Is Deflate-Gate Over?

With the Super Bowl now concluded and New England crowned NFL world champs, concern over low air pressure in footballs will rapidly retreat from our consciousness. Concern over whether and when low mortgage rates will rise however, should never retreat in our minds and should always remain front and center.

The Federal Reserve Board's minutes released after the December 2014 meeting indicated that the Fed would wait at least two meetings before raising rates. Its inclusion in that statement means the Fed does not intend to act at its meetings in March or April. The December language appears to us to put the focus on the Fed's meeting in June for a possible raise in rates.

Fed officials have long pointed to that June meeting as the most likely date for a first rate increase, and some analysts continue to regard that as a good bet. In their statement  released last week, the Federal Reserve and its chairwoman, Janet Yellen again kept its options open, signaling that it would not raise short-term interest rates any earlier than June.

Just as the Fed statements are beginning to sound repetitive, so too am I when I tell you that smart buyers and sellers will move quickly this year while interest rates, not unlike the AFC playoff footballs, remain somewhat deflated. Thirty-year fixed rate loans are running at approximately 3.65%. If rates were to rise to 5% before you make your move, you would end up paying an additional $57,000 in interest over the life of a $200,000 loan...that's a tidy sum that could otherwise be put into an IRA for early retirement or pay for a child's college tuition.

Don't be caught short. The Super Bowl is over and the real estate market in Dane County is wide open for business. Give me a call to see if I can help!

No Preconceived Notions

We do not have cable television.  We had Dish Network for a while, but discontinued that, too.  We don’t really miss it, unless the Badgers are playing.  That was the case last winter as the Badger Basketball team was making a great run at the end of the season.  We headed to a local tavern to take in the game.

While watching, we met a gentleman who was also a sports fan and had just moved back to Madison after some time away.  We chatted about the game (a victory!) and the changes that had taken place since he had left Mad-town.  I also learned that he was thinking of buying a house.  We exchanged cards and called it a night.

Over the next few weeks, we stayed in touch and I learned about what he was looking for.  A house with character was important to this buyer.  He also likes to cook, so a “good” kitchen was also essential.  We looked at some small houses.  We looked on the near east side and the near west side.  We even looked at some condos.  No luck.  Nothing was “right”.

 

I had seen a house on the near east side listed for sale and I went to take a look.  It was small, quaint and in a great neighborhood.  And did I say small?  The kitchen was old and outdated.  Certainly, I thought, not the right house for this buyer.

A few days later, I received an e-mail from my client saying he found a house he’d like to see again.  He had gone to an open house and was intrigued.  It was the “old, outdated, small kitchen” house that I had discounted as not the right house for this client who likes to cook.  We scheduled an appointment to see it again.  We looked at it a total of five times.  He loved it!  Well, he loved many things about it and he could see the potential that some elbow grease and some updates could bring to a house that was in a terrific neighborhood.

I almost always learn something from my clients.  I learned a great lesson from this client who taught me that I should never discount a property as not the “right” one.  That is never my decision.  It is always the decision of my client.  I can advise and counsel and play devil’s advocate.  But at the end of the day, the decision on whether or not to make an offer on a house always rests with my client.

My client decided to make an offer on the “old, outdated, small” kitchen house.  After some tough negotiating, he had an accepted offer.  He was thrilled!  He told me the house makes him happy.  What could be better?  I think he is now deciding how to make the kitchen into a chef’s paradise! Perhaps you know someone who needs an advocate to help them buy or sell a house.  Please feel free to pass along my number, 608.333.4406.  I’d be happy to help!  And I promise – no preconceived notions!

Tree Hugger

Passers-by, both vehicular and on foot, stop in awe at the sweater that hugs a tree in the Westmorland neighborhood.  No doubt, it's an odd sight!  A sweater on a tree?  What's up with that?

For the past several years, the owner of the house has had a much smaller "muffler" knit around the tree trunk each winter.  This year, she went wild.  She knit squares and patches and flowers in bright, sunny colors.  As Fall approached, she could be seen at the base of the tree assembling the bits and pieces around the trunk.  As the sweater grew up the trunk, out came the ladder
so the artist could reach to the branches to knit together more parts and pieces.  And the glorious tree sweater was born. If she had a taller ladder, no doubt the sweater would reach higher into the branches.


For neighbors, its a bright spot on these cloudy, cold and sometimes gloomy days of winter.  Which is precisely why the owner created the tree sweater.  In her words, "I can't look out my window at gray and brown all winter.  I need to see something bright and cheery."  And bright and cheery it is!

She has received notes, comments from dog walkers and bikers and smiles from children.  It has brightened the days of the neighbors as well as the artist.

A reason to smile on a cold winter day since it's not everyday you see a tree wearing a sweater!

Customer Service

Great customer service isn't what it used to be, so I was pleasantly surprised the other day when I found a note in my mailbox.  It read:

"Hi! My name is Mary and I am your new mail carrier.  I just wanted to take a moment to let you know that I am new to this route and I will do my best to provide excellent customer service.  If by chance you receive mail that does not belong to you please put it back in your mailbox and do not write directly on the mail as it needs to be forwarded on.  If there is something I need to know please leave me a note. I am happy to make changes when needed.  Have a great day and I look forward to seeing you when I'm out and about.  Sincerely, Mary"

Wow!  I was shocked and delighted!  We don't think much about the mail service or the carrier who delivers it.  We expect it. The mail arrives, we sort it, pitch it, file it, etc.  Here is a person who takes pride in her work. She cares about her customers, she wants to help, she wants to provide the best service she can.  Good for her, and lucky for those of us on her new route.

In my business (Real Estate), great customer service is what sets me apart from others.  It's what I pride myself on and what my clients expect and deserve.  Sadly, it's a philosophy that has been missing in this country in recent years.  I'm glad there are still people who see the value of making a difference through customer service.  Evidently Mary is one of them!

2014 November/December Home Sales

As 2014 came to a close, home sales on the near west side of Madison continued to be healthy.  Although there was the normal seasonal downturn, between mid-November and early December, there were 50 sales.  Not a bad number for the tail-end of the 4th quarter.

Below is a list of sales through December 5, 2014.

2014 November/December Home Sales

6413 Inner Dr $370,000 12/05/2014 138 Lathrop St $360,000 12/05/2014 2920 Colgate Rd $625,000 12/05/2014 910 Hathaway Dr $232,400 12/05/2014 621 Constitution Ln $188,900 12/05/2014 1021 Lorraine Dr $150,000 12/05/2014 5603 Hempstead Rd $166,700 12/04/2014 1513 Madison St $290,000 12/04/2014 3510 Gregory St $389,900 12/03/2014 310 Eugenia Ave $197,500 12/03/2014 438 Virginia Ter $422,500 12/03/2014 6329 Piping Rock Rd $115,000 12/03/2014 4429 Hillcrest Dr $225,000 12/03/2014 6 Cheyenne Cir $390,000 12/03/2014 321 Falles Ct $325,000 12/02/2014 309 Glenway St $460,000 12/02/2014 3919 Shawnee Pass $267,500 12/01/2014 563 Chatham Ter $266,500 12/01/2014 5337 Oak Crest Pl $222,500 12/01/2014 491 Rushmore Ln $210,000 12/01/2014 621 Bordner Dr $199,900 12/01/2014 1441 E Skyline Dr $367,100 12/01/2014 1202 Frisch Rd $197,500 12/01/2014 1101 Lincoln St $752,500 11/25/2014 2615 Kendall Ave $235,000 11/25/2014 205 Highland Ave $252,500 11/25/2014 3546 Heather Crst $145,000 11/25/2014 1030 Waban Hl $379,000 11/25/2014 25 N Spooner St $315,000 11/25/2014 301 Park Way $185,000 11/25/2014 6652 Offshore Dr $125,000 11/24/2014 1121 Valley Stream Dr $140,000 11/24/2014 514 Caldy Pl $268,600 11/24/2014 1714 Fritz Ave $220,000 11/24/2014 118 S Whitney Way $181,500 11/24/2014 1406 Whenona Dr $187,500 11/20/2014 4306 Mohawk Dr $225,500 11/20/2014 206 Marion St $350,000 11/20/2014 1902 Rowley Ave $150,000 11/20/2014 22 Lathrop St $634,400 11/19/2014 1205 Pontiac Trl $166,000 11/19/2014 711 S Orchard St Unit 206 $128,100 11/19/2014 106 Farley Ave $425,000 11/18/2014 1234 Wellesley Rd $590,000 11/18/2014 3525 Tallyho Ln $425,000 11/14/2014 6410 Masthead Dr $243,000 11/14/2014 3532 Cross St $290,000 11/12/2014 5905 Old Middleton Rd $209,000 11/12/2014 3605 Sunset Dr $770,000 11/11/2014

* Prices are estimated. Actual sales price unavailable.

Fresh Start

Out with the old, in with the new.  That’s the theme this time of year as hundreds of thousands of people make New Year’s resolutions.  It seems like a good time to start fresh, to turn over a new leaf, to begin again as we enter a new year.  These folks pledge to lose weight, get organized, save more money, eat healthy, exercise more, quit smoking, quit drinking alcohol, and so on.

 

These are all admirable declarations and the timing sounds right, but according to a recent study by the University of Scranton, a mere 8% of American’s who make New Year’s Resolutions are successful in achieving them.  And only 64% keep the resolution beyond the first month. 

Perhaps there is a better way.  I would argue traditional resolutions are all “me” driven.  Maybe we should change our mindset for resolutions and become more “other” focused.  And what if we re-pledged these promises every month or even every day?

For instance, I plan to:

Be generous - give more, take less.

Be kind – do unto others…

Help – not only when needed, but anytime.

Laugh – or better yet, make someone else laugh.

While these things may not seem as grand or impressive as losing weight or saving more money, they will hopefully make me a better person and help someone else at the same time.   All the best for a new year filled with giving, kindness and laughter. What's your New Year's Resolution?

Year End Real Estate Thoughts...

As we enter December, we look back on a year that was. More than anything else, it was a year which indicated that we are returning to normal in the real estate market. How do I define normal?

The first word that comes to mind is "seasonal." For the first time since the start of the Great Recession in 2008, we saw housing inventories and closed sales more in line with the typical "end of school year" and "beginning of school year" seasonal spikes that we have been accustomed to over the past decades.

The second word that comes to mind, (actually the next two words) are: "Interest Rates." When a real estate market recovers, we have historically seen a rise in interest rates each and every time. While in most cases, the increase is a simple supply and demand type of response, this time around the feared rise in interest rates is more tied to global economic conditions and interactions than in earlier periods. During the 1978-1982 time period, a strict internal supply and demand situation tied largely to population growth caused housing, as well as just about every other segment of the consumer market, to experience rampant inflation. Economic leaders took bold steps to cool all markets... and cool they did by raising interest rates on housing loans to as much as 17%.

Will we see that same precipitous rise in rates again? There is little dispute that some type of increase is definitely in the cards for next year, however no one is predicting the double digit rates of the 80's. Instead, we will likely see small moves by the Fed possibly as early as the end of the first quarter of 2015. That said, with the lower rates, consumers are wise to recognize that a rise in rates from 4% to 5% represents a 25% increase in your interest rate...ouch! No time like the present to get moving.

Predictions for next year?  I see a very fast market early on in 2015 with inventory evaporating faster than it did in the spring of 2014. I would recommend that buyers move now to have set up a search profile to keep you abreast of offerings in our market. And for smart sellers, I'd advise to list now so you can sell your current home and also find a new one while market supply still allows you some very good selections. This is not a typical, programmed, "act now or lose it" recommendation. Those looking to lock in a new home with a great fixed mortgage rate are in a race with the Fed...a race you don't want to lose.