Dallas Homes 360

Who Ultimately Determines the Value of Your Home?

Up until just eighteen to twenty-four months ago, most of the local markets in the United States had experienced a decade or more of healthy real estate appreciation. Home prices in many of the nation™s largest markets experienced double digit inflation annually. During that time a number of interesting phenomena also occurred.

The national economy was strong and continuing at an above average pace, until the United States went to war resulting in three and four dollar a gallon gas prices. The outlook on jobs was positive, although annual incomes could not keep pace with the escalation in housing prices. Home builders were building feverishly, setting up for an inordinate number of spec homes in their inventory. And in an interest to enable every citizen a chance at the American Dream, with optimism at its peak, mortgage brokers approved loans for people with marginal or no credit, and very little, if any money. These loan terms were œugly and the idea was that the borrower was given a fixed rate for a few years, and during that time, he or she could clean up the credit and refinance. But that never happened. Instead, the œugly terms reared their ugly heads and 6% rates reset and gave way to 11% rates. These borrowers were hourly wage earners and salaried employees with no way to handle the addition to the mortgage payment.

That said who ultimately determines the value of a home? What will a ready, able and willing buyer pay for the home of their dreams? The answer to this question is really quite simple. It depends on how long the property is on the market.

If a buyer œfalls in love with a home that has been on the market for one day, who is in the driver seat when it comes to negotiating the price of that home? The seller is. While there are protections in most real estate association promulgated contract forms that the home must appraise, it would be hard to argue, the house was not worth what the ready, able and willing buyer was willing to pay.

Conversely, if a seller™s home has been listed for sale for 322 days, who is in the driver seat with respect to negotiating its price? The buyer is. Typically, in this scenario, the home was priced too high to start, and has been reduced several times over the last year. If the market is experiencing a slowdown, the price reductions are usually chasing the market down, rather than establishing a position in front of the trend.

With nearly twenty years of real estate sales experience in the Dallas Forth Worth area, I can unequivocally say, without reservation, that the seller will optimize what his home is worth, if he prices it right, out of the shoot and generates maximum interest in the property in the first few weeks on the market. If it is perceived as a value by one buyer, it will be perceived as such by other buyers and many times the seller will receive multiple offers! What a great spot to be in, to maximize his return on his investment.

The moral of the story¦..PRICE IT WELL and IT WILL SELL!

IT™S ALL ABOUT THE PICTURES!

Real estate is a very local business. Broad national generalizations, like buyers market or sellers market may not apply to a specific market or neighborhood, so be careful when you read the local newspaper or USA Today or WSJ.

A buyers market means, by definition, that there is more than a six month supply of inventory on the market.   This is measured by the number of homes for sale in a given area divided by the average number of sales that close in a given month. So, if there are 35 homes on the market in a particular search area, and the same area experiences an average of 5 closed sales per month, it would be considered a buyers market, because there is a seven month supply of homes currently on the market.

I personally love buyers™ markets. It separates the men from the boys, and the women from the girls! In a sellers™ market just about anyone holding a real estate license, with a little luck, can be successful. But it is markets where inventories are on the rise, that good listing agents will shine. They not only shine, they will leave many in their wakes.

Since 2000, our industry has changed radically. For listing agents, understanding technology and all the available resources and tools available to hellp you, the seller, is an absolute requirement. It is all about the pictures! Click  here for a  Visual Tour, an example of the many tools I use to market listings.

Many of my colleagues continue to spend large amounts of money in the Dallas Morning News (DMN) to buy 14 characters to describe their listings. I stopped advertising in the DMN over five years ago. According to the National Association of Realtors (NAR), 82% of all people considering purchasing a home, begin their search on the internet.   It did not take a degree in rocket science for me to figure out that I needed to be marketing my listings on the web in a big way!

There are so many websites, services and tools available to us as agents that unless you are really up on the technology, and have the financial wherewithal to purchase the latest and greatest, you may not be able to provide the same level of service to your clients as the next agent. Unfortunately for the sellers, most of them do not know enough to ask.

For information of what you should expect as a seller, feel free to contact me by email at judy@theswitzerteam.com or call me on my cell at 214-801-7273.

I put DW Skelton™s Forecast Results on my blog because he is a very esteemed appraiser, and one of the few I know who understands the subtle differences between lot values + improvement values, and the difference between them, and the standard comparables most realtors use to price homes.

I so appreciate DW™s research he put together for the Dallas MLS meeting, and knew you would, too!

In a nutshell:

DALLAS is ideally suited to avoid the declining real estate market. Real estate cycles typically last for 20 years. The worst real estate market existed in 1988.

DALLAS will be affected. Most of the markets in the rest of the United States started to feel the effects in 2004. Cycles typically last for 6 years.

We should expect a short and shallow adjustment over the next two years. Then it will SPIKE! It always spikes when the down cycle ends.

BUYERS™ MARKETS “ CURRENT SUPPLY OF HOMES for SALE

6-8 MONTHS    UNIVERSITY PARK & HIGHLAND PARK
8-10 MONTHS    PRESTON HOLLOW
4-5 YEARS      FRISCO ($1,000,000 + HOMES)

Most of Dallas in areas where new construction is limited, is experiencing a sellers™ market. At some point there is expected to be a minor adjustment, but the DALLAS Proper REAL ESTATE market is very strong.

Contact me, or your real estate agent to develop the right marketing plan for your particular situation!   Call me on my cell phone at 214-801-7273 or email me at judy@theswitzerteam.com

Check back often.   I will be writing about Dallas residential real estate from lots of different angles, to try to give a complete (360 degree) view for sellers, buyers, real estate professionals or anyone else interested in what is happening in Dallas!!