With prices and interest rates at the lowest we are likely to ever see, many of my past customers are asking me if now is a good time to sell and move into a larger home. It really depends on your personal situation.
These questions will help you decide whether you’re ready for a home that’s larger or in a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.
1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.
2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.
3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district.
4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.
6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
Thursday, September 29, 2011
Tuesday, September 27, 2011
Is it Cheaper to Rent than to Buy in Jacksonville's Intown Neighborhoods?
In many cities in the US the answer to that question is "no." Jacksonville's Intown Neighborhoods are definately still buyer's markets so I decided to check our housing stock prices against the rental sales to see if a nice decent home can be purchased for what the median rental rate was in each of the neighborhoods.
In Springfield, Riverside, Avondale, St. Nicholas, and Murray Hill the median rental price is between $800-$1000. This would be the equivalent of about a $100,000 home purchase (depending on down payment, interest rate, etc). In San Marco the median rental rate is around $1200, the equivalent of around a $120,000 home purchase. I have to admit I was skpetical on what each neighborhood has to offer under $100,000 and $120,000, but I was very pleasantly surprised. There are many great homes on the market that do not appear to need a lot of fixing up, which can be overwhelming for a first time home buyer. Many of these homes, in fact, have already been renovated and updated and would be great starter homes.
This is just one of about a million indicators suggesting that you should be buying a home if you have the credit score necessary to get a mortgage. Other indicators include: interest rates for home loans are down across the board, and adjustable-rate mortgages in particular are looking very attractive to homeowners who might not be in the house for the long haul. And while there are some justified fears that low consumer confidence could drive prices even lower, there’s also evidence that the market is starting to stabilize, especially on the local level.
Over the long haul real estate is an investment. Buying now, when so many indicators favor buyers, can save a potential homeowner lots of money that may otherwise be thrown away on a rental that they could be owning and building equity in over the years - maybe even turning their first home into a rental property when they are ready to move up into a larger home.
I will be putting out the 3rd quarter market update at the end of September in my newsletter. Comparing the Intown markets this year to last year is a good indication of which markets are stablizing. If you do not receive the newsletter, email me
In Springfield, Riverside, Avondale, St. Nicholas, and Murray Hill the median rental price is between $800-$1000. This would be the equivalent of about a $100,000 home purchase (depending on down payment, interest rate, etc). In San Marco the median rental rate is around $1200, the equivalent of around a $120,000 home purchase. I have to admit I was skpetical on what each neighborhood has to offer under $100,000 and $120,000, but I was very pleasantly surprised. There are many great homes on the market that do not appear to need a lot of fixing up, which can be overwhelming for a first time home buyer. Many of these homes, in fact, have already been renovated and updated and would be great starter homes.
This is just one of about a million indicators suggesting that you should be buying a home if you have the credit score necessary to get a mortgage. Other indicators include: interest rates for home loans are down across the board, and adjustable-rate mortgages in particular are looking very attractive to homeowners who might not be in the house for the long haul. And while there are some justified fears that low consumer confidence could drive prices even lower, there’s also evidence that the market is starting to stabilize, especially on the local level.
Over the long haul real estate is an investment. Buying now, when so many indicators favor buyers, can save a potential homeowner lots of money that may otherwise be thrown away on a rental that they could be owning and building equity in over the years - maybe even turning their first home into a rental property when they are ready to move up into a larger home.
I will be putting out the 3rd quarter market update at the end of September in my newsletter. Comparing the Intown markets this year to last year is a good indication of which markets are stablizing. If you do not receive the newsletter, email me
Monday, September 19, 2011
3 Reasons Not to Overprice Your Home
A new study by property website Zillow.com shows that many home sellers are unrealistically optimistic, asking considerably more than they're likely to get. As a result, they risk long delays in finding buyers, which means a lot of lost revenue while the house sits idle on the market.
What's more, homeowners who bought after the housing bubble peaked in 2007 were even more unrealistic than those who bought before or during the bubble, perhaps because post-bubble buyers thought they got better bargains than they actually did.
Market value is a tricky number. This is because comparable-sales data do not always provide a good guide to a home's value. Nearby homes that have sold in the past six months or so may be quite different from yours in appearance or condition, and there may be too few recent sales to get a proper valuation. That being said, you won't have much chance of getting a premium price on a your property if similar homes have sold for less.
As a seller, you have a right to ask for whatever price you want, which you can drop if no one bites. You may get lucky, but asking too much involves a number of risks, even if you're just "testing the market" for a few weeks or months.
On the pro side, you might get your high asking price. Selling a house is not like a dealer selling cars or McDonald's selling Big Macs, because the home seller needs only one buyer. It's possible that someone will find your home so perfect that it justifies a premium price. For example, a home with a garage converted into a shop may be a turnoff to most buyers because most of them have cars, but a nondriving tinkerer may love the extra work space.
More often, though, pricing your home too high works against you in some important ways. Here are three of them:
1. Agents react. Real-estate agents — yours and the buyers' — may not want to waste time with a home that's unlikely to sell. Though a higher price means a bigger commission, agents might figure they can move two or three homes in the time it would take to sell yours, earning more even if each offers a smaller commission than your property does.
2. Buyers react. Buyers who like your house but pass on your property because of the price may find something else and close a deal before you drop your asking price to a level they'd accept.
3. You need that money. Even if you get your full asking price, the time it takes to get it may cause you to miss out on the house you want to buy. You may have to settle for something that's not as suitable. Even worse, you may end up spending more than you had planned, offsetting the premium you got on your sale.
Setting a proper sale price is both an art and a science. A key step is to shop carefully for an agent who can help you, looking for one who is very familiar with your community and comes with good references. Steer clear of dabblers who sell only a few homes a year. You want a pro who is on top of the market and will value a good reference from you.
Drive around to look at the "comparable" homes used to set your asking price, and look for others if necessary. If you're on a park, don't use a comparison from a home down on busy street. Make sure the house's curb appeal matches yours. Keep in mind that a computer that spits out comparable sales isn't likely to know that your home has a new kitchen and the others don't.
Finally, keep an eye on the "traffic" - the number of potential buyers who come through your property. A good agent will have a sense of how many buyers are looking. If you are not getting your share, it's a sign you are reaching on price. If dropping your price is inevitable, it's better to do it sooner than later.
What's more, homeowners who bought after the housing bubble peaked in 2007 were even more unrealistic than those who bought before or during the bubble, perhaps because post-bubble buyers thought they got better bargains than they actually did.
Market value is a tricky number. This is because comparable-sales data do not always provide a good guide to a home's value. Nearby homes that have sold in the past six months or so may be quite different from yours in appearance or condition, and there may be too few recent sales to get a proper valuation. That being said, you won't have much chance of getting a premium price on a your property if similar homes have sold for less.
As a seller, you have a right to ask for whatever price you want, which you can drop if no one bites. You may get lucky, but asking too much involves a number of risks, even if you're just "testing the market" for a few weeks or months.
On the pro side, you might get your high asking price. Selling a house is not like a dealer selling cars or McDonald's selling Big Macs, because the home seller needs only one buyer. It's possible that someone will find your home so perfect that it justifies a premium price. For example, a home with a garage converted into a shop may be a turnoff to most buyers because most of them have cars, but a nondriving tinkerer may love the extra work space.
More often, though, pricing your home too high works against you in some important ways. Here are three of them:
1. Agents react. Real-estate agents — yours and the buyers' — may not want to waste time with a home that's unlikely to sell. Though a higher price means a bigger commission, agents might figure they can move two or three homes in the time it would take to sell yours, earning more even if each offers a smaller commission than your property does.
2. Buyers react. Buyers who like your house but pass on your property because of the price may find something else and close a deal before you drop your asking price to a level they'd accept.
3. You need that money. Even if you get your full asking price, the time it takes to get it may cause you to miss out on the house you want to buy. You may have to settle for something that's not as suitable. Even worse, you may end up spending more than you had planned, offsetting the premium you got on your sale.
Setting a proper sale price is both an art and a science. A key step is to shop carefully for an agent who can help you, looking for one who is very familiar with your community and comes with good references. Steer clear of dabblers who sell only a few homes a year. You want a pro who is on top of the market and will value a good reference from you.
Drive around to look at the "comparable" homes used to set your asking price, and look for others if necessary. If you're on a park, don't use a comparison from a home down on busy street. Make sure the house's curb appeal matches yours. Keep in mind that a computer that spits out comparable sales isn't likely to know that your home has a new kitchen and the others don't.
Finally, keep an eye on the "traffic" - the number of potential buyers who come through your property. A good agent will have a sense of how many buyers are looking. If you are not getting your share, it's a sign you are reaching on price. If dropping your price is inevitable, it's better to do it sooner than later.
Monday, September 12, 2011
What to do if your house still hasn't sold by Labor Day
The house-hunting season in NE Florida is a little different than in other parts of the country. In most areas of the country, Spring and Summer are the busy seasons whereas in NE Florida our Summer's tend to be so hot that house-hunting actually slows down. As we begin to enter the cooler seasons here, house-hunting tends to pick up September through mid-November, slowing a little for the holidays, then picking back up again after the holidays through the Spring.
We are noticing this year that there is a lower inventory of competitive properties on the market. People are only selling their homes if they really have to and buyers have also become much pickier since the housing crisis turned it into a buyer’s market. There’s not a good selection of homes out there right now, so keeping your house listed as we head into the higher selling season is a good idea.
There will be a new crop of buyers out there now, including anyone who couldn’t find the right home during the height of house-hunting season last Spring and took a break from looking to go on vacation in the heat of the Summer. They will be looking to close by Thanksgiving.
If you are going to keep your house on the market as we head into the higher selling season here are some tips to remember:
Reconsider the Price
If your house has been on the market since last Spring, you need to look at what other properties sold over the summer in your area and what they sold for. If your asking price is much higher, you may need to lower it.
We all love our homes, but pricing is based on supply and demand.
Review your Marketing Strategy
Since you’re dealing with a small window of time in which buyers will still be actively looking before the holiday slow down, you’ll need to also review your advertising or marketing strategy.
Talk to your real estate agent and find out where their leads have been coming from. Push to have the marketing freshened up in these areas, including new photos and new language.
Give Your Home a Face Lift
Curb appeal is immensely important. Buyers watch HGTV and they go out and look for homes that look the ones on their TV shows.
As such, homeowners should spend some time improving their house’s exterior. For instance, a fresh coat of paint on the front, new shutters or a glossy finish on the doors. Also consider changing your landscaping to reflect the fall foliage. Replace the flowers with fall plants.
What other tactics can homeowners use to increase the likelihood their house will finally sell? I put together an "owner’s guide to selling" that also provides additional staging tips. If you aren't already working with a Realtor, email me for a copy.
We are noticing this year that there is a lower inventory of competitive properties on the market. People are only selling their homes if they really have to and buyers have also become much pickier since the housing crisis turned it into a buyer’s market. There’s not a good selection of homes out there right now, so keeping your house listed as we head into the higher selling season is a good idea.
There will be a new crop of buyers out there now, including anyone who couldn’t find the right home during the height of house-hunting season last Spring and took a break from looking to go on vacation in the heat of the Summer. They will be looking to close by Thanksgiving.
If you are going to keep your house on the market as we head into the higher selling season here are some tips to remember:
Reconsider the Price
If your house has been on the market since last Spring, you need to look at what other properties sold over the summer in your area and what they sold for. If your asking price is much higher, you may need to lower it.
We all love our homes, but pricing is based on supply and demand.
Review your Marketing Strategy
Since you’re dealing with a small window of time in which buyers will still be actively looking before the holiday slow down, you’ll need to also review your advertising or marketing strategy.
Talk to your real estate agent and find out where their leads have been coming from. Push to have the marketing freshened up in these areas, including new photos and new language.
Give Your Home a Face Lift
Curb appeal is immensely important. Buyers watch HGTV and they go out and look for homes that look the ones on their TV shows.
As such, homeowners should spend some time improving their house’s exterior. For instance, a fresh coat of paint on the front, new shutters or a glossy finish on the doors. Also consider changing your landscaping to reflect the fall foliage. Replace the flowers with fall plants.
What other tactics can homeowners use to increase the likelihood their house will finally sell? I put together an "owner’s guide to selling" that also provides additional staging tips. If you aren't already working with a Realtor, email me for a copy.
Tuesday, September 6, 2011
Founder of ForSaleByOwner.com Gets Broker Help
I can’t resist commenting on the story which recently appeared in the Wall Street Journal regarding Colby Sambrotto, the founder and former CEO of forsalebyowner.com. It seems the founding father and lifelong evangelist of the concept of selling your home without a real estate agent was forced to hire a broker to sell his home after failing at what he preaches others should do.
After failing to sell his NYC apartment on his own as a For Sale By Owner (FSBO), Sambrotto hired a broker and paid a 6% commission in order to get the job done. His personal experience helps refute some of the myths Sambrotto has been espousing for over a decade. Let's look at two of those myths:
Myth #1 – You Will Pocket More Money Selling on Your Own
Most FSBO sites say you can save the commission by selling on your own. What happened in Sambrotto’s sale?
From the WSJ article:
“The broker, Jesse Buckler, said he told Mr. Sambrotto the apartment in the Lion’s Head building on West 19th Street near Sixth Avenue was priced too low and wasn’t drawing the right buyers.
By May, it went into contract, he said, after attracting multiple offers. It closed in the last few days for $150,000 more than the original asking price.”
Myth #2 – The Internet Alone Can Sell Your Home
Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. What happened to the FSBO guru when he attempted to only depend on the internet?
From the WSJ article:
“Looking to move his family to the suburbs, [Mr. Sambrotto] said he carefully staged his apartment for sale himself, and put it on the market. But after using a mix of websites to publicize his apartment, he said he had only ‘middling success’ and switched to a broker because many buyers were so reliant on brokers.”
Real estate brokers utilize many ways to market properties, not just the internet.
Bottom Line
There is a reason the real estate industry has been around for centuries: it performs a valuable service.
After failing to sell his NYC apartment on his own as a For Sale By Owner (FSBO), Sambrotto hired a broker and paid a 6% commission in order to get the job done. His personal experience helps refute some of the myths Sambrotto has been espousing for over a decade. Let's look at two of those myths:
Myth #1 – You Will Pocket More Money Selling on Your Own
Most FSBO sites say you can save the commission by selling on your own. What happened in Sambrotto’s sale?
From the WSJ article:
“The broker, Jesse Buckler, said he told Mr. Sambrotto the apartment in the Lion’s Head building on West 19th Street near Sixth Avenue was priced too low and wasn’t drawing the right buyers.
By May, it went into contract, he said, after attracting multiple offers. It closed in the last few days for $150,000 more than the original asking price.”
Myth #2 – The Internet Alone Can Sell Your Home
Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. What happened to the FSBO guru when he attempted to only depend on the internet?
From the WSJ article:
“Looking to move his family to the suburbs, [Mr. Sambrotto] said he carefully staged his apartment for sale himself, and put it on the market. But after using a mix of websites to publicize his apartment, he said he had only ‘middling success’ and switched to a broker because many buyers were so reliant on brokers.”
Real estate brokers utilize many ways to market properties, not just the internet.
Bottom Line
There is a reason the real estate industry has been around for centuries: it performs a valuable service.
5 Great Reasons to Sell Your House Today
Determining when the right time to sell your house can be a difficult decision. It really depends on what your familiy's needs and goals are. If you don’t need or want to move for a few years it might make sense to wait for the housing industry to recover and prices to appreciate. However, if you wish to move within the next six to eighteen months, it is probably better to sell sooner rather than later. Here are five reasons why:
Your House Will Get More Exposure in the Fall than in the Winter
Spring housing sales usually level off in the summer and then regain momentum in September/October. With the spring buyers’ market having passed, don’t miss the early fall market. It consistently outperforms the winter season.
Distressed Properties Will Impact Prices
All of the real estate information available is indicating that distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.
Mortgages Will Become More Difficult to Attain
Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.
Now is the Perfect Time to Move-Up
With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home. If you move into a more desirable home now, you will be in position to gain larger equity as prices eventually appreciate.
Most Importantly, You Get to Move On with Your Life
Probably the most important reason to sell is so you can get on with your life. You are considering selling for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you are thinking about moving. Are these reasons really important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.
The KCM Blog
Your House Will Get More Exposure in the Fall than in the Winter
Spring housing sales usually level off in the summer and then regain momentum in September/October. With the spring buyers’ market having passed, don’t miss the early fall market. It consistently outperforms the winter season.
Distressed Properties Will Impact Prices
All of the real estate information available is indicating that distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.
Mortgages Will Become More Difficult to Attain
Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.
Now is the Perfect Time to Move-Up
With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home. If you move into a more desirable home now, you will be in position to gain larger equity as prices eventually appreciate.
Most Importantly, You Get to Move On with Your Life
Probably the most important reason to sell is so you can get on with your life. You are considering selling for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you are thinking about moving. Are these reasons really important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.
The KCM Blog
Dog Park Proposed for Riverside
From Un-used Storage Lot to Community Resource
The Riverside Dog Park is a two-acre, off-leash dog park currently being planned for the northwest corner of Riverside Park, adjacent to College Street. Approximately one-third of the property, under the Interstate 95 overpass, would be re-purposed from a Florida Department of Transportation (FDOT) storage lot and added to the existing lands of Riverside Park. Through an in-kind donation from the Haskell Company, and with RAP’s support, a committee has met regularly with a landscape architect to develop a draft plan for the park
Key Features of the Riverside Dog Park:
One-and-a-quarter acre large/active-breed area. The active area will feature decomposed granite ground cover, an eighth of a mile walking path and a shade pavilion.
Quarter-acre small/passive-breed area featuring significant old-growth tree coverage and bench seating.
Ample on-street parallel parking will be created along with one dedicated handicapped-accessible parking space, adjacent to the existing JEA substation.
Double-gated entries for both pet areas accessible by keyfobs.
A new sidewalk that will connect Park and College Streets – serving as a neighborhood connector.
Dog Park will extend north to Annie Lyttle School property line, hopefully renewing interest in the rehabilitation of this historic building.
A Demonstration of Low Impact Development (LID)
The park will serve as a demonstration of low-impact development that protects the St Johns River, located a quarter-mile to the east. As the park is constructed, an active effort will be made to recycle removed materials, particularly concrete, and to use recycled materials wherever possible. The active area of the park will house a bio-retention pond, featuring natural grasses and plant life that filters any park runoff before it reaches the river. Existing foliage will be preserved to the extent possible, and new plants and grasses native to the Northeast Florida region will be incorporated. Educational signage will be posted to help inform the public about this aspect of the project.
A Self-Sustaining Community Resource
As planned, residents will access the park via a key fob access system through the main entrance off the east side of College Street. Residents will be able to purchase a key fob at various local retailers for a nominal fee (e.g. $25/year), and funds raised through the sale of the fobs will be dedicated to park repair, maintenance, and neighborhood preservation.
Project Campaign and Timeline for Completion
RAP and other community supporters of the Riverside Dog Park expect to begin a fundraising campaign this fall and hope to have funding, City support and necessary land leases completed in the late fall or early spring. Construction is expected to take up to two months. Opening day is slated for late spring or early summer 2012.
How You Can Help
Purchase a paver. RAP is currently working on a fundraising campaign that will feature ways to honor your loved pets.
Donate to the park. Small donations make a difference as well. Donation jars will be set up at the RAP Booth at Riverside Arts Market and at RAP Headquarters (2623 Herschel Street).
Source: RAP
The Riverside Dog Park is a two-acre, off-leash dog park currently being planned for the northwest corner of Riverside Park, adjacent to College Street. Approximately one-third of the property, under the Interstate 95 overpass, would be re-purposed from a Florida Department of Transportation (FDOT) storage lot and added to the existing lands of Riverside Park. Through an in-kind donation from the Haskell Company, and with RAP’s support, a committee has met regularly with a landscape architect to develop a draft plan for the park
Key Features of the Riverside Dog Park:
One-and-a-quarter acre large/active-breed area. The active area will feature decomposed granite ground cover, an eighth of a mile walking path and a shade pavilion.
Quarter-acre small/passive-breed area featuring significant old-growth tree coverage and bench seating.
Ample on-street parallel parking will be created along with one dedicated handicapped-accessible parking space, adjacent to the existing JEA substation.
Double-gated entries for both pet areas accessible by keyfobs.
A new sidewalk that will connect Park and College Streets – serving as a neighborhood connector.
Dog Park will extend north to Annie Lyttle School property line, hopefully renewing interest in the rehabilitation of this historic building.
A Demonstration of Low Impact Development (LID)
The park will serve as a demonstration of low-impact development that protects the St Johns River, located a quarter-mile to the east. As the park is constructed, an active effort will be made to recycle removed materials, particularly concrete, and to use recycled materials wherever possible. The active area of the park will house a bio-retention pond, featuring natural grasses and plant life that filters any park runoff before it reaches the river. Existing foliage will be preserved to the extent possible, and new plants and grasses native to the Northeast Florida region will be incorporated. Educational signage will be posted to help inform the public about this aspect of the project.
A Self-Sustaining Community Resource
As planned, residents will access the park via a key fob access system through the main entrance off the east side of College Street. Residents will be able to purchase a key fob at various local retailers for a nominal fee (e.g. $25/year), and funds raised through the sale of the fobs will be dedicated to park repair, maintenance, and neighborhood preservation.
Project Campaign and Timeline for Completion
RAP and other community supporters of the Riverside Dog Park expect to begin a fundraising campaign this fall and hope to have funding, City support and necessary land leases completed in the late fall or early spring. Construction is expected to take up to two months. Opening day is slated for late spring or early summer 2012.
How You Can Help
Purchase a paver. RAP is currently working on a fundraising campaign that will feature ways to honor your loved pets.
Donate to the park. Small donations make a difference as well. Donation jars will be set up at the RAP Booth at Riverside Arts Market and at RAP Headquarters (2623 Herschel Street).
Source: RAP
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