[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3950655851[/flickr]I have always been a fan of great architecture. It is like living in a work of art, and is designed to enhance one's life. Take this listing on a hilltop neighboring Venice; it has nothing but the highest level of finishes, soaring ceilings adding volume, and a wide open ideal floor plan. It is my opinion that great design adds value. One can not use the standard dollars per sq. ft in analyzing these one of a kind special properties, as they are just that--special. There is a finite amount of truly good architectural properties relative to the housing availability as a whole. One must be careful however; as when the market was hot, everybody was looking to fix & flip properties or build for spec. It is these spec builders that often cut corners to minimize costs and maximize profits, which is certainly understandable, but it is those projects that make truly great design and attention to detail that much more in demand. This property in it's entirety can be seen at http://modernonmoore.com, and was built by a noteworthy builder/designer for himself and his family, and therefore, was built to the highest standards.
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Home Prices vs. Cost of Financing
An article came out today by Fiserv, a financial information and analysis firm, predicting housing prices would fall nationally 11.3% by June 30th, 2010. This may or may not be correct, as my crystal ball is fuzzy today; however, I would like to point out a few things to clear up the picture for the person who may be on the fence of whether to purchase now or later. 1. The Fiserv article speaks to an average around the United States. We all know that real estate is about location; thus, can be extremely different from city to city--even neighborhood to neighborhood within a given city for that matter. Los Angeles real estate is much different then Detroit for instance.
2. Areas where there was tremendous investor speculation (ie Miami, Las Vegas, & Phoenix) will be hit the hardest and bring down the national averages, where some cities prices may be rising, albeit at a small clip.
3. Interest rates are hovering at near historic lows currently, and can't stay there forever.
I would like to focus on the last point for a moment, as it is key. I was watching CNN's business correspondent, Ali Velshi, this morning, and I believe he hit the nail on the head. He made the point that should prices slide 11% but interest rates rise just 2%, one would actually end up paying more for the property. Let's use $500,000 as an example. If one were to purchase a $500,000 property now at 5.5%, the interest on a monthly payment would be $2,291.67 (there are other costs involved like property taxes, etc). Now let's say that Fiserv is right and the property is worth $445,000 a year from now, but the interest rate rises to 7.5%, as many economists think it will, one's interest payment is $2,781.25. This is a difference of over $5,800/yr! The beauty is one can lock in the historical low interest rates that are currently available for 30 years.
A home purchase is the largest investment most of us will ever make, and I do not take it lightly. All I am saying is to not only focus on the media reports, as they are not always talking about your area. Also, remember that statistics can be skewed, so delve deeper into the numbers in order to come to the right decision for you and your family. The goal is always to buy low and sell high, but the actual costs associated with the purchase must be factored in.
Marketing Real Estate Outside The Box
I currently have two listings with special instructions (ie limitations) for me to follow while marketing my client's properties. The instructions are as follows: no signs, no open houses, not putting it on the MLS, and not sending just listed flyers in the immediate area; all of which are staples among real estate brokers. One listing is almost $2,000,000, so is clearly a large deal and a top priority. It is this listing that I have been racking my brain, and doing every possible thing I can think of to get the proverbial word out about this dynamic home. To date, I have put it all over the internet (on probably 10 + sites at this point), posted it daily on craigslist, contacted every potential buyer/associate I know that may be interested or know of anyone who may be, as well as essentially created my own MLS. The client did not want it officially listed, but what I have done is search for every agent with a listing over $1M in Mar Vista, Venice, Santa Monica, and Marina Del Rey, and sent them the listing directly. The MLS is basically an easy way to alert other agents of new listings, which is exactly what I am trying to do; albeit in a much more time consuming fashion. I always try and follow my client's preferences of course, but also need to get the job done at the same time.
It is this outside of the box thinking, and aggressive online marketing, that is leading the way to closed sales currently. Experience is great don't get me wrong, but many older agent's have become lazy and accustomed to properties closing quickly with minimal marketing while the market was at it's peak, which doesn't really work anymore. This is the benefits to a young and hungry real estate professional, who is connected to the places where the modern buyer is looking.