Market Trends Explained

Article by Ethan Nobles of the Arkansas Realtors Association.

Since the first of the year, we've heard a lot about housing markets being down around the nation.
Here in Arkansas, we've seen slowing sales. There's no point in denying that, in most markets, sales are down when compared with 2006 numbers. Through September, there were 23,622 homes sold by Realtors in the state, down 8.47 percent from 25, 809 houses sold in the first nine months of 2006.
There are a couple of things to keep in mind when talking about homes sales in Arkansas. First of all, we're coming off about 7 years of unprecedented sales and 2006 was the second best year on record in terms of sales in Arkansas.
Meanwhile, home prices have continued to appreciate across the state. Through September, the average price of a new or existing home was $154,175, up 1.57 percent from $151,796 through the first nine months of 2006.
In short, sales are down a bit, but average prices are increasing. In other words, we're seeing a return to a normal market in Arkansas. That might be good news for buyers who have been at a disadvantage for years.
Currently, sellers tend to be more wiling to negotiate than they were a couple years ago when all one had to do was list a home and wait for offers. And, those offers did come pretty quickly-so quickly, in fact, that sellers started to view the atypical market they enjoyed through last year as typical.
In Arkansas, a normal housing market is marked by slow, steady growth in terms of both sales and average prices. Average prices are still rising a bit here in the Natural State and we're still seeing houses move at a healthy rate. They may not be selling as quickly as they were a couple of years ago, but they're still selling.
Now, we've got a situation where sellers find themselves in the position of competing a bit more to attract buyers than they have in the past few years. We're seeing sellers and builders throw in more incentives, such as remodeling allowances, home warranties and amenities such as privacy fences in hopes of getting buyers to give their homes a second look.
Here at the Arkansas Realtors Association, we keep a close watch on markets around the state and have found something that should be of comfort to sellers. A home might sit on the market for a bit longer than it did a couple of years ago, but sellers do generally get their list prices.
This is important to point out because some national real estate experts are encouraging buyers to take advantage of "desperate" sellers and make offers to buy homes for substantially less than fair market value. There's no reason for sellers to be so desperate in Arkansas that they'll take any offer that is presented.
In short, that home might not sell as quickly as it did in the banner year such as 2005, but history suggests that it will sell. A patient seller in today's market may well get the price he wants for his home, so long as that price is reasonable.

Why overpricing and soliciting "offers" doesn't work

Many sellers feel they must list their property higher than the market analysis so they will have "room to negotiate." While it is true that some buyers may want to make lowball offers, the buyers who really want your house will pay fair market price. Also, buyers have access to a lot of the information we Realtors have access to, so they are better informed about the market value when they decide to make an offer on your home. And, last but not least, a well priced property can result in multiple offers, even in this market, and that is the true test of market value.

*If your home IS NOT being shown, it means that the buyers think that your price is too high and they are choosing to look at other homes.

*If your home IS being shown, but you are not getting any offers, it means that the buyers are finding nicer homes for the money. Your asking price is too high.

*If your home is in the running, but the buyers buy something else, or if the buyers view your home for a second time, but they buy something else, it means that your home isn't priced competitively and you are helping the competition sell their home.

Written by: Rusty Armstrong, Broker, ERA Armstrong Team

Tips on Pricing your property to sell in a Buyer's Market

Central Arkansas has recently been through its best real estate market ever. Now, the national real estate market has taken an extreme down turn and the average price of some homes has actually gone down. That may seem a little depressing, but the Central Arkansas market has remained much better than most markets. We have seen a 3% increase in average home price overall. That makes our market seem a little better than most, but we still have our issues. Many price ranges and areas of our market have large numbers of homes on the market and competition is fierce. For example, one of my listings has 50 or more houses for sale at one time just in the same subdivision. Days on the market have increased and it has become more of a buyers market. Pricing your property at a realistic value has become even more important in today's market.

The two most important questions you should be asking your real estate agent:

1. What have properties similar to mine sold for in the past 3 months?
Why only 3 months? Because prices have been falling in some areas for the past year,
and if we use comparables that are older than that, it may represent an asking price that is too high in this current market.

2. Who is my competition in the marketplace?
By comparing listings that are in direct competition in your price, size range and general
area, you will be able to price your home so it will not be rejected instantly.

My goal as a listing agent is always to get you the highest price possible in the shortest amount of time. This now requires that we incorporate smart pricing strategies that will help us accomplish your goal of selling at market price.

5 Ways to Avoid Foreclosure

Foreclosures are on the rise. It's reported that Forclosure Filings are up 93% this year. A lot of people got in trouble when they purchased a home a few years ago when the markets were crazy. They chose Adjustable Rate Mortgages (ARM) and the interest rates on those loans fluctuate after a few years at a fixed rate. With those interest rates rising, some homeowners find themselves unable to keep up with the mortgage payments and facing foreclosure. Here are 5 ways to possibly avoid foreclosure.

1. REFINANCE- You can refinance to a fixed rate mortgage to get out of the ARM loan with a high interest rate. This is an easy thing to do, but not everyone can do it because you do have to come up with money for closing costs. This tactic has saved many people from foreclosure.

2. MORTGAGE RELIEF- If you don't have the money necessary for closing costs so you can refinance then there is something available called mortgage relief. Call your lender as soon as you feel you can't keep up with the mortgage payments and they might extend the foreclosure period for you. Usually a home is foreclosed on if the homeowner is just 3 or 4 months behind on mortgage payments. If you are up front with the lender and ask about mortgage relief, you might get a few extra months to get back on your feet.

3. FORBEARANCE- This is where you don't have money to make your house payments so the lender will let you not make payments for a few months. This sounds great, but you are still accruing interest on the loan.

4. LOAN MODIFICATION- Loan modification can be done if you are 30-120 days late on your mortgage payment, but you have a good credit score. You can call your lender and ask them about modifying your loan. They might work something out to where they lower your interest rate or they extend the years on your loan so that your monthly payment is lower.

5. SHORT SALE- This is usually the last and final option. It usually happens when someone bought a house with no money down and since the market has changed some and they now have a high interest rate ARM, they actually owe more than the house is worth. The bank will let you sell the house for less than it is worth and they will forgive you of the rest of the loan. Instead of the bank incurring all those costs of foreclosing they will actually take money off of the loan. You are still required to pay taxes on the difference of the loan, but sometimes this can be a lifesaver to someone who is really in over their head.

If you feel that you might not be able to pay your mortgage, call your lender and discuss some of these options with them so that you can possibly avoid foreclosure.

Getting Preapproved

One of the first things you want to do when you think you might want to buy a home is talk to a mortgage loan officer. This is what is called "Getting Preapproved". The mortgage professional will obtain a lot of information from you and pull your credit report. Based on all of this information and assuming that everything you told them is correct, they can give you the price range for homes that you can afford. They can also tell you things that you should do to improve your credit score and secure a more favorable interest rate. A side note: Prequalified is not the same as preapproved. When you are prequalified, no credit report is pulled and the amount is based on information that you have supplied.

So, of course it is important for you to know what you can afford, but it is just as important for the seller to know that you can afford their home as well. A lot of time and money is wasted on buyers that just aren't qualified to purchase certain homes. If you don't know how much you can afford you might do the following. Call up your favorite realtor, me of course, find a neighborhood that you like, find a house that you love, write an offer on that house and then it gets accepted. The seller gets excited that they have sold their home. You spend money on getting a home inspection, about $300. You put down earnest money to secure the sale, about $500. Then you go talk to a mortgage officer and they say that they can't give you the loan because you don't have enough money!!!! You have then wasted your money for the inspection, possibly your earnest money and more importantly you have wasted the seller's time and took their home off the market for a while.

The moral of the story is, it is advantageous for everyone involved in the transaction if you go to the mortgage company and get preapproved before you make an offer on a home. You will potentially save money, you will feel more confident about your decision, and the seller is more likely to take your offer if they know that you have the funds to follow through with the sale.

If you are interested in buying a home, of course give me a call and let me know, but also call a mortgage loan officer so you can feel good about your decision. One of my favorite Mortgage professionals is Zack Lovett with Cornerstone Mortgage. His cell number is 501-681-7077. Feel free to call him anytime. He works 24hrs a day just like me!

How to make your home sell more quickly and for more money.

Selling your house can be an exciting time in your life. It can also be a nerve-racking time. Every seller wants to sell their home for the most money in the least amount of time. There are some things that I have learned over the years that usually will make you net more money and speed up the sale.

1. Price- In today's market, price is extremely important. Buyers are not willing to pay more than market value for a home anymore. Average days on the market have gone up and a guaranteed way to make sure that your market time is as small as it can be is setting your home at an attractive price. You want other agents and buyers to look at your home and think, "Wow, at this price I can't afford to not buy it." I know that sentence was a double negative, but you get my point.

2. Curb Appeal- After you get the price right, this is the next most important thing. You want buyers to drive by your house and want to go inside. You want them to think that it is so cute on the outside that it has to be just as cute on the inside. Some ideas: freshly planted flowers, a fresh coat of paint on the exterior, a new doormat, a clean yard, and trimmed bushes. This list could go on, but just look at your home as if you were a buyer and you will see what needs to be done.

3. Clear the clutter- This is so important. Almost every buyer at least opens up the closet doors and cabinets. You want them to feel like they have ample room for their belongings. You don't want them to open up the closet and purses and shoes are falling on them. Clearing the clutter will make your home more organized, look better, and gets you a head start on packing.

4. Staging- There are professionals that do this for a living, but you can do some of it on your own. Go through your house, room by room, and take a good look at the space. If there are two huge couches in your not so huge living room, you might want to get rid of one to create the illusion of a bigger space. The internet has a lot of resources and tips for staging. I will probably do a future blog just on staging.

5. Availability- Make your home easy to look at. When a buyer wants to see your house, try to fit it in on their schedule. They could only be here for the weekend and can really only do it that certain time. Allow your agent to hold the home open. Allow a sign in the yard and a lockbox.

6. List your house- Studies have shown that homes listed with a real estate professional will sell more quickly and for more money. That sounds good, huh?

If anyone else has any tips or tricks that worked them I would love to hear them.