I kept count. I’ve been asked that question five times today. How’s the market? The answer is “yes!” (One thing we can probably all agree on: there IS a market.) When we try to get much beyond that answer we have to start with the observation that “markets” are really about supply and demand. So it’s a fun question with some very general answers and implications. Maybe a more interesting and appropriate question is “How much does it really matter how the market is?”

The market doesn’t buy real estate. The market doesn’t sell real estate. If the market does anything it reflects some general trends regarding supply and demand. By its nature it is passive and historical. I’ve never had a market attend a closing.

Back when management by objectives was fashionable I had a little sign that read “It’s difficult to remember that your objective is to drain the swamp when you are up to your butt in alligators.” Likewise, it’s sometimes difficult to remember that we’re trying to facilitate the buying and selling of real estate when we’re up to our butts studying market information and other distractions. Instead of looking for the plug that drains the swamp we find ourselves yelling to each other, “Hey, have you seen any alligators?! How big are they? Let’s check over here…”

Alligators bite; the market doesn’t. I worry less about what (and how) the market is doing and more about what (and how) I and my clients are doing.

Can you stand some more information about the market? We are once again blessed with another round of statistics! Personally, I’ve been enjoying press releases and commmentaries that are citing lots of national and regional statistics and then towards the end of the tale of woe offering “but real estate is ultimately local in nature.”

Here’s a bottom line number that might surprise you: total home sales in 2007 were the fifth highest on record! Now of course we can make that fairly negative by noting Continue reading »

The creativity of con artists is truly impressive. This one has (or was) taken place right here in Maine. (Thanks to the Maine Association of Realtors for the warning.)

In short, a property was listed for sale with the information available on the Internet.  The “bad guy” took the information and advertised the property as available for rent, listing himself as the contact.  When he was contacted by prospective tenants they were instructed to send/wire money in advance to secure the rental. The actual owner of the property knew nothing and had no intentions of renting.

It’s important to remember that Internet information can be used by unscrupulous people for personal gain. In any transaction – rental or otherwise – exercise caution!

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing. (Note these are national figures; local trends may be significantly different.)

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.

Among the many pieces of advice available are “suggested questions.” Here’s one NOT to ask.

Some pundits seem to want to reduce the process for selecting a real estate agent to a simple series of interview questions. Questions are important.  Questions are supposed to generate useful information to aid in decision-making. In that regard, you might consider the most important question in the process is the one you start by asking yourself. “What am I looking for in an agent and how will I find it?” That’s a simple question, albeit not an especially easy one.  But all the questions you ask your prospective agent should be geared towards it. So let’s consider one question the pundits often suggest you ask. “How many transactions have you completed in the past year?”

When I get asked a question like that Continue reading »

Mary from Georgia continues to support the somewhat strange notion that real estate and recipes go together.  Some will remember that she was at least indirectly responsible for the recipe for “Fawn Doo” posted earlier… Well, this one actually sounds pretty good… and here’s how it might relate to real estate:

 If your house is listed for sale and prospective buyers are coming to see it, smells are important! So you could try baking this bread! (If I’m personally involved I have a slight preference for cookies…)

No Knead, Dutch Oven Bread Continue reading »