High Tide Realty Team of Coastal Properties

As of late, it seems that I™ve had a rash of conversations with people who, at some point in the conversation or another, become fixated on the reports that the œaverage home sale prices are consistently going down in an attempt to argue the point that the economy is still worsening.   It™s at this moment that these conversations get interesting because I don™t buy it.   Not only do I œnot buy it, I also believe that if we real estate professionals do our jobs well, we should drive the œaverage home sale prices down even further.

Reports of declining œaverage home sale prices do not mean that the price of every home in America is worth less than it was worth last month, which is what journalists are trying to signal with such reporting.   It simply means that when you take the sum total of the prices for which all homes sold over a period of time, and you divide that number by the number of sales that took place, you get the œaverage home sale price in the area of focus during that period of time.   The over-generalization of this concept by people, and particularly by real estate agents, is where I push back and challenge this dramatization of reality.

In Atlanta (or any other city, for that matter), if you divide the total of the home sale prices in December by the number of transactions that closed in December, then you get the œaverage sales price for homes sold in December.   If you did the same thing in November, then December™s average home sale price would be either less than, the same as, or more than the other months™ average sales price.   A lower average home sales price from one month to the next, or one quarter to the next, or even one year to the next, means that the MAJORITY homes that were sold were generally less expensive than they were the previous period.   Whether your home is worth less this month than it was last month is an entirely different “ and more specific “ issue.

In 2007, every single indicator of the economy was going œsouth, EXCEPT for the average home sales price, which was consistently going UP, when it seemed it should be going down.   Once we started looking at this little indicator, we soon realized that the increasing average home sale prices were what I called a œfalse positive.    

In 2007, the average home sale price of homes in Atlanta had risen to well over $200,000. 60% of the homes that were selling were selling at a price greater than $200,000.   40% of the homes that were selling were selling at a price less than $200,000.   That™s because the early phase of this economical downturn first impacted lower end buyers.   We stopped giving mortgages to and trying to make homeowners out of people who never deserved to be homeowners in the first place, which, initially started to remove some entry level buyers.   And with home sale prices œimproving, more financially stable buyers continued to buy with confidence and concern that prices may continue to go up and become less affordable over time.   As a result, more homes were selling over $200,000 than the number of homes sold in previous periods, thus increasing the average home sales price.   It didn™t take too long for the rest of the world to realize that the increasing average sales price was deceiving as it was being interpreted.

Fast forward to the end of 2010 and more than 60% of the homes that were selling were selling at a price LESS THAN $200,000, while only 40% of the homes that were selling were selling at a price more than $200,000 in Atlanta.   That™s a huge shift in the dynamics of real estate sales over a 3 year period.   Hence, the average home sale price is now significantly less than $200,000 in metro Atlanta.  

There™s no question that the value of homes has declined over the past three to four years.   However, in many areas home prices have found some stability, and further declines in the œaverage home sales price could “ and should “ provide a œFALSE NEGATIVE.   If we do our jobs to help educate our clients on the opportunities that the market presents, then we should continue to drive the average home sales price DOWN by selling more homes in the less than $200,000 price ranges.

œBuy low.   Sell high.   That™s the secret to building wealth.   If it™s not a time to œsell high, then it should be a time to œbuy low¦ or at least it should be a time to buy lower priced property.  

What constitutes œlower priced property?   The simplest answer to this (although not complete) is entry level houses and investment properties.   Three of the biggest opportunities in the market today are (1) first-time home sales, (2) investment property sales and (3) distressed home sales.   Real estate professionals everywhere should be on a mission to find anyone who doesn™t own a home and who has a good job, and help them buy a home.   Likewise, we should be helping our clients who only own the home they live in to buy another home that they can hold and rent for positive cash flow.   Whenever we see someone driving a new car, we should ask, œWhy didn™t you buy a house instead?

Most people who are financially okay and living in expensive houses have no idea that what used to be the amount of money required for a down payment on a home can now purchase an entire house.   Do the math on buying home for $50,000 cash and renting it for $500 or $600 or $700 per month.   It likely generates more than a 10% cash on cash return for the buyer, and that™s not even taking into consideration the fact that the property will appreciate over time and create equity.

The point to all of this is that we should be helping people who could and should be buying first homes and investment properties to buy them.   Doing so will generate more lower priced transactions and will, in fact, lower the œaverage sales price of homes that you sell, which, in turn, may lower the œaverage sales price of homes sold in your area.

Stop letting sound bites from the media educate your clients.   Give them the understanding that they need to take full advantage of the opportunities to change their financial future forever.   Stop letting buyers evaluate property as if they are going to flip it, when they should be looking at holding it for 5 to 7 years.   While this may not be the best time for people to œsell high, it™s the safest time in our lifetime to œbuy low.   If people are qualified to buy a house and they don™t own one, then they should buy one.   If people are capable of buying an additional property (or properties), then they should.   They just need us to provide the logic, the rationale and the wherewithal to do so.

As of late, it seems that I™ve had a rash of conversations with people who, at some point in the conversation or another, become fixated on the reports that the œaverage home sale prices are consistently going down in an attempt to argue the point that the economy is still worsening.   It™s at this moment that these conversations get interesting because I don™t buy it.   Not only do I œnot buy it, I also believe that if we real estate professionals do our jobs well, we should drive the œaverage home sale prices down even further.

Reports of declining œaverage home sale prices do not mean that the price of every home in America is worth less than it was worth last month, which is what journalists are trying to signal with such reporting.   It simply means that when you take the sum total of the prices for which all homes sold over a period of time, and you divide that number by the number of sales that took place, you get the œaverage home sale price in the area of focus during that period of time.   The over-generalization of this concept by people, and particularly by real estate agents, is where I push back and challenge this dramatization of reality.

In Atlanta (or any other city, for that matter), if you divide the total of the home sale prices in December by the number of transactions that closed in December, then you get the œaverage sales price for homes sold in December.   If you did the same thing in November, then December™s average home sale price would be either less than, the same as, or more than the other months™ average sales price.   A lower average home sales price from one month to the next, or one quarter to the next, or even one year to the next, means that the MAJORITY homes that were sold were generally less expensive than they were the previous period.   Whether your home is worth less this month than it was last month is an entirely different “ and more specific “ issue.

In 2007, every single indicator of the economy was going œsouth, EXCEPT for the average home sales price, which was consistently going UP, when it seemed it should be going down.   Once we started looking at this little indicator, we soon realized that the increasing average home sale prices were what I called a œfalse positive.    

In 2007, the average home sale price of homes in Atlanta had risen to well over $200,000. 60% of the homes that were selling were selling at a price greater than $200,000.   40% of the homes that were selling were selling at a price less than $200,000.   That™s because the early phase of this economical downturn first impacted lower end buyers.   We stopped giving mortgages to and trying to make homeowners out of people who never deserved to be homeowners in the first place, which, initially started to remove some entry level buyers.   And with home sale prices œimproving, more financially stable buyers continued to buy with confidence and concern that prices may continue to go up and become less affordable over time.   As a result, more homes were selling over $200,000 than the number of homes sold in previous periods, thus increasing the average home sales price.   It didn™t take too long for the rest of the world to realize that the increasing average sales price was deceiving as it was being interpreted.

Fast forward to the end of 2010 and more than 60% of the homes that were selling were selling at a price LESS THAN $200,000, while only 40% of the homes that were selling were selling at a price more than $200,000 in Atlanta.   That™s a huge shift in the dynamics of real estate sales over a 3 year period.   Hence, the average home sale price is now significantly less than $200,000 in metro Atlanta.  

There™s no question that the value of homes has declined over the past three to four years.   However, in many areas home prices have found some stability, and further declines in the œaverage home sales price could “ and should “ provide a œFALSE NEGATIVE.   If we do our jobs to help educate our clients on the opportunities that the market presents, then we should continue to drive the average home sales price DOWN by selling more homes in the less than $200,000 price ranges.

œBuy low.   Sell high.   That™s the secret to building wealth.   If it™s not a time to œsell high, then it should be a time to œbuy low¦ or at least it should be a time to buy lower priced property.  

What constitutes œlower priced property?   The simplest answer to this (although not complete) is entry level houses and investment properties.   Three of the biggest opportunities in the market today are (1) first-time home sales, (2) investment property sales and (3) distressed home sales.   Real estate professionals everywhere should be on a mission to find anyone who doesn™t own a home and who has a good job, and help them buy a home.   Likewise, we should be helping our clients who only own the home they live in to buy another home that they can hold and rent for positive cash flow.   Whenever we see someone driving a new car, we should ask, œWhy didn™t you buy a house instead?

Most people who are financially okay and living in expensive houses have no idea that what used to be the amount of money required for a down payment on a home can now purchase an entire house.   Do the math on buying home for $50,000 cash and renting it for $500 or $600 or $700 per month.   It likely generates more than a 10% cash on cash return for the buyer, and that™s not even taking into consideration the fact that the property will appreciate over time and create equity.

The point to all of this is that we should be helping people who could and should be buying first homes and investment properties to buy them.   Doing so will generate more lower priced transactions and will, in fact, lower the œaverage sales price of homes that you sell, which, in turn, may lower the œaverage sales price of homes sold in your area.

Stop letting sound bites from the media educate your clients.   Give them the understanding that they need to take full advantage of the opportunities to change their financial future forever.   Stop letting buyers evaluate property as if they are going to flip it, when they should be looking at holding it for 5 to 7 years.   While this may not be the best time for people to œsell high, it™s the safest time in our lifetime to œbuy low.   If people are qualified to buy a house and they don™t own one, then they should buy one.   If people are capable of buying an additional property (or properties), then they should.   They just need us to provide the logic, the rationale and the wherewithal to do so.

As of late, it seems that I™ve had a rash of conversations with people who, at some point in the conversation or another, become fixated on the reports that the œaverage home sale prices are consistently going down in an attempt to argue the point that the economy is still worsening.   It™s at this moment that these conversations get interesting because I don™t buy it.   Not only do I œnot buy it, I also believe that if we real estate professionals do our jobs well, we should drive the œaverage home sale prices down even further.

Reports of declining œaverage home sale prices do not mean that the price of every home in America is worth less than it was worth last month, which is what journalists are trying to signal with such reporting.   It simply means that when you take the sum total of the prices for which all homes sold over a period of time, and you divide that number by the number of sales that took place, you get the œaverage home sale price in the area of focus during that period of time.   The over-generalization of this concept by people, and particularly by real estate agents, is where I push back and challenge this dramatization of reality.

In Atlanta (or any other city, for that matter), if you divide the total of the home sale prices in December by the number of transactions that closed in December, then you get the œaverage sales price for homes sold in December.   If you did the same thing in November, then December™s average home sale price would be either less than, the same as, or more than the other months™ average sales price.   A lower average home sales price from one month to the next, or one quarter to the next, or even one year to the next, means that the MAJORITY homes that were sold were generally less expensive than they were the previous period.   Whether your home is worth less this month than it was last month is an entirely different “ and more specific “ issue.

In 2007, every single indicator of the economy was going œsouth, EXCEPT for the average home sales price, which was consistently going UP, when it seemed it should be going down.   Once we started looking at this little indicator, we soon realized that the increasing average home sale prices were what I called a œfalse positive.    

In 2007, the average home sale price of homes in Atlanta had risen to well over $200,000. 60% of the homes that were selling were selling at a price greater than $200,000.   40% of the homes that were selling were selling at a price less than $200,000.   That™s because the early phase of this economical downturn first impacted lower end buyers.   We stopped giving mortgages to and trying to make homeowners out of people who never deserved to be homeowners in the first place, which, initially started to remove some entry level buyers.   And with home sale prices œimproving, more financially stable buyers continued to buy with confidence and concern that prices may continue to go up and become less affordable over time.   As a result, more homes were selling over $200,000 than the number of homes sold in previous periods, thus increasing the average home sales price.   It didn™t take too long for the rest of the world to realize that the increasing average sales price was deceiving as it was being interpreted.

Fast forward to the end of 2010 and more than 60% of the homes that were selling were selling at a price LESS THAN $200,000, while only 40% of the homes that were selling were selling at a price more than $200,000 in Atlanta.   That™s a huge shift in the dynamics of real estate sales over a 3 year period.   Hence, the average home sale price is now significantly less than $200,000 in metro Atlanta.  

There™s no question that the value of homes has declined over the past three to four years.   However, in many areas home prices have found some stability, and further declines in the œaverage home sales price could “ and should “ provide a œFALSE NEGATIVE.   If we do our jobs to help educate our clients on the opportunities that the market presents, then we should continue to drive the average home sales price DOWN by selling more homes in the less than $200,000 price ranges.

œBuy low.   Sell high.   That™s the secret to building wealth.   If it™s not a time to œsell high, then it should be a time to œbuy low¦ or at least it should be a time to buy lower priced property.  

What constitutes œlower priced property?   The simplest answer to this (although not complete) is entry level houses and investment properties.   Three of the biggest opportunities in the market today are (1) first-time home sales, (2) investment property sales and (3) distressed home sales.   Real estate professionals everywhere should be on a mission to find anyone who doesn™t own a home and who has a good job, and help them buy a home.   Likewise, we should be helping our clients who only own the home they live in to buy another home that they can hold and rent for positive cash flow.   Whenever we see someone driving a new car, we should ask, œWhy didn™t you buy a house instead?

Most people who are financially okay and living in expensive houses have no idea that what used to be the amount of money required for a down payment on a home can now purchase an entire house.   Do the math on buying home for $50,000 cash and renting it for $500 or $600 or $700 per month.   It likely generates more than a 10% cash on cash return for the buyer, and that™s not even taking into consideration the fact that the property will appreciate over time and create equity.

The point to all of this is that we should be helping people who could and should be buying first homes and investment properties to buy them.   Doing so will generate more lower priced transactions and will, in fact, lower the œaverage sales price of homes that you sell, which, in turn, may lower the œaverage sales price of homes sold in your area.

Stop letting sound bites from the media educate your clients.   Give them the understanding that they need to take full advantage of the opportunities to change their financial future forever.   Stop letting buyers evaluate property as if they are going to flip it, when they should be looking at holding it for 5 to 7 years.   While this may not be the best time for people to œsell high, it™s the safest time in our lifetime to œbuy low.   If people are qualified to buy a house and they don™t own one, then they should buy one.   If people are capable of buying an additional property (or properties), then they should.   They just need us to provide the logic, the rationale and the wherewithal to do so.

Dare To Bear It

February 20, 2010

          Come take a chilling plunge into the Atlantic

Ocean to support Special Olympics New Hanover

County. Join us for live music, costume contest, a

silent auction, food, art,   Hot Rods and more.

        In order to participate in the 6th Annual Polar

Plunge, you must raise a minimum of $50.00 ($30.00

for students) per plunger. We invite you to plunge as

a team or as an individual. Teams must have at least

5 members and each plunger must raise $50.00

($30.00 per student) minimum.

We look forward to seeing you

Saturday, Feb. 20, 2010

Click the link below to learn more about the Federal Housing Tax Credit!   It has just been extended and is a great deal for first time home buyers!

http://www.federalhousingtaxcredit.com/

Come to the North Carolina Festival by the Sea this  Saturday and Sunday  in Holden Beach!   This 2 day event features a kick-off parade down the Holden Beach causeway, a Kingfishing tournament, Surf Off and Grom Fest, and lots of good food and arts and crafts.   Visit http://www.hbmerchants.com/events.html  for more info.

Come to the North Carolina Spot Festival this weekend, September 26th and 27th, in Hampstead!

There will be great entertainment,  food, a shag contest, and more, so don’t miss out!

Click the link below for more information and pictures:

http://www.ncspotfestival.com/

Enjoy Historic Downtown Wilmington from a different view: the Jubilee Snooze and Cruise Yacht on the Cape Fear River!   Jubilee Snooze and Cruise is located just across the river from the Battleship North Carolina, offering dinner cruises, dockside dining, berth and breakfast, and more.   Click the link below to visit the website and learn more about rates and offers.

 http://www.jubileesnoozeandcruise.com/

Enjoy Historic Downtown Wilmington from a different view: the Jubilee Snooze and Cruise Yacht on the Cape Fear River!   Jubilee Snooze and Cruise is located just across the river from the Battleship North Carolina, offering dinner cruises, dockside dining, berth and breakfast, and more.   Click the link below to visit the website and learn more about rates and offers.

 http://www.jubileesnoozeandcruise.com/

Enjoy Historic Downtown Wilmington from a different view: the Jubilee Snooze and Cruise Yacht on the Cape Fear River!   Jubilee Snooze and Cruise is located just across the river from the Battleship North Carolina, offering dinner cruises, dockside dining, berth and breakfast, and more.   Click the link below to visit the website and learn more about rates and offers.

 http://www.jubileesnoozeandcruise.com/