Concerned about sinking home prices
Q: Bob, here are several questions for you, we realize you can answer just so much? We (our family and some neighbors are concerned about the sinking prices of our homes. What can we do NOW (if not already too late)?
Jack, Linda and friends
A: J, L, friends and anyone in this same boat. This is my opinion and (especially) the professionals I interview for my columns each week. I do receive SEVERAL e-mails, letters, etc. It may be a while before I answer such. Most of it is pretty current, the way our cities, counties, states, etc. keep changing so many things about our system. Always go that extra mile on something you are not comfortable with. Keep inquiring until you are satisfied. Now on to the question.
The residential Real Estate Market now is one of the trickiest in decades. Prices are back to what they were in the late 1990s- or less, depending on where you live – and continue to drop. The housing market is likely to start stabilizing (I hope if figures continue to proceed the way they are now) by late 2010. Until then, there is plenty that you can do to help yourself, whether you have paid off your mortgage and want to downsize, you’re trying to refinance, your family is growing and you want a bigger place, you have to move because of a new job or you’re a first time homebuyer.
First Steps
Start by doing a computer search at www.zillow.com or realtor.com to find prices that are comparable in your area, have sold for and an estimate of how much your home is worth. But don’t rely on these sites if you are actually intending to buy or sell.
REASON: Most of their estimates are too high. The information comes from public records that may be several months old (as I mentioned earlier in the second paragraph). In this real estate market, values and many things change from week to week. For greater accuracy, you need a comparative market analysis (CMA) from a real estate agent, which contains up-to-date data and factors in other criteria that can affect home values. These factors include the exact condition inside and out and the location of a home in relation to street, power lines, etc.
For Longtime Homeowners
If you have owned your home for 25years or more:
THe GOOD NEWS: Even if your home has lost value in the last few years, it is still worth a lot more than you have put into it. So, if you need a home-equity loan, you are likely to qualify. There’s also good news if you want to sell your home and buy another one. If you are in an urban area and plan to downsize to a hard-hit Sunbelt state, such as Arizona, California or Florida, you can buy (at this time) your new home for nearly 50 percent less than it would have cost you five years ago.
THE BAD NEWS: You’ll find potential buyers are extremely selective, taking their time and demanding the lowest possible price.
What to do if you want to sell:
PRICE YOUR HOME REALISTICALLY. Set the prices at what you can really get, not what you think it should be worth. Also, don’t add an extra 20 percent to leave wiggle room for negotiation as you might have done in better times.
Get a GOOD real estate agent who has a track record and will show you the (CMA) figures to really back up his figure. Some Realtors (Not that many) may give you the price you like, figuring to lower it later. Good real estate agents tell you and show you for back up to not waste your/their time and money. Entering the market with the higher price means that many potentials will ignore your home.
CONSIDER BUYING YOUR NEW HOME BEFORE YOU SELL THE OLD ONE IF YOU HAVE ENOUGH CASH FOR THE DOWNPAYMENT. (Be very careful!!) Then rent out the old one to cover it’s property taxes, insurance, etc., until the market recovers. This approach can get you an extra $50,000 or more when you do sell the home down the line in a better economic climate.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor,
Century 21 Birchwood Realty Inc.
4040 Del Prado Blvd., Cape Coral, FL
239-549-5724 Office, 239-542-7760 Fax