Dec 28, 2008

What's In, What's Out with Home Buyers in 2009?

by Mark Nash

[Guest blogger Mark Nash, author of four real estate books including the classic 1001 Tips for Buying and Selling a Home, has completed his annual survey of 839 real estate agents in all fifty states in the U.S. and the eight provinces of Canada. Nash's survey is distributed each fall to subscribers through his monthly electronic newsletter, 1001 Real Estate Tips.
What's In, What's Out with Home Buyers illuminates what's popular or what sours homebuyers in both the home purchase or sale transaction, and home decor. Compiled annually from the trenches, it offers a spectrum of tips that cover the reality of buying a home, and design no-nos and buyer must-haves for home sellers. More than 450 media outlets in North America utilized Nash's 2008 edition. For interviews, call Mark at 773-610-2074 or email him at Mark.Nash (at) cbexchange (dot) com. --Eds.]

  • Sidelined home buyers. Family or lifestyle additions, or changes made in buyers' households in the last three years are forcing those waiting out the market transition to finally get off the fence and say, "It's time for our family to buy the new home that suits our new needs."
  • Home uplifts. Not a big renovation, but some new finishes that can visually hold over stay-put home sellers. Not a gut, rehab-to-the-studs new kitchen, but new flooring, countertops, and/or appliances.
  • Collaborative home pricing. The old days of home sellers configuring a home's price are out. What's new is that the seller, along with their agent, looks at closed comparables, sets a price, then the buyer and their agent can agree or disagree -- but in the end, a mortgage lender and their appraiser will set the price, as they are assuming the most risk in the transaction.
  • Balanced reporting by real estate and personal finance journalists. Consumers learned in 2008 that the "doom and gloom" residential real estate market headlines don't apply to all markets. What's been lost in the foreclosure hype is that there are still stories of homes selling in short market times (as little as 3 days), homes selling at full price, and some selling with multiple contracts on the table. Existing home sales will be 5.02 million for 2008, versus 5.652 million for 2007 -- a decrease of just over eleven percent, considerably less that the recent correction in the U.S. stock market -- and this realistic view shows that over five million people purchased a home despite the dire headlines of 2008.
  • Creative home seller financing. Exhausted home sellers are turning to self-financing to move properties. Installment sale contracts and lease-to-own are the most popular and effective ways for sellers to begin to receive income from a property that has languished on the market in 2008.
  • Real estate agents as a housing resource, not a salesperson. Future-minded real estate agents help consumers through the home sale or purchase process, which takes a skilled agent who is driven not by sales but by providing resources to help the consumer determine if they should buy or sell a home. Home ownership is not for everyone. Factors such as a potential job move in 3 years or less, marginal credit, and lack of interest in home maintenance can be reasons for a resource-driven agent to advise their client not to buy.
  • Property tax appeals. With home prices dropping, many savvy home owners are appealing their property taxes. This is especially attractive to those looking to sell their home in 2009. With a competitive marketplace, those with the most realistic taxes are more likely to offer buyers an overall lower expense in home ownership.
  • House therapists. Divided partners in a home are increasingly relying on an independent third party (house therapist or coach) to bring household relationships to common ground on such prickly issues such as to stay or move, how much to spend on remodeling or decorating, or doing nothing at all. Third parties can outline the benefits and pitfalls of over-spending on a new, larger home or weighing in on a spouse's desire to over-improve for the neighborhood. With less equity and with the financial stakes higher, smart couples hire a home therapist to wrangle concessions and agreements out with their significant other instead of doing damage to their relationship by going head-to-head.
  • Architectural overhead garage doors. After years of bland vanilla garage doors, architecture has permeated the door most people look at the most. Traditional styling has arrived with mullioned windows, faux wrought-iron hinges, and latches that provide the original, non-overhead garage door look. Contemporary looks now include adjacent siding applied over the door for a seamless look, much like the panels installed on refrigerator doors to complement cabinets in a kitchen.
  • Loveseats. A pair or trio is gaining acceptance as the functional way to rearrange a living or family room. Consumers appreciate the ease at which they can rearrange them, move an extra one to another room, or provide long-term furniture flexibility in future homes. Plus, they're tired of sitting miles away from others on over-sized sectional sofas.
  • The master bed as a throne. With consumer spending down and more nesting at home, home owners are focusing on making their bed like an at-home luxury hotel experience. Posh linens, pillows, and mattresses create a getaway without leaving home.
  • Older, war-horse appliances. Collectible working appliances from the 1940s through the late 1980s have found a new niche among homeowners who appreciate their rock-solid construction and durability. Harvest gold double ovens from the 1970s repainted a metallic red and go from boring to bold. Cold spot refrigerators from the 1950s refinished in sky blue can perk up the butler's pantry in suburban home. And, the early 1960s dryer that looks like it's from a Jetson house -- painted pink to match -- punches up the in-unit laundry room in a condominium.
  • Dining chairs that don't match. With consumers watching their non-essential spending closely and electing to stay home to entertain friends, many have found a quick pick-me-up for their dining room suite: mismatched pairs or single chairs. Feedback from friends or family has been favorable to this easy and cost-effective way to say, "Welcome to my cutting-edge table."
  • Obama-era paint colors. President-elect Barack Obama will add a fresh, younger, and forward-looking feel to residential interior paint decor in the spaces at The White House when he and future First Lady Michelle get their say. Look for parchment whites, cashmere yellows, bright optimistic blues and radiant golds. Depressing Bush-era colors such as plum, chocolate brown, rusty mustard, and pale sage will gladly be replaced by more optimistic colors in American homes.
  • Fixer-upper homes. With larger down payments required by mortgage lenders and consumer credit cards maxed out, homebuyers want a home in move-in condition. The DIY days are on the wane as buyers want to inherit new kitchens and bathrooms.
  • Homebuyers' endless "circling" of prospective short-list properties. This is the practice of overly optimistic thinking by buyers who circle a preferred property indefinitely, often for months, waiting for further price reductions or to wear out long-weary sellers -- and it's definitely backfired for buyers who practice this style of pre-negotiating. They often lose their short-list dream home and frustrate savvy, price-right sellers. Ditto the bottom-feeder buyers.
  • Real estate agents that started their career in the boom. It was easy for any new real estate agent to have instant clients during the boom years. After all, they thought the business was about order (contracts) taking. Now they've realized they didn't build a long-term client base during the boom or acquire knowledge about servicing clients' needs in a not-so-easy market.
  • Home staging. A recently over-used low-cost marketing band-aid for vacant or occupied homes with longer than normal market times. Buyers have had enough of the non-professional usage of assorted leftover props placed around a for-sale home to make it supposedly homey. Buyers say, market it as it is and clear out the tired silk flowers and stale potpourri.
  • Indoor-outdoor carpet. One of the staples of quick-fix home sellers for basements, balconies, screened porches, and lanais -- buyers have said, "Enough already!" Many have told agents that inexpensive indoor-outdoor carpet is visual pollution and often masks flaws in a home.
  • Track lighting. Thought of by homeowners to be a quick way to get an art gallery look, many prospective buyers usually take them out and discount their appeal. As one Gen-X homebuyer said to me, "Why do sellers install them up when they don't really have any interesting artwork or architectural features to spotlight? They bring undue attention to nothing."
Copyright, All Rights Reserved Mark Nash 2008