Miracle Sales

The Board of Realtors maintains a store where I shop for supplies for my real estate business. It’s not an office supply store but carries specialty items that many Realtors use in marketing themselves or the homes that they sell. Stuff like: signs, sign riders, open house materials, flyer boxes, client gifts, proprietary software and packages of real estate forms, disclosures and contracts. The place has everything from maps and key-chains to notebook computers. If you ever signed a guest book at an open house or have signed a standard real estate contract, it probably came out of our store.

A new item that is selling like “Two Buck Chuck” (now $3 wine from Charles Shaw) is figurines of St. Joseph. Joseph, Jesus’ earthly father, is the patron saint of home, family and home sellers. St. Joseph was a good husband and father (good qualifications for sainthood) as well as a carpenter and homebuilder.

Many Realtors are following an ancient ritual and burying St. Joseph (the figurine not the real Saint) in the front yard under the “For Sale” sign of homes they have for sale. The centuries-old ritual is supposed to be bring good fortune to home sellers and commissions to their agents. According to the information on the package “Hundred of thousands of people have sold their homes under the patronage of St. Joseph, whose intercession they sought after burying the statue.” The 4-inch statuette comes with a Realtor’s Prayer attached. Once St. Joseph is under the “For Sale” sign” the agent recites the prayer and a successful closing won’t be long in the offing.

At $9.95 including the prayer, I have included St. Joseph as part of my marketing campaign. Other agents may offer sellers virtual tours, open houses and full-page advertising but I am taking St. Joe on my listing presentation. He is now my best buddy. Wouldn’t you rather have an agent in partnership with St. Joseph working for you?

Realtor’s Prayer
Lord
I know this old fixer is over priced for its condition
But I needed the listing before my career’s attrition.
The carpets are worn and the paint is peeling.
The front door is warped and the roof is receding.
The landscaping is sparse, the pool is green,
My sellers are cranky and their dog is just mean.
My marketing plan was one to behold
But after no showings it’s now 90 days old.
I know there are many fine houses to buy
This isn’t one so I need St Joseph to try.
Oh, bring me a buyer who doesn’t need to sell first
Contingency sales are always a curse.
A qualified buyer with down payment to spare
High FICO scores and a lender who cares.
The place is a wreck for all to see
So a blind Home Inspector is ideal for me.
Disclosures and reports with no seller omissions
Less they interfere with future commissions.
Any offer would help but full price is best
My seller’s are anxious along with the rest.



I don’t suggest sellers rely 100 percent upon St. Joseph to sell their home. If a home hasn’t sold within the first 90 days of the listing period there are three primary reasons. The first is the price. There is an old saying among experienced agents, “Price cures all ills”. No matter a home’s condition, location or the current market condition, if a home is priced correctly, it will sell. The reverse is also true. No amount of advertising or open houses will attract a buyer to an over-priced listing. Sellers and their agents should price a home high enough to maximize the seller’s profit but low enough to attract buyers. In our changing market this is easier to write about than put into practice.

A home’s condition is the second most common reason that it isn’t selling. Homebuyers are paying more for quality and less for space. Smaller homes that are in top condition and properly staged will outsell larger ones that need repairs and remodeling. Smaller families and high-energy costs are diverting many buyers away from an emphasis on size and square footage to an emphasis on design and features. Quality is replacing quantity.

The third reason a home hasn’t sold within 90-days usually has something to do with accessibility. A home needs to be easily available most all the time for showings. A buyer’s agent may have only a few hours and not days to set up showing appointments. When selecting homes to show on short notice, I review the listings agent’s comments about showing instruction published in the MLS. Here are the ones I avoid: Tenant requires 24-hour notice. No showings on Saturday. Day sleeper no showings. Call agent to schedule showings. Beware large dog. Call agent for alarm code. No lock box, key in office. Restrictive hours. Here are the agent’s comments I look for when pressed for time: Vacant lock box. Call first lock box. Easy to show. Go and show. Show anytime. Agents welcome L.B. The published agents showing instructions also reveal much about a seller’s motivation.

Yes, every situation and home is different but in today’s market, sellers need every edge in their favor. Price, condition and accessibility are three big ones, although I am not ruling out the miracle of asking St. Joseph for a little help.

Silicon Valley's home values drop

Silicon Valley's median home price dropped 6.1 percent in the past two months, the largest such decline in three years. The $50,000 loss over the two-month period was the largest ever. Granted, percentage-wise, a $50,000 drop from $800,000 is the same as a $25,000 drop from $400,000, but the dollar figures reveals that the higher prices go, the more room that they have to fall.

The median price for single-family home prices came in at $770,000 in August, down $35,000 from July, which reflected a $15,000 drop from June. "The market is not tanking, but it is reminiscent in many ways to the real estate market of the early 1990's," said Edwin Resuello, president of the Santa Clara County (Silicon Valley) of Realtors.

"We saw a two- to three-year downturn in the housing market, a huge number of foreclosures and a new trend that was labeled 'short sales.' Wouldn't you know it, we have similar characteristics just starting to show now," said Resuello, also broker-owner of Realty World Silicon Valley Homes in San Jose.
Surrounding county markets and a few Silicon Valley sub-markets already reveal year-over-year price declines and that trend is likely to spread further into Silicon Valley, most experts say. The up and then down cycle is normal for the market and it has been too hot for too long during what many considered an unsustainable boom of record proportions.

"Yes, some segments of the market will go down, and these will be properties that are overpriced by sellers still thinking they can get whatever they want for a property. It's like a wildfire that has been out of control for a couple of years, but that has finally been brought back to just a steadily burning flame. Sellers have either got to get smarter and less greedy or they will be stuck with these overpriced properties for months. The day of insane overbidding is over," said Linda Boyd, a broker associate with Meredith Homes & Enterprises, Inc. in Los Gatos.
Neighboring counties, San Mateo County (down 4.5 percent) to the north and San Benito (down 0.84 percent) and Santa Cruz (down 2.3 percent) counties to the south, also experienced year-over-year price declines.

Homebuyers in the market now certainly can enjoy a better negotiating position, but they should not expect fast gains and they should plan on staying in the home long enough for a return to at least offset buying and selling costs.
Buyers are going to have more choices, but they too have a learning curve to go through. I heard a speaker at a broker's tour breakfast sum it up perfectly: 'Sellers want last year's prices and buyers want next year's prices.

Builders report slower sales

Builders have sold 6,265 new homes over the past seven months in Placer, Sacramento, El Dorado, Sutter, Yolo, and Yuba counties. That’s down 4,655 units during the same time period last year according to Hanley Wood Market Intelligence, an industry-tracking firm based in Southern California.

In addition to fewer sold units builders are experiencing a record number of buyers backing out of their purchase commitment. Buyers having second thought and canceling their purchase contracts happens but usually the cancellation rate is less than 5 percent. Most builders are now reporting 23 percent in Sacramento County and 30 percent in El Dorado County. So what’s up with that?

Consumer confidences has been a driving force in the housing market. Homebuyers purchased homes beyond the traditional reasons of shelter, security, long-term appreciation and equity building by paying off the mortgage over a long period of time.

Homebuyers up until this last year have been trading housing like baseball cards. Investors and flippers accounted for nearly one-third of all home sales during 2005 in the capital region. Speculation was rampant. It could not last forever and we are now feeling the morning hangover from the wild party of the last five years.

Builders will slowly reduce their standing inventory and carefully evaluate and restrain their future construction commitments. With fewer new units on the market the builder incentives will disappear and the new home market will slowly come into balance between existing supply and demand. Everything has it cycles.