The Newest "Problem" for the Housing Market? A Shortage of GOOD Homes!

Finally the media is catching on....some headlines in todays Los Angels Times :"Shortage of homes for sale creates fierce competition" ! It goes on to talk about there not being very many really nice, sellable homes on the market....
Well, that is nothing new for me! The fact is there IS a shortage of good homes, properly priced, in good locations, with nice floor plans that are well maintained. Over the years I have noticed that, on an average, Harbor Town keeps about 32 homes for sale at any given moment. Today there are only 21 homes that are for sale (and 7 pending contracts!!!).

I have always thought that the "HOUSING CRISIS" was actually a paradigm shift. People want OUT of the cookie cutter, nondiscript, boring suburbs. They want MORE out of life. They want a community where they can feel they "belong". They want their weekends back to enjoy with friends and family. They don't really want to be stuck to the sofa watching TV or  having to mow the grass. And they want a home that is the right size to actually "live" in, not some monstrous mc-mansion sitting in the middle of an acre field! These are things that I know, deep down, people crave- even if they don't know it themselves. Hey, I have been in this business for 18 years-  and I can't help but notice!

So, that puts Downtown Memphis ahead in the housing market- and it puts Harbor Town clearly way out in front of the Downtown market.

Why? For Harbor Town the answer is simple- good planning. Walkable, friendly, pretty, convenient, fun and wonderful little Harbor Town. With it's shops and their smiling store clerks- the small intimate pubs and restaurants, sunsets over the Mississippi- some people find it hard to ever leave. But when you do leave there is a plethora of other things to do and places to go right across a very short bridge!

 Most of the homes are well designed and sitting on small lots that do not require hours of attention. There are lots of walking trails and parks. There are beautiful vistas to make you smile. There is a marina to connect people with the water. There are friends to meet and things to do! It truly is a complete lifestyle. Harbor Town couldn't be more popular!
And there are a few homes available- if your home is sitting on the market here, you need to look at the price and/or condition of the house.

The South End of town, suddenly with in the last few months, has become VERY popular. But it is hard to find a home there! Not a day goes by that I don't receive an inquiry call about homes in the south end of town for under $300k.  But there are only 6 homes available in South Bluffs and three of those are well over one million dollars! Outside of South Bluffs there is absolutely no single family homes available! There are some condos- but good ones are hard to find! The foreclosures have completely dried up- except some that are poorly designed and/or in bad condition. And as far as the rental market goes- it's running at about 100%!

So- here it is folks- The newest "problem" for the housing market is a lack of shortage of nice places to live! But I am here to tell you, thats nothing new!

Stuff to DO near DOWNTOWN MEMPHIS!

WE ARE SO LUCKY! We live in Harbor Town- that wonderful little village that sits right along side of the downtown core of Memphis. There are lots of thing to do here- beautiful walks, nice restaurants, kayaking and bike riding- but sometimes you just want to get out and explore a bit further! So here are  some of the little treasures that I have found along the way.....

Take a drive north off the Island- did you know that there is an amazing state park just a 15 minute drive up there? It is called "Shelby Forest" and it encompasses 13,467 acres of bottomland hardwood forests. There are 20 miles of hiking trails, 5 miles of paved bike paths, 8 miles of horse trails, two lakes and the Mississippi River! Tim and I go there regularly to commune with nature. It is fantastic! There is nobody there! On our hike last week we saw two bald eagles circling overhead! The forest is also home to deer, turkey, beaver, foxes, otters and bobcats. Stop by the park nature center and grab a map before you set out.

On the way to the park, stop by the Shelby Forest General Store. It remains unchanged since it was built in the Great Depression! There you can grab a sandwich and a drink- say hello to "Jay-Jay' the rooster- maybe catch a little bluegrass on the patio and chat with the ever cordial owners, Doug and Christin.
They also sell frisbee discs for the neighboring frisbee disc golf course ( the largest one in the southeast!)

After you have had your delicious sandwich and walked off  the calories on the trails- drive on up a few more minutes north and visit the Old Millington Winery at 6748 Old Millington Road! You heard my correctly! A WINERY- just north of here! You can pick up a couple of bottles of their award winning red wine and enjoy them in their garden watching some live music (Sundays)!

Need to stock up on some farm fresh produce? Keep driving to Highway 51 and you will find the "Jones Orchard" fruit stand where they sell veggies, homemade cakes, jams and jellies. There is even a small concession stand there.

On the way back home you will pass the ever-so cute Dewitt Spain Airport where, for a small fee, you can be whisked away on an aerial tour of the city! You may even be inspired to take flying lessons!

So those are my suggestions to while away some summer hours....what are yours? Please share!

If you hear the words "SHORT SALE"- RUN !!!!

What, exactly, is a short sale anyway? Everyone asks me that question- so let me try and map out a scenario for you-

You see a home that you love for $300,000 and decide to purchase the piece of property by taking out a mortgage. The bank lets you borrow the money at 5% interest and a 5% down payment. Now you owe the bank $285,000 with payments of $2000 each month for 30 years to repay your debt. Something terrible goes awry, you lose your job or something, and you are unable to pay back your debt. You stop making your house payments. The bank is threatening foreclosure. You tell the bank you will try and sell it and save everyone the hassle of a foreclosure- The bank won't have to evict you ( you can stay in the house). They won't have to maintain a vacant property and the bank won't have to be responsible for the property taxes and homeowner association fees etc.. (you will).  The bank says ok- lets try it- we will give you some time to see if you can sell it yourself before we foreclose on the property. So you call a realtor and say- "do what ever it takes to get me an offer on this house". And the realtor says "okay, lets ask $150,000 for it- that ought to work!" But wait a minute- you OWE $285,000-( that's the 'short' part of a 'short sale'.)  So $150,000 is an arbitrary number- the bank has not agreed to it. It is completely made up by you and the realtor.

Lets look at this scenario from another persecutive, that of the potential buyer of a short sale. The property is being offered "for sale" at 50% of the original price of the home. "WOW! What a deal"you say!- But wait! Remember, the number is an arbitrary one- who said $150,000? Certainly not the bank! The realtor and the seller did- and they have absolutely no idea if the bank will take that amount or not ( and if you think about it- why would they?)- however, what the seller does know, is that the bank will not be evicting him as long as he is trying to go down the "short sale" route- so he is now living rent free as long as he can string this short sale out.

During this process the bank is going to require that the seller send them all of their financial information each and every month- if they don't the process will be delayed. And if the bank doesn't accept the $150,000- the deal is dead.

I don't think that you can get into much more of a convoluted mess.

And short sales are ripe for fraud. A friend told me that he was looking at a short sale in Destin, Florida. It looked like a GREAT deal- $550,000 to purchase a home that once sold for $1.2 million. The seller met him at the property and told him that if he could see his way to pay the seller $30,000 cash for a "chair" that would remain in the house- he would take the $550,000 offer to his bank. ( In other words the seller would receive a $30,000 payday for making the deal happen).

I have also been hearing about realtors, who once they have had a persons home on the market and been unable to sell it iwithin a couple of months or so they actually "recommend" that the seller stop paying their house note and begin slipping into the short sale process! Oh my!

And a couple of months ago one of my clients attempted to purchase a 'short sale'  and the seller asked for $10,000 in cash. Jeeze!

It's murky out there in the 'short sale' world....if you hear "short 'sale' it's best to just RUN in the other direction! If you must dabble in the world of distressed properties- stick to the foreclosures. When you get a foreclosure the process has already been taken care of. The bank owns the property. They have contracted with a realtor to sell the house at a certain (usually depressed) value- and things are fairly straight forward. Also, know this- these days most regular sellers have "considered the market". There are GREAT deals out there without having to go through any type of distressed sale.

It also goes to show you that a realtor with the knowledge and expertise to help you avoid these new mine fields ought too be worth their weight in gold to you!

Foreclosures in Downtown Memphis

Luckily, there has hardly been any foreclosure activity on the Island. Why? Well, the fact is that most of the people who buy a home on the Island are people of means. Many of the homes that were built by Lenox Homes that lie to the north of Harbor Town are purchased by fairly wealthy parents who want to furnish their child a nice, safe place to stay while they attend college to become dentists or optometrists or do their residency at one of the local hospitals. These people don't wind up in foreclosure- they have options.

The people of Harbor Town proper are an anomaly in Memphis. They come from all over the globe. They are the people who have been brought in from other parts of the world to be the movers and shakers of our society. The human resource head hunters found them and they, luckily, found Harbor Town. They are not going to stop paying their house notes. They are not going to get foreclosed on. In the past 5 years or so of this "media made economic crisis" there have only been a scant few foreclosures and almost all of them can be attributed to a divorce or some other personal crisis.

There are a few condos in foreclosure on the south end of downtown. I had the opportunity to show three of them today. These, folks, are amazing opportunities for the savvy investor.  There is a 3 story townhouse in State Place, hardwood floors through out, granite and stainless in the kitchen and a one car garage for $134,900. Unbelievable! This unit sold for $225,000 in May of 2007! As far as the second and  third property goes- never mind- they are no longer available- I sold them!

If you want to grab a bargain to live in, flip or add to your portfolio- email me at ksoro@comcast.net and I will send you information. We are living in historic times! Make the most of it!!!

ZILLOW- AND IT'S NASTY EFFECTS

Zillow- the real estate website that sets itself up to be the end all definition of any given piece of real estates' value is absolute hog-wash.

Please, stop showing me "Zestimates"! ( That's what they call their estimated value of any given home).

Here is the problem. Zillow, is nothing more that a computer data base. It collects the information on past sales and present listings. It has a radius of what it includes in the data that it sifts through to come up with what it thinks your (on any given property) is worth. Now, think about it. We live in Memphis. There are HUGE differences in neighborhood values- just going from one block to another- much less if you include things in, say, a two mile radius.

As I sit here writing this in Harbor Town Proper- that radius would include the Lenox Homes to the north of me on Mud Island, Waters Edge, Island Crest, the condos on the south side of the bridge, Uptown, the Pinch, and the homes along North Parkway. These are all VERY different neighborhoods, with VERY different home values. BUT Zillow does NOT differentiate. It can't. It's just a computer program.

(If we have BIG trouble with it here - just imagine what can happen in Midtown!!!)

If you don't get a real estate professional who knows what is going on in the area that you are looking in- and you rely on these computer sites- you are going to get BAD information. And don't just click the button to the realtor who is advertising on Zillow. They just paid for that- it does not mean that they know anything about a given area! Do your homework and use your heads. You should know that if you are looking at a home in the middle of a run-down neighborhood with a crack house next door , the property is not worth a gojillioon dollars, and conversely, a beautiful custom home in Harbor Town proper is worth more than a nondescript, mass produced tract home.

But Zillow- won't tell you that because it CAN'T. Zillow has never been here. Zillow has never seen the houses. Zillow doesn't understand that one home may have a beautiful view and exquisite finishes and another home has builder grade finishes that need replacing. It compares oranges to apples. So, please, don't buy into its notion. It is not accurate. Instead, rely on the advise of a smart, savvy realtor who is tuned into the area that you are interested in. Let them help you form an opinion of price. There really is no substitute.

Personally, I think that Zillow has done a lot of damage. I think that they should not be allowed to operate as they do. I believe that they have done more damage to real estate values that anyone can imagine. And I would like to see them gone. But Zillow is not the only offender- so watch out and use some common sense when making what will likely be the most expensive purchase of you life.

In the meantime- I know that if you can't beat em' join em'- so soon you will see my smiling face on the Zillow page and you will be able to click on me- and I will help you sort out what is fact and what is fiction.