Pricing Your Home to Sell

How much your home is worth to you and how much it is considered to be worth in the real

estate market can be two very different numbers. If you’re planning to put your home up

for sale, one of the most important factors in making a quick sale is pricing the property

correctly. There are a few important guidelines to remember.

Pricing your home too high can mean it might end up sitting on the market. Pricing it too low

means that you’re losing potential revenue and leaving money on the table. By pricing your

home “just right,” you will not only ensure that it will appraise for approximately the same

value (increasing the likelihood that your buyer will secure financing), but you will likely see an

offer or two – and if you’re lucky, multiple offers.

So, what is the best way to determine how you should price your home? It’s best to look

at recent, comparable sales, or “comps” in your neighborhood or surrounding area. Once

you have a “feel” for comps in your area, your agent can help you decide how your home

stacks up. Using his or her expertise can be helpful if you don’t have a lot of specifics about

how your home compares against others in terms of features and upgrades, additions, or

renovations.

With the market in better shape now than in recent years and inventory levels low, your

chances of selling your home quickly are good – but this still depends greatly on pricing. With

a little research and the expert advice of your agent, you’ll be able to price your home just

right to make that sale.

by Kristin Brown, www.realtytimes.com, August 20, 2013

PROOF THERE IS NO BUBBLE -- 6 REASONS

According to KCM Blog, a real estate blog, well documented with national sources and valid statistics, and a recent job report regarding wages, give great evidence that there is no bubble.  Talking about the possibility of a bubble has made for good fodder both in the papers and on cable newscasts.  However, take a look at the following and you will find some compelling reasons to keep an open mind and draw your own conclusions.  1) 41% - Percentage of homes being bought where payment is cheaper than renting.  2) 16 X's - The ratio of home prices to rents in the first  quarter of 2013 is slightly better than long-term average.  3) 8% - The percentage housing is still undervalued on a price to income ration.  4) 91% - Percentage of the country which is still undervalued.  5) Pent up demand / Low inventory.  6) Wages are rising.  We aren't even mentioning larger down payments, stringent loan qualifications and number of owner occupied versus investors is rising significantly.  Finally, has it been mentioned the renewed perception that home ownership is once again a great investment?

WHAT WERE THE ACTUAL NUMBERS?

The entire Southland hit a sales high in May, the highest in 7 years.  The median price hit a 5 year high.  According to records kept by DataQuick, there was a total of 23,034 new and resale houses and condos sold in LA, Ventura, OC, SD, Riverside and San Bernardino.  That was up 7.6% from the previous month of April, and 3.8% up from  May 2012.  However, there is still room for growth, as May 2013's numbers are still off 10% historically of what May usually produces since DataQuick started keeping records in 1988.  The total number of sales for all properties in OC was 3,648, up 11% from May 2012 and the median price was $540,000 up 24% from a year ago.  The number of resale homes was 2,347, condos came in at 1,013 and new homes still lagged, from lack of product, at 288.  Million dollar homes are making a big comeback, recording the highest number of sales since 2007.  For all of last year, 2012, there were 26,993 homes sold at $1,000,000 or higher.  That is up 27% from 2011.

THREE AWESOME REASONS TO BUY A HOUSE NOW!

Reason #1 -- According to S&P/Case-Shiller, prices will continue to rise in 2013.  In fact, they adjusted their original forecast of 8% to 11%.  Reason #2 -- Mortgage rates will continue to rise.  According to Freddie Mac, 1/2 a point interest has already been factored in and likely will stay there for the time being.  But don't test providence.  Reason #3 -- It is time to make a decision.  The time for hesitation, waiting for the bottom of the market, has come and gone.

PROPERTY TAXES SEE BIGGEST JUMP IN FIVE YEARS

Yes, the notifications from the county tax assessor are making their way to your mail box as this is being written.  The boost is the result of a more robust market, solid appreciation, and new parcels which have sold, including commercial development as well as homes.  Prop 13 only allows 2% adjustment, so long time homeowners may get a notice of a slight uptick, but the most revenue will come from new housing developments, which allow for a fresh tax assessment based on sales price, broken down by land and improvements, and new commercial properties, factories, and shopping centers, to name a few revenue sources.  If you have questions about your tax bill, you should not hesitate to call the Tax Assessor and talk to one of their appraisers.  If you are in OC, you can view your tax bill online.  

ALL REAL ESTATE LOOKS GOOD 10 YEARS LATER

Many investments, whether bonds, stocks, mutual funds, etc, are bought to hold and in fact become long term investment strategies.  Remember, we have been desensitized these past 10 years from one extreme to another.  First, from 2002 to 2006, the public saw real estate as a means to get rich quick. Investment  for  the short term.  Sadly, many people got caught holding the bag, and lost a lot of money, trying to make real estate something in their investment portfolio, it was never meant to be.  Then the other extreme hit, of no one wanting properties except the heartiest, cash flush, investor.  But if you take10 years, any 10 year period, after the great depression, there is no time that real estate did not do well.  Food for thought.  

MONEY MAGAZINE'S REAL ESTATE EDITION...HEADLINE -HOUSING IS BACK!

If you are a natural pessimist, or from Missouri, and you want to see it for yourself, you may want to pick up this month's Money magazine.  Inside, they prove their four points: 10 In the last year, home prices increased in 92 of the country's 100 largest metro areas.  2) Homes are more affordable than any time in the last 40 years.  3) The number of houses for sale is the lowest in a decade and possibly a generation.  4) Price increases are projected for most of the country in 2013.

Bank of America and Merrill Lynch's analysts had the following statement, "We believe that the gain in home prices can persist despite subpar economic growth this year...The combination of low interest, high affordability, and improving expectations for home prices, provide powerful momentum for the housing sector."  Finally, the National Association for Business Economics reported in HousingWire, "While Gross Domestic Product (GDM) is expected to be negatively impacted by all the uncertainty surrounding the nation's impending debt ceiling debate and risks of sequestration, the housing market is expected to continue its upward trajectory."

These reports and analysis of the current housing market may explain why so much cash is flooding the real estate market.  Many economist deem it the safest bet for growth in the coming 3-5 years.  This newsletter always touts the benefits of home ownership and real estate investment.  The leveraging of your cash is the best feature.  But return on investment is always a reason to look to the market.  Many who study the real estate market are beginning to see signs of the start of the next upward cycle.  Don't expect it to be a 2002 through 2006 phenomenon.  Hopefully, we will never see that kind of bubble again, fueled by improperly documented and ridiculous loan programs.  But real estate has always been cyclical and this time around is no different.  Many people try to figure out the exact moment it hits its low and the exact moment to sell high.  Applause to you if you get it right, but for the rest of us, the question is, "Do current market conditions benefit a buyer?  Low interest rates, a bottomed out prices, would evoke a positive yes from this author.  Sellers too, can begin to see their equity returning and be motivated to sell now as well, to take advantage of lower prices on their next purchase.  Overall, you'd have to give a thumbs up to at least considering a real estate investment, either a owner occupied home, a second home, or an investment.

WHAT WERE THE ACTUAL NUMBERS?

The numbers were pretty good, if you like to see the median price rise in Orange County.  The prices jumped again as the February median price rose to $477,000, a whopping 22.3% change from February 2012.  The change from the previous month, January, was 6.7%  The total number of homes sold was 2,252.  The break down was 1,424 single-family resale, 679 condominiums and 149 new homes.  The new homes is where Orange County and all of So Cal is lacking.  Building permits are just starting to find a more robust number, to indicate that housing starts are making their comeback.  Unfortunately, the new homes don't go up over night, so it may be another year, before the market gets help there.  And it is helpful, because many sellers who wish to move up, currently have no place to move up, new homes typically provide that niche.  It is predicted here that the housing recovery will get even hotter as new homes hit the market in bigger numbers.  Fourth quarter foreclosure filings, Notices of Default plummeted to its lowest level in 6 years.  According to DataQuick, the quarter produced 38,212 NoD's, which is a 22% decline in those filings.  OC was down 70% in February of their filings of the same period a year ago.  Not only are economic times better, but lenders have shown their preference for short sales over foreclosures; along with more stringent loan qualifying guidelines and fewer lenders in the market, there has been a natural progression towards a healthier market.

ORANGE COUNTY JOB GROWTH PREDICTED TO OUPACE NATION'S AND STATE

Economists say employment will grow modestly in 2013 led by construction.  As was just stated in the previous section, construction is on the rise.  Builders are starting to build again and hopefully, there will be financing available not only to the big builders, but to a lot of the smaller ones that were forced out of the market during the housing collapse.  Hopefully, they may be lured back into the market, because it provides more jobs and more choices to the prospective buyer.  California has a higher unemployment rate than the nation at this moment.  However, it is expected to grow at a faster rate as well.  No doubt California was one of the hardest hit states, but California has weather, educated work force, and a diversified economy.

CALIFORNIA REMAINS THE MOST POPULOUS STATE

People have to live somewhere.  This seems such a simple statement, but it is true.  The pessimists who say it is too expensive to live here, work here, own a business here, need to truly think about life without California.  No ocean, no desert, no local skiing, no UC college system, the arts and diversity of Los Angeles, the Lakers, Nokia, concerts, in short, the lifestyle.  There are many intangibles that go into where a person or a family lives.  No one place can have them all, but California comes close.  At the end of the day, where would an investor or homeowner realize their biggest gain on a home?  El Paso or Irvine?  Dallas or Los Angeles?  Amarillo or Fullerton?  Well, you get the idea.  It's hard to beat So Cal for housing appreciation.  

MORE YEAR-OVER-YEAR GAINS FOR SOUTHLAND HOME SALES AND PRICES

Southern California has continued its gradual recovery in housing, stymied only by sluggish jobs and lack of inventory.  This newsletter's last edition of 2012 made mention of the less than 3 months inventory in most cities.  A neutral market is considered 6 months of inventory, that is a market that favors neither seller nor buyer.  So it could be said that as we start out 2013 we have a seller's market.   That being said, other aspects of the economy, such as sluggish job growth, coupled with amazingly low interest rates, still favor the strong buyer.  Perhaps it is a more even market after all, and that is not such a bad thing.  A total of 19,285 new and resale houses and condos sold in the Southland counties from Ventura down to San Diego.  That is the highest monthly total since November 2006.  That number is up 14% from November of 2011.  Activity rose the sharpest in the mid to upper range of houses, a range typical of "move up" buyers, and would account for the pent up demand of that market segment.  In fact, sales in that range, $300,000 to $800,000 jumped 34% year over year.  Short sales, where properties sell for less than what is owed against them, still accounted for 26% of the market share in November.  (The last complete monthly stats available.)  When looking at the increase in sales volume year over year, of the Southland counties,  Orange County leads the way at 25% followed by San Diego with 23%.  San Bernardino actually declined by 3% performing the worst of all counties.  More properties should hit the market as the new year gets underway, typical for the first quarter as many sellers sit out the holidays.  This should bode well for both seller and buyer, by allowing more choices for the buyer, a little more competition for the seller, to keep pricing increases in check.  Expect to see a healthier housing market this year, with growth that can be sustained by economic reality rather than the financing fancies of years gone by.

HAPMAN REPORT PREDICTS SLOW JOB, HOUSING GROWTH

In a nutshell, 26,000 new jobs, 6.8% increase in home values, and 10% rebound in construction spending.  Is this accurate?  Are you a half empty or half full type of person.  Tax hikes and uncertainty of the national debt and ceiling are certainly reasonable concerns.  Construction seems likely to make a bigger comeback than that forecast.  However, jobs does remain a concern.  Rumor on the street is that there are companies out there with cash on the sidelines, and jobs in the pipeline.  This column will weigh in with a "half full" vote, that housing will be stronger than last year and the distressed property continuing to be absorbed and outpaced by equity sellers.

WHAT WERE THE ACTUAL NUMBERS?

The total number of units sold for November in Orange County was 2,879.  This number includes 1,841 resale houses, 829 condos, and 209 new homes.  The median price for all homes was $450,000 and that is a change of 12.5% from a year ago.  The median resale price was %525,000, and condos came in at $307,500 and new homes topped out at $606,250.  Foreclosed homes across the nation plunged 23% and although California wasn't in the group of the 5 states with the lowest number of foreclosures, it also is no longer in the group of the top 5 states.  Good news for California.

GET READY FOR THE MORTGAGE MARKET OF 2013

Bankrate.com had some awesome tips to consider for getting the best deal on mortgage rates this year whether you're buying or refinancing.  Here's the top 5:  1) Stop procrastinating and refinance!  If you're paying more than 3.75 to 4 percent, it's time.  These rates won't be here forever.  2) Ensure that your credit is golden.  Credit standards remain tight, but there are things you can do to take care of old dings on your credit.  Pay off a low balance credit card and watch your credit score go up 30 points.  3) Underwater refinancers...don't take no for an answer.  HARP, the :home affordable Refinance Program, is here to help you.  Go online to find information.  4) Compare FHA versus conventional loans.  FHA requires a much smaller down payment.  5) Approved for a mortgage?  If yes, then don't buy anything!!  Don't apply for credit anywhere else during your loan process.  Once you're approved, lenders don't want to know you're out borrowing and getting into more debt.