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Real Estate Needs Politicians OUT

11-02-09

Do you remember when you were growing up and falling down all the time, Mom would put a band aid on your fleshy scrape to keep it from getting infected. That band aid made you feel really good, but it came with a price.

Removing a band aid from a messy wound is not a pleasant experience. There are two schools of thought on how to remove the band aid:

Take your time – Be very slow, gently trying to “peel” it away from the would without damaging new skin or pulling hairs out.
Grip it and rip it – Get hold of a tiny corner, count out loud from 1 to 3, then violently pull the band aid away from the wound in a nano-second.

Both ways cause pain, but most would argue that the latter produces better results (less pain and shorter recovery period).

The Real Estate Market Is In A Scrape

So why does somebody who writes a blog about real estate start a discussion about band aid removal? Great question … and the answer is because it was the best analogy that I could come up with to describe what is going on between our politicians and our wayward real estate market.

If you were paying attention on Friday, you might have heard that Senators reached a compromise to extend the $8,000 first time home buyer tax credit. They also added a $6,500 tax credit for other primary-home purchasers and raised the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, housing-industry sources said.

Under this proposal, home buyers will have until June 30 to go to close on their purchases. But this is not a “done deal,” as the measure still faces votes in the full Senate and the House.

The Treatment For A Broken Real Estate Market Is “More of the Same?”

Albert Einstein’s definition of insanity: “Doing the same thing over and over again and expecting different results.”
Congress’s Solution to our housing market woes: Create unfunded financial incentives to propel the market beyond the extent to which it could perform under normal market conditions.

Hey, WAIT A MINUTE, isn’t this how we got here in the first place. Didn’t we (the government) push to achieve results in home ownership rates by creating loan programs for consumers who historically had a high rate of default? Didn’t this stimulate home-buying to such an elevated level that we produced significantly more homes than we needed?

Then, rather than see the good times come to an end, didn’t the mortgage industry create even crazier loan schemes to keep the good times rolling?

And roll they did.

Congress To Send Housing Market To Detox

[click to view Detox Plan as envisioned by Congress…]

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Tallahassee, FL:Summerbrooke Home Sales Continue Decline

10-30-09

Joe Manausa - Tallahassee Real Estate

Tallahassee has quite a few golf courses and most of them have neighborhoods that are built around and through the golf courses. In the northeast quadrant of Tallahassee, you can find the Summerbrooke neighborhood which is also built around a locally developed golf course.

The Tallahassee Real Estate Blog often visits Summerbrooke in order to keep our readers informed of the activity in the housing market. As we have seen (and reported) in the past, Summerbrooke home sales continue to be affected by the market as much as any other neighborhood in Tallahassee.

Summerbrooke Home Sales Stabilizing At 2 Per Month

When we measure the trend of recent home sales in Summerbrooke, we can see the market has plummeted 63% from the peak when more than 6 resale homes per month were selling. It appears as if the Summerbrooke housing market has stabilized at about 2 homes selling monthly.

Summerbrooke Home Sales Graph

The average home price in Summerbrooke has dropped 20% since the peak of the market. The red shaded area in the real estate graph above shows how rapidly average home prices rose, and how they have come back about 1/3rd of the way.

Home Values Continue Dropping In Summerbrooke

When we look at the average price per square foot of homes sold in Summerbrooke, we get an overall feel for how well home values have held. Valuations appear to have fallen roughly 16% since the peak of the market in 2006.

[click for recent Summerbrooke Home Sales…]

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Tallahassee, FL: Piney Z Sees More Falling Prices

10-29-09

Joe Manausa - Tallahassee Real Estate

Every time I do a Tallahassee neighborhood report featuring Piney-Z, it seems like my comments and email go from positive to negative. I have even been accused of “bashing” the Piney Z Subdivision (as if I hold a grudge against a community???).

Certainly, that is not the case. Piney Z is a very desirable neighborhood located in Northeast Tallahassee, with home prices about 20% above the median for our county. I try to do regularly updates for many of the more active neighborhoods in Tallahassee, and Piney Z falls into this category.

Monthly Resales Stabilizing In Piney Z

This first real estate graph features existing home sales (resales) in Piney Z, with all of the non “arms length” sales removed. It is the clearest reflection of regular market activity in the past. When you look to the base of the graph, you will find that I am not using information from the Tallahassee MLS, rather I am reporting on all of the sales in the Piney Z neighborhood.

What this graph is showing is that unit sales in Piney Z (vertical blue bars) have dropped roughly 70% since the peak of the market, but monthly sales seem to be stabilizing around 3 resales per month since July of 2008.

The bad news is that the average home price in Piney Z [click to continue…]

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As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates on real estate in Tallahassee Florida.

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

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Forecast Home Sales With REALTOR.com Report

10-28-09

Joe Manausa - Tallahassee Real Estate

I am always looking for ways to discover earlier signs of impending movements in the Tallahassee real estate market. The key to forecasting the future is knowing the “natural order of things” and then looking for the first signs of the first steps in the process.

The best forecasters build models, based upon the end-state that they are seeking, and them work them backwards, always seeking for clues of earliest signs. For example, we could create a simple model like this:

Home Sales In Tallahassee

This shows the hierarchy of what must occur for us to see a turn in the housing market. We are seeking year-over-year increases in home sales. Currently, our housing market activity roughly down 34% from where it “normally” is and over 60% down from the top of the market. The following real estate graph of historical “Daily Buyer Activity” shows we are:

The left scale shows the average number of homes sold in a day in the Tallahassee MLS is currently around 6.0, but it has been as high as 16! We want our forecasting model to tell us what is going to happen next, so looking at the model, our next exam should focus on pending home sales in Tallahassee.

[click to see PENDING SALES REPORT and REALTOR.com Report…]

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Do You Trust REALTOR® Reports?

10-27-09

Joe Manausa - Tallahassee Real Estate

Anybody who knows me will tell you that I am an Army Football fan. I played for Army in the 1980s and I attend their annual football team reunion up at the academy each year.

Recently, I had a conversation with a friend who is also a fan, but is (I believe) a little biased when reporting how well a team with a 3-5 record is really doing.

Army played Rutgers this past Thursday night, but I did not watch the game. The next morning I read that we had lost the game, so I called my friend to see how the team had performed.

Our Conversation

Me: So did you watch the game?

Him: Yes! Man we had it right in our hands.

Me: Really?

Him: Yeah, we really looked strong. We took the opening drive and shoved it right down their throat. We ran 11 plays and scored a touchdown. We were dominating.

Me: Oh? What happened after that.

Him: Well, Rutgers ran off 17 straight points and then scored the final 10 points of the game to beat us 27-10.

Now I wouldn’t call his recollection of the game a true, un-biased account. I’m not so sure that Army “had it right in their hands.” I’ve learned over time that if I really want to know how well (or how not-so-well) the Army Team has done, I need to read a few different accounts from the game. Everybody has their own viewpoint, and all come will a bias.

Beware Of False Prophets In Real Estate

So why do I begin a real estate blog with a story about Army Football? Because home sales in Tallahassee are a lot like the Army Football Team. There is a lot of talk and great signs of promise, but so far the record indicates that a recovery has not been made!

Recently, a local publication took a report from the Florida Association of REALTORS® and wrote an article that I think painted a picture that is not truly accurate. Much like my friend reporting on Army Football, the writer spouted a few positive (facts) and then let the reader conclude that the Tallahassee housing market is on the upswing.

Unfortunately, REALTORS® typically only report about 1/2 to 1/3 of all the home sales in a market. I like to know what the REALTOR® reports are saying, but to get a true picture of the Tallahassee real estate market (or any real estate market for that matter), one has to dig deeper.

[click to discover "the rest of the story"…]

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Photos from Joe Manausa - Tallahassee Real Estate

Joe Manausa - Tallahassee Real Estate