Douglas Trudeau’s Blog

Some buyers need attention. In today’s real estate market there are many Home Buyers who with a little TLC can eventually afford a home. Not everyone is making mega bucks, or have the fortune of others. Especially in today™s economy. Sure the ones home buyers with perfect credit and the ones with cash are the easiest to work with. No argument. In a perfect world all home buyers would have cash or perfect credit. Now, back to reality. I refuse to turn my back on home buyers who need extra attention.  

As REALTORS ® we have as much responsibility to those who with a little TLC can live the American Dream of home ownership as we do to in terms of a car salesman I knew, a “home run.” I asked a Loan Officer whom I have sent several referrals and received none if he was interested in being the preferred lender for all future clients on a new technology system for getting home buyers. His response was, “I™m sorry, but right now I can™t commit to being your preferred lender until your communication with your prospects include the five questions listed above in some form or another. These are the questions:  

1. Do you have verifiable continuing sources of income that you have been reporting to the IRS on your tax returns for the past two years or more?
2. Do you have open and active credit cards and/or auto loans that you have been paying on time with no lates within the last 12 months?
3. Would you characterize your credit history as good or better?
4. Are you a US Citizen or Permanent Resident Alien?
5. Do you have money saved for a down payment or can you get a gift for the down payment?

 Keep in mind, I have received zero buyers from this Loan Officer whom I have sent referrals for over a year. I work just as hard for the person buying a $50,000 home as I do the person who is wanting to buy a $500,000 home. Both are human beings, both deserve the best service they can get. There is another Loan Officer whom I have one client he is working with who has an inexpensive provider for helping clients repair their credit. An important service for many of the clients I run across.  

I expect a lot from Loan Officers. After all, if I refer clients to a Loan Officer, my reputation is on the line. If the Loan Officer does a good job, she or he will get more referrals from me and from the buyers. ·                

• First, the Loan Officer I work with has to be reliable.
• Will s/he answer the phone beyond Monday through Friday from 8-5?          
• Will s/he stay in touch with clients of all levels and keep me updated?
• Will s/he work with clients needing TLC as well as the crème at the top?
• Does s/he have a program for helping potential home buyers fix their credit?
• Does s/he have reasonable pricing for clients and is not charging them high fees?
• Can s/he perform and close on time consistently? This is an area I find troubling.  

Greed is what got us into the mess we are in now. By the sweat of the brow, elbow grease, whatever anyone prefers to call it, we can work our way out of this hole. Call me old fashioned, but, you have to take the bad with the good. When I made my vows over 35 years ago I promised for better or worse. The struggle through the worse makes the better that much greater. I™m not marrying my clients; however, I am giving them my commitment.  Taking from  Elis Island where the Statute of Liberty stands œGive me your tired, your poor, Your huddled masses yearning to¦ in this case yearning to buy a home. I am not giving a Loan Officer just the creme that are easy to work with. Either you take all, or you get none.

Visit me (click each)  if you want  learn more:

Facebook

Twitter

Website

What I Offer Buyers

Tucson real estate has been a popular selection for retirement and winter homes for years. Traditionally December has less sales than November. Not in 2010. December sales rose over 16% above November’s sales. Unusual for Tucson. In late 2009 through mid 2010 home buyers received tax incentives to buy homes. Not in 2010, yet real estate sales in December 2010 were over 2% above that of December 2009.

The highest number of  sales were for homes that sold for $120,000 to $139,999. Followed by homes in the $100,000 to $119,999 range.  Homes  selling for  $200,000 to $249,999  were the leading price range for years. In December, these homes came in 3rd place. Buyers are taking advantage of the bargains they are getting for a lot less.

The northwest part of Tucson had the highest number of real estate sales. The northwest portion of Tucson traditionally has more sales than other sections of the Tucson Metro area. The northwest had nearly double the volume of sales of the nearest competing area which was the north.

Homes under contract rose significantlyfor December 2010 as compared to December 2009. With 1,470 homes under contract in 2010 as compared to the 847 in 2009, 2010 has sen the highest number of homes under contract since 2004; which had 1,282 homes under contract.

Real Estate is still alive in Tucson. Deals are being made daily for those willing to move forward and live the American Dream. For December to have the number of sales it did is a good sign for local homeowners. We continue to bounce along the bottom. Buyer confidence is the determining factor. Homes that sold for $700,000 are selling for $300,000 to $400,000. Homes that sold for $200,000 are selling today for $100,000. How much longer these bargains will continue is unknown. Nobody can accurately predict the end. The real question is, “When will it bee too late.”

Health is an unforeseen benefit of home-ownership. Directly from the NAR Study…

“Homeowners are happier and healthier than non-owners. But again, it would be incorrect to simply look at the correlation between home-ownership and health outcomes to draw conclusions since home-ownership is also correlated with such factors as income and education levels. And surely, higher income and education are associated with better health. Nonetheless, there are a few academic studies that provide evidence of the positive impact of home-ownership on health even after controlling for factors like income and education. Rohe and Stegman found that low-income people who recently became homeowners reported higher life satisfaction, higher self-esteem, and higher perceived control over their lives.21 But the authors cautioned on the interpretation of the causation since residential stability was not controlled for. Similarly, Rossi and Weber concluded that homeowners report higher self-esteem and happiness than renters.22 For example, homeowners are more likely to believe that they can do things as well as anyone else, and they report higher self ratings on their physical health even after controlling for age and socioeconomic factors. In addition to being more satisfied with their own personal situation than renters, homeowners also enjoy better physical and psychological health.23Another study showed that renters who become homeowners not only experience a significant increase in housing satisfaction, but also obtain a higher satisfaction even in the same home in which they resided as renters.24

More recently, research examining the association of self-rated health with socioeconomic position showed that social mobility variables, such as the family financial situation and housing tenure during childhood and adulthood, impacted one™s self-rated health. In particular, the socioeconomic disadvantage indicated by not being able to save any money or not owning or purchasing a home, is negatively associated with excellent or very good self-rated health. 25 A similar examination, but looking at self-reported financial well-being, also showed financial well-being depends on home ownership, the number of children, health insurance, age, and income.26″

Crime is a concern for everyone. I know in our large community of nearly 3,000 homes, the areas where owners outnumber renters crime is a little lower. When I had a listing in Green Valley. The homeowner was away, so I would check on their home. When they got back they had a list of every time I arrived, where I parked, whether I went inside or just walked around the back checking the outside. Their neighbor watched every move. Homeowners have a tendency to lookout for other homeowners. Renters sometimes come and go.  Homeowners are more likely to share personal information with other  homeowners, less likely to reveal things  to renters they are not sure will be there tomorrow.

Homeowners are more likely to form neighborhood watch groups.  Keeping an eye out for each other when they are away, knowing what vehicles belong in their neighborhood.  Per the NAR study, “Homeowners have a lot more to lose financially than do renters. Property crimes directly result in financial losses to the victim. Furthermore, violent non-property crimes can impact the property values of the whole neighborhood. Therefore, homeowners have more incentive to deter crime by forming and implementing voluntary crime prevention programs.”  They go on to say, “Research on crime and home-ownership shows that homeowners are far less likely to become crime victims.”

Owning a home has more benefits than just possession. Property value is increased, homeowners feel safer with neighbors who are homeowners, children to better in school, employment is impacted, etc. With  the Buyer’s Market we are experiencing today, it makes more sense than ever to buy a home.

21 Rohe, W. and R. Stegman. 1994. “The Effects of Homeownership on Self Esteem, Perceived Control, and Life Satisfaction of Low Income People,” Journal of the American Planning Association, 60(2), pp. 173-84. 24 HLuis Diaz-Serrano. Disentangling the housing satisfaction puzzle: Does homeownership really matter? HJournal of Economic Psychology. Amsterdam: HOct 2009. Vol. 30, Iss. 5; pg. 745 25 Catherine R Chittleborough, HAnne W Taylor, HFran E Baum, HJanet E Hiller. Monitoring Inequities in Self-Rated Health Over the Life Course in Population Surveillance Systems. HAmerican Journal of Public Health. Washington: HApr 2009. Vol. 99, Iss. 4; pg. 680, 10 pgs 26 HDavid Penn. Financial well-being in an urban area: an application of multiple imputation. HApplied Economics. London: HOct 2009. Vol. 41, Iss. 23; pg. 2955  

Homeowners are less likely to move than renters. What does this mean. For the neighborhood it means more stability and safety; neighbors looking out for neighbors. If you know your neighbors, you look out for them. If you’re not sure about them, you avoid them, avoid what they do and are less likely to look out for them. So, there is that immediate impact on your home. For children it means staying in school with the friends they have developed for years. A stable home environment is important to learning. For businesses it means stable employees who are less likely to leave for another employer in another city.

Children are impacted by our decisions. Children from stable homes do better socially and in school. Combined with stability of growing up in one home in the same location, their chances of success is increased. NAR reported, “The decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in renter households.” With the decline in worldwide ratings for math, sciences, and reading, homeownership is a small part in reversing that trend. Teenage pregnancy is a problem throughout the US. The NAR report indicated, “Furthermore, daughters of homeowners have a much lower incidence of teenage pregnancy. The authors point to certain behavioral characteristics required of homeowners that get passed onto their children. First, a home purchase naturally involves one of the largest financial commitments most households will undertake. Homeowners, therefore, tend to minimize bad behavior by their children and those of their neighbors that can negatively impact the value of homes in their neighborhood. Second, homeowners are required to take on a greater responsibility such as home maintenance and acquiring the financial skills to handle mortgage payments. These life management skills may get transferred to their children.” They go on to say that homeownerhip also lends to independence from welfare amongst young adults. Behavioral problems are reduced, better reading and math results, and children can feel better about themselves. Homeownership isn’t the only solution to improving education, however, it is an important factor that should not be ignored.

Employment is a major issue in America today. Homeowners are more likely to want to keep their current job. For employers this helps in not having to train new employees and slow production or services. For the employee it means stability and the willingness to work through challenges, problems, and issues. Rather than leaving the job. Unemployment is traditionally lower amongst home owners. Since, the study occurred, that statistic may be less reliable. However, increasing homeownership could be a way to slowly  work out of the current recession we are in. Owners would be more likely to keep their job, spend money on things to improve their home, thereby increase GNP, creating more jobs, and we work our way out. Not the total solution, however, and intricate part.

I’ll be back with more, hopefully a little faster this  time. Clients come first and I have been more busy with clients lately than I have been in  the past few years. Good for me to remain a home owner. You can keep  up with me on Facebook, Twitter, and on my website. See you next blog.  

Homeownership does not impact only the homebuyer her or himself. Homeownership has a broad impact on families, neighborhoods, education, labor, the economy, crime, delinquency, and self-esteem to name a few. This will be one of a series of commentaries to open a dialog for both homeowners and non-homeowners alike to comment and provide feedback. For simplicity, I will be referring to non-homeowners as renters. I will offer the NAR report in its entirety at the end of this series. Home ownership is the American Dream. We just have to get Americans back to believing they can fulfill that dream once again.

NAR (National Association of Realtors) put together some comprehensive information based primarily on the Census, and followed by numerous other studies. Quoting from the NAR, œResearch has consistently shown the importance of the housing sector on the economy and the long-term social and financial benefits to individual homeowners. The economic benefits of the housing market and homeownership are immense and well documented¦ Household real estate holdings totaled $16.5 trillion in the first quarter of 2010. After subtracting mortgage liabilities, net real estate household equity totaled $6.3 trillion. In today™s news a trillion dollars does not seem like a lot. However, in perspective one trillion in terms of second is a significant amount of time. A close friend put it to me this way. 1 million seconds was  12 days ago, 1 billion seconds was the year 1977, 1 trillion seconds was 31,000 BC. I think a trillion dollars is a significant amount.

Think about your neighborhood. You can almost tell who owns and who is renting by the appearance of their front yard. For the most part, though not all, homeowners keep their front yard cleaner. Renters, with some exceptions, have a tendency to avoid putting money into plants, gravel, fence repair, sweat, etc. Those things are left to the landlord. Most landlords don™t go around to their properties to clean them up every week. When there is a party in the neighborhood, who has the louder party for the norm? If the neighbors get upset, renters can move on. Homeowners have to stay and face the music. Who is going to be less likely to want to deal with those neighbors year after several year? Homeowners tend to care a little more about their home™s appearance, and how well they get along with neighbors. Which would you prefer for your neighborhood, to be surrounded by renters or owners? Would you prefer a family buy the house across the street or an investor? Those who live in apartments, what are your neighbors like?

I remember when I first moved into our neighborhood. It was nothing but homeowners. Everyone kept their yards up, everyone looked out for each other. Twenty three years later a few investors bought homes in our subdivision. One neighbor just rented out his house. I can already tell the difference. Cars parked in the front yard, he never did that. Loud booming music when the pull up. Never had that problem from the owner. Haven™t seen the renters in the front yard cleaning, trimming, pruning or weeding since they moved in. He was out there a few times a week. Won™t be long before the weeds start growing and who knows what else. Yet, the family across from them who are renters take care of the yard as if they were the owners. Maybe they can influence the new renters (hint)? All the owners on our street do a good job keeping up their yards. Sometimes we borrow tools from one another, or give tips on what we are doing that they like and want to repeat. For curb appeal, owners tend to take better care.

What is the first thing buyers see when they are driving around looking for a home to buy? If we encouraged our friends to buy homes rather than rent, imaging the impact it would have. Imagine if every home for sale in your neighborhood was purchased by a potential home owner rather than an investor?

What I am trying to convey, is for the most part homeowners take better care of their home. Thereby adding to the value of the neighborhood. See you next blog for Benefits of Homeownership Part II where I will talk about the impact on employment with more quotes from the NAR. In the interrum, swing on by my website  or visit me on facebook.

It never ceases to amaze me on the different levels of service provided to Sellers. I was looking at a million dollar listings earlier that has been on the market 10 days with no pictures. Now is that good service to the client? One of the first things Buyers look for are pictures. I like to have pictures ready to put into the system within minutes of listing a home. I like to grab the attention of Buyers from minute one.

I can’t tell you how many times I have previewed homes for clients. Taking pictures and emailing them to my clients; to let them have a better idea of what the home looks like before they waste their time going to see the home. To me, that’s service. I can’t help it, I just can’t be average. Especially in today’s market and world of business. Taking that extra step, going that extra mile is what makes the difference to me.

I predicted back in November 2008 that June sales for 2009 would be approximately 1,036. For most of the year my predictions were off by 20-30 home sales. Sales were in reality 20-30 below predicted sales from January through May. June was another story.

Traditionally June home sales in the Tucson real estate market are lower than May. Not in 2009. Remember, I predicted 1,036. Actual reported sales is 1,147. That is 111 more sales than anticipated. I didn’t see that one coming. The last time we saw a spike in June sales was in 2005 during the frenzy of sales that created today’s down market.

What does all this mean? Right now there are 2,395 homes under contract out of the 8,491 homes that were put on the market. That leaves 6,096 homes available without offers on them. With the current market and average monthly sales for 2009 that would mean there are roughly 6.9 months of inventory. As the number of home available (inventory) slowly continues to drop and sales continue the market is heading toward correcting itself. Not there yet, but we are headed in the right direction. The good news   is that we aren’t getting into deeper trouble in the market. How long it takes to return to normal depends on buyer confidence, which is still low. For each home sold there is a ripple effect; i.e., sales of refrigerators, washers, dryers, furniture, curtains, landscaping, etc. Each home sale leads to more sales in other related industries. So, home sales are key to our recovery. The sales are out there, buyers who qualify just need to buy. Hesitation is hurting the economy.

There is one danger lurking in the shadows, though. Barney Frank and company who failed to regulate the market in the first place is suggesting loosening the requirements for home loans. Not sticking to guidelines and too many sub-primes loans is what got us into this mess in the first place. If he gets his way, we could end up repeating what we just went through over the past two years, only worse. What in the world is he thinking? That one we can see coming. Proof that another village has been robbed (of their village idiot).

Being a business major its hard for me to stay away from statistics forever. The MLS finally has a President who understands how to report valuable information. Oddly enough the information is disseminated faster as well. Forget the fact that she is the designated broker for Tierra Antigua Realty, the company where I work. Was I kissing up or what. Enough of that.

First, lets look at the number of homes available on the market. The number is steadily declining. In fact this number has not seen an increase since January 2009. Wait, we always see an increase in January. So if we go back to the last real increase that would be September of 2008, peaked in November, dropped again in December. That’s nearly six months of declining inventory. The steepest months have been April through May. All in all its an approximate 40% decrease since the highest month of April 2007 when we had over 10,000 homes for sale. In and of istslf this is not enough information.

Second, the number of pending sales. Each month since January that number has increased. But wait, it always increases from January through May. Plus it is lower than the numbers we saw in 2008. So, not much there, right? We’re all in agreement.

Third numbers to consider are the absorption rate. What in the world is an absorption rate you might ask? The absorption rate is an indicator of how fast supply is being taken up by demand. Say you have an inventory of 1,000 baseballs to sell with 300 selling each month. If no other baseballs were added to the inventory the absorption rate would be roughly 30%. Which would mean that you would have just over 3 months of inventory. Now if you are at the beginning of baseball season, that could be a bad thing. If its post season, it could be a good thing. With me now?

In December the absorption rate was 8.9%, in May it went up to 20.0%. Do the math. So, how does that compare to 2008. Well in December 2007 the rate was 9.2%, slightly higher that December 2008. Not good you might think? The absorption rate in 2008 was 17.4% in May 2008, and 20.0% in 2009. Not a real significant increase, however heading in the right direction. The desired range is 25-30%. Below that, and homes not moving. Above, like the 35-62% we experienced in 2004 and 2005, and you have sky rocketing prices. Need I say more?

What does all this mean to me if I am a home-buyer? It means that there are indications that the bottom has been reached and we are heading back to recovery. If we follow seasonal trends, which we have been to varying degrees, we are months if not weeks away from seeing the end to a bleak housing market in the Tucson area. Does this mean the same is in effect around the US. I doubt it. Its most likely regional. Which for Tucson means we have a healthier market. For those who are sitting on the fence post looking to buy in Tucson, the old saying of woulda, shoulda, coulda is right around the corner.

One of my favorite golf courses in all of Greater Tucson is Randolf North Municipal Golf Course

Randolph North Municipal Golf Course was the former home of the PING/Welch’s Championship LPGA Golf Tournament and has been the site for PGA tournaments from 1979  through  1990.     In the past it was the site of the PGA Seiko Tucson Match Play Championship and the PGA Joe Garagiola Tucson Open. Randolph was once touted as one of the best municipal courses in the country. Located in central Tucson, Randolph is easily accessible from any part of Tucson.

The course setting is a scenic with several tall trees, lush fairways, and a beautiful view of the mountains surrounding Tucson.
The fairways are forgiving. You can break out those $4 golf balls here.  You forget that you are in the heart of Tucson on the inner fairways and holes.

Most noted for its mature vegetation including tall eucalyptus trees, pines, palms, and numerous plants. The layout is a typical country club design with tree lined fairways and parallel holes. The course features water hazards, long fairways, and greens that vary from relatively easy to severely sloped or tiered, and from small to large.

Clear the water off the tee on the 9th and 18th holes then lay up before the green.

The water hazards aren’t over yet. There’s more before the green. The bottom of the water hazard at the end of these  fairways are lined with golf balls from those daring manly shots. The 9^th has 2 before the green.

If you use a SkyCaddie ® like me, you’ll know  how far to hit for your lay up. You just saved that $4 ball from Neptune’s depths. There is nothing better than taking the guesswork out of how far to hit your shots. On the 18th hole know that there are two water hazards near the green. You think you cleared one, only to fall prey to the second hazard. If you hit a slice off the tee on the 18th, good luck finding your ball in the chipping area. You may be hunting for your ball amongst several dozen.

Off the 10th tee across the water and running alongside the 18th fairway is one of the best the chipping areas in Tucson with 4 greens, a sand trap and room to work on your short game from 10 yards to 150 yards. The first green is over a sand trap, perfect for those finesse chip shots. Second is the a 75 yard chip and pitch green. Third is the 150 yard shot onto an over-sized green. Last, and where slices off the 18th come in is the 100 yard practice green for dropping those soft

Don’t let the raccoons, ducks and coyotes interrupt your early morning practice.  The driving range on the south side of the complex near Dell Urich (next golf course  blog)  gives you a chance to find your game for the day. Four practice greens spread out from the driving range to the 10th tee box give you a chance to work on your putting. Randolph Golf Course is truly one of the two best municipal golf courses in Tucson.

While going through the MLS looking for properties along golf courses I was not impressed with what I saw. Now keep in mind, all of these properties are listed as being on or next to a golf course.

First home is in a low income part of town near a municipal golf course. The community has nothing to do with the golf course itself. There is a 12 foot high chain link fence separating homes from this municipal golf course. Yet, the Agent listed it as being on a golf course. Stretch of the imagination to say the least.

Second home, on a community not within 5 miles of a golf course, yet listed as such. Maybe with a big screen TV turned to the Golf Channel…a far stretch of the imagination.

Third home, listed as on the golf course…right? If you eliminate the two rows of homes between it and the golf course…perhaps.

Fourth home, two block away from a baseball park. Neasest golf course, 3 miles away.

Fifth one, busy street and 100 yards between the house and the golf course.

Sloppy, sloppy, sloppy. Buyer confidence is low as it is, then we have Realtors who are being sloppy about their business. Maybe I’m too picky, but I prefer meticulousness and accuracy to sloppiness. I like to double check listings to make sure my clients and the home is represented correctly. Its hard to send information to clients when the listing information isn’t accurate or is misleading.

On the positive side, I did find several homes that backed up to golf courses. Some were really nice. The kind you want to show to clients just to see it yourself.

This is one I showed last year. Too bad its not on the market now. I did see some that I liked though. Anybody want to go see them?