Marketing
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Very cool -- drones are being used in California to market high-end properties |
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 A custom-designed drone with a camera attached is now being used to capture fantastic views of high-end properties in California. Read the article (with an embedded video) for more details. | |
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Monthly housing costs down 28% from 2007 peak |
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 How much does it cost on a monthly basis to buy the median price home in our area, assuming 80% financing? Today, that adds up to a $791 monthly payment. That marks a dramatic 28% decline since 2007 when the monthly payment would have been $1,094. The decline in median sales prices over the last few years (from $195K to $175K) combined with the decline in interest rates (from 6.2% to 3.9%) has brought average monthly housing payments down to very affordable levels. Again, the graph above (click here for a more legible PDF) shows the mortgage payment including principal, interest, taxes and insurance (PITI) assuming 80% financing at November's average 30-year interest rate, and assuming Harrisonburg's real estate tax rate ($0.59 per $100). | |
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If you haven't sold your property in two months.... |
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 Click the image above to watch a 4 minute video from the Wall Street Journal (and Smart Money) about the state of the current housing market. From the video.... "As a buyer, if you're seeing properties on the market that have been there for more than two, three months, those properties aren't going to move. There's no real reason to make an offer on those properties. If a property can't sell in the first two months, there's a problem with that price. The price is not realistic for the market, the buyers aren't willing to take it. So, the only way that sellers are going to move their property if they need to sell now is you either are going to price it at what the average price is for your market, or, ideally, slightly below which will bring in more buyers and more attention. If your home is sort of on the market now for months, the chances are moving it at the current price are very slim." So, if we believe the above (two months without a sale = problem with price) then it's interesting to note the following about our local market.... 803 active residential listings (H'burg, Rock Cnty) 660 of those 803 listings are more than 2 months old Thankfully, 405 of those 660 listings have had a price change, but many have then gone another two months without selling. Perhaps it's not true for every property (two months without sale = wrong price) but that logic can certainly be applied to many properties. | |
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Motivated, eh? Really? |
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 Please bear in mind, this is not related to the price of any homes currently on the market. It is, however, a reminder that if you are motivated as a seller that it is important that such a motivation carry over into your pricing as well. | |
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The list price to sale price ratio has adjusted with market, but not as much as you might have thought |
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 Back in 2000, homes sold at an average of 97.4% of the list price --- now, they sell for an average of 94.7% of the list price. That's not actually much of a shift --- only a decline of 2.7%. A few other observations....
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This Home Is Priced To Sell... |
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I often chuckle when I see "Priced To Sell" in the description of a property in the MLS. This is funny to me because in theory you should be able to adjust the price until your house sells --- but oftentimes in the current market, pricing alone won't sell a house. If a house should be priced at $330k, it could be listed or six months at $300k without finding a buyer, and then another six months at $270k without finding a buyer. Again, great pricing does not create a buyer that isn't there to be begin with! All that said, listings that are "priced to sell" (per the listing agent's opinion) do perform better than most....
Do bear in mind --- simply adding "priced to sell" onto your current listing won't necessarily make it sell faster --- it probably actually does need to be priced to sell! | |
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Answer: Real Estate Agents, The Internet and Yard Signs |
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Question: What are the top three ways buyers find homes?  It is amazing how quickly the internet has become such a major force in the distribution and consumption of information in our daily lives. Click on the image above for a detailed PDF. See below for the data table.  | |
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Peer Pressure in Real Estate: If everyone else rejected this house, I probably should too, right? |
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 Yet another reason to get the list price right from the beginning --- if you start your list price too high, and languish on the market, new prospective buyers looking a a new price will still wonder why nobody has bought it to date, and will be less likely to act based on the lengthy time on the market. I can't tell you how many times (a lot) lately I have been showing a house to a buyer client and after finding out how long the house has been on the market (6 months, 8 months, 14 months, etc) they say: "so.....why hasn't this sold, given all of that time on the market?" Sometimes we can figure out why --- because the price started to high, or because they hadn't yet staged the empty house with furniture, etc., etc. That said, quite often we can't figure out any particular reason why a house hasn't sold after having been on the market for many (or many-many) months. This often leaves my buyer clients in a state of uncertainty, full of doubt and some fear. Even if they like the house (and even if they are considering pursuing it) they wonder why their home buying peers have not bought the house to date. If other reasonably intelligent home buyers have looked at the house and decided NOT to buy it, there must be a reason --- and even if my buyer client can't see that reason, they should probably follow the lead of those who had viewed the house previously --- by not buying the house --- right? Hard to say. Right now a home buyer in this state of mind can console themselves by thinking about how sellers far outnumber buyers -- thus there will always be lots of houses that haven't sold even though you REALLY think they should have. But even so, there will continue to be doubt and concern filling the room as prospective buyers realize that all of the past prospective buyers concluded that they should NOT buy the house. Again -- one good lesson to take from this as a seller is to realize that it is of utmost importance to have your home priced appropriately from the start, and to make sure your home is being marketed to the fullest extent possible --- from Day 1. | |
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Eliminating Distractions and Objections |
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 Preparing your home to go on the market can be challenging (and tiring), and often sellers-to-be need a second (or third) set of eyes to provide suggestions about where to focus their time and energy. There are many different theories about how to best prepare your home to be on the market and viewed by buyers --- and ways of expressing those theories.
Distractions are the things that keep a prospective buyer from focusing on your house. That might be knick knacks, or family photos, or refrigerator magnets, or an overflowing pantry, or fascinating artwork, or an abundance of indoor plants, or a strange odor, or brightly colored wall hangings. Whatever it is --- if a buyer is focusing on one (or more) of these items, they're not focusing on your house. They're reading all of the Far Side comics on the fridge instead of marveling at the granite countertops, tile backsplash, recessed lighting, and stainless steel appliances. They're amazed at how you fit 234 board games into the coat closet instead of taking in the quality workmanship of the trim detail in the foyer, and the mountain views out the picture window in the family room. As you prepare your home to go on the market, close your eyes for a few moments when standing at the entrance to each main living area. Then, open your eyes, and take note of where your eyes are immediately drawn. Or, walk slowly through the space (or ask a friend to help) seeing where your eyes (and your mind) linger. Objections are those correctable physical characteristics of your home that give a buyer a reason to mark your home off their list, or to move it down a notch in their preferences. Perhaps it is that the vinyl siding needs to be power washed, or that three bi-fold closet doors need to be adjusted, or that there is poor lighting in the kitchen, or that the deck needs staining. There are oftentimes small home maintenance items that should be attended to before putting your home on the market. There are two potential dangers of having these items unresolved --- first, a buyer might become too overwhelmed by the work that they need to do to the home once they move in, and second, a buyer might extrapolate from what they can see to imagine what they cannot. A classic example of this is the dirty furnace filter that makes a buyer assume that the HVAC system has never been serviced, is in a terrible state of disrepair, and will need to be replaced immediately. As you're preparing your house to go on the market, I'm happy to provide you with another set of eyes and to give you some new perspectives on how to best prepare your home to be shown to buyers. When you're ready, just give me a call (540-578-0102) or send me an e-mail (scott@HarrisonburgHousingToday.com). Also, don't fret about having your home in perfect "show condition" before you call me --- I'm happy to give you some guidance and feedback while you're still in the process of preparing your home to go on the market. | |
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Deceived By Active Comps! |
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Pricing a home to sell in the current market can be a challenge. Oftentimes, there aren't enough recent comparable sales with which to come to a solid conclusion about the value of a house. Another perspective from which to explore the value of a home is by putting it in the context of other homes currently listed for sale. Let's take a look at how this might work..... Comparable Home #1 - FOR SALE Priced at $235,000 / Days on Market: 45 Comparable Home #2 - FOR SALE Priced at $240,000 / Days on Market: 75 Comparable Home #3 - FOR SALE Priced at $229,000 / Days on Market: 150 Looking at the above, we might reasonably assume that we could price your home at $229,000 and be just fine with selling it in a reasonable time period. We might even get away with pricing it at $235,000. Or if we wanted a faster sale $225,000 should do the trick. But wait..........several recent experiences suggest to me that none of the conclusions stated above are reasonable assumptions....... What if we knew that none of the three homes have had any showings in the 1.5, 2.5 or 5 months that they have been on the market. Does that change things? You bet! By pricing your home in the same general range as these three comparable homes we would likely be setting ourselves up to have approximately the same number of showings that they have had............zero! Now, unfortunately, it's not always the case that we can know how many showings comparable active listings have had in the past X months. It is something, however, that we can (and should!) at least TRY to find out through conversation with the listing agents. As one additional reinforcement of this point, even if three homes had sold for $245k in the past six months, that still doesn't mean the three list prices we considered above ($225k, $229k, $235k) are reasonable. If comparably priced homes that are currently on the market are seeing absolutely no buyer interest given their pricing, then we'd be foolish to list at the same general price point and expect different results. So......how many showings do you want to see on your newly listed home? I'm assuming a few more than zero! | |
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How to sell and buy at the same time when you only want to sell if you find something you want to buy. |
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It is hard to do, but is still a reasonable approach. I am working with three couples right now who each want to move to a new home. One family wants more space in the house, one wants more space around the house (land), and one wants to live in a different part of town. Each of these three couples must sell their home in order to buy a new home. In our current market (with many more sellers than buyers) I always encourage seller/buyers (people who have to sell before buying) to put their house on the market before they make an offer on the replacement house. Since it is a lot easier to buy than it is to sell, it's usually best to start marketing your home for sale and seeking a buyer before you try to contract on the house that you are going to buy to replace your current home. These three couples want to take a different approach, however, and it is quite understandable! As they look at the market to find homes that they might purchase they each find that there are not too many homes that meet their unique set of buying criteria -- size, price, location, etc. They thus conclude that they don't want to put their house on the market yet because if they don't find the right home, they won't sell their current home. You might push back on that and suggest that they could and should go ahead and put their current home on the market anyhow, since they won't necessarily sell it right away, and because they could always turn down an offer from a buyer. Their position, however, runs deeper:
If you are hoping to sell your current home and buy a new home, the first step might not always be to put your house on the market. If you know of plenty of homes that you would buy as a replacement home, then it probably is appropriate to start by listing your home for sale. If, however, you aren't sure whether you'll be able to find a new home to buy, the most appropriate first step may be to start checking out the candidates for a replacement home before you go to the great lengths of putting your home on the market for sale. | |
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If you are trying to sell your home, you might want to check out your competition. |
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I continue to find it quite amazing that one-third of the homes that sell these days do so within 90 days of when they come on the market. However, even with that startling statistic, many (most?) homes languish on the market. There are, after all, 632 single family homes on the market right now in Harrisonburg and Rockingham County, and last month only 32 such homes went under contract. That gives each home a 1 in 20 chance of being purchased in any given month. Ouch! So, with so many homes for sale, it is very important to make sure that you stack up well against the competition. By competition, I mean the homes that buyers will also view when they come to view your home. Sometimes these homes are in your neighborhood, sometimes they are just in the same price range but in a different area. Put yourself in the mind of a buyer that might be considering a purchase of your home and then search online for homes that would meet their needs (including your home). Sometimes....beyond just viewing these homes online, it can be helpful to walk through the competing homes. As you are viewing each competing home you should consider whether you (as a buyer) would buy your home (given your list price) or the competing home (given that list price). This context can help you to better understand whether you have priced your home competitively in the market. One word of warning --- competing active listings could lead you astray! You could have your home listed at $200k, go through five competing homes that are priced around $210k and be reassured that your list price of $200k is right on target. However, you also need to check recently sold properties that would have also been competing with your home. If all of the recently properties that recently sold were at prices around $180k, then even though active listings confirm your $200k list price, you still may be overpriced. Pricing, positioning and marketing are tricky right now, with fewer home sales, and lots of inventory --- but they are more important than ever. I enjoy working with people who like to dig into the numbers and get a good feel for an appropriate list price for their home. If you're ready to start the research, analysis and discussion process, let me know. | |
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Listing your house this fall or winter? Stop what you are doing. Go outside your house. Take lots of photos! |
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Photos are one of the most important marketing assets when selling your home. Blurry photos, dark photos, few photos don't do you much good in telling the story of why your home is outstanding. So...as we approach the bleak and dreary winter months, I encourage you to take some photos of your home if you're thinking of listing your home anytime in November, December, January or February. A few other notes about photos, while I'm on a roll....
If you're planning to list your home with me, then I'd be happy to come take the photos now to prepare us for the months to come. | |
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Harrisonburg / Rockingham MLS Changes Days On Market Accounting Practices |
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Here's how it started, or so they tell me.... In some other city or town in Virginia, a relocating buyer swept into town looking to buy a house. He found a great house, discovered that it had only been on the market for a few weeks, and made a offer on the house relatively close to asking price given the short length of time on the market. After moving in, he was talking to a neighbor, and commented on how glad he was that he was able to secure the house even though it was such a new listing. The neighbor laughed, saying "What are you talking about? They had been trying to sell that house for three years!" How was it possible there? Was it happening here? The buyer's confusion, it seems, was based on the "Days on Market' field in the local MLS. The information that the buyer reviewed showed a very low number for "Days on Market" and he understood that to mean (as most people would) that it was a very recent listing. But in that area (and yes, in Harrisonburg and Rockingham County -- until recently) this "Days on Market' field could be conveniently reset by re-listing a property with a new company. Indeed, even around here, if a seller became worried about buyers' perceptions of an ever increasing "Days of Market' value, that seller could list their home with a new real estate company, and start over at ZERO! But now, things have changed around here.... Our local association of Realtors (HRAR) MLS changed in the past two weeks, introducing a new "Cumulative Days on Market" field. This field will now track the total length of time that a property has been on the market, even if it is listed by multiple companies. Thus, if Brokerage A has a property listed for 300 days, and after the listing agreement expires, the property owner hires Brokerage B, the "Days on Market" slate will no longer be wiped completely clean. "Days on Market" will indeed return to ZERO, showing the length of time on the market with the new listing broker, but "Cumulative Days on Market" will continue to increase, to 301, 302, etc. Does "Cumulative Days on Market" EVER reset?? If a property has been off the market (not listed) for 120 days (4 months), then both the "Days on Market" and "Cumulative Days on Market" will reset to ZERO when the property is re-listed. How does this affect buyers, or sellers? As a buyer, it will now be easier than ever for your Realtor to quickly discover how long a seller has truly been attempting to sell their home. As a seller, it will no longer be able to present your home as a NEW LISTING all over again just by switching real estate companies. So, good or bad? I'm glad the change has been made --- it makes it more difficult for a seller to be deceptive (which is reasonable) and it makes it easier for a buyer to have a clearer understanding of the status of the property. But what do you think? | |
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Price Right From The Start, Unless You Find Great Joy In Waiting |
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 As referenced yesterday, we're seeing quite a few price changes --- nearly 700 so far in 2009 --- so let's examine why they are happening, and whether they are necessary. First, most (but not all) price changes are reductions. Price reductions happen primarily because a house isn't selling at the existing asking price, and the hope is that more interest and activity (and perhaps an offer??) will be generated by lowering the price. Put another way, a price reduction is an indication that the original asking price was too high. So.....why is it so important to get your price right from the get go? Mainly because if you don't, you're house will sit on the market until you do. That's right --- my slightly scientific analysis (below) indicates that your house won't sell until you get the asking price set properly. It's a long and arduous task to examine price reductions in detail via our Multiple Listing Service, so I was only able to analyze trends based on a small sample size --- the 60 most recent home sales in Harrisonburg and Rockingham County. Here's what I found.... The 35 homes that did not reduce their asking price:
Thus, if a home is "worth" $200k, there would be two options:
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A picture may be worth a thousand words, but perhaps a million are needed for a housing decision! |
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Two weeks ago I showed some clients two houses in Massanutten. My clients had reviewed the photos (interior and exterior) of both homes online, and were quite a bit more excited about the second house. And yet --- when we went to see both homes they were somewhat surprised to discover that the first house was MUCH more attractive (generally speaking, and specifically to their interests). As it turns out --- beautiful photos can be taken of a less than attractive home to make it look moderately interesting and exciting. And yes, not so great photos can be taken of a beautiful home, making it seem mediocre and drab. What does this mean for you? BUYERS ought to consider going to visit homes that they have disqualified based on interior photos. Unless you are convinced that the photos are a true, accurate, fair representation of the extent and condition of the home's interior, you should go take a look! SELLERS ought to make sure that their home is presented in the best possible manner when it comes to exterior and interior photographs. I have found that a wide angle lens and an external flash unit can make an extraordinary difference in photo quality. | |
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I am impressed by my clients! |
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Without a doubt, we're in a very challenging real estate market right now --- we've seen fewer and fewer home sales over the past several years. Thankfully, we haven't seen a significant decline in home values (as has been seen in most areas of the country) --- but it's still a difficult time to sell a home. Amidst this, it's great to be working with seller clients who are dedicated to working hard to do everything possible to sell their home:
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Why do I use floor plans to market a house for sale? |
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As I've mentioned before, sometimes I wonder whether flyers are good or evil. Having concluded, at least for the time being, that they are good --- I do take some extra time to try to make them as information-packed as possible. One part of flyer creation that I particularly enjoy is creating floor plans to give a passerby a solid understanding of the space and layout of a home. Below you'll see what these floor plans start as --- a very rough sketch as I measure the house. (click on the image for an enlarged version)  Then, the fun begins --- as I re-create the floor plans on the computer to provide a more visually pleasing layout. (again, click the image for an enlarged version)  The floor plans above are actually my first attempt at representing some of the exterior features (sidewalk, landscaping, fence) of a house. I did so for this particular home (1027 Stuart Street) because the owners have made such wonderful improvements outside the boundaries of the house --- a large patio, extensive flower beds and garden area, a hammock terrace, a solar-powered water feature, solar-powered landscaping accent lights, a fire pit and a storage building, all in a large, flat backyard enclosed with low-maintenance composite fencing. See for yourself --- view photos of this home on Flickr. | |
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Lot sales are still "in the gutter" |
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As I expressed some time ago, my hope for the 2009 Harrisonburg and Rockingham County real estate market is that we would see the end of the ever-decreasing number of home sales in our market. We have seen (approximately) a 25% decrease in number of sales between 2006-2007, 2007-2008, and 2008-2009. Lot sales, however are doing much worse!  In the first four months of this year (2009), In all of Harrisonburg and Rockingham County, there have only been 11 lot transfers of less than one acre. | |
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Under contract in a week?? |
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The home pictured below, located at 115 West College Street in Bridgewater came on the market about two weeks ago. Within a week we had 9 showings and 2 offers, one of which was negotiated and accepted.  But wait --- how could this be?!?? I thought sales were dreadfully slow right now in Harrisonburg and Rockingham County!?? Indeed --- home sales are quite slow right now compared to the past several years, but buyers are still buying, and some are moving quickly! What were the secrets to the success of the sale of this home?
Feel free to get in touch if you'd like to discuss how to best market your home to sell. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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Commonwealth of Virginia
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