Real Estate Information Archive

Some of you may remember my post “Your Agent was trying to help you when they said Short Sales Suck!” from May 2008.

Nearly 2 years have passed from that day and in many ways, Short Sales still DO suck, but their time of “sucky-ness” (don’t look that up, NOT a word) may be soon coming to an end.

As we are all so very aware, the Federal Government has decided to stick their fingers in just about everything we do with the exception of which sugar cereal we feed to our children. (that’s probably coming…)

In a rare flash of brilliance, some of their new legislation could actually be the best thing to hit Buyers, Sellers and Real Estate in General in a long time.

The problem with short sales has always been summed up in a few major points:

• Short Sales take too long (as in 3 to as many as 10 months!)
• The eventual outcome of the Buyer’s original offer is always unknown (The chances of actually getting the home you offered on was a literal craps shoot)
• They were a miserable ton of work for every single person involved in the transaction

See, the bank that the Seller is no longer making a mortgage payment to (in most cases) typically hasn’t APPROVED the sale of the home at the list price. So Buyers come along looking at a home listed for $150k that the bank may only let go for $170k. That’s just not right, totally confusing and emotionally painful.

New legislation proposed by the US Treasury would make the following changes to the Short Sale process:

1)      Banks would be FORCED to respond in 10 days or less! (Vs. 30-90 in a typical case)

2)      Sellers – yes, the SELLERS who couldn’t pay their mortgages could possibly get up to $1500 for relocation costs

3)      1^st Mortgage Holders could get $1000 per closed short sale

4)      2^nd Mortgage Holders (the stickiest short-sale killers in the business) could get $3000 per closed sale

Will this come to pass? I don’t know. You can bet they will be taking money from mine and your pockets to fund the plan though, which is one of the negative side-effects of the plan. Does the “disease merit the treatment?”

Shoot me some feedback.

BUYERS – have you been involved in trying to secure a short sale? What kind of experience was it?

SELLERS – are you in that same position? Honestly, is it a HUGE pain in the neck or what?

You can avoid reality, but you can't avoid the consequences of avoiding reality.

-Ayn Rand

Hey let's just have a frank little chat here: The "down" real estate market has been going on for 3 or 4 years now, yet alot of St. George Sellers are talking like this wave just hit us. Grief!

As a St. George area homeowner (a.k.a. future St. George Seller), I will be the first to say "I GET IT!" I get your pain, your frustration and dissappointment with what "could have been" and what certainly "was" in terms of market values for a short period of time. VERY short.

As a Seller, if you want to win the prize in this current market may need to get really courageous and set the "new market price" in your neighborhood. Yes, that means the LOWEST price anyone has seen in that area since 2003 or 2004.

In today's video I talk about the benefits of doing so and the potentially COSTLY consequences of not doing so. St. George Sellers are learning, but the learning curve has been slow and alot of owners have paid a steep price for that curve.

Man up!

"But Jeremy, I offered above full list price and STILL got beat out! What gives?

If I had $5 for every Buyer who has been shocked (and dismayed) about having to "compete" for homes in this so-called "Buyer's" market, I'd have a nice little vacation fund built up.

Today we talk about

• the "Tale of 2 Markets", those listings that are "in" the market, and those that are "out" of the market;
• why Buyers are getting into bidding wars in St. George, Utah as well as other Western markets,
• and also why Sellers have to get in the "critical 20%" if they are going to sell.

Below this video is a copy of the chart I discuss in the video. Enjoy!

The tides are a turnin' in many parts of the St. George area real estate market this month! Friends and clients on my mailing list have been hearing about this for the past few months and the positive news keeps coming.

In an article from today's "Spectrum" newspaper titled "Local Economy Stabilizing", local & regional economist Lecia Langston said Washington County's economy is beginning to stabilize. Well it's about time!

For so long our area was "insulated" from the major ebbs and flows of the economy, feeling only a percentage of the cyclical changes that may have been felt in other major metropolitan areas. Why? Well if you live here you know the answer, and if you are moving here you also understand. Great location, weather, scenery, national parks, low crime, the works!

Outside of all the economists' hard-to-understand charts and graphs, what we are seeing "on the ground" is this: Properties hitting the market and selling in a few days or less for list or even above list price, with the final price and terms being determined through a "bidding war." (see this WSJ article on just that: BIDDING WARS)

Here are some hard figures to consider:

1. "Pending" sales up nearly 40% since February. All of the major financial and housing experts use pending sales as a major indicator of housing market health.

2. "Active" listings down 12% in that same time frame. Real estate, just like handguns and hammers, is about supply and demand. Lower supply is what we want.

There is still a TON of foreclosure inventory coming, but I think this is a good thing. Why? Because every well-priced home that hits the market right now, especially under $300k, is selling in just a few days. This tells us the public is finally ready to pull the proverbial trigger and get into the housing market.

Housing has always driven the rest of the financial markets. When people are buying, sellers are getting paid and spending that $$ on other homes, goods and services. In that process, real estate agents, title and mortgage people also get paid. They in turn spend money, and the eternal sales cycle continues.

Please feel free to comment or ask questions on this page about the figures above, as well as your personal opinions about the market. Onward!

Look, I'm not going to sugarcoat this: Sales were down in September, the Economy is a mess and the Media isn't helping in any way shape or form. This is what Washington County Real Estate Sales have looked like for the past 3 months:

That last column is what we call the "absorption rate." 28 months of inventory was not good. 34 months of inventory is LESS good.

The flip side?

• Credit actually IS available and we continue to see people buy and sell homes.
• There are so many good stories out there, but nobody is telling them.

We just sold a home for 3 sisters from Idaho. They had held this condo in their family for many years and made a nifty profit. They were REALLY happy and it was closed and recorded just 38 days after it hit the market.

We assisted another young couple get into their first home last month and they are tickled pink. It was a bank-owned property, priced extremely well, and it got them out of a small apartment.

Then there is another family living in my immediate neighborhood whose' house is under contract to close sometime next week. They have owned it for 3-4 years, will take a nice little profit, use it to pay off some debt, then rent a larger home for a while preparing to buy again down the road.

I understand it is tough right now...BOY do I understand it. However, there really are good things happening for some people, housing values are getting back in line for the "everyman" and tremendous opportunities are surfacing for investors.

When all else fails I count my blessings every day to have a wonderful wife, 4 hilarious little kids and for every chance I get to enjoy the simple pleasure of pedaling and suffering on my mountain bike or road bike.

If you have any good, OR bad stories to tell about this market is affecting you, send them on over.