Market Conditions Across the State

What can we say that we haven’t said before? Newspapers warn of possible foreclosure moratoria, job growth is just barely in the black ink and the midterm election cycle brought new leadership to Washington, DC. Buyers are still armed with access to cheap loans and strong negotiating power. Recovery continues to crawl forward nationally; let’s take a look at what’s happened locally amidst all this news.

Pending Sales in the Beaufort region decreased by 23.4 percent from last October to arrive at 59. Year-to-date, sales were actually up by 23.3 percent. New Listings decreased by 33.7 percent to land at 134 and the overall inventory of 1,744 increased by 17.5 percent.

Prices did lose some ground. Median Sales Price decreased by 8.5 percent, registering in at $177,000. Average Days on Market, at 215, increased by 16.3 percent versus last year. Negotiations moved toward buyers as Percent of Original List Price Received at Sale decreased by 4.0 percent to 83.7 percent.

Several months of private sector job growth weren’t sufficient to lower the stubbornly high 9.6 percent national unemployment rate. Our recovery is moving at a sloth’s pace, but at least it’s moving forward. A stronger labor market will drive new household formations and instill the confidence needed for current homeowners to move up and for renters to consider ownership.

Source:Beaufort County Association of Realtors (12/10/10)

 

November KCM 2010

Helping us all to avoiding short sale lawsuits

Original Article source: Massachusetts Real Estate Blog

There is no question that in this economic down turn we have experienced over the last five years or so that short sales and foreclosures have become part of out everyday Real Estate landscape.

Every week there are countless new short sale listings that hit the market.  In many of these short sales the seller, not understanding there is a big difference between a traditional Real Estate transaction and a short sale hires any ole Realtor® they happen to come across to represent them.

One the other side of the coin, there are also plenty of Real Estate agents that see the growing number of short sales coming available for sale and realize there is a lot of money to be made.

The problem however, is that many of these agents are flying by the seat of their pants and have done nothing to educate themselves on the ins and outs of closing a short sale.

As a Realtor® who has been successfully closing short sales for almost four years, this is one of my biggest pet peeves! How anyone can look a desperate seller in the face and take on a listing to sell their home with no short sale expertise is just beyond me. It pisses me off when I see a new short sale listing hit the market and know the agent has no track record with this type of transaction.

There are many Realtors® that are putting the noose around their own neck. In desperate times people do desperate things. The end result is that on many occasions consumers get very poor advice that can cost them dearly.

Realtors® that do not have short sale expertise could really do themselves a favor by referring the business out to an agent that is qualified to get the job done.

You may be wondering why this has become such a passion of mine? The answer is simple. Short sales have become stigmatized because there are numerous Real Estate agents and buyers that have been involved in deals where the listing agent did not know what they were doing. The end result for a number of different reasons is a sale that didn’t happen. This leaves a bad taste in everyone’s mouth. Going forward it makes it harder for the agents that do know what they are doing to find buyers for the short sales they are marketing.

Below I am going to touch on all the things you should look out for in trying to successfully complete a short sale whether you are in Massachusetts or another state.

Properly pricing a short sale

When you are short selling your home there is a good chance that you are not able to afford the monthly mortgage payments any longer. You may be just scraping by and know that next month you won’t have enough to pay your lender. When you decide to short sell your home and are no longer paying your mortgage pricing the home properly becomes critical.

The last thing you want to do is either over price or under price the home. For obvious reasons if you over price you will more than likely not be able to procure a buyer in a timely fashion.

If you under price the home and receive a contract from a buyer, the lender is going to reject the short sale after reviewing the appraisal or broker price opinion that they order.

Both of these scenarios can leave you with nothing and that much closer to a foreclosure. A short sale should be aggressively priced such that you will find a buyer in a timely fashion but not so low the lender is going to reject the short sale contract.

The short sale contract

There are numerous Realtors® that are clue less when it comes to giving sellers advice on the short sale Real Estate contract. Lets get one thing straight right off the bat….. When a seller signs a Real Estate contract it is almost always legal and binding as to the terms and conditions in the agreement.

Here are 4 short sale contract issues you need to be aware of:

• Realtors® submitting multiple unsigned offers to your lender
• Realtors® submitting low ball offers to the lender
• Realtors® allowing home inspection contingencies after short sale approval.
• Realtors® allowing an investor to negotiate the short sale

1.    When a Realtor® submits an unsigned offer to your lender YOU do not have a legal and binding contract. The buyer can walk at any point in time with no consequences to them! Does this benefit a seller in anyway? The answer is NO NO NO!  The Realtor® you hire should be looking to lock up the most qualified  buyer who stands the greatest chance of getting to the closing table.

2.    If you sign a low ball offer you stand an equally strong chance that the lender is going to reject your offer and send it back. If you accept an offer that is no where near the market value do you really expect the buyer is going to agree to the price the lender wants? Not likely and again you will be back at square one after being off the market for an extended period of time.

3.    Allowing home inspections after the short sale approval is another big mistake. Do you really want to have your home off the market for months, get a short sale approval from your lender and then find out the buyer wants to back out due to inspection items? Don’t let the blind lead the blind. There is no reason for letting a buyer have home inspections after short sale approval. I find most buyer’s agents think they are protecting their client by trying to save them from spending a few hundred dollars. WRONG – what the buyer’s agent is preventing is the buyer from negotiating a pricing discount if there were issues discovered. Lenders DO NOT negotiate home inspections issues after short sale approval.

4.    Letting a buyer negotiate for a seller is clearly foolish. The investor only cares about the seller if they get the terms THEY want.  An agent who lets an investor take over a short sale transaction is asking for a lawsuit. Realtors should not let investors negotiate a short sale!

Short sale negotiations

This is clearly an area where you will see most of the lawsuit’s against Realtors®. There are agents who are engaging lenders in the negotiations of short sale approval but don’t have the knowledge and understanding of either short sale debt release and/or short sale tax ramifications.

Who do you think will get sued if a seller receives a 1099-C or 1099-A at the end of the year or gets stuck with a deficiency judgment by their lender(s) at some later date in the future and they were not informed up front about it?

There are many Realtors® who have negotiated short sales that misrepresented to their client that the short sale approval letter removed the short sale deficiency when in fact it did not.

Realtors® are supposed to abide by the Real Estate Code of Ethics but clearly there are many who’s judgment is clouded by the almighty dollar.

The Code of Ethics clearly states:

Article 11  Realtors® are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client.

Article 13  Realtors® do not engage in the unauthorized practice of law.

Speaking of giving legal advice, there are Realtors® who are guilty of telling their client to stop paying the mortgage to complete a short sale. While this may be the proper advice in 9o-95% of most circumstances with short sales what if the sale falls into the 5-10% where stopping payment was not necessary?

Most major lenders may require payment stoppage but some of the smaller lenders do not have that guideline. Telling a seller to stop paying the mortgage could have serious consequences on their credit that could have been avoided. Again Realtors® should not be giving this kind of advice. It should come from a lawyer.

The take home message here is to make sure you do your home work when hiring a Realtor to represent you in your short sale!

Fripp Island Real Estate Market 10-02-10

The Fripp Island Real Estate Market.  Where are we?

My recent newsletter/blog gives some sales stats for Fripp Island and other surrounding similar markets. http://lowcountryrealestate.wordpress.com/2010/09/29/33/

I believe that Fripp Islands real state market is probably at the same point in the market where we were a year ago and with little change in market appreciation to be seen over the next 12 months.  Having said that, I don’t want you to think it’s all gloom and doom.  As you know with most stats the numbers can be made to reflect what ever opinion one favors.  In this market you need to look closely at the total level of sales in dollars as they have remained relatively unchanged while all of the other intragale parts of the puzzle have changed.  We have seen nearly the same total in sales dollars as last year while experiencing a fairly sharp downturn in pricing ( this is due to continued pressure from an ever increasing supply of properties).  This market dynamic has produced  an increase in the total number ot units sold… slightly up over this time last year… at least on Fripp and the area of Beaufort.   There are a few investors out there that see this as a market bottom and they are beginning to take action.  These investors are in the driver’s seat and they know it.  They are demanding more concessions from Sellers than ever before and their getting them.

On top of this we also need to deal with our national problem of a  very large  and growing shadow market* ( see my definition below) lurking out there.  I fear that the banks reluctancy to deal with their REO’s in a judicious and efficient way will only prolong the continued growing market supply of properties for sale. We currently have a 22 months supply in the local market and a 12- 18 month supply nationally (these numbers vary depending on who you listen to)  Again, please do not think I am a “Gloomy Gus”  after all,  all real estate is local… and I believe the coastal  areas will see positive change before the rest of the nation will.  We are already seeing this in the Myrtle Beach area and the Charleston area.  Keep your hopes up that this trend of the investor stepping back into picture will begin to build in momentum and by the spring of 2011 we will see the light at the end of the tunnel before the rest of the market segments and by this time next year we will begin to see a glimpse of appreciation.

Please feel free to share your thoughts on this topic in my comments.  I have supplied a few graphics below to help.

*Shadow Market

“unseen” or “unofficial” properties that lay on the outskirts of the currently listed properties or properties that are publicly for sale. I use the term “Shadow Market” to describe number of homes, villas and homesites out there that fall into one or more of the following categories:

1. Not listed for sale however the property may currently be in the process of going into foreclosure and and the bank or secured lender plans to put it on the market as soon as the process is complete.

2. The home that is an REO or already owned by the bank and just has not made it to the formal public market as of yet
3. The existing homeowner that plans to put their home on the market as soon as he or shee sees the slightest improvement in market conditions.

South Carolina among lowest tax rates in the nation

States With Highest, Lowest Property Taxes

Using U.S. Census data, the nonprofit Tax Foundation has uncovered where the highest property taxes in the country are paid relative to the median value of the homes. Some of the locales may surprise you.

New Jersey came in first — no surprise there — but New Hampshire, which has no state income tax and prides itself on that, had the next-highest real estate taxes as a percentage of home values.

Louisiana had the lowest median taxes compared to property values, another ho-hum finding. But the second-lowest taxes compared to values are in pricey Hawaii.

The national median for real estate taxes is 1.04 percent of a property’s value. Here’s the list of the top 10 states with the highest median real estate taxes as a percentage of median home value as well as the ranking of states with the lowest:

States with the highest taxes:

1. New Jersey (1.89 percent of property value)

2. New Hampshire (1.86 percent)

3. Texas (1.81 percent)

4. (tie) Wisconsin (1.76 percent)

4. (tie) Nebraska (1.76 percent)

6. Illinois (1.73 percent)

7. Connecticut (1.63 percent)

8. Michigan (1.62 percent)

9. Vermont (1.59 percent)

10. North Dakota (1.42 percent)

States with the lowest taxes:

1. Louisiana (0.18 percent)

2. Hawaii (0.26 percent)

3. Alabama (0.33 percent)

4. Delaware (0.43 percent)

5. West Virginia (0.49 percent)

6. South Carolina (0.50 percent)

7. (tie) Arkansas (0.52 percent)

7. (tie) Mississippi (0.52 percent)

9. New Mexico (0.55 percent)

10. Wyoming (0.58 percent)

So if you have been considering moving to Beaufort, SC , Fripp Island, SC,  Coosaw Point,SC, or one of our other Sea ISland Communities now is a good time to begin your search.

Source: 2009 U.S. Census Data and Tax Foundation calculations

Fripp Island Turns 50

The “Fripp Turns 50″ anniversary celebration is from 1 to 6 p.m. Oct. 10 at the Fairidge House on Fripp Island. The house is the original home of the Krell family, who, along with the Kilgore family, were the first developers of the Fripp Island Resort. Both the Krell and Kilgore families will serve as honorees, along with other special guests including celebrated authors and Fripp Island residents Pat Conroy and Cassandra King, Carl Smith, Pierre McGowan and former Fairidge owners Sally and Anton Campanella. Tickets are $25 each, with money raised benefitting the Fripp/Harbour Habitat for Humanity project. Reservations are required by Friday and attendance is limited to 300 guests.

Details: 843-838-3004, frippturns50@islandrealty.info

Read more: http://www.islandpacket.com/2010/09/29/1388198/fripp-turns-50-celebrates-founders.html#ixzz111k0JYpK

Sea Islands of Beaufort Market Update 09-29-10

Real Estate Market Update
This is a question I get every day and almost every day I find myself giving a slightly different answer.   Your outlook on the housing market depends on how you interpret the signs.  Federal Reserve Chairman Ben Bernanke’s “unusually uncertain” economic outlook underpins the need for job growth before housing demand recovers across the nation.  However, let’s focus on the local story before trying to fix the national malaise.  Pending Sales in the Beaufort region decreased by 10.5 percent from last August to arrive at 68.   We have seen this number New Listings increased by 13.9 percent since last August and the overall inventory of 1,782 increased by 34.9 percent.  Median Sales Price increased by 0.6 percent compared to last August, registering in at $212,250. Average Days on Market, at 213, increased by 36.4 percent versus last year.  Months Supply of Inventory increased by 8.7 percent to weigh in at 22.0 months. In the coming months, keep an eye on Active Listings and Months Supply.  Slowed sales may increase inventory, depending on listing activity.  Keeping your focus on the task at hand “When is the best time to buy a Home?” you would be forced to consider the following :

Top 10 reasons to buy a home today:

1. You can get a good deal.
2. Mortgages are cheap ( All time low).
3. You can save on taxes.
4. It will be yours.
5. You’ll get a better home.
6. It offers some inflation protection.
7. It’s risk capital.
8. It’s forced savings.
9. There is a lot to choose from.
10. Sooner or later, the market will clear.

A closer look at our local communities.

Coosaw Point

Stats for all Available Coosaw Point Homes.

Dataw Island

Stats for all Available Dataw Island Homes.

Fripp Island

Stats for all Available Fripp Island Homes.

Habersham

Stats for all Available Fripp Island Homes.

Harbor  Island

Stats for all Available Harbor Island Homes.

Todd McDaniel and Christian Sherbert
Specializing in: Fripp Island, SC,  Coosaw Point, Harbor Island, SC Dataw, SC and all of the many Beaufort Communities of the South Carolina Sea Islands
Prime South Carolina Properties
“The Sea Island’s best source for Real Estate sales and service”
Todd’s cell  843-263-1906    Christian’s  843-575-5667