Understanding Real Estate Appreciation Part 2

Back on May 2 I did a post entitled “Understanding Real Estate Appreciation”.  I think I need to spend some time and elaborate on that further.  There are two types of appreciation:  gradual, natural appreciation and forced appreciation.  Natural appreciation occurs when you buy a home and over time economic and social factors gradually drive the price of your home up.  This is the topic we primarily focused on in our previous post.  Click here to view that post.

Forced appreciation is actually done by someone or something and can occur very quickly.  Forced appreciation can occur in many different ways.  The home can be just cleaned up and picked up.  A home can be updated to increase the value.  This usually occurs in older homes that are dated and suffer from “functional obsolescence” which really just means that they really don’t function to meet people’s lifestyle anymore.  The home may be a small two bedroom home in an older established neighborhood of three bedroom homes.  An addition to this home to add an extra bedroom could make this home greatly appreciate in value.  Forced appreciation can occur by a possible rezoning if the property is better suited for commercial or industrial use. 

 Updating a home can range from a complete renovation or just some touch ups such as fresh paint, new carpet, appliances and fixtures.  You don’t have to know a lot about renovating and you don’t necessarily need to hire a contractor to achieve forced appreciation.  It is a good idea to try to find comps in the area to see what those other properties have and feature.  It would be really good if you could find “sold” ones so that you may see the difference and compare the two.  If you are looking to buy, renovate and resell, you want to do a thorough inspection of the home as well as other ones in the area and use the phrase K.I.S.S. (keep it simple stupid).  If you are buying in an area that houses are a 3/2 with Formica counter tops you don’t need a 5/3 with granite.  Keep things in tune with the rest of the neighborhood.   

Obviously the biggest and best improvements you can make are to bathrooms and kitchens.  Updating these generally give you the best return on your money and are huge selling features.  A surprising feature that is an unexpected selling feature is outdoor living space.  Buyers love patios, decks and ways to extend their living space outside.

Understanding Real Estate Appreciation

Panama City Beach real estate appreciation refers to an increase in value of your Panama City Beach Home and the property. When your property “appreciates” you have greater equity against which to borrow, and you realize a greater profit when you sell. Property values fluctuate regularly for many different reasons, so how do you know the home you’re buying is going to appreciate over the years?

The economy is the driving factor of real estate appreciation in the Panama City Beach as well as in the entire U.S. That includes interest rates as well as the current employment rate, business growth in the area, housing supply and demand and affordability.

Regional economic and social factors also affect Panama City Beach Real Estate appreciation. Many homebuyers choose to live in areas with the best and most convenient features for households to thrive, such as a close proximity to schools, jobs and commerce.

A good school district can also be an indicator of good home appreciation. It is believed that good schools help foster lifestyles associated with high levels of attainment at the individual, household and community level. However, because of Panama City Beach Real Estate is mostly purchased by vacationers some factors are not as important to others as a lot of people are temporary residents.

Demographics also play a role in real estate appreciation. For example, during the 1980s, much of the baby boomer generation (People born between 1946 – 1964) was buying real estate, causing homes to appreciate at a faster rate than inflation and made real estate a profitable investment. The group referred to as Generation Y – born roughly between 1980 and now – is the biggest generation since the baby boomers. Their contribution to real estate is expected to be far greater than their older siblings of Generation X (born between 1965 and 1979).

There are some aspects that significantly contribute to real estate appreciation, which you may want to ask your agent about when shopping for a home:

Recent sales. Performance Realty will retrieve public records on Panama City Beach Real Estate sales in the neighborhood you wish to live in. How many home sales have there been in the past year? What are the asking prices? Do the final sales exceed the asking prices?

Appreciation history. Have home prices risen or declined over the past 5 to 10 years? Is the neighborhood considered desirable because of its location, amenities or affordability?

Panama City Beach business economy. Is there a good mixture of business or does the area rely on one industry? Have any new industries moved into or out of the area? Is there a lot of new development nearby? Economic changes such as a large factory going out of business can dramatically affect demand for housing in a particular area.

It is important to note that while appreciation is nice to have, it should not be the reason you decide to buy a home in a particular area. Even if you buy a house in a rapidly appreciating area, there is not a guarantee that its value will rise by the time you want to sell it. That’s why it’s best to pick a neighborhood – and a home – in an area that suits your own needs.

Part 6 of Reasons Why Homes Don’t Sell

Part 6 and the final part of the series brought to you by Performance Realty “Top Reasons Why Homes Do NOT Sale.”  The # 6 reason of your home not selling is Your home is NOT easily accessible.

To get your Panama City Beach house sold quickly, it’s important that it is easy to show to as many potential buyers as possible. The first thing a good agent will do when working with buyers is talk to the buyer and learn what kind of Panama City Beach home they are looking for. Then the agent searches all the available homes for those most closely matching what the buyer wants. Next, the agent puts together a list of the best matches to go show to the buyer. When a busy agent is compiling a list of Panama City Beach houses to show a buyer, the agent will naturally tend to show those houses that are easiest to gain access to first. Many homes on the market have “lock boxes” on them. The lock box is a device which holds a key to the home, that only qualified local agents can access. Panama City Beach houses that are listed as being “lock box, no appointment needed” will get shown more often than homes listed as “agent has key, call for appointment”. If at all possible, you should let your agent put a lock box on your home for easier showing.

If you can’t do a lock box, you need to be sure that you make it as convenient and easy as possible for other agents to show your home. If they call, do whatever you have to do to accommodate letting them show your home to buyers on their schedule. If you don’t, the agent will probably show the buyer other Panama City Beach homes for sale, and if that buyer makes an offer on one of them, you’ve just lost a great opportunity.

It’s best if you can leave when the agent and buyer arrive to see your Panama City Beach home for sale. Buyers won’t feel comfortable with you there and it could sour an otherwise good impression.  Make sure your home is easy to show!

Part 5 of Reasons Why Homes Don’t Sell

Part 5 of the series brought to you by Performance Realty “Reasons Why Homes Do NOT Sale.”  The #5 reason for your home not selling could be The Market is Slow.

You’ll hear it described as a slow market, or a buyer’s market, or maybe a cold market. But it all means the same thing. Panama City Beach real estate sales are slow; there are too many Panama City Beach homes for sale and too many Panama City Beach condos for sale and not enough active buyers. There are several things you can do to combat a slow market. The most effective strategy is to sell at a lower price. Buyers are expecting to find bargains during a slow market. You can also help yourself by offering to pay some concessions to help a buyer that might not have a lot of cash. The ultimate way to beat a slow market is to simply wait it out. But that’s not always an option for many sellers.  If you are unable to wait it out and you owe more than what your house is currently worth, Performance Realty will walk you through the short sale process guiding you every step of the way.  We will supply you with the proper forms and negotiate with your lender directly on your behalf.  You will NEVER have to talk to the bank if you don’t want to.  For more information on short sale assistance please feel free to contact us. 

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Part 4 of Reasons Why Homes Don’t Sell

Part 4 of the series brought to you by Performance Realty entitled “Top Reasons Why Homes Do NOT Sale.”  The #4 reason for your home NOT selling is Your Marketing Campaign Is Out of Steam. 

The best Panama City Beach Real Estate agents all use an aggressive marketing plan to market their listings. If your listing agent isn’t making sure your property can be found easily on the internet, isn’t actively advertizing his or her listings to other agents in the area, isn’t running ads in the local newspapers and real estate publications, then it might be time to change agents. If all your agent has done is put a sign in your front yard and add your home to the local MLS, then that agent isn’t coming close to doing all that can be done to effectively market your home.  Performance Realty prides itself in keeping up with the latest technologies.  We currently market your listings on approximately 100 websites.  We use various types of listing syndications that automatically puts our listings in the top real estate directories.  Performance Realty uses various types of online advertising that gives us solid leads via the internet.  Chances are if you are reading this post you found us online.  If you can find us, so can buyers.  We currently rank in the Top 5 of real estate companies on Google for keywords that were searched the most by buyers.  There is a lot more to advertising your listings than just putting a sign in the yard and advertising in local papers.  A lot of buyers are out of town and without the latest technology and an internet presence a lot of potential buyers could miss the opportunity to view your home.  As we have discussed before that is a critical mistake in this market.  It is a buyer’s market and there is an abundance of inventory to choose from.  If you are interested in viewing our noncommittal listing presentation or seeing our technology at work don’t hesitate to contact us.

Part 3 of Reasons Why Homes Don’t Sell

Part 3 of the series brought to you by Performance Realty entitled “Top Reasons Why Homes Do NOT Sale”.  The #3 reason for your home not selling could be the most famous phrase in real estate…….Location, location, location.

It’s the oldest cliché in the world, but it’s true. When it comes to Panama City Beach Real Estate, it’s all about location.  Traditional things like how good the schools are, crime rates, visual appeal of the neighborhood and noise or the smell of pollution can all influence how desirable the location is to your buyers.  There isn’t anything you can do about a bad location.  The only really reliable way to overcome a bad location is with a lower price. Simply put, an identical home in a bad location won’t sell for as much as the same home in a better location.  Another famous saying in real estate is that you don’t want to own the nicest and biggest house on the block.  It’s better to be a smaller house in a neighborhood full of larger homes as the larger homes increase the value of your Panama City Beach home. The appearance of your neighbor’s home can dramatically impact the “salability” and overall price of your home.  This is why gated communities and subdivisions with strict covenants and restrictions became such a big hit. Developers thought that buyers would like the idea of their property values being protected by all the houses in the neighborhood looking alike. Neighborhoods that have a good “walkability” rating also command higher prices than those that don’t offer sidewalks and are located in high traffic areas.

A key thing to remember is real estate is local.  Things that may impact home sales in one part of country may not necessarily impact home sales in other parts.  In rural areas, “walkability” and subdivisions don’t have the same impact as they do in urban areas.  Rural buyers probably don’t want covenants and restrictions but rather open space and an easy commute to town. 

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Part 2 of Reasons Why Homes Don’t Sell

Part 2 of the series brought to you by Performance Realty entitled “Top Reasons Why Homes Do NOT Sale”. The # 2 reason for your home not selling could be The Condition of YOUR Home.

In the current Panama City Beach real estate market there is a lot of competition out there to sell homes. Buyers can afford to be selective.  Your home has to compete against other similar homes for sale, as well as competing against shiny brand new homes that were built during the boom but are still vacant.  It is NOT like it was several years ago when buyers had to move quickly.  Buyers are more patient now and looking at far more houses.  They have more time to decide and more to choose from as inventory is still extremely high.  This is especially true in the Panama City Beach Real Estate market as the area is growing so rapidly. The more you can do to make your home look appealing to a buyer, the better your chances for a quick sale. Look at your Panama City Beach home for sale with a critical eye – put yourself in the buyer’s position. A buyer doesn’t want to have to do anything except move in. Once again, it is a good idea to hire a professional.  Panama City Beach Realtors know what buyers are looking for.  Ask a Realtor to come by and give you a Free Home Valuation to see where you stand.  Then ask for any suggestions they may have that would help you sell your house more quickly and for more money.  Realtors are unbiased and should give you an honest opinion.  After all, if we take a house that we know we can’t sell, it is costing us money.  Our opinions may come off as insulting but I assure you they are NOT meant that way.  We are there to help you.  We want to be able to sell your house. 

Your best “bang for the buck” in improving the condition of your home is paint and flooring. Make sure that all of the paint is in great condition, both inside and out. Repainting doesn’t cost too much, and will usually make the biggest impact on buyers. Make sure all of the flooring looks good too.  Again, it’s not that expensive but it sure does make an impact on buyers coming to look at your home.  Another thing we have discussed in the past is curb appeal.  If a home doesn’t appear to be taken care of on the outside, not many buyers think it is taken care of on the inside.  We can’t sell your home if we can’t get people through the front door.  It’s also great if you can afford to spend a little more to give your home a custom look.  Custom flooring, kitchen backsplash and shower tiles as well as counter tops, appliances and fixtures can have a tremendous impact.  For just a little bit more money adding a custom feel and look to your home could be the difference between your home sitting on the market for a year or selling within 30-60 days and for more money.  As we discussed earlier, in real estate, time can equal money.

If you are interested in updating your home to put on the market ask your Realtor if they offer coupons from Lowes. Lowes works hand in hand with the National Association of Realtors and offers variuos programs for Realtors to hand down to their clients. 

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Reasons Why Homes Don’t Sell

This is Part 1 of a series of posts brought to you by Performance Realty entitled “Top Reasons Why Homes Do NOT Sale”.  If you have had your Panama City Beach home on the market for several months and haven’t seen much activity or any offers chances are there could be only one factor or a number of factors why your home is not selling.

We see it all the time.  A house comes on the market and there is a lot of excitement from everybody involved.  As time goes by the excitement wears off.  This is why it is important to price your house right to start with.  There is a lot of positive momentum when houses come on the market.  It’s important to keep that momentum. 

No doubt about it, the most common reason for a Panama City Beach home for sale not selling is that the asking price has been set too high. There are many reasons sellers set the price too high, ranging from over enthusiastic listing agents to unrealistic seller expectations. Regardless of the reason though, if you’ve priced your Panama City Beach home for sale too high, you’ve set yourself up for a number of obstacles to selling your property. Even if you do get an offer for the overly high asking price, the deal may fall apart before closing because the buyer may have problems financing at too high a price. Deals fall apart all of the time because the appraisal comes in too low. Look at other properties for sale, ones as similar and as close to yours as possible. If they are going for less than you are asking, you may be priced too high. The fact is, your property is competing against those other properties, and what buyers are willing to pay is what will determine final sales prices.

Using comps to determine the asking price can be tricky.  If your neighbor sold their house for $185,000, that doesn’t mean they walked away from the closing table with $185,000 being the final price.  There could have been various closing costs or seller concessions involved that are not public record.  Realtors talk and find details out that is deal specific.  Another important factor is that you could be experiencing a declining market.  For example, if the market is declining a difference in 6 months could mean the difference of a 5% decrease in your homes value.  That is why it is important to hire a professional.  Professional Realtors deal with issues like this every day.  Performance Realty has full time Realtors that analyze market trends and research home prices to establish a good list price to capture the momentum of the market.  Are you ahead if you are able to sell your house for $10,000 more by holding your property a year?  On an average home the answer is no.  You have paid a year’s worth of mortgage payments and interest.  Plus, if the market has shifted and it becomes an escalating market you could pay more for the next home you purchase.  It is important to get the list price right the first time.  Call us today at Performance Realty for a Free Home Valuation, fill out the form below or visit our website.  It is noncommittal and gives you a very good idea of what your home is worth.  Our home valuation is unlike any other you’ve ever seen.

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Flowers = Instant Curb Appeal

Curb appeal is one of the most important aspects to consider when selling your Panama City Beach Home. Although over 80% of buyers shop for homes on the internet, they often do drive-bys of homes they may potentially be interested in. When selling your Panama City Beach Home, it’s the appearance from the street that will very often determine whether potential buyers come in to see the inside or never call their agent for an appointment to see the inside.

Flowers are one of the easiest and least expensive ways to make the front of your house look inviting and instantly increase the curb appeal of your Panama City Beach House. Without any real landscaping, flowers can transform a rather drab and dreary looking front yard into one that looks colorful and lush, especially during spring and summer. You should take advantage of the seasons by planting pots and flower boxes.

Timing is also critical. You should choose colorful flowers that will be in bloom during the time you’re selling your Panama City Beach House. Planting the flowers in planter boxes and pots is easier than planting them in the ground and lets you more easily place them where they can have the most visual impact. You don’t need to have a green thumb, or spend a lot of money to get great results either. Visit your local home improvement center or nursery and they will be happy to advise you of the best flowers and plants for your purpose. You can put together several very nice planter boxes and pots of flowers for well under $100. And it’s easy!

A nice thing about using flowers in this way is that you’ll see the results immediately.  And so will buyers visiting your home!