Unstructured: Editor's Blog of AOL Real Estate

3:20:24 PM EDT Washington Post Profiles Professional Stager

While professional stager Lyric Turner admits that she's making less money as a professional stager, she's having a lot more fun doing it.

Anyone who has a flair for color and spacing can be a potential stager, but there's no Coldwell Banker of staging or Bachelor's Degree of staging that you can get that will give you credibility. Either you can do it or you can't. Certainly a few months as a regular real estate agent might help you establish some street cred in the marketplace, but no certification is required.

Ms. Turner generally charges $5,000 to $6,000 for two months to stage a vacant three bedroom house. Considering that most people are probably looking at a $10K reduction in price if they can't find a buyer, that money is most likely well worth it. She also does consultations for as little as $250.

At the same time, I've noticed on HGTV's "Get It Sold", they generally reduce the price first and then stage the home, so it seems like a bit of a bait and switch -- but sellers who have given it a shot on their own are probably likely to try almost anything to get their homes sold. However, on that show, they are usually spending $1,000 or so, so it's not really costing the buyers anything, and on at least a few shows, I've seen a bidding war break out, so they end up getting higher than the list price. 

Staging also seems to be more effective in condos and town homes that are basically the same.

If you are looking to sell your home for top dollar, you may want to ask your agent about working with a stager, or see if one of your friends is an aspiring stager. Maybe they can reorganize your space for free and start building their own portfolio.


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4:06:39 PM EDT New Yorker Essay Says Ownership Ties People/Economy Down

"In the U.S., it may be worth noting, the states that have the highest unemployment rates—states like Alabama, Michigan, Mississippi—are also among those with the highest homeownership rates. ... And reluctance to move not only keeps unemployment high in struggling areas but makes it hard for businesses elsewhere to attract the workers they need to grow."

This essay does a great job of calling out the biggest downside to homeownership -- increased difficulty in relocating.

Particularly in an area where one of the mainly employers suddenly lays off a significant portion of the workforce, the housing market is going to be flooded with homes for sale, valuations are going to drop, and owners will be forced to choose between selling at a loss, foreclosure or making the payments on a home with income they don't have.

At the same time, there is a lot more affordable housing in the United States than there are in places like Switzerland (mentioned in this article). Renting may not be a particularly viable option in rural areas where most homes are owner occupied, but you could see a scenario where the main breadwinner in a family might rent an apartment in another city as the rest of the family continues to live in the home they own.

In fact, NPR's Marketplace did a piece on Canadians from the eastern part of the country who spend most of the year in the mining towns of western Canada's providences, because they want their children to grow up somewhere completely geographically seperate from where they live. This is not uncommon in other parts of the world.

Of course, there's also no socialized medicine in the U.S., so owners for the most part need employment to be able to provide medical care for their families.

While this article raises some great issues, it probably doesn't do as much to suggest solutions, besides curbing our enthusiasm for ownership, which may be too little, too late.



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3:05:07 PM EDT 18 Out of 25 Markets Are Up Since 2003; 7 Are Down

The Wall Street Journal and Radar Logic put together this graphic to illustrate the price per square foot in 25 major cites from 2003, 2005 and 2007 (2008 data not available yet.)

On the main page, the number you see is the year prices were the lowest. So if you see a blue square for 2007, that would be bad, because that means prices are lower than they were in 2003 or 2005. No cities are green, ergo the prices in 2005 were always higher than either 2003 or 2005.

Out of the 25 cities, seven, or slightly less than a third, show price depreciation since 2003 per square foot. Four of these cities are in the Midwest, including Cleveland, Columbus, Detroit and St. Louis. The other three are Denver, Boston and Sacramento.

So, the question from my perspective is, if you were told you had a 66 percent chance of your home being worth more in four years than it is was when you bought it in 2003, that seems like a pretty good bet, doesn't it? If you take Detroit out of the mix, the odds actually go to 6 out of 24, so you had a 75 percent chance that your house would be worth more after four years.

If you bought in 2005, you probably aren't happy in some of these cities, but if you expected to show a profit on your home after two years, that just hasn't been the case historically. I suggest wait another year or two, rent your house out if you need to, and read this article about lowering your property tax assesment

I'm hearing a lot about how bad things are in Miami, but this graphic has prices up 40 percent from 2003 to 2007, although down 10% from 2005. In Atlanta, you have a market that has barely changed, with prices rising 1.2% from 2003 to 2007.

So, some much appreciated historical perspective on how we got where we are.

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2:37:40 PM EDT Fractional Ownerships Marketed in NYC, Paris, Etc.

At AOL Real Estate, we've looked at fractional ownership in the past. Possibly because buyers are less likely to want to cover multimillion dollar condos as a pied a terre or second home, this post discusses opportunities to "own" a portion of the weeks in luxurious condo-hotels such as the St Regis in Manhattan. Particularly for euro-toting foreign buyers that visit U.S. cities on a frequent basis (say six or eight times per year), this seems like an interesting idea.

"St. Regis rolled out their fractional development in 2006 on several floors of their midtown hotel. There are studios, and one- and two-bedroom units for $300,000 to $750,000 a share with 28 days of use a year."

For example, if you try to get a three or four star hotel room in Manhattan during certain weeks of the year, such as right before the Christmas holidays, you can expect to pay three to five hundred dollars a night if not more, so a week is costing you $2,100 to $3,500 as it is. At the low end, you can probably get some nights for $200. So 28 nights a year at $200 a night is $4,800, and $14,000 at the $500 level.

If you financed that over 30 years, a $300,000 fractional at $10,000 per year plus interest starts to look reasonable for four weeks a year, plus assume there's at least some resale value.

As the post calls out, there can be a lot of fees involved, so at some point just getting a normal hotel room may be more reasonable, assuming my math hasn't bored you to tears.

Plus, most of us have better things to spend $300,000 on.


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2:18:02 PM EDT Several New Real Estate Reality Programs Indicate Ratings Are Still There

Happened to catch an episode of Property Ladder last night where the flippers went over budget by about 200%. They still ended up making about $100K on their sale.

According to this AP article, HGTV had it's highest rates every in January, with nine of it's top 10 shows being about real estate:

"Nine of its top 10 series deal with the housing market, including "House Hunters," "My First Place," "Hidden Potential," "Buy Me" and "Design to Sell." The network did a special Feb. 29 theme day of "taking the big leap," or investing in that first house."

On the one hand, this may just indicate that with the writer's strike, people who normally would be watching "The Office" or "Lost" were watching more cable shows instead of repeats. I watch HGTV as much or more then the next person, and I think three of the those five shows are pretty lame.

At the same time, it's not like HGTV in particular has a lot of choice in their subject matter, since Home is in the name of the channel.

Also, it's not like HGTV's advertisers are going to be very happy if they start running shows called "I Want to Keep Renting" or "Too Broke to Redo My Kitchen."

One show that was pretty interesting, Bravo's "Million Dollar Listing," seems to have fallen off the radar, and some of these "flipping" shows are as much about the personalities as they are about investing in real estate. Is "Hell's Kitchen" a cooking show, or is it really a show about a cook who happens to be kind of a jerk.

On some level, same thing with "American Idol."


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1:56:29 PM EDT Thanks to CNBC's Diana Olick for this HUD post that allows you to check the limits in your area:
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-06ml.doc


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1:46:37 PM EDT Close to Home: One Study Finds DC Sales Up, Index Says Down

"... , home prices in D.C. fell 9.4% in December according to the Standard & Poor’s S&P/Case Shiller Home Price Indices report, which tracks sales of the same homes over time and is generally considered to be the best measure. But John McClain, senior fellow and deputy director for the Center for Regional Analysis, said the multiple listing service data is sometimes more accurate in a down market."

One commenter calls out this home inventory link, which shows prices down less than 2 percent in the last month, but with inventories rising almost 10 percent. Certainly one expects inventories to rise some what on a seasonal basis as the D.C. market enters the peak spring selling season, and a 2 percent price dip isn't too bad, but what seems clear from the report is that prices are way down in some areas like Prince William County  and Loudon, and flat or only down slightly in other areas. ("In Prince William County, home prices dropped 25% in February compared to a year earlier. And prices fell 12.3% during the same period in Loudoun County.")

In a word, the market is certainly frothy, which is probably better than stagnant.


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2:18:35 PM EST Do you think that you have to have two full-time incomes in order to afford a home these days? Would you look at alternative sources of income, such as renting out a room or take a second job in order to keep up with rising housing costs?
Post Your Thoughts

Are you worried that some senior citizens may not be able to afford to keep their home as prices for utilities rise?
Post Your Thoughts




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4:55:13 PM EST February Editition of Trulia Trends

Warning: PDF

Trulia does an excellent job putting the foreclosure situation in perspective by region. As they say, REO properties (which are being sold by banks) are basically the same price in the Mid-Atlantic and Southern regions as the normal existing home listings are. In the Midwest, the REO properties are essentially being dumped at 25-30% discount, so it makes sense for owners in those areas to hang on for a year or so if they can. At the same time, those homes are the cheapest in the country, so hopefully the mortgage payments are the least onerous.

By comparison, when you look at foreclosures in California, you see that in Bakersfield, REO properties are also basically the same price as regular listings. In Stockton, which is often talked about as the center of the foreclosure "crisis" they are only 3 percent less. But in LA, the difference is more like 30 percent. You could argue that the prices in Stockton are already depressed enough, but for those looking to get a bargain, the REO properties in LA and San Fran are available at a much deeper discount than in these peripheral areas. Even in San Diego, which is a very desirable location, the difference in price is just under 20 percent.

Finally, Trulia looks for markets that are showing signs of recovery. Albuquerque, Queens, Tulsa, Memphis and St Louis are the five that are called out as either being flat or up 5-10% in recent months. Memphis, St Louis and Tulsa, as cities in the Midwest, probably never experienced the kind of housing boom that you saw on the coasts. New York continues to be a hot market as stock brokers and other financiers get their annual bonuses, and Queens, Brooklyn and the Bronx are the areas where you a young professional can still get a deal compared to Manhattan. From what I understand, Albuquerque is being touted as a highly affordable retirement location, so you could see that city doing slightly better than Phoenix or Reno which are more overbuilt.

Things to think about it. Have a great weekend.


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1:23:09 PM EST Economist: Who's Hot, Who's Not for Unemployment



Thought this chart did a great job of explaining some of the reasons why some housing markets are doing so poorly while others probably don't have a whole lot to worry about in the long term.

With employment above 5 percent in places like Michigan and Nevada, those housing markets are probably not going to bounce back any time soon. But with employment below 4 percent in states such as Utah and (ahem) Virginia and Maryland, there's probably little reason to panic. In fact, Forbes just listed Richmond, Va., as one of the best cities for bargain hunters, with one of the lowest foreclosure rates in the country. Number one on the list is Salt Lake City.

At the same time, this Zillow survey on seller expectations has been getting a lot of attention. While you could argue that homeowners in the West are the most out of touch with their valuations, which Zillow has going down 8 percent, they are also the most in touch, with 34 percent of owners acknowledging that their valuation has gone down, the highest in the country. The number that say their valuations have stayed the same is also the lowest. What if the 36 percent live in Washington State, Utah and other states where valuations haven't gone down as much?

If anything, the South seems the most upside down. You see that Zillow has their valuations falling 4 percent, second worst in the country, but 37 percent of southerners think that their valuation has risen and only 21 percent think their valuations have gone down. In the Northeast, Yankee owners seem to be staying put, with 47 percent of owners thinking their valuation has basically stayed the same. But according to the Economist, with unemployment above 5 percent in Maine and Connecituct, the Northeast as a region is hardly impervious to the bust cycle.

The one market that really stands out to me is Charlotte, which is right between NC and SC, where unemployment is fairly high. But homes are considered to be so affordable by East Coast standards, even if they went down by 5 or 10 percent, it wouldn't be that bad in terms of total dollar amounts compared to losing 30 percent of the value of your million-dollar home in California.


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