Millie Legenhausen, CRS, GRI, CIPS, MBA

Contrarian investors know to jump in when everyone else is fleeing. Right now the news couldn't be bleaker, but could this be the bottom of the real estate slump? I am awaiting Congress' vote for the $700 million bailout with the rest of you. Another big bank was scooped up at a bargain basement price last night. Looks like a lot of Fall cleaning going on in the financial markets. If Congress approves this bill, pressure on the economy should ease and money should start flowing again. That should jump start this housing market.

Looking at housing in my town of Hamden, Connecticut, I see that our inventory has dropped recently. We have 317 single family homes for sales in a town of nearly 60,000 people. Two thirds of the inventory is priced under $300,000. People are not fighting this market. If they tried to sell and couldn't, they took their houses off the market. Of course, those that have to sell are in a different predicament. They have to negotiate hard with buyers, who are looking, and finding, bargains. Despite this situation, the spread between listing and sales prices is less than 10%, on average. We all know, if a contract favors one party too much, it generally falls apart. A good contract is a win-win situation.

So we wait. I predict this log jam will break soon. There are buyers and smart investors out there, who will see this as an opportunity that rarely comes along. Prices and interest rates may fall a bit further, but this is prime time to make a move. Economic activity is on hold right now, but not for long.

Fortune's inaugural Small Business Magazine for April 2008 has named Hamden, Connecticut one of the 100 best places in America to live and start a small business! Hamden came in #33 on the list, reflecting the town's focus on bringing in new business in manufacturing, health care, and services. There are several Enterprise Zones throughout the town with development incentives. Funding is available in the form of grants, tax abatements, and low-cost loans. The Economic Development office will help with information. This is a healthy trend in a sagging economy.

This recognition is an added bonus for a town that offers wonderful variety. Hamden is urban, suburban and even rural in some parts. The town covers 33 square miles in area and is home to over 59,000 residents. Its major employers are Quinnipiac University, several large health employers, and Town services and schools. Residential housing prices can range from $200,000 to $2,000,000. There is beautiful topography with rolling hills, trout streams and Sleeping Giant State Park with its 32 miles of hiking trails. Located directly north of New Haven, it offers quick access to a thriving cultural scene.

I have proudly sold homes in Hamden since 1991. If you have clients relocating to the area to start a business, work in healthcare or education, or work anywhere in New Haven County, please contact me for an information packet or for a referral.

... and other schemes. Have you received calls from your nocturnal clients who watch infomercials promising great buys and quick profits in real estate? I get these calls periodically - mostly to ask if these opportunites exist locally. They don't. The market in Connecticut is slow, but not that bad. To give you some indication of our optimism, there is a house in New Haven with contaminated soil that is still listed above $200K. For a similar amount you can purchase a house without a kitchen in North Haven. In either case, the cost of rehab and/or remediation would far exceed the current fair market value of the finished product.

There is money in Sweat Equity, not in Flipping. Buyers willing to buy a home that needs TLC will probably do just fine over time. If they are going to be living in a neighborhood they like and slowly improve the house, they should build equity in the next few years. Statistics bear this out - people make money on houses they have owned over a decade. If they think they are going to buy a wreck to rehab and flip, I will bet they are going to loose money. The cost of labor in Connecticut is very high, and anyone who has priced building materials knows that projects are going to cost substantially more than anticipated. Carpenters have an edge in that they can do the work themselves, if they can find the time.

Foreclosed properties are often in nightmarish shape. They are also sold "as is, where is". I prefer to sell the probate properties, that often just need cosmetic work and relatively minor repairs. Bathrooms and kitchen may be "dated" in probate properties, but they are in working order. Buyers can move in and start to modernize, hopefully one project at a time. The greatest danger to buyers today is to try to do too much at once. Start a project and finish it! I have seen several situations over the years where buyers started demolition in several rooms at once, ran out of money, and walked away from the house in frustration and defeat.

As professionals, let's use this time to identify homes in our market areas that are the true "diamonds in the rough". By advising our clients to purchase these homes, we can help them build equity without all the gimmicks.

Lately I've been humming a few of those depression era songs. They are so bright and positive - perfect for gloomy times. I am, by nature, a positive person. I remind myself that these tough economic times will pass, just as they did in the mid 1990s in Connecticut. The early 90s was a time of bank failures, insurance in crisis and the end of the cold war. It is said that when the Berlin wall came down, it came down on Connecticut. With peace, came a big reduction in government military spending, and as a consequence, job lay-offs. At the time, I would comment that the state of Connecticut was being shaken, and its people were falling off and landing in the Carolinas. It seemed that everyone wanted to relocate. Our recession lasted until 1996, but I continued to sell real estate throughout the period, because people need housing, whether the economy is good or bad.

Housing prices in Greater New Haven are down 10% or so from their highs, but rents are not followng suite. How much are your "potential" clients spending for rent? Have you considered a seminar for renters? Low mortgage rates + great prices = a great time for renters to consider buying. I find, however, that many people have awful credit. You may want to host a seminar on credit in conjunction with a banker or credit union officer. It is a topic of value for the public and can create a pool of potential buyers for you, now or down the road. Mortgage money is available for people who have their financial house in order.

The theme for the day is to stay positive. This market will turn around with time. Practice visualization - it is a great mental exercise. Write down a few sentences that describe your thriving business, with a steady stream of referrals from colleagues and previous clients. The idea is to describe yourself as you wish to be, but keep it in the present, as though you have already achieved it. The mind is literal. If it believes it is successful, your business will be too. Never present a negative side to your clients. You can be professional and state the facts as they exist, but then present the opportunities. When clients say they would rather wait this market out, state that it is almost impossible to time the market, whether in real estate or finance. If they need housing now, you can help them find something within their budget. As April 15th (tax day) nears, point out that they may want or need a deduction for the following year. Fear works against us. I recently heard the term fear described as "false expectations appearing real". Gives you something to think about, doesn't it?

Use this time to think positive and move your business forward in preparation for the next economic upturn.

I say this to every seller I meet. It gets them thinking about making a favorable impression. I walk around the house and yard with them, asking them to play the role of the potential buyer. It can be enlightening - or not. Sometimes sellers will speak with pride about renovations or redecorating they did 40 years ago and how much value that adds to the proprerty. We may have to work with that, so my mantra with sellers is Quality-Order-Serenity.

Quality: It is imperative that everything be in working order, even if it is not modern. I ask sellers to fix all those small things they have been putting up with, such as leaky faucets, loose hinges, doorknobs that come off in your hand, and windows that don't open or stay up. I try to highlight architectural features, such as moldings, fireplaces and mantles, built-ins, or a bank of beautiful windows. Many homes in Hamden built in the 1930s and 1940s have wonderful architectural details. Some have stone front porches, porticos or tudor features.

Order: With our busy lives, we seem to be a bit messier. Clutter must go! Clutter confuses my buyers, who often want to just leave the house rather than focus on what may be under the clothes on the floor or the stacks of boxes in the corner. Clutter is ugly and can be hazardous. I see blocked back stairways in multifamily units all the time, and shudder at the thought of an emergency evacuation in the middle of the night. I recently met a Feng Shui practitioner, and am quite fascinated by the concept. Feng Shui literally translates into "wind-water". It is a discipline that strives to make our lives more harmonious by integrating humans with their natural environment. It focuses on energy flows throughout the home. Much of the modern contruction and decor borrows from this, including open floor plans, the placement of oversized windows and furniture arrangement. Feng Shui abhors clutters, which blocks energy. Some houses have a wonderful energy. They are light, they are spotless and there is a natural flow or traffic pattern to each room. Furniture is scaled to the size of each room. These are the houses that sell almost immediately, if they are priced right.

Serenity : The purchase of a home is an emotional, as wel as major financial, undertaking. Buyers want to come home to a house they love, to help them justify the expense. Sellers need to appeal to all the buyers' senses. The house should sparkle and should smell good. No fish fries the night before an open house. (True story!)Master bedrooms should look peaceful, with beautiful bedding and no work stations. Dining rooms can set the tone for the home - formal, relaxed, or playful. With baths, think "spa". A beautiful framed mirror over a sink can give the impression of luxury. Rolled towels and fine toiletries can add to the spa feel.

Remind your sellers that selling a house is a cooperative endeavor. Together you can have some fun working to make that first impression a lasting and positive one. I welcome your comments.

Think of me when working with clients relocating to the Greater New Haven area.