2011 brought some changes to the Dayton real estate market. These type of crystal ball posts are sometimes difficult to write because my business might be very different than another real estate agent’s business. Some of us specialize in condos, or foreclosures, or investment properties. There are agents who specialize in lease-to-own, or upscale, or new builds. I’m sharing the things I’ve noticed, but as always, talk to a real estate agent for your specific needs.
A few things to keep in mind if you are buying a home: some markets are being driven by foreclosures or short sales. One of trends that seems to be emerging among foreclosures or cosmetically flipped homes is that are being listed at below market prices which creates a bidding war. In other words, a home hits the market priced lower than other homes and within days there are multiple offers on the property. It’s a good strategy for a seller to get at or above asking price so be prepared if you are looking at foreclosures- you may need to act fast, and might end up paying full price or more to get the home you want. Now this isn’t horrible in and of itself as long as the price supports updates you will be making so don’t panic, but also don’t get sucked into more for a home than its worth. Know what the neighborhood will support.
Short sales are a different beast altogether and while the process for buying and selling short sales has improved over the past year, you should still expect that they could take months to close. However, because short sales account for a large percentage of homes on the market, it’s worth it to plan ahead and take them into consideration. In many communities, distressed properties are driving the market, so if sweat equity doesn’t bother you, this is a good market for you. If you don’t want to do the work yourself, there are a few loan options available for owner occupants who would prefer to finance any repairs or upgrades. Programs like the 203k financing require preparation, organization, and stick-to-it-tiveness on your part, but the repairs have to be made by contractors and professionals. These trends will continue for quite some time in this area as housing stock ages and becomes more distressed.
The other big trend this year is in rentals and seller financing. People need a place to live, and while interest rates have hit record lows and there are lots of homes on the market, if you can’t get a loan, you can’t get a loan. Enter seller financing like land contracts and lease-to-own, and a market for rentals. If you are considering being a landlord, this is a good time to do that, if you are a seller looking for a way to create a niche seller’s market within this broader buyer’s market, this is a remarkable time to do that.
Speaking of trends, I want to point out that a few weeks ago it was reported that National Association of Realtors (NAR) got it wrong:
“All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought,” NAR spokesman Walter Malony told Reuters. “
If you’ve been paying attention to what is happening in your own neighborhood, this should not be news to you. There are few established neighborhoods in the Greater Dayton area which haven’t taken a hit the last 4 years in particular, but for a number of neighborhoods in Montgomery County, this has been going on for years as those neighborhoods have been bleeding population for decades. It’s supply and demand and I don’t see us picking up in population for awhile. Now, shrinking should no longer be confused with dying, but it is a trend and that’s what we are concerned with for this post. So expect inventory to stay up. Land banking and planned demolition will be part of life in the Miami Valley. Again, this may or may not be doom and gloom, but it is change.
Still, the NAR is the national organization that is tasked with representing its members and they have become one of the most important lobbying groups on K St. When the NAR talks, our elected officials pay attention, but that doesn’t mean you should. If you want to know what is going on in your community, ask a local real estate agent to pull the stats for a particular area, because for us the market talks and in order to serve our clients, we listen to the market, not the NAR.
One more possible trend to be aware of: Because the real estate market has changed, many agents have left the business, some numbers suggest as much as 40-50% and I see this as positive. It’s anecdotal I know, but it seems that those agents who are left are highly professional and some of the best I’ve had the pleasure of working with, and to me, this is good news for everyone.
All the best to the entire DaytonMostMetro.com family- editors, readers, contributors, and here’s to finding more silver linings in 2012!