Category Archives: Buyers

Is the real estate sky falling … or NOT!

Posted on 08/25/2010 by Elaine Reese| Leave a comment

chicken littleBy now, you’ve probably heard the various news media (national & local) reporting on the July housing data as compared to last July. The number of homes sold in July 2010 is down versus what was sold in July 2009. Is anyone really surprised by this? We knew it would happen, because the Tax Credit incentives merely moved sales to the first half of the year as those homes had to close by June 30.

I’ve never been one to just accept the info that is published because I know that there are so many caveats to the data. So I decided to relook the sales in MY service area: the Olentangy and Dublin school districts.

JAN-JUN Sales Comparison 2010 vs 2009

  • Olentangy: 478 homes sold with an average price of $328,996 in 2010. 397 homes sold in 2009 with an average price of $318,040. So for the first half of the year, the number of homes sold was up 20% and the average price was up 3%.
  • Dublin: 369 homes sold with an average price of $313,201 in 2010. 290 homes sold in 2009 with an average price of $313,516. So for the first half of the year, the number of homes sold was up 27% and the average price was flat.

JULY Sales Comparison 2010 vs 2009

  • Olentangy: 83 homes sold with an average price of $340,319 in 2010. 108 homes sold in 2009 with an average price of $313,211. The number of homes sold is down 23% but the average price is up 9%.
  • Dublin: 61 homes sold with an average price of $363,381 in 2010. 87 homes sold in 2009 with an average price of $330,215. The number of homes sold is down 30% and the average price is up 10%.

What does AUGUST look like?

  • Olentangy: As of today, 185 homes have closed or are in-contract. This compares favorably to the 104 homes sold last year in August.
  • Dublin: As of today, 111 homes have closed or are in-contract. This also is favorable to last year when only 56 homes sold.

This shows the danger in putting so much emphasis on just one month’s worth of sales. My fear is that with all the publicity July’s numbers are receiving, that it will influence current buyers to decide to not buy. This would be a mistake because they have much to gain with the extremely low interest rates.

Of course, there may be markets nationwide that aren’t as positive as the news we have here, but at least for now, we’re doing OK.

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Delaware County, Dublin Ohio, Franklin County, Home buying process, Homes, Housing stats, Lewis Center Ohio, Powell Ohio, Sellers

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Know when to “fold ‘em”

Posted on 08/18/2010 by Elaine Reese| Leave a comment

Can a real estate agent decline your business when you are buying or selling a home? The short answer is ‘yes‘. That’s because real estate agents are self-employed and can operate their business as they choose … as long as it’s done legally.

Why might an agent not take my business?

  • The primary issue is often HONESTY or TRUTHFULNESS. If the agent suspects you’re not being truthful in the information you’re providing, they may be cautious about working with you.
  • RESPECT and TRUST might also be a reason. Few people want to work so closely with someone who doesn’t respect them or might treat them rudely, but that’s true for many industries, not just in real estate.
  • UNREALISTIC EXPECTATIONS can lead to frustrations down the road. Sellers who want to overprice their homes regardless of what the comps indicate may have a hard time finding an agent to list their home. Likewise, buyers who are determined to to buy a home for 80% of its list price regardless of the competitiveness of the list price, may find themselves without an agent to drive them around neighborhoods writing countless offers.
  • FAILURE TO ACT to prepare to sell or buy, such as cleaning the home properly, making suggested repairs  or meeting with a lender to get pre-approved prior to viewing homes.
  • OUTSIDE THE AGENT’S AREA of expertise or geographical area may cause an agent to decline. Currently, numerous agents are not working with short-sales or REO’s. Some agents may not want to work with farmland because they feel they lack the expertise required. Still other agents may have a policy to not work beyond a certain number of miles from their home base or office.
  • Some agents don’t work with THIRD PARTY RELOCATION sellers or buyers. These are clients taking new jobs in other areas and the new employer has hired a 3rd Party Relo company to handle the move. The agent must pay 38% or more of their commission to the Relo company. With other financial requirements from the Relo company, an agent may make only 45% of their normal income. If the time involved with the Relo client cuts into the service level the agent is able give a regular client, the agent may refuse the Relo business.

Just like any other company or business, real estate agents have a business plan with target markets, sales & income objectives, and the need to control overhead costs. Remember, while you are interviewing the agent to see who YOU want to work with, the agent is subtlety interviewing you to see if your goals/intentions fit their biz plan. Sometimes it’s a good fit and sometimes it’s not. To reference Kenny Rogers’ song, gotta know when to hold ‘em & when to fold ‘em.

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Home buying process, Home selling process, Homes, Homes for sale, Realtors®, Realtor® selection, Sellers

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Do you REALLY know where you live?

Posted on 08/09/2010 by Elaine Reese| Leave a comment

Searching the Internet for homes for sale in Delaware County by zip code can be a mistake. Likewise, trusting any housing stats that show the info by zip can be very misleading. Why? Because the boundaries for the zips in Delaware County have no relevance to municipalities or school districts or general geography.

The first home I purchased was located in Franklin County, in the Worthington School District, with a Dublin phone exchange. The property taxes were based on the city of Columbus with Columbus police, fire, trash and snow removal. My MAILING address was Powell 43065. Essentially, I wasn’t sure where I lived.

At that time, I inquired as to why I had a Powell mailing address since Powell is in Delaware County. I was told that it was due to the mail routes (and zips) being set up when the land was rural. They told me that Worthington wasn’t set up to do mail delivery to farm land properties.

ZipMap
Click map to enlarge

So fast forward to today to see how strange the zip codes are for southern Delaware County. I’m not sure how these zip boundaries were determined but since the area was farms until recent years, I suppose it has something to do with rural carrier routes. Even then, I don’t understand why 43015 (Delaware, orange area) extends all the way down to Powell Rd, west of Rt 23. Why doesn’t 43065 (Powell, lavender area) go straight to the east with Rt 23 as its border?

Another issue is that these zip areas contain multiple school districts. For example, the 43065 Powell zip contains portions of 4 school districts (Olentangy, Dublin, Worthington and Buckeye Valley). Because home sales/prices differ within each of the four school districts, it would be misleading to provide you with the data using only the zip code. A similar problem exists for the Galena zip code (43021, teal area) and the Delaware zip (43015, orange area). These additional areas also have multiple school districts which aren’t aligned with the zip boundaries.The Lewis Center zip code, 43035 is a little “cleaner”.

This “mess” is why I typically report sales by school district. First of all, doing so provides larger geography, making the reports a little easier to understand. Home buyers are “generally” a little more familiar with school district areas, and even if they don’t have children in school, they know that their property taxes will be impacted (high or low) by the levies from the schools.

The next time you see a real estate agent or a newspaper reporting on housing sales or prices, try to determine what they are using for their search, otherwise you’re apt to be misled.

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Delaware County, Delaware Ohio, Galena Ohio, Home buying process, Home prices, Homes, Homes for sale, Housing stats, Lewis Center Ohio, Powell Ohio, Schools

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Do you know what interest rates are now?

Posted on 08/03/2010 by Elaine Reese| Leave a comment

Quick … if I were to ask you what the interest rate is now on a 30-yr fixed rate loan, would you know the answer? Do you know what the rate was a year ago?

A year ago the rate was 5.25%. Today it’s 4.5%, depending on the applicant’s credit score and income/expense ratios. That may not seem like much of a difference, but let’s look at how much it changes your monthly payment.

Suppose you want to buy a home in southern Delaware County with a $250,000 mortgage. At last year’s rate, your P&I would have cost $1,382.50. At this year’s rate the P&I would be $1,267.50. So your mortgage payment would be $115 less than it would have been last year. That’s a savings of $1,380 per year … basically the savings of one entire monthly payment.

If you been sitting on the fence regarding selling or buying a home, you should consider how beneficial it would be to do so now from an interest rate perspective. Of course, there are other things to think about such as the equity you now have in your home and the price it might sell for, but if you’re in a good position it is certainly something to think about.

Give me a call and I can help you with comps, plus, I’ll do a Net Equity Estimate for you to see if it is a good time for you to change homes.

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Delaware County, Home buying process, Home prices, Homes, Homes for sale

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Making an offer on a luxury home in Delaware County?

Posted on 07/18/2010 by Elaine Reese| Leave a comment

A couple days ago, I wrote about whether it was a buyer’s or seller’s real estate market in the Olentangy school district. In that report, I calculated the absorption rate of current inventory by the various price ranges. At the end of the article, I noted that making an initial offer of 85% of list price might not sit well with sellers in the lower price ranges, but might be worth a try in the very high price range where the absorption rate was quite long.

A reader asked whether a seller would agree to the 85% ratio or whether that would just be a starting point on an offer on homes priced over $500,000. Naturally that depends on the seller and whether their home is competitively priced or not.

To better answer that reader’s question, I went to the MLS system to calculate the ratio of sell price vs list price for each of the price ranges. The following chart shows the AVERAGES for single family homes that have sold since January in the Olentangy school district. Of course, I have no way of knowing what the initial offers were. All this tells us is what the seller and buyer finally agreed to for a selling price.

Luxury Homes List-Sell Ratio for Olentangy School District
Price Range Avg List Price Avg Sold Price Avg List/Sell Ratio Avg $ Discounted
$500′s $550,355 $505,957 92% -$44,398
$600′s $649,650 $615,359 95% -$34,291
$700′s $767,200 $715,650 93% -$51,550
$800′s $862,450 $812,500 94% -$49,950
$900′s $992,450 $910,000 92% -$82,450
$1,000′s $1,524,155 $1,274,750 84% -$249,405

As an example, if you’re shopping for a home priced in the $900′s, should you automatically expect a seller to settle at 92% of the list price? NO! These are AVERAGES. Each home will have a unique situation. Your best advisor is your real estate agent. They can check to see how long the home has really been on the market (the DOM resets every time a seller changes agents). They can view how frequently the seller has taken price reductions.* They also can analyze comparatives to determine how they compare to the home under consideration. Armed with all the data, the agent can help the buyer develop a strategy for how their offer should be positioned so BOTH parties feel good about the transaction. And, remember that it’s not always about the price but other terms of the contract are important as well.

* I once saw a home that had been on the market for some time with regular price reductions of a certain amount leading us to wonder “how low will they go and how long did they plan to keep it up?”.

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Delaware County, Galena Ohio, Home buying process, Home prices, Home selling process, Homes, Housing stats, Lewis Center Ohio, Powell Ohio, Sellers

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Is it a Buyer or Seller market?

Posted on 07/15/2010 by Elaine Reese| 2 Comments

tug 'o' warThe answer to that question is “it depends”. How’s that for a non-answer! I looked at sales and absorption rates for just the Olentangy school district, since that’s where most of the sales occur in Delaware County. The “experts” generally consider an absorption rate of 6-7 months to be a stable market. Less than that would be a seller’s market. Over that, of course, would be a buyer’s market.

What I found is that the type of market depends upon the home’s price, at least according to the Active Listings that were available yesterday afternoon when I pulled the numbers from the CBR MLS system.

This chart shows the number of homes sold between Jan-Jun for last year and this year. The ‘% Chg’ column is the year-to-year change of the number of homes sold. The Active Listings reflect the number of homes that were available for purchase yesterday afternoon. The final column shows the number of months it would take to sell the active listings based on the sale rate during the first 6 months. What is not shown are the homes that are currently in-contract.

Olentangy School District Home Sales Jan-Jun 09 vs 10
Sold Price Sold 2009 Sold 2010 % Chg Active Listings Mos to Sell
<$200K 50 54 8% 50 6
$200′s 160 191 19% 210 6
$300′s 98 122 24% 171 8
$400′s 48 54 13% 73 8
$500′s 20 26 30% 57 13
$600′s 14 10 (29%) 48 29
$700′s 7 9 29% 27 18
$800′s 1 2 100% 19 57
$900′s 2 2 - 9 27
+$1,000′s - 6 - 35 35

Based on what the chart is telling us, homes priced under $299,999 are in a stable market. In the $300′s thru $400′s, it’s moved just slightly into a buyer’s market. $500,000 and up is definitely a strong buyer’s market.

So how do you use this info? If you’re a buyer interested in a home costing $225,000, it’s probably not wise to submit an offer of 85% of list. You’ll just anger the seller. However, if you’re buying a home over $1,000,000 then “go for it”! :-)

Copyright © 2010. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Galena Ohio, Home buying process, Home prices, Home selling process, Homes, Homes for sale, Housing stats, Lewis Center Ohio, Powell Ohio, Sellers

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