Continental Ranch – How Home Values have Changed
September 24, 2008
Had a little fun with some numbers and graphs today. Two things to show you.
First, this is a graph of average price per square foot for Continental Ranch from the start of 2004 through today, sold single family homes only:
You can see the Continental Ranch market peaked sort of late 2005, early 2006. And that the spread of this data, the range in selling price per square foot, has grown wider over time as well. Some of those home owners are back to 2004 values, but not all.
One other thing I think this illustrates well - I’m asked near daily if we’ve reached the bottom of the market. But if you look at the period roughly between 9/2005 and 3/2006, there’s a 6 month spread of data where values don’t really go up or down. In this case, it signaled the start of values declining in Continental Ranch, but we didn’t see that numerically until 6 months later. I can’t call an official ‘bottom’ until prices start trending in the opposite direction, which may be half a year after the start of the change. Do I think we’re close? Probably, but there are some major events coming up soon that could change that answer depending on the outcome. The best you can do is to make decisions based on the information available today, and with an eye to how long you plan to own that home.
One more chart. I do love graphs.
This is a chart of the ratio of sale price to original list price since early 2004. Lots of home buyers want to know how much to offer. As we can see here in Continental Ranch, some homes are priced well, and sell at or near 100% of listed price, and others, well, others sell far below their original list price. And many more are selling far below list price than were a couple years ago. Is this a sign of Sellers pricing their homes unrealistically? Or agents not in touch with the market and overpricing? Or both?
Take the Memories, but Don’t Leave the Paint
September 19, 2008
In honor of Talk Like A Pirate Day, I bring you this undersea adventure room.
And yes, the ceiling is painted in the water motif too.
I’m sure the child who lived in this room adored the dolphin and all the custom paint. But when it came time to sell, the owners were too emotionally attached to the paint job to repaint the walls with something more neutral.
And this house sat on the market for a long time, slowly coming down in price. And the owners moved away. And they got to take all their lovely memories of this room with them - and still didn’t repaint it, even though they’d already left the house behind.
And the house sat on the market longer. Because it wasn’t just one room painted in an, ah, unusual manner. It was the whole house. And finally, someone picked it up on the cheap, and turned it into a nice place.
Memories, you get to take with you. Your paint job - not so much. Holding onto this paint job cost the owners tens of thousands of dollars.
Preliminary Home Inspections and Research
September 13, 2008
I have a client considering a home that doesn’t have any covered parking. Nice house, but the owners had a big living room built instead of a carport. They claim that a garage or carport could be built over to one side of the house, but there’s really no guarantee of that.
So if not being able to build covered parking is a deal-breaker, then how much do we investigate before deciding whether or not to make an offer?
We can look up the zoning and setback requirements, get deed restrictions and a current copy of the HOA restrictions. But without a survey, we can’t measure distance from the house to the property line to see if a structure can be fit into the space.
So do you pay for the survey before you make an offer, or do you try to get one done in a limited inspection period? Or make the whole deal contingent on an acceptable survey? Will the owners even allow you to conduct preliminary inspections and surveys before going under contract? What if you spend all this money researching and then you and the Seller can’t agree on price or terms?
And on the other side of this deal, if the owner is claiming covered parking can be built, shouldn’t they really have already done this kind of research and footwork?
Every decision when you buy a home is a trade-off. Same goes for sellers.
If the owners had already done their research before they made the covered parking claim, they might have had an offer from us by now. As it is, why should we go through all that trouble, when there are hundreds of other homes on the market that are just about as good?
Bad First Impressions
September 13, 2008
If it takes a whole page of instructions for an agent to get into your house, then you should consider fixing the problem. There’s nothing more detrimental to a buyer’s first impression than having a hard time getting into a house, to be fighting a lock or sticky door. Already, in a Buyer’s mind, there’s stuff to be fixed. You’ve just given a buyer the impression that you don’t take good care of the place, and the sales price is plummeting in a Buyer’s mind as they add up the cost of imagined repairs - all before we even step foot in the house.
When You Can’t Just Throw Money At The Problem
September 13, 2008
Last week, we talked about buying a home with little or no money down. Here’s another aspect we didn’t cover in that discussion, from a Seller’s perspective.
Here’s the common scenario: let’s say you just accepted an offer and agreed to pay 3% in down payment and an additional 3% in closing costs to the Buyer. And the Buyer does their inspections and then they ask for repairs.
Now, in Tucson, when a Buyer asks for repairs, they have to actually ask for the repairs, they can’t just demand money or a price reduction. What a Buyer can do, however, is ask for the Seller to either 1) do repairs A, B, and C, OR 2) credit the buyer $XYZ to go towards their closing costs instead of doing any repairs.
Many Sellers just throw money at the repairs instead of actually having them done, which saves the Seller some hassle, and the Buyer gets to pick the service provider that they like best. Sometimes, it’s the best solution all around.
BUT - when a Buyer is already getting their down payment and all of their closing costs paid by the Seller, then often the Seller can’t just throw more money at the repairs. The Buyer can’t accept any more money and still get the loan, all the costs are already being paid. The Sellers only choice is to actually have the repairs done.
(Well - potentially another choice would be to buy down the Buyer’s interest rate, and throw money at that instead of repairs, but you’d have to negotiate all that out in a very small window of time and you’d have to run it by the lender to make sure it was all fine with their guidelines, that you weren’t bumping up against other seller contribution limits.)
Just something to consider when you’re contemplating a Buyer’s offer.
Taking Your Home Off The Market
September 13, 2008
Found in the recent search terms: Should I take my house off the market for a month?
I don’t know. But here’s the discussion that comes to mind: Do you think the market is going to change that much in a month? Real estate markets tend to move more like glaciers than like jets.
What will you do when you put your house back up on the market? Will you keep the same price? Will you change the condition? In the Tucson MLS, withdrawing your home from the market for 30 days will ‘reset’ your days on market count, but any agent worth their salt will check the history (that’s a one click easy check) and see that you were listed before and for how long and at what price.
Also: How much will it cost you to carry the house for another month? If you take your home off the market for a month, then put it back on, let’s say it takes a month to get a buyer and another month to close. That’s 3 more months of mortgage, utilities, taxes, insurance, and HOA fees. Is that total more or less than the amount you’re willing to change your price today?
Or how about this: What will interest rates be in a month? There’s something that can change quickly. What new financing restrictions will there be in a month? How will the availability of home loans stretch or shrink your potential pool of Buyers over the next 30 days?
What was the goal of selling your home in the first place? Has that goal changed?
It’s all about risk, and making that risk as small as possible, right? So after thinking about all of that, should you take your home off the market for a month?
Can We Get A Little A/C Action In Here?
September 13, 2008
Summer has spung (or does Summer sum?).
The weather man says it’s going to be 107 this week.
And I don’t mind the temperature, really. You live in the desert long enough, you learn how to deal with it, how to keep cool.
However, it is time to issue my annual summer complaint about people trying to sell their home in the Tucson summer while leaving off their air conditioner.
I can’t tell you how many vacant houses I’ve walked into over the past few days where it was 90 degrees. Inside. I tell you, no one wants to spend time in and contemplate a home when you’re slowly roasting. It’s exhausting.
Please, those of you selling your home here in Tucson, vacant or not - let’s turn on that air conditioner. Give yourself a fighting chance to keep someone in your home long enough to possibly consider purchasing it. You don’t have to set it to 72, somewhere in the low 80’s is acceptable.
Your potential Buyers will thank you!
Being The Nicest Home On The Block
September 13, 2008
A quick note on a busy day:
Being the nicest home on the block is really not the best thing in term of your home’s value.
Think about it this way: would you rather pay for a $200k home in an area of $100k homes, or would you rather buy a $200k home in an area surrounded by $400k homes?
The fancy name for that is the Principle of Regression: basically, all the homes around your home are either helping you or hurting you. So if you’re the best home around, every one else is keeping you down!
And a nice desert vista from North Tucson:
Using All Sources To Value A Home
September 13, 2008
More and more, as the local MLS becomes merely one option as a place to list your home for sale, it becomes important to check other sources when you’re trying to value a home for sale or find comps to write an offer.
Especially in the high end market, many of those sales happen from word of mouth, are not listed in the Tucson MLS, or may have been listed in other services where it can get more exposure to that high end buyer.
In the regular folk price range, there are always sales that aren’t entered into MLS by the agent, or were sold by owner.
If we want to get a full picture of the value of a property, I think it’s important to check all sources - not just the local Tucson MLS.
One of those important sources is the Pima County Recorder. Hopefully, anytime a property transfers ownership, that Buyer and Seller had the sale and the deed recorded. Luckily, I have pretty easy access to that through a system called CRS, which aggregates public data from sources including the recorders office. Now, it may take a little bit of time for CRS to get updates from the Recorder’s office, but usually, I can see recorded sales within a few weeks of them happening.
Photos Matter. A Lot.
September 13, 2008
I was at a new listing with my photographer the other day. He takes the photos, and I play assistant: holding flashes, stopping ceiling fans, opening blinds, clearing counters, holding the pool cleaner hose out of the shot, that sort of thing.
So I’m hiding in a nook with my Seller in the kitchen, just outside of the photographer’s 
shot, ready to spring into action to move something on or off the counter, and my Seller turns to me and says:
This sure is different from what the last agent did.
Turns out, the last agent came over with a 
disposable camera, snapped a few shots, and went on their merry way.
So yeah, I can see how this would be different.
I think having good house photos when you’re trying to sell is one of the most important things. If your home doesn’t look 
attractive and inviting in photos, then no one is going to want to come and see it.
Good real estate photos takes some skill too. Personally, I know the kind of shots that I want, but I don’t have the camera equipment or the patience to learn how to do it. I hire out my photography, and it’s hardest working money I spend on a listing, 
hands-down.
I won’t post the old agent’s photos to protect the (not so) innocent, but I think my photographer’s work stands alone, even without showing you the other photos for comparison purposes.
I don’t care if you’re selling yourself or if 
you’re listed with another agent. Demand good photos. I don’t care about the list price of your home either. Every home needs superb photography, from the $90,000 condo to the million plus mansion.
- Current Market Conditions
- Latest Home Selling Articles
- How Real Estate Agents Work
- My Selling Services
Home Seller Information
