Tuesday, December 30, 2008

Top 10 Project Paybacks in Toms River, NJ

According to Remodeling Magazine's, 2008 Cost vs. Value Report, 9 out of the top 10 project paybacks are "exterior" remodeling projects: 

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year's Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level. 

1. Upscale fiber cement siding (86.7%)

2. Midrange wood deck (81.8%)

3. Midrange vinyl siding (80.7%)

4. Upscale foam-backed vinyl (80.4%)

5. Midrange minor kitchen remodel (79.5%) 

6. Upscale vinyl window replacement (79.2%)

7. Midrange wood window replacement (77.7%)

8. Midrange vinyl window replacement (77.2%)

9. Upscale wood window replacement (76.5%

10. Midrange major kitchen remodel (76.0%)

So, if you have to sell and you've made any of these improvements to your property in the last year, all is not doom and gloom. Today's BUYER sees the value in these remodeling projects and is willing to pay you back on your investment!



Friday, December 19, 2008

Part 2: Insanity Wins a Round

They say the sequel is always worse than the original. Well, here's the response I received from yesterday's "Unfortunate Seller". You be the judge:

"Thank you for your input.  The house is empty now and we already have another home.  We realize we will have to drop the price, but we're trying to minimize our loss.  We purchased it in 2006 on the high side at $***,*** because of it's upgrades.  Along with reducing the price (we're not sure yet to what, but not by $100,000), we are shopping around for a realtor who will reduce the commission so that we can at least minimize our loss."

Am I the only one who sees a whole lot of "pain" in their future? Not "pain" in the compound fracture sense, but "pain" in the incapability of accepting the reality of their situation sense.

"…but not by $100,000"…

"…so that we can at least minimize our loss."

These poor souls actually "believe" someone is going to buy their home. Hopefully, they are well off enough to survive the next decade owning two homes. Did I mention this particular home is located in a "Retirement Village"? Hopefully, their "Retirement Fund" doesn't also include a 401K!

Here's my reply to their response:

"I empathize with your situation.  My wife and I purchased a "brand new" home in 2005; it's worth $120,000.00 less now!

Unfortunately, the local real estate market is not going to improve anytime soon.  In my professional opinion, prices will not return to 2006 levels for at least another 10 years.  Do you have that much time to "waste" chasing the market?  How much is this home costing you in carrying costs (taxes, association fees, maintenance, etc.)?  And, as your home is unoccupied at this time, it makes selling in this market even more challenging!

If you really want to "minimize" your losses, hire a "sales and marketing" professional based on their success in selling in this market NOT a "listing" brokerage based on commission…that will only prolong the pain and end up costing you more!  I apologize for sounding so negative but telling you anything but the truth would be a greater disservice."

Does anyone think I will get another response?


Thursday, December 18, 2008

Insanity vs. the “Code of Ethics”

Here's an ACTUAL e-mail I received earlier today from the owner of a home that is listed with another broker and about to "expire". (I've changed the name of the brokerage for obvious reasons):

"We are the owners of the above home for sale.  Our current listing agreement with 1a2b3c Realty will soon be expiring and we are shopping around for a reduced real estate commission.  What's the lowest percentage commission you would be willing to list it for?"

An analysis of similar homes to theirs clearly showed they were at least $100,000.00 over-priced!

On how many different levels is this situation ABSURD?

Please don't get me wrong. I'm not just frustrated with the mindset of the homeowners. What possessed the real estate agent to take that listing at that price in the first place? What was the Broker/Manager thinking when they permitted this disservice to their client?

Now, 6 months later, these misguided folks are shopping for another brokerage based on "lowest commission percentage" via the internet! The saddest part of this tragic story is; it's not over yet. They will succeed in finding exactly what they are looking for; a brokerage to take their listing, at their price, for the lowest commission. Another 6 months will pass, without anyone looking at their home, and the cycle will continue…unless…

Unless we as an industry remember and practice the REALTOR "Code of Ethics" by being honest and professional! Let's STOP the insanity one e-mail at a time. Here's a copy of my response:

Thank you for remembering and considering Coldwell Banker Flanagan Realty.  Unfortunately, to enter into a "service agreement" based solely on the amount of the real estate commission would be another disservice to you; the first was an agent and brokerage listing your home at "that" price in the first place.

Please understand, I'm not trying to insult you or your home, but an analysis of your model, in your Village, clearly shows your home was "overpriced" for the current real estate market by at least $100,000.00.

I'm confident your home is far superior to other models in your village but just as the stock market determines the current value of any particular stock, the real estate market determines the current value of any particular home.  So, attempting to market and sell your home above the "market range" would be like trying to sell penny stocks for a dollar.

Re-listing your home based on a reduced commission will only lead to more frustration and disappointment for everyone involved.  May I ask, "Why are you attempting to sell your home?"  "Where would you like to move to?"  And, "How soon would you like to get there?"

Please feel free to post your comments.




Tuesday, December 16, 2008

The Ocean County Board of Realtors' 2008 REALTOR of the Year!

How often do we, as practitioners, criticize the decisions of our local boards? Well, I'm proud to report that our local board, the Ocean County Board of Realtors, located in Toms River, NJ, has made a decision that is indisputable. Their decision to bestow the honor of "2008 Realtor of the Year" to Robin Bahr is perhaps, in my opinion, one of the best decisions made in 2008!

Not only is Robin the "consummate professional", (GRI, CRS, SRES), but she also personifies the REALTOR "Code of Ethics"! Everyone and anyone, who has had the privilege of working with Robin, will acknowledge her dedication, passion and compassion. Aside from her many contributions throughout the years to the Ocean County Board of Realtors, Mrs. Bahr was instrumental in the re-formation and development of the Women's Council of Realtors, Ocean County Chapter, serving as it's President in 2008!

When Robin is not serving her clients and customers, or volunteering her time with the WCR and OCBR, she may be found at one of many of her charitable pursuits; including but not limited to the "Relay for Life" for the American Cancer Society of Toms River, NJ. Robin believes in the ultimate goal of equality for all women in the areas business, opportunity, growth, health and well-being by serving on the Business and Professional Women's Association of Ocean County.

I'm quite sure I'm leaving out many more of Robin's contributions to our industry and our community, but suffice it to say, in my decade of real estate experience, I have yet to meet her equal!

Monday, December 8, 2008

What is the definition of “insanity”?

What's the definition of "insanity"? Answer; doing the same thing over and over again, expecting different results.

Today, The Washington Post reported, Homeowners redefaulting after getting aid. According to John Poirier's and Patrick Rucker's article, "more than half of mortgages modified in a bid to avoid foreclosure fell delinquent within six months"! They go on to report that Comptroller of the Currency, John Dugan, suggests the following reasons why (or a combination of all of them):

  • Was it because modifications did not reduce monthly payments enough?
  • Was it because consumers replaced lower mortgage payments with increased credit card debt?
  • Was it because the mortgages were so badly underwritten that borrowers simply could not afford them, even at reduced payments?

The one question Mr. Dugan forgot was; was it because these borrowers never should have been approved for a mortgage in the first place? What makes us, anyone, think that by reducing the SAME borrowers' payment, the BORROWERS' behavior will change???

Unfortunately, sometimes we must be "cruel to be kind". Nature has its own primitive way of ensuring the survival of the species; the weak, sick and old are picked off by the predators. It's the "Natural Order" of things. Let's take a lesson from Nature and save our, the tax payers money, by allowing this round of foreclosures to run its course. Save the "bail out" for the borrowers' who deserve it; Mr. & Mrs. Homeowner, who can no longer afford their mortgage because he or she lost their job, NOT because he or she NEVER should have received a mortgage in the first place!


Tuesday, December 2, 2008

Outbreak of RDS (Rampant Denial Syndrome) Hits Toms River, NJ!

Some FASCINATING statistics for November in Toms River, NJ:

Statistics Summaries Report

Category - SingleFamily / Area: TOM - TOMS RIVER TWP / County: OceanStatistics for Entire MLS from 11/01/2008 to 11/30/2008


Total List / Closed $

Avg List $

Avg Closed $


Median Price $




$53,993,900 / n/a






Under Contract


$14,936,496 / n/a








$19,293,212 / $18,131,450








$36,429,631 / n/a






Currently Active (as of today)


$360,865,054 / n/a






--Information deemed reliable but not guaranteed--Copyright: 2008 by the Monmouth County Association of REALTORSR
We Never Stop Moving!


Why would I call them "fascinating"? Let's take a closer look, shall we?

  • 46 Homes CLOSED during November at an average price of $394,162
  • And ONLY 38 homes went UNDER CONTRACT at an average price of $393,066
  • SO, why did 109 NEW homes LIST for an average of $495,357 when…
  • 77 homes EXPIRED at an average LIST price of $473,112????????????

Here's my Official Diagnosis:

Toms River, NJ, continues to suffer from RDS (Rampant Denial Syndrome). When 109 Sellers think they will sell for more money than 77 unsuccessful sellers FAILED to sell for; that's RAMPANT DENIAL SYNDROME! When real estate agents continue to LIST homes for an average of $100,000 OVER the current CLOSED price; that's RAMPANT DENIAL SYNDROME! When, despite the OVERWHELMING EVIDENCE ABOVE, sellers and agents REFUSE to accept REALITY; that is RAMPANT DENIAL SYNDROME!

CAUTION: Failure to seek immediate treatment for RDS could result in catastrophic consequences such as "short sales", "foreclosures", "bankruptcies", "insanity" and in certain cases DEATH (of a real estate agent's career)!!!

Tuesday, November 25, 2008

Isn't Technology Wonderful?

It's 4pm(EST) and I have received no less than 3 e-mails, on my "Blackberry", alerting me to the Fed's decision to purchase "X" amount of mortgage backed securities and the subsequent effect this announcement has had on interest rates. Isn't technology wonderful? In order to verify this information, I went to Inman News and sure enough; here's their release...Isn't technology wonderful! Then, I log on to activerain and see that Rob Rauf (see Rob's post here) has already posted this news...Isn't technology wonderful?

So, if technology is so wonderful, why aren't more real estate agents in Toms River, NJ, using it to get this exciting news out to all their buyers and buyer prospects? Well, let me give you my hypothesis:

They would rather be basting a turkey secure in their own rationalization that NO business is ever conducted over a Holiday Weekend, let alone this year. And yes, I know Thanksgiving is still two days away!

Now, please let me clarify; I have nothing against Holidays, especially Thanksgiving. I too am looking forward to loosening my belt a notch and fading in and out of a "stuffed" slumber during football...BUT NOT UNTIL THURSDAY!

Alas, have no fear; for if we are the statistics? And we are! I find comfort in the knowledge that 13% of us (real estate agents doing business in Toms River, NJ) will be busy taking advantage of; the Fed's decision, lower interest rates and technology. The same 13% will enjoy their turkey just a little more than their peers this Thursday, secure in the knowledge that while everyone else was in "Holiday Mode", they were e-mailing, texting and CALLING their buyers and buyer prospects with the GOOD NEWS!

Wednesday, November 12, 2008

Riddle Me This, Batman...

Within the last 2 weeks, I have been questioned by a couple of our better Listing Agents as to why our company does not list RENTALS. Apparently, there are a significant number of unsuccessful sellers in the Toms River, NJ, market that would like the "option" to rent their home if they cannot sell it at their price.

So, let's look at this conundrum from the three significant perspectives; first, the Agent's Perspective:
  • It's a tough market out here. We have 14 months of inventory here in Toms River and none of my listings are selling, so why can't I make a few bucks renting it for them?

Yes, it is a tough market and discretionary sellers who are still in denial over the market value of their home are only making it tougher! The potential return on investment for "spot rentals" is NOT worth the time, aggravation and liability involved. Are we NOT fooling ourselves into thinking we're busy, and thinking we're making money, instead of staying FOCUSED on our goals and the true value of our TIME?

Next, let's look at the "Bewildered One", the perspective of today's Accidental Landlord:

  • "I'm not giving my house away! Maybe I'll just rent it until the market changes and then sell it? I don't have to sell!

If you don't have to sell, do EVERYONE and this country a service and take your home off the market! These "sellers" are half the reason we have 14 months of inventory in Toms River, NJ. Just be aware; because of all the "tightened standards" in the mortgage industry, your pool of tenants consists of those who DON'T have good enough credit to get a mortgage OR; those who just lost their home to FORECLOSURE or took a SHORT SALE! Have you read NJ's TRUTH IN RENTING handbook?

And last but certainly not least; my humble opinion as the Broker/Owner:

  • It is a tough market out there and my agents are frustrated and discouraged. It is my RESPONSIBILITY to support, encourage and help them make money! Should I be looking at alternate sources of revenue?

Absolutely. But RENTALS are NOT a viable, sustainable source of revenue in our market! There are buyers who understand what a GREAT TIME it is to buy and sellers who have to sell. We must stay FOCUSED on helping today's First Time Buyer achieve the American Dream and we must be SELECTIVE and assist only those Sellers who need to sell! To compromise on this commitment would be IRRESPONSIBLE.

Monday, November 10, 2008

What's YOUR Top 3?

I received an interesting e-mail last week. It was part of a recruiting campaign by a local "100%-Residual Income" driven brand. Before I launch into my criticism of this e-mail, let me point out something positive about it; only my e- mail address showed in the "to" field!

The "guts" of the e-mail was a WORD attachment entitled, Top 20 Important Questions for Agents to Ask During a Real Esate Interview. No, that's not my typo. That is exactly how "Estate" was spelled on the attachment! Aside from the redundancy of Top 20 and Important, the title was effective enough for me to read on...their next mistake.

Here are the Top 3 of the Top 20:
  1. How many training classes do you offer per month?
  2. Who will train me?
  3. How much will the training cost?

I won't speak for any other real estate professional but those 3 questions wouldn't make my list at all, let alone the Top 3! Now, don't get me wrong; I'm a huge proponent of training and education but...obviously, this Broker does not understand and does not respect their target customer; today's "experienced sales associate". Today's ESA has most likely been trained because they are STILL HERE! I propose today's ESA would more likely ask these 3 questions:

  1. How will you help me make more money?
  2. What are you doing in this market to generate leads?
  3. Will leads from my activities be directed back to me?

I may be wrong but I don't think so...The main problem, as I see it, with this particular company's philosophy is that they haven't accepted WHO their REAL CUSTOMER is; today's real estate consumer (buyers & sellers)! And, as long as they stay focused on recruiting "experienced sales associates" that are concerned about how much training will cost, they will lose much more than just the "t" in "estate"!

Wednesday, October 1, 2008

I Want My Cake And Eat It Too!

Woman eating a cake

"I don't want a "starter" home! I want the home I grew up in. I don't want to do any work and I'm only going to pay this much for it." --Today's First Time Homebuyer

"Yes, I'm aware it's no longer a Seller's Market but I'm not going to give my home away!"--Today's Typical Homeseller

"Buyers are liars and Sellers are nuts!"--80% of Today's Real Estate Agents

"If the government doesn't bail out Wall Street, we're heading into the Second Great Depression!"--The National Media

"The American Public has every right to be upset. It's not fair for the tax payer to pay for the mistakes and greed of our financial institutions. But, we have no choice!"--POTUS

"It's Bush's fault. It's Clinton's fault. It's Wall Street's fault. It's Greenspan's fault. It's Bernanke's fault. I better sell my stocks, cash in my 401K and take my money out of the bank before it's all gone!--Joe Public

Thursday, September 4, 2008

Back to School, Again!

Welcome back, to school that is!

In her wonderful article, Inside the Mind of the Consumer, in the September issue of REALTOR magazine, author Wendy Cole quotes a top Chicago broker as he answers the question, “What exactly are buyers and sellers seeking these days?” His answer:

“Nordstrom service, Disney innovation, and K Mart prices!”

Today’s “First Time Homebuyer” is a completely different consumer, or “mutant” as one of my salespeople might say, than the FTHB of the past! They have access to too much information and despite all that information, and misinformation, at their fingertips, they seem to take an almost “whimsical approach to determine fair pricing.”

As reflected in yesterday’s lesson, today’s FTHB is convinced prices will drop further. When presented with the data that shows that even if home prices do fall another 10%, and interest rates rise just a half a percent, they will actually be paying more (monthly) for the same house; they just nod their heads and stick to their guns! Why?

For one, very simple, reason: They don’t have to buy!

They want to buy but they want to buy the home they grew up in. They don’t want to “start out”, they want to “move in” and move on…

New Coldwell Banker® Broker Survey Reveals Possible Disconnect
in First-Time Home Buying Process

PARSIPPANY, N.J., (Aug. 21, 2008) – First-time home buyers are primarily concerned with affordability when choosing a new home, but their expectations may be too high relative to their current financial buying power, according to a recent Coldwell Banker® survey conducted among its brokers. While nearly half of the Coldwell Banker broker respondents reported that affordability was the No. 1 concern for this group, 81 percent said today’s first-time home buyers consider move-in conditions to be very important when searching for homes. In contrast, only 7 percent are looking to purchase “fixer-upper” homes that they could buy at a lower price and renovate themselves.

“In the past, first-time home buyers were willing to purchase older, more basic houses in an effort to save money and break into homeownership,” said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate, LLC. “Today, this group has greater home expectations because they have grown up more accustomed to their parents’ lifestyles. It is important for first-time homebuyers to remember that by considering a ‘fixer-upper’ for their first home purchase, they can build equity over time and move up and into their second-stage home that better reflects their expectations.”

Survey findings also suggest that first-time home buyers worry more about credit ratings and approval than they did a decade ago, but less about down payments. This may be because they have saved money themselves, or have received additional support from parents to help their first-time home purchase.

According to 29 percent of brokers surveyed, first-time home buyers were more concerned with down payments 10 years ago than anything else, while only 17 percent said this is the biggest concern in today’s market. Meanwhile, survey respondents said that only 4 percent of first-time home buyers were worried about their credit scores in 1998, while 14 percent said it is more of a concern today.

“Owning a home is a great investment that will provide tax breaks, financial gains – as well as considerable joy over the years,” Gillespie said. “First-time home buyers now have higher standards, placing an increased focus on the financial aspects of home ownership and at the same time, want a larger home they can live in right away.”

Additional key findings from the survey include:

· 71 percent of brokers noted that first-time home buyers are looking for larger homes than they were 10 years ago.

· According to 41 percent of the respondents, proximity to job is the No. 1 attribute first-time home buyers are looking for in a home.

· 35 percent of the survey respondents said “investment” is the No. 1 reason first-time home buyers are making their purchase.

· 46 percent of the survey respondents reported that first-time home buyers look at five to 10 homes, on average, before making a purchase.

In addition, the survey explored initial reasons that a first-time home buyer contacts a Realtor in today’s market and how that has shifted from 10 years ago, according to the Coldwell Banker brokers:

Today’s Market vs. 10 Years Ago:

They are ready but want assistance in the process, including identifying neighborhoods, negotiating of price and paperwork: 73% vs. 32%

Because that is what they feel like they are supposed to do: 3% vs. 28%

To view houses / do walk-throughs: 17% vs. 30%

To help with navigating mortgage issues: 1% vs. 4%

They are not ready but trying to better understand the process: 6% & 6%

Methodology: Coldwell Banker Real Estate LLC conducted an online survey about the trends real estate professionals are seeing with first-time home buyers. The survey yielded responses from 150 Coldwell Banker brokers across the United States.

Wednesday, September 3, 2008

Back To School!

Today marked the return to the classroom for school children across Ocean County, NJ. By most accounts it was a long, dry, hot summer. Am I talking about the weather? An interesting analogy could be drawn between this past "Summer Break" and the Summer Real Estate Market here in Toms River...

"We want to be in our new home before school starts."

Traditionally, these words meant the three months of June, July and August were our biggest closing months here at the Jersey Shore. But if we compare 2007 with 2008, two of those three months were down from the same time last year and August of this year was significantly below August of 2007:

Category - Single Family-Toms River
Mo/Yr Monthly Sales Avg List $ Avg Sale $ % Diff Sell/list Avg DOM Curr Inventory Mos Inventory

June 2007 88 $445,644 $425,660 95.52% 80.0 871 9.90
July 2007 81 $402,287 $383,148 95.24% 76.0 877 10.83
August 2007 90 $403,178 $381,372 94.59% 100.0 860 9.56

June 2008 95 $455,884 $427,894 93.86% 99.0 829 8.73
July 2008 79 $391,795 $372,642 95.11% 95.0 806 10.20
August 2008 65 $361,688 $343,605 95.00% 100.0 786 12.09

What do these numbers mean?

Well, lets go "Back to School"!

As we can see, there were 95 closings, in Toms River, in June of this year, compared to 88 in June of 2007. Which means that these homes probably went under contract in April and May (Peak Selling Season). Nothing new here...

But when we look at July and August of 2008, compared to the same time last year, the data tells us that the homebuyer took the summer off! Why? Good question.

The homebuyer who bought in April and May and closed in June of 2008 was the traditional Nuclear Family. They wanted to be in their new home before school started! But what about the homebuyer who bought, or didn't buy, in June, July and August?

The NAR (National Association of Realtors) estimates that 40%* of all homes purchased this year (2008) will be purchased by First Time Home Buyers! These particular buyers are far different than their predecessors of the last "buyers market", 1990-1993.

Tomorrow, we will go back to school and examine exactly what today's First Time Homebuyer thinks, wants and buys!

*This percentage is probably higher locally (Ocean County, NJ) by about 5%.

Wednesday, July 30, 2008

National Housing Report: June Sales and Prices Down (Except in Toms River, NJ)

NAR Releases June's Housing Market Report:

The National Association of Realtors recently released their housing numbers for June 2008. Here's a brief synopsis:
  • Nationally; sales were down 16.4% and prices were down 7.9% versus June 2007
  • Northeast; sales were down 19.9% and prices were down 3.0% " "
  • South; sales were down 18.2% and prices were down 4.5% " "
  • Midwest; sales were down 18.2% and prices were down 4.8% " "
  • West; sales were down 10.1% and prices were down 17.2% " "

What does all this information mean? Well, according to the "National Media Outlets", it's the beginning of the Apocalypse! Fortunately for us, there are a few reputable analysts who read the POSITIVE in all these negative numbers.

"Overall, we've seen marked improvement in every region of the country over the previous month," said Steve Murray, editor of REAL Trends. "By no means is this reason to celebrate, but their are telltale signs that could indicate reasons for some optimism. Of particular interest was the increase in closed sales in California, up 6.6% versus June 2007, and Nevada, where sales were up 3.6% over a year ago. With these markets firming, there are signs that the worst may be in the past."

All Real Estate Is Local:

So, how did Toms River, NJ, compare to the Nation in June 2008? Here's how:

  • Closed Sales (June 2008 vs June 2007); UP 9%!
  • AVG Sales Price (June 2008 vs June 2007) ; UP .05%!

If we look back at the numbers in May 2008 versus May 2007:

  • Closed Sales down 8.1% and prices down 6.2%

Toms River, NJ, may be ahead of the Nation in showing signs of firming? It's only two month's worth of data. Let's see what July's numbers say!

Wednesday, July 16, 2008

Perception Is Reality

and so, misperception is fantasy?

According to most of the major news sources; Fannie Mae and Freddie Mac are on life support and Indy Mac should be tried as a war criminal. Combined with the current price for a gallon of gasoline and the "weakness" of the U.S. dollar, one would be INSANE to buy a home today, right?

"Buy Low, Sell High"

That's how one makes money in the stock market. Well, that's also how one makes money in the real estate market! After all, real estate is a commodity, an investment and a tax shelter. But it's more:
  • It's a dream (Home Ownership)
  • It's a lifetime
  • It's a family
  • It's memories

It's many different things to many different people. Can anyone place a price on a lifetime, or period, of memories?

20/20 Hind-sight:

Remember the late seventies, early eighties? Remember the late eighties, early nineties? Knowing what we know today, is it safe to say we all would have bought homes then if we could have? Of course we would have! Why then, are we scared to death to buy in the late 0's?

What does all this have to do with real estate in Toms River, NJ?

Everything! Although all real estate is local, perception is not. We, as consumers, are influenced by national and global news, events and yes, trends, or dare I say it, fads. We like to buy what everyone else is buying, when they are buying, and vice-verse.

So, a "bedroom community" within an hours drive of the financial capital of the world, with access to the Atlantic Ocean and the Pinelands, is prone to the same prejudice and social pressure as every other "place to live", or is it?