Stagnant home prices boost home affordability - Aug. 21, 2007

Stagnant home prices boost home affordability - Aug. 21, 2007
Soft home prices boost affordability
Indianapolis is still the most affordable of big housing markets. Los Angeles is the least affordable.
By Les Christie, CNNMoney.com staff writer
August 21 2007: 5:56 PM EDT
NEW YORK (CNNMoney.com) -- Midwest cities dominated the top of the most affordable, housing markets list, according to the latest survey from the National Association of Home Builders (NAHB).
The report covered the three months ended June 30 and Indianapolis retained its number-one rating among big U.S. cities for being most affordable. Indiana neighbor, Kokomo, ranks first among all 215 markets rated. The highest ranked market outside the region is Cumberland, Maryland, rated 12th.
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As for least affordable housing markets, Los Angeles is dead last.
The most vicious foreclosure states
Nationally, home affordability has improved quite a bit over the past year as many markets experienced price declines or stagnation and earnings have increased. To be deemed affordable, housing expenses must be no more than 28 percent of income. Expenses include property taxes and insurance as well as the mortgage payment.
The percentage of homes affordable to the median income household for the nation as a whole increased to 43.1 percent compared with 40.6 percent during the same three months of 2006.
The NAHB survey, done in collaboration with Wells Fargo Bank, bases its affordability ratings on the percentage of new and existing homes sold in the individual markets that were affordable to households earning the median income for that area. It also takes into account mortgage rates.
Thus, Indianapolis's 86.8 rating meant that less than 14 percent of all homes purchased in the metro area were unobtainable by a typical family. By contrast, only 3 percent of Los Angeles homes sold could be comfortably afforded by an average family.
That's despite the fact that median household income for the two metro areas was roughly the same - $63,800 for the Hoosier capital and $61,700 for Angelenos. The difference, of course, was in the median price of homes. In Indianapolis, $122,000 bought the median home compared with $530,000 in Los Angeles.
California cities fill the foreclosure list
Nine of the 10 least affordable markets were in California. Salinas (3.7 percent), Merced (3.8 percent), Santa Anna (4.4 percent) and San Francisco (5.7 percent) formed the bottom five. The only outsider to crack the list was New York with 6.3 percent of homes affordable to median-income households.
Detroit (86.0 percent), Buffalo (84.8 percent) and Cleveland (78.7 percent) were other large metro areas with high affordability numbers.
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Top 10 Predictions for Home Buyers & Sellers in 2007

From Elizabeth Weintraub,Your Guide to Home Buying / Selling.FREE Newsletter. Sign Up Now!
What Will Happen to the Real Estate Market in 2007?
Everybody wants to know where real estate is headed in 2007. Will prices continue to fall as they have in most areas of the country or will the American market rebound? Will interest rates remain stable? Will 2007 be a good time to buy or sell real estate or should we all head down to Mexico instead and check out Donald Trump's Baja resort south of Tijuana? Based on current market forecasts and real estate economic facts and trends of 2006, here is my professional home buying and selling prediction for next year.
(1) More Single Women Will Buy Homes Than Ever Before
Single women already make up a larger percentage of home buyers year after year. More single women are saying "no" to marriage but "yes" to a mortgage.
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(2) Home Prices Will Remain Soft
Buyers will wonder if they should get off the fence and buy now or if they should wait. Across most of America, there are no indications that we'll see double-digit appreciation for a while and, in fact, if prices haven't fallen in your neighborhood yet, they most likely will in 2007.
(3) Agents Will Negotiate Record Numbers of Counter Offers
Finding a real estate agent who will negotiate for you as a seller or a buyer is going to be more important in 2007 than it has been in previous years. Sellers will not accept offers as written and will issue a counter. Buyers will not accept the seller's first counter and will issue a counter of their own. It will not be unusual to see five or more counters per transaction before an agreement is reached.
(4) Buyers Will Pass By Overpriced Homes
Buyers are becoming more educated. They know when the price is right, and overpriced homes will be scratched off their list of possible homes to consider. Buyers view sellers with overpriced listings as inflexible and not serious about selling. With large numbers of well priced homes available to them, buyers won't waste time on sellers who refuse to be reasonable about pricing.
(5) Buyers Will Demand Upscale Features
As more inventory comes on the market, buyers will have more to choose from before making an offer and will gravitate toward homes that require no updating or costly remodels. Buyers will expect homes to be turnkey and ready to occupy. Kitchen and bathroom remodels will fetch top dollar over homes without updates.
(6) Sellers Will Hire Home Stagers
Some sellers will be lucky and find a real estate agent who can offer home staging services, but many sellers, to be competitive among other listings, will hire a professional stager before putting their home on the market. Furniture rental companies will set up accounts offering 30- to 90-day financing at zero interest and no payments to accommodate home sellers who want to pay staging fees at closing and not upfront.
(7) Agents Will Take Overpriced Listings
Just because the market has changed is no reason for agents to wise up and stop taking overpriced listings or to stop hurting their seller's chances to sell. In fact, many agents won't be able to afford to pay MLS dues and will be fighting for survival, so they will continue to inflate home prices in hopes of beating out a competitor for a listing. This battle will help to retire agents who shouldn't be in the business in the first place.
(8) Virtual Tours Will Gain Popularity
Online listings without virtual tours will be passed over. Virtual tours will gain popularity because buyers will demand them. Like the old MLS books without a photo, an online listing without a virtual tour will be a non-entity and ignored. In addition, buyers will want audio with the visual.
(9) More than 50% of Listings Will Feature a Price Reduction Within 30 days
Sellers can do everything else right but fail miserably if the home is priced too high. The number one reason why properties don't sell is price. Anything will sell for the right price. The first trick is to figure out what that price should be before putting your home on the market. The second trick is to figure out when to reduce the price.
(10) Buyers Will Be More Selective When Choosing an Agent
Choosing the right agent is the single most important factor when buying or selling real estate. However some people make the mistake of choosing a DNA agent (family related) or a neighbor, without ever thinking about the main reason to hire an agent or how to go about determining the fit for themselves. As appreciation slows, sellers and buyers alike will be more discriminating and ask the tough questions to further protect their hard-earned dollars.
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Elizabeth Weintraub's Advice for Home Buyers
Top 8 Home Buying ReasonsThree Biggest Home Buying MistakesHow to Protect Your Good Faith Deposit
Elizabeth Weintraub's Home Selling Advice
Top 10 Tips to Effectively Market Your House14 Ways to Hold a Successful Open HouseHow to Make Sure Your House Won't Sell
Advice from Elizabeth Weintraub That You Won't Find Anywhere Else on the Web
What You Need to Know About Homeowner AssociationsHow to Save Money on Your Homeowner InsuranceHow to Redo a Kitchen and More
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Making an Offer on a Home

by Janet Wickell
Determine Value Before You Make an OfferIf you've been home shopping for awhile you might feel confident that you understand the market value of houses in your area, but it's not unusual for even seasoned home buyers to feel a bit queasy when it's time to make a formal offer. Use these tips to begin investigating your local real estate market.
Attend Open HousesAttending open houses helps you track the actual condition of homes on the market--insight you won't get by looking only at recorded stats. Keep the handouts you are given at open houses and then watch for the For Sale signs to come down. Go to the courthouse to make sure the house sold and to research its sales price.
Find Home Sales PricesAdvertising gives you a feel for the average asking prices of homes, but asking prices are often inflated.
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Your focus should be on the sales prices of similar homes that have sold recently.
Ask the staff at your local courthouse (or equivalent) to explain how to find deeds and other records and how to interpret notations on them. For example, where I live, each real estate deed is stamped with the amount of excise tax paid at closing, and each tax dollar paid represents $500 in sales price, making it easy to calculate how much the buyer paid for the property.
You might find that records for your area are available on disk or online, but in many towns they are not.
Use local records to help you see where prices are now, but don't make the mistake of basing an offer on the amount a current owner paid for a property--it doesn't usually work. Value has nothing to do with a previous sales price if real estate prices have escalated since the sale.
Tax ValuesTax valuations are not a good measure of a property's market value. Your community might have a general guideline, such as tax value = 80% of market value, but the figures are not usually reliable. Ask your local tax assessor for details about your specific area.
AppraisalsIt will slow you down, but you can probably order an appraisal before making an offer. Make sure the results will not be shared with others and keep in mind that the opinions of different appraisers often vary.
Working with Real Estate AgentsSeller's AgentsA seller's agent won't become too involved in your pricing dilemma, because it's that agent's duty to get the best deal for the seller. You'll get facts from the agent, but not opinions. Most seller's agents will print out information about similar properties that have sold recently, called comparables, for you to study.
Buyer's AgentsA true real estate buyer's agent will help you determine the best price and terms to offer for a property. The agent will discuss comparable properties and should be fully involved in offer strategies.
Neutral AgentsSome real estate agents work as neutral parties rather than representing either the buyer or seller. Ask your agent to explain how your local laws affect his efforts on your behalf.
Low vs. High OffersCome in too low and you'll run the risk of alienating the seller. That's fine if low is all you'll go, or if the property is truly overpriced, but it can create problems with future negotiations if the seller interprets your offer as a personal insult. She may not be as anxious to deal with you as she would have been had you made a more realistic first offer.
Come in too high and you probably won't find the seller's low point, but if you really want the house, and if competition is swift, an offer near or above the asking price might be a must. Learn as much as possible about your local real estate market before you make a move.
Factors that Can Affect Seller Motivation
How long has the house been on the market? If only a short time the sellers might not be ready to lower the price.
How does the house compare with others for sale in the same neighborhood? Too high or too low? Can you determine why?
Is the house in need of repairs or massive updates? Updating items such as insulated windows, plumbing and electrical systems, kitchens, and baths can be costly.
How old is the roof? How many more years should it last?
What about the neighborhood, do you foresee home values climbing, staying the same, or possibly taking a downturn?
Bottom LineAnalyze each home's condition and compare it to others on the market, but realize that your final offer will likely involve a good deal of gut instinct. Is it the house for you? If you've been searching for a home for awhile, you will probably know the answer to that question the minute you walk in the door.

RSS and Blog Marketing for Real Estate

Submitted by Tinu Abayomi-Paul on Sat, 07/30/2005 - 12:49.
Earlier this month, Realtor Magazine announced that they would be featuring an article about Tampa Bay Realtor John Mudd and the success he has been having in attracting prospects and media attention with his blog on real estate.
Since then, many others in the Real Estate market have been curious about how to implement similar strategies to capture leads in their areas.
This article is part of a series that provides insight to the unique ways that the strategy of blogging and the use of RSS and/or Atom feeds can be applied as part of your web promotion strategy.
1. Capture better search engine positioning for your local market with a blog.
By now it's apparent that blogs with unique content can bring you better search engine rankings. This advantage is strengthened when you use a blog software tool that enables you to publish posts on your own server, which we'll go over in more detail in part two of this article series.
RSS and Blogs bring you special web promotional opportunities that can help your blog and the site where it resides rank higher in search engines, due in part to the way they are organized. Particularly for narrow local markets, this can both widen and deepen your audience within 3 - 8 weeks with proper implementation.
By far, this is not the only benefit of blogging or RSS - though if you're looking for better organic search engine ranking across a multitude of keyword phrases, this just may be the answer for you.
2. Dominate your local niche by becoming a resource for information for home buyers and sellers in your area
The ease of publishing content to a blog, coupled with one of the easier ways to implement RSS, its accompanying feed, gives you the ability to provide fresh and relevant information, often at the same rate of time it would take to write a short email.
With the proper blog publishing system, the speed at which you can now provide information means that you can publish updates more often, drawing more attention to your web site from search engines and visitors alike.
After landing in your blog, links to other relevant parts of your site can draw visitors to the areas you most want them to pay attention to, such as your updated listings - which can also be made available via RSS if you so choose.
Why RSS?
It can mean 100% delivery of your message to your prospects, in a fashion that they choose to have pulled to them. Rather than attempting to digest all the information at your blog in one visit, they can skim your headlines, read a summary or post, and then click through to your site upon finding information that draws them in.
You can supplement this with email for users who are more comfortable with receiving your information the traditional way.
While promotion and updates via email are not necessarily to be discounted, the use of RSS and other feed formats lend themselves to additional promotional possibilities.
3. Have yet another reason to remind prospects to return to your site - and shorten the sales cycle using a multiple feed strategy
With the combined power of blogging and RSS, you can construct multiple outlets for information that are each hyper-targeted to several segments of your market. Instead of attempting to force your static web site to capture home buyers and home sellers for your area, as well as provide the statistical information on your locale, you can build several focus areas and promote them side by side.
For example, if your local area is Frederick, Maryland, you can dedicate one blog and its accompanying feed to recent Frederick listings, and then have a separate feed that automatically provides updates on area schools, crime rates, cost of living and other statistical information home buyers consider when making purchasing decisions. Separate blogs and feeds on the same site could focus on the needs of home sellers in the area
The possibilities are truly as endless as the number of markets you wish to capture.
It is often said that it may take up to seven times for a prospect who comes across a marketing message to buy. Therefore, the faster the opportunity arises for you to contact your potential client, the closer they may be to a buying decision. If you are able to provide them with the information they need to make that decision with updates from your site, the likelihood that they may ultimately make that purchase decision through you increases.
Updates to blogs and RSS feeds can give you the power to make this transition happen at a faster pace, as the production cycle of the content takes only the time you would need to publish that information.
Rather than contacting your web content management department, forwarding content, and waiting for the page to be published, then picked up by search engines, with a blog, you simply log into your administration area, type and publish.
These pages can also get picked up by search engines faster through the power of syndication - those already following your feed receive your update instantly.
There are more ways that you can use RSS to draw more qualified prospects to your business which will be covered in part two of this series.
Tinu Abayomi-Paul is the co-owner of Leveraged Promotion,which provides many solutions for companies who prefer toout-source their online promotion needs. Athttp://blog.leveragedpromotion.com you can find out moreabout how RSS, Blogs and Podcasting can increase youronline visibility.

Land Buying Advice

by Janet Wickell
Finding the Perfect Real Estate for Your New HomeBuying land can seem intimidating, but it really isn't difficult at all when you analyze your needs and determine which types of land are most suitable for the home you plan to build.
Talk with a mortgage broker or bank loan officer to find out how much you can afford. If you plan to build right away, the loan officer should explain construction loans, including the closing procedures you'll encounter while the house is being built.
Get EstimatesTalk with area building contractors to determine the average price you can expect to pay per square foot for the type of home you wish to build.
Include estimates for building a driveway or road to the homesite.
Don't forget estimates for well and septic systems if your home will not be connected to community water and sewer.
To find the maximum amount you can spend for land, deduct the estimated building costs from your total budget--then deduct a bit more for unexpected expenses.
Your Wants and NeedsMake a list of all features that would exist on the ideal piece of land. Review the list, highlighting your must-haves, such as a great view, privacy, or a waterfront building site.
What's the minimum size lot or tract of land you are willing to consider? Keep in mind that a heavily wooded, 1-acre lot is sometimes more private than a 3-acre lot that's all open lawn. Tour a variety of neighborhoods and pay attention to the settings.
Land UseHow will you use the land? Consider only tracts of land where the home you want to build is allowed. Most developments are governed by restrictive covenants that dictate everything from home size to building type to paint color. Study covenants for potential sites carefully to determine if you can live with the restrictions.
Start Your Search
Look for 'For Sale' signs on your drives through favorite areas.
Search for properties on the Internet.
Note the exact location of interesting tracts, then visit your county tax office to find the owner's name. Contact the owner to ask if the land is for sale.
Talk with an agent about your wants and needs so that she can help you locate the perfect tract.
Does the Land Suit Your Home Plans?Ask a builder to accompany you to your top choices, to offer advice about the best building sites and to suggest home plans that will work with the topography.
UtilitiesCheck availability of utility services to the land.
EasementsAn easement is the right to use another person's land for a stated purpose. Does someone else have the right to use the property you want to buy? Find out before you make an offer, or add a contingency to the offer that you must approve existing easements before finalizing the sale.
Locate Property Boundaries
Look for iron pins at the corners of property, or at any point where the property line makes a turn. You might find iron pins flush with the center of the road, too.
In wooded areas, watch for pathways cut by surveyors when they marked a property line. They are often visible for many years.
Trees or bushes along property lines are might be marked with brightly colored paint or plastic.
Boundary SurveysSurveys are always a good idea and some banks require them. Updates to existing surveys are often acceptable and are less expensive than ordering a new survey.
If there's a question about the number of acres in the tract, your offer can be stated as "X dollars per acre as determined by a new survey." Now, you'll need to word it a bit better, and state who will pay for the survey. The method can work to either the buyer or seller's advantage, depending on how many acres are found.
Road Maintenance AgreementsIf the property is accessed from a private road your bank might require a recorded agreement that shows all owners have promised to help with road upkeep.
Environmental IssuesAsk for a signed statement that discloses facts about buried items, such as oil or gas storage tanks. Their removal and cleanup can be expensive.
ContingenciesBefore you make an offer, think about the what ifs--things that would make the property unusable for your purposes. Add these to the offer as contingencies, things that must or must not happen before you buy. For example:
Offers for land without sewer hookups should be contingent on your ability to obtain permits for a septic system.
If an architectural review committee must approve your home plans, the offer should be contingent on obtaining approval.
The offer should be contingent on obtaining the type of financing you desire.
Some contingencies are included in standard contracts, but your agent, contractor, or real estate attorney can help you determine if other contingencies should be added.
Searching for land can be a fun adventure. If you look hard enough, you may find a perfect building site just waiting to be cleared from an overgrown jungle of brambles and weeds.

Tips for a Better Real Estate RSS Feed

Tips for a Better Real Estate RSS Feed
Friday, January 26, 2007, 4:13:35 AM
Like anything else, a little work can pay dividends. Well-written real estate RSS feeds are more useful to readers and result in more website traffic for the publisher. Below are several tips for making your RSS feed more effective.
1. Use interesting titles
Like a book is often judged by its cover, an RSS feed item is judged by its title. Make sure your title is interesting, and try to put the most important information early in the title, since some newsreaders truncate title beyond a certian length.
Also, keep in mind that some newsreaders are set to only show feed item titles. Don't assume that any feed item descriptions will be shown.
2. Include keywords
Since some readers will discover your feed through the many RSS search engines on the internet, you will want to include as many descriptive keywords in your feed item titles and descriptions. That does NOT mean you should just add a string of keywords. Rather, incorporate keywords naturally into your titles and descriptions.
3. Don't include all your content
Some publishers put full content text directly in the feed item. The problem with including full text in a feed is that a reader has no incentive to click through to the publisher's website. Instead, write your feed item descriptions as 'teasers' that make a reader want to click over to the website to read more.
Make your feed item descriptions brief, and include descriptive keywords. Remember some newsreaders are set to truncate long descriptions, and some newsreaders won't show descriptions at all. Keep your most important information at the start of your description.
4. Keep your content fresh
Updating your feed regularly is a good way to keep reader interest. Feeds (like websites) that are not updated for months on end tend to lose repeat visitors. How often you refresh your content is up to the publisher. Keep in mind, however, that readers can set their reader to show as few as three feed headlines at a time. While it's not likely a problem, updating too often could mean that some items may get overlooked.
Content is king. Use these tips to keep your RSS feeds well-read and your website well-trafficed!
RSS is a growing technology that should be taken seriously. Start early and reap the benefits of RSS marketing today!