Bill the Broker Blog

The Federal Open Market Committee, know to many by its more common name, The Fed, held rates steady at it’s meeting this Wednesday.

Citing “tentative signs of stabilization” in the housing market. Orlando, being the super-market that it is, seems to feel market conditions in many areas faster and harder than many other markets. The report also cites “somewhat firmer economic growth.”

Stabilization and consumer confidence are what we’ve been seeing more and more of in the market over the last several months.

For additional information, check out the analysis at Bankrate.com.

This just in from Nick Pilz at Appraisal & Consultant Services, Inc.

“Well year end data is up on the ORLRealtor.com website.

Here is what is interesting:

40% of sales occurring in Orlando were between $200,000 and $300,000

Sales were down 36.43% for the Month of December (2005 vs 2006)

Year to date 2006 sales were down 12.33% (this should have been expected and honestly isn’t as bad as it could be)

Year to date 2006 % Change in median home sales price up 7.36% (this was driven by a strong 1^st quarter which we will not have in 2007)

December % change over December % change 2005 is up 4.21% which is the best in 6 months (but this is only because December 2005 fell 4% so if we adjust then there was a mere .21% change)

So we have a 7.36% growth year to date in Central Florida Real Estate with an inflation rate of about 4% or an adjusted 3.36% growth”

You can check out the entire report here.

According to Nick, over the past 2 months the average home resale, that is sale of a home that is not new construction and is listed on the MLS in Orlando, has taken on average 100 days to sell.

Around November of 2005, the “Real Estate Boom” as we all knew it, more or less came to a screeching halt. Since that date, a statement my associate Nick Pilz made plays over and over in my head on every listing appointment I take. “Get your price out in front of the market and you’ll never be the one chasing it.” The conditions we’ve been living in since that day have put his statement to the test. Was he accurate? I’d give you 2 guesses, but you’ll only need one: Nick was dead on.

The question of price is a more difficult equation than what I’ve just keyed in on. Being ahead of the market is mantra of sorts around these parts; at the very least, a guideline that comes with a fairly stern warning. But to neglect the human emotional side of the deal is always a grave error in our business. It’s more than numbers, it’s the clients home. No one enjoys leaving money on the table. What it boils down to is a balancing act. To achieve balance in a transaction is to contract and close.

So what are we balancing? Frequently it’s all situational. For instance, been in a vacant home that’s listed for sale? Chances are their situation is they’re out of the house, won’t be coming back and are making mortgage payments on an empty box. Anyone in this situation should be priced ahead of the market because just a couple of months of mortgage payments could quickly catch up to where the price should have been in the first place. If you’re currently living in the house and have an extended time frame on when you need to sell, then the variables in your equation change drastically. You may be able to afford the chance that someone may stumble in and love your home. They may be willing to pay a 5% premium or more. Now, is that 5% worth gambling with? If the market is unstable or turning downward, probably not. What’s the cost of the alternative temporary living situation? Are you moving to an area where the cost of living is much lower? Is the dollar today worth more than the possibility of a few dollars more in 3-6 months?

These are all questions that have various answers. It all depends on the seller. However, more likely than not, sellers I’ve worked with only see the price as a number unto itself. No outside factors. No equation to be balanced. Just the price and nothing else. It’s a dangerous cocktail of emotional reasoning that has tagged sellers all over. Just down the block from my home is a home for sale that has had a sign out reading “Must sell today!!!” for the previous several weekends. I’d love to hear their story, but I bet I already know it.

Find a reputable Realtor, Appraiser or both. Tell them your situation and listen to their advice. Craft an attack plan that balances your situation with your objectives while staying tuned-in to the market conditions.

This post was inspired by an article Nick Pilz sent me: Blueprint for home sales: Price it right

This, of course, is great news. We’ve been seeing the market come around more and more over the last couple of months. Just through chatting with people, it’s plain to see that consumer confidence is coming back. Earlier this week I heard a client finally say ‘hey, we can get a really good deal right now.’ He couldn’t be more right.

From Fran and Rowena out in Sunny California.

Article at MortgageBankers.org

Nick’s Take:

Don’t get your hopes up: “for the week ending December 8.”

Either a weekly fluctuation linked to Christmas bills. Realization from homeowners that they need to act before the end of the year. Or carry over from lazy brokers that didn’t want to close during Thanksgiving.

The adjusted inflation rate is low (that is minus all of the auto industry problems) and that means either we will stay at this rate or it will go up.

Until this inventory catches up all of this other stuff really doesn’t matter. We are coming down from the high and with a normal market there is an overcorrection (which ideally would be the best time to buy and the worst to sell). But with our inventory levels this overcorrection might last a few years.