Realtors across the country are inundated with questions about the current real estate market from worried customers on both the buying and selling sides.
Fear of navigating the market's unprecedented conditions keeps many families from making any move at all. This inaction not only limits them from getting on to the next phase of their lives, but also causes them to miss out on opportunities to buy homes at historically low prices and interest rates, said Charles Richardson, regional senior vice president of the west central region of Coldwell Banker Residential Real Estate.
"Today's marketplace is filled with great values, the kind of values we haven't see in more than a decade," Richardson said.
To help quell concerns and explain the status quo, Richardson provided answers to some of the questions customers ask his sales associates most frequently.
Q: What are the characteristics of the market right now?
A: "The real estate market right now is seeing historically low interest rates and more stabilized home pricing. The recent depressed pricing is because about 40 percent of the closed sales in the past six months are short sales and foreclosures, which have a great influence on bringing prices down. And, with many more foreclosures still in the pipeline, we're not completely done with that adverse influence on pricing.
"The median home price was less than $100,000 in January, but is now about $113,000, a sign that things are moving up. And most homes are selling for below $250,000, including about 85 percent of home sales in Hillsborough County and 80 percent in Pinellas County."
Q: Is real estate inventory decreasing?
A: "The real estate market today is shrinking, as far as active listings are concerned. The number of homes for sale in Hillsborough and Pinellas counties has gone down by 31 percent since last January. As a result, this is a great time to come back in the market if you have tried to sell in the past few years."
Q: How important is pricing your home right in order to get it sold and bring traffic to your property?
A: "Pricing your home correctly is critical. I look at it this way: You can either be on the market or you can get it sold. This might not be what sellers want to hear because their expectations aren't in line with the current conditions. Remember, the home the seller moves to is also priced in the current conditions; so they'll end up with something that is potentially of greater value.
"I recently experienced that very scenario. When I sold my home last spring, I lost money, but I gained when I bought my current home because of its price. Also, I locked into an amazing interest rate and, in the end, I got more home for the money than if I had sold at the peak of the market. It is always about the relative values at the time you sell and then buy again. There are truly great values to be had."
Q: What is a REO property?
A: "REO stands for Real Estate Owned and refers to an asset owned by a bank or other lender. Typically, only 3 to 5 percent of active monthly inventory recently has consisted of REOs. But in the last six months, they represent about 25 percent of closed sales."
Q: What price ranges are the best deals?
"The current market has adjusted across all real estate price segments; so there are deals to be found at all price points. The most active price range is under $250,000."
Q: Is it a "move up" market?
A: "This is an ideal time to move up to a home that better fits a family's needs. That being said, we are also seeing many families downsizing. That is a reflection of the economy, but it could also be the trend toward making do with less."
Q: What does a real estate agent do for me compared with selling my home on my own?
A: "It is dangerous to sell your own home is this market. Today's economy is unlike anything we've seen; so you need someone trained and qualified who understands the current conditions, supply, REOs and short sales, pricing, etc. You need someone from contract to closing. This is not the time to hire your friend who is not trained."
Q: What is the difference between a company like Coldwell Banker and a smaller real estate firm?
A: "It's an internet marketing age. Nine out of 10 people make their initial real estate contact on the internet. Ten years ago, that was only 18 percent. In order to sell your home, you need to reach as many people as possible."
"Coldwell Banker is an international real estate company and every listing we take is marketed on over 550 websites reaching buyers around the world. We also have Coldwell Banker offices in over 50 countries on six different continents. So the same Coldwell Banker yard sign you see in your yard is the same one you will see in China. "
Coldwell Banker Residential Real Estate has 18 offices in Hillsborough and Pinellas counties. There are 83 offices and nearly 4,800 sales associates throughout Florida who closed more than $7.95 billion in sales volume in 2009. Worldwide, there are more than 96,700 Coldwell Banker sales associates.
For more information about Coldwell Banker, visit FloridaMoves.com.