Monday, November 29, 2010

Difference Between a "White Lie" and "Lying"

When Rebekah & I were growing up our parents instilled in us the value of telling the truth. We were told the story of "The Boy Who Cried Wolf" over and over and I (Melissa) share that with my children now. Our parents had no tolerance for lying. With that said, there was always this gray area of "white lies." According to our friends and even some teachers, it was ok to tell a "white lie" so long as no one got hurt. It was hard to discern why that was ok, but plain out "lying" wasn't (a lie is a lie right)? Now that I'm older, I think I understand now.

If a husband or wife asks if it is okay to invite their parents over for dinner, the spouse would probably say 'sure' even if it wasn't 100% the truth. That was a 'white lie'. If a young boy dresses up as a monster on Halloween and asks his father if he looks 'really scary', it was okay for his dad to say 'YES'! That was a 'white lie'.

In both cases, the person telling the 'white lie' was saying what the other person wanted to hear. In both cases, there was no harm in not telling the 100% truth. In both cases, it was a 'white lie'. However, if we are not telling the 100% truth in order to save someone's feelings AND IT HURTS THEM, we are lying.

Why am I bringing this up in today's blog?

I believe there are still some in the real estate industry more worried about a homeowner's feelings than they are about telling the truth about the current value of their home. These agents are not necessarily malicious. They just realize they may disappoint a seller at a listing appointment by telling the truth about what the house will sell for. They find it difficult to deliver tough news. To make sellers feel better, they lie and sometimes they do it just to get the listing!

Good agents can deliver good news. Great agents know how to deliver tough news.

In today's real estate market, YOU NEED A GREAT AGENT. You need an agent that will tell you the truth, even when you don't want to hear it. You need an agent more worried about your family than they are about your feelings. You need an agent who can get the house sold! That's us. We have disappointed people by telling the truth. We have hurt people in their pockets by telling the truth. At the same time, we've helped dozens of families by telling the truth and we've moved them to the next chapter in life by telling the truth. It is always the right thing to do in our eyes. In the end, they always understand why we did what we did, even if they didn't like it.

What this means to you

If you are interviewing potential listing agents, demand they tell you the truth. Don't hire the agent that tells you what you want to hear. Hire the agent that tells you what you need to know. Reward their honesty.

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A portion of this material was taken from: KCM Blog

Friday, November 12, 2010

Why Are Housing Prices Still Falling?

In the past few days, three separate pricing reports showed that national house prices have begun to soften. Altos Research shows that prices fell 3.1% over the last three months. Clear Capital's Home Data Index Market Report shows that prices have fallen 5% in the last quarter. The Zillow Real Estate Market Report shows a 1.2% quarterly decline and a 4.3% yearly decline. Anyone selling a house should understand what is currently happening in the market and what impact certain factors will have on prices over the next six months. Let's look at those factors.

The Expiration of the Homebuyers' Tax Credit

The tax credit was introduced by the administration to stabilize house prices. The TARP Report spells this out quite clearly. The thinking was, if they rewarded purchasers to buy, they could lower the months' supply of housing inventory. By increasing demand and decreasing supply, prices would level off. And they did originally.

However, when they extended and expanded the tax credit earlier this year, the opposite occurred. When buyers came out, more property owners (individual homeowners who had previously held off putting their home on the market and banks with an ever increasing supply of foreclosures) decided that was the time to put their houses up for sale. Instead of lowering supply, it actually increased the supply of homes on the market. Inventory rose and demand faded with the expiration of the tax credit. Larger supplies and less demand will cause prices to fall.

Distressed Properties

Foreclosures and short sales have dramatically affected prices in almost every section of the country. Zillow has reported that 20.1% of all homes sold in September were foreclosures and an additional 27.3% were short sales. A foreclosure, on average, sells for 65% of full value and short sales sell for 85% of full value. Obviously, as more distressed properties sell the more the average sales price falls.

Distressed properties also have a major impact on appraisals. Even if a non-distressed property sells, the appraiser may use distressed properties to determine value in that neighborhood. We can see that distressed properties therefore impact prices even on the non-distressed properties sold.

We will be dealing with this issue for some time while banks clear the inventory of foreclosures they currently own. It was just reported that there is over 40 months of supply we must work through. Increased supply causes prices to soften.

Lack of Consumer Confidence

Many economists believe that the housing recovery depends on resurgence in job growth. It will be difficult for the buying public to have the confidence to make big ticket purchasers (including housing) until they are confident that they can stay employed. Demand will continue to be weak until the economy recovers. Weak demand causes prices to fall.

Bottom Line

Pricing of any item is determined by the ratio of supply and demand. Demand for housing will remain soft until the economy recovers. The months' supply of housing inventory continues to remain too high and is increasingly being made up of distressed properties which are sold at a discounted price. That means that nationally home prices will continue to fall.

Please call or email a Realtor  (preferably us HAHA) to determine how the above issues will impact prices in your area. Make sure they tell you the truth not just what you might want to hear. Only by knowing the truth can you pick the best option for you and your family.

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Content Taken from KCM Blog

Tuesday, November 9, 2010

Real Estate in Numbers: Clayton County, Fayette County, Henry County

We previously posted a blog that shows the first quarter numbers versus the second quarter for Clayton County, Fayette County and Henry County. We're a month late, but here's how the third quarter compared:

Notice how in each county listed above, the second quarter numbers are better than the first and third. Wonder why? ...the home buyer tax credit. In order qualify for the credit, buyers had to be under contract by April 30th and closed by June 30th (the close date deadline ended up being extended later on, but originally it was June 30th). With more sales and a higher average sales price, I would say it worked; however, now that it's gone, we're seeing the true colors of the 2010 real estate market. Over to the right of each table, I've included the 3rd quarter numbers for 2009. Remember Melissa's post about waiting until next spring to list your home? This is a clear example as to why that might not be such a bright idea. For the folks who considered putting their home on the market in the 3rd quarter of 2009 but waited until early spring, look at the price differences:

Clayton County 3Q2009 VS 3Q2010: 12.13% decrease in value
Fayette County 3Q2009 VS 3Q2010: 3.15% decrease in value
Henry County 3Q2009 vs 3Q2010: 2% decrease in value

The numbers are clear... values are still declining! So if you're thinking of selling, unless you can afford to wait a few years, now might be the best time to sell. In a few months, the numbers will likely still be declining as our market hasn't hit rock bottom yet.

We can't wait until the day that we can post a blog about the increasing value and appreciation we're seeing across the southern crescent of Atlanta, but until then, we're calling it like we see it!

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Monday, November 1, 2010

Will Your House be Worth More in the Spring?

This is a question anyone thinking about selling must ask. Should they sell now or should they wait for the spring? Most years that would be an interesting question. There is a belief that many buyers come out in the spring and, with that increase in demand for housing, prices may appreciate. This year is unlike any year in recent memory. Most experts believe there will be continuing depreciation of home values throughout the next 18 months.

As we posted on recently, there may be a window of opportunity throughout the rest of 2010 as the banks try to straighten out the paperwork on thousands of foreclosures. Once that paperwork is corrected, the flow of distressed properties coming to the market at discounted prices will begin again.

This was mentioned in the latest Home Price Expectation Survey. Robert Shiller, MacroMarkets co-founder and chief economist said this:

 "Over the past month, the average projection for 2010 nationwide home price performance improved slightly among our experts, but for each year thereafter it deteriorated. One plausible explanation for this month's more negative overall sentiment is recent news concerning foreclosure processing questions and the related possibility of extending the supply pipeline."

Other experts are also reporting that prices will soften next year

In October's RPX Monthly Housing Market Report, CEO Michael Feder commented:

"We are at a flex point in housing valuation. With record supply, already paltry demand and systemic threats to a possible correction, we remain terribly concerned about forward home prices.”

The very next day, in a special release, Clear Capital reported a "sudden and dramatic" drop in U.S. home prices:

"Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months."

Bottom Line
If you plan to sell within the next year, you shouldn't wait for the spring market. Price the home at a compelling price to make sure it sells in the next sixty days.

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