Some Communities Are Waiting For The Tide To Rise!

By
Real Estate Agent with RE/MAX Elite 513.265.3004 www.LizTour.com SAL.2002007747

TideSome Communities Are Waiting For The Tide To Rise!

As we review home values in our Warren County market, it becomes pretty apparent that some communities are waiting for a rising tide.  Not a literal watery tide, but the real estate recovery tide that lifts all ships homes.  These communities are developments primarily built in the 2005-2009 time frame.  New construction was booming, hammers were swinging and builders were turning cornfields into communities at a rapid pace.

Few people saw the market downturn coming until it was too late.  The homes were theirs, mortgages signed.  In some cases builders stopped in mid-development and home values were further hurt.  Amenities promised?  Sorry about that!  Acres of bulldozed dirt, half finished streets and an uncertain future.  Fortunately for most of these communities, other builders have recently acquired the lots and they're making efforts to finish the communities.  Now that doesn't mean the new homes are always at the same price point, but a finished development trumps an unfinished product.

Meanwhile, homeowners have been stuck in limbo, and this doesn't apply merely to homeowners in partially finished communities, but some finished communities too.  The values dropped enough that if the owner didn't make a significant down payment, they're unable to walk away without cutting a check at the closing table.

If the owner doesn't have the needed cash reserves, they've got the choices of taking a short sale credit hit, letting the bank foreclose, or continuing to wait for a return of home values that gets them out at least even on the mortgage.

So that's what we primarily see, homeowners waiting for that rising tide.  Communities where people are waiting for the option of moving to the next chapter in their lives.  In the meantime, the sellers are firmly tied to the Mortgage Pier with an uncertain time table for departure.

Unfortunately for today's buyers, that also means many desirable communities have no inventory for sale!  Nothing to buy, because the price the seller needs, the buyer won't pay.  And even if they did agree, the appraiser will be screaming "NO that price isn't supported!".

So we're hoping that tide comes in soon!  Most of our market is rising, but we've still got captive communities waiting for their turn.

If you're thinking about selling your Warren County home and need to know if the tide has come in for you, please contact us for a free consultation.  No hassle, no pressure.

Serving Warren County's residential real estate needs,
Liz and Bill aka BLiz

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REALTORS(S) Serving Warren County Ohio & Adjacent Areas

The Liz Spear Team of RE/MAX Elite
Elizabeth & William Spear
Ask for us by name if you visit the office!

EHO Two locations: Lebanon & Mason, OH
Liz direct:  513-265-3004
Bill direct: 513-520-5305     
Fax: 866-302-8418

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Dorie Dillard 07/19/2012 07:00 PM
Topic:
Home Selling
Location:
Ohio Warren County
Groups:
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Advice for Buyers
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Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Jane, Catch-22, sellers won't sell until they can afford to, and the flip side is that means their purchasing power probably diminished also.

July 19, 2012 01:07 PM #4
Rainmaker
882,661
Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate
What are they waiting for? The Tide has risen!!!!
July 19, 2012 01:07 PM #5
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Ronald, Not everywhere, at least not yet.  A recent for instance, one local community had typical purchase prices in 2005-2009 of $350-500k.  Most recent sales prices are in the $300-400k range.  Most homesellers don't have $50k or more to make thing whole, and if they don't have a driving need to sell just yet, there best course is to wait it out.  Most aren't going to opt for a short sale unless they HAVE to move soon, and the majority don't fall into that category.

July 19, 2012 01:15 PM #6
Rainmaker
676,254
Gene Mundt
www.genemundt.com - Joliet, IL
Mortgage Lender - Chicago/Chicagoland Mortgages

BLiz:  I'm beginning to see some signs of municipalities stepping up to the "plate" around here.  They're pro-actively pursuing builders and offering incentives to get the market moving once again in their communities.  This obviously helps new buyers, but definitely addresses the issues you speak of too ... eventually.  Help is sometimes slow in coming.  But still, something proactive and positive is better than just waiting for a cure ...

Gene

July 19, 2012 01:49 PM #7
Rainmaker
1,346,210
Anita Clark
ColdwellBanker SSK Realtors ~ 478.960.8055 - Warner Robins, GA
Realtor - Homes for Sale in Warner Robins GA

BLiz: All it takes is a ripple or two for consumers to feel comfy enough to get back in the water.  The waters will rise!

July 19, 2012 02:13 PM #8
Rainmaker
687,854
Steve and Jan Bachman
RE/MAX Gateway, Reston, Herndon, Ashburn, Sterling, Fairfax - Herndon, VA
Realtors - Northern Virginia

 

fairfax county real estate agents Jan and Steve Bachman


EXACTLY the SAME thing has happened here. Huge numbers of new homes were built in 2004-2006...the peak of the real estate frenzy.

Home values in Northern VA were going up 25% per year  from 2002-2005....it was crazy. Then..it stopped and the market fell until first quarter 2009. Folks who bought near the peak may never get what they paid.

Many folks are $200,000 upside down even after the market rise of the last 3 years. It is very sad.

BUT...prices continue to climb, interest rates are at historic lows and buyers are out in force....chasing a very small inventory.

July 19, 2012 03:00 PM #9
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Gene, I'd say your area is ahead of ours in that regard.  Locally I'm not seeing evidence that the municipalities are trying to spur activity.  Most of the problem here may be as specific as 100 home subdivisions built and purchased during the 2005-9 time frame.

Anita, It will eventually, the question is how long can some of these sellers wait?

Steve, We never had serious appreciation here, and fortunately our price point is lower too, so rare is the $200k drop in value.  Mostly we're dealing with $50k or less move, but that's still a chunk of serious money when the median prices are around $200k for most of our market area.  As a whole, I'd say this problem is mostly in the laps of the sellers who bought the more upscale homes vs. the typical tract home.

July 19, 2012 03:22 PM #10
Ambassador
754,062
Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Same, same here BLiz and it's just the way it is.  Many folks who bought brand new are a bit dissappointed when they have to sell now.  The value just simply isn't there for them to walk away without paying at the closing table or trying a short sale.  Thems the breaks.  The sad part is is that when I ask many folks where their buyers agent was, 7 out of 10 times, they didn't have one and of the other 3, the only time they saw their agent was the signing of their contract and then the closing table.  

July 19, 2012 03:50 PM #11
Rainmaker
597,970
Nancy Conner
Managing Broker - City Realty Inc - Olympia, WA
Olympia/Thurston County WA

Ditto - in our area too, the neighborhoods that were built in the "crazy times" are the ones that are just barely starting to kind of sort of recover.  We did see an influx of out of state investors buying up presale homes in those neighborhoods, hoping to flip them when they were complete - and some of them were just a little bit too late and got burned!

July 19, 2012 04:31 PM #12
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Brenda, It's a shame, and wish things were different, but that's not the case.  And we've encountered the same before, ready to sell and you find out they overpaid.  Went straight to the builders rep and didn't have an agent to tell them that resale potential was near zero for the next 5 years if they paid what they were going to pay.

Nancy, It's a set of handcuffs if they bought during that time frame.  We didn't have speculators here, just enough market decline for select areas to make moving almost impossible without a short sale or a lucky day at the lottery.

July 19, 2012 04:48 PM #13
Rainmaker
709,048
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Liz and Bill, here's hoping the tide turns quickly for your Warren County real estate market.  Some relieve could be used by all, I'm sure.  

July 19, 2012 05:15 PM #14
Rainmaker
568,650
Bobbie Smith
RE/MAX OF THE POCONOS - Stroudsburg, PA
Real Estate in the Poconos of PA 570-242-1891,

Very well put Bliz. I like the analogy.  Our market has seen very similar happenings.  We are still waiting for the tide to come in.

July 19, 2012 05:48 PM #15
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Juli, The good news is the bulk of our local market HAS turned up.  It's the folks that bought in certain new developments in 05-09 that are bearing the brunt of the pain.

Bobbie, We know it will get there in time, but it's tough for everyone to be patient.

July 19, 2012 05:50 PM #16
Rainmaker
1,037,089
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

We are seeing an increase in sale throughout several parts of America... Tme will tell if this if prices will move upward. We will take all the good news we can get.

July 19, 2012 07:03 PM #17
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Joan, Even locally some areas are doing well, with the price drops of the last couple of years already recovered.  Progress is being made, but it's certainly not uniform.

July 19, 2012 07:55 PM #18
Rainer
234,262
Doug Bullwinkel
Vitek Mortgage Group - Roseville, CA
NMLS #281609

There's no time like today to buy or sell a home.  With prices and interest rates so reasonable right now, there will never be another opportunity like this.  Sellers will only have to pay more for the next home they purchase so trade across while the prices and property taxes will be lower.  The future will only be more expensive for everyone. 

July 20, 2012 03:10 AM #19
Rainmaker
1,006,917
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Liz & Bill.  There is a fourth alternative.  You could rent your home.

July 20, 2012 03:25 AM #20
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Doug, The challenge for many of these people works out to cash flow.  Without enough to allow to leave house A, they can't move on to house B to take advantage of lower rates.

Conrad, We had some sellers recently take that route.   But unless our mortgage pro gave us bad information, you basically have to be able to afford your "old" home that is rented out AND your new home under debt ratio limits to get a loan for a 2nd home.  Obviously if true that takes most people out of the running to be able to rent out their old and buy new.  Instead, they'll be renters too.

July 20, 2012 03:49 AM #21
Rainmaker
546,569
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

Hopefully, those who did the right thing--didn't bail out-- and waited will be rewarded with increasing equity.  Do you know how many of those homes were bought originally with 100% financing, stated income, stated asset loans? In other word, most probably mortgage fraud... That is what has hurt many new development communities in my area.

July 20, 2012 09:38 AM #22
Ambassador
1,446,022
Liz and Bill Spear
RE/MAX Elite 513.265.3004 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Gary, Totally invisible to us as far as form of financing to that degree of detail.  I suspect everyone is pretty much on the up and up, this is just bad luck with buying at market peak and then having prices drop enough to take them hostage.

July 20, 2012 01:55 PM #23
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