December Update on the Bradenton Real Estate Market

As 2006 draws to a close, I thought it was a good idea to take another look at how our Bradenton real estate market is doing. In short, we have a long way to go before we come to the end of the housing correction that started towards the end of 2005.

The most optimistic report I have seen recently predicts a 4.8% drop in real estate prices for 2007 (Fortune Magazine, see link at the end of this paragraph). That is compared to the 14-15% decline I have seen other reports predicting. Most of the reports point to around the third quarter of 2007 as the time the market will hit bottom and then start leveling out. http://money.cnn.com/popups/2006/fortune/invguide_realestate/2.html

This is not a doom and gloom scenario, merely, one that reflects the adjustment our market is making after being inflated by too many investors purchasing too many properties. There are certain factors that are in our favor, such as good interest rates, good employment rates and other good economic indicators that tend to tell us that this will blow over without too much fanfare.

What does this mean for sellers? If you absolutely must sell your home quickly, you will need to drastically drop your price to get it sold...probably back down to 2004 levels. If you don't have to sell right now, I would suggest holding off for at least another year, until some of the excess homes on the market have cleared. The homes that are selling now are not selling at market value, they are selling well below market value (in other words, only the real bargains are selling).

What does this mean for buyers? If you are ready to buy now, this is a great time as there are plenty of homes to choose from and many motivated sellers who are willing to negotiate a good price. The problem lies in finding those owners who are truly motivated, versus those who would like to sell but "aren't going to just give it away." So, the key is to find a good Realtor who specializes in helping Buyers find the right homes. At a minimum, you will want to find a Realtor who is an Accredited Buyers Representative (ABR).


Here are the final stats for single family homes in Bradenton for the past month:

• 4,244 active listings (this does not include unrepresented sellers and developers)
• 171 homes sold within the last month
• Average sales price was $371,439
• Average sales to list percentage was 95%
• Average days on the market = 83
• Absorption Rate = 24 months (number of months it would take to get rid of excess inventory at the current rate)

Final stats for the condo market in Bradenton for the last month:

• 2,031 active listings
• 52 condos sold in the last 30 days
• Average sales price was $252,463
• Average days on the market = 102 days
• Average sales to list percentage was 90%
• Absorption rate = 39 months

Please keep in mind that the activity during the holiday season tends to decrease. I will do another update towards the end of January which will hopefully see the numbers of listings decrease and the amount of sales increase, giving us a better absorption rate. In a healthy market, the absorption rate will be around 3-5 months.

Wishing you a safe and happy end to the holiday season!

Will Updating My Bradenton Home Help It Sell?

The answer to this question is yes, but how much money are you willing to invest and how much more would you have to receive on the sale to make it worthwhile?

I believe you need to ask yourself the following questions before making a decision (running the idea by a Realtor is also a good idea so you will have an unbiased point of view):

1. How much money do I have to update my home? A lot of Sellers like the idea of doing improvements, but don't want to go into debt to do it. If you are cash poor I would suggest working on low cost alternatives (see below), versus large scale remodeling or replacements.
2. How much is my home worth compared to other homes around me? Unfortunately, it is very easy to get carried away with making improvements to your home and end up with a home that is worth quite a bit more than the surrounding homes. The values of the surrounding homes will then pull down the value of your home. Conversely, if your home is the least expensive home in the neighborhood, you can probably do quite well by investing in some quality upgrades.
3. If you are thinking of doing it yourself, will you be able to do a professional quality job? The idea of doing it yourself is great, the reality is often quite different. If you won't be able to finish the project quickly, it is better to hire a professional. If you aren't sure of the quality you'll be able to have after the project is done, it is better to hire a professional. Buyers can usually spot work that was done by someone who isn't an expert on a project. This can actually cause the offering price to go down!

If you are on a strict budget, I would recommend that you focus on making the home appealing to buyers when they walk in. This would include things like a fresh coat of neutral, updated paint inside and outside the home. Pay particular attention to the front door and entry area. Even something as subtle as a nice planter, a brass kick plate and a door that's free of scratches will make a great first impression. Remove all wall paper from the home, as it is often a big turnoff to most buyers. If you have old wood grain cabinets that date the home, paint over them! Hiring an interior designer is a good way to start, so you can focus on the most important aspects and wait on the rest (this is why we provide a one hour designer consultation to all of our sellers when they first list).

If you have a little more money to invest, I would suggest considering what the return on your investment will be. The Association of Realtors just published it's yearly report on what projects are likely to bring the greatest returns. Just go to: http://www.realtor.org/rmomag.NSF/pages/2006CostvsValue?OpenDocument . The top three returns on your investment in the Southeast are as follows: fiber cement siding (93%), vinyl siding (90%), mid scale bathroom remodel and vinyl windows tied (87%).

Some items, aren't a matter of how much return on your investment you will reap, but if your house will be able to sell without them. Some items like an unsound roof or an inadequate air conditioner will cause buyers to shy away from making an offer on your home. At the very least, most offers would come in at a lower price because the buyers are planning on having to cover these expenses in the near future. Items like these, are better to be replaced before your home goes on the market, making them a non-issue. If you can't afford to replace these items right now, offering a credit for the replacement would be the next best thing.

Final thoughts: Given the current buyer's market, I would be wary of making high cost improvements to your home. You are more likely to do better by pricing your home correctly. Right now, price is the most important factor in the buying process. Buyers have a large number of homes to choose from, so they tend to visit the homes with the most reasonable price for the square feet and area. You want to be in this category, otherwise, no matter how nice you have made your home, it won't sell simply because no one is interested in seeing it to begin with.

Bradenton Home Inspections & Radon

The general consensus from most people I speak with about radon in Manatee County is that we don't have a problem with it .... and for the most part that is correct. Even the EPA states that Manatee County overall has low levels of radon present on average ( a "predicted average indoor radon screening level less than 2 pCi/L" based on the EPA maps) and is not an issue for most homes and condos around the Bradenton area.

However, how much would you pay to make sure that you aren't exposing yourself to a toxic gas that could give you lung cancer. There is no odor or other signs of it's presence. Having a radon test could save your life or the lives of your family members. According to the EPA literature, radon kills more people a year in the US than drunk drivers, yet we hear so little about it.

There have been isolated cases of radon found in Manatee County. This includes a large pile of soil in a particular new home builders subdivision that tested very high for radon and is now being examined, turned and will not be usable for construction until the levels of radon have been brought down to a safe level. I am currently working with a buyer who has a contract on a home that tested positive for radon, a nasty last minute surprise that needs to be taken care of before the closing.

Surprisingly the standard FAR contract for the sale of residential real estate (the form most Realtors in Manatee County use) does not include radon in the "warranted items" category. It is instead listed separately as far as items that can be screened for. If found to be over the acceptable level, the owner can choose to mitigate (fix the problem) or just walk away from the deal unless the buyer wants to pursue the sale knowing there is radon present. Of course, if radon was found above acceptable levels, the sellers would be obligated by law to disclose that fact to any potential buyers in the future, even if mitigation was performed.

The newer the home, the more likely that if radon is present, it will build up and become unhealthy for the occupants. The old homes with multiple leaks (drafty windows, flooring, etc) actually have lower risk because they are exchanging air from the outside more frequently (this does not rule out risk though).

So how can you protect yourself from radon? This is what I have learned from speaking with several experts on the matter:

1. The first step is to have your home tested. This must be done by someone certified with the state to do so. Just go to http://www.doh.state.fl.us/environment/community/radon/blstfrms.htm and you will find a list of all the individuals and companies able to perform these tests. It is not cheap, the lowest price I was able to find was $175.00 with most of the companies charging an average of $250.00.
2. When you ask for the test there are two main types, one involves testing pieces that must be sent away to a lab and will basically measure the highest level of radon that was found over the 48 hour period. The other type of test actually will give you a readout of the levels each hour and the results are available almost immediately. From what I have learned it is possibly better to pay a little extra for the test that gives you the hourly readouts, in case there was a sudden radon spike and then low levels the rest of the time.
3. The level that EPA states is safe is 4.0 pCi/L. Anything over this is believed to be a risk for cancer and should be mitigated (fixed so that the air is safe to breathe).
4. There is also a long term test for radon, it must be in place for a minimum of three months. This will give you a more accurate reflection of long term risk, but if you have had a previous "high" reading, I would be hesitant to remain in the home while the test was under way. I have been told that radon levels will vary based on the temperature or other climatic conditions, so the long term test does seem like it would give a better overall picture, particularly if you are already living in the home you are going to test.
5. If your test results comes up high, you will want to contact a company certified in mitigation with the State of Florida. The costs are not exorbitant and the process seems fairly straightforward. The first approach involves cutting access into the foundation of the home and then venting the radon (that would come from below the home) away from the home. The second approach is a whole house ventilation system, that allows a certain amount of fresh air inside, frequently enough that the radon levels are effectively reduced to safe levels. For homes that are quite new, this approach has the added appeal of improving the overall air quality at the same time, since it is also an issue with the "tightness" of today's new homes.

So, if you purchasing a home, condo or other dwelling in Bradenton, I would suggest that you go ahead and order a radon test at the same time. Graham with National Property Inspections was able to handle the testing for me and was very helpful with providing information after the fact. His website related to Bradenton Property Inspections is located at http://www.npiweb.com/gjohnson/index.htm . Feel free to call me with any general questions or concerns related to Bradenton Real Estate.

******Please remember, I am not an expert on radon in any way, shape or form, but thought that this was important information that buyers (and homeowners in general) should have. For detailed answers, please consult one of the individuals or companies listed on the State of Florida site.*****

Helpful Radon Links:

• http://www.epa.gov/radon/zonemap.html (this is the map of the country/states and expected levels)
• http://www.epa.gov/radon/ (general information on radon)
• http://www.epa.gov/radon/pubs/hmbyguid.html (link to a publication on radon that you can download)

Buying Bradenton Real Estate? Make Sure You Order Inspections!

Sometimes it's tempting to try to save a few dollars in the buying process ... but is this the most cost effective strategy in the long run?

I always recommend a quality home inspection to all the buyers I work with. It doesn't matter if the home is brand new or 50 years old, there are always potential problems that may need to be dealt with. Wouldn't you rather know up front if there are any major issues with the home you are committing yourself to?

Some of the things I have had turn up:

-Major foundation problems that required parts of the home to be placed on pilings
-Radon (I will address this issue in my next blog as this is something I am dealing with now)
-Improper Wiring
-Problems with the A/C unit and other major appliances

All of these items may not be apparent to most buyers, but may be present. A quality home inspector knows what to look for and will let you know what problems they found. Often they will suggest that you have a licensed contractor inspect the item in question.

For further information on what to look for in a home inspector as well as what the home inspector should be looking for, I would suggest you take a look at my page on home inspections: http://www.bradenton-real-estate-connection.com/buyerarticles.php?article=home-inspections .

The standard FAR contract for purchase addresses limits that the seller's will be responsible for. If there are items found not up to warranted condition (basically it means that all appliances and major house systems need to be working in the manner they were designed). So, the question is, why wouldn't you want to insure that you are purchasing a quality home and that as many repairs as possible will be made before you move in?

Selling Bradenton Real Estate in a Strong Buyer's Market

Given the strong buyer's market in the Bradenton area we have been giving the following tips to any potential sellers. Although the majority of seller's have gotten the message that it is no longer an easy job to get your Bradenton real estate sold, some are still clinging to the old market and inflated prices.

So, what do you need to do to sell your home?

1. List with a qualified Realtor, who has experience in the local market and keeps up with the latest ways of getting their listings noticed. Education is important, find an agent with the CRS designation (they must complete stringent education as well as prove proficiency through number of closed transactions).
2. Price your home at the bottom level shown on the market analysis your Realtor prepared for you. Keep in mind that the market is still adjusting and there continues to be a glut of homes which will keep sales prices down for some time.
3. Prepare your home to sell ... it must stand out from all the rest both online and in person. We believe in this so strongly that we hire professional interior designers for a one hour consultation, so you know what needs to be done to make the best first impression.
4. Make your home easy to show. The more difficult it is for another real estate agent to bring buyers into your home, the more likely they will just move on to another listing instead. We recommend an electronic lock box with one hour advance notice for showings.
5. Make sure marketing is targeted to a particular type of buyer. Ideally all advertising should not only list standard information on your home, but include the benefits of these items as well as help the buyer visualize how it will enhance their lives.
6. Get other agents in to your home...caravans, broker's opens, having your listing pitched at local board of Realtors meetings are important.
7. Is your home or condo on the web? Amazingly, we still see homes that have no web presence at all. Minimally it should show up on Realtor.com and through other agents web searches. Ideally you want upgraded listings on Realtor.com with virtual tours, multiple photos and text describing your listing, along with other major sites both in the US and out of the country.
8. Stay in touch with your Realtor and be open to feedback from other agents and buyers. If you aren't having any traffic in your listing, make sure you are priced competitively and make a good impression.
   

Following these tips will help you get your home, condo or investment property sold in the least amount of time and for the best price possible. Please go to www.bradenton-real-estate-connection.com for more detailed information on the buying or selling process in the Bradenton area.

Welcome to Bradenton Real Estate Updates

Hello,

Thanks for taking the time to find our blog on Bradenton Real Estate. We plan to have regular updates on the market as well as helpful information for both buyers and sellers in the current market.

I would suggest that you take a look at our new website www.bradenton-real-estate-connection.com for some basic information on the buying and/or selling process as well as some general information on this area. As the site is new and we are still working out a few kinks, please be patient with our progress.

In the meantime, I will be happy to respond to any immediate requests for information.