The Biggest Real Estate Story of 2006 was the story that wasn’t, I am happy to report, the bubble never burst.  Lots of people are blaming the media for creating these concerns, but in the end, fundamentals won out.  Consumer confidence is starting to rebuild, and bigger market forces than the media are driving the market, Homeownership is a safe, secure way to build long-term wealth. The national median price of homes bought ten years ago has increased 88 percent. The number of US households is expected to increase 15 percent during the next decade, creating a continued high demand for housing.

I came across this survey of 923 real estate agents, brokers and executives who responded to a survey request in Agent to Agent, an online magazine,  with predictions for trends in the coming year:

What’s in?

Homes that are priced right:
Look at only the sold comparable’s from the last 3 months. LOOK AT THE FACTS and price accordingly.

Savvy buyers:
With interest rates historically low and pent-up demand from a soft year in 2006, “Deferred demand” from 2006 could ignite a mini-frenzy.

Upscale garages:
Today’s garage owners want them decked out with cabinet and storage systems, mini-refrigerators, insulation, heating and air conditioning and durable but residential-looking flooring.

Two home office:
Size matters, make sure each is at least ten-by-ten feet.

Building green:
Based on three areas; energy conservation, indoor air quality, and resource conservation. Natural forms of energy, such as wind, solar, and geo-thermal if available on-site, are maximized.
 
Structured wiring:
Must-have for technology based home buyers. Coaxial TV cable, voice, and data lines, distributed radio, remote camera security are wired through out a home into multi-outlet boxes called home network centers.

What’s out?

“As is” in home sale marketing:
Anything went in the boom market, but if you’re planning to use “as is” in 2007, forget it. Buyers see it as a red flag about the home the seller. You have too much competition to be chasing buyers away.
 
Buyer incentives:
Gimmicks only confuse and distract buyers. Cut to the chase and deduct the cost of your free-with-purchase from your current price and send the signal to buyers that you’re serious about selling.
 
Bedrooms not large enough for a bed:
In the boom, rehabbers and developers learned the fastest way to profit was to increase the room count of a home of an existing home. Bedrooms shrunk size when a four-room one-bedroom was gut-rehabbed into a four-room two-bedroom.

Over-full-price offers:
It was a strategy in the boom market to under-price a home and let the market set the selling price. Not today, one thing that won’t change in 2007 is that every buyer will want a deal, and walk from one if they don’t get one.
 
Endless Open Houses:
The open house pendulum has swung from “the house sold in the first day” to “we need to have our house open every Sunday.” Desperation is when your home is open every Sunday. Buyers know and track it. Plan on every three weeks to have a public open house.

This Week’s Real Estate Insight:

By the late spring of 2007, the media will likely begin reporting positive “uplifting” trends. Statistical momentum says that will inevitably happen. Many potential buyers will regain the confidence to enter the market. Some smarter buyers will see the herd of impending buyers over the horizon and will want to get a jump start.

With more than 8.5 million existing and new homes sold, and mortgage rates still at 6.5 percent, 2006 was a pretty good year for residential real estate, after the massive appreciation of the past few years, home prices began to moderate and we are seeing a much more balanced market.

So what’s coming up for 2007? Interest rates should continue at the current, historically low level. With Existing sales leveling  at a little under 6.5 million, and new construction falling, there will be good deals on existing homes and perhaps even better deals on new construction.

If you’re planning to buy a home in 2007, here’s a list of New Year’s resolutions you might consider making:

Get credit and finances in order:
 
Even if you have bad credit, lenders will be more forgiving if they see you’ve gotten your act together in the last six to 12 months. Federal law now requires each of the three main credit-reporting bureaus (Experian, Equifax and TransUnion) to give you a free copy of your credit history once a year. To get yours, go to http://www.annualcreditreport.com/. Add your credit score from Equifax for $6.95.
 
Know how much can afford to spend for a home:

Get Pre-approved from your lender, you can shop on line as well. There are lots of financing options these days, I got a great deal, and incredible service from my local credit union. Beware of predatory lenders, if the deals sounds too good to be true.
 
Interview at least three brokers before hiring one:
 
Choosing which agent to use or choosing not to use an agent can be critical to your successful purchase; someone you can trust, with whom you wouldn’t mind spending a lot of time, and who is knowledgeable about the neighborhoods you’ve selected.
 
Read and understand all documents before signing them:
 
Take the time to read all documents thoroughly, considering all the ramifications of these documents, so many people just blindly sign things without really knowing what they are signing.  Ask an attorney to explain things that don’t seem to make sense. It’s important that you understand what promises have been made and what warranties have been granted, and what implications these documents have for your personal financial and emotional well-being.

This week’s Real Estate Insight:

Financial preparedness, a Realtor you can trust,  getting organized and gaining knowledge about where you want to be living will help make your home purchase as smooth as possible. I wish everyone a happy, healthy, and prosperous New Year!