Christchurch Real Estate

Christchurch Real Estate Prices Keep Climbing.

I have been reading a few things lately about the Real Estate prices in and around Christchurch and New Zealand. There seems to be much talk about the market prices climbing up and up and up in recent months and reaching what one is calling record prices. What the hell is going on. The country is still suffering one of the longest recessions in recent times and Real Estate companies across the board are spouting out that the housing market is in full recovery.

Here is what I read on stuff.co.nz http://www.stuff.co.nz/the-press/news/christchurch/3239911/House-prices-break-record

Median house prices in other regions in the year to December were, with annual price growth in brackets: Nelson-Marlborough $343,500 (14.5 per cent), Wellington $400,000 (8.1), Southland $184,000 (10.84), Otago $230,000 (unchanged), Central Otago Lakes $432,500 (1.16), Auckland $470,000 (6.81), Northland $306,000 (minus 2.08), Taranaki $280,000 (7.69), Manawatu-Wanganui $230,000 (2.9).

Come on. Look at the bigger picture and look whats going on. Now I know I am not qualified to rattle off any official stuff. But you have to ask the questions that will this price recovery actually keep going. And when they talk about median prices. The reality is that more higher priced homes have been selling in the last 6 months than in previous homes comparatively to the lower priced homes. From my understanding of going to peoples homes the amount I have been most people who own homes under the 400k mark are finding the times tougher and arent moving.

Compare that to many people who are downsizing their homes at the moment. People in bigger houses in posh locations looking to downsize and have something with smaller mortgages. The reality is that people out there still worry about the prices of homes. Our home affordability allbeit better than previous years is rising fast and is one of the most expensive in the world.

On top of all of this you have to keep in mind we still have an extremely low OCR which is tipped to rise by June this year kissing good bye to the relatively cheap money we have had access to for the past 12 months. Bollard has tipped a mid-year increase in the official cash rate from its current record low 2.5 per cent but the market is anticipating he will start as soon as March and have hiked the OCR by 75 basis points by June 30.

I am sorry to say but if you look at the signs they do not paint a pretty picture. The average Kiwi is going to be priced out of buying a home. And if they do they most certainly will be stuck with a massive mortgage.

I feel the Real Estate industry shouldnt be telling the country that house prices are heading to an all time high. Its just not healthy to be doing this at this time. Sellers will start to expect higher prices. Great if your a home owner though. There is a drought of listings at the moment. A sure sellers market. So what the industry needs to do is attract more listings. Which is what the article above will most certainly do. Before you buy or sell right now make sure you do your research on true facts as there are too many conflicting opinions out there, including mine. But you need to look at cold hard numbers and look at the trends.

Good luck.

January 19 2010 | Uncategorized | 2 Comments »

Valuations – What Are They And How Are They Made

The first thing that you must do with any real estate transaction is to accurately determine the value of your real estate property since it is important for your property to appraise for its full sale price.  You should obtain a registered valuation for your property which sometimes can take some time.  The cost of this may vary depending on the location and value of your  property but it is important to get this value accurate.

To View The Rest Of This Post Click This Link

June 28 2009 | Uncategorized | 1 Comment »

Home Hints – When Choosing An Agent….

Real Estate Agents….. Well most think that they can be done without but when it comes to seeling your house most of us although we dont like to agree with it couldnt have done without our agent. Now you will probably agree with me more if you had a good agent. This like in any idustry is a risk that will be present but you need to identify which is a good agent. This I have done previous in this blog but I will detail off in another blog post later. In this blog post I mainly want to talk about what the agent will do to get you listed up.

When I say listed up I mean formally signed into an agreement with the agent so that the agent can act on your behalf to sell the property. Here is the catch though and you need to be aware. When you do sign up you are not signing up with the agent as such but with the agency. When you enter into an agreement with a real estate agency to market your home, you are ‘listing your home for sale’. One agent may sign you up and be your main contact, but once you’ve listed your home all the agents in that company can try to sell your home.

The agency works for you and their skill and experience can make a lot of difference.  If you dont know an agent yourself already talk with several different agencies to find the one that suits you best because you need to find someone you can trust and can communicate with peoperly. Also look for a company that looks to have a dominant market in the industry. This will really help as they will have greater reach than an agency thats smaller. So when you work with the agent you need to be confident they can do the job on your behalf. You need to ask questions.

Questions to ask the agent

• are you a member of the Real Estate Institute (MREINZ)?
• how long have you been in the business?
• what qualifications do you have?
• what references can you provide?(ask to talk to sellers they’ve worked for)
• how well do you know this area?
• what can you tell me about local trends?
• what buyers do you have on your books?
• how would you market my home?
• what sort of buyers will it appeal to?
• how are you better than your competition?
• what types of promotions do you do?
• what will you do if my home is slow to sell?
• when and how will you report back to me?
• what is your fee?
• would there be any other costs?
• what do you think my home could sell for?
• why do you think that is the right price?
• is there anything I should do to the home?

Two important things to remember

1. A point of warning. Some agents buy a listing. The value an agent puts on your house issometimes  partly based on trying to get your business (are you likely to choose the agent who gives you the lowest price?) So how they will try to get the best price for you is more important than the price they quote. The best agent to choose is the one thats going to give you the best price in your pocket at the end of the day. Your buying opportunity is best in the first month. Be very careful not to be overpriced when you come to the market. Be realistic and firm.

2. You want to be sure the agency will try to get the best price for you, not just a quick sale. So look at their approach and experience, not just the sales figures. The experience of the office is just as important as your agent.

Sole or general agency?

A sole agency is when you give one real estate agency the exclusive right to try to sell your home for a certain period. It means you can’t list the property with anyone else or try to sell it privately during that time.

A general agency means you list your home with several agencies and can sell it yourself if you want. Only the agency that sells the home gets the commission.

You generally will get better service from a sole agency because they have more incentive to sell it. My advice is to only sign up for a short time, say one or two months at a time. This will help keep the agency ‘on it’s toes’, give them incentive to sell in that time and it means you can review their performance and change the agreement, or the agency, if things are not working out as you’d like. And on the other side of this in that time you may find that you just cannot accept the market value of your home so you should access if this indeed a waist of time or not.

Home buyers tend to shop around so listing with one agency doesn’t mean fewer buyers.

Listing agreements

Ask the agents you talk with for a copy of their listing agreement – this generally is standard practice. This is the contract between you and the agency setting out what the agency will do, how your home will be sold and the fees you agree to pay.

Agreements can vary quite a bit between agents – and you can negotiate what is in them. As with any other legal contract, you should get your lawyer to check the agreement before you sign it.

Before signing, check it includes

• your name and the agency’s name
• the correct details for your home
• the chattels that are or are not for sale
• how the home will be sold
• how and when the agency will report to you (ask for weekly reports)
• the agency fees and costs.

Be careful at this stage of selling. I would always ask for a marketing plan before signing an agreement. Even if it is not a concrete marketing plan you should get a commitment from your agent so that after signing the contract agreement that you will have things start to happen.

From here on in is where it gets exciting for you.

June 16 2009 | Home Sellers and Buyers Guides and Sellers | 4 Comments »

Home Hints – What Way Should I Sell My Home?

1. by offer and negotiation

2. by auction

3. by tender.

Most people sell through an agent, but private sales are becoming more common.

1. Selling by offer and negotiation

Most homes are still sold this way. You set an asking price, put your home on the market and if a buyer is interested they make an offer. If you’re using a real estate agent and someone wants to make an offer the agent usually contacts other interested buyers in case they also want to make an offer – so you could end up with several offers at once.

Offers are usually made using the standard sale and purchase agreement form developed by the Real Estate Institute and Auckland District Law Society.

If you want to accept, you just sign the form. But if you want to negotiate you go back with a ‘counter offer’ by putting your change on the form and then signing it. If the buyer signs the change the deal is done – or they may come back with another counter offer themselves. This process is repeated until you and the buyer agree on the price and all the conditions – or you can stop at any stage. Your real estate agent will act as the go-between and try to help you make the deal.

Once both you and the buyer have signed the form and initialled all the changes, the agreement becomes legally binding. The buyer then pays the real estate agent a deposit (usually 5-10% of the sale price).

Is the offer conditional?

The buyer will normally have several conditions in the agreement, such as getting a building consultant’s report, or arranging finance. Once these conditions are met the agreement between you becomes unconditional and you are both legally bound to go ahead with the deal. The real estate agent then takes their fee out of the buyer’s deposit and pays you the rest.

If either you or the buyer back out at this stage it usually means the lawyers (and maybe the courts) become involved and penalties and costs may be awarded.

Negotiating the deal

As the seller you can also negotiate on the price and the other conditions. For example you might be prepared to accept a lower price if the buyer makes an unconditional offer or agrees to give you more time to find another home. Or you might want to keep some of the chattels.

If the buyer wants to make their offer conditional on selling another home you can add an ‘escape clause’ in case you get a better offer from someone else. It means you can give the first buyer a deadline to go unconditional and if they can’t meet this you can accept the other offer.

2. Selling by auction

Auctions are often used if a property is unusual or hard to value because it has a special feature, such as a great view. The main advantages of selling by auction are that competition between buyers can push the price up – and the sale is unconditional.

The way it works is that interested buyers bid for your home on the auction day. You usually set a reserve (the minimum you’ll sell for) and once bidding is over this level the home is sold to the highest bidder, they pay a deposit and settlement is usually 20 days later.

Two important things to understand

1. you shouldn’t tell anyone your reserve – only the auctioneer just before the auction starts

2. you need to do your homework before setting the reserve, because if a home sells at auction it is unconditional – you can’t negotiate further.

What if the reserve isn’t reached?

If the bidding doesn’t reach the reserve the home is ‘passed in’ and the auction ends. However, you can then negotiate with the highest bidder or, if that doesn’t work out, with the other bidders.

You can also sell before the auction if you receive a good offer – but you would generally expect the offer to be unconditional. Usually if this situation arises the agents will notify everyone interested in your home, so they have a chance to put in offers as well.

One drawback to selling by auction is the extra cost of promotion, which you will have to pay on top of the real estate fees.

3. Selling by tender

Tenders give the seller a chance to see what interest there isin their home, without having to put a price on it. Tenders can also be useful if you have a set date you need to sell your home

by, but they generally work best for special or unique properties.

Potential buyers are invited to submit written offers, usually by a set date. You are not obliged to accept any of the offers, and can choose to negotiate with any of the people who have made an offer if you wish.

If your home is likely to attract a lot of interest, a tender may help you get the best price for it. This is because potential buyers don’t know what other people may offer and tend to put in their best price with few if any conditions. On the other hand tenders can limit the number of people who are prepared to make an offer – some are put off by the closed nature of the tender process.

You can tender your home using the services of a real estate agent, or privately through a lawyer or another agent. If you use a real estate agent they will arrange everything. You will pay their normal fees and probably extra for advertising.

June 01 2009 | Home Sellers and Buyers Guides and Sellers | No Comments »

Home Hints – How Do I Decide What To Sell My Home For

It’s important to do your homework before you decide on the asking price for your home. There are several sources of information you can use to work out what your home might sell for.

Your rateable value

The rateable value (RV) provided by your local authority is not necessarily a good guide to what your home might sell for. Some homes sell for a lot more, or less. The value does not include chattels, such as carpet, drapes, light fittings, appliances and built in items that can add to the saleable value of your home.

Your real estate agent

Most agents are happy to do a free appraisal to give you a price they think it would sell for. While an experienced agent will have a good idea of the current market, it is still only their view and different agents could have quite different views. Some may tend to give a higher price to encourage you to sign up with them, while others may give a lower price because it makes the home easier to sell.

Other recent house sales

Try to find out what other homes in the area have sold for in recent months. You can buy this information from QV (Quotable Value). Your real estate agent can provide similar information from the REINZ (Real Estate Institute) database. You could ask the agent to show you similar homes for sale in your area, so you get a feel for the ‘competition’.

Registered valuation

Getting a valuation from a registered valuer may cost $500-$800, but it can be a good guide to how much your home is likely to sell for. The valuer will look at the features and condition of your property, as well as what similar properties in the area have sold for. Ask your lender who they recommend you use.

A registered valuation can be a useful negotiating tool. You don’t have to tell the agent or anyone else what the valuation is, but you can indicate that an offer is under valuation and needs to come up. Or if you are happy to accept an offer at the valuation price you could offer to share the valuation report with the buyer if they share the cost with you.

What will a buyer pay?

Many people think their home is worth more than it really is – but in the end it’s only worth what a buyer will pay. If you overprice your home you could put genuine buyers off. And if a home is on the market for a while without selling, buyers tend to wonder what’s wrong with it. So it pays to be realistic about your sale price at the start.

Is your home hard to value?

If your home has features that set it apart from other homes, such as a view or waterfront location, it may be hard to decide on a sale price. It may be better to sell by auction or tender because you don’t have to set a sale price – instead the buyers bid or tender what they are prepared to pay.

Do you have a large section?

It will increase the value of your property if your section can be subdivided. Check it out with your local authority and if subdivision is possible tell the valuer and agent.

May 29 2009 | Home Sellers and Buyers Guides and Sellers | No Comments »

Home Hints – Should I Sell It, Do It Up Or Rent It?

What are your options?

Before you decide to sell, here are a few things to think about first

• could you get the home you want by renovating or extending instead?
• how much more will you have to pay to get the home you want – can you afford it?
• would it be a good idea to keep your current home as a rental investment?
• if you’re selling so you can retire do you have any other options?

Should you do up or move?

Selling and moving can be an expensive business. So if you like the area but the home no longer meets your needs, renovating or extending may be a good option instead of selling.

On the plus side

You save the cost of moving and selling your home. Estate agents fees could be up to 4% or more of the price you sell your home for – and moving could cost you several thousand dollars. There’s more about costs later on, and a list of costs in the guide Tool kit.

On the other hand

You need to be careful that you don’t overcapitalise and spend more on your home than it’s worth. If you alter your home would this make it better than other homes in your street or area? If the answer is yes, you may not get all your money back when it’s time to sell.

It’s not for everyone

Doing up a home is not for everyone. It can be hard living in a home during renovations, and if you have to move out for a while it can add quite a bit to the cost of the project.

There’s more about renovating in the ‘Building and renovating’ section, and some advice on what may or may not add value to your home.

What will it cost to move?

The main costs you will have when you sell are the real estate fees and your moving costs. But you also need to be prepared to pay some one-off expenses for your new home, for instance if you need to make repairs or buy new appliances and furniture.

Real estate fees

The real estate agent is paid by the seller when the house sale becomes unconditional.

The fees and costs can vary quite a bit from company to company. Some companies charge a base fee plus a commission based on how much your home sells for. Others charge just a commission and some charge a fixed fee no matter what your home sells for.

Base fees are usually around $500 plus GST. Commissions are usually about 3-4% (plus GST) of the sale price, but may work out less for more expensive homes – or you may be able to negotiate a fixed fee. You may also have other costs such as advertising (which you pay even if the home doesn’t sell).

You may be able to get a better deal, especially if you sign up with just one agency, so be prepared to talk with several agents and negotiate the fee. However, the fee is not the only thing you should think about.

Moving costs and insurance

Moving costs vary considerably. You could expect to pay anything from $1,000 to $3,000 to move within the same town or city. It also depends on how much of the packing you will do yourself.

Most contents insurance policies don’t automatically cover your belongings during a move, so you’ll probably need to ask your insurer to give you extra cover for the day. Or the moving company may be able to provide the cover. If you’re planning to do any of the packing or moving yourself, it would pay to check what the insurance will cover.

Should you keep your home as an investment?

Many New Zealanders own a second home as an investment. It makes sense to do the sums and think about the possibility of keeping your current home as a rental property before you decide to sell. It could be one way to start or expand your investment portfolio.

On the plus side

If owning a rental property is something you have in mind for the future, keeping your current home when you move could be a practical way to achieve it. It means you’ll save on the time it would take you to look for a suitable rental property to invest in, you won’t have to pay a real estate fee to sell your current home, and you should have a good idea of what maintenance might be needed.

On the other hand

Not all homes are suitable rental properties. You need to be sure the home will be easy to rent, and that you can get enough rent to cover the costs of keeping it. We can help you work out how much you might need to borrow, and what your loan would cost.

Will the rent cover the costs?

To get an idea of the rent your home might fetch, check similar places listed with local rental agencies. The Department of Building and Housing website provides information on average rents for homes around the country.

You could also ask a rental agency, or property manager, to give you an opinion about how easily your place might rent and what rent you could expect to get.

Ideally your rent should cover your loan and all expenses for the property. You need to allow at least 25% of the rental income for running costs such as rates, insurance and maintenance – and more if you use a property manager.

Would it make a good rental?

You need to try to think about your home in a detached way (which is not always easy).

Ask yourself

• is the home in a good, safe area?
• are there good facilities nearby, such as shops, medical centre, sports grounds?
• is the home close to public transport?
• is it in good condition?
• is it easy to maintain?
• are the grounds easy to look after?
• is it sunny, sheltered and not damp?
• are the living areas a reasonable size?
• does it have 2-3 bedrooms?
• does it have a modern bathroom, kitchen and laundry?
• are appliances and fittings in good order?
• is there a garage or off-street parking?
• is there private outdoor living space?
• how much rent could I expect to get?
• would the rent cover the loan, rates, insurance and upkeep for the property?

If you’ve answered mainly ‘yes’ chances are your home has reasonable rental potential. But you also need to check with local authorities to see if there are any plans for major changes in the area that could affect the property’s future value, such as zoning changes or plans to build a motorway nearby.

Try to avoid ‘having to sell’

It’s best if you don’t have to sell in a hurry. So if you’re making an offer on another home, give yourself plenty of time to sell. And make your offer conditional on your home selling at a price acceptable to you. If you can’t sell by the date set and don’t want to miss out on the new home, ask your lender if you can get ‘bridging finance’ (a short-term interest only loan) to tide you over.

If you’re in a position where you think you may have to sell, it could be a good idea to put your home on the market sooner rather than later, to give yourself more time to find a buyer willing to pay the price you want.

May 28 2009 | Buyers and Home Sellers and Buyers Guides | No Comments »

Westpac The First New Zealand Bank To Give New Zealanders A Mortgage Holiday

Finally there seems to be a little relief for those who are becoming financially stressed by this global economic downturn. Westpac is the first bank in New Zealand to follow Australia’s lead and offer 12-month mortgage holidays.The decision is part of the bank’s new set of measures to help financially stressed customers. Australia’s biggest banks are offering customers a 12-month holiday after pressure from their Prime Minister Kevin Rudd to go easy on those who had lost jobs and were struggling to pay their mortgage.

Prime Minister John Key said he welcomed the positive step to help those New Zealanders who had lost their jobs and still had to service their mortgage. Westpac New Zealand discussed its proposals with Mr Key before announcing it would offer customers new options of interest-only repayments and to extend the period of loan contracts.

But while many customers will welcome the new offers, Westpac acknowledged that postponing loan payments for any period would increase debt, and therefore may not be suitable for many borrowers. Mortgage holidays are nothing new. They have been around for some time and under special circumstances the banks usually will allow you to ask and try for one. But now the recent announcement is a step forward for people who are struggling a little more than they could have before. Its a step to helping people keep their homes in my view.

There are inherent dangers of mortgage holidays – for like all holidays they ultimately have to be paid for and would be careful in the way it applied the options.

Taking a holiday from your mortgage repayments certainly gives you a breather for a few months if that keeping that roof aloft begins to look a bit precarious, but to ensure your next intake of breath isn’t a sharp one, beware of the pitfalls. Missing payments can have a huge impact on future payments and the size of you overall mortgage.

Here’s what will happen to say myself in this situation;

• Taking just one year’s mortgage payment holiday.
• The price of the home dropping in value by 10 percent.

CASE STUDY

My house is worth $300,000 in todays market. My mortgage loan is for $270,000. So, I own 10 percent of my home at the moment. In one year, the 10 percent estimated drop means my home will be worth $270,000 the amount of my loan. If I add on the $15,000 I plan to defer on the mortgage that then means I owe $285,000 on the mortgage, but the home is now only worth $270,000 and I will owe $285,000 so that means I will have negative equity in the home. Meaning I will owe more on their home that it’s actually worth. This isn’s a problem if I don’t intend to sell but I probably wouldn’t be able to remortgage in future untill I get some equity in the home.

.
It sounds like a really terrible situation and sounds daunting and you have to look at both sides of the fence when thinking of taking the holiday. The most important action that can be taken in times of hardship is for you to talk with their bank early so that if you are in trouble the bank can help you make the best descision for your current financial situation.

April 11 2009 | Sellers and The Market | No Comments »

Home Staging and its Importance in Todays Market

If you are one of the tens of thousands of homeowners attempting to sell your home at any one time now then you know how hard it is becoming to both get people to the home and once there get them to like it enough to put an offer on it. You will have been undoubtedly been told that times are tough and to expect to take a hammering on the price of your home. Not only are homes all over the country losing value, but sellers are having to compete with mortgagee sales at lower than market value and the credit freeze that is preventing a lot of people from getting financed. So what is the secret to selling in today’s market? If you are really serious about selling. Over the past few months I have been flooded with reports with people saying they know the answers to how to make that sale in this market and there seems to be a clear point that all seem to agree on. And this is Staging.

Chances are, if you’ve bought or sold in the past few years, you’ve heard of the term “staging.” Staging is the art of preparing your home to appeal to the most buyers through de-cluttering, organizing, cleaning and repairing, and then marketing to your target audience. The last one may sound like a business pitch, but it is vitally important. The first four on the list are not only important, but will benefit your family and your well-being by bringing about a change and newness to your home and ultimately prepare you for your next move.

De-Cluttering:
This can be a touchy subject for some people. We all know that many items in our home are sentimental but when you have to resort to trailblazing a path to the front door, it’s time to let go. If you MUST keep 100 copies of your favorite magazine, rent a storage unit while your house is for sale. You will get back the money you spend when your house sells faster and who knows, you may even learn to enjoy the extra space!! De-cluttering also includes de-personalizing. Start your packing early by putting family photos, heirlooms and other personal items in storage. Replace them with neutral accents or nothing at all. A buyer has to feel as if the home they walk into could be their home.

Organizing:
This goes right along with de-cluttering. Organization and placement of items in your home will not only make your rooms and closets look much larger, it will show the buyer that the current owners are organized and accountable and believe it or not, trustworthy. Check out home décor magazines for inspiration and ideas.

Cleaning and Repairing:
We all put off home repair or remodeling projects due to lack of funds, schedules and other priorities, but now is the time to get serious. Any project that has been left undone needs to be finished or at least finished to the best of your ability/budget. This will be your advantage over foreclosures; many of them are left dirty and in disrepair. If your home shines and looks well cared for, the buyer’s perception is their reality! The number one complaint from real estate agents who show or visit your home is a lack of cleanliness. Cleanliness also happens to be the hardest part of staging. If you have animals or children, you undoubtedly find a mess as soon as one is cleaned up. Deep cleaning is the first step. Clean your drapes, dust your window blinds, and by all means, keep your kitchen spotless! If you are leaving the appliances, make sure they are thoroughly cleaned with a grease cleaner, oven cleaner or specialty cleaning agent for your appliance. Don’t forget the top of the refrigerator and range hood! You never know how tall your potential buyers may be! Then have your family make a pact and be diligent about it until the house is sold.

Reaching your target audience:
This is where the little touches make a big difference. Make sure your home is inviting from the inside out. Neutral paint on in the interior, adding greenery on tables and shelves, and dressing up the front porch or entry with a wreath or nice patio furniture will all make an excellent first impression. Put away any kids’ toys in the front yard and hide garbage cans the best that you can. Don’t forget to make a lasting impression by having a sheet with all of your home’s information– schools, shopping, library, golf course, etc. And last but not least, treat your potential buyers like a new friend: have warm coffee or tea brewing, bottled water and cookies or other snacks readily available in the kitchen.

These are the very basics of home staging. You can find many more tips and suggestions on the internet, home and garden programs or with your real estate company. Also, there are many professional home stagers who will do the job for you. If the project overwhelms you, this may be a practical and worthwhile solution. Find these professionals online, in the phonebook, ask a friend, or enquire in your local chamber of commerce.

The benefits of home staging are lasting long after the ink is dry on the contract. You may just make a habit of staging your next home…for yourself!

February 25 2009 | Sellers | 7 Comments »

A Quick Guide To Buying A Home. What To Look Out For, What To Watch.

There is probably no better way to become aware of the condition of a home than to have your home inspected by a licensed inspector. However, there are several considerations on which only you, as the purchaser, can decide. And, as I’ve said in other articles, it’s my belief there are some things you must do yourself: Manage your money.  Raise your children.  And, also… purchase your home!

1.    Location, location, location…

Probably the most important factor is that your new neighbourhood is a good fit.  Take some time to drive around the area and make sure you like it. Check out the traffic at rush hour – if the home you like is on a main street, make sure the traffic noise won’t be a problem for you.

Additional location considerations might include: Where are the closest schools?  Having schools nearby can be great if you have young children yourself.  It can be rather annoying with noise or traffic, if you don’t!  Does the lot back to a wash? If you have cats or a small dog, they might be at risk to urban coyotes and other wildlife. Is there an alley? Alleys have both positive and negative features. They provide a buffer between you and the back neighbor, but they also give opportunities for clandestine behavior since they are relatively private.

You might want to check the crime statistics for the area, something you can find by googling “neighborhood crime data” along with the community of your choice.  You may also go to the county sex offender registry and make sure you are comfortable with your neighbors. I

Check into nearby vacant lots. You never know when the lot your kids play on will be developed into something you might not want to have as a neighbour.

You can even ask your agent to speak with your potential new neighbors. Find out if there is any unreported crime; ask if there is a rock band that practices all afternoon. Find out if there is a problem neighbor at whose address the police have a reserved parking spot. Ask the immediate neighbors if they plan any major remodeling or additions. This could lead to a year of construction vehicles and noise from sunrise to sunset. A few minutes of due diligence can prevent an unhappy ownership situation.

Make sure the lot has good features; i.e. not located in a flood area, and not the lowest lot in the area (sure to be 3 inches deep in water every time it rains). Generally this is not a big issue because most municipalities will not give a building permit for such areas.�
 

2.    What do I really need…?

The home you pick should meet whatever needs you or your family have. Think about the future. Having kids? Already have kids? Kids leaving? Getting married? How big a home do you need, how many bedrooms and bathrooms? For later resale, the most popular single family home is a 3 bedroom 2 bath home. Homes with only 1 bathroom or only 2 bedrooms are more difficult to sell than the more standard 3/2.

Take the family and spend a little time in the home. Spend a couple hours, especially during the morning or afternoon rush hour. Make sure the noise and activity levels are acceptable, and make sure the home has all the conveniences you like.

Is a pool important? Somewhere to relax on those hot summer weekends? Be sure to inspect the pool closely, using a professional inspector. Pool maintenance can be quite expensive and time consuming. I personally do not have a pool service, instead I have an automatic chlorinator and an automatic pool sweeper. These items are a significant up front expense, but can yield years of virtually maintenance free pool enjoyment. Insist that all pool equipment be in excellent working condition.

3.    Last year’s remodel… this year’s nightmare?

Many older homes may have been converted from a one bath to a two-bath home. You can usually tell.  Make a careful inspection and see if this was done.

Sometimes a master bath has been divided and made into two bathrooms. If the remodel was done well and permitted (a permit was obtained from the municipality), this is a better situation than a poorly done, unpermitted change. You can often find permit information at the city planning office.

Sometimes additional square footage has been added to a home, either by converting the garage into a bedroom or office, or by enclosing the patio. Telltale signs of this might be: No garage, or a garage door that is still there but has no purpose; a slanting floor (garage floors and patios often slant to provide drainage); unusually low ceilings in one room; no air conditioning vents in the room; an outdoor carriage light on the wall of the room; a room with one cinderblock wall and 3 wood frame walls.

Some homes built with a carport have had the carport enclosed. This is an inexpensive and useful remodel, provided it was done correctly and with the proper permits. Things to check for: A window from the house into the garage; garage door is not self closing and/or is not  a solid core door; one garage wall is block, the other walls frame; no power outlets on the garage walls except on the back wall.

Look at the flooring in the home. Flooring is an upgrade many homeowners attempt on their own, but without sufficient skills. Often before selling, owners will rip out old carpeting and install laminate wood flooring. Look for the seams in the laminate; one of the more difficult things for the unskilled installer is to plan the job appropriately so that the seams in the flooring come out right, with no gaps. Further, many installations run right up to the baseboard – sometimes there are two baseboards, the old original and then the new baseboard to cover the gaps from the flooring!

The proper installation is generally to remove the old baseboards so that the flooring is seamless from wall to wall and only a single baseboard is installed. New baseboards should be installed – this minor step costs little and makes a big difference. You can often see a discoloration at the bottom of the old baseboard where the carpet used to be. And, most do-it-yourselfers are not good at mitering the corners and fitting the baseboards perfectly. Just look at the joints and the corners – you will be able to tell, easily, whether the installation was done well.

Tile is another homeowner do-it-yourself favorite, and again, without the proper skills, the job can look terrible close up. Uneven levels in the tiles, grout lines that are not straight, and poorly done corners are just a few examples. Just look at the work, you will be able to tell whether it was done professionally or not.

Finally, look for additions. This is often evidenced by one part of the home leaning away from another part – look at where outside walls meet. Look at joints in the outside walls and see if they are pulling away from each other. Look at the flooring in the home at the same point; if there is carpeting, it is harder to tell, but sometimes the addition will have a different slope from the main part of the house.

For information about remodel work, trust your home inspector. This sort of thing is often more cosmetic, but might make a big difference upon resale.

4.    Who built the ark?  OR….

How is the home constructed? Some older homes are slump block, and this is a wonderful thing, as the utility bills will be substantially less than for a frame house. These homes stay warmer in the winter and cooler in the summer.

While my personal favorite construction is slump block, a close second would be block homes. With these homes, you may find the cable TV companies complain when they have to drill through the block to add an outlet! Block or brick, or some form of masonry, can provide a strong, stable framework that has inherently good insulating qualities.

For some time, homes were literally built by framing the home, wrapping it with insulation and chicken wire, and then using a gunite machine to spray stucco on the outside. I know I am not characterizing this very well, but it is probably the bargain basement construction method. Unless this process is completed carefully, the stucco can develop cracks. Newer homes are built with framing, then engineered wood (plywood or particle board), then insulation and stucco. This is much more stable than chicken wire over framing!

Any of these construction methods, done properly, are acceptable. My opinion is that the risk of problems is lower with masonry of some sort.

When my grandparents bought their last home they did not check any of the electrical outlets. The inspector verified that they worked, but the brand used by the contractor must have been the very cheapest, because none of them will hold onto a plug – the spring action is so weak that the plug literally falls out of the outlets, this is just something to keep an eye out for.

Similarly, look at the valves under the sink and toilet. Make sure the lines are copper and not galvanized. Galvanized pipe, installed in the 70’s, will almost surely be rusty and possibly leaking now, 35-40 years later. Insist on a repipe to copper at the seller’s expense. Have your inspector make sure the plumbing is copper.

I like to make sure the inspector checks the shut off valves under the sinks and toilets, because in older homes, they are often frozen and impossible to use. If there is any evidence of leaking, have the seller replace them with new ones which are less prone to freezing. When you have to have your sink or toilet worked on, you won’t have to shut off water to the entire house for half a day.

5.    Rules, rules and more rules…

who ever your agent is they should make sure you get a copy of any Covenants, Conditions and Restrictions on the property. These are rules associated with a property which are part of the deed and run with the land. 

Other things to think about (this list is by no means complete):

-    Cost of homeowner’s insurance

-    Taxes/Rates

-    Utility costs

-    Garbage pickup / bulk pickup

-    Neighborhood watch

-    Internet service

-    Sky

-    Street condition, paving

-    Security system

-    Paint condition

-    Driveway condition

-    Roof condition

-    Age of air conditioners

-    Septic or sewer?

-    Age of faucets and other fixtures and their condition

-    Type of electrical wiring (aluminum, copper?), electrical panel, breakers

-    Condition of shower enclosure and tub area (mold?)

-    Insurance claims history

-    Street utility manhole in front of house?

-    Distance to fire hydrant?

-    Water pressure?

-    Condition of watering system for grass, shrubs?

Finding the perfect home for you and your family should be an enjoyable experience.  I hope these guidelines will help you in your search and home buying experience! Good luck.

February 08 2009 | Buyers | 1 Comment »

Going Green – Are You Going to Keep Up With What Society Wants?

Generation Y have been bought up with an awareness of the environment and have become more inclined to use and purchase items that are deemed eco friendly. As a result eco-friendly properties are growing to be more well-liked. For a sellers best interest if your house is eco it’s useful for your buyers to be able to identify sustainable home building resources for themselves. When it comes to buying a home if you know the details of its build you can make vital decisions between one property and another based on just how careful the construction has been with taking into account the impact of protecting the environment. You can also identify which properties will save you funds when it comes to running costs and making repairs. And if you plan to put up additional buildings or extensions to your property, you’ll know how to go about it in a responsible way.

Here is a quote taken from a book I have been reading on sustainable living. It says sustainable material can come in many forms. Preferably it should be offered locally to lessen the environmental impact on transportation. The materials should originate from renewable sources, such as sustainable forest plantations, and the processing and manufacturing involved in preparing them for construction use should be efficient and non-hazardous. They should also be intended to last for a long time, reducing the need for repairs and replacements. It sounds like a lot of hog wash but the practical use and the impact

Sustainable building materials are not only excellent for the environment, they’re good for your health. In order to take full advantage of their staying power, they should be water resistant, which will also go well in stopping the growth of mould and rot, which can harm your health in many ways. Using natural materials such as wood or stone means you won’t have to be concerned about toxic and carcinogenic emissions such as those emitted by some petroleum-based building materials and asbestos. If builders used recycled or reclaimed materials in the construction of a property, you can use air-monitoring equipment to check the interior air quality and make certain no problems have arisen as a result. For many construction businesses, such tests are standard on eco-friendly homes, making them a better bet than ordinary properties. And most sustainable materials are designed for easy cleaning so that you won’t have to use to use strong chemical cleaning products which can potentially harm both you and the environment.

Once you begin looking into sustainable building materials, you’ll find that there are all sorts of intriguing options out there, including traditional cedar or stone, lightweight but unexpectedly strong bamboo or cork with wool-based cavity filling providing a tremendously efficient substitute to standard insulating materials, and linoleum or terracotta tiling perfect for floors. Materials such as these can be used to craft a home that is good for the environment, good for you, cheap to run and truly individual. You really can’t lose.

But for a start here are a few things you can do in your house today.

Start with Just a Bulb

Start with small changes that make a big difference in your own energy use and the pollution we generate. If every homeowner replaced their five most frequently used light fixtures or the bulbs in them with ones that have a low energy rating then you can save 10% of your power bill straight away. The initial cost can seem high but the long term rewards are good.

• Kitchen ceiling lights
• Living/Family room table and floor lamps
• Outdoor porch or post lamps

Facts

Energy saver lighting uses about 75% less energy than standard lighting, produces 75% less heat and lasts up to 10 times longer.

The energy used in the average home can be responsible for more than twice the greenhouse gas emissions of the average car. Helping with global climate change starts right at home with easy changes like light bulbs and fixtures.

Heart of the Home

Close to 50% of the energy used in your home goes to heating and cooling. It makes sense to ensure your systems are operating efficiently.

Air Filters & Obstructions

Change the air filter on your heaters or air conditioning modules at least every 3 months to run it at its maximum efficiency. Clogged, dirty filters really reduce efficiency of your system and the air quality in your home.

Keep your vents and registers unobstructed. Move drapes, rugs and furniture away from heat registers and return-air vents. Free-flowing air through the units provides more comfort and will save you money.

Save Money with Regular Maintenance

Get a tune-up for your HRV equipment yearly. Airflow and other problems can reduce your system’s energy efficiency by 15%.

Install a Programmable Thermostat

A programmable thermostat can save you  hundreds a year in energy costs! It will give you the flexibility to turn down the heat or air conditioning during the day and when you are away for extended periods of time.

Save 25 to 40% on Energy Costs

Seal your leaky heating and cooling ducts and increase their efficiency by as much as 20%, while increasing the comfort in your home. Much of your heating and cooling goes out through leaky ductwork.

Close to 75% of installed cooling equipment has the incorrect amount of refrigerant. This can lower efficiency from 5-20% and cause premature failure. Work with your contractor to verify the level is correct.

Going Tankless

Infinity hot water heating (tankless) have an advantage over tank water heaters because they provide significant energy savings. The tank water heaters must constantly heat the tank’s water waiting for the demand, where the tankless provides the hot water on demand. Installing tankless water heaters in new homes makes a lot of sense. When replacing a tank water heater in an existing home, the cost of the tankless, plus installation will generally be 2-3 times higher.

If you are replacing an electric or liquid propane tank water heater with a tankless, the savings can be up to 50% on water heating costs. The cost of heating hot water in a home is about 14% of your energy bill, so it is a significant expense.

There are both electric and natural gas tankless hot water heaters. The natural gas units are more expensive than the electric, but they cost about 10-15% less to operate. A good plumbing contractor can help you calculate your potential savings and payback period, plus discuss which is better for your home.

Front Load vs. Top Load

When you need a new clothes washer, there are quite a few choices, but the primary choice is between a front or top loading machine design.

Front loading machines use about 38% less water and 56% less energy, and they are also easier on clothing because there’s no agitator. They require less detergent too. Big families can fit more clothes in a load, saving even more energy and some time doing laundry too. Front loading machines also extract more water, reducing drying times for additional energy savings.

Front loading machines do cost more upfront, but can pay for themselves fairly quickly. A family of four can save around $100 annually just on water and energy costs alone. The cost of top loading machines ranges from $400-$1200 and front loading machines from $700-$1500. A front loading machine can pay for itself in 2-3 years, depending upon the model you choose.

Remember to always look for ENERGY STAR!

ENERGY STAR Savings

Products with the ENERGY STAR rating use 10-50% less energy and water than standard models. The money you save on energy will more than make up for any additional cost. Look for the EN ERGY STAR label on clothes washers, refrigerators, dishwashers and many other household systems and appliances.

January 25 2009 | Buyers and Sellers | 2 Comments »

Kitchens And Bathrooms Sell Houses

What are the two areas that we spend the most time in during any one day? The answers is the kitchen and bathroom. These areas are the business areas of anyones home and can easily set your home apart from the others. In previous posts I have spoken about the need, espessially in this current market to set youself apart from your competition. People spend a large part of their day in their kitchen and bathroom and this goes hand in hand with all the research I have looked at that has shown these two rooms to be at the top of the list of selling features when it comes to real estate sales.

Todays trend is to have an open plan kitchen. A big open plan kitchen can be good for watching the kids while making dinner, but not only growing families are looking for a larger kitchen. Open plan kitchens are also great for those who enjoy cooking and entertaining. When it comes to selling your house take care to make sure your kitchen is showing its true counter and cupboard space by clearing the bench clutter and removing excess decorative items from the tops of cupboards and in glass door cabinets. Also, make sure there are no additional carts, bookshelves or tables hindering the traffic flow.

When showing the house make sure the kitchen looks bright and clean. This area is generally the ladies area. In the kitchen you need to be thinking “how am I going to get the ladies to like this area.” This isn’t fact but generally the lady in the family will have more say when it comes to the buying process and the kitchen is a great place to start winning her over.

Today’s image of the ideal bathroom is that of a spa-like getaway inspiring a sense of relaxation and freshness. No matter the size or style of your bathroom, you can make it a more restful place to escape. The bathroom is a family area and generally a private area where parents are looking after their younger children or the rest of the family are cleaning and preparing themselves for the day or night. It’s very important.

Here is a list of things you can do to improve these two key areas in your home:

* Start with the paint colour. Pick a neutral colour that will flow nicely with the rest of the home. Paint the ceiling a tint of that colour and the trim a lighter colour. White trim can give a clean feeling to a room.
* Fix damaged tiles or replace unattractive flooring. Old vinyl tile with mold and mildew stains will really diminish the value of your home. Update with current flooring to make the room look more appealing and larger. Take the time to line up new tiles properly, crooked tiles or inconsistent patterns are not an improvement.
* In showers, sinks, tubs, or toilet repair damaged caulking and get rid of mildew stains. Wash fabric shower curtains to remove mold and mildew or purchase new shower curtain liners.
* Shine hardware. Make your faucet, taps, and showerhead sparkle. Use a toothbrush around faucets where it is difficult to clean. Turn your shower curtain bar, so that the shiniest part is facing outward. The eye is attracted by shiny things and it will make any hardware look new again.
* Sinks should be clean and stain free.
* Tighten or replace loose cabinet handles. Updating cupboard hardware can be a really quick update and change the whole feel of the kitchen or a bathroom vanity.
* Leaky faucets should be repaired.
* Old kitchen and bathroom cabinets should be painted or refinished. Do not be afraid to paint wood.
* Bench tops that are old and scratched should be replaced; an updated bench top will make a big difference in the offers that you receive.
* Remove garbage for a clean look and smell. Make it smell pleasantly clean but be careful not to over-scent with products that may be offensive to some.
* Allow natural light to come in. Tie back curtains and reevaluate window treatments. Window treatments should highlight the window, not conceal or distract from it. Clean mirrors, lighting fixtures and bulbs as well as, windows inside and out.
* Remove things that make the house and these areas personal to you. As they are family orientated areas people will want to try and imagine themselves in there.

By doing these things and possibly spending a little more time fixing or cleaning these areas can have a great effect on the selling of your home. I am not going to say that it will increase the value of your home – unless you totally renovate. But what I will say is that it will give your house that edge to stand out in the crowd. With sales volume the lowest in 17 years you need to have an edge and a reason for people to want to buy your house. I believe if you follow the steps outlined above you will be well on the way to having a better competitive edge than your competition.

January 18 2009 | Sellers | No Comments »

Selling your house in 2009

Marketing, price, presentation

Christmas and New Year is over. We are pretty much now beginning the 2009 year off back into work. I was back at work today to a bombardment of paperwork to be completed. The joys of life. As I said in my previous posts I said 2009 will be a year for change and opportunity. In terms of the change I believe that it will be more important than ever to be at the front edge of what’s happening so you don’t get lost in old ways of technology so that you’re not left behind which could cost you money.

There will be in 2009 a very big change in focus when it comes to marketing. As the credit crunch and the recession take full effect during the early parts of the year there will be a focus to finding more effective ways to market products to reach the audience. And Real Estate will be no different. This to me will be a vitally important key component that is going to become more and more important this year than ever before. Where and How you market your property will be the defining point in the result you achieve when you try selling. Obviously there are other things and I will cover them here as well.

The medians to advertise your property are going to change. In my opinion the need for print media is going to become less and less effective. The cost vs. the result isn’t stacking up any more. Don’t get me wrong that if you put a good sized ad in the news paper you are going to get a lot of local views that day in the paper but it’s a one shot. With the time taking to sell increasing and the attention span of the reader gets smaller due to increased pressures at work and with the family. (Our lives aren’t getting any slower). I think the way to go moving on in the future will be for longer term and specific advertising. This will be online and longer term print media.

When I Say longer term print media I am talking about the local Real Estate book that gets published by either the company or a collective of companies. But I feel that if the company isn’t big enough and doesn’t hold enough listings that if it tries to make a publication of its own for the area it will not get as much coverage. This is only because people these days and I think more towards the future don’t want to have to look all over the place to look at their complete choices. The one stop shop type of model is going to please the consumer of tomorrow.

Realestate.co.nz which is now New Zealand’s leading online Real Estate portal has a dominating effect on Real Estate adverting online. But this is a good thing for the way we as a society want to go. This will enable the public to have the greatest and a more comprehensive search. The reason I say that these sites and publications are going to become more important to your marketing is that people will want to compare your property with what else is on the market. I know people have been doing this for ever but the thing that I think is going to change is that people don’t want to be searching around all over the place to find comparisons. Also with our ever fast passed world you need to be out in the spotlight for longer. This is the reason for the publication with a longer shelf life to be more important in your marketing.

Along with where you market your property in 2009 Price is going to be ever so important. The slow down and recession which started in 2008 and that is now coming with us in 2009 is going to make pricing harder than ever but more important than ever. The thing is that some people will price to the market and some wont. If you are one that hasn’t our going to help the ones who have sell their property.

During the comparing process the buyer goes through your property will simply be eliminated because it’s a higher price compared to what they could buy down the road. I can’t stress this enough. You MUST price the property competitively in today’s market if you want to sell. And you need to advertise that. Be firm on that price but make it known. If you’re going down the track of no priced marketing Auction is the best way to go but make sure you at least have a guideline and listen to the buyers feedback on where they believe the price could be. But be firm on a reasonable value because buyers in a buyer’s market are tough but do listen.

One thing I want to mention on this point is that I know of agents out there actively in the field who are buying listings. Telling the vendor at the point of sale that the property is X amount which is a little more than any other agent you had in has said. This tactic is going to kill your chances of selling and what’s more frustrating is its going become more stressful for you when it seems like your dropping your price constantly because your agent you have chosen says you need to meet the market. 2009 will not be a time to test the market. It’s a time to listen, be aggressive and achieve results.

Presentation is going to be important. When marketing your property online the only guide the buyer has to go by when in the comparison stage is the pictures. Which make having good quality photographs very very important. There are plenty of places to go to have photography done and there will be more I think coming soon to give you a good choice of photographs. But it’s also about the photos that you take. Some agents and people swear by having less photos so that a person enquiring will ring the agent for the enquiry. This is wrong. And even more wrong for a generation Y person. Generally what will happen is that people just want to see everything so that they fully know what to expect. Then they can compare and either eliminate or shortlist the property.

Once the property is shortlisted you then will find the buyer will contact the agent and find out more meaningful and maybe more specific information for their needs. If they don’t contact the agent directly they will go to the open home.  If all the preparation work and everything is done right then you will hopefully get a contract on your property. But everything has to be right. In 2009 there will still be sales and probably more than in 2008 but the properties that sell will be priced right, marketed right and well presented. The combination of these factors and doing them right, especially been proactive about the marketing will ensure that you have a successful sale in 2009.

January 05 2009 | Sellers and The Market | 5 Comments »

New Zealanders Moving To Australia In Record Numbers.

 I just read an article published on stuff.co.nz and its one that I thiought I need to share with you because of the impact this will be having on the housing market in New Zealand. The article is below:

The exodus of migrants to Australia hit a record in the past year, while tourist numbers from northern Asia are slumping badly because of the global economic slowdown.

Australia’s stronger economy is an increasingly large safety valve for Kiwi workers in tougher times.

In the past 12 months, the number leaving to live or work in Australia would fill Wellington’s Westpac Stadium, with another 800 standing outside.

The net loss to Australia in the past year was 35,300 almost 100 people a day. That is the biggest exodus on record. Previous peaks in migrants came after the 1987 share crash and in the late 1970s.

New Zealand gained 3600 permanent or long-term residents in the past 12 months.

In November alone, 600 more people left New Zealand than arrived. That is a bad sign for an already struggling housing market, with Westpac economists expecting house prices to fall by another 5 per cent next year.

Tourism is also facing a tougher year. The industry employs one in 10 workers in New Zealand and some economists expect the sector to be badly affected by the global recession, cutting into the $1 million an hour that overseas tourists spend here.

Tourist arrivals in November were down 4 per cent on the same month last year. But there was a 46 per cent dive in Japanese tourists for the month. South Korean and Chinese visitor numbers also fell sharply.

Tourism New Zealand chief executive George Hickton said he expected tourism to be down by 6 per cent or so in the peak summer season. “But our concern would be from March, the low season, as bookings are quite light.

“We will have to batten down the hatches to get through a tougher time.”

New Zealand would get some benefit from the big fall in the kiwi dollar, which meant tourists typically spent more while they were in New Zealand. Lower world oil prices would also eventually result in lower air fares.

In November, tourist numbers were down sharply because Japanese parents cancelled school charter flights for 6000 children after the high New Zealand dollar pushed up the cost of thetrip.

But Tourism Industry Association chief executive Tim Cossar said the fall in the dollar meant New Zealand was a good value holiday destination.

Backpacker hostels, holiday parks and motels were so far unaffected by the recession, but bookings “were looking tough” after February, he said.

However, the domestic tourist market was still strong and Australian tourist numbers were holding up.

Source: stuff.co.nz by James Weir

Will this be impacting on our New Zealand Housing Market. There is no doubt in my mind that for the short term it will be. To create a balance in the market there needs to be equal supply and demand. At the moment there is substantially more property on the market than buyers. In my last post this is the classic signs of decline.

I asked my followers on twitter why you think so many people are leaving for over seas and most of them said it was for increased wages.  Although the cost of living is higher over in Australia people in this recession time aren’t so much looking at the bottom dollar but the top dollar and this is where we are suffering at the moment.

The effects of this on the Housing market in New Zealand may aid in bringing prices down further but there is no way of telling this. But what it will do is put more stock onto the market and add even more time to how long it takes to sell a property. 

December 21 2008 | The Market | 1 Comment »

The 4 Real Estate Seasons And Its Effects

During the last few years the real estate market was rising all over and we were experiencing a sellers market. The media went wild over the frenzy and everywhere you looked there was someone or something telling you that real estate was HOT HOT HOT! Prices were going through the roof and there was unprecedented growth and people were becoming rich by simply buying and selling houses.

Now the market going through a correction because there was too much growth too fast. In some areas prices and inventory levels are going to decrease. Is that a good thing? Yes, it is. It’s healthy for each market to go through it’s cycle. This ebb and flow is good and allows each market to grow and then collect itself and catch up, and then eventually grow again.

What has happened over the past few years is prices have increased and increased and just keep increasing. But this prolonged spur of growth can’t be sustained forever and there then there comes a point when people are no longer able to pay the prices of the homes. During the boom times people begin to notice how much the neighboring homes are being sold for and they want in on the action. When a market heats up and prices begin to rise quickly everybody starts throwing their homes on the market and the market becomes flooded with property.

Eventually when the demand slows, but people are still wanting to sell for more and more, those home-sellers (who are always the last to accept the end of a growth period) will need to adjust for this and the market can correct itself.

Here below is a wheel with what I call the 4 seasons of any market. I will explain them below.

This boom or growth time is called the expansion. Expansion brings job growth, population growth and a high demand on the infrastructure of an area. Roads need to be built, restaurants open, hospitals expand and prices rise. This in the Real Estate market brings new construction, new sub divisions and more money. Property prices increase and demand for the property on the market increased. This was felt here in New Zealand around the years of 2001 to 2007.

In New Zealand what we experienced in the later parts of 2007 was equilibrium. Equilibrium is when things begin to slow and settle. Prices have reached their limits, or beyond, and this period of time brings high prices and as a natural consequence less businesses move into, or expand in, the area. In this part of the cycle prices usually slow to a steady lever but this time because of the Global Credit Crunch we have seen a very short time in this area and fast movement into the next step in the cycle which is Decline.

Decline occurs as the demand for housing decreases, job growth stops and businesses begin to relocate to save money. During this time, prices become stagnant or even decline as rents and occupancy go down. Usually this decline is merely a slowing of the growth rate, but in markets where the rise was too fast the decline must result in a correction (decline) of prices which is what we have seen during 2008.

The market will then move into absorption. Absorption occurs as the lower prices and occupancy levels fall below the national averages and/or the area becomes attractive again to businesses looking to relocate. Usually in this time incentives are introduced by governments to encourage growth within the community.

I like to think of the market as a natural and living cycle that has laws that it has to follow. The easiest way to explain this is by calling the 4 cycles in the market a season. Just as nature has it’s seasons, real estate markets have a healthy way of transitioning from period to period. Sometimes depending on external factors such as warmer sea temperatures a season could be more violent. In the real estate market the same principle will apply. If there is an unusually high turnover of volume or higher than usual debt in the market this will affect how the next season performs. Experiencing these transitions and understanding them is very important and if your serious on property this will give you a huge leg up and will also help you as a home buyer or seller understand how they work so you can weather out the storms and relax in the warmer and rosier seasons.

December 20 2008 | The Market | 2 Comments »

What Are You Waiting For?

Its official. Sales volume is the lowest it has been for 16 years 11 months and the market has never been harder to work. Sellers, Buyers and agents… We are all having to adjust, compromise and accept that the days of the boom are well and truly over. And property prices have in fact in some areas come back 10% and some places maybe more. Negativity is so easy to talk about these days when the markets are depressed. Every day we are all hearing about the Credit crisis, banks bailout, tougher lending, house prices and sales fall, car industry crashes, jobs been slashed, and I could go on for a very long time.

These of course are the reality of today but we have to look in hindsight at whats happened prior to bring this about and the fact of the matter is that too many of us are forgetting about is that from 2000 to 2007 there were 7 years where there was the biggest economic growth this world has ever seen. This created jobs in huge amounts businesses were making money without huge expense and effort, many people bought property and in 4 years sold it for double what they paid for it enabling them to buy bigger and better homes and allowing others to get into the market easily at the time. We were all living relatively good lifestyles and many of us were probably living at a level above where we deserved to be.

Reality has hit home but is this a reason to be scared, freak out and stop doing the economic activities we used to do? NO! It’s a time to consolidate definitely and a time to work smarter and stop being lazy. Do you want to be left behind and watch the ones who take action now prosper in ten years time. Are you going to be the one who says, dam I wish I took action when there was time. I sure hope not. There is no reason to worry, it’s time to start opening your eyes up and see whats happening around you. We have seen a major shift in the market place one which few people really expected, homes and property continue to be bought and sold at new levels every day of the year. There are always people who need to sell, and people who need to buy, and so long as there are these 2 people in the market, property will sell. It just won’t sell at prices that where around in 2007. 

Housing prices today right now are in many places at a level that has made homes right across the board more affordable. And in my view the key to selling your property in 2009 will be in the ability to show that your home has the best value for money on the market, and attract the right buyers to it, and when you’re buying and selling on the same market you aren’t gaining or losing any of that market change. Don’t be afraid to step up to the mark and make a move.

There are some very good buys out there now. We don’t know if there will be better buys to come. All we can do is work with what we have now, and there are plenty of people wanting to sell. Plenty of people are wanting to buy. Enquiry on this blog has doubled in the past three weeks and the search terms are mostly about how to find a good buy. If you want to know where a good buy is, talk to a trusted real estate agent. In this market as a seller they are going to be your best help and also for a seller a real estate agent will be helpful in so many ways. Its bridging that expectation gap which the agents do in order to meet everybody’s needs which is so important.

I have a very large social network online and am in constant contact with them. Today I conducted an experiment. On Twitter I asked a simple question. ‘What are your concerns going into 2009?’ 70% of the response I received was positive and about the opportunities that they see coming into play now. The other 30% were concerned about the financial pressures of life. Which person do you think is going to take action and prosper from it.

Take action. Don’t sit by and let things happen before you. If you have a problem, for example you need a job transfer somewhere and you need to sell the house, take action and sell it. Maybe consider a part swap of a possession somewhere else or something else to sweeten the deal to the buyer. These things will work and you will see the results. I believe the time of opportunity is near. But the opportunity is lost if your too late. Be in. Don’t be scared and think of the long term goal. If your purchasing a home today, tomorrow or in the near future good luck. There are some great buys out there for you to snap up and they arent a trick. This is for real. People lived lives a step above what they earnt and now are having to take the hit. This is the opportunities for you. 

December 16 2008 | Buyers and Sellers and The Market | No Comments »