Weems Plantation is a popular Northeast Tallahassee neighborhood that is undergoing some turmoil related to the age of the community, as are all newer neighborhoods around Tallahassee.
With home sales happening at half of our historical rate, we know that a shadow inventory of pent-up supply is growing, and thus so too will the list of homes for sale in Weems Plantation.
People who want to move, but know they owe more on their homes than what is worth, are growing in number. They want to flee, but do not know how.
The impact that this is having on neighborhoods in Tallahassee that are less than 15 years old is greater than it is on those that have been around for a longer period of time.
Why you say?
Because young neighborhoods all have one thing in common for certain. Everybody who owns a home there purchased it in recent years.
Everybody who lives in Weems Plantation moved in after June of 1999, and the majority of homeowners in Weems Plantation have been there 5 to 7 years. This means that normal move cycle trends forecast that the majority of homeowners currently want to sell their home.
All neighborhoods undergo this phenomenon as they grow out of their infancy, but unfortunately for Weems Plantation and other young neighborhoods, they are going through it during the worst real estate market to hit Tallahassee in a long, long time. I suspect if prices were to suddenly increase by 30% and buyers flooded back to the market (don't hold your breath), we would see a lot of homeowners step out of the shadows in Weems Plantation.
Because of this, there will be an abundance of supply on hand for many years to come. Homeowners who choose to sell a home sooner rather than later, will get the best prices for the next five or more years. The decision for homeowners will be to either sell immediately, or hold the property for 15+ years for the decision to make smart financial sense (I dedicated an entire previous post explaining how to calculate the best "financial" decision on whether to sell or hold).
The average sales price of a home in Weems Plantation in 2011 was $157,800, which was down from the $209,000 average in 2006. The graph below shows no signs of the decline stopping anytime soon, even though the first and only sale of 2012 is higher. The percentage of recent sales that have been distressed properties is on the rise, which will make it even harder for arms length home sellers to compete for a sale in 2012.
Home values have fallen 25% in Weems Plantation, from nearly $150 per square foot in 2007 to an average of $112 per square foot thus far in 2012. With more short sales and foreclosures hitting the market, we can expect to see further real estate depreciation in Weems Plantation.
List Of Recent Home Sales In Weems Plantation
A question on many people's minds these days is whether you buy a home or wait until home values fall even further.
We know that home values will continue to decline over the next several years.
And we also expect that these historic interest rates will not last forever.
In an attempt to bring clarity to the "buy a home or wait" debate, I have set up a real estate model that will help most people understand that the answer is fairly simple, but it varies for each person's unique situation.
In order to create the real estate model on the left, I had to start with some basic assumptions.
First of all, I assumed that the average homeowner would be able to borrow money at today's low interest rates. Were this not true, the homebuyer should be more inclined to wait, as home values are still depreciating.
Secondly, I assumed that the average homeowner would live in the home for ten years before selling. This allowed me to calculate a total interest expense to use in the comparison.
Finally, our model compares the cost of waiting (should interest rates rise) to the cost of not waiting (the real estate depreciation that will occur).
The graph shows the amount of "additional money" spent (in green) as interest rates go up. At 4% (today's interest rate), the amount is zero.
The red portion of the graph shows the equivalent real estate depreciation that would need to occur to equate to the same cash difference that rising interest rates would cost.
For example, if you are worried that property values will drop 10% between now and ten years from now, that would equate to a mortgage interest rate increase to 5.1%.
Everybody has their own beliefs on what is going to happen to our economy, to mortgage interest rates, and future property values. This model can work for anybody.
Simply plug your strongest concern into the model, and compare it with "the other side of the coin."
If you are more concerned about rising interest rates, then start on the horizontal axis. Choose a rate you think makes sense, then look straight down and determine the "red" value. That will be the equivalent rate of depreciation needed to be the same as your anticipated mortgage interest rate.
I am confident home values will continue to fall. The imbalance between supply and demand will take time to consume, and during that time, pricing pressures will drive values lower.
But I am also concerned that mortgage interest rates could rise. When they do, history tells us they will be moving swiftly, and low interest rates will be gone for good.
Based upon the economic impact for most families, it would seem that the risks of waiting are higher than the risk of buying now
Home values have dropped over 35%, thus the rate of depreciation from this point in should slow. All models that we use show values rising inside of the ten-year span that we have used for the model.
Historically low interest rates, coupled with the ability to cherry-pick a below-market value, make the "buy a home or wait" answer lean in the direction of buying now for a family that will live in the home for ten or more years.
Yogi Berra has said a lot of things about baseball, but what would he he say if asked about Selling A Home in 2012?
Berra was a fifteen-time All-Star, and the Major League Baseball MVP three times, in 1951, 1954 and 1955. While he is arguably one of the best baseball players of all time, he is better known for his "yogi-isms," his wonderful way with words.
I thought it might be interesting to apply some of his most often quoted expressions, but use them in reference to Selling A Home.
"Overwhelming underdogs" - if two homes are equal, then price is the only differing factor. If you want to sell a house in 2012, then it is your job to make sure your home is "equal to" nicer homes, not lesser homes. You do this by making sure it is impeccably groomed; it should be maintained for expected showings 24/7.
"If the world were perfect, it wouldn't be" - A home's value is relative. It is relative to all the other homes that are available the day that a homebuyer is going to make a purchase decision. No matter how much you think your home is perfect, others will see it in the context of all of their other choices.
"If the guy was poor, I would give it back" - Yogi's reply when somebody once asked what he would do if he found a million dollars... Every home could be somebody's castle, as well as somebody else's dump. No matter how nice your home is, somebody in the world (i.e. the Queen of England) could not fathom living there. The opposite is true as well. Marketing your home as "nice" or "fantastic" is generally a waste of time, it should be targeted to a specific expected buyer pool.
"You've got to be very careful if you don't know where you're going, because you might not get there" - You need to be focused on getting your home sold all the time. You have to understand that there are more sellers than buyers right now, so Selling A Home is like being unemployed, you always have to be ready for a job interview. Not maintaining your home is like going on a job interview and not bothering to comb your hair.
"It's deja vu all over again" When you hire a real estate agent based upon the price that the agent says she can get for your home, then most likely you are going to be disappointed. 64% of all homeowners hire the first agent they interview, primarily because they "like" the agent and are happy with the "promised" sales price. This is something that hasn't changed in my 20+ years in real estate and these homeowners end up having to hire another agent for the job of really Selling A Home.
"I usually take a two hour nap from one to four" Open houses are for information seekers. Always have been, always will be. It's a great chance for real estate agents to meet future home buyers, but history teaches us we have less than a 1% of Selling A Home through an open house. You should demand your agent use their time marketing your home to people who might actually buy it.
"The future ain't what it used to be" We know that 94% of home buyers are using the internet. Shouldn't the real estate agent and real estate company you hire for Selling A Home be spending 94% of their marketing time and marketing budget on the internet?
"You can observe a lot by watching" - All you have to do is spend about an hour on the internet, and you will find the most aggressive regional company that dominates the internet for Selling A Home. Just google "top real estate agent Tallahassee, FL" (or whatever your city) and you will find out who most likely can drive the most local, ready buyers to your home.
There is no reason for you to be baffled about Selling A Home in 2012. If you want to find out what your options are, just drop me a note and I will walk you through how the top real estate internet marketing plan will get you top dollar in today's difficult housing market.
I hope you found the clarity and wisdom in Yogi's thoughts, as they surely will help you if are planning on Selling A Home in 2012.
Changes have been made by the Federal Housing Administration (FHA) that are going to have an immediately wonderful impact on people who want to do a Tallahassee FHA streamline refinance.
You see, the FHA has found itself in a bad position, and perhaps it feels that best way to protect itself is to to do a little more of "what got us here in the first place."
So what the heck is this all about and who could need or want a Tallahassee FHA streamline refinance?
A Tallahassee FHA streamline refinance is simply a way for people who have FHA loans to lower their interest rate and payment amounts.
The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:
And the good news only gets better!
There are no credit checks, no property appraisals, no income verifications, etc. If you have a house with an FHA loan, you qualify!
So, in a nutshell, you should contact a Tallahassee FHA streamline refinance mortgage lender to see how much they can lower your payments on your home because ....
You Already Qualify!
FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. So if you already have an FHA loan ...
The the FHA has already guaranteed a lender that you will repay the loan.
It's in their best interest to make it easier for you to do so!
So even if you own 100% more on the home than it is worth (with an FHA loan), and you've lost your job, and your credit score is 500, ... you still qualify. Why?
Because the FHA has already guaranteed your loan amount, that's why. They can reduce their risk if they can make it easier for you to repay the loan
With today's historic low interest rates, the time is right for FHA financed homeowners to consider this as a long-term option for owning the home.
That means you should immediately talk to a trusted Tallahassee mortgage broker to do a Tallahassee FHA streamline refinance and see how much savings you can gain.
As our federal government continues to flail and waste time disputing who caused the housing market collapse, I just sit here wondering what we're going to do when Fannie Mae And Freddie Mac finally crash.
Did you happen to catch the Super Bowl this past Sunday? Even if you didn't, have you participated in our one-question survey about the impact of Super Bowl advertising? Please give us your quick answer by visiting our Super Bowl Advertising Survey (by clicking the link).
A long time buddy of mine send me a link to an article that really summarizes this concern for me. Christopher Whalen wrote a commentary on HousingWire titled On GSE reform: Be Careful What You Wish For that should make all tax-paying US citizens scratch their collective heads. I want to share a few quotes from Mr. Whalen about Fannie Mae And Freddie Mac.
Think about it. These are organizations that are funded by the government, so their accountability for profitability (think survivability if they are private businesses) is very loose. Who needs to profit when the government is backing you. So what motivates the GSEs (Government Sponsored Enterprises) if not sound financial decision making? Mr. Whalen points out:
... the close operational integration of the top four banks and the GSEs, including Fannie Mae And Freddie Mac and the Federal Home Loan Banks, which are the largest GSEs of all. You cannot separate the GSEs from JPMorgan Chase, Citigroup, Wells Fargo and Bank of America — the four horsemen of the financial apocalypse that exercise illegal cartel control over the secondary market for residential mortgages. The big four zombie banks run the GSEs in the same way that they exercise control over special purposes entities and the private mortgage insurers.
The road to hell is said to be paved with good intentions, and Fannie Mae And Freddie Mac were established with good intentions in mind. But they have evolved to a cancer that is killing housing, and I believe is holding back the economy. Mark Calabria of the CATO Institute notes:
“By focusing on ‘the role of government’ in housing, [Nocera] moves the debate away from the reckless immoral behavior of Fannie Mae And Freddie Mac. He can claim this is about social policy and paint himself as a caring progressive, despite the massive regressive theft that Fannie Mae And Freddie Mac have actually been.”
Everybody knows that Fannie Mae and Freddie Mac have been hammered. Nobody argues that they are a viable, economic entity. But did you know that the reality of their financial situations is far worse than what most are reporting? On this, Mr. Whalen observes:
In the case of the GSEs, the loss on a bad loan is not recognized until the underlying collateral is sold — meaning that there are tens if not hundreds of billions of losses embedded on the balance sheets of Fannie Mae and Freddie Mac in the form of bad loans.
What is going to happen when the proverbial s#*t hits the fan? If hundreds of billions of loans go bad, will our banking system survive? Or will the next administration (we know Obama is going to continue to ignore this through elections) decide to bail out the banks by printing another trillion dollars?
I know there are "way smarter" people out there who pay attention to this, I'll be looking for their thoughts and ideas. I can promise you this, the lack of leadership in Washington today might be causing a problem that could collapse our economy. It has happened elsewhere. Are we just a "Super-sized" Greece?
If we do not put some bright, non-politically charged minds, on the task of reforming and dissolving Fannie Mae And Freddie Mac, then what we know of the housing market collapse will pale in comparison to what is ahead.
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Serving the Needs of everyone regarding Tallahassee Real Estate and Homes in Tallahassee. The Customer is our primary focus, using technology and Great People to serve your needs. Come check us out!
Century 21 First Realty is in Tallahassee, Florida and serves Leon County and the surrounding markets.
Our Mission:
To establish and maintain an organization whose people, systems, technology and agents provide professional service second to none. We will use our cross-synergies to increase profits to our office, business to our agents, as well as increasing the benefits to our clients. There shall be no better company with whom to buy or sell a home than Century 21 First Realty.
Furthermore, we will establish the premier company of choice for the real estate professional: to create an environment that is positive, professional, cheerful, energetic and productive. We will maintain the best support systems, the best staff, the best technological tools, and the best training programs for our associates. The union of the best office with the best professionals shall result in a profitable relationship to all parties.
Century 21 First Realty is a Lead Generating Machine! Do you need to sell your home? Do you want to expose your property to every potential buyer? Nobody has web presence an international distribution channels like Century 21 First Realty.
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Full Service Brokerage From large commercial developments to first time home buyers.
At Century 21 First Realty, we feel that one of the best ways to ensure customer service is to train our Agents. In order to be the best coming selling Tallahassee Real Estate, we feel it is necessary for the Agent and the Company to constantly train, because if you aren't getting better, you are getting worse! We conduct 8 different training sessions each week. Four are focused on our newer associates, and four are focused on advanced training topics. All of our training is taught by Owners or by the General Manager.
The primary intent of the training is to ensure that our agents are providing a high level of service to their customers. The secondary intent for the training is to provide the tools to the Associate to assit them to increase their business to a level that they are happy with. We individually consult with our associates and develop a business plan with them to achieve their goals. We find that no matter how talented a person is, they can always use some coaching. Just ask Tiger Woods
Anybody can claim to have a training program, but you must measure training in terms of the results generated. In a market where the average agent closes five transactions per year, our First Year agents are averaging over 12 transactions. We are selling Tallahassee Real Estate! They are better trained than most of the experienced agents in the market, and their performance shows. If you feel that you could be doing more business, or even if you just want to do more business, come talk to us and let's see if you are a "fit" for our program. You'll be glad you checked us out!
Probably the greatest trait of our company that distinguishes us from the rest of the Real Estate Companies in Tallahassee is our commitment to generating business. This serves a dual purpose. First, it helps us better serve our clients by having a large lead pool of buyers and sellers (a needs and wants list of over 3000 active customers for Tallahassee Real Estate!), and secondly, it allows us to feed our agents' business streams when they feel like they can handle more business. This is truly a win-win for our agents and customers.
Being a full service company also lets us better-serve the investing customer. They can buy properties, sell properties, have us manage their properties, all without having to try to coordinate the varying services among different companies with differing goals and operational procedures. Our investors know that we are constantly seeking to find more properties to acquire, as we service hundreds of investment-property owners already in our portfolio. Knowing that we have a hand in the market and are always finding new properties lets them know that when they are ready to grow their portfolio, we are ready to help. Whether you want a single property or to acquire a portfolio, we can help! Please call us today at (850) 386-2001
Here is a list of some of the Subdivisions in the Tallahassee Real Estate Market that we serve:
7/11/2007
Hello Mr. Peeples (General Manager at Century 21 First Realty),
First of all I wanted to say thanks for meeting with me yesterday. I really enjoyed talking with you. It was nice to have someone talk straight to me about this business. I was emailing you to say that I am not going to be able to make it to the training session today. I have a schedule conflict that I forgot about until today. I know you will be devastated without me there, but the show must go on! Just wanted to let you know that I will not be there today, but I do plan on being there tomorrow. Look forward to seeing you tomorrow and showing you that I'm not a "phantom!"
Sincerely,
Stewart Waters
Please see my Real Estate Blog at http://www.realestateblogtallahassee.com/
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