From National Realty News

NEW YORK, - Despite the well-documented pullback in the real estate market, consumers' real estate appreciation expectations may still be too optimistic, according to the Second Annual RBC Capital Markets Consumer Survey. Nearly half of all homeowners still expect at least 5 per cent annual increases in their home values over the next few years, but this is down from almost 60 per cent of homeowners last year.

The national survey of 1,003 Americans also revealed that 25 per cent of homeowners have already paid off their mortgage - twice the number of people with risky variable and interest-only mortgages (13 per cent). "While it's true that it may be easier to pay off a mortgage in Selinsgrove, Pennsylvania than it is in NYC, we were still very surprised that the number was so high," said Scot Ciccarelli, managing director and equity research analysts for RBC Capital Markets. "This goes against the general belief that most Americans are leveraged to the hilt."

More than 80 per cent of all homeowners surveyed have at least $50,000 of equity built up in their homes and almost 60 per cent believe they have at least $100,000 of equity in their homes, underlining how much home equity has been built up in the U.S. over the last several years.

However, those who entered the end of the housing cycle with variable rate and interest-only mortgages are clearly at risk once their mortgages renew. Nearly 40 per cent of those with variable rate and interest-only mortgages are concerned with their ability to meet higher payments, while 13 per cent haven't even considered the ramifications. While this is a fairly small segment of the overall survey (approximately 6 per cent), it suggests material risk to this segment of the population.

"While real estate expectations are lower than they were last year, consumers still seem optimistic despite what we are seeing in the marketplace," said Ciccarelli. "Declining real estate values could eventually impact consumer spending as people don't feel as wealthy as they used to and become less likely to borrow against the equity they have built up in their homes."

Ciccarelli also noted that while people have built up substantial home equity over the years, he is very concerned about those people with variable and interest-only mortgages. "Many of them seem ill equipped to handle the higher payments they will eventually incur."

The survey was conducted in September and released today at the RBC Capital Markets Consumer Conference in Orlando, Florida, which is being attended by institutional investors and business executives from across the U.S.

Consumer Spending

Beyond housing, the survey results yielded several other intriguing findings:

"Getting Exactly the Right Product" is far more important to consumers than traditional shopping attributes like brand, convenience and service. More than half (51 per cent) of survey respondents indicated that "price" remains their single biggest focus when they are shopping. However, 35 per cent indicated that "getting the right product" was most important to them, far more than the other three aforementioned attributes.

More importantly, those with the highest incomes favored "getting the right product" over everything else, including price (47 per cent vs. 33 per cent). In addition, those that favored "getting the right product" were also the most avid users of e-commerce, as 38 per cent of this group indicated that they use the Internet more for shopping than they once did compared with just 20 per cent of the "price" driven consumers.

"People usually know what they want and the Internet is great for targeted purchases", said Ciccarelli. "It also seems to play less of a role in searching for the best price for something than we would have thought. These findings underscore the importance for companies to have a strong multi-channel distribution strategy.

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Emotion vs. Reason

When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.

You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.

The first step in getting your home ready to sell is to "de-personalize" it.

The reason you want to "de-personalize" your home is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about owning the house. Therefore, put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box. Rent a storage area for a few months and put the box in the storage unit.

Do not just put the box in the attic, basement, garage or a closet. Part of preparing a house for sale is to remove "clutter," and that is the next step in preparing your house for sale.

This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it. Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements.

Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.

Kitchen Clutter

The kitchen is a good place to start removing clutter, because it is an easy place to start. First, get everything off the counters. Everything. Even the toaster. Put the toaster in a cabinet and take it out when you use it. Find a place where you can store everything in cabinets and drawers. Of course, you may notice that you do not have cabinet space to put everything. Clean them out. The dishes, pots and pans that rarely get used? Put them in a box and put that box in storage, too.

You see, homebuyers will open all your cabinets and drawers, especially in the kitchen. They want to be sure there is enough room for their "stuff." If your kitchen cabinets, pantries, and drawers look jammed full, it sends a negative message to the buyer and does not promote an image of plentiful storage space. The best way to do that is to have as much "empty space" as possible.

For that reason, if you have a "junk drawer," get rid of the junk. If you have a rarely used crock pot, put it in storage. Do this with every cabinet and drawer. Create open space.

If you have a large amount of foodstuffs crammed into the shelves or pantry, begin using them – especially canned goods. Canned goods are heavy and you don’t want to be lugging them to a new house, anyway – or paying a mover to do so. Let what you have on the shelves determine your menus and use up as much as you can.

Beneath the sink is very critical, too. Make sure the area beneath the sink is as empty as possible, removing all extra cleaning supplies. You should scrub the area down as well, and determine if there are any tell-tale signs of water leaks that may cause a homebuyer to hesitate in buying your home.

Closet Clutter

Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look "crammed full." Sometimes there are shoeboxes full of "stuff" or other accumulated personal items, too.

Furniture Clutter

Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.

Storage Area Clutter

Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.

Or have a garage sale.

Plumbing and Fixtures

All your sink fixtures should look shiny and new. If this cannot be accomplished by cleaning, buy new ones where needed. If you don’t buy something fancy, this can be accomplished inexpensively and they are fairly easy to install. Make sure all the hot and cold water knobs are easy to turn and that the faucets do not leak. If they do, replace the washers. It is not difficult at all.

Check to make sure you have good water pressure and that there are no stains on any of the porcelain. If you have a difficult stain to remove, one trick is to hire a cleaning crew to go through and clean your home on a one-time basis. They seem to be wonderful at making stains go away.

Ceilings, Walls and Painting

Check all the ceilings for water stains. Sometimes old leaks leave stains, even after you have repaired the leak. Of course, if you do have a leak, you will have to get it repaired, whether it is a plumbing problem or the roof leaks.

You should do the same for walls, looking for not only stains, but also areas where dirt has accumulated and you just may not have noticed. Plus, you may have an outdated color scheme.

Painting can be your best investment when selling your home. It is not a very expensive operation and often you can do it yourself. Do not choose colors based on your own preferences, but based on what would appeal to the widest possible number of buyers. You should almost always choose an off-white color because white helps your rooms appear bright and spacious.

Carpet and Flooring

Unless your carpet appears old and worn, or it is definitely an outdated style or color, you probably should do nothing more than hire a good carpet cleaner. If you do choose to replace it, do so with something inexpensive in a fairly neutral color.

Repair or replace broken floor tiles, but do not spend a lot of money on anything. Remember, you are not fixing up the place for yourself. You want to move. Your goal is simply to have as few negative impressions upon those who may want to purchase your property.

Windows and Doors

Check all of your windows to make sure they open and close easily. If not, a spray of WD40 often helps. Make sure there are no cracked or broken windowpanes. If there are, replace them before you begin showing your home.

Do the same things with the doors – make sure they open and close properly, without creaking. If they do, a shot of WD40 on the hinges usually makes the creak go away. Be sure the doorknobs turn easily, and that they are cleaned and polished to look sharp. As buyers go from room to room, someone opens each door and you want to do everything necessary to create a positive impression.

Odor Control

For those who smoke, you might want to minimize smoking indoors while trying to sell your home. You could also purchase an ozone spray that helps to remove odors without creating a masking odor.

Pets of all kinds create odors that you may have become used to, but are immediately noticeable to those with more finely tuned olfactory senses. For those with cats, be sure to empty kitty litter boxes daily. There are also products that you can sprinkle in a layer below the kitty litter that helps to control odor. For those with dogs, keep the dog outdoors as much as possible. You might also try sprinkling carpet freshener on the carpet on a periodic basis.

Costs of Repairs

Do not do anything expensive, such as remodeling. If possible, use savings to pay for any repairs and improvements – do not go charging up credit cards or obtaining new loans. Remember that part of selling a house is also preparing to buy your next home. You do not want to do anything that will affect your credit scores or hurt your ability to qualify for your next mortgage.

Fixing Up Outside the House

Most real estate advice tells you to work on the outside of the house first, but unless there is a major project involved, we believe it is best to do it last. There are two main reasons for this. First, the first steps in preparing the interior of the house are easier. They also help develop the proper mind set required for selling - beginning to think of your "home" as a marketable commodity. Second, the exterior is the most important. A homebuyer’s first impression is based on his or her view of the house from the real estate agent’s car.

So take a walk across the street and take a good look at your house. Look at nearby houses, too, and see how yours compares.

Landscaping

Is your landscaping at least average for the neighborhood? If it is not, buy a few bushes and plant them. Do not put in trees. Mature trees are expensive, and you will not get back your investment. Also, immature trees do not really add much to the appearance value of the home.

If you have an area for flowers, buy mature colorful flowers and plant them. They add a splash of vibrancy and color, creating a favorable first impression. Do not buy bulbs or seeds and plant them. They will not mature fast enough to create the desired effect and you certainly don’t want a patch of brown earth for homebuyers to view.

Your lawn should be evenly cut, freshly edged, well watered, and free of brown spots. If there are problems with your lawn, you should probably take care of them before working on the inside of your home. This is because certain areas may need re-soding, and you want to give it a chance to grow so that re-sod areas are not immediately apparent. Plus, you might want to give fertilizer enough time to be effective.

Always rake up loose leaves and grass cuttings.

House Exterior

The big decision is whether to paint or not to paint. When you look at your house from across the street, does it look tired and faded? If so, a paint job may be in order. It is often a very good investment and really spruces up the appearance of a house, adding dollars to offers from potential homebuyers.

When choosing a color, it should not be something garish and unusual, but a color that fits well in your neighborhood. Of course, the color also depends on the style of your house, too. For some reason, different shades of yellow seem to elicit the best response in homebuyers, whether it is in the trim or the basic color of the house.

As for the roof, if you know your house has an old leaky roof, replace it. If you do not replace a leaky roof, you are going to have to disclose it and the buyer will want a new roof, anyway. Otherwise, wait and see what the home inspector says. Why spend money unnecessarily?

The Back Yard

The back yard should be tidy. If you have a pool or spa, keep it freshly maintained and constantly cleaned. For those that have dogs, be sure to constantly keep the area clear of "debris." If you have swing sets or anything elaborate for your kids, it probably makes more sense to remove them than to leave them in place. They take up room, and you want your back yard to appear as spacious as possible, especially in newer homes where the yards are not as large.

The Front Door & Entryway

The front door should be especially sharp, since it is the entryway into the house. Polish the door fixture so it gleams. If the door needs refinishing or repainting, make sure to get that done.

If you have a cute little plaque or shingle with your family name on it, remove it. Even if it is just on the mailbox. You can always put it up again once you move. Get a new plush door mat, too. This is something else you can take with you once you move.

Make sure the lock works easily and the key fits properly. When a homebuyer comes to visit your home, the agent uses the key from the lock box to unlock the door. If there is trouble working the lock while everyone else stands around twiddling their thumbs, this sends a negative first impression to prospective homebuyers.

I'm always glad to answer any of your real estate questions. You can reach me at the office, 480-603-3800 or on my cell at 480-694-7733.

People often ask me if Chandler real estate values are in the toilet. Well, let's see. Let's take a look at some MLS stats for the past 5 years. These numbers are for South Chandler, or what we call "Area 507". In August 2002, 311 new listings came on the market with an average list price of $229,240. That month, 158 homes sold at an average price of $199,185, or 97.68% of list price. It took 69 days to sell a home. In August 2003, 300 new listings came on the market with an average list price of $246,645. That month, 183 homes sold at an average price of $227,957, or 97.81% of list price. It took 55 days to sell a home. In August 2004, 340 new listings came on the market at an average list price of $299,158. That month, 288 homes sold at an average price of $269,722 or 99.16% of of list price. It took 36 days to sell a home. In August of 2005, 340 homes came on the market at an average list price of $419,256. Stop... Look at that number again. In August 2004, the average list price was $299,158. In 2005, $419,256. Okay, let's move on. In 2005, 265 homes were sold at an average sales price of $395,860 or 99.39% of list price. It took just 23 days to sell a home. Here we are in 2006, you know, the toilet year. In August of 2006, 481 homes were listed at an average sales price of $454,989. 176 homes sold and the average sales price was $431,157 or 96.77% of list price. It took 89 days to sell a home. Are you able to see the bigger picture? Most people own a home for 7 years. Even if you've only owned your home for 2 years, you're not really in a bad place at all, are you? The real estate gurus will tell you that in a stable market, 90 days on the market is normal. And annual appreciation in 4-6%. Hmmm..... I'm inclined to say that real estate in South Chandler is not in the toilet at all. It's just more realistic. It's more stable. That's a GOOD thing, to be sure. If I can answer any specific questions, please don't hesitate to call me at 480-603-3800 or 480-694-7733.