Pending Reassessment in Town of Egg Harbor, Wisconsin

Pending reassessment for the Town of Egg Harbor do to decline in property values.

 

Listen to my latest blog for details!

 

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Good News for the Housing Market

My friend, Laura Seefeldt, Johnson Bank, shared the following good new with me today. Even with the stock market news, there is some good news for the housing market!!!

"On The heels of yesterdays 500+ drop in the DOW, unemployment figures were released this morning with surprisingly good results. 117,000 new jobs were created in the private sector last month, much better than expected.　The result was a lowering of the unemployment rate to 9.1% from the previous months 9.2%.　 So the roller coaster continues and I thought I would share a rate sheet today to give you an idea where rates stand. Historically low!!"

Home loan interest rates are still VERY APPEALING... 15 year fixed at 3.4% with jumbo loan rates on 15 year fixed at 3.875%!　 THIS IS GOOD NEWS FOR THE HOUSING MARKET...NOW IS THE TIME TO BUY!

Real Estate Statistics & List to Sale Price Ratios

When I talk housing statistics, I commonly refer to the "list to sale price ratio".　Why is this so important?　The list/sale price ratio tells us a lot about the market conditions. For instance, a few years back, when the market was strong, we saw most properties selling at 95% to 100% of list price. When this percentage began to fall, it was a clear indicator of falling values. A smart REALTOR, who continuously watches housing trends and stays on top of the list/sale price ratios, will be able to provide the best advice to both Seller and Buyer clients. With Seller clients, we know pricing is the key to selling. If I see list/sale price ratio dropping, I know it is time to look at the pricing of my listing inventory and make recommendations to my Seller clients to better position them in the market we are given.

I do caution Buyers from using the list/sale price ratio as their sole source of establishing a price to offer on a property.　The current average list/sale price ratio for properties sold in Northern Door County is 88.52%. Knowing the trend, I had my Seller client’s price ahead of the curve. Because of this, my average list/sale price ratio so far this year is 93.95%. This means I am netting my Sellers 5.43% more than the market is giving AND we are selling faster with less complication. For information on complications that occur with contracts, see my blog, "Housing Trends & Contract Failures".

Housing Trends & Contract Failures

According to a recent report on National Housing Trends put out by the National Association of REALTORS (NAR), purchase contract cancellations caused the slip in residential home sales reported in June. Lawrence Yun, NAR chief economist, said, “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month.” Yun further explained, it is unclear all the reasons why for the contract cancellations, but “problems including tight credit and low appraisals” are contributing factors. (REALTOR.org. Washington, DC, July 20, 2011).

While, I agree with Mr. Yun, the other less apparent reason for purchase contract cancellations is the uneducated participants involved in the transaction. Now, more than ever, it is vital that you work with a REALTOR who is educated on the market in which they represent. The best way to find that REALTOR, is to look for the REALTOR with the highest sales volume. Experience goes along with high sales volume. Nationally, the average REALTOR sells only 7 properties per year.

Here’s a thought for you………… If you’re told that you need surgery, would you choose a surgeon who has performed the surgery 7 times or one who has performed the surgery hundreds of times? I know that I’d choose the latter.

When you’re interviewing a REALTOR to represent you, ask how many properties they have sold in the last 5 years. Then ask them to show you the sales. I can almost guaranty you, by selecting the REALTOR with the largest sales volume, your transaction will make it to the closing table and it WILL close.

DOOR COUNTY REAL ESTATE MARKET UPDATE

Quick Market Comparison for Northern Door County for Jan 1, 2011 - June 8, 2011*

As of June 8, 2011, the number of inland home sales in Northern Door County was up by 24% with the average sale price remaining about the same as in 2010 ($260,000). Waterfront home sales were down slightly, but the average sales price was up from $544,389 in 2010 to $667,863 this year. Residential condominium sales remained nearly the same and the average sales price was $310,707 (up from $289,188). SEE DETAILED INFORMATION HERE!

*This representation was prepared by Connie Erickson, Door County Realty, Inc. from the MLS statistics on 6/8/2011 and is based on data supplied by the Door County Board of REALTORS Multiple Listing Service. Neither the Board nor its MLS guarantees or is in any way responsible for its accuracy. Data maintained by the Board or its MLS may not reflect all real estate activity in the market. All REALTOR member agencies report all their sales to the MLS unless directed otherwise by a seller. Therefore, there may be some sales not included in these statistics. Private sales (those with no REALTOR involvement) are not included in these statistics.

Yes, You Can Finance Vacant Land!

YES, YOU CAN FINANCE VACANT LAND!

There are lenders who prefer not to finance vacant land, however, Robin Sodd at North Shore Bank in Sister Bay will! Their current lot loan program requires a minimum of 20% down. The loan is a 3 year adjustable rate mortgage (ARM) at 3.50%. The loan can be amortized up to 15 years if under $100,000. The interest rate of 3.50% can adjust a maximum of 2% per year after the 3rd year and has a lifetime cap of 6%, so the interest rate will not exceed 9.50%. (Note: These terms are as of May 11, 2011 and are subject to change. See lender for APR.)

A letter from the Village, Town, or County Zoning Department (whichever applies) indicating the property is "buildable" is required. In addition, a soil test confirming the type of septic system the property will support is also required. If you do not plan to build right away, Robin said the soil test could possibly be waived. A current survey of the property may be required.

For questions pertaining to vacant land loans, contact Robin Sodd at: rsodd@northshorebank.com

BIG Zoning Changes Affect Shoreland Owners!

There are new rules coming that will affect shorefront land owners!

All properties that fall within shoreland zoning jurisdiction will be subject to the new rules. The new NR115 is in effect now, however counties have until February of 2012 to have an ordinance in place. The new ordinance could be in place anywhere from November 2011 to that February 2012. There may possibly be an extension from the State to that deadline.

The following is my understanding of of the new rule after listening to a presentation given by Kay Miller of the Door County Zoning Department:

1. There will be no clear cutting on a shorefront parcel, nor is there currently. The rules will allow tree cutting/trimming of 30% of the lot or 200' whichever is less for viewing/access corridor. No additional cutting is allowed.

NOT ACCEPTABLE CLEARING ACCEPTABLE CLEARING

2. The height restriction will be 35’ above grade. The Door County Zoning Ordinance (DCZO) already has a 35' height restriction and a 28’ height restriction on lots less than 90' wide.

3. The biggest eye opener for me is the impervious restrictions which currently equals not more than 45% for most of the shoreland zoning districts under the DCZO. Impervious means anything that is not green, so the current rules say that you can use 45% of the property to build, put in driveways, patios, etc., the remainder must remain "green." The new rule says that you can only have 15% of the lot in impervious area. "Green" means anything that is green: vegetation, garden, trees, grass. One can go as high as 30% of impervious area with mitigation, and the new rules will never allow any more than 30%. This would apply to any proposed projects. If you are over the allowable "Impervious Surface Ratio" you may keep what you have until some proposed change triggers action. Mitigation will require an agreement to be recorded on the deed.

4. There will be new rules regarding set back averaging. The building set back requirement is 75' from the Ordinary High Water Mark (OHWM). Under current rules, this 75' set back can be lessened should there be an existing dwelling on either side of you, but within 100' of your building site, that is located less than 75' from the OHWM. This means you could have a home on one side and a vacant lot on the other side. The new averaging procedure requires that there be dwellings on both sides and within 100' of your building site, in order to use the averaging procedure.

If you are considering...
-purchasing waterfront land and building, you may want to ACT NOW as the new rules may limit what you have in mind!
-adding on to your existing waterfront home/cottage/structure, you may want to ACT NOW!
-making any type of changes whatsoever, you may want to ACT NOW!

As always, speak to the Zoning Department and a builder to see how these changes will affect you now or in the future.

To find out more about this, I encourage you to go to: view the Door County Zoning Ordinance or call the Door County Zoning Department at 920.746.2323 and ask for Kay Miller or the appropriate zoning administrator for the town you are requesting information.

If you have a family member or friend who is planning on building on a shorefront/lakefront lot or expanding their current home or cottage, send this to them...they'll be glad you did!

Home Inspection - What will it Cost?

When purchasing a home, having a home inspection is a good way to insure there are not major defects with the property and it's a good way to learn about the property you are purchasing and how things work. Below, Gene Sunstrom of Second Opinion Home Inspections, answers common questions that I receive from Buyers.




1) What is the cost associated with home inspection?
The inspection fee for a typical single-family house varies as does the cost of housing. Similarly, within a given area, the inspection fee may vary depending on a number of factors such as the size of the house, its age and possible optional services such as radon testing or thermal imaging. The cost of a home inspection for an average home of approximately 2,000 square feet would be $300.00.

While finding out the cost of a professional inspection service is a great idea, a far better idea would be for customers who call to ask "What are the qualifications of the home inspector who will be inspecting my home?" because the answer to that question can determine how much a home inspection can save you both short and long term.

2) How long does it take?
The length of time that a home inspection takes varies with the size, age, additional testing, etc. A 2,000 square foot home normally takes from 1 ½ - 2 hours on site and an additional 1 hour to complete the written report.

3) Should Buyer be there?
We encourage the buyer to attend the inspection if possible; this provides an opportunity for the inspector to explain first hand issues discovered or possible suggestions to reduce maintenance on the home in the future.

It is often not practical for the buyer to attend; most home inspectors now have reports that are computer generated with digital images to accurately display problem areas or recommended improvements outside of the structural integrity of the building. These reports can be generated within hours of the onsite inspection and delivered by email to buyer and the buyer’s agent.

For answers to specific questions, you can contact Gene Sunstrom at:secondopinion@charter.net or visit his web site: www.secondopiniondc.net

HOME SALE STATISTICS

The Nation Association of REALTORS, in their April monthly Wisconsin Housing Report, reported sales of existing homes fell 18.5% in March compared to the same time last year. One has to be cautious when looking at these statistics because the stats are being compared with the same time last year when the home buyer tax credit was offered. This really is not an apples to apples comparison.

Existing home prices in the Northeast dropped 11.2%. It is important to remember that real estate markets are local.

The unemployment figures in Door County for the month of March improved slightly, but will improve largely as the summer approaches with the seasonal activity of the vacation market. Those who are buying recognize the opportunity to capitalize on the excellent interest rates and the fact that our market sale prices have decreased approximately 5 to 10%.

My personal activity is greater than the years’ before, and I anticipate a much better year in 2011 than 2010. While I remain cautiously optimistic, if one is priced correctly and teamed with a REALTOR with an aggressive marketing program, those combinations will obtain the Contract for Sale. The next and final step is getting it closed. So when you are looking for a REALTOR to select, ask the REALTOR how many Contracts (accepted Offers) they have had this year AND how many of those contracts closed. My contract to contract closed ratio, year to date is 100%.

REMODELING COST VS. VALUE

According to a recent article in "The Residential Specialist", the top home improvement projects that gave the highest return on investment in 2010 were: entry door replacement, garage door replacement, siding, wood deck addition, minor kitchen remodel, window replacement, attic bedroom remodel, and basement remodel. (March/April 2011) Eight of these ten items were exterior replacement projects, which "generally perform better because they are among the least expensive projects to complete and are nondiscretionary improvements that contribute to curb appeal, a strong subjective factor among homebuyers" the article explained. Two home improvements projects that recouped the least were home office remodels and sunroom additions.

Pier Registration Deadline in April 1, 2011

Waterfront property owners with larger piers must register their piers with the DNR by April 1, 2011 to ensure their piers will be "grandfathered" from new size limits adopted by the State of Wisconsin in 2004.

Generally, a pier will need to be registered if it:

(a) is wider than 6 ft, but less than 8 ft in width
(b) has a platform at the end of the pier that has a surface area of less than 300 ft (w/ a max. width of 10 feet)
and/or
(c) more than 2 boat slips for the first 50 feet of shoreline frontage and 1 boat slip for each additional 50 feet of shoreline frontage.

To register a pier, a waterfront property owner must complete and mail a registration form to the DNR. To obtain a copy of the registration form and to find out more information about which piers need to be registered, please visit the DNR's website at: Waterway & Wetland Permits: Piers, Docks and Wharves.

DOOR COUNTY REAL ESTATE MARKET UPDATE

So far this year, Door County’s Northern Door real estate market is showing a slight decline compared to last year. As I look at the sales statistics for the period of January 1 through March 17, there were 38 closed sales reported to the Door County Multiple Listing Service in 2010 and 28 closed sales reported this year. On a whole, the number of reported sales is less than last year, however, inland home sales are nearly double; 7 in 2011 vs. 13 reported this year. The stats also indicate the list price to sale price ratio is up slightly for inland homes. Last year, during these first three months, the sales reported were at 89.96% of list price. This year, the ratio is up to 91.73%. This does not mean the values are up, it merely indicates that the listing prices are closer to what Buyers are willing to pay.

I will be updating my market stats after the first quarter stats are in. Watch early April for the updated report on my web site.

As you know, I LOVE TALKING REAL ESTATE…So if you ever have questions about Door County’s real estate market, do not hesitate to call me.

WELLS IN DOOR COUNTY

Municipal sewer and water are available in the Village of Sister Bay and in the City of Sturgeon Bay. Private wells are required in the rural areas of Door County as well in the towns and villages that offer municipal sewer only. I recently had the opportunity to ask one of Door County’s most reputable well drillers, Euclid Well Drilling, common questions on wells that I receive when selling real estate.








Q: What does a well cost?


A: On average, a complete new well and pressure system runs approximately $8,000.00.


Q: How deep are wells in Door County?


A: The average depth is 240’. However, each area can be different…from 100’ deep in Little Sturgeon to over 300’ deep in the Monument Point area.


Q: Are there areas in Door County that require deeper wells than other areas?


A: The Department of Natural Resources requires different amounts of casing in different areas.


Q: How long does a well last?


A: Wells should last many, many years. It is the pressure system that wears out. The pumps last anywhere from 10 to 20 years.


Q: What is “blue shale”? How does it affect wells? Where is it found?


A: Blue shale is soft rock. We normally put our casing below the blue shale since it is soft and will flake off and actually make the water cloudy. It can collapse and fall in on the pump. It is usually found near the shorelines.

Mark and Cindy Euclid of Euclid Well Drilling can be contacted by email at: cin1227@centurytel.net

DOOR COUNTY SEPTIC SYSTEM LAW

When selling and purchasing Door County real estate it is important to understand local ordinances and how they will impact the transaction.

Door County has an ordinance that requires existing private septic systems to be evaluated prior to the transfer of ownership. It is the seller’s responsibility to have the system inspected and pays the costs associated with the inspection. A licensed soil testing does the inspection and submits a written report to the Door County Sanitarian’s office. The sanitarian will personally inspect the system and make a final determination of passing or failing.
According to Chris Olson of the Door County Sanitarian’s office, over the past 5 to 10 years, the ratio of passing to failing systems has been approximately 80:20. Of the 20% of systems that failed, approximately 80% of them failed because they were installed prior to 1975 and were in unsuitable soil conditions. Chris also pointed out that steel holding tanks over 20 years old are also likely to fail.

If after an inspection, a system is deemed failing, the property owner will be required to replace the system within one year of the inspection date. When buying or selling Door County real estate, I can help you through this process and make sure that we properly deal with the inspection in an Offer to Purchase.

Lender Rules Are A Revolving Door

According to Lawrence Yun, Chief Economist for the National Association of REALTORS, real estate sales in the US in 2010 were equal to the number of sales in 2000, yet the US population dropped by 27,000,000 since 2000. (2011, REALTOR magazine). As I wrote in my January newsletter, the Door County MLS reported a 5% increase in the number of reported sales in 2010 over 2009, however both years maintained 26% of properties listed for sale actually sold.

After 27 years in the real estate business and selling 60 to 100 properties a year in Door County, I'd like to think that there is not too much the I haven't seen. However, these last couple of years it has been hard to get a handle on lenders and their financing requirements. This is a revolving door of rules and regulations. If your credit score is 640 you might get a loan, but you are in a better position if your score is higher. Now, more than ever, it is vital that you speak with a local lender before you move forward with looking at real estate, even if you have cash for a big down payment. I recently had a well qualified buyer with cash to pay for a property he wanted to purchase. However, he wanted to financing the purchase. The offer was made, subject to financing (which we anticipated would happen fast due to his cash position), but on the last day, he was turned down! Even if you're "golden", have cash, and good credit, I strongly recommend....see a local lender first. When you're ready, call me first. I work with local lenders daily and can help you through the process.

Real Estate is "Local"

Yesterday we attended our monthly Door County Board of REALTORS luncheon and Bill Malkasian, President of the Wisconsin REALTORS Association, spoke to us. I love listening to Bill as he is always so well informed. I wanted to share with you some of the information he shared with us.

First, as of February 1, 2011, your Wisconsin home must have Carbon Monoxide Detectors. Dubbed as the "silent killer", carbon monoxide claims more then 2,000 lives each year.

Bill emphasized the fact that real estate is "local". Madison, WI market is not the same as the Door County, WI market. Unfortunately, the press does not always report it that way. It is an important concept to understand and now more than ever, it is very important to choose a REALTOR who is familiar with the market and can interpret it for you. I will talk more about that later, and exactly how you can choose that REALTOR.

Bill stated that there is a 13.5 month inventory average in the State; it is far different in Door County. The upper end second home market, he said, is the most challenged of all categories in the State (Door County had more of these sales in ’10 than ’09 and you can always see the whole picture all the way back to ’08 on www.ConnieErickson.com). Bill indicated 2011 will be a better year because of the certainty of the tax code as it relates to capital gains. In 2110, the average sales price for the State was $189,900. He explained Freddie and Fannie cease to exist, Bill said, “they will exist in 5 years and be replaced due to privatization."

While Bill and I know you’d like a better report – Bill said to expect flat line growth in ’11. There are 35 newspapers left in Wisconsin; 17 are owned by Gannett. Interest rates may go down again a bit later this Spring and this is a great time to buy. Finally, Bill shared that Wisconsin has a low unemployment rate of 7.8% compared to the 9.4% US rate.

Lastly, I want to share I am the proud recipient of the Betty Graf Scholarship Award for 2011 and will use that assistance to take the Certified Property Distressed Expert course in February so that I can better assist my clients who are upside down and close to or in foreclosure.

H.R. 4853: Real Estate Provisions in the 2010 Tax Relief Bill

The following information was recently published in an article by the National Association of REALTORS:

Congress has passed and President Obama has signed legislation (HR 4853) that extends the Bush-era tax rates and a host of other expired and expiring provisions. The legislation is not “paid for,” so there are no revenue raisers taken from real estate or other industry groups. The package provides temporary extensions of its numerous provisions. Some are retroactive, as well, so that the rules that had been in place previously will operate as if they had never expired.

Only the provisions that affect real estate investment and operations are included in this summary. The bill itself is vast, even though there are few expansions or cutbacks of previous or current law.

Capital Gains: The tax rate will remain 15% for assets sold or disposed of during 2011 and 2012. Depreciation recapture tax rates remain 25%. No new limitations are created for Section 1031 like-kind exchanges. The 15% rate is retained for dividends received during those years. Small investors with incomes in either the 10% or 15% brackets will have a capital gains and dividend tax rate of 0%.

Estate Tax: During 2010, the estate tax was repealed, but heirs who received assets from an estate were required to use a so-called “carryover basis” in determining the value of the assets they receive. Carryover basis is the amount that the original owner of the asset paid for it. Prior to 2010, the heirs had always received the asset with a “stepped-up basis.” Carryover basis requires heirs to know when the decedent acquired his/her assets and at what price. Stepped-up basis measures the value of the asset at its fair market value at the time of the death. Carryover basis is astonishingly burdensome. “Basis” is the value used to determine gain/loss when the heir sells an inherited asset.

In 2009, the estate tax was in place with an exclusion of $3.5 million and a maximum tax rate of 45%. In 2010, there was no estate tax. Without Congressional action, the estate tax would have been revived in 2011 with an exclusion of only $1 million and a maximum rate of 55%. This legislation revives the estate tax as of January 1, 2010, with an exclusion of $5 million ($10 million for a couple) and a maximum rate of 35%. The executors and heirs of those who died during 2010 may elect to pay no estate tax, but the assets will be subject to the more burdensome carryover basis rules. That election will not be available for those who die after 2010. The $5 million exclusion and 35% rate will be effective through December 31, 2012.

Leasehold Improvements: The legislation renews the 15-year cost recovery period for leasehold improvements made between January 1, 2010 and December 31, 2011.

Bonus Depreciation: Assets with a cost recovery period of 20 years or less are eligible for 100% depreciation (expensing) in the year the assets is placed in service. This rule applies to all assets placed in service on or after September 8, 2010 and before January 1, 2012. Eligible assets placed in service during 2010 will qualify for a 50% bonus depreciation allowance.

Energy-efficient Existing Homes: The tax credit for homeowners who make specified energy-related improvements to existing homes was scheduled to expire December 31, 2010. It has been extended through December 31, 2011. The qualified investments include replacement windows, doors, or skylights, some roofing materials and some heating and cooling equipment. The amounts of the credit vary depending on the asset and its energy rating as determined by the Energy Star program. The standards for qualified property are tougher than they were in 2010, so homeowners will need to exercise great care in their acquisitions. The credit is available only for improvements to a principal residence and only if the improvement is original to the property and only if the property will last for at least 5 years. The credit is not available if the improvement is financed using any form of subsidized energy program.

Energy-efficient Buildings: Owners of commercial buildings may qualify for tax credits for investments in designated insulation, windows and roofing improvements. Improvements to the heating/air conditioning systems, water heaters and air circulation fans may also be eligible for the credit. As with the home improvement credits, these credits require compliance with a variety of energy efficiency standards. Investors should exercise great care in determining what assets will satisfy the given criteria. The improvements must be in place on or before December 31, 2011.

See: REAL ESTATE PROVISIONS IN THE 2010 TAX RELIEF BILL for a complete summary posted by the National Association of REALTORS.