Happy New Year
Newsletter - McCall’s Real Estate
2016 - Let us say good-bye
We’re into a whole new year and it feels good to see the end of 2016. Things were pretty tough last year. The market was off, buyers were still looking for bargains, and while there were sales prices stayed low. Things sold - they did - they closed, but slowly and not for a profit. Now, I don’t want to make excuses, but there’s a reason I’m not banging on doors and asking for price reductions. 1. We had bad weather with lots of rain through the spring. 2. Sales in the primary home market were up through the summer as usual, but not in the second home, land market. 3. The fall is generally a good time for sales as leaf lookers pour into the county, but this year we had forest fires. Forest fires! Yikes - we were between the Party Rock fire and the South Mountain Fire. This was not conducive to sales.
Real Estate as Investment
I’ve been working in real estate since 2002, that would give me 15 years, technically 13 if you discount the two years I spent in real estate marketing. Around 2008 I bailed out of real estate sales and went into advertising, selling pages in The Real Estate Book to Brokers, shooting cover pictures and writing ad copy. Even then I believed Mark Twain, “Buy land, they’re not making it anymore.” I believed owning a home is your best investment, and in 2007 bought a home. I expect you know what happened to those of us who bought a home in 2007. A term was coined - under-water - and even ten years later we haven’t seen any gains. I bought a lot from Fall Creek, too. Lot 2 in Golden Valley Estates. We’ve been making payments faithfully since 2002 and now, 15 years later could probably sell the property for what we owe on it. So, when I say I feel your pain, I do.
Real Estate is sold based on supply and demand.
Homes and land in high demand net higher prices, homes and land in low demand net lower prices.
Real Estate Market Cycle
Recovery - Begins when new construction starts, foreclosures clear the market place, and empty homes fill up.
Expansion - Demand increases when there is growth and you can build a house for less than you can buy one.
Excessive Supply - The supply continues to increase with new construction until demand decreases.
Recession - Demand decreases and we have an oversupply. If interest rates have risen with the market we’ll see big losses as people realize they can’t recover their investments and let their property go into foreclosure rather than continuing to make payments. Rents may be lowered, sellers lose equity and get stuck often owing more than the property is worth. The bottom of the market doesn’t occur until new construction stops and demand begins to grow.
Where Are We Now?
We are still dealing with a few foreclosures, but it looks like most of those have cleared the market. There’s always one once in a while. There’s one in Bostic right now with 20 acres and I’m getting daily queries about it. There’s always a demand for deals. There aren’t many available anymore.
This brings me to the disappointed buyer. I’m still getting a few, but not as frequently as last year. I’d be showing property to a married couple and at some point one would look at the other and say, “We should have bought that cabin last year.” And I wish I could get them back to their vehicle immediately because what’s happened is they’re going to hang onto the “one that got away”. They’re disappointed. They held out for the best deal and they held out too long. They’ve missed the boat. They don’t buy. Their perception is that they missed their opportunity and rather than recognize that they’re still pretty close to the bottom of the market, they cross their arms and create the story about the cabin they could have bought for $89,900 or was it $69,900, maybe $59,900? This leaves homes sitting on the market while buyers run around looking for a deal.
1. Buyers object to rising prices
2. Sellers object to lengthy time on the market
This leaves buyers paying more than they want to pay and sellers netting less than they want to net. It’s not an ideal situation but we have to contend with it until the demand catches up with the supply, and right now we’re teetering on the brink. It’s going to get better or it’s not, we’ve been in a holding pattern for months.
Here’s what I’m doing. I am continuing to utilize the tools at my disposal, the Rutherford County and the Mountain’s MLS’s. I have one URL link available in each of the MLS’s, so although you have a YouTube video on our channel, courtesy of Paradym, I have no place to post it. I am posting RealBird slideshows in the Rutherford MLS and Paradym Visual Tours in the Mountains MLS. I hired Scenic Oversights, Chris Roach, to shoot aerial pictures of several homes. I have had him take drone videos for me in the past, but with no link-outs available in the MLS there’s no way to distribute the videos unless I embed them in the Paradym tours, which makes the tour so long it’s slow to download. That will change as technology improves. There’s always something new coming down the pipe and I’m an early adapter. I have to remind myself not to go after every new and shiny object I run across. I like to wait, until some reviews are in, until we have information sufficient to make a decision. Just now, I’m studying the new full-frame cameras with super duper wide-angle lenses. I’m not sure I like the pictures. It makes small rooms look so large that people are disappointed when they see a house in person. I’m not sure it is a good idea, but I am studying it.
Things are improving in Rutherford County. Forest City's Facebook is expanding, another building is going in. A Chinese Company has purchased the old Sarah Lee plant in Forest City, they’ll employ about 300 people and eventually 600. The Tryon International Equestrian Center has established itself as a world-class venue. They have won the opportunity to host the 2018 World Cup which will bring about 500,000 people to the area. Things look good for 2017, but prices haven’t risen, I remain cautiously optimistic and am always working for you.