon with my purchases, for the record, different debate here!)  Those in the know say that consumers spent less this holiday season, did you?

Help me out, are we buying out of a recession or have we been sold it?

 Open for discussion… Set me straight!