Kensington short sale...SOLD after 653 days on the market!

A Kensington model on Houlton Circle that had been on the market since April of 2008 has finally sold for $345,000.

The original agent placed it on the market at $549,000, eventually reducing it to $410,000. After 269 days on the market, the owner switched agents. The new agent priced it at $400,000, had it on the market for over a year, and eventually sold it for $345,000. A selling price over $200,000 less than the original asking price...think someone made a pricing error here?

I see this too often, where wrong pricing, whomever is at fault (agent, owner, or both) ends up costing the seller tens of thousands..and in this case hundreds of thousands of dollars...as well as a great deal of time and stress.

Journeys End homes currently under contract...a very informative breakdown

There are currently 8 Journeys End homes under contract...which is good news.

But...look at the map graphic below for "the rest of the story"

There are only three homes (of 8 total) that are NOT Short Sales

This does not bode well for property values going forward as short sales typically sell at a discount to non short sales. And with the ratio being 5 "under contract" homes being short sales and only 3 being non short sales, this could cause an appriasal problem with sales later this year...this is an excellent graphic backing up the advice that I have been giving to sellers/potential sellers in Journeys End lately: the window of opportunity is small, try to get on the market, under contract, and sold in the next 3-5 months.

Thanks for reading,

Steve Jackson

Journeys End sales the previous 60 days...map view

There were 6 recorded sales in Journeys End in the previous 60 days...only 1 of them was a short sale.

1. Santa Fe...short sale...$300,000...pool/lakeview
2. Biltmore...$335,000...lake/pool
3. Windsor...$415,000...lake/pool
4. Santa Fe...$327,500
5. Biltmore...$315,000...pool
6. Windsor...$369,000...pool/canal 

Journeys End Foreclosure details

As of 1/15/10 there were 26 Journeys End homes in some stage of the foreclosure process...below is a breakdown by street:

• C Durham - 7
• Houlton Circle - 6
• Finamore - 4
• Bither - 2
• Nikki - 2
• Kaleb - 1
• Jessica - 1
• Eamlyn - 1
• Eugene - 1
• Wilbur - 1

Buckingham under contract....

The extended Buckingham with a pool that went on the market a month ago at $365,000 has gone under contract.

The current owners purchased the home for $387,500 in 2003.

This is the basic Buckingham floorplan...I believe the original owners had the builder make the covered patio a part of the home.

Industry insiders expect market to resume fall...

NEW YORK (CNNMoney.com) -- After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.Prices have risen more than 3% since May, according to S&P/Case-Shiller. But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up.

Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%."We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."

There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.

The above is a snippet of a CNNmoney.com article from Friday, January 1st.

Take a look at this mortgage interest rate comparison I've done:
4.5% on a $400k loan = 2025.19/mo
8% on a $276k loan = 2026.74/mo

Right now...we are at about a 5%+ average mortgage rate...it has risen the past 3 weeks, and that is with the feds direct involvement with the rate mechanism. If the feds "backs away" from direct involvement some time this year, rates will surely increase. It is not too inconceivable that rates could rise to 8%, which, in the example above, reduces the buying power of the representative buyer $124,000!

If the "blame" for the housing bubble has been "low interest rates and loose lending standards" what effect will the opposite have? Couple higher rates, extremely tight/restrictive lending standards, the end of buyer tax credits and a wave of bank-owned homes...It's not a pretty picture being painted.