Archive for the 'Berkshire Land' Category

Williamstown CMA

A comparative Market Value Analysis or “CMA” in Realtor speak is a Broker price opinion based on the current real estate Market in Williamstown or the  Berkshires or your real estate location.  “Your location” is the key word here.  The same home in Palm Springs Florida may sell for far more than a similar home in Hancock MA.   Location  is everything in the real estate market.  While homes in the Berkshires and Williamstown, Stockbridge, Lenox, and Great Barrington.  Key points to keep in mind when you imagine how much your house is worth are

• How many jobs does your town area offer- right now
• What are the demographics of the community-  young families, retirees, and careerists
• How many homes are on the market right now

What is the least important fact when you imagine how much your home is worth?

• Current listing price of homes in your neighborhood (meaning the how much is the “for sale “amount on homes still for sale- which can be 8-36% higher than what the home will eventually sell for)
• What you paid for your home, what improvements you made when you bought the home

What is the most important piece of information to keep in mind when you imagine how much your home is worth?

• What have homes sold for in your neighborhood within the past 12 months (not in 2007 when real estate experts claim the housing market bubble was a the top of the boom)

The four values that a Broker or professional may discuss with you…

• Market Value- the most probable price that a property should sell for in the current competitive and open market.  Market value depends on what a buyer is willing to pay in the current real estate market.   Suppose you owned a BMW car lot with 15 used BMW vehicles all in excellent condition.  Colors may vary, options may vary and sticker price may vary.  However, the bottom line in sales is what is important to the buyer- If price of the vehicle is the bottom line for the buyer, the cheapest BMW will be snapped up.   If the buyer is insisting on a BMW loaded with options then the vehicle with the most options for a price within reason will sell first.  Bottom line is the buyer will determine which vehicles sell and how quickly they sell.  The same is true of real estate.   The seller of BMWs may want top dollar and that would be possible if the car lot owner had only one BMW and it was the only one in town.  Not true in vehicles and not true in real estate in 2011.
• As-Is Value- no frills included, the property is being sold exactly as it is.  What you see is what you get.  The end.  This price will usually be much lower than the Market value and it may be possible to negotiate it lower.
• As-Repaired Value- This is a tricky one.  The appraiser or broker may place a value on the cost of repairing the issues found during the home inspection.  After the recommended repairs, the house should be in turnkey condition.  Problem with this one is that after you make the improvement the home may still sit on the market for a while.  A good thing about this one is that you can negotiate with the buyer and perhaps lower the price if the buyer will do the repairs themselves.
• Quick-Sale –Value- This value is below the current market value and usually indicates the buyer needs to immediately liquidate the property or the property is in foreclosure.  This value may be considered if the buyer has immediate need of cash, has already purchased another home, or if the buyer has moved to another state and does not want to continue carrying the cost of two homes. 
• Conservative real estate experts estimate that 1% per month of a home’s value is the actual carrying cost for an empty home.  If you home is worth $200,000 then 1% per month translates to expenditures per year of $24,000 per year.  If the home is on the market for 3 years then the owner has lost $72,000 in carrying cost.  Meaning actual value received upon selling for $200,000 minus the $72,000 to hold the home 3 years = $128,000.    That is a 36% loss of value. 

The best advice your agent can give you is to have your home appraised prior to putting it on the market.  The cost can range from $300-$450 and is well worth the time and effort.  The number one reason homes do not sell is that they are overpriced for the current market.    Priced right is half sold!

Churning a listing.  Resetting the clock.  NEW listing.  Really?   Churning the listing occurs when a seller takes their home off the market for a few days or weeks and then re-introduces the home as new to the market.  Churning a listing is as old as the real estate sales profession.  At one time I suppose it was easier to convince a buyer that the home was actually NEW to the market.  That was before the age of the Internet and the eternity of web pages.  The WEB never forgets when a home first came on the market.

The first question buyers will ask an agent is “how long has that one been on the market?”   Buyers make incorrect assumptions about homes that have been for sale for a long time (some in Williamstown for a long as five years or more).   The first assumption is that the seller will be willing to entertain any offer out of a desperate need to unload the property.  This assumption is more often wrong than right.

When the buyer discovers that the NEW listing has actually been on the market for 5 years the next question is “if they are trying hide the number of days on the market what else are they trying to hide?”    Full time agents and serious buyers (with lots of time to browse the NET) know full well how long a house has been for sale.    Nobody is being fooled and the agent who “churns a listing” over and over may begin to be perceived as less than honest. 

Agents defend “churning a listing” by stating they are honoring their fiduciary duty to the client.   However, Article 1 of the National Association of Realtors Code of Ethics makes it clear that the obligation to the client is primary but where exactly does “resetting the odometer” fall on the ethical spectrum.

Smoke and mirror tactics cannot conceal the fact that most likely the “churned listing” is overpriced.  We recommend sharing these three tips with the seller:

1. stage the home so it looks more attractive

2. price it right and sell it

3. move on with your life

Lets face it churning a listing is an attempt to manipulate the facts in an untruthful way.  Real Estate Agents  would always function with fiduciary responsibility to their clients as a priority in a perfect world.  We all live in reality and reality is that wrong facts are worse than no facts at all.

American Dream?

Writing about Williamstown Real Estate and Berkshire county in general we do not foresee auctions on the rise but we do see real estate activity on the upswing. The increase in real estate sales activity will be welcome news for Berkshire County sellers who have endured some pretty lean years since the bubble burst in ’08.

Berkshire Real Estate Sales volume had dropped substantially until the tax incentives helped lift volume last winter and prices have generally taken a beating but we think the worst is behind us now.

This is not to say that the Williamstown real estate and Berkshire Real Estate market will shift rapidly from a buyer’s market to a seller’s again this year or any time soon but what we wish to emphasize is that the best breaks for most buyers may soon be gone come spring. April is historically the most active month of the year for properties to go under contract, particularly in the northern states where winter weather can keep people indoors.

If this coming April turns out like most years, then we would expect a pretty active buyer pool which will typically grab the best properties first, leaving those sellers and their agents who still haven’t adjusted to the “new reality” scratching their heads wondering why their property hasn’t sold.

There is no mystery however. If a property remains unsold for more than a reasonable period of time which come spring, would be only a month or two, then the only reason and remedy is price. It’s that simple.

I like the analogy of an apple tree for our real estate market this season. Let’s consider this a year when there are lots of apples on the trees just as we expect there will be plenty of listings for buyers to choose from.  One tree loaded with apples sits on one side of a wall and belongs to a farmer with two children. They are young children and so can only pick the lower apples and only the ones they can readily eat so that there are plenty of apples on the tree which eventually fall to the ground and rot.

The other tree on the other side of the wall belongs to a young farmer with loads of children and they invite all their friends to come pick apples any time which they do, for pies and canning and eating so that the tree is picked bare and none go to waste. They used ladders too so every good apple was picked.

And so it is with real estate.  If there are loads of buyers, all the homes and properties are sold but if there are too few buyers for the number of homes or properties, then many will remain unsold, particularly the ones that at too high, in price that is.

If you are a seller, the lesson this year will be one of pricing to the market, from the beginning of the season so that your property is one of the lucky ones to be picked. I expect there will still be quite a few unpicked apples by the end of the season.

If you are a buyer, there should be plenty of fruit to choose from but getting there early so you can pick from the best priced properties will make a difference and that is why we say “going, going, gone”.

Balancing Act in the Berkshires

Delicate Balance 

The Berkshires are a spectacular geographical location that blends culture, proximity to urban amenities yet sufficient distance from urban sprawl along with unmatched natural scenic splendor.  Apparently, the experts agree since the Berkshires are cited in National Geographic’s Traveler magazine as one of the top 10 places to visit in America.

 Berkshire property owners encourage  promoting the uniqueness of the Berkshires  to bring in new businesses.   However, we do so with more than a modicum of worry.   New business will bring with them employees who will buy and settle in the Berkshires.   The dilemma occurs when we compare the sedate atmosphere and quiet rural life style we treasure with that of a thriving  industrial community.

The Berkshire real estate market reflects this push pull dilemma of preserving the lifestyle we treasure while actively promoting and encouraging new businesses and entrepreneurs to settle in Berkshire County.   Loss of large industrial employers in the Berkshires has contributed to a lack of qualified buyers contributing  to the glut of real estate inventory.  We are experiencing a dilemma and a “Catch 22” in real estate .   In the Berkshire County Real Estate market sellers currently outnumber buyers four to one.   We are rich in homes for sale.  Buyers would increase if our business community began thriving again.  Attracting businesses will require political savvy, tax breaks and a compromise from both the business owners and the residential property owners.  Finding a middle ground in maintaining the value of living in the Berkshires with the value of having abundant employment is the goal.

Berkshire County MA is a buyer’s dream market; plenty of choices, increasingly eager and flexible sellers and great local lenders with terrific loan rates. Why aren’t  more buyers attracted to a home in the Berkshires?  The Berkshires are not widely known beyond the northeastern part of the United States even with the good press in travel magazines.    The reality is that most people need to sell their own home and have promise of employment before they can purchase another home.   

So that brings us back to the dilemma of  attracting new business to the Berkshires.  What kinds of impact would a large influx of new people have on the Berkshires? Many Berkshire small towns were all built in a much earlier era.  Accommodating larger numbers of people, cars and businesses would bring  parking lots, franchise stores and  increased traffic congestion on what are mostly two lane roads.

 Would these parking lots, franchises and crowded roads be inevitable?   To some extent, yes . The Berkshires will always attract new residents drawn to  the rural quality of life here while that quality remains rural.  Buyers today may be looking to live in the country but they are also wanting employment near to their home.  

Can the Berkshires balance the irresistible force of growth and maintain its’ unique charm?  What are your thoughts?  We would love to hear from you with comments about growing businesses in the Berkshires.

Berkshire Home Sale Proactive Packing

Berkshire home for sale.  Checklist to begin preparing for the move.

You have listed your home with a great Berkshire Real Estate agency, you are confident your home will sell within a reasonable amount of time and now you need to know where to start the preparations.

We have 10 tips that will get you motivated and going forward.

1. Make a list.  Write down everything you can imagine that will need to be completed before you close the door to your sold home and climb into the moving van.  Everything should be written down even if it seems obvious.  After the sale negotiation process begins, activities will speed up and the list will be your lifeline.
2. Prioritize.  Now that you have your list, it is time to prioritize the tasks.  What can be done today and what can wait until the week before the move?  Obviously if you will be showing your home, the first thing is to pack personal items that are not used daily.  Items such as personal family photos, kid’s class projects lovingly cherished, fine china or porcelain decorative items, and other objects that make the house personally unique should be bubble wrapped and stored safely.  Remember you are selling your home to someone with different memories and treasures than your own.  The goal is to make the buyer imagine his or her own treasures in the house. 
3. Gather your supplies.  If you intend to empty storage rooms then you will need containers to sort what is going with you and what can be donated or sent to the trash bin.  Clear plastic containers are great for items that you may immediately need upon arrival at your new home.   Cardboard boxes, labels, packing tape, old newspaper print, bubble wrap, and other cushioning items will get you started on decluttering.   Remember that extra towels, sheets, and dishtowels can be used as cushion material when packing breakables. 
4. Keep things together that will be stored together in the new home.  Garden tools should stay with garden supplies.  Sheets and pillows should stay with other bedding items.  If it is summer then pack your winter garments.  If it is winter, then pack your summer garments.  Either label all containers with a magic marker pen or better still a peel off sticky label.  You may need to retrieve an item and knowing what is in the boxes will prevent much aggravation as you search them all.
5. Use your luggage for items that are not in use and probably will not be used until you arrive at your new home.  Using luggage makes the items easily accessible if you should need something in an emergency. 
6. Begin with the time-consuming areas first.  The garage, the den or home office often are stacked high with items that are not used daily and can be packaged and stored ahead of the move date.  Take out all the boxes and items and place them in the center of the room.  Create a “keep” and “do not keep” pile.  Decide where to send the “do not keep” items and take them either to the dump or to a donation center.  Then take another look at the “keep” pile.  This is the time to take a critical look and decide whether you really need that  1978 tennis racket.
7. Photograph your valuable items before packing them away.  Perhaps attaching a photo to the outside of the box may save you hours of search time at your new home.  Photographs can also serve as proof of the condition of the item before the move and for insurance purposes if the item is damaged in the move.
8. Once the home sale is being negotiated, it will be time to consider address changes for magazines, credit card bills, and mail.  Opening a bank account in the target town (if you are moving to a different area) will be required.  Start this a month ahead of the anticipated date of closing.   Find out about school requirements if you have school age children (have immunization records and other required records sent to the new school).    Talk to your physician and get copies of your records sent to your new physician in the target town.  Get updates on all your prescriptions and have them filled before moving to the new town.
9. Verify what the licensing requirements are for your driver’s license and vehicle license by contacting the town or state Motor Vehicle office.  Ask your veterinarian what immunizations your pets will need and get those updated before the move.  It will take a while to find a new vet.
10. Clean rugs before rolling them up to take with you.  Check to confirm the date your moving company will arrive and confirm the costs.  Check with your insurance agent to verify that your car, health and home insurance will cover any possible losses or accidents during the move.  Provide one or two of your neighbors with your new address and phone number in case of emergency.  Make sure to have your car serviced if you will be driving a long distance.  Arrange for packing and unpacking labor if needed and confirm the dates again. 

These are some very simple ideas to get you started on your way to packing and moving your home.  The actual moving process goes much smoother if you prepare far in advance for every conceivable problem that might occur.  By sitting down and writing out that list before you jump into action you can be sure that you have done your best to make the whole process easier for you and your family.

The best time to sell your Berkshire home.

When is the best time to put my Berkshire home on the market?

The best time to place your Berkshire home on the market is when you have committed to the decision to sell your home and are firmly committed to moving forward. 

Myths still exist in the real estate business about waiting until spring to place your home on the market.  Why?  Before the internet and high-speed travel, most people shopped for homes by driving around neighborhoods.  

They often had a black and white real estate listing book in hand as they drove past homes for sale.  This method of home shopping took time and good weather.  Although time may have been readily available BEFORE  dual working partners and kids with multifaceted sport schedules, the weather did not often co-operate.   Weather in the Berkshires in the winter and early spring months is not always conducive to afternoon pleasure drives.   Spring in the Berkshires however was great time to get out and shop for a home by car.  Thus the recommendation of listing your home in the spring when the market was beginning to peak.

Also, during the years when baby boomers were putting kids through school, working to climb corporate ladders and co-ordinate all the social activities of those growing kids moving during a school month was just too difficult in the winter months.  Many of these boomer couples did wait until the spring to begin their search in hopes that by the start of the school year the new house would be bought, the move would be done and life would go on smoothly in the new town or state.

As baby boomers age and their children have fewer kids we are seeing schools closing or merging in order to bolster lagging budgets.   Fewer families with kids, partners waiting to have children until they are well over 30 and a growing population of empty nesters have shattered the myth of waiting until spring to place your home on the real estate market.   No longer are “school” and “children” the major concerns in a decision of when to buy a home.  These days it is more likely to be a retirement town or second recreation home for the weekends that buyers are looking for.   And many of these buyers are empty nesters, well educated and savvy bargain shoppers.

Myths exist in the real estate business about waiting until after the holidays to place your home on the market because home sales are “slow” during the holiday season.   While it is true that home sales do go down during the holiday season (also a prime time for real estate agents to vacation) home sales do not stop. 

People continue to buy homes whether winter, spring, summer or fall.   In fact placing your home on the market in the winter can be to your advantage, as you are not competing with all the new homes that will appear on the market at the beginning of spring.  Less competition means better odds that your home will attract a buyer.  Consider it the lottery of real estate— fewer homes=fewer tickets thus giving you better odds that you will be the winner of  the buyer lottery. 

Traditionally spring and summer see a tremendous rise in new homes coming on the market.  In a buyer’s market, the competition for attention is fierce among sellers during this six-month period.  If you wait to place your home on the market during this highly competitive season you may need to drop the beginning price to attract buyers to your property or at least offer some sort of incentive to real estate agents to sell your home such as a bonus finder’s fee.   

All these myths and facts aside, well-informed homebuyers today will begin to shop from home via the net well in advance of getting into the car.   Most begin at least 6 months before they decide to make an offer with some beginning a year in advance to shop for housing.  No longer does the homebuyer travel to a town to drive around for a day looking for homes that are for sale.   

The internet has become the Amazon.com mall for homebuyers.  Buyers looking to retire in the Berkshires may live in Long Island New York or Boston MA or even as far away as Los Angeles.  These buyers are shopping via the internet.    Here at Harsch we follow our website statistics and see that many of our buyers are from New York city and the surrounding states including Southern Vt., adjacent New York State,  Rhode Island, Connecticutt and New Jersey.

When listing your property disregard the seasons and the myths.  Your most important choice is to list with an agency that can reach as many websites as possible and can present your home in the best light and can offer you full realty services from the beginning of the transaction all the way through to the closing date when you turn over the key to your SOLD home.   Harsch Associates Berkshire Real Estate has been doing this for 35 years.  We sell homes in every season and in every circumstance.  We are here for you when you decide to sell.  Remember the time to list your property is when you are firmly committed to selling and moving forward.  Contact Harsch and we will be with you every step of the way.

At Home by Bill Bryson

Dwelling, habitat, lodging, or home?  How did home become what it is today?  And furthermore why?  Bill Bryson who wrote one of the most read books of the past decade A Short History of  Nearly Everything has tackled these questions and more.  His newest tome is At Home:  A short history of Home Life which reveals the history of many items, historical events and people who contributed to what we call a house today.  Bryson discovered many interesting facts about homes  from architecture to electricity, from preserving food to epidemics, from crinolines to toilets and how each invention/room came to be what and where it is today.

We Americans primarily use our homes for many purposes including eating, sleeping, vacationing, socializing, working and nurturing members of our close social group including significant others, parents and children.  Expanding industry and cities resulted in the need for more housing after WWII.  Many homes were built in housing “tracts” which continued to expand resulting in the suburbs of today.  Many of these tract home were built quickly and cheaply to maximize  profits for developers.  The construction and foundations of these modern homes can often be less stable than a farm house built in the nineteenth century.   Many nineteenth century historic homes exist in Berkshire county including large Victorian mansions and frugal farm home with large barns.

Berkshire County has few cities that are densely populated and thus few housing tracts. Places where tract housing exists is usually where laborers working in large textile mills were housed.   Many of the homes in Berkshire County are historic, many are architecturally unique, many have been designed by local and well known architects and built by local builders who live in the community.  “They don’t build them like they used to” is a common phrase among home buyers and builders in the Berkshires, where quality homes abound.   Historic homes are often constructed more solidly than homes that are much more recently built.  

More recently built homes in the Berkshires may feature many energy conservation features.  The Berkshires have always been  environmentally  conscious.  Uniquely designed homes can be found throughout the Berkshires that feature passive solar collection systems and other “green” methods of heating and cooling.  Williamstown MA located in Northern Berkshire County recently achieved the status of a “green” town. 

Too learn more about historic homes in the Berkshires and find “green” homes available for purchase in the Berkshires contact Harsch Associates Berkshire Real Estate today.

Living in the Berkshires and Southern Vermont can be a very chilling experience.  Especially for Northern New England  property owners whose property is exposed to below zero temperatures all winter.  Did you know the most important home investment you can make in the winter season is preventing damage from frozen and burst pipes?    Head off serious water damage by doing these 10 things.  

1. Insulate any pipes exposed to the cold. 
2. Keep temp inside your house at 55 or above even when you are gone. 
3. Leave faucets  on with a tiny trickle of water when temperatures drop below zero. 
4. Locate the water shut off valve in your home before you need it. 
5. If you do not have it already add insulation to your crawl space or basement when the weather warms up.  Install battery powered leak alarms (cost is around 15$ each). 
6. Make sure that your sump pump is working. 
7. Make it habit to check pipes for tiny leaks before they become major issues. 
8. Search out pipes that are not insulated and insulate them. 
9. Look for hidden pipes in unheated attics, basements, crawl spaces and garages then insulate them before they freeze and burst. 
10. Check with your local home supply store for heated pipe wrapping especially if the pipes are in an exposed crawl space where wind chill can quickly send air temperatures below zero.  

Need more Winterizing Tips for your Berkshire Home this winter?  Read on…

Winterizing your Berkshire Home

Time in 2010 - Rethink Buying

Time Magazine 2005- Buy Real Estate!

In September of 2010 I completed my 35th year in Williamstown real estate. There was a time when counting the years in my early career meant simply lasting from one year to the next in business. I recall how I began my career right around Labor Day of 1975 with high hopes and many trepidations, having left the security, though modestly remunerating, of a teaching job at Pine Cobble School. I was full of enthusiasm and fears but had a good teacher and mentor in my then broker. The first office was primarily an insurance agency and real estate was a extra “back-up” income for my Broker. I was to bring real estate forward with new energy and attention. I also obtained my insurance license and devoted some of my time to that as well.
 
September passed, then October and no real estate contracts. Then November came and was almost going to pass when I put my first property under contract at Thanksgiving. That was more than symbolic as it turned out. I felt like the Pilgrim who had struggled to survive and finally there was some promise of reward. The sale didn’t actually close until the following February as I recall so it took me six months to earn my first income from real estate. I also had my first and fortunately last two migraines ever, the first one right after signing the contract in November. 

In the months that ensued, thanks to determination, many appreciative former parents of students who became clients,  a patient wife, supportive family and good training by my broker, I gradually built a reputation and one success on top of another. In December of 1978 I left my mentor and broker.  So on January 1 of 1979 I began a new phase of my Berkshires Real Estate career and with two totally green and brand new Real Estate Agents, Martha Dietze and Judy Peabody we began what was then Harsch Realty.  We later changed the name because too many Williams College  students thought it was amusing to add an ‘I’ to the word “Realty” on our Real Estate signs changing it to “Harsch Reality”. Thus today, we are “Harsch Associates Berkshires Real Estate”.
 
I’m sure I had a few more headaches in the early years but the company grew rapidly and very quickly became the leading Real Estate agency  in Williamstown and then we added real estate offices in Bennington VT and Manchester VT, North Adams MA and Lenox,MA. At our peak in 1990 Harsch Associates had 50 sales associates divided about ¾ in the residential division of the company and ¼ in our business and commercial division plus 10 employees. It was a large and busy company and in our top year we closed on over $32 million in sales. 
 
Changes happened as they always do and in the ensuing years, following significant changes to tax laws affecting depreciation rules for one and other internal changes, we began a downsizing process. Today we are a highly efficient, very personal  group that does as much in real estate sales as agencies three to four times our size.   We sell our listings on average in less time and on average at substantially less of a discount to list price than our chief competitor and we have the most comprehensive most visited web site in our entire market area of the Berkshires.  Our office is located in a historic building- Walden House at 311 Main Street in Williamstown MA. We provide privacy and spacious conference rooms to discuss your real estate listing and buying needs with total confidentiality.   
 
I wrote back in ’06 that the market had peaked in our market area in terms of sales volume in ’05 and I later wrote in ’08 that prices had peaked in ‘07. These two predictions in time proved accurate. It is reasonable to think the bottom was reached in volume in ’09 but that prices will not start to advance overall until next year and even then only very slowly and randomly. This is because a substantial backlog in Berkshires and Williamstown Real Estate inventory exists that will take time to work through. As our local population drifts south,  the baby boom generation moves  in to retirement mode with the intention of selling their “extra home” and unless we see a significant increase in employment figures, the Williamstown and Berkshire Real Estate supply will still outstrip demand leaving many real estate sellers still hoping for purchase offers. 
 
In an effort to stimulate the nation’s economy following the dot com bust and then the terrible events of 9/11, Alan Greenspan pumped money in to the economy like free beer at a frat party and soon the nation was on another bender leading to the gold rush of the housing bubble, which like the dot com bubble and all others before it, was doomed to burst. Thus the excess of  home inventory and the accompanying discomfort today for sellers. This is the “hangover” we have to work through.  Those who did not  “benefit” during the bubble are very uncomfortable now.  It is very difficult to deal with increasing days on the market before a purchase offer is received. 
 
But like the mess that has to be cleaned up following the frat party, there is a lot of cleaning up in real estate that has to be done and it will be a while before real estate  return to some semblance of “normal”.   That said,  there are really only two reasonably certain ways to deal with this period of recovery. One is to just sit it out and wait for prices to rise again but this can be misleading. After all, its expensive to keep a property you no longer want or need and inflation will gradually eat away at the value of those future dollars. Between the carrying costs and the loss of future purchasing power, not to mention the postponement of other plans, the “holding strategy” can result in more loss than gain,
 
The best approach is “realism” and understanding fair market real estate value (see our blog on this topic). This requires recognizing the degree of competition for your property in the market and deciding to price your property to compete well.   There are not  many shoppers  in the current real estate market and the current buyers are making well considered decisions before making any purchase offer. 
 
Sellers can find it hard to deal with hard reality in a buyer’s market. Even costly improvements that were highly desired several years ago, hold little appeal for the savvy buyer today. Selling your home in a buyer’s real estate market depends on pricing to sell knowing the fair market value in your area.  Without an unbiased  professional appraisal to justify the listing price, it is easy to see why there are many homes that languish on the market as compared to the few “priced right” homes which are actually selling fairly quickly.  Many sellers are  unable to view their property (home) objectively.  Sound real estate advice from a knowledgeable real estate agent plus a professional appraisal in hand will go a long way when pricing a Berkshire property and will result in a purchase offer within the shortest amount of time.   No buyer will overpay in a buyer’s market, especially when they obtain the right to cancel the contract based on an appraisal that is very likely much lower than the listing  price.  No bank will offer a loan above what a property is actaully worth in today’s buyer’s market.   Low loan rates do not mean a willingness to extend credit beyond what a property is worth.
 
From 2000 to 2007 the median price of a home in the US jumped from 3.5 times the average household income to almost 5 times the average household income.   Such inflation was and is unsustainable except through artificially low interest rates.  Many investors began a rush in to the real estate market thinking of real estate  as the next “hot commodity”.

I commented on the growing number of people, whether as second incomes, side jobs, retirement activities or in the contracting business who were buying houses to simply fix and flip. I knew the ral estate bubble was becoming too big to sustain and the end was near when I learned in ’06 of young  college graduates who were setting up businesses to “fix and flip” houses. Now many of these entrepreneurs are unemployed.   The market has been glutted with “fix and flip” homes valued at lower prices than they were purchased for and foreclosures have ended many career dreams.  
 
Buyer euphoria, low rates, easy money, and a false impression of a booming economy all came together in the perfect real estate collapse storm. That destructive storm has passed we hope.  A  lot of cleaning up and recovery is taking place now will continue into 2011.  The real estate bust and ensuing economic recession brought the country to a national real estate “Katrina” sized crisis.  We are currently in the ”clean up”  phase and real estate gains as we knew them are no longer happening .   The nation is recoverying . However, things will not bounce back to the way they were in 2005-2007.   The nation is burdened by enormous loads of debt and jobs are not rebounding since so many jobs have been shipped overseas to much cheaper labor markets. 

The decade ahead will be defined by how willing and able and quickly we do adjust to changing economics. It will require current sacrifices to assure future stability and growth.  New homes which are being built  emphasize the trend toward smaller and more energy efficient units.  In the academic world it is often said “publish or perish”.

In real estate is it adjust your price to the market or prepare to continue to live in your current home for many more years.   As we close this first decade of the new millennium and prepare to enter a new real estate market in 2011 where cost competitiveness is the key to selling success we will be encouraging our sellers to be very aware that  they are priced competitively to try to attract real estate purchase offers.   

We will  be counseling all buyers to view their home purchase not as a  promise of profit potential.  The most important reason in 2011 for purchasing a home is  the pleasure and comfort of  living within the home and community. America is returning to the roots of real estate purchasing in that residential real estate should be thought of as a home, a place of peace and enjoyment for the occupants and still the best  “investment” a family can make toward their financial well being.

Over the long run, homes have provided a solid very respectable average annual appreciation of approximately 5%. Not bad at all when you can enjoy living in your investment (playing, sharing, caring, belonging to a community and providing shelter for those you love).  These are things a stock share cannot offer.  
 
At Harsch Associates we understand and anticipate  trends and have  made adjustments to help our clients get the best results possible in a buyer’s market.  We have been able to bring together a satisfying number of sales (up 17% from 2009) in  this tough real estate market.  Our buyers and sellers have benefitted from our close attention to real estate trends. We are committed to achieving the absolute best results for our clients, both buyers and sellers.

 
Selling real estate today is far more complex a process than when I began in 1975. Numerous regulations on the local, state and national level have been added to the process over these past 35 years and its almost impossible for anyone in our business who is not full time and fully dedicated to adequately serve the buying and selling public. Naturally this leads to a broad diversity of levels of skill and dedication and thus very mixed results for the public. We believe we consistently provide the best possible service and results  for our clients. 
 
We wish you a wonderful holiday season and we look forward to our next real estate closing with you in 2011.
 
Paul Harsch, President and Realtor®
Harsch Associates Berkshire Real Estate

Berkshire Fair Market Home Value- Defined

Fair Market Real Estate Value Defined- Berkshire Real Estate

Berkshire home sellers can teeter between hope and worry in the housing market in the Berkshires. Berkshire buyers are confused and hesitant.  Real estate agents often fall somewhere in between the emotions of hope and despair depending on the particular day and month.  Our agency serves the entire of Berkshire County Ma. including Stockbridge, Lenox, Great Barrington, Williamstown, Hancock and all towns in between.

Harsch Associates Berkshire Real Estate (established in 1975) has experienced the rise and fall of the Berkshire Real Estate market through many cycles.  Our Berkshire housing market follows the general tide of the overall US economy.  Fortunately, in the Berkshires the rise and fall of home prices is less volatile than many other markets. 

Harsch Associates has tracked the average median selling price of single-family homes in Berkshire County since countywide records became available in 1987 and the average rate of appreciation over that time span is 6% per annum. That sounds good.   Similar to the stock market in many ways,  the prices of homes in Williamstown and Berkshire County can shift without warning.  What goes up will come down.

If you purchased  a Williamstown or Berkshire home in 2000 and sold the home in 2007 ( the peak year for home values in the Berkshires)   you enjoyed  roughly  60% appreciation in price. However, if you sold in 2009, you gave up over 20% of any potential gain.  Sellers who sold Berkshire Real Estate recently (2010) have fared less well.   Berkshire real estate buyers have snapped up many right priced homes in the 2010 housing market.  Berkshire home values today have dropped back to 2004/2005 levels.  This leads us to a discussion of determining fair market value so that you can actually sell your property to a Berkshire Buyer.

What is fair market value?  FAIR MARKET VALUE IS THE PRICE AN INFORMED BUYER IS WILLING TO PAY A SELLER WITHOUT PRESSURE CONSTRAINTS ON EITHER PARTY.  This means neither party has to buy or sell in an emergency.

Why are Berkshire County home inventories so high while Berkshire home loan interest rates are so low?  Berkshire Buyers are still purchasing homes but unfortunately many Berkshire sellers are not pricing to the current market.   The main reason for not selling a home within a reasonable amount of time (which can vary) is that many homes are priced above current fair market value.  

Current fair market value pricing applies to many items including homes and stock shares. Can you imagine going to a stockbroker and insisting on selling your valuable stock in XYZ Corporation for $80 per share when the current fair market value is $65 per share?  You can insist on the undeniable value of XYZ stock shares.  You can explain to the stockbroker how when you bought your shares the company was soaring and every investor wanted a share of XYZ.  You need to receive $80 per share because you paid $70 per share and you deserve a profit since you have held the stock for several years. 

However, when the stock market day is done the cold hard truth is that no wisestockbroker  is going to pay you $80  for a stock share that is only valued at $65 in today’s market.   At this point, you can keep the XYZ stock share and wait to see if the price rises again.  If the price falls even lower, you will have lost more than your initial $15.  Would you keep a stock that continued to decrease in value?  Maybe for the long term, but keeping an unused or no longer desired  home is a pricey investment that will quickly drain your wallet.  This is especially true if you no longer live in the home.

Real estate and stock shares prices behave similarly.  Current supply and demand for Berkshire properties determines the fair market value.  If someone insists his or her property is worth $500,000 and another home with more amenities is available for $400,000 then the wise buyer will most likely purchase the least expensive of the properties at $400,000 which is the fair market value the buyer is willing to pay.

So, how does a Berkshire seller know what the current fair market home value is in Williamstown or any other Berkshire town right now?  A licensed Berkshire Real Estate appraiser is the best way to approach the thorny issue of fair market home value.  Ask your Real Estate agent for several references or follow this link to the American Association of Home Inspectors to find a local certified home inspected with a reputation for accurate work.

Another more complicated approach 9used by your Williamstown Real Estate Agent is to look at the average rise and fall of home prices in the Berkshires or your particular town/neighborhood.   The average market analysis comparative Berkshire home price is based on the median selling prices obtained for similar properties in similar neighborhoods Williamstown or other Berkshire towns.  This median price is usually fairly accurate unless you have made substantial changes or investment in your property, which should be taken into consideration before finalizing a listing  price.  Realtor.com and Zillow.com offer basic tools for estimating  the fair market value of your home, although no one is more qualified to quote a fair market home value for your Berkshire property than a professional real estate appraiserworking with  your real estate Broker.

Fair Market Value is determined only through logical analysis, not guesswork or dreaming. If a seller is sincerely motivated to sell then obtaining an appraisal prior to listing a property with a Berkshire Broker is the best advice.   Not pricing to the current real estate market is the most common cause of Berkshire Properties languishing on the market for years with no offers to purchase.   

If you are truly motivated to sell your home then price it to the current fair market home value.  Many Berkshire Real Estate Agents will quote you a listing price that meets your dreams but that will not sell your property.   Best advice: work with an experienced broker who takes the time to analyze the market and to provide written carefully documented numbers that support pricing recommendations.

Let go the notion that a wealthy stockbroker from New York’s Wall Street with loads of money will pay you more for your home than a local buyer will.  Fair market home value is reality.  Today’s wise buyers will not waste hard-earned money.  Educated buyers are looking for a fairly priced home.  When a Berkshire buyer finds a home they want that is priced to the current market, they will be quick to make an offer.

Paul Harsch, Broker

Harsch Associates Berkshire Real Estate