Linda Tremblay, Associate Broker Bucks County, PA Real Estate Services

If you've been interested in buying or selling a home, but are unsure whether the timing is right, you're probably not alone. It's easy to lose perspective on our own local market amidst the barrage of news about the nation's housing market during this period of change. Still, to grasp what is really happening today -- and make a sound choice about buying or selling a home -- requires an understanding of what a normal real estate market looks like.

Here are some of the measures that indicate the state of a housing market.

Appreciation
Think the first six years of this decade were normal? Not by a long shot. Nationwide home values between 1980 and 2000 increased an average of 26.5% every five years -- or just over 5% per year -- according to data from S&P/Case-Shiller Home Price Indices. By contrast, average nationwide home prices between 2000 and 2006 increased 89% -- or roughly 15% per year!

It's no surprise some buyers and investors began to view homeownership as a short-term get-rich-quick opportunity rather than what it has always been -- a long-term investment that provides a dependable roof over one's head and some very valuable tax advantages.

Affordability
The fact that average nationwide home prices have declined in the last couple of years reflects a return to a healthier market where buyers can better afford the homes they want to purchase. Consider that the national average sales price of homes traditionally has been two-and-a-half times average household income. From 2004 through part of 2006, that ratio had soared to four times average income.

While homeownership rates hit record highs during those years, some buyers stretched their budgets too far in order to purchase homes and/or took mortgage loans they couldn't afford over the long term. Little wonder foreclosures increased.

Supply
The supply of homes for sale, relative to demand, has a major impact on the direction of home prices. In the housing industry, that relationship is expressed by "month's supply of inventory," which is the total number of new and existing homes for sale divided by the number of homes sold per month. Balanced markets (where neither buyers nor sellers have a particular advantage) have about a six-month supply of homes.

During the housing boom, where housing supply in some markets fell to one or two months of inventory, competing buyers bid up prices that resulted in double-digit annual appreciation rates. As inventory exceeds a six-month supply of homes, buyers begin to have an advantage when negotiating with sellers, and downward pressure on prices may occur.

Sales-To-List Prices
Another indicator of the direction of a housing market has to do with how close actual sales prices are to listing prices and how that ratio changes over time. Using statistics from the local multiple listing service, we can determine the average listing price of homes in a particular area over a specified period of time and compare that figure with the average sales price of area homes over the same period. If, for example, homes were selling at 92% of list price six months ago, but are now selling at 95% of list price, we know downward pressure on prices is easing, and the market is moving toward a more normal condition.

Local Factors Key
Although it may be satisfying to understand what is going on as the nationwide housing market returns to equilibrium, those trends have little impact on the housing market you may be considering buying or selling in. Housing markets vary widely by region, city and even neighborhood according to economic conditions and employment opportunities, housing inventory, community amenities, tax rates, transportation options, insurance costs, etc. In addition, local markets can change considerably from year to year, even month to month.

Looking at the very latest local data and trends is key to making a sound buying or selling decision in any particular market. That's one of the most important services we offer our clients. As local experts, we track the factors that affect our market and are happy to share that information with you. We can even help you craft strategies to take advantage of the opportunities available in the real estate market right here.

Want to find out more? Simply give Linda Tremblay or Marcie Purcell call or send us an e-mail. There's no obligation -- we're always happy to hear from you!

This weekend I went out on a listing appointment and met some very nice people. They had tried to sell their home awhile ago through a couple agents and were now very frustrated. Having spent an hour with them in my office (They walked in looking for an agent) and another two hours with them walking through their home, going over marketing and answering their questions, I could understand their frustration.

They live outside a lovely town that we will call Town A. One agent from Town B (a couple miles away) that they have had come interview with them said "Don't list your home with anyone from the Town A area. It will be the kiss of death and your listing will not sell" The next agent from the Town A area told them "Don't list your home with a broker from Town B. Your home will never sell" These poor people are now confused. What should they do. My opinion "List your home with whoever you feel comfortable with as long as they are not so far away that it is not horrible to commute between your agent's office and your home. Our multiple listing service covers many counties, so the buyer's agent most likely will not come from either Town A or Town B"

Next they proceed to tell me that one agent told them to leave the furniture in their home as it made the home look as though it was staged. (Their home looks beautiful). The next agent told them to take everything out. What are they to do? My opinion was to leave the furnishings in. The home was not cluttered. If your home is cluttered, you may need to get rid of somethings, but I do not think an empty home is as warm as a nicely staged one.

Then there is the should I get rid of every picture in the home or not? Pictures of your family can distract from the buyers attention to your home, especially if there are lots and lots of pictures. Having said that, I do not fell that a couple pictures, tastefully placed are going to either sell or not sell your home.

Lastly, they were confused about price. One agent told them, "We will list high and bring it down weekly until it sells" The other told them to "price it lower." Everyone asked them where they wanted to price the home., to which their answer was "My opinion does not matter. I want to know where to price it to sell" My opinion "Any honest Real Estate agent will tell you to price it where its true value is. Pricing your home too high will end up netting you less then if you had priced it correctly. Do not hire an agent just because they tell you that your home is worth more than the other agent did. Make them show you where their number is coming from. Hire an agent that you can trust to tell you the truth, not say something just to get your listing."

If you are looking to sell a home in Bucks or Montgomery county, PA, call or email Linda Tremblay and Marcie Purcell. We will be very happy to help with your real estate needs. We will answer your questions honestly even if it slims our chances of obtaining your business.

The Quakertown Veterinary Clinic located on Old Bethlehem Pike is holding its annual Pet Fair this Saturday, June 6 from 10am until 2pm. There is plenty to do for all ages and both admission and parking are free.

For the younger ones, there are free pony rides, a free petting zoo, and a coloring contest for children in kindergarden to fifth grade. In the areana, there are obedience demonstrations, K-9 Police Demonstrations, information on creating a relationship with your pet and much more. There will also be vendors with pet products, rescue agencies and other vendors.

Stop on over and enjoy the pet fair help by Quakertown Veterinary Hospital. They specialize in pet care, pet boarding, doggie day care (my puppy Chance loves it), pet training, or of course baths & nail clipping.

If you live in the Quakertown area and are a pet lover, there will be something there for you. If you are considering a move to the Quakertown area and need a pet friendly home, Linda Tremblay and Marcie Purcell would love to help you find it. Call or email us today.

TRUE OR FALSE?

You've heard the myths about buying and selling real estate. Now it's time to separate fact from fiction. Many things that were true 20, 10, even five years ago are not true today. You can't depend on the old beliefs to serve as accurate guidelines in today's market. Test your know-how with this true-or-false quiz.

Buying

Buying the most expensive home I can afford makes economic sense.
True or False?
During a period of rampant inflation -- and with it, assured appreciation on your home -- that makes sense. But in days of slower appreciation, buyers should exercise greater caution. If you feel comfortable maxing out on your monthly mortgage payment, that's your decision. Just make sure you don't bite off more, financially, than you can chew. (Answer: True and False.)

I can get a better deal working without a real estate agent. I'll save on the commission.
True or False?
Long ago, you may have been able to buy a home without professional help. In today's litigious times, however, buying a home without a professional in your corner can be a costly mistake.

There's more to buying a home than just signing the bottom line. Can you be sure what the home is really worth? Who will ensure that you are taken care of in the process? Do you know what disclosures are required? Do you know what the seller's agent is not allowed to tell you that a buyer's agent must tell you?

When you're dealing with the most expensive investment of your life, you should get help from someone who has your best interests at heart. (Answer: False.)

I don't need more than one real estate agent to do a thorough house search.
True or False?
With today's computerized multiple listing service and cooperation between real estate companies, buyers don't have to work with several agents to get to all the inventory. In fact, today, with buyer representation, agents preview the best properties to their clients first. Buyers who link up with an agent and show loyalty to that agent get better service than the buyer who skips from agent to agent. (Answer: True.)

I don't need an agent. I can get all the information I need on the Web.
True or False?
There's a difference between information and knowledge. Unless you can decipher the mountains of information on the Internet, all you have are printed pages with addresses and pictures on them. With such an important decision, buyers need to know everything there is to know about a property -- and that includes seeing it firsthand. Your agent's know-how is critical in preparing an offer, negotiating a contract and following through from financing to closing. (Answer: False.)

Selling

Frequent newspaper and magazine advertising isn't the best way to sell a home.
True or False?
Some home sellers believe advertising their homes two or more times a week brings the best results. Though homes can be advertised effectively, most sales (about 65%) are made either to buyers referred to an office by previous clients or buyers already on tap through individual agents' networking and personal marketing. (Answer: True.)

I should only choose a company and agent who recommends the highest listing price.
True or False?
Pricing is merely a starting point. The best criteria for choosing who lists your home is not opinion on price, but a firm's reputation for giving home sellers an edge. In addition, you need a neighborhood specialist who can negotiate well because, no matter what price you set, many buyers will want to bargain. (Answer: False.)

I should fix up my home before placing it on the market.
True or False?
While most buyers will personalize the home they buy, they still need a clean slate on which to plan their ideas. Most buyers simply don't have the time, imagination or money to cope with a run-down, untidy property. Painting and clearing clutter will give your home a fresh look. (Answer: True.)

How did you do on our quiz? If you have more questions, feel free to call Linda Tremblay and Marcie Purcell at your convenience, and we'll be happy to set you on a successful path to a home purchase or sale.