Market Forecast
The past three years have seen major challenges in our real estate market locally, and nationally. Foreclosures, price declines, mortgage lending challenges, high unemployment rates, and the global credit meltdown have destabilized the market. Where in the past, a seller wanting to move up could plan on an orderly process of listing their home and buying a new one in a single season, this process has become so uncertain in some cases it has taken years to effect the same change. There are some positive, and not-so-positive signs on the horizon that we have identified. For 2011, we can expect the following:
Unemployment Easing: When people don’t have jobs, they don’t buy houses. While that is obvious, when people are merely in fear of losing their jobs, they also stop thinking about buying houses. The good news is that the unemployment rate for the nation has dropped below the scary 10% threshold. Even better news for us locally is that the rate in Champion’s market area of Maryland is less than 7%. Full employment is traditionally defined as 5% so we are very near that level. While we feel the pain for our unemployed neighbors, we are happy that 93% of them are employed, and have good prospects for the future.
BRAC Finally Kicking In: The Base Realignment and Closure Act influx to Ft. Meade is finally resulting in new jobs – and therefore home purchases. It is estimated that nearly 10% of all sales in 2011 for Anne Arundel County and the nearby Eastern Shore will be to BRAC buyers. We’ve been waiting for them for many years, and it is good to finally welcome our new neighbors.
“Dodd-Frank Wall Street Reform And Consumer Protection Act” This new legislation will impact the availability of mortgages and is as comprehensive a sea-change as the Health Care Act, and as clearly understood by the regulators and industry. Expect new sweeping changes to start hitting the mortgage process in early spring. Obtaining a mortgage will be a harder process in 2011 than in the past, but not to worry. At Champion Realty Mortgage we have the experts to guide our buyers through the process of obtaining financing. Loans won’t be as easy to get, but mortgages will be available. Just expect fire drills in the process as we meet the new demands imposed by Dodd-Frank on Lenders and Borrowers alike.
Interest Rates to Remain Favorable: The mortgage market has been below six percent for over a year. While we expect that trend to continue, you should anticipate that rates will start to rise slowly starting in April when Dodd-Frank starts to kick in. Our crystal ball, notably not 100% accurate, has them staying in the fives for the year, which will be good for the market.
Investors Come Back Into the Market: There has been an increase in demand for quality rental property from two sources. BRAC transferees who want to rent before they buy, and people displaced by foreclosure or short sale who need to rent until their credit is repaired. These two trends have had an inflationary pressure on rental rates, combined with the deflation in property values has combined to make residential rental property a great investment again.
Overall, we are predicting that 2011 will be marginally better than 2010, with unit sales approximately 8% greater than last year, and house values flattening out after the declines of the last three years.
TEN things you Must do to sell your property in 2011
Some of the tried and true ways for selling real estate just don’t work anymore. We have put together this brief report to make you aware of the ten things you mustdo to sell in 2011. If you have any questions, please feel free to discuss it with us. If you are currently listed with another broker, this is not intended as a solicitation of your listing, but merely helpful advice. And now, the Ten Musts of 2011 from Champion Realty:
Zeros Are Your Friend! Buyers are using the Internet to search for properties. No surprise there, but did you know your price should end with at least four zeros? Five is even better! That way you appear in buyer’s searches both up and down from your target list price. For example, if your property is worth in the mid-300s and you price at $349,999 anyone searching for $350-$400,000 won’t see your listing. If you price right at $350,000 you will show up for buyers searching with that price as both a ceiling and a floor in their search parameters. So, for 2011 you should price with as many zeros as possible.
Big DOM = Good: Some sellers take their property off the market for 90 days to re-start the Days on Market (DOM) clock in the MLS. The old theory was that by doing this, your property would show up as a fresh listing and get more showings. This just doesn’t work any more. Buyers in 2011 actually want a “seasoned seller” with a realistic understanding of the market; and a property that may have already had the price adjusted to the current market. Buyers are afraid that new sellers may be overpricing, or inflexible. Also you should know that in the MLS database, a buyer’s agent can find out the full listing history of a property for the past decade. Every price change. Every listing and re-listing. So you aren’t really fooling anybody by “resting” the listing. Don’t be afraid of a history with a lot of Days on Market. It’s okay. Almost an asset in 2011.
Stage but don’t sterilize: Properties that are selling today are in really good condition. No deferred maintenance. No peeling paint, dirty dishes in the sink or unmade beds. The best properties have had 50% of the stuff taken out of closets, and been de-cluttered. They may even be de-personalized a little, but don’t take all signs of human life out of a property. It needs to feel like a home. As always, lots of lights turned on, drapes wide open, no pet odors or other smells, kitchen counters clutter-free, and not too much furniture or stuff to make it feel small. But don’t forget to leave a few family pictures around to show that people do make it a home.
QR Codes: Quick Response codes are the new-new thing in technology. Think barcode versions of web addresses for use by smart phones. Have you started to notice them in magazines and wonder what they are? With a QR code on a sign or mailer, we can direct buyers with smart phones directly to a webpage listing of your property. With the explosion of iPhone and Droid smart phones you can’t afford to market your property without a QR code!
Re-Price Every Three Months: You have to know the market as well as your prospective buyers. You shouldn’t price your property in a vacuum and then wait forever before reevaluating. Your buyers are out there looking at 30 properties that compete with your listing. How do you stack up? As a seller, you need to go with your agent and get out there and look at the competition and see how they compare. If you were a buyer, would you choose your house or another one that you are competing with? Think like a buyer and recheck this every three months as price is a moving target.
Photos, Websites and YouTube: The first showing of your property to buyers will not be in person. It will happen online on one of literally millions of websites that Champion uses. The key to the web is to have great property photos uploaded to the MLS, and from there uploaded to the cloud. You also need to have a YouTube video to attract some of the younger buyers who are out there surfing. A minimum of eight great photos is essential, and they need to be refreshed seasonally. Your broker needs to understand how to use the internet distribution channels to get your property listing out to as many different websites as possible. (BTW, Less than 7% of brokers use an aggregation service to shotgun their listings to all the internet websites. Of course you need to do that too, and also of course, Champion does it for all of our listings.) The broadest coverage leads to the most showings. Showings lead to contracts. Don’t hide your listing on the internet.
Centralized Showing Service – The Professional Choice For Scheduling Showing Appointments: The most progressive Real Estate Brokers in our area have joined together with CSS to create an easy, professional way to schedule showing appointments. With one call, agents can schedule appointments for any listing from all of the participating brokers – saving a lot of time and stress. If your listing can’t be scheduled through CSS you are missing out on good buyers.
Mobile Websites and Texting Tools: OMG! You have to have the latest in GPS enabled marketing and mobile websites and working for you to sell your property. Is your listing geo-coded to show up on GPS searches by smart phones? With Champion’s exclusive OMG technology, we make sure your property shows up in searches in your neighborhood, even to buyers several streets away. Every Champion agent has a personal website optimized for mobile applications, and with a built-in GPS-enabled search function of course.
Great Brochures: With buyers looking at 30 other properties before they pick the one they want to buy, it is easy for them to forget which ones they liked. A professional produced full-color brochure is essential to keep your property top of mind while they evaluate which listing they should buy. Don’t rely on the computer print out from the MLS as your sole collateral marketing material.
Human 2 Human: Communication is Key It isn’t enough in 2011 to just follow up with agents who have showed a property, especially if that is only happening by e-mail. Many times a good listing agent during a phone conversation with the showing agent can probe to find out what can be done to tip the buyer over the top into writing a contract.
For 2011, technology is going to be very important but the key to sales this year is personal contact. Voice-to-voice. Face-to-face. Technology helps sell houses but in the end it is the personal efforts of the agent that gets the job done. At Champion we know the market, the technology, and the sales skills to sell real estate. Let us help you with your real estate needs. Best wishes for a fantastic 2011.
