Bloomsday and House Buying

Dear Friends,
It is the age-old question: After you have run Bloomsday, after you have made it across the finish line, collected your T-shirt and had a conversation with your heart promising it that if it would just keep beating for a little bit longer you would never put it through anything like that again, after you have run Bloomsday and survived, what do you do?
What is the perfect icing for the cake we call Bloomsday?
More carbo loading? Downing a dozen Mimosas? Convincing your legs to move again? Buying a new set of knees? All good ideas but no. Bloomsday requires a larger gesture.
I've always felt that buying a house strikes just the right note.
And not just any house. It has to be the right house. It has to be a house that, like all Bloomsday runners, has been gotten in shape through dint of hard work and dedication to purpose.
It needs to be this house: From the front deck you can sip mimosas and recover from Bloomsday.

This house has been transformed into something very special. It is the house version of a sleek Bloomsday runner: New flooring, Pottery Barn colors, updated bathrooms, cozy gas fireplace, decks front and back and it is on a quiet cul-de-sac, so the kids can play in the street without getting run over by a semi. When we took the office tour, everyone raved about it. There is a family room in the basement (through the French doors), 4 bedrooms, and a spacious 2 car garage.

You can get more information by going to http://www.tourfactory.com/420161 or, better still, you can come by and see for yourself. I will be having an open house there this Sunday, Bloomsday, from 1:00 to 4:00. The address is 4712 S. Keyes Ct. From Highway 195 turn off at Qualchan drive, go up the hill at Lincoln Blvd, Keyes will be on your right as you go up Lincoln. Gorgeous house, great neighborhood. A super buy at $234,875.
Now, if you already have a house, or you didn't actually run Bloomsday (like me), so buying a house for yourself is out, please feel free to forward this email (or blog, depending upon where you are reading this) to someone who wants a house that is move-in ready.

Doug

Pay Now or Pay Later

There used to be a commercial for Fram oil filters built on the theme of "pay me now or pay me later." A mechanic was rebuilding an engine that he says wouldn't need rebuilding if the owner had used Fram oil filters. The message: you can buy a Fram oil filter from him now or an expensive engine rebuild from him later.
Cute.
I don't know if it is true or not (although I religiously bought Fram oil filters for the next 30 years after I saw the commercial), but I do know there is a corollary in real estate: It has to do with updating your house and it goes, "You can buy it now or you can buy it for someone else, later."
Here is how it works. You are not planning on moving any time soon. Your kitchen is dated. Should you spend the money to update it?
Quick answer: Yes. If you would like the new kitchen and if you can afford it. (And you should really try to afford it.)
If you do not update your kitchen, when you do sell - off in the future somewhere, - the market will discount the value of your home for the out of date kitchen. The long term reality is you are going to buy a new kitchen for somebody, someday. It probably ought to be you, don't you think?
The same goes for outdated carpets, beat up trim, unfinished basements, bathrooms that need fixing - the list goes on and on.
Now, it is possible that the discounting won't be dollar for dollar what you would spend, and certainly, you can't expect a dollar for dollar return in increased value when you update, but in general, updating is worth it - especially if you will enjoy your house more between when you upgrade and when you sell. And when you take into account inflation and the increasing cost of doing anything, it is really worth it. Anything done today will cost less than the same thing done several years from now.
So when people ask me if they should update the kitchen or finish the basement my answer is always yes - because you're going to pay for it in the long run anyway. So you might as well enjoy it yourself.

How I was Showing Homes to One Guy and Almost got to Fly in Another Guy's Homebuilt Airplane

What you need to know before you read this is that I love to fly. I have my pilot's license (single engine land), although I haven't flown in a small plane since the 1980's. I haven't flown in years for a lot of reasons, which makes me, as a pilot, what they call low-time-dangerous. I love airplanes. Big ones, small ones, planes of all sizes and shapes. I especially like the homebuilt planes. The notion that for something like the cost of a mid-sized car you could actually own your own floatplane or beefed up ultralight, well, that really turns my crank.


So. Friday night I am showing a couple of houses in the valley to a client. On the way home, I am passing a residential area that has a private airstrip for the people who live there. I almost sold a house on that airstrip once, and since it is similar to the houses I am showing my client, we take a short detour.
We putter on down to the end of the airstrip looking at the houses (none of which are for sale) and next to the runway is a plane with a 70-ish guy just sitting in it. He looks like he is just about to start or finish a flight. His plane is clearly not your garden variety Cessna or Piper, and looks like a homebuilt or two I have seen in Kitplanes magazine which I read sometimes when my wife isn't looking. His plane is very sexy.
So I stop and ask him what kind of plane it is, and if it a home built. It is. He asks if I fly. I tell him I used to. We pass the time like that for about a minute. Then he asks if I want to go up with him.
Yikes! Really?
Really.
I tell him no, I really can't. I am, after all, with a client. He says ten minutes, max. My client then says he doesn't care, and that I should go for it. He'll even take pictures of me in the plane if I have my camera with me. Which, as a good real estate agent, I do.

What the heck, I say.
So we get the plane aimed the right way, and the pilot shows me how to get in. Getting in is a lot like getting into a kayak - you kind of shift your weight up and over and slip down in. You don't get into this plane quite so much as strap it on.






The pilot helps me hook up my four point seatbelt, get the headphones on and we taxi off to the other end of the runway for take off.










At this point, I am thinking this is very cool. We're going flying! I am also looking at the instrument panel and thinking how unfamiliar it all looks. There are some new gizmos that weren't around the last time I flew - GPS for instance - but mostly I've just forgotten what all that stuff is for.
We do the pre-flight run up and routine which is all terribly familiar and I am ready go, and getting pumped when there is some hitch in the smooth working of the horizontal elevator - that thing on the tail that makes the plane go up or down.
He fiddles with it for a while, and then says well, back to the barn. Something in there isn't right, and if it ain't right, we don't go, he says. He says one of the reasons he's flown for so long and lived to tell about it is he never takes a plane into the air when there is a problem on the ground.
Thinking of the consequences I couldn't agree more.
So we taxi back. He says he owes me a flight and he'll call me one day. I give him my card.
I am disappointed, but glad that if there is a problem we found it before going up. And glad I've got a pilot who doesn't take risks. This day, it will have to be enough to sit in the cockpit and taxi.
And if he ever calls me for that flight? I'll let you know.

To Fix or Not to Fix

It is a little known fact that when Hamlet was on stage asking, "To be, or not to be, that is the question," Hamlet's mother, the queen and Lady of the House at Elsinor was in another part of the castle asking her real estate agent at the same time, "To fix up or not to fix up?"
You can't be in real estate too long before someone asks you Standard Real Estate Question #3: Should I fix up and update my home before I list it, or let the new owner do that?

To which I would generally give standard Real Estate Answer # 36A which is, "Gee, that's a tuffy."

That's a joke.

I would say paint, clean up, don't spend a lot of money. And don't believe the TV shows that purport to show someone spending $2,000 on fix ups that net $40,000 more in home sale price. Not in this market, anyway. (Any house that can be flipped like that was being flipped like that.)

What's not a joke is this: in a hot market where people are bidding up homes, or at least feeling like if they don't act right away they will lose out, whether you paint or not, or replace the deck or not, or replace that 1970's orange shag carpet or not usually didn't make a whole lot of difference. The house was going to sell anyway.

Think of it this way: in a rising market buyers are competing with other buyers. But now we are in a buyer's market. Now, with nine or ten months of inventory sitting on the market, the game has changed. In a buyers market, the houses compete.

And if you are going to try to sell a home, you need to understand this change and it all has to do with time on the market.

In June of 2006, we had about 2100 homes for sale. That month we had about 800 closings. By dividing the total inventory by the closings (2100 / 800 = 2.6) we get how many months of inventory we have. (If no more homes came on the market, and we continued to sell at the rate of 800 per month, in 2.6 months we would sell the last available house.)

Now jump to today. We have 2778 homes for sale. We have 293 closings. That equals 9.4 months of inventory.

With nine months worth of homes on the market, the fix up answer changes dramatically.

We have a new goal: get to the front of the long line of houses (about 2500 at this count) waiting to be sold.

We do that by being fixed up completely. If a buyer has lots and lots of choices, they don't have to accept a house that needs new paint or gutters repaired. They don't have to put up with a kitchen that needs new cabinets because there is probably one out there. And the money you spend isn't about how much you'll get back, but about what it takes to be the best house in a very competitive market, and get it sold at all. And pricing is about value: it is no longer about being priced fairly, but about being the best value for the buck - which might mean being lower than other comparables in the area.

So when someone asks me if they should replace the deck I say yes. Put in new carpet? You bet. Have a landscaper trim the plants ...yes.

Think of it this way, it is deal or no deal and your house is what they are looking at and comparing their first impression with all the other houses on the market in that price range. You don't want anything to get in the way of their saying "Deal!"

Move in Ready

When you are buying a house, does it matter who owned it before you?

Darn tootin' it does. If you have cat allergies, you don't want a house owned by a cat lover, and if you're not handy at fixing things you don't want to live in any house I've lived in.

If you could describe the perfect owner to buy a house from, what would it be?

If I could pick from a whole list of adjectives and descriptions, I think "works in construction," great with tools", and "meticulous" come pretty close to perfect.

Which, coincidentally, is how the owner of this great little South Hill rancher describes. Which may be the reason this house is so amazing. In fact, and I'm not just saying this, "meticulous" is the word that comes to mind when you see it.It has been completely redone with a remodeled kitchen, remodeled bath, a large master fashioned out of two smaller bedrooms, two bedrooms and a family room in the completely finished basement, a two car garage with opener and a fenced back yard for Bowser. And it will have a new roof by closing. Did I mention the hardwood floors in the living room and dining room?

And, get this, all the appliances stay, including the main floor washer and dryer. The washer and dryer! All the buyer of this house has to do is bring clothes, dishes and some food and they are done.

This house used to have the basement partitioned off as a separate rental unit, and it could be returned to that function, but it would be a shame to undo all the work and love that has gone into this little beauty.

If you know of someone who is looking for a south hill charmer, this is the one. A steal at $175,000. I'll be open on Sunday from 1 to 4. if it hasn't sold sooner. If you are an agent, it's got a lockbox, call first and show. To see it online, go to http://www.tourfactory.com/415735

February Update

It is April 1. April Fools Day. It is a lovely Spring day and I wonder: given the never-ending winter we've had, is this an April Fools joke on a cosmic scale? Is it going to snow again tonight? Or is spring finally here?

(For the record, let me remind everyone: to date this year, we have had no nice 60 degree days. Zero. Nada. As I write this, there are still piles of snow in the driveways I can see, and my yard is still covered with snow from last night. It still feels like we've been in winter forever. It's been snowy for so long that a daily hit of Prozac in my Starbucks coffee is starting to look like a good idea.)

This talk about the weather isn't completely off the subject. Around the office, it is part of an ongoing conversation about whether or not the real estate market in Spokane is being impacted by the neverending winter. We wonder if, when it finally does warm up, will buyers finally emerge from the sidelines and buy, kicking the market into gear, or are the buyers already in gear, and this is as good as it is going to get? (Oh, please God, say that isn't so.) It certainly feels like the weather is holding things back.

Which begs the question, what is the market doing? To which the answer is: about the same.

The Spokane Association of Realtors tracks activity by month, and compares it to the same month one year ago and two years ago. We just got the numbers from February.

This February, SAR tallied 293 closed sales. That compares with 407 the Feb before and 461 in 2006. There were 2,778 active listings this Feb, compared with 2,233 last year and 1,581 the year before that. Two years ago, sales equaled about 29% of listings; this year it was about 10%. Yikes!

Fewer buyers looking at more inventory. A lot more inventory. And that has been the pattern for about a year. Average prices are hovering about where they were a year ago.

What we don't know is whether or not there are fewer people looking - or just fewer making offers that get accepted. Those of us in real estate are fervently hoping it is the latter, and that with enough Prozac or sunshine people will start buying.

I'll let you know. For now, I'm happy just to bask in the sunshine and hope the nice weather is not an April Fools joke.

Prozac will do that to you.