What Else Can We Do?

Bar none the most frequent question I get asked by clients is "What else can we do?"

There's no doubt about it, the most important place for your home to be advertised is MLS & Realtor.com, that's where over 80% of home sales are going to come from. The two places I recommend all my clients to put their homes is Zillow.com ( which we do for your) & Craig's List, and I recommend they update it at least every other day if not daily. These services are completely free and Criagslist.com is the largest classified in the nation. There are also lesser known services such as kijiji.com and backpage.com that I would recommend posting an occasional ad, but Craig's List is the big one.

Most people know about Zillow.com and they put their homes on there and never go back, which works fine for Zillow because it stays posted for a certain number of days without any upkeep. Craig's List requires more vigilant upkeep. Although your ad will stay on Craig's List for up to 45 days, within 2-3 days the listing becomes buried many pages from the font page and becomes nearly useless.

How To Keep Craig's List Fresh?

Check out a website called Postlets.com. You can upload your listing information and pics to them and they export everything to Craig's List & backpage for you. Here's where you need to keep vigilant. Once they've created your post they will generate an HTML (hyper text markup language) code for you. It looks like gibberish if you don't understand HTML, but that doesn't matter. Copy the code into a simple text or word document on your computer and just get in the habit of going on Craig's List every other day and creating a new ad. You can create an account for free, and then you just need to paste the HTML code that you have saved to your computer and this will save you the time of having to type a new ad every day.

Keep in mind, if you want to put it on Craig's List daily like we recommend,you're going to need to create 2 different ads in Postlets with differing texts. Craig's List will not allow you to paste the same ad twice within 24 hours, so create an ad for even number days and odd number days.

Mandatory Apprenticeship

I remember distinctly passing my real estate exam, getting my license, finding my broker and being extremely excited about getting my start...The problem was, I didn't know anything. Sure, I passed the exam and new all the laws, but that's not what being a Realtor is about. It's about giving advise and helping me find property that is best suited to their needs. It's about how to handle all the different parties in a transaction and how to negotiate and close the deal.

I believe that the real estate industry should follow the appraisal industry and adopt a mandatory apprenticship program. In order to become an appraiser one has to have 90 class room ours and then 2000 apprenticeship hours. Real estate agents are advising people about the biggest purchase most of them will make in their lives, and agents don't need to disclose how long they've been active, how many transactions they've done or how experienced they are.

For example, when you first start out as an agent you are taught to talk about "we" a lot. We have 6 offices, we have over 40 homes sold this month, we have sold $80 mil worth of real estate. In order to make up for the agent having ZERO experience, the agent just says we a lot and that way he/she can take credit for everything the brokerage they're with has done, which in turn makes the agent sound very knowledgeable. Is what the clients don't know is that agent may be licensed for all of 3 days and works from home and has a broker that spends far more time on the golf course than in the office.

If there was a mandatory apprentice ship, which should be a combination of homes sold and hours spent, then all buyers & seller would be guaranteed to be working with an agent that has at least seen a transaction from start to finish and has some a far better idea what they're doing.

As always, you can sell your home on the MLS & Realtor.com for only $295 at www.295List.com

Median House vs Average House

The question posed is, what is a better market indicator, the Average Home Price or the Median Home Price, and what's the difference?

People tend to get confused between median and average, and many people believe it to be the same thing. Everyone knows that an average is the sum of the group divided by the number in the group. That works well with batting averages and things of that nature, but when you start using numbers that can have large skews on the high or low end, the median is a much better indicator.

I typically think of median home price as "What can I realistically buy the typcial house in that neighborhood/town/state for?" The median will represent that number far better than the average. Here's a real esample for a search I ran today. If a buyer wanted to buy a home in the 85262 zip code, under 1,400 sq ft, I would come up with a median home price of $409,900, yet the average price would be $2,126,000. Can you imagine being a home buyer and asking "What's the average home price for homes under 1,400 sq ft in the 85262 zip code?" Then you get the answer of over $1.2 Million. If that buyer was qualified for a $500,000 home, based on the average home price, they would think they couldn't find anything in that area, even though there are only 2 above $500,000.

How can this be? This is the perfect example of how numbers outside the typical range can greatly skew a number. In the above example there were 5 homes available between $369K - $449K, one home at $875,000 and the last home was $12 Million. When averaged out, the total comes to over $2.1 million.

So, the answer to the initial question is clearly the median home price is a far better indicator. It tends to track the "typical home" in a neighborhood, and isn't as subjective to huge swings due to sales on either extreme.

As always, we offer $295 MLS listings at www.295List.com .

First-Time Home Buyer Tax Credit

The First Time Home Buyer's Tax Credit is a credit equal to the lesser of 10% of the homes value or $7,500. The tax credit is available to all first time home buyers who buy their home between April 8th, 2008 and July 1, 2009.

How does it work?
This is actually a tax CREDIT and not a tax deduction. So, if you usually receive a refund every year from Uncle Sam, you will now receive an additional $7,500 on top of what ever you typically receive. Likewise, if you usually have to write a check to Uncle Sam, you'll be able to make that check out for $7,500 less.

Are there any catches?

Of course! This tax credit works like an interest free loan and must be repaid over a 15 year period. Keep in mind though, a "typical" $7,500 loan would have $4,200 in interest that you will save. (assuming a 7% interest rate)

Are there any income limitations?

This is only available to single tax payers with incomes up to $75,000 and married couples with incomes up to $150,000.

What is a First Time Buyer?

The definition is a buyer who has not owned a PRINCIPAL residence in the past 3 years. So if you sold your home in 2005 or prior, you are a first time buyer. Owning an investment or vacation home that is not your principal residence does not diqualify you. If you're married, and either you or your spouse has owned a principal residence then you are both disqualified.

Does a manufactored home qualify?

If the home is your primary residence, then yes! This also includes townhouse, condos and house boats.

NAR Rant - Stop The Misinformation Campaign

Let me preface this by saying I understand the NAR (National Association of Realtors) is founded by agents and their job is to take care of their memborship, and I do believe they have provided some excellent benefits in securing partnerships with companies and securing discounts for its membership. BUT, I also believe that they're a huge part of why agent's have such a bad reputation.

Now, I've had a problem with the misinformation campaign the NAR has been putting out for years, and the well informed public realizes that their numbers are "slightly" skewed to favor agents. The rub for me is the NAR has never stopped saying that it's a great time to buy. Not once did they say, "The market is priced too high and buyers should beware." Gathering statistics to put in a previous blog I decided to read the

NAR's "Economic and Market Watch Report," ( can be found at http://www.armls.com/httparmls.html ). Now this is a local report for Maricopa County. Just for fun I'd thought I'd go back and check how well they predicted the market shift.

I went back to Q3 of 2006 which was the beginning of the downward slide. June '06 had the highest median home value of $264,800. The NAR rated the market as a 5 on a scale of 1-5 with 5 being a "strong seller's market." I just thought Whoops, they missed it just like a lot of the experts did. I was sure they'd correct themselves for Q4.

Q4 2006 - They called it a 4 on the scale, so at least they down graded, but median home prices had now dropped nearly $15,000. They predicted that Q1 2007 prices would increase.

So here's were my huge issue comes. Every single quarter the NAR forecasted that home prices were going to go up the following quarter. As of the last report Q3 2008 (Q4 not released yet), median home prices has fallen 43%, and yet they keep forecasting a rise in prices and keep telling the public to buy now.

Look, I'm a proud member of the NAR and have been for nealy 10 years, and I plead to my brethren to please stop feeding BS to the public, tell them what's really going on, tell them we're probably not going to pull out of this in the next 12 months, and then COUNCIL them on their options and give them choices with THEIR best interest in mind.

Home Sales Up 7th Straight Month

The number of homes sold has been up every month since June when compared to the previous year, and the total number of homes sold is up by 5,389 homes over 2007, which is an increase of nearly 9.5%. This is a good sign indicating buyers are starting to come back into the market. You can see a large change in the number of buyers in the 4th quarter of 2007 vs the 4th quarter of 2008. Unfortunately, it doesn't mean we're close to being out of the woods yet. The number of homes on the market is still nearly 57,000 and we currently have a 10 month supply of homes. Until the current inventory drops significantly and gets closer to the 30,000 homes on the market number, we're going to continue to see delcines in home prices. I will have the median home prices out next week as well as the annual summary.

I couldn't get the entire chart to fit, so please click the image at the beginning of this post for all 12 months gonig back to 2001.

Home Sales Per Month
	Oct	Nov	Dec	Total
2,005	8,046	7,350	6,549	106,730
+/-	-2,447	-2,013	-1,138	-30,238
change	-30.41%	-27.39%	-17.38%	-28.33%
2,006	5,599	5,337	5,411	76,492
+/-	-2,142	-2,019	-1,991	-19,662
change	-38.26%	-37.83%	-36.80%	-25.70%
2,007	3,457	3,318	3,420	56,830
+/-	1,932	1,094	2,197	5,389
change	55.89%	32.97%	64.24%	9.48%
2,008	5,389	4,412	5,617	62,219

The first line is the actual number of homes to sell in the given month, followed by the difference in sales of the following year and the percentage change.

Should I Sell Now?

This is the most common question I get asked, "Should we sell now or wait this out?" I've been telling people for the past 2 years and will continue to tell people for the foreseeable future;

" If you're planning on selling your home in the next 3 years, SELL NOW!"

I have had countless people in the past year especially tell me they're not selling now, they're going to wait 3 months, 6 months or a year. Home prices dropped at over 2% PER MONTH last year, which means if you were going to sell your $300,000 home in January and decided to wait until July, your home would have lost $36,000 in value.

Unfortunately, this isn't the type of the market where you can try to price it a little high and then lower your price, you will be constantly trying to catch the declining market and it will cost you thousands more than pricing it right from the beginning.

We are not at the bottom of this market yet either. Lending is still extremely tight, unemployment is on the rise and loans are resetting constantly which is causing more homes to go into default and flood the market. The biggest indicator for a turn in the market is the foreclosure market. Until foreclosures decline, the REO & short sale properties will continue to place a downword pressure on the market. In my opinnion, we can expect 2009 to be another down year. I do not believe we will see 20%+ drops like 2008, but I don't think a drop of 10%-12% is out of the question.

It's not all doom and gloom, there are buyers out there if the price is right, we're still selling multiple properties per month and rates are incredibly low. Long and the short of it is price your home right, and get your home on the market NOW if you're planning on selling.

With that said, selling now isn't the best option for everyone. The market will come back, it's just not going to be soon. If you bought your home with a 10 year plan in mind, then the value of your home right now doesn't mean anything. If you have a good loan or own your home free & clear, selling your home now just to go rent something is a horrible option for you.

There's not a one size fits all in ANY market. If you'd like to go over your options, please feel free to give us a call. We'll walk you through everything from a deed-in-lieu to renting to just waiting this out.

Please feel free to call or write if you would like comps for your neighborhood, and remember, you can always find $295 MLS listings at www.295List.com

Home Prices Plummet 33%

The S&P Case-Shiller Home Price index was released on 12/30 and its indicies shows that Phoenix metro home prices have fallen by 33% from October '07 to October '08. Of the 20 metros in the index, Phoenix has the steepest drop, followed by Las Vegas, San Francisco, Miami and Los Angeles.

This may not be any entirely fair assessment of the market as October will go down as one of the worst financial months in this countries great history. October had the worst month in the US history for the stock market and President Bush signed a $700 billion dollar plan the same month, but there is no way to spin this into a postive light.

Blog More

One of our New Years resolutions is to blog more and give more valuable information about real estate and our financial world. If anyone has any topics or questions they would like to ask, please don't hesitate to contact us. 

Happy New Year

Happy New Year to all. I hope this 2009 brings everyone great happiness and health. It is our hopes to bring continued great customer service this year and if we can do anything to improve or expand our services, please let us know.