Mobile Realtoreality

For a couple of years now I have noticed more listings with a value range pricing. This is a concept that's tough for me to grasp. I know of at least one major Real Estate company in Mobile that has been practicing this strategy for a few years. And there are others following that same lead now, I'm sure. But what's the point?

I can't see signing an agent agreement listing my home with a price range of $20,000 - $30, 000 or more. I'm sure there must be some logic behind the move. It just escapes me.

One argument found recently --

In a market flooded with homes that don’t sell for months and sometimes years, some weary sellers are trying to entice buyers by listing their houses with a price range instead of a fixed amount, according to Gannett News Service.
Called “range pricing” or “value range marketing,” the practice gives potential buyers a range that the seller finds acceptable. The process encourages open negotiations with a seller who will come down in price and a buyer who will go up. Compromises and amenities are frequently negotiated to reach a final price that is acceptable to both parties.

But I tend to agree with the prognosticators saying "why would a buyer walk in and make an offer on the top price when perhaps they could purchase the property at the lowest end point price?" Why not just price the home at a true adjusted market rate or a little below market and let the negotiations begin? The concept has to be very confusing to buyers. And in today's market, the last thing any agent wants to do is confuse potential buyers.

Here is a link to a recent article on value range pricing -- More agents here using value range pricing

On another troubling note. Recently I posted about the false information provided by numerous national real estate web sites. While researching value range pricing this morning I visited one such site. I typed in my current home address and was surprised to find a couple of interesting facts --

First off, the site did not report the correct bedroom/bathroom count, or correct square footage. Secondly, the price range value was almost $80,000 -- Interesting, but extremely troubling. Are these site really useful to potential buyers searching the internet for homes? I am not sure from where the information for these sites is abstracted and I'll bet you could go to two or three sites and find different results.

Sometimes I wonder when too much information available on the internet today is worse than not enough.

During the housing boom a few years ago, appraisers were not held accountable for inflated pricing estimates. The demand for homes was high, it was a sellers market, and mortgages were more easily available. No one saw the recent downfall in the housing industry coming;  or if they did, ignored it. According to numerous reports, appraisers were pratically writing appraisal reports to the satisfaction of the sellers and not to the guidelines and specifications mandated them. And no one was questioning.

Now with a flatline effect in the housing market and the financial crisis of lending institutions, appraisers are definitely under the microscope. As a result, appraisals are not always coming in at a satisfactory level of pricing sought by the sellers. So then what happens? If a buyer has submitted an offer at the original asking price and the appraisal is lower, a couple of things can happen. Either the seller can agree to lower the price, the buyer can pay the difference out-of-pocket, or the deal falls through and most likely the house is withdrawn to list later.

Another situation can also occur. In the instance of newer construction in Downtown Mobile, for example, there may not be similiar homes to run comparables. So what happens in this case? The apprasier can deduce a price by assigning a value to the property, then assessing a square footage costs based on what it would costs to reproduce the home, and finally apply some depreciation value. The second and more important approach is to apply comps. In any result, buyers will not be able to secure a mortgage higher than the appraised value. A seller or I suppose even a buyer, could request a second or third appraisal to confirm or negate the first appraised value.

But in the end, it doesn't really matter how a seller prices a home; the appraiser basically has the final say.

According to an article in Realty Times this week, the pending home sales index jumped 5.3 % nationwide. In the South, the number is higher at 9.3%. Some experts predict the recently passed stimulus package should increase home sells by at least 2,000,000 between now and mid-2009.

So the question is, how will this play out in the Mobile area? Your guess is probably as good as mine. Although home sales have not increased  in Mobile over the summer, most agents do believe once summer is over, kids are back in school, and things settle back into more of a routine, sales will pick up.  And with all the news of economic development coming into the area, how could it not but improve? But the trend over the summer has actually shown a decrease each month in home sales in Mobile from over 200 in June to less than 100 so far in the month of August, but prices seem to be holding steady with little percentage decrease.

Personally I have noticed more people looking to rent. And a few I have worked with have wanted to rent condos or apartments downtown. Well, good luck. The rental market downtown is either non-existent or doing extremely well, because finding such units for prospective renters has been a chore.

To read the full Realty Times article, see Realty Times - Real Estate Outlook: Pending Sales Jump.

In the most recent August 2008 issue of Mobile Bay Business Journal there are two very positive articles on the Mobile and Baldwin County fronts. While overall real estate in the U.S. is getting unusually bad press, the Gulf Region, and mostly the Mobile area is showing growth. The two articles linked below refer to the "Local real estate activity increasing" and "Baldwin economy in top 4% of nations micropolitan areas". This is encouraging news on all fronts. It is a necessity to the growth of Mobile and Baldwin County that we continue to hear and read positive reflections of growth in the region and not the continual perception that this area is suffering the same doom and gloom as the U.S. real estate market in general.

To access the two articles mentioned, click the links below:

Local real estate professional provides statistics and information on the residential housing scene

Baldwin economy in top 4% of nation’s micropolitan areas

Yesterday an out-of-town developer stopped by the office to ask questions about the housing market in Mobile and in particular, how condos are selling. He is responsible for one major condo development in downtown; one that is not selling well at the moment. Prior to his visit to the office he had toured other condo units downtown and had some interesting comments on several. He was especially surprised at the current asking price of a number of "upscale" units and questioned the market for such high-end units in downtown Mobile. He may be right or wrong. I don't have any data supporting otherwise. In my own opinion, I would think if the pricing were correct, upscale units would sale rather quickly.

Why shouldn't Mobile have condos with unique finishings, high-end appliances, and extra features not currently found in many available units?

Later in the afternoon I got into a discussion with another agent over development in downtown and what I had been hearing from potential clients looking to move downtown. Most people in the Mobile metro area currently live in single family homes with yards. When I have shown property downtown, one of the first observations I hear is, "there is no outside space". And I have heard this repeatedly. Quite honestly, if I were looking to move downtown, I would prefer a small backyard; somewhere to at least let the dogs out or to have a small grill, maybe a few plants.

So the question is, why can't I have both the luxury of living downtown, outside space, and maybe other amenities I have grown accustom to in my midtown home?

It's not that Mobile is a major metropolis where the only way to build is up. There is plenty of space, empty lots, and full city blocks waiting for the "just right" development to bring more people downtown. Look at cities such as Washington, DC or even a smaller city such as Savannah, GA -- the downtown areas offer rowhouses with yard space in most cases. This is a idea waiting to hatch in Mobile. Not only would this concept of rowhouses bring what a number of people want, it would make downtown Mobile a more attractive, appealing, and liveable city.

The time to plan for this development is now. Why can't we have the best of both worlds? --

One of the few, if not only, blocks of rowhouses in downtown Mobile

 Last week on WHIL, The Gulf Coast's Public Radio Station's show, Mobile Matters, Kathy Richardson interviewed Mobile Mayor Sam Jones about the rebid announcement of the tanker and other topics concerning growth and economics in our area. The air date was Saturday, August 9, 2008. Click to listen.

Another feather has been added to the cap for Mobile as National Geographic names the city in its 50 best towns in which to live and play. The article appears in the September '08 issue. In a press release from National Geographic,

WHERE TO LIVE & PLAY NOW: The 50 Next Great Adventure Towns — In its fourth "Next Best Places" issue, National Geographic Adventure names the 50 best towns in which to live and play. These innovative towns aren't just prime relocation spots right now, but are smart choices for the future. And these 50 zip codes aren't merely move-in ready today, they've got a plan for an even better tomorrow. Adventure writers Sarah Tuff and Greg Melville sort out the towns according to region, ranging from adventure 24/7 hubs loaded with outdoor options to urban players that offer a variety of jobs and cultural activities without sacrificing green space. Twelve particularly hot spots to scout the local flavors are highlighted (noted below by an asterisk). Page 74.

• West: Arcata, Calif.; Bellingham, Wash.; Coos Bay, Ore.; Girdwood, Alaska; Hood River, Ore.*; Lihue, Kauai, Hawaii; Joshua Tree, Calif.; Klamath Falls, Ore.; Leavenworth, Wash.; Malibu, Calif.; San Francisco*; Seattle*
  
• Rockies: Carbondale, Colo.*; Colorado Springs, Colo.; Hailey, Idaho; Idaho Falls, Idaho; Lander, Wyo.; Missoula, Mont.*; Ogden, Utah*; Pagosa Springs, Colo.; Prescott, Ariz.; Red Lodge, Mont.; Reno, Nev.; Silver City, N.M.; Tucson, Ariz.
  
• Central: Bardstown, Ky.; Grand Marais, Minn.*; Hermann, Mo.; Lafayette, La.; Milwaukee, Wis.; Mobile, Ala.*; Mountain View, Ark.; Oklahoma City; Peoria, Ill.; Rapid City, S.D.; San Antonio*; Traverse City, Mich.
  
• East: Avalon, N.J.; Blue Hill, Maine; Boston*; Brattleboro, Vt.; Charleston, S.C.; Charlottesville, Va.; Chattanooga, Tenn.*; Islamorada, Fla.*; Lenoir, N.C.; Plymouth, N.H.; Salisbury, Md.; Saranac Lake, N.Y.; State College, Pa.

President Bush signed the Housing and Economic Recovery Act last week. Among the points favorable to stimulating home sales, is the $7,500 incentive for first-time homeowners to buy a house. In the Act, a first-time homeowner is anyone who has not owned a home in the past 3 years. Local realtors and builders are pinning hopes on the package to help reduce current new and existing home inventory.

Points of the tax credit:

• The tax credit is available for first-time home buyers only.
• The maximum credit amount is $7,500.
• The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• The tax credit works like an interest-free loan and must be repaid over a 15-year period.

In Mobile County new construction is down some 25% from a year ago with new housing starts at approximately the same number. Baldwin County new construction is down nearly 43% over the same period in 2007.

Other points of the bill include;

Foreclosure relief that will guarantee up to $300 billion in refinance mortgages where current mortgage holders agree to accept partial payment so the outstanding principal on the new loan is more affordable for borrowers.

Mortgage revenue bonds to issue an additional $11 billion in bonds to be used to refinance subprime loans, mortgages for first-time home buyers and multifamily rental housing.

For tax year 2008, taxpayers who do not itemize their deductions but pay property taxes will receive a $500 additional standard deduction ($1,000 for married couples).

For frequently asked questions and more information on the stimulus package, see Federal Housing Tax Credit.

We are all now in a wait and see mode. Most area realtors and builders are optimistic the bill will definitely stimulate housing sales, both new and existing homes. For a summary of the bill see Summary of Bill.

Please be patient as I am in the process of converting to a new template. The new version 5 of Squarespace allows much more functionality than I currently have access to. Hopefully within the next couple of days, I will have numerous questions answered and you will see a new look. Cross your fingers and wish me luck.

With the number of foreclosures nationwide and people desperate in some cases to sell their homes, I decided to take a look at a few unique methods currently being used to promote sells.

First I decided to see how many homes may be listed on eBay. Interestingly enough, I didn't find any for the Mobile or Baldwin County areas. But there are a number of homes for sale in Florida and other parts of the country. I'm not sure I would feel comfortable bidding on a home online site unseen. But it is an interesting approach available to everyone with a computer.

Another innovative way is to produce a YouTube advertisement providing an interactive tour of your home Check out this For sale by owner example on YouTube.

Obviously other internet sites, such as Craigslist.org are popular and rather user friendly.

And I remember a few months ago reading about a couple who were holding a essay writing contest with an minimal entry fee, I want to say, of around $1000 per entry. Of course they were depending on a set number of paid entries to cover the asking price of their home. 

I'm sure there are many more innovative marketing techniques that I have not mentioned or thought of today and unfortunately for those of us in the Real Estate business, it is not encouraging to hear of all the unique and creative ways people are marketing their homes themselves without an agent.

We probably need to take advantage of any marketing tools at our disposal to show potential sellers how we can market their home for quick sell at the asking price.

Check out this YouTube video for more interesting advice....

Update on Monday, August 11, 2008 at 04:29PM by MLE

Today in the mail I received a postcard -

BUY THIS HOUSE OR SEND ME A BUYER AND I WILL GIVE YOU

A 7-DAY RENT-FREE CONDO 3 BR. 3 BTH. IN SANDESTIN, FL

PLUS $2500

The homes are in Fairhope, Alabama and are listed for $719,000 reduced from $795,000 and the second is $485,000.

"So much attention has been focused on sex offenders living near you. What about thieves, violent offenders, murderers, or con artists? Find out if these criminals live near you with our Neighborhood Watch."

That's the blurb from the site, Criminal Searches. The site even offers the names and addresses of people with traffic violations. I think that's a bit too much information. But it is interesting to know if you may have any convicted felons, violent offenders, or those convicted of multiple offenses living in your neighborhood.

This is an interesting article from "The Real Estate Bloggers".  I think most agents in Mobile will agree the national media is a major cause in the problems currently being seen in the housing market for Mobile and Baldwin County as well as other parts of the country.  A number of people locally do not realize the market here has not been anywhere close to as slow as other regions of the country. Home prices have not fallen dramatically and in some local areas are on the rise. But the media still causes skepticism when people are considering buying or selling a home.  Maybe if the local news and media would debate the issue people here would listen.

From the editorial --

"Sound familiar? Those are just a few of the headlines that have been thrown around by the media lately. In a time where people are very much influenced by what’s in the news, it seems a bit irresponsible for the media to be feeding the housing panic with such gloomy headlines.

Of course, the media isn’t the only channel to blame - consumers, speculators, politicians, real estate professionals, the economy and a ton of other factors all have a hand in the state of the market. And the majority of them are being pretty pessimistic about the whole thing.

What they don’t seem to get is that pessimistic speculation can hurt the market just as much as tangible factors such as mortgage rates, employment rates, etc. The fact is, the strength of the U.S. economy, while relying on many different factors, also relies heavily on the sales industry in general and sales people specifically.

That’s right, when it comes right down to it, sales people are a driving force of our economy. An analogy may help in this case: say suddenly, all over the country, sales forces in radio advertising just stop working. No more prospecting, no more aggressive sales calls, nothing. What would happen?  The radio advertising industry would plummet, crash, grind to a halt - mostly.

So, what do you think happens when real estate agents start to believe that the market is crap and there is no way they can get contracts? They’re going to stop working, they’re going to stop actively persuading people to buy or sell, and surprise, surprise, the market is going to slow even further!

The bottom line is, there are many factors contributing to the appearance of a housing market crash, when in reality, the majority of the market is just leveling out and still making positive gains in value. You cannot generalize the real estate market of the entire country and expect to be accurate with your findings.

It’s time for the media to quit all the doom and gloom reporting, even if it gets more ratings than fluff stories; for the lazy agent to quit whining that there’s no work to go after; and for everyone to realize that what we’re REALLY seeing across most of the country is simply the leveling out of a major housing boom.

Don’t believe it? Check out these 26 facts you AREN’T hearing or reading through mainstream news media. Visit the site 26 Things The Media ISN’T Telling You About The Real Estate Market to see facts and other factors.

News this week from the FHA that should be of interest to buyers in the Mobile area ---

Realty Times - FHA Announces Tough New Anti-Flipping Rules

FHA Rules Tough on Condo Sales

I haven't mentioned this subject before today, but it has to be a concern to most everyone. A couple of months ago, I visited a link from a well know and widely used internet portal, clicking on the link promising to quote the current value of our home. Needless to say, I was slightly disturbed by the dollar amount appearing on the screen in front of me.  Not knowing the how or where the data was extracted, I quietly dismissed it.

Today while perusing other real estate blogs, interestly enough, I came across an article addressing this same issue. Teresa Boardman posted on the St. Paul Real Estate -- If you read it on the internet, it must be true.

"....seller is very concerned that potential buyers like her co-worker will see the low valuation and decide not to buy the home, because it will be listed for a higher amount.  Buyers who look up the value of that property, on a web site that has home values, may believe what they see, because it is what they want to see, and because it is on the internet.  Home owners like my client are justified in being worried about the low value.

I don't have an answer for this one but think that there should be some kind of a rule or law against giving bad property valuations to the general public.   There isn't such a law. The web sites have disclaimers on them and they operate under the same rules as this blog does, freedom of speech.  Unfortunately some consumers believe what they read on the home valuation sites.  Most some of the sites are actually "lead capture" systems, and seller information is sold to Realtors and the promise of an on-line home valuation is just bait."

This article relieved my fears to a degree, but I can completely agree that buyers look at these sites and don't see making an offer at the true market value for a home in any given area. It's enough that the real estate market in general is perceived in the national news to be in a downward spiral everywhere, when that statement is just not true. And locally, the Mobile market is down somewhat, but only slightly compared to other parts of the U.S.

The only way to derive the true list price of a home is to look at a comparable market analysis (CMA)otherwise, what similiar homes in the same local area have recently sold for or are currently listed. Sellers may also wish to seek an appraisal from a qualified and reputable appraiser before listing property.

The real estate market is tough enough without these "tools" available on numerous reputable web sites providing false data.

In my last editorial posting, (Mobile - City of Continual Complacency), I likened Mobile to a city where the natives are content with the way things have always been. And that's not to say it's a bad thing.

But on a more positive note -- Mobile as it is today has plenty to offer on the social scene-- the arts, Mardi Gras, street parties, Bayfest, Azalea Trail Run, Chili Cook-off, Beerfest, fishing rodeos and other festivals galore. There's always plenty to do.

In today's Press-Register a brief article provides an inside look at street parties in Mobile. Street parties are popular usually during the Spring  but sometimes held in the Fall. The article focuses on Beverly Court  - Birth- al.com, but the planning and logistics are basically the same for all street parties in midtown Mobile.

I remember moving to Upper South Georgia Avenue in Mobile 5 years ago. The weekend following our move was the annual USG affair. Unfortunately since we had just moved onto the street and not settled in, we were unable to participate other than as guests. And unfortunately, I wasn't even able to attend having planned a business trip that took me out of town for the weekend. But since that time, we have participated whenever the neighbors have agreed to hold a party. It's a neighbor bonding experience to a degree. And it's definitely something friends look forward to an invitation to attend.

So while there are plenty of issues to complain about in Mobile -- no one can complain there's nothing to do.

To see a partial listing of events occuring in Mobile, see Calendar of Events on the Mobile Bay Convention and Visitors Bureau web site.

From the Village of Spring Hill,

Village of Spring Hill Public Forum
Government Plaza Auditorium
Thursday, August 7, 2008
7:00 p.m.

Council Members Reggie Copeland and Gina Gregory have called a public meeting to discuss the proposed optional zoning overlay and the proposed Blueprint for the Spring Hill area.  These have both been approved by the City’s Planning Commission and will soon be acted upon by the City Council.

The optional zoning allows the necessary coding to guide development toward a pedestrian-friendly, walkable neighborhood.  Together, The Blueprint for Spring Hill and the zoning can help improve the aesthetics, safety, and economic viability of our community.

It is critical that we show City Council members our support of this Ordinance and the Plan by attending this important meeting at 7:00 p.m., Thursday, August 7, Government Plaza Auditorium downtown. 

Update on Tuesday, July 29, 2008 at 03:07PM by MLE

from a fellow agent,

Council Members Reggie Copeland and Gina Gregory have called for a community meeting at 7pm on August 7 to answer questions regarding the optional zoning ordinance for Spring Hill.  It is very important that we have a good showing of people in support of the project.  The meeting is at the Auditorium at Government Plaza, and City Council members will be there.  They are wavering under the pressure of a few people who are against this project.  They will not vote in favor of it unless they see a big showing of support of the project.  I know you are probably all sick of all these meetings, but this is a crucial time for us to make our voices heard.  Those who are against this have been sending out false information to make property owners worried about things that are untrue and therefore getting their support against the project.  This project is a great project and will increase all of your property values and investments.  It is outrageous that a small few can cause such opposition when the majority of the property owners are for it.  The opposition is planning on busing people downtown whom they have convinced with false information to be against the project.  There are plans poised to be put in place for street lights, moving wires, sidewalks, an improved intersection, great developments, etc.  Right now.  We just need the City council to say it is ok. If so it will start happening immediately. This is our final chance to go forward as a city instead of being the "city of forever potential" or "imMobile".  It is of the utmost importance that you attend this meeting and show your support of this fantastic project. 

Since moving to Mobile over 5 years ago, I have continued to hear the phrase, "CIty of Perpetual Potential". For a while I found this a comforting ideal. Mobile is a city of enormous potential and apparently the potential is perpetual. Therefore, disconcertedly, it really never is fulfilled.

Consequently, sadly as I must, I now have a more appropriate catch phrase when discussing the City of Mobile -- "the city of continual complacency". According to one definition on Dictionary.com, complacency means "self-satisfaction or smug satisfaction with an existing situation, condition, etc. "

Now many readers will argue with this statement. There are a few city officials and citizens alike busting butt to boost economic development in Mobile. And given, a few monumental projects have seen fruition with supposedly many more plans on the drawing board. - Many plans never to be seen or heard of again.

Of course, Mayor Sam Jones is striving to develop a workable city plan and people are clamouring for downtown development - grocery stores, movie theaters, affordable housing, more city parks, etc. But the question is, do people in Mobile really care about development?

Again, I think a few citizens do, and people moving into Mobile from other cities and countries may not be as happy with the status quo and hopefully may somehow influence the pace of growth. But in general, I honestly believe people in Mobile really could care less, particularly those old Mobilians happy with their estates, beach houses, and worldly travels. Give them their social scene and Mardi Gras, and the world goes on. Growth and change are not their friends.

Eventually Mobile may become the world class port city I believe it should be. But how long will it take to ultimately maximize the potential for growth, prosperity, and viability? Another old saying may have to suffice -- "good things come to those who wait." Of course in terms of a new Mobile, some of us may die waiting.

State Farm announced it will increase homeowners insurance rates by 12 percent to 18 percent in Mobile and Baldwin counties. The company will also cancel wind coverage for at least 700 policy holders along the coast. For the full story as reported in Forbes, see State Farm raises rates for coastal Alabama.

I am somewhat surprised by this move particularly since the Alabama coast has not seen any hurricane activity in 3 years. It is not to say a hurricane will not occur in the region this year, but I find the move by State Farm to be premature in light of their increasing profits. Unfortunately it is becoming harder and harder to find adequate, affordable homeowners coverage in Mobile and Baldwin counties.

Mickie Russell, Dauphin Realty, announced this morning that her company has joined seven other firms in forming a new statewide network of Alabama independent real estate brokerages. 

The network, Alagroup, consists of LAH, James Grant Realty Co. of Dothan, Averbuch Realty of Huntsville, Hamner Real Estate of Tuscaloosa, Meyer Real Estate of Gulf Shores, Dauphin Realty of Mobile, Aronov Realty of Montgomery and Real Estate Shoals of Florence.

Network members will retain their independence but "coming together will create a synergy that will benefit their agents, employees as well as their clients," Lawrence said in a press conference at Birmingham Botanical Gardens.

Alagroup has created a Web site, Alagroup.com, with links to member companies and a new logo. Lawrence said affiliation of independent real estate brokers is the first covering the entire state.

The group includes only one company per market, giving them exclusivity. Lawrence said Alagroup is looking to expand by adding other independent real estate companies in Auburn-Opelika, Anniston, Dothan and Gadsden.

The organization's web site can be found at: alagroup.com