The complete press release from the GNAR can be found here. The gist of the report though, is that closings are down 28.7% in March, compared to March of 2007.

The following is also in the report.

The median residential price during March was $178,388$160,573. That compares with median residential and condominium prices at this time last year of $173,400 and $153,400 respectively. The average number of days on the market for a single-family residence was 80 days.

As bad as things are supposed to be, home values are still appreciating in Middle Tennessee. Just think how much they are going to appreciate when this “crisis” is over.

If you are waiting to buy for any other reason than you have some work to do credit-wise, you are making a huge mistake.

There have been lots of confusing reports over the last few days concerning Real Estate and the housing market.

First, we received this positive news, telling us how home sales increased in February.

Then yesterday we found out that home prices declined.

Today the big news is that new home sales, or new construction, saw a decline in the month of February.

So what does all of this mean? As I have said many times before, everything having to do with economics is cyclical. Federal Reserve Policy certainly had an effect on the housing cycle. By keeping the Federal Funds Rate low for way too long, the Fed encouraged mortgage lenders to issue credit to people that were not credit worthy. As a result of that, demand for homes increased. In any market, whenever demand increases, prices will increase. There was so much demand during the housing boom, that increases in supply (new construction) never had the effect of reducing price.

Well not until now, that is. When people began defaulting on loans, two things happened. The amount of existing homes on the market increased substantially. Also, as a result of the boom/bubble, too much new construction had been built. That accounts for the supply end of the equation.

Another result of foreclosures was a tightening of credit standards, which equals less demand.

Regardless of what the product is that you are selling, when you have an increase in supply and a decrease in demand, you get a decrease in price. It’s called the law of supply and demand. It’s really just simple economics.

So when I saw that home sales had increased in February, I knew without a shadow of a doubt why. I knew that it was because sellers were reducing their price.

So is any of this a catastrophe like the media and national politicians are making it out to be? Does this “crisis” require a government solution? The answer to both of those questions, in my opinion, should be no. The cycle should be allowed to run it’s course and work itself out on it’s own. Full disclosure here, I am a member of the National Association of Realtors, and the trade union, being a huge lobbying organization, has a much different opinion. But they are wrong. There is nothing catastrophic about business cycles and there are lots of lessons that need to be learned as a result of this one.

Lastly, we should never forget that all Real Estate is local. There is no such thing as “the Real Estate market”. Real Estate actually consists of many local markets, and this market in Middle Tennessee has never been in a crisis. Prices have not increased like they did in previous years. But they have not decreased either. Are we selling less homes? Sure. But that has more to do, in my opinion, with tight credit standards, than anything else. This market is still good. It’s a good time to buy and it isn’t that bad of a time to sell. If you can find a Realtor like myself, that is willing to give you the same quality service for a 4% commission, saving you thousands of dollars, you probably ought to go with that guy. Just saying.

From Bloomberg.com:

March 19 (Bloomberg) — Fannie Mae and Freddie Mac agreed to expand their purchases of U.S. mortgages and related securities after the Bush administration reduced the amount of capital the companies are required to hold as a cushion against losses.

The government-sponsored enterprises had their biggest two- day gains on record in New York Stock Exchange trading as their surplus capital requirement was cut to 20 percent from 30 percent by the Office of Federal Housing Enterprise Oversight. The companies, the largest sources of money for U.S. home loans, also agreed to raise a “significant” amount of new capital.

The goal is to “help restart the housing engine that powers our economy,” Fannie Mae Chief Executive Officer Daniel Mudd said at a news conference in Washington today. Freddie Mac CEO Richard Syron added: “This is what the GSEs were put in place for, to deal with situations like this and we will deliver.” continue reading

This kind of goes without saying, but I will say it anyway. Now is a really, really good time to buy. Interest rates are low. Prices are down. What are you waiting for!

From REALTOR magazine:

Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.

• Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.

• Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.

• Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.

• Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

As for the location part of it, Kingston Springs and Pegram has excellent schools. Harpeth High which serves both communities, was actually one of only four schools in the whole state to win the Blue Ribbon Award last year. Comparing what it would cost to rent in the area is a moot point if you choose the right location. For instance, over the last four years that I have lived here, I have seen my home’s value increase about 20%. That’s wealth that I would not have earned had I rented.

The one thing I believe that anybody in any business needs to do to be successful, is to attempt to see things through the eyes of the consumer, the customer, the client. I really don’t think a whole lot of that is done in the real estate business today. For some reason, Real Estate professionals have instead tried to convince the public to think like them. Rather than giving the same amount of service for a lower price, companies today are instead offering gimmicky service ideas for a higher commission.

In my opinion, that is the wrong approach. What the people need and want today is good quality service for a lower price. Now there are some companies that will charge you a flat fee to put your house on the Multiple Listing Service. Those companies offer you no service, but they at least give you exposure on the MLS, which is certainly important. I am not offering that. I still believe in the importance of having a full service Real Estate agent to market your property and handle all of the particulars, so I highly recommend you stay away from those “flat-fee MLS” companies. What I am offering though is the exact same quality service that you would receive from any Real Estate professional, but at a lower cost.

First off, it is important to understand that in Tennessee, all commissions are negotiable. Most agents though, charge around 6%. That is 3% for the buyer’s agent, and 3% for the listing agent. If the listing agent happens to find a buyer themselves, a buyer that is not represented, that listing agent ends up getting the whole 6%. That’s $12,000 you are paying the agent to list and sell a $200,000 home. Do you think that is a good deal? I doubt you do. In fact, you almost never hear of a seller happy with the service he received for the price. He might be appreciative of the service, but certainly not the price. Of course it is imperative that any home listed offer 3% to a buyer’s agent. That’s why most For Sale By Owners are even willing to offer an agent 3%. Sure it is true that real estate agents are ethically bound to help their client, regardless of how much money they are to make, but let’s get real. We all know that to compete with the other properties in your area, it is critically important to offer 3% to a buyer’s agent.

So where am I going with this? Knowing that today’s consumer is looking for value, I am willing to list your home, and offer you the same quality service that you would get from any agent, at a 4% commission rate. That is 3% for the buyer’s agent, and 1% for me. Yes, I will list your house, spend money to market it, and do it all for the potential of only making 1%. Not only that, but if I bring a buyer myself that is not represented by another agent, I am willing to wave one of those percents and settle for only 3%. On a $200,000 home, that is a potential savings of $6,000. On a $400,000 home, you could potentially save $12,000. Am I crazy for offering this? Are other agents going to hate me for messing up their good easy living? Perhaps. But as I said before, to last in any business, you have to think like the consumer. And the fact is, consumers feel like they are getting ripped off when they pay 6% (assumption, all commissions are negotiable), regardless of how happy they are with their agent’s performance.

So rather than pay too much for the services of a competent Real Estate professional or pay a flat fee for absolutely no service, contact me. I will do the same thing other agent’s do and sometimes more, but unlike them, I will also be nice enough to let you keep a little money in your pocket.

So if you live in the Nashville, Pegram, Kingston Springs, Fairview, Burns, White Bluff, Ashland City, Dickson, Brentwood, Franklin or any other surrounding area in Middle Tennessee, contact me, that is unless you don’t like saving money.

Once again, government isn’t the solution. Government is the problem.

Justin does a great job of explaining the way things work in America these days.

So, for those of you who are still trying to catch up, this is how things work in America. The government decides something in the economy isn’t “fair”. The government then enacts some sort of legislation to fix the problem. This legislation causes a new, much worse problem. The government blames capitalism and calls for more of the same bad legislation to fix things.

I really wanted to take more than that excerpt. The paragraph that follows what I lifted, is of equal importance. Please read the whole thing.

Personally, I am glad that more people were able to get loans and that interest rates were low. People were given an opportunity. Some didn’t do so well with the opportunity, but I still think it is good that they got the opportunity.

Here is a good post, from Jeff Carlsbad’s blog for first time buyers, that lays out some good reasons for using a buyer’s agent.

The following is an excerpt.

So why is having an agent working for YOU important?

• You want someone who is looking out for your interests as the buyer; asking questions, obtaining information, and making sure YOU understand the implications of all that you do in the transaction.
• You want confidentality. An agent working for you will keep information s/he learns from you private and not share it with the seller or the listing agent (e.g., you might tell your agent that you are willing to pay full price if you need to, but want to start lower - this could really damage your negotiating if this were shared with the listing agent and seller, couldn’t it?).
• You probably want and need assistance determining an offer strategy. An agent working for you can help you determine the BEST price to offer based on current market conditions (although it is YOUR decision). An agent who is not, who is working for the seller, cannot help since their job is to help the seller get the best price, not you. Make sense?

As a consumer, it is in your best interests to have someone working for you during the transaction. So keep this in mind as you think about who you want to help you buy your new home.

Remember, the person on the sign represents the seller, not you.

While searching for articles about the importance of hiring a buyer’s agent, I found this football comparison.

Think of the Listing Agent of a home as the coach for the “home team.” Now think of the Buyers Agent as the coach of the “Visitors Team.” Before 1993, the coach of the home team tried to get his team to win and the visitors coach could give compromising and confidential information (like reasons they want the house, motivations, final offer/price) to the home team to “win.” Now after 1993, the buyer’s agent, or the only goal of the coach for the “visitor’s team” is to help his team win the game by providing the following 6 characteristics:

1.“Undivided Loyalty” – The agent is prohibited from advancing any interests harmful to the client’s interest.

2.“Obedience” – The agent is required to act, following and abiding all lawful instructions, subject to the client’s continuous control and not making decisions for that client without expressed permission

3.“Reasonable care and diligence” – The agent is required to protect the client from foreseeable risks of harm or damage.

4.“Confidentiality” – The agent is prohibited from communicating personal information about the client that was given to or acquired by the agent.

5.“Full Disclosure” – The agent is required to disclose honestly all information concerning the transaction that might affect the decisions a client makes.

6.“Accounting” – The agent is required to promptly report to the client all money and property received and paid out.

I have already explained in this post, why it is important to hire an agent to represent you on the buying side of the transaction. But I wanted to elaborate a little more, because I just don’t think most people get it.

First off, the service that a buyer’s agent performs is free. It costs you nothing. If you want to look for homes on your own, by all means do so. In fact, I have provided you the way to do just that on my website. But rather than attempting to contact every single seller’s agent, just tell me which homes you are interested in and I will arrange times for you to see every one of them. I will walk you through every step of the process. If you don’t use me to help you and try to contact these agents on your own, you are walking into the transaction unrepresented. The seller’s agent is contractually bound to represent their client’s interest only. They are not your agent, but only work for the seller. In a situation like that, you don’t have an agent.

But lets say you are just looking and not ready to make an offer. I can almost guarantee you that every agent you contact is going to try and make you their client. Why not just skip all of that, and allow me, someone who is working for free, to help you in the first place?

Don’t be afraid of me as if I am some type of vacuum salesman. The fact is, I can’t sell you anything. My job is to work in your best interest, and your best interest always means allowing you to make this very important decision without influence.

You might wonder why I am offering you a free service, and why anybody would do such a thing. The fact is, I do get paid if a deal is closed, but my commission is paid by the seller, not you. It is important to remember that if you work with a buyers agent for a long period of time and then stop in somewhere and buy a home without your agent, your agent gets nothing. Being good people, you would never want to do that to someone that has been working hard for you, would you?

People, the bottom line is this. If you are relocating to this area, or you are a first time buyer, hire a buyers agent. It’s a free service. Hopefully you will hire me, but regardless, hire somebody. Never enter into a real estate transaction unrepresented.

What a game! It will certainly be remembered as one of the best of all time. Both defenses were outstanding, but New York’s ability to put pressure on Brady was the difference. If Brady wasn’t getting sacked, he was being knocked down. In spite of the Giants defense though, Brady was still able to drive his team down the field and hit Moss for what could have been the game winner.

But the Giants offense, which had also been shut down, due to an outstanding effort by the New England D, would not be denied. The Patriots defense made Manning and the G men earn it though. The key play was when Manning somehow avoided a sack and slung the ball downfield. The pass was somehow caught by Tyree, who used his helmet to snag it. The winning touchdown to Burress ranks up there with Montana to Taylor in Super Bowl XXIII. It was that big, and maybe even bigger, considering the Patriots had one of the best teams ever.