Is it finally time to dive into the housing market in Bucks County?

I have a number of people who have been following the local real estate market for many months, and in some cases, more than a year.  I watch as these folks search my website for listings, and we  have actually looked at homes, from time to time, in some cases. According to an article in the Wall Street Journal, yesterday, some people are finally deciding that the time is right to take advantage of the glut of inventory of houses to choose from, as well as low interest rates, and are taking the plunge.

As the article points out, the housing bust, appears to be creating a new group of winners; first time home buyers.  People who watched as friends rushed to buy homes several years ago, are now in a position to take advantage of what look like, incredible deals.  According to the National Association of Realtors, first time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006. 

First time home buyers are in a great position.  They are lured by home prices that are obviously depressed.  In some markets, prices have fallen by as much as 40% from peak levels.  Fortunately, in Bucks County, prices have not fallen as significantly, but they are definitely lower.  Houses are clearly more affordable.

In addition, mortgage rates are near historic low levels. 

On top of low prices, and low mortgage rates, it appears as though there is going to be a great tax break specifically for first time home buyers, in the financial rescue plan.  As the plan is currently presented, first time home buyers may be eligible for an 8,000 tax credit, if they buy in 2009. 

First time home buyers are in a great negotiating position when making offers.  Having nothing to sell, makes them extremely strong buyers.  Often sellers are willing to accept lower prices, knowing that a first time home buyer, with strong credit, is presenting offers that are clean, meaning that there is no worry about the sale of another house. 

Because of the amount of inventory, buyers can be patient and selective.  Although we won't know where the bottom of the market is, until it is too late, it appears to be an ideal time for first time home buyers, to get into the real estate market.

Yardley Bucks County Real Estate Update

For those who read my blog, I have to apologize for not being very diligent about posting, recently.  Believe it or not, I have actually been pretty busy practicing real estate.  I thought it would be interesting, to offer a brief review of some of the transaction challenges, along with some successes we have seen, of late.  This may help to provide a more accurate indication of what is really happening in the Bucks County/Mercer County, and surrounding areas.

With regards to my listings, I am fortunate in that I am marketing homes in a very diversified price range, from the 200,000 range to well in the millions.  In my opinion, the higher priced market has been impacted more significantly than more modestly priced homes.  An indication of this, is that in Upper Makefield Township, it would actually take years to sell all the houses that are currently on the market, priced over 1 million dollars, based on the current rate of sales.  I recently listed a house priced at 294,900, and we negotiated an offer within the first 2 weeks that the house was on the market. 

I recently listed another property in New Jersey, and we got an offer within the first 4 days of putting the house on the market.  We are still waiting to see whether this will work out. 

If you are wondering what I attribute the fast turnaround to, with regards to both of these recent listings, it is that the homes showed incredibly well, and were priced to reflect current market conditions.  I think that is the single biggest obstacle that we face right now.  I believe that many sellers still are not realistic enough about what happening in the market.  If a house is not priced appropriately, there is no doubt that it will sit on the market for a long time.  There is a lot of inventory competing for the attention of buyers, and there are not enough qualified buyers to absorb all of the inventory.  On top of that, in many areas we are seeing more short sales and bank owned properties than at any time since I have been in real estate. 

I recently had a buyer make an offer on a short sale, and it can be a long and arduous process, since the ability to close the transaction is entirely dependent on the lender accepting the offer.  Depending on the lender, that process can take weeks, or longer. 

Another transaction that I am currently working on, brings up another potential challenge.  I am working with a buyer who made an offer on a property that was absolutely gorgeous.  Totally upgraded, move in condition, and priced at what we thought was a very realistic value.  We wrote an offer, negotiated the price, and thought the process would be quick and easy.  That is until the appraisal came in below the contract price.  Basically that means that the buyer would not be able to get the loan as per the mortgage contingency on the contract.  Somewhat in response to the mortgage crisis, appraisers are now being extremely conservative, so this is not an unusual problem.  Based on the appraisal, we had to re-negotiate the price, and were able to work out a combination of a lower price, and some additional buyer funds to ensure that the house will go to closing.  It was just not an easy process.

I could go on and on with a variety of stories about what is happening in our market.  Prices are challenging for sellers to deal with, but there are houses selling every day.  If you are a seller, be realistic, make sure your house shows as well as it possibly can, and be pro-active in responding to the market.  I have a book that I can email, called, "450 ways to get your house sold quickly".  If you are thinking about selling, I highly recommend reading through this booklet, it offers great advice about getting a house ready to show. 

For buyers, you can be selective, and there are great opportunities in the market.  Interest rates are at all time, historic lows.  Have we reached the bottom of the market?  Only time will tell, but I do know that by the time we know for sure whether we have reached the bottom, it will be too late. 

Bucks County Real Estate Update

It has been a while since I posted a specific, statisfical update, of the various Bucks County markets, that I server.  I am sure that everyone realizes that, if you are a seller, in the current market, the market is not very good.  Although Bucks County, still is a lot better off than many areas of the country, we are still going through a very difficult, buyers market.  That means that there are lots of houses on the market, and not many buyers.

Looking at the numbers, through October, of this year, the volume of sold units is noticeable lower than previous years, to date.  For example, Lower Makefield Township is down 28%, Upper Makefield Township is down 24%, Solebury is down 32%, Northampton is down 24%, and Buckingham is down 19%.  This should not come as a surprise to anyone.  The current pending sales, show a similar decline.

The average asking price of homes currently in inventory, as of October 08, has decreased sequentially from September of 07, in virtually all of our markets.  I would expect this trend to continue, until our sales volume increases. 

Inventory levels in October, actually decreased from September of 08, in most of our markets.  If you compare current  levels of inventory to 07, Lower Makefield is down 12%, Newtown down 30% and Buckingham down 9%.  There are some markets where inventory levels have actually increased compared with 2007.  With much lower sales volume, the change in inventory levels does not alter the basic reason for the buyers market, which is, as I mentioned earlier, that there are lots of sellers, and not so many buyers. 

I did have 2 listings that have sold in the past week or so, so there are homes selling.  What did those sellers do that enabled them to obtain an acceptable offer?  Essentially, they made sure that they did everything they could to enhance the way their house showed, and most importantly, they priced it right!  In both cases, we received offers that were within the average discount range, which is currently about 5 % or so, and they were extremely realistic and responsive in the way they negotiated.  In both cases, they will be able to move on with their lives.

Given the current market conditions, it is more important than ever, that homes be priced correctly, and marketed to as wide an audience as possible. 

If you want to see the statistical breakdown of the various markets, please click on the following link:

Bucks County Real Estate Statistics

Please keep in mind that real estate is still extremely local.  Even withihn the same township, statistics can vary from neighborhood to neighborhood.  If you are anywhere in my market area, either in Pennsylvania or New Jersey, I have a great program that will provide you with an emailed report every month, that will show you homes that are active, pending and sold, within about a 5 mile radious of your house.  The report will include days on the market, as well as pricing trend lines.  It is a great way to stay up to date with what is actually happening in your specific neighborhood.  If you would find that helpful, all I need is an address, and an email, and you will recieve the report, automatically, each month.

Yardley Real Estate Update

First, I have too apologize for not posting in such a long time.  I really have no excuse for it.  I love to write, and have let to many things get in the way of my blog posting.  I am going to be much more diligent in the future.

Because it has been such a long time since my last post, I have a lot to share.  I attended a real estate conference in Arizona, a couple of weeks ago, that was absolutely the best, most informative and inspirational real estate event I have ever attended.  I learned a tremendous amount, while there, and shared ideas with a group of amazing, productive, and wonderful people.  I am going to share some of what I gained from that conference, in another post.

I saw an article in today's Wall Street Journal, that I could not help sharing.

Basically the article talked about some incentives that sellers are using to get their house sold.  I am not suggesting that any seller I am currently working with, try any of these strategies, although they may work!

Here is one I absolutely loved.  A seller in Texas, who is trying to sell a 6200 sq. ft house, is giving the new owner a brand new car.  Not just any car!  He is throwing a new Porsche Boxter into the deal, for the new owner.  Apparently a family with a 16 year old, recently saw the house, and the 16 year old is, "driving" her parents crazy, in hopes that they buy the house, and she gets the car.

A seller in Phoenix, where prices have fallen more than 19% from July to September, from a year earlier, is offering to install a pool, patio and professional grill, should a prospective buyer be interested in those amenities.   Otherwise, he is willing to knock off 100,000 from the price.

Then there is the seller in California, who is willing to pay to have his property professionally maintained for 6 months, for the new owner, and is throwing in a washer, dryer, along with a flat screen TV, and furniture in order to entice offers.

The best incentive deal I ever heard of, was actually offered on a property in North Jersey a couple of years ago.  The seller of the house was offering a 250,000 bonus to the selling agent, along with a Ferrari to the new owner!  Asking price of that house, was over 7 million dollars, so I guess they could afford that kind of incentive.

On a personal note, I still believe that those trying to sell in the current market, need to do what sellers always need to do; that is, make sure your house shows as well as possible and is priced well.  I had 2 listings that sold within the past couple of weeks.  One in Yardley and one in Langhorne.  In general, Bucks County real estate values are down approximately 15% from the height of the market.

My Book

Visit my book website http://buckscountyrealestatetips.com/

Wall Street Journal Advice for Sellers

With all the negative news in the headlines, about the struggling real estate market, it was somewhat refreshing to me, to see an absolutely fabulous, accurate, and worthwhile article that appeared in the Wall Street Journal, this past Monday, titled, "How to Sell a House when you Have to Sell in Now".  http://online.wsj.com/article_email/SB121553612650836199-lMyQjAxMDI4MTE1NjUxMzY2Wj.html

Contrary to what you might suspect, reading the headlines, there are houses selling in our market, every day of the week.  There are sellers who have to move, generally for traditional reasons, such as job transfers, outgrowing homes, downsizing, family circumstances, etc. There are buyers out looking at homes, every day, as well.  The article offered 7 steps to consider, in order to effect a sale in today's market.

Those 7 steps include the following:

1.  Don't wait around.  Basically the advice is that because the time on the market has increased, if you have to sell, don't sit around trying to sit out the market.  If you want to sell, the best, and only way to make that happen, is to put it up for sale.

2.  Fix it up and clean it up.  The advice in the article is not to spend a lot of money on big ticket renovations, but to make sure that everything is in good repair, including paint, etc.  Please note, that this won't necessarily give you a pricing advantage, it will just ensure that your property stands out from the competition.

3.  Price it Cheaply.  Note the language that David Crook, the author, used.  He advised to be realistic, in setting the price from day 1. Don't let the house hang on the market for month after month.  Remember that your house is worth what it is worth today, not 3 years ago.  Buyers are looking for, and buying, those homes that they perceive to be bargains.  Your price has to stand out.

4.  Although I am obviously biased, this one is my favorite!  Hire a Top Real Estate Agent.  The author's advice is to, "Get the best, most aggressive selling (listing) agent you can find."  This is self explanatory, but basically the point is, that with the market being as challenging as it is, sellers need to take advantage of every possible activity to maximize the properties exposure to the market.

5.  Promote, Promote, Promote.  This is a follow up to the above suggestion.  As a seller, the article suggests that you should have a hand in making sure that your property is exposed everywhere possible.  Make sure your house is on all of the leading web portals, including Trulia, Zillow, Cyberhomes, Realtor.com, to name a few. Get really creative.  Perhaps you can promote the property in your own corporate newsletter, and intranet listings.  If you are part of an organization, put it in your organization newsletter, or bulletin.

6.  Play the banker.  If you are fortunate enough to have lots of equity, or perhaps no mortgage, consider offering the buyer some kind of creative financing.  Might be the difference between a buyer purchasing your house, rather than some else's.

7.  Take the Offer.  I can't emphasize this enough.  I can't tell you the number of times that sellers won't take an offer, and then regret it, months later.  Negotiate the best you can, but be practical and realistic. If the offer is reasonable, and I understand that is a magical word, be prepared to accept it. Remember, that as much as you love your house, it is only worth what someone is willing to pay for it.  That will, in all  probability, in today's market, be less than what you think.

As I said at the beginning of this post, I think the Wall Street Journal did sellers everywhere, at great service with this article.  Obviously the Journal has a great deal of credibility.  I have been trying to get this basic advice to sellers, for some time.  It makes a lot more sense coming from the Wall Street Journal, than from me.  If you are a seller in this market, do yourself a favor, and think very seriously about this advice.

Jim Gillespie presenting Martin Millner with the top team at Coldwell Banker Hearthside

I was very proud, recently, to have received an award from Coldwell Banker Hearthside, as the top producing team in the entire company, for the second consecutive year.  The award was presented to me, in front of the whole company, by the CEO of Coldwell Banker, Jim Gillespie.  Jim delivered a wonderful address, which I will speak of, in a minute. 

I don’t like to spend too much time talking about my real estate accomplishments, but this award was particularly meaningful.  Obviously 2007 was a very challenging year for most realtors.  My team and I,  had a very strong year in 2007, despite the markets challenges.  We constantly strive to deliver service that is better than expected, and to search for tools that enhance our ability to expose our listings to the market.

Jim Gillespie, as the CEO of Coldwell Banker, is a highly respected and knowledgeable expert on real estate.  You can see Jim often, on many of the financial news stations, commenting on what is happening in the real estate market.  These comments were taken directly from his presentation to our company, at our awards celebration, recently.

As I have posted about several times, the overall real estate market is not as bad as the press would have us all believe.  According to Jim, and all of these statistics are completely documented, of the 75 million homeowners in the US, 35% have no mortgage.  50% have fixed rate mortgages, 6% have a government loan and only 9% have subprime loans!  We also don’t learn from the press reports, that according to NAR (The National Association of Realtors) the average median price increase in real estate from 1972 through 2007 was 6.2% per year. 

When reporting about the so called foreclosure crisis, the press does not dig into the real numbers, rather they play up the percentages without noting the true effect on our industry.  According to RealtyTrac, which is a leading source for tracking foreclosures in the US, last year there were 1.2 million foreclosure filings, but there were actually 405,000 homes lost to foreclosure.  This year  they are suggesting that the filing number may jump to 1.5 million filings, which the press uses as the number of homes actually lost to foreclosure.  History tells us that the number will be well under half of the foreclosure filings.  In 2006 there were around 268,000 homes lost to foreclosure.  In 2007 that number jumped 51% to 405,000 according to RealtyTrac.   While playing up the 51% increase in foreclosures, the press does not look at how those actual numbers affect the real estate industry.  In reality, there were less than 140,000 more homes lost to foreclosure during that one year period, which represents less than a week’s worth of sales in 2007 when we saw 5.6 million re-sales and approximately 800,000 new home sales.  This is not meant to negate the tragic impact that home owners face, when losing their home to foreclosure.  It is only meant to point out that we are not getting the true picture of the real estate industry, from the press.  As I have repeatedly pointed out, real estate is local, local, local!

In Jim’s presentation to us, he went on to point out a number of extremely encouraging demographic trends that bode well for real estate, in general.  There are 78-79 million baby boomers, who are still in their prime and will be purchasing real estate for decades to come.  They are purchasing second homes, retirement homes and have discovered real estate as an investment.

The kids of baby boomers, 73 million strong, will fuel real estate for the next 5 decades.
Legal immigrants is the third demographic that will continue to drive real estate.  There are between a million and a million and a half legal immigrants, depending on the source, who arrive in this country and add value to our nation.  These people want and deserve the American Dream of homeownership.
Finally, there has been a dramatic increase in home ownership among minorities.  According to Nar, the homeownership rate of minorities has grown from 40% to 50% in the past the years, and this percentage will continue to increase.

People buy real estate, in general, for lifestyle.  According to NAR there have been 4 million jobs created,  4 million marriages and 8 million babies born in the last two years.  These are lifestyle changes that many times, trigger a home purchase.

The long term outlook for real estate is extremely strong as our population grows from 300 million today, to over 400 million by the 2040’s.  According to two major studies, there will be a long term imbalance of supply and demand.  The Brookings Institute issued a report in December, 2004 stating that by the year 2030 we would need 58.9 million additional residential units to meet the countries demand.  The Arthur C. Nielsen Institute at Virginia Tech recently did a similar study looking out to 2040 and predicted we would need 70 million additional residential units built by that year.   These studies bode very well for the long term appreciation for real estate.

Finally, according to NAR there will be 15 million households formed between now and the year 2015 outpacing the past 10 years of household formations.

I apologize for such a long post, this time around.  I thought it was very important to let readers understand that there is a lot about the state of the current real estate industry and market that we don’t get by listening to the press.  Jim Gillespie did a great job of creating some balance in analyzing the numbers and what they mean to all of us.

Bucks County Real Estate Trends

First quarter statistics are in, so we are able to begin to develop a better indication of where things are with regards to real estate in the communities I serve, in Bucks County.  I have written many posts in the past, explaining that the market in Bucks County, is nowhere near as depressed as it is in some markets in the country.  I will address that issue, in another post to follow shortly. 

Here in Bucks County, looking at first quarter statistics, there is no question that we are continuing to experience a buyers market.  That means that there are lots of things on the market, not as many buyers.  One point of emphasis though, is that contrary to what the press would have everyone believe, foreclosures in our area, are still not influencing the market significantly.  I still have buyers who are under the impression that every house currently on the market, is being sold by a desperate seller, who is facing imminent foreclosure.  That is simply not the case.  Virtually every single seller in the market, that I am aware of, is selling for life style, or job transfer reasons.  I have sellers moving up, downsizing, and selling becuase of job transfers.  All of those reasons, are completely normal.

Here is what the statistics show.  The volume of sold/closed units through the first quarter was noticeably lower than last year, in virtually all of our markets.  Lower Makefield Township was actually down almost 30%, and Upper Makefield was down almost 50%.  Newtown Township was actually the exception, in that Newtown showed an increase of approximately 4% in closed first quarter units.

Inventory is trending as one would expect in a buyers market.  Inventory is up from February in all markets.  If you compare inventory levels at the end of March 2008, with March 2007, the results vary from market area to market area.  For example, Lower Makefield's inventory of homes was lower at the end of March this year, than last year, by almost 22%.  Newtown, Upper Makefield and Solebury are higher, as is Buckingham and Northampton. 

Average days on the market are higher over a year ago, reflecting tougher market conditions for sellers. 

Looking at sold/list ratios, shows slighly increasing discounts of between 6 & 10 percent in most markets.

Despite all of the above, the market contines to be extremely price sensitive.  There are still many examples of houses selling quickly, and selling for close to the asking price.  For example, I recently had a listing right in Yardley Boro, on the main street.  It sold in 2 days, for almost exactly the asking price.  Where is the press when that happens!

The message from looking at all of these statistics is that houses are selling every day of the week.  If it is priced correctly, and marketed correctly, it will sell.  It is still a buyers market, but there are still buyers looking, and buyers are making offers. 

In future posts, I will delve into the statistics a little deeper, and I will also reflect on some additional observations about the current market.

Bucks County Market trends

I finally saw an article in the local press, yesterday (Feb 26th) that accurately described our local market.  Here is a link to the entire article, which appeared on the front page of the Philadelphia Inquirer. (http://www.philly.com/inquirer/real_estate/Houses_still_find_eager_buyers.html)  Basically, the article said that there are still situations in our current real estate market, where houses attract more than one buyer.  Essentially, it comes down to price.  If a house is priced appropriately, it will get shown, and it will sell.  According to the article, for all of 2007, the median price of houses sold in Bucks County, was down 0.3%, in 2007, which represents a pretty insignificant drop.  Even in terms of units, for the entire county, Bucks was off 4.4% for the previous year.  Again, if you read all of the national articles, you would presume that Bucks County is experiencing a real estate depression.  That is simply not the case.

Looking at the statistics locally, from January, some of our local markets, are actually ahead of last year.  Lower Makefield Township is up by more than 15%, and is Newtown Township.  Solebury and Buckingham Township are down.  Inventory has increased in virtually of our markets, in January, from December.  However, if you compare inventory this January, with last January, most markets are actually showing less inventory than a year ago.  Again, this varies on a township by township basis.  Sales discounts still continue to average around 5% or so, from the asking price. 

What all of the statistics mean from a local perspective, is that the market in Bucks County is nowhere nearly as weak as it is in some parts of the country.  Although it is still a buyers market, homes that are priced correctly can and do sell, and they can sell for pretty close to the asking price.  I recently had a listing in Yardley Boro, that was priced right, showed well, and sold the second day on the market, for virtually the asking price.  (http://101nmainstreet.com/)

Bucks County Real Estate, to open house, or not?

I came across a very interesting article in one of our local newspapers, last week, regarding open houses.  http://www.nj.com/starledger/stories/index.ssf?/base/news-13/120253533995340.xml&coll=1#continue

The article focused on a 72 year old resident of a New Jersey town, who spends about half the year in Florida, and claims that he and his wife have been visiting open houses for decades.  They say in the article, rather proudly, that they never go with any intent to buy anything, they are just nosy and curious.  So, the question is, although realtor open houses are a long time staple of the industry, do they work?

I was very fortunate, early in my real estate career, to have met a motivational speaker/trainer, by the name of Mike Ferry, who was extremely opposed to open houses.  I have continued to follow that training, for the most part.  As the article referenced above points out, very few buyers actually ever buy the house they came to the open house, to see.  More often than not,  I have found that visitors to open houses are nosy, and the least motivated buyers.  What most realtors don't tell their seller clients, is that realtors do open houses, to find clients.  That's great, except it doesn't do the job that the seller has hired us to do, which is to sell their house.  I have always felt that an open house was perhaps the most passive marketing strategy available to a realtor.  You don't have any way of qualifying the buyer, or to find out if they are serious about buying a house, or not.

With statistics showing that more than 90% of actual buyers in my market place, find that the Internet is the most important place for them to find the house they ultimately buy, along with information from their realtor, to me, those places are the most productive way to market properties. 

I don't mean to ruffle any feathers, for those realtors that do focus on doing open houses, but if you are a seller, and ask those realtors for an honest and open assessment of why they are holding open houses, Sunday after Sunday, most will admit that they are using the sellers house as a tool to attract clients, in the hope of selling them something else.  Again, this is a very personal perspective, and I know that there are many, successful agents, who might not agree with me, but it is an interesting conversation to have.  I have found that the overwhelming majority of my clients, when told that I am not a big believer in the open house strategy, are relieved, and tell me that they hated the idea of doing open houses, anyway. 

As always, your comments are welcome.

Bucks County Real Estate trends

In an interesting article this morning, the Bucks County Courier Times,  finally acknowledged what I have been discussing with buyers and sellers for all of 2007, which is that, although we in Bucks County are experiencing a difficult market for sellers, things are nowhere nearly as bad here, as they are in many parts of the country.  As the article states (http://www.phillyburbs.com/pb-dyn/news/111-01282008-1478346.html) "Bucks County fared better than the region and the nation, in home sales last year. "  For all of Bucks County, according to market statistics, the number of home sales declined by about 4%, for all of 2007, from 2006.  To put that in perspective, nationally, home sales dropped 13%, between 2006 and 2007.

Even within Bucks County, individual Townships and Boro's, did not necessarily perform exactly the same as the county as a whole.  For example, according to our MLS statistics, Lower Makefield Township actually had an increase in the number of units that sold in 2007, as compared with 2006.  (439 units closed in 2006, 460 closed in 2007)  Upper Makefield actually saw a 12% drop in the number of sold units from 2006 to 2007. (125 sold in 2006, while 110 sold in 2007)

Interestingly enough, despite the tough market conditions, inventory of homes actually declined in virtually all of the Bucks County markets, from November 2007, to December 2007.  This was the case in Lower Makefield, Morrisville, Newtown, Soleburry, Buckingham and Northampton.   What this all means, is that in terms of months of inventory, several markets are actually trending towards a more balanced condition.  For example, Lower Makefield had approximately 5 months of inventor, Newtown Township had 6 months of inventory, as did Northampton Township.  Upper Makefield and Solebury remained solidly in a, buyers market, scenario.  Upper Makefield and Solebury, each have approximately 14 months of inventory.

What all of this means to buyers and sellers in Bucks County, is that it is a mistake to presume that nothing is selling.  Buyers are making offers every day, and sellers are accepting offers every day.  Interest rates have dropped to almost historic low levels, and there are still lots of choices for buyers.  Buyers are actually seeing an average of 5% discount from the list price.  As always, price is critically important.  Overpriced listings will stay on the market and get stale.  Listings that are priced correctly, given the current market conditions, do get shown, and will attract offers. 

For those reading this post, who are in Bucks County in Pennsylvania, or Mercer County, in New Jersey, I have a program that allows a consumer to track from their own computer, sales activity in their neighborhood, and the program will actually show how long homes stay on the market, and it will also track discounts from list price.  In addition to that, it will track pricing trend lines, so you can really see what prices are doing, in  your specific neighborhood.  If you are interested in that, just drop me an e-mail, and I will set it up for you.