A Brighter Note for Housing

While the Grinch may have had his way with housing this past year, better days are ahead. NAR Chief Economist Lawrence Yun tells us that the economy and housing will easily escape recession, but foreclosure rates will continue to rise in 2008. Some markets will do better than others, however on the whole, the national home sales and price situation will be very similar in 2008 to 2007.

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"Copyright National Association of REALTORS®, Reprinted with permission."

MONEY GROWS ON THIS TREE!

Let's plant two “money trees” and watch their growth. We'll plant the first by placing $20,000 in a savings account earning 5% interest, and leave it there for five years. After five years, we'll withdraw our initial investment ($20,000) plus the interest ($5,525). We invested $20,000 and received back $25,525, a 5% yield.

Now, let's plant the second tree. We'll buy a home for $100,000 and invest $20,000 (as the down payment). For the sake of argument, we'll assume that the home appreciates at 5% each year, just as the savings account earned 5% interest. At the end of five years, the home will be worth about $128,335, a $28,335 gain (that's at an annual rate of 5%).

We invested the same $20,000, and received back our $20,000 investment plus another $28,335 (the increase in value) for a total of $48,335. The rate of return is a sizable 19.3 percent! By purchasing the home, we were able to earn 5% appreciation on the entire $100,000, whereas on the savings account we earned 5% only on the $20,000 investment.

Incidentally, if we had invested only $10,000 in the same $100,000 home ($10,000 down payment - $90,000 loan), we would have received the same $48,335 in return for only a $10,000 investment - a whopping 37.04 percent return! Now you can see the obvious benefits of home ownership!

SECRETS OF THE GARDEN!

It's easy to understand how landscaping can enhance your home's appearance, livability, and resale value. There are many affordable improvements that will boost your curb appeal, but you can begin by investing in just a little elbow grease to trim bushes and prune dead tree limbs.

One simple project that will significantly impact your property's perceived value is planting trees. Proper installation of just three trees can cut energy bills an average of $100 to $250 annually!

Then there's the question of color, and plants like junipers and boxwood provide interest all year long. When planting flowers, you’ll find that red and white colors provide the biggest impact.

Water goes hand in hand with planting and landscaping, and everyone (including the birds) loves the soothing sound of a cascading pond waterfall or fountain. Also consider ways to conserve water in the garden, like xeriscaping with drought-resistant plants.

You certainly don't have to go "whole hog," and you can cut your costs by working in stages. Of course, you can learn more about the most beneficial landscaping by visiting a botanical garden, participating in a local "garden walk," or getting advice from your neighbors.

The most important thing to keep in mind is to have fun. And who knows? Developing your green thumb now may just produce a little more "green" when you sell your home!

FACTS, NOT FANTASY!

Confused about setting an asking price for your home? It's not surprising, considering the mixed signals you might be receiving about the "national" real estate market. First, understand that there is no such thing as a national market - only thousands of individual markets experiencing different conditions.

If you don't have detailed information about local home sales, it's just about impossible to determine your home's value to buyers. Even prices from just six months ago probably won't hold up, so it's critical to have access to real-time information about trends in this market.

Details should include the total number of properties currently for sale, the number of both pending and sold units, the average listing time, and the average listing price and sale price. You must compare pending sales and final sales, because the pending transactions really reveal where the market is heading (as opposed to where it was when a sale took place.)

Start your pricing decision by contacting a real estate professional, who has access to this information and the experience to interpret the facts. Your representative will not set the price for you - that's your final decision. But don't be surprised if the agent walks away from an overly optimistic asking price, because the agent can't afford to invest time, money and energy in an overpriced listing, and neither can you.

Vacant Home or "Open House"?

If you move out of your home while it's on the market, you'll expect your real estate agent to handle showings in your absence. But how do you avoid the unwanted attention that a vacant home can attract from uninvited intruders?

There are many suggestions to offer to increase your security. While your agent likely won't have the time available to constantly monitor your home, you do have the option of registering with the local police department, so that officers assigned to your neighborhood can keep an eye on your home and perform security checks as needed (generally at no charge).

If you have a security system already installed, be sure to notify your service that the house is empty, and provide an emergency contact number. Also employ a caretaker for the grounds, to keep the yard clean and maintained for a more lived-in look. Stop your newspaper deliveries and make sure your mail is being forwarded to your new address before your big moving day.

Don't leave anything valuable behind, and be sure to program all of the lights on timers, inside and out. An overlooked issue, however, is to not leave the lights on all night, as that is actually an obvious clue that no one is home.

Some simple planning now can save you untold worry and stress later. Enjoy your move!

Two Sides of the Same Coin!

How would you place a value on your home? More critically, how would you put a price on your home? Sounds like the same question, but it suggests the difference between price and value that's important to understand as you prepare to sell your home.

Two homes may have identical features and prices, but factors like location and condition can impact the homes' perceived value. To arrive at an attractive asking price, you must compare your home's value against its competition, which is easily done through realty websites and advertisements.

Your goal is to set the right price right away. Your best window for a full price offer will come within the first three weeks, so if you don't see any activity in that timeframe, take action. In changing markets, pricing a home becomes an ongoing activity. You need to consider real estate dynamics - new listings, recent transactions, expired listings, shifts in inventory, and so on.

Your best source of information and guidance is your neighborhood real estate agent, whose vocation it is to monitor all those conditions and bring buyers and sellers to the table for a satisfying transaction. Meet with your representative to discuss your motivation and timetable, compare your home's value against the competition, and analyze current trends in this market. The relationship between price and value will become crystal clear!