Mt. Horeb Area Real Estate Blog

Price Check

I walked away from a listing last week.  The home, while beautiful, is priced about $20,000 above everything else in its desirable neighborhood.  It's on a better lot than some of those homes, but then again it is also smaller without any finished basement space.  And since they wouldn't lower their list price, I didn't take the listing.  I knew I couldn't truly represent them when I didn't believe in the price. 

I know that when you take their list price and deduct all fees and taxes, they probably are making less on the home than it cost them to build.  The problem is...buyers don't care.  They aren't going to over pay on current market values to help out a seller.  My job is to consult with people on how to sell the house.  What would sell that house is a price drop. Their options, therefore, are sell the home for a loss or wait.

These are tough times to be selling in those higher price ranges.  The only things seller control are price and condition.  If the location is good and the condition is great, the only thing left to play with is price.  If you must sell, and your home isn't, you probably need to lower the price.

Fire Muster

The Annual Fire Muster is this Saturday, August 23. This is a fundraiser for the Mt. Horeb Volunteer Fire Department.   It's great fun for the kids, but adults have fun too.    There are fire truck rides, firehose water games, a fireman flee market, steak feed, beer and live music.  Most of this is free, but there is  a charge for food, beer and music. 

Schedule of Events

• 11-3:30 Fireman Flea Market

• 11-11:45 Stand Still Apparatus Parade

• 11:30 Mt. Horeb Community Parade

• 12-1:30 Fire Truck Rides

• 12:30 Kids Water Events

• 1:30 Adult Water Events

• 4:30-7:30 Cherokee Band

• 5 Steak and Brat Supper

• 8-12 Bob Rocks Band

Focus on Appraisals

Pricing homes can be a painful experience for both Realtors and Sellers.  Sellers are not seeing the value increases they saw their neighbors or friends get a few years ago, and in some cases, they may actually be asking for less than they paid for the home.  Realtors are faced with being brutally honest with sellers and losing the listing or going with the sellers and overpricing the listing.

While there are many problems with overpricing, one of the things I always need to tell sellers is that even if they would get their dream price, it may not appraise out.  Sellers tend to roll their eyes and tell me "oh they will make it work out".   Not anymore.

More and more, Realtors, sellers and buyers are in situations where homes are not appraising out---or being deemed "worth" what the seller is asking for.  In those cases, the buyer can either walk, the seller can reduce the price accordingly or the buyer can come with cash to the closing table to make up the difference.

The Wisconsin State Journal just ran an a good series on appraisals.  They have many different articles and takes on it, but my favorite is the one that focuses on Wisconsin.  I feel Wisconsin has been, by all reports, a little quicker to "make things right" in the appraisal/lender situation.  Like I said earlier, there is certainly, in this area, no guarantee that the appraiser with just "make it come out" at expected value.

The other article that I like was the Q&A for homeowners.  The one piece of advice I liked was that the buyer should pick the appraiser.  I think buyers assume that the lender HAS to pick the appraiser, but the buyer ultimately pays for it, so they have every right to pick it.

The other to articles have a national focus:  Bad Appraisals Hurt Homeowners and American Real Estate Appraisal System is Crippled.

 

Friday Fun

One of my favorite bloggers is Teresa Boardman out of St. Paul, MN.  Every Friday, she skips real estate and just posts something fun.  My broker, Darren Kittleson, sends out a great newsletter to us every Friday.  He also always includes some "just for fun" links.  I think I'm going to jump on the Friday Fun bandwagon and do a little fluff today.

This one is from Darren.  It's so unbelievable it's funny.  You find yourself thinking "no way...she didn't"...Check it out:  Staging Hell. 

Happy Fun Friday!!

Two More Things for Sellers to Do

When I meet with a seller to list their house, I not only tell them all the great things I will do for them, but I also give them the "Seller To Do List".  You all watch HGTV so I know you could guess what's on that:  Clean like crazy, declutter, create curb appeal, stage, etc. 

However, there are two recommendations I give sellers that are not on those shows:

1)  Get  a presale home inspection done.  Some Realtors (like myself) even offer this as a listing incentive.  Even if your home is relatively new, I recommend having an inspector come through to tell you what may be an issue if you should get an offer.  The last thing anyone wants to be surprised with after a great offer (after which point you've likely gone out and bought your own new house), is a major defect that either has to be fixed or likely the buyer has the option to walk.  I have heard urban myths of crazy sellers who say they don't want to know what's wrong, and they will just wait for the uneducated buyer who won't perform an inspection or hope for a not-so-great inspector. In this market, I say...good luck with that.

2)  Add a buyer's home warranty as a sale incentive.  Home warranties cost about $400 and will cover the buyer for one year after purchase in case some of those "getting up there" mechanicals go kaput.  Many Realtors will write it into the offer to purchase anyway, so it's good just get advertise it up front to get those buyers in the door.

Remember, it's all about selling your house with the least amount of hassle and the most amount of money.  These are meant to help that happen!

More on Gas Price Impact on Suburban Home Prices

The Wisconsin State Journal published an article yesterday (Tuesday, August 12) about the impact gas prices have had on Suburban Home prices.  I still stand by my original post.

Here's the link: http://www.madison.com/wsj/home/local/300210

Make sure to read the feedback forum that follows the article.  There are also some cool links in an inset box to check out!

Gas Prices Effecting Suburb Sales?

A couple weeks back, the Capital Times published an article called "Bust Times for the 'Burbs" about how gas prices were causing people to buy closer to metropolitan areas to avoid commute times.My first inclination was to completely agree that this may be true, especially when I look at the great little communities of Blue Mounds and Barneveld, communities that have great value in home prices but are seeing a very slow market.I also was tending to agree because I am one of those workers that has the fortunate opportunity to work from home to avoid the cost of gas and that's exactly what I chose to do last fall.

However, then I realized one problem with that theory--at least with Mt. Horeb. First, I know for a fact that my commute and the commute of anyone who has to drive the beltline is exactly the same. It takes me about 22 minutes to get from my door to my west side office door.I know it takes my co-workers that same amount of time due to high traffic volumes in Madison.Now, I'm not an expert in how gas is used idling vs. driving, but I would be surprised if I learned that it was that much of a difference.

Then, lets consider the price difference to buy in Madison vs. Mt. Horeb. You can find more, cheaper homes in Madison, but clearly a metropolitan area will have more inventory. It's what you get for your money that is different: older vs. newer, busy neighborhood vs. quiet, etc. Not only that but when you consider how your taxes can jump living in Madison vs. a suburb, there may not be much of a monetary savings at all.

I know my "green" friends will scold me lovingly to tell me its not always about the money, but about conserving our resources. I get that.The article's focus, however, WAS on the money. Since this is a rebuttal to that article, I felt I must address their issues. Not only that but people move outside metropolitan areas for a way of life, and that desire for that smaller town life isn't a fad. It's been around a long time...I think it will stay around for awhile too.

First Time Homebuyers MUST Read

Have you heard about the newly enacted legislation crediting first time home buyers $7500 on their taxes?

Read more about it here! http://www.federalhousingtaxcredit.com/

There are some income limits ($95,000 for individuals, $170,000 for couples), but in general there doesn't seem like a lot of hoops to jump through.

Not sure what a "tax credit" is? Check out #11 on the Frequently Asked Questions of that website.

I'd take it!!

Hot Market Stats

Well, the typically "hot" selling/buying season is over so its time to see what happened.  The following statistics are taken from the Southcentral Wisconsin MLS from Jan. 2008 to end of July 2008 and are deemed reliable but not guaranteed.  I'd like to add the disclaimer that I don't truly feel the busy season is ending as open houses are getting lots of traffic and my buyers are starting to make some moves.  We'll see...maybe what was "typical" is no more...

One of the stats I want to share with you without confusing you is the expiration rate.  There are a number of homes that get listed that don't sell and simply fall off the market.  For example, in Barneveld 35 homes were listed Jan-July and only 14 sold. That's almost 50% that didn't sell at all.  Clearly, if you are putting your house on the market, that's not the category you are hoping to be in.  I'm going to call it the "expiration rate" below.

Village of Mt. Horeb

• Average list price of 103 homes on the market: $305,062
• Average sale price of 60 homes sold: $222,653
• Average days on market 134
• Expiration rate: 49%

City of Verona

• Average list price of 68 homes on the market: $441,747
• Average sale price of 82 homes sold: $293,657
• Average days on market: 109
• Expiration rate: 36%

City of Middleton

• Average list price of 112 homes on the market: $552,806
• Average sale price of 88 homes sold: $351,366
• Average days on market: 67
• Expiration rate: 33.85%

Village of Blue Mounds

Average list price of 8 homes on the market: $244,200

Average sale price of 2 homes sold: $312,500

Average days on market: 23

Expiration rate:  43%

Village of Barneveld

Average list price of 17 homes on the market: $277,117

Average sale price of 14 homes sold: $162,992

Average days on market: 90

Expiration rate:  49%

As usual, there are many interesting pieces to this market statistics puzzle.  If there is something specific you'd like to know about your town, school district or even your neighborhood, I'd love to crunch the numbers!

10 Facts You Should Know About WI Real Estate

The Wisconsin Real Estate Association has put together a flyer/brochure about today's real estate markets.   I think this one of their best but I won't list all 10.  Here are the top three points:

1)  There is no such thing as a National Real Estate market.  When looking to buy or sell, pay attention to local market trends for pricing and inventory.  A devastating market in San Diego and Florida doesn't mean a thing in Wisconsin!

2)  Home values are STABLE in Wisconsin. The WRA reports that in 2007:

• The average price of a WI home remained stable, with a .2 percent improvement".
• While there are pockets of decline, generally speaking, homes are still worth more than they were three years ago.
• WI continues to outperform the rest of the Midwest.

3)  A house is a place to make a home, not a buck.  I agree:  see my post "Is it Real Estate or a home?"   The problem is that most of us think of it in terms of "how much will I make when I sell?" vs. building a home for yourself and/or your family. 

For more housing facts visit www.wra.org/housingfacts.

If you are following advice point #1, your best bet for your truly LOCAL market facts is ME, your local realtor.  Check back soon as I'm in the processes of compiling our local data!