Older homes vs. Newer Homes

When looking for a home to purchase, most people are faced with the choice of purchasing an older home or a recently built or a brand new home. Both options have their pros and cons, so when faced with the decision of whether to buy an older or newer home, you must really know your housing needs.

I personally am a fan of older homes. Often older homes in older neighborhoods have more character and charm as opposed new homes in newer neighborhoods. Older homes located in older neighborhoods usually have larger yards, more trees and seem much less cookie cutter than the newly built neighborhoods. Also, older neighborhoods located in the hearts of cities usually maintain their value very well and are more likely to appreciate in value compared to newly built homes and neighborhoods built in outlying parts of cities. This is especially true now days. Today there is a trend for people to move closer into the city. This trend to move inward is in large due to the rising cost of fuel. Nevertheless, this is causing homes located centrally in the city to rise in value.

Also, if you renovate an older home you now have the best of both worlds. You have many of the benefits that a newly built home has (i.e. updated electrical and plumbing system, the home is more energy efficient, ect..), with all of the charm and character that an older home offers. If you are buying an older home that has been renovated, it is important to pull permits, look at invoices for work that was done, make sure the people that did the work were licensed, and check to see if there were any warranties for the work that was done.

Although older homes offer the benefits mentioned above, older homes also have their disadvantages.

For homes built before 1967, there is high chance that there is lead based paint present in the home. Usually lead based paint is not a problem if it is painted over, but this may not always solve the problem. Exposure to lead based paint may cause a list of health related problems. For more information on the health risks of lead based paint, please visit http://www.epa.gov/lead/pubs/leadpdfe.pdf

Another disadvantage to older homes is that they are less energy efficient. Older homes usually come with older windows, older heating and air conditioning systems, and less insulation which may cause the home to be an energy hog. However, the city of Tallahassee has programs available that make it very affordable to make your older home more energy efficient. The city is offering rebates on energy star appliances. In fact, until September 30th 2010, city of Tallahassee is offering double rebates on energy star natural gas appliances. The city of Tallahassee also has financial incentives for installing new insulation and repairing air ducts. For more information on financial incentives for making your home more energy efficient, visit
http://www.talgov.com/you/energy/energy_programs.cfm

Another disadvantage that older homes have that might deter young families is the lack of children in the neighborhoods. A lot of time, older neighborhoods do not have a high level of turnover. Many people who live in the older neighborhoods have been there a long time and are empty nesters. The best way to find out if there are children in the neighborhood is to talk to the neighbors who live in the area.

Overall older and new homes have their advantages and disadvantages. When deciding on an older home or a newer home, it's important to look at your housing needs and make sure the home and the neighborhood fit your needs accordingly.

Tallahassee's 2010 Housing Report

Hello all,

Today I will be providing you with a current update on Tallahassee's residential real estate market.

I took the liberty once again of doing some research using the market statistics for residential home sales here in Tallahassee. These statistics were provided to me from the Tallahassee Board of Realtors. Specifically I looked up the average sale price, the number of homes sold, the average number of days a house is listed for sale before it sells, the sale price to list price ratio ( what a home actually sells for compared to what it was listed for sale at), and the number of homes sold compared to the number of homes listed for sale. The time period I looked at is from January 1st 2010 through April 31st 2010. I not only looked up these statistics for Tallahassee as a whole, but I also looked at these numbers in each specific quadrant of Tallahassee (Northeast, Northwest, Southeast, Southwest).

After I looked up these statistics for 2010, I also looked up these same statistics for the time period of January 1st 2009 through April 31st 2009. I did this because comparing this years market statistics to last years market statistics helps us to see which direction our housing market is headed. The results of my research is below. Again we are comparing the statistics for the time period of January 1st 2010 through April 31st 2010 to the time period of January 1st 2009 to April 31st 2010.

TALLAHASSEE AS A WHOLE

• Number of homes sold has increased by 24% in 2010 compared to 2009
• Home prices have decreased on average by 7.2%
• The number of days the average house is on the market before it sells has increased from 129 days to 142 days
• The sale price/listprice ratio has increased by 1.68%.
• The percentage of homes that sold compared to the average number of listings on the market for sale has increased from 25.33% in 2009 to 31.03% in 2010.

Overall we have had more sales and a decrease in home prices. Homes are now selling closer to what they are listed for, but they are staying on the market longer before they sell. We are now selling more homes compared to how many are up for sale which means the size of Tallahassee's housing inventory is decreasing.

NORTHEAST TALLAHASSEE

• The number of homes sold has increased by 44% in 2010 compared to the same period in 2009
• The average home price in the northeast has decreased by 17.15%
• The average number of days a home in the northeast was listed for sale for before it sold increased from 125 days in 2009 to 138 days in 2010.
• The average sale price/list price ratio went up by 1.64%
• The percentage of homes that sold compared the average number of homes listed for sale increased from 25.75% in 2009 to 37.95% in 2010.

Overall northeast Tallahassee saw a whopping increase in sales activity (largely due to the liquidation sale of the condos at Barrington Park Condos), and a large decrease in home prices. It has taken longer on average to sell a house in the northeast this year, and homes in this area are now selling for closer to what they are listed for sale at. Finally, the inventory of homes has decreased in the northeast this year.

NORTHWEST TALLAHASSEE

• The number of homes sold in 2010 has increased by 34.8% compared to the same time period in 2009.
• The price of the average home in the northwest has decreased by 2.96%
• The average number of days a home stays on the market for sale before it sells has increased from 139 days in 2009 to 141 days in 2010.
• The average sale price/list price ratio has increased by .85% this year
• The number of homes sold compared to the number of homes listed for sale has increased from 20% in 2009 to 25.55% in 2010.

Overall, we have seen a big increase in sales in the northwest part of Tallahassee, and prices have decreased by a small amount on average. Once again, housing inventory on this side of town has decreased, and it has taken just a couple more days on average to get a home sold this year compared to in 2009. With the exception of "number of homes sold." real estate in the northwest has remained pretty stable in 2010 compared to the year prior.

SOUTHEAST TALLAHASSEE

• The number of homes sold on the southeast has decreased by 4.7% compared to the same time period last year
• Prices have come down this year by 14.7% on average compared to last year.
• The number of days on average it has taken to sell a home in 2010 has decreased from 133 days in 2009 to only 116 days in 2010.
• The average sale price of a home compared to the average price a home is listed for sale at has decreased by 1.55%
• The percentage of homes sold compared to homes listed for sale has decreased from 30.88% in 2009 to 29.33% in 2010

Overall the real estate in southeast Tallahassee has gone in a different direction than real estate in Tallahassee as a whole. Sales have decreased, inventory of homes has increased, and it has taken less days on average to sell a home this year compared to last. Prices have decreased which is the only statistic that is the same as the rest of Tallahassee.

Southwest Tallahassee

• The number of sales is exactly the same in 2010 as it was in 2009 on the southeast side of Tallahassee
• The average price of a home has decreased by 11.3% on this side of town this year.
• The average number of days it took to sell a house was 95 in 2010 compared to 99 in 2009.
• Average sale price/list price ratio decreased by .25%
• The number of homes sold compared to the average number of homes listed for sale decreased from 30.88% in 2009 to 29.33% in 2010

Southwest Tallahassee has the least amount of sales activity of any of the other quadrants of Tallahassee. Sales stayed the same, prices decreased, and housing inventory has increased.

CONCLUSION AND FORWARD OUTLOOK

Overall the fundamentals of the real estate market in Tallahassee are looking strong. Sales are up and housing inventory is down in 2010. This has been caused by an increase in demand for housing, which has been caused by several factors including an increase in consumer confidence, decreasing home prices and new loan programs designed to get buyers financed to purchase a home.

Prices have declined, but this is not due to the fundamental principals of demand and supply. In fact, demand has increased and supply has decreased which would lead one to think that prices should have increased this year. This is not the case though. Prices have dropped because of the rising number of distressed sales (short sales and foreclosures) that we have seen this past year. Distressed sales usually sell for below market value which decreases the value of surrounding properties. Once all of the distressed sale properties get sold, our housing market's fundamentals are in place to lead us back to rising real estate values. That could be a while though...possibly a couple years.

If you have any questions about our local real estate market, please feel free to call me at (850) 567-0037 or email me at nahoom1171@yahoo.com

Have a great week!

How to evaluate and find a good investment/rental property.

There is no doubt that the current economic condition our country is in is far from what many people picture as a healthy and vibrant economy. With high unemployment, rising fuel costs, the limping housing market, and the multitude of banks and other businesses that are failing...our country is struggling to nurse our economy back to a healthy state. However, one thought to ponder is this... and I quote "during an economic recession, money does not disappear, it simply changes hands."

What this means is that even though an economic recession causes a lot of people financial problems, it also creates great opportunities for some others to make money. One great opportunity to make money right now is that of purchasing investment property for the purpose of generating rental income. Home prices are reaching lows that we have not seen for almost 10 years. Many reasons have contributed to the decline that we have seen in home prices. It is harder to get a loan to purchase a home now days, which has caused demand for homes to come down, thus decreasing home prices. Also, many banks that have foreclosed on properties are selling these foreclosed homes for much below market value because they want to get these "non-performing assets" off their books as quickly as possible. When banks do this, it also contributes to depressing the values of the homes around the homes they sell.

While home prices have come down, demand for rental properties has remained very stable. With less people able to buy homes now days due to stringent lending standards, there are now more people looking to rent. Also, there are millions of people who are losing their homes to foreclosure in our country, and these people are also now looking for places to rent. With that being said, demand for homes to rent is still strong.

With prices for homes being very low and rental rates still high, it is now easier than it has been in a long time to purchase a property, rent it out and have the rental income exceed the mortgage payment and other expenses of owning the home. There is now a tremendous opportunity for people who have a lot of idle cash and good credit. These people have the ability to buy property for very cheap, rent the property out and make a strong return on their investment. I have had the opportunity to help several investors purchase properties for great prices. These investors were able to rent out their properties and earn return on investments of around 9% or 10% a year. This is a way better return than can be earned by keeping your money in a bank. Also, keep in mind that the return of 9% or 10% does not even take into account the increase of the value of the property itself over time. I know it is hard to believe right now, but yes, property values will begin to increase again.

So if you are one of those people that has some money to invest and you have good credit, what do you need to do to begin finding great investment property that you can earn a high return off of? First off, you need to figure out how expensive of a property you can buy. If you plan on purchasing a property with all cash, it is very simple. You just decide how much cash you are willing to spend on a property. If you are going to take out a loan to purchase a good investment property, you can go to a local lender and after evaluating your income, expenses, assets and credit score, he/she can tell you what you can afford to spend on a property.

The second thing you need to do is get familiar with rental rates in your area. You can do this by talking to a competant real estate agent or property manager in your area. You can also get a good idea of rental rates by searching online at properties that are for rent.

Once you have figured out how much you can afford to spend on your investment property and you have become familiar with rental rates in your area, it is time to locate some potential properties. When you are searching for the right property, you have to take several things into consideration. The first thing is location, location, location. In my book, this is the number one thing to look at. A good location is going command a higher rental rate, it will make it easier to sell the property in the future and it will make it much more likely that the value of the property will appreciate over time. The third thing to look at is the condition of the property. If the property is very cheap, but you have to sink a lot of money into it, it might not be a good deal. However, there are times where you can get a very good deal on properties that need fixing up, so you just have to evaluate the property on a case by case basis and make a good business decision. Getting educated on property values in different areas of your town can help you with making this business decision. A competant REALTOR should be able to help educate you on property values in different areas in your city.

Once you have figured out what you can afford to spend on a property, you have become familiar with rental rates in your area, and you have located a few good canidates for investment properties, it's time to figure out your projected rental incomes and projected expenses for each property. Figuring out the the projected rental income for the properties you are interested in is fairly easy. Just find out how much the rental rates are for simalar properties in the same neighborhood. You can do this by knocking on doors and asking residents what they pay for rent, or you can search online or call the "for rent" signs in the neighborhood and inquire about how much people are asking for rent.

Figuring out expenses is a little bit more involved. Here are the following expenses you are going to have to account for and how you can figure them out.

1. Principal and interest expense (if you get a loan to buy the property)- You can figure this out by plugging the numbers into a financial calculator. You just need to know how much money you will be borrowing, what your interest rate is for the loan, and how long of a period the loan is amortized over (i.e. 30 years, 15 years) If you don't want to figure this out on your own, call your lender and they can tell you what this expense will be.
2. Taxes-You can get a very good estimate of your tax expense by calling your local property appraiser's office. Taxes are figured out by multiplying the sale price of the property by the millage rate in the area the property is located. So if you know these figures, it is easy to figure out on your own.
3. Insurance-You can figure this out by calling your insurance agent. It is sometimes good to get a few different quotes from different companies.
4. Homeowners association or condo association fees-Some properties are located in communities that charge association fees. Usually for the fees, the association will take care of things like road maintenance and lawn care in the neighborhood. Condo associations usually have the highest fees, but you also get more for the high fees you pay for. To find out what the association fees are in a given neighborhood and what the fees cover, you should contact the homeowners or condo association that the property is located in directly.
5. Misc Maintenance expenses-A good rule of thumb is that yearly maintenance expenses will be about 1-2% of what you purchase the property for. This expense can vary depending on how old the property is, what the condition of the property is like and how much maintenance (if any) your homeowners or condo association takes care of. For instance, most condo associations are responsible for the roof. So if this is the case, you do not have to budget for replacing your roof.

Once you have figured out the property's projected rental income, and you have figured out it's projected expenses, you can figure out what the property's annual return on investment will be. You subtract your yearly property expenses from your yearly rental income to give you your yearly net cash flow (hopefully it's positive). You next divide this yearly net cash flow by the purchase price to give you your annual return on investment. If your projected return on investment is acceptable to you and you like the property, you can next proceed to making an offer on the property.

I have successfully helped several investors locate and purchase lucrative investment properties. If you have any questions about buying rental properties please feel free to give me a call at (850) 567-0037 or email me at nahoom1171@yahoo.com

Look out for rising Mortgage Rates After March 31st.

After March 31, The Fed has announced that it will stop buying mortgage backed securities from both Fannie Mae and Freddie Mac, which will in turn possibly cause interest rates on home loans to rise.

Last year, as a result of the of the mortgage crisis and as a result of the Government takeover of two of the largest companies in the secondary mortgage market, The Federal Reserve began purchasing mortgage backed securities from Fannie Mae and Freddie Mac in order to keep the secondary mortgage market liquid so that lenders could continue to issue loans. The Fed purchasing these mortgage backed securities was a way to keep interest rates low so that demand for purchasing houses would increase and continue to remain high. However, as of March 31st, the Fed will no longer continue to purchase these mortgage backed securities from Fannie Mae and Freddie Mac, which means it will make it harder for lenders to issue loans and sell them into the secondary mortgage market. There is a good possibility that this will drive interest rates on home loans up. To better understand this, it might be helpful for me to briefly explain how the secondary mortgage market works, and how it affects interest rates. I will also explain what mortgage backed securities are. Once you get an understanding of these concepts, you will better understand the Dramatic effect that could take place once the fed stops purchasing mortgage backed securties from Fannie Mae and Freddie Mac on March 31st.

When a lender makes a home loan to a customer, it is rare that the lender keeps that loan in their own portfolio. Usually what happens is first the local lender makes a loan to Suzie Homeowner. This lender is part of what is called the primary mortgage market. After this lender who is involved in the primary mortgage market, issues the loan to Suzie Homeowner, that lender sells the loan off to another company who is involved in the secondary mortgage market, such as Fannie Mae. This system is good for lenders in the primary mortgage market, because they make the fees off of initiating the loans, and then they sell the loan to a company in the secondary mortgage market, and the bank who initially made the loan gets their cash back so that it can make more loans to other customers and in turn make more money on loan fees. So you see, the banks in the primary mortgage market make a lot of their money on the fees from initiating the loan, and then they sell the loans to companies in the secondary mortgage market.

The companies in the secondary mortgage market buy hundreds, thousands and even millions of these home loans from lenders who initiate these loans. The companies in the secondary mortgage market can either hold these loans on their books and earn money on the interest received from the loans, or they can package these loans up and sell them to investors as mortgage backed securities. You are probably asking "what the heck is a mortgage backed security?"

A mortgage backed security is a lot like a share of stock. It is a trading security that is actively traded in the open market in the same way that stock is traded. A share of stock is backed by the value of a company. A mortgage backed security is backed by the value of many mortgages that have been pooled together. Mortgage backed securities are created when companies in the secondary market pool together many mortgages that they own and create securities (called mortgage backed securities) that are backed by the value of these pooled loans. They in turn sell these securities to private investors much like companies sell stock to private investors.

This whole process that starts off with the local lender making a loan to Suzie Homeowner, and that ends with investors buying mortgage backed securities, is what enables banks to continue making loans at affordable interest rates.

However, in 2008, Fannie Mae and Freddie Mac ( the two biggest companies in the secondary mortgage market) began having bad problems because many of the loans that they purchased from lenders in the primary mortgage market, began to default. These bad loans made it so investors stopped buying mortgage backed securities from Fannie Mae and Freddie Mac. This eventually led to Fannie Mae and Freddie Mac ending up on the brink of failure, which led to the government taking them over.

The government believed that Fannie Mae and Freddie Mac needed to continue. This was because these companies played such a large role in the secondary mortgage market industry. If Fannie Mae and Freddie Mac failed, it would make it much harder for local lenders to make loans and sell them off into the secondary mortgage market. This would mean that local lenders would have to start holding more loans in their own portfolios. This means lenders making loans would have to take more risk, which means they would charge borrowers higher interest rates. These higher interest rates would reduce demand for purchasing houses, which would be bad for the economy. At the time this was going on, this could have sent our country into a depression.

To prevent all of this from happening. The government got The Federal Reserve to start buying up Mortgage backed securties from Fannie Mae and Freddie Mac. This in turn enabled Fannie Mae and Freddie Mac to continue to buy mortgages from lenders in the primary mortgage market, which enabled lenders to freely make loans at low interest rates. However, after March 31st, the Fed will not continue to buy mortgage backed securities from Fannie Mae and Freddie Mac.

After March 31st, we will be relying on private investors once again to start purchasing mortgage backed securities from Fannie Mae and Freddie Mac. Some think the private investors will start buying mortgage backed securities again from these companies because lending standards are much higher now, which would make the loans that Fannie and Freddie have in their portfolios, good loans. However, would you buy stock from a company that just emerged from bankruptcy? I would not. It's the same concept.

It is very likely that private investors will be very weary about buying mortgage backed securities from Fannie and Freddie. Again, this will make it harder for lenders who make loans, to sell the loans into the secondary mortgage market. This will drive up interest rates on home loans. Higher interest rates will mean less demand for housing and will possibly lead to a further decrease in home values.

If you are thinking about buying a home. I would find a home as soon as possible and lock in a low interest rate before they go up after March 31st. If you have any questions on this subject, please feel free to email me at nahoom1171@yahoo.com or give me a call at 850 567-0037

Foreclosures and Shortsales. What you should know

Today I will be talking about foreclosure sales and short sales. In today's real estate market, our housing inventory is loaded with distressed properties. Both short sales and bank foreclosed homes are sitting on the market waiting for buyers to come along and move in. While you can get a great when you buy one of these properties, you also must understand that buying one of these properties entails more risk.

Before I get into talking about short sales and foreclosure, I think it would be a good idea to define what a short sale and a foreclosure property are. A foreclosure property is when a bank has already seized the property from the last owner of the property because the previous owner was not making his/her mortgage payments. The property is now owned by the bank.

With a short sale, the current owner has a mortgage on his/her property, but the fair market value of the property is less than what they owe on their loan to the bank. Also, property owners are also usually behind on their mortgage payments when they want to do a short sale. When a property owner is in this situation, and wants to sell his/her home, they negotiate with the bank to accept an amount of payment from the sale of the property that is less the the amount of money they owe the bank for their home loan. Banks have incentive to take less money than the property owner owes to them because they do not want to foreclose on and repossess the home. It costs the banks a lot of money to foreclose on a home, so by working a short sale, the bank avoids the foreclosure expenses.

As I mentioned, you can get a great deal when you buy a short sale or a foreclosure property.

FORCLOSURES
With foreclosed properties, banks own the properties and are paying taxes and insurance on these properties every month. In addition to that, these properties have a high opportunity costs to the banks. Instead of having these "non performing assets" as banks call them, on their books, they would rather sell them and have cash to make more loans with. All these things I have just mentioned make banks motivated to sell these properties. If you have cash to purchase a property, and you can close on the deal quickly, there is a good chance you can get a great deal on a foreclosure property. Banks like it when buyers purchase properties with cash because they do not have to worry about the deal falling through because the buyer's home loan financing falls through. Banks also like quick closings because the faster they sell the property, the less money they have to pay on taxes and insurance related to the property.

However, just because you can find a great deal on a forclosure property, it does not mean the bank is going to give the property away. Banks do their due diligence in order to find out the value of the property that they own so that they can get fair market value or at least close to fair market value when they sell the property. Banks usually have a real estate agent, in the town where the property is located, go ahead and list the property for sale. The listing agent will use his/her knowledge of the local real estate market to list the property at fair market value. Also, banks will sometimes have an appraisal performed on the property by a liscensed property appraiser, to find out what the value of the property is. I have had clients who have gotten great deals on forclosed home, and I have had clients, who have put offers on foreclosed homes, have their offers rejected by banks.

When you are buying a foreclosed property, you are taking a larger risk than when you buy other property. Banks own these homes. However, the banks usually do not know anything about these properties, and they almost always make buyers purchase the homes in "as is" condition. This means that it is up to the buyer to verify everything that is wrong with the property before purchasing it. When purchasing a foreclosure property there are a few things you can do to minimize risk. First off, work with a competant real estate agent who has worked with foreclosure properties before. Second, make sure that you have the property inspected by professionals before purchasing the property. The inspections I would recommend include include a general home inspection performed by competant home inspection company, and a wood destroying organisms inspection. If you need any other inspections done, the general home inspector should let you know. You can visit http://www.bobbynahoom.com/ to find home inspection companies that I suggest using. In addition to inspections, you need to have a survey performed on the property to make sure there are no encroachments on the property. You also need to have a title search done on the property to make sure that you are buying the property with clear title. You should purchase a title insurance policy as well which will protect you from title defects if any pop up that are not found in the title search.

Going through a foreclosure is much like buying a normal property, but instead of dealing with a seller that has lived in the property or at least seen the property, you are dealing with a bank who has never seen the property. The time frame to close for a foreclosure is the same as a normal sale. When you are buying a foreclosed property you must prove to the seller bank that you either have the funds to purchase the property or that you have been approved for a loan to purchase the property.

SHORT SALES
While foreclosures are a little more risky than normal sales, they are a lot less complicated and time consuming than short sales are. When you are purchasing a short sale, you are dealing with two parties. You are dealing with the actual owner of the property, and you are dealing with the bank that the property owner has their home loan through (remember this is because in a shortsale the bank has not repossessed the owner's home yet, so they are not officially the owners). You have to get both the bank and the property owner to agree to the offer you make. In short sales, banks usually take a while to approve the offer. This approval process usually makes the short sales take a longer time. When you go to purchase a short sale, expect about 60-90 days before you can close and move in to your home.

There are usually less unknowns with a short sale as opposed to a foreclosure home because you are dealing with a property owner who usually knows about the property. However, you still need to perform your due diligence to make sure you know as much as possible about the property before you purchase it. Again you should work with a REALTOR who has experience with short sales, get inspections done, a survey done, a title search done and get title insurance. Short sales are usually sold "as is" but sometimes the seller's will perform repairs.

In summary, there are a lot of short sales and foreclosed properties for sale right now. You can find great deals when buying these properties, but you need to understand that you must do your homework before you purchase one of these properties.

If you have any other questions about short sales or foreclosure properties, please feel free to call me at (850) 567-0037 or email me at nahoom1171@yahoo.com

Tallahassee Real Estate Market Update-things are looking good!

Despite the doom and gloom that everyone is hearing about in the news these days about real estate, there are some areas throughout the country where real estate markets are improving. By nature, real estate markets are unique from city to city and from town to town. With that in mind, you must realize that the doom and gloom you hear in the media about the real estate cannot be true for everywhere. In fact a perfect example is Tallahassee's Real Estate market. The real estate market in Tallahassee seems to be doing pretty well.

As a REALTOR, I have access to market statistics for Real Estate here in Tallahassee that are provided to me through the Tallahassee Board of Realtors. This past week I have taken the liberty of doing some research to find out which direction our local real estate market is headed in. In my research, I divided up houses both by area and by price range. I divided up Tallahassee into 4 quadrants, Northeast, Southeast, Northwest and Southwest. The price ranges I used were from $0-$125K, $125K-$250K, $250K-$375K, $375K-$550K and $550+. I compared market statistics on houses in each of these price ranges and in each area for the last quarter of 2008 to the houses in each price range and in each area for the last quarter of 2009.

As a whole, the number of houses on the market in Tallahassee has decreased from last year, and the number of homes sold has increased from last year. With housing inventory down and sales up, this is a strong indicator that demand for homes in Tallahassee is increasing, and our real estate market is on it's way back to being healthy. Here are a few examples to illustrate my point. On the northeast side of town for properties under $125,000, the ratio of homes sold over number of homes listed for sale on the market increased 29% in the fourth quarter of 2009 compared to the fourth quarter of 2008. Another example can be seen for homes priced between $125,000 and $250,000 located on the southeast side of Tallahassee where there was a 45% increase in the ratio of homes sold over the number of homes listed for sale on the market. The increase in this ratio of homes sold compared to homes listed for sale has taken place all throughout Tallahassee. For houses above $550,000 the increase in this ratio for 2009 is smaller compared to the increase in this ratio for homes in the lower price ranges. Again the increase in the ratio of homes sold over homes on the market for sale means that more homes are selling and inventory of homes is decreasing. This is a good sign of increasing demand which is what ultimately leads to home values increasing.

As a whole, Tallahassee has seen a small reduction in the value of homes in the last year, but the losses in value are small and it appears that prices are bottoming out. In some areas of Tallahassee though and in certain price ranges, home values are actually increasing! Yes, you read that right, increasing. For instance,  for homes priced between $250,000 and $375,000 located on the northeast side of town, home prices were 1.3% higher on average in the last quarter of 2009 compared to the last quarter of 2008. Another example are homes located in northwest Tallahassee that are in the price range of $125,000 to $250,000. In the last year, these homes have seen an increase in value of 1.5%. There are also a couple other examples of homes in certain price ranges and in certain areas where small gains in value have occured in the last year. In all of the other areas and price ranges, prices have either remained flat or have experienced small decreases in value. This is a far cry from what the media is telling us though.

The last value that I looked at when doing my market research was the average days on the market for homes before they sold. This is another number you can look at to assess what demand is like.  When this number is high, usually it means demand is weak, and when this number is low it usually means demand is high. Overall the numbers show that about half of the subsets ( homes in certain areas and certain price ranges) of homes throughout Tallahassee have seen decreases in the number of days in takes to sell a home, and other half of the subsets have seen increases in the number of days that it has taken to sell a home.  Here are a few examples.  On the Southwest side of town for homes priced from $125,000-$250,000 the average number of days on the market before a home sold decreased by 74days in the 4th quarter of 2009 compared to the 4th quarter of 2008.    For homes priced between $375,000-$500,000 on the northeast side of town this number increased by 39 days in 2009, and for homes priced between $0 and $125,000 on the northwest side of town this number increased by 39 days as well. 

While Tallahassee's Real Estate market is still not as good as we would like it to be, it is headed towards recovery.  Although home prices overall are slightly down, and the number of days it takes to sell a home is about the same as last year, the number of homes sold has increased and the amount of homes listed for sale has decreased.  This shows that demand for homes is picking up and the supply of homes is going down which means it should not be too long before we see home prices starting to increase overall throughout Tallahassee.  As mentioned before there are homes in some areas in certain price ranges that are already increasing in value.  With the tax credit deadline for first time and repeat homebuyers coming up at the end of April, we can expect to see a surge of demand for homes in the next couple of months.   Because of this, right now might be a great time to list your home in Tallahassee for sale if you are thinking about doing so.

Home improvement projects with the most bang for your buck.

Hello Everybody,

Today I will be discussing a few of the most profitable home improvement projects of 2009. This information comes from the 2009 Cost vs. Value report created by Remodeling Magazine.

Replacing an entry door was the most profitable home improvement project of 2009. The average cost of replacing a front entry door was $1,172 and the average return on investment was 128%. This high return on investment indicates that first impressions are very important to homebuyers.

Adding an attic bedroom is also another smart home improvement if you are looking for some more space in your home. This is one of the more expensive home improvement projects that a homeowner can perform, but the return on investment for this project is not bad coming in at 83.1%.

Looking for more space to entertain? Adding a wood deck is a great solution to that problem. It's average cost to add wood deck to a home was a little above $10,000 in 2009, and the return on investment for that project was 80.6% in 2009.

Mid-range bathroom and kitchen upgrades also proved to be a smart home improvement upgrade in 2009 with an average return on investment of 71% and 72% respectively. Upscale bathroom and kitchen upgrades had a return on investment of about 10% less than the mid-range kitchen and bathroom upgrade.

Is it time to replace those old windows? Go ahead and replace them with new vinyl windows. The average return on investment for this project in 2009 was 83.6%

Finally, replacing your siding with fiber cement siding also proved to be a financially sound home improvment project with an average return on investment of 76.5%.

To see the cost and return on investment of all of the home improvement projects, visit http://www.remodeling.hw.net/2009/costvsvalue/national.aspx