What We Already Knew...Winston-Salem "Open for Business" according to Yahoo!

Great news from Yahoo! Real Estate! In the online article dated March 26, 2009 Raleigh and several other NC towns are listed as being very attractive to businesses. As the headline indicates, this is something that any of us that have lived in NC any length of time are well aware of. So in this 11th annual ranking of the Best Places for Business and Careers, Raleigh grabs the top spot, while Winston-Salem turns up #18. The study looks at job growth over the past five years and future projections. It also looks at living cost data and well as income growth and migration trends according to the Yahoo! article. The article goes on to state that these areas all have "high tech" investments which tend to be one of the first things that comes back once we begin to see economic recovery. Winston-Salem leads the nation in bio-technology research and is making waves in nano-technology.

Hitting Bottom....

There is a great deal of speculation out there as to when the proverbial bottom of the real estate market is going to occur. The fact of the matter is no one knows for certain and statistics vary state to state, region to region, city to city and n'hood to n'hood...you get the picture.

What we do know is that interest rates are LOW! Waiting to buy a home until prices hit bottom may mean taking a higher interest rate, as rates are anticipated to go up at some point.

My little stint on the local news station raised some questions from my loving husband and some of the locals at Smittys. "How", they say "do the numbers that you cited during the interview work out? Seems like fuzzy math!"

What they are referring is the statement I made about prices falling significantly and rates rising 1-2% which is a very likely scenario given all of the economic indicators. So I enlisted a lender partner of mine, Luann Davis at WR Starkey Mortgage to run some scenarios for me to prove my point. Now keep in mind, the term "nominal" is subjective depending on your economic status and comfort level, but I think these figures prove the point very well.

Assume a $200,000 loan amount-30 year conventional loan-4.5% interest rate (fixed)
PRINCIPLE AND INTEREST: $1013.37--TOTAL PAID TOWARDS PRINCIPLE (thus reducing your loan amount)-$3266 in the first year

Assume the price of the home falls 10% and your new loan amount is $180,000-30 year conventional loan-rates RISE ONE POINT to 5.5%, doesn't sound like a big deal--right? Plus, you got a great deal on the house, 10% off asking price (average list to sell is 3-5%)!! WRONG!
PRINCIPLE AND INTEREST: $1022.02!
So the payment is $9.02 higher and the TOTAL PAID TOWARDS PRINCIPLE in only $2424.76

Total cost of waiting for prices to fall is this scenario is $842 per year or an extra $70.17 per month!

Ok, so let's move on to a doomsday scenario...PRICES FALL BY 20%!
You are now only borrowing $160,000 but rates are at 5.5%--sounds great huh? You are really wheeling and dealing now! :0

You are right that your payments are lower, only $908.46, about $104.92 each month lower than the original scenario at $200,000 for a yearly savings of $1259.04. However, the principle reduction of $2155.32 is $1110.68 less than the $200,000 scenario at the 4.5% interest rate. This equates to a savings of $12.35 per month by NOT WAITING!

YOUR HEAD IS SPINNING...where do all of these numbers fit in you say?

Bottom Line (literally) :) **Thanks Luann!**

The lower rates equate to more buying power as opposed to waiting for lower prices.

Brooke

Kernersville Home Sweet Home Event A Success!

Great turnout, beautiful weekend for the event and lots of interest...I had 15 couples on Saturday and between 30-40 on Sunday...several folks that came by on Saturday came back on Sunday with friends or family...From what I gathered from agents that were at other listings of mine that were open, they also had good traffic--especially Oakmont, Abington and Browns Run.

You've heard me say it before and I will say it again--low rates (4.5 on Friday), tons of inventory, money to be lent and I will be posting graphs/charts very soon with correlations regarding waiting for the market to hit "bottom" and what that means to those of you who are thinking of waiting to purchase.

Check out the link on WXII that includes coverage from this weekend's event:

http://www.wxii12.com/money/18988297/detail.html

Have a great Monday!

Brooke

Budgeting in a tough economy...

Ok, we're all doing it everyday...looking at and readjusting our personal and company budgets to meet tough economic times. As I said in yesterday's blog, I spent one of my days last week listening to department head presentations for the Town of Kernersville. Our town manager, Curtis Swisher did a great job of prepping each department for tough times, not that they aren't painfully aware already. Most of our departments were making cuts to their budget and trying to save the town money long before it was en vogue.



Ok, back on track...the meeting...every request for the most part was lean and mean but that doesn't mean that each department will get everything or anything that they want. With tax values increasing, folks on a shoestring as it is and no cuts in existing services projected, that leaves raising taxes in order to provide for these items, programs and positions, unless they are subsidized by a grant as some of the Police department's requests are.

So the opposite of raising taxes is cutting taxes, something that I have been a proponent of for years. A couple of ways to do this would be to cut back on the intensity of some of our services such as brush, white good and bulk trash pick up...we run three or more trucks by some residences in one day to provide these services. This service could be curtailed to once per quarter or once in the Spring and in the Fall like our neighbors in Winston do. We could still provide year-round drop off for those items needing immediate attention.



Something else suggested by another board member is to look at privatizing the way we handle payroll. There was a request for a new staff person in Finance to alleviate some of the obvious burden on the staff in this department. Even though outside payroll servcing was looked at several years ago, it may be, as one alderman put it, a great time to re-visit the idea, given the economy and the growth of the town staff. An additional suggestion was to go to a monthly pay period for some, not all, departments.



We could also look at privatizing some of programming with Parks and Recreation if the program is not "break-even" or profitable...I will say that I was impressed that the current director, Ernie Page, understands that a mega-recreation center is not something that Kernersville can sustain and he seems to be working very hard to make sure that any future facility built would be utilized appropriately without unnecessary burden to the taxpayers.



I am sure that there are various other ways to cut back, re-configure our services and the way they are delivered so as to not have to raise taxes and to hopefully start our town on a plan to cut taxes as the commercial and industrial base continues to grow. These discussions are just the beginning of a long process leading up to the approved budget in June...So if you have any ideas that you would like to share regarding this issue, I invite you to comment or to send me an email at bcashion@toknc.com

Have a wonderful rainy Monday!

Brooke

Sorry for being slack...

Last week was a wild week...we had our Allen Tate Spring convention in Charlotte and I had our department head budget presentations for the Town of Kernersville...that didn't leave a tremendous amount of time to blog, however, it did give me lots of material.

I'll start with some of our presentation highlights from convention...great speakers, very helpful and time-appropriate topics. One of our speakers, Steve Harney, spent a great deal of time breaking down the current economic crisis and how it is shouldered on the backs of Realtors everywhere...basically if every Realtor (over 1 million strong) would sell one house tomorrow we would be out of the majority of this mess...the world economy isn't so great and it relies heavily on the United States economy...the US economy relies heavily on real estate and housing...and where my friends, does that end or begin, depending on how you are looking at it---it's the Realtor's responsibility to spread the word that NOW is the best time to buy since 1971 when this data started tracking regularly...Steve showed us numerous slides from various studies to prove his points...some of which are...

1-Even over the past ten years, though the economy has taken some tumbles...every major investment engine was down by double-digits...Dow, NASDAQ, S &P...but housing, was STILL up by over 60% even with the most recent depreciation.

2-Interest rates are low, prices are dropping but even if you are waiting for the "bottom" and no one knows where that is...your differential between payment and pricing (even if prices dropped 40%) would not change your payments by more than a few dollars per month...even if rates did go to 6 or 6.5+...I am waiting to see if I can post his charts so that you can have a visual...

3-North Carolina may just be "last to the party" to quote Harney...meaning that where other areas of the county seem to be straightening out, we are just now feeling some of the effects of job loss nationwide as folks come to NC looking for the jobs that we have been creating and thus pushing our unemployment up even higher...its not that we aren't creating jobs, its just that we have been inundated with new folks that are absorbing these jobs...and as unemployment rises, foreclosure rates usually follow...

This isn't being written to depress you into a further funk, but to help you to understand, especially if you are a seller, that we need to, as Harney said it "catch these prices from the bottom up"...that means that even though we saw tiny amounts of appreciation in the 1st and 2nd quarter of 08, we are now seeing 3-4% depreciation in NC and expected to see 14+% by year end...so the moral of this story is that aggressive pricing now may save you since prices are not expected to return to TODAY'S levels until Fall 2014 according to Case-Shillings....just by not realizing this...you lose close to $400 a week in VALUE (expenses not included) on a $240K house...

On a brighter note...activity with buyers is up...just on Friday during a one hour span I had over 15 showings scheduled for my listings and I showed property to buyers all day Saturday and am showing again this afternoon...That means folks are out there, but you have to be the best in condition, most aggressive in pricing and realistic when it comes to the market...Have a great day! Stay dry!

Brooke

Happy Monday...Just a Few Funnies to Brighten Your Day...

These bust on both sides and given the mess across the board it's comforting to know that this has been going on since the inception of government. It's nothing new, just very cylical...enjoy this gorgeous weather and again, Happy Monday!


1. “In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress.”
—John Adams

2. “If you don't read the newspaper you are uninformed; if you do read the newspaper you are misinformed.”
—Mark Twain

3. “Suppose you were an idiot. And suppose you were a member of Congress. But, then, I repeat myself.”
—Mark Twain

4. “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
—Winston Churchill

5. “A government which robs Peter to pay Paul can always depend on the support of Paul.”
—George Bernard Shaw

6. “A liberal is someone who feels a great debt to his fellow man; which he proposes to pay off with your money.”
—G.. Gordon Liddy

7. “Democracy must be something more than two wolves and a sheep voting on what to have for dinner.”
—James Bovard, Civil Libertarian (1994)

8. “Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.”
—Douglas Casey, classmate of Bill Clinton at Georgetown University

9. “Giving money and power to government is like giving whiskey and car keys to teenage boys.”
—P..J. O'Rourke, Civil Libertarian

10. “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.
—Frederic Bastiat, French Economist (1801-1850)

11. “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
—Ronald Reagan (1986)

12. “I don't make jokes. I just watch the government and report the facts.”
—Will Rogers

13. “If you think health care is expensive now, wait until you see what it costs when it's free!”
—P..J. O'Rourke

14. “In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other.”
—Voltaire (1764)

15. “Just because you do not take an interest in politics doesn't mean politics won't take an interest in you!”
—Pericles (430 B.C.)

16. “No man's life, liberty, or property is safe while the legislature is in session.”
—Mark Twain (1866)

17. “Talk is cheap...except when Congress does it.”
—Anonymous

18. “The government is like a baby's alimentary canal, with a happy appetite at one end and no responsibility at the other.”
—Ronald Reagan

19. “The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.”
—Winston Churchill

20. “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”
—Mark Twain

21. “The ultimate result of shielding men from the effects of folly is to fill the world with fools.”
—H erbert Spencer, English Philosopher (1820-1903)

22. “There is no distinctly native American criminal class...save Congress.”
—Anonymous

23. “What this country needs are more unemployed politicians.”
—Edward Langley, Artist (1928-1995)

24. “A government big enough to give you everything you want is strong enough to take everything you have.”
—Thomas Jefferson
25. “The biggest difference between Republicans and Democrats is the spelling.”
—Anonymous
26. "Yesterdays are over my shoulder, so I can't look back for too long. There's just too much to see waiting in front of me and I know that I just can't go wrong."
--Jimmy Buffett

Brooke

Feeling Stimulated? Some Markets Are Beginning to Feel Something...

My husband, Jake, travels to and from Raleigh on a semi-regular basis for his job. Once he is in our fair capital city, he tends to ask those who live and work in the area, how things are going in their neck of the woods--economics, real estate, politics, etc.

This past week, he was talking with a former college roommate who had his home on the market for the past year with little to no activity. He finally closed on his home in the suburbs and purchased a trendy little loft in downtown Raleigh. He was gushing over the $8000 tax credit and what a "shot in the arm" it had been to the real estate market. How it had been "dead" and once the tax credit was announced and the details understood, how all of these buyers came out of the woodwork, showings immediately picked up and lo and behold, he had an offer on his home within weeks.

Jake of course arrives at home, tells me the story and proceeds to interrogate me as to why our area just doesn't seem to "get" the advantages of this credit and what it means to home buyers who are currently looking or considering purchasing over the next few months.

My response was this:
Our area is usually a little slow to respond to things that seem to come "without strings".
Generally, we are a pretty conservative bunch when it comes to our finances, especially those folks in the greater Winston-Salem area. A local bank exec, told me several months ago, that folks in our area incur less debt than their neighbors in other cities and have a good deal more liquid assets or "cash on hand" than their counterparts. For the most part, we're skeptical when the government says "hey, take this and give us nothing in return". Also, we like to know all of the details...

-Do we have to pay it back?
The first tax credit which expired in Dec 08 did have to be paid back, this one does not have to be repaid.

-Does it have limitations that apply to first-time buyers only?
As long as you have not owned a home in the past three years, you qualify as a first-time buyer.

-Are condos and townhomes allowed?
Yes, as long as it is your primary residence.

-Is the credit refundable?
Yes, It will reduce or it can eliminate income tax liability for the year of the purchase. Any unused amount can be refunded.

-Is there an income limit? What if I make too much money?
Yes, you cannot make over $75,000 individually or $150,000 jointly.

-How long do I have to make a purchase?
As long as you close before December 1, 2009 you qualify for the credit.

-When can I start looking for new homes?
The program is already in effect, so start now while rates are low and inventory is high!

Hope this information helps and allows folks some comfort while they are out looking for a home and STIMULATING the Triad's economy by purchasing real estate!

Brooke

Just Down the Road a Piece...

You may have noticed the banner and the empty space at 104 South Main Street or maybe not...

Our physical office has moved. Allen Tate has consolidated it's Kernersville and Clemmons offices to the Stratford Road location in an effort to centralize resources. Being in Winston is nothing new for me, since I moved to my Kernersville office just four years ago after working for another real estate firm in Winston. The great part is, our office is just off of Business 40 and Stratford Road, allowing me easy access to all of my clients, not just those located on the eastern side of the county.

For the most part, real estate offices as you currently think of them are a way of the past. Long gone are "bricks and sticks" and anyone in that state of thinking is in denial about the trend coming from the West. Any agent worth their salt is virtually "virtual" anyway. Between "smart phones", wireless access at just about any location and the plethora of technology that has inundated the real estate world, there is little need for a physical office with the exception of file storage and that too is slowly becoming digitized.

I look forward to still seeing you around Kernersville and all points in between...should you need to meet, I can accommodate you most anywhere, laptop and Treo in hand. Should you find yourself in Winston, stop by and say "hi"...our new address is:

514 South Stratford Road Suite 280

I'd love to have coffee or lunch with you if you are out this way...

Brooke

Need Dinner Ideas? What A Great Idea!!

This rainy, windy and cold Sunday morning found me in Charlotte after an Allen Tate gala for top-producers. As I sipped my coffee and thumbed through the Charlotte Observer, a small column caught my eye.

Always the one to be looking for something that saves me time spent struggling over dinner menus each week, not to mention, the repetitive nature of the meals I produce, I loved the column before me. It was simple, so simple I asked myself "Why didn't I think of that?"

Here, right before my very eyes, was a week's worth of menus, some economical, some meat-less, some specifically kid-friendly--All prepared by a registered dietitian. Does it get any better? The Sunday menu is featured with the recipe and additional daily recipes can be found online. So from one working person to another and any folks in between, I'd like to share this little gem.

http://www.charlotteobserver.com/609/story/558195.html

From what I could tell, it's updated every week and the recipes seem very user-friendly. So enjoy the snow and bon appetite!

Brooke