Charleston Real Estate Blog

The housing bill, duh

A clear reason why the American public gives Congress an approval rating currently estimated to be 9% can be found in the housing bill recently passed. Does anyone really think there is anything of value here other than shareholders and bondholders of Fannie and Freddie (I'm not suggesting we should have let F & F collapse, I'm just not sure this was the right approach to solve their problems nor will Congress' efforts result in much more than election year campaign bluster and braggadocio).

Highlights courtesy of MarketWatch.

Major elements of housing bill

• A backstop plan for Fannie Mae and Freddie Mac that extends an unlimited line of credit and gives the government the authority to buy the companies' stock. 

• Funds to insure up to $300 billion in refinanced mortgages.

• A tax break of up to $7,500 for first-time homebuyers.

• A new regulator for Fannie and Freddie.
An affordable housing trust fund financed by Fannie Mae and Freddie Mac.

• $4 billion in emergency assistance to communities to buy and rehabilitate foreclosed homes. 

Is this any way to sell your home

A couple who were interested in retiring to the Southeast were taking a tour of various cities including the Charleston area that they thought they might be interested in moving to. We made arrangements to meet and spend the day showing them homes for sale in Mount Pleasant, which they had heard would be the best place for them to live in the Charleston area.

Of the 95 currently available homes between $350,000 and $400,000, we selected an even dozen to view recently and I attempted to make appointments. And the reason I highlight the word attempted is because we were only able to view 9 of the homes.

Now I'm pretty sure that most buyers will not buy a home if they are not able to view it. And the sellers for the 3 homes that we were not able to view should probably not be expecting to get a contract until they replace the DO NOT ENTER sign with a FOR SALE sign and begin to let buyers view their homes.

I called 2 days before we planned to view the homes and was advised by Centralized Showing Service who sets up showing appointments in the Charleston real estate market that one seller said that it wasn't going to be a good day to view their home, another seller never bothered to respond to Centralized Showing's request for an appointment and believe it or not, the real estate agent for the 3rd home had to be contacted directly and didn't bother to return my phone call.

Obviously, it's best when selling your home in today's Charleston real estate market with all the competition you face from so many other choices that buyers have is to make your home as available to see as possible. Sure, there are situations when dogs might have to be put away or a little straightening up from the kids would be appropriate but to not think it would be a "good day" or to not bother to respond or return a phone call is not any way to sell your home.

In general, if a buyer can't view your home, they generally are not going to want to buy it.

Sign of the L at Wachovia

The big W from Charlotte posted the big L today reporting a whopping record loss of $8.9 Billion, more than the bank ever earned in a year. Most of the problems and losses at Wachovia were attributed to the purchase of Golden West Financial two years ago just as home prices were peaking. Golden West more or less invented the option ARM which I have characterized as potentially the most insidious mortgage a less financially astute borrower could select. An option ARM loan allows the borrower to skip part of the payment and add it to the principal. Making matters worse is that 70% of their option ARM loan portfolio is centered in 22 housing markets in California and Florida. Read more at Bloomberg.com.  

What's next for Wachovia. New CEO, Robert Steel, formerly of Goldman Sachs and the US Treasury Department has been brought in to straighten out the mess that Ken Thompson left. It's just my opinion but I think Jamie Dimon from JP Morgan Chase might step in and pick up a sweet deal. It would certainly give JP Morgan Chase a major banking franchise in the growing Southeast. The price would be cheap and they probably will get some government support if they make a purchase, after all, right now everyone is waiting in the government bread line.

Photo courtesy of Flickr by troubled-diva.

An exciting new floor plan in White Gables, Summerville

I recently showed an out of town client homes for sale in White Gables in Summerville. They started their Charleston real estate search online and determined that White Gables was the only neighborhood they wanted to see. White Gables is a traditional neighborhood featuring front porches and sidewalks with friendly neighbors and lots of activities for people of all ages.

I was especially impressed with a new floor plan being offered, a one story floor plan called the Andover somewhat larger than the very popular Georgetown plan that White Gables has offered since the neighborhood was first developed.

I especially liked the foyer with great sight lines through the home. The formal dining room to the right as you enter the home could also be used as a formal living room or study/home office. The kitchen was spacious and included a nice island with bar seating and an eat in area. The large family room was located in the rear of the house. The master bedroom had good closet space and the master bath was luxurious and two secondary bedrooms are split from the master for privacy. 

As is typical in today's Charleston real estate market, the builder has several spec homes available for purchase at a nice discount since they are completed and sitting unsold. You can also build from the ground up and customize any home to your heart's delight and there are builder incentives available as well. There is also a nice selection of preowned homes at all price points.

Please call or email me for more information for both new construction and preowned homes available in the neighborhood. I'll be happy to show you all the very nice homes for sale in White Gables in Summerville. 

Real estate online search - you deserve better

I've written previously about the problems with inaccurate information on real estate listing sites. Now the LA Times did a study on searching online for a home at the most visited real estate websites. They found between 49 and 168 homes based on their search criteria.

The results:

1. Zillow 168
2. Home Gain 142, 48
3. Zip Realty 126
4. Yahoo! real estate 107
5. Realtor.com 103
6. MSN real estate 103
7. ReMax 91
8. Trulia 71
9. Coldwell Banker 29, 96
10. AOL real estate 49

Why the discrepancy in how many homes are available. Because in many cases, it depends on real estate agents submitting their listings to the real estate search sites. Realtor.com does get their listings directly from the MLS and MSN now uses Realtor.com for their real estate search. But Realtor.com is "clunky" compared to the super cool tech toys available at some of the newer search sites. Coldwell Banker wants you to see their listings before all the available listings. Some sites want to sell you to an agent as a lead (that's right, they want to sell you as a lead and I'm not sure that's the best way to find a real estate agent to help you with the purchase of your next Charleston home).

I don't want to brag (ok, maybe I do) but the new map based search on my website has more cool features and listings updated daily directly from the Charleston MLS. If you want the most accurate Charleston real estate listings and all the cool tech toys, this is the place to search.

You deserve better.

Can we walk?

Despite the record drop in price this week of a barrel of oil, I don't think anyone really believes gas prices will ever be cheap again. And one real estate trend that will be a result of $4 gas is the desire to live closer to work, shopping and activities. Just this week, I got a phone call from a homeowner in Mount Pleasant who wants to sell their home and move to Historic Downtown Charleston for those very reasons.

On the home page of my website is a new widget that will let you know what's close to your home or any home in the Charleston real estate market you may be considering purchasing. 

Click here and check it out. Find out whether you can just walk to your car or what's nearby that you can walk to.

More photos please

 ... but not too many. The number one request that I get from Charleston real estate buyers who are searching online for listings is whether there are more photos available. The Charleston MLS permits real estate agents to provide up to 24 pictures and my website provider, Point2 allows up to 36 pictures. It's important to remember to words, up to.   

Point2 recently released the results of their 2008 photo effectiveness study of real estate listings.

Key Findings

Compared to listings with only one photo, those with 21 or more photos generated more than triple the number of Detailed Views, more than double the amount of Interest, and double the number of Leads. 

Compared to listings with no photos, those with 21 or more photos generated more than fifty-five times the number of Detailed Views, nearly twenty-seven times the amount of Interest, and eight hundred and ninety-eight times the number of Leads. 

Views, Interest and Leads jumped 20 percent or more as the number of photos increased from 15 to 16.

  

The bottom line is that one picture is far better than none and the sweet spot appears to be 16. And I might add that all the pictures should be marketable shots that will help to sell the listing rather than just providing photos up to the limit available.

To illustrate, do these pictures really help sell this home? I noticed this listing this morning and the agent included 36 photos including some of these forgettable pictures.

And don't forget the first rule of real estate photography. Don't photograph the toilet seat up.

Charleston property tax update

The South Carolina legislature reformed property taxes recently and some questions now have answers. (Of course, when laws are enacted, they need to be translated into English so we can understand them so it generally takes time.)

I work with many people who are considering relocation to Charleston, many from very high property tax states and they are always concerned with how much property taxes are on any property that they are considering in the Charleston real estate market.

Basically, property taxes in South Carolina are quite low especially compared with many other States. Reform was apparently needed because home values soared and long time homeowners were not able to stay in their homes because the taxes increased so much over time, they were forced to sell (albeit at very nice profits).

The net result was that property taxes for school were removed from homesteads effectively lowering property taxes. The sales tax was increased except for the previously fully taxed groceries which was reduced to 1%. The hospitality tax combined with higher sales tax shifted some of the burden to the very large tourist population. And homeowners enjoyed reduced property taxes.

Furthermore, there are limits on increases to 15% every five years. But (and there is always a but), when a home transfers from one owner to another, the cap is removed and the assessor can raise the assessed value of your home to the current sales price.

But don't worry, the property taxes will still be reasonable, just not as reasonable as your new neighbor who may have lived in his/her home for a number of years. And a point of sale property tax increase is how many places in the US reassess the value of your home. A good conservative rule of thumb is to estimate 1% of the sale price of your home for property taxes. The property taxes on a $200,000 home should be approximately $2000 and property taxes on a $500,000 home should be approximately $5000.

If property taxes are important to you, you should consider getting a written estimate from the tax assessor prior to writing a contract on any home you are considering purchasing.

And make sure to apply for the 4% tax ratio on your principal residence, it will save you a lot of money.

The Big Picture

Barry Ritholtz calls it like he sees it.

"The collection of ne'er do wells, clueless dolts, political hacks, and oh, let's just be blunt and call them what they are -- total Idiots -- expands into an ever larger circle.

While the Republic burns due to the unsavory combination of incompetence, ideological rigidity, and crony capitalism, the fools and assclowns seem ever more determined to avoid any personal responsibility for the damages they have wrought. Instead, they flail about blindly, blaming everything and everyone -- except their own horrific negligence.

This is financial incompetence writ on a scale grander than anything seen for centuries."

Read it all. Idiots Fiddle While Rome Burns.

Mortgage insurers and declining housing markets

The good news for the Charleston real estate market is that Charleston is not considered a declining market according to the mortgage insurers. A lot of the country is as mortgage insurers attempt to reduce risk.

A big change is that borrowers can no longer avoid mortgage insurance by taking out the piggyback loan which has virtually disappeared. The good news is that mortgage insurance is finally tax deductible, likely a big reason for trying to get around it in past years. But make no mistake, today's mortgage market requires a down payment, mortgage insurance when the down payment is less than 20%, good credit and documentation.

While Charleston is not currently rated a declining market, we still face headwinds from very high inventory levels and fewer sales. As I've mentioned on many occasions, high supply and less demand pressures prices. But as I notice the areas on the chart, of course there are the usual suspects, California, Florida, Arizona and Nevada along with the economically troubled Midwest. But a lot of large metropolitan areas seem to be designated including the very populated Northeast corridor and I can't help but wonder if the mortgage insurers are painting with too broad a brush by not digging down and analyzing how home prices are doing in specific areas such as zip codes. Here in Charleston as an example, home prices are performing somewhat differently in Mount Pleasant and Daniel Island than Summerville and Goose Creek.  

Here is a very helpful map from the WSJOnline showing declining housing markets.

Inaccuracy of real estate listings

Joseph Ferrara at Sellsius addresses the problem of inaccurate real estate listings that frustrate real estate agents, sellers and buyers.

"Inaccuracy of listings on real estate listing sites is the Achilles’ heel which could lead to their demise." Read more including a great photo displaying Joe's great sense of humor and a link to a post by a real estate agent who is frustrated as a result of inaccurate information.

There are so many places that real estate agents post listings today in addition to the local MLS and their personal websites. The consumer real estate public thinks the information they view is accurate. Many people who are searching for Charleston real estate don't search the Charleston MLS but instead are searching for Charleston homes on Zillow, Trulia, Google, MSN, Yahoo! and many other national sites. Some consumers even mistakenly think that information from all real estate sites come from the MLS. 

Even a few listings on the Charleston MLS are sometimes inaccurate because every once in a while the listing agent doesn't update the listing from active to contingent (under contract) or even to sold. The MLS includes a standard disclaimer, "information deemed reliable but not guaranteed".

But the MLS generally has most if not all of the available listings and many syndication sites fall woefully short of 100% since it is up to the real estate agent to provide the listing information. Not all agents do. Heck, some real estate agents only include one picture of the home for sale. 

But the many syndication sites that many real estate agents use to provide the widest possible exposure for their listings depend on feeds so even if you update the information, some sites may not pick up the feed and obvious frustration can set in for everyone involved.

The seller may want to know why the price reduction hasn't been entered, a potential buyer wants to know why the home is still listed for sale even though it has already gone under contract or the sale has already closed. And everyone wants to know why there aren't more pictures. 

The bottom line. Everyone blames the real estate agent.

Offshore oil and the Carolina coast

High oil prices have pushed the controversial ban on offshore drilling to the forefront. President Bush has lifted the moratorium, Congress and individual states will need to do the same. As is typical, the political parties are split on the issue.

But don't expect to see large oil and gas platforms off the Carolina coast in the next few days or any immediate relief to prices at the pump since the first oil to be discovered won't come online for many years.

In fact, you're not likely to even see the platforms, proposed to be built over 50 miles from the shore addressing a concern that tourism will suffer as a result. I love the beach as much as anyone but I'm not sure that even someone with "eyes like an eagle" will be able to see the platform while sitting on the sand in beaches up and down the coast. As to environmental concerns, frankly, I'm just not educated enough to comment about the potential impact on the subject.

IndyMac Bank fails, what about FDIC insurance

With banking regulators taking over IndyMac Bank, you may be wondering how safe your money is. The WSJ had an an interesting article about how much money is on deposit at banks in excess of the FDIC insurance of $100,000 per depositor per bank.

Click here to read "Bank fears spread after seizure of IndyMac". 

My best advice, stay under the FDIC insured limit by keeping your money in several banks. You'll sleep soundly at night no matter what happens.

And it will be a lot more comfortable than stuffing cash into your mattress.

A modest mortgage proposal

With the government throwing trillions of dollars around almost daily including the latest announcement of support for Fannie Mae and Freddie Mac, I think the government should just pay off everyone's mortgage.

I'm not sure of the total cost but at least it's something most everyone would appreciate.

A solution to unwanted junk email

... winds up in my spam email folder. Rather ironic I thought.

Hi Howard,
 
I'd like to take the opportunity to introduce myself in hopes that you and I can work together and establish a business relationship in the near future. I stumbled across your contact information while searching for real estate companies in the Charleston and surrounding area, so I figured I'd shoot you an email to see if we can help each other out. My name is xxxxx, a Business marketing alumni from the University of xxxxx. As an internet marketing and web development consultant, I am frequently asked... "xxxxx, why do I receive so much junk email, how do these people have my contact information, and most importantly... how do I make it go away?" 
 
After being asked numerous times, I finally decided to put together an article/guide on how to effectively deal with the many aspects of this ongoing problem. One might even consider this very email as unsolicited, but essentially my goal is to educate people. By giving back to my community and getting this information into the hands of professionals like yourself, I can always hope for future potential business opportunities.

Anyhow Howard, I'm not here to waste your time... but if you think you can benefit from learning more... I am offering my guide for only $8.00 and encourage you to take a look at what is found inside - http://xxxxx  - or you can always shoot me back an email with any questions.

Thanks for your time,

I hate spam, I'm sure you do too and I don't spam my database with unwanted junk emails. I send one monthly Charleston real estate update a month and give you the opportunity to opt out if you choose.

So I would suggest the real solution is to turn your spam filter on and save the $8 this character is charging and hopefully stuff like this and the many other unwanted emails you receive every day will not see the light of day in your inbox.