Tri-State Real Estate Blog

Inventory Slightly up from last month, yet homes priced correctly still selling well - average 76 days on market - New Castle, DE and Chester County, PA

Market statistics continue to show that homes for sale that are priced correctly according to their condition and the market comparables (similar homes sold recently) sell well - going Under Contract on average in just 76 Days on Market (DOM) in Sept 2009.  This is down slightly from a year ago (at 79 DOM in Sept 2008) and off the annual high of 103 DOM in Jan of 2009.  

This is in contrast to the increase in the average Days on Market for both For Sale and Expired home for sale which we've seen in the past year.  Expired Homes (those that did not sell) have gone from 155 average DOM last Sept up to 188 average DOM as of Sept 30 2009. 

If you want to sell your home, John Luca has the experience to review your home's condition as well as the market comparables of recently sold homes and advise you on the correct price point as well as staging and other helpful sales tips - this can make the difference between you going Under Contract and being able to move or ending up on the Expired list.  

Please call John at 302-999-6966 to answer any real estate related questions on the market in your area, or about buying and selling in this environment.

Have a great October!

Mary Luca

Charts used in the analysis - plus additional statistics are below for your viewing - click on the links to view all of the data that I've prepared for you.

Mary and John Luca   TriStateTeam.com at Prudential Fox & Roach 4764 Limestone Rd Wilmington, Delaware 19808 Office: (302) 999-6966 Email Link

Download Average Days on Market for Under Contract Properties Chester and New Castle Counties Sept 30 2009 John and Mary Luca

Download Basic Absorption Residual Inventory Chester and New Castle County Sept 30 2009 John and Mary Luca

Download Months Supply of Inventory and Days on Market Chester and New Castle County Sept 30 2009 John and Mary Luca

Download Supply and Demand Chester and New Castle County Sept 30 2009 John and Mary Luca

Download Supply and Demand FS UC New Chester and New Castle County Sept 30 2009 John and Mary Luca

 

Market Update

Pending sales for April 2009 in the $150,000 & Under price range are up for April by almost 12% compared to April 2008.  This is great news for the housing market and also means that the $8000 tax credit for First Time Buyers, along with the historic low interest rates, are definitely stimulating the housing market in this price range.  Over time this will have a positive effect on the higher price ranges, as sellers will now be in a better position to “move-up” buying more expensive homes, which for now are still selling at rates below sales numbers for 2008. 

Other positive data includes signs of price stabilization in the $150,000-$400,000 price range where the average sold price for the first 4 months of 2009 is 99.6% of the average sold price compared with the first 4 months of 2008. 

If you have a question about your particular home or market sector, feel free to give me a call at 302-999-6966.  John

Pricing Your Next Home - Bidding Based on One Comparable Property

The question below gives a high level idea of the financial risk you take when bidding on real estate if the property is not valued properly.

Q: Someone in our online forum asked if it was okay to pay $620k for a completely updated dated 3br 2.5ba house in Greenville, Delaware, stating that a house next door sold for that much in 2006.

A:  Without seeing the property and comparing it to other sold homes in the area, it would not be possible to give you an accurate answer and would do you an injustice to try to give a yes or no at this point. Meeting with a professional realtor who has experience in studying and pricing homes accurately, and negotiating is recommended to inform you and protect your interests.

However in general, the market is down since 2006. For all of 2006 in the Greenville, Hockessin, Centreville area, the average sold price for homes (that settled in the $50k to $2mm range) was $556,906. Whereas the average sold price for the same range of homes from July 2008 through Feb 2009 was down to $490,602.

To peg the bid for your next home strictly on one home's sales price next door that sold in 2006, would be risky. If you would like an analysis prepared for you, please contact a professional realtor. Typically real estate agents do not charge to work with buyers (we do not), and therefore your representation is free - from finding a home with you, through negotiations (and re-negotiations after a home inspection if needed) - all the way through settlement.

Please let us know if you have further questions or would like a detailed analysis prepared for you.

Sincerely,
John Luca - Licensed in PA, DE & MD
Full Time Expertise - Working Full Time for You!

Opportunistic Market for Buyers and Sellers - Here's Why:

How’s the real estate market? Well compared to the stock market – I’d say pretty good!

This is actually the most opportunistic market I’ve seen in years.

And I’m very excited about the opportunities for both Buyers and Sellers.

The first-time buyer tax credit of $8000 recently passed by Congress is already jump- starting the activity in the first time buyer price range 0- $200,000.

The great news for sellers is home values have only declined modestly in our area compared to other parts of the country. So now would be an excellent time to make a move up, downsize or head to warmer markets where the deals are fantastic.

New Castle County Real Estate Market for February 2009, had an increase in homes under contract along with an increase in homes sold vs January 2009. In addition we saw a decrease in the number of homes “On the Market” dropping from 3977 to 3866 (3% decrease). This continued a 3 month trend of a lower Month’s Supply of Inventory (MSI). The MSI tells how many months it would take to sell all the homes in the county at the current monthly sales average. The MSI is a calculated by taking the current number of homes on the market divided by the average monthly sales number, with the assumption that no more homes would come on the market over that period. We know that homes will continually be coming on the market, but for the purpose of this calculation we use only the number of homes on the market as of right now. For Example, currently there are 3056 homes on the market with an average monthly sales volume of 360 homes sold. Dividing 3056 by 360 equals the number of months it would take to absorb this inventory or 8.5 months. In a strong seller’s market the MSI could be as low as 2-3 months like what had in 2004-2006. In a strong buyer’s market the MSI, would be anything above 10 months of inventory. I consider the market to be a “Neutral Market” whenever the MSI ranges between 5-7 months.

The median sold price and the average sold price continue to decline. The average sold price for the county in Feb 09 was 235,000 and the median was $200,000 - down from $269,000 and $230,000 respectively, from Feb 2008 numbers.

Download March 2009 Newsletter NCCO report  

If you have specific questions on buying, selling or investing - please call me (John Luca) at 302-999-6966.  Have a great day - I'm off to shovel a driveway at a vacant home for my seller - we've got a buyer touring it today :)

 

January Brought Good News on the Home Front

I would like to announce a little good news occurring in the New Castle County Real Estate Market for January 2009. We have had a $15,000 increase in the median home price average compared to December 2008 and a $9000 increase in the average sold price compared to December 2008. Comparing these levels with averages from one year ago, I am also encouraged by the fact that the decline in the median home price average is only 2.2% and the average sold price is only 4.2%. As a whole our county along with the Philadelphia Metro region, is fairing much better than most of areas across the country. Additionally our 9.7 Months Supply of Inventory (MSI) is at its lowest level since September 2008 when it was 9.2, which again compares favorably with national levels.

 

Before we get too excited, there has been a fairly significant reduction in the number of homes selling. Home Sales for January 2009 are off 33% at 207 sales compared to 309 sales for Jan 2008. Heading into to Spring, I would say as long interest rates remain low we will have decent activity and sales in the market. The key for sellers is to be aggressively competitive to stand out. Buyers are still looking for deals and will find them because they are out there.

For more details download the charts below, or contact me at 302-740-5872

Regards,John Luca

 

Download Jan 2009 Median-Sold Avg

 

Download Jan 2009 Mo. Supp Inv

 

Download Jan 2009 Sales NCCo

 

 

 

Waterfront Anyone?

I thought you'd enjoy this shot of my brother, Mike, on Red Mill Pond from this weekend.  As my brother says, only three months until we can put the boat in :) .

 

While we're waiting for the thaw, let's take a look at market price activity for single family homes in Sussex County over the past five years.  

I looked up some stats in the Sussex MLS, and although the market is down you’ll see it’s not drastic -  we are much better off than other sectors of the nation (John could go into more specific detail, as he’s the real market man - feel free to call him on 302-740-5872).  

Here’s just a few Sussex numbers:

5 year Residential Single Family Median and Average Sold Price History:

Year	Average Sold Price	Median Sold Price
2004	$343,188	$240,000
2005	$413,605	$285,000
2006	$404,951	$284,250
2007	$404,414	$286,950
2008	$378,989	$265,000

By simple calculation you can see that we are only about 7% off the high Median Sold Price for Single Family Homes in Sussex (dropping from $285k to $265k).  Yet we are still in gain territory versus prices in 2004.  I know those are high level numbers, but I start in generalities until someone wants a detailed drill down of a specific area.  In addition, it sometimes helps to step back and look at the bigger picture.

Have a nice evening – and let’s think spring so we can enjoy more outdoor activities soon (and get that boat in!)

Mary

Comparing 1990 with 2008

In a conversation with a broker the other night, it came to mind that the market today, actually has shorter Days on Market (DOM) than back in 1990-1991 when interests rates were significantly higher than they are today. 

To prove whether memory served correctly, I've dug up old MLS books from New Castle County for the 1990-1991 era for DOM statistics to compare to today.  You'll notice that with the change in technology and measurement capabilities, I have data for 6 month time periods for '90-'91 versus monthly data for 2008, however, the point is proven.

I've also included data from our mortgage consultant (Jason) showing the significant difference in interest rates between the two time periods.  

The point is - the market is slower, and it slowed down faster this time, however, in some ways it's still not as bad as it has been in the past, and we recovered then.

Just food for positive thought.

Have a great day,

Mary 

 Download DOM Chart

       

Download Mortgage Chart

   

 

December 2008 Market Analytics + 2 year summary

It's no surprise that market activity has slowed down in the last couple years, however, being a statistical person, I enjoy studying charts (I was a technical trader on the "street" for JP Morgan trading federal funds, eurodollars, derivatives, treasuries, etc. using chart analytics, and I consider it fun).   Meanwhile, John not only studies the statistics, he lives in the market daily with the clients and has a feel for the market that goes beyond stats. 

Being the techy, I wanted to get the charts out right away now that 2008 has wrapped up, in case any of you like to study the numbers in the market.  While I've created all the analytics below for both December and the past two years for your own review, I think it's always helpful to know a couple high level statistics to see the overall flow.  

As you can see from the 2 years charts for New Castle County:

• Monthly Supply of Inventory has risen from Dec. 2006 at 6.1 months to Dec. 2008 at 11.9 months, meaning at the current sales rate, it would take almost twice as long to sell all the homes currently on the market as it would have taken two years ago.

• This is supported by the fact that while Properties for Sale only increased 10.8% between Dec. 2006 and Dec. 2008, the purchase of those home slowed as Sold Homes dropped by 54.1% at year end 2006 vs. 2008.  

• Another important statistic is that Sold Homes Average Days on Market (DOM) increased from 45 days to 88 days from Dec. 2006 to Dec. 2008- almost doubling. 

From all this we take, what we mostly knew - there are not significantly more homes for sale on the market, just longer days on market due to less buyer contracts.  A bright spot I see here is, it could be worse - there could more significantly more homes on the market in addition to less demand.  So when buyer confidence returns, the MSI should be able to drop back down faster than in an environment where the homes for sale increased significantly. 

Now for fun I'd love to study these trends using technical analytics like Bollinger Bands or Fibonacci retracements, however, I don't have that software right now to apply to these statistics and need to get back to work on more meaningful systems for our clients such as updating our MLS Home Search Software (look for Sold Home data to appear there soon!). 

John is at work on another computer right now, but hopefully will get to post some market "color" for you from his experience in the market in December (the market is still moving - we were able to help 5 buyers and 1 seller settle in December alone).  Until then, feel free to give him a call if you'd like to get that color over the phone or have specific questions answered (302-740-5872; 302-999-6966)

Happy New Year - Mary Luca

Download NCC Supply and Demand Analysis John Luca Dec 2008

Download NCC Home Price Analysis John Luca Dec 2008

Download NCC Month Supply Inventory Analysis John Luca Dec 2008

Download NCC Month Supply Inventory Analysis John Luca 2007- 2008

Download NCC Home Price Analysis John Luca 2007- 2008

Download NCC Supply and Demand Analysis John Luca 2007- 2008

Seller's Market? Yes, one does exist!

Currently in the areas of Elsmere, Newport and Pike Creek (referred to as NCC Zone 3), in a perfect first-time buyer price range of $0-$160,000 we have a bona-fide seller's market.  

What is "seller's market"?  The National Association of Realtors defines a seller's market as any area that has 6 months of inventory or less.  The current inventory level of Zone 3 for $0-$160k is 47 units with an average of 11 sales per month, which equates to just 4.3 months of inventory. 

New Castle County as a whole has an 8.6 months supply of inventory.  Looking at the remainder of NCC from $0-$160k it's even longer - a 10.7 month supply.  Both of these numbers point to a buyer's market in NCC on the whole, as opposed to a seller's market in Zone 3 in this price range.

Are you looking to buy or sell?  Let me help you find value in today's market. 

John Luca  (302) 740-5872  John@TriStateTeam.com 

(in which we happen to have a hot new listing)

Nov. NCC Market Analysis + Charts, Tables, Price Trends

Click on the links below to view the market statistics for November 2008 for the past year. 

As far as inventory is concerned, you'll notice that the For Sale, Sold and Under Contract average Days On Market (DOM) for New Castle County (NCC) crept up in November, while Months Supply of Inventory (how long it would take to sell all the inventory currently on the market at today's sales rate) crept up as well. 

While that shows what we all know, that the market has slowed on average there are positive notes.  In addition to the anecdotal evidence of John's previous post this week noting sales contracts for homes that are priced right and show well and the bonus buyers and sellers receive from the drop in interest rates, there are statistical bright spots.  On a positive note for sellers, the number of new properties For Sale and New to market each month has been steadily declining for the past few months.  That's less competition entering the field each month.

In addition, John's daily work in the market is showing him where pockets of activity are - he'll be posting on a seller's market he's discovered tomorrow.

If you have an area you are interested in buying or selling in, don't just go by what the headlines say and make a local assumption.  Talk to someone who is working in the market all day, every day - who has a feel for it through actual market experience and negotiations.  Someone who will study pockets of local activity where your specific area of interest lies.  Then, once you have that expert advice from your real estate consultant, decide what makes the most sense for you at this point in your life. 

To contact John for a private local analysis for yourself or a friend, just drop him a line at John@TriStateTeam.com or call me on 302-740-5872.

Download NCC Home Price Analysis John Luca Nov 2008

Download NCC Supply and Demand Analysis John Luca Nov 2008

Download NCC Month Supply Inventory Analysis John Luca Nov 2008

 

Mary B. Luca; MBA; ePro; Realtor DE & PA; Mary@TriStateTeam.com

There is Life in the Market!

I've experienced a little spike in the local market just in the past week as I've been blessed to help clients get 3 signed contracts - 2 for our buyers and 1 for our seller.  So there is still life in the market! 

Additionally, interest rates have dropped in the last couple weeks - and this provides a benefit to both buyers (whose purchasing dollars are stretched farther by saving interest) and sellers (whose homes become more affordable for buyers).

Look at this simple example:

As of yesterday, the 30 year fixed was hovering around 5.625%   Back on 11/20, we were around 6.125%  Here are different payments these rates would imply, principal and interest (taxes and home owners insurance not included.)

 6.125%      $150k mortgage = $911.41/mo         $400k mortgage = $2430/mo

 5.626%      $150k mortgage = $863.48/mo            $400k mortgage = $2302.62/mo

As you see the $150k buyer would save about $575 per year in payments, while the $400k buyer would save about $1528 per year! 

To learn more about the market activity or how these rates might affect your buying or selling ability, please feel free to call me at 302-740-5872 or shoot me an email at John@TriStateTeam.com

Have a great day!

John Luca 

 

NCC Market Analysis + Charts,Tables, MSI, DOM, Price Trends

To View the Latest New Castle County Market Analysis either click on the charts below to enlarge or use the Download links to view the files:

Download NCC Month Supply Inventory Analysis Oct 2008

Download NCC Home Price Analysis Oct 2008

Download NCC Supply and Demand Analysis Oct 2008

To discuss home buying or selling related to these statistics, contact John Luca 302-740-5872

   

 

 

 

What makes a good investment?

The Key to a good investment is the Rate of Return, otherwise known as ROI for Return on Investment.  The historical ROI on real estate has been approximately 11%. 

Statistics will prove, if a person:

1. buys a rental property,
2. rents it out at a break even from a cash flow standpoint - {which means the monthly income (rent) equals the monthly expenses (principal and interest payment + taxes + insurance + maintenance)}
3. purchases with a 20% down initial investment and a 15 year mortgage,
4. and has no appreciation on the rental property over the 15 year period,
5. the ROI would equal approximately 11%. 

How can this be?

Let's use the following example:

A person buys a $100,000 investment property with a 15 year mortgage.  15 years later the home is sold for $100,000.  The net return is $80,000 for a $20,000 initial investment.  The ROI is 10.78%. 

Appreciation and a positive monthly cash flow, are "icing on the cake". 

The bottom line is, you can still have a large ROI without appreciation or a positive cash flow.  

For an in-depth discussion on investmenting in real estate, contact John Luca - John@TriStateTeam.com 302-999-6966 

Your credit report: Knowing is half the battle

Your credit report: Knowing is half the battle

Your credit score can either be a badge of honor or a dark cloud over your head. Good credit gets you low rates on mortgages, low rates on auto loans, and any credit card that you choose. Bad credit gets you turned down for mortgages, sky-high interest rates on auto loans, and secured credit cards that are worse than the terms that a loan shark would give. Nowadays employers, the military, and even your children’s private school may request a copy of your credit report.

If you are reading this blog, then most likely you are shopping for a home. If you do not know if your credit is good enough to buy a home, now is the time to check your report. I have had many people call me who had been shopping for homes online for months without having their credit checked. Some of them were quite surprised to find items on their credit report that they did not recognize. Some of these were negative items, often referred to as “derogs” (short for derogatory.) In some cases these potential buyers were unable to get the lowest rate, or even worse get approved at all.

There are so many websites and so many people that want to tell you how to have great credit. Many of them are confusing, and many of them are contradictory. I prefer to keep things simple, start by getting a copy of your report. In my opinion annualcreditreport.com is the best site on the internet to get a free copy of your report. Take a good long look at the report and ask yourself the following questions:

1) Do I recognize every account?

This happens more than you may think. It is one thing to have a derog on your report if you are at fault; it is another if it is not. If you believe that an account on your report does not belong to you, follow the instructions on annualcreditreport.com to dispute it.

2) Should this old debt STILL be on my report?

Old collection accounts and tax liens should only be on your report for seven years since their last activity. Are they older than this? Dispute them.

3) Was I really late on my bill that month?

I recently had a woman come to me with a credit report that stated that she was four payments behind on her credit card last year. This was during the time that she was having a charge reversed to a merchant who charged her for merchandise that she never received. She disputed it, the lateness was corrected.

The best part about your credit report is it tells you how to improve it! Somewhere at the top or the bottom of every report is a list of the four things that you can do to improve your score. These are not generic suggestions; these are suggestions that are customized to you based upon your report. The worst thing that you can do when the stock market is down is to not open your monthly statements. The worst thing you can do when you fear that your credit score is down is to not look at your report. Until you know what is on your report, you will never know how to improve it.

Submitted by: Jason Infanti

For further assistance contact Jason via email:  Jason@JohnLuca.com or phone:  302-999-6940 referencing his blog article

Fannie Mae and Freddie Mac - how it affects you and the market

Earlier today, Treasury Secretary Henry Paulson announced that Fannie Mae and Freddie Mac have been placed into conservatorship by the Federal Housing Finance Agency (FHFA).  This is the most important event our industry has experienced in the past three years.  This is good news for both the mortgage and real estate markets.

This government takeover will be a catalyst for the following changes:

• Immediate reduction in mortgage rates due to the narrowing of Fannie/Freddie yields over Treasuries
• Stabilization of credit markets
• Positive changes in investor psychology
• Positive impact on real estate market due to lower rates.  When combined with the first-time buyer tax credit, this will stimulate the first-time home buyer market, which will unlock the trade-up market

In the future, we will look back on this event as the beginning of a slowly improving real estate market.  Please pass this positive news on to our sales associates and employees.

     Larry

(quote from: Larry Flick IV, Chairman and Chief Executive Office of Prudential Fox and Roach Realtors printed with permission)

Interview with Joan Docktor concerning Buyers' Concerns in Today's Market

Interview with Joan Docktor
Excecutive Vice President of Sales, Prudential Fox & Roach Realtors/Trident

Mary Luca:

Joan thank you for being here with us today and sharing your extensive experience.  You've served clients as a Realtor for decades, and participated in many markets. What would you say to buyers at this juncture who are concerned about whether or not the home they are interested in would appreciate?

Joan Docktor:

As we know homes in our marketplace have appreciated 60% over the last five years. Since that appreciation has slowed some buyers are sitting on the fence. They are just not motivated to buy. They are afraid the home they will purchase may drop in value.

As I think about this, it seems that the following conversation that I had in the 90’s might apply now.

Buyers always asked me if I thought the home they were interested in would appreciate. My answer was always the same, "If you stay in a home long enough it will. If you move next year it may not but if you stay for six to ten years I am sure you will be fine."

I often told them, "You are leveraging the purchase and only investing 10% or 20%. You will accumulate more wealth by owning your home than you will from most other investments. The appreciation is based on the entire value of the home, not just your down payment."

If you make a $20,000 investment in the stock market your appreciation is based on $20,000. But if you put that same amount down on a home that costs $200,000 the appreciation will be based on $200,000, a much larger base and therefore a greater return.

Now I am sure this is something that we all think about regularly, but maybe the buyers are not focused on this and this discussion in the next few days may help them to make the purchase decision that is best for them.

All Things Related to Real Estate

Welcome to Tri-State Real Estate Blog.  There are many aspects to owning, financing and maintaining real estate. 

Our Mastermind Blog Team is here to offer pointers and answer questions related to your real estate.  We don't plan to overwhelm you - just to give you one meaningful morsel of information shared by each guest author once a month. 

Here's a sample of what's to come....(subscribe on the right column to receive updates as they are posted)...

Investing in Real Estate - as a primary residence, secondary residence, investment properties, self-directed IRA investments, REITs...

Maintaining Real Estate - home maintenance tips throughout the year, home staging and interior decorating information, cost vs. benefit of various home improvements

Financing Real Estate - when to refinance, financing options, the difference between the "price" of mortgage money vs. the rate quoted, investment financing vs primary resident financing, broker vs. bank benefits when borrowing

Tax Tips - ideas for investing now and enjoying later, 1033 exchange overview, what's deductable, depreciation, business structure for investing

Real Estate Market Highlights - what's the market doing right now in your area, buyer and seller tips, how to find your dream home, rent vs. own benefits

This is just a short list of our starting ideas - Our Blog is like a living being on the web which grows with your presence.  Our experts are here to help you.  Please sign up on the right hand column to subscribe to updates, and write to us with questions which we will consider for future topics.

Finally, when you see the level of expertise that each carefully selected member of our Mastermind Blog Team has in their respective industry, please feel free to contact them for their help in your personal financial and real estate endeavors.  Just let them know you found them through this Blog, so they know someone's actually reading - it will get them juiced to core dump their knowledge into our Blogosphere, and we'll all benefit!

Make it a great day!

Mary Luca