Home Equity Credit – is it crunch time?

It?s no wonder that home buyers sit on the fence and wonder when the right time to buy will arrive? Since the the mass confusion in the markets continues and the various media outlets can?t seem to come together on what?s really up anymore.

Here’s a perfect example of Florida Real Estate as compared to other states :

In this weekends local St. Pete Times Finance section, I read an article that discussed the facts, that some home owners were finding out that the falling values of their homes were effecting previously issued home equity lines of credit. This column-article by Helen Huntly lists several local citizens as point of reference.

What?s interesting in this story, is that one of the individuals used as a source doesn’t come clean and tell the Times that their are umm issues with that owned property, that would make anyone understand why the bank said NO.

St. Pete times should vet comments or sources a little bit more prior to printing articles using outside sources.

Ok even so ?..this seems plausible given the current economic climate we are in. But then today I read an online article on the Wall Street Journal touting how a Home Equity line of Credit could be your safety net ?

The last line in that article is kind of interesting to say the least ?And you won’t be penalized if you never tap your home-equity credit line.?

So what?s your experience, is this happening as much as the Times says it is here in the Greater Tampa Bay?

What about the WSJ article?good idea or bad ?

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Clearwater Home – SOLD – Dililigence and Persistence wins

Future Home Realty and the Greater Tampa Bay Real Estate Team of Marie Becklund and Theresa Townsend announce the Sale of 2924 Eagle Estates Circle, a beautiful home in the Eagle Estates development of Pinellas County, Clearwater Florida. This Stunning Home is close to Chi Chi Rodriquez & Countryside Golf & Country Clubs.

We would like to say Congratulations and Thank You to the Proud New Owners of 2924 Eagle Estates Circle. Greater Tampa Bay Real Estate wants to Wish you many Happy and Memorable Years to come in your New Home.

ENJOY

This has been a long haul. We finally sold a home that we have worked so very hard to market for the former owner.

In any market there is always that one house that no matter what you do, short of dropping the price to a ridiculous level it does not sell. In this case the home is in a beautiful location and the home is no ugly duckling either. What is interesting is that when the former owner purchased the home in the early 90?s it had been on the market for over a year.

We gave up on counting exactly how many open house events, broker events and listing tours we provided on this home. We had received several offers over the course of the listing, but they were not serious and considered low ball offers when compared to the other homes selling in and around the neighborhood.

The new owners are ecstatic, and the seller is very happy to have sold the house. So persistence can make the sale when both parties come to together and realize they can make a deal that works for both.

I can tell you that it is interesting, that we have had listings where the owner did not head our advice and subsequently re-listed the home with another agent only to find that their home is still unsold many months later. So jumping ship is not always the best thing to do, you really have to look at what your agent is doing for you. If they are doing everything humanly possible and the home is still not selling, then the price may have to be lowered to compete in the current market. I can tell you that the owner still made a good profit over what they had originally purchased the home for.

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Denial will stop you from selling your home

 

A new report from Zillow.com shows home values dropped nationwide by 3%. Chief Financial Officer Spencer Rascoff discusses which cities saw the largest declines.
Time for little cold water on the face for those that have obviously been asleep for oh..the last year. Hey times are tough, I don?t need to rehash all the media hype of the last several months however, todays news has continued with fact that Mortgage Applications volumes decreased this last week in large part because the interest rates started creeping back up again. The Wall Street Journal reported on Zillows market data from Monday, that outlines the Bubble Areas of California and Florida. Basically, they reported that prices are still falling and may continue to fall more.

So where does this leave the home owner that really wants to sell their home ? Well first off you have to be really motivated to sell. Yes it is difficult the house you are selling was to bank role your retirement plan and so you have a certain number that you feel you have to sell at. Sound familiar ? If this is you then you had better get your head out of the sand. Either take your home of the market and forgo that retirement plan for a year or two or reduce your house to what your realtor says it should sell at. And even then you need to be prepared to lower the price even more again.

That is if you want to really sell your home ? Now maybe you don?t have retirement in mind, but you wanted to profit from your sale. Who doesn?t ? However, if you have had your home for some time, you have a lot of room to work with. It is unfortunate that homes are over valued. And yes that means the very one you are trying to sell now.

You can read more of this article by the WSJ concerning your R.O.I. here:

As I am writing this, I am also reminded of an article I read in January?s issue of Realtor Magazine discussing this issue of Realtors trying to get Sellers to Get Real. They did cover both ends of the spectrum and covered unrealistic buyers expectations too. The larger issue that we face here in Florida is the fact that our homes are over valued. It is not personal, believe me, we bought into a new home at near the top of the market. If we had to sell today we would loose a lot, but that?s just what the market bares right now and being realistic is the only way to keep moving forward.

If you are a Realtor and have ?clients who won?t budge from unreasonable thinking,? then you may have to try an alternative approach to the one you are currently using. One of those items that I find no one has mentioned is the use of BLOGS. Yep, give them the web site address here or email them the link to this article. They can get mad as hell at me, but I have included the links to the statistics within this article.

I can?t say it any better than this ?When you have clients or prospects that are being unreasonable, it?s your job to help them revise their expectations based on the market reality.? I have to give credit where it?s due. This quote is from Kelle Sparta?s article that I mentioned above. (Kelly is the author of The Consultative Real Estate Agent).

In closing, it appears that the signs of denial for Sellers are still all over the map here in Florida and California. . Inman news covers it fairly well in their article entitled Denial: Didn?t we do this stage already ?

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A Real Estate Story of another cyclical time

Most every thing related to Real Estate sales is cyclical. Even if we had not had all the issues with the sub-prime market conditions…the bubble had to burst. The gains made by many here in Florida over the last year…at the height of the industry were rather ridiculous and I think this resetting will normalize things out.

During the Holiday’s I visited my ailing Father in California who at 90 still recalls his heyday in the market and also a large down turn. He was very big into Real Estate in the early to mid 60′s for about 6 years. He was active in the Oakland Bay Area Real Estate scene and even had his Brokers license. He recalls that about 3 years into his business that the market started a correction and prices and commissions went down along with many of the Realtor s.

The later 2 years, as a full time Realtor he took on odd jobs in the shipyards in San Francisco because he had a family of 6 to provide for. My mother was a stay at home mom with two toddlers and two other young boys just starting elementary school. My father was also a trained mechanic and a member of the merchant marines,so he would do his real estate during the day and at night would drive to SF and work as a first mate on several ships. When the market continued into it’s 2nd year of correction, he had to make a choice that I think was almost ordained for him. He did not make enough to pay the mortgage and keep 4 boys and their mother fed and clothed. At that time many women were not working, it was not the norm. He was offered a position to go back to sea. At that time my father was in his mid 40′s and he stayed on in the merchant marines until he retired in his mid 60′s as a chief engineer. He still dabbled in Real Estate through out his working time. When he retired he sold several duplex he owned and bought an apartment complex in Hayward, California that he managed for many years. He finally sold it about 6 years ago. Not something he wanted to do but age had caught up with him and my step-mother was afraid he would fall off a ladder trying to fix something. My dad did not like to hire sub contractors to do repairs. He did almost everything himself. I recall the week he sold the apartment…he was very sad and told me that he felt like he had lost a family member.

My wife is the Real Estate professional in the family. I am the Technical guru and having worked on the National Scene as a VP of IT for New Homes Realty, I know my way around the industry and have many contacts. If the market had not taken a down turn, who knows I might have even taken a license. For now I am happy to help my wife and her partner Marie get a leg up on their competition in the market and keep them at the cutting edge on the technology side.

This is a rather tough blog for me to write as my father is in the last stages of his life having been diagnosed with a terminal form of cancer a few moths ago. So the lengthy discussions I had with my father over the holiday?s will be the last. He wanted to impart on me how tough he knows conditions can get, but said that the market will correct itself. He has had long discussion with Theresa as they connected a lot on the Real Estate front. So I know things will get better.

My Dad?s parting comments on this conversation were ?be sure to take care of your customers?. Which is something that we see a lot of comments about. I read a great article over at Inman news today written by Marc Davidson of 1000 Watt Consulting, (which by the way is another great Blog to read up on) Where he discusses among other things that 2008 should be the year of CEM or Customer Experience Management. You can read his article from the links I left but a few bullet points I think are worth repeating here.

• 2008 should be the year of CEM
• 2008 needs to be the year of crystal vision.
• 2008 is the year to reduce expenses.
• 2008 must be the year we begin to conserve.

I am also resolving here to not use the term down market anymore as it appears by all measures that the market is returning to a normal cyclical correction.

Related Posts:

Is there an upside to real estate downturn ?

Are Florida Realtors up for the challenging time ahead ?

Happy New Years from Tampa Florida

To a Great 2008

Well it’s finally the New Year and many are talking about resolutions, well just what the heck is a resolution anyways ?

Here’s one example as applied to Realtors:

The new year resolution is one example of the rolling forecast-method of planning. According to this method, plans are established at regular short or medium-term time intervals, when only a rough long-term plan exists.

According to market surveys, many agents don?t make set plans, they wing it. While that has worked in the past during a rolling economy, in the current down market cycle it is extremely important that business activity?s are planned. While there are many daily activities that cause a plan to go awry not having one is just cause for frustration and set back.

So a good resolution would be to make a plan for the year, a long range set of goals with smaller milestones along the way to help guide and motivate you towards the larger goal for the year.

The Real Estate Industry took it?s lumps last year and many people through-out the United States were effected. Whether you worked in the industry or not you were most likely effected. By all accounts it appears that it may still be a little rough, but we vow to keep an optimistic outlook and look at the glass as half full going into the year.

We wish everyone a very Happy and Prosperous New Year!