Real Estate Investing

There’s a new movie about to hit titled “2012.”  It’s about the doomsday of Earth on December 21, 2012 - as predicted by The Mesoamerican Long Count Calendar (according to Wikipedia):

The Long Count sets its “time zero” at a point in the past marking the end of the previous world and the beginning of the current one, which corresponds to either 11 or 13 August 3114 BC in the Gregorian calendar, depending on the formula used.

Others  believe that there will be a shift in our global consciousness.  What I’m hoping is for a shift from a shaky housing market to one that can stand on its own legs (NOT sealegs!).

Business Week just published an article called “What Will Your Home Be Worth in 2012?”

… we weighed historical data against current trends to get a bead on which way the markets might jump at one-year increments. By combining data, we were able to get a pretty good idea of what home prices would be in three years’ time. Across the board, real estate prices will continue to drop before rising slightly by the fourth quarter of 2011. Why is that important? Given the wretched state of the real estate market today, both homeowners and potential buyers might be better able to make an informed decision about when, and whether, they should move or stay put.

It looks like in my own area, the value will be 1.4 percent less than it is now, but nationwide the projected value increases by 1.7 percent.  I would suggest that it’s time to move, but clearly that wouldn’t be a good decision! O.o

Check out the data in your area here.

For a link to the upcoming movie titled 2012, go here (where I pulled the image for this post).

A colleague of mine recently posted on her Facebook account her perfect homebuyer story. Dawne Davis of Bob Parks Realty LLC said,

I’m celebrating my clients’ “perfect” new homebuyer story. Robyn and Allen Robertson just closed on a brand new home (priced well below market value at $73.00 per sqft!) and actually netted $8000 in the process. The builder, in an effort to get inventory sold, offered an incentive that paid $10,000 of their closing expenses, AND they received their $1,000 earnest funds back at closing, so they got into the…

Dawne added in the footnote that the home even appraised for $10,000 more than the sales price.

Like Dawne, there are a few of my favorite homebuyer stories.  One couple found a beautiful home that backed to a creek, there was a horse barn and some acreage to go along with the house that was all-brick, had gorgeous bamboo floors, and a great design.  Yes there were a couple of little snags that we worked through, but the best part was that the appraisal came in at $30,000 over the list price.  That was a good day.

Another great buyer searched for six months. My very realistic estimate on the number of houses we saw is over 100.  But we found her home.  It has a certain appeal in that a married couple lived there most of their lives and we think the ghost of the man still visits.  There’s an old greenhouse that nature is slowly reclaiming.  A workshop also sits behind the house and it smells like my grandfather’s old machine shop.  It’s a home brimming with memories.  What makes this such a great home buyer story?  My buyer - as famous as famous gets in the Nashville society of bloggers and their blogs - is blogging about the surprises she discovers in her yard every week.  She bought the home in the fall so we had no idea about what kind of plants and flowers would burst forth in the spring.

And now we’re finding she also has crawdads.

What have you discovered in your house or yard?

Although existing home sales gained 5 percent in February according to the National Association of Realtors - and reported by MSNBC.com - the slow down in home sales over the past six months may be breeding a new way to price homes when they are listed.

A friend of mine contacted me last week because she may be taking a job out-of-state.  Her home is already located in a neighborhood where few houses turn over… it’s not that they don’t sell, it’s that people don’t leave.  Because of this, it may be very challenging to come up with a fair market price point to list her home.  When I ran my numbers, I can justify listing it for between $180,000 and $280,000 - a price spread too wide to make me at all comfortable.  I don’t want her to sell it for too little, but also don’t want to price it so high that she can’t sell.

Clearly I’m going to have to call in the cavalry on this one.  I’m putting together a pricing team to go with me to review the property.  After we tour the inside of the home and walk the acreage, we’re going to separately crunch our own numbers.  Afterward, we’ll sit down at the conference table to defend our potential list price - our final number is the one I’ll share with my seller.

This type of scenario could become more commonplace as it gets harder to find comparable home sales since sales have been down.  I’m relieved to have a team of colleagues willing to help me out because certainly I won’t mind stepping in to help them as well.