Saint Cloud, FL

Real Estate marketing is the cornerstone of our business. If you read the featured post here on Active Rain yesterday INTERESTING INFO ON WHO IS BUYING AND HOW THE MARKET HEALS ITSELF FROM THE BOTTOM UP a recent survey shed some interesting light on how the market is changing and how those changes are affecting sales which are on the rise.

LESS THAN 1%

A Nationwide survey recently revealed that less than 1% of all home buyers who purchased their homes in the past year did NOT learn about the home they purchased from a Home Book or Magazine. If you are spending your advertising dollars in this medium you may want rethink it. You are missing 99% of successful buyers.

In fact 90% of them, used the Internet at some point prior to purchase. They generally started their search online and then contacted an agent. What sites were they visiting? Local MLS sites were the most popular (60%) followed by Realtor.com and Real Estate Company site (46% each) Real Estate Agent Web site were a close 4th at (45%)

MARRIED -VS- SINGLE, WHO ARE BUYING MORE HOMES?

Overwhelmingly 60% of the buyers were married. 21% were single women, outnumbering single men by over 2:1 (single men accounted for 10%)

BUYER RESOURCES: CHANGE FROM POINT OF ORIGIN TO CONCLUSION

Interestingly enough how they begin the process and how a buyer will ultimately end the process by completing the transaction change from the the beginning point to the conclusion.

87% Relied on a Real Estate Agent

WHERE ARE BUYERS BUYING?

54% of all homes purchased were in a Suburb or Subdivision.

Quality of Neighborhood was the number one influencing factor in the decision to purchase among 64% of the buyers surveyed.

26% felt schools were important

COMMUTING COSTS

Only 36% of the buyers felt commuting costs were VERY Important

Compared to 42% who felt they were only somewhat important.

What these numbers suggest is that the quality of the neighborhood still outweighs the convenience of the commute. 78% of the respondents had purchased a single family family home. In the suburbs, giving consideration to the quality of the neighborhood or subdivision, and and smaller more economical sizes of homes than were in demand 2-3 years ago.

Knowing how to market, to whom we are marketing and the best ways of reaching potential buyers will help us to streamline where to investment marketing dollars for successful sales.

EFFICIENCY DID HAVE WEIGHTED INFLUENCE?

On average 1600 square feet was the size of the home most first time home buyers selected, and 2100 square feet for second time or repeat buyers. This is sharp contrast compared to previous years where buyer demand was for large homes.

88% of buyers said heating and cooling costs were important. This couold be one reason they are trimming the square footage of the homes they are buying on a National average.

HOW ARE YOU INVESTING YOUR MARKETING DOLLARS?

The market always heals from the bottom up" according to Paul Bishop, National Association of Realtors Vice President of Research. According to the recently released sales numbers 47% of buyers this past year were first time home buyers. Surpassing the previous high record of first time purchasers set back in 1991

"These buyers are critical to housing and a general economic recovery ...they absorb inventory, free existing owners to make a trade and stimulate related goods and services " said Bishop. He compared this rise to the last recession in 1991, where the same dynamic played out "first time home buyers started the chain reaction that led the nation out of recession" he said. Bishop credits tax incentives,record high affordability, and pent up buyer demand to this spike in recent sales. Economists would also credit the FED with suppressing any immediate rise in interest rates affecting home mortgages while the economy is still so fragile.

BUYER PROFILES ARE ALSO DIFFERENT THAN ONE WOULD EXPECT

The median age of a first time home buyer is 30 indicating that some are younger and some are older. They are planning to live in their homes for at least ten years. The typical cost Nationwide was $156,000 down 7% from last years figure of $165,000. 87% of First time Home Buyers surveyed consider their home to be a good investment." Single Family homes sold a higher rate than other forms of housing. In fact 78% of the home achieved were single family homes

HOW ARE BUYERS PAYING FOR HOMES? 96% Chose a fixed rate mortgage. (55% used FHA compared to 8% Using VA Programs) 61% of First time buyers used their savings as a down payment. 22% received down payment assistance as a gift from family. 6% received loans for down payments from family 6% tapped into a 401 (k) program

WHAT IS OLD IS NEW AGAIN- SAVING MONEY FOR A DOWN PAYMENT ON A HOME

39% of home buyers have cut back on luxury items, 38% cut back on entertainment and 30% cut back spending on clothing according to the study.

And a staggering 80% of first time home buyers are using the Internet.

HOW HAVE RECENT CHANGES IN REAL ESTATE AFFECTED SALES?

13% Experienced a Purchase Agreement that was canceled, terminated or fell through "This raises the question of how many potential buyers were unsuccessful because of problems with appraisals or loan qualifications. The market would be stronger without these problems" Bishop added.

Only 8% of applicants were rejected for loans (a 92% success rate) 12% of applicants said that financing their first home was more difficult than they expected. 8% of all buyers paid cash.

85% of Successful Home Sellers used a Real Estate Professional. Sellers surveyed want agents to price their homes competitively, find a buyer, market the property and sell within a specific time frame.

THE TAX CREDIT EXPANSION INTO 2010

The expansion of the tax incentive program will extend to homes placed under purchase agreements by April 30, 2010 and will include home buyers who have owned a home in the past 5 years.

Repeat Buyers surveyed had an average age of 48, earning $88,100 and plan to stay in the homes they purchased on average for 12 years. These buyers typically bought more expensive housing. The median price on a National level was $224,500

RECORD DECLINE IN FOR SALE BY OWNER PROPERTIES.

In the actual number of homes sold without representation was a record low according the most recent survey only 6%. Declining for the second year in row.

The most difficult tasks reported by owners attempting to sell homes themselves were,; preparing and fixing the home, understanding and performing the paperwork and selling within the planned length of time.

The overwhelming majority of successful sellers used a Real Estate Professional full service brokerage.

Want to know more about how to Marketing works?

DO AMERICANS UNDERSTAND HOW THE GLOBAL ECONOMY REALLY AFFECTS WHAT THEIR HOUSE IS WORTH? Sadly, for the vast majority, the answer would have to be no. Do we understand the difference between inflation and deflation? Deflation is what is causing your homes to be worth less. If asked the majority of Americans fear inflation, but without it, their homes will never recover lost value.

INFLATION VS DEFLATION

I recently stumbled across an arguement for inflation entitled "Overcoming America's Debt Overhang" it is a long read, but worth the time and effort. It explains in great detail why inflation is necessary and how in the long term it will actually help the US recover.

WHEN WILL THE MARKET RECOVER?

It depends on whom you ask. Conditions, supply and restrictions now in place all suggest it will never return to the previous levels.

CONDITIONS- What created the bubble were liberal lending policies. Stated Income, Interest only loans, and other risky lending practices which fed the need for consumer greed.

They no longer exist.

SUPPLY- In order for prices to go up, supply must come down.

Unbridaled consumer demand, was the leading cause of the housing price spike, As word spread of the fortunes to be made in the housing market this escalated demand as consumers rushed to buy anything and everything housing related they could. Regardless of what the actual value may have been.

Those buyers... no longer exist.

RESTRICTIONS- THE LACK OF RESTRICTIONS ON CONSUMERS BORROWING MONEY IN 2005-2007

Unlike the 1980's when inflation pushed mortgage interest rates to over 20%, incredibly people still bought homes. Today the interest rate is 4-6% on home loans yet consumers are not flocking to the banks. WHY?

HERE IS THE GOOD NEWS

While wages may not be going up, the majority of Americans are still working 90%

Purchasing a home when the market is down is the best long term hedge against rising inflation.

Purchasing a home now and taking advantage of the additional tax incentive good through 4/30/10 is an excellent hedge against deflation. You can create upto an $8000 buffer. This will offset any drop in value inthe immediate furture.

THE BASIC THING TO KNOW ABOUT INFLATION IS THIS....

The dollars spent today WILL be worth less in the coming years, therefore it will take more of them to purchase goods in the future.

Need Proof?

Ask your Grandparents or parents what they paid for their first home.

DOES THE GLOBAL ECONOMY IMPACT WHAT GOODS YOU CAN BUY?

Anything you purchase that says made in China would be an indicator that the Chinese Manufacturers rely heavily on exports to sustain their economy.

ARE YOU A CONFIDENT CONSUMER?

Elementary economics is being manipulate in the local housing market here in Kissimmee and Saint Cloud , Florida. Supply and Demand. It appears that the supply is being controlled by the banks. As the market has stabilized, inventories are declining. Bank Owned homes under $200,000 have been priced between $68 and $82 a square foot. In this past week, the trend has been to price these distressed properties at $100 a square foot. If there are buyers, and the inventories are drying up, these prices are bound to raise. Inventories are being manipulated.

There are many families in homes that they have stopped paying their mortgage for 10 months or more, and the foreclosure process hasn't even been started. Traditionally, 3 missed payments triggers a foreclosure filed. The delay, the lenders are saying they have too much inventory to start the process.

The only cynical answer I can come up with is lenders are being subsidized by our government for mortgage non payment.

Short sales have also slowed way down in the negotiating. Lenders, with large REO inventories are not trying to negotiate a settlement in lieu of foreclosure. Just more delays.

Government intervention will stretch this "Housing Crisis" past the time for normal recovery.

Selling a home can be a very emotional experience. Suddenly the "enhanced value" becomes intertwined with emotion as the walk through becomes a trip down memory lane. What is valuable to one person may not be relevant to another. Over time, people do things to their homes which have great personal meaning. The key word is personal. It may not necessarily add value to your home, no matter how much you love it.

I recently met with a lovely couple who have a home they wish to sell in St. Cloud Florida. They contacted me having heard good things, seeing my articles in the local St, Cloud Florida News (paper), and here on Activerain as well.

The home has been lovingly maintained. Every corner had been dusted and the home was beyond immaculate we decided to sit in the Florida Room which was very uniquely designed. It had movable walls with vinyl windows which completely open in nice weather and shield you from the harsh elements during bad weather, today it was wide open and the ventilation was fabulous. The pool sparkled brilliantly under the warm midday sun, as we sipped chilled ice tea with a twist of home grown fresh lemon, cut pulled from their citrus tree, and we talked about Real Estate.

They felt confident their old appraisal was still valid. I had pulled fresh comparables and prepared a Comparable Market analysis which I showed them as we discussed what they hoped to achieve in selling their home. They were not very happy with what the numbers revealed. "That is considerably lower than our appraisal". Their appraisal was dated 2006.

So to settle their discouragement, I suggested they have the same appraiser do a new appraisal. Confident I was wrong and they were right, they proceeded with that plan.

A week later I called them back. They were happy to hear from me. It turns out the appraisal which had just been done was back, and even lower than we thought. This was very valuable insight for them, and in the end money well spent in paying for an independant appraisal- that is what a would be buyer will do.

Armed with this new information, they realize a lot has changed in the past three years. The bubble had burst.

They felt I knew my market, and what I talking about and they were very gracious in telling me that.

Not to burst ones bubble, is important.

Homes are selling here in St. Cloud Florida but the price has to be appropriate for the market conditions.