Real Action in Real Estate
What's selling in today's marketplace? Buyers are looking for more than a good deal — they want a unique home that offers something extra
Ask Tom Valdes, a Georgia real estate developer best known for the 11 golf communities he has created, if reports are true that golf course homes are cluttering the market across the nation as recession-battered buyers flee elsewhere, and he sighs. He knows many golf communities are in trouble. But, he stresses, "the right homes still are selling. Unique circumstances can help a golf community prosper even in this market."
Read that again, because what Valdes is saying defines today's overall real estate market as well. One-dimensional, cookie-cutter houses are out. Properties with special appeal are attracting buyers, often in distinctive communities like the exclusive Hamptons a couple of hours outside New York, classic Shaker Heights in Cleveland, and Venice, Calif., in Los Angeles County, where a spate of green construction — solar-powered homes that actually produce ample energy to supply their needs — is bringing in well-heeled buyers, according to Valerie Fitzgerald, a Southern California real estate expert and author of Heart and Sold: How to Survive and Build a Recession-Proof Business.
Valdes, president of the Georgia Club Real Estate Company, offers some strong evidence that the right home still can sell. He says his golf community homes are selling because they offer, in addition to golf, good proximity to Athens, Ga., home of the University of Georgia, which means a social calendar packed with everything from philosophy lectures to big-time football.
Run-of-the-mill properties may be less compelling today, but give buyers something to get excited about and that just may make the difference. Location has always been critical, says Valdes, but in today's market it's more important than ever. And a prime location — one that pulls in many kinds of buyers — is one draw that just may let a development succeed in tough times.
"Perceived value is everything in the current real estate market," adds Diane Keyes, a Minneapolis-based home stager and author of This Sold House.
Karin Posvar-Picket, a New York real estate agent and senior vice president with the Corcoran Group, concurs: "Value is what sells today."
Buyers are terrified — and the word is no exaggeration, say many experts — about overpaying for a home. So the homes that win sales are those that strongly communicate they're good buys. This works in two directions, according to Keyes. Immaculate, well-maintained homes communicate their worth, she says, but so might a rundown home that has the right price. "Average is not selling today," she adds.
Starkly dramatic proof that there's something new to be written about real estate comes from Brendon DeSimone, a San Francisco real estate agent who says he recently put in a bid above the asking price on a three-bedroom fixer-upper — and lost out. The Victorian in San Francisco's prime Noe Valley neighborhood was listed at $969,000 and sold for almost $1.1 million, despite needing over $100,000 in updates and repairs, per DeSimone's estimate. What made the house compelling: good views, a great location, and the fact that San Francisco, almost surrounded by water, will never expand beyond its 49 square miles. Also influencing today's market, says DeSimone, are extremely attractive mortgage rates (30-year fixed-rate mortgages with rates under 6 percent are commonplace) and the possibility that just maybe, the real estate market has hit bottom and is primed for a rebound, at least in certain parts of the country.
The action isn't just at the high end, either. Renewed activity is also beginning to bubble among first-time buyers, says Richard Swerdlow, CEO of Condo.com, a real estate portal. In part that's due to an $8,000 federal tax credit available to first-time homebuyers as part of the federal economic stimulus program. This, says Swerdlow, is indeed stimulating buyer interest at the lower end of the market, and in some regions that tax credit just may prove to be adequate for a down payment.
Except, stresses DeSimone, today's buyers need to come in with verifiable income — "You don't see no-document loans anymore," he says — and a good credit score. Have both, says DeSimone, and mortgage money is increasingly available. That, too, is reviving enthusiasm among buyers.
Beginning to believe that, just maybe, there's life in the U.S. real estate market? Vivid affirmation comes from Than Merrill, star of the A&E network's Flip This House, who insists that — naysayers aside — he's busier than ever flipping houses for profit, mostly in his home turf of Connecticut. Merrill readily concedes that the era of the easy flip, generating huge profits, is over. "We're working very hard to find buyers for our properties. A few years ago, buyers found us." But, he stresses, when a property is available at the right price, solid profits still can be made by flippers. "I usually like paying about 65 percent of what others would think is fair market value," he says. "We're finding sellers who want to do deals with us because we can close quickly. We are finding it easier to line up skilled construction labor, and, yes, we're earning profits by flipping houses. Work hard at it and you will profit — even today."
— Robert McGarvey
Are You Online?
A strong Internet presence is no longer optional when selling a house — it's now mandatory, says Minneapolis-based home stager Diane Keyes. "Without a good Internet presence, forget about it." The reason is in the numbers. As the inventory of unsold houses hits record highs, overwhelmed buyers have so much to choose from, they do their early screening online only. Houses that don't show well online won't get showings, says Keyes. What this means is that good photographs, good virtual tour video, and snappy copy have become key to attracting buyers. "Homes with the right Internet presence definitely are selling," says Keyes. — R.M.
Photograph: iStockphoto
