Pittsburgh continues to rank as one of the nation’s most stable residential real estate markets, according to a recent study.

There is a less than 1 percent chance that home prices in the Pittsburgh region will be lower in two years than they are today, according to the study released by Walnut Creek, Calif.-based PMI Mortgage Insurance Co.

“The reason that Pittsburgh has such a low risk is that prices there never exploded like they did in other parts of the country,” said David Berson, chief economist with PMI. “There were very stable home price gains.”

Only one other metropolitan area, Fort Worth-Arlington, Texas, had a smaller chance of seeing home prices decrease in two years, according to the study.

Topping the list as most risky real estate markets were Riverside-San Bernardino-Ontario, Calif. (93 percent), Las Vegas-Paradise, Nev. (91 percent), and Orlando-Kissimee, Fla. (85 percent).

The quarterly ranking, which uses data from the Office of Federal Housing Enterprise Oversight, considers only loans made by Freddie Mac and Fannie Mae. It does not include jumbo or subprime loans.

Cortesy of Pittsburgh Business Times

Most sellers have an emotional connection to their home and feel it deserves top dollar when being sold. Everyone naturally wants to get the most money for his or her product, but “sellers must not be hasty with this all-important decision,” cautions real estate expert Robert Jenson, founder and CEO of The Jenson Group. “Indeed, the most common mistake that causes sellers to get less than they hope for is listing the sale price too high.”

Jenson notes, “Listings reach the greatest proportion of potential buyers within the initial days and weeks after hitting the market. If a property is overpriced early on, it will be dismissed - or outright missed - by prospective buyers and may result in price reductions that will reflect poorly on the listing. Overpriced properties languish on the market, and most end up selling at a lower price than would have been realized had it been priced properly in the first place.”

To help would-be sellers foster maximum profits with their real estate transaction, Jenson offers these insights on the various elements that must be considered when establishing a fair, competitive and marketable sale price for a home:

1. Square footage: Total square footage is an important consideration when establishing a home’s sale price, but this is usually just a starting point for buyers who will use it to narrow down the field, but make an actual purchase decision based on many other factors. There are some general rules of thumb to know when considering a home’s price per square foot, such as smaller homes generally get a higher price/foot than large homes, and single stories will sell for a higher price/foot than a two story.

2. Location within community: Homes that back up to a busy street get, on average, 10-20% less than homes elsewhere in a neighborhood. Anticipate this type of obstacle and factor it into the original sale price to avoid inevitable price reductions down the road, which reflect poorly on the listing and will likely cause it to sell at a lower price than would have been realized had it been priced properly at the onset. Quiet cul-de sacs, golf or water frontage, lots that offer privacy are value adds that can certainly justify a higher sale price than other homes in a community - or be leveraged as an advantage against competing listings.

3. Views…or lack thereof: Whether it is the ocean, a downtown skyline, the mountains, water or some other desirable landscape, buyers are willing to pay a premium for views and a home should be priced accordingly. Just be realistic. A view that can only be had by standing on the counter from the second story looking out the window to the left simply doesn’t count, and it’s inadvisable to dupe a prospective buyer by adding this to the listing’s MLS description.

4. Upgrades and features: It’s a simple formula: upgrades = sold. For a home to sell quickly and for the price desired, it must be “finished” with as many structural and interior design upgrades as possible…and nothing’s too small to leverage in establishing a home’s price point. From crown molding to faux paining to door handles and cabinet handles/knobs with modern finishes, to more obvious upgrades such as appliances, window, counter, cabinet and floor treatments, to swimming pools and surround sound wiring…any functional or beautification enhancement to a home are considerations in establishing its true value and strategic sale price.

5. Community amenities: Guard-gated communities or those with amenities such as a clubhouse, swimming pool and/or fitness center are also elements that often raise a home’s price per square foot. When pricing a home without these benefits, know whether you are competing against other homes that do offer such value adds so that you can price your home as aggressively and competitively as possible.

6. Comparable sales: Price your home referencing sold comparables -price per square footage of other homes that have already sold in your community - up to 3-months old maximum, as looking beyond 3-months is simply not a realistic portrayal of current market conditions and may steer you in a wrong direction. It’s also as important to compare your listing to active competing listings - homes currently for sale, which is the best tool for honing an effective pricing strategy - particularly for highly motivated sellers.

7. Professional appraisal: Sellers often frown on the idea of paying for an appraisal before there’s even an offer on the table, but doing so is actually one of the most important things a seller can do in pricing a home relative to current market conditions. Want to sell the home quickly? Price it at or below the appraised value as buyers are educated, are shopping deals, and will recognize your fair price and be more apt to pay it with less haggling.

8. Current mortgage conditions: The current mortgage market has tightened its proverbial belt and many lenders now require higher credit scores coupled with higher down payments, which can cash strap a buyer who will most definitely be holding out for the best deal possible. Every seller naturally wants to get the most money for his or her product, but a savvy seller will understand the mortgage industry’s impact on the buyer and will price accordingly.

Courtesy of RISMEDIA March 28,2008

A flood of foreclosures swamped the Pittsburgh region in February, which saw the most foreclosed homes in more than two decades.

Four hundred owners lost their homes in February in the five-county Pittsburgh region, 64 more than February of last year, according to RealSTATs, a South Side-based real estate information company.

In the 22 years since RealSTATs began keeping records, no one month has recorded more foreclosures than February’s total.

Allegheny County led the pack with 222 home foreclosures in February, up 55 from February 2007. Butler and Washington counties had 16 and 17 more foreclosures in February than the same month last year, respectively.

“‘How long will it last’ and ‘how bad will it get’ are two questions many want to have answered,” said Daniel Murrer, vice president of RealSTATs, in a statement. “February’s 19 percent jump in foreclosures combined with an 11.4 percent drop in market activity is troubling news for Western Pennsylvania. We’ve seen the clouds on the horizon, the storm is now here.”

Courtesy of the Pittsburgh Business Times

Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone.

Here’s why:

Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home.

Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World.

Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent.

Home owners can itemize. That opens up opportunities to deduct a host of other items that wouldn’t be deductible if the taxpayer took the standard deduction.

Source: The Boston Globe, Leonard Wiener (03/02/08)

The number of foreclosures in the Pittsburgh area fell almost 30 percent from a year ago, and the city ranked 86th of 100 cities tracked for foreclosure rate in 2007.

Irvine, Calif.-based RealtyTrac Inc. said Pittsburgh logged 9,012 default notices, auction sale notices and bank repossessions on 4,040 properties last year.

The Detroit area had the highest foreclosure rate in the nation last year at one property facing foreclosure for every 20 households, about five times the national average of one for every 97 households. Cities in Ohio, California, Florida and Michigan dominated the metro areas with the 20 highest foreclosure rates nationwide, accounting for 15.

Courtesy of the Pittsburgh Business Times

A study of housing affordability nationwide ranks Pittsburgh 174th out of 201, according to the Center for Housing Policy.

The report, “Paycheck to Paycheck: Wages and the Cost of Housing in America,” was released Tuesday. It examines home prices in 201 metropolitan areas and the ability of workers in 60 occupations to purchase a home.

Pittsburgh ranks as the 28th most affordable housing market based on a median price of $123,000 in the third quarter of 2007 as recorded by the National Association of Home Builders.

Cleveland ranked as No. 176, with a median price of $121,000.

San Francisco is the nation’s costliest metro for a home at $770,000. California has the top six home prices with New York City seventh at $525,000.

The nation’s cheapest housing prices — $87,000 — can be found in Davenport, Iowa, and Lima, Ohio.

The Center for Housing Policy is the research affiliate of the National Housing Conference of Washington, D.C. The study can be found at www.nhc.org.

Courtesy of the Pittsburgh Business Times

Existing home prices declined nationally in 2007 - likely the first drop in median home prices since the Great Depression.

It is the first annual drop in existing home prices since the National Association of Realtors began collecting data in 1968. But NAR spokesman Walter Molony said academic sources say it is the first annual drop since the Depression.

For all of 2007, the median price of existing homes in the U.S. came in at $218,900 — down 1.4 percent from $221,900 in 2006.

The numbers illustrate the continued housing slump in the U.S. and markets such as Phoenix, Las Vegas, Southern California and Miami.

Courtesy of PITTSBURGH BUSINESS TIMES 1/24/2008

Keeping a multi-purpose fire extinguisher in kitchen and on each floor of the house is a must. We see news reports about homes that catch on fire by accident and think “that won’t happen to me”. This is the time to be prepared and think of the “what ifs”. If you do have extinguishers then please make sure you inspect and recharge if the pressure is below the operating range. It also helps to have an escape plan for your household. Review the plan every so often so that everyone knows what to expect if the unexpected ever happens.

Be safe and I wish everyone a blessed and prosperous January!

 I am sitting in my office on December 31st and just solidified a contract on another listing, what a great way to end the year!! I thought I would end the year on a good note from our MLS service, West Penn MLS, and once again put to rest the doom and gloom that you are hearing on the major TV networks about the housing market. Although it is true in some markets I think it is important that we focus our attention on the Pittsburgh region and what we as Realtors have seen and what we expect in the upcoming year. The fact still remains that sellers need to have their properties in tip top shape before putting them on the market and they must be priced properly! Buyers are still getting good deals and the interest rates have been holding steady.  I hope you enjoy the information and like always please do not hesitate to contact me with any questions or concerns. Lastly I would like to thank everyone with whom made 2007 a very memorable year for me and my family. I appreciate and value the relationships which I have been blessed with and I wish everyone a Blessed and Happy New Year! ============== DID YOU KNOW      DESPITE WHAT YOU HEAR FROM THE MEDIATHE GREATER PITTSBURGH AREA REAL ESTATE MARKET IS DOING WELL  ·       New listings are down only 4.30% and our market is not over flooded with listings.·       Closed listings are down only 2.80% and not in the 20% to 30% range as many parts of the country·       Average days on market are up only 4.30% unlike many parts of the country where the average days on market are up by 40% to 50%·       The average price of sold properties is up 3.20% from $146,302 to $150,962 *The above comparisons are made based on the same period last year.   SPREAD THE WORD

This was a recent article in the Pittsburgh Business Times dated 12/14/2007. Please take the time to read it over and contact me with any questions or you can post your comments for all to view. It demonstrates just how hard it really is to sell your home on your own, even a major player in the Pittsburgh Real Estate market such as Coldwell Banker got out of that end of the business and has moved away from the Blue Edge style of real estate marketing. A good, knowledgeable real estate agent with a written market analysis and a written marketing plan is still worth the money that a FSBO thinks they are saving.  Good real estate agents don’t deliberately ignore FSBO’s or have some scheme to steer customers away from a perspective buyer we just focus on helping our existing clients first and foremost. A FSBO like our competitors are just that, competitors, just like WalMart is to Target and so on. In the contrary when we have a perspective buyer and we as agents feel a FSBO has a home which might fit the buyer’s needs then we contact the FSBO and ask if they are working with agents, most usually will. Nobody forces anyone to list their home with an agent but in the long run when you consider what a good, knowledgeable agent will do for you, it’s worth the money! Real estate like most industries has different levels of education which an agent can obtain. There are varying designations and along with some of the higher designations you also have to have the hands on proven experience. The CRS designation which I hold is one of the highest and post prestegious designations because it requires both educational and proven experience in selling homes.  For more information about a CRS designee then visit www.CRS.com and you will understand why the designation is a symbol of excellence in the real estate industry.

Enjoy the article!!

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Solveig Peters, a postdoctoral associate and academic advisor at the University of Pittsburgh, has a theory unrelated to her academic position.

“I’m convinced that the Realtors are trying to undermine anyone who is trying to sell their own house,” said Peters, who has been trying to do just that with her Murrysville home for the past six months.

After months of frustration — facing resistance from Realtors who, she said, steered clients away from her house — Peters is giving up the fight.

“I’m going to take it off the market,” she said. “I feel like they got me no matter what.”

Several years have passed since the emergence of the Internet helped lower barriers for people interested in selling their own homes. And the for-sale-by-owner concept, long dismissed as ineffective by real estate agents, has gained some credence among consumers.

FSBO sales make up only a small fraction of total home sales, according to the results of a survey released last month by the Washington, D.C.-based National Association of Realtors.

About 12 percent of all transactions in 2007 were for-sale-by-owner, according to the NAR, down from a record of 18 percent in 1997.

The percentage of for-sale-by-owner sales often decreases in a slow housing market as owners look to agents to help sell their homes.

At least one local real estate firm has dropped its foray into the FSBO industry.

Several years ago Coldwell Banker Real Estate Pittsburgh launched an effort dubbed Blue Edge in an attempt to capitalize on the independence of people working without an agent.

Blue Edge listed homes on its Web site and in the West Penn Multi-List but didn’t offer the personalized service of a standard real estate agent.

And instead of a regular real estate commission of 6 percent or 7 percent, homeowners paid a 2 percent commission to use Blue Edge.

But only about a quarter of the homes listed with Blue Edge sold over the program’s four- or five-year life, said George Hackett, president and chief operating officer of Coldwell Banker Real Estate Pittsburgh.

“It taught me one thing,” Hackett said, “which is something I always knew — how important a Realtor is.”

bsemmes@bizjournals.com | (412) 208-3829