Recent Sales Folow-Up

I thought I would follow-up from my previous entry. The end result for sales in McCracken County for the month of July ended up being 55 homes. After my previous blog entry there were several more sales made or entered into the MLS. So July was actually slightly higher than June.

Recent Sales

I haven't done a blog entry in a while so I thought I would do one on recent sales. Many people have commented about how slow the market is right now. Yes, sales have slowed a bit but people are always selling and buying. Some people are afraid to get their feet wet right now because of what they see or hear in the news.

I checked some statistics for single family homes in McCracken County this morning. The statistics show a slowdown as well. A significant point to remember is that sales earlier this year were high due to the tax credit. Many buyers and sellers were taking advantage of the 10% tax credit on resale homes. During the months from March to June the number of homes sold in McCracken County varied from 47 homes in March to as high as 69 homes in May. May was the month that most homes would have closed and taken advantage of the tax credit. Sales in April were 67 and June was down to 49 homes. So we had 47 in May, 67 in April, 69 in May and 49 in June. As you can see the number of sales increased and then came back down after the tax credit expired.

The month of July is nearly over. So far the number of sold McCracken County, single family homes has numbered just 32. There are 4 others that are pending but scheduled for July. Of further significance, the number of expired listings during the months mentioned varied from 10% to 15%. The number of expired listings in July has been 30%.

Here is a little extra info if you are interested. The average price of sold houses in McCracken County from the months March to June was as low as $118,000 in March to $176,000 in June. Again, this was the average sold price. The average unsold price for homes that did not sell varied from $153,000 in June to $205,000 in May. Notice how the average unsold price in June is less than the average sold price in June. Sometimes the statistics can be misleading. Everyone needs to remember that these are statistics and sometimes statistics can be quoted in different ways. However, the number of homes that sold during these months by an agent are fact.

Web Site Changes

My web site's homepage has undergone a few changes. I have had several regular visitors request that I add new listings for the other types of properties that are available. The properties displayed on the homepage are properties that have been listed in the last 48 hours.

In addition to the new listings I also went to the riverfront and took photos of several murals. The mural across the top shows the riverfront from many years ago as riverboats travelled passed the Paducah riverfront. The other photo of the mural changes each time you visit my website. There are a total of 11 mural photos you may see.

2010 Homes Sales Statistics

I've seen and heard from other agents that homes under $100,000 are selling very well because of the $8,000 tax credit. I checked the MLS for some statistics to see if this is correct. Here's what I found.

There have been a total of 332 homes to sell since January 1, 2010

• 185 homes under $100,000 have sold (56%)
• 73 homes between $100,000 and $150,000 have sold (22%)
• 34 homes between $150,000 and $200,000 have sold (10%)
• 38 homes over $200,000 have sold (11%)

Pending Home Sales Climbing

The number of Pending home sales in our Western Kentucky MLS is finally starting to increase. The number of Pendings had been holding steady around 70 for a couple of months but with the deadline for the home buyer tax credit nearing home sales are increasing.

January McCracken County Courthouse Auction

The McCracken County Master Commissioner's sale includes many foreclosures. In the current list to be auctioned on February 22 are the following properties. As the commissioner usually states before the auction some of these properties may not go to auction. Many of these properties are available as short sales before the foreclosure auction.

These properties cannot be accessed so buyers take risks with purchasing one of these properties. Generally, the lender that foreclosed on the property buys the property back at the courthouse auction. This step is a formailty. After the lender takes control of the property the lender does several things to prepare the property for sale: 1) The lender must determine the property's current market value so an appraisal or BPO is ordered, 2) a cleanup crew will remove all remaining personal items from the home, 3) another crew will make repairs to ensure the property isn't damaged by weather and that the property is safe for potential buyers to tour the property. In the case of HUD homes there will often be property condition reports. After most of this is complete a real estate agent will place the property on the market.

Property for Rent

January McCracken County Courthouse Auction

The McCracken County Master Commissioner's sale includes many foreclosures. In the current list to be auctioned on January 25 are the following properties. As the commissioner usually states before the auction some of these properties may not go to auction.

These properties cannot be accessed so buyers take risks with purchasing one of these properties. Generally, the lender that foreclosed on the property buys the property back at the courthouse auction. This step is a formailty. After the lender takes control of the property the lender does several things to prepare the property for sale: 1) The lender must determine the property's current market value so an appraisal or BPO is ordered, 2) a cleanup crew will remove all remaining personal items from the home, 3) another crew will make repairs to ensure the property isn't damaged by weather and that the property is safe for potential buyers to tour the property. In the case of HUD homes there will often be property condition reports. After most of this is complete a real estate agent will place the property on the market.

Residential Sales Year to Date

This past year has had a lot going on in the residential real estate market. The beginning of the year doesn't quite resemble the present state of real estate. In regards to foreclosures, the number is still rising and the values of those homes are increasing as well. Aside from the foreclosures some home values are down slightly.

The number of homes that sell during the winter months are less than during the warmer months. Cold weather doesn't make for a good time to move unless it's absolutely necessary. We are now entering the period when homes sales will slow again.

Over the year homes that did sell sold for an average of 91% - 94% of the asking price. This means if the average sale price of a home with an asking price of $100,000 likely sold for around $91,000 - $94,000 in price.

Average sales prices ranged from $101,045 to $139,109 across all the counties in our Western Kentucky MLS. The number of days on market ranged from 138 days to 167 days. Another intesting statistic was that of all the homes that have been for sale, only 21% to 46% sold.

Of particular interest are very low interest rates and government programs designed to encourage home buying. Some lenders have interest rates as low as 4.3%. I always tell home buyers to shop around when deciding who to obtain a mortgage from. Why? Interest rates are a very important factor but closing costs can be significant as well. Some lenders will charge you a hefty fee just to provide you a loan. Of the government programs are the $8,000 New Home Buyer and $6,500 existing homeowner program. The state of Kentucky also has a program for anyone purchasing a brand new home.

Commercial Real Estate

I've noticed a lot of commercial real estate going to auction recently. The economy has put a real damper on commercial property transactions. Owners who haven't been able to sell their buildings in an adequate amount of time either find alternate uses for them, continue trying to sell or auction.

An example of an upcoming commercial auction is the Turner Publishing building on Broadway. This auction includes two downtown buildings near each other. They have been on the market since Jan 2008. It was originally listed for $310,000. Since then the price has been dropped in large increments. The current price is $189,000. Don't forget, this is for two buildings. One is suited for a retail business or office space and the other is more suited for storage. With these buildings being in downtown Paducah and there always being a lack of parking even an auction may not bring much.

Kentucky Home Buyer Tax Credit

Besides the $8,000 first time home buyer tax credit, the state of Kentucky also has a tax credit for purchasers of new homes. The purchase has several stipulations but has the advantage of working for previous home owners whereas the $8,000 tax credit won't.

More information is available on this state web site.

Upcoming Courthouse Auction

The McCracken County Master Commissioner's sale includes many foreclosures. In the current list to be auctioned on August 25 are the following properties. As the commissioner usually states before the auction some of these properties may not go to auction:

Fair Housing

As a Realtor, I am required to complete 3 hours of continuing education in real estate law and another 3 hours in general real estate knowledge. For this year's law course I chose to complete an online course in Fair Housing. The course has been very interesting and a bit scary with some of the examples provided.

A section of the course is about cultural diversity. The section pointed out differences from our local culture that I found were quite interesting. A few of these culture differences are noted below:

• In the US we say "time is money" and expect meetings to take place on time. The Japanese, however, find it acceptable to be 15 to 30 minutes late. Germans and Aussies however find one minute late as being rude.
• Most houses are built with the front door facing the street. Some Asian cultures require the front door to face a specific direction. Some middle eastern cultures will only live in a single story home.
• Most everyone has heard of fung shui. This is an ancient Chinese philosophy that intends to improve the flow of energy in a person's environment. This means better flow energy in the person. A fundamental teaching of fung shui teaches that bad luck travels in straight lines that are called "secret arrows". Good luck, however, travels in curved paths. Fung shui believers prefer curved or spiral staircases. Stairways facing the front door are considered bad, as bad luck can enter and good luck can leave. The stove and the sink must not be opposite each other because fire and water do not mix.
• Many Americans are superstitious of the number 13. Many tall buildings skip the 13th floor. Many Asian cultures consider the number eight lucky and the number four unlucky. The word for the number eight sounds like "rich" or "luck" and the word for the number four sounds like "death". Koreans associate the numbers three and seven for the same reasons.
• A death in a home would be a significant factor for someone from Asia because they would not want to risk inheriting the previous owner's bad luck.

Tax Credit Changes Denied!

I was informed today that the FHA has officially determined that banks cannot offer bridge loans against the new home buyer tax credit as mentioned in the previous blog post. Apparently, a law was found that prevents banks from providing loans for the 3.5% down payment as required by FHA loans. The FHA rules require that the buyer must provide the down payment. A loan from a bank to cover the down payment is not allowed.

Further details of the ruling can be found here.

Possible Changes to Tax Credit

I received an email today from a local lender. The email was forwarding an article from CNN. The article referred to possible changes to the $8,000 first time homebuyer tax credit. NAR pointed out that many first time homebuyers have difficulty making the 4% down payment required as part of an FHA loan. Right now, new home buyers would receive up to an $8,000 tax credit on their next tax return. This means buy a home now, get free money later. However, buyers without the 4% down payment can't purchase a home.

This potential change proposed by HUD would allow these qualified first time home buyers, who are also FHA approved, to use the tax credit immediately for the 4% down payment. This would spur much more home buying.

If you have been searching for a home and qualify as a first time homebuyer, call me so I can assist you in getting pre-qualified with a lender. After the lender has pre-approved you we can tour homes that fit your needs and budget. My number is 270-994-3749

Number of Home Sales Still Rising

The number of pending sales in the Western Kentucky MLS are slowly rising. I checked this statistic in the MLS this morning and it was up to 87 properties. Some of these properties are homes, some are commercial, lots or farms. Some may even be multifamily homes like duplexes and such.

Interest rates have been fluctuating slightly but rates are still great. Rates WILL eventually go up. Don't get left behind or regretting you had purchased when rates were low. Also, don't forget about the government's first time homebuyer program that could get you up to an $8,000 tax credit on your tax return.

If you are considering purchasing a property call or email me so we can talk about the home buying process or what you need. Finding a home can often take weeks or months to find a home that fits your needs and wants. I often find many home buyers aren't familiar with the process. If we can sit down for a bit I can explain the process and answer any questions you may have. And remember, as a buyer my services are paid by the seller so you won't owe me anything. :-)

My cell phone number is 270-994-3749

Pending Homes Sales

Ever notice in the news about a statistic called "Pending home sales"?

What is a "pending home sale"? A "pending home sale" is a home where the buyer and seller have agreed on a sale. This is the official status of a home after a buyer has agreed to buy the home and before the home has closed. This is usually a period of about 30 days. During this time the buyer generally has the home inspected and is ensuring there aren't any problems with a home loan.

Where is this statistic recorded? This is a statistic found in the Multiple Listing Services around the country. As of this morning there are 76 properties (residential, commercial, land, multifamily, farms) with a Pending status in our Western kentucky Regional MLS. This is the most I've seen in a Pending status in many months.

Why is this important? The data obtained from the pending home sales is used by the National Association of Realtors to calculate the Pending Homes Sales Index (PHSI). This official leading indicator indicates the number of homes sales expected in the next 30 or 60 days. Generally, 80% of Pending homes close within 60 days. Not all homes do close but a good percentage do.

Next time you hear this statistic in the news, generally around the first week of each month, pay attention to if the count has increased or decreased from last month. This tells you what buyers are doing.

Resale Homes

What is a "resale home"? Basically, it's a used home. On the flip side you've got a brand new home that no one has ever lived in.

A common mistake made by most buyers touring homes is the failure to overlook certain particulars of the home. When touring a resale home potential buyers should try to overlook the furniture, the colors of the walls and, when possible, the flooring. Many buyers will often repaint the walls or change the flooring. If the home has wood flooring, some buyers will put carpet over the wood. Our MLS even has a spot for just this type of flooring (carpet over wood) because it's so common.

Buyers that critique wall colors, furniture and such can't find a home they're happy with. By overlooking these small details and seeing the potential in the home you can include your plans into purchase negotiations. For example, if you like a home but don't like the color of a room or rooms, include special requests in your purchase offer. Request the sellers repaint the wall to a color of your choice or put down different flooring. You can even purchase the paint and take it to them. Your Realtor will likely ensure the purchase contract is written so that the paint job must be approved after completion and that the buyers don't backout after the rooms have been painted. If the sellers won't make these type of changes lower your offer price and take on these changes for yourself.

This also applies to countertops, light fixtures, window coverings and wallpaper.

Surge in Mortgage Applications

Mortgage applications have been surging for the past several weeks. A few of the local mortgage officers I speak with have described how they are covered up with current home owners refinancing into lower rates and wanna be home owners trying to take advantage of low interest rates and a plethora of homes to choose from.

Three mortgage officers I know of send out weekly emails to real estate agents with notices of their rates. Last week saw a big dip in rates to well below 5%. Those rates didn't last long but are still very attractive.

If you are considering purchasing a home in the near future the most important first step for you to take is to meet with a mortgage officer of your choosing and get pre-qualified for a loan. Many of us agents will ask you right off the bat if you are pre-qualified. Some agents will ask you go get pre-qualified before showing you a home. Some foreclosures on the market require a pre-qualification letter with your purchase offer to prove you are qualified for a loan before your offer to purchase will be considered.

Another advantage of getting pre-qualified? Your mortgage application adds to statistics which can help improve the appearance that the economy is recovering. :-)

Today's Master Commissioner Sale

The master commissioner's sale was held today at the McCracken County Courthouse. There were probably 50 people in attendance. Of the many properties I listed in a previous blog here are a few highlighted properties that were sold.

• 1415 Madison St, lot, appraised at $2,500. Sold for $1,700
  
• 1424 Little Avenue, lot, appraised at $5,000. Sold for $3,450
  
• 934-936 North 10th Street, appraised for $110,000. Sold for $73,500
  
• 2069 Irvin Cobb Drive, former bar or nightclub, appraised at $240,000. Sold for $200,000. This property was previously listed by a couple of in-town agents at a price between $650,000 to $775,000
  
• 1724 Monroe, house, appraised for $60,000. Sold for $40,001
  
• 1204 Park Avenue, house, appraised for $45,000. Sold for $34,000
  
• 250 Jennifer Lane, house, appraised for $240,000. Sold for $205,000
  
• 101 Sarah Cove, house, appraised for $68,000. Sold for $45,339
  
• 2865 Oaks Road, house, Appraised for $96,000. Sold for $109,100.

Many of today's foreclosures had private buyers bidding against the lenders that foreclosed on the properties. In one auction the bank actually lost the auction. I suspect the attorney that represented the lender was allowed to bid up to a certain amount. The winning bid was 1 cent higher than the banks max bid.

The appraised values were the values stated by the auctioneer.

One of the things I get a kick out of when I attend these auctions is how many of the attendees know each other. I myself knew several people there today. Like myself, several people were there taking notes and not participating.

I particularly like attending these classes because I get to meet new peers and talk with friends. One of the ways we meet new peers is by working in groups on brief group collaborations. We also exchange business cards so we can provide client referrals to some of the agents we meet (networking).

Of all the good conversation I had there was one thing in particular that was said that most, if not all, agents had noticed. Most agents have noticed a significant increase in business since January 1st. Some agents said their buyers were waiting until after the annauguration took place. I personally noticed an increase in business shortly before that event.

Court House Auctions January 26 at 1:30pm

Generally, any bank lender foreclosures that are held are purchased back by the lender. These autions are usually not purchased by auction visitors. There are properties to be auctioned from time to time that are unrelated to failed mortgages.

This January 26, 2009 there are several properties being auctioned. Most are lender foreclosures but there are several this month that are being auctioned to pay delinquent taxes, nuisance code liens or are the result of a dispute between parties. Habitat for Humanity has foreclosures this month as well. This month I have listed auctions that would likely be available to a private buyer or investor.

• 1415 Madison Street - Judgement to collect $10,531.78 due to nuisance code liens and delinquent taxes, interest, attorney fees and auction costs.
   
• 1424 Little Avenue - Judgement to collect $10,941.37 due to nuisance code liens and delinquent taxes, interest, attorney fees and auction costs.
   
• 934-936 North 10th Street & 2069 Irvin Cobb - Recover costs of $11,231.57 for delinquent taxes on both properties. Recover costs of $3,568.72 for citation liens on the North 10th Street property. 934 -936 North 10th Street is 2 tracts measuring 134' 6" x 48' x 134' 6" x 48'. Tract 2 is 134' 6" x 24' x 134' 6" x 24'. 2069 Irvin Cobb is 1.024 acres according to subdivision plat.
   
• 1724 Monroe Street - Recover costs of $64,276.42 to recover judgement plus attorney fees and costs of sale.
   
• 1204 Park Avenue - Recover costs of $41,161.30 plus contingent deferred interest and costs of the sale. This is a Habitat for Humanity foreclosure. Lot size is 50' x 165'
   
• 1316 Madison Street - Judgement to collect $13,439.98 due to nuisance code liens and delinquent taxes, interest, attorney fees and auction costs.
   
• 927 Finley Street - Recover costs of $18,634.45 plus contingent deferred interest and costs of the sale. This is a Habitat for Humanity foreclosure.

As noted in the information posted in the Paducah Sun notice, these homes are generally not available for inspection even if you intend to bid on a property.

I intend to attend this auction. If you have any interest in any of these auctions let me know what you have in mind. Maybe I can provide assistance.

I don't want to list your house...

Yes, if you aren't serious about selling your home I'll pass on listing it. When I try to sell a home for a client I invest a lot of time and money. If you unable or unwilling to maintain the home in a good, clean condition or not willing to negotiate a fair price then we are likely wasting your time and mine.

When I list a home I gather important information about the home for placement in the MLS. This single entry gets your home listed on many, many web sites. An example of a few commonly used web sites are Realtor.com, Zillow.com, Trulia.com and my own and most other realtor web sites.

In addition to the MLS, I typically place your home with a brief description in the Paducah & McCracken County edition of the Catalog of Homes. This catalog displays many homes for sale in McCracken county. The catalog is used by buyers, sellers and others just to pass the time. Placing your home in the Catalog each month is not free and does not guarantee any responses.

Furthermore, I place a Prudential Real Estate yard sign in your front yard so that passersby will know your home is for sale. The sign has the well known Prudential name and "The Rock" logo on it as well my name and phone number across the bottom. The yard sign indicates that your home is being sold by a professional and allows interested parties to call me for more information. If someone wants to see your home I will coordinate an appointment for them to see the home.

I also place your home on a few additional web sites I frequent. Some are free and some are not. I may place ads in local newspapers from time to time along with Open House notices if you permit me to host. The typical open house in the Paducah area is performed from 2-4pm on Sunday afternoon.

This process may go on for months.

So, if you are serious about selling your home, in the current market, I'll be happy to list your home, advertise it and show it. Otherwise, you might consider waiting until market conditions improve.

Vacated Church I Sold Turned Into Something Good For Society!

All the churches were priced really cheap. One of them was in good shape and was being sold by the former church members who had attended. Their families had attended this church for many years and were sad to have to sell it. They were being very particular to who they sold the church for. When my client and I were gathering info on the church and he was considering making an offer, without even seeing the church, we had another buyer who was making an offer as well. I learned that other buyer's offer was turned down because he wanted to sell the items in the church piece by piece. The persons responsible for selling the church turned that offer down pretty quickly.

The church had the pews and the pulpit still inside. If I remember correctly the sound system was still in place as well. The basement leaked a little. Some of the shingles were blown off the roof. The church members had buried steel rods on the church property to mark the property boundary from the cemetery next door. The parking lot had grown grass over a majority of the gravel.

During the closing my client, Ron Henry, asked us to pray with him and he showed us a video he had produced himself. This video took nearly an hour for all of us to watch. The person's present besides myself and Ron were the broker doing the closing and the representatives from the church. Ron made it clear to the former church members he had no intention of destroying the church. As a matter of fact I believe the agreement even stated that if Ron ever decided to get rid of the church that the former church member's would have the opportunity to buy it back at the same price.

I hadn't heard from Ron since the closing. My job was done. The church building was near the town of Clinton, KY, nearly an hour away from my home and work. That friend that referred Ron to me brought me a newspaper article that was written a few months ago. I was so impressed I wanted to share it with everyone else.

Read the article to see what Ron did with this church building! Here's to you Ron!

Buy a home, receive a $7,500 interest free loan from the Fed

Interest rates are another advantage to home buyers. Rates are about as low as they get. With today's interest rates you can save a ton of money over the length of a 15 or 30 year loan. A few years ago when I refinanced my home loan the length of my loan dropped from 30 years to 15 years. My payment stayed the same.

Another, lesser known advantage to buying a home now is a tax free loan available via the Housing and Economic Recovery Act of 2008. This loan is available to qualified home buyers when the 2008 or 2009 tax return is filed. To be qualified, a home buyer must not have owned a home in the past 3 years. The amount of credit is equal to 10% of the purchase price but no more than $7,500. If you purchase the home after Jan 1 2009 but before the deadline of July 1, 2009, you can still receive the credit by filing an amended 2008 tax return.

Remember, I said this is a LOAN? You receive the money via your taxes but it's equivalent to a interest free loan. After two years the money must be repaid via your tax return. If you claim the full $7,500, your tax return will pay back $500 each year over a 15 year period until the full amount has been returned.

Another key point... if you sell your home before the amount has been repaid at a profit you must pay off the loan with any profits. On the other hand, if you sell the home at a loss the loan is forgiven.

Another important detail I've read regarding pay back of the loan at tax time is you may need to adjust your federal tax wage withholding to ensure you cover the credit pay back.

More details are available on Realtor.org and at KAR.com

Thinner Catalog of Homes

This month's issue was noticeable thinner. I compared last month's issue and found that it does indeed contain fewer pages. The last issue had 115 pages. This issue has 102 pages.

I don't have a page in the Catalog this month myself. The homes I had listed have either sold or expired so I didn't place an order. The expired listings have sellers waiting for the market to rebound before they attempt to sell again.

While talking to my broker about listing incentives, we talked about how the current problem isn't getting people to list their homes, it's getting buyers for those homes. Although interest rates are going lower and lower, people are being very cautious during these tough economic times. The market hasn't come to a complete standstill. Not everyone halts their life during a recession. If mortgage rates go down to 4.5% we expect buyers to come out again.

Personally, I obtained my own home loan with a local mortgage officer using a VA loan. When I purchased the home in 2001 I got a rate of 7.5% and a 30 year term. I refinanced with another VA loan and the same mortgage officer back in 2003. My rate went down to 5% and a 15 year term. My payment went up a handful of dollars but it was WELL worth the savings.

My broker and I also spoke about how the local board of Realtors had nearly 20% of their agents not sell a single property in 2008 and they expected several agents to escrow their license in 2009.

Bargains

I went to another auction this past Saturday. Up for absolute auction was a 2,900 square foot home. The home was valued at around $300,000. It was a 2 story home, 4 bedroom with 3.5 baths. Most of the home was outdated but it was maintained well. The outside of the brick home was in very good condition. I believe they said it was built in the 70's by a reputable construction business - of which the son of the construction business had lived next door for a while.

The owner of the home had past away 3 years ago. The widow had built a new home and moved into that home with her daughter. The auctioneer asked for a moment of silence before the auction began in respect of the family. I don't know if they were present but I didn't hear him mention the family being there. All of the owner's belongings were about to be auctioned off as well.

Although the home was really nice and large with a good neighborhood the home didn't yield much. As with the previous auctions the auctioneer appeared disappointed or maybe even embarrassed that the home was getting so little response. I think there were 3 bidders that bid but near the end one had dropped out. A young family ended up with the house at $145,000 - not including the 10% buyers fee tacked on by the auctioneer.

Like I said, I don't know about previous years but the auctions I've seen in my area recently have been good for the buyers but not so good for sellers unless they only want to get rid of the property quick.