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Posts Tagged ‘real estate crisis’

Durham Area Trends

  Durham US Local Trend
Price Activity      
Current Median Q3 2010 $184,900 $177,100 Up but slow
1 year appreciation .3% -.6%  
3 year appreciation -1.1% -.19.9%  
3 year equity gain -$2,000 -$44,000  

 

These figures come from NAR, the National Association of Realtors.  Although median prices in the Durham, NC market are up slightly and are ahead of national median prices, it is important to understand that no market exists in a bubble.  The Durham market is reliant on the U.S. market and the entire global economy.  So, without equity as shown by the three year gain, or more accurately loss, home sales will remain sluggish simply because consumers don’t have the money to purchase homes.  Consumer home equity is lost and will take years to recover. 

Home owners can build faster equity in their homes if they make additional payments to principal, avoid borrowing against their properties and if they make cautious investments in enhancing their homes.  Owners contemplating a home sale should gird themselves too; there should not be a presumption of appreciation but rather a presumption of a loss.

Similarly, owners considering a home sale should engage a real estate professional sooner rather than later to discuss merchandising their property, staging their property and enhancing their property so that it stands out among the competition.

Interested in doing so?   Call me, Michael Sullivan, I’m always happy to walk through a property with an owner.  I can also offer rental and leasing solutions to owners in a position to move in that direction.

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2010 Second Quarter Real Estate Wrap Up

Where is the target? Based on the data in the 2nd quarter Triangle Area Residential Realty Report or (TARR) real estate is still trending down in terms of price and up in terms of days on market. Correctly pricing homes is still an issue; traditionally REALTORS and appraisers have relied on sold data to assist home sellers in determining prices for property. With foreclosure filings up 12% in Durham County, and foreclosed homes accounting for 8% of the active inventory these properties aren’t dominating the market but they are indeed driving values down, as are too many short sale properties.

In the Q-2 of 2010 there were 24,450 showings logged into Centralized Showing Service, (CSS) this is a decrease of 10% from Q-1. Additionally there were 970 listings with a status change from either Active or Contingent to Pending in Q-2 2010, this is a 12% decrease compared to Q-2 of 2009. These lower showing numbers and lower pending numbers will also produce lower closing numbers in Q-3 of 2010 and this will place additional downward pressure on home prices.

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Michael Sullivan, Realtor with Fonville Morisey Realty in Durham NC brings nearly seventeen years market experience to the Raleigh, Durham, Cary, Hillsborough and Chapel Hill real estate market. Mike Sullivan lists and sells homes from Burlington NC to Clayton NC. Michael Sullivan is a broker, E-pro, SRES and CREN and has made client advocacy and education hallmarks of his residential real estate practice. Call Mike Sullivan today at 919-608-2372 and let him help you find a place to call home.

 Ok, so today I’m going to talk a little differently with respect to how I write and comment on this funny animal called residential real estate. No doubt about it since 2007 things have been hard, really hard; I’ve had to work harder, work faster, spend more and work longer hours. I have had to go back to basics; send, call, see, hold open houses and constantly be looking for deals to cobble together. I have also had to be ever mindful of my role as a REALTOR or real estate agent. I counsel buyers and sellers, I assist buyers in finding their new home and working through the ever changing and complicated process and I coach sellers in how to sell their homes.

Up until 2007 I thought that I was pretty good at helping sellers establish a price for their homes. 2007 became a reality check for me, no longer was it sufficient to look at comparable sales and determine value, we had to look at current competition and then project to where we saw sales numbers falling to. This is akin to shooting a bullet into a black hole and trying to hit something. Or even more accurately standing in the Grand Canyon and trying to catch a single feather as it floats to the bottom. Ok, well maybe that is a bit of an exaggeration but you get my point.

For the last three years I’ve had to face home sellers who own very nice homes, well presented, well cared for and we thought well priced and adjust our prices downward and downward and downward. Currently I see values near 1997 values, and that is a tough pill to swallow. I think values are stable but only time will tell, there are a whole lot of foreclosed homes flowing onto the market at he moment.

On the flip side buyers ask again and again, why has this home been for sale for so long? Time and again my response is the market, plain and simple the market, there are fewer buyers, there are more homes there are oodles of foreclosed and short sale homes all competing for a limited number of home buyers. A Limited pool of buyers who have been told to save their money and not spend and are doing just that, a limited pool of buyers looking longer, looking harder and bargaining harder to buy a home.

I have also had to spend much more time coaching buyers through the mortgage process. The banks, after the proverbial horse has left the barn, and the barn has all but burned down have slammed the barn door and tightened lending regulations to a strangle hold. These, in some instances, banking criminals, have become completely ridiculous; some bankers are requiring that storage sheds be removed from sales contracts because said sheds are not real estate. Well theoretically this is true, but then a house isn’t real estate either, a structure is a fixture and those fixtures add value to the real estate which is the land. These bankers are also requiring that drapes, rods, some appliances be removed from contracts too. All of a sudden the offer to purchase and contract isn’t an instrument to bring buyers and sellers together, but rather a form to protect banking interests.

I think protecting banking interests is laughable. The banks definitely know how to protect their interests; they perpetrate wholesale fraud and deception in the banking melt down and then get the American taxpayer to bail them out and then to throw salt in the wound, penalize those very people who saved the bankers velvet skin. It is indeed maddening and every single American tax payer who is current should be furious. Frankly I find all of this exhausting and it leaves me feeling more than just a little tense and angry.

You see from 2002-2007 when Wall Street money moved into banking and real estate; and almost everyone was speculating in the real estate industry, some of us saw dark clouds on the horizon and screamed about them. The banks threw money and value around like the pocket book was bottomless. Greed, graft and corruption, with a wink, wink, nod, nod, to ethical and moral behavior went right out the window and like profits eventually did…down the proverbial drain. Banks would lend to folks with no credit, low credit, stated income, one hundred and three, four, five, six, seven, eight, nine and ten percent to value. No deal was too scary, no buyer too risky, no new home neighborhood too over-valued.

Then poof in 2007 it went south and in a hurry and now they have slammed the door on the monster that they created and the tax payer paid the bill and they, the bankers are still writing the rules. The inmates have the keys to the asylum and all of us should be terrified. What happened in this banking crisis is nothing more than a ponzie scheme, as long as money was flowing in from the bottom all was well, but when the pool of qualified buyers dried up, then the banks and Wall Street went looking for a fresh crop of mortgage borrowers. Unfortunately those new buyers were credit unworthy and here we are. We are left cleaning up a huge mess made by bankers, Wall Street, some real estate professionals and people who were credit unworthy.

Scads of REALTORS have left the industry, perhaps rightly so, many should have gone; realistically why would anyone put their trust to purchase or sell their largest asset in the hands of a person who works in real estate part time? It is a poor decision; we wouldn’t hire a doctor, lawyer or stock broker who was part time, why then a real estate professional? For this travesty I’ll shame the national and local associations for chasing the dues dollar and basically throwing anyone who could pass a state test and write a check for dues into the fray, professional standards are at best lax and at most nonresistant for newly licensed real estate professionals; for the most part training is a joke too, there are some exceptions; my present company excepted.

Optimistically, hopefully I think we’re near the end of the tunnel, but I don’t know. I think history will judge this one much more than an ugly recession, I think this one will be characterized a depression and only time will tell when and where it will end. As an industry real estate is leaner and perhaps this is good, fewer of us will do more and hopefully those of us left will elevate the professional standards of a bruised and damaged industry. As for banking and Wall Street, who knows what their house looks like?

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