Sales Trending Upward in 2010

Last week for the first time in quite a while, I didn’t cringe when I looked at our monthly numbers. In fact when I finished studying them I was down-right happy. I am by no means telling you that this challenging market is behind us but I am telling you that we are starting to crawl out of the darkness.

Our “closed sales” and our “pending home sales” are more than twice what they were year to date in ’09, additionally, our walk in traffic, phone ins and web site hits are also twice what they were YTD. Island Realty is still the leader east of Cowan Creek with both listing volume and closed sales and we are the dominant force on Fripp Island (43% market share), Harbor Island (30% market share) and Coosaw Point (58% market share).

Last year we did 70% of our business in the 2^nd half of 2009 and I was hopeful that the trend would continue and it has. The market continues to be demanding however and depending on what you read either the recession is behind us or soon to be over. The truth is no one can tell you for sure the exact moment that we are out of this until we are well past it. The statistics that I cited above give me great hope that we are either out from under the black cloud or soon to be and when that happens, I will be supremely happy, not happier than our buyers and sellers, but supremely happy nonetheless.

Locally, both inventory and prices are starting to stabilize. Although lending is still tight, those with good credit can still get loans. Additionally those who are able to obtain financing are snapping up property at bargain prices which is a win / win. The buyers get almost instant equity and we as neighbors and home owners get a reduction in inventory supply, which helps prices stabilize, which is critical to returning to a normal market. Indeed a win / win.

So what does my crystal ball say? Quite frankly the volatility of the market over the last two years has shattered my crystal ball. The last two years have been the toughest of my career and I was licensed in 1995. The market did strange and weird things. Banks did even stranger things on short sales and foreclosures, the stock market did strange things as well.

Truly though, I believe there is real evidence of improving conditions in many respects. Employment is improving, retail spending is improving and auto sales are up (I personally participated in boosting the auto sales). Even the most pessimistic of forecasters noted that jobs and housing would need to turn before we should feel like we are back on track. I can tell you that we at Island Realty are doing our part to keep the housing component on track, no small task, but we are doing our part. Another win / win.

What are you thinking SC?

To: The Leadership of South Carolina:

Hello South Carolina government, what are you thinking?

An amendment was introduced by Representative Ted Vick, of District 53 - Chesterfield County, which would have established a new statewide property tax for homes valued at over $250,000. The amendment was debated at length and failed very early Thursday morning. Representative Gilda Cobb-Hunter introduced and ultimately withdrew an amendment that would have repealed the 2006 changes to the property tax structure known as Act 388.

My question is, how much more can the real estate market take? In our area, we are starting to see glimmers of recovery and a new tax on homes at $250k + would definitely hinder sales so thank heaven that was defeated. Why is it that the state & it’s officials, particularly in areas away from the coast, view real estate and the potential tax as such a cash cow?

In any event, I bought my home on Fripp Island in 2004 for a vacation getaway and moved here full time in January 2007. Please note that this was after a 3 year search of 2^nd home communities and I looked at numerous coastal communities between Virginia Beach, VA and Jacksonville, FL. There were many criteria in my home search but please note that the state governments and their treatment of property owners was an important factor in my decision.

Please, let’s not lose sight of the fact that the second home & retirement home market is an integral part of our state’s economy and the people that are our potential buyers have lots of alternatives to SC. The greed or tax lust that I keep reading about will ultimately harm us all I am afraid. Please urge our legislature to continue to do everything possible to straighten out the ludicrous “point of sale” tax. Oh and thank you for squashing the tax on homes over $250k.

Do the Lenders Really Want to Get the Short Sales & Foreclosures Off Their Books

Yes, there are glimmers on the horizon of an improving economy and housing market. Yes, I have written countless times regarding what a good time it is to buy. Yes, I have even reprinted other people's missives on the subject, so you know I believe it is a good time to buy. And finally yes, prices are still attractive, interest rates are still good and the inventory of homes to buy is still larger than normal.

So what's my beef?

Short sales and foreclosures, that's my beef. Specifically how uncooperative the lenders in these positions are. As I write, our company has a listing that is in short sale status (the lender is willing to take less than is owed on the property) with multiple offers on it. As the Broker in Charge, I had to step in and take over the negotiations because the listing agent also brought one of the offers. So my first course of action is to submit all three offers to the lender. Done. Knowing full well that these things take longer than normal I waited a few days to contact the lender. When I contacted them to check the status and see how they were going to proceed --

a. choose one offer and reject the others,
b. negotiate all the offers or
c. reject all the offers

I was told that I should have selected the best one and rejected the others. To which I explained that this wasn't possible, that I had to present all offers and although technically they aren't the seller (yet) the transaction is subject to third party approval. The person on the other end sighed heavily and told me that my offers although they had been submitted five days earlier were waiting for document review from the underwriter, not document review of offers but of the home owner's file. In other words they wouldn't even look at any of them until they amassed reams of paper from the seller.

Five days after that, I have checked back twice and the only thing I can tell you is that the seller's file is complete and the offers have gone to the underwriter. They can't / won't tell me which offer has been chosen, they don't know who the underwriter will choose. They can't / won't let me talk to the underwriter. They tell me that a decision should be made in about 30 days. I tell them that the home is due to be foreclosed on prior to that. They say call a week before to get them to avert the foreclosure.

Next, I ask them to please take pity on me and my buyers. I try to explain that without even knowing if their offers have been selected or not that they will grow nervous and weary and that we stand the chance of losing any or all of the buyers and clearly that isn't good for either of us. I told them that most buyers won't wait 30 days to know if they are even going to be negotiated with, that they will start looking around at other stuff. The response, "well, if one or all of them walk just notify us".

I ask them to take pity on my seller. I explain the state of anxiety a seller must be in when they are on the brink of something as serious as short sale and if that doesn't work, foreclosure. I tell them I will do whatever I can to help expeditite the process. I am essentially told, "sorry about your luck, we will be done, when we are done".

I am STUNNED....... Every day for months and months the whole country has been reading about the economic and housing crisis. We have read about how no one is doing anything, that consumer confidence is at a historic low, that lenders are awash in foreclosures and short sales, that families are losing their homes, people are losing their jobs etc. The news has been dismal at best and here in our situation, we have ready willing and able buyers and we can't even get a response.

This I know for sure, it is paramount that we get the inventory reduced. Prices have no hope of returning to normal until there are fewer homes. That is a simple law of supply and demand. We have no hope of a serious reduction in inventory with such a lack of cooperation from the lenders. This particular lender's representatives were down right disdainful in speaking with me. If I am frustrated, I can't imagine how the buyers must feel.

Is there an answer? Yes, get the lenders to cooperate with ready, willing and able buyers. How do we do that? I'm not sure, it will take someone much smarter than me to figure that one out.

We're on YouTube

We're on YouTube. In today's world everyone wants to see things immediately and I get that, I'm that way too. With that said, our listings are appearing on YouTube. To take a look at what we've got, just click on the link below.

http://www.youtube.com/view_play_list?p=F957FE6ACC0F2000

Posting videos is just one more thing that we do for our clients.

Quick Fact About '08

Once again, Island Realty was the clear leader east of Cowan Creek both in sales volume of $32,000,000 and number of units closed at 37. Our nearest competitor had volume of $19,000,000 closing 19 units. Given the challenging economic times I am very proud of these numbers and clearly we are keeping our market share.

Have we seen the bottom of the market? Who knows, certainly not me and no one will know until it has passed. This is just a guess, I suspect the real esate market graph will look somewhat like a V. In other words, if (and I hope it doesn't) it continues to slide downward, when it hits bottom, I believe that with all the pent up demand, it is going to blast back.

Think about it, the front end of the baby boom is starting to retire, they are beginning to inherit, their kids are off their payroll and they have their 401 k money etc. So many people have been sitting on the sidelines that when this thing turns, I suspect they will all be jumping in at once. The simple laws of supply and demand tell me that all that pent up demand will drive prices up. So what's the takeaway here? It's a buyers market, so buy. Buy now while you can buy low, before the prices start rising, before the inventory decreases, before interest rates begin to creep. Speaking of which, I just closed on a great piece of property, so my money is indeed where my mouth is.

Real Estate on the Sea Islands in The New Year

Welcome to 2009. Where to start, where to start? In about 10 days we will have a new president. My hope is that the new administration can help pull the country out of the challenging real estate market, get the economy under control and most importantly get things in Iraq and Afghanistan under control as well. Somehow they all seem interconnected to me and helping one of those things will ultimately help the other two.

From my point of view, our year is off to a good start. While we are only 13 days into the New Year, Island Realty has already put 7 properties under contract for a total value of $2,765,900 all due to close within the next 45 days. Additionally Island Realty boasts 48 % of all the active listings on Fripp and 36% of all the active listings on Harbor. Further I/R claims 50% of the new contracts on Fripp and 100% of the new contracts on Harbor.

Dataw remains a challenge to us but we are committed to penetrating that market in '09. With a combination of newsletters, e-blasts, community participation and plain old fashioned hard work, by this time next year our Dataw statistics will be just as impressive as our Fripp and Harbor statistics. Stay tuned.

Real Estate is a Long Term Investment

The news media is all abuzz these days with information about what is happening in the real estate market. But if you rely on the media to tell you whether now is a good time to buy or sell, you may be missing some great opportunities. To get the proper perspective on the value of real estate, you have to go right to the source, and that means talking to the professional Realtors at Island Realty of the Low Country.

According to 2007 National Association of Realtors president, Pat V. Combs, “Perceptions about real estate have been skewed in recent months due to the overwhelming focus on national figures. While average sales and prices help us identify trends, the fact is all real estate is local – conditions vary greatly from one market to the next. Unfortunately that news is unreported.”

The current 10 year low home sales activity can partly be justified by the virtual non-existence of sub-prime loans, which accounted for about 20% of mortgage originations in recent years. But sub-prime loans were virtually non-existent 10 years ago also. Conforming loans have tighter underwriting standards – but those standards were also pretty much in place 10 years ago. What is limiting housing demand, therefore, cannot be explained by fundamentals. The soft housing demand is psychological. It is a crisis of confidence.

Lawrence Yun, NAR Chief economist says, “The bottom line on the economy is zero growth in the first half of the year, but 2% economic expansion in the second half of the year. Rising home sales and rising home prices at the end of the year will mark one heck of a recovery after so many unprecedented disruptions.”

We at Island Realty of the Low Country agree with Mr. Yun. We also believe that when the housing market comes back, it will do so with a vengeance. With that in mind we are busy getting ready for just that. We are optimizing our internet search engine placement, gaining dominance on You Tube and enhancing our interactive web site just to name a few of the actions in the works.

When you are ready to list your home or search for a new one, turn to your best source, the professionals at Island Realty of the Low Country. We are more than ready to help you sell your house at the highest price on the best terms and / or find that perfect home in that perfect neighborhood. Call us!!!