Spotting Market Bottoms in 2008, Strategies for Home Sellers

In this week's survey of news from across the Web, Open House looks at why you may want to buy in 2008, smart strategies for home sellers and buyers, a plan to put seniors to work to pay off property taxes and a real-estate niche that's benefiting from foreclosures.
By: Lauren Baier Kim: RealEstateJournal.com
Here's a look at what's new in real-estate markets across the U.S. from around the Web.

Resolve to buy in 2008

Demand for U.S. residential real estate isn't dead, it's just stalled, writes Thomas Kostigen of Marketwatch. He notes that sales of luxury homes have been strong and that "with the value of the U.S. dollar low and real estate prices dropping, it isn't hard to imagine foreigners taking bigger positions in properties here as part of their overall portfolios." Prices and sale volumes are already down 25% in some areas of South Florida, and when overseas buyers see values dropping 50%, they are likely to buy, he says.

"At the first blush of renewed energy, the real estate market will bounce back," he says.

Real-estate strategies for the new year

Steve McLinden of Bankrate.com agrees that home values will "stabilize again," but it will be a rocky ride until they do - especially for home sellers, he says. He advises that they stay put and "ride this out," he suggests. For sellers whose circumstances demand that they sell in today's soft market, he offers several tips, including:

• Realize that your house is worth only "what someone is willing to pay" and price accordingly. Throw in incentives like a free flat-screen TV, or offer financial assistance like helping the buyer secure financing or covering closing costs.
• Spruce up your house - don't try to sell "as-is" unless you're willing to sell for a bargain-basement price.
• Look for a seasoned real-estate agent with a high percentage of sold homes.
• Know your local market well.
• Get your listing online.
• Try renting out your house instead of selling or offering a lease-to-own option to renters.

For buyers, he recommends not waiting to pounce on good deals, as the housing market may be "at or near bottom," and using the glut of homes on the market and sellers' anxiousness to sell to bargain more effectively. Make your purchase contract contingent on the home passing inspection, obtaining buyer financing, etc., he says. Do your research on the local market, noting asking and selling prices, and don't overlook "diamonds in the rough" - residences that aren't cosmetically attractive, but have good bones, he says. He also suggests factoring in a house's potential resale value before making a purchase.

Seniors sent to work to pay taxes

Greenburgh, N.Y., located in the state's Westchester County, is considering a program that will allow seniors to literally work off their property taxes, according to an Associated Press article published in the New York state government's Legislative Gazette. Through the program, the town would employ 25 seniors for $7 an hour in a variety of jobs, and allow them to work off about $500 a year from any outstanding property-tax debt.

The plan has its supporters, but the relief may not go far enough - Greenburgh has the third-highest property taxes in the U.S., the AP says. For instance, one senior interviewed in the article who has already taken out a reverse mortgage to help cover her expenses, says that she pays $12,000 in property taxes a year.

Similar programs are already in place in areas like Colorado, Massachusetts and South Carolina, the article says, with seniors in Boulder County, Colo., doing landscaping work and staffing the courthouse's information booth to help pay their bills.

New real-estate niche heats up

In the midst of the housing slump, one segment of residential real estate is hot - "real estate owned" homes, known as "REOs," says the Washington Post. These are foreclosed homes that banks failed to auction off at the courthouse.

Real-estate agents, title lawyers, cleaning specialists and information technology firms looking to profit from the surge in foreclosures are all getting into the field, the Post says. While some REO agents - who earn a commission for each home they sell - are having luck, the niche isn't for everyone. The Post notes that such agents have high operating costs, having to pay for homes' heating, electrical, cleaning and maintenance costs. For instance, one husband and wife team in Maryland who specialize in REOs typically pays $5,500 a month for homes' gas and electric bills, the Post says.


Ms. Kim is a senior editor at RealEstateJournal.com.