Wednesday, February 22, 2012

How To Approach Selling a House in the Current Market

You may believe that selling your home is impossible in today’s market. You may feel powerless to the process. What could YOU possibly do to turn this housing market around?

There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to guarantee that your house will sell even in the current market.

How you ask? Let’s look at the simplicity of the famous Serenity Prayer and apply it to selling a home in today’s real estate market.

“Grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main reasons that the housing prices have softened:
+ The current economy
+ The inventory of distressed properties (foreclosures and short sales)

As an individual homeowner there is no way for you to impact either of those two situations. The best think-tanks in the country are struggling to discover solutions.

Have the courage to change the things you can

There is not a vacuum of buyers in the market. There is a vacuum of homes a buyer in today’s market will purchase. Let us explain: could you sell your home today for $1? … $1,000 … $10,000? Of course you could. There are plenty of buyers in the market for a home they consider priced correctly. You have to decide what the correct price is for your home if you truly want to sell. If you want your house sold, you must list it at a price a buyer will pay for it. Not a buyer from 2006 but today’s buyer who has plenty of homes from which to choose.

It will take courage to sit with a real estate professional and honestly decipher the true value of your home. If you want to sell, you must have that courage.

The wisdom to know the difference

We all realize that the economic situation will take some time to correct. If we want to wait for prices to return to 2006 levels, we will probably have to wait for 5-7 years.

Look at the reason you decided to sell in the first place and decide whether the extra money you would get from the sale is worth that wait. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Excerpted from Keeping Current Matters Blog, quoted with permission.

Friday, February 3, 2012

5 Real Estate Trends to Look For in 2012

Excerpts taken from Keeping Current Matters, Real Estate Web Site

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are four real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

■ They will eat up some of the buyer demand in the market.
■ They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals

What are some of the bottom lines from all of this? Here is yours truly's best shot at his clearest crystal ball.

+ We will see a bottom in prices in PA in 2012. In fact, there are some indications this has already happened.

+ Once it becomes common knowledge that we hit the bottom and are on the way back up, there will probably be a mini panic of people jumping to get on the band wagon before it gets too far out of the station.

+ Now is the best time to buy a house that we have seen in the last 50 years, and that we probably will see for the next 50.

How many of these will come true? I will keep track and let you know.

Wednesday, January 25, 2012

When the Prophet Says Buy – BUY!

Excerpted from Keeping Current Matters and reprinted with permission.

R. Talbott, previously a Goldman Sachs investment banker, is a bestselling author and economic consultant. When it comes to the housing market he is also a prophet. When housing prices started to skyrocket in 2003, he published The Coming Crash in the Housing Market correctly warning us that a real estate bubble was forming. Then in January 2006, he called the absolute peak of home prices in the US by releasing a new book, Sell Now! The End of the Housing Bubble.

Mr. Talbott, the person who accurately predicted the housing bubble and its bust, now has a new prediction – IT IS THE TIME TO BUY A HOME! In a recent article, Homes – Buy Now!, Talbott simply explains:

“I have been waiting for more than five years to offer this advice. It is now time in most cities across the country to buy a new home or refinance your existing home with thirty-year fixed rate mortgage debt.”

He goes on to explain that his conclusion is based on four different metrics, all of which favor buying today:

■ Home Prices Relative to Peak Prices During the Bubble
■ Home Prices Relative to Construction Costs or Replacement Costs
■ Home Prices Relative to Incomes and Rents
■ Home Prices in Real Terms, Not US Dollar Terms

Bottom Line, If the person who called the real estate bubble and its bust says now is the time to buy, we believe it is time to buy.

As I mentioned in another recent blog, our local market is starting to show some signs of recovery. Inventories of houses for sale in some selected parts of Delaware County are dipping back into Seller's Market territory (defined as 1-4 months of inventory).

That is not yet reflected in any county wide trends, but at the end of 2011, there were 3,320 single family houses for sale in Delaware county. That is down from over 4,000 in July so the trend is in the right direction.

Tuesday, January 24, 2012

Real Estate 2012: Many Positive Outlooks

Excerpts reprinted with permission from ""

There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever we write a post like this, we unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.

It is for that reason that we want to share the beliefs of other organizations in this post.

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.” For the complete article please go to

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”


“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

What does it all mean? Well like any forecast, the only thing we know for sure is that it is WRONG. We do not know if it is wrong on the high side, wrong on the low side, wrong early or wrong late. But, the significant thing is probably that after years of Gloom and Doom, a lot of people who make their livings forecasting real estate trends are turning bullish.

Will it happen, time will tell. My read is that the consensus is that we will hit bottom sometime in the first half of 2012.

There are some signs that this is already happening in our immediate area. For example, inventory of houses in Broomall, zip code 19008, priced from $250,000 to $350,000 is about 3 months (10 houses selling each month and 32 for sale). In Springfield, zip code 19064, in the $175,000 to $250,000 price range, there is about a 4 month supply (30 houses for sale, selling 7-8 a month). That is getting back into seller market territory. (Under 5 months of inventory is defined aas a seller's market where there are more buyers than sellers and there is upward pressure on prices).

Will that continue or are we just seeing some statistical anomalies. Time will tell, but I think we are about to turn the corner.

Friday, January 20, 2012

Overwhelming Sentiment, Now Is The Time to Buy

Research Institute for Housing in America did a recent survey among a wide spread of age groups, to include both renters and home owners. Question that was asked was, "Is This a Good Time To Buy a House? (Excerpted with Permission of

The results of this survey, in terms of Home Owners who agree and Renters who agree are.

Under Age 30 - 81% and 83%
Ages 30-39 - 83% and 60%
Ages 40-49 - 83% and 72%
Ages 50-59 - 78% and 48%
Ages 60-69 - 82% and 60%
Ages 70-79 - 76% and 60%
Ages 80+ - 74% and 88%

Couple these sentiments with two other major major factors, namely:

Prices are still soft, though there is some evidence that we have reached the bottom.

Interest rates are at levels not seen for decades and probably have only one way to go and that is up.

And we have an overwhemingly positive case that now is the time to buy.

Would appreciate your comments and questions. Thanks for reading.

Wednesday, January 18, 2012

Where are House Prices Headed in 2012

There is no shortage of opinions as to where home prices are headed in 2012. From Clear Capital’s expectation that prices will show a ‘slight uptick’ this year to Fitch’s projection that prices ‘will fall another 13 percent’, there seems to be no consensus as to where real estate values are headed. How can there be such a disparity of opinion among industry experts? Prices are determined by the relationship between supply and demand and there are many unanswered questions regarding both of these components.

Questions about Demand

Will this be the year that the 5.9 million adults between the ages of 25 and 34 that are still living with their parents decide to purchase a home of their own?

With mortgage payments lower than rent payments in the majority of the country, will first time buyers finally decide it makes more financial sense to buy rather than rent?

Will the baby boomers take advantage of the great deals available and start purchasing vacation and retirement homes?

Will investors continue to purchase large quantities of distressed properties?

Will hedge funds negotiate a deal with the banks for bulk purchases of foreclosures?

Questions about Supply

Will 2012 be the year that builders again increase inventories of newly constructed homes?

Will baby boomers put their primary residences up for sale and relocate to their retirement destinations?

Will 2012 be the year that the shadow inventory of foreclosures finally makes its way to market?

If prices depreciate, it will force more homes into a negative equity situation. Will this create another surge in short sales and foreclosures?
Will the government put together a plan to convert large numbers of foreclosures into rental properties?

Bottom Line

With so many unanswered questions regarding both the demand for housing and supply of properties, it is very difficult to determine where prices will be at the end of the year. We suggest you contact a local real estate professional to help you determine where values are headed in your area.

Real Estate really is a local proposition and conditions vary a lot from market to market. If you have a question about house prices and the direction in your area, I can help. Just give me a call at 484-574-4088 or email to

Above body reprinted with permission from Keeping Current Matters.

Friday, July 15, 2011


This is another in a series of blog posts in which I intend to excerpt and expand upon portions of a recent book, "Reckless Endangerment".

The authors of this book investigate and take apart the various factors that led to the current recession or depression (you pick the term) in the real estate market.

From 2000 through 2006, the average price of a single family house in Delaware County increased by 61%. (From $160,000 to $257,000 as per MLS, Trend). Since then we have had a market correction that has driven the average resale price down by 27% nationally. In Pennsylvania, the average decline since 2006 has been 13% (Freddie Mac, 05/11).

One of the predictable results of that kind of a decline is a glut of houses on the market. As per MLS Trend, in Delaware county, there are 4,103 single family houses for sale as of June, 2011. Back in the height of the good old (or was it really) seller's market, the inventory of single family houses was around 1,600. Wow, a 256% increase in inventory. No wonder prices are down.

One other indicator of stress in the housing market is the rate at which single family houses are either 90+ days behind in mortgage payments or in foreclosure. According to, the rate for Fannie Mae purchased loans was under 1% until late 2007. Since then, in 2010, it spiked to a heretofore unheard of 5+%, a five fold increase.

Along with this glut has come the now all too familiar litany of high unemployment, declining incomes and immense pain on the part of a lot of people.

What caused this dramatic shift and all of the corresponding misery? More on that in the next blog post which will be out next week. Suffice it to say, it came about because lenders made way too many easy loans, with standards that were way too lax.

However, was it because of the "Greedy Bankers and Wall Street Sharks" who
"Took Advantage of Government De Regulation to mess up the economy? That is the basic line that has been pushed by most of the major media in this country.

However, as I think you will see, the answer is Not Really. It was caused by deliberate policies of our federal government interfering in and, in effect, over regulating the loan market.

I would welcome your comments and thoughts.