July 28th, 2007 4:54 PM by Lisa Carey
For my subscribers who enjoy keeping an eye on the Tallahassee Real Estate Market, here's a great article written by Don Pickett, Chairman of the Market & Trends Research Committee for the Tallahassee Board of Realtors. It appeared in today's local newspaper, the Tallahassee Democrat. If you have any questions about these trends or sales in your area, please don't hesitate to email me at Lisa@CareyCottage.com. Thanks, Lisa Carey, Realtor, e-Pro
Everyone involved in the real estate market and particularly the sellers with residential properties for sale are all keenly aware the current market is a tough one. It is a fact. What you can do is make the most of it the best way you can, if you want to be a winner. And there are things that you can do in order to cope with this market.A look at the local real estate market
First of all, you need to be aware of the fact that, even though our market is not great, Leon County is one of the top three areas in Florida in terms of appreciating single-family home value, showing a 4 percent appreciation for this year's sale of re-sale single family homes. In comparison, the Melbourne-Titusville-Palm Bay reported a depreciation in value of 16 percent!
My volunteer job for the Tallahassee Board of Realtors is to watch market trends, and we keep historical market statistics. The quarterly graph printed on this page depicts quarterly single-family (detached) homes. You will note the upward closed sold from the first quarter through the second quarter is a mirror image to the same period of previous years. This is a seasonal thing with a gradual drop for the remainder of the year. This has been the previous pattern.
The number of resales and new construction-closed sales at the end of the second quarter is about the same as the third quarter of 2003. It just seems in the beginning of 2005 new construction just took off with blind exuberance, as also did investors, in response to an abnormal real estate market as they turned a deaf ear to warnings of the "bubble bursting." There was an attitude that "it couldn't happen here."
Right now we are closing about 10 percent of the active listings each month even as more homes come onto the market. A survey just completed showed about 30 percent of the currently listed residential investors own properties. While we all consider our purchase of a home as an investment, investors are those that purchase a residence without any intent of personally occupying it.
We currently have about a 40-week supply of residential properties listed in our entire MLS (multiple listings service) market with an average of 483 new listings being added each month. Until this additional number of new listings begins to shrink, we will continue to tread water with a very high inventory of residential properties for sale. In June 2005 we had 1,326 single-family homes for sale. This June we had 3,327. In June 2005 we had 272 condos/townhouses, and now there are 1,272. This huge residential inventory is not going to go away anytime soon. On a bright note, in June we closed 483 residential properties which is higher than 15 of the last 24 months.
The second graph depicts the closed sales activity of resale homes in Leon County and the total MLS actives in all counties. While closed sales in no way keeps up with the supply, the median and average price of sold price of homes is very healthy and certainly shows stability in our local market.
When we look at the sales activity for resale single-family homes in the first half of 2007 in our immediate multi-county area, we find the total number of homes sold in 2007 is down in all areas from 18 percent to 36 percent, and the appreciation is generally remaining about the same as in 2006, particularly in Leon County. So while sales are down, those that sell are being sold for about the same price as 2006. Having said that, there are more incentives being offered by sellers such as paying the buyers' closing costs; consequently, reducing the sellers net.
Appreciation in Leon, Wakulla and Gadsden counties ranged from minus 7 percent to a plus 9 percent. In Jefferson County 28 resale homes showed a 48-percent increase, and in Franklin County five sales showed an average decrease of 42 percent. A note, this data is based on properties listed by the Tallahassee Board of Realtors MLS and does not include other sales. Franklin County has its own MLS. I have heard from several sources that the total number of closed residential properties in Franklin County sold in their MLS is 22 for the entire year so far.
A problem affecting the sale of the condo/townhouse market may be the large number of new apartment complexes that came online in the past few years with more on the way. These complexes provide many amenities that small condo/townhouse developments do not. Given a choice, the renter is more likely to select the one with more goodies. As a result, many investors are left with empty properties.
Another problem for investors that have purchased in small developments is that buyers shopping for student housing want more amenities as well and are more apt to purchase in larger condo developments. These condo developments can provide the parent with more peace of mind in their sort of absent ownership that their property will be well maintained. Additionally, buyers are more likely to purchase in developments that have a strong homeowners association; thus, avoiding the junkie look in the smaller projects.How to sell your property
Now, what do I do if I currently have my property for sale or if I am about to put it on the market?
First, you want to increase your odds of being a winner in getting your property sold in the shortest time and the best price. Selling real estate is serious business, and you need to approach it just as that and insure you have the best professional help available to you.
If you are just beginning the process, your first step in increasing your odds of success is selecting your real estate professional. One of the considerations is the Realtor's knowledge of the current market. The length of time a Realtor has been practicing the trade, does not mean an agent is the most qualified. An experienced Realtor with a good track record in home sales is a must in today's very competitive extremely high inventory market. It is yesterday's news that all you need is someone to get your home in MLS.
When you select your Realtor, you need to make similar considerations to ones you would make in selecting any other professional. Try to find out something about the Realtor and the company they represent. As you look at options, examine track records in marketing properties, the marketing plan and if it includes all current marketing tools expected in this very Internet savvy marketplace. Do the Realtor or company have a presence in all media sources buyers will be using? What is the sphere of contacts the Realtor has with other agents? Do you select your Realtor by choosing the one that recommends the highest list price? Again, this is not a wise business decision. Just like the surgeon or attorney with a great reputation for their results, a full-time Realtor with all the knowledge, experience and tools will serve you best and likely save you money.
There are basically three big factors regarding selling real estate, the first and most important is location. There is nothing you can do about this. The next factor is the asking price with the last the condition of the property.
The asking price needs to be based on the current market sold prices of similar properties, not what someone else is asking or what you personally believe your home is worth. It even may be worthwhile to take a look at comparative prices from up to a year ago. An appraisal may be a good idea; however, your real estate professional can best advise you. Keep in mind buyers are few and their choices are many.
Condition of the property may be the hardest one for you. Some homes are show homes to start with and look like a model. In many homes people have excessive furnishings. This condition is a problem in trying to stage the home for display to a potential buyer. Put yourself in a buyer's shoes, and you can recognize the pitfalls. Imagine you are looking to purchase a home. Which one are you going to buy? Would you prefer the move-in-ready home or the one that has potential to look good after spending a lot of money and time?
It may be a tough and difficult decision; but are you willing to do all that is necessary to make your home a winner in this very difficult market?
Even in the best of circumstances you are going to have to be patient and understand it may take months to finder a buyer. Your efforts to price your home right and preparing it, as well as your landscaping, for the market will likely payoff with a shorter time to an offer.
And when you get an offer, be prepared to negotiate to an acceptable contract for both you and the buyer.
Remember, the home I said I listed and had a contract in two weeks? The house was built in 1971 and had a dated interior. The sellers installed a new roof, painted the exterior and got an appraisal to determine a reasonable price for the current market prior to listing. The interior was all spotless and all in good working order and the landscaping was very attractive.
And at the end of the process there was good location, the property was priced right and it was ready to show. That is how it became a winner!