Will Richardson

First-Time Home Buyers Take Note

There are two factors in the market place at present that have a very important bearing on first-time home buyers.    The first is the government tax credit of $8,000.00.  If you qualify for the credit, you must purchase and close on or before November 30th of this year.  With the average time to close a  standard sale from date of contract standing at approximately 45 days, it won’t be long before that November 30th date is a real factor.  Short-sales (that’s a home that is worth less than the mortgage against it) can commonly take four to six months to close after a contract offer is submitted–keep that in mind with that November 30th deadline looming.

A second important factor at present for first-time home buyers (and all other buyers for that matter, except those paying all cash) is that mortgage rates have moved up about 100 basis points (each basis point is equal to 1/100 of one-percent, so a 100 point basis point move is 1.0%) in the past month or so.  The good news is, rates are still below 6.0% for well-qualified buyers, which historically speaking, is still a very good rate.  The bad news is many economists think that rates will continue to move higher, especially with the spectacular deficit spending at the Federal level.  I personally believe rates will continue to move higher from this point, but obviously, neither I, nor anyone else knows for sure.  But it is a fact that today’s rates are very low compared to the last 30 plus years.  In 1977, when I bought my first home, I paid 8.25% for my 30 year fixed mortgage; a very good rate at the time.

The bottom line–if your job situation is secure, the two factors listed above are very compelling reasons to pull the trigger on a home purchase.

One more thought–I wish you and yours a safe and festive 4th of July!!

Will Richardson

MBA, RE/MAX Hall of Fame

RE/MAX Town & Country

214-543-7600-cell

Is this a good time to buy or sell a home?

April 14th, 2009

I’ve been asked by a number of people whether this is a “good” time to buy or sell a home.  In my opinion there’s not a way to answer that question and have the answer apply to a broad spectrum of people.  There are just too many variables that apply on an individual basis for a blanket answer to apply whether the answer is “yea” or “nay”.

But I can cite some factors that should go into the calculations of any potential home buyer or seller and how they relate to the current market.

A big positive factor right now is interest rates.  Yesterday, I saw quotes for 30 year conforming fixed money at 4.75% with a one-point origination fee.  To put that rate in perspective, we purchased our first home in 1977 and were delighted to get a 30 year fixed rate mortgage of 8.25%.  In 1985 we made another home purchase and got an excellent rate (for the time) of 11.5% fixed.  Current 30 year fixed rates are at or near their lowest in over 35 years and there is no guarantee that these rates will hold at this level for long.  While mortgage rates are not directly tied to the 30 year Treasury Bonds, the market does demand a risk premium over Treasuries for mortgage loans, and if the rates on Treasuries start back up, mortgage rates will likely follow.  And with the amount of funding the U.S. Treasury is going to be doing for the foreseeable future in order to cover the huge deficits that the federal government is racking up in their ongoing effort to lessen the effects of the current down-turn, I would not be at all surprised to see Treasury and mortgage rates start rising sooner rather than later.

Here in North Texas, we’ve been fortunate to escape the huge amount of over-building that took place in some parts of the country (especially California, Arizona, Nevada and Florida) and our local economy has also held up well by any measure relative to other parts of the country, including the unemployment rate, job creation, and diversity.  That does not mean that we have been unscathed by the recession–we just haven’t seen nearly as severe an effect here as in some other locales, and I’m hopeful that we will continue to avoid the worst of the effects.  The local real estate market is fairly balanced with an approximate 5 month supply of homes for sale locally according to recent reports.  That is surely a major reason why our home prices have held up well, with flat prices or slight drops in value occurring in many area neighborhoods over the past year or so.

Of course home prices could fall further.  So could interest rates.  Prices could also increase and interest rates could as well.  A more important question, in my mind at least, is how do you look at your home?  Even though I’ve sometimes made money on the sale of my personal homes over the years, I don’t look at my home in the same way I look at other investments.  To me, a home is a place to raise my family, provides shelter, and offers a sense of permanence.  Even though I’ve been a Realtor for almost 20 years ( and was directly involved in real estate finance and construction prior to that) I’ve always looked at my personal home in this way.  Affordability has always been key–the fact that you can qualify for a huge mortgage doesn’t (in my mind, at least) mean that you should take one.    I’ve always wanted to be in a position to be able to pay my bills even if my income level dropped significantly.  I just feel more comfortable living below my means and feel strongly that having a good margin of affordability in a mortgage payment is a wise course of action, as is having a good amount of money set aside for the proverbial “rainy-day”.

Of course “huge” is a relative term.  If you’re a multi-millionaire, a mortgage payment of $10,000.00 or more a month isn’t all that large relative to your available resources.  On the other hand,  I know a number of people who own their homes out-right.  Did you know that over 30% of the homes in this country do not have a mortgage?  I think that’s a very significant number, and one that the news media seems to almost never get around to mentioning when discussing the home market.  Keep that percentage in mind the next time you see one of the doom and gloom newscasts.  My Pappy has a saying which comes to mind; “Figures don’t lie, but some liars can figure”.

The bottom line, from my perspective anyway, is we all have to live somewhere.  And where ever that “somewhere” is, there’s a cost.  I believe buying a home with a fixed rate mortgage that costs you a reasonable amount relative to your income and assets is an excellent way to take a degree of control over that cost over time.  And if inflation comes roaring back (I’m not saying it will, but I’m sure concerned about it with the way the printing presses are running at the Treasury!), having a home that you own out-right or with a low fixed-rate mortgage like those being offer at present, will be an excellent way to keep your cost of “shelter” at a reasonable price.

The last bout of high inflation we had back in the early 1980’s saw the price of that little custom house we bought in 1977 double in just seven years.  If we’d been renters during that time, or had taken out a floating rate mortgage, we would have seen our cost of shelter increase dearly.

There are a number of other factors to consider when thinking of buying or selling a home–I’ll discuss some of those in my next post.

Best Regards,

Will Richardson

MBA, RE/MAX Hall of Fame

RE/MAX Town & Country

214-543-7600-cell

Welcome to my updated website!

Welcome to my updated website!  As some of you know, I’m a real estate agent with RE/MAX Town & Country here in Allen, Texas and have been plying this trade for over 19 years.  I’ve had the privilege of meeting and working with hundreds of wonderful families over the years and continue to thoroughly enjoy my chosen profession.

I have sold homes in a number of north Texas communities with my major emphasis on the north Dallas suburbs of  Allen, McKinney, Plano, Van Alstyne, Fairview, Lucas, Parker, and Richardson, but over the years I have sold homes in a number of other communities including Southlake, Ft. Worth, Dallas, Mesquite, Garland, Carrollton, Corinth, Denton, Anna, Melissa, and Flower Mound.  I was born here (a 5th Generation Texan), hold an MBA from the University of North Texas, and excepting the months of July and August, can’t imagine living anywhere else.  Before getting the itch to be self-employed, I served as CEO and President of Richardson National Bank.  In addition to an MBA, I have an undergraduate degree in Finance and also graduated from the Southwestern Graduate School of Banking at SMU.  In 2001, I was inducted into the RE/MAX International Hall of Fame.

When I moved to the neighborhood of Watters Crossing in 1995 from Richardson, I began writing a news letter with information about the local real estate market and other areas of interest that I thought my neighbors might find useful.  Fourteen years later I’m still writing and delivering my newsletter to the good folks here in Watters Crossing.  I thought it might be of interest (especially to my Watters Crossing neighbors) to publish some of those letters here in my blog, in addition to my musings on things real estate and life in general.

2008 Market Recap for Watters Crossing

Dear Watters Crossing Neighbor:

Happy New Year to you and yours!  We were blessed to have all of our children here for the Holidays (including our grandson!) and thoroughly enjoyed the hubbub and confusion of a full house.  Now it’s back to just Terri and me-we’re enjoying the quiet, but missing the kids.  I hope your Holidays were joyful and the New Year finds you in good health and looking forward to the new adventures that life holds in store.  Speaking of adventures, the Fourth Quarter was certainly that for home sales in Watters Crossing, as shown in the chart below.

While the DOM (Days On the Market) improved throughout the year, the 4^th Quarter ASF (Average Square Foot) hit a low we haven’t seen since 2003, and only four homes were sold.  In a nutshell-it wasn’t pretty.

But the picture isn’t all dark, by any means.  Interest rates are currently at a level not seen since the early 1970’s-I was quoted a rate of 4.75% today for 30 year conforming money.  That coupled with the decline in home prices in recent months makes homes much more affordable for more buyers in the market.  The only ingredient that’s missing is confidence.  To feel optimistic about the future against a backdrop of incessant negative economic news is not easy.  Most people, me included, have seen the value of their investments decline over the past year, and layoffs in a number of industries are on the rise.

Of course not everyone’s job is in jeopardy.  I would go so far as to say that the vast majority of the folks living in Watters Crossing aren’t at risk of losing their jobs.

So if your current home isn’t meeting your needs, and your job is secure, it may be an excellent time to move.  It will probably take a while to sell your house, and it won’t fetch the price that it would have a year ago.  But the home you’re buying won’t fetch that year-ago-price either, and if today’s interest rates hold, the affordability of your purchase is improved even more.  To paraphrase the investment guru Warren Buffet:  “Be fearful when the market is greedy and greedy when the market is fearful.”

One final thought.  They don’t hand out awards for paying more than your fair share of taxes, and chances are pretty good that when the proposed property tax assessments come out this spring, your friends down at the tax office will assess your home above market value.  When you get your proposed assessment, feel free to give me a call if you believe the value is too high and I’ll be happy to check for comps.  In the meantime, if you have any real estate questions or needs, call me at 972-390-2664.  I’d love to visit with you.

Best Regards,

Will Richardson

RE/MAX Town & Country

2008 Third Quarter Sales for Watters Crossing

The weather sure has been beautiful the last week or so.  Cool, crisp mornings…warm sunny afternoons…if I wasn’t reading the Wall Street Journal on a regular basis I’d be in a really good mood.

Below is a comparison of the year-to-date sales in Watters Crossing to the previous three years.

The Third Quarter numbers show a nice improvement over the first two quarters of this year, though not approaching the Second Quarter of 2007.  The Days on the Market (DOM) dropped from 117 to 91, while the Average Square Foot (ASF) price rose to $89.15 from $86.83 in the prior three months.

To date, the Dallas area has one of the strongest job markets in the country and that’s one reason our prices have held up so well.  Another is the price of our homes in relation to average incomes-the homes in Watters Crossing (and in most of the DFW market) are affordable to a large number of people.  There never was a bubble here, so we’re not seeing the huge drops in price that many neighborhoods in California, Florida and Nevada are seeing.  But if we have a steep recession and the unemployment rate has a significant increase locally, we could see prices drop and foreclosures increase.  I would like to think that won’t happen, but unfortunately, with the current mess on Wall Street it might.  In my opinion, it’s a real good time to be conservative, save some extra money, hope for the best, and plan for the worst.  And if you decide to make a move, give me a call.  I’ve been doing this long enough to see a number of ups and downs in the market (18 years) and I have an unmatched track record of selling homes here.  The three homes I sold in the Third Quarter averaged $92.10 per sq. ft. and were on the market only 40 days!

Best Regards,

Will Richardson

MBA, RE/MAX Hall of Fame

2007 Watters Crossing Real Estate Report

Dear Watters Crossing Neighbor:

Well, all of the Christmas decor has been returned to its place of storage, our children have back to their homes (or college, in the case of our youngest), so it’s a good time to take a last look at the real estate market in 2007 and how things appear to be shaping up for 2008.

First of all, the review for 2007.  Take a look at the quarterly breakdowns below for the years 2004 through 2007.

Overall, the numbers are very good.  We set an all time record for the Average Square Foot (ASF) price in 2007 of $91.81, and the average Days on Market (DOM) for the year was just shy of two months, coming in at 58 days.  The performance in the third and fourth quarters didn’t match the first half, but despite the incessant negative real estate press over the last year, Watters Crossings sold for the highest price ever on average.  I believe the reasons for this fact are primarily; neighborhood appearance and amenities, convenient location, Norton Elementary, and the bang for your buck relative to surrounding neighborhoods.

Looking forward to 2008, the continued development of the high-end retail in Montgomery Farms as well as the much higher prices they are charging for the housing developments abutting Watters Crossing will, I believe, have a positive impact on the prices for homes in our neighborhood.  The recognition of Norton Elementary as a National Blue Ribbon School is another very strong selling point as well.  As long as the job market continues to be strong locally (and I believe it will be) I look for 2008 to be another excellent year for Watters Crossing.

One final thought.  Well, two final thoughts, actually.  First, if you are thinking of selling your home in 2008, I would love to talk to you.  Second, if you receive a tax assessment notice that you believe is excessive, give me a call and I’ll get you sales comps to help you fight an increase in taxes.  The bottom line is, if you have a real estate question or need, I want to be the person you call!

Best Regards,

Will Richardson

RE/MAX Town & Country

2006 Watters Crossing Sales Report

Dear Watters Crossing Neighbor:

Another year gone…does anyone know how to slow this ride down?  It seems like it was only yesterday when our family moved to Watters Crossing from Richardson, but it was 1995 (and I have the hair-line or lack there of, to prove it)!  In 1995 our three children were in the 8th, 6th and 1st grades, respectively.  Today, two of our three children have graduated from college, and our youngest will be out of the nest and off to college in the Fall.  We moved to Allen because we felt the schools were excellent, and we fell in love with Watters Crossing.  We still feel the same way on both counts.

Here is the full year real estate report for Watters Crossing for 2006 compared to 2005, 2004, and 2003.

As the numbers show, 2006 was a banner year for Watters Crossing home sales, across the board.  The average square foot price (ASF) was an all-time high, the average days-on-the-market (DOM) fell by almost half from prior year, and the total number of homes sold, though not at the level of 2004, compared favorably to 2005 and 2003.  Two of the seven Watters Crossing homes I sold in 2006 were on the market for less than a week (one sold for more than list price!) and another brought $330,000.00 (without a pool) which was the highest sales price in our neighborhood for the year.

A number of you have asked if I sell homes anywhere other than Watters Crossing.  The answer is, absolutely!  Most years, more than 60% of my sales are outside of the neighborhood.  I’ve listed and sold homes in Frisco, Plano, McKinney, Lucas, Fairview, Richardson, Dallas, Irving, Van Alstyne, Southlake, and even Ft. Worth, in addition to other neighborhoods here in Allen.  So, if changing circumstances call for you to move out of Watters Crossing, but you plan on remaining in the area, give me a call.  If I work with you on the sale of your current home as well as a home purchase, I can save you some money, and we’ll find the perfect home to fit your needs.  My home office number is 972-390-2664, or drop by my house and I’ll put on a cup of coffee!

Best Regards,

Will Richardson

RE/MAX Town & Country