A Warmer Winter?

To us, a warm winter is one with a lot of real estate sales! The recent extension and expansion of the homebuyers' tax credit gives us hope for the traditionally slower months. Because of the timing on the new bill, sellers and buyers should realize that they can't wait until the spring market. Buyers who have no home to sell (usually the first-time buyers) can probably put off finalizing a sale, since the contract must be signed by April 30,2010 and must close within 60 days, by June 30, 2010.

Many of the houses listed in the so-called "spring market" are still coming on the market even into May, so it won't be possible to wait until all the possible choices are available for viewing. Of course, if a buyer also has a house to sell, he or she should get started right away, since that could take up the intervening months. In addition, people should factor in extra time for mortgage approval, as we have been finding that the appraisal process in particular is taking far longer than it did before.

All of that leads to the conclusion that buyers who wish to take advantage of the tax credit cannot risk waiting until the spring rolls around. Since sellers certainly need to start soon, that argues for a busier winter than we're used to having. Don't forget that, although the holidays are busy and it's difficult to schedule showings, many homes look their best when decorated. In addition, the snowiest and iciest months are later in the winter, so now is better from that angle. It's also good to remember that it can pay to list when there isn't much around to compete. Once others realize that time is of the essence, you can already be negotiating your sale and moving on to a new purchase.

Busy Time in Relocation

As many people may know by now, we have grown so much in our relocation services business that we spun it off and renamed it Pearce Plus, primarily because we use real estate companies other than our own in areas we don't serve (and, in some special circumstances, in our own area as well). We are serving as advisors and administrators for human resource departments about policies and procedures involved in relocating employees from around the world to New Haven, and, increasingly, from one place to another when New Haven isn't either the destination or the point of origination. For example, we may help a company here do a group move from California to Florida. We are also representing many senior living facilities in moving seniors through our Senior Services division, now also under the Pearce Plus banner. These activities are specialized and deserve to be separated out, as they

Other companies who do what we do are usually independent entities, although often they are under the umbrella of a real estate company (Cartus, for example) and use their own agencies wherever possible. Although our relocation employees operated indepedently, we thought that renaming our services would make the point more clearly to clients and to the public. We chose this point in time because it's so busy now. After a lull, when corporations were all putting their hiring on hold, we are seeing a spurt of new employees coming into the region. Seniors, of course, are often driven to sell by factors other than market timing, so that market is strong as well.

And, we must admit, it's nice to have something positive to report in these gloomy times!

It's the Buying Time of Year Again

Our agents have heard me say this every year, but it's time to say it for this blog: The best time to buy a house is between Halloween and Thanksgiving. Sellers are ready to sell, as they start to pay heating bills, think about plowing, and head into the holidays. Buyers are mostly settled into new homes or forgetting about buying until spring. It's hard to show houses in the winter. There's snow and ice, not to mention cold. Parking and driveways can make open houses and showings tricky. Although many homes show well when they are decorated for the holidays, most families are busy at that time of year and don't want to have to keep their homes clutter-free and ready to show. Most buildings look better in light, and there isn't much of it in the dead of winter. All of that adds up to the realization that, if you haven't sold your home within the next three weeks, you probably aren't going to sell it until the spring.

Despite that chilling thought, there are sellers who want to move at this time of year. For one thing, some have tax reasons for wishing to close before year end. Some have jobs or commitments in other places. Some are tired of the selling process, and some have another home waiting for them. Some just want to spend the winter in a warmer place. All of those people are competing for the buyers still looking when winter comes. Therefore, if you are an eager seller, you are most likely to compromise on the price at this time of year.

Buyers can capitalize on these factors to negotiate for a better price as the weather gets cold, especially if the home is empty and sellers are worried about freezing pipes and empty oil tanks, or even just heating and plowing bills. This is the time of year when a month of expenses can easily become six months of expenses, and sellers will take that into account.

If you are a buyer, particularly a buyer with cash, here's your chance! Don't waste it--buy now.

Tenant Fit-up Issues

Today our Commercial Department, along with Petra Construction, hosted a panel to teach the ins and outs of tenant fit-up costs, procedures, time lines, and taxes. Tony Santore from Beers Hammerman was our guest accountant.

We had a good turnout, and the group asked lots of questions. It's a big issue for us, simce many deals now fall apart over the costs of tenant fit-up. The big lessons: Most people don't start early enough, or leave enough time; he who has the cash is king, and there's never been a better time to build; learning the tax ramifications, and getting your accountant involved early in the process, can save you a lot of money; and Realtors, developers, and construction professionals should all work together, even before the land is purchased or the lease is signed.

After the panel, guests were treated to two presentations, one on BIM (a new way to visualize the space before it's built) and the other on estimating. All agreed that it was a great morning, and those of us in the real estate business look forward to helping our clients understand the questions to ask, and when to ask them.

News from Around the Country

I just got back very late last night from Cincinnati, where The Leadership Council (a group of large independent real estate brokerage firms from around the country) met at Comey & Shepard's offices there. The trip itself was uneventful, except for the US Air flight from Philadelphia to Dayton (no, there's no more direct flight from New Haven to Cincinnati!), where the gate attendant announced that the plane had no working bathroom. Sounding just like someone's mother, she then proclaimed that, if you thought you'd have to go, you should go now, before getting on the plane! A new low in air service---and they're probably working on coin-operated toilets as we speak....

We always learn a lot at these meetings, and this one was no exception. On a beautiful fall Sunday, we sat in a windowless basement conference room all day, and listened to tales of woe from around the country. The brokers in this group were all hoping that the bottom has arrived; indeed, there are some signs that it has passed. Their average sale prices, however, were all down from a year ago, and most had unit declines of 10 to 20% from a year ago, and a two-year decline of more than that. Homes under $200,000 are selling everywhere, mostly to first-time homebuyers. Homes over $700,000 are not selling anywhere, to anyone.

In a twist on the common phrase, there is no broker left behind. All of us have had trouble getting transactions closed in this market. Financing is hard. Closings are delayed or cancelled. There doesn't seem to be any difference in big companies vs. small; all are affected. In fact, so-called traditional brokers are doing better than the discount or 100% companies in percentage of business. All parts of the country have had issues, although the places that didn't go up much (in our group, Tulsa and Des Moines) are much less impacted now. In fact, those companies in our group are chugging along. New construction and commercial real estate were low points for pretty much every firm.

We remained optimistic and, for the most part upbeat, helped by good food and plenty of wine. Next spring, when we meet in Iowa, we'll be hoping to break out the champagne. Until then, it's back to work!