Smart Investors KNOW THEIR MARKET !!!

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Smart Investors KNOW THEIR MARKET !!!
3RD Quarter 2009 R.E. Sales Market Update
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WHY IS IT IMPORTANT to Know Your Market?

• Know what to offer
• Know what to sell for
• Know what rent to charge
• Know your cash flow
• Have the proper financing available
• Identify Opportunities Faster than Your
  Competition!
• Anticipate change be prepared for it
• Understand a winning deal vs. losing deal
• Make better, faster decisions that make you money

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Steps to Knowing Your Market

• Step 1 LOCATION
• Google Maps - a snapshot view of street and
  neighborhood.
• Step 2 - COMPS
• MLS and begin researching comps
• - compare similar homes in square footage, lot
  size, of bedrooms, style of property, distance
  of my subject house - a few blocks at most.
• - I select all active, pending, and sold listings
  that match.
• - Scrutinize all Sold listings - 6 months. (dom,
  s/a, etc.)
• Step 3 VIEW THE COMPETITION
• visit the properties currently on the market to
  gauge the competition and see with my own
  eyeballs (not an MLS photo) View rentals, sales
  or whatever your goal is
• IS THIS ENOUGH?
• NO - Next, I have to look at trends.

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Steps to Knowing Your Market

• Step 4 Identify Trends for Your Target Market
• Step 5. Know the Good Pockets
• Step 6 Know How to Interpret the Sales Data

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Trends for Our Market 2001-09

• 2001 2003
• Normal, stable growth
• 2004 2006
• Growth explosion - sellers market
• Home values increased, DOM short, shortage of
  inventory, increased competition, more buyers
  than sellers, easily available financing programs
• 2006-2009
• Later 2006 decline started
• DOM higher, of homes sold lower, Avg. Sale
  Price Lower BUT.
• Averaged over last 8 years in the sales cycle
  there is still healthy growth overall in avg.
  sale price of
• Market Correction

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8 Year Sales Trends 5 Counties

• County 2001 2009 Change
• Phila 169,234 194,435 13 1.6 Yr. Inc.
• Delco 189,057 215,802 12.5 1.5 Yr. Inc.
• Montco 201,410 242,869 17 1.1 Yr. Inc.
• Bucks 206,848 252,074 18 2.25 Yr. Inc.
• Chester 221,8089 258,146 16 2 Yr. Inc.
• 
  ____________________________________

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2008-09 Market Trends Montgomery
Year Listed Units Sold Listed Avg Sold Avg DOM
July 08 1001 629 252,059 250,905 64
Aug. 08 863 524 250,961 255,521 65
Sept. 08 925 516 256,388 245,529 69
Total 2789 1739 /62 253,155 250,886 /99 66
Year Listed Units Sold Listed Avg Sold Avg DOM
July 09 890 647 248,338 245,659 80
Aug. 09 850 642 246.829 242,519 74
Sept. 09 927 566 256,360 244,323 78
Total 2667 1845 /69 250,645 244,174/97 77

SUMMARY - 5.5 6 -1 -3 16
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2008-09 Market Trends Delaware Cty
Year Listed Units Sold Listed Avg Sold Avg DOM
July 08 626 354 219,638 228,188 55
Aug. 08 498 366 210,677 223,354 64
Sept. 08 634 303 217,429 217,254 71
Total 1758 1023/ 58 216,303 223,220/103 63
Year Listed Units Sold Listed Avg Sold Avg DOM
July 09 525 394 214,233 218,603 84
Aug. 09 485 378 212,406 214,612 76
Sept. 09 609 305 223,630 244,323 73
Total 1619 1092 / 67 217,220 218,824/100.4 78

SUMMARY - 8 6.8 .004 -2 20
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2008-09 Market Trends Philadelphia
Year Listed Units Sold Listed Avg Sold Avg DOM
1550 756 197,231 202,717 63
Aug. 08 1333 716 192,221 198,957 69
Sept. 08 1495 756 206,658 188,718 66
Total 4378 2104 /48 198,925 197,232 /99 66
Year Listed Units Sold Listed Avg Sold Avg DOM
July 09 1184 737 201,036 199,342 75
Aug. 09 1160 748 194,327 197,702 75
Sept. 09 1356 632 198,959 193,486 74
Total 3700 2117 /57 198,172 197,014 /99.4 75

SUMMARY - 14.5 .006 -.004 -.002 13.5
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2008-09 Market Trends Bucks Cty.
Year Listed Units Sold Listed Avg Sold Avg DOM
July 08 689 430 270,313 266,135 60
Aug. 08 655 385 257,147 260,042 62
Sept. 08 611 333 261,764 252,842 68
Total 1955 1148 /58 263,230 260,236 /98.8 63
Year Listed Units Sold Listed Avg Sold Avg DOM
July 09 650 459 264,033 260,772 72
Aug. 09 529 433 261,799 250,140 77
Sept. 09 636 394 268,026 249,312 83
Total 1815 1286/70.8 264,781 253,681 /95.8 77

SUMMARY - 8 12 -.004 - 3 22
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2008-09 Market Trends Chester Cty.
Year Listed Units Sold Listed Avg Sold Avg DOM
July 08 533 363 266,626 265,298 69
Aug. 08 435 342 263,400 269,224 75
Sept. 08 557 286 273,101 262,296 74
Total 1525 991 /65 268,071 265,787 /99 73
Year Listed Units Sold Listed Avg Sold Avg DOM
July 09 650 459 264,033 260,772 72
Aug. 09 529 433 261,799 250,140 77
Sept. 09 636 394 268,026 249,312 83
Total 1815 1286 /70 264,781 253,681 /95.8 77

SUMMARY 19 30 -2 - 5 5
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From the TrenchesObservations from Our Local
Experts

• Single family homes in Delco in OKschools are
  selling well. Not at their top but 95
• Commercial is in the tank - you need deep
  pockets to buy and hold today
• High end over FHA limits - hard to get buyers,
  500-800K. They need much more cash due to no
  PMI available
• Rentals under 60,000 in OK areas are selling
  slowly
• Middle-level fixers in good schools are also
  selling if they are discounted enough.

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Local Expert Tom Noden

• Del. Cty. Short sales are not getting shown by
  regular agents because they do not want to wait
  for their commission and the buyers do not
  understand the deal.
• Chester Cty Homes with longer commutes are slow
  to sell and are very off their high , about 35
  off 
• Retail buyers are picky about the quality of
  homes and still offer low bids. Then wonder why
  they do not get accepted. Nice homes in good
  schools are still great flips. A nice flip is a
  QUALITY rehab, no shortcuts, spend extra.
• The margins are bigger in the off market as the
  purchase price is far lower even if the sale
  price is down a bit.
• This is a  great time to flip homes and to buy
  better quality rentals then you would normally
  buy.

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Local Expert Raymond LeMire

• Qualified buyers do exist. However, all (that I
  have seen) are FHA buyers.
• There is still lots of activity in the market
  despite all the negative news, people continue to
  sell, buy and rent houses.
• I have rented several houses in the past couple
  of months. All advertised on Craigs List. All
  had had multiple qualified applicants - my ads
  showed rehabbed houses in beautiful condition.

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Local Expert Raymond Lemire

• There is a lot of inventory for buyers to choose
  from. Your house needs to stand out from the
  crowd.
• There will continue to be a lot of foreclosure
  activity next year as adjustable rate loans
  continue to adjust. The first major wave of Alt A
  loan defaults will start early 2010. (no-doc
  loans)

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Local Expert Dennis Cline

• The single family market will tank if they do
  not extend the 8,000 credit. 
• We are in for another price adjustment if the
  government decides to get their hands out of
  the foreclosure market.  There are thousands of
  foreclosures that are sitting at banks that have
  not hit the sheriff sales due to government
  intervention.  These are going to have to go
  somewhere or the banks are going to go under. 
  Either the government is going to have to bail
  out the banks, again or they are going to have to
  let the banks foreclose on these assets and sell
  them.  It is going to come crashing down - the
  only question in my mind is when.

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Local Expert Dennis Cline

• FHA is considering a program to allow investors
  to buy houses that are in foreclosure, lend them
  the money to buy and fix up with the intent that
  these investors would either rent or sell the
  house when finished.  May be a new program or a
  revamp of the 203K program.
• This is the best market for the savvy real estate
  investor.  Great deals, great financing,
  motivated sellers - the best time to be a real
  estate investor is in a down market.  However
  this takes a whole new skill set to understand
  the market and the techniques that are going to
  work. 

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Great Market for Flipping Retail

• 7405 Woodbine Ave
• Under Contract 2 Weeks Mult.Offers
• 164,900

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Great Market for Flipping Retail

• 1262 Pierce St.
• Sold 1 Month Before Rehab Complete
• Full Price 275,000

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Great Market for Flipping Retail

• 1230 Juniper St.
• Sold in 2 Wks.
• Multiple Offers
• 274,900

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Great Market for Flipping Retail

• 342 Tree St.
• Sold in 1 week
• Multiple Offers
• 171,000

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Current OPPORTUNITIES

• Foreclosures
• Short Sales
• Sheriff Sales
• Subject To
• GREAT time for investors to buy bargains
• GREAT time to buy and hold
• Adjust your rents/cash flow for this market
• GREAT time for buying bargains and reselling
• GREAT time for creative financing with
  motivated sellers

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5 Secret Weapons to Adapt Prosper in this
Fickle Market

• Know your market!
• DIG Article June Know Your Market!
• Micro level macro level
• Adapt your marketing
• Message media consistency
• Develop your U.S.P (branding, personal, warm)
• Creatively develop your financial strategy
• Owner financing, LOCs, Cash, IRAs, private
  funding, work on your 5 Cs to improve your
  mortgage desirability, get to know your local
  bankers, hard money, creative financing,
  partnering, wholesaling, etc.

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5 Secret Weapons to Adapt Prosper in this
Fickle Market

• 4. Develop Your Expertise
• Do what you know, learn something new, or get a
  knowledge partner or team
• Experiment
• Be innovative, be willing to try new things and
  perhaps discover a new niche!

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Choose Your Strategy!

• Asleep at the Wheel? Miss Your Target!

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Choose Your Strategy!

• Expect to be Successful
• Have Confidence
• Believe in Yourself
• Pitch Till the Game is Over
• Stay Focused
• Trust in Your Team
• Use Your Strengths, Skills Knowledge
• Know Your Game!
• Execute Like A Pro

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Go Phillies!Go Investors!Go Buy A House!

• Thank You DIG Members !!!!!
• Kathy Gilmore
• Investor
• Realtor
• Business Coach
• 610-212-4330
• yourphillycoach_at_yahoo.com
• www.reallifecoachingsite.com