Our Market as of April 5, 2009

Here is a quick and rough data:

We currently have 226 single family homes priced between $50,000 to $250,000 under contract in Columbia school district in MLS.

Of these 226, 66 were on market less than 30 days.

The longest on market day is over 700 days.

Why some sold in 1 day, while others take 700 days?

In my experience, first factor is price. No matter the age and location of the house, if it is over priced, it will be on the market for a while. How long it will sit depending on how much it is over priced.

Sellers who bought a home around 05-06 have a hard time to price it according to current market. Yet the reality is pricing it right, pricing it competitively will save seller much headache and money later. Having a home for sale for over a year or 2 years cannot be beneficial to anyone esp. the buyer -- often the over priced home end up selling for less than market because the buyer tend to negotiate more aggressively, knowing that it's a stale listing.

Needless to say, other than price, how well the home shows is important. Painting is an inexpensive way to spruce up a home quickly. I have heard many seller say, 'we don't know what color the buyer would like, buyers would like to paint it to their own color choice anyway.'

However, the living room and kitchen often give the first impression, and if seller is serious about selling, they should paint at least the living room and kitchen to a neutral color, but not white. I cannot count how often a buyer would say 'boy that house look sterile.' A house with nothing but white paint make people think of hospitals.

A few hundred dollar in paint and labor can bring a couple of more thousand in sales price, because new and neutral paint would make a home look new and well cared for.

If a seller does not know what color to choose, one easy way is to go view some new construction homes, and copy one of them.

Being a landlord

We finally closed on our 4-plex. Previous owner owed taxes plus mortgage, and etc. We finally agreed on a price that they and we both had to pay more to get the deal done.

As it happened, the day we closed, I had a friend who had a friend needed a place to live for 1-2 months. So we rented to them. 3 of the 4 units were already rented, although March rent has not been paid. Previous owner was a long distance owner, he did not take care of his tenants well, and the tenants did not pay rent on time. Such was a vicious cycle.

Hopefully, as we have become the owner, and hired a good manager, he would start reinforcing the rent payment, and taking care of the tenants better. 3 old tenants all have a list of repairs that previous owner did not attend to.

Since I was the one rented out the last unit last week, I dealt with the tenant. It's not a tough job, but can be tedious. Most of the jobs are cleaning jobs, and thankfully, they got done within the week.

I can see now that it is really worth it to hire someone to manage the rental property. With a family to take care of, and having another job, trying to take care of these rentals ourselves would be very time consuming.

We pay our manager 7% of our gross rent. He is responsible to collect rent, get tenants if one unit becomes vacant. The repair and cleaning is extra, for which we pay him $20/hour. If the job is more than he can handle, he would discuss with us.

There is no free lunch. Although our gross rent return looks very good, this investment is not without risk, nor is it a piece of cake.

Remodel Cost vs Value

A very useful website:

http://www.remodeling.hw.net/costvsvalue/index.html

24 pendings over the weekend

This past weekend we had 24 properties under contract in Columbia MLS system. One of Paul' buyer is one of them. Paul also has a condo under contract verbally, which is not included in the 24 count.

One thing worth to note is that 3 of the 24 are in the $300k price range. So the outlook for the higher price home in the Columbia MO market is looking good this year.

Foreclosure rate in Boone County

From Columbia Business Times:

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Local foreclosures on record pace; However, numbers still small proportion of property total

by Jacob Barker

November 28,2008

Tom Schauwecker, Boone County’s assessor since 1989, and Greg Harmon, a veteran real estate agent, are both authorities on the subject of foreclosures. Both say they’ve never experienced anything like the current market, which is forcing a record number of people to lose homes and land.

For Tom Schauwecker and his staff, the downturn is giving them some down time for the first time in years. For Harmon the slowdown has swamped his Web site, which tracks and lists foreclosures in Boone County.

Schauwecker said for the past 19 years, “we’ve been so busy appraising and photographing new construction, that the decline in building permits has allowed us to step back and do a little analysis.”
Tom Schauwecker

Tom Schauwecker
Greg Harmon

Greg Harmon

His staff was able to compile a detailed list of property foreclosures in Boone County-expected to reach 300 this year-and develop a map showing their location. There’s been a lot of inquiry on the subject, he said, primarily from the media.

Rob Wolverton, president of R. Anthony Development, cautions that the local foreclosure rate should be put in perspective: it’s high for Boone County, but low relative to total property and to the national rates.

“For those 300 people, this is a catastrophe,” Wolverton said. “But there are more than 40,000 housing units in Boone County. It’s an issue, but it’s less than 1 percent of the market.”

An estimate from the Secretary of State’s office at the beginning of October put the total number of foreclosed homes in Missouri at 27,000. Nationally, for all FDIC insured institutions, the ratio of non-current loans and leases to total loans and leases in the second quarter more than doubled, to 2.04 percent.

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To read more:

http://www.columbiabusinesstimes.com/2825/2008/11/28/local-foreclosures-on-record-pace-however-numbers-still-small-proportion-of-property-total/

I am on someone else's blog

http://decoratornextdoor.blogspot.com/

Tuesday, March 3, 2009
This Might Be The Year
An interview with Ling Bunch, Realtor
House of Brokers

Another busy week

In the CBOR MLS, 17 homes went under contract over the weekend.

I had a closing on Friday, Feb 27th. It was a relaxing weekend for me, I did not work much at all, other than surfing the internet.

Buyers are like tulips, they pop up out of no where when Spring comes around.