Foreclosures and Short Sales are Comparables

A debate recently in my office between another agent and I focused on whether foreclosures and short sale properties really should be used for comparables for “normal” sales.

My esteemed colleague believes that since foreclosures and short sales are sold under “distressed” situations, they are not good comparables for other homes for sale.  My counter is that many foreclosures and short sale properties are not in bad condition and so they should sell at a fair market price regardless of their “distressed” situation.

When it comes down to it, foreclosure and short sale listings most often do sell at a discount to regular listings and should have that taken into consideration, but even in a slow market houses priced appropriately are selling quickly, so those are market prices.

What we do find is a substantial disparity on how much of an impact those foreclosures have on the houses around them.  In areas with low numbers of foreclosure and short sale properties, we find that those properties have little effect on the market as a whole.  Where there are a high number of these properties in a single area, we find the the impact is more like an exponential impact: the higher the number, the more substantial the impact each additional listing has.

Posted by Aaron Dickinson - Edina Realty on 02-29-2008 at 12:02 am
Posted in Community Issues, Foreclosures & Short Sales, Info for Buyers, Info for Sellers, Opinion, Personal Experiences with 0 Comments

NAR Needs to Shut Up

If the incessant radio ads from the National Association of REALTORS were not enough, now I see they are also on television with the same garbage: “real estate is a good investment and historically doubles every 10 years.”  Give me a break.

There are many, many things that my association does well but this is a prime example of a ridiculous message at a horrible time.  I don’t know if there is a single consumer out there today that expects that a house they buy today will double in the next 10 years… and I think most understand that the housing market is not going to move higher for several years.

This ad simply promotes the misconception that REALTORS do not understand what is actually happening in the real estate market today, or that we simply will not accept it.  When sales are down 30%+ from two years ago (and consequently commissions) and we’re seeing more empty desks and less people in the office, I can assure you that we as agents understand that this is a different market with different needs.

Instead of trying to sell promises of sunshine in the middle of a hurricane, the National Association of REALTORS would be much better off to admit that this market isn’t perfect for everyone, but that there are good opportunities out there for certain people in certain situations.

NAR: Please either promote a more realistic message or shut up entirely… I don’t need the kind of help you’re giving me right now.

Posted by Aaron Dickinson - Edina Realty on 02-15-2008 at 01:02 am
Posted in General, Info for Buyers, Info for Sellers, Market Stats, Opinion with 1 Comment

Spring Parade of Homes in Full Swing

The Parade of Homes started last weekend and continues through March 16, 2008.  This is typically a time where we see a uptick in buyer activity and in the past, builders have used this as a platform to push some of their “spec” homes and of course push their custom homes as well.

While it certainly seems inviting for buyers to go to these model homes on their own, doing so means they miss their opportunity to get fair and impartial information from an agent representing their best interests.  Some homes on the Parade are a good value, some are not.  Each builder, location, and style/model of home has its good and its bad, and a knowledgeable agent can provide great advice on the available options.

Many buyers think that they can go see the houses on their own and then bring an agent back to help them with the one they want to purchase.  While that is true, what the buyer probably doesn’t know is that their agent may or may not be compensated by the builder for the sale because of Procuring Cause.

Simply put, buyers that want to have an agent represent them in a transaction should coordinate all their showing activities through that agent.

Posted by Aaron Dickinson - Edina Realty on 02-14-2008 at 10:02 am
Posted in Info for Buyers with 0 Comments

Market Stats Showing Acceleration of Downturn

If you look at both the weekly MAAR report  and the January Monthly Indicators  you will see that the market is slipping more substantially in January this year vs. previous years.

I personally see this as a positive as the current capitulation in the market will hopefully mean a quicker trek to the bottom and should help drive buyers waiting on the sidelines back into this market.  I also feel like these stats finally show what I think many people have felt out in the market for quite some time…

With the HAI hitting 149 & a historical average in the mid-150’s (RREAR Page 2 and January Monthly Indicators Page 12), we’re getting awfully close to historical affordability levels.

Due to our seasonal nature in Minnesota real estate I still think we won’t see a bottom until Q4 2008 but the acceleration downward makes it seem more possible that this market will find its bottom in 2008 and not limp slowly down the hill for years to come.  Add to that the plan the 6 banks are putting forward to renegotiate loans already in default and I sense that this market is finally starting to make steps that will lead to a definite bottom in the future.

It’s impossible to time the market bottom and with interest rates still near all-time lows it isn’t a bad time to make a move up to a more expensive home or to buy a first home.  Prices may fall further but if interest rates move higher on inflation fears, any additional decrease in sales prices may be erased by equivalent or greater increases in interest rates.

If you’re wondering if now is a good time to buy for your situation, feel free to call or email me to discuss your situation.

Posted by Aaron Dickinson - Edina Realty on 02-11-2008 at 09:02 pm
Posted in General with 0 Comments

Train Information on Rail Lines in Minnesota

A client of mine found information via MNDOT regarding the traffic levels of train tracks throughout Minnesota, including the Twin Cities.  Unfortunately it does not show the train times but it does give an approximate count of the number of trains per day and the speed at which they travel:  http://www.dot.state.mn.us/ofrw/freightData.html

Pretty cool information… thanks Lisa & Jason!

Posted by Aaron Dickinson - Edina Realty on 02-11-2008 at 07:02 pm
Posted in Community Issues, General, Info for Buyers with 0 Comments