2013 Home Sales Very Strong

According to the National Association of Realtors®; existing home sales (called re-sales) for all of 2013 were the highest since the boom year of 2006.  In all, there were over 5 million sales in 2013, which was over a 9 percent increase from 2012.

The median home price for 2013 nationally was $197,00 which was an 11.5 percent increase from 2012.  It was the strongest gain since 2005.  The percentage of short sales and foreclosures as a part of all sales dropped by half over December 2012.  The increasing median price is partly fueled by the lack of these distressed properties pulling down prices.

Lawrence Yun, NAR chief economist, said housing has experienced a healthy recovery over the past two years. “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” he said. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”

Top Subdivisions in Sales for 2011

I was curious about the top selling mid-range communities in Forsyth County, so I ran a search in FMLS for subdivisions in Cumming, Georgia with home sales during the 2011 calendar year, having 4+ bedrooms and selling between $200,000 and $400,000.  Here’s the top 5 (with ties):

1) Windermere – 15 Sales

2) Fieldstone (all sections) – 13 Sales

3) Polo Golf & Country Club (all sections) – 11 Sales

3) Thorngate – 11 Sales

4) Evans Farm – 10 Sales

5) Green Summers – 9 Sales

5) Jamestown – 9 Sales

Each of these communities had foreclosures and short sales as part of the volume.

This Month in Real Estate – Dec. 2011

This Month in Real Estate – Nov. 2011

This Month in Real Estate – Oct. 2011

Are Buyers Waiting in the Weeds?

I’ve been watching something the last 60 days that I’ve personally decided may be a trend here in Cumming, Forsyth County, Georgia. I’ve noted several examples of this phenomenon, but I’ll use one property as an example.  I listed this two-story, late 90’s build home with a finished terrace level last September for $365,000.  The home is very well maintained, has a great back yard with both a sun deck and a screened porch.  The owner told me that they wanted to go ahead and get on the market, but really wasn’t going to be motivated to sell until Spring 2011.  After a few showings, we reduced the price to $350,000 sometime in late 2010.  All through the listing period, the property received at least one showing a week, with a little lull during the Holidays.  The only negative about this property is that it has a steep driveway up to the garage entrances, which I pointed out during the listing appointment and was confirmed from showing feedbacks.  After looking at our local market trends (prices still moving slowly downward), recent sales (very few) and the competition, I counseled my client to go ahead and drop the price to $340,000.  That goes against my personal philosophy of pricing homes at specific price points, such as at $350,000.  (As an aside, buyers search from $325k – $350k or $350k to $400k.  A price at $340k would cause us to miss buyers starting their search at $350k.  That’s why I try to price property at search points.) So, I dropped the price on Sunday morning.  Since that time, I’ve had one showing each on Monday – Wednesday and two showings today (Thursday).  I’m fairly convinced, but with fingers crossed and a rabbits foot in my pockeet, that we will get this property under contract shortly. So, what’s the trend I mentioned at the beginning?  Buyers seem to be reticent to physically view a property until the price hits what they believe to be either fair or a sllight deal.  Otherwise, they are just flat skipping equity-seller properties and sticking with foreclosures and short sales (which represent about 50% of the sales in Forsyth County).

Changes to FHA Mortgage Insurance Premiums

The Federal Housing Administration (FHA) will be increasing their Mortgage Insurance Premiums (MIP) by 0.25% on all 15 and 30-year loans.  The up-front MIP will remain at 1%.  The increase will take place on all loans insured by FHA on or after April 18, 2011.

What happens when my appraisal comes in low?

In an uncertain market, there are several reasons why this can happen.  First, banks are now required to choose appraisers somewhat blind, so they can’t necessarily use someone local who knows the market.  For instance, I had an appraiser come from Spartanburg, SC to value a property in Forsyth County, Georgia.  A 4,000 sq.ft. home in Spartanburg doesn’t cost as much as one in Cumming.  There was a natural bias for this appraiser to not understand local values.

Second, some properties are just hard to match up with sold comparables.  The comparable sold properties ideally should be in the same subdivision and have closed within the last 90 days.  Appraisers also need a minimum of three sales to compare.

This made me do a quick analysis of sales within Forsyth County from January 1, 2011 until now.  Of all the hundreds of communities within the County, there were only thirteen with three or more sales so far this year.  The highest two had seven sales and were Chattahoochee River Club and Windermere.  Olde Atlanta Club and St. Marlo had five.  Champions Run, Green Summers and Riverstone Plantation had four.  Brandon Hall, Fieldstone, High Gables, Longlake, Polo Golf & Country Club and Villas at Habersham all had three sales this year.

So, back to the question of “What happens when my appraisal comes in low?”.  The first thought is to see if the buyer can add a higher down payment to make up the difference and complete the transaction.  This may sound far-fetched, but I had exactly this situation on a $425,000 home that appraised at $400,000.  The buyer came up with an additional $20,000 and we closed the sale.  In everybody’s opinion, the appraisal was just flat wrong.

Another option is to have the seller lower the price to the appraised value so the sale can be completed.  In a lot of cases, this is exactly what happens.  The listing agent should gather some comparable properties and work through the loan officer to try and get the appraisal amended, if possible.

In another case where we had a log home with very few comparable properties, we simply had to change lenders to get things done.  Even in this case, the mortgage officer had to really fight for the buyer who incidentally had about $125,000 equity in a $375,000 property. 

The last option is to simply have everyone part ways.  It’s not the best option, because at this point everyone has time and money into making the transaction happen.  However, in some cases this is the only way to resolve the situation.

Where do most buyers search for homes online?

I just saw some numbers on monthly visits to home search sites that came from comScore Media Metrix. The far and away winner was Realtor.com with about 32M monthly visits. After that, it was Zillow with about 17M, Trulia with 12M, Yahoo with 10M, AOL and Homes.com with about 5M and then a few smaller sites such as Homefinder.com, Homegain.com, Hotpads.com and Listingbook.com.

Of course, most people use these sites to start looking at areas, get the lay of the land, find out about schools, what you can get for your money, etc.  Once they have settled on an area, they begin using the searches provided by the agent’s local MLS system.  In my case, I use a combination of both FMLS searches and Listingbook, depending on what my client needs and their technical ability.

It will be interesting to see what mobile search applications become dominant over the next year or so.  Keller Williams, Realtor.com, Trulia, Zillow and SmarterAgent all have applications in use now.

Five Selling Tips for your Home

1. Lighten up your home.  Open up all the blinds, put higher wattage bulbs in the lights and possibly repaint darker rooms to a light earthtone.
2. If you really want to set a target for the look of your home, walk through some furnished model homes in your price range and in your area.  Ignore some of the fancy decorator touches, though.
3. If you have some areas that are somewhat non-descript, make them have a purpose.  Create a foyer off the garage to a mud room.  Make an unused bedroom into an office or a kids’ after-school room.
4. Add some curb appeal by trimming branches, sprucing up the mulch and reshaping overgrown shrubs especially if they block views from the inside out.
5. Do a little power washing, but be careful!