No surprise, it’s still a mixed market.

Mixed in this regard–yes, home sales are up year-over-year, but the growth and strength in the market is in newly constructed home sales. Take a look at these 2 charts:

The first chart shows that newly constructed homes are increasing in sales as a percentage of the overall market over the last 3 to 4 years. Currently, almost 40% of the local real estate market in Fayetteville consists of new home sales.

The next chart explains why that is significant to people who want to sell their existing home in Fayetteville. There is absolutely no shortage of homes for sale in the Fayetteville real estate market, and sales of existing homes are lagging behind in the popular price ranges in both number of homes sold and percentage of the market.

Many real estate agents and market observers are singing the praises of a real estate market that is showing improvement from last year. While I also am happy about an increase in home sales, I want to offer a caution to people who need to sell their existing home in Fayetteville, NC. Buyers are clearly demonstrating their preference for new homes over existing ones.

Any seller of an existing home must be certain to market, maintain and price their home at the front of the real estate market if they want to compete for the buyers coming into the market. We are entering the busy season for real estate sales in Fayetteville. Historically, the late-spring and summer months (2d and 3d quarter) are the best months for home sales in this area, and many sellers are also anticipating an increase in buyers as a result of the BRAC move slated for this year. If a person selling their home in Fayetteville wants to compete for those buyers, they will need the services of an agent who understands how tough the competition really is.

Take a few minutes and read through the executive summary of the Fayetteville, NC Real Estate Market, 1st Quarter 2011. It addresses how the market has performed over the last quarter and how market absorption rates have an impact on sellers (and buyers) of new and existing homes in Fayetteville, NC.

Fayetteville, NC Real Estate Market Report – January 2011

And then, visit my website to see more.

Posted via email from JuliGrace

Overall, the market was 31% off its high of 2006. A total of 3,576 existing homes were sold. New construction homes added another 2,156 sold.

Sales of existing homes were below the average of the last 10 years by about 10%. In new construction, however, sales were above the average of the last 10 years by over 17%.

The rate at which existing and new construction homes sold is also a mixed story. Existing home absorption rates were very high, clearly indicating a buyers market. For new construction, absorption rates were balanced in most price ranges.

Take a minute to look through this executive summary. Click on the image below to read this report in full screen:

Fayetteville, NC Real Estate Market Report – January 2011

Buyers are purchasing new homes faster than existing homes. New construction offers many of the features and amenities that existing homes in the area may lack. New construction in some price ranges is selling better than existing homes–more new construction homes are sold than existing homes.  It is not because there is a shortage of existing homes–many existing homes currently on the market will not sell.

So, what does all this mean? Sellers of existing homes have a tough job to get their home sold; not only must their home compete with other existing homes, it must compete with new construction.  Effective marketing will be needed to get the buyer’s attention, but more-so, price and condition will have to be carefully set by home sellers if they hope to actually get a buyer to write an offer.

On the other hand, buyers have a lot of homes from which to choose, so finding the best one should not be too difficult. Mortgage rates are still very low, leaving interested buyers with good credit in a very strong position.

Click on the image below to read this quarter’s report in full screen:

Fayetteville, NC Real Estate Market Report – August 2010

There is a large inventory of homes on the market right now. Sellers should be prepared to price their homes aggressively, ensure they are in top condition, and market them effectively to get them sold in a reasonable time frame.  Not every house on the market right now will sell! A large number will linger on the sales market, receiving few showings, or be placed on the rental market.  Competition is very intense, and existing homes also have strong competition from newly constructed homes.

The new construction sales market is relatively balanced in most price ranges.  Builders are offering incentives to buyers, and buyers have shown over the last year that they prefer new homes and the amenities they can find in new construction.  That is good for builders, but not for sellers of existing homes.

Some home sellers are able to get results by understanding how to price their home at the front of the market.  Understanding the absorption rates for different neighborhoods and for homes similar to theirs allows sellers to know what price will make their home competitive.  If you want to know more about absorption rate pricing, or need more information about this report, send me an email or give me a call at (910) 644-0303.

What is an absorption rate and why do I care?

In my page about the local market, I explain that the absorption rate is a number that reflects how many months it will take to sell all the houses currently on the market–basically, how fast the market can absorb the inventory.  Experts agree that if it takes 5 – 7 months to sell a house, that can be considered a balanced market.  Shorter than that is considered a sellers market and longer than 6 months is generally understood to be a buyers market (of course, these are general terms–don’t get too wrapped up about the exact number of months.)  The chart below shows the latest numbers, and they vary only slightly from last month’s numbers.

[table=5]

So, just looking thru the data, houses listed for sale for less than $150,000 are still selling in under 6 months time.  That accounts for over 50% of the houses currently on the market.  Note, also, that houses listed for sale over $225,000 are taking over a year to be absorbed.

Now, here are the factors to consider about what all this means to you:

• Home Sellers – houses do not sell in the order in which they come on the market.  A fairly priced house that is in great condition and in a good location will sell much more quickly than the absorption rate implies;
• Home Buyers – the market is not terrible, but there are plenty of really great houses available and sellers may be willing to negotiate more;
• Investors – Fayetteville is a great market with a lot of affordable homes that still offers outstanding potential to build wealth through real estate.

Lastly, remember that absorption rates are a lagging indicator of the market.  The numbers are based on how quickly homes have sold over the past 12 months.  They don’t offer a prediction of what will happen in the future.  The future of the local market is controlled by population growth and economic/job growth.  These factors bode well for the Fayetteville market, which is tied very closely to Fort Bragg, and is expecting an substantial increase of higher level military and civilian postions as military bases are realigned under federal law (Base Closure and Realignment Commission – BRAC.)

Shane! Shane! Come Back!

Wait, Wait, Don’t Tell Me…

Every successful writer for executive-level thinkers knows that for the sake of clarity and brevity, one must always put the bottom line up front; BLUF.  So, before we get back to Twitter and theorizing about social network marketing and human connections, I have to tell you the real secret to business success (or any other success) is extremely simple: tithe.  I’m not kidding.

“…and thus put me to the test, says the Lord of hosts; see if I will not open the windows of heaven for you and pour down for you an overflowing blessing.”  Malachi 3:10 (NRSV)

My husband and I tithe on every single penny that comes into our businesses or our family.  We give 10% back to God, and then we do taxes, bills, savings and all our wonderful little marketing experiments with whatever is left.  I have to tell you, it has worked stunningly well.  I continue to get listings and sell houses at a successful rate, my business and market center continue to grow, and our troubled little property management company has increased by over 400% in the last year and a half.  Now, there is no doubt that we work hard and try to treat our clients and employees well, but we haven’t done anything that even comes close to our best marketing effort and have been hugely distracted by other challenges over that same period of time.  To boot, the real estate market here in Fayetteville, NC, as elsewhere, has made a dramatic shift.  Still, success comes.  So, it really isn’t us, it clearly is Him, and if you are a Christian and are not tithing, I encourage you to start.  We have never, not one time, hear me–NEVER–gone without in the entire time we have been tithing, and we have enjoyed a continuing period of blessing even though we’ve made some pretty boneheaded business mistakes.

“Back to the Casbah and the Business of Spying…”(Dan Jenkins, Semi-Tough)

But, back to our story.  My first thought during that challenging time was that we should create or pay for a new website that was hi-speed, Google-page-rank-centric,search engine optimized, blog-errific and sure to get us back to the top of the search engines like we were in the good ole’ days.  We looked around, considered contracting Hobbs and Herder, put a notice out on E-lance, and got too busy to follow up on any of it.  One day, to my great dismay, I opened my website to do some maintenance and found that everything had either disappeared or changed.  Fonts were all messed up, pictures were re-sized or missing, buttons and links were not working.  This website that I’d spent so much time on, that albeit a template site, still got plenty of use and some pretty good reviews, was just about worthless.

I closed it that day, signed up for a WordPress account and started re-learning everything.  I created a LinkedIn account because I got a request from a friend, a fellow Realtor®.  I started a Twitter account because I’d read about it somewhere.  And, I added a Facebook account because everyone in my family that I was hounding to join Twitter kept asking me what was the difference between a tweet on Twitter and an update on Facebook, and I couldn’t answer them.  It was slow going, and I’m still not even close to finished, but one thing troubled me even as I schemed to have the best real estate website and social network in Fayetteville…my business had continued to grow and my clients continued to use me even though I had no usable website, no on-line social networks, and none of what the bloggers were saying was “must have.” Another “seems to me” moment?

Oh, That Explains It.

You know, Keller Williams is an “open book” company.  I love that, and it forces you to do 2 things–keep really good books, and look at them often.  After one particularly heated meeting among the fellow owners of our market center, I went to get some numbers to prove my point (which was a pretty forgettable one) and in my research, I pulled up the last 3 years of my production since joining the company.  I set it aside with the intention of doing some real hard analysis, and a few days later, I noticed this exchange on Twitter between @ResPres (Jeff Turner) and @Ribeezie (Ricardo Bueno):

These 2 were discussing a post on Ribeezie’s blog in which he’d pointed out that many people were missing the point of social network marketing–that it wasn’t about numbers or ratings, it was about people.  He used a quote from Seth Godin to make that point and that pulled a lot of things together for me.  I went back and looked at my numbers for confirmation, but I already inherently knew what I would find.  My business had come from 3 sources: previous clients and their referrals (over 60%), listings in two neighborhood farms in which I had proven results or listings that came from people seeing those results (another 25%,) and a white-hot buyers agent who could convert internet leads which had come in from Realtor.com Featured Homes™ or my own website.  Of those sources, the first two accounted for the bulk of my production and those were built on connections I had with people.  Furthermore, I had lost my buyers agent and hadn’t found any suitable replacement, and my business had not suffered unduly.

From Tweet to Tweetup – Finally!

One day last week, I had my first tweet-up ( a meeting with others who you follow on Twitter.)  I went to lunch with @bluedevilmsn, who I met on Twitter (see this post) and with whom I had been trading tweets and direct messages.  I found a new friend and a great connection!  We had an enjoyable lunch and I realized as I drove home (rode off into the sunset like Shane) that my business was built on these connections and that I LOVE that.  I also realized that Twitter, Facebook or any other social network site is not a farm and not a magic database that will drive my business.   But, they are a great way for me to connect to people, they help me do it better and more inexpensively, and it is fun and exciting to use them!  Still, you have to go from on-line to in-person at some point.  Despite all the bloggers and all the advice about gee-whiz technologies, page ranking, search engine optimization, and maximizing popular social networks the best advice I have gotten, and the only advice I’ll pass along is this:  By all means, build a great web presence, but, it seems to me that when you connect with your people they become your clients and if you serve them well you will build a business that withstands shifting markets, internet trends and personal difficulties.

“May the favor of the Lord our God rest upon us; establish the work of our hands for us–yes, establish the work of our hands.”  Psalm 90:17

In my page about Fayetteville Real Estate Market Information, I explain that absorption rates are a way of showing how quickly homes are selling.  This chart shows, based on sales over the last 12 months, how many months inventory there are for homes in each price range.  Take a look at the following table:

[table id=4/]

Here’s the bad news (if you are a real estate agent or a home seller.)  Right now, in every price range over $150,001 there is more than a 6 month supply of houses on the market, and for price ranges over $225,001 there is over a year supply.  For price ranges below $150,000 there is a 5 month supply on the market.  By most expert opinion, this data suggests we are in a buyers market and it certainly shows that the market in Fayetteville is much more sluggish than usual.

But, statistics can be misleading, and here are a few facts to consider:

• absorption rates are a lagging indicator of market activity–they look back over the last 12 month period, not forward;
• houses do not sell in the order they come on the market.  The fairly priced house, that is well maintained and in a good location will sell more quickly than other houses, and it will have more buyers interested in it;
• 67% of the houses for sale in Fayetteville are priced under $175,000 and those price ranges sell more quickly, even if there are more houses available.

Additionally, if we compare the number of houses on the market to the last report, there are more homes for sale in the lower price ranges than last time, and fewer homes for sale in price ranges above $175,001.  This indicates that some sellers may be waiting for conditions to improve before they list their house for sale.

Okay, so what does this mean to you?

• If you are considering selling your home, or if you already have your home on the market, you will have to make sure your home is priced right and in good condition if you want to sell it quickly.  Good marketing, including proper maintenance and staging of your property will make a difference.
• If you are a buyer in the market for a home right now, you will have a good selection of homes available, and sellers may be willing to deal more than they normally would.  In the Fayetteville market, it is not at all unusual for sellers to contribute to a buyer’s closing expenses, and if you are planning to use a VA loan to purchase your home you may be able to buy a home with very little out-of-pocket expense.
• If you are an investor, there are good properties available.  Anecdotally, the rental market in Fayetteville has improved appreciably.  Houses seem to be renting faster–it may be that more people are choosing to rent over buy while they wait for economic conditions to improve.

Selling or buying a home right now requires a little patience and an experienced broker if you are hoping to make the best of market conditions.  Please email me or call me if you want some advice or are unsure of the best way to proceed.   You can still meet your objectives for buying or selling even in the current market.