Home Values and Controlling Supply

January 3, 2013 by

I once lived in a community with mature trees, decent landscaping, and a river with wood pedestrian bridges running through the middle of the property.  We had excellent access to large roads, zero traffic issues, and a great location.  Despite these amenities, units sold for tens of thousands of dollars less than other comparable communities nearby.  How could this be?

The answer is simple if you agree that value is an opinion that becomes tangible only when an agreement between buyer and seller is made.  Ultimately, value is in the eye of the beholder.  Sellers within the same community compete against each other for the buyer.  This is natural of course, since sellers normally have no relationship or obligation to the other.  I am no scholar or game theory, but I am of the opinion that this situation is detrimental to the community and the sellers.  Is it not possible to compete with other communities instead of one another?

When a real estate developer markets a new community to prospective buyers, his competition is another community, not himself.  Although difficult, if the community can coordinate with their sellers, they may be able to influence supply.  Difficult, yes but I still think possible, especially in smaller communities.

Filed Under: Raising Home Values

The Lonely Mailbox

May 6, 2012 by

Why do entrances get all the glory?  Or at least the Annual flowers and landscaping lighting?  Mailboxes are pitifully neglected, and yet the mailbox is the one place that a homeowner is most likely to stop before driving into the garage and closing the shades.

I am of the opinion that mailboxes should be glamorized and adorned with  some landscaping and annuals.  A concerted effort should be made to prevent rust or other stains, and the paint fresh.  Putting makeup on this previous blemish might just brighten up the remainder of a homeowner’s day.

Filed Under: Raising Home Values, Raising Morale Tagged With: , , , , , , , ,

Mitigating Foreclosures

May 6, 2012 by

I’ll preface this post by saying that my comments are mere conjecture… so far:

If you live in a community, chances are good that at least one homeowner is in the process of losing their home.  The HOA is unlikely to recoup any monies since the mortgage company holding first position on the deed will extinguish all subordinate claims.  And banks are the worst homeowners.

I have watched as a Bank foreclosed on a homeowner, refused to pay HOA dues, then foreclosed on themselves to avoid paying any of their debts.  The legality although dubious was not worth the Community’s resources to challenge, although I believe we lost more than 4 grand. Additionally, the neglected home is sold at significant discount to the least qualified candidate.  Any board knows that 1 or 2 foreclosures can have drastic consequences.

Is there another way?  With decisive action can a Community control the foreclosure process to their advantage?  Is it conceivable for the Board to purchase the home from the Bank even before a short sale listing?  The Community by investing in their own community has prevented unconcerned outside players from acting against the neighborhood’s interests.  Obviously there is some risk involved; the home needs to be improved to market condition, but who is better informed on homes values in the neighborhood than the board?  If the home sells for market value to a solid homeowner, then breaking even on the project could still be considered a success.  There might even be a little extra for… Reserves.

 

Filed Under: Raising Home Values Tagged With: , , , , , , ,