There are three primary reasons why a home hasn’t sold within the average amount of time for a given market. This month we’ll review the second reason: “Inadequate Marketing”.

Believe it or not, marketing is a numbers game. Pre-internet, the average home took 20 phone calls from buyers before an acceptable offer would be presented. In the new technology age, it’s probably closer to 2000 hits on the internet. For the past 3 years, Realtor.com has released statistics that state nearly 80% of all home buyers found the home they purchased via the internet. However, print advertising and a sign in the yard are still an absolute necessity. After all, the more buyers who find out your home is for sale, the better chance you have of selling. Over the past few years, the top 5 real estate websites for marketing homes (in order from most hits to fewest hits) are: (1) Realtor.com, (2) Craigslist, (3) Zillow, (4) Yahoo, and (5) Trulia. If your home isn’t listed for sale on all 5 of these websites, you haven’t even begun to market online. Realtor.com accounts for nearly 8% of all real estate search hits, while the other 4 account for an additional 22% of the total hits in the U.S. (according to inman.com). That still leaves 70% of all real estate buyers searching the internet throughout thousands of other websites.

In the month of January, the Yakima area real estate market recorded 62 total homes sold with an average sales price of $178,660.  While average sales prices remain high, total homes sold continues to decrease.  January typically records the fewest number of sales for any month.  The 62 total homes sold in the Yakima area market this January happens to be the lowest total Yakima has seen in more than a decade.  On the other hand, the average sales price this January was $25,000 higher than the January average over the past 10 years.

Your Local Real Estate Professional,
Cory Bemis

There are 3 primary reasons why a home hasn’t sold within the average amount of time for a given market. This month we’ll review the first reason: “Presentation and Depersonalization”.

Properly preparing a home for marketing involves much more than cleaning, decluttering, and making minor repairs. The optimal solution is to neutralize the home completely. The first step is to remove all personal items from the home. It’s much more difficult for a buyer to make an offer on a home if it feels like someone else’s home. Personal items include family photos, religious items, and anything else that could distract the buyer from imagining their own personal items in the home. The second step is to freshen up and revitalize the home. Numerous little changes can make a huge difference. A few ideas to start with include: update with new door knobs throughout (especially the front door/main entry), outlet and light switch covers, light fixtures (inside and outside the house), vent covers and return duct, knobs and pulls in the kitchen and bathrooms, neutral paint colors, doorbell, and a digital thermostat. It’s truly surprising how much these minor changes can freshen up a home. The third step is to detach yourself from the home as much as possible. The average home in Yakima right now takes 4 months to sell. If you’re going to get serious about selling, take everything you most likely won’t use in the next 4 months and move it to storage (winter clothes/summer clothes and etc.). $80 per month for a storage unit is far less expensive than 6 more months on the market. Check back next month for the second reason why a home hasn’t sold!

In the month of December, the Yakima area real estate market recorded 82 total homes sold with an average sales price of $168,073.  This is the highest average sales price in December over the past 4 years. However, this is the lowest number of homes sold for any December in more than a decade.

To view more statistics pertaining to the Yakima Real Estate Market, click the link below or visit my blog (mobile friendly) at www.corybemis.com

Click here to view monthly statistics chart.

Your Local Real Estate Professional,
Cory Bemis

Given the current buyer’s market in Yakima, a hot topic right now is “Making Lowball Offers”. Most stories you hear from friends these days that pertain to buying a house are preceded with one of two introductions, “Everything was going great…until” or “We got an amazing deal!” Don’t get me wrong, not all real estate stories are told to induce sorrow or jealousy from the listener… just the juicy ones. If the story is about their amazing deal, it almost always starts with why they decided to make an offer significantly lower than the asking price. Realtors commonly refer to this type of an offer as a “lowball” offer. In our current market, lowball offers are becoming more and more common. Does this mean all buyers should be making lowball offers right now? Not necessarily.

If you’re thinking about making an offer on a home, you don’t want to offer so little that the seller is insulted. On the other hand, you don’t want to pay more than what the seller is willing to accept. This is a classic conundrum every buyer faces when making an offer. So how do we know when to lowball and when to offer high? First of all, be confident that you know the true market value of the home. This isn’t the asking price, the county assessor’s price, or the zestimate on Zillow. This is simply the highest amount any buyer is willing to pay on the open market. Secondly, don’t let your emotions interfere with the transaction. Always be able to walk away from the transaction if the seller wants to sell for more than the amount the home is worth. The third piece of preparation is to determine the reason the seller is selling and how strong their motivation is. Is the seller still living in the home and hasn’t completely committed to moving yet because they’re waiting to see if they find a buyer? Maybe the home is owned as an estate with no mortgage and a beneficiary is trying to get it sold as soon as possible for whatever they can get. Always take the seller’s situation into consideration.

Making an offer on a bank foreclosure home is the most common scenario where a buyer feels there’s nothing to lose if they make a lowball offer. In this situation, the fact that the seller won’t be insulted by a low offer is mostly true. However, most of these homes are already priced below value. If you start with a low offer, it may be countered at full asking price, or simply rejected and ignored. In the meantime another buyer may step in and make an offer. Now demand exists and your chances of getting an amazing deal are slim to none. Some of these homes sell for more than the asking price, even in our local market.

In conclusion, there is no set formula or percentage that is considered to be a lowball offer. Sometimes a seller is ecstatic to get an offer 20% or more below their asking price, where in other circumstances a seller is insulted by an offer 5% below their asking price. As long as you’re prepared with the right tools and the proper knowledge, you’ll be able to find a great deal on a home that meets your needs.

In the month of November, the Yakima area real estate market recorded 108 total homes sold with an average sales price of $160,504.  How does this stack up against previous months?  Click below to view the monthly statistics chart.

Click here to view monthly statistics chart.

Your Local Real Estate Professional,
Cory Bemis

As the weather begins to cool down, look for sales to slow down a little.  November, December, and January traditionally record nearly 20% less total homes sold than the autumn months.  I often have clients who ask whether or not it’s even worth trying to sell in the winter.  As my first economics professor would answer, “It depends”.  It depends on whether you want to sell… or need to sell.  Which mindset do you have?  If you want to sell, how bad do you want to sell?  Next take a look at the facts.  I always have an updated monthly statistics spreadsheet (which can be found on my blog at www.corybemis.com).  This chart gives the exact numbers for all homes sold in any given month over the past 5 years.  While sales do indeed slow down in the winter, there are still many people who need to purchase a home no matter the season.  Competition with other sellers will increase in the winter as there are typically 20% less buyers in the market.  Therefore, it wouldn’t be a good idea to cushion the asking price as much as you may in the spring.  However, allowing for the inclusion of buyers’ closing costs in the asking price is always recommended in a buyers’ market.  If you are on the fence about whether or not you should list your home right now, consult a realtor.  Ask how many similar homes are currently on the market and how many have sold in the past six months.  This will give you an idea of how strong your chances of selling will be in the upcoming months.

October home sales in the Yakima Area Real Estate Market increased dramatically when compared to any previous month this year.  The total number of homes sold was the highest for any month dating back 16 months to June of 2010.  When compared to October of last year, total homes sold increased by 30%.  The average sales price increased 3.5% when compared to October 2010.  This is the first time in more than a year that the total number of homes sold and the average sales price increased simultaneously when compared to the same month of the prior year.  This October had the highest average sales price of any October in the Yakima area…ever.

In the month of October, there were 122 total homes sold with an average sales price of $174,886.

Foreclosure update:  In my newsletter last month, I mentioned foreclosures made up 24% of total sales that month, and 20% of total sales year to date.  In October the foreclosure sales (bank owned sales) totaled 24, which comes out to 20% of the total sales for the month.  This number is right on par with our expectations.  While foreclosures made up for 20% of all sales in October, the average sales price climbed to the second highest value of the year.  High average sales prices are an obvious indicator of a healthy market. Unfortunately, one month isn’t a very strong sample.

For a free list of Yakima area foreclosures currently on the market, log on to www.YakimaRepoAlerts.com

Click here to view monthly statistics chart.

Your Local Real Estate Professional,
Cory Bemis

In the month of September, there were 104 total homes sold with an average sales price of $146,970.

Should we be concerned with the extremely low average sales price? Not yet. Two months ago, the average home sales price in July was $148,493 with 90 total sales. The number of homes currently for sale in the Yakima market continues to decrease. As of today, there are 1,202 homes for sale on the MLS of Yakima. At this time in 2010 and 2009, there were respectively 1,291 and 1,373 homes for sale. As the number homes for sale continues to decrease, sales prices should remain constant unless demand also begins to decrease.

Of the 104 homes sold this September, 25 of those homes were foreclosure sales. At 24% this month, the amount of foreclosure sales continues to grow when compared to total sales. Year to date, just over 20% of all homes sold have been foreclosures. Last year this number was closer to 15%. Prior to that, it was unusual for more than 5% of all sales to be foreclosure sales. Expect this percentage to remain high for the next couple of years. While banks are pricing these homes at or below market value, they are continuing to reject many low offers and wait for offers closer to market value. This is actually good for our local market as banks could very easily reduce their prices in order to sell the homes more quickly. In turn, this would undoubtedly lower the value of homes in Yakima.

It appears doubtful that the number of foreclosures will begin to diminish anytime soon. Many of the 5 year ARM (Adjustable Rate Mortgage) loans issued in 2006 and 2007 are now beginning to adjust. In many of these cases, home owners could see their monthly payment increase by 50% or more. If these home owners are unable to make the new increased payments, they are left with only a few options. The first option is to refinance the home. With interest rates nearly 3% lower than in 2007, a refinance could lower their payment back to the original amount. However, the qualifications for obtaining a new mortgage are much more stringent than they were 4 or 5 years ago. These increased credit ratings, increased down payment requirements and new debt to income ratios could make it impossible to refinance in some cases. Another option is to sell the house. Unfortunately, many home owners who obtained these loans haven’t built up enough equity to sell their home at the fair market value without having to pay for the difference. Quite a few banks are still allowing short sales (where the proceeds from the sale fall short of the debts owed on the property), which may be the only option left. Unfortunately, short sales will most likely negatively effect the sellers credit report.

Your Local Real Estate Professional,
Cory Bemis

In the month of August, there were 116 total homes sold with an average sales price of $168,830.

The 116 total homes sold is the highest total for any month in Yakima dating back to June of 2010. The $168,830 average sales price is the second highest for any month in 2011. As mentioned earlier, both of these statistics are good indicators for what to expect this fall. Look for the September and October sales figures to remain fairly consistent with this August. A strong real estate market this fall is imperative for house values to remain stable throughout the winter.

Yakima makes a top 10 list on Inman News:

You may have seen this article come through your social media streams or e-mail sometime in the past week (see website at the end of the article). Inman news used the Zillow.com home value index (HVI) to compare home values in more than 200 metro areas throughout the United States. Yakima ranked number 5 overall for metros with the greatest 5-year gain in real estate values. In the past I have rarely given credit to Zillow and the “zestimates” that they provide for every single home in the U.S. A few years back this Seattle company only provided information for Washington State and has since expanded. Zillow uses a formula to estimate home values which combines recently reported sales data and public home information provided by the county assessor’s office. After looking at the Zillow numbers and knowing Yakima is down nearly 5% in both average and median sales price when compared to the peak year of 2007, I wanted to find out whether or not Zillow was indeed accurate.

In comparing year to date sales statistics between 2006 and 2011 in Yakima, I found that the average sales price has increased by 6.5% and the median sales price has increased by 8.7%. The 2011 year to date average sales price for the Yakima area market is $163,518 and the median sales price is $146,750. Depending on how accurate Zillow is in other markets, Yakima may very well be one of the best real estate markets currently in the nation.

http://www.inman.com/news/2011/09/2/10-metros-with-greatest-5-year-gain-in-real-estate-values?page=0%2C4

Your Local Real Estate Professional,
Cory Bemis

July home sales in the Yakima Area Real Estate Market decreased significantly when compared to last month. Total homes sold decreased by 19.6% while the average sales price decreased 17.1%. This July appears to be comparable to July of last year. In 2010, total homes sold in July decreased 42.8% with a 6.5% drop in the average sales price when compared to the previous month. Should we be worried? July is traditionally the “gap” month in the Yakima real estate market. March through June post the highest sales numbers nearly every year. The next three major real estate transaction months are generally August through October. Keep in mind, the majority of sales in July are generated from transactions which began in June.

In the month of July, there were 90 total homes sold with an average sales price of $148,493.

In my newsletter last month I mentioned there were an uncharacteristic 6 sales with purchase prices above $400,000. In comparison, this month there were only two sales above $300,000 with the highest being $390,000. The lack of high end sales this month was the primary factor for the 16.8% drop in the average home sales price.

In the month of June, there were 112 total homes sold with an average sales price of $179,042.

The average sales price spiked up significantly this month as there were 6 residential sales with purchase prices above $400,000. To put this in perspective, the last time the Yakima Market had 6 or more sales above 400k in any one month was 32 months ago in October of 2008. This also occurred in May and July of 2008 and five times in 2007.

In the month of May, there were 101 total homes sold with an average sales price of $162,568.

An interesting topic that has recently come up in the news is the amount of bank owned foreclosure homes on the market. Year to date in 2011, 21% of all residential home sales on the Yakima MLS have been bank owned homes. In 2010, only 15% of these sales were bank owned homes. Prior to 2007, this statistic was generally less than 5%.