As Fisbo, our highly spoiled six pound poodle, and I took our early morning walk a few days ago, I used the time to contemplate how our real estate business has evolved during 2011 and thought about what’s ahead as we kick off 2012.
Our walk was made rather intriguing because the neighborhood was shrouded in fog, limiting visibility sometimes to only a few hundred feet.
You can’t see very far ahead, and as you keep moving, what’s behind you grows increasingly vague.
Predicting home sale trends in Birmingham and Shelby County can be a little like walking into the fog: You can see a certain distance in front of you, but after that, knowing what’s ahead gets tricky.
That’s not to say we’re in a fog about what will happen, market-wise, during 2012. In fact, Colleen and I are optimistic that a lot of people will be buying and selling homes during ’12.
We think it’s going to be a busy and successful year.
Our optimism about ’12 is due in part to 2011, a year that was not only productive for us, but outperformed previous years.
For a lot of people in the Birmingham area, 2011 was a very difficult year, with the April 27th tornado affecting so many thousands of people and Jefferson County declaring the largest municipal bankruptcy in history.
I believe the new year will be one of healing and stories of success.
If You’re Buying:
2012 will be a year of excellent opportunity.
You might have to spend a little more time picking and choosing than during previous years, because inventory in some areas has dropped. This doesn’t mean the good deals are gone. It just means you’ll have to do a little more work to find them. An Agent with a good knowledge of the market as well as sharp negotiating skills will be one of your most valuable assets during this time.
Pricing will continue to be very much in your favor, but if you’re in search of a “steal,” you stand a greater chance of a Seller saying, “no deal.” If inventory continues to drop, Sellers have less competition, and therefore less reason for agreeing to a “fire sale” Offer.
The Buyer who understands and accepts this still stands to get a very good deal.
With no sharp rise in mortgage interest rates on the horizon, ’12 is shaping up to be another year of tremendously low borrowing costs.
If You’re Selling:
You will be in a better position to get your home sold than in some previous years. Home values will continue to be a big challenge, but the news isn’t all bad. With the number of homes for sale dropping in some areas, what has been very much a Buyer’s Market shows signs of changing. That’s a good thing, but the change is going to be gradual.
During ’11, we saw many homes sell for the same price they sold for ten years earlier. This was great for the Buyer, but not for the Seller. Seeing both Buyer and Seller bring checks to the closing table was not uncommon last year.
If you plan to sell during ’12, understanding one “fact of life” about the Birmingham and Shelby Co. real estate market will help: The maximum a Buyer thinks your home is worth may wind up being significantly less than you had anticipated.
We do feel optimistic that the slide in values is beginning to ease. This easing, however, is likely to be so slow and so slight that many people selling in 2012 may not feel it’s very noticeable. It’s important to remember, though, that the slide in home values didn’t happen in a few weeks or months, but rather, took years. Any correction won’t happen fast, either.
And then there’s the matter of your home’s condition. Do you want your home to appeal to a majority of possible Buyers or only a few? In the Birmingham and Shelby Co. area, the overwhelming majority of Buyers we work with want homes that are immaculate, need nothing done, and are “move-in” ready. We do get calls from Buyers looking for places to fix up, but they expect to pay “bottom dollar” for the work they know they’ll have to do.
Price wise, this home was nowhere near our biggest sale. But it’s not about the money.
The Seller had tried to sell five times before, starting three years ago, and not had success.
This was a sizable home in extremely nice, clean condition. But the sales price had never been in alignment with what was taking place in the Shelby Co. market, and we didn’t feel that the property had been marketed correctly.
Lowering the price was not easy for the Seller to do. But we worked hard in marketing the property, and our Seller worked hard, too, cooperating closely with us as we moved toward our common goal.
That team work finally paid off with a successful closing.
It pays to be a student of the market. Many of the sales Colleen and I helped with here in the Birmingham area offer lessons to the wise if you’re thinking of selling during ’12.
A 2011 Low Point:
We had many successful sales last year. But one home we listed in No. Shelby Co. was not destined to be one of them. It stayed on market for five months and never received an Offer. The home was not priced correctly, drew very little interest, and had significant structural issues cited by many of the few Buyers who actually looked inside.
During one phone call, the Seller (who had moved out but was still making monthly payments) says, “I really need to sell this house.” Only seconds later—during the same conversation, as we discuss pricing—he says, “I’m not giving my house away.”
The Seller’s viewpoint could be summed up in five words: Take it or leave it.
Buyers gave their answer.
The experiences from both our High Point and Low Point provide clear support for a prediction we’ll make for the year, though it’s not the boldest call I could make: 2012 will show that price and condition have never been more important in getting your home sold.
Changes To The Dictionary:
As we kick off ’12, I’m also deciding that it’s time to change the definition of some of the terms real estate Agents use (hmmm … am I allowed to do that?).
Agents have long referred to motivated and unmotivated Sellers. These categories don’t exist any longer. A Seller who is determined to do what it takes to get their home sold is, by definition, motivated. They will adjust their price as needed and will make sure their home is immaculate (as so many folks we worked with did last year). These are the people who, in all likelihood, will get to sit at a closing table.
The unmotivated Seller is typically unwilling to price attractively enough to receive an Offer. They also choose not to deal with with the moldy smell in the basement or the rotted wood that needs to be replaced. This person is not a Seller. They are a home owner. If they do happen to receive an Offer, it is likely to be for an extremely low price.
This year will be another time of great opportunity in real estate. If you’re giving thought to buying or selling a home, you no doubt have questions. Whether you’re a veteran or just starting out, Colleen and I hope you will feel welcome to contact us for assistance.
Feel free to call us at 205.356.5412 or 205.677.8686. Or e-mail us at: firstname.lastname@example.org
And we’re on Facebook, if you’d like to join us.
As for walking through the fog, I look forward to it. What might be ahead may not always be known, but if you’re determined to keep moving, the scene gets clearer as you forge onward.
Our optimism and positive thinking have us excited … we know there are lots of opportunities ahead.
We look forward to being part of your 2012 success story…