Roger Johnson, Realtor - Hickory NC Real Estate

Sorry, but I feel like I have to say this. I've already seen numerous buyers that seem to want to buy a house, but are going about it like someone is dragging them to their grave. And quite frankly, I really don't know why, except for some media scare.

Yes, I know that there are some out there that want to buy a house and have the capability to buy (income, credit, etc), but because of their specific economic situation (like a possible lay-off, slow in their work), decide not to pursue a home purchase at this time. That's just being a responsible person in my book. No sense in getting something if your job isn't secure at this time. However, that's not what I'm talking about, either.

I'm talking about the buyer that can buy and wants to buy, or either HAS to buy, yet still is trying to play some sort of waiting game or something. Yes, the media has gone on and on about the dropping house values and yes the media has gone on and on about the frozen credit markets. Now, here's some truth to the hype. All markets aren't created equal. In my post, Year End Market Report.., you can see that the local area is not nearly as bad as the mass media numbers. As to frozen credit, credit is still available to buy homes, and it's not just for the high credit scores, either. There are government loan programs still available for the "credit-challenged," let's say.

So, if you're sitting on the sidelines during what is clearly going to be a great time to buy a property because of possible credit issues, then don't. Run down to your nearest mortgage broker and see what you can qualify for in terms of a mortgage. If you don't know where to go, call me and I'll give you several good choices. Once you're qualified, you can start the search for your dream home.

And, if you're sitting on the sidelines waiting on the market to bottom out, stop waiting. By the time you figure out where the bottom is, the market is already going back up. You simply can't judge the bottom. If you can get a great price on a house NOW, why wait? Any possible money that you save by waiting (assuming the value will drop more, which I doubt), can easily be recaptured both in long-term appreciation and tax credits.

Finally, if you're already in the market and looking at homes, do NOT procrastinate when you find something you want. I've already this year alone, had 3 buyers be very disappointed because they found a house they really wanted, but either waited too long make an offer or actually waited too long to even go look at the house and they were put under contract by someone else. People, this is the time for real deals, and real deals don't stay on the market long, regardless of market conditions.

Search for you dream home at: www.RogerAJohnson.com

Hello All. I hope everyone had a December with Christmas and the Holidays and I hope everyone is enjoying 2009. For those keeping up with this blog, I basically was slack in December (no posts). Hey, everybody needs some time off!

This is the year-end market report for the Catawba Valley MLS area and specifically for the counties of Catawba, Alexander, and Caldwell of NC. As I stated in my previous post, All Real Estate is Local:, I do not believe in a "National Housing Market." Yes, national events will affect local markets, but to a large degree, housing markets are intensely local in nature.

As always with any reports concerning data (including National ones), it's important to know where, and how, the data was collected. This information was pulled using the data from the Catawba Valley MLS system on 1/04/09 and includes only stick-built construction sales, that is only single family homes, condos and townhomes. It specifically excludes all multi-family units, all commercial, all raw land, and all mobile or modular type home sales. It does NOT exclude any distressed sales, which include foreclosures and shortsales.

Home values in Catawba County have basically held steady from 2007 through the end of 2008. The average sold price in 2007 for a home in Catawba County was $171,293. The average sale price in 2008 ended at $169,600, a difference of only $1693. That is approximately a 1% drop in value overall, or basically a flat market. The average days on market in 2007 (DOM) was 136 and DOM in 2008, 146. Again, no real change. In 2007, 60% of all listed homes sold. In 2008, that dropped to 49% sold, though there were LESS homes listed in 2008.

Another important note to that is some interesting data that came up concerning those unsold homes. The average price of unsold homes in 2007 was 208,500 (rounded). In 2008, that price jumped to $233,000. This is important to note, as what this means to me is that the unsold homes in 2008 were grossly overpriced for the market.

In Alexander county, home prices took a bit of a hit. 2007 shows an average sell price of $185,000 (rounded) compared to 2008 of only $175,500 or a $9,500 difference. That's about a 5% drop in value. DOM increased from 135 to 157 (but better than the 3rd quarter report of 170). Total home sales dropped from 55% sold to 45% sold. NOTE: Alexander county is serviced by multiple MLS systems and this may or may not be an accurate sampling.

Caldwell county is down as well, but some positive news, too. 2008 sale price average for Caldwell was $137,500 (rounded) compared to $133,000 in 2008. That's a 3.5% drop, though a major climb from the low 3rd quarter report of $127,000. A very strong third quarter. DOM has remained pretty much unchanged 132 to 128, respectively. And total home sales follows the above trend with 57% of all listed sold in 2007 vs. 46% in 2008.

So what does all this mean to you? As a buyer, it's good to know the market. With these numbers, it's clear that there should be a number of homes on the market for you to choose from, but now you know that, even though it's a buyer's market, you cannot routinely get lowball offers accepted. Sellers are still getting what they are asking for (96% of asking price, on average), it's just taking a little longer. For a seller, you know that it may take a little longer to sell your property. You also know that your property needs to be in the best show shape that it can be because there are more properties out there.

If you would like to learn more about the market or are interested in buying or selling, you can visit me at www.RogerAJohnson.com or call 828-568-2121 ext 310.

The Government's attempt at bailing out the economy with the $700 Billion approved by Congress in an attempt to help stabilize the credit markets hasn't gone so well, so far. Not only did the Government use about $230B to buy ownership portions of various lending institutions (which was NOT what it was initially lobbied for in the first place), which hasn't helped, they have basically decided to sit on the rest of the money, apparently until someone decides something more constructive (or destructive) to do with it. Again, hardly a way to help the sagging economy or the frozen credit markets.

However, like all good Americans, I have an opinion on what could have been done (and still could with the rest of the money) that would actually help the economy, help the credit markets, and if people were wise, would create real wealth at the same time.

Currently, there are about 50 Million homes with an outstanding mortgage against it (Taken from U.S. Census). The first simple solution would be to just dole out the money on those mortgages, regardless of default status. Divided equally, that would be about $14,000 per home with a mortgage. Now, I'm not saying just "give" the money to the homeowner. It must be used to pay down the mortgage debt. Even $14K would pay off a lot of those mortgages, and greatly help everyone else. The lenders would be in better financial shape, opening up the credit markets. Homeowners could stop foreclosures, possibly payoff some mortgages, get several months of payments paid and/or be in a good position to refinance into a better mortgage, freeing up money for spending (helping economy) and saving (building wealth).

Another option, data taken from Plunkett Research, Ltd. shows that there is roughly about $14 Trillion in outstanding mortgage balances in the U.S. today. Again, it's a simplified option, but the Government could have used that money to buy down every mortgage in the country by one half it's current balance. That too, would greatly help the banking/lending industry which would open up the credit markets. It would put all homeowners in much better shape financially as well. It would spur a great increase in refinances, which would put all mortgages in better positions and lower payments (creating wealth and helping economy). It would more than likely completely turn around the housing marketing, too, as a lower mortgage would mean being able to actually sell those homes for their true value (no more over leveraged homes). And for those in markets not being hit with major value declines, creating a huge pool of money on the sale of the property to put down on your next home (making it possible to find 20% down again).

Yes, these too would have their issues and not everyone would approve. Still, I think that they would get the job done that it was supposed to be getting done in the first place and would actually be putting the money to use for the people it was actually taken from. Give me your feedback and let's do what the Government is not able to do!

For more information on the Hickory, NC area visit: www.RogerAJohnson.com

Some For Sale By Owner sites, or FSBO (pronounced Fizz-Bo) as it's called in the real estate world, love to show you how "easy" it is for you to sell your home yourself. Hey, it's their job, after all, to convince you to list with them (that's what they're doing, you know) vs. listing with a REALTOR®. That's the only way that they get paid is to get you to advertise with them. However, the reasons that they give for someone to go FSBO vs. listing with a REALTOR® are flawed, at best.

1. Less hassles and frustrations

Somehow, having to maintain all the advertising (not to mention the cost of that advertising), schedule showings, preview buyers, show your property, getting your property ready to show, contacting attorneys, appraisers, contractors, inspectors, etc and a whole host of other "behind the scenes" things that go on when your property is on the market is supposed to be less hassle and frustrating than simply letting a professional, knowledgeable and experienced REALTOR® take care of it for you. Of course, if you believe that you don't have to keep your house clean and "ready to show" and that you can make appointments when it suits you, then they may have a point.

2. You can sell your home better than anyone else

The simple truth here is...it ain't true. The fact is BECAUSE it's your home, you'll have a harder time selling it than a neutral third-party (that includes a REALTOR® or your next door neighbor). Why? Because you have an emotional attachment to the property. It is practically impossible for you to separate you from your home and "sell" it to a potential buyer. Even I, as a REALTOR® prefer to list my personal home with another agent because they will be better at selling it than I will.

3. Sell for a price on your terms; you're in control

Well, you can choose to price your home for whatever you want. However, it's the market that will ultimately decide what that property sales for. So, you can decide to price your home within the current market prices, or you can simply wait for the market to "catch up" to your price. If you're ready to sell, which would you prefer? An agent can help you in setting an accurate price based on current market conditions, not simply guessing.

4. More $$$ in your pocket

This is "save the commission" argument. The facts are that, on average, agent-assisted home sell for 32% MORE than FSBO sales. Now, would you lose 32% in order to "save" 5 to 6%? Furthermore, the majority of buyers that do seriously look at FSBOS (truth is, most are just "lookers") are expecting a DISCOUNT on the purchase of a FSBO by the usual commission fee for your market. Both buyer and seller can't get the "savings." Guess who wins if you want to sell?

5. Sell your home fast

Supposedly, because you don't "up" the price to include a commission, your home will sale faster. Truth is, as stated above, buyers looking at your home will deduct the commission from your asking price, so if you've already reduced your price, you're getting hit TWICE, (that's assuming that it's priced right in the first place). Also, almost 90% of all home buyers use an agent to find property. If yours isn't listed, it's not "on the market" to those buyers. Can you really sell your home faster AND for more money by ONLY marketing it to 10% of the active buyers in the market?

6. Less uncertainty

You'll have less uncertainty because you'll get to interview the buyer and will know the "serious" ones. I ask, how exactly? Do you have a lot of experience dealing with home buyers to determine how serious they are? How would you know if they are even qualified for the price of your home? Sure, they'll say they are, but what if they're lying (buyers DO do that sometimes)? Furthermore, for buyers who didn't like the property, you'd like to know why. However, most buyers wouldn't be truthful with this either when dealing with the seller directly, as most don't want to say anything negative about your home to you. They will to an agent, though and you can use that to help you sell. An experienced professional REALTOR® will have a system in place for you, as the seller, to get good feedback on showings.

7. It's easy...as selling a car

Seriously, this is just a complete myth. That is the definition of comparing apples and oranges there. They say that a lender or an attorney will "take over" the process of the sale once you get a contract on the home. That, too, is simply not true. A lender is going to make sure that the buyer gets the loan (assuming that they're qualified). They are not going to do anything about the sale other than that. An attorney is going to make sure that the documents provided to HIM (if you forget something, that's your problem) are legal and valid for your state, that's all. They're not going to make sure everything is moving forward as it should and don't care if it does. Furthermore, in many states (NC for example), the closing attorney works for the BUYER.

If you'd like more information on listing and selling your home, visit my website at www.RogerAJohnson.com

It sounds simple enough, but many truly overlook this simple statement: Invest in yourself first. Most will hear this when they ask "how do I start in real estate?" and taking the time to educate yourself on some basic investing techniques is definitely a must do before jumping into buying properties. However, this article's title is the answer to the question most asked after reading a few books/courses on REI which is usually, "what type of property should I buy first?" And my answer to that is invest in yourself first.

By that I mean if you do not yet own your own home, then your first investment property should be your new home. Why you ask? You can't make money buying your own home, right? How will that help me in real estate investing? Won't that hinder my ability to buy more investments? I'm sure that these and other questions immediately pop up in your head, especially with some of today's writers/gurus teaching that buying your own home is a bad thing. If you notice, however, most of them are writing that from the comfort of their own home. Hmmm.

Why should your first investment be your own home? It gives you a specific goal of what you're looking for in your first property. It gives you the best opportunity to get to understand what is actually involved when you buy a property without the added potential for failure (since you'll be the 'tenant' you won't have to worry about your 'exit strategy'). It also covers you if you have misjudged the numbers a bit. Regardless of your intended type of investing, you can buy your first property through a real estate agent. Doing it this way, and asking several questions along the way, will help you understand a real estate transaction more thoroughly than any course, and you'll have the agent there to guide you through your state's forms and procedures.

Once you purchase your own home, it can be your stepping stone to further investments. If you were practicing your investing strategy, you should have gotten a pretty fair deal off of FMV. That translates into equity. If you bought a property that appraised for $100k for only $80K, then you've got up to $20K in equity for down payments on other investments. If you bought a multi-unit, you've got the other units to rent out that will help you cover your own monthly payment. If you live in this property for at least 2 years under current tax laws, you can sell it and you won't have to pay taxes on the profit. Average appreciation is 3-5%, so you'll net yourself a cool $6-10K just for owning a home.

Won't owning a home make it harder to buy more properties? Truthfully, if you're buying conventionally, it might, but only a little. By now, you should know that the best place to obtain "conventional" type loans is through a mortgage broker. If you're buying rentals, 75% of the fair market rent will count as income to you from the new rental. So on a $400/month rental, $300 of it won't count as debt. If your monthly payment is less than $300, then you have actually lowered your debt to income ratio. And, making your monthly payments on your home not only improves your credit score, it gives a positive impression to the lender. Homeowners are more stable and dependable.

Finally, take a look at the statistics. Over 90% of people who pursue a career in real estate investing never buy one property. By deciding to invest in yourself first, you've already set a goal which is what most of these 90% fail to do. Of the 10% left, fewer than half ever by more than one property. The reasons for this are many, most of which are eliminated or reduced by the mere fact that this is your home you're buying. And if it turns out that you only buy one, at least it's the one you live in. If you already own your home, take another look at it to see how it can benefit you in your REI career. If you don't yet have a place of your own, then consider my suggestion when cruising for properties.

You can find out more about real estate investing and buying properties at www.RogerAJohnson.com