Bonnie Cox Real Estate Musings

Anyone who lives in Maryland has probably read in the "Sun" and the "Aegis" about tragedy of Altieri Homes. 

Are they criminals?  Or victims of the economy.

Altieri Homes is based out of Columbia County.  They have been charged by Maryland's attorney general with taking deposits and payments from about 20 homebuyers in Howard and Harford counties without starting or finishing building the homes.

They have also been accused of failing to pay subcontractors, refunding customer's

deposits or advance payments.  Many other builders are facing the same thing, but this is the first I've heard of an attorney general getting involved or threatening "severe sanctions" against companies falling victim to the housing market.

In the Baltimore Sun, Douglas Gansler, Maryland's attorney general, stated "My office will seek severe sanctions against builders who operate without being registered (not the case here) or fail to properly handle consumer deposits."  He fails to mention that our governments (state and federal) do this on a daily basis without reprisal.

I would like to know why Altieri Homes is being made the example?  Instead of folding, as many independent lumber yards in Maryland I know of have done, they simply tried to stay afloat for as long as they could, only to find that the banks were no longer lending.  Why aren't charges being leveled at the lending institutions?  Fannie and Freddie and the congressmen who conned so many investors into believing all was okay with them?

Many, many home builders have had to close their doors or struggle over the past few years because of the housing market.  I know personally the family's of two big ones here in Maryland that have had to either pull their offices out of the state or shut down completely.

As tight as this market is, not enough business is to be had to help cushion a builder to fix any trouble spots or make repairs on construction, which is also one of the problems Altieri faces.

My husband (a wholesale lumber and millwork representative) has been laid off since January 30^th.  He has had no job bites other than the odd jobs through people at church every so often.  We don't own a big house, we didn't overspend during the "heyday".  We have three vehicles . . . none of them under 10 years old, and we have no credit cards.  We haven't used them in over six years.  We are just now coming to the end of what we had in savings.  We never expected him to be out of work this long and my business  (real estate) is choppy at best.

I really don't think that the people who provided the jobs should be the one the government goes after when they themselves are the ones who were not only complicit, but created this mess.  How do you get blood out of a turnip?  Tax it?  Are you freaking kidding me?

It does not matter what the attorney general does to Altieri Homes at this point.  It is obvious they are broke.  The best they can hope to accomplish is to make it impossible for them to ever carry a contractor's license again and possibly take the rest of everything they own.

As for me and my husband, I guess we'll just hold out and do the best that we can until the attorney general starts coming after private citizens when they can no longer pay their bills.

I was surprised to see how many open houses there were listed in MRIS today.  I am not holding one myself, but I will be attending a couple of them.

Memorial Day weekend is a great time to hold open houses, have yard sales, etc.  A number of our agents here expect a huge turn out.

Remember, not every Open House is going to yeild a contract on your house.  We've seen less and less of this today on our local market here.  But it certainly is a great way to drum up some leads and get your cards in people's hands.  Almost everyone that comes in that door is either looking to buy now or in the future, or knows someone that is in the market to buy or sell.

I have been torn on the idea of holding anything on Memorial Day weekend because I think the holiday has been commercialized just as much as any other holiday.  However, holding that open on the Sunday before the holiday keeps me from feeling that I'm treading on the memories of our soldiers.

It's also a time when family from out of town is visiting.  If they are thinking of relocating, there couldn't be a better time to go see some houses in the area, since they are already there.  I have seen a trend lately of family wanting to get together in these tough, economic times, for support of each other and being close enough to help out if needed. 

Retireing moms and dads moving closer to their children, who have children of their own that may need babysitting, families getting bigger homes so their parents can live with them, siblings just entering the workforce who purchase together because they otherwise couldn't afford to do so.

Don't be afraid to hold opens on holidays.  I've met two people during our last open house that both purchased their previous homes on Mothers day! 

Media Mayhem in the Real Estate Market

"The real estate market is dead!" " We're in a depression!  This is horrible!"  " You may as well hang up your open house signs and pop your balloons because recovery is futile!"  "Things have never been this bad!"

Every time I turn on CNN, CBS or ABC News (Yes FOX, you are guilty too), you hear this mantra being repeated.  Not only is the real estate market writhing in its death throes, it is pulling the rest of the economy down with it.  The sky is falling, okay?  Now take your Prozac and get over it.  Since the rest of the world depends on your real estate market, I guess you've got some work to do.

Sane real estate professionals pour through their monthly and year to date statistics on their local market and see falling numbers:

Harford County, Maryland has dropped 9.82% in their average sold price compared to April of last year.  Median sold price dropped 7.05%.  Total Units sold dropped 30.10% from April of last year.  However, average days on the market decreased from 125 from last year, to 121 this year.  That is a 3.20% improvement.

Baltimore County saw less of a decrease percentage on home prices between April 2008 and 2009, however the average D.O.M. increased by about 4%.  That is something to think about if you are considering purchasing a home in Baltimore County.   It may be easier for you to find better deals than if you purchase in Harford.

This tells me that average prices of homes are still coming down (good thing for buyers).  Units sold, while 30% less than last year, could also mean that fewer homes are going up for sale.  You wouldn't know it to look at my neighborhood, but I look at this as a market correction.  This is what you should be explaining to your home owners who are on the fence about lowering the price of their homes.

The best indication that will tell you if your market is improving is that average D.O.M. (days on market).  If it is decreasing, that is a good thing.  This is the number I would keep an eye on.

Keep in mind that the freak of nature we saw in the early 2000's, with prices of homes increasing in value 10% or more every year was just that . . . a freak of nature.  It was not the norm.  Home owners and investors expecting to take from the market are not going to have to give back a little. 

This isn't dooms-day.  This isn't the sky falling and CNN analysts don't know everything.  Fear-mongering abounds on the evening news.  These people should be writing fiction and giving Stephen King a run for his money.  The facts are in the numbers, not the beet-red face of Lou Dobbs sputtering beat-box economic fire and brimstone like Baptist Minister (get your umbrellas).

The facts are what goes up must come down.  The faster and higher prices rise, is how fast and hard they will crash.  This is not the worst economy we've ever had.  This is not the worst recession we've ever had.  You can wallow in self-pity or you can keep on going like we are headed for a "normal" market, which we are.

The correction has been swift.  Painful, but swift.  Take advantage of the new tools this correction has given you.  You have little window of opportunity to have first-time buyers take advantage of the $8,000 tax rebate, the 4.75-4.85% interest rates and home prices down around 2004 levels.  There IS no better market to buy!

So go out there and spread the good news.  The sooner we take the initiative to correct our own market, the sooner the rest of the economy will recover.  There are buyers out there!  Who are YOU going to give them to?

Bonnie Cox