Notes on Real Estate 
Notes on Real Estate
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Like the prize in the Cracker Jack box, it's at the end of the newsletter.
It has felt like spring much of this winter, and when Shelley and I went out looking at some open houses last weekend all the Realtors were saying that there was considerable action. Faux Spring is what it is. Let the temps drop ten or fifteen degrees and add a few inches of snow and things will simmer down. (As they have just done this weekend.)
Spring, the real spring, is just around the corner. Before you can say Peter Cotton Tail, folks will be hopping down the real estate trail. What will the new season show us in terms of numbers of listings and the prices? So, what does the near future bring?
David Lereah, NAR's [National Association of Realtors] chief economist noted on January 10th, "A lot of demand has been met over the last five years, and a modest rise in mortgage interest rates is causing some market cooling. Along with regulatory tightening on nontraditional mortgages, there will be fewer investors in the market this year. The 30-year fixed-rate mortgage is likely to trend up gradually to 6.7 percent during the second half of the year. This will preserve generally favorable affordability conditions and keep the housing market at a more sustainable sales pace."
Greenspan's retirement and other economic forces, including the price of crude oil will have some initial superficial effects. However, I believe there are two strong similarities between the price of a gallon of gas and the price of a mortgage. We get accustomed to it. Our initial, knee jerk reaction can go in either direction, action-oriented or non-action-oriented.
The first reaction is almost a cliché. How long ago was it that we said we'd never consider paying over $2.00 a gallon? I almost can't remember, can you? The second reaction is about relativity. Not the Darwinian kind (well, almost, but…). If all else seems good, we move forward. If all else seems bad, we tighten the belt, batten down the hatches, and go into a watch mode.
All that being said, I believe the most critical aspect to home buying and selling is going to be price setting. And that having been said, the most critical aspect to correct pricing is going to be all about eliminating greed. Why? The margins are going to be thinner. As a home buyer's agent, my concerns will be about trying to figure out if the seller is coming into the market with an inflated opinion of the home's value. As a seller's agent listing a home, my greatest concern is going to be about over-pricing to comply with the seller's need or greed factors versus the true value of that home in that locale.
The smart buyer will be patient this spring. The smart seller will be pragmatic.
For many a buyer it's going to be a question of timing. Is the house they are considering ready to move at the price they want to pay?
For many a seller it's going to be a question like this: Would you rather put your home on the market for XXX thousand and sell it, or pretend you ought to get XXX-Plus thousand and watch it sit until you have to lower the price, maybe more than once, and possibly lower than the first suggested price in order to sell it at all? Price competitively and get it sold.
Put these two forces together, and that's my prediction on what’s going to be going on this Spring.
If you'd like a FREE Comparative Market Analysis, let me know. We can do it by e-mail, if you want. We can take a look at what homes like yours in your neighborhood, and in "comparable" areas, have been selling for and what the comparables on the market are currently asking. We can consider some of the more critical variables – fireplaces, pools, new appliances and mechanicals, etc. When we’re done, you'll have a pretty good idea what you could get for your home this spring (even if you have no intention whatsoever of selling it). Just ask.
That’s it for now. Except this:
1. If you have interests or questions, please e-mail me or give me a call.
2. Check out my website HERE
The opinions expressed in this newsletter are solely those of Tom Crone and others being quoted and do not necessarily reflect the opinions of Coldwell Banker Burnet or its affiliates.
